What are the required disclosures in a GIPS-compliant presentation?

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AcadiFi · Accepted Answer

GIPS 2020 requires specific disclosures in every compliant presentation. Key mandatory disclosures:

1. Compliance statement: the exact wording 'Firm XYZ claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards.'

2. Firm definition: how the firm is defined for GIPS purposes.

3. Composite definition: description of the composite's investment mandate, objective, strategy, and any material use of leverage, derivatives, or short positions.

4. Benchmark description: why the benchmark was chosen. If no benchmark, state the reason.

5. Fees: fee schedule for the composite, including performance fees. Disclose whether results are gross or net of fees.

6. Currency: currency used for performance reporting.

7. Minimum presentation period: five years of annual returns (or since inception if less than five years), growing to ten years over time.

8. Number of portfolios and composite assets at period-end.

9. Percentage of firm assets represented by the composite.

10. Dispersion measure: internal dispersion (e.g., asset-weighted standard deviation of individual portfolio returns within the composite) for composites with six or more portfolios for the full year.

11. Ex-post standard deviation: three-year annualized standard deviation of monthly returns for composite and benchmark.

12. Significant events: policy changes, key personnel departures, material litigation.

Example: Redcliff Equity Composite presents 2020-2024 annual returns gross and net of fees, with MSCI World as benchmark, internal dispersion disclosed annually, and three-year ex-post standard deviation for 2022-2024 since full history is available. Any unusual events — a key PM departure mid-2023 — must be disclosed prominently.

Missing any required disclosure can invalidate the GIPS compliance claim until corrected.

What are the required disclosures in a GIPS-compliant presentation?

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