Explain how composites are defined around a shared mandate, objective or strategy, and why this matters

A composite gathers all portfolios managed to a similar mandate, objective or strategy, so its record represents what a prospective client for that strategy would have received. The definition drives inclusion: every actual, fee-paying, discretionary segregated account managed that way must belong, as must any pooled fund that meets the definition, and this prevents a firm from showing only its best accounts. Firms often define composites by asset class, style or benchmark, risk and return target, the instruments allowed such as leverage or derivatives, and material constraints such as tax status or ethical screens. Definitions are documented and applied consistently. Too broad a composite blends different strategies and misleads; too narrow a definition multiplies composites with few portfolios. Size alone is not a valid basis unless it changes how portfolios are managed.