JerkFace Capital launched a fund-of-funds portfolio last month. The new fund is a composite of three of their best performing strategies. Two of these strategies have been around for ten years and the other for five years. As a GIPS-compliant firm, which composite track record should Jerkface Capital show to prospects of the fund-of-funds portfolio? A) One month B) Five years C) Ten years
A man all 3 were tough. I’ll be appt for 1 right!
B
B
A Because the fund-of-fund portfolio was only launched last month nevermind the underlying have been around for ages. If the fund-of-fund portfolo can show five years, it means the firm can take the best performing funds and assemble it into a single fund-of-fund product and resulting in an upward bias of the composite returns.
B
Its “C”. Because the 2 strategies have been around for 10 years and to not show their perf for the entire time would not be in compliance.
onelasttime Wrote: ------------------------------------------------------- > Its “C”. Because the 2 strategies have been around > for 10 years and to not show their perf for the > entire time would not be in compliance. The question specifically asked “which composite track record should Jerkface Capital show to prospects of the fund-of-funds portfolio?” It isn’t asking about how many years to show for the other strategies.
I’d say A. The firm is already GIPS compliant. The new fund just came into existence last month.
Correct answer is A
“The new fund is a composite” are the key words…A portfolio can be put in more than one composite.