Core Satellite Approach

Core satellite portfolio management is an investment strategy that incorporates traditional fixed income and equity based securities i e.

Core satellite approach.

The core satellite approach provides these advantages. The core satellite investing approach provides a framework for investors to allocate their investments across different asset classes investing strategies and instruments. Core and satellite is a common and time tested investment portfolio design that consists of a core investment such as a large cap stock index mutual fund which represents the largest portion of the portfolio. Long term because timing the market is difficult.

And in order to maintain a well balanced and diversified portfolio a common strategy is to split your assets into core and satellite. Let the core grow on its own but keep a close eye on the satellite portion. Stability holding your assets for the long term reduces the impact of market volatility at the end of the day. Diversification within the core spreading your core investments across and within asset classes and regions helps you maximise returns and minimise risk.

The core satellite approach advocated by dbs cio hou wey fook aims to help you balance risk and reward. The core segment can essentially be left to grow but the satellite part. Your core portfolio is. The core satellite approach is one such strategy.

Definition of core and satellite portfolio. Global to get best in class assets. Multi asset to decrease overall volatility. A core satellite approach allows businesses to lower overall client investment costs and in many cases enhance practice profit while providing clients with greater consistency of results.

What is the core. Once implemented the approach is easily managed giving you time to concentrate on the important things in your business. A core satellite approach is a great way to focus on long term capital growth while still allowing for the opportunity to juice returns through active portfolio management. An investment plan can be formulated using the core satellite approach that ensures structure.

In some ways it s similar to the smart beta approach gaining popularity in the etf world. Index funds exchange traded funds etfs passive mutual funds etc known as the core portion of the portfolio with a percentage of selected individual securities in the fixed income and equity based side of the portfolio known as the satellite.