Building returns through overlay
As asset managers seek to move away from simply neutralising risk to actively managing their portfolios to bolster declining returns, currency overlay is increasingly in vogue. Phil Moore looks at how currency overlay is now seen as a portable source of alpha
Remember the days when, in the equity investment management community, everybody won a prize? With double-digit returns regarded almost as the divine right of cross-border equity investors for so much of the 1990s, currency fluctuations were viewed as irrelevances that would always come out in the wash over the long term, with losses (or gains) of 0.5% here or 1% there nothing to lose any sleep over.
With feast having turned so decisively to famine, and with few strategists seeing anything to
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