PERFORMANCE REPORTING

The CFA Institute Global Investment Performance Standards (GIPS®) are globally accepted and considered industry best practice for investment performance reporting and presentation. Adopted by organizations around the world, the GIPS® standards have been implemented by most of the top asset management firms. The goal of the standards is to make it possible for investors to compare one firm’s performance against that of another firm. 

How GIPS® work: The Global Investment Performance Standards are a “set of standardized, industry-wide ethical principles that guide investment firms on how to calculate and present their investment results to prospective clients,” according to the CFA Institute.

THE CFA INSTITUTE STANDARDS:

Enable investors to directly compare one firm’s track record with another firm’s record.

Include composite presentation, improving transparency by eliminating survivorship biases, misrepresentations and historical data omissions.

Evolve to address issues that arise in a dynamic investment industry.

[Incentivize] firms to invest significant time and resources into internal risk-control mechanisms and setting performance benchmarks—the hallmarks of reliable long-term success. (To claim compliance, an investment firm must demonstrate adherence to comprehensive rules governing input data, calculation methodology, composite construction, disclosures, and presentation and reporting.)