Collective Investment Trusts

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A Collective Investment Trust (CIT) is a pooled group of trust accounts operated by a trust company or a bank. Collective Investment Trusts combine the assets of various individuals and organizations to create a larger, well-diversified portfolio. [1] Many individual employees encounter CITs through their investment in employer provided contributory retirement plans. There are two types of CITs:

  • A1 Fund: A fund of grouped assets contributed by either the holding bank or affiliated banks for the exclusive purpose of investment and reinvestment. These funds are usually called Collective Investment Funds.
  • A2 Fund: A fund of grouped assets contributed by pension, profit sharing, retirement, or other trusts that are exempt from federal income tax. This is the plan type that most employees encounter.[1]

References

  1. 1.0 1.1 definition, investopedia

External links

Selective list of CIT management firms