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If currency overlay isn't part of your investment agenda then you must have money to burn
International investment is good - but gives currency exposure
Currency:
- is a risk and can hurt asset performance
- is driven by different fundamentals than those that drive domestic assets
Good asset market returns in no way implies good currency returns
Assets and currency are completely separate and equally important investments
Most asset managers don't adequately separate these issues. They focus on assets, not currency - they are not currency specialists
Use a currency overlay specialist in parallel with your asset manager
Currency overlay:
- replaces accidental currency exposure from asset manager with intentional currency exposures of a specialist
- allows the investor the opportunity of best asset strategy coupled with the best currency strategy
- can readily provide risk control simultaneously with added return