标题: Fkn GIPS ... Gross OR Net, or Net? [打印本页] 作者: cfa10yrplan 时间: 2011-7-13 13:36 标题: Fkn GIPS ... Gross OR Net, or Net?
I was like 99% sure I read that you can do either one, as gross is only "recommended" (of that im 100% sure, just re-read it).
But recently I had a buddy who swears you MUST show net of fees return, and I think i encountered a question that was kind of vague but pushed you in that direction. I searched the text high and low and found no explicit statement to either way, but it did reference showing both gross and net, as if it was permissible either way.
Can someone confirm, with reference, if you can show either or? [exuding PE which is gross AND net SI-IRR]作者: lcw77 时间: 2011-7-13 13:36
I think you can show either and just have to cleary disclose and labelle. For PE its net and gross is must.作者: Zestt 时间: 2011-7-13 13:36
As odd as it sounds, I think GIPS requires either or, but Asset Manager Code of Professional Conduct requires both. I had the same confusion but that is what I concluded...作者: mik82 时间: 2011-7-13 13:36
That is what I had understood as well. I am certain with AMC.作者: bkballa 时间: 2011-7-13 13:36
In general, its either gross or net , but you have to disclose which one. However, they RECOMMEND that you use gross.
For RE, its also gross or net.
For Private Equity, its both gross and net .作者: ll11 时间: 2011-7-13 13:36
"Presentation and Reporting — Recommendations
5.B.1 FIRMS SHOULD present GROSS-OF-FEES returns."
So do they mean that IN addition to the net of fees, you should present gross of fees?
And if it is true that it is Net-OF fees , the reason should be that they are always lower, right?作者: Windjam 时间: 2011-7-13 13:36
I`m not getting this. Aren`t you supposed to disclose BOTH!作者: strikethree 时间: 2011-7-13 13:36
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)作者: former 时间: 2011-7-13 13:36
Don't know if this helps, but I'm looking at the Asset Manager Code right now...
Per the AMC:
"At a minimum, Managers should provide clients with gross- and net-of-fees returns and disclose any unusual expenses."作者: Valores 时间: 2011-7-13 13:36
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.作者: bpdulog 时间: 2011-7-13 13:36
For the exam I am sticking to what smokin'hot said. Straight from the book.作者: Unforseen 时间: 2011-7-13 13:36
Paraguay, not sure which question you are referring, but if it was asking about AMC< it would have been a violation, yes.作者: bodhisattva 时间: 2011-7-13 13:36
No it specifically dealt with a mid cap gips compliant composite.作者: nannan66 时间: 2011-7-13 13:36
Paraguay. Dude. Then I have no idea.作者: bboo 时间: 2011-7-13 13:36
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?作者: thommo77 时间: 2011-7-13 13:36
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!作者: liangfeng 时间: 2011-7-13 13:36
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.作者: Colum 时间: 2011-7-13 13:36
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.
