Discuss a key attribute of the currency overlay that would increase the likelihood it would be allowed in terms of strategic portfolio positioning.

Wilson Manufacturing (Wilson) is an Australian institutional client of Ethan Lee, who manages a variety of portfolios across asset classes. Wilson prefers a neutral benchmark over a rules-based approach, with its investment policy statement (IPS) requiring a currency hedge ratio between 97% and 103% to protect against currency risk. Lee has assessed various currency management strategies for Wilson’s US dollar-denominated fixed-income portfolio to optimally locate it along the currency risk spectrum. The portfolio is currently in its flat natural neutral position because of Lee’s lack of market conviction.