What are trailer fees?
Trailer fees are fees payable to distributors (including financial advisors) who sell the fund to the investors. The trailer fees are generally paid out from a fund’s annual management fees (which is part of the total expense ratio1) by the fund manager or product provider to distributors. As such, trailer fees are not additional cost to end investors.
1The expense ratio refers to the ongoing costs of operating a fund by fund managers/insurers expressed as a percentage of the fund's average net assets. Operating costs include investment management fees, trustee fees, and audit fees, etc.
This information is sourced from CPF
Related questions
How is CPF Board enhancing the disclosure of trailer fees?
Do all CPF Investment Scheme (CPFIS)-included Unit Trusts/ILP sub-funds charge trailer fees?
Do I need to pay additional fees due to trailer fees disclosure by my product/service providers? Is there any action required of me (as a CPFIS investor)?
What is an expense ratio?
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