Ch.12 · Matching Schemes to Investor Profiles · medium
What is 'core and satellite' portfolio construction strategy in mutual funds?
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EXPLANATION
The core-satellite approach uses a stable, low-cost, diversified core (e.g., index fund or large-cap fund) forming 70-80% of the portfolio, while a smaller satellite portion takes targeted bets in higher-conviction, higher-risk categories (mid-cap, sectoral, international). This balances stability with alpha-seeking.
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