Spreadsheets are powerful tools. In business, they've become indispensable. But, they come with huge risks. Let's briefly touch on a few. Systems on spreadsheets ... not usually a good idea Around 30 years ago I took over responsibility for a NYC-based asset manager's...
Performance Perspectives Blog
Thoughts on performance measurement from David Spaulding and other members of our team.
Spreadsheets for performance: caution!
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First Rate, Inc.’s rate of return functionality has passed TSG’s software certification!
TSG has conducted software reviews for over 20 years. However, it was only recently that we decided to formalize the process, and offer a formal “software certification” to firms and institutions who have performance measurement software. What criteria do we use when...
GIPS dispersion: against which returns, gross- or net-of-fee?
The GIPS(R) standards require compliant firms to include a measure of dispersion for each year in which they have six or more accounts present for the full 12 months. But, which return should they use, gross-of-fee or net-of-fee? What about for the 36-month, ex...
Draft GIPS Guidance Statement on Supplemental Information: remember to chime in!
I finally got around to writing up my comments to the draft guidance on supplemental information for GIPS(R) (Global Investment Performance Standards). Since the idea of supplemental information pertains to just about all firms that claim compliance with the...
Hidden Figures in Performance and Risk Measurement
Hidden Figures: the movie My wife and I recently saw the movie "Hidden Figures," which is about the contributions that three black women made to the U.S. space program, starting in the early 1960s. It takes place in Virginia, which at that time was still a highly...
Sources of errors in performance attribution
The need to acknowledge the existence of errors in performance attribution I found the above graphic today on Facebook, from the "I Love Mathematics" group. If you haven't figured it out, yet, I love mathematics. It occurred to me that a similar graphic could be...
GIPS: Claiming compliance but not verified? Not a good thing.
The Global Investment Performance Standards (GIPS(R)) are, to a large extent, quite flexible. For this post, I'll address one particular aspect: compliance. It's voluntary. You don't have to "pass a test" to claim compliance: just about anyone can do it. And once you...
The mysteries of excess returns
You no doubt have run into cases where returns don't seem to make sense. Well, the same thing can occur with excess returns. What's wrong with this table; specifically, the excess return? Last week I was contacted by one of our GIPS verification clients, regarding a...
Can Investment Consultants comply with the GIPS standards?
On the CIPM(R) group of LinkedIn I saw the following question posed: "Has anyone heard of GIPS being implemented for Investment Consulting firms? I.e., can investment consultants claim compliance with GIPS? Someone offered the following response: "That's a big 'NO'....
Before you buy, verify! Or, at least get an independent check of a firm’s GIPS compliance claim
So, you're thinking of acquiring another asset manager; or, perhaps to merge with one. The other firm claims compliance with the Global Investment Performance Standards (GIPS®). Do you think it's worthwhile to have someone "double-check" their GIPS compliance claim?...