Managing significant wealth presents a distinct set of challenges for high-net-worth Australians. As your portfolio grows, so does the complexity of maintaining steady growth, protecting your capital, and navigating Australia’s tax system without taking on unnecessary risk.
The core-satellite portfolio approach offers a practical solution. This investment strategy allows you to build a strong, reliable foundation while also creating room for targeted growth. It provides the structure to diversify effectively, stay agile, and make informed decisions within Australia’s financial and regulatory landscape.
In this article, Ausfirst Lending Group explains how high-net-worth Australians use the core-satellite strategy to grow and protect their wealth with greater control and flexibility.
Why Asset Allocation Matters for Long-Term Wealth Management
As your wealth grows, the focus often shifts from chasing returns to striking the right balance between growth and protection. At this stage, strategic asset allocation becomes essential for managing your investments with clarity and discipline.
Your goals may now go beyond personal wealth. You might be planning for future generations, supporting charitable causes, or structuring your portfolio to be both sustainable and tax-efficient. Without a clear strategy, an overly aggressive or scattered approach can introduce unnecessary risk and lead to inconsistent outcomes.
This is where structure makes a difference. The core satellite model offers a clear framework that supports long-term wealth preservation, while still providing the flexibility to pursue new opportunities as your priorities and the market evolve.
How the Core Satellite Portfolio Approach Works
The core satellite approach separates your portfolio into two distinct but complementary parts. Each plays an important role in supporting your overall investment strategy.
- Core – The stable foundation, made up of diversified, lower-risk investments that aim to deliver steady long-term returns. It anchors your wealth through market ups and downs.
- Satellites – The flexible, growth-focused portion. These higher-risk investments are designed to capture opportunities in emerging sectors or outperform the broader market.
This structure provides a powerful combination of stability and flexibility. It allows you to maintain confidence in your long-term base while allocating selectively to new opportunities that may offer greater upside. Whether you’re interested in digital innovation, sustainability themes, or undervalued sectors, the satellite portion lets you explore them with control and precision.
Why More High-Net-Worth Investors Choose This Strategy
More high-net-worth investors in Australia are recognising that a rigid, one-size-fits-all portfolio no longer meets their evolving needs. The core satellite investing strategy offers a more tailored and responsive solution. Here’s why it is gaining momentum among wealthy Australians:
- Stability through diversification
- Freedom to explore high-potential themes
- Personalisation based on your risk appetite
- Efficient risk management
- Tax structuring potential
- Adapts to changing priorities
- Helps avoid emotional investing
Building Stability: What Belongs in the Core of Your Portfolio
Your core portfolio is more than a collection of safe assets. It represents the solid foundation that stays resilient through market fluctuations while steadily building long-term wealth. For high-net-worth Australians, this part of the portfolio is essential for preserving capital, generating reliable income, and maintaining confidence in the broader investment strategy.
Here are the key asset types that often form the core of a well-structured portfolio:
- ASX 200 or diversified index funds – Low-cost, broad-market exposure with proven performance over time.
- High-quality fixed income assets – Including government bonds or investment-grade corporate bonds for regular income.
- Blue-chip Australian shares – Think companies with consistent dividends and strong balance sheets.
- International ETFs – For diversification across developed and emerging economies.
- Core property holdings – Such as inner-city commercial or premium residential real estate with strong rental history.
Your core is where discipline matters most. It’s the layer that cushions volatility, anchors your wealth plan, and provides the confidence to take more calculated risks in other parts of your portfolio.
Using Satellites to Pursue Growth Without Sacrificing Stability
While your core delivers stability, the satellite portion of your portfolio introduces targeted opportunities for growth. These assets allow you to explore new sectors, take advantage of emerging trends, or express investment convictions. Satellites are typically smaller in size but can have a significant impact on performance when selected and managed thoughtfully.
Here are some popular satellite options used by experienced investors:
- Thematic ETFs – Focused on trends like green energy, AI, or robotics.
- High-growth Australian mid-cap stocks – Companies with potential but less coverage than blue-chips stocks.
- Private equity or venture capital – Direct or fund-based exposure to early-stage companies.
- Cryptocurrency – Allocated carefully and often with a long-term horizon.
- Alternative assets – Including agribusiness, infrastructure projects, or art/collectables.
- Actively managed funds – Run by skilled managers with a track record of outperforming.
- Emerging markets exposure – Accessing fast-growing regions with higher risk but also high return potential.
The satellite portion of your portfolio works best when it is dynamic, well-researched, and regularly reviewed. It is designed to enhance overall performance without undermining the security and consistency of your core.
Managing Risk and Rebalancing a Core Satellite Portfolio
Building a portfolio is just the start. Ongoing management keeps it aligned with your goals and the market. Here are key practices that experienced investors use to manage risk and maintain alignment:
1. Set clear limits for your satellite allocation
Satellite investments are intended to enhance your returns, not dominate your portfolio. Keeping them within 20 to 30 per cent of your overall asset mix helps contain risk while still allowing room to capture higher-growth opportunities. This cap protects your core from volatility while giving you flexibility to explore ideas that align with your convictions.
2. Rebalance on a consistent schedule
Over time, market movements can cause your portfolio to drift away from its original allocation. Rebalancing on a regular schedule, such as every quarter, every six months, or following major changes in the market, helps restore your intended structure. This process reduces the risk of overexposure to any single asset or sector and encourages consistent, disciplined investing.
3. Establish exit strategies in advance
Having clear criteria for when to reduce or exit a satellite investment can prevent emotionally driven decisions. Whether it’s reaching a specific return, a change in fundamentals, or a shift in personal goals, knowing your exit plan ahead of time ensures you’re acting strategically, not reactively.
4. Optimise tax outcomes through strategic timing
Effective tax planning is a critical part of portfolio management. By carefully timing when you realise capital gains or crystallise losses, you can reduce your tax liability and enhance after-tax returns. This is particularly important when investing through structures like discretionary trusts or self-managed super funds.
5. Use performance benchmarks to stay objective
Setting clear benchmarks or target returns for both your core and satellite investments can help you track progress without relying on gut feeling or market hype. These benchmarks provide a reference point for reviewing performance and deciding when adjustments are necessary.
6. Maintain diversification within your satellite positions
Just like your core, your satellite portion should avoid placing too much emphasis on any single theme or sector. Spreading your investments across a range of strong ideas or asset types, such as emerging markets, venture capital, or thematic exchange-traded funds, can help reduce risk and create more consistent returns.
7. Work closely with a trusted financial adviser
Regular reviews with a qualified adviser can add significant value. An experienced professional can provide insights into performance trends, identify new opportunities, and keep your strategy aligned with your changing goals and circumstances.
Ready to bring structure and freedom to your investment strategy? Speak with a finance broker who understands your goals.
The Role of Tax and Regulation in Australian Core Satellite Portfolios
For high-net-worth Australians, tax planning is a key part of a strong investment strategy. Dividend-paying Australian shares in the core can enhance after-tax returns through franking credits, while choosing lower turnover assets and carefully timing satellite trades helps reduce capital gains tax.
Negative gearing remains a valuable option for managing taxable income, particularly with property and shares. Trusts allow income to be distributed strategically within the family, and staying within superannuation contribution limits protects access to concessional tax rates.
Satellite investments, especially in private or alternative markets, must meet regulatory requirements set by ASIC and the ATO. In this approach, tax efficiency is not just a benefit. It is a core driver of long-term portfolio success.
Real Portfolio Examples: Applying the Core Satellite Strategy
One of the strengths of the core-satellite strategy is how easily it adapts to different stages of life and levels of risk tolerance. Whether your focus is income, balanced growth, or long-term capital appreciation, the framework can be shaped to fit your personal goals.
Below are three example portfolios that illustrate how high-net-worth investors might apply this approach in practice:
✅ Conservative Investor (Age 65+, focused on income)
- 80% Core – A stable foundation made up of high-quality bonds, dividend-focused ETFs, and income-producing property to ensure reliable cash flow.
- 20% Satellites – Targeted exposure to Australian dividend shares, hybrid securities, and carefully selected listed investment companies to enhance yield without taking on excessive risk.
✅ Balanced Investor (Age 50, still growing wealth but conscious of volatility)
- 65% Core – Diversified index ETFs and professionally managed accounts provide broad exposure with disciplined risk management.
- 35% Satellites – Growth-focused assets such as thematic ETFs, private equity funds, and commercial real estate add performance potential while maintaining an overall balanced structure.
✅ Growth-Focused Investor (Age 35–45, long runway to retirement)
- 50% Core – A core built around ASX 200 ETFs, global equity funds, and REITs offers diversification across sectors and geographies.
- 50% Satellites – A more aggressive tilt, with investments in small-cap ASX stocks, high-growth US tech companies, ESG funds, and early-stage ventures aiming for long-term capital growth.
These examples are starting points, not templates. Your portfolio should reflect your personal objectives, income needs, liquidity preferences, and family wealth strategy.
How to Build Your Own Core-Satellite Strategy
Ready to put the core satellite model into action? These steps will help you structure a portfolio that reflects your goals and adapts as your needs change:
1. Clarify your objectives
Know what you’re aiming for, whether it is income, growth, tax efficiency, or preserving wealth for future generations.
2. Determine your core and satellite split
Many start with 70% core and 30% satellite, but adjust based on your goals and risk tolerance.
3. Choose high-quality core assets
Focus on stable investments like diversified funds, bonds, or blue-chip Australian shares.
4. Add targeted satellite investments
Use this portion for higher-growth opportunities like emerging markets or early-stage ventures.
5. Define success and review regularly
Set clear goals and maintain a consistent rebalancing schedule to stay aligned.
6. Work with a trusted adviser
A professional can help with structure, risk management, and finding suitable investment opportunities.
Take the Next Step: Put the Core Satellite Approach into Action
The core satellite portfolio approach provides a smart way for high-net-worth Australians to blend long-term stability with focused growth. By combining a strong foundation with flexible, high-conviction investments, this strategy supports wealth preservation while allowing you to take advantage of new opportunities as they emerge.
If you’re looking to refine your investment structure, improve tax outcomes, or align your portfolio with evolving goals, now is the time to take a more strategic approach. With the right guidance, you can create a portfolio that balances discipline with adaptability, built around your unique circumstances and long-term vision.
Start with a clear strategy that gives you confidence today and flexibility for tomorrow. Contact Ausfirst Lending Group to build a portfolio that grows with your goals.
Frequently Asked Questions (FAQs)
Yes, this strategy works well within both family trusts and self-managed super funds. These structures allow you to separate core assets, like Australian shares or bonds, from growth-focused satellite investments such as global equities or alternatives. Each part can be tailored to suit different goals, timeframes, and tax outcomes.
Yes, property can be used in both parts of your portfolio. Core property might include stable residential or commercial assets with long-term rental income. In the satellite, property could include development projects, short-term leases, or specialised assets with higher return potential.
The core usually includes more liquid assets such as listed shares, bonds, or managed funds, which are easier to access if needed. The satellite may hold less liquid investments like private equity or direct property. With the right balance, you can meet cash flow needs while keeping long-term goals intact.
Common mistakes include placing too much into high-risk investments, overlooking diversification, or failing to review the portfolio regularly. Not defining the purpose of each asset or chasing trends without a clear plan can also affect performance. Staying focused on your long-term goals helps avoid these issues.
Start by identifying global trends you believe in, such as renewable energy or artificial intelligence. Look for investment options that offer targeted exposure, like thematic funds or specialist portfolios. Regular reviews help ensure your satellite investments stay aligned with changing global opportunities.
