GIPS - Real Estate (Schweser book5 pg195)

CFA Level III
#1

<1> in the mid of the page, you should notice: income and cap return components sum to the total return for each quarter annual income and annual cap return components DO NOT sum to the total return for each quarter anyone could explain why that’s the case for annual income and annual cap return?? <2> Also to confirm: it’s GIPS requirement, quarterly SIIRR must be annualised - don’t think it’s mentioned in Schweser

#2

anyone?

#3

<1> You must the talking about the calcuation method. Quarterly results are chaine-link, there must be some small rounding in those results.

#4

that confused me too. i think you meant: “annual income and annual cap return components DO NOT sum to the total return for each year” whereas quarterly income and quarterly cap return do sum to the total return for each quarter. the reasoning is because you chain link quarterly returns to get the annual return i.e. (retq1 +1)*(ret q2+1)…

#5

i think it depends on the calc period, if I calc annual income and cap return (without doing qtrly - think it’s allowed before 08). annual total return = sum of annual income and cap return

#6

i think you can do it 2 ways. Quaterly sums up and chain link, or anually sums up

#7

sounds good, CSK, thanks. just need some confirmation, Schweser made lots of unnecessary “notes” what’s your view on: <2> Also to confirm: it’s GIPS requirement, quarterly SIIRR must be annualised - don’t think it’s mentioned in Schweser

#8

It’s because, if you Sum your monthly or quarterly and then link them, this will be different return than if you just summed up teh quaterly or monthly returns.