TY - JOUR T1 - The Relative Importance of Asset Allocation and Security Selection JF - The Journal of Portfolio Management SP - 46 LP - 55 DO - 10.3905/jpm.2006.661371 VL - 33 IS - 1 AU - Kodjovi Assoé AU - Jean-François L'Her AU - Jean-François Plante Y1 - 2006/10/31 UR - https://pm-research.com/content/33/1/46.abstract N2 - There remains an active debate as to whether asset allocation or security selection is more important in investment performance. This revisit of the question uses a normative framework suggested before, but adds a more representative opportunity set for asset allocation, an unbiased dataset for stocks, and a modified security selection methodology that ensures strict uniformity with asset allocation rebalancing rules. In this case, the results do not support a clear hierarchy of investment choice. The extent to which asset allocation or security selection generates dispersion in active return is largely time-dependent.TOPICS: Portfolio construction, equity portfolio management, performance measurement ER -