Derivatives

Derivatives—broadly defined as financial instruments whose value is derived from a separate asset or metric—have become an integral tool in modern financial management. Many fund advisers integrate derivatives into their funds’ portfolios.

Fund boards oversee investments in derivatives as part of their general oversight of portfolio management. While derivatives are similar in some ways to other portfolio holdings, their unique benefits, risks, and resource requirements may warrant additional attention from boards.

Below are links to additional resources created, published, and maintained by other organizations. They are merely a sample of additional resources for fund directors. IDC does not control, cannot guarantee, and is not responsible for their accuracy, timeliness, or continued availability. These links are provided solely as a service to fund directors and should not be construed as indicating in any way that IDC endorses either the content provided or the third-party providers of any such content.

Securities and Exchange Commission: Investor Bulletin: An Introduction to Options