February 7, 2019

Rebalancing Through an Overlay Strategy During Periods of Volatility

Periods of high volatility create opportunities for investors to add value through portfolio rebalancing, yet many institutional investors face challenges in implementing a portfolio-rebalancing strategy that provides for discipline and responsiveness during volatile markets. A lack of consolidated current portfolio values, onerous formal decision-making and approval processes, and difficulty determining when is the right time to trade often delay identifying and acting on rebalance triggers. Once approval is obtained, coordinating with many managers to buy and sell physical securities, funds, or both can be time consuming and expensive. Responding in a timely and efficient manner to unanticipated market moves under this scenario can be very challenging.

How to address this challenge?

Investment advisory services offered through Parametric Portfolio Associates^® LLC ("Parametric"), an investment advisor registered with the US Securities and Exchange Commission.

Parametric (National Registration Database No. 42850) is also registered as a Portfolio Manager with the securities regulatory authorities in certain provinces of Canada with regard to specific products and strategies. Parametric provides advisory services directly to institutional investors and indirectly to individual investors through financial intermediaries. The information on this website does not constitute an offer to sell, or a solicitation of an offer to purchase, securities in any jurisdiction to any person to whom it is not lawful to make such an offer. Investing entails risks and there can be no assurance that Parametric (and its affiliates) will achieve profits or avoid incurring losses. All investments are subject to potential loss of principal. Parametric does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Please refer to the Disclosure page for important information about investments and risks.

S&P Dow Jones Indices are a product of S&P Dow Jones Indices LLC (“S&P DJI”) and have been licensed for use. S&P^® indexes are registered trademarks of S&P DJI; Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); S&P DJI, Dow Jones, and their respective affiliates do not sponsor, endorse, sell, or promote Parametric and its strategies, will not have any liability with respect thereto, and do not have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indices.

Rebalancing Through an Overlay Strategy During Periods of Volatility

Market Volatility Spikes, but What’s “Normal”?

Using Completion Overlays and Sleeves to Enhance Portfolio Flexibility

Cash Securitization: The Challenge of Effective Liquidity Management