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Reviewed by Apoorva | Updated on Feb 19, 2021



The overlay is a management style that blends an investor's privately-managed accounts. Overlay management makes use of software to track down an investor's combined position from separate accounts.

Understanding Overlay

The overlay system analyzes if there are portfolio adjustments to make sure that the overall portfolio remains balanced in order to prevent inefficient transactions. Overlay portfolio management makes sure the investors' strategies are implemented and coordinated successfully.

Factors to Consider

  1. Overlay portfolio management is applicable to the portfolios of institutional investors and ultra-high net worth individuals.

  2. Money managers and financial advisors follow it to foresee and track the various investor accounts in their care.

  3. It seeks to improve the communication between the separate managers, allowing for increased transactional efficiency.

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