Russell

Asset allocation decisions have historically been an “either A or B” choice required for a pension fund’s policy portfolio. An overlay can allow for a mix that is not limited by this mutual exclusivity constraint. Accessing futures markets for Treasury exposure (with a modest amount of leverage) can be risk-reducing in nature and improve the efficiency of a pension’s asset allocation. While many pensions might be concerned about any leverage, and their investment policy limitations might currently preclude it, we believe times are changing and have helped clients achieve this portfolio structure.