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A Superior Collective Investment Trust Onboarding Experience.
A Superior Collective Investment Trust Onboarding Experience.
There are now two investment lineup decisions, not just one.
Collective investment trusts and mutual funds are the two most popular investment products offered to retirement plan participants. In general, they both often hold identical portfolios, invest in the same securities, are managed by the same asset managers, and follow the same investment strategies. Where they differ is in their regulatory requirements and distribution structures, both of which impact their resulting fee profiles.
According to the most recent Morningstar and Cerulli data, the average actively managed mutual fund is three times more expensive than the average actively managed CIT — a gap of 38.5 basis points.1 Compounded across a forty-year contribution period, that difference can mean more than a million dollars in additional retirement balance.
The cost advantage doesn’t stop at retirement. For a median-income participant, the lower-cost vehicle can extend income from the account by roughly eight years before depletion.
Cost is the headline, but not the whole picture. CITs also offer tax efficiency, institutional-grade access for plans of all sizes, and sit naturally inside today’s plan designs — including as the most common QDIA in defined contribution plans.
Still have questions about CITs? We’ve addressed the most common misconceptions.
Great Gray Trust Company, LLC Collective Investment Funds (“Great Gray Funds”) are bank collective investment funds; they are not mutual funds. Great Gray Trust Company, LLC serves as the Trustee of the Great Gray Funds and maintains ultimate fiduciary authority over the management of, and investments made in, the Great Gray Funds. Great Gray Funds and their units are exempt from registration under the Investment Company Act of 1940 and the Securities Act of 1933, respectively.
Investments in the Great Gray Funds are not bank deposits or obligations of and are not insured or guaranteed by Great Gray Trust Company, LLC, any bank, the FDIC, the Federal Reserve, or any other governmental agency. The Great Gray Funds are commingled investment vehicles, and as such, the values of the underlying investments will rise and fall according to market activity; it is possible to lose money by investing in the Great Gray Funds.
Participation in Collective Investment Trust Funds is limited primarily to qualified retirement plans and certain state or local government plans and is not available to IRAs, health and welfare plans and, in certain cases, Keogh (H.R. 10) plans. Collective Investment Trust Funds may be suitable investments for plan fiduciaries seeking to construct a well-diversified retirement savings program. Investors should consider the investment objectives, risks, charges, and expenses of any pooled investment fund carefully before investing. The Additional Fund Information and Principal Risk Definitions (PRD) contains this and other information about a Collective Investment Trust Fund and is available at www.greatgray.com/cit-fund-info/principal-risk-definitions/ or ask for a free copy by contacting Great Gray Trust Company, LLC at (866) 427-6885.
Great Gray® and Great Gray Trust Company are service marks used in connection with various fiduciary and non-fiduciary services offered by Great Gray Trust Company, LLC.