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: Minimum Asset Level

Source: GIPS Handbook, 3rd Edition

We have a composite of 120 portfolios with a 10-year track record. We’d like to establish a composite minimum size to reflect the fact that we can no longer manage portfolios that have a value less than the minimum size according to the composite objective. This is largely due to the portfolios decreasing in size whereby there are not enough assets to buy the appropriate number of securities for the style. Would we lose the historical performance record of the composite by removing so many portfolios (more than half)?

The historical performance of a composite does not change if a firm establishes a new minimum for the composite. If a firm chooses to implement a minimum asset level or change a minimum asset level for an existing composite, the firm must document and disclose the change to the minimum and apply the new limit consistently going forward. The firm must not go back and restate historical performance to include or exclude portfolios using the new minimum asset level. Prospectively, the firm will include in the composite only those portfolios that meet the composite minimum.

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