Governance
Investment Policy Statement (IPS)
A document outlining an investor’s objectives, risk tolerance, and guidelines for managing an investment portfolio.
What is an Investment Policy Statement (IPS)
An Investment Policy Statement (IPS) is a formal document that outlines an investor’s financial objectives, risk tolerance, and specific guidelines for managing their investment portfolio. It serves as a strategic roadmap for family offices to ensure that investment decisions align with the family’s long-term goals and values.
Components of an Investment Policy Statement
An IPS typically includes components such as investment objectives, asset allocation strategy, risk management guidelines, performance evaluation metrics, and any specific constraints or preferences. These elements help family offices maintain a disciplined approach to portfolio management and adapt to changing financial circumstances.
Related Terms
Asset Allocation
The process of distributing investments among various asset classes to balance risk and reward according to an individua...
ViewDiversification
Investing in a variety of assets to reduce exposure to any single asset or risk.
ViewInvestment Strategy
A plan that outlines how the family office will invest its assets.
ViewRisk Management
The process of identifying, assessing, and mitigating risks that could affect the family office.
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