In Micro Performance Attribution The pure allocation calculation takes the difference in the sector weights times the difference between the return of the sector in the benchmark and the total return of the benchmark . In the CFAI text there’s a small note about how this formula is extracted saying something like in a portfolio all sum of the difference in the weights between the portfolio and benchmark must equal one… so the formula looks like: Sum [W(P,j) - W(B,j)] * [R(B,j) - R(B)] So when comparing this to global performance attribution shouldn’t the market allocation formula also have the same consideration? Since even here the diff in the weights of the markets in the portfolio versus the benchmark should equal one?? The formula for market alloc in global perf. att. is Sum [W(P,j) - W(B,j)] * R(B,j,l) howcome the total return on the benchmark in local currency is not subtracted from the second part of the equation?

the result is the same: because Sum [W(P,j) - W(B,j)] * [- R(B)] = 0

It’s a different attribution model. See my earlier post. However, as ddolphin mentioned, your overall result from the allocation term is exactly the same at the total fund level - but the individual sector levels will be different.

my concern is the individual sector level… which post are you referring to darkstart?

never mind…just saw your other post…reading through it now…if it doesn’t make sense…i’ll buzz you again …