Rekenthaler Report

Collective Investment Trusts: The Invisible Giant

John Rekenthaler

The Name Game
Collective investment trusts are big. The financial-technology firm ALPS judges that CIT assets hit $2 trillion in early 2016 and will reach $3 trillion by the end of this year. (For comparison’s sake, U.S. exchange-traded funds are at $3.5 trillion.) Morningstar shows CITs to have $2.4 trillion. Either way, there’s no doubt that CITs command substantial assets and are growing rapidly.

What is less certain is what to call CITs. Cristiano Ronaldo dos Santos Aveiro and Lionel Andrés Messi Cuccittini, the world’s best soccer players, possess fewer names than do CITs, which are variously billed as collective funds, collective trust funds, commingled funds, common funds, and common trust funds. Broadly speaking, they are also a form of separate account. But a consensus appears to be coalescing for the term CIT, which is what Morningstar (and this column) uses.