A good question on 5/10-year performance record. I missed it.
Inception date: 12/31/2003. Performamnce record: 2005,2006,2007,2008, 2009Q1.
GIPS compliant? Why or why not.
i wil say…not GIPS compliant because:
[1] Fails the at least 5 years of GIPS compliant requirement.
[2]Even if the performance was given since 2004 or 2003, the 2009 Q1 suggests we are annualising returns, which we should not do for measurement periods less than 12 months?
please say this is right !!
I would not use them
Not compliant. They need to show 2004 returns in order to be compliant.
There’s nothing saying that you CAN’T show the 2009Q1 performance, just as long as you’re not annualizing it…
darkstar,isn’t one of the presentational requirements that we present total/composite total returns for an annual period? so its ok to show quarterly results as long as we dont annualise them? argh…
Yes, it says 2009Q1 is not annualized.
Alladin, looks like your answer (s) right.
Correct, you have to present returns for annual periods. However, if it’s April 2009, as a prospective client you’d probably want to see the firm’s Q1 results, wouldn’t you? It is actually recommended to show monthly/quarterly returns.
right thx darkstar…completely forgot the recommended stuff.
Maybe in the footnotes or clarifying comments. But not included in the annual performance results. Incomplete years should not be listed there
Hmm, I don’t remember that. Can you please reference where in the GIPS standards it says this? I might have missed something…
5.A.4 Returns for periods of less than one year MUST NOT be annualized.
Unless the 2009Q1 numbers were annualized - this should not be problem.
Maybe I was misinterpreting 5.A.1 which says you should present a year’s worth of additional data each year.
cpk, you are right , you can show partial years , provided you clearly mark it as such
2012 Mock que 58