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

Key Conceptfor 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.

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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 to make the GIPS standards more relevant to different types of discretionary asset managers.  For firms already claiming compliance, especially managers of segregated accounts, changes were expected to be minor… and they are.

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GIPS® Standards Do’s & Don’ts

GIPS® Standards Do’s and 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.

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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.

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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.

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Advisory Only Assets – Understanding New GIPS® Terminology

The roll-out of 2020 GIPS® is underway and currently open for comment.  One of the more confusing provisions in the exposure draft is the proposed requirement to report Advisory Only Assets separate from GIPS Firm assets.

This 2020 GIPS provision is not a big departure from prior guidance.  It is important, however, to understand if you and your colleagues—and regulators—use the term “advisory only” assets differently than it is used in the 2020 GIPS Glossary.  This article will define the terminology and help you assess the impact of the new terminology for your firm, if any.  We’ll also line up the GIPS terminology with regulatory assets under management and provide clarifying examples.

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