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.

Content from prior Q&As was included in the GIPS Standards Handbook as much as possible and many Q&As were archived. Change the Status drop-down filter to "Archived" to see the archived Q&As.

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Effective

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1 Result

Archived

Effective: 1 January, 2014 - 31 December, 2019

Categories: Benchmarks

Source: GIPS Executive Committee

If the firm changes the benchmark for a composite, should the benchmark be changed historically for the composite?

When making this decision, the firm should consider that the GIPS standards are an ethical set of guidelines for presenting composite performance. The firm must keep in mind the principles of fair representation and full disclosure when considering this retroactive change. Changes to the benchmark primarily intended to make historical performance look better by lowering the benchmark return violate the spirit of the GIPS standards. Because benchmarks are continually evolving, if the firm decides the new benchmark is a more representative test of the effective implementation of an investment strategy, the firm may consider changing the benchmark retroactively. This is most likely to be appropriate if the benchmark has recently been created with history and was not previously available for use. In most cases, however, it may be most appropriate to change the benchmark starting in the current period. The firm must disclose the date of, description of, and the reason for the benchmark change. In addition, firms are encouraged to continue to present the old benchmark.

Please also see original Q&A