Core-Satellite Investing In Singapore: A Practical Guide

By
Syfe Singapore
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Core-satellite investing is a structured way to build a portfolio with discipline (so it can compound over time) and flexibility (so you can express targeted ideas without derailing your plan). In practice, you allocate most of your capital to a diversified, lower-maintenance core, then reserve a smaller portion for satellites—purposeful sleeves such as REITs, factors, or themes—sized so they do not overwhelm long-term outcomes.

For many Singaporean investors, the hardest part is not finding the “best” stock or trend. It is building a portfolio that can withstand market cycles, avoid hidden concentration (for example, over-reliance on one market, sector, or style), and remain investable even when headlines turn volatile. This guide explains how core-satellite investing works, how to size each sleeve, how to select satellites that genuinely add value, and how to maintain the approach using clear, repeatable rules. You will also find practical portfolio templates you can adapt, whether you invest with ETFs or prefer a managed solution.

Table of Content

What Is Core-Satellite Investing?

Core-satellite investing divides your portfolio into two components with distinct roles:

Core: The foundation

The core is the larger allocation that targets broad, diversified exposure—commonly via index funds/ETFs or a diversified managed portfolio. The objective is consistency and resilience.

Satellites: The add-ons

Satellites are smaller, intentional allocations that express a specific view—such as a Singapore REIT sleeve, a sector or theme tilt, factor strategies, or selected regional exposure—while keeping total risk controlled.

The portfolio logic (and the behavioural benefit)

Core-satellite investing works because it balances two real-world needs:

  • You want a portfolio that can compound steadily over time; and
  • you also want room for purposeful tilts, without rebuilding the entire plan.

A common mistake is treating satellites as the “real” portfolio and the core as an afterthought. In practice, the core typically drives most long-term results. Satellites should be sized so that even if they underperform, the broader plan remains intact.

Why This Framework Fits Singapore Investors

Core-satellite investing is especially practical because many Singapore investors manage wealth across several “buckets” (CPF, property, cash, and market investments). Within the market investment bucket, this framework helps you build global diversification while still allowing measured localisation.

1) It reduces home-bias risk without ignoring local needs

Singapore’s equity market is small relative to global markets, and many investors already have Singapore exposure through job income, property, and SGD-based liabilities. A globally diversified core can reduce reliance on one local market outcome, while satellites can be used selectively for local objectives (for example, an SGD income sleeve).

2) It creates a clear boundary for portfolio experiments

A defined satellite allocation makes experimentation safer. If a theme goes out of favour, the portfolio can still function because the core remains dominant.

3) It encourages consistency where it matters most

The more frequently a portfolio is rebuilt, the more likely it drifts into performance-chasing. A stable core is a practical defence against that.

How To Design The Core

In core-satellite investing, the core should be broad, cost-efficient, and deliberately uncomplicated. Over long horizons, outcomes are usually driven by:

  1. The equity/bond mix
  2. Diversification
  3. Fees and turnover
  4. The ability to remain invested.

1) Start with a risk level you can sustain

Before selecting products, determine the core’s risk level (how much volatility you can tolerate without reacting emotionally). Many investors anchor this through an equity/bond split:

  • Conservative core: higher bond allocation, lower equity allocation
  • Balanced core: meaningful equity exposure with bonds as stabilisers
  • Growth core: mostly equities with a smaller bond ballast

Satellites should not be used to compensate for an unsuitable core risk level. If the core is too aggressive for your temperament, satellites do not solve the problem—portfolio behaviour does.

2) Build globally first, then add local exposure intentionally

A frequent mistake is calling a concentrated allocation “core”—for example, relying mainly on STI exposure, a few local bank stocks, or a single-country ETF. A resilient core is usually anchored by diversified building blocks (global equities plus high-quality bonds) rather than a single market or sector.

A practical core often includes:

  • Global equities (broad developed + emerging exposure rather than a single sector/country)
  • High-quality bonds (SGD or global investment-grade, depending on objectives and constraints)
  • Optional diversifiers (only if they have a clear role and you can explain it in one line)

3) Use a core-satellite split that matches your experience level

A widely used split places most of the portfolio in the core and keeps satellites meaningfully smaller. Common example ranges include 60–80% core and 20–40% satellites, adjusted for your risk tolerance and how hands-on you intend to be. In practice:

  • If you are newer or prefer simplicity, 80–90% core can be easier to maintain;
  • If you are experienced and process-driven, 60–80% core can still work, provided satellites remain controlled.

How To Choose Satellites That Add Value

In core-satellite investing, satellites are optional. They should exist for a specific purpose, not to make the portfolio feel more interesting.

A practical satellite budget

Many investors benefit from using a simple guardrail:

  • Core: 60%–90%
  • Satellites (total): 10%–40%

A beginner-friendly starting point is 90/10 or 80/20, then only expanding satellites if you can maintain discipline through drawdowns.

Three filters before adding any satellite

Use these filters to prevent “portfolio clutter”:

  1. Diversification filter: Does the satellite introduce genuinely different exposure, or does it duplicate the core?
  2. Edge filter: Is there a reason to own this beyond recent performance?
  3. Behaviour filter: Can you hold it through a drawdown without abandoning the plan?

If a satellite fails any filter, a smaller allocation—or a watchlist instead of a position—may be more appropriate.

Common satellite types for Singapore investors

  • Singapore REITs / SGD income tilt: A small sleeve of Singapore REITs can help you target regular SGD payouts and keep some income exposure closer to home. Just note that REIT prices can still swing like equities, especially when interest rates rise or markets sell off.
  • Regional tilts: This means putting a bit more weight into specific regions (e.g., Asia ex-Japan, China, or India) because you believe in their long-term growth. These markets can move more sharply and are more exposed to policy and geopolitical changes, so expect higher ups and downs.
  • Factor tilts: “Factors” are styles that have historically been associated with returns, such as value (cheaper stocks), quality (stronger balance sheets/profits), or small-cap (smaller companies). They can add diversification, but they may lag the broader market for years at a time.
  • Thematic ETFs: These focus on a specific trend like AI/technology, clean energy, or healthcare innovation. They can perform very well when the theme is in favour, but returns tend to be less predictable and more dependent on sentiment—so they are usually best kept as smaller satellites.
  • Single stocks: Individual companies can deliver strong returns, but outcomes vary widely. Keep single-stock positions modest unless you are prepared to do ongoing research, monitor developments, and stay calm during volatility.

Where Syfe Managed Portfolios Fit

Core-satellite investing does not require a fully DIY setup. Syfe managed portfolios can be used as the core, the satellites, or both—depending on how hands-on you prefer to be.

Core role (the foundation) 

  • If your priority is a diversified lower-maintenance base, a Syfe Core portfolio can serve as the “core” in a core-satellite investing plan. These portfolios are globally diversified across equities, bonds and gold via ETFs, with four risk profiles (Core Defensive, Core Balanced, Core Growth, Core Equity100) to match your time horizon and risk appetite.

Satellite role (targeted sleeves) 

  • If you want targeted exposure without building it from scratch, you may allocate a smaller portion to a focused sleeve—such as the Income+ portfolio built with PIMCO’s fixed income expertise (cashflow objective), the REIT+ portfolio (SGD real estate income exposure), or choose from one of the Curated themes (e.g. innovation, ESG, other global sectors) built from global ETFs.
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Sample Core-Satellite Portfolios For Singapore Investors

These are illustrative templates, not personalised advice. Use them as starting points for core-satellite investing based on your objective, time horizon, and risk tolerance.

Template A: Simple global core + local income satellite

Who it suits: Investors who want a clean structure with an SGD income sleeve.

  • Core (80–90%): diversified global allocation aligned to risk level
  • Satellite (10–20%): Singapore REIT allocation or diversified income sleeve

Why it works: The core anchors global diversification; the satellite provides measured localisation for income objectives.

Template B: Growth core + one thematic satellite

Who it suits: Investors with 10+ years and high tolerance for volatility.

  • Core (70–85%): mostly global equities (with optional bond ballast)
  • Satellite (15–30%): one diversified thematic or sector tilt

Discipline rule: only adjust the satellite using pre-set allocation rules (rebalancing), not headlines.

Template C: Income-focused core-satellite (pre-retirees / retirees)

Who it suits: Investors prioritising spendable cashflow while managing drawdown risk.

  • Core (70–85%): more conservative diversified allocation
  • Satellites (15–30%): income sleeves sized cautiously

Reality check: income does not eliminate drawdowns. A robust plan typically also includes liquidity planning and withdrawal discipline.

Template D: Two-satellite barbell

Who it suits: Investors who enjoy targeted sleeves but want tight controls.

  • Core (80%): broad diversified allocation
  • Satellites (20%) split into two sleeves
    • Satellite 1 (diversifier): a stabilising or diversifying sleeve
    • Satellite 2 (conviction): one targeted region/theme

Why it works: it reduces portfolio clutter and keeps core-satellite investing maintainable.

Maintenance Rules: Rebalancing, Risk, And Diworsification

Core-satellite investing works when maintenance is systematic. Without clear rules, portfolios drift and satellites can unintentionally dominate.

Rule 1: Choose calendar rebalancing or band rebalancing

  • Calendar: rebalance every 6 or 12 months
  • Bands: rebalance only when allocations drift beyond a set range (for example, ±5%)

Calendar rebalancing is often simpler. Band rebalancing can provide tighter risk control.

Rule 2: Use cashflows for rebalancing where possible

Rather than selling immediately, rebalance through:

  • directing new contributions to the underweight sleeve, or
  • using distributions to top up underweights.

This reduces friction and helps maintain discipline.

Rule 3: Define clear rules for removing satellites

Satellites are allowed to underperform. The key is avoiding indefinite “hope holding.” Consider exiting when:

  • the satellite no longer diversifies (high overlap),
  • the thesis has changed materially, or
  • the holding is driving reactive behaviour.

A practical discipline: write a one-line thesis and a one-line exit condition when you add the satellite. If you cannot state both clearly, it is usually not a strategic satellite.

Rule 4: Check overlap annually

Overlapping satellites are a common source of unintended concentration. If two satellites represent the same exposure, consolidate.

Rule 5: Avoid diworsification

“Diworsification” is diversification in name only—too many holdings that add complexity without improving outcomes. In core-satellite investing, satellites should earn their place by adding a distinct role.

Quick Takeaways

  • Core-satellite investing works best when the core remains dominant and satellites are deliberately limited.
  • A practical starting point is 90/10 or 80/20; more complex splits are only helpful if you can maintain them.
  • The core should be broad, diversified, and cost-conscious; satellites should have a clear purpose.
  • Use three filters for satellites: diversification, edge, behaviour.
  • Rebalance with a simple rule (calendar or bands) and use cashflows to reduce friction.

Conclusion

Core-satellite investing provides a practical framework for investors who want both discipline and flexibility. By keeping most of the portfolio in a diversified core, you anchor your long-term outcome to broad market returns and risk control rather than to a small set of highly concentrated ideas. Satellites can still play an important role—particularly for investors who want measured tilts toward income, local exposure, factors, or themes—but they should remain clearly sized and intentionally justified.

The advantage of this approach is not merely theoretical. A clear structure reduces ad-hoc decision-making, curbs performance chasing, and makes it easier to maintain consistent investing habits through volatile periods. If you are updating your investment plan, begin by defining your target core/satellite split, selecting a core risk level you can sustain, and limiting satellites to those that genuinely diversify or serve a specific goal.

Frequently Asked Questions (FAQs)

1) What is a good core-satellite investing split for beginners?

A common starting point is 90% core and 10% satellites. It keeps the portfolio stable while still giving you room for a small satellite sleeve.

2) Can I build a core-satellite investing portfolio using only ETFs?

Yes. Many investors use broad global equity and bond ETFs as the core, then add a small satellite allocation (for example, a REIT or thematic ETF sleeve), sized conservatively.

3) Do I need satellites for core-satellite investing to work?

Not necessarily. A well-diversified core can be sufficient on its own—especially if your main goal is long-term growth with minimal maintenance. Satellites are optional “add-ons” that can help you express a specific objective (such as an income tilt or a small thematic view), but they should remain small and clearly defined so they do not increase complexity or risk beyond what you can manage.

4) How often should I rebalance a core-satellite investing portfolio?

Many investors rebalance once or twice per year, or when allocations drift beyond a set band (for example, ±5%). Using contributions and distributions to rebalance can reduce selling.

5) What is the biggest mistake in core-satellite investing?

The most common mistake is allowing satellites to become the portfolio—too many themes, too much overlap, and too much tinkering. The core should remain the primary driver of long-term outcomes.

Resources & Further Reading

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