Investment Policy Statement Construction Core Concepts Investment Policy Statement (IPS) The IPS is the governing document for all investment decisions. It specifies objectives (return and risk), constraints, asset allocation ranges, rebalancing policy, benchmark selection, and review schedule. Every portfolio action should be traceable back to IPS provisions. Return Objective The required return is the rate that funds all future liabilities and goals. - Required return: Solve for the discount rate that equates the present value of assets to the present value of future liabilities/spending ne…