Nearly 50% of 401(k) plans at firms with over $10 billion in assets now use collective investment trusts instead of mutual funds.
Collective investment trusts (CITs) now account for nearly 50% of 401(k) plans offered by employers with over $10 billion in assets. The shift is driven by lower costs, as CITs avoid SEC registration fees and marketing expenses required for mutual funds.
Previously, mutual funds dominated retirement plans, but CITs have gained traction due to their fiduciary oversight by banking regulators. The trend reflects broader demand for cost-efficient investment options in employer-sponsored retirement accounts.
The change has raised concerns among regulators about transparency and investor protections, though no immediate market reaction was reported.