Risk Overlay Associates, LLC offers discretionary Index Overlay Strategies.
Index Overlay strategies are the combination of an index paired with an actively managed option overlay.
This approach of combining an index with an option overlay differs from traditional managers in that Risk Overlay Associates looks to generate returns from the option overlay which may have the effect of lessening, neutralizing, and/or increasing the market exposure of the underlying index through the purchase or sale of options.
A metaphor of what we are looking to offer is:
Think of a portfolio as a car.
With our offered strategies the body of our car is an INDEX fund.
By purchasing or selling options we are able to gas or break the car.
Being able to gas and break an index fund by paring it with an option overlay gives us the ability to:
speed up, slow down or stop the car over a given investment horizon
We favor this approach to investing vs. a traditional investment approach which primarily looks to construct a portfolio based on a basket of stocks and generate returns from stock selection, market cap weighting, and
sector allocations relative to a benchmark.