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   Overlay Risk Management
   















 

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Overlay Risk Management

An approach to asset risk management that turns over most of the assets of a portfolio to managers selected for their unique skill in particular markets, and assigns an overlay manager responsibility for partial or full asset allocation and/or currency risk management. The overlay manager typically uses options, futures, swaps, and other derivative risk management instruments rather than cash markets to keep execution costs low. See also Currency Overlay Management, Overlay Strategies.

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