Just like having a strong core is very important for building a healthy body, in investing, asset allocation in the core is also very important.
Core-satellite strategy helps you build a well diversified portfolio.
- Core is designed to provide stable long-term returns. It ensures that the core of your portfolio is strong, protected and growing
- Satellites are riskier than the core but also have the potential of offering greater returns. They move up or down with the benchmark equity indices like Nifty
Building the core with All Weather Investing smallcase
- AWI helps you invest in gold, equities and fixed income as a part of one single smallcase
- The fixed Income portion of the All Weather Investing smallcase always generates positive returns
- The equities portion moves with the market to generate high long-term returns, while the gold portion protects your investment when the markets crash
- Rebalance ensures that your money is always in the right place at the right time
- It should be the first step towards starting your investment journey
Slow moving satellites
- This is the next step after core, smart beta smallcases are created with an objective to generate more returns than the market
- These smallcases only consist of large-caps, which are the top 150 market cap stocks listed on NSE
Fast moving satellites
- These smallcases majorly consist of mid-cap and small-cap stocks
- They help you take exposure to themes, ideas and sectors you believe will be growing in coming time (like speciality chemicals and affordable housing)
- These smallcases can generate high returns, but are very volatile in nature
- Thus, you should look into investing in them only after you have built your core and have also invested in the slow moving satellites
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