- Endowus has launched a new suite of Satellite Portfolios starting with the six most requested by our clients in a survey. These are Technology, Global Real Estate, Megatrends, China Equities, China Fixed Income, Low Volatility Fixed Income (which replaces the previous Ultra Defensive Portfolio).
- Most investors should begin their journey with the Endowus Core Portfolios — Flagship and ESG — and it is where the bulk of an investment portfolio should be allocated to. It is the anchor to the long term growth of wealth through a passive, diversified and low cost way. For many they may not even need a Satellite allocation.
- The new Satellite Portfolios are advised portfolios curated to give clients an institutional-grade, professional and diversified portfolio for each satellite category to meet the needs of our clients for further diversification or to reflect their conviction in certain sectors, countries or themes.
- Each portfolio went through a rigorous selection process by the Endowus Investment Office that reviewed hundreds of funds to select only the best-in-class to construct these highly optimised portfolios. We introduce several funds previously unavailable in Singapore to create truly differentiated and highly sophisticated portfolios through either an institutional share class or using 100% trailer fee rebates to achieve an efficient and low-cost portfolio.
Technology has enabled and democratised access to financial solutions in recent years, and investors have a plethora of options to personalise their investment portfolios. While some prefer to be more hands-on with their investments and individually select the underlying funds or securities for their portfolios, many of our clients have requested for a curated advised portfolio of funds that can be conveniently selected off-the-rack with one click — trusting the Endowus Investment Office to help them invest better so they can live easier today and better tomorrow. These clients can enjoy the benefits of professional portfolios that have screened the many thousands of funds out there to pre-select the best-in-class funds, build optimised portfolios for them, at the lowest cost.
What are the Endowus Satellite Portfolios?
Endowus has launched a new suite of Satellite Portfolios starting with the six most requested by our clients in a survey. These are Technology, Global Real Estate, Megatrends, China Equities, China Fixed Income and Low Volatility Fixed Income (which replaces the previous Ultra Defensive Portfolio). These Satellite Portfolios are carefully curated, constructed and actively monitored by the Endowus Investment Office to make the portfolio customisation process easier for our clients. We focus on optimising the risk-adjusted returns, diversifying across investment styles and managers, and lowering costs at the individual fund and portfolio level.
More satellite portfolios will be made available in the coming months to broaden the investment options and access to Endowus advised and optimised portfolio choices. While most investors should and do start with the Core portfolios as the anchor to its investment portfolio with meaningful allocation to it, some clients with a high conviction in certain markets or sectors can simply invest into an Endowus Satellite Portfolio to complement their Core Portfolios, without having to select from the thousands of individual funds available in the market.
These portfolios are currently available for cash investment only, and follow the same fee structure as our other advised portfolios. You will also be able to easily set up a one-time or recurring investment for these satellite portfolios to invest based on your personal goals.
Learn more about: The Endowus Core-Satellite Investment Approach
What is Satellite investing?
Satellite strategies have several characteristics that separate themselves from Core portfolios. Firstly, they tend to be more concentrated in nature and narrower in exposure such as in certain sectors or countries or themes, as compared to the passive broad market exposure of Core portfolios.
Secondly, while they may follow an index and can be passive, most Satellite portfolios and funds tend to be active versus being passive in the way they invest and seek to generate alpha (above market returns).
Thirdly, the investments tend to be tactical or opportunistic investment strategies as opposed to the strategic nature of Core investments.
Finally, the investments tend to be shorter term in nature and may not be held for a long time as would a Core investment. So Satellite portfolios are used to supplement the Core portfolios to provide further diversification opportunities to generate alpha, or to express a specific investment view or strategy for the investor. This can be done through a single fund or a portfolio of funds.
The right way to use Endowus Satellite Portfolios
As mentioned above, we must always start from the point of view that everybody is different, with different risk appetites and different goals for their investments. Many investors may not even require Satellite portfolios as we believe the Core Flagship and ESG portfolios provide sufficient diversification and long term growth of wealth. Regular savings plans and dollar cost averaging reduces risk and provides compounding upside for most investors.
For those that want to use Satellite portfolios, it should supplement their existing exposure to Core portfolios, or if you are a beginner investor, you should always commit to a Core-Satellite allocation that is right for you. You may not want any Satellite allocation and so will keep the portfolio 100% in Flagship and/or ESG portfolios - the Core advised portfolios. For those who do want some allocation to Satellite, the right number could be just a 10% allocation to test the waters or to diversify a little, and for some others with a higher risk appetite, it could be as high as 50%. We know that Core should always remain the biggest weight in your portfolios to build long term passive growth in wealth, but again we re-emphasise that each individual has different circumstances, risk appetite, goals and time horizons so there is no definitive or prescriptive way to allocate to the Satellite portfolios.
Needless to say, it is important to look at one’s overall portfolio holistically to make sure that you are comfortable about how the new Satellite portfolio allocation changes the asset allocation of the overall portfolio. The two illustrations below suggest how adding Satellite portfolios to existing Core portfolios can affect and change the overall asset allocation and risk profile of the overall investment portfolio. It is easy to lose sight of the overall total picture or how these various goals and portfolios are working together towards your common investment goals. However, the Endowus platform was created to provide you with the bird’s eye view of the overall portfolio and also allow you to view it at the goal or funding source level as well.
Why we created the Endowus Satellite Portfolios
As Singapore’s leading digital wealth advisory platform, we endeavour to provide our clients the most complete investment experience possible. Beyond being the only digital advisor for CPF investments, and the first to launch an ESG portfolio, our team has worked continuously to include new offerings based on clients’ needs.
We received client feedback that some prefer to rely on our expertise to construct portfolios based on specific investment themes, rather than choosing funds themselves through the Endowus Fund Smart platform. We have thus created a simpler approach for clients to have a more personalised investment experience with Endowus, while removing the need for the client to construct their own portfolios without help.
Our investment approach to satellite investing
Active in investment approach
The Endowus Investment Office utilises best-in-class actively managed funds in the construction of each of the six Satellite Portfolios. We have selected the top funds from among hundreds of different funds in the investable universe and worked with the fund managers to make them available to our clients at discounted fees. These funds are SGD-denominated or hedged, and are UCITs funds for tax efficiency.
Optimised, risk-adjusted returns
The Endowus Investment Office assesses the risk-return profile of each individual underlying fund and constructs portfolios with optimised asset allocation to enhance the overall risk-return metrics. Within each of the satellite portfolios, we use different funds with different investment strategies and investment mandates. The funds are also selected based on their lower correlation with each other to further optimise investment outcomes.
The funds selected are diversified across geography, investment styles and sectors, and also across fund managers, to minimise concentration risks within the portfolio. Given that these funds have similar investment themes, it is even more important to diversify, be it across geographies for a specific investment sector (such as Technology Portfolio) or across sectors for a specific geography (like China Equities Portfolio).
More resources on how to use the Endowus platform for Core-Satellite investing
Please read more about our Endowus Core-Satellite Investment Approach – an article from the Endowus Investment Office about the background of Core-Satellite investing, what is a core portfolio and what does it mean to have a satellite allocation. We also give actual examples of how to use the Endowus satellite portfolios together with the existing Endowus Core portfolios on the platform.
If you would like more details of the individual satellite portfolios, we have published an in-depth analysis and deep-dive on each portfolio below, which you can access by clicking on the links to the deep dive Insights articles of your choice:
You can begin your Core-Satellite investment portfolio construction by clicking on the below button to get going. The Endowus mobile app will be updated with the latest Satellite portfolios made available from today.
Any opinion or estimate above is made on a general basis and none of Endowus, nor any of its affiliates, representatives or agents have given any consideration to nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Opinions expressed herein are subject to change without notice.
Investment involves risk. Past performance is not necessarily a guide to future performance or returns. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.
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