Global Investment Performance
Standards questions with answers.
Goals of the GIPS Executive Committee ANS -· To establish investment industry best practices for
calculating and presenting investment performance that promote investor interests and instill investor
confidence
· To obtain worldwide acceptance of a single standard for the calculation and presentation of
investment performance based on the principles of Fair presentation and Full disclosure
· to promote the use of accurate and consistent performance data
· to encourage fair global competition among investment firms without creating barriers to entry
· to foster the notion of industries self regulation on a global basis
Key Features of the GIPS Standards ANS -· the GIPS standards are the ethical standards for investment
performance presentation to ensure fair representation and Full disclosure of investment performance
· meeting the objectives of Fair representation and Full disclosure is likely to require more than simply
adhering to the minimum requirements of the GIPS standards
· the GIPS standards require firms to include all actual, discretionary, fee paying portfolios in at least one
composite defined by investment mandate, objective, or strategy in order to prevent firms from cherry
picking their best performance
Firms are initially required to present? ANS -· firm is required to initially present a minimum of five years
of annual investment performance that are compliant with the GIPS standards
· if the composite or firm has been in existence for less than five years, the firm must present
performance since the firm's inception
· later the firm must present in additional year of performance each year, building up to a minimum of
10 years
· firms may link non GPS compliant performance to their GPS compliant performance provided that only
GPS compliant performance is presented for periods after January 1st 2000, and the firm discloses the
periods of noncompliance
· firms that manage private equity, real estate, and/or wrap fee/ separately managed account (SMA)
portfolios must also comply with sections 6, 7, 8 respectively of the provisions
Standards questions with answers.
Goals of the GIPS Executive Committee ANS -· To establish investment industry best practices for
calculating and presenting investment performance that promote investor interests and instill investor
confidence
· To obtain worldwide acceptance of a single standard for the calculation and presentation of
investment performance based on the principles of Fair presentation and Full disclosure
· to promote the use of accurate and consistent performance data
· to encourage fair global competition among investment firms without creating barriers to entry
· to foster the notion of industries self regulation on a global basis
Key Features of the GIPS Standards ANS -· the GIPS standards are the ethical standards for investment
performance presentation to ensure fair representation and Full disclosure of investment performance
· meeting the objectives of Fair representation and Full disclosure is likely to require more than simply
adhering to the minimum requirements of the GIPS standards
· the GIPS standards require firms to include all actual, discretionary, fee paying portfolios in at least one
composite defined by investment mandate, objective, or strategy in order to prevent firms from cherry
picking their best performance
Firms are initially required to present? ANS -· firm is required to initially present a minimum of five years
of annual investment performance that are compliant with the GIPS standards
· if the composite or firm has been in existence for less than five years, the firm must present
performance since the firm's inception
· later the firm must present in additional year of performance each year, building up to a minimum of
10 years
· firms may link non GPS compliant performance to their GPS compliant performance provided that only
GPS compliant performance is presented for periods after January 1st 2000, and the firm discloses the
periods of noncompliance
· firms that manage private equity, real estate, and/or wrap fee/ separately managed account (SMA)
portfolios must also comply with sections 6, 7, 8 respectively of the provisions
