Ch. 1: The Portfolio Management Process and The Investment Policy Statement

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5 Terms

1
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5 investment constraints

Liquidity, time horizon, tax concerns, legal and regulatory factors and unique circumstances

2
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Three steps in investment process

Processing, execution and feedback

3
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What are involved in the planning steps

Objection and constraint determination

Investment policy and statement creation

Capital market expectation formulation

SAA

4
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Some components that are included in the IPS other than objectives and constraints

Review of IPS and investment performance

Performance measures and benchmarks to compare performance

Guidelines for rebalancing

Considerations in developing asset allocation

5
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What does IPS provide

A governing document for all investment decisions and portfolio management process

Return objectives and risk tolerance over the relevant period of time

Potential constraints such as liquidity, tax and regulation

Guidance for other issues such as reporting, performance measurements and investment strategy