Jamaal Wilkes Financial Advisors, LLC
Long popular with institutional investors, non-profits and high net worth individuals, the “core -
satellite” approach to investing is gaining more attention from individual investors who want to
enhance overall portfolio performance, control risks, and minimize costs.
Our Advanced “Core - Satellite” investment strategy is essentially an asset allocation program
using a broad index fund for the “core”, and “alternative investments” for the “satellite”.
“Alternative investments” might include mutual funds, hedge funds, private equity, real estate, or
sector funds, to name a few. Our Advanced Core - Satellite strategy seeks to resolve the old,
ongoing debate between indexing, or “passive” investing, and “active” investing. Advocates of
“passive” investing have long argued that the best way to capture overall market return is to
use low-cost and broad indexed investments. But proponents of “active” investing believe that
it’s possible to beat the market and generate higher returns by hiring skilled managers, picking
the right investments, and taking advantage of market trends. Instead of dictating that you
follow one investment approach or the other, the core - satellite strategy blends the two (2)
together and provides a compromise to the argument and overall can still provide a lower level
of risk and minimize costs to the end investor.
Although there are no hard and fast rules, you generally keep the bulk, or “core”, of your
investments dollars in cost-efficient broadly indexed investments designed to predictably
capture market returns by closely tracking a chosen benchmark. While core holdings are
generally chosen for their low-cost ability to closely track a specific benchmark, satellites are
generally selected for their potential to add value, both through enhanced returns or by reduced
portfolio risk. Satellites are typically low correlation, alpha-seeking investments—those that
have the potential to substantially outperform a benchmark. Great candidates for satellite
investments include less efficient asset classes where the potential for active management to
add value is increased, particularly where those asset classes offer returns that are not
closely correlated with the core or with other satellite investments. Since it’s not uncommon for
satellite investments to be more volatile than the core, it’s important to always view them within
the context of the overall portfolio. Critical factors in a core - satellite investment strategy are
the choice of asset classes and the asset allocation between the core and the satellites, which
should reflect your investment goals and risk tolerance.
A customized core - satellite investment strategy can offer a real solution for some investors.
JAMAAL WILKES FINANCIAL ADVISORS, LLC is a Registered Investment Advisor (RIA) with the
State of California and therefore, is not legally empowered to provide investment advisory services
to residents of any state other than California. This website shall in no way directly or indirectly
be construed as a solicitation to sell investment advisory services outside the state of California.
CA License 0B90669.
satellite” approach to investing is gaining more attention from individual investors who want to
enhance overall portfolio performance, control risks, and minimize costs.
Our Advanced “Core - Satellite” investment strategy is essentially an asset allocation program
using a broad index fund for the “core”, and “alternative investments” for the “satellite”.
“Alternative investments” might include mutual funds, hedge funds, private equity, real estate, or
sector funds, to name a few. Our Advanced Core - Satellite strategy seeks to resolve the old,
ongoing debate between indexing, or “passive” investing, and “active” investing. Advocates of
“passive” investing have long argued that the best way to capture overall market return is to
use low-cost and broad indexed investments. But proponents of “active” investing believe that
it’s possible to beat the market and generate higher returns by hiring skilled managers, picking
the right investments, and taking advantage of market trends. Instead of dictating that you
follow one investment approach or the other, the core - satellite strategy blends the two (2)
together and provides a compromise to the argument and overall can still provide a lower level
of risk and minimize costs to the end investor.
Although there are no hard and fast rules, you generally keep the bulk, or “core”, of your
investments dollars in cost-efficient broadly indexed investments designed to predictably
capture market returns by closely tracking a chosen benchmark. While core holdings are
generally chosen for their low-cost ability to closely track a specific benchmark, satellites are
generally selected for their potential to add value, both through enhanced returns or by reduced
portfolio risk. Satellites are typically low correlation, alpha-seeking investments—those that
have the potential to substantially outperform a benchmark. Great candidates for satellite
investments include less efficient asset classes where the potential for active management to
add value is increased, particularly where those asset classes offer returns that are not
closely correlated with the core or with other satellite investments. Since it’s not uncommon for
satellite investments to be more volatile than the core, it’s important to always view them within
the context of the overall portfolio. Critical factors in a core - satellite investment strategy are
the choice of asset classes and the asset allocation between the core and the satellites, which
should reflect your investment goals and risk tolerance.
A customized core - satellite investment strategy can offer a real solution for some investors.
JAMAAL WILKES FINANCIAL ADVISORS, LLC is a Registered Investment Advisor (RIA) with the
State of California and therefore, is not legally empowered to provide investment advisory services
to residents of any state other than California. This website shall in no way directly or indirectly
be construed as a solicitation to sell investment advisory services outside the state of California.
CA License 0B90669.
| Managing Wealth Intelligently |
ADVANCED CORE-SATELLITE INVESTMENT STRATEGY
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