Fund performance presentations – standards and potentially unethical practice

THE Christmas lights along Singapore’s shopping belt have been turned on. Year-end is fast approaching. Most investors would want to take stock of their investments in 2022. Thereafter, some investors may make investment decisions for the year ahead. They may pour more funds into risk assets, liquidate certain investments, or stand pat with others.

Portfolio managers know the importance of the year-end period. In presenting performance reports to current and potential investors, managers must not engineer performance presentations. They must present credible performance information, and avoid misstating performance or misleading investors.

Investors may ask how much confidence they can have in managers to do what is right when presenting performance data.