GIPS - Historical Performance Record

The GIPS standards require firms to show investment performance for a minimum of five years , or since the inception of the firm or composite if either has existed for less than five years. After presenting at least five years of GIPS-compliant history, the firm must add annual performance each subsequent year building to a minimum of 10 years.

Question: Why’s the point to build up 5 years first and then gradually add it to 10 years? If 1-10 years are compliant with GIPS, 11 years breaches then still can’t claim follow GIPS right? Sorry, I don’t get the point what’s the 10 years mean here…

I think the point is to show a minimum of 5-years as your headliner presentation but must include up to a minimum of 10-years elsewhere. Im not sure though as it’s not really clear but this “After presenting at least five years of GIPS-compliant history,” sounds like seperate presentation, probably right after the 5-year view.

BTW, 11-years of performance meets the minimum 10-year threshold required to claim complaince with GIPS.

Thanks Galli.

My interpretation is:

Lets say I want to begin GIPS compliance today and my firm is 8 years old. I would only need to present the past 5 years of GIPS compliant history while not including the first 3 years in my presentation at all. Then I would have present each subsequent year moving forward in compliance with GIPS.

That’s what I thought it meant, however I’m unsure if it’s allowable to simply not include the first 3 years from my example in the presentation, perhaps someone can clear that up please?