Core and Satellite Approach for Child Education – How to go about?.

POSTED BY sunil ON September 3, 2013 4:32 pm COMMENTS (7)

Dear All,

I have tried finding the information on Core and Satellite approach and, its advantages and disadvantages from our forum, but was not successful.

I have few points to discuss/rather suggestions.

1. How a core and Satellite should be made.

   Should it comprise of 2-3 Large and 1 Midcap Fund (In Core) and have More aggressive Mid Cap/Oppurtunities Fund in Satellite?


Should it comprise of 2-3 Large and 1 Midcap Fund (In Core) and have Sector Funds (Banking, FMCG and Pharma) Funds in Satellite?

2. What should be ideal review period for Core and Satellite seperatly, since these 2 should be maintained seperately (If not please let me know why?).

3. Can this process work better to just have 1-2 Large Cap and 1-2 Mid and Small Cap Funds?  –  Any information/links suggesting such data, i would be thankful.

Searched Extensively but could not find the information, hence this request.


FYI – MY PPF, Life Cover, Emergency Fund and Medical Insurance are in place.

I am looking for a returns of about 11-12% CAGR over a period of 16-17 Years.


Any articles related to this can be helpful.

Thanks in Anticipation,


7 replies on this article “Core and Satellite Approach for Child Education – How to go about?.”

  1. sunil says:

    Thanks Ashal for your response.
    Regarding Fidelity, my mistake i wanted to type Franklin …. don’t know what i was thinking while typing.

    Thanks once again.

    Sunil. 🙂

  2. Dear Sunil, 11-12% is OK but there is no guarantee that you ‘ll be able to get that return. Fidelity AMC is no more as it’s business is taken over by L&T.



  3. sunil says:

    Also, is my returns of 11-12% manageable? or should i cut short my view??? – If not manageable, i shall increase the amount to invest hence the question.

  4. sunil says:

    Hello Ashal,
    I am sorry if i have conveyed my message on IDEAL in a wrong way, i never intended for the hard and fast rules, instead i require some information on what time period should one consider to review a portfolio, if he selects a cyclical sector, or an oppurtunities fund, or a Banking fund?, this was my intention in askig IDEAL.

    Anyways, it seems simple to have a large cap+a solid Mid Cap (IDFC premier) in a core and any mid+Small in satellite (I will think and pick from Fidelity smaller companies…. or an oppurtunity funds – One Fund only).

    I feel IDFC can be a part of Core portfolio – My choice though.

    Thanks Ashal again for your quick response.

    I am open to suggestions.


  5. Dear Sunil, I personally do not take any knee jerk changing action in my portfolio. Interestingly the word I feared most from all of you is IDEAL. All of you people are interested in IDEAL things & at the same time, all of you are aware that nothing is IDEAL in this world. 🙂



  6. sunil says:

    Thanks a lot Ashal.
    What should be the ideal review period for any Mid Cap fund?, i generally do a yearly review of my allocation.
    So, how should i balance with my satellite portfolio if i have only 1 fund. Is it simply meaning what ever the amount decrease or increase in the value keep it???

  7. Dear Sunil, your PF, PPF & 1 large cap forms the core of your portfolio. Use 1 Midcap fund as your satellite fund. that’s it. Increasing number of funds ‘ll not help you to get the returns you are looking for.



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