INVESTMENT POLICY STATEMENT: MR. HASSINI YASSINE

This Investment Policy Statement (IPS) has been developed for Mr. Hassini, a moderately conservative investor with long-term financial goals. His primary objectives include securing retirement savings and funding his child’s future education. He seeks a strategy aligned with his risk tolerance and interest in ethical investing. The investment philosophy blends Shariah principles with ESG criteria, applying dual screening exclusively to equities. The portfolio construction follows a Value-Growth blend, and targets developed markets primarily in Europe and in the United States, where regulatory and sustainability frameworks are more robust. Strategic asset allocation was determined using Mean-Variance Optimization (MVO), resulting in a static portfolio with a 45% allocation to Shariah- and ESG-compliant equities, 45% to sovereign fixed income, and 10% to cash investment for liquidity and sequencing risk coverage. The final portfolio offers an expected annual return of 8.46% with a volatility of 11.91%, and a Sharpe ratio of 0.46. A dynamic optimization strategy using a 36-month rolling window was also analyzed for comparative purposes but was deemed unsuitable due to excess volatility. Risk analysis combines Monte Carlo simulations, risk metrics (e.g. Sortino Ratio, VaR and CVaR), and a forward-looking qualitative risk matrix addressing structural risks over the full horizon. These assessments confirm that the strategy remains within the client's constraints while providing robust capital preservation under both normal and stressed conditions.