Claims compliance with the GIPS but benchmark does not meet SAMURAI criteria

[FrankCFA]

Will it cause any issue? Or it’s independent. Thanks.

[sachin_patel]

its fine… no such criterias defined for benchmark

[Hard_Dollars]

Based on the Curriculum, “Disclose reasons for not choosing a Benchmark”

[kikentai]

Almost no company out there uses a custom benchmark, which is the only one that meets that critera, but lots of companies do claim compliance with GIPS. You just need to clearly state what the composite benchmark is. Custom benchmarks are very expensive and time consuming products. MSCI index licensing fees are already ridiculous and shops hate paying them.

[Chuckrox8]

@kikentai

Almost no company out there uses a custom benchmark, which is the only one that meets that critera, but lots of companies do claim compliance with GIPS. You just need to clearly state what the composite benchmark is. Custom benchmarks are very expensive and time consuming products. MSCI index licensing fees are already ridiculous and shops hate paying them.

That’s a pretty big generalization. My company has 200+ unique composite strategies and I would estimate that we use a custom index for 10-15% of the composites. Most of our custom indices are for quantitative equity strategies or some of our more esoteric fixed income composites.