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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Effective: 1 June, 2004 - 31 October, 2012

Categories: Carve-Outs

Source: Guidance Statement on the Treatment of Carve-Outs

Firm B manages balanced portfolios and would like to carve-out the equities to create an equity composite. Firm B charges 0.75% for its fixed income strategy, 1.50% for its equity strategy, and 1.00% for its balanced strategy. How should the investment management fee be allocated to the equity carve-out for presenting a net-of-fees return?

Firms must allocate fees to each segment that are appropriate to the asset class. In this case, the firm must use the 1.50% that it charges for equity management.

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