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Creating an Investment Policy

Creating an Investment Policy

Investment policies serve as blueprints for investment plans. With the Policy tool in the web-based versions of Morningstar Direct, you can create a custom investment policy (the documentation of your investment strategy).

The overall steps are as follows:

  1. Create an investment policy and select the Level 1 (global category) asset classes and proxies.
  2. Add the Level 2 (Morningstar Category) asset class.
  3. Select the Level 2 sub-asset classes and proxies.
    Note: You can create additional asset-class levels, as needed.
  4. Set the weight of each Level 2 sub-asset class.
  5. Save the investment policy.
    Note: You can also use a third level to create an investment policy.

To create an investment policy, do the following:

  1. In the header, click the Create icon, then select Policy. The Policy Editor window opens.

    Createpolicy.jpg

  2. In the Asset Class Level area, from the Level 1 menu, select Global Broad Category Group.
  3. In the Name column, from the menu, select a category.
  4. In the Proxy column Search field, enter the name of an index and select it from the search results.

    Level1.jpg

  5. Click the Add Asset Class icon. A new row appears.
  6. In the Name column, from the menu, select an asset class.
  7. In the Proxy column Search field, enter the name of an index and select it from the search results.

    Equity.jpg

  8. Continue adding asset classes and their proxies.

Now that you have created the Level 1 asset classes, you can create sub-asset classes and proxies for the Level 1 asset classes. Do the following:

  1. In the Asset Class Level area, click Add Level.

    AddLevel.jpg

  2. From the Level 2 menu, select Morningstar Category.
    In the list to the right, the Level 1 asset classes (Name column) and proxies (Proxy column) are displayed. Each Level 1 shows a row in which you will create its Level 2 asset classes (sub-asset classes).

    Level2.jpg

For more detailed instructions, see the Creating Investment Policies guide.

Version history
Revision #:
3 of 3
Last update:
‎06-13-2019 01:15 PM
Updated by:
 
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