#8 Component Returns

'COMPONENT RETURNS: Capital and Income Returns of a Portfolio, Pooled Fund, Total Fund, or Composite. ' Click to Tweet

Full Definition

This term is defined  in the GIPS 2020 Exposure Draft as The CAPITAL RETURNS and INCOME RETURNS of a PORTFOLIO, POOLED FUND, TOTAL FUND, OR COMPOSITE.

Key Points about This Term

  1. This term is technically not new in the Global Investment Performance Standards (GIPS) vocabulary.
  2. Its use was however limited to the Real Estate provisions of the 2010 GIPS.
  3. Under the GIPS2020, it has been formally created as a specific term with specific recommendations to show such returns.
  4. Its use has been expanded beyond Real Estate in light of the goal to eliminate asset class focus of the old Standards.
  5. Fun Fact – It appears two (2) times in the Exposure Draft, excluding its appearance in the definitions and comments sections.
  6. Possible Evolution under new Standards – The term is here to stay, albeit as part of recommended best practice in performance presentations.