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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CurrentEffective: 1 November, 2012Categories: Composite ChangesSource: GIPS Handbook, 3rd Edition
We are changing our investment process and the personnel involved in the management of a U.K. strategy. The risk and return objectives will be lower, and the process for managing the strategy will be predominantly based on a bottom-up stock selection approach as opposed to the previous top-down asset allocation approach. Does this require a change in composite?
The firm must determine if the changes in investment process and personnel will result in a change in the investment strategy of the portfolios in the composite. If this will be a new investment strategy offered by the firm, a new composite must be started with a current composite creation date and no composite history. If the changes in process and personnel involved do not result in a change in investment strategy, the firm must not create a new composite, but must revise the composite description and composite definition where appropriate. The firm must clearly document its decision and rationale.
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