Page 15 - 2017 INVESTMENT PHILOSOPHY - May 2017

THE FOUR MAIN ASSET CLASSES FOR INVESTORS:

Equities [shares]
Fixed income
Cash • Government and • Represent shared ownership of limited • Ownership by companies and
Property
• Bank & building
What it is society, (instant • UK Government gilts • Tend to be listed and traded on national and individuals of physical
companies asset classes
corporate borrowing:-
access & timed
residential and commercial
property
deposits)
international stock exchanges
• US Government treasury
• Cash funds
bonds etc
• Corporate bonds Give owners a share and exposure to: • Owners:
What it does regular • Over a set period, based • Company profits as dividends any increase in • Share in rent from tenants and
• Provides
These generate income:
(monthly or
on interest rates at the
the capital value of the shares
any capital gain / loss on sale of
yearly) income,
time of issue
the property
• Any company misfortune, e.g. bankruptcy,
influenced by
up to value of share holding
• Improve the value of assets
• Pay back the principal
changes in base
rates on maturity (unless the • Different markets and sectors through active management
issuer defaults) and development
• Capital is • Individual gilts and • Dividends and share prices change with • Tends to pay regular income
(although not guaranteed)
bonds tend to offer:
secure • Fixed income (yield) company performance and demand for • Potential for capital growth in
Performance characteristics • Ideal for short • Capital values that • Some companies have a policy of not paying • Can be illiquid if prices fall or
individual shares
• Income is low
and variable
property value
out dividends, but re-invest in the company
fluctuate with changing
term savings
vacancy rates rise
• There is potential for substantial capital gains /
interest rates
losses
• But no long
• Potential for capital gain
• Offers diversification across
term
or loss during the life of
(e.g. UK, Europe, US) and sectors (e.g. financial
types of property so spreading
the bond
protection
against • Greater capital security • Equities offer diversification across markets market sectors, territories and
services and property) so spreading risk
risk
inflation than equities
ENABLE INDEPENDENT FINANCIAL LIFE PLANNERS IS A TRADING STYLE OF ENABLE INDEPENDENT LIMITED
ENABLE INDEPENDENT LIMITED IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY. Version 2017 - April