1
Q
A
2
Q
3 drivers of portfolio performance?
A
Asset allocation, timing, selection
3
Q
Most important driver (Brinson)?
A
Asset allocation
4
Q
Timing return formula?
A
(WA − WB) × RB
5
Q
Selection return formula?
A
(RA − RB) × WB
6
Q
Residual return formula?
A
(WA − WB)(RA − RB)
7
Q
Key finding of BHB (R² ~ 90%+)?
A
Asset allocation explains most variation
8
Q
Key finding on timing/selection?
A
Add little value on average
