What is Defensive Assets?
Defensive assets are lower-risk investments like cash and bonds that aim to preserve capital.
Detailed Explanation
Defensive assets include cash, term deposits, and bonds. They provide more predictable returns and protect against significant losses.
Example
Illustrative example — A conservative fund might have 80% in bonds and cash. In a market crash, it might only drop 5% while a growth fund drops 25%.
Frequently Asked Questions
Should I have all defensive assets?
Only if you are very close to retirement or withdrawing soon.
Related Terms
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