Investment performance is the return or worth you as an investor receives on an investment portfolio.

The investment portfolio can comprise an individual asset or multiple assets. The investment performance is calculated over a definite period of time and in a definite currency. Investors often differentiate diverse kinds of return. One is the dissimilarity between the total return and the price return, where the previous takes into account income (interest and dividends), whereas the concluding only takes into account capital appreciation. Another difference is among net and gross return. The 'pure' net return to the investor refers to the return net of all fees, expenses, and taxes, while the 'pure' gross return is the return before all fees, expenses, and taxes. A variety of disparities between these two extremes are present. Which return one considers is based on what one is trying to measure.

For instance, if one wishes to gauge the ability of an investment manager to augment value, then the return net of transaction expenses, but gross of all other fees, expenses, and taxes is a suitable measure to come across at since fees, expenses, and taxes other than transaction expenses are frequently outside the control of the investment manager. Yet another significant distinction is between the money-weighted return and the time-weighted return. The previous is appropriate if the manager decided on the timing of inflows in or outflows from the portfolio. The concluding is appropriate when the manager is not accountable for the timing of cash inflows into and cash outflows from the portfolio.

Understanding the concept of Global Investment Performance Standards - GIPS

Global Investment Performance Standards refers to the standards used by investment managers for forming performance presentations that ensure just representation and complete disclosure of investment performance results. Global Investment Professional Standards were formed by the Chartered Financial Analyst Institute and administered by the GIPS Executive Committee. They are consistent guidelines for reporting the knack of an investment firm to make earnings for investors. The GIPS is put out by the Chartered Financial Analyst Institute (CFA Institute), previously known as the Association for Investment Management and Research (AIMR). These principals were intended so latent investors could compare investment firms around the world. The standards were initially introduced in 1999 but have been developed since 1980. Staying on top of the performance of the investments in your portfolio or a retirement fund is important if you want to build a secure financial future. Key to maximizing the return on your investment is the ability to assess current investment performance and determine if it is acceptable. Here are some tips on how to perform this type of assessment and make sure your investment portfolio is where you want it to be.

Reviewing the investment performance on a regular basis in the portfolio or retirement fund is vital. Sorry to say, far too many investors do not execute a review on anything other than a informal basis. Rather, they wait until they receive a statement on the status. But don’t be scared of setting your own standards for investment performance that will help you to a great extent.