As global markets become more interconnected and investor expectations rise, transparency and comparability in investment reporting have never been more crucial. The Global Investment Performance Standards (GIPS) play a central role in this landscape, establishing a common language for reporting investment results worldwide. For Australians—whether you’re a retail investor, financial adviser, or an institutional asset manager—understanding GIPS is now essential as new regulations and market trends put performance disclosure under the microscope in 2025.
What Are GIPS? A 2025 Definition
The Global Investment Performance Standards (GIPS) are a set of voluntary, ethical standards created by the CFA Institute. They provide a framework for investment firms to calculate and present their investment performance in a way that’s both transparent and comparable across global markets. GIPS address inconsistencies in how investment results are reported, helping investors make informed decisions with greater confidence.
Key features of GIPS in 2025 include:
- Standardised Calculation Methods: Ensuring performance is calculated consistently across funds and asset classes.
- Comprehensive Disclosures: Requiring firms to disclose methodologies, fees, and historical data, reducing the risk of misleading information.
- Global Applicability: Making it easier to compare Australian investment products with international peers, especially as more local managers seek global capital.
With the latest GIPS 2020 update now fully adopted in Australia, 2025 is seeing even stricter adherence and enhanced oversight from regulators and industry bodies.
Why GIPS Matter for Australian Investors and Asset Managers
For Australian investors, the assurance that comes with GIPS-compliant reporting is more than just a box-ticking exercise. In a world where greenwashing and performance exaggeration are hot topics, GIPS provide a level playing field. Here’s why they’re so relevant in 2025:
- Greater Trust in Reported Returns: Investors can compare funds knowing performance data isn’t cherry-picked or manipulated.
- Attracting Global Capital: Australian asset managers adopting GIPS are better positioned to win mandates from super funds, sovereign wealth funds, and foreign investors demanding robust standards.
- Regulatory Alignment: ASIC has signalled in 2025 that GIPS-aligned disclosures are considered best practice, especially for ESG and alternative investments where performance measurement can be complex.
- Risk Mitigation: Transparent reporting reduces litigation risk for firms and advisers, a growing concern amid increased regulatory scrutiny.
For example, several major Australian superannuation funds have begun requiring GIPS compliance in their manager selection processes, raising the bar for domestic asset managers.
How GIPS Are Used in Practice: Real-World Examples from 2025
GIPS standards aren’t just theoretical—they’re shaping the way investment products are presented, compared, and scrutinised. Here’s how:
- Performance Presentations: GIPS-compliant firms provide detailed fact sheets and annual reports with multi-year, net-of-fees returns, showing both the highs and the lows.
- Due Diligence: Institutional investors and advisers use GIPS verification as a filtering tool when selecting fund managers, knowing it signals operational maturity and data integrity.
- ESG and Private Markets: The latest GIPS standards now cover alternative and ESG strategies in more detail, which is vital as Australian investors pour record funds into sustainable and private market assets in 2025.
For instance, an Australian boutique fund manager seeking to attract international investors recently became GIPS-verified, resulting in a significant uptick in both local and offshore inflows. Meanwhile, ASIC’s 2025 guidance highlights GIPS as a benchmark for performance disclosure in the rapidly growing ESG fund space.
The Road Ahead: Will GIPS Become Mandatory in Australia?
While GIPS remain voluntary, the writing is on the wall. With mounting pressure from institutional investors and regulatory signals pointing to higher standards, GIPS compliance is quickly shifting from a differentiator to a baseline expectation in Australia. As cross-border investment ramps up and investors demand ever-greater transparency, expect more firms to embrace these standards as the new normal.
