Prospectus Guidelines
The investment prospectus you will be preparing for the Client is not a generic
mutual fund prospectus, it is a specifically tailored investment strategy for your individual clients
(not the masses) that falls under the umbrella title of prospectus (thought there are some
similarities between the two). So, don’t be afraid to be specific and reference the clients in the
write-up (e.g. executive summary).
This final prospectus must contain:
- Title Page (include: name of consulting firm (PIS), name of portfolio strategy, one sentence
objective of strategy or fund, investment disclaimer(s))
- Executive summary (lays out/summarizes investment strategy and all content that follows)
- Mission statement (brand, characteristics, differentiation, values, target audience, goals)
- Background/history of consulting firm (this is fictional—keep it simple; try and tie it into
the brand and values which you came up with though, as those are the key elements you
will want to convey to the client)
- Description of advisory committee
- Contact information
- Investment objective(s)
- Asset allocation
- Investments—list different investments and short summary
- Justification/plan of action/principal investment strategy
- Annual Portfolio Operating Expenses (table)
- Example that compares cost of investing (assume: $1,000,000 investment)
- Principal Risks (based on your investment strategies)
- Historical performance summary of investment strategy (from simulation) since
inception—may want to compare with a benchmark
o Historical performance of individual assets/funds
- Tax information disclaimer
o Treatment of capital gains/dividends/interest
- Necessary investment disclosures—non-guarantees (SEC), past/future performance
- For income strategies: expected dividends/interest
- Growth projections: dividend income, interest income, overall portfolio
Example of optional information to include:
- Personal information summary
- Demographic information of client
Other Information:
- The prospectus should be in the neighborhood of 8-10 pages
- Style matters… the assignment will be judged as a professional document, if it looks
sloppy or like you just put something into Word a few hours before the due date don’t
expect a great score—this falls under the “organization” assessment column in the rubric
- Please don’t choose a font that’s hard to read
- The use of charts, graphs, etc. to illustrate investment performance or any other
appropriate areas of the prospectus are strongly recommended (beware of cut/paste)