A 12b-1 fund is type of mutual fund that charges its holders a 12b-1 fee. A 12b-1 fee is a fee used to pay for a mutual fund’s distribution costs. It is often used as a commission to brokers for selling the fund. 12B-1 funds take a portion of investment assets held and use them to pay expense fees and distribution costs. These costs are included in the fund’s expense ratio and are described in the prospectus. 12b-1 fees are sometimes called a “level load.”
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