There is quite a lot of material dedicated to return attribution. At it’s core, I’m trying to find out how this is useful to anyone.
As an Example: say Benchmark Port. holds 1 stock, stock A. 2 managers are tasked with outperforming the benchmark.
-Manager #1 does in depth fundamental analysis and ends up choosing Stock B for his portfolio.
-Manager #2 is a Chimpanzee who presses a key on the computer which chooses Stock B as well.
Stock B outperforms the Benchmark by 5%.
We can spend endless hours slicing and dicing the 5% into buckets and categories, but why does it matter and who cares? It tells us nothing.
Everyone knows that Luck is a huge factor, probably the most prominent one. For every 1 reason a Manager chooses a stock there can be 1,000 unrelated reasons why that decision turns out to be outperforming or underperforming.
It all seems like a lot of nuanced BS to me.
It would MAYBE make sense if the investment thesis is tied to the attribution. For example, Manager A selects 10y Bond ABC bc they believe 10y rates will fall due to very specific reason XYC. And that exact thesis plays out…but even then