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CFA Institute – Exposure Draft Guide for Best Practices in Return Attribution Reporting
Letter Summary
Return attribution helps firms evaluate active investment decisions by identifying sources of excess return relative to a benchmark and supporting informed discussions with clients. It can be applied to backward-looking (ex post) or forward-looking (ex ante) returns; this Guide focuses solely on ex post attribution. While established methodologies exist for calculating return attribution, there is limited guidance on how to report and disclose the results. To address this gap, CFA Institute has released an Exposure Draft of the Guide for Best Practices in Return Attribution Reporting to gather public input on fair presentation and full disclosure of attribution information, particularly in marketing materials, with relevance also for internal and client reporting.
Overview of the Council’s comments:
The Canadian Investment Performance Council (CIPC) has submitted its response to the CFA Institute’s Exposure Draft Guide for Best Practices in Return Attribution Reporting, expressing strong support for the principles of fair presentation and full disclosure.
While acknowledging the complexity and diversity of attribution methodologies used across firms, the CIPC offered targeted recommendations aimed at improving clarity, transparency, and consistency in client reporting.
Key themes from the response include:
• Supporting disclosure of representative portfolio selection policies, with consideration for administrative burden
• Recognizing the potential value of multi-year attribution when aligned with investment cycles and clearly documented
• Emphasizing consistent and transparent disclosure of attribution methodologies, including cumulative vs. annualized approaches
• Encouraging clear treatment of cash, currency effects, leverage, and derivatives when material to results
The feedback reinforces the importance of well-documented policies and client-focused disclosure as attribution practices continue to evolve.