Performance Attribution
Performance Attribution is a way to understand why an investment portfolio performed the way it did. Think of it like a report card that shows which investment decisions worked well and which didn't. Investment managers use this to explain to clients how they added (or lost) value compared to their investment goals. It's similar to breaking down a recipe to understand which ingredients made the dish taste good. Other terms you might hear include "return attribution," "investment performance analysis," or "portfolio attribution."
Examples in Resumes
Developed Performance Attribution reports for $2B worth of client portfolios
Implemented new Performance Attribution analysis system that improved reporting accuracy by 30%
Led team of analysts in creating monthly Performance Attribution and Return Attribution presentations for institutional clients
Typical job title: "Performance Attribution Analysts"
Also try searching for:
Where to Find Performance Attribution Analysts
Professional Organizations
Online Communities
Professional Networks
Example Interview Questions
Senior Level Questions
Q: How would you explain performance attribution results to a non-technical client?
Expected Answer: Should demonstrate ability to simplify complex attribution analysis into clear, understandable terms, using relevant examples and visual aids to explain portfolio performance to clients.
Q: What steps would you take to validate the accuracy of attribution results?
Expected Answer: Should discuss importance of data quality, reconciliation processes, and various checks and balances to ensure accuracy of performance calculations and attribution analysis.
Mid Level Questions
Q: What are the key components of a good attribution report?
Expected Answer: Should mention allocation effect, selection effect, currency effect if applicable, and how these combine to explain overall performance relative to benchmark.
Q: How do you handle attribution analysis for different investment strategies?
Expected Answer: Should explain how attribution methods might differ for equity vs fixed income portfolios, or for different investment styles like growth vs value.
Junior Level Questions
Q: What is the difference between absolute and relative performance?
Expected Answer: Should explain that absolute performance is the portfolio's actual return, while relative performance compares returns to a benchmark or target.
Q: What data is needed for basic performance attribution?
Expected Answer: Should list portfolio holdings, benchmark weights, returns data, and transaction information as key requirements for attribution analysis.
Experience Level Indicators
Junior (0-2 years)
- Basic performance calculation methods
- Understanding of investment terms
- Excel and basic reporting skills
- Data collection and verification
Mid (2-5 years)
- Complex attribution methodologies
- Client reporting and presentation
- Performance analysis software expertise
- Quality control procedures
Senior (5+ years)
- Advanced attribution analysis
- Team management and training
- System implementation oversight
- Client relationship management
Red Flags to Watch For
- Lack of understanding of basic investment concepts
- No experience with performance calculation standards
- Poor attention to detail in calculations
- Inability to explain complex concepts simply
- No knowledge of industry compliance requirements
Related Terms
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