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Finance Dictionary and Glossary of Investment Terms
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%.
One of the many charges that mutual funds sometimes levy on assets under investment. Many supposedly no-load funds charge 12b-1 fees, which are supposed to pay for distribution and marketing. Total 12b-1 fees are capped at 1.00% of average net assets annually.