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Glossary

Equities

Equities represent ownership interests in a corporation, typically in the form of common stock, giving shareholders a claim on the company’s assets and earnings.

Luca Moschini

— 1 min read

Definition

Equities are shares of stock issued by a corporation that signify ownership in the company. Holders of equities own a portion of the business and participate in its financial performance.

Equities differ from fixed-income instruments such as bonds or mortgages because they represent ownership rather than a lending relationship.

How It Works

When a company issues stock, it creates equity that investors can buy and sell. Each share represents a fractional ownership stake in the corporation.

Equity investments are commonly held directly as individual stocks or indirectly through stock funds, which may focus on different investment objectives.

Why the Term Matters

Equities are a core asset class in financial markets and play a central role in capital formation and wealth creation. They allow companies to raise capital while giving investors exposure to corporate growth and profitability.

Because equities reflect ownership, their value is closely tied to company performance and market conditions.

  • Common Stock
  • Ownership Interest
  • Fixed-Income Securities
  • Stock Funds
  • Asset Classes

FAQs

What are equities?
Equities are ownership shares in a corporation, usually issued as common stock.

How do equities differ from bonds?
Equities represent ownership in a company, while bonds represent a loan made to an issuer.

What rights do equity holders have?
Equity holders typically have ownership rights that may include voting and participation in company earnings.

Are equities considered an asset class?
Equities are considered a major asset class alongside fixed income and cash equivalents.

How can investors gain exposure to equities?
Investors can gain exposure to equities by owning individual stocks or through stock-based investment funds.

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