representative of firm’s performance accounts. performance of selected overall investment results. time periods.
GIPS ⇒ set of ethical principles (standardized, industry-
wide & voluntarily followed by firms). Clients have more confidence in reported performance & can easily compare investment firms’ performances.
3. b
Composite ⇒ grouping of individual discretionary portfolios representing
a similar investment strategy, objective or mandate. Provide information about investment style results & various types of securities being managed. Each portfolio is assigned to a composite before its performance is known (no intentional superior composite creation).
3. c Verification
Requirements Recommendations
Performed by independent third party Firms are encouraged to pursue
(firm-wide basis). independent verification. Verifier must attest; Disclosure language; Firm has compiled with composite “[insert name of firm] has been verified construction requirements. for the periods [insert dates] by [name of Firm’s policies and procedures are verifier]. A copy of the verification report designed to present and calculate is available upon request.” performance in accordance with the GIPS standards.