Industry leader SEI recently concluded in a white paper that collective investment trusts (CITs) are becoming more popular in the defined-contribution retirement market. In the first quarter of 2008 alone, 63 new collective trusts were launched, and from 2004 to 2007 CIT assets actually tripled.

While CITs share similar characteristics of mutual funds, they are an institutional-only product that combines assets from multiple retirement plans into a single portfolio. Best known for their cost effectiveness and lower fees – which can most likely attributed to their simple structure and regulatory status – CITs are exempt from SEC registration as well as from the 1940 Investment Company Act.

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