October 13, 2010
I oppose the use of 12b-1 fees.
In the words of one of my favorite investment advisors, The Motley Fool- 12b-1 fees are a type of sales charge that mutual funds are allowed to impose on all shareholders of a fund in large part to market the fund to additional shareholders. The fees are directly subtracted from the returns of the fund on an annual and ongoing basis -- in some cases for decades. The fees may be used for a variety of purposes, including paying for administrative services, and paying brokers or other professionals who sell or otherwise recommend the fund to their clients. They are not used to improve the research of stocks bought for the fund, nor in any way to improve the performance of the money already invested in the fund.