Investment Policy Statement Individual Investors: Mr. & Mrs. Grey

This Investment Policy Statement (IPS) is a formal document that establishes a structured investment framework and serves as a communication mechanism between the client and advisor, ensuring clarity, alignment, and accountability in all investment decisions. It is developed for a Swiss couple, Mr. and Mrs. Grey, with a moderately conservative risk profile, who seek to invest a CHF 500,000 inheritance over a 15-year horizon, targeting a real annual return of 5.17%. The investment objective is to grow the portfolio to CHF 1,064,331 in order to fully repay their mortgage and accumulate capital for their child’s education and discretionary early retirement. The investment philosophy follows a passive, factor-aware, and behaviourally aligned approach, emphasizing long-term discipline, global diversification, and implementation simplicity through a carefully screened universe of low-cost, physically replicated ETFs. The portfolio reflects structural and factor-based tilts emerging from ETF screening and constraintdriven optimization. The final portfolio is constructed using Mean-Variance Optimization and corresponds to the Tangency Portfolio, offering the highest Sharpe ratio on the efficient frontier, with a projected real annual return of 5.94% and annualized volatility of 7.8%. Risk is assessed using Value at Risk (VaR), Monte Carlo simulation, and a structured risk assessment matrix to evaluate downside exposure and ensure alignment with the client's risk profile.