Core and satellite.
Most of the money in a cheap index fund, a smaller slice in the active or thematic funds you believe in. This shows what the slice has to return to beat simply keeping it all in the core.
Usually 70% to 90%, in a Nifty 50 or broad market index fund.
Your active, thematic or small-cap picks. Be honest about it.
The answer
The satellite earns its place.
₹2.0 L more than keeping it all in the core, if the satellite really beats it by 1.0 points a year for 15 years.
All core
₹1.01 Cr
- Return
- 12%
80/20 split
Better₹1.03 Cr
- Core grows to
- ₹80.7 L
- Satellite grows to
- ₹22.2 L
How it adds up
- The core, 80%, grows to₹80,73,216
- plusThe satellite, 20%₹22,22,725
- equalsTogether₹1,02,95,941
- minusAll in the core instead₹1,00,91,520
- equalsThe satellite adds₹2,04,421
What this assumes
A monthly SIP split by the share you set, each part at its own steady return after costs. Real returns vary year to year, and active funds rarely beat their index for long.
Rules and rates from
Education only, not investment, tax or legal advice. I am not a SEBI-registered investment adviser.
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