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 September, 2001 - 31 October, 2012

Categories: Dispersion

Source: Investment Performance Council (IPC)

If the full-year dispersion is calculated for “full-year-only” portfolios yet linked-quarter performance for the year includes portfolios that were added or removed from the composite during the year, do the two numbers really have relevance to one another? This especially holds if the actual composite performance differs materially from the performance of the full-year-only composite.

The GIPS standards acknowledge that, by using only portfolios that have been managed for the full year for the annual composite dispersion calculation, the dispersion number will not precisely correlate to the actual reported performance. The dispersion result will be accurate enough, however, to provide a client an idea of what the dispersion is in the composite for the year. The GIPS standards do not require a specific formula for dispersion. A firm could present the standard deviation, a range (i.e., high and low), quartiles, or any other appropriate method of central dispersion.

Please also see updated Q&A