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 December, 2009 - 31 October, 2012

Categories: Carve-Outs

Source: GIPS Executive Committee

Our firm currently uses carve-outs for the Equity Composite, and allocates cash based on relative beginning of period assets. Generally, the percentage of carve-out assets in the Equity Composite has been quite high. Beginning as of 1 January 2010 we have several portfolios that are solely invested in the equity strategy as a dedicated mandate and due to the 1 January 2010 carve-out requirements, we are discontinuing the use of carve-outs with allocated cash in that composite. In this situation, can we link performance of the new dedicated mandate portfolios to the previous performance history based on carve-outs? May we also show performance of the equity segment excluding cash?

In this example, the Equity Composite will continue as it includes all portfolios managed in that strategy and the performance prior to and after 1 January 2010 must be linked. The carve outs with allocated cash must be removed from the composite effective 1 January 2010. From that date forward this composite would only include portfolios that have a dedicated equity mandate. The performance of the equity-only segment may only be shown as Supplemental Information. Please see the sample presentation at the link above.

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