What is an attribution analysis?

Attribution analysis is a method for evaluating the relative performance of a portfolio by comparing it to a benchmark. This analysis helps to understand how the portfolio performs in relation to the benchmark.

Attribution analysis examines how different components of the portfolio – such as stocks, sectors, or regions – contribute to the total relative performance. The contribution is determined by the under- or overweighting of specific sectors, regions, or individual securities. This means you can see how strategic choices in the portfolio's composition have influenced the return relative to the benchmark.