The CIT Opportunity Series

CITs move into the mainstream

CITs aren’t new, but their advantages in terms of pricing, flexibility, and speed to market make them extremely attractive in today’s DC environment and have driven a recent surge in their use.

The primary driver of CITs’ resurgence is the continued fee pressure throughout the DC landscape. Plan sponsors’ increasing concerns about their role as fiduciary — and the associated potential for participant lawsuits — have caused them to look for cost savings in every area of their retirement plan, from investments and recordkeeping to advisory and consulting services. On the investment side, CITs present a cost savings solution; Callan found that 42% of plan sponsors are somewhat or very likely to switch to more low-cost institutional investment vehicles such as a CIT in 2019.¹

CITs’ growth potential and the vehicle’s critical place in the DC ecosystem have caused many asset managers to offer multiple CITs and a wide selection of share classes. By making investment solutions available in mutual funds, CITs and/or separate accounts, asset managers can approach sales opportunities with a vehicle-agnostic investment perspective and drive a more consultative conversation about feature, function and cost.

This video series highlights some of the themes in our brief: Capitalize on the demands for customization and collaboration