Investment Policy Formulation
Investment policy formulation at Garden State Trust Company involves creating structured guidelines that govern the management of client assets. The policy serves to align investment strategies with clients’ financial goals, risk tolerance, and other constraints.
Investment Policy Formulation
Investment policy formulation at Garden State Trust Company involves creating structured guidelines that govern the management of client assets. The policy serves to align investment strategies with clients’ financial goals, risk tolerance, and other constraints.
Key Steps in Investment Policy Formulation
1Client Profiling
- Understanding the client’s financial situation, investment goals (e.g., growth, income, or preservation), risk tolerance, and time horizon.
- Categorizing clients as individuals, trusts, estates, or institutions.
2Statement of Objectives
- Setting clear, measurable investment objectives such as achieving a specific rate of return, preserving capital, or generating income.
3Investment Strategy Development
- Identifying the level of acceptable risk, including market, credit, liquidity, and inflation risks.
- Ensuring diversification to minimize risks.
4Asset Allocation Strategy
- Establishing guidelines for asset allocation across major classes such as equities, fixed income, cash, and alternatives.
- Defining target percentages and permissible ranges for each asset class.
5Investment Guidelines and Restrictions
- Specifying allowable investments, prohibited assets, and any ESG (Environmental, Social, Governance) considerations.
- Considering restrictions such as avoiding certain industries or adhering to tax efficiency.
6Performance Benchmarks
- Defining benchmarks for performance measurement (e.g., S&P 500 for equities or Barclays U.S. Aggregate Bond Index for fixed income).
7Implementation and Monitoring
- Regularly reviewing portfolio performance against benchmarks and adjusting strategies as needed.
- Ensuring compliance with the investment policy and any regulatory requirements.
8Ongoing Review and Updates
- Periodically revising the policy to reflect changing economic conditions, market trends, or client circumstances.
Role of Garden State Trust Company:
- Fiduciary Responsibility: As a trust company, Garden State has a fiduciary obligation to act in the best interests of its clients, adhering to prudent investment principles.
- Customization: Investment policies are tailored to meet the diverse needs of their clients, such as high-net-worth individuals, family trusts, charitable foundations, and retirement plans.
- Transparency: We ensure clear communication with our clients through a well-documented investment policy statement (IPS).
If you would like more detail on specific components, such as asset allocation strategies or risk management practices please feel free to contact us.