12B-1 fees

12B-1 fees

The percent of a mutual fund's assets used to defray marketing and distribution expenses. The amount of the fee is stated in the fund's prospectus. The SEC has recently proposed that 12B-1 fees in excess of 0.25% be classed as a load. A true no load fund has neither a sales charge nor a 12b-1 fee.

12B-1 Fee

A fee one must pay in a 12B-1 Plan. A 12B-1 plan is a mutual fund that, instead of a load (or sales fee), annually charges shareholders a small percentage of the fund's market value, which is called a 12B-1 fee. Instead of assessing a fee when buying or selling shares as most mutual funds do, 12B-1 fees are deductions from the fund's market value per shareholder. Usually a 12B-1 fee is less than 1% of the market value.
References in periodicals archive ?
The CRR paper looked at 2009 data and concluded (not considering performance at all) 12b-1 fees alone cost IRA investors $2 billion.
In 2008, these 12b-1 fees amounted to more than $13 billion, up from a few million dollars in 1980 when they were first permitted, she added.
As far as 12b-1 fees are concerned, it will go a long way if we just call them what they are, which are a fee for advice," OppenheimerFunds chairman and CEO John Murphy told us last year.
Mutual funds can charge fees for the following: marketing, 12b-1 fees, management fees, advisor fees and trading costs.
25) By 2002, the share classes of nearly all load funds were sporting 12b-1 fees.
Make sure that agreements with service providers clearly disclose both direct and indirect fees, including float income, shareholder service fees and 12b-1 fees.
These two opposing perspectives are important when discussing issues such as fee levels and the potential increased regulation or elimination of soft dollars or 12b-1 fees.
Finders' fees," 12b-1 fees or other forms of compensation that may have been paid for asset placement are appropriately applied, utilized and documented.
Unlike loads, 12b-1 fees are paid out of fund assets and reduce investor returns.
Since then, funds have developed ways to apply Rule 12b-1 fees to provide investors greater flexibility in choosing how to pay for the services of individual financial professionals that advise them on fund purchases.
Relatively few funds include information such as loads, 12b-1 fees, and expense ratios in their advertisements, and fund ads rarely discuss risk.
On average, an investor pays 1% to 2% in expense ratio fees, which include management fees, 12b-1 fees, and fees for general operating costs such as fund Websites, semiannual reports, and 800-numbers.