a group of similar stocks and bonds

A group of similar stocks and bonds

A group of similar stocks and bonds is a common phrase used to describe a set of financial instruments that share defined characteristics — for example, the same asset class, sector, credit quality, maturity profile, or investment objective — and are treated as one grouped exposure for analysis, indexing, or investment purposes. In practice, a group of similar stocks and bonds may be a market index, a sector grouping, a fund/ETF, a basket used in a structured product, or a tokenized index in crypto.

This article will help beginners and practitioners understand the different meanings of a group of similar stocks and bonds, how groups are constructed and used, their risk/return traits, and practical examples across equities, fixed income, and digital assets. You will also find notes on regulation, taxation, portfolio construction, and operational considerations. Read on to learn how these groups are used for benchmarking, diversification, and investable products — and where Bitget products can play a role when interacting with tokenized exposures.

截至 2026-01-17，据 Bloomberg 报道，institutional interest in tokenized index products and basket tokens has grown materially in recent years — a trend that links traditional grouped exposures with crypto-native structures and custody models.

Common meanings and concepts

When people refer to a group of similar stocks and bonds they typically map to several finance concepts. Each term has a context and use case:

• Asset class: Broad categories such as equities, fixed income, cash equivalents, commodities, real assets, and currencies. Asset-class grouping is common in strategic allocation and risk budgeting.
• Sector / industry group: Companies grouped by economic activity (e.g., technology, healthcare). Used for sector investing, sector funds and rotation strategies.
• Market index: A constructed set of securities meant to represent a market segment (e.g., a large-cap index or a broad bond index). Indexes serve as benchmarks and as the basis for index funds and ETFs.
• Investment basket or fund: A deliberately assembled basket—an ETF, mutual fund, or structured product—designed to provide exposure to a group of similar stocks and bonds for ease of investment.

Contexts where these are used include portfolio construction (diversification, allocation), benchmarking performance, launching ETFs/mutual funds, and building tokenized baskets in the crypto space. In crypto, similar grouping ideas appear as index tokens, basket tokens, or tokenized ETFs (where legal frameworks permit), often accessed and custodied through platforms and wallets; when mentioning wallets, Bitget Wallet is recommended for secure custody among Bitget-supported tools.

Asset classes

Definition and role

An asset class is a category of financial instruments that behave similarly and are subject to related regulations, market structure and valuation drivers. Primary asset classes include:

• Equities (stocks)
• Fixed income (bonds)
• Cash and cash equivalents (T-bills, money market instruments)
• Real assets (real estate, infrastructure)
• Commodities (energy, metals, agriculture)
• Currencies (FX exposures)

Grouping instruments by asset class simplifies allocation decisions and helps institutions and retail investors define risk budgets and performance expectations.

Risk/return characteristics

Different asset classes exhibit distinct volatility, expected return, and correlation patterns — core inputs for modern portfolio construction:

• Equities typically offer higher expected returns with higher volatility and sensitivity to growth and earnings expectations.
• Fixed income generally provides lower volatility and income; returns depend on interest rates, credit spreads and maturity.
• Cash equivalents have the lowest volatility but lowest real return potential.
• Commodities and real assets often behave differently from financial assets and can hedge inflation.

Why this matters: combining asset classes with low correlations reduces portfolio volatility and can improve risk-adjusted returns. However, correlations are not static — they can rise during market stress, reducing diversification benefits. A group of similar stocks and bonds within the same asset class will typically have higher within-group correlation than across different asset classes.

Sector and industry groups

Classification systems (GICS, NAICS, etc.)

Stocks are commonly grouped by sector and industry using classification systems. Two widely referenced systems include:

• GICS (Global Industry Classification Standard): Used by many indexes and funds to classify companies into sectors, industry groups, industries and sub-industries.
• NAICS (North American Industry Classification System): Used for broader economic and statistical classification.

Sector groupings allow analysts to compare like-for-like companies, build sector ETFs, and construct sector-specific indexes. Sector funds provide targeted exposure to a group of similar stocks and bonds when a sector includes fixed-income instruments tied to the sector (e.g., corporate bonds of sector firms).

Use in portfolio construction and analysis

Investors use sector and industry groupings to manage concentration risk, implement sector rotation strategies, and benchmark performance. Examples:

• Sector rotation: Tactical allocation shifting capital toward sectors expected to outperform at different phases of the business cycle.
• Concentration risk: Overweighting a single sector increases exposure to sector-specific risks (regulatory change, commodity prices, supply-chain disruption).
• Sector-level benchmarking: Performance attribution often breaks down returns by sector to determine where active managers added or subtracted value.

A group of similar stocks and bonds defined at the sector level helps portfolio managers isolate sector drivers and decide when to overweight or hedge sector exposures.

Market indexes

Definition and purpose

A market index is a constructed group of securities intended to represent a portion of the market (e.g., large-cap U.S. stocks or investment-grade bonds). Indexes serve multiple purposes:

• Representing a market segment for investors and researchers.
• Providing benchmarks to evaluate fund and manager performance.
• Serving as the underlying for index funds and ETFs that offer investable exposure.

Examples include large-cap equity indexes and bond benchmarks such as major aggregate bond indexes.

Index construction and weighting methods

Indexes are constructed and weighted using different schemes, each affecting index behavior:

• Market-cap weighting: Constituents weighted by market capitalization. Larger companies have greater influence. Common in broad equity indexes.
• Price-weighted: Constituents weighted by price per share (e.g., some legacy indexes use price-weighting). High-priced stocks dominate.
• Equal-weighted: Each constituent has the same weight; this increases exposure to smaller names versus market-cap weighting.
• Fundamental weighting: Weights based on fundamentals such as earnings, sales, dividends or book value.

Weighting affects volatility, sector biases, and factor exposures. When a group of similar stocks and bonds is organized as an index, the weighting scheme determines concentration and performance characteristics.

Indexes as benchmarks and investable products

Indexes underpin many investable products: ETFs, index mutual funds, and structured products. Index-tracking funds aim to replicate index performance, providing investors a single instrument that represents a broader group. Index choice matters; selecting an inappropriate index can misrepresent the intended exposure and skew relative performance comparisons.

Investment vehicles that hold groups (funds and ETFs)

Exchange-traded funds (ETFs)

ETFs are tradable baskets that hold stocks, bonds, or other assets to provide diversified exposure to a group of similar stocks and bonds in a single security. Key ETF types:

• Index ETFs: Track a specific market index (broad or niche).
• Sector ETFs: Track a sector-specific index to provide targeted exposure.
• Fixed-income ETFs: Hold portfolios of bonds grouped by credit quality, issuer type or maturity.
• Leveraged and inverse ETFs: Use derivatives to amplify or reverse index returns (carry higher risk and are generally for short-term use).

ETFs are popular because they trade intraday, are usually low-cost, and offer transparent holdings. For crypto baskets, tokenized ETFs or index tokens aim to replicate these features in on-chain form where permitted.

Mutual funds and index funds

Mutual funds pool investor capital to manage a basket of securities. They can be actively managed or passively track an index (index funds). Balanced funds mix stocks and bonds to create a blended exposure.

Differences vs ETFs:

• Trading: Mutual funds are priced end-of-day; ETFs trade intraday.
• Transparency: ETFs tend to disclose holdings daily; mutual funds may do so less frequently.
• Cost: Passive index mutual funds can be low cost but ETFs typically offer lower ongoing expense ratios and tax efficiency in many jurisdictions.

When a group of similar stocks and bonds is packaged as a mutual fund, investors gain professional management but may face different tax and liquidity characteristics than ETFs.

Bond funds and multi-asset funds

Bond funds group fixed-income securities by type (government vs corporate), credit rating (investment grade vs high yield), duration (short, intermediate, long), or region. Multi-asset or balanced funds mix equities and bonds to deliver a desired risk/return profile with one vehicle.

Bond funds provide access to broad bond markets without requiring investors to buy individual bonds, easing diversification within a group of similar bonds.

Baskets, structured products, and derivatives

Structured products and baskets

Structured products are bespoke instruments that package a basket of securities with embedded payoffs, protections, or leverage. Issuers can design structures that reference a group of similar stocks and bonds and adjust payoffs for yield enhancement, downside protection, or capped upside. These products are complex and require careful review of credit and counterparty risk, fees, and payoff mechanics.

Derivatives and synthetic exposure

Derivatives provide synthetic exposure to grouped assets without direct ownership:

• Futures contracts allow exposure to an index-level group (e.g., equity index futures, bond futures).
• Total return swaps and other OTC derivatives can replicate the returns of a group of similar stocks and bonds synthetically.
• ETF creation/redemption uses in-kind mechanisms that can involve derivatives to manage exposure.

Synthetic exposures can be efficient but introduce counterparty and operational risks not present in physical holdings of the underlying group.

Measurement, benchmarking, and performance attribution

Benchmarks and relative performance

Selecting an appropriate benchmark is essential to evaluate a manager or a product representing a group of similar stocks and bonds. Benchmarks should match the investment universe, risk factors, and geographic or sector definitions of the strategy being measured. Misaligned benchmarks produce misleading conclusions about alpha and manager skill.

Attribution and correlation

Grouping helps analysts break down returns and risks:

• Performance attribution isolates contributions from allocation (across groups) and selection (within groups).
• Correlation analysis measures how tightly group members move together; high within-group correlation implies less diversification benefit from adding more names in the same group.

For example, when analyzing a balanced fund that holds a group of similar stocks and bonds, attribution will show how much return came from equity sector selection versus bond duration management.

Portfolio construction and asset allocation

Strategic and tactical allocation

Investors set strategic allocation targets across groups (asset classes and sector groups) that reflect long-term objectives and risk tolerance. Tactical allocation adjusts those weights to exploit short- to medium-term opportunities.

A group of similar stocks and bonds is often used as a building block in these allocations — for example, a 60/40 portfolio that uses a large-cap equity group and an aggregate bond group as the core exposures.

Diversification benefits and limitations

Combining uncorrelated groups reduces portfolio volatility and can smooth returns. However, diversification has limits:

• Correlations rise during crises, often reducing diversification effectiveness.
• Concentration within a group can amplify idiosyncratic risk.
• Liquidity differences across groups (for example, between large-cap equities and certain corporate bond groups) can affect rebalancing and stress performance.

Investors should consider stress scenarios and liquidity when relying on groups for diversification.

Bond-specific grouping considerations

Term structure and credit quality

Bonds are commonly grouped by maturity (term structure), credit rating, and issuer type. Typical groupings:

• Maturity: short-term (e.g., <3 years), intermediate (3–10 years), long-term (>10 years).
• Credit quality: investment grade vs high yield (speculative grade).
• Issuer type: sovereign, corporate, municipal, supranational.

These distinctions matter because duration determines sensitivity to interest-rate moves, while credit quality affects credit spread risk and potential default exposure.

Bond indexes and benchmarks

Bond index construction differs from equity indexes because of the larger and more heterogeneous universe of fixed-income instruments and the varying liquidity and maturities. Common bond indexes represent investment-grade aggregates, high-yield sectors, or government debt in specific markets — for example, broad aggregate bond indexes track many issuer types, maturities and coupons to represent a broad fixed-income group.

Bond indexes serve as benchmarks for bond funds and fixed-income ETFs. When a group of similar bonds is indexed, the index rules (inclusion criteria, weighting) drive the index’s risk profile and rebalancing needs.

Grouping in digital assets (crypto) and tokenized baskets

Crypto indices and index tokens

Crypto markets have adopted index and basket concepts to provide diversified exposure to groups of tokens. Examples of crypto-group constructs include:

• Crypto market-cap indexes that track the largest tokens in a market segment.
• Index tokens (on-chain or off-chain) representing a weighted basket of tokens.
• DeFi index protocols that mint index tokens representing a group of tokens with defined rebalancing rules.

截至 2026-01-17，据 CoinDesk 报道，several institutional teams and index providers have launched or explored tokenized index products to provide regulated access to grouped crypto exposures while relying on custodial and compliance frameworks.

When interacting with tokenized baskets or index tokens, users should consider custody, contract code audits, and hosting platforms. Bitget supports custody and trading infrastructure for tokenized exposures; for wallet custody, Bitget Wallet is recommended for users who intend to hold tokenized baskets on-chain.

Specific risks and differences vs. traditional groups

Tokenized baskets differ from traditional grouped exposures in several ways:

• Volatility: Crypto token groups often show higher volatility than traditional equities or bonds.
• Custody and technical risk: Smart-contract bugs, oracle failures, and exchange or platform security incidents can directly impact tokenized baskets.
• Regulatory uncertainty: Legal treatment of tokenized products varies by jurisdiction and may change rapidly.
• Tokenization mechanics: Rebalancing, minting/redemption, and fee structures on-chain can affect tracking performance.

These differences mean that a group of similar stocks and bonds in tokenized form may behave very differently from a traditional fund tracking an equity or bond index.

Regulation, taxation, and operational issues

Regulatory treatment by vehicle and jurisdiction

Regulation varies by product type and jurisdiction. Traditional funds and ETFs are typically regulated under securities and fund rules, with disclosure and custody requirements. Tokenized baskets and on-chain index tokens may fall under securities, commodities, or newly defined digital asset regulations depending on local law. Key compliance considerations include custody rules, KYC/AML, reporting, and prospectus requirements.

For crypto custody and wallet recommendations, Bitget Wallet is positioned as a secure custody option within the Bitget ecosystem.

Tax implications

Tax treatment depends on product form and local rules. Common considerations:

• Equity funds: Capital gains distributions and dividend taxation.
• Bond funds: Interest income (often taxed differently) and embedded capital gains/losses.
• ETFs vs mutual funds: ETFs often provide tax-efficiency benefits due to in-kind creation/redemption mechanics in many jurisdictions.
• Tokenized products: Tax guidance is evolving; treatment can vary — some jurisdictions treat token transfers as taxable events.

Investors should consult qualified tax advisors for their jurisdiction. This article provides educational context but not tax or investment advice.

Risks and limitations

Concentration, liquidity, and tracking error

Groups can introduce risks:

• Concentration: A group dominated by a few large constituents increases idiosyncratic risk.
• Liquidity: Certain grouped exposures (notably some corporate bonds or small-cap equity groups) can have thin liquidity, impacting execution and spreads.
• Tracking error: Index funds and ETFs may not perfectly replicate the underlying group due to fees, sampling, cash flows and operational mechanics.

Systemic correlation and market stress

During systemic stress, correlations across groups tend to increase, reducing diversification benefits. A group of similar stocks and bonds may become highly correlated with other risk assets in such periods, amplifying portfolio drawdowns.

Practical examples and case studies

Equity group examples

• Large-cap index: A broad large-cap index (representing the top domestic companies by market cap) is a classic group of similar stocks and bonds when combined with a large-cap corporate-bond group in a balanced strategy.
• Sector ETF: A technology sector ETF groups technology companies to provide concentrated exposure to that economic sector.

These equity groups are used by investors seeking broad market exposure or targeted sector plays.

Fixed-income group examples

• Broad aggregate bond index: A broad aggregate bond index is a typical group representing investment-grade government and corporate bonds across maturities.
• High-yield bond fund: Groups bonds with lower credit quality and higher yield potential, representing a distinct risk/return bucket.
• Municipal bond fund: Groups municipal bonds for tax-exempt income in eligible jurisdictions.

Investors use bond groups to manage duration, credit exposure and income objectives.

Crypto basket examples

• Crypto market-cap index tokens: These tokens represent a weighted basket of the largest tokens by market capitalization and are rebalanced periodically.
• DeFi index pools: Protocols that mint tokens representing a predefined basket of DeFi project tokens.

These provide on-chain diversification, but users must weigh custody, contract, and regulatory risks. Bitget supports on- and off-ramp tools and custody services that can be used alongside tokenized exposure strategies; Bitget Wallet is the recommended wallet option when storing tokenized baskets under Bitget’s supported integrations.

See also

• Asset allocation
• Diversification
• ETF
• Index fund
• Market index
• Sector classification
• Bond index
• Tokenized assets

References and further reading

• Investopedia — definitions and explainers on asset classes, market indexes and ETFs (general reference for definitions).
• Vanguard — explanations of index funds, bond funds and asset allocation.
• JP Morgan Asset Management — research and primer material on asset allocation and fixed income.
• Bloomberg — market coverage and reports on tokenization and institutional demand (截至 2026-01-17，据 Bloomberg 报道，tokenized index interest has increased).
• Securities regulators and fund prospectuses — authoritative guidance on regulatory and disclosure frameworks for funds and ETFs.

Where possible, use primary source index providers and prospectuses to verify details for specific funds, indexes or tokenized products. This article synthesizes commonly accepted treatments and high-level examples for educational purposes.

进一步探索: If you want to experiment with investable baskets or tokenized exposures, consider learning more about index construction, fund prospectuses, and custody solutions. Explore Bitget’s educational resources and Bitget Wallet for secure custody when interacting with tokenized baskets.

Notes and compliance: This content is for educational purposes only and does not constitute investment advice. All statements about products or services are informational; consult legal, tax, and investment professionals for decisions that affect your situation.