What Is a 12b-1 Fund?

A mutual fund that imposes a 12b-1 fee on its investors is known as a 12b-1 fund. A mutual fund’s distribution and marketing expenditures are covered by a 12b-1 charge. It is frequently utilized as a commission to brokers when the fund is sold.
12b-1 funds employ a part of their investment assets to pay for high fees and distribution charges. The expense ratio of the fund includes these charges, which are detailed in the prospectus. A “level load” is a term used to describe 12b-1 costs.