Investment policy

THE SITUATION: You are a Research Analyst working for a top portfolio management firm, "UMUC Portfolio Management" (in no way affiliated with the University of Maryland University College). A high-net-worth client has approached your firm with the objective of finding an analyst qualified to manage their large portfolio. Your firm has selected several of its analysts to develop test portfolios in order identify the best person to manage the portfolio of this rich client. You have been selected by your firm to develop a 5-week trial portfolio to present to the client (and class). Because of the importance of this client (and their potentially large investment) your fee for demonstrating superior portfolio selection and management skill will be substantial. The analyst with the best report will become the portfolio manager for this high-net-worth client's portfolio (valued at over $100 million). Your portfolio management report and presentation will be submitted directly to your firm's high-net-worth client with the approval of your firm's Board of Directors. The success of your recommendations will determine the success of your firm in landing this large investor. (It is expected that your portfolio recommendations will not be the same as those reached by other analysts). You should do a market wide financial evaluation to determine the current situation, best investment course, appropriate asset allocation for this important client.

STEP ONE: The assignment for the first week is to develop an investment policy statement to guide the portfolio construction and asset management.

To get started refer to Content Week 1. You’ll disciver an Ebook titled, “Leading the Way with a Clear Investment Policy Statement” and an articles titled, “The Creation of an Investment Policy Statement”.

You Investment Policy Statement should be 1-2 pages (300-600 words), with at least three references.

Note: You do not have to create investment allocations.

You investment policy statement should include the following:


Return objectives

Investment constraints Taxes

Your investment theory