Investing term

What is Satellite sleeve?

A small portion of your portfolio (usually 5–15%) reserved for active picks, with the rest indexed.

A satellite sleeve is a small portion of your portfolio — often 5–15% — set aside for active picks or themed bets, while the bulk stays in low-cost index funds (the core). It's a structured way to express conviction or scratch the stock-picking itch without risking your whole plan, capping how much your active bets can help or hurt.

For example

You keep 90% in index funds and reserve a 10% satellite sleeve for two stocks you believe in — your bets matter, but can't sink the ship.

Satellite sleeve is taught hands-on in Stage 13 — Active Investing: Should You Even Bother?.

See the lesson →

Related terms

Active investingPicking individual stocks (or actively-managed funds) instead of just buying the index.CatalystThe event or condition that will close the valuation gap — and an estimated timeline.Circle of competenceThe set of industries, business models, and types of companies you actually understand well enough to evaluate.ConvictionHow strong your evidence is for a thesis — and therefore how much capital it earns.
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