Published Jun 6, 2026 4 Min Read

Copy Link

Introduction

A core satellite strategy helps you balance stability and growth in one portfolio. The core portion focuses on long-term wealth creation, while satellite investments seek additional return opportunities through selective exposure to specific themes, sectors, or investment styles.

  • Core investments usually form 60% to 90% of the portfolio.
  • Satellite investments typically make up 10% to 40% of the portfolio.
  • Index funds, large-cap funds, and diversified equity funds are common core holdings.
  • Sectoral, thematic, mid-cap, and small-cap funds are often used as satellite holdings.
  • SEBI requires all mutual funds to display a riskometer ranging from Low to Very High risk.
  • You can start a SIP from Rs. 100 per month and choose from 4,000+ mutual fund schemes on the Bajaj Broking website.

You can begin your mutual fund journey on the Bajaj Broking website by completing KYC, exploring thousands of schemes, and investing through SIP or lumpsum mode.

What is the core portfolio?

The core portfolio is the foundation of your investments. It contains funds that aim to provide steady long-term growth and broad market exposure.

Core investments are usually chosen for their diversification, lower turnover, and long investment horizon. Many investors use index funds, large-cap funds, or diversified equity funds as their core holdings.

Core investment typePurposeTypical risk levelSuitable for
Index fundsTrack market indicesModerateLong-term investors
Large-cap fundsInvest in established companiesModerateConservative equity investors
Flexi-cap fundsDiversified market exposureModerate to HighGrowth-oriented investors

What is the satellite portfolio?

The satellite portfolio complements the core portfolio. It contains investments selected to enhance return potential or capture specific market opportunities.

Satellite holdings may include thematic funds, sectoral funds, mid-cap funds, or small-cap funds. These investments often carry higher risk and should be monitored regularly.

SEBI's riskometer helps investors understand scheme risk levels, ranging from Low to Very High.

Examples of core and satellite portfolio investments

The exact allocation depends on your goals, risk tolerance, and investment horizon.

Portfolio componentExample investmentsAllocation example
Core portfolioIndex funds, large-cap funds, flexi-cap funds70%
Satellite portfolioMid-cap funds, small-cap funds, thematic funds30%

A conservative investor may keep 80% in core investments and 20% in satellite investments. An aggressive investor may choose a 60:40 allocation.

Why do investors use core and satellite portfolios?

The core satellite portfolio strategy offers several benefits.

  • Helps balance stability and growth.
  • Reduces dependence on a single investment style.
  • Provides broad market exposure through core holdings.
  • Allows participation in high-growth opportunities through satellite holdings.
  • Makes portfolio management more structured.
  • Helps investors align investments with long-term financial goals.

The strategy can also reduce concentration risk because investments are spread across multiple fund categories.

Key principles of core-satellite investing

A successful core satellite strategy follows a few important principles.

Keep the core diversified

The core portion should provide exposure to a wide range of companies and sectors. Diversification helps reduce risk.

Limit satellite exposure

Satellite investments should remain a smaller part of the portfolio. This prevents high-risk positions from dominating overall returns.

Review periodically

Review your portfolio at least once or twice a year. Rebalancing helps maintain your desired allocation.

Match investments to goals

Your asset allocation should reflect your financial goals, time horizon, and risk tolerance.

When should you consider a core and satellite portfolio?

You may consider this approach if:

  • You want both stability and growth.
  • You have a long-term investment horizon.
  • You are comfortable taking moderate market risk.
  • You want flexibility to explore specific themes or sectors.
  • You prefer a structured investment framework.

The strategy is suitable for both SIP and lumpsum investments. On the Bajaj Broking website, investors can choose from 4,000+ mutual fund schemes across equity, debt, hybrid, ELSS, thematic, and other categories.

How to build a core satellite mutual fund portfolio in India?

You can create a basic core satellite portfolio in a few simple steps.

  1. Define your financial goal and investment horizon.
  2. Assess your risk tolerance before selecting fund categories.
  3. Allocate 60%–90% of your portfolio to core investments such as index or diversified equity funds.
  4. Allocate 10%–40% to satellite investments such as thematic, sectoral, mid-cap, or small-cap funds.
  5. Complete KYC, which is mandatory under SEBI regulations.
  6. Invest through SIP or lumpsum mode on the Bajaj Broking website.
  7. Review your allocation annually and rebalance when necessary.

Conclusion

A core satellite portfolio combines long-term stability with opportunities for additional growth. The core portion forms the foundation of the portfolio, while satellite investments provide targeted exposure to higher-growth areas.

By maintaining proper allocation, reviewing investments regularly, and following your financial goals, you can use the core satellite strategy to create a balanced investment approach.

Frequently asked questions

What percentage of my portfolio should be core investments?

In most core satellite portfolio strategies, the core portion represents 60% to 90% of the total portfolio. The remaining 10% to 40% is allocated to satellite investments. The exact allocation depends on your risk tolerance, financial goals, and investment horizon. On the Bajaj Broking website, you can choose from 4,000+ mutual fund schemes to build a suitable allocation.

Is the core and satellite portfolio strategy suitable for beginners?

Yes. A core satellite portfolio can be suitable for beginners because it combines diversified core investments with a limited allocation to higher-risk opportunities. Beginners often start with index funds or large-cap funds as the core portion and gradually add satellite investments as they gain experience. SEBI's riskometer can help you understand the risk level of each scheme.

How often should I review my portfolio?

You should generally review your portfolio every six to twelve months. Regular reviews help you maintain your target allocation and rebalance when market movements cause your core and satellite proportions to change. You should also review your portfolio after major life events or changes in financial goals.

What is the core of a portfolio?

The core of a portfolio is the main investment component designed to provide long-term growth and diversification. It typically includes broad-based investments such as index funds, large-cap funds, or diversified equity funds. The core portion usually represents the largest share of a portfolio and serves as its foundation.

Show More Show Less

Related Articles

Article 1

Gold ETF or Exchange Traded Fund

Read More

 Article 2

What are Closed Ended Mutual Funds

Read More

 Article 3

Portfolio Management

Read More

 20-25-rule-for-mutual-funds 4

20/25 Rule in Mutual Fund

Read More

Related Videos

Important things NRIs must know before investing in India
 
 

Important things NRIs must know before investing in India

What is Fund of Funds (FOFs)?
 
 

What is Fund of Funds (FOFs)?

What are the objectives of Mutual Funds?
 
 

What are the objectives of Mutual Funds?

Reinvest your Mutual Funds dividends for growth
 
 

Reinvest your Mutual Funds dividends for growth

Home > Investments > Mutual Funds > Core and Satellite Portfolio

Related Links

Bajaj Finance app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finance App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finance App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finance App today and experience the convenience of managing your finances on one app.

Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

Disclaimer

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form.

(ii) carry customized/personalized suitability assessment.

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.


Disclosure: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.

Download app image