Performance attribution analysis is a method used by analysts at Morningstar and elsewhere to help determine why a fund performed the way it did during a given time period. Did the fund underperform relative to its benchmark because of a few bad stock picks, or was it because the fund invested too heavily in a poorly performing sector of the market? If a fund outperformed its benchmark, is it because the manager chose the right stocks to invest in, or because he or she managed to avoid stocks that would have weighed down performance? These are the sorts of questions performance attribution analysis can help answer.