Morningstar May Fund Flows Reports Highlights Switch From Mutual Funds to Collective Investment Trusts

Morningstar May Fund Flows Reports Highlights Switch From Mutual Funds to Collective Investment Trusts

In Morningstar’s U.S. Open-End Asset Flows Update for June, Michael Rawson, CFA highlights a growing trend of asset flows from active mutual funds to Collective Investment Trusts (CITs).  In the article, Michael cites costs as one factor, but there are other advantages that CITs have over mutual funds that we’ve mentioned before, including additional fiduciary protection for the Plan Sponsor.

An interesting statistic Mr. Rawson quotes is that market share of active mutual funds in the U.S. equity fund space has dropped from 89% 15 years ago to 64%.  ETFs and passive mutual funds have been the recipient of those flows.

The entire article can be accessed at Morningstar.com here: http://bit.ly/1uHKJAy