Offering allows investors to moderate volatility and hedge in down markets. Investment advisory InTrust Advisors is out with a new overlay product for high-net-worth and institutional clients. IA Active Hedge Overlay is meant to let high-net-worth and institutional investors hedge portfolios in down markets and enhance market performance in up markets, while, in most cases, reducing portfolio volatility.

Overlay management has to do with account-level rebalancing, restrictions, cash flows, and, where relevant, tax-liability management of investment portfolios.

Adaptive processes

"The most exciting aspect of this solution is that it is not a pure expense to the client like when options or option collar strategies are utilized," says InTrust managing director Jeff Diercks. "It can flip long and add substantially to overall portfolio performance."

Diercks adds that IA Active Hedge Overlay can be tweaked to meet the IRC 817 (h) diversification rules for insurance and annuity contracts. "We think this will be a great solution for those carriers, companies and policy holders who need to stabilize return streams to meet long-term benefit obligations."

Tampa, Fla.-based InTrust started out in 1997 as a multifamily office. In 2000, as a result of internal expertise in hedging strategies, it launched a fund of hedge fund and began managing separately managed account allocations to hedge funds for private-placement life and annuity clients. Two years ago it started working on its Market Adaptive Portfolio Strategies, and focused its efforts on refining its internal investment-management capabilities. -FWR

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