12B-1 Fee
In examining the expenses associated with the administration of a mutual fund, investors will see a fee that is referred to as the 12B-1 fee which is typically money used for marketing, advertising, and distribution (the fees paid in compensation to brokers and financial entities responsible for selling fund shares.)

Some mutual fund investors object to paying the 12B-1 fee since they are bearing the cost of the fund's programs geared toward attracting other investors. At times, however, these fees are also used to finance investor benefits such as the maintenance of shareholder services and communication venues such as a help line. Often the 12B-1 fee is simply a part of the fund's expense ratio which is the percentage of the fund's assets that go into administrative costs.

The rate of the 12B-1 fee will vary from fund to fund and if the expense is of concern to you as an investor you should make inquiries into its nature and use prior to purchasing fund shares.

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