Investor Glossary-12b-1Investor Glossary-12b-1Investor Glossary-12b-1Investor Glossary-12b-1Insightful stock market charts - Click here
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


The HTML to link to this page

12b-1 refers to the fees mutual funds pay for marketing the fund. The name 12b-1 is a reference to the section of the Investment Company Act of 1940 that allows mutual funds to pay distribution and marketing expenses out of fund assets. The SEC permits 12b-1 fees to be charged under the theory that marketing increases fund assets and benefit investors indirectly through better absorption of fund expenses. The SEC limits 12b-1 fees to one percent annually with a maximum of 0.25 percent going to brokers. Critics say the 12b-1 fee can be used as a hidden load with A and B class shares having different 12b-1 fee structures. Funds that charge 12b-1 fees of less than 0.25 percent per year may be marketed as "no-load". The best way to avoid paying 12b-1 fees is to check the fund prospectus. The SEC requires funds to disclose their 12b-1 fees in the list of fees in the prospectus.

Rate this 12b-1 definition...

Learn about investing with the Investor Glossary Term of the Day

Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.

Popular Terms: required rate of return, ex-dividend date, Key Rate Duration, FICO score, VIX, deferred revenue, class C shares, in escrow, wholly-owned subsidiary, reverse mortgage, minority interest, option premium, risk management, LIBOR, irrevocable trust, average price per share, 144a, implied volatility, margin rate, annual return, current ratio, dividends payable, Zero Cost Collar, real GDP, limit order, EBITDA, open position, stock market close, cancelled check, retained earnings, debt service coverage, deferred tax, phantom income, command economy, APR, ex-dividend, FTSE, per diem, 1031 exchange, labor relations, inflation, stock split, covered put, 401a, diluted share, liquidity ratio, balance sheet, 1035 exchange, quality assurance

Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use