%0 Journal Article %A Clifford H. Quisenberry, Jr. %T Optimal Allocation of a Taxable Core and Satellite Portfolio Structure %D 2003 %R 10.3905/jwm.2003.320470 %J The Journal of Wealth Management %P 18-26 %V 6 %N 1 %X The author starts by noting that there is growing recognition in the financial services industry that the design and structure of equity portfolios with multiple managers should be fundamentally different for a taxable investor than for the typical institutional investor. Many have observed that taxable investors can reap significant benefits by adopting a “core and satellite” portfolio structure. This structure consists of an index-like core manager who generates capital losses surrounded by satellite managers who are seeking to add alpha. The question then becomes, how much should be allocated to the core? In this article, the author quantitatively models the core and the satellite structure to find the optimal core allocation and answer the question. The study shows that allocations of 50% or more are often warranted. %U https://jwm.pm-research.com/content/iijwealthmgmt/6/1/18.full.pdf