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 March, 2006 - 31 October, 2012

Categories: Composite Changes

Source: GIPS Handbook, 2nd Edition

One of the portfolios in our All Cap Growth Equity composite changed objectives towards the end of the second quarter (client agreement date: June 21) from All cap ($300MM and above market cap) to Mid Cap ($1B – 10B).

Should the portfolio be taken out of the All Cap composite for June, even though the portfolio’s objective only changed in the last 9 days of the month? In talking to the portfolio managers involved, no changes were implemented during the short period because of the similarity of the two styles (all cap vs. mid cap)

Does the client objective change automatically exclude the account from being in the all cap composite for June?

Shifts from one composite to another should be consistent with the guidelines set forth by the specific account agreement or with documented guidelines of the firm’s client. In the situation you present, if there was any latitude within the agreement as to when the change should occur, in the interest of fair representation and full disclosure, the firm should include the account in the All Cap Growth Equity composite only through the last full measurement period that the account was managed to that strategy.

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