PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investment management, today announced the launch of the MDT Mid Cap Growth Collective Investment Trust (CIT) for retirement plans. This move comes as collective investment trusts (CITs) are gaining momentum in the retirement planning space, outpacing mutual funds.
A House-passed bipartisan bill with securities law reforms includes changes so 403(b) plans can offer collective investment trusts. This development signifies a significant shift in the retirement investment landscape, with CITs becoming increasingly popular among plan sponsors and participants.
Collective investment trust target-date funds have moved ahead of their mutual fund cousins, grabbing 50.5% of assets as of June 30. This shift highlights the growing preference for CITs due to their potentially lower fees and enhanced customization options.
There's a push by Congress, spearheaded by ranking committee member Sen. Tim Scott, to include the ability for 403(b) plans to use CITs. This legislative effort could further solidify the position of CITs as preferred investment options for retirement plans.
June 2024 data from Morningstar show collective investment trust target-dates make up about 50.5% of TDF assets. This data reflects the increasing dominance of CITs in the target-date fund market, signaling a shift in investor preferences towards these collective vehicles.
Collective investment trusts (CITs) are a greater focus of attention and activity in the wake of SECURE 2.0, as a recent Congressional bill aims to expand their usage in retirement plans. This heightened interest in CITs underscores their growing importance in the retirement planning industry.
Collective investment trusts are overtaking mutual funds in 401(k) plans, according to new research from Cerulli; however, barriers to entry still exist. Despite their increasing popularity, CITs face challenges in terms of regulatory hurdles and operational complexities.
While collective investment trusts (CITs) nearly surpassed mutual funds in 2023 as the most popular target-date vehicle, the firm's data now indicates a further shift towards CITs. This trend suggests that CITs are becoming the go-to choice for retirement plan investors seeking cost-effective and tailored investment solutions.
Federated Hermes launches new MDT Mid Cap Growth CIT for retirement plans, leveraging an advanced stock-selection process. This new CIT offering underscores the growing demand for innovative investment solutions in the retirement planning sector, as investors seek out options that offer both growth potential and risk management.
