A pension fund manager makes investments in big$-$cap stocks, small$-$cap stocks, and bonds for her clients, most of whom are retired workers with limited risk tolerance. The following table summarizes the pension fund$$s asset allocation and performance categorized by asset class over the past $12$ months.

Benchmark weight

Actual weight in portfolio

Benchmark Performance

Actual Performance

Big cap stocks

$40\%$

$50\%$

$9\%$

$8\%$

Small cap stocks

$20\%$

$40\%$

$12\%$

$13\%$

Bonds

$40\%$

$10\%$

$5\%$

$4\%$

Please evaluate the pension fund$$s performance relative to its benchmark.

How much of the pension fund$$s active return can be attributed to asset allocation? How much to selection?

Given the fund performance and client information detailed in the question, do you think the pension fund is managed effectively and appropriately?