The Myths of GIPS®: Money-Weighted Returns for Client Performance Reporting

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By Trevor Davies, Vice President, Senior Business Architect, Albridge, an affiliate of Pershing, a BNY Mellon company
David Spaulding, The Spaulding Group

When measuring performance, results can differ depending on whether money-weighting or time-weighting is used. The time-weighted Global Investment Performance Standards (GIPS) are often viewed as an industry best practice. As a result, GIPS are often applied to all business models. However, money-weighting may actually be the more appropriate way to accurately measure performance. The Myths of GIPS addresses the value (and limitations) of time-weighted performance measurement and offers insight into tailoring reporting methods to better serve clients, including:

  • The distinct advantages of time-weighted and money-weighted returns
  • How to choose the appropriate calculation method
  • The benefits of offering a choice of reporting options

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