[Verse 1] Portfolio managers make their choices every day Some pick winners, some pick losers in the fray But when returns roll in, how do we dissect the game? Brinson breaks it down, allocating praise and blame Three effects emerge from this analytical maze Allocation decisions and selection displays Plus interaction where these forces collide The Brinson model reveals what's truly inside [Chorus] ASI remember - Allocation, Selection, Interaction Break apart performance with mathematical satisfaction Weight times return, benchmark minus active play Brinson shows us where the alpha came to stay ASI remember - three effects that tell the tale Which decisions worked and which were bound to fail Asset allocation, stock selection combined Interaction effect completes the analytical mind [Verse 2] Allocation effect measures sector betting skill Overweight tech when it soars up the hill Underweight bonds when rates start to climb Portfolio weights versus benchmark through time Take the difference in weights, multiply by bench return Shows if asset allocation helped your portfolio earn Positive means you allocated smart and true Negative shows your sector timing came unglued [Chorus] ASI remember - Allocation, Selection, Interaction Break apart performance with mathematical satisfaction Weight times return, benchmark minus active play Brinson shows us where the alpha came to stay ASI remember - three effects that tell the tale Which decisions worked and which were bound to fail Asset allocation, stock selection combined Interaction effect completes the analytical mind [Bridge] Selection effect reveals stock-picking prowess clear Portfolio return minus benchmark in each tier Weighted by benchmark weights, the calculation flows Did you pick the diamonds or just average joes? Interaction captures when both skills align Overweight sectors where your picks truly shine Difference in weights times selection spread Shows when allocation and picking both paid [Verse 3] Sum them together, these three effects as one Total active return shows what you have done Separate skill from luck in manager review Brinson attribution reveals what's really true Performance mysteries dissolve in morning light When mathematics cuts through marketing's bright Each decision measured, each outcome weighed The Brinson model shows how alpha's truly made [Outro] ASI breaks it down, three effects divine Allocation, Selection, Interaction combine Manager evaluation crystal clear and bright Brinson model guides us through attribution's night
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