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CFA Level I · CFA Level I Exam · Guidance for Standard I: Professionalism

A performance analyst finds that a fund manager strayed from the stated mandate. The head of the investment team asks the analyst to change the composite benchmark so that the fund's relative result looks better. The analyst's most appropriate action under Standard I(B) is to:

The analyst should complete the performance calculation and analysis faithfully and refuse to let the request influence the result. Standard I(B) guidance says internal or external influences, such as requests to alter composite benchmarks after negative results, must not affect independence and objectivity, regardless of size or documentation.

  1. Acomplete the analysis faithfully and not allow the request to affect itCorrect
  2. Bchange the benchmark if the fund's returns are only slightly affected
  3. Cchange the benchmark if the team head documents the request in writing

Explanation

Guidance states analysts may be asked to alter composite benchmarks because of negative results and must not allow internal or external influences to affect independence and objectivity. A small effect or written documentation does not make a biased change acceptable.

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