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Attribution analysis uses the Fund Manager's and Benchmark's asset allocations and returns across asset classes. A potential investor wishes to understand the skills of a
Attribution analysis uses the Fund Manager's and Benchmark's asset allocations and returns across asset classes. A potential investor wishes to understand the skills of a Fund Manager based on the data below:
Asset Class
Fund Weight
BM Weight
FM Return
BM Return
Equity
20%
50%
6%
8%
Bonds
80%
50%
6%
4%
Explainwhy is it important for the investor to decompose Active returns rather than simply use Active returns to compare performance?
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