Fund Evaluator:

GMO Benchmark-Free Allocation III Overview

GMO Benchmark-Free Allocation III (GBMFX) is an actively managed Allocation Global Moderate Allocation fund. GMO launched the fund in 2003.

The investment seeks positive total return. The fund is a fund of funds and invests primarily in Implementation fund, other series of GMO Trust whether now existing or created in the future, including the Fixed Income funds and the Alternative funds, and in GMO-managed exchange-traded funds.

About GMO Benchmark-Free Allocation III (GBMFX)

There are 2 members of the management team with an average tenure of 15.15 years: John Thorndike (2019), Ben Inker (2003). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: MSCI World NR USD index with a weighting of 100% and Bloomberg US Agg Bond TR USD index with a weighting of 100%. GMO Benchmark-Free Allocation III has securities in its portfolio. The top 10 holdings constitute 0.0% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

GMO Benchmark-Free Allocation III is part of the Allocation global asset class and is within the Allocation fund group. GMO Benchmark-Free Allocation III has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0%. There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). GMO Benchmark-Free Allocation III has 0.0% of the portfolio in cash.

Assets Under Management

The fund has $749 million in total assets, which is below the $959 million average for the Global Moderate Allocation category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

GBMFX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The GMO Benchmark-Free Allocation III expense ratio is high compared to funds in the Global Moderate Allocation category. GMO Benchmark-Free Allocation III has an expense ratio of 1.35%, which is 29% higher than its category average, making the fund expense ratio grade a D. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. GMO Benchmark-Free Allocation III has a portfolio turnover rate of 11%, indicating that holds its assets around 0.1 years. By way of comparison, the average portfolio turnover is 65% for the Global Moderate Allocation category.

Recently, in the month of August 2026, GMO Benchmark-Free Allocation III returned 1.1%, which earned it a grade of F, as the Global Moderate Allocation category had an average return of 1.6%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

GMO Benchmark-Free Allocation III has a trailing yield of 3.70%, which is above the 2.59% category average. The fund normally distributes its income semi-annually and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

GMO Benchmark-Free Allocation III Grades

Year to date, the fund has returned 14.2%, 4.4 percentage points better than the category, which translates into a grade of A. The fund has returned 22.9% over the past year (grade of A), 15.9% over the past three years (grade of A) and 10.0% per year over the past five years (grade of A) and 6.8% per year over the past 10 years (grade of D).

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