Investment Policy

Policy development for endowments, foundations, hospitals, high net worth, and defined benefit investment programs
The policy development process is an important first step in developing an understanding of your specific needs and circumstances.

Ellwood is driven to develop a clear understanding of every organization’s situation. We build consensus across committee members and provide additional analysis and discussion when needed.

Our process for policy development
The policy development process has a natural chronology. It is important to address each step.

Step 1: Research
We focus on the following to form a policy statement:

  • Delegation of responsibilities:
    • Investment committee
    • Management and staff
    • Investment consultant
  • Investment portfolio objectives and constraints, including:
    • Return objectives
    • Investment timeframe
    • Liquidity needs
    • Risk tolerance
    • Legal structure
    • Other unique structural constraints
  • The asset allocation policy:
    • Capital appreciation vs. capital preservation
  • Asset allocation:
    • Targets
    • Ranges
    • Rebalancing procedures
  • Investment manager guidelines and evaluation criteria
  • Parameters for returns including market indexes to be used as performance benchmarks
  • Ongoing monitoring and controls

Step 2: Draft a Statement of Investment Policy
Following this research, we develop a first draft of a Statement of Investment Policy. This combines your specific investment objectives and constraints with our insights.

The final Statement of Investment Policy records:

  • Results of the asset allocation review
  • Investment manager structure discussion
  • Manager research process
  • Performance evaluation or scorecard

Step 3: Implement and maintain

The final policy becomes the governing document for the investment program. The investment policy should be reviewed at least annually and revised if necessary.

All of the analysis that we conduct (asset allocation, investment manager structure, manager selection, portfolio reporting, and benchmarking) is driven by the investment policies outlined for the portfolio.

Goals aligned with needs and constraints

Our goal is to develop a portfolio that meets the investment objective while complying with your constraints. We specifically identify measures to assist investment committee members in evaluating the portfolio’s probability for goal achievement.

Need an investment policy developed for your organization? Contact Ellwood today.