Difference between Core Need Fund and Satellite Fund? Aadhav, 13 Dec 2013

Hi, Can you clarify the difference between Core Need Fund and Satellite Fund please? I see Satellite Fund's are mainly for Wealth Creation, and Core Need Fund's are for Child eduction, Retirement etc... But what is the different interms of how they work, the return % etc? Also can I assume we need to invest long term in both types of funds to have better return?

Fintotal Answer

Hi Aadhav, core needs are those which you cannot compromise on and cannot take chance to give it a miss. Achieveing these should be the first priority. Satellite needs are those which can be acheived after you have achieved your core needs. They may not really affect your life. So our approach for core needs and satellite needs is that, large cap funds tend to be little stable in terms of returns in long run and so are best suited for core needs. Mid cap funds are suitable for satellite needs since they tend to more volatile. There is no such thing called as core funds and satellite funds. It is just a way we address the needs and thus the funds suitable to achieve those needs.

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