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: RiskSource: GIPS Handbook, 3rd Edition
For periods ending on or after 1 January 2011, firms must present, as of each annual period end, the three-year annualized ex-post standard deviation (using monthly returns) of both the composite and the benchmark. There are a number of variations in the way in which standard deviation can be calculated. Is there a preferred methodology?
No. Standard deviation is a universally recognized measure, and while there are different variations, the GIPS standards do not require one particular calculation methodology. A firm must determine which calculation methodology (or methodologies) will be used and must use the selected methodology (or methodologies) consistently. The same methodology must be used for both the composite and the benchmark.
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