Portfolio Management interview preparation

Questions

100

Traced to a firm

40

Firms

24

Updated

September 2026

Asked at

All firmsBLBlackRock4Vanguard4WMWellington Management4Amundi3ACAQR Capital Management3Neuberger Berman3SCSchroders3Man Group2MSCI2Northern Trust2AllianceBernstein1Apollo Global Management1Blackstone1BMBNY Mellon1Carlyle Group1Fidelity Investments1Goldman Sachs1Invesco1Millennium Management1MSMorgan Stanley1NUNuveen1PIMCO1SSState Street1TPTPG1

Topic

All topicsPortfolio theory5Factor models8Asset allocation11Rebalancing3Portfolio construction7Benchmarks and tracking error5Performance measurement8Risk management6Fixed income and LDI5Currency and global3Implementation and costs5Active versus passive6India markets7Brainteasers5Career and fit16

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1. 035How do you choose a benchmark for a mandate, and what makes a benchmark bad?Benchmarks and tracking errorCorephone / first roundAsset managementInstitutional asset management

   Say this

   A good benchmark is investable, unambiguous, specified in advance, and it represents the manager's actual opportunity set. A bad one is either unachievable, like a fixed 8 percent hurdle, or so different from the portfolio that the excess return measures style rather than skill.

   Then walk it

   1. The standard criteria, from Bailey: unambiguous, investable, measurable, appropriate to the manager's style, reflective of current investment opinion, specified in advance, and owned by the manager in the sense that they accept it.
   2. Investable is the one most often breached. A benchmark including names that cannot be bought in size, or an index with a 15 percent single-stock weight that breaches the fund's diversification rules, sets the manager an impossible task.
   3. Appropriate to the style matters most for attribution. Measure a small cap value manager against a broad large cap index and the excess return is mostly the size and value factor, not the manager. You will fire them for style and hire the next one at the wrong point in the cycle.
   4. Bad benchmark type one, absolute hurdles: 'cash plus 5 percent' is fine as an objective but useless as a benchmark, because it gives no information about whether the manager did well in the environment they faced.
   5. Bad benchmark type two, peer group medians. They are not investable, they are survivorship biased, they are only known after the fact, and they encourage herding. Useful as context, wrong as a benchmark.
   6. In practice I would use a market index matched to the opportunity set, with a custom or blended index where the mandate spans regions or asset classes, and I would state the currency hedging convention in the benchmark definition. Hedged versus unhedged is worth several percent a year and it is astonishing how often that is left vague.

   Where candidates lose it

   Listing the textbook criteria without saying which ones actually get breached. Concrete failures are what earn the marks: peer medians, absolute hurdles, style mismatch, and an unspecified currency hedging convention. That last one is a detail interviewers in global mandates notice immediately.

   Expect next

   • How would you benchmark a multi-asset fund with no natural index?
   • Should the benchmark be hedged or unhedged?
   • What is wrong with a peer group benchmark?

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.