12b-1 fees are generally annual fees that are paid out of firm’s mutual fund assets for marketing and advertising expenses. When investors put money into a real estate mutual fund, some money pays for the expenses associated with that fund. The fund charges the customer to help cover some of its administrative costs. One of those customer charges is a 12b-1 fee. The Securities and Exchange rule of 1980 designated this fee, which is a marketing or distribution charge the mutual fund may levy. The fee ranges from .25 percent to 1 percent of a mutual fund’s net assets. It cannot exceed 1 percent. These fees go to the companies or individual brokers that sell fund shares. Mutual funds pay .4 percent of the value of shares sold to the investment company that sells the shares. The fund then charges the investor a 12B-1 fee to help pay for this compensation. If the fee is no larger than .25 percent, the mutual fund may call itself a no-load fund. Some funds waive these fees for investors who buy shares directly from the fund. Mutual funds that have a front-end load may charge the 12B-1 fee on top of the front-end load. Investors can find out what 12B-1 fees the fund charges by reading the prospectus. Generally, the Statement of Additional Information section of the prospectus will explain what the 12B-1 fees are used for.