Currency Overlay

Parametric’s Currency Overlay helps investors mitigate unintended currency risks within a portfolio, thus affording investors a more direct return on the underlying assets.

Two components make up international investing returns: asset return and currency return. With Currency Overlay, investors can better manage the level of currency risk within the international portion of the portfolio.

Investing in an overlay program involves risk. All investments are subject to loss. Learn more.

Derivatives such as futures, swaps, and other investment strategies have certain disadvantages and risks. Futures require the posting of initial and variation margin; therefore, a portion of risk capital must be preserved for this purpose rather than being allocated to a manager. Liquid futures may not exist for published benchmarks, which may result in tracking error. Also, some intraperiod mispricing may occur. Swaps require periodic payments, may be less liquid than futures, and may have counterparty or credit risk. Some investment strategies require a cash investment equal to the desired amount of exposure.

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