Collective Investment Trusts (CITs) are becoming increasingly prevalent in retirement plans, with over 78% of defined contribution (DC) plans offering them, making them the second most common investment option after mutual funds. CITs serve as cost-effective, tax-exempt pooled investment vehicles offered through banks or trust companies, delivering many benefits of institutional accounts alongside accessibility for retirement plans. 

Compared to mutual funds, CITs often feature lower administrative and compliance costs, and their fee flexibility and eligibility for smaller plans enhance their appeal for sponsors and advisors. They are available only to qualified retirement plans under ERISAand are not open to IRAs or certain other tax-advantaged arrangements

 While CITs may mirror mutual fund strategies, slight performance differences can arise due to varying fee structures, cash flows, and corporate-wrapper mechanics. 

Finsum: Fiduciaries should consider the switch from mutual funds to CITs, the transition process is relatively straightforward.