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Core & Satellite Investing

Michael Glennon
Michael Glennon

What is core and satellite investing, and how can you use it to increase returns across your portfolio? If you're interested in learning more, read this ebook.

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GLENNON CAPITAL Core & Satellite Investing
04 What Is Core Investing? Table of Contents T H E 05 Core Investing Assets 06 What Is Satellite Investing? 07 Satellite Investing Assets 08 How To Implement Core & Satellite Investing
The information contained in this article is general in nature and does not consider your personal financial situation. The information is not a recommendation or an offer to buy securities. You are advised to seek professional financial advice prior to making any investment decisions. The views expressed in this article may change at any time, such is the nature of the investment markets. | 03Core Satellite Investing Disclaimer GLENNON CAPITAL
The "core" of your portfolio is typically invested in low fee products that perform in line with the markets after fees. Investors will receive close to market returns and close to market volatility, but by design these products are unlikely to outperform. | 04Core Satellite Investing What Is Core Investing? Core The assets in the core are the mainstay of your portfolio, providing you exposure to market returns at low cost. Most of your portfolio will be invested here. GLENNON CAPITAL
What kind of assets would make up the core of your portfolio? | 06Core Satellite Investing CoreInvestment Assets * * * * Australian large cap Exchange Traded Funds (EFTs) Large managed portfolios of blue chip shares Cash & enhanced cash-type investments Low-risk property and infrastructure GLENNON CAPITAL Your financial advisor or portfolio manager might also have some suggestions for a secure investment that will suit your portfolio and meet your financial needs. The question is: how do we increase the return of your portfolio while reducing the risks?
To increase the returns of your portfolio you can make smaller investments in "satellites". These satellites will diversify your exposure away from the "core" and may increase returns while reducing risk. The satellites are small parts of your portfolio and so potential losses are also small. | 05Core Satellite Investing What Is Satellite Investing? Satellite 1 The "core" and "satellite" portfolios work together to give you risk-adjusted returns better than what you may have made by investing in the core portfolio alone. GLENNON CAPITAL Satellite 2 Satellite3 Satellite 4
What kind of investments might sit outside the core, but will also provide diversification and higher risk-adjusted returns? Here are a few suggestions that are worth looking into: | 07Core Satellite Investing Satellite Investment Assets * * * Smaller Company Funds Hedge Funds Geared Investments GLENNON CAPITAL Satellites will often be managed actively and will rely on the skill of the fund manager to achieve returns. They may not invest in stocks you recognise and they may charge higher fees. Correlation with your core portfolio will likely be low. Your satellite portfolios may perform well when your core portfolios perform poorly.
Here are three factors to consider when looking to use core and satellite investing: | 08Core Satellite Investing How To Implement Core & Satellite Investing * * * Ideal core investments - what investments will provide security for your portfolio? Ideal satellite investments - what investments will provide extra returns and diversification for your portfolio? Weighting of your investments - how much of your assets do you want to allocate to your core investments and to your satellite investments? GLENNON CAPITAL Are you going to explore core and satellite investing?
Glennon Capital was founded in 2008 by Michael Glennon. Previously, Michael worked with some of the best institutional small company fund managers in Australia, and in 2007, he was recognised for his achievements and received the IMCA Money Management Fund Manager of the Year (Small Cap) Award. Michael founded Glennon Capital to offer specialist small company investment management to high net worth individuals and family offices, as well as through selective platforms for clients with less than $1 million to invest in their portfolios. Today, our flagship fund Glennon Small Companies Limited (ASX:GC1) opens up the investment opportunity for all. GC1s Initial Public Offering was completed in August 2015 and is now a listed investment company that is traded on the Australian Stock Exchange (ASX). We are proud to be recognised for co-investing with clients in all portfolios an important feature which ensures that our values and principles are aligned with those of our clients. | 09Core Satellite Investing About Glennon Capital GLENNON CAPITAL
Address Level 17 25 Bligh Street Sydney NSW (02) 8027 1000 Phone Glennon Capital Email info@glennon.com.au Connect

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Core & Satellite Investing

  • 1. GLENNON CAPITAL Core & Satellite Investing
  • 2. 04 What Is Core Investing? Table of Contents T H E 05 Core Investing Assets 06 What Is Satellite Investing? 07 Satellite Investing Assets 08 How To Implement Core & Satellite Investing
  • 3. The information contained in this article is general in nature and does not consider your personal financial situation. The information is not a recommendation or an offer to buy securities. You are advised to seek professional financial advice prior to making any investment decisions. The views expressed in this article may change at any time, such is the nature of the investment markets. | 03Core Satellite Investing Disclaimer GLENNON CAPITAL
  • 4. The "core" of your portfolio is typically invested in low fee products that perform in line with the markets after fees. Investors will receive close to market returns and close to market volatility, but by design these products are unlikely to outperform. | 04Core Satellite Investing What Is Core Investing? Core The assets in the core are the mainstay of your portfolio, providing you exposure to market returns at low cost. Most of your portfolio will be invested here. GLENNON CAPITAL
  • 5. What kind of assets would make up the core of your portfolio? | 06Core Satellite Investing CoreInvestment Assets * * * * Australian large cap Exchange Traded Funds (EFTs) Large managed portfolios of blue chip shares Cash & enhanced cash-type investments Low-risk property and infrastructure GLENNON CAPITAL Your financial advisor or portfolio manager might also have some suggestions for a secure investment that will suit your portfolio and meet your financial needs. The question is: how do we increase the return of your portfolio while reducing the risks?
  • 6. To increase the returns of your portfolio you can make smaller investments in "satellites". These satellites will diversify your exposure away from the "core" and may increase returns while reducing risk. The satellites are small parts of your portfolio and so potential losses are also small. | 05Core Satellite Investing What Is Satellite Investing? Satellite 1 The "core" and "satellite" portfolios work together to give you risk-adjusted returns better than what you may have made by investing in the core portfolio alone. GLENNON CAPITAL Satellite 2 Satellite3 Satellite 4
  • 7. What kind of investments might sit outside the core, but will also provide diversification and higher risk-adjusted returns? Here are a few suggestions that are worth looking into: | 07Core Satellite Investing Satellite Investment Assets * * * Smaller Company Funds Hedge Funds Geared Investments GLENNON CAPITAL Satellites will often be managed actively and will rely on the skill of the fund manager to achieve returns. They may not invest in stocks you recognise and they may charge higher fees. Correlation with your core portfolio will likely be low. Your satellite portfolios may perform well when your core portfolios perform poorly.
  • 8. Here are three factors to consider when looking to use core and satellite investing: | 08Core Satellite Investing How To Implement Core & Satellite Investing * * * Ideal core investments - what investments will provide security for your portfolio? Ideal satellite investments - what investments will provide extra returns and diversification for your portfolio? Weighting of your investments - how much of your assets do you want to allocate to your core investments and to your satellite investments? GLENNON CAPITAL Are you going to explore core and satellite investing?
  • 9. Glennon Capital was founded in 2008 by Michael Glennon. Previously, Michael worked with some of the best institutional small company fund managers in Australia, and in 2007, he was recognised for his achievements and received the IMCA Money Management Fund Manager of the Year (Small Cap) Award. Michael founded Glennon Capital to offer specialist small company investment management to high net worth individuals and family offices, as well as through selective platforms for clients with less than $1 million to invest in their portfolios. Today, our flagship fund Glennon Small Companies Limited (ASX:GC1) opens up the investment opportunity for all. GC1s Initial Public Offering was completed in August 2015 and is now a listed investment company that is traded on the Australian Stock Exchange (ASX). We are proud to be recognised for co-investing with clients in all portfolios an important feature which ensures that our values and principles are aligned with those of our clients. | 09Core Satellite Investing About Glennon Capital GLENNON CAPITAL
  • 10. Address Level 17 25 Bligh Street Sydney NSW (02) 8027 1000 Phone Glennon Capital Email info@glennon.com.au Connect