An essential tool for managing large pools of capital, derivative overlays help manage risk elements and improve performance, while simultaneously reducing exposure to unintended risk.
Bespoke solutions - to fit your unique situation
We offer a flexible and scalable overlay platform that supports a broad range of derivatives-based solutions. As at December 2016, we managed £70 billion in overlay strategies.
Some of our overlay solutions include:
Liquidity management/ Cash equitisation
There is an increased need for larger pools of liquidity to meet bulkier cash flows related to benefit payments, and/ or support derivative based investment strategies. Liquidity reserves create a drag on portfolio performance as they are not intended cash allocations within a strategic asset allocation. We offer an overlay service which allows you to sit on a cash reserve without experiencing performance drag – by giving the desired market exposure over the cash.
A rebalancing overlay can be used to help ensure that an investor’s target asset allocation is held in place in a cost efficient and accurate manner, avoiding unwanted tracking error which results from market drift. This is cheaper than rebalancing selling/ buying physical assets.
Fund restructuring/ Interim asset management
Effecting changes in your asset allocation using a derivative overlay can enable you to get the desired market exposure quickly and efficiently, ahead of the movement of physical securities.
Tactical asset allocation
Implement tactical tilts around a long-term policy target. This can be done either using your views or accessing the insights of Russell Investments strategy team.
Add or remove currency exposures.
How can we help?
If you are interested in exploring how our full range of investment implementation solutions can help you, contact us today.
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