The roads to currency overlay

Currency overlay is catching on, but potential clients are confused by the different management techniques on offer. Paul Lyon talks to two currency overlay managers employing different styles, about the development of their industry

The globalisation of investor portfolios, the introduction of the euro, as well as various emerging market crises, have all brought increasing attention to the concept of currency overlay management, which involves managing the currency exposures in an investment portfolio separately from the underlying asset exposures, whether they be fixed income or equities. This is usually conducted by an external currency overlay manager attempting to limit currency losses while participating in