Core-Satellite Strategy
As Core & Satellite (including core-satellite approach , English : core - core) is referred to in the portfolio management division of a portfolio to a broad diversified core investment ( "Core") to provide a basic return with sufficient certainty, and more Individual investments ("satellite") with higher risk and potential return, which are attached to increase returns.
The satellite investments only represent a small proportion of the overall portfolio. They are mostly actively managed sub-portfolios that cover selected areas, they should deliver above-average returns and have a diversifying effect due to the low correlation with the core investment.
Satellite investments such as geographic regions, asset classes or management styles / strategies are suitable for enriching or diversifying the core portfolio .
The core-satellite strategy is used in asset management practice.
The core-satellite approach as an extension of portfolio theory
Structuring capital investment portfolios in line with returns and risks is a core task in asset management, and the modern portfolio theory (MPT) according to Harry Markowitz is often used to cope with this. However, their use often results in portfolios that are too one-sided. With the core-satellite approach as a further development of the MPT, it is possible to integrate strategic investments, regulatory restrictions or even the individual needs of private investors into the optimization of the investment strategy.
Individual evidence
literature
- Tobias Hintelmann, The Core-Satellite Approach. Idea, empiricism, theory and evaluation. Diplomica Verlag, Hamburg 2008, ISBN 978-3-8366-6624-4 (also: Bremen, Univ., Diploma thesis, 2008).
Web links
- Risk Measurement of Investments in the Satellite Ring of a Core-Satellite (PDF, English; 429 kB)