8/10/2019 Investment Policy Statement-Final

1/15

Group 7: Section BAviral Bansal 13P135

Rishi Chaturvedi 13P162

Sabbineni Anusha 13P164

Praveen Kumar 13P223

Omkar Tungare 13P240

8/10/2019 Investment Policy Statement-Final

2/15

Investment Policy Statement

A document drafted between a portfolio manager and a client thatoutlines general rules for the manager such as the investment goals

and objectives of the client, investment strategies to employ andspecific information on matters such as asset allocation, risk toleranceand liquidity requirements.

Introduction

8/10/2019 Investment Policy Statement-Final

3/15

What are the contents of an InvestmentPolicy Statement?

What is the purpose of a policystatement?

Its importance in InvestmentManagement?

Agenda

8/10/2019 Investment Policy Statement-Final

4/15

Overview

8/10/2019 Investment Policy Statement-Final

5/15

to help client meet their financial goals

Outline Clients attitude, expectations, objectives, and guidelines inwritten format

Outlining eligible asset classes and investment Strategy formanaging the Clients assets based on

Encouraging effective communication between client and advisor

Establish formal criteria to select and evaluate the performance ofmoney managers

Background & Purpose

8/10/2019 Investment Policy Statement-Final

6/15

Key Information

Covering information such as Client name, Tax Id , Investment AdvisorFirm, Custodian, Accountant, Attorney.

Financial Goals

Investment Objectives

Assets Covered

Current Combined Market Value

Client Advisor

Background & Purpose

8/10/2019 Investment Policy Statement-Final

7/15

Investor Risk-Return Profiles

8/10/2019 Investment Policy Statement-Final

8/15

Statement of Investment Parameters

Volatility Tolerance

Asset Class Preferences

Investment Time Horizon

Discretionary Authority

Portfolio Asset Allocation

Broad Portfolio Balance Asset Allocation

Portfolio Rebalancing

Investor Risk-Return Profiles

8/10/2019 Investment Policy Statement-Final

9/15

8/10/2019 Investment Policy Statement-Final

10/15

8/10/2019 Investment Policy Statement-Final

11/15

Manage the assets according to respective prospectus/ contract

Exercise full investment discretion with respect to buying,managing and selling securities

Vote promptly in all proxies and related actions in the bestinterests of the clients

Money Managers

Responsible for safe keeping the clients assets

Handle all incomes and payments on behalf of the clients Settle transactions

Periodic reporting of transactions, cash activity and assetsowned to the clients

Custodian

Duties and Responsibilities

8/10/2019 Investment Policy Statement-Final

12/15

8/10/2019 Investment Policy Statement-Final

13/15

Regulatory

oversight

Stability

Oforganization

Expense

ratios/fees

Holdings

consistent withstyle

Performance

VsRisk

Trackrecord

Correlation tostyle or peer

group

Relative

performance

Assets

undermanagement

Modeled Portfolio Behavior

8/10/2019 Investment Policy Statement-Final

14/15

Monitoring of Money Managers

Ongoing review and analysis of a money manager is just as important as the duediligence process followed for the initial manager selection.

Changes in investment professional staffingSignificant reduction or growth in assetsChange in firm ownershipAny legal or regulatory proceedings

Measuring CostsExpense ratios or investment feesCustody fees

Annual ReviewBoth Client and Advisor will review IPS at least annually to determine relevanceand feasibility of investment objectivesAdjustments are not made due to short term changes in markets

Control Procedures

8/10/2019 Investment Policy Statement-Final

15/15