Rebalancing Through an Overlay Strategy During Periods of Volatility

Periods of high volatility create opportunities for investors to add value
through portfolio rebalancing, yet many institutional investors face challenges
in implementing a portfolio-rebalancing strategy that provides for discipline and
responsiveness during volatile markets. A lack of consolidated current portfolio
values and onerous formal decision-making and approval processes—coupled
with determining the right time to trade—often delay identifying and acting on
rebalance triggers. Once approval is obtained, coordinating with many managers
to buy and sell physical securities and/or funds can be time-consuming and
expensive. Responding in a timely and efficient manner to unanticipated market
moves under this scenario can be very challenging.
How to address this challenge?
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