What are the three factors of the manager continuation policy performance (MAA)?

The three factors of the manager continuation policy performance, often referred to in the context of the Manager Assessment and Appraisal (MAA), are Measurement, Attribution, and Appraisal.

Measurement involves quantifying investment performance, which is a critical first step in evaluating whether a manager is meeting the required benchmarks and performance standards. Accurate measurement provides a clear view of how the manager's strategies have performed relative to predefined expectations or indices.

Attribution goes further by breaking down the sources of performance. This analysis allows investors to understand the various factors contributing to overall returns, distinguishing between skill and luck. It helps identify whether the manager's decisions genuinely added value or if performance was driven by external market movements.

Appraisal incorporates qualitative assessments into the evaluation process. This is where ongoing review of the manager's capabilities, decision-making processes, and overall strategy take place. It allows for a comprehensive understanding of the manager’s effectiveness and suitability for continuing the relationship.

Together, these three components create a robust framework for evaluating investment managers, ensuring that decisions regarding continuation or termination are based on both quantitative performance metrics and qualitative considerations. This detailed assessment framework supports informed decision-making aligned with the overall investment strategy and objectives.