Micro Performance Attribution - P46 bk 6 CFAI

There was a reqest for how to remember Mircro Performance Attribution - many of us (including me) have been having issues. Try this for starts – I tried to come up with a rhyme: Pure sector, Selection, and Within, there is such a spin In the first two, the little weights are the same it’s the returns that the game Little B, Big B, little P little B (3 Bs and a P – Returns are easy you can see) ‘Within’ carries little bench weight and the returns are not that great. Look at the formula in the CFAI readings and just state this above. Try saying it and writing the formula. LITTLE – refers to using the asset level (within the portfolio) where as BIG refers to using the TOTAL for the portfolio. The first two components weightings are the same (Weight of each portfolio asset minus its corresponding benchmark asset (aka little)). It’s the RETURNS that you have to remember are different, PURE bench mark asset return (little B) to TOTAL Benchmark return (BIG B) – If it helps, REMEMBER THAT PURE REMAINS ‘PURE’ WITH “B” and Selection (Return on the Portfolio Asset to the corresponding Benchmark asset return (THEY SELECT SOMETHING DIFFERENT). Within carries little weight (since it is only 1 W – the weight of the bench asset x returns are not so great (little P – little B) (NOT GREAT - SAME AS LITTLE) My description is not so hot - but just read the rhyme and look at the formula… Anybody got something easer like “The Quick Brown Fox…” or “There once was a man from Nantucket…”