Investment Policy Statement (IPS)
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. Specific information on matters such as asset allocation, risk tolerance, and liquidity requirements would also be included in an IPS. Investopedia Says:
For example, an individual may have an IPS stating that by the time he or she is 60 years old his or her job will become optional, and his or her investments will annually return $65,000 in today's dollars given a certain rate of inflation. This would be only one of many points included in an IPS; however, it probably would also include such things as general guidelines outlining what the individual wants to leave behind to loved ones when he or she dies. Related Terms:
Asset Allocation
Liquidity
Portfolio
Portfolio Manager
Risk Tolerance
Strategic Asset Allocation
Tactical Asset Allocation Inflation-Protected Security (IPS)
A type of fixed-income investment that guarantees a real rate of return. The real rate of return is the nominal return, less the inflation rate, thus protecting investors from inflation. Investopedia Says:
The purchase of IPS products is most often done with government products, such as Treasury inflation-protected securities (TIPS), but private sector companies also offer these products. Related Terms:
Corporate Inflation-Linked Securities
Dollar Bond Index-Linked Securities - Dollar BILS
Inflation
Inflation Risk
Inflation-Linked Savings Bonds - I Bonds
Nominal Interest Rate
Real Rate of Return
Securitization
Treasury Inflation-Protected Securities - TIPS |