Ethical Performance Presentation Inquiry

Medium Cfa Institute Code And Standards Duties - Performance Presentation

As an investment manager, you are responsible for presenting the investment performance of your portfolios to potential clients. Under the CFA Institute Code of Ethics and Standards of Professional Conduct, particularly the Duty of Performance Presentation, you must ensure that your performance presentations are fair and complete.

To assess your understanding of the important aspects of these presentations, consider the following scenario:

After calculating the performance of your portfolio, you decide to include only the periods where your fund outperformed the benchmark in your presentation while omitting underperformance periods. This selective presentation positions your fund in a better light at a presentation to new potential clients.

Based on this scenario, which of the following actions aligns with the CFA Institute's standards concerning performance presentations?

Including all periods of performance, regardless of whether they were above or below the benchmark.

Omitting periods of underperformance to focus on stronger performance.

Using hypothetical performance for the omitted periods to give an impression of stronger overall returns.

Hint

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