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: Inception Date

Source: GIPS Handbook, 2nd Edition

A firm manages private client portfolios. Depending upon when the portfolio came under management, returns will vary because of opportunities available at the time. Can a firm establish composites based on the date a portfolio comes under firm management?

In very specific situations, it may be appropriate to group portfolios into composites according to inception date (e.g., venture capital composites, after-tax composites, municipal bond composites). Because composites should represent consistency—or lack of consistency—of a strategy over time, a composite based on inception date would, generally, not show representative results of how the strategy performs over time as market conditions change. New portfolios are added to a composite according to reasonable and consistently applied manager guidelines.

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