Q & A Database
The GIPS Standards Q&A database contains questions and answers (Q&As) on various searchable topics that provide additional interpretation on an issue. Q&As are considered to be authoritative guidance and must be followed in order to claim compliance with the GIPS standards.
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CurrentEffective: 1 January, 2020Categories: Composite Calculations, Composite ConstructionSource: 2020 GIPS Standards
Firm A has a client that has multiple segregated accounts (e.g., personal trust and a personal investment account) and manages these accounts as one “master” portfolio. For purposes of the GIPS standards, can Firm A treat these accounts as one portfolio and include them in an appropriate composite?
If a client has multiple portfolios that are managed collectively as one “master” portfolio, the firm can treat this “master” portfolio as any other portfolio and include it in an appropriate composite. Firms may treat this “master” portfolio as one portfolio for the purposes of calculating composite dispersion and the number of portfolios within the composite. Alternatively, if each segregated account is managed to the composite strategy on a standalone basis, the firm has the option to include each segregated account in the composite and include each segregated account’s monthly return in the composite internal dispersion calculation. Firms should consider if tax considerations or account restrictions of any of the individual segregated accounts affect the overall asset allocation process or the implementation of the firm’s strategy for the “master” portfolio.
Please also see prior version