The amount of fund fees saved per year by investing via Endowus compared to popular fund platforms or banks can come from from two sources:
(1) 100% Cashback on trailer fees, or
(2) the difference in fees between the share-class of the fund on Endowus versus the share-class typically sold to individual investors.
We’ve provided some illustrations below to show how impactful these two factors can be on your investments.
Illustration 1 (Savings from Trailer Fee CashBack)
Morgan Stanley Global Brands Fund from Morgan Stanley Investment Management:
At Endowus, we offer the USD A share class (accumulation) which is also the popular share class offered on other platforms. The fund fees (“Ongoing Charges'') per the fund’s website as of January 2023 is 1.84%.
The trailer fee component of this fund is 0.72% p.a. Endowus rebates 100% of this trailer fee as Cashback to you. Hence, after CashBack the fund fees are significantly reduced by close to 40% to 1.12% (1.84% - 0.72% = 1.12%).
Illustration 2 (Savings from accessing institutional clean share class)
Fidelity Global Technology Fund from Fidelity:
A popular USD accumulation share class for this fund that is available for retail investors is share class A. The total expense ratio of this share class is 1.88%* as of April 30 2022. As of mid-December 2022, share class A has over US$900mn assets according to Fidelity’s website.
At Endowus, we offer the USD Y share class (accumulation) on our platform. This is the clean share class with 0% trailer fee. Its total expense ratio is significantly lower at 1.03%* as of 30 April 2022. Thus, through Endowus, the fund fees are significantly reduced by 0.75% (1.88% - 1.03%), representing a 45% savings.
*Source: Fund’s Key Fact Statement