12B-1 Fees

12B-1 fees are fees charged by mutual fund companies to mutual fund investors for various non-sales expenses of the funds. 12B-1 fees cover shareholder services, promotions, advertising, and any activity associated with the marketing and distributing of the funds shares. 12B-1 fees are named for the Securities and Exchange Commission rule that authorizes mutual funds to charge them. The SEC does not impose a legal limit on 12B-1 fees. However, the National Association of Securities Dealers requires that 12B-1 fees used for marketing and distribution not exceed 0.75 percent of a funds average net assets each year. 12B-1 fees can be imposed only if a mutual fund has first adopted a plan (called a 12B-1 plan) to authorize their collection.