We’re using cookies, but you can turn them off in Privacy Settings. Otherwise, you are agreeing to our use of cookies. Learn more in our Privacy Policy.


This article presents a framework for determining the contributions of different aspects of the investment management process—asset allocation policy, active asset allocation, and security selection—to the total return of investment portfolios. Data from 82 large pension plans indicate that asset allocation policy, however determined, is the overwhelmingly dominant contributor to total return. Active investment decisions by plan sponsors and managers did little on average to improve performance over the 10-year period December 1977 to December 1987. The performance attribution framework is also extended to account for actual and synthetic cash holdings within asset classes.

About the Author(s)

Gary P. Brinson CFA

Gary P. Brinson, CFA, is the president of GP Brinson Investments. Previously, he founded Brinson Partners, Inc., and served as chairman of the Institute of Chartered Financial Analysts, a predecessor of CFA Institute. Mr. Brinson is a member of the Economic Club of Chicago and the advisory council of the Financial Analysts Journal. He was named Outstanding Financial Executive by the Financial Management Association and received the CFA Institute Award for Professional Excellence. Mr. Brinson is the co-author of two books on global investing and has written numerous articles on an array of investment topics. He holds a BA in finance from Seattle University and an MBA from Washington State University.

Brian Singer
Brian D. Singer CFA

Brian Singer, CFA, partner, is the head of William Blair’s Dynamic Allocation Strategies (DAS) team, on which he also serves as portfolio manager. He is also a member of the Investment Management leadership team. Before joining William Blair in 2011, Brian was the head of investment strategies at Singer Partners, LLC. Before that, Brian was the head of global investment solutions and the Americas chief investment officer for UBS Global Asset Management, where he was a member of the UBS Group’s managing board and global asset management executive committee. Brian is extensively involved with the CFA Institute. He formerly served as a board member and chair of the CFA Institute board of governors. He is a member of the CFA Society Chicago and a former chair and member of the CFA Institute Research Foundation board of trustees, and in 2015, he received the CFA Institute’s Distinguished Service Award, which recognizes CFA members who have made a significant contribution to the CFA Institute through their leadership, exceptional stewardship, and outstanding service. Brian has written extensively on global portfolio, currency, and performance issues, and co‐wrote the seminal Determinants of Portfolio Performance II: An Update with Gary Brinson and Gilbert Beebower. In 2009 Brian was the lead author of Investment Leadership and Portfolio Management from Wiley Publishing. In 2018 the CFA Society Chicago awarded Brian the Hortense Friedman Award for Excellence, and in 2015 The Spaulding Group inducted Brian into the Performance and Risk Management Hall of Fame. Brian serves on the endowment investment committee for Exeter College at Oxford University; he is chairman of the “Free to Choose Network,” which is inspired by the ideas of economist Milton Friedman; and he serves as a member of the Rehabilitation Institute of Chicago Keystone board. Brian received a B.A. in economics from Northwestern University and an M.B.A. from the University of Chicago’s Booth School of Business.

Gilbert L. Beebower