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). Read more
Tag Archive for: GIPS
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.
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.
Ten Steps to GIPS® Compliance
Is your firm considering GIPS Compliance?
Cascade Compliance can help asset managers achieve and maintain independently verified GIPS compliance. Compliance with the GIPS standards is a firm-wide process, often required by consultants and institutional investors. Third-party verification brings additional credibility to that process and supports the overall guiding principles of full disclosure and fair representation.
Cascade Compliance was established with a 100% dedication to consultation and verification services for the investment industry. With that focus comes thought leadership and a commitment to keeping clients informed about operational and compliance developments and upcoming changes from the CFA Institute.
Here are 10 helpful tips for becoming GIPS compliant:
Step 1 – Gain Management Support: Management must commit time and resources to bring the firm into compliance. Create a GIPS committee that includes leaders from different departments at the firm.
Benefits of GIPS® Compliance
The primary objectives of the Global Investment Performance Standards (GIPS) are full disclosure and fair representation in marketing presentations. The benefits of GIPS compliance go beyond the compliant presentation, though. Claiming compliance with the GIPS standards shows a firm is committed to ethical best practices and that the firm employs strong internal control processes.