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.
More to explore
Extensive Capabilities of an Overlay Program: More than Meets the Eye


by Richard Fong, Managing Director, Overlay Solutions; Heather Wolf, Portfolio Manager
August 4, 2025
Read why we believe consultation, customization and flexibility are three key elements of a successful and holistic overlay program.
Turning Obstacles into Opportunities with Rebalancing


by Heather Wolf, Portfolio Manager; Richard Fong, Managing Director, Overlay Solutions
July 24, 2025
Read why we still see value in rebalancing—as long as there is disproportionate relative performance between the asset classes.
Broadening the Overlay Horizon: Adding Diversification with Trend Strategies


by James Thorson, Portfolio Manager, Overlay Solutions; Richard Fong, Managing Director, Overlay Solutions
January 6, 2025
Learn how we can help investors implement systematic strategies like trend following within an overlay program.