How are 12b1 fees calculated?

Within this 1% annual cap, the distribution and marketing component of the 12b-1 fee is restricted to a maximum of 0.75% per year. This portion covers expenses related to promoting the fund and reaching out to potential investors.

The 12b-1 fee, a common expense in mutual fund management, is subject to a yearly cap of 1%. This limit ensures that investors are not overburdened by excessive fees.

Moreover, investors should carefully evaluate the services provided by their funds to determine whether the 12b-1 fee is justified based on the level of service and support they receive.

On the other hand, the service fee component of the 12b-1 fee can account for up to 0.25% annually. This segment is intended to cover the ongoing operational costs associated with managing the fund, such as administrative expenses and recordkeeping.

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