Collective investment trusts (CITs) — pooled investment funds designed exclusively for qualified retirement plans — became even more popular last year, as they were included as one of the investment options in nearly 71% of 401(k) plans, up from 60% in 2014 and 52% in 2013, according to a recent report from research group Callan Associates.[1. Source: Callan Associates, 2016 Defined Contribution Trends report, Jan. 1, 2016.]
Mutual funds still dominate 401(k) plans, but CITs have been gaining market share. With heightened attention being placed on the decisionmaking process of plan sponsors, many of them have placed CITs among the investment options for the 401(k) plans they manage.
And as more qualified plans place CITs on their investment menus, use of the vehicles has skyrocketed in recent years. CITs currently account for $2.4 trillion (or 16%) of the $15 trillion invested in 401(k)-style and pension plans, up from $1.3 trillion (and 12.7% of the total) in 2009, according to the Investment Company Institute and Cerulli Associates.[2. Source: The Wall Street Journal, “Some Funds in Your 401(k) Aren’t Really Mutual Funds After All,” Sept. 25, 2015.]
Learn more CIT statistics and reasons why more plans are considering them.
Betsy Warrick is a Senior Vice President at Invesco Trust Company.
Invesco Distributors, Inc. 02/16
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