12b-1 Mutual Fund Fees

                 

The 12b-1 fees were originally permitted by the SEC to allow mutual funds to market their product to new investors. They’re actually a sales load that adds up over the years. Fortunately, most funds no longer use them.

                     

The 12b-1 charges originally were used to pay fees for the distribution of funds by brokers. But fees still persist, even when brokers are not involved.

                     

Avoid any mutual funds that charge them. Those fees become significant deductions from your accumulated holding values over the years. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)