Target-Date CITs Continue to Surpass Mutual Funds

Collective investment trusts are becoming the face of the target-date market and continue surpassing their mutual fund counterparts since first landing the No. 1 spot in 2024. By the end of 2025, CITs represented 54% of total target-date assets, up from 52% the year before, according to Morningstar’s “2026 Target-Date Fund Landscape.”

Target-date launches through 2025 remained consistent from 2024, driven by the launch of 21 new CIT series. As in years prior, most of the new CIT series are based on existing lineups from major mutual fund providers.

“Very few of the 21 launches represent genuinely new strategies; the vast majority are institutional CIT versions or extensions of existing mutual fund target-date lineups,” wrote Mahi Roy, a multi-asset and alternative strategies analyst at Morningstar and the report’s author, in an email to PLANADVISER. “In practice, these launches are largely structural conversions, rather than new glide paths or investment approaches, clearly signaling that the industry’s current priority is cost efficiency, CIT structure and retirement-plan distribution.”

Overall, the target-date market increased by 20.3% in 2025, reaching $4.8 trillion, according to the report.

In February, Sway Research LLC noted similar findings in its target-date report, which found 21% growth last year and assets reaching $4.8 trillion.

The industry remains concentrated, with five firms controlling 80% of assets. Vanguard led the group with $1.8 trillion in assets under management and 37% of market share.

For advisory firms considering their own CIT suites, Roy warns that the target-date market “is highly competitive, dominated by a few large providers. So scale and distribution are key. … The ongoing shift from mutual funds to lower-cost CITs shows large plans favor institutional structures.”

The five firms with the most target-date assets—Vanguard is joined by Fidelity Investments, T. Rowe Price, BlackRock and Capital Group—have remained unchanged since 2024. While Vanguard controls 38% of CIT assets—the largest share within the target-date market—the other four lag, with T. Rowe Price controlling 14%, BlackRock 13%, Fidelity 8% and Capital Group not even reaching enough CIT market share to make the list.

The continued shift from mutual funds toward lower-cost CIT structures also brings a portfolio trend in higher equity exposure early in the glidepath. The median equity allocation for investors 45 years from retirement reached about 93%, up from 89% a decade ago, according to the report.

“Many CIT-based TDFs combine low-cost index exposures with proprietary strategies, allowing providers to reduce fees while maintaining differentiated portfolio construction,” Roy wrote. “However, solutions incorporating income-generating assets, annuities or private investments—like BlackRock’s LifePath Paycheck—deviate from traditional glide paths.”

The move toward CITs still reflects institutional cost efficiency, but these new income-focused strategies highlight areas of evolving portfolio design as well.

“Firms entering this space need clear differentiation in glide paths, customization or manager selection and must be ready for close fiduciary scrutiny on fees and governance,” Roy wrote. “CITs were traditionally used almost exclusively by very large retirement plans due to their scale and administrative requirements. The continued shift toward CITs shows they are now more accessible to smaller plan sponsors and the financial advisers who serve them.”