{"data":{"id":"us-ky/krs-273.605","jurisdiction":"us-ky","citation":"KRS 273.605","heading":"Standard of conduct in managing and investing institutional fund.","body":"(1) Subject to the intent of a donor expressed in a gift instrument, an institution, in\nmanaging and investing an institutional fund, shall consider the charitable purposes\nof the institution and the purposes of the institutional fund.\n(2) In addition to compl ying with duty of loyalty imposed by law other than in KRS\n273.600 to 273.645, each person responsible for managing and investing an\ninstitutional fund shall manage and invest the fund in good faith and with the care\nan ordinarily prudent person in a like position would exercise under similar\ncircumstances.\n(3) In managing and investing an institutional fund, an institution:\n(a) May incur only costs that are appropriate and reasonable in relation to the\nassets, the purposes of the institution, and the skill s available to the\ninstitution; and\n(b) Shall make a reasonable effort to verify facts relevant to the management and\ninvestment of the fund.\n(4) An institution may pool two (2) or more institutional funds for purposes of\nmanagement and investment.\n(5) Except as otherwise provided by a gift instrument, the following rules apply:\n(a) In managing and investing an institutional fund, the following factors, if\nrelevant, shall be considered:\n1. General economic conditions;\n2. The possible effect of inflation or deflation;\n3. The expected tax consequences, if any, of investment decisions or\nstrategies;\n4. The role that each investment or course of action plays within the overall\ninvestment portfolio of the fund;\n5. The expected total return from income and the appreciation of\ninvestments;\n6. Other resources of the institution;\n7. The needs of the institution and the fund to make distributions and to\npreserve capital; and\n8. An asset's special relationship or special value, if any, to the charitable\npurposes of the institution;\n(b) Management and investment decisions about an individual asset shall be made\nnot in isolation but rather in the context of the institutional fund's portfolio of\ninvestments as a whole and as a part of an overall investment strategy having\nrisk and return objectives reasonably suited to the fund and to the institution;\n(c) Except as otherwise provided by law other than KRS 273.600 to 273.645, an\ninstitution may invest in any kind of property or  type of investment consistent\nwith this section;\n(d) An institution shall diversify the investments of an institutional fund unless\nthe institution reasonably determines that, because of special circumstances,\nthe purposes of the fund are better served without diversification;\n(e) Within a reasonable time after receiving property, an institution shall make\nand carry out decisions concerning the retention or disposition of the property\nor to rebalance a portfolio in order to bring the institutional fund int o\ncompliance with the purposes, terms, and distribution requirements of the\ninstitution as necessary to meet other circumstances of the institution and the\nrequirements of KRS 273.600 to 273.645; and\n(f) A person that has special skills or expertise, or is  selected in reliance upon the\nperson's representation that the person has special skills or expertise, has a\nduty to use those skills or that expertise in managing and investing\ninstitutional funds.","path":["KRS Chapter 273"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=13769","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:25Z","sha256":"1f231b8e3ce70a3e7a00a9f13685bce6aae75f8ba4de1a6147bd4c5912e28040","source_id":"us-ky","stale":false,"prev":"us-ky/krs-273.600","next":"us-ky/krs-273.610"},"notice":"GroundRules: Original legal text. Not legal advice."}