Active Currency Management is Back: FX Volatility and Challenges

Präsentation from 16. September 2025
Members Only
Toby Goodworth
Marco Stigler-Thomas, CFA
Details

Since the end of the zero-interest rate policy (ZIRP) era the divergence in global growth, inflation, and interest rates have seen currency risks return to investor’s portfolios. This was a pivotal regime change and with FX risks no longer able to be ignored, investors have been forced to reevaluate how they manage these currency risks. Moreover, geopolitical risk and in some regions increased fiscal deficits also increase portfolio volatility for investors with foreign FX exposure. 

This session will provide a practical toolkit for investors currently facing these issues. Specifically, we will focus on what currency overlays do, and how active FX overlays can help both control currency risk and add uncorrelated excess returns. We have seen increased demand for FX overlay management in this market environment from many large institutional investors around the world together with investors from Germany. We also provide an up-to-date review of the provider landscape, and the range of approaches offered. Finally, we offer some insight for investors by reviewing how different types of investors globally have successful deployed currency overlays into their portfolios.

Please note that the presentation must not be shared.

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