RPT – INSIGHT-US mutual funds cut expenses by shifting billions to trusts

Mutual fund companies, including No. 2 Fidelity Investments, have slashed fees on their most popular funds by shifting billions of dollars into collective trusts not regulated by the U.S. Securities and Exchange Commission. The growing shift to collective trusts could prove a weapon for actively managed mutual funds losing out to low cost passive investment products such as the exchange-traded funds offered by rivals such as Vanguard Group, the biggest mutual fund company. For investors, one drawback is less transparency about the risks and performances of their holdings. “CITs are more opaque to the outside world because reporting requirements are not as stringent,” said Michael Rawson, manager of research at Morningstar Inc. More on Reuters here.