What is a Mutual Fund 12b-1 Fee?

By Stock Research Pro • November 24th, 2009

A 12b-1 fee, also known as a “trailing commission” or “hidden fee” is an annual marketing or distribution fee charged by some mutual funds. The Financial Industry Regulation Authority (FINRA) allows funds to charge 12b-1 fees of up to 1.00% on an annual basis and the fee is considered an operational expense for the fund.

While no-load funds do not typically charge a 12b-1 fee, Class B and C share mutual funds often charge the maximum fee of 1.00%. The 12b-1 fee is deducted from the net asset value (NAV) of the fund.


The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.

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