Resources
SEC Marketing Rule – Hypothetical & Extracted Performance
Hypothetical performance will be prohibited beginning November 4, 2022, unless the advisor takes specific steps to address its potentially misleading nature. The SEC’s goal with this portion of the rule is to ensure that advertisements containing hypothetical performance are only distributed to investors who have the financial expertise and resources to interpret the data and understand the risks and limitations of these types of presentations.
SEC Marketing Rule – Prescribed Time Periods
Beginning November 4, 2022, all performance presented in an SEC-registrant’s marketing materials must include the additional time period requirements. One-, five- and ten-year net performance must be included in marketing materials when presenting performance.
SEC Portability Predecessor Performance
A portfolio manager’s track record is an important asset and key pillar of evaluation by institutional investors/asset owners. Ensuring that a portfolio manager’s performance can—or whether it should—go with her/him/the team to a new firm is of critical concern for planning or evaluating any transition.
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.
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.