WHERE IT FITS

A Core/Satellite Approach
Seasoned investors understand the importance of staying focused on the big picture. This is why many use a core and satellite approach to portfolio structure. Thoughtfully constructed, a core/satellite structure can cost-effectively deliver on the promise of a multi-manager asset allocation. Active risk budgeting, cash and security flow coordination, and overall tax management can be tailored to the individual investor.

TMC is more than a low-tax core portfolio. It is an investment building block that allows an investor to simplify and, at the same time, creates the flexibility to do more.

A well-conceived core/satellite structure allows for:

• Reliable Market Exposure: The core allocation may track the desired market with consistency.
• Minimal Gain Realization: Tax management within the core may help lower and delay taxes for the overall portfolio.
• Reduced Trading: Because of the significant allocation of assets to the low-turnover core, the frequent trading required for active management and rebalancing is reduced.

Parametric builds tax-efficient, separate accounts that can be benchmarked to virtually any standard or customized index. Some examples are shown in the table below.