New Delhi, June 10 -- The core-satellite investing strategy helps investors build a balanced portfolio by combining passive and actively managed investments. It is a portfolio construction approach designed to balance returns, risk, and costs.

Through passive investments, investors gain exposure to low-cost and relatively stable options, while active investments allow them to explore emerging opportunities in the market. This approach enables investors to benefit from the strengths of both investing styles.

Here is a closer look at the core-satellite investing strategy, how to build a portfolio using it, and its key advantages and limitations.

In simple terms, the "core" forms the foundation of an investment portfolio. It typically con...