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Fund Spy

Farewell, Mutual Funds in 401(k)s?

Behind the accelerating shift from mutual funds to CITs on 401(k) plans.

Earlier this year, Morningstar’s John Rekenthaler wrote that the mutual fund era was giving way to the exchange-traded fund age. Traditional funds may retain a foothold in tax-advantaged 401(k) plans, where ETFs’ tax efficiency is irrelevant. However, another vehicle--the collective investment trust--is undermining even that last bastion for mutual funds.