Browse CFA Level 1

Chapter 10: Portfolio Overlays and Currency Management

In this section

  • Use of Derivatives for Risk Control
    Learn how portfolio managers use futures, options, and swaps to manage and mitigate various market risks, aligning derivative overlays with broader investment strategies.
  • Currency Risk and Hedging Techniques
    Explore essential currency risk strategies using forwards, futures, and swaps to manage and mitigate exchange rate volatility in global portfolios.
  • Overlay Strategies in Equity and Fixed Income Portfolios
    Explore how derivative-based overlay strategies in equity and fixed income portfolios can dynamically adjust exposures, manage risk, and optimize market opportunities without altering core holdings.
  • Active Versus Passive Currency Management
    A comprehensive discussion of passive versus active approaches to currency overlay strategies, illustrating performance potential, risk controls, and best practices for CFA candidates.
  • Evaluating Results of Currency Overlay Programs
    A comprehensive guide to measuring and interpreting the outcomes of currency overlay strategies, including performance attribution, risk metrics, correlation with broader portfolio returns, and manager due diligence.
  • Understanding Forward, Futures, and Currency Swaps
    A comprehensive overview of how forwards, futures, and currency swaps function as essential instruments in managing currency exposures within a portfolio.
  • Managing Complex Currency Hedging Strategies
    Explore layered hedges, multi-currency exposures, and advanced option-based currency strategies in this in-depth guide to complex currency hedging for CFA® candidates.
  • Synthetic Exposure Creation via Derivatives
    Explore how derivatives can replicate physical asset exposures, optimize tax efficiency, and unlock agile portfolio strategies in advanced portfolio management.
  • Institutional Practices for Overlay Management
    Learn how institutional investors deploy overlay management strategies to optimize risk exposures across multi-asset portfolios, highlighting centralized governance, real-time monitoring, and best practices for performance reporting.
  • Assessing Overlay Costs and Slippage
    In-depth exploration of overlay costs, slippage, and best execution practices, helping investors optimize their portfolio overlay strategies.
  • Multi-Currency Portfolios and Hedging Policy
    Explore the complexities of managing currency exposures within multi-currency portfolios and learn how a formal hedging policy can mitigate FX risks, preserve home-currency values, and potentially enhance returns.
  • Risk-Return Considerations in Overlay Implementation
    Learn how overlay strategies affect a portfolio’s risk-return profile, including hedging, alpha generation, and the latest techniques in risk analytics.
  • Dynamic vs. Static Overlay Approaches
    Explore the differences between static and dynamic overlay strategies, including implementation examples, governance considerations, and common challenges in currency and portfolio overlays.
  • Benchmarking Overlay Performance
    Learn how to effectively benchmark overlay strategies—such as dynamic currency overlays—by comparing returns against suitable reference points, assessing hedging efficiency, and applying risk-adjusted performance measures.
  • Using Option-Based Overlay for Tail Risk
    Discover how option-based overlays can help manage extreme market movements, mitigate downside exposure, and enhance overall portfolio risk control through protective puts, covered calls, and collar strategies. Understand key concepts such as deep out-of-the-money options, implied volatility, and practical implementation tips for robust tail risk hedging.
  • Case Studies of Overlay Strategies in Practice
    Explore real-world examples and insights on how overlay strategies function and adapt under changing market environments, with practical lessons from crises and successes.
Thursday, April 10, 2025 Monday, January 1, 1

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