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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Archived

Effective: 1 November, 2012 - 31 December, 2019

Categories: Fees

Source: GIPS Handbook, 3rd Edition

We want to report the net-of-fees returns of a composite. Should we state the actual net-of-fees returns for all portfolios, which would reflect the deduction of the actual fee paid by each portfolio, or can we use a model fee?

The net-of-fees return is defined as the gross-of-fees return reduced by the investment management fee (including performance-based fees and carried interest). Firms are permitted to use either the actual investment management fee incurred by each portfolio in the composite or the highest investment management fee appropriate to a prospective client to reduce the gross-of-fees return to calculate the net-of-fees return.

Please also see original Q&A