GIPS stands for ‘Global Investment Performance Standards’.
Why were the GIPS standards created?
In the past, investment performance presentations were misleading. Questions about the accuracy and credibility of data made comparisons among different investment firms difficult. Common misleading practices included:
The GIPS standards were created to prevent misrepresentation of performance. They establish an industry-wide, standard approach for calculation and presentation of investment performance.
What parties do the GIPS standards apply to?
GIPS apply to investment management firms. Compliance to GIPS is voluntary and not required by any legal or regulatory authorities.
Who is served by the standards?