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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ArchivedEffective: 1 November, 2012 - 31 December, 2019Categories: New Portfolios/AccountsSource: GIPS Handbook, 3rd Edition
Firm A has two composites, a global government fixed income composite and an emerging market fixed income composite. Do the GIPS standards require the firm to establish the same policy for including new portfolios in composites across the firm?
The GIPS standards require that firms establish a policy for including new portfolios in each composite and apply the policy consistently on a composite-specific basis. Different strategies may result in different time frames for inclusion based on the liquidity of the assets involved. While in most situations it is fairly easy to purchase and sell global government fixed income securities, emerging market debt may be more illiquid and, therefore, may initially require a longer period of time to implement the firm’s strategy. The global government fixed income composite might have a new portfolio inclusion policy with a shorter time frame relative to the emerging market fixed income composite.
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