[Verse 1] Portfolio manager Sarah built her strategy bold With benchmark weights and active picks to hold But when returns came rolling in that autumn day She wondered where the alpha went astray The Brinson Model holds the key to see Three forces dancing in her equity [Chorus] Allocation, Selection, Interaction too Three effects that tell us what the portfolio can do Asset weights and stock picks, how they intertwine Brinson breaks it down into components divine A-S-I, decompose the why Behind the numbers reaching for the sky [Verse 2] Allocation effect shows the sector bets Overweight in tech while energy's in nets Take the benchmark return times the weight you chose Minus benchmark weight times benchmark's rose Pure sector timing stripped of stock selection This effect reveals your asset direction [Chorus] Allocation, Selection, Interaction too Three effects that tell us what the portfolio can do Asset weights and stock picks, how they intertwine Brinson breaks it down into components divine A-S-I, decompose the why Behind the numbers reaching for the sky [Verse 3] Selection effect captures picking skill Within each sector, beat the market still Portfolio return minus benchmark's pace Times the benchmark weight in that space Stock-picking prowess isolated clean From allocation's systematic scheme [Bridge] Interaction's where it gets complex and neat When allocation and selection compete Overweight a sector that outperformed strong Double-counted value won't last long Cross-effect adjustment makes the math complete Three pure components, attribution's feat [Chorus] Allocation, Selection, Interaction too Three effects that tell us what the portfolio can do Asset weights and stock picks, how they intertwine Brinson breaks it down into components divine A-S-I, decompose the why Behind the numbers reaching for the sky [Outro] Now Sarah sees her value-add so clear Which decisions cost and which endear Brinson Model splits the total score Into three effects worth fighting for
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