Collective Investment Trusts for 401(k) Plans Becoming More Popular

By admin
In March 12, 2015

A recent article titled “US Mutual Funds Cut Expenses by Shifting Billions To Trusts” discusses  the growing use of Collective Investment Trusts (also known as Collective Investment Funds, CITs or CIFs) based upon their lower cost structure.  A few excerpts:

Assets in CITs are surging because they can have significantly lower overhead costs than the average mutual fund. CITs can only be offered to qualified retirement plans such as 401(k)s and analysts say their less stringent reporting requirements translate into lower operating expenses for fund companies. Meanwhile, there has been a rash of lawsuits in which employees accuse their employers of charging excessive fees in their 401(k) retirement plans.

In recent years, research firms have estimated that CIT assets would top $2 trillion in 2015. But a Reuters analysis of disclosures by trust banks, including ones operated by BlackRock Inc, State Street Inc and Wellington Management, reveal that figure was easily surpassed in 2014.

Collective trusts, or (CITs) are similar to mutual funds in that they are commingled assets. They differ from mutual funds in that , rather than being registered with the SEC, they are bank registered. Also, unlike mutual funds, CITs are only available to qualified retirement plans, and are subject to ERISA.  Collective Trusts

ETF Model Solutions is the investment manager for the Endowment Collective Fund, sponsored by Alta Trust.  The Endowment CIF is an index-based Fund that is based upon the Endowment Index™.

You can read the  entire article here.

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