Question: In a particular year, a fund manager made the following investments in the following asset classes: Weight Return Bonds 40% 5% Stocks 60% 18% The
In a particular year, a fund manager made the following investments in the following asset classes:
Weight | Return | |
Bonds | 40% | 5% |
Stocks | 60% | 18% |
The return on a benchmark portfolio was calculated as follows:
Weight | Return | |
Bonds (Bond Index) | 70% | 3% |
Stocks (Stock Index) | 30% | 12% |
Calculate the contribution of security selection (in percentage terms) to the fund's total excess return.
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