GIPS Standards 2026: What CIPM Level 1 Candidates Need to Know
- Kateryna Myrko
- 19 hours ago
- 4 min read
For anyone preparing for the CIPM Level 1 exam, understanding the GIPS Standards 2026 is a critical component of success. The Global Investment Performance Standards (GIPS®) form a cornerstone of the CIPM Level 1 curriculum, particularly within the performance presentation topic. As the 2026 syllabus introduces a new learning outcome in this area, it’s essential for candidates to grasp both the fundamentals and the latest expectations.
Why GIPS Matter for the CIPM Level 1 Exam
The CIPM (Certificate in Investment Performance Measurement) program, governed by the CFA Institute, trains professionals to measure, analyze, and present investment performance in line with global best practices. According to the official CIPM curriculum, GIPS standards are explicitly included in Level 1 under Portfolio Performance Presentation. The emphasis on GIPS reflects the industry’s prioritization of fair representation and full disclosure in performance reporting.
In particular, the GIPS Standards 2026 component tests candidates on how firms construct and present composites — groups of portfolios managed according to a common strategy — in a way that ensures transparency and integrity.
What’s New in GIPS Standards 2026 for CIPM Level 1
While much of the 2026 CIPM Level 1 syllabus remains stable compared to prior years, there is a notable
new addition related to GIPS composite construction. Specifically, the curriculum now requires understanding of:
Rules for portfolio movement into and out of composites — How and when a portfolio may be switched between composites.
Timing for including new portfolios — When a newly managed portfolio must begin to be reported within a composite, according to GIPS timing guidelines.
Timing for excluding terminated portfolios — When and how terminated portfolios should be removed from a composite in a GIPS-compliant way.
This added learning outcome underscores the operational realities of managing GIPS composites—not just calculating returns, but implementing them correctly over time.
Core Concepts of GIPS for CIPM Level 1
To master the GIPS portion of CIPM Level 1, you should be confident across several foundational topics:
Definition of firm and discretion: Understanding what constitutes a “firm” under GIPS, and how portfolios are defined as discretionary (i.e., managed with full discretion) is essential.
Composites and their purpose: Why firms establish composites, how they group portfolios, and the importance of consistency in strategy.
Fair representation and full disclosure: Candidates must be familiar with the GIPS principle that firms should present performance in a way that neither misleads nor hides unfavorable results.
Verification: The role of independent verification in GIPS compliance, and how verification supports the credibility of performance reporting.
Performance presentation requirements: Key components of GIPS composite reports, including composite returns, definition of the composite, and required disclosures.
How to Prepare Effectively for the GIPS Standards 2026 Section
Given the GIPS part of the CIPM Level 1 exam, here are actionable strategies for preparing effectively:
Start with the Learning Outcome Statements (LOS)
Use the LOS in your official CIPM Level 1 curriculum to map out exactly what is tested. Since GIPS is directly linked to composite construction in the 2026 syllabus, make sure you understand all sub-points of the new learning outcome.
Read the relevant GIPS material
While you don’t need to memorize every provision of the full GIPS standards text, you should study the sections on firm definition, composites, verification, and the operational rules added in 2026.
Use the “Where Theory Meets Practice” guide
The CFA Institute provides a “Where Theory Meets Practice” guide for CIPM candidates that helps illustrate how GIPS rules are applied in real-world firms. This aids in translating technical standards into practical scenarios.
Practice with exam-style questions
Work through item sets and multiple‑choice questions that focus on GIPS scenarios: inclusion of portfolios, composite reports, and disclosure rules. This will reinforce both the concepts and their practical implications.
Create a summary sheet for GIPS rules
Build a clear, concise cheat sheet that covers the new timing rules for composites, the infrastructural definitions (firm, discretion), and disclosure requirements. This will be extremely helpful in review.
Exam Implications & Why This Matters
Because the CIPM Level 1 exam assesses not only technical calculation but also policy application, the addition of composite‑construction rules for GIPS Standards 2026 matters more than just cosmetically. It reflects a practical, real-world concern: compliance isn’t just about calculating returns—it’s about reporting them responsibly.
For CIPM Level 1 candidates, this means:
You cannot ignore operational aspects of portfolio reporting.
Understanding timing and governance of composites can make the difference in application-based questions.
Mastering these rules strengthens your capacity to advise on GIPS compliance in a real investment firm.
Final Thoughts
If you’re preparing for the CIPM Level 1 exam, GIPS Standards 2026 deserve your full attention—especially in light of the new learning outcome around composite construction. Invest time in understanding how GIPS defines a firm, organizes composites, and dictates when portfolios enter or exit them. Leverage official curriculum resources, apply consistent practice, and summarize critical points in review notes. By doing so, you’ll not only navigate the exam more confidently but also build a strong foundation in the ethical and operational best practices central to investment‑performance measurement.
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