GIPS advertisement

yazena

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Pls help with this: the Q
“36 Bugle Capital Advisors places an advertisement for its Targeted Maturity Composite in major newspapers on 30 April. The advertisement includes the GIPS Advertising Guidelines compliance statement and presents annualized composite and benchmark returns for the 1-year, 3-year, and 5-year periods ended 31 December. Does the advertisement satisfy the requirements of the GIPS Advertising Guidelines?
A Yes.
B No; it omits the period-to-date return.
C No; it omits five years of annual returns.”

The answer is B, but I thought it is A due to :

“Advertisements that state a claim of compliance and present performance must also present one of the following sets of total returns:

a one-, three-, and five-year annualized composite returns through the most recent period;
b period-to-date composite returns in addition to one-, three-, and five-year annualized composite returns through the same period of time as presented in the corresponding compliant presentation; or
c period-to-date composite returns in addition to five years of annual composite returns calculated through the same period of time as presented in the corre- sponding compliant presentation”
 
Oh I hate such grey areas. Would anyone care to explain this ridiculousness?
I assume that we always need the period-to-date returns if the advertisement date (April 30 in this example) comes several months after the “most recent period” end?
 
The key here is that the returns are through 12/31 rather then 4/30. If the 1,3,5 were through 4/30 then it would be fine. You can either have the 1,3,5 be through the lasst year end and then show period to date returns or show 1,3,5 through the period shown.
 
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