Performance attribution

Performance attribution, profit attribution, or investment performance attribution is a set of techniques that performance analysts use to explain why a portfolio's performance differed from the benchmark. This difference between the portfolio return and the benchmark return is known as the active return. The active return is the component of a portfolio's performance that arises from the fact that the portfolio is actively managed.The working group recommend that the notional fund concept be extended to cover the whole fund, i.e. fixed interest, equity and cash investments and by using appropriate indices the actual fund is compared with a notional fund chosen such that the proportions in the different investment sectors follow those laid down by the trustees. Performance attribution, profit attribution, or investment performance attribution is a set of techniques that performance analysts use to explain why a portfolio's performance differed from the benchmark. This difference between the portfolio return and the benchmark return is known as the active return. The active return is the component of a portfolio's performance that arises from the fact that the portfolio is actively managed.