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.