The Core-Satellite portfolio strategy
A two-layer portfolio construction where a low-cost passive core anchors the long-term return and active satellites pursue selected bets.
A 75-second animated walk through the Core-Satellite portfolio construction strategy. Built for ECON3006 and the EFEP cohort at UEH, where students meet portfolio construction for the first time and need a clean mental model before diving into the maths.
The Core layer holds broad, low-cost passive exposure — typically a global equity index fund and a domestic bond fund — which delivers the bulk of long-term return at minimal fee drag. The Satellite layer holds concentrated active bets — sector tilts, factor exposures, single-stock convictions, alternative assets — pursued with discipline and a defined risk budget.
The lesson closes with the practical question every investor has to answer: what fraction of the portfolio is core, what fraction is satellite, and how often do you rebalance between them.