GIPS Flashcards
What is the compliance statement used to indicate that the performance presentation is in compliance with GIPS?
(Insert name of firm) claims compliance with the Global Investment Performance Standards (GIPS) and has prepared and presented this report in compliance with the GIPSs standards. (Insert name of firm) has not been independently verified.
How frequently are portfolios required to be valued?
Beginning on or after Jan 1, 2010, at least monthly and on all large external cash flows.
What are the GIPS calculation methodology requirements for returns.
Total returns must be used.
Time-weighted rates of return that adjust for external cash flows must be used. Periodic returns must be geometrically linked. Returns from cash and cash equivalents held in portfolios must be included in total return calculations.
What are the requirement for calculating composite returns?
Composite returns must be calculated by asset-weighting the individual portfolio returns using beginning-of-period values or a method that reflects both beginning-of-period values and external cash flows.
What is the GIPS compliance statement for verified firms.
[Insert name of firm] claims compliance with the Global Investment Performance Standards (GIPS) and has prepared and presented this report in compliance with the GIPS standards. [Insert name of firm] has been independently verified for the periods [insert dates]. the verification report(s) is/are available upon request.
Verification assess whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis, and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure accuracy of any specific composite presentation.
What is the GIPS compliance statement for verified firms and also had a performance examination
[Insert name of firm] claims compliance with the Global Investment Performance Standards (GIPS) and has prepared and presented this report in compliance with the GIPS standards. [Insert name of firm] has been independently verified for the periods [insert dates]. the verification report(s) is/are available upon request.
Verification assess whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis, and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The [insert name of composite] has been examined for the perios [ insert dates]. The verification and examination reports are available upon request.
For real estate, what are the investments that would fall under the general provisions of the GIPS (as opposed to the provisions dealing directly with real estate and private equity).
- Publicly traded real estate securities, including any listed securities issued by public companies.
- Mortgage-backed securities (MBS).
- Private debt investments, including commercial and residential loans where the expected return is solely related to contractual interest rates without any participation in the economic performance of the underlying real estate.
What types of investment are excluded from the definition of private equity?
Open-ended and evergreen funds, both of which are covered by the general provision of GIPS.
Describe the valuation requirements for real estate.
Beginning Jan 1 2011, real estate investments must be valued at fair value.
On or after Jane 1 2010, firms must value portfolios as of the end of each quarter or the last business day of each quarter using fair value principles.
For periods beginning Jan 1 2012, real estate investments must have an external valuation done at least once every 12 months.
Beginning Jan 1 2006, real estate portfolio returns must be calculated at least quarterly after the deduction of transaction costs during the period.
Beginning Jan 1 2011, income and capital component returns must be calculated separately using geometrically linked time-weighted rates of return.
Composite returns, including component returns must be calculated at least quarterly by asset-weighting the individual portfolio returns using time-weighted rates of return.
In addition to the total return, the capital return and income return components must be disclosed, must sum to the total return, and must be clearly identified as gross or net of fees.
What is the closed-end fund reporting requirements?
Since inception rates of return (SI-IRR) must be reported using at least quarterly rates of return. Time periods less than a year are not annualized and periods longer than a year are annualized.
How often must private equity assets be valued?
At least annually, at fair value.
