how is allocation effects not part of active management? isnt it the plug for how the manager deviated from his set policy allocations so wouldnt that mean it is part of active management as well as the investment manager effects?
It simply isn’t.
It’s the plug figure to make everything tot up to the total portfolio return. It encompasses trading fees, timing, market movement, and so on.
It has nothing to do with the manager deviating from his benchmark.