The 12B-1 Fee was introduced as part of the Investment Company Act of 1940. This Act allows a Mutual Fund to collect a fee for the promotion, sale, or other activity connected with the distribution of its shares. So defined, a 12B-1 fee is an annual marketing or distribution fee of a mutual fund. 12B-1 fees are considered operational expenses. This fee is often called “Load.” This fee can be reasonably low, but they do get high. Investors should research the load charged on funds they’re invested in to make sure they’re not paying too much. My preference is funds with a load below .50%.
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