Composites in Performance Watcher enable wealth managers to aggregate multiple portfolios that share similar characteristics (such as risk, currency, or mandate type ) into a single representative benchmark.

They provide a clearer view of strategy performance and enable peer comparisons across the Performance Watcher community.

Purpose

To create meaningful benchmarks that reflect real investment strategies.
To allow objective, comparable reporting without cherry-picking portfolios.
To enable automated, daily-tracked indices for the community.

Types of Composites

1. Automated Composites

Definition: System-generated composites built from fixed rules.
Criteria:
- Discretionary accounts only
- Single currency and single risk level
- Minimum portfolio value: USD 50,000
- Equal-weighted calculation
Purpose:
- Provides daily, standardised performance data.
- Serves as the building block for official indices (PWI, PWI+).
Transparency: Cannot be altered manually.

2. Bespoke Composites

Definition: Manually constructed, more customizable.
Customisation Options:
- Clusters by investment style or team
- Portfolio size thresholds
- Specific relationship managers or supervisors
- Discretionary and non-discretionary accounts
Methodology:
- Equal-weighted
- Daily outlier cleaning using inter-decile filtering
Purpose:
- For internal supervision, analysis, and reporting.
- Not eligible for indices unless made PW Compliant.

3. PW Compliant Composites

Definition: Composites that meet PW’s strict construction rules, ensuring fairness, consistency, and comparability.
Criteria:
- Discretionary accounts only
- Automated or bespoke
- Minimum 10 portfolios (5 allowed temporarily)
- USD 50,000 minimum portfolio size
- Single currency, single risk level
- Clean performance data as measured by PW
Purpose:
- Standardises composite construction across the community.
- Ensures regulatory and reporting alignment.
Flexibility: Can be automated or bespoke, but must follow PW-compliant methodology.

4. Publishable Composites

Definition: A subset of PW-compliant composites eligible for public display in the community.
Additional Requirements:
- Represents ≥ 50% of discretionary AUM and accounts of the Ecosystem for the currency/risk pair
  - (40% allowed temporarily for max 3 months)
- Minimum history requirement (1 year, 6 months temporarily)
- Certified client status required
Purpose:
- Allows managers to share live, real performance with prospects.
- Increases transparency while preventing cherry-picking or model portfolios.

Benefits

Fairness: Objective construction rules, no cherry-picking.
Transparency: Every composite is traceable and auditable.
Efficiency: Automated updates, daily performance tracking.
Flexibility: Supports both standardised (automated) and custom (bespoke) needs.

The Glossary