Structure & Management
Designed to meet the needs of a specific 401k or pension plan, Collective Investment Trusts (CITs) are portfolios of investments managed by either a bank or trust company. These trusts can be passively or actively managed.
Like a mutual fund, the portfolio comprising the trust can invest in an array of products, ranging from stocks and bonds to ETFs, mutual funds, and other investment types.
Since these products aren’t registered or open to the general public, reduced marketing and compliance expense keeps these products more affordable. As an added benefit, they are also tax exempt.
Convenience & Accessibility
These investments are only available through private providers like an employer or the government. As such, their structure also lends itself to fewer trading and market-timing issues.