GIPS Compliance for Fund Factsheets
Of the Top 100 asset management firms around the world, around 85% claim compliance with the Global Investment Performance Standards (GIPS) – this is increasingly common as more firms adopt the standard. The Quant Reports platform has all the required widgets and calculation methodologies to present GIPS compliant presentations. Complying with the latest GIPS standards (2020), can give managers an advantage competing for assets globally.
In order to claim compliance, firms must adhere to rules governing input data, calculation methodologies such as performance and other metrics, meaningful composites and disclosures – Quant Report has the tools to assist with these processes. An overview of what is required:
- Definition of the firm
- Composite return calculation (compliant with GIPS)
- Error-free presentation of investment performance results
- Time-weighted rate of return
- Ex-post standard deviation (3 years)
- Since Inception Internal Rate of Return (SI–IRR)
- One, three and five year TWRR RoR, for funds with a history shorter than 5 years since inception can be used
- If the fund has been operating for less than 1 year, annualized returns may not be used
Firms have indicated that being recognized as following an independent, self-regulated, and globally recognized ethical standard that addresses the quality and consistency of input data related to calculation and presentation of past performance is beneficial for due diligence reviews that are conducted by both prospective and existing clients. Being able to indicate adherence to recognized standards rather than having to justify a firm’s proprietary approach during every review is a benefit and allows more time to be spent discussing other aspects of investment management, rather than focusing on data quality.