Gross/Net of Fees (GIPS)

Reading 48 discusses gross-of-fees and net-of-fees. Are both of these required? I can’t find the page in this Reading that spells out which is a recommended disclosure and which is a required disclosure. Thanks.

I think that the “firm” can post either gross or net of fees returns (doesn’t have to be both) but it has to be explicitly say which one is posting

I think you have to present gross of fees (footnoted), with an additional note stating that net of fees are available upon request can someone confirm?

bison_foilist Wrote: ------------------------------------------------------- > I think you have to present gross of fees (footnoted), with an additional note stating > that net of fees are available upon request > > can someone confirm? Where is the footnote ?

Pg 312, Vol 6 3rd paragraph. Could present both, but it has to be accompanied by appropriate disclosure. Gross of fees - Firms disclose if they deducted any other fees in addition to actual trading expenses Net of fees - Must disclose if they deducted any other fees in addition to trading expenses and management fees.

idreesz Wrote: ------------------------------------------------------- > Pg 312, Vol 6 > > 3rd paragraph. > > Could present both, but it has to be accompanied > by appropriate disclosure. > > Gross of fees - Firms disclose if they deducted > any other fees in addition to actual trading > expenses > > Net of fees - Must disclose if they deducted any > other fees in addition to trading expenses and > management fees. The firm does not have to disclose net of fees return but gross of fees return must be disclosed along with any other fees in addition to trading expenses. The reason why Gross of fees return is mandatory is because it shows the clients how the manager is performing with regards to the benchmark. The net of fees return is not a true replica of benchmark return.

me. tega. dont think that is right. you could do either except in certain circumstances.

someone wirth access to a book can you please confirm for the eidfication of the rest of us please

I think gross of returns is the preferred method, but who cares, this is such short-term memory stuff, just cram it in your head the week before the test.

According to the 2010 GIPS standard: 6.A.23 Net of fees for real estate close end 7.A.21 Net of fees AND Gross of fees for private equity CFAI text mentioned this under huge pile of words specifically: page 328 bottom and page 331 somewhere in the center.

Reading GIPS today, second time. And after discussion here I decided to download the GIPS pdf: http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2010.n5.1 PRESENTATION AND REPORTING Requirements 5.A.1 The following items MUST be presented in each COMPLIANT PRESENTATION: b. COMPOSITE returns for each annual period. COMPOSITE returns MUST be clearly identified as GROSS-OF-FEES or NET-OF-FEES. Recommendations FIRMS SHOULD present GROSS-OF-FEES returns. CALCULATION METHODOLOGY 2.A.4 All returns MUST be calculated after the deduction of the actual TRADING EXPENSES incurred during the period. FIRMS MUST NOT use estimated TRADING EXPENSES. Plus partly mentioned in Disclosure

8.A.6 When FIRMS present performance to a WRAP FEE/SMA PROSPECTIVE CLIENT, performance MUST be presented net of the entire WRAP FEE.

a do what now?