Question: 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

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% Explain why is it important for the investor to decompose Active returns rather than simply use Active returns to compare performance

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