GIPS SUMMARY FOR REVIEW

DataMonkey… you are DA MAN!

Spur: I meant to ask the same question. In one of the practice exam, there was a quesiton that stated gross and net of fee return should be disclosed as per std. I know that GIPS does not ask for both except pvt equity. Can someone answer? thanks.

Data_Monkey You have an error in the above it should be Less than 6 not less than 5, Its fixed: • # of portfolios (unless there are less than 6 portfolios for the full year – then not required) | Amount of Assets in composite | composite percentage of the total firms assets or the amount of the Total Firms assets at the end of a period. • Measure of dispersion of individual portfolios returns for each annual period (unless there are less than 6 portfolios for the full year – then not required)

bigwilly Wrote: ------------------------------------------------------- > Data_Monkey You have an error in the above it > should be Less than 6 not less than 5, Its fixed: > > • # of portfolios (unless there are less than 6 > portfolios for the full year – then not required) > | Amount of Assets in composite | composite > percentage of the total firms assets or the amount > of the Total Firms assets at the end of a period. > > • Measure of dispersion of individual portfolios > returns for each annual period (unless there are > less than 6 portfolios for the full year – then > not required) Bigwilly 5.A.1 d. actually says “5 portfolios or less” but since that is same as <6 mathematically it works for me. Perhaps that is how Datamonkey’s otherwise splendid review was slightly askew on that point. COULD SOMEBODY PLEASE KINDLY ANSWER THIS…AT LEAST ONE PERSON BESIDE ME IS WONDERING. MANY THANKS?: Is it true that for Asset Manager Code of Professional Conduct BOTH gross- and net-of-fees must be disclosed but for GIPS gross- OR net-of-fees must be disclosed? Isn’t this an inconsistency or am I missing something? Can someone kindly clarify this a little bit for me. Many thanks.

Yes i fyou have 5 or less then that is the same as 6, but I believe it was written before as just less than 5.

A big thanks to D_M and 738 - Great JOB well done! Just one error (not sure if it has already been mentioned) - the beg CF should be Beginning BV capital employed. Quoted from Iconnel738: Capital employed (CE) = beg CF + weighted sum of remaining CF’s

Someone can advise on this point below. Last full mean last reported period or last full Fiscal year period. Eg. Full year is Jan to Dec. On 31 Dec Firm A terminated Portfolio A1. Last reported is up to 30 Sept. So for Oct to Dec they should still include Portfolio A1 in its composite since it is the full measurement period (i.e it as terminated on the last day of the last quarter)? Thanks. From GIPS : 4. Include the performance of Terminated portfolios in historical returns in the appropriate composites UP TO the LAST FULL measurement period

If on June 15th I get notice that my client is pulling his money, then the last full measurement period is May 31st, regardless of when the client gets his money back. Also, the performance will remain in the composite from Inception of the account until May 31st. You will not remove this historical performance or else you will have survivorship bias.

bigwilly Wrote: ------------------------------------------------------- > If on June 15th I get notice that my client is > pulling his money, then the last full measurement > period is May 31st, regardless of when the client > gets his money back. Also, the performance will > remain in the composite from Inception of the > account until May 31st. You will not remove this > historical performance or else you will have > survivorship bias. A bit tricky…just wondering if your client pulled out on 31 May should you report that port return in the composite since it did contribute to the performance for the full quarter. But this is clear for me…if he terminate on 15 May then we should exclude that port for that quarter.

UPDATE ON DISPERSION: * Firm CAN choose one of the three but don’t have to, they can choose another method - but it must be representative and they must disclose how it is done. Dispersion types recommended include (including but not limited to:) • High and Low annual returns: High value - Low Value = Difference + Easy to perform - Outliers can skew figures • Interquartile Range 1-24% | 25%-75% |76-100%

You dont exclude it for the Quarter if you are weighting it Monthly. I know my firm weights it monthly so it would still effect the quaterly composite return but for say only 2/3rds of the quarter.

bigwilly Wrote: ------------------------------------------------------- > You dont exclude it for the Quarter if you are > weighting it Monthly. I know my firm weights it > monthly so it would still effect the quaterly > composite return but for say only 2/3rds of the > quarter. aha thanks. forgot the monthly thingy.

bigwilly Wrote: ------------------------------------------------------- > You dont exclude it for the Quarter if you are > weighting it Monthly. I know my firm weights it > monthly so it would still effect the quaterly > composite return but for say only 2/3rds of the > quarter. I understand that there will be no portfolio valuation or return calculation for A1 in Q3 and Q4 (correct if i am wrong). Just some questions following this. 1. When it comes to the year-end, the composite dispersion should NOT include A1. Correct? 2. When it comes to year-end, should number of portfolios for the composite count this A1?

Data_MOnkey and Inconel738, very much appreciated for your work here. I was justa bout to sit down for another GIPS review when I came across these. Now I have something to study at work for the next couple days :slight_smile:

Sticky, I want to say: Correct and Correct to both.

One correction for Data Monkeys post- Trade date accounting needs to be used started Jan 1st 2005, not 2006 Otherwise very helpful post

I dontknow if institute has forgottento update, but in the PDF docuemtn for GIPS standards, appendix A showing sample presentation still shows no of portfolio less than 5(not less than 6) as the reason for not showing…

Bump

Rocking guys this just saved some precious hours of exam day

YOU ROCK, MAN~~