Collective Investment Trusts (CITs), also known as commingled funds or collective investment funds, have been around for many years, but are generally less well known than mutual funds. While mutual funds and CITs are both an investment option funded by shareholders that trade in diversified holdings and are professionally managed, there are differences in how CITs are registered and what investors may access them.
CITs are sponsored by a bank or trust company and are only available to certain retirement plan sponsors and their plan participants – retail (public) investment is not permitted. CITs pool assets from multiple retirement plans into a single investment fund, similar to a mutual fund. While mutual funds are regulated by the Securities and Exchange Commission (SEC), CITs are regulated by the Office of the Comptroller of Currency (OCC) as well as the IRS and DOL. As a result of the regulatory difference, mutual funds are required to report and disclose their holdings on a quarterly basis. Mutual funds are typically accompanied by a ticker symbol, so investors are able to search for more information about the security’s holdings and other characteristics. Unlike mutual funds, CITs are not publicly traded and are not subject to the reporting and disclosure requirements. As such, public information is generally unavailable for CITs.
| A comparison chart between mutual funds and CITs is provided below: Collective Investment Trust | Mutual Fund | |
| Sponsor | Offered by bank or trust company | Offered directly or through financial intermediaries (asset management, insurance companies, etc.) |
| Eligible Investors | Qualified retirement plans; not available for investment by the general public | Offered to both institutional and retail (public) investors |
| Ticker Symbols | Not provided | Provided for each fund including each share class |
| Fund Information | Available on designated web portals, often established by the plan sponsor or recordkeeper | Available online through the fund house and other prominent investment research websites |
| Fee Structure | May have multiple share classes. Flexible for negotiated pricing. | May have multiple share classes. Fees are typically pre-established. |
| Oversight and Regulation | Office of the Comptroller of Currency (OCC), IRS, and DOL. Fund trustee can be subject to ERISA standards. | SEC and Investment Company Act of 1940. Manager not held to ERISA standards. |