Each Global Explorer core is the foundation of the portfolio and provides broad diversification among global securities markets. Each core consists of low-cost exchange-traded funds (ETFs) that track domestic and international stock and bond markets.
We may add satellites to a portfolio to complement the core. Satellites may consist of actively managed mutual funds or passively managed index funds or ETFs. Satellites give us the possibility to add value for clients through active managers.
The goal of adding a satellite is to benefit from an asset class, skilled manager, or specialized strategy that may improve returns, create a new source of diversification, or offer additional downside protection within the portfolio.
We have defined a baseline target asset allocation for each of our portfolios that defines the proportion of equity and fixed income as well as the proportion of US and international assets. We may adjust any of these targets by plus or minus 5%.