Evaluating Ethical Investment Processes in Asset Management

Hard Asset Manager Code Investment Process

ABC Asset Managers is considering implementing a new investment process to enhance their portfolio performance and align it with the principles outlined in the CFA Institute's Asset Manager Code. As part of this effort, they seek to ensure that their investment process adequately addresses key ethical and professional standards, including transparency, consistency, and investor protection.

In an internal meeting, the compliance officer proposed three different approaches to the investment process. The team must evaluate each option against the principles of the Asset Manager Code to determine which approach best aligns with ethical practices.

Which of the following approaches is the most aligned with the Asset Manager Code's guidelines for the investment process?

Implement an ad-hoc investment decision-making process that allows for flexibility but lacks documented rationale.

Establish a structured investment process with clearly defined roles, responsibilities, and systematic documentation of all decisions.

Use a quantitative model for investment decisions, but it operates without regular updates or accountability for its performance.

Hint

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