ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An investment policy statement (IPS) is a document drafted between a portfolio manager and a client that outlines general rules for the manager. This statement provides the general investment goals and objectives of a client and describes the strategies that the manager should employ to meet these objectives.

Detailed explanation-2: -The components of an investment policy statement are scope and purpose, governance, investment, return and risk objectives, and risk management. An IPS provides guidance to portfolio managers when making portfolio decisions and helps keep clients from making emotional decisions related to their portfolio.

Detailed explanation-3: -An investment policy statement is a strategic document that outlines guidelines for achieving a client’s investment goals. It lays the foundation for the client-financial advisor relationship and details how the financial advisor will make investment decisions.

Detailed explanation-4: -Accordingly, the objectives of investment funds can be generally classified as the following: Invest to maintain capital. Invest to achieve income. Invest to achieve income and growth.