2 min read 28 Mar 22
Trustees can access a wide range of potential investments. Which particular product, or combination of products, is used depends on the specific requirements of each trust.
Trustees must invest the trust fund. Assets must be acquired (or retained) to produce a financial return for the trust. Stone v Stone (1869) 5 Ch App 74
Trustees have a duty of care.
And on further appeal to the House of Lords
Trustees must clearly avoid risk.
The duty of the trustees in relation to investment is to use their powers in the best interests of current and future beneficiaries.
Trustees should obtain the best rate of return regardless of their own, or the beneficiaries’, political, social or moral views.
In a later case the Court held that investment involved “…seeking to obtain the maximum return by way of income or capital growth which is consistent with commercial prudence.”
Trustees need to consider diversification of the trust investments but they do not have an absolute duty to diversify.
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