Market and asset classes

Markets and asset classes

One of the best ways to get a good balance between risk and reward is to build a diversified portfolio covering a mix of asset classes, geographies, industries and types of companies – and all of these can be accesses via tracker, or exchange-traded, funds.

What this service covers

We aim to help you build a portfolio that is properly balanced between risk and return. You can choose one of our ready-made portfolios or build your own portfolio using funds from our top tracker list to suit your personal needs when it comes to your overall goals, target returns, time horizon and risk appetite.

In all cases, the investments should be held on a medium-to-long term basis, by which we mean three to seven years.

There are three major asset classes covered in our free investment guidance service and they all have their own characteristics. An explanation of each asset class is given below, but it is important you appreciate by investing in a tracker fund, you are buying a fund that tracks a market with the underlying investments as described below.

Shares, also known as equities

Shares – also known as equities or stocks – can be more risky but have the potential to provide higher long-term returns, either in the form of income or capital gains, or a mixture of both. They can however be volatile and prone to losing as well as long winning streaks, even if over time history suggests they provide returns which help protect money from the effects of inflation.

Larger companies’ shares are typically less risky than those of smaller companies.

Developed stock markets - those in the West or Japan – tend to be better regulated, more transparent and less risky than emerging markets, the up-and-coming economies of Asia, Latin America, the Middle East or Africa, where there can also be greater geopolitical risk.

As you will expect, typically those investment markets and asset classes with the bigger risk come with a greater potential for larger gains and losses.

Bonds, or fixed-income

Bonds – also known as fixed-income investments– are less risky, focus on income and provide lower but steadier returns than equities. Individual bonds provide pre-determined interest payments, or coupons, and should also see the return of the initial investment when the bond matures. The big danger is inflation rises, as this would force bond issuers to offer higher coupons on new bonds and tempt owners to sell their existing holdings to get access to the improved coupons. By investing in a fund that tracks a bond market, you are investing into a basket of bonds with varying terms, coupons and counter parties.


Property is a long-term investment that tends to bring some income in the form of rent and also potential for capital gains, as the value of buildings or houses rises. However, the 2008 crisis shows valuations can fall as well as rise so there are sizeable risks here.


If you want to hold cash only then this service is not suitable for you, although cash is an important benchmark for any portfolio builder and should be held as part of your portfolio.

Ready-made portfolios

Invest in the AJ Bell Youinvest cautious portfolio

Cautious portfolio

This portfolio aims to give a steady total return over time.

Try our cautious portfolio
Invest in the AJ Bell Youinvest balanced portfolio

Balanced portfolio

This portfolio aims for growth and income through taking some risk without extreme volatility.

Try our balanced portfolio
Invest in the AJ Bell Youinvest adventurous portfolio

Adventurous portfolio

This portfolio aims for higher growth by accepting higher volatility.

Try our adventurous portfolio
Build your own portfolio using the AJ Bell Youinvest investment guidance

Build your own portfolio

This tool lets you create your own portfolio from our top tracker list.

Try our build your own portfolio