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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Effective: 1 January, 2020

Categories: Wrap Fee Portfolios

Source: 2020 GIPS Standards

We manage small cap portfolios for three wrap fee sponsors, using the same strategy. We place reliance on each sponsor’s aggregate information, effectively viewing each sponsor as a single portfolio rather than identifying each client-level portfolio as a portfolio. When reporting performance of the style-defined small cap composite, how should we report the number of portfolios and the measure of internal dispersion?

If the firm is relying on each of the three sponsor’s aggregate information for disclosure and performance reporting purposes, the number of portfolios could be reported either as three or five or fewer. The firm may report a measure of internal dispersion using the annual returns from each of the three sponsors or could choose to not present the internal dispersion and report five or fewer portfolios in the composite.

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