GIPS_Pratice Problem_Q36

CFA Level III Portfolio Management
#1

Why option A is incorrect?

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

  1. one-, three-, and five-year annualized composite returns through the most recent period;
  2. 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
  3. 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 corresponding compliant presentation.”

Shouldn’t set a of total return presentation applies?

#2

I had the same exact question and came here looking for the answer. Too bad nobody has posted an explanation yet. I think that either the answer is flat-out wrong, or the explanation of when you need period-to-date returns is poorly explained to the point of being incomprehensible.

#3

Hey, I found the answer in an old thread! Or at least what someone claims is the answer. Here it is:

https://www.analystforum.com/comment/91511075#comment-91511075

" 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."

Personally, if that’s the correct explanation, then the GIPS Advertising Guidelines are very unclearly phrased.