Investment practices, regulation, performance measurement, and reporting of performance results have historically varied considerably from country to country. Some countries had established performance calculation and presentation guidelines that are domestically accepted, and others have few standards for presenting investment performance.

These practices have limited the comparability of performance results between firms in different countries and, historically, have hindered the ability of firms to penetrate markets on a global basis. CFA Institute (formerly known as the Association for Investment Management and Research or AIMR) recognised the need for a global set of performance presentation standards, and in 1995, it sponsored and funded the Global Investment Performance Standards (GIPS) Committee to develop a single standard for presenting investment performance. In February 1999, the GIPS committee finalised the GIPS standards and presented them to the AIMR Board of Governors, who formally endorsed them. Although CFA Institute is funding and administering the activities of the GIPS standards, the success of the Standards is the result of an alliance among experts from a variety of fields within the global investment industry.

The performance measurement of investment portfolios has been an accepted part of the management control process following its introduction as an analytical tool in the 1960s. Beginning with a simple rate of return, performance measurement has developed over the years into a sophisticated and specialised product that now allows a detailed investigation and interpretation of performance via a plethora of statistical methods. However elaborate the methodology and analysis employed may be, the rate of return remains the single measure that is most commonly used by investment managers across all markets to present their performance track records. Until recently, there was no uniformity in the way such results were presented. The 'cherry-picking' of only the best performing portfolios for marketing purposes was a common complaint faced by all investment managers. This should no longer be an issue, as compliance with performance presentation standards will, over time, become an essential requirement for any investment manager attempting to sell their expertise to prospective clients both at home and further afield.

Performance standards are not a new phenomenon. They have existed in some form since the 1980s, although adherence by investment firms was for the most part limited. In the mid 1980s, concerns regarding the presentation of performance results led the members of the Financial Analysts Federation to develop a set of standards. Following the establishment of the Association for Investment Management and Research Performance Presentation Standards (AIMR-PPSTM) in 1990 in North America, the standards were reviewed by the industry prior to their formal implementation in 1993.

Encouraged by the success of the standards and interest shown from other countries outside North America, AIMR (now known as the CFA Institute) developed a set of standards that would be universally accepted. The formal adoption by AIMR of GIPS in 1999 has resulted in an increased awareness of the requirements for investment management firms to comply with performance presentation standards. The establishment of GIPS as the global minimum standard effectively means that performance results of managers can be compared with one another irrespective of their home base. GIPS amounts to objective global standards which fund managers can use to proclaim their own expertise in investment performance, at least where such a proclamation is justified. Above all, GIPS can be used by clients of investment managers to make a useful, objective assessment of investment performance achieved by different managers.

However, in order to maintain global relevance, the CFA has recognised the need to continually update the GIPS standards through interpretations, guidance statements and new provisions. Realising that the investment industry is constantly changing, the CFA believes the GIPS standards must be flexible at all times to remain effective - indicating a fine balance between consistently improving the standards and minimising undue disruption to firms that are claiming compliance, or are in the process of doing so.

The development of "Gold" GIPS in 2004 involved a review of the existing GIPS provisions in an effort to eliminate the need for separate investment performance standards in different jurisdictions. In the CFA's view, the "Gold" GIPS standards represent the highest quality and most rigorous performance presentation and measurement practices that firms can adopt.

On February 4th 2005, the CFA Institute Board of Governors approved the revised Global Investment Performance Standards, which created a single global standard of investment performance reporting and increased minimum standards worldwide. The revised GIPS standards represent the most comprehensive and significant upgrade to the Standards since their introduction in 1999.