So under CM, the proportion of your wealth invested in equities is fixed relative to the others (30% eq/70% bonds), but in absolute terms it is proportional to the wealth…
Which of the two is the relevant fact in exercises? I have seen it both ways and I am a bit confused.
Remember this formula:
Target equities investment = M(Portfolio value - Floor value)
In Constant mix, M<1 and Floor value = 0. In your example, M = 0.3
Target equities investment = 0.3 * Portfolio value
As portfolio value rises, Target equities investment rises, but is still proportional to total portfolio.
In CPPI, M>1
In B&H, M=1