RT Journal Article
SR Electronic
T1 ETFs in Core-Satellite Portfolio Management
JF ETFs and Indexing
FD Institutional Investor Journals
SP 75
OP 88
VO 2007
IS 1
A1 Noël Amenc
A1 Felix Goltz
YR 2007
UL http://guides.pm-research.com/content/2007/1/75.abstract
AB This article outlines the possible uses of ETFs in core satellite portfolio management. First, the concept of core satellite portfolio management is introduced along with its benefits. Second, concrete examples of using ETFs in a core satellite framework are presented. The illustrations show that (i) the efficient use of ETFs for sub-segments of the bond or equity markets allows investors to create portfolios that beat broad market indices in terms of their risk/return properties, and (ii) a dynamic allocation strategy between the core and the satellite portfolio allows investors to gain access to the outperformance of the satellite, while controlling the risk of underperformance.