The intention of the paper is to describe the benefits of measuring investment performance and to give methods of so doing.

Section 1 gives the background to the subject; it points to the use which an objective investment performance measurement has for both the investment manager and the investor.

Section 2 describes the methods of measuring performance using overall rates of return. An example is given of results by three possible methods.

Section 3 deals with comparisons of performance. The advantage of analysing results is given. Methods are suggested for comparisons of actual rates of return with those of indices, notional portfolios and other funds.

Section 4 introduces the idea of risk, suggesting that risk is something for future policy rather than past performance measurement.

Section 5 applies the principles of performance to various types of funds giving difficulties particular to each.

The paper ends with a plea for the use of a common objective performance measurement.