ATTRIBUTION ANALYSIS
Attribution Analysis: translation
A performance-evaluation tool used to analyze the abilities of portfolio or fund managers. Attribution analysis uncovers the impact of the manager’s investment decisions with regard to overall investment policy, asset allocation, security selection and activity. A fund or portfolio’s returns are compared to a benchmark in order to determine whether a manager is actually skilled or just lucky.
Fund and portfolio management cost money, and so attribution analysis helps determine whether that money is being well spent. This technique is commonly used by institutional investors, but is not widely used by individuals. This analysis helps investors enlist the best managers and maximize their returns.