John is a portfolio manager responsible for managing a diversified equity portfolio. For the past year, his portfolio has outperformed the benchmark index by 2%. During a performance evaluation meeting, John's supervisor asked him to prepare an attribution analysis to explain the sources of this outperformance. Attribution analysis focuses on breaking down the returns of the portfolio into contributions from different investment decisions such as asset allocation, sector allocation, and security selection.
In this context, which of the following components is primarily evaluated in attribution analysis when determining how much of the portfolio's excess return is due to selection decisions?