Overview

An Investment Policy Statement (IPS) is a foundational document that serves as a strategic guide for managing an investment portfolio, clearly outlining the investor’s objectives, risk tolerance, asset allocation, and governance framework. This course explains how an IPS defines the scope and purpose of the investment program, assigns roles and responsibilities among trustees, investment committees, and managers, and sets forth policies for risk management, liquidity, and performance monitoring. By establishing clear guidelines and decision-making criteria, the IPS helps align investment activities with the long-term goals of the pension scheme or institution, reduces emotional or ad hoc decisions, and ensures accountability and transparency. Participants will learn how to develop, implement, and regularly update an IPS to reflect changing market conditions and investor circumstances, thereby enhancing portfolio discipline and governance.

Key Topics:

• Investment Objectives and Scope – Understanding how to articulate clear investment goals, time horizons, and the overall purpose of the portfolio within the IPS framework.
• Asset Allocation and Risk Tolerance – Developing strategies for diversifying investments, balancing risk and return, and documenting risk preferences and constraints.
• Roles, Responsibilities, and Governance – Defining the duties of all parties involved, establishing decision-making processes, and creating oversight mechanisms for effective IPS management.
• Liquidity and Constraints – Assessing liquidity needs, regulatory requirements, ethical considerations, and any unique client or organizational preferences that impact portfolio construction.
• Monitoring, Review, and Policy Updates – Implementing systems for ongoing performance evaluation, benchmarking, and updating the IPS to reflect changes in objectives, market conditions, or regulatory environments.