#8 Component Returns
'COMPONENT RETURNS: Capital and Income Returns of a Portfolio, Pooled Fund, Total Fund, or Composite. '
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
- This term is technically not new in the Global Investment Performance Standards (GIPS) vocabulary.
- Its use was however limited to the Real Estate provisions of the 2010 GIPS.
- Under the GIPS2020, it has been formally created as a specific term with specific recommendations to show such returns.
- Its use has been expanded beyond Real Estate in light of the goal to eliminate asset class focus of the old Standards.
- Fun Fact – It appears two (2) times in the Exposure Draft, excluding its appearance in the definitions and comments sections.
- Possible Evolution under new Standards – The term is here to stay, albeit as part of recommended best practice in performance presentations.