Global Investment Performance Standards (GIPS )

Transcription

1 Global Investment Performance Standards (GIPS ) Guidance Statement on Broadly Distributed Pooled Funds Webinar 28 January 8pm EST

2 Pooled Funds You may ask your questions by doing the following: Type your question in the Q&A box at the bottom of your screen: We will try to answer your question during the Q&A sessions. If we can t get to your question during the Q&A sessions, or if you have any follow up questions after the webinar, please submit your question to the GIPS Helpdesk at gips@cfainstitute.org and we will respond to you via later. Note: A recording of this webinar will be available on the GIPS website. 2

3 Pooled Funds Webinar - AGENDA 1. Scope 2. Purpose 3. Defined Terms 4. Required Items 5. Recommended Items 6. Compliant Presentation 7. Other Information 8. Next Steps 9. Resources 10.Q&A 3

4 Pooled Funds: SCOPE Situations where a firm is marketing a pooled fund to more than one investor Targeted Pooled Funds Broadly distributed Limited or no contact with prospective investors Applicable Firms Manage pooled funds AND Create official fund documents and marketing material 4

5 Pooled Funds: PURPOSE The GIPS standards do not explicitly address broadly distributed pooled funds. Must prospective investors receive a compliant presentation? There are notable hurdles that firms managing pooled funds face in complying with the GIPS standards. 5

6 Pooled Funds: PURPOSE Notable hurdles to compliance: Local laws and regulations May prohibit certain information from appearing in fund material. Typically specify performance calculation methodology. Differences between returns in official document and in the GIPS compliant presentation Lack of contact between fund firm and prospective investor 6

7 Pooled Funds: PURPOSE Important Point: Hurdles impact compliance related to fund materials for prospective investors. They do NOT impact the firm s ability to comply with other requirements of the GIPS standards, such as: Having all discretionary portfolios in a composite. Producing a compliant presentation for all composites. 7

8 Pooled Funds: PURPOSE Benefits of Pooled Fund Guidance For Investors Increased comparability of pooled fund information across various jurisdictions Enhanced investor confidence Greater consistency of information across various fund families 8

9 Pooled Funds: PURPOSE Benefits of Pooled Fund Guidance For Firms Clarity on the responsibilities of a compliant firm that manages pooled funds More effective competition through easier comparison of their pooled funds with global peers Direction in following best practices related to the marketing of broadly distributed pooled funds 9

10 Pooled Funds: QUESTIONS Any Questions on what we ve covered thus far? 10

11 Pooled Funds: DEFINED TERMS Pooled Fund Net/Net Return Time-weighted and net of all fees Sales charges and loads not included in calculation Should be disclosed if they are required by local laws and regulators to be included in the calculation of the pooled fund net/net return Official Pooled Fund Document Official offering document or documents required to be presented to prospective pooled fund investors prior to or concurrent with their initial purchase of a pooled fund 11

12 Pooled Funds: DEFINED TERMS Prospective Pooled Fund Investor Any investor who is interested in investing in the type of broadly distributed pooled fund targeted by this Guidance Statement Fund-Specific Marketing Material Material in electronic or paper format that includes the particular pooled fund s objective, strategy, and fundspecific performance, and is intended to be distributed to all prospective pooled fund investors who are considering investing in that specific pooled fund Examples: Fund fact sheets, Fund profile sheets, etc. 12

13 Poll Question 1 Sales Loads and Charges Does your country or region require sales charges and loads to be included in the calculation of pooled fund returns? A. Yes B. No C. Not sure 13

14 Pooled Funds: REQUIRED ITEMS 1. Description of the pooled fund s investment mandate, objective, or strategy 2. An indication of the pooled fund s risk, either a qualitative narrative or a quantitative metric, as mandated by the local regulators If not mandated by the local regulators, firm may choose the risk measure to present 14

15 Pooled Funds: REQUIRED ITEMS 3. Pooled fund returns calculated according to the methodology and for the time periods required by local laws or regulations If the local regulators do not mandate the: Methodology for calculating pooled fund returns A pooled fund net/net return must be calculated and presented Time periods to be presented returns must be presented, thru the most recent period with the period-end date clearly identified, consistent with one of the followings: 1-, 3-, 5-year annualized returns Period-to-date returns in addition to 1-, 3-, 5-year annualized returns Period-to-date returns in addition to 5 years of annual returns 15

16 Pooled Funds: REQUIRED ITEMS If document/material is created for a specific pooled fund share class returns must reflect the fees and expenses of that specific share class If document/material is not created for a specific share class returns must reflect fees and expenses of the share class with the maximum fee, or returns for all fund share classes must be presented 16

17 Pooled Funds: REQUIRED ITEMS 4. Benchmark total returns for the same time periods as the pooled fund, and the benchmark description If no appropriate benchmark the reason for the lack of a benchmark (such as No appropriate benchmark exists ) must be disclosed 5. Currency used to express performance 17

18 Pooled Funds: QUESTIONS Any Questions on what we ve covered thus far? 18

19 Pooled Funds: RECOMMENDED ITEMS 1. Sales charges and loads: Should be disclosed in the fund s official document and fund-specific marketing material If deducted from pooled fund returns, this should be disclosed 2. GIPS Pooled Fund Claim of Compliance: XXX, the firm managing this pooled fund, claims compliance with the Global Investment Performance Standards (GIPS ). For more information about the GIPS standards, please visit 19

20 Poll Question 2 Recommended Items If returns reflect sales loads, should firms be required to disclose this? A. Yes B. No 20

21 Pooled Funds: COMPLIANT PRESENTATION Offer of a compliant presentation in the official pooled fund document and the fund-specific marketing material is neither required nor recommended. Firms are not required to provide a compliant presentation to a prospective pooled fund investor unless requested to do so. Firms may consider their obligation under Provision 0.A.9 fulfilled if all the required items are included in the official pooled fund document and the fund-specific marketing material. 21

22 Pooled Funds: COMPLIANT PRESENTATION Important Note: It is still required that a pooled fund firm that claims compliance with the GIPS standards: Have every discretionary portfolio in a composite. Be able to produce a compliant presentation for every composite. Provide a compliant presentation to a prospective pooled fund investor upon request. 22

23 Pooled Funds: OTHER INFORMATION Local laws or regulations may require pooled fund firms to provide information in addition to the required and recommended items in the Guidance. Firms are encouraged to give as full a picture of the pooled fund as possible. Firms must adhere to the principles of the GIPS standards fair representation and full disclosure when preparing materials for a pooled fund. 23

24 Pooled Funds: NEXT STEPS Exposure draft of the Guidance: Will be available on the GIPS website ( by noon US eastern standard time (EST) on 29 January 2016 for the public comment period. Comments on the new Guidance: Comment letters should be submitted to by 29 April Final Guidance: Will be released after comments are considered, and the draft is revised (if necessary) and approved by the GIPS Technical Committee and the GIPS Executive Committee. 24

25 Pooled Funds: RESOURCES Important resources for your reference: Submit your comments on the exposure draft of the guidance statement to GIPS Helpdesk For follow-up questions pertaining to the information presented during this webinar, or for any technical inquiries pertaining to the GIPS standards GIPS Website where you may find: Complete list of Guidance Statements New Q&A Database Brochures & Webcasts Newsletter Archive GIPS Newsletter Twitter 25

26 Pooled Funds: Q&As You may ask your questions by doing the following: Type your question in the Q&A box at the bottom of your screen: We will try to answer your question during the Q&A sessions. If we can t get to your question during the Q&A sessions, or if you have any follow up questions after the webinar, please feel free to your question to the GIPS Helpdesk at gips@cfainstitute.org and we will respond to you via later. Note: A recording of this webinar will be available on the GIPS website. 26

27 Pooled Funds: UPCOMING WEBINAR Current plans are to hold a more in depth webinar on the Guidance Statement on Broadly Distributed Pooled Funds in March to help answer questions that you may have after you have read the exposure draft and before you submit your comments to us by 29 April Please stay tuned for more details which will be included in: upcoming editions of the GIPS Newsletter, the GIPS website; and the GIPS Twitter account CFA Institute. All Rights Reserved. Attendees of this webinar may use these materials for non-commercial purposes provided proper attribution of authorship is displayed. 27