Hi guys i have 3 question related to Gips material 1- what is the differences between trade date account and settelment account 2- what is bundled fees , wrap fees, custodial fees 3- what evergreen fund mean ? Thanks in advance .
Only know the answer for last question: Evergreen fund:a fund in which the returns generated by its investment are automatically channelled back into the fund rather than being distributed back to investors. The aim is to keep a continuous supply of capital available for further investments.
Thanks yyk6221. Another 2 question 4- What is rollover risk 5- What is pro bono basis appreciate any help guys
1- what is the differences between trade date account and settelment account. Trade date is the the parties accept to enter into agreement to do the trasaction. Settlelment date is when you finalize what you were agree upon on the trade date. For instance you may buy some futures contract today ( which is the trade date) and only take position of the contract tomorrow after the clearing house settle all the of the trasaction that happen today. For GIPS only the trade is matter.
Please any one ???
Which ones in particular are you most confused about? 1. Echo tibwa’s response - this is more an apples to apples comparison requirement. Funds had the potential to either use trade date accounting vs settlement date accounting in performance calculation. As you know, trade date accounting is based on the actual transaction date (i.e. say you execute an order to buy XYZ stock today at $10, you will take delivery of the XYZ stock in three days based on most exchanges) this means your cost of XYZ stock is based on the date of trade (i.e. $10), not on the date of settlement (e.g. $10). As there may be a difference in price between settlement date vs trade date - comparing the performance between funds is easier if there is just a rule stating the use of one. 2. Bundled fees - Think of it as an all inclusive fee charged to the client- that would include investment management fees, transaction fees (i.e. brokerage), etc Custodian fees - most individuals or institutions don’t hold securities (i.e. share certificates) - instead they hold it in a custodial account. Custody fees include the fee of all administrative work (i.e. keeping track of security costs, accepting dividend payment (or coupons if you’re holding bonds), etc) They also have the ability to lend out your securities for a fee to the borrower (important for investors that need to borrow securities to “short”) in which you as the rightful owner receive a cut from. 3. Evergreen - echo the previous comment 4. Rollover risk - (I’ll review this and get back to you… I’m assuming it’s in the context of futures but just in case) 5. Probono basis - All I understand with probono is either the work is done for free or payment is based on the outcome at a later date (legal definition)
Sha i appreciate your help. Thank you very much
Hi NV85 - unfortunately I just flipped through GIPS and I’m not seeing the section you are referencing w/r/t rollover risk. (Honestly, it was trully a quick flip) That being said, I’m about 95% sure this speaks to futures/fowards that is covered in section in derivatives. Let me know via a separate thread, if you have problems with the definition of rollover risk.