Understanding the growing universe of collective investment trusts

As CITs rise in popularity, we examine the top questions surrounding the investment vehicles

Warrick_headhsotCollective investment trusts (CITs) — pooled investment funds designed exclusively for qualified retirement plans — have been garnering a lot of attention and assets in recent years. They account for $2.4 trillion (or 16%) of the $15 trillion invested in 401(k)s and pension plans, up from $1.3 trillion (12.7% of the total) in 2009, according to the Investment Company Institute and Cerulli Associates.1

One of the reasons I believe CITs are becoming more popular these days is the enhanced understanding plan fiduciaries and other decision-makers have about the investment vehicles. Such advisors, I believe, need to be well-versed in CITs to be able to objectively weigh their benefits and considerations. A lack of familiarity isn’t a good reason to ignore these investment vehicles, which may be appropriate for many plans.

To help with the information-gathering process, I’ve listed some of the top questions we receive from clients and prospects about CITs, along with answers I believe will help shed light on this growing investment trend.

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