Investment Policy Statement

Every endowment fund needs an Investment Policy Statement to provide direction to their investment managers. A typically IPS describes an organization’s investment goals and objectives, risk tolerance, target asset allocation and ranges, reports required, and other items.

ECF can help Episcopal organizations develop or refine their Investment Policy Statements by providing samples as well as commentary on existing policies. Please contact Ken Quigley at ECF for information.

Some of the topics included in a standard IPS include:

Purpose

  • To define policies and guidelines for investment of assets
  • To establish investment goals and objectives
  • To permit the use of investment managers, define terms, and offer guidance
  • To establish criteria for evaluation of performance

Background

  • Describe funds to be managed
  • Define oversight, structure

Policies

  • Investment Principles
    - “Prudent Person” rule
    - Diversification
    - Restricted investments
    - Use of investment managers
    - Total return/spending rule
    - Time horizon
  • Investment Objectives
    - Preserve capital
    - Control risk
    - Provide income
    - Grow assets
    - Follow investment discipline
  • Investment Goals (general)
    - Achieve adequate return for expenditures
    - Account for inflation
    - Grow the fund
  • Investment Goals (specific)
    - Target rate of return
  • Investment Strategy & Guidelines
    - Asset mix (equities/fixed income)
    - Allowable investments
    - Prohibited investments
    - Asset Allocation Guidelines
    - Evaluation measures
    - Diversification targets
  • Reporting
    - Performance review and evaluation
    - Regular reporting to vestry, congregation
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