[Verse 1]
When measuring returns across the time
Two methods help you draw the line
Time-weighted shows the manager's skill
Money-weighted shows what clients feel
External flows can skew the game
Time-weighted keeps performance the same
But money-weighted tells the tale
Of when your cash flows set the scale
[Chorus]
Evaluate, calculate, measure what you've done
Sharpe and Treynor, Jensen's alpha, ratios for everyone
Benchmark right, attribution bright, macro micro view
GIPS compliance, performance guidance, showing what is true
[Verse 2]
Benchmarking needs the perfect match
Asset class and style to catch
Custom benchmarks blend the weights
When standard indices create debates
Brinson shows us equity's way
Asset allocation holds the sway
Security selection plays its part
Fixed income needs a different art
[Chorus]
Evaluate, calculate, measure what you've done
Sharpe and Treynor, Jensen's alpha, ratios for everyone
Benchmark right, attribution bright, macro micro view
GIPS compliance, performance guidance, showing what is true
[Bridge]
Sharpe divides by total risk
Treynor uses beta's whisk
Information ratio's tracking error base
Sortino only counts the downside case
M-squared adjusts for leverage too
Jensen's alpha shows value new
[Verse 3]
Attribution breaks it down
Macro asset allocation crown
Micro shows security selection's might
Fixed income duration gets it right
GIPS standards keep it fair
Verification shows you care
Composite rules and disclosure clear
Performance presentation crystal dear
[Chorus]
Evaluate, calculate, measure what you've done
Sharpe and Treynor, Jensen's alpha, ratios for everyone
Benchmark right, attribution bright, macro micro view
GIPS compliance, performance guidance, showing what is true
[Outro]
Time and money weighted returns
Benchmarks chosen, ratio learns
Attribution tells the story right
Performance evaluation shining bright