The Global Investment Performance Standards® (GIPS®) are a set of standardized, industry-wide ethical principles that guide investment firms on how to calculate and report their investment results to prospective clients. CFA Society Nigeria is leading the industry effort to promote the voluntary adoption of these standards by investment management firms in Nigeria.
CFA Society Nigeria is promoting the GIPS standards through the GIPS country sponsor. The Investment Performance Company Nigeria Ltd/Gte was incorporated in October 2017 as the GIPS country sponsor, and CFA Society Nigeria is a leading promoter of the company.
When investment firms follow global standards for presenting investment performance, it gives investors the transparency they need to compare and evaluate investment managers.
Who Should Adopt GIPS Standards?
- Investment firms
- Investment managers
Why Adopt GIPS Standards?
The GIPS standards:
- Feature a rigorous set of investment performance measurement standards adopted in 37 countries and recognized globally.
- 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.
The standards give incentive to 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.