Attribution Analysis of Portfolio Performance

A financial advisor is analyzing the performance of a client’s investment portfolio, which is primarily composed of U.S. stocks, international equities, and fixed income securities. The advisor has recently implemented a change in the allocation by increasing the weight in growth stocks while reducing the allocation to value stocks. Over the past quarter, the portfolio returned 8%, while the benchmark index (a blend of growth and value stocks) returned 6%.

To evaluate the performance, the advisor conducts an attribution analysis, focusing on the effects of asset allocation versus stock selection. It is vital to determine how much of the portfolio's excess return can be attributed to strategic decisions versus tactical decisions.

With this context, the advisor has assigned the following values in the attribution analysis:

Contribution to return from asset allocation: 1%

Contribution to return from stock selection: 1.5%

Which of the following statements accurately describes the attribution analysis conducted by the advisor?