An essential tool for managing large pools of capital, derivative overlays help manage risk elements and improve performance. Russell Investments offers an overlay platform that supports a broad range of derivatives-based solutions.
We comb through your portfolio in search of slippage—inefficiencies that lead to lower return and higher risk. Through the use of a derivatives overlay, we can correct the underlying source of slippage.
Beta management for portable alpha
We use derivatives to manage the beta (market) exposures associated with portable alpha strategies. We work with you to determine the best instruments to use for your particular strategy—typically futures, swaps or a combination of the two.
Many investors recognize that they are exposed to interest rate risk, but do not have high confidence this exposure will add value. Hedging this risk through increased physical bond holdings may not be feasible or desirable given the investment opportunity cost. Learn more about our LDI implementation capabilities.
A derivatives overlay allows you to gain interest rate exposure synthetically, while leaving most of your cash available for return-seeking strategies.
Additional applications for overlays
Effect changes resulting from major shifts in your asset allocation or mergers of multiple plans, independent of the movement of physical securities.
Efficiently manage multiple exposures at the total fund level.
Tactical asset allocation
Implement tactical tilts around a long-term policy target.
Add or remove currency exposures.
Episodic cash flows
Manage contributions into and disbursements from your portfolio more efficiently.
Learn more about our implementation solutions
Our program can result in a cost effective solution for a core component of your trading and risk management initiatives.
Our seasoned team employs the latest advances in technology to find liquidity pools that reduce transaction costs and manage risk.
This is an essential tool for managing large pools of capital as derivative overlays help manage risk elements and improve performance.
We have helped clients manage their risks and investment performance when restructuring their portfolios or asset classes for over 25 years.
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