Fundamentals of Performance Measurement – PLUS
Module 5 – The GIPS® Standards
Virtual learning classes, approximately 4 hours each
Day 5: The GIPS® Standards
Establish fundamental knowledge about the Global Investment Performance Standards, its history, and its many concepts and requirements. The session will be based on the 2020 edition of the Standards.
- We begin with a discussion on the history of the Standards, to include an explanation as to why it was necessary to develop them, as well as how they’ve evolved over the past three decades.
- We discuss an approach to use to become compliant.
- We discuss the fundamental concepts of firm definition, composites, discretion, and dispersion. Other aspects of the Standards, such as minimum account size and composite creation date, are discussed.
- We discuss the importance of policies and procedures, and many of the topics that must be addressed.
- We discuss error correction guidance, and why firms may not want to employ all of the suggested levels.
- We review the different approaches to calculate composite returns.
- We go over the reporting requirements.
- We review what is meant by, and the role of, verification.
- We discuss the various approaches to measure dispersion.
- As to standard deviation, we explain how it can be used for both dispersion and volatility.
- We discuss fair value, and the various approaches to be employed to derive it.
- We discuss supplemental information, to include what it is and how to deal with it, as well as how it’s changed
- We review the advertising guidelines.
- We discuss the role of guidance statements.