Skip to Content

Governance of Collective Investment Trusts: Benefits To Plan Investors

November 25, 2024

Both mutual funds and collective investment trusts (CITs) are commonly used as investment options in retirement plans, such as 401(k) plans. However, the two investment vehicles differ in many ways such as good governance practices, regulatory bodies, and cost structure. CITs offer fee flexibility and investment flexibility with robust investor protections, making them a viable alternative to mutual funds. While both mutual funds and CITs are extensively regulated to protect investors, CITs offer unique advantages for retirement plans. Coupled with ERISA’s fiduciary protections, CITs must follow a longstanding and comprehensive legal structure designed to protect plan participants and maximize their risk-adjusted financial returns. All of which make CITs increasingly attractive when selecting retirement plan investment options.
Read more about the added layer of protection for CIT investors here.