|A summary of these are:
- Modern Portfolio Theory (MPT) is adopted as the standard by which fiduciaries invest;
- Fiduciaries can avoid liability by exercising reasonable skill and care in making a delegation to an agent that will be held to the same standards as the fiduciary;
- May of 1992 American Law Institute (ALI) Third Restatement of the Prudent Investor Rule recognizes:
- Little or negative payoff when fiduciaries and other investors try to apply expertise, investigation and diligence in efforts to “beat the market”, particularly after research and transaction costs;
- Little correlation between fund managers’ earlier successes and their ability to produce above-market returns in subsequent periods.