Does anyone have a simplied list of things required versus recommended in the performance Presentation? Every single question I come across where they ask which is required vs. recommended I can’t get it right.
A consolidated list would be greatly appreciated
I gave up GIPS few months ago. Now I live a happy stable life. I came to realize that the hills are alive with the sound of music
Probably you will see only one set of questions in PM session.
The best approach is to read several times Schweser Secret Souce on gips and focus on other areas.
^ ha
I just re-read the GIPS section for the second time. I think i’ve successfully ripped out 50% of my hair.
6 hours into this section, time to move on.
I just watched arifs video and printed 75 page slides.
Now i will revise it and make imp points. Then will do all CFA EOC + Past cfa questions
Pray 3/6 come again
Let’s attack it!!!
REQUIREMENT
• Standard 5.A.1.
The following items must be reported for each composite presented: a. At least five years of annual performance (or a record for the period since firm or composite inception if the firm or composite has been in existence less than five years) that meets the requirements of the GIPS standards; after presenting five years of performance, the firm must present additional annual performance up to a minimum of ten years. b. Annual returns for all years clearly identified as gross- or net-of-fees. c. For composites with a composite inception date beginning on or after January 1, 2011, when the initial period is less than a full year, firms must present returns from the composite inception through the initial year-end. d. For composites with a termination date of January 1, 2011, or later, returns from the last annual period through the termination date. e. Annual returns for a benchmark, which reflects the mandate, objective, or strategy of the portfolio. f. The number of portfolios in the composite at each year-end. If the composite contains five portfolios or less, the number of portfolios is not required. g. The amount of assets in the composite at the end of each annual period. h. Either total firm assets or composite assets as a percentage of firm assets at each annual period end. i. A measure of dispersion of individual portfolio returns for each annual period. If the composite contains five portfolios or less for the full year, a measure of dispersion is not required. • Standard 5.A.2. For periods beginning on or after January 1, 2011, firms must present for each annual period: a. Three-year annualized ex post standard deviation using monthly returns for the composite and benchmark. b. An additional 3-year ex post risk measure if management feels standard deviation is inappropriate. The firm must match the periodicity of calculated returns used for the composite and benchmark. • Standard 5.A.3. Firms may link non-GIPS-compliant returns to their compliant history so long as the firms meet the disclosure requirements for noncompliant performance and only compliant returns are presented for periods after January 1, 2000. • Standard 5.A.4. Returns of portfolios and composites for periods of less than one year must not be annualized. Discussion: The annualizing of partial-year returns is essentially the simulation of returns over a period, which is not allowed. • Standard 5.A.5. For periods beginning on or after January 1, 2006, and ending prior to January 1, 2011, if a composite includes carve-outs, the presentation must include the percentage of the composite that is composed of carve-outs for each annual period. • Standard 5.A.6. If a composite contains any non-fee-paying portfolios, the firm must present, as of the end of each annual period, the percentage of the composite assets represented by the non-fee-paying portfolios. Discussion: An example of a non-fee-paying portfolio is one that is managed on a pro bono basis. Portfolios that are non-fee-paying do not have to be included in any composite, and the firm need not make any disclosures regarding such portfolios. • Standard 5.A.7. If a composite includes bundled-fee portfolios, the firm must present, as of the end of each annual period, the percentage of the composite assets represented by bundled-fee portfolios. GIPS Presentation and Reporting Recommendations • Standard 5.B.1. Firms should present gross of fees returns. • Standard 5.B.2. Firms should present: a. Cumulative returns for composite and benchmarks for all periods. b. Equal-weighted mean and median returns for each composite. c. Quarterly and/or monthly returns. d. Annualized composite and benchmark returns for periods greater than 12 months. • Standard 5.B.3. For periods prior to January 1, 2011, the 3-year annualized ex post standard deviation of monthly returns for each year for the composite and its benchmark. • Standard 5.B.4. For each year in which an annualized ex post standard deviation is present for the composite and the benchmark, corresponding annualized return should be presented. • Standard 5.B.5. For each year that annualized composite and benchmark returns are reported, the corresponding annualized standard deviation of monthly returns for the composite and benchmark. • Standard 5.B.6. Additional ex post composite risk measures. • Standard 5.B.7. Firms should present more than ten years of annual performance in the compliant presentation. • Standard 5.B.8. Firms should comply with GIPS for all historical periods. • Standard 5.B.9. Firms should update compliant presentations quarterly. (Above from Schweser)
GIPS is only about 5% of the exam. Know the basics, but don’t kill yourself trying to learn all the minute details. Your time is better spent elsewhere.
Above is basic…I believe.
^ you deserve to pass.
In my opinion, Secret Sauce and some practice is sufficient for GIPS.
Don’t through a rubber to my head, my friend:)
Btw, remember 5% means from band 9 to pass!
