The investment policy statement (IPS) is the foundation for the portfolio management process. In Module 2, you will choose from a list of industries, create a fictional client within that industry,...

The investment policy statement (IPS) is the foundation for the portfolio management process. In Module 2, you will choose from a list of industries, create a fictional client within that industry, formulate its aspirations, circumstances, and challenges, and create an IPS for the fictional client that isno more than six pages. Typically, an asset manager will interview the client for a few hours (or more, if it is a very complex case) and then provide a draft IPS. Once everyone is on the same page, the client signs the IPS, signaling agreement with its contents and proposed approach. In our case, you may assume we are taking seven weeks to come up with the initial draft. Over those weeks you will complete and refine the IPS. You will be graded every step of the way. During the final week, you will resubmit it.

Your Module 2 IPS submission must include an asset allocation scheme for your fictional client. Asset allocation is important in a wide variety of investment applications and must be consistent with the IPS. StockTrak does not have asset allocation functionality, so how you come up with your asset allocation is up to you. You can use existing algorithms or determine the allocation using intuition, but please note that more quantitative approaches are viewed as more reliable and professional and may yield a higher grade in this class. Your asset allocation scheme should includeat least eight asset classes. Your recommended allocation must be consistent with your client type and overall IPS contents. Calculations backing up your asset allocation should be included in an appendix to the IPS and don't count toward your six page limit.