Case Study - Long US Equity with basket of Currencies

Chinese investor wants to be long US equities, and gain exposure to high yielding currencies, as opposed to realizing further depreciation of the local Renminbi currency.

Trade flows:

ETF Manager would take the clients CNY and sell them for USD. They would use those USD to buy SPY ETF shares on a US exchange. The long SPY equities would be used as collateral to open an FX contract with a bank. The FX contract would sell USD and buy equal amounts of dollar equivalent of Russian Rubles (RUB), South African Rand (ZAR), Australian Dollars (AUD), New Zealand Dollars (NZD) and Mexican Pesos (MXN).  The net result for the Chinese investor would be a long exposure to the US equity (S&P 500) + dividends, long a portfolio of equal weighted (20% each against USD) currencies that generate an annual yield above 3% via Over the Counter Currency Swap contracts. This yield can provide an income generating program, for aggressive investors, utilizing the Overlay Capital Adaptive hedging program can provide additional income towards the total return .


CASE STUDY - US Fund with long japanese equity exposure

US based investor wants to be long Japanese equities, and due to concerns with Yen movements impacting the return, wants to manage the FX exposure.

Overlay Capital using the Adaptive Hedging Signal service to provide hedge recommendations to take advantage of the volatility in currency markets to enhance the total return for the investment.

Overlay Capital uses a 50% hedge for a benchmark to measure excess return generated from the adaptive hedging program.

 CASE STUDY - Trading firm looking for trade signals

Trading companies that are looking for trading signals can utilize the adaptive hedging program to generate long/short strategies. 

The directional trading signals will provide clients opportunities to enhance their returns.


Traders can utilize the core adaptive methodology for shifts in the signals for trading opportunities. 

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