Collective Fund FAQ

Question: What is a Collective Investment Fund?
Answer: A Collective Investment Fund also known as a Collective Investment Trust is a bank maintained fund that is exempt from registration under the Investment Advisers Act of 1940.

Question: What is the difference between a Collective Fund and a Mutual Fund?
Answer: Both Collective Funds and Mutual Funds look and act very much alike. The main difference is the regulating body. Banking regulations govern Collective Funds and the SEC governs mutual funds. As a result Collective Funds are only available to qualified retirement trusts such as 401k, Profit Sharing, Defined Benefit Plans, etc. CITs offer the same kind of diversification as a mutual fund but also add an additional layer of fiduciary protection.

Question:Are CIFs brand new?
Answer: No. CIFs were first offered in 1927 and gained popularity in 1936 when Congress gave them tax exempt status. Until the 1980s they were the vehicle of choice for retirement plans due to their low costs. However, CIFs were typically valued annually or semi-annually and with the emergence of daily valued 401k plans a daily valued vehicle was needed and mutual funds filled that role. CIFs have begun to regain their popularity over the last several years as retirement plans are becoming more cost sensitive and because most CIFs are now valued daily.

Question: What is the NSCC?
Answer: The NSCC is the National Securities Clearing Corporation and is where virtually every mutual fund and collective fund trade is processed. By receiving an NSCC Cusip a Collective Fund is available to trade with virtually any custodian in the US.

Question: What are the advantages of starting a CIF with Alta Trust?
Answer: CIFs are low cost vehicles that give you access to $14.5 Trillion in assets. CIFs are managed in omnibus so you can have thousands of retirement plans investing in your strategy and as the manager you only have to manage one account. On top of all that Alta Trust is one of a few companies in the country that dedicates itself to Collective Funds. We have developed a cost effective way to establish and administer CIFs that we feel every money manager in the country should at least think about.

Question: Is it risky to start a CIF?
Answer: No, not if you start a CIF with Alta Trust. Alta Trust takes care of all of the CIF ERISA, IRS and Banking compliance so our managers can focus on managing money.

Question: How long does it take to set up a CIF?
Answer: It typically takes about two months to establish a CIF.