Understanding Composites in GIPS

Hard Global Investment Performance Standards Key Concepts

In the context of the Global Investment Performance Standards (GIPS), which of the following best describes the concept of composites?

A composite is a grouping of individual portfolios that are similar in strategy or mandate. The purpose of creating composites is to provide a fair representation of the investment performance of a firm's investment management capabilities.

Which of the following statements is correct regarding composites under GIPS?

Composites must always include all portfolios managed by the firm to provide a comprehensive representation.

Performance results for composites must be calculated using a time-weighted return methodology.

Composites can be constructed using a single portfolio to represent the firm's investment performance.

Hint

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