Publications

- December 1, 2014: Vol. 26, Number 11

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Attribution: What it is and how it is measured

by Jeffrey Havsy

1 One of the hottest topics in commercial real estate, especially for open-end funds, is performance attribution. Investopedia defines it as “a performance-evaluation tool used to analyze the abilities of portfolio or fund managers. Attribution analysis uncovers the impact of the manager’s investment decisions with regard to overall investment policy, asset allocation, security selection and activity. A fund or portfolio’s returns are compared to a benchmark in order to determine whether a manager is actually skilled or just lucky.” Using attribution, investors are able to determine why their manager under- or overperformed relative to a benchmark instead of just how they performed. The seminal performance attribution paper was written for the Journal of Portfolio Management by Gary Brinson and Nimrod Fachler in 1985. You will often hear the term Brinson-Fachler attribution, which incorporates the attribution methodology from that paper. The other frequent refe

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