Core/Satellite Investing

Many investors now see indexed and active investments working together. Their strategy is to build a low-risk, cost-effective core investment using broad-based index funds, while pursuing higher returns with more aggressive satellite investments in active funds, exotic index funds and individual stock positions.

The advantage of this approach is that you can tailor portfolios to meet very specific risk return requirements. Before iShares, the barriers to this had been cost. Once an investor starts to use more than one or two investment funds, fees can eat into profits.

iShares can minimise this problem. They are cost-effective (with Management Costs* starting as low as 0.09% per annum) so you can take positions in a range of funds without worrying about excessive management fees associated with more expensive investments.