- Hardcover: 400 pages
- Publisher: McGraw-Hill; 1 edition (December 6, 2004)
- Language: English
- ISBN-10: 0071413375
- ISBN-13: 978-0071413374
- Product Dimensions: 6.3 x 1.3 x 9.1 inches
- Shipping Weight: 1.6 pounds
- Average Customer Review: 1 customer review
- Amazon Best Sellers Rank: #4,795,115 in Books (See Top 100 in Books)
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Core-Satellite Portfolio Management: A Modern Approach for Professionally Managed Funds Hardcover – December 6, 2004
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From the Back Cover
The innovative approach that combines indexed and active management, to lower risk while enhancing growth potential
The core-satellite portfolio approach combines the most powerful aspects of active and passive management into a flexible and market-proven investment strategy. Increasingly popular with major institutions and investment professionals worldwide, it enables portfolios to produce market returns while adding the potential to outperform popular market benchmarks through alternative investment vehicles.
Core-Satellite Portfolio Management provides a comprehensive overview of both the theory and practice of the core-satellite approach. Combining insights from award-winning professor and financial executive J. Clay Singleton with contributions from leading practitioners and consultants, it details:
- Performance-enhancing, cost-effective core stock and bond strategies designed to provide efficient total market exposure
- Satellite investments such as small stocks, hard assets, high-yield debt, and more that enhance returns without adding extraordinary risk
- Best-practices for complying with rules and regulations--summarized from legal standards, professional organizations, and special evaluative studies
Core-satellite portfolios allow fiduciaries to enhance overall performance by adding value from active investment management without deviating from major market movements. Core-Satellite Portfolio Management provides authoritative insights and hands-on techniques for utilizing this extraordinarily effective approach.
Core-Satellite Portfolio Management outlines a portfolio strategy that is ideal for fiduciaries looking to combine the best aspects of active and passive management into a single, successful portfolio management program. It provides a rational framework that efficiently organizes all investment possibilities, allowing clear-cut and frank evaluation of the potential returns and risks of a portfolio.
Core-satellite investing allots a percentage of a portfolio's assets to core investments like blue chip stocks (where prices are competitive and active management has little chance to add value), placing the remainder in satellite investment classes like small stocks or high-yield bonds (where active management can measurably impact performance). The resulting core-satellite portfolio keeps pace with broader market averages, while providing the flexibility necessary to reach financial objectives by earning better-than-market returns.
Chapters written by some of the top practitioners in investing today reveal how investment professionals can:
- Anchor a core component with stock index or exchange traded mutual funds, then round it out with bonds diversified across issuers, sectors, and quality
- Use the return and volatility of alternative asset classes like oil and gas to achieve superior performance
- Use holding analysis and return-based style analysis to detect and remedy style drift when returns have been disappointing
- Measure portfolio performance and risk in innovative ways, including value at risk, the Stutzer Index, and others
Fiduciaries have the difficult responsibility of ensuring that the funds entrusted to them meet the risk and return objectives of both the donor and the beneficiary. Core-Satellite Portfolio Management shows how that responsibility can be met, by providing complete coverage of a core-satellite approach that utilizes state-of-the-art asset allocation strategies, reduces costs, controls risk, and increases liquidity--without sacrificing long-term return.
About the Author
J. Clay Singleton, Ph.D., C.F.A., is professor of finance in the Crummer Graduate School of Business at Rollins College. He was previously vice president of asset allocation consulting and training for Ibbotson Associates and senior vice president in charge of the Chartered Financial Analyst® program at the CFA Institute. Prior to his investment career Dr. Singleton was dean at the University of North Texas and taught at the University of Nebraska, the University of Virginia, and the College of William and Mary. He has won numerous awards for his teaching and published articles in academic and professional journals including the Journal of Finance and the Journal of Portfolio Management.
Top customer reviews
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The chapters in the book are:
- A Core-Satellite Appraoch to Portfolio Management
- Quantitative Finance
- Core Equity
- Core Fixed-Income Management
- Satellite Bonds - High Yield and Distressed Debt
- Management of Currency Fluctuations Associated with International Investments
- Treasury Inflation-Protected Securities
- Hard Assets
- Finding Value in Small Stocks
- Risk Measurement of Investments in the Satellite Ring of a Core-Satellite Portfolio
- Indentifying and Adopting Best Practices for Institutional Investors
As you will notice, of the 11 chapters in the book, only 1-2 are dedicated to the actual Core-Satellite portfolio allocation technique. The balance of the chapters are allocated to explaining the different asset classes, general risk-return nuances and some practical issues to be borne in mind.
This is my main grip with this book. There are umteen books explaining each of the asset classes. I did not buy another book for that. Also only a chapter describing as asset class is hardly enough to go out and actually invset in the asset class.
At best, it expands your context, making you aware of the different asset classes to be included in the Core and in the Satellite portions of the portoflio. At worst, it is a waste of time and paper!
I would have much rather preferred the book to have focussed on the following issues:
- What criteria to use to allocate an asset either to the Core or Satellite portion of the portfolio
- How to first construct the Core portfolio
- How to the systematically add Satellites to the Core portfolio and the measure the impact of these additions
- How and when to move an asset from the Satellite asset class to the Core asset class
- How do you do portfolio allocation on the Core and Satellite classes individually as well as a whole.
- etc. etc.
Overall, it not worth the expense and time; and while it did add to my overall investment perspective, it did so with diminshed return.