What is Currency Overlay?
Currency Overlay A portfolio management technique using derivatives to manage currency risk separate from the underlying assets, common in global portfolios.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Currency Overlay” Used in Practice?
Currency overlay strategies allow investors to manage foreign exchange risk independently from asset allocation decisions.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Currency Overlay?
A portfolio management technique using derivatives to manage currency risk separate from the underlying assets, common in global portfolios.
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