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: Discretion

Source: GIPS Handbook, 3rd Edition

A firm is hired to manage a multiple-strategy mandate. Must a discretionary, multiple-strategy portfolio be included in a multiple-strategy composite? Would the answer be the same if each of the portfolio’s segments were included in a corresponding composite? For example, if a firm manages a discretionary balanced strategy that contains equity and fixed income segments, must the balanced portfolio be included in a balanced composite if the equity and fixed income segments (including cash) are included in their respective composites?

The GIPS standards require that all fee-paying discretionary portfolios must be included in at least one composite. Accordingly, a discretionary multiple-strategy portfolio must be included in a multiple-strategy composite.

The answer would be the same if each of the portfolio’s segments is included in the relevant composites. Including all the segments of a discretionary multiple-strategy portfolio in composites does not eliminate the requirement to include the total portfolio in a composite.

If the firm does not have discretion over the asset mix but has discretion over the segments of the various asset classes, the segments must be included in relevant composites (provided that they are representative of an investment strategy and managed with their own cash balances).

When generating the total firm assets number, an asset must be counted only once, even if it is included in more than one composite.

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