Create an Investment policy statement with the following:

• Return Objective
• Risk Objective
• Time Horizon
• Liquidity Requirements
• Tax Considerations
• Legal and Regulatory Constraints
• Unique Circumstances

The client has $1 million dollars in assets and it is a foundation. The foundations policy has been to pay out virtually all of its annual net investment income. Its investment approach has been conservative in the past, primarily consisting of xed-income assets. The foundation understands that these actions are likely to cause the real value of foundation assets and the real value of future impact to decline because of pending ination effects. The foundations annual grants must at least equal 5 percent of its assets market value to maintain the U.S. tax-exempt status, a requirement that is expected to continue indenitely. The foundation anticipates no annual gifts and fundraising activity for the foreseeable future. Given recent market conditions and economic uncertainty, the foundation wishes to develop a new investment policy, but the committee is unsure how much higher spending can or should be. The committee wants to pay out as much as possible; however, it understands that preserving the real value of the foundations assets is equally important in order to preserve its future funding capabilities.