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: Terminated Portfolios

Source: GIPS Handbook, 3rd Edition

Firm A has a policy of removing terminated portfolios from composites on the first day of the month that the firm was notified of termination. If notification of a portfolio’s termination is received on 25 May, when should it be removed from the composite if composite returns are calculated monthly?

The firm’s policy should be based on removing the portfolio from the composite after the last full measurement period for which the firm has discretion over the assets. Assuming monthly performance measurement periods, if the firm lost discretion to manage the portfolio effective 25 May, the portfolio must be included in the composite performance calculations through 30 April and must be excluded from the composite calculations for May.

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