Currency overlay is the management of the currency exposure inherent in cross-border institutional investments, and is taken separately from the management of the underlying investments. Exposure to foreign currencies increases the volatility of their returns, without increasing the returns themselves and academics and consultants recommended that the currency exposure should be stripped out of international portfolios and eliminated as far as practicable. Thus arose the currency overlay manager, who not only offered risk reduction, but also added return from applying their skill in selectively hedging. The currency overlay industry has grown from nil in 1984 to an estimated $120bn today. Even so, it represents only about 8% of total cross-border assets held by pension funds world-wide. There is therefore considerable room for further growth in currency overlay, particularly in markets with low overlay penetration, such as the UK. The US is particularly active in this field. This book will provide a comprehensive description of currency overlay, its history, the reason for its emergence, the debates and controversies, the different styles of currency management, and the industry's performance track record. It will also discuss possible future developments and growth.