12b-1 fee


An extra fee charged by some mutual funds to cover promotion, distributions, marketing expenses, and sometimes commissions to brokers. A genuine no-load fund does not have 12b-1 fees, although some funds calling themselves "no-load" do have 12b-1 fees (as do some load funds). 12b-1 fee information is disclosed in a fund's prospectus, is included in the stated expense ratio, and is usually less than 1%.

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I did not want to pay the 12b-1 fee because I always tried to avoid fees and did not agree with it at all.

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I was looking at my 401K statements and my earnings weren't what I expected so my boss suggested I look at the 12B-1 fees my funds are charging me.

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Brokers like to sneak in a little extra for themselves in commission with the 12B-1 fee; read over your prospectus carefully to avoid this surprise.

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