General term for an investment strategy in asset management. In this case, the portfolio is managed prudently and risk-bearing investments are avoided wherever possible. – In the case of certain contracts – especially for retirement provision – laws or supervisory authorities prescribe a balanced investment, and here above all with regard to risk diversification, the matching of assets and liabilities and the hedging for the nominal value guarantee; all this is often called the prudent man standard of care in German. Such restrictions necessarily mean that corresponding funds can generate lower returns because they are not allowed to take certain risks. – See pension contracts, investor protection, balanced fund, pension funds, straitjacking, overregulation, growth-oriented. – Cf. Deutsche Bundesbank Monthly Report, July 2002, p. 37 (explanatory notes).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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