what is overlay 
overlay refers to a management style that harmonizes an investor s separately managed accounts overlay management uses software to track an investor s combined position from separate accounts the overlay system analyzes any portfolio adjustments to ensure the overall portfolio remains in balance and to prevent any inefficient transactions from occurring overlay portfolio management makes sure the investor s strategies are implemented and coordinated successfully overlay portfolio management is often used with the portfolios of institutional investors and ultra high net worth individuals money managers and financial advisors employ it to oversee and track the various investor accounts in their care 