Passively managed funds and portfolio allocation

The crux of your investment portfolio is allocation to various investment assets like equity, bonds, gold, etc.

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Within these are sub assets e.g. large cap/small cap stocks, long maturity/ short maturity bonds, etc.There is another approach to portfolio allocation. There would be a core part of portfolio, and a satellite component. The core componentis not to be disturbed unless there is a drastic change in the market or in the fund. The satellite component is for taking tactical calls based on prevailing market situation. It is meant for taking advantage of extant market situations, and therefore the investment tenure can be short term. The more defensive the portfolio, the higher should be the core component as satellite is for taking higher risks.Passive funds