More Collective Investment Trusts Being Added to DC Plans

More Collective Investment Trusts Being Added to DC Plans

There are now over 3,200 collective investment trusts (CITs) tracked in the Morningstar CIT database, collectively holding nearly $2 trillion according to a recent article that appeared on WealthManagement.com.  That’s up from $896 billion in 2008.  Callan Associates estimates that 71% of DC include at least one CIT in their plan up from 60% and 52% in 2014 and 2013, respectively

Why are CITs becoming more popular?  Reasons included in the article note cost advantages over mutual funds, less expensive regulatory requirements, pricing flexibility, the institutionalization of DC plans, broader range of asset classes within CITs, improved administrative and operational efficiency (such as daily valuation), and improved participant communications, such as fact sheets.