Entries by Kim Cash

2020 GIPS® Standards – Bridging the Fund vs. Composite Divide

Key Concepts for Fund Managers Firms managing only commingled funds often question the relevance of creating GIPS-compliant composites for pooled funds that are essentially already of asset-weighted, strategy specific “composites.”  The 2020 GIPS standards added options that make GIPS compliance much more meaningful for managers of pooled funds, especially for firms with dozens of mutual funds and alternative investment strategies delivered in commingled fund vehicles. U.S. mutual funds will now follow the GIPS standards’ Broad Distribution Pooled Fund guidance, which is a mouthful, but it’s a […]

A 2020 GIPS Standards Game-Plan

First-Steps for Segregated Account Managers Firms managing segregated accounts who claim compliance with the GIPS standards – and firms who currently include pooled funds in composites, present TWRs, and expect to continue doing that: this article is for you.  Since the major rewrite of the GIPS standards was first announced, the focus has been on updates […]

GIPS® Standards Do’s & Don’ts

First Quarter 2019 is almost half over. Now is a great time for an in-depth review and refresh of firm-wide GIPS standards policies and procedures, especially for firms on an annual verification cycle. Here’s a list of Do’s and Don’ts to help with those P&P reviews and final polishing of GIPS Composite Reports.

Money-Weighted Returns in Excel

Beyond “Don’t Use” – How (Not) to Calculate Money-Weighted Returns in Excel

If cost was of no matter, then asset managers would all own (fill in the blank with your favorite accounting system).  For emerging asset management firms, cost does matter.  When managing a start-up commingled fund, an investment firm only needs to calculate a single return stream to comply with best practices in the GIPS® standards.  It’s hard to justify a six-figure expense when Microsoft Excel is free, never mind the pitfalls.

Multi-Asset Composite Membership Changes – GIPS® 2020

In the 2020 GIPS Exposure Draft, provision 3.A.10 is a revision of 3.A.7 that incorporates the term “client-directed” from the GIPS handbook. It prohibits composite membership changes unless there is a composite redefinition or a documented “client-directed” change to a portfolio’s investment mandate, objective, or strategy.

This provision ensures an asset manager’s decisions are reflected in the composite’s performance, providing accountability for tactical decisions or style drift over time.