Cash Overlay
Parametric’s Cash Overlay solution helps institutional investors mitigate performance drag by eliminating unwanted cash held for operational purposes, such as benefit payments or capital calls, or residual cash within manager portfolios.
Most institutions don’t prescribe a portion to cash in their target allocation but do carry some level of cash exposure, which can be a drag on performance. A Cash Overlay solution can help mitigate that drag.
Investing in an overlay program involves risk. All investments are subject to loss. Learn more.
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Why choose Parametric?
How it works
We identify sources of residual cash and desired market exposures.
We determine the appropriate overlay instruments to meet the investor’s overall objectives.
We monitor cash through automated custodial data feeds and execute trades so we can ensure any overlay exposures are in line with cash balances.
We continually evaluate any potential overlay program changes to ensure they remain appropriate for a plan’s objectives.
Intended benefits of Cash Overlay
Minimized drag
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Cash Overlay helps eliminate the cash drag on operating and manager cash balances.
Liquidity
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Cash Overlay improves day-to-day liquidity and reduces transition costs.
Simplicity
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Cash Overlay streamlines cash-flow management.
Get in touch
Want to know more about our Cash Overlay solutions? Complete our contact form, and a representative will respond shortly.
More to explore
Consider New Ways to Invest Margin Cash and Capture Rising Yields
by Brian Barney, Managing Director, Institutional Portfolio Management and Trading; Chris Haskamp, Director, Investment Strategy, Government Securities
August 17, 2023
With Treasury yields on the rise, it’s time for institutions to reevaluate their cash positions. See the potentially improved efficiency of an overlay program.
What Is Overlay? A Look at Four Common Applications
by Antony Motl, Portfolio Manager
August 14, 2023
Can an overlay program help investors increase expected return and reduce tracking error relative to a targeted policy allocation? In this paper we delve into the most common overlay components to explore how such a framework allows for seamless integration with investment staff, underlying investment managers, and other stakeholders.
Enhancing Overlay Collateral Efficiency
by James Thorson, Portfolio Manager
July 31, 2023
Is there a more capital-efficient way to participate in a futures overlay program than posting cash? We explore how Treasury securities can come to the rescue.