Obsido’s common sense asset managing process is based on systematically rebalanced, transparent and cost effective core satellite strategy where the core is based on market weighed ETFs (Exchange Traded Funds) and satellites are smart beta ETFs.
Core-satellite strategy
ETF based core/satellite investing is a strategy that divides a portfolio into two components. The “core” comprises market weighed major asset classes combined to achieve a particular risk/reward profile. Smart Beta satellites have the potential to add value when combined with your core, but may be associated with additional risk.
Maintaining core and satellite exposure to indices through ETFs allow you to benefit from outperformance, while minimizing the impact of underperformance.
Systematic rebalancing
The investments must be rebalanced to keep the asset classes aligned with the investor’s long-term asset allocation strategy. Rebalancing reduces risk, invests cash effectively and keeps the investments on track. A disciplined rebalancing program also eliminates subjective and emotional decision making.
An systematic ongoing rebalancing program is rigorously applied at Obsido Ltd’s asset managing process. We review the investments continuously and execute the trades whenever asset classes are off the target allocation by a significant amount.
The rebalancing of the investments is not automatic. Although our computer programs alert the need for a review, each review is individually conducted by our asset management staff that makes the ultimate rebalancing decisions. There are reasons investments may not be rebalanced at the time they are identified. Expected cash flows, taxation and trading cost minimization play important roles in rebalancing decisions.
