Construction and Purpose of Composites

A composite is a grouping of individual portfolios with a similar investment objective or strategy. The composite return represents the asset weighted average return of all the portfolios in the composite.

Composite creation is important for consistency and comparability of performance over time and among firms. A composite must include all actual, fee-paying, discretionary portfolios managed by the firm that have the same investment objective, or strategy. For example, a composite, such as mid-cap growth stocks, should include all the portfolios that the firm manages, or managed historically, with this mandate. All the groupings must be pre-identified.

Finance Train Premium
Accelerate your finance career with cutting-edge data skills.
Join Finance Train Premium for unlimited access to a growing library of ebooks, projects and code examples covering financial modeling, data analysis, data science, machine learning, algorithmic trading strategies, and more applied to real-world finance scenarios.
I WANT TO JOIN
JOIN 30,000 DATA PROFESSIONALS

Free Guides - Getting Started with R and Python

Enter your name and email address below and we will email you the guides for R programming and Python.

Saylient AI Logo

Accelerate your finance career with cutting-edge data skills.

Join Finance Train Premium for unlimited access to a growing library of ebooks, projects and code examples covering financial modeling, data analysis, data science, machine learning, algorithmic trading strategies, and more applied to real-world finance scenarios.