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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
.
Glossary
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