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GIPS (Investment Perf)

Asserting compliance with the Global Investment Performance Standards (GIPS) signifies a firm-wide commitment to fair representation and full disclosure…

What GIPS (Investment Perf) requires

Asserting compliance with the Global Investment Performance Standards (GIPS) signifies a firm-wide commitment to fair representation and full disclosure of investment performance, a claim this node validates as true. Adherence requires firms to maintain rigorously documented composite definitions, a foundational element within the GIPS Standards for Firms. The calculation methodology must be systematic and verifiable, mandating trade-date accounting for all transactions and accrual accounting for fixed-income securities. Furthermore, portfolio valuations must occur on a monthly frequency, with established policies for large cash flow adjustments to ensure temporal accuracy of time-weighted returns. Performance presentation necessitates calculation and disclosure of both gross-of-fees and net-of-fees returns. A compliant presentation must show a minimum track record of five years, annually adding performance until a ten-year target is achieved. To bolster this assertion, independent verification is required, ensuring a third party attests that compliance policies are designed and implemented correctly. Comprehensive supporting records must be maintained for a retention period of ten years, substantiating all historical data. Adherence to this comprehensive framework not only provides global comparability but also aligns with the SEC Advisers Act Rule 206(4)-1 by establishing a disciplined process for producing performance advertising that is not materially misleading.

Pillar: Workplace · Authority: CFA Institute · Version: 1.1.0 · Last updated:

Primary source: https://www.cfainstitute.org/standards-and-advocacy/asset-manager-code/gips-standards

SHA-256 integrity: fd6fe5d681266f322170614e0ec6a62b51fe9feb57707297c81f0b4365ef0c42

Primary Citations — 6 traced to source

  • CFA Institute: GIPS Standards for Firms (2020), Section 1: Fundamentals of Compliance
  • CFA Institute: GIPS Standards for Firms (2020), Section 2: Input Data and Calculation Methodology

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