[1] GTAA is believed to be derived from, and share some characteristics of, global macro hedge funds and tactical asset allocation (TAA).
Global macro hedge funds, like GTAA, seek to profit from taking positions in major world equity, bond or currency markets.
However, the two differ in the fact that global macro has been characterized by large, undiversified bets, while modern GTAA strategies are generally well-diversified and operate with risk controls.
The strategic rebalancing element of GTAA program is designed to remove any unintentional asset allocation risk which can be caused by various factors, including: drift risk, which occurs when the value of underlying portfolio holdings moves away from the strategic benchmark due to differences in asset class returns, due to changes in asset valuation, cash holdings, currency deviations from stock selection, unintentional country deviations within underlying stock/bond portfolios, manager of benchmark transitions, and contributions to and redemptions from the portfolio.
[1] The overlay element of GTAA program is designed to capture excess return through intentional, opportunistic, long and short positions in asset classes and countries.