Introducing the AV Core-Satellite Separately Managed Account
Unleashing the power of passive investing with the benefits of active management in an SMA
Experience the best of both worlds
The AV Core-Satellite Separately Managed Account (SMA) Series provides reliable, cost-effective portfolio solutions based on a dynamic core-satellite framework.
The AV series uses Vanguard’s market-leading index funds and ETFs to create a low-cost, diversified core. We select satellite active managers to gain exposure to a range of sectors and styles. Our dynamic asset allocation overlay varies the weights to managers to improve risk-adjusted returns by responding to economic and market conditions.
This flexible portfolio construction approach recognises that long-term investment success depends on securing the right balance of assets and the right active management talent.
The SMA structure allows you to offer a high-quality core-satellite solution that can respond efficiently to market trends while reducing the administrative burden.
Explore the Four Risk Profiles of AV Core-Satellite SMA Series
Tailored SMAs catering to different goals, risk tolerances and time horizons. Each risk profile is regularly rebalanced and updated to maintain the core and reflect the latest investment recommendations.
60% Income | 40% Growth
Moderate Strategy
The AV Core Satellite Moderate SMA is designed for investors with a minimum 4 year timeframe, who want a balance between income and modest capital growth over the long term.
45% income | 55% Growth
Balanced Strategy
The AV Core Satellite Balanced SMA is designed for investors with a minimum 5 year timeframe, who want a balance between capital growth and income.
25% income | 75% growth
Growth Strategy
The AV Core Satellite Growth SMA is designed for investors with a minimum 6 year timeframe, seeking growth with some income.
10% income | 90% Growth
High Growth Strategy
The AV Core Satellite High Growth SMA is designed for investors with a minimum 8 year timeframe, who primarily seek capital growth and some income.
Enjoy these benefits
A separately managed account brings even more efficiency to a core-satellite portfolio. Here are some of the reasons why the core-satellite approach works so well within an SMA structure:
SMAs adjust portfolios on your behalf, enabling prompt response to market changes.
Keep your clients aligned with their investment strategy, reducing the risk of clients migrating into a different risk profile.
An SMA means you don’t have to obtain approval from every client with advice documentation (ROA) for every change. All client portfolios will reflect the latest portfolio recommendations.
Advisers can spend more time with clients improving strategic outcomes which add more value than investment selection, implementation and writing ROAs.
Choose between consolidated reporting or delve into underlying holdings based on your clients' preferences, delivering personalised insights for an enhanced investment experience.
The AV Core-Satellite SMAs offer exceptional value for your clients, making them a cost-effective solution for your advisory services.
Support you need, when you need it
When you choose the AV Core-Satellite SMAs, we provide the support you need, exactly when you need it including the following content:
Updates on market events to facilitate informed adviser-client conversations.
Notifications of portfolio adjustments, along with advice text explaining the benefits for your clients.
Monthly email templates for your use with clients incorporating portfolio positioning and implemented changes complete with rationale.
Monthly and quarterly updates on markets, portfolio results and investment strategy.
Stay connected and confidently engage with your clients with the support of AV Core-Satellite SMAs. We provide the tools, so you can focus on delivering exceptional financial advice.
Frequently Asked Questions
Core-satellite combines low-cost, indexed managed funds and exchange traded funds (ETFs) as the core of the portfolio (~60%) with actively managed investments (~40%) for the satellite allocation. Then we tilt the portfolio within strategic asset allocation (SAA) limits (+/-15%) towards a particular sector or style, to outperform or reduce risk.
Vanguard’s ETFs and managed funds are reliable and cost-effective—foundational characteristics for Aequitas’s investment approach. Aequitas stands for fairness and equality, and we are drawn to the alignment of owner and investor interests which is unique to Vanguard. Further, Vanguard’s adviser and investor support is without peer in Australia.
ETFs allow faster execution (often at a lower cost) which is more efficient when taking advantage of opportunities or dynamically tilting away from risks, especially during stressed market environments.
Alternative assets enhance portfolio diversification and risk-adjusted returns. Alternative investments exhibit a lower correlation with the primary asset classes (stocks and bonds) both during normal market conditions and times of stress. This divergence is typically a result of employing investment tactics that mitigate exposure to mainstream markets, such as risk hedging or agile strategies that swiftly adapt to changing circumstances. Alternative investment approaches can also profit from both market declines and upswings in prices (something that traditional long-only portfolios can't do).
We expect selected alternative funds to achieve roughly half the risk level of equities on average, accompanied by correspondingly moderated expected returns. Due to their limited correlation with conventional asset categories, they contribute to an improved overall balance between risk and potential returns within the AV portfolios.
The SMA allow for DAA tilts up to +/- 15% for each asset class allocation and the overall growth/defensive allocations. This means the portfolios will always be true to label and maintain their risk profile. Investment Committee consultation is required for any move in excess of +/-10%.
No. The portfolios are usually updated in 2% increments (although smaller and larger changes are permitted). The average turnover is approximately 20% p.a.
Very low. Because we are appointing managers to play a certain role in portfolios (e.g. deliver the growth or value factor premia or government bond allocation).
Aequitas will provide portfolio reports and relevant communication materials to advisers.
Advisers will have access to a dedicated AV Core-Satellite website portal.
AV Core Satellite SMA typically require a minimum investment amount of $50,000.
The AV Core Satellite SMAs can be made available on any platform where there is demand.
Aequitas can provide detailed analysis to support your best interest duties.
Receive insights into the AV Core-Satellie SMA series