Page 21 - FINAL CFA SLIDES JUNE 2019 DAY 1
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LOS 4.b: Explain the construction and 4. Introduction to the Global InPerformance Standards (GIPS®)
purpose of composites in performance
reporting..
A grouping of individual discretionary portfolios representing a similar investment
strategy, objective, or mandate.
• E.g. “Large Capitalization Growth Stocks” and “Investment Grade Domestic Bonds.”
A composite, such as International Equities, must include ALL fee-paying,
discretionary portfolios (current and past) that the firm has managed in accordance
with this particular strategy.
Firm should identify which composite each managed portfolio is to be included in
before the portfolio’s performance is known. This prevents firms from choosing
portfolios to include in a composite in order to create composites with superior
returns.
