Article Quick Links

Why?
What?
How?

App Features Overview

Additional Resources

Why Use the Composites App?

• Track strategy performance to attract prospective clients.

• ​​​Achieve GIPS compliance or the gold standard for advertising strategies to potential clients.

What is the Composites App?

If your firm is looking to claim GIPS compliance, or if you already claim GIPS compliance and are utilizing Orion, you'll want to become familiar with how the composite system works. For firms not looking to claim GIPS compliance, you can use the app the same way, but more or less for internal purposes. 

By definition, a composite is a group of accounts that all share a common variable between them. In the financial world, this variable is often related back to the investment strategy the accounts are invested in during a particular time frame. If you created a composite group based on a model assignment titled "Model X", then every account assigned to Model X could theoretically be included in that group. The ultimate goal of a composite is to produce a singular performance return for a stated period based on the accounts included in the group. These returns could then be used to entice new clients, or even current clients, to invest in a particular strategy since the return of the group should reflect how the overall strategy did when implemented.

Composites App Overview Video (~2:44)

How?
App Features Overview

Account Lists

The account list tab is the heart and soul of the Composite app and holds all the data being used in the composite calculations. Each account list represents a particular calendar month during a given year. Certain data points such as Beginning Value, Net of Fee Return, Gross of Fee Return, Model, etc. are included on each of these monthly lists.

The accounts lists are also where all the necessary audits and edits need to take place. Once an account list is generated, it is first considered preliminary, meaning that it has yet to be reviewed and should be thoroughly audited by the firm before it can be reported on. Once a preliminary account list becomes live, you are able to report on it going forward.

Related Resource: How to Create a Composite Account List

Back to Top

Reports

Reporting your composite returns is the ultimate goal. This is actually where the composite itself is constructed. With Orion's composite reports, you have plenty of flexibility when it comes to how you organize the composite groups. Create as many individual reports as you'd like, or combine all the composite groups into one consolidated report for a high-level view. Each composite group you decide to add has a number of filters allowing you to set strict parameters on which accounts can be included from the accounts list.
 

Rules

Rules help the system determine the account's fundamental inclusion/exclusion status within an account list. In Orion, establish these rules to help automate the inclusion and exclusion of accounts each time a list is generated. For instance, you could create a rule that states every account assigned to Model X must have a minimum value of $100,000 and a minimum equity allocation percentage of 75%. Any account assigned to Model X that does not meet the other two criteria is automatically excluded.
 

Composite Wizard

The Composite Wizard tool is the home of the manual account list generation. This tab walks you through a series of selections to determine which accounts generate in a given list. It is best practice is to generate a list for all accounts each month. 
 

Related Resources: 
How to Automate Your Monthly Composite Account List Generation
How to Create a Composite Account List

Additional Resources

Create Your Firm's Monthly Composite Workflow
How to Include and/or Exclude Accounts from a Composite
How a Composite Group is Calculated in Orion
Composite Returns and Fees
Composites: Fee Amount % Logic
Preliminary vs. Live Account Lists in Composites
GIPS and Orion
What Are Wrap Fees?
Portfolio Groups
Account Level Composite Notes
Composite Filter Settings
How to Fill Out the Composite Import Template
How Composite Dispersion is Calculated in Orion