The core/satellite strategy involves defining the majority of your investment assets as core capital. This helps map your basic strategy, and ensures you pursue this strategy consistently with around 80% of your investment capital. The core investment approach will help reduce your risk as a broadly diversified asset allocation fund will usually act as your core investment. This is a mixed fund that comes with either a higher or lower equity component depending on your risk/return requirements.
The remaining 20% of your investment capital forms “satellites”. You can use these satellites to invest in areas that interest you, and you can set your very own priorities. For instance, if you feel modern technologies such as artificial intelligence or smart cities have a great deal of potential, you can invest the satellites in your portfolio specifically in a suitable thematic fund. You also have the option of investing some of your capital in sustainable projects or specific regions of the world. PostFinance offers a variety of funds, including nine of its own and around forty third-party funds.
Shares and bonds from newer, less established sectors tend to entail a greater level of risk. That said, you can also use your satellite investments to limit your risk as well, which could involve optimizing your diversification with an investment in real estate.
All in all, the core/satellite approach can help you reduce your overall risk if you continue investing the majority of your assets, i.e. your core capital, in the wider market, whilst you use your satellites to invest in areas that interest you personally. This means you can factor your own thoughts into your investments without entering into any cluster risks that could jeopardize your total assets.