Parametric

One of the major concerns for an institutional investor is maintaining sufficient liquidity in the portfolio during periods of high volatility and market stress. The problem many investors face during such periods is that the desired source of liquidity is often fixed income, which can be strained from a liquidity perspective. In a period when liquidity is needed and portfolio rebalancing is necessary, an overlay program allows an investor to raise cash from the most liquid portion of their portfolio to use both for plan expenses and to rebalance the portfolio back to policy targets.