Since we have just tipped into the new financial year, it is instructive to reflect on the returns rendered by different asset classes over the past 12 months. And let’s try to rank these investments by their relative risk.

This behoves one to start with risk-free cash. The Reserve Bank of Australia’s overnight cash rate returned 4.24 per cent over the 12 months to June 30. Short-term bank bills issued by the big four banks did a little better, delivering 4.37 per cent. When investing in a bank bill, you are lending money to the institution on an unsecured basis for, say, a three-month period.