Many companies replacing mutual funds with collective investment funds in retirement plans

By ELEANOR LAISE The Wall Street Journal Don’t look now, but your favorite 401(k) mutual fund may be going the way of the VHS tape. In a drive to cut costs, 401(k) plans are replacing familiar mutual-fund investment options with more-obscure vehicles known as "collective investment funds." Just like mutual funds, collective funds pool investors’ assets and invest in stocks, bonds and other securities. The chief difference: Collective funds are typically available only in retirement plans. Because they aren’t sold directly to the public, they generally aren’t regulated by the Securities and Exchange Commission. Collective funds tend to be substantially cheaper than mutual funds, largely because they don’t have to comply with SEC regulations or market to retail customers. That’s driving 401(k) plans to embrace these products,... [read full story]