Performance Analytics Expert Group
The Performance Analytics Expert Group (“P Group”) is a forum for performance analytics professionals to discuss and develop ideas, concepts and theories relating to performance measurement and analysis, and produce working papers for submission to industry associations and regulators.
The charter of the P Group is:
"a forum for investment professionals to discuss and develop ideas, concepts and theories relating to performance measurement and analysis, and produce working papers for submission to industry associations and regulators"
The current Chair of the P Group is Stuart Hoy from J.P. Morgan Chase and the Deputy Chair is Stephen Campbell from KPMG.
Performance analysts and those involved with the Standards are encouraged to join the P Group as a forum to keep informed on performance issues and changes to the Standards.
Relevant FSC Standards and Guidance Notes (links)
The main features of this Standard are to specify the principles adopted when calculating Total, Growth and Distribution Returns; enable proper assessment of Product returns when comparing Month-End returns, after fees and tax paid by the Product, with market indices and other Products (ie peer comparisons), ensure there is as much consistency as possible with the Australian Investment Performance Measurement and Presentation Standards and Global Investment Performance Standards.
The main features of this Standard are: To specify standards to be adopted by a Financial Services Council member in the promotion of its Financial Products and Services; as well as provide guidance in the interpretation and application of those standards.
The purpose of this Guidance Note is to assist Financial Services Council members in following the global standard for the presentation of historical investment manager performance through adoption of the Global Investment Performance Standards (GIPS).
Global Investment Performance Standards (GIPS) and GIPS 2020
The CFA Institute GIPS are recognised as global best practice for investment performance reporting and presentation, providing for consistent and transparent reporting framework.
The GIPS Standards were updated in 2019, with an effective date of 1 January 2020, with three new GIPS Standards released as follows:
GIPS 2020 Policy Briefing: Presentation October 2019, by Kate Misic, Head of Alternative Investments, Telstra Super
For the first time in nearly a decade, the CFA Institute updated the investment performance reporting standard used by over 1,700 asset managers and asset owners worldwide.
On June 30, 2019, CFA Institute unveiled the 2020 edition of the CFA Institute Global Investment Performance Standards (GIPS®), which are evolving to ensure their practicality and relevance to the investment management industry. The update reinforces the core purpose of the GIPS Standards: Delivering performance transparency and comparability for the benefit of investors globally and for the ultimate benefit of beneficiaries.
In October 2019 Kate Misic, GIPS Standards veteran expert provided an update highlighting some of these technical changes in the 2020 GIPS Standards, with the slides available for download pdf here .
Explanation of the Provisions
The CFA Institute has also developed a number of explanations to the provisions within the GIPS Standard, with explanations for Provisions in Section 1, 2 and 3 now available on the CFA Institute website. As further explanations are completed they will be available on the relevant website.
Asset Owners – until the guidance for Asset Owners is completed, the CFA Institute has suggested that asset owners may find it helpful to consider the guidance for firms, with many of the concepts being very similar.
- Explanation of the Provisions in Section 1 - Fundamentals of Compliance
- Explanation of the Provisions in Section 2 - Input Data and Calculation Methodology
- Explanations of the Provisions in Section 3 - Composite and Pooled Fund Maintenance
To find out more about the GIPS Standards and Explanations follow the links above.