explanade
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- Joined
- May 10, 2008
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- 7,714
When I FIRE'd, I left my 401k funds with my former employer.
They've since changed the custodian, now with Empower.
Just got an email that they're replacing a bunch of funds in the plan with "Collective Investment Trusts" or CTI:
In my case, my funds are being transferred from VBTIX to Vanguard Total Bond Market Index Trust, with gross expense ratios of .04% vs .035%.
OK, I can't complain about a lower ER.
Here is a specific description from VG:
I assume the investment makeup is similar to VBTIX but I don't like that it doesn't have a ticker symbol, making it a hassle to track. I guess I'd have to always log on to my 401k account in order to see what's happening.
Anyone deal with CITs?
They've since changed the custodian, now with Empower.
Just got an email that they're replacing a bunch of funds in the plan with "Collective Investment Trusts" or CTI:
What is the difference between a mutual fund and a collective investment trust?
A mutual fund is an investment company registered with the U.S. Securities and Exchange Commission (SEC) that buys
a portfolio of securities selected by a professional investment advisor to meet a specific investment objective. Collective investment trust (CIT) funds are created by a bank or trust company for qualified retirement plans, such as 401(k) plans, which pool the assets of retirement plans for investment purposes. They are governed by rules and regulations that apply to banks and trust companies instead of being registered with the Securities and Exchange Commission (SEC) and do not require a prospectus or have a ticker symbol. These funds are also referred to as collective or commingled trusts.
In my case, my funds are being transferred from VBTIX to Vanguard Total Bond Market Index Trust, with gross expense ratios of .04% vs .035%.
OK, I can't complain about a lower ER.
Here is a specific description from VG:
Vanguard Total Bond Market Index Trust
Ticker symbol: N/A

What it is: This fund is a collective investment trust fund, not a mutual fund. It does not require a prospectus or have a ticker symbol.
Goal: Seeks a high level of interest income by tracking the performance of a broad, market‐weighted bond index.
What they invest in: The fund attempts to track the performance of the Barclays Capital Aggregate Bond Index, which is a widely recognized measure of the entire taxable U.S. bond market. The index consists of more than 5,000 U.S. Treasury, federal agency, mortgage‐backed and investment‐grade corporate securities, with a total market value exceeding $4 trillion. Because it is not practical or cost‐effective to own every security in the index, the fund invests in a large sampling that matches key characteristics of the index (such as market‐sector weightings, coupon interest rates, credit quality and maturity). To boost returns, the fund holds a higher percentage than the index in short‐term, investment‐grade corporate bonds and a lower percentage in short‐term Treasury securities. Fixed income investment risks include interest rate risk (as interest rates rise, bond prices usually fall), the risk of issuer default and inflation risk. Lower-quality debt securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Share price, yield and return will vary.
I assume the investment makeup is similar to VBTIX but I don't like that it doesn't have a ticker symbol, making it a hassle to track. I guess I'd have to always log on to my 401k account in order to see what's happening.
Anyone deal with CITs?