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Investment Insights

What should every good SIPO cover?

Kiwi Invest

Written by Kiwi Invest

Keeping you up-to-date with all the latest updates at Kiwi Invest.

Wednesday 28 August, 2019

Knowing your objectives – and requirements? That's smart.

Your ‘Statement of Investment Policy and Objectives’ (SIPO) summarises your investment objectives, strategy, considerations and expected returns. It guides communication to stakeholders and partners – ensuring no surprises... and helps trustees and directors, demonstrate good governance.

Trustees should be able to demonstrate that all investment decisions are made:

  • Seeking to maximise the net return, vs. risk
  • Subject to any relevant constraints
  • In the context of ‘risk tolerance’ and limits
  • Showing due care and skill

 

WHAT EVERY GOOD SIPO SHOULD COVER:

PURPOSE

A statement that clearly defines why the funds are invested, on whose behalf, and what benefits they aim to create.

RESPONSIBILITIES

Who is responsible for the SIPO and its review (usually the Trust Board), who will make investment decisions, and who will perform (and receive) reporting.

RISK TOLERANCE

How much risk the organisation will take in its investments.

INVESTMENT STRATEGY

The strategy that will be followed, the principles that will guide all decisions, and how success will be measured.

RETURN STATEMENT

The expected returns, and how it will be measured.

RESTRICTIONS

Critical guidelines or limits that affect the investment strategy.

 

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