A composite is an aggregation of one or more portfolios managed according to a similar investment mandate, objective, or strategy and is the primary vehicle for presenting performance to prospective clients. The firm must include all actual, fee-paying, discretionary portfolios in at least one composite. Composites must include all portfolios that meet the composite definition. In this way, firms cannot “cherry-pick” their best performing portfolios to present to prospective clients. Non-fee-paying portfolios may be included in the firm’s composites, however, firms must present the percentage of composite assets represented by non-fee-paying portfolios as of each annual period end. If the firm includes non-fee-paying portfolios in its composites, they are subject to the same rules as fee-paying portfolios (e.g. the firm must not move the non-fee-paying portfolio into and out of a composite without documented changes in client guidelines or the redefinition of the composite make it appropriate). Firms are permitted to include a portfolio in more than one composite, provided it satisfies the definition of each composite. Non-discretionary portfolios must not be included in a firm’s composites.