Explanation

In the portfolio management process, the feedback step involves monitoring and evaluating portfolio performance against the investment policy statement and client objectives. The key components of the feedback step are:

1. Performance measurement - Measuring and evaluating portfolio returns
2. Performance attribution - Analyzing the sources of portfolio returns
3. Performance appraisal - Assessing whether the portfolio met its objectives
4. Rebalancing - Adjusting the portfolio back to target allocations

Let's analyze each option:

A. Portfolio construction - This is part of the implementation step, not the feedback step. Portfolio construction involves selecting specific securities and building the actual portfolio.

B. Performance measurement - ✓ CORRECT - This is a core component of the feedback step. It involves measuring portfolio returns, comparing them to benchmarks, and evaluating performance against objectives.

C. Developing the investment policy statement - This is part of the planning step, which occurs before portfolio implementation. The IPS establishes client objectives, constraints, and investment guidelines.

The Portfolio Management Process Steps:

1. Planning - Develop investment policy statement (IPS)
2. Execution - Portfolio construction and asset allocation
3. Feedback - Performance measurement, monitoring, and rebalancing

Therefore, performance measurement is the only option that belongs to the feedback step of the portfolio management process.