Rule 12b-1 Fee

Rule 12b-1 Fee This is a fee that has been charged by a mutual fund to cover various miscellaneous expenses that occur over time. In some cases, this fee is used to cover promotion or marketing of the fund, while it can also be used for distribution costs and as commission to give to managers. There are types of funds that do not have a rule 12b-1 fee but in these cases, there will be other hidden fees or higher commissions in order to cover these expenses. The fee must be stated up front and it is usually less than 1%, so it does not interfere with the overall gains of the mutual fund.