Book 6, Read 48, Q 23 says that a “Benchmark must be provided” However “If no benchmark is provided, a reason must be given as to why this is the case” So, isn’t it more correct to say that a Benchmark is recommended, and if one is not provided a reason must be given as to why this is the case? If benchmarks are required, then there wouldn’t need to be a rule about not providing one, since you wouldn’t be in compliance if you didn’t provide one.
if ‘benchmark must be provided’ was a recommendation only, then even if you didnt provide one, you neednt state it explicitly. but under GIPS , one is reqd to state it so if no benchmark is provided. i guess there’s the difference between requirement and recommendation in this case.
boost Wrote: ------------------------------------------------------- > Book 6, Read 48, Q 23 says that a “Benchmark must > be provided” However “If no benchmark is provided, > a reason must be given as to why this is the > case” > > So, isn’t it more correct to say that a Benchmark > is recommended, and if one is not provided a > reason must be given as to why this is the case? > If benchmarks are required, then there wouldn’t > need to be a rule about not providing one, since > you wouldn’t be in compliance if you didn’t > provide one. It is a requirement. In case the portfolio has type of investments that does not have a benchmark which is appropriate, they have to state the reason.
Remember hedge funds dont really have specific benchmarks to compare themselves with? Those are the type of cases when rule case applies. Firm shows presentation with no benchmark, and then they need to explain why there is no benchmark.