Quick Definition

A 12B-1 fee is an annual marketing or distribution fee on a mutual fund, charged to fund shareholders to cover the costs associated with selling fund shares, including advertising and commissions paid to brokers.

Examples

• 1A mutual fund with a 0.25% 12B-1 fee means that each year, 0.25% of your investment is used to cover marketing expenses.
• 2If you invest $10,000 in a mutual fund with a 0.50% 12B-1 fee, you will pay $50 annually for these fees.
• 3Funds with higher 12B-1 fees might offer more extensive marketing and potentially attract more investors, but they also reduce the investor's returns.

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