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Investment Policy

Definition

An investment policy is a set of guidelines that dictate how an individual or institution manages their financial assets to meet specific objectives. This policy typically outlines asset allocation strategies, risk tolerance levels, investment horizons, and acceptable asset classes. For institutional investors, it ensures adherence to fiduciary duties and aligns investment decisions with organizational goals and regulatory requirements. A well-defined policy provides a structured approach to capital deployment and risk management. It is a fundamental document for financial governance.