Several exposures can depend on the same capital.
Derivatives add exposure without paying both full purchase prices.
Owned assets: €100,000
€90,000 shares and €10,000 cash including any posted collateral. Solid: shares; hatched: cash.
Cash supports the contract below; it remains inside the same €100,000.
Additional exposure
Bond-futures initial notional €60,000. This reference amount is not an owned asset.
Exposures: 90% and 60%, totalling 150% of capital. There is no second withdrawal pot.
Exposure scale and the wider meaning of overlay
Normalising 90/60 to a 60/40 ratio would hide their scale; unlevered 60k/40k differs. Cash includes any posted collateral within original capital. Equal notionals also differ in risk: short/long-duration bonds have different sensitivities.
An overlay applies positions to an existing portfolio; currency hedging or risk reduction need not increase exposure. The provider’s Return Stacked FAQ describes exposure above capital and financing/leverage, not independent evidence of improvement.
The added layer can lose at the same time.
Before: shares €90,000 + cash €10,000
Shares lose €18,000; futures settlement takes €6,000 from cash.
After: shares €72,000 + cash €4,000 = €76,000
Solid: shares. Hatched: cash. A 24% loss; the settled futures loss is counted once.
The €4,000 includes any still-posted cash; it is not necessarily withdrawable. Maintaining positions throughout is assumed, not proof that €10,000 meets real collateral requirements.
Reconcile owned assets and the illustrative unlevered comparison
An unlevered 60k/40k allocation under the same percentage assumptions loses 12k + 4k: 16% overall. This isolates exposure size under invented conditions, not real funds or future results.
Later recovery cannot meet an earlier cash call.
Settlement or higher collateral demands can force exposure reduction before period end; later gains act on the changed portfolio.
The example assumes positions survive interim cash demands. Assets elsewhere may miss the deadline. Later gains do not provide cash retroactively.
Count financing and shared losses in the same comparison.
Financing can enter as loan interest or derivative pricing. Treat collateral income, management, trading and underlying expenses consistently. The extra exposure must cover these effects before adding to net results.
Expected offsets can weaken. ECB analysis illustrates inflation shocks hurting shares/bonds together; other combinations have other shared vulnerabilities. More intensive capital use guarantees neither improvement nor failure.
What job justifies the added layer?
Name its purpose and affordable loss if both parts disappoint. Compare suitable overall risk, costs and decisions with a simpler alternative.
A fund can operate collateral/contracts but retains their consequences in unit value. Its mandate’s place in household savings remains your decision; stacking is optional, not a required investing step.