2 questions reported in GMO interviews, organised by the group that asks them. Every question carries a model answer and graded feedback on your own attempt.
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Strategic versus tactical allocation, risk parity and rebalancing rules. 2 questions
The organising distinction in any multi-asset mandate.
Explain strategic and tactical asset allocation. Which contributes more to returns, and how much should a manager deviate?
The central problem in multi-asset investing, and 2022 made it concrete.
In 2022 both equities and bonds fell sharply. Why did the 60/40 portfolio fail, and what does it mean for diversification?
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
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