- Currency overlay
Currency overlay is a financial trading strategy or method conducted by specialist firms who manage the currency exposures of large clients, typically institutions such as pension funds, endowments and corporate entities. Typically the institution will have a pre-existing exposure to foreign currencies, and will be seeking to;
- limit the risk from adverse movements in exchange-rates, i.e. hedge; and
- attempt to profit from tactical foreign-exchange views, i.e. speculate.
The currency overlay manager will conduct foreign-exchange hedging on their behalf, selectively placing and removing hedges to achieve the objectives of the client.
Many types of currency overlay accounts are more focused on the speculative aspect, i.e. profiting from currency movements. These so called 'pure alpha mandates' are set up to allow the manager as much scope as possible to take speculative positions. As such, they are similar in nature to foreign-exchange hedge funds in terms of objective and trading style.
- Harris, Louise (2006). "Currency Overlay: An Introduction" . Retrieved November 14, 2006.
- Smith, Ralph (2003). "Currency Hedging for European investors" . Retrieved May 24, 2006.
- Xin, Dr Hai (2003). Currency Overlay - A Practical Guide Book (UBS). Second edition to be released in 2011.
- Record, Neil (2003) Currency Overlay (Wiley)
Wikimedia Foundation. 2010.
Look at other dictionaries:
Currency Overlay — The outsourcing of currency risk management to a specialist firm, known as the overlay manager. This is used in international investment portfolios to separate the management of currency risk from the asset allocation and security selection… … Investment dictionary
currency overlay — noun The separation of currency risk outsourcing costs from asset allocation and security selection costs … Wiktionary
Foreign exchange market — Forex redirects here. For the football club, see FC Forex Braşov. Foreign exchange Exchange rates Currency band Exchange rate Exchange rate regime Exchange rate flexibility Dollarization Fixed exchange rate Floating exchange rate Linked exchange… … Wikipedia
COMA — Cache Only Memory Architecture (Computing » Hardware) * Children Of Mental Awareness (Medical » Hospitals) * Come Out Of My Ass (Miscellaneous » Funnies) * Currency Overlay Management Account (Business » International Business) … Abbreviations dictionary
Iskandar Malaysia — Iskandar Malaysia, formerly known as Iskandar Development Region (IDR) and South Johor Economic Region (SJER) is the new main southern development corridor in Johor, Malaysia. The Iskandar Malaysia was established on 30 July 2006. It is named… … Wikipedia
Steam (software) — Steampowered redirects here. For the steam engine, see Steam engine. Steam … Wikipedia
Peer-to-peer — Not to be confused with point to point. This article is about peer to peer computing. For other uses, see Peer to peer (disambiguation). A peer to peer system of nodes without central infrastructure … Wikipedia
Christopher Ironside — FSIA 1970, OBE 1971, FRBS 1977 (11 July 1913 – 13 July 1992) was an English painter and coin designer, particularly known for the reverse sides of the new British coins issued on decimalisation in 1971. He began his career as a painter, studying… … Wikipedia
Lateinische Buchstaben in Unicode — Lateinische Buchstaben, also Schriftzeichen, die auf dem lateinischen Alphabet aufgebaut sind, sind in Unicode in derzeit 19 Blöcken enthalten. Die 26 Grundbuchstaben befinden sich – neben Ziffern, Satzzeichen und Steuerzeichen – im Unicode Block … Deutsch Wikipedia
Tilde — For the baseball player known as the Big Tilde, see Magglio Ordóñez. ◌̃ Tilde Punctuation … Wikipedia