Alternative Allocation Fund

The GMO Alternative Allocation Fund aims to generate positive total return while enhancing portfolio diversification through low correlation to traditional risk assets. The Fund offers broad exposure across multiple asset classes liquid alternative categories, including merger arbitrage/event-driven, equity market neutral, global macro, relative value quality, and volatility. We believe the Fund’s success is driven by the following key features: 

Dynamic Allocation on Two Levels

• Top-down. The GMO Asset Allocation team allocates capital based on risk and opportunity at the portfolio level. This is especially true at valuation extremes, when investors need risk management the most.
• Bottom-up. The underlying investment strategies dynamically alter exposures and risk levels in an alpha-proportional manner.

Diversity of Risk and Return

• The Fund accesses a broad set of risk factors including carry, momentum, quality, value, and volatility.
• The team combines skill-based alpha strategies with those designed to capture alternative risk premia.

Efficient use of Capital - The team employs overlays that enable exposures greater than 100%, enabling a concentration of alpha not possible in a traditional fund-of-fund model.

Transparency and Liquidity - The portfolio management team has complete transparency, not just of positions but of the rationale and conviction levels of the underlying teams. Investors benefit from daily liquidity.

Experience - GMO has over 25 years of experience in both managing individual alternative strategies and integrating them into multi-strategy solutions.