In the past two years, four providers of target-date funds have started collective investment trust versions of life cycle strategies to complement traditional mutual fund offerings.
The largest target date fund (TDF) providers continue to strongly favor the mutual fund form of TDFs over the collective investment trust form, as one-third of the providers only offer TDFs through a mutual fund vehicle, according to Portfolio Evaluations Inc., a Warren, N.J.-based consultancy that benchmarks investments for retirement plans.
Collective investment trusts are only available to investors through qualified retirement plans. Because they are not sold through the retail market, they have fewer disclosure requirements and subsequent costs. Issued by banks, they are not regulated by the Securities and Exchange Commission, but rather by state banking regulators in most cases.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
