Overlay Strategies

Manage portfolio risk with the efficient use of derivatives.

What are overlay strategies?

Overlay strategies are investment strategies that use derivative investment vehicles to obtain, offset or substitute specific portfolio exposures, beyond those provided by the underlying portfolio assets. They allow pension fund sponsors to increase or reduce exposure in a fund, relative to its actual funded amount.

The strategies generally involve a synthetic replication of an asset class, market or factor exposure, such as portable alpha, foreign exchange overlays, rebalancing, liability-driven investments, cash equitization, hedge fund replication, and completion overlay.

The fair value of the overlay portfolio is often very small or even zero because it is generally funded  and implemented by using derivatives. The overlay portfolio can be highly leveraged as a result of using derivatives.

Overlay Strategies Symposium

    CME Institute Courses

    Explore the futures and options markets with a variety of resources designed to help you at each stage of your trading journey.

    Introduction to Futures

    Curious about what futures can bring to your portfolio? This course gives an overview of the aspects of futures pricing, trading, and market structure. Learn how futures can help you reach trading objectives with greater ease and effectiveness and potentially lower costs.

    Start today


    As a central counterparty, CME Clearing acts as the buyer to every seller and seller to every buyer to ensure the financial security of the marketplace and reduce clearing participants counterparty risk and achieve operational and financial efficiency. Gain an understanding of how the clearing market structure is defined, risk management policies and procedures, and the activities of CME Clearing.

    Start today

    Contact us

    Interested in learning more about Overlay Strategies? Contact us for more information.