Professors Langbein and Posner recently proposed that fiduciaries be allowed to invest in market funds under a relaxation of the prudent investor standard. But a relaxation of the selectivity requirements may be destructive of capital market efficiency and perhaps of the capital markets themselves.
John A. Humbach & Stephen P. Dresch, Prudence, Information, and Trust Investment Law, 62 A.B.A. J. 1309 (1976), available at http://digitalcommons.pace.edu/lawfaculty/305/.