Questions tagged [12b-1 fees]

henry_harrison_philosopher Wed Sep 25 2024 | 7 answers 1804

Could you please clarify if ETFs, or Exchange-Traded Funds, typically carry 12b-1 fees? These fees, often associated with mutual funds, are designed to cover distribution and marketing expenses. I'm curious if ETFs, known for their lower cost structure compared to traditional mutual funds, also incur such charges. It would be helpful to understand if this is a standard practice in the ETF industry or if there are variations among different ETF providers.

KpopHarmony Thu Sep 05 2024 | 6 answers 764

Who exactly foots the bill for 12b-1 fees? Are these costs passed on directly to investors, or are they absorbed by the mutual fund company itself? If they are passed on to investors, does this mean that the investor is essentially paying twice for fund management services - once through the management fee and again through the 12b-1 fee? And how does the size of a fund's assets impact the amount of 12b-1 fees charged? Is there any transparency around how these fees are calculated and allocated?

Caterina Wed Sep 04 2024 | 7 answers 1560

Can you please elaborate on the primary purpose of 12b-1 fees? Are they meant to compensate for certain services rendered to investors, cover the costs associated with distribution and marketing of mutual funds, or serve a different purpose altogether? It would be insightful to understand the key expenditures that these fees are intended to address.

Caterina Wed Sep 04 2024 | 7 answers 1730

Excuse me, could you please clarify something for me? I've been doing some research on mutual funds and I came across the term "12b-1 fees." I'm curious to know if American funds typically have these fees associated with them? I understand that these fees are sometimes used to cover marketing and distribution expenses, but I'm not sure if it's a common practice among American fund companies. Could you shed some light on this for me? Thank you in advance for your help.

CryptoKing Wed Sep 04 2024 | 7 answers 1481

When it comes to the question of whether 12b-1 fees are good or bad, it's important to understand both sides of the argument. On one hand, proponents of these fees argue that they allow mutual fund companies to cover the costs of marketing and distributing their products, ultimately benefiting investors by making it easier for them to access a wider range of investment options. However, critics of 12b-1 fees contend that they are a hidden cost to investors that can significantly reduce their returns over time. So, are 12b-1 fees ultimately a positive or negative aspect of the mutual fund industry? Let's delve deeper into the issue and explore the potential benefits and drawbacks of these fees.