A certain group of assets that represent the basic and well established form of assets/ investments/ holdings. Such assets have the same, or similar, “traditional” characteristics in terms of nature, type, risk-return profiles, revenue generation patterns, etc. A traditional asset class consists of assets or investments that, in addition to having established and stylized patterns of performance and market behavior, bear or exhibit similar defining elements. For such similarities, a given traditional asset class would be subject to, or treated under, similar laws and regulations within a specific economy or beyond.
The main examples of traditional asset classes include the basic categories of equities (e.g., stocks), fixed income (e.g., bonds), money market vehicles (cash equivalents or cash-like securities).
Traditional asset classes are usually set against alternative asset classes that feature different risk-return profiles, market behavior, etc. This is made up of assets not classified within traditional or classic asset classes, such as, or investments in, real estate, commodities (e.g., gold and silver), natural resources, infrastructure and master limited partnerships (MLPs).
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