Equities represent shares of ownership in publicly held companies and are frequently referred to as shares or stocks. This class has historically provided the highest long-term returns relative to the property and income asset classes but may also be subject to a higher risk of low or negative returns in the short to medium term. Equities are classed as growth assets because they primarily provide returns in the form of capital as well as a dividend or income yield.
Equity asset class funds may invest in several geographic regions around the world or may focus on the equities of a particular country or region. They may also invest in a broad range of industries or they may concentrate on one or more industry sectors. The objective is to ensure long-term capital gain for the investor, which usually arises from an increase in the share price of equities over time.