"Core and Explore" Strategy?

[asrmek]

Hi,

My firm is considering moving from an asset allocation strategy to a core and explore strategy in our fee-based accounts. This would be a major shift for us. I need to do a lot of work to consider all of the implications of making this change, as well as the feasibility for our team from an investment management perspective. Does anyone currently use a core and explore strategy? If so, what does it look like, and do you have some resources that you use for idea generation?

Thanks.

[Sweep_the_Leg]

Core and explore was the thing a few years ago. Basically putting the majority of your assets in “core” or traditional products, and the rest in some alternatives, high tracking error funds, nontraditional and/or unconstrained bond funds, and other asset classes that offer a unique return profile.

I think the reason we don’t hear the term as much anymore is because it’s kind of become the norm. With so many more liquid alternative and nontraditional fixed income options available today, they’ve just sort of become part of the norm.

[Black_Swan]

@Sweep_the_Leg

I think the reason we don’t hear the term as much anymore is because it’s kind of become the norm. With so many more liquid alternative and nontraditional fixed income options available today, they’ve just sort of become part of the norm.

Yeah, but haven’t they become part of the norm?

[Matt_Likes_Analysis]

Norman. Would you like to chime in on this?

[Sweep_the_Leg]

@Black_Swan

@Sweep_the_Leg

I think the reason we don’t hear the term as much anymore is because it’s kind of become the norm. With so many more liquid alternative and nontraditional fixed income options available today, they’ve just sort of become part of the norm.

Yeah, but haven’t they become part of the norm?

[GorillaNerd]

sounds a lot like core satellite it was in the cfa curriculum when i was studying for it.

[DPBass88]

Yea, this is core satellite. What was your old asset allocation? What’s the goal of your firm? The core portfolio should be aimed to achieve those baseline goals and the satellite portfolios should be for capturing alpha.

[Iprofit4sure]

Sounds like a porno title kind of

[Slim_Charles]

it is the norm for any sophisticated firm in the RIA and family office space… anyone who puts clients solely in cookie cutter ETFs is probably a small Mom & Pop shop that doesn’t manage much AUM.

my advice - break it down by alt asset class… then research types of strategies within asset class. then research top managers. allocate to top managers. once you develop comfort and expertise you can find more talented niche managers that do well but don’t have the big brand name.

Reach out to some alt firms. you got $ to put to work? yeah, they’ll take your call

AQR, Point 72, Ares, Blackstone, etc