I know you may include non fee paying portfolios according to GIPS as long as you diclose % of assets but it does not state if you need do decide to include non fee paying portfolios, must you include them all? It never says that so are you allowed to cherry pick your best performing non fee paying accts? And I forgot, can you change which fee paying portfolios you inlcude year to year?
all fee paying discretionary portfolio’s must be included in a composite.
strikershank Wrote: ------------------------------------------------------- > all fee paying discretionary portfolio’s must be > included in ATLEAST ONE composite. 
funny, i wrote at least one composite that thought that sounded wrong and deleted it to read a composite. well, that wasn’t really funny. i shoudl’e began with interstingly, …
I understand that but what if you decide to include non fee paying portfolios, do you need to include them all or can you cherry pick the best ones? And can you remove and/or add these non fee paying portfolios regularly?
Good question - Schweser doesn’t inidcate whether or not all non-fee portolios must be included if one is.
s23dino Wrote: ------------------------------------------------------- > I understand that but what if you decide to > include non fee paying portfolios, do you need to > include them all or can you cherry pick the best > ones? And can you remove and/or add these non fee > paying portfolios regularly? good question, even cfai material does not address this specifically; however, since you can not cherry pick fee paying and discretionary portfolios; then if you decide to include the non-fee paying then you should consistently going forward, unless there is a change in objectives and no longer fit the composite. it would be all about recommendation of ‘full disclosure’.
s23dino Wrote: ------------------------------------------------------- > I understand that but what if you decide to > include non fee paying portfolios, do you need to > include them all You do not need to include all non-fee paying portfolios. See discussion section next to 5.A.7, p.188, Schweser #5. Having said that, I think you are only expected to include non-fee paying portfolio that are: - pro bono based - using investment firm’s seed money ie. non fee paying portfolios like simulated portfolios are still NOT allowed in any circumstances. (correct me if wrong) > or can you cherry pick the best ones? I think under circumstances I described above, you can cherry pick what to include in a composite, but once included, those portfolios are subject to general GIPS provisions (eg. you cannot take them out next year simply due to underperformance) > And can you remove and/or add these non fee > paying portfolios regularly? as said, don’t think so. GIPS apply when these portfolios are included. comment welcome though. - sticky
> ie. non fee paying portfolios like simulated portfolios are still NOT allowed in any circumstances. (correct me if wrong) this is wrong non-fee portfolios are allowed if they are discretionary, however firms are not required to include them. If they decide to include them they must disclose what is the proportion of assets in non-discretionary portfolio in a composite. non-disctitionary fee paying or non-fee paying portfolios are not allowed, as well as simulated portfolios are not allowed. Simulated portfolios could be presented in suplemental materials with all approprite disclosures.
Pretty good question. I feel edge is right. Haven’t found the proof yet.
volkovv, you are correct. Thanks! - sticky
volkovv Wrote: ------------------------------------------------------- > non-fee portfolios are allowed if they are > discretionary, One more question, volkovv. I think simulated portfolios are non-fee paying but DISCRETIONARY by nature? However, simulated portfolio are not allowed. > however firms are not required to > include them. If they decide to include them they > must disclose what is the proportion of assets in > non-discretionary portfolio in a composite. > > non-disctitionary fee paying or non-fee paying > portfolios are not allowed, as well as simulated > portfolios are not allowed. Simulated portfolios > could be presented in suplemental materials with > all approprite disclosures. I want to read through the material regarding presenting simulated portfolios in supplemental materials. Which page (CFAI/Schweser) is this? Thanks. - sticky
sticky, CFAI V6, p. 305 second paragraph Simulated porfolios cannot be included in a composite. They can be can be shown in supplemental information but cannot be linked to actual performance returns.
volkovv Wrote: ------------------------------------------------------- > sticky, CFAI V6, p. 305 second paragraph > > Simulated porfolios cannot be included in a > composite. They can be can be shown in > supplemental information but cannot be linked to > actual performance returns. I believe “supplemental information” can even be the promotion of a new investment product where no previous returns existed but they compiled simulated results.
is this summary correct? fee nonfee discret must be in at least 1 comp. may be presented but must disclose %. (eg. pro bono, seed fund) simulated port banned. pls put in suppl. non-discret not in GIPS - sticky
I tried to draw a 2x2 table but never realized it screwed up. Rewritten. (1) fee, discret: must be in at least 1 composite. (2) nonfee, discret: may be presented but must disclose % (eg. pro bono, seed fund) simulated portfolio banned. Please put int suppl. (3) fee/nonfee, nondiscret: NEVER any performance in GIPS. Counted in firm total asset though. Is this summary correct? - sticky