Nicolas Bezos, CFA, develops marketing materials for an investment fund he founded 3 years ago. The materials show the 3-year, 2-year, and 1-year returns for the fund. He includes a footnote that states in small print “Past performance does not guarantee future returns.” He does not claim compliance with GIPS in the disclosures or footnotes. He also includes a separate sheet showing the most recent semi-annual and quarterly returns, which notes that they have been neither audited nor verified. Has Chen most likely violated any CFA Institute Standards of Professional Conduct?
According to the answer, Nicolas didn’t violate the Standards neither by presenting the 3-year, 2-year, 1-year returns, nor by presenting unaudited and unverified most recent semi-annual and quarterly returns.
In fact, CFA institute requires performance information to be complete, faire, and accurate, but that’s it. No requirement for being GIPS compliant, no requirement for auditing or verification.
I was wondering though, in this question, the fact that there’s “Past performance does not guarantee future returns.” stated make it seem like it would make the presentation more compliant to CFA Standards. Do we all agree that this is neutral in regards to the compliance of the presentation?