What is the primary purpose of an investment policy statement in segregated funds?

The primary purpose of an investment policy statement in segregated funds is to outline the fund's objectives and strategies. This document serves as a guiding framework that defines the fund's goals, investment philosophy, and the specific strategies that will be employed to achieve those goals. By clearly articulating these elements, the investment policy statement helps to ensure that all investment decisions align with the overall mandate of the fund, providing a roadmap for managers and stakeholders.

The investment policy statement typically addresses aspects such as risk tolerance, asset allocation, and performance benchmarks, ensuring that everyone involved understands the direction and intent of the investment approach. This clarity is essential in fostering effective management and accountability, as it provides a basis for evaluating the fund's performance and making adjustments as needed.

While aspects like management fees, potential investments, and timelines for performance reviews are relevant to fund management, they do not encompass the main function of an investment policy statement. Instead, these topics would be considered part of the broader context of fund operations and governance, rather than the core focus that the investment policy statement embodies.