#1 Additional Risk Measures

ADDITIONAL RISK MEASURES - Risk measures included in a GIPS REPORT beyond those REQUIRED. Click to Tweet

Full Definition

This term is defined in the GIPS 2020 Exposure Draft as Risk measures included in a GIPS COMPOSITE REPORT, GIPS POOLED FUND REPORT, or GIPS ASSET OWNER REPORT beyond those REQUIRED to be presented.

Key Points about This Term

  1. This term is fundamentally not new as it has been used in the ‘Presentation and Reporting’ provisions in the 2010 edition to represent the additional risk measures that compliant firms can present in addition to the required three-year ex-post standard deviation measure if they believe that the required risk measure is not appropriate (2010 Edition 5.A.2b).
  2. What has been added is its formal recognition as a term plus its formal expression as ‘Additional Risk Measures’ instead of ‘Additional three-year ex-post risk measure’ expression for it in the 2010 edition of the GIPS
  3. Fun Fact – It appears eleven (11) times in the Exposure Draft, excluding its appearance in the definitions
  4. Possible Evolution under new Standards – Firms will be required to adhere to certain Standards when presenting ‘Additional Risk Measures’ when they choose to do so. These requirements include ensuring that the periodicity of the returns basis used is the same for the Composite/Pooled Fund and benchmark; and using the same calculation methodology (Exposure Draft 2.A.20, 9.A.16).