Currency overlay has grown in parallel with the international diversification of institutional investment portfolios. Currency overlay mandates now cover around $100bn in assets, and 18 years since the first overlay mandate, currency overlay has now come of age. Currency Overlay looks at all the components that make up an overlay mandate and the decisions and analysis leading up to it. It is written in an accessible style, designed for the interested asset manager, pension fund manager, investment consultant, trustee or student. Many of the author's analyses start from first principles. Concepts important to the case are fully explained before utilising them, allowing the reader with no prior knowledge of the subject to exercise independent judgement. The author makes wide use of self-contained 'boxes' to illustrate and INDICE 1 Introduction. 2 The problem. 3 Currency hedging. 4 Foreign exchange market # history and structure. 5 Theory of currency hedging of international portfolios. 6 Passive currency overlay. 7 Currency overlay benchmarks. 8 Overlaying different asset classes. 9 Is the currency market efficient? 10 Active currency overlay # management styles. 11 Active currency overlay # evidence of performance. 12 Implementing currency overlay. 13 Looking ahead.