Page 44 - DCAC Nov 2025 Files
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Collective Investment Trusts (CITs) Pros & Cons
Pros Cons
• CITs provide plan fiduciaries and participants • CITs do not have a ticker symbol or
the potential for considerable savings as the prospectus, thus limiting a participant’s ability
industry becomes more focused on driving to conduct independent research and
down plan costs to enhance performance. performance evaluation.
– Fund information most likely would be
• CITs can provide stable investment accessed via record keeper websites,
management and trading efficiencies as they which will still have the fund prospectus.
benefit from more stable cash flows from an
institutional investor base. • Participants that are invested in CITs and then
leave their employer can not roll their
• Portfolio managers typically have more collective trust over to an IRA. They have to
flexibility to apply the strategy per sell and then roll over cash.
institutional guidelines and have the ability to
customize the CIT. • CITs assume the same investment risk as other
investments, with no guarantee from the bank
or any regulatory authority such as the FDIC.
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