Trailer fees are paid by Fund managers to distributors (i.e. your broker/financial advisor). This commission is paid continuously as long as an investor holds the Funds and usually ranges between 0.5% - 1% per annum, or greater than 50% of the fund-level fees. This potentially leads to misalignment of incentives between an investor and distributor, and higher fund-level fees.
Thus, Endowus clients get 100% of these trailer fees back as Cashback, as we want to stay independent and completely focused on building the best portfolios for you rather than selling you products that pay us the highest fees.
Generally, we distribute the Cashback on a quarterly basis. For example, you can expect to receive the Q1 Cashback in Q2.