IPS Constraints
Liquidity Requirements Time Horizon Tax Concerns Legal and Regulatory Factors
The Investment Policy Statement
Portfolio planning can be defined as a program developed in advance of constructing a portfolio that is expected to define the client’s investment objectives. The written document governing this process is the investment policy statement (IPS). The IPS is sometimes complemented by a document outlining policy on responsible investing—the broadest (umbrella) term used to describe principles…
Pooled Interest – Other Investment Products
A fund management service for institutions or individual investors with substantial assets is the separately managed account(SMA), which is also commonly referred to as a “managed account,” “wrap account,” or “individually managed account.” Exchange-Traded Funds Hedge Funds Hedge funds are private investment vehicles that typically use leverage, derivatives, and long and short investment strategies. Private Equity and…
Pooled Interest – Type of Mutual Funds
Money Market Funds Bond Mutual Funds Stock Mutual Funds Hybrid/Balanced Funds
Pooled Interest – Mutual Funds
Mutual Funds Rather than assemble a portfolio on their own, individual investors and institutions can turn over the selection and management of their investment portfolio to a third party. One way of doing this is through a mutual fund. This type of fund is a comingled investment pool in which investors in the fund each have…
The Asset Management Industry
Active versus Passive Management Traditional versus Alternative Asset Managers Ownership Structure Asset Management Industry Trends
Types of Investors
Individual Investors Institutional Investors
Steps in the Portfolio Management Process
When establishing and managing a client’s investment portfolio, certain critical steps are followed in the process. We describe these steps in this section.