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Asset Class Breakdown

Asset Class Breakdown

What Is an Asset Class Breakdown?

An asset class breakdown gives the rates of core asset classes found inside a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and then some) generally allude to broad categories like equities, fixed income, and commodities. Frequently, sub-asset classes might be reported in concentrated portfolios or for more granular detail.

Understanding Asset Class Breakdowns

An asset class breakdown addresses the distribution of assets in a portfolio. Breakdowns are calculated by isolating the market value of a specific asset class' holdings by the fund's total assets. Complete asset class breakdowns are normally given to assist an investor with figuring out the fund's investment objective and risk management strategy.

Investing by asset class is a primary way for investors and professional portfolio managers to oversee risk. Asset classes might incorporate cash, fixed income, equities, commodities, and real estate. Each has its risk qualities and return opportunities. Fixed income and equity investments are ordinarily asset classes utilized for core holdings. Both have different investment options, with fixed income utilized for additional conservative investments and equities utilized for additional aggressive allocations.

Cash investments are the most conservative and can incorporate high-yield savings accounts and money market funds.

Types of Sub-Asset Class Breakdowns

Sub-asset class breakdowns are likewise frequently utilized in due diligence fund reporting and can offer comparable help for investors. Sub-asset class breakdowns might be utilized when a fund is highly moved in one asset class.

Fixed income sub-asset class breakdowns can incorporate many loans, government bonds, corporate bonds, and municipal bonds. Equity sub-asset classes can comprise of special categories, for example, real estate investment trusts (REITs) and master limited partnerships (MLPs). They may likewise incorporate market capitalization breakdowns like small-cap, mid-cap, and huge cap or investment styles, for example, growth stocks and value stocks. Investing in international investments can add sub-asset class parts for investments.

Illustration of Asset Allocation Breakdown

60/40 funds are a well known decision for investors seeking balanced asset allocation fund options. The BlackRock 60/40 Target Allocation Fund gives one guide to investors. This Fund utilizes a fund-of-funds approach to give a 60/40 asset class breakdown among equity and fixed income.

Individual fund holdings are utilized to give exposure to different sub-asset classes, including U.S. stocks, developed market stocks, international stocks, and 7-to 10-year Treasury bonds. BlackRock's asset allocation funds incorporate the 40/60 Target Allocation Fund, 80/20 Target Allocation Fund, and the 20/80 Target Allocation Fund.

Special Considerations

The asset class breakdown is in many cases utilized in marketing the fund to investors since it is a simple method for introducing the surmised risk profile of a fund. Asset allocation funds will generally shift by asset mix, frequently marketed as conservative, moderate, or aggressive funds.

Higher equity exposure is ordinarily found in more aggressive growth funds. Moderate funds will generally have a balanced asset allocation approach that is equally weighted among equity and fixed income. Overall, modern portfolio theory recommends that asset allocation can be a vital determinant for total return potential and risk qualities.


  • Asset class breakdowns assist investors with grasping the stray pieces of their portfolios, management's objectives, the distribution of funds, and the inherent risks.
  • Asset classes can incorporate stocks, bonds, commodities, cash, real estate, and currencies.
  • An asset class breakdown shows how certain core asset classes are represented in an investment portfolio.