In Schweser it says that: Under the old Prudent Man Rule, the preservation of the principal and purchasing power by earning a return sufficient to offset inflation was required. Under the new Prudent Investor rule, growth in the real value of the principal (returns in excess of inflation) is permissible. So are they saying that under the old rule, return above inflation was required, but under the new rule, returns in excess of inflation are permissible? Can someone explain how this has changed?
No. under the old rule, they emphasized on preservation of capital. So just maintaining the purchasing power (generating returns equal to inflation) was enough.