Model Examination

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Ashland Partners can complete an examination of investment performance results for a model portfolio (“Model Examination”). A Model Examination is an independent third-party attestation of model portfolios performance results and may include any of the below examples:

  • Model Performance: Investment results of a “model” portfolio where the portfolio does not include any actual assets under management.
  • Hypothetical Performance: Results that may have been derived from actual performance but not in the context in which it is being presented. For example, if the performance of actual portfolios in an equity composite are combined with the performance of actual portfolios in a fixed income composite to show what the results might have been had they been combined, the results would constitute hypothetical performance.
  • Backtested Performance: Performance results created by applying an investment strategy or methodology to historical data. Backtested performance attempts to indicate how a product constructed with the benefit of hindsight would have performed during a certain period in the past if the product had been in existence during such time.

Upon successful completion of the examination, Ashland Partners will issue its opinion as to whether the firm in question has complied, in all material respects, with adherence to disclosed methodologies for the calculation of investment performance results. Such an opinion will be issued as an Independent Accountant’s Report.

What does a Model Examination Test?

Minimum Model Examination procedures include, but not limited to, the examination of the books and records as they relate to hypothetical portfolios performance calculations.

  • Review of firm policies and procedures for the calculation of investment performance.
  • Tests on hypothetical portfolios, to ensure that returns are calculated in accordance with the firm’s policies and procedures.
  • Tests on sampled inputs and assumptions.
  • Review of any benchmark results and other information to be included in the schedules or notes to schedules.
  • Review of selected disclosure presentations and/or other presentation materials for adherence to industry accepted practice of disclosure and presentation.

 

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