12B-1 (DISTRIBUTION) FEE

A 12B-1 fee is a fee assessed by a mutual fund to its shareholders. The fees cover the fund’s marketing expenses and are named after the section of the Investment Company Act of 1940 that makes them legal.

Mutual finds must disclose their 12B-1 fees in a fee table labeled “Shareholder Fees” in their prospectuses. Mutual funds must also disclose the expenses these fees cover in the “Annual Fund Operating Expenses” section of their prospectuses.