Why is Constructing a Portfolio Important?

Having a portfolio reduces the likelihood that a single asset’s underperformance will drag down your overall portfolio performance, as it may be less correlated with other assets in the portfolio.

A strong and resilient portfolio reflects your investment objectives and risk appetite.

Enables you to take a long-term view in investing. At the same time, you can rebalance your portfolio (i.e. buy or sell some securities in your portfolio) to capture short-term opportunities that arise from market volatility.

DBS's Chief Investment Officer, Hou Wey Fook, believes that the Core-Satellite Approach is the best approach for portfolio building.


What is the Core-Satellite Approach?

At DBS, our Chief Investment Office (CIO) adopts a core-satellite investment approach.

The “core” makes up the heart of the portfolio, and is:

  • Multi-asset to decrease overall volatility
  • Global to get best-in-class assets
  • Long-term because timing the market is difficult

The “satellite” portion complements the “core”, and is:

  • Inclusive of technical and tactical factors
  • Short-to-medium-term
  • Opportunistic so that you can take advantage of trending themes and sectors to sweeten returns

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