bpdulog

For the exam I am sticking to what smokin'hot said. Straight from the book.

Unforseen

Paraguay, not sure which question you are referring, but if it was asking about AMC< it would have been a violation, yes.

bodhisattva

No it specifically dealt with a mid cap gips compliant composite.

nannan66

Paraguay. Dude. Then I have no idea.

bboo

Paraguay Wrote:
-------------------------------------------------------
> smokin'hot Wrote:
> --------------------------------------------------
> -----
> > AMC- disclose both- REQUIRED
> >
> > GIPS- you can present either, but gross is
> > RECOMMENDED
> >
> > GIPS, P/E: net of fees and gross of fees
> SI-IRR
> >
> > Wrap Fees/SMA- must present returns after
> > deduction of all BUNDLED FEES (this makes sense
> if
> > you think about it)
>
>
> This was everyones take, however have you taken
> the sample exam? The question specifically says a
> violation took place because they did not report
> net of fees returns.


Was there supplemental information to convert from gross to net?

thommo77

I just did the CFAI sample exams and I have to agree with Paraguay. Question 23 of sample 2 mentioned that the column "net of fee" is required while the column "gross of fee" is only recommended. GIPS is freaking confusing!

liangfeng

I think my take on that, is it was just a poorly designed question.

I believe the intent was that since the answer choices force you into making one of them a recommendation versus requirement, we get confused and interpret it as required in general.

I think what they are doing is saying, hey... you have to have one of them, and since we know gross is recommended and not required, we pick net.

Takeaway: In isolation either, if you have to pick one or the other that is required, net.

Colum

So I redid all of GIPS and of course couldn't find a conclusive solution.

Here is my interpretation though. EOC 26 lists a company that reports gross of fees and asks you show all of the omissions and errors they have. One of the omissions and errors is not that they reported gross of fees and not net of fees.

Sample Company 2 in Actual GIPS Appendix reports gross returns only and is used as a template.

Sample Company 8 uses net only.

Answer is you can do either as we originally suspected.

I firmly believe CFA Sample was not written by CFAi.