Prudent Investor Rule
/ˈpruːdnt ɪnˈvɛstər ruːl/
Definitions
- (n.) A legal standard requiring fiduciaries to invest trust assets with the care, skill, and caution a prudent person would use, focusing on overall portfolio performance rather than individual investments.
The trustee complied with the prudent investor rule by diversifying the trust's assets to minimize risk.
Forms
- prudent investor rule
Related terms
See also
Commentary
The rule emphasizes portfolio-wide risk and return rather than isolated investment decisions; drafters should clarify fiduciary scope and compliance standards.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.