Collective Investment Trusts (CITs)
The collective investment trust is no longer the retirement industry’s best-kept secret. Along with our AmericanTCS affiliates, American Trust Custody can offer you the ability to sub-advise a CIT with your investment strategy, which can be used on any custodial or retirement platform at an extremely competitive price point. Imagine getting your strategy into the hands of participants where you can truly make a difference in their retirement outcomes.
The majority of DC plan decision-makers, including advisors and consultants, continue to favor CITs, particularly because of their relatively low costs and flexibility in pricing. Several CIT providers have even reduced or waived their minimum investment amounts in recent years.
What is a Collective Investment Trust?
A CIT is a type of investment vehicle that pools money from multiple qualified retirement plans to invest in a variety of assets. Unlike mutual funds and exchange-traded funds (ETFs), CITs are not publicly traded and are only available to qualified retirement plans. CITs date all the way back to 1927. However, around the turn of this century, CITs began to adopt the trading and information availability conveniences of mutual funds, which made them a more palatable investment option.
Which Plans Qualify to Invest in a Collective Investment Trust?
- Qualified pension and cash balance plans
- Qualified profit-sharing and stock bonus plans
- Government plans – 401(a) and 457(b)
- MEP or Union plans
- 401(k) Plans
The Benefits of CITs:
Low Cost
CITs are typically less expensive than mutual funds and ETFs because they are not subject to the same regulatory requirements. This allows for lower fees and expenses, which can result in higher returns for investors.
Customizable
Our CITs are flexible and customizable, allowing qualified retirement plans to tailor their investments to meet their specific needs and goals. They can be used to invest in a variety of asset classes, including equities, fixed income securities, and real estate, among others.
Long-Term Focus
Fiduciary Status
By selecting a CIT, the plan sponsor is relieved from fiduciary responsibility for the day-to-day investment management decisions made on behalf of the CIT and remains responsible only for prudently overseeing and monitoring the CIT and its trustee.
Tax Advantage
CITs are tax-exempt. As a result, the trustee generally can make investment decisions without tax considerations.
Risk Management
Our team of experienced investment professionals carefully manages the assets of our CITs to help mitigate risk and maximize returns for our clients.
Why Choose American Trust Custody?
- Expertise: Our team of experienced investment professionals has a proven track record of delivering results for qualified retirement plans.
- Focus: We are dedicated to meeting the unique needs of qualified retirement plans and providing personalized service to our clients.
- Dedication: At American Trust Custody we are dedicated to helping our business partners provide first-class service to their clientele.
American Trust Custody Services
- Establish the CIT with the NSCC for FundServ trading on any NSCC member investment platform
- Create all required trust documentation and agreements
- Set your portfolios on ModelxChange for easy, efficient administration
- Perform all custody and safekeeping
- Strike daily unit values
- Handle all aspects of trading, reconciliation, and transfer agency functions
- Offer online access for daily activity viewing
- Monitor, track and create performance reports
- Create custom fact sheets and provide to all necessary parties
- Make available quarterly and annual activity reports
- Coordinate required annual audits
- Produce annual Form 5500 DFE filings
Collective Investment Trust Fact Sheets Prepared by American Trust Custody
View our collective investment trust annual reports for the most recent annual financial statements.
*Must be a qualified investor
*CITs supported by American Trust Custody are trusteed by an affiliate, American Trust Company, a non-depository Tennessee-chartered trust company.
Mid Atlantic Trust Company, doing business as American Trust CustodySM, is a South Dakota state-chartered non-depository trust company.
Securities offered through Mid Atlantic Clearing & Settlement Corporation and NewEdge Securities, Inc., members FINRA/SIPC. Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. Trust services offered through Mid Atlantic Trust Company, a non-depository trust company. All rights reserved.
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