Performance attribution

Performance attribution is a process that explains why an investment portfolio's returns are different from a benchmark or market index. It breaks down the contributions of various factors—such as individual asset selection, sector choices, or market timing—that influenced overall performance. By analyzing these components, investors can understand which decisions added value and which strategies might need adjustment, providing insight into the effectiveness of their investment approach. This helps in making informed decisions to improve future results and better align investment tactics with financial goals.