Methods

Core - Satellite Logic

One of the approaches that allow the optimal management of the exposure to markets and risk is defined as the Core - Satellite method, combining a rather stable "core" component to a more dynamic "satellite" element.

The Core component is aimed at achieving the mid-long term goals. It is structured to maximize the likelihood of accomplishing the agreed goals, bearing in mind of the time frame as well as the risk profile.

The Satellite component is aimed at leveraging the opportunities as they present themselves; it is a marginal portion of the portfolio as it stands out for a higher risk profile. It aims at generating added value by turning immediate opportunities into investments.

The two components together allow to form integrated portfolios aimed at accomplishing the agreed goals consistently with the expected yield and the risk profile.

In summation, we look at our portfolio not only in its entirety, but also in its different components as well as the different approaches and risk-yield profiles they follow: one is more diverse and targeted at leveraging the mid-term components of the investment tools, the other is more dependent on shorter-term or instant opportunities the manager should detect from time to time.