A 12b-1 fee is charged for a mutual fund this fee is for marketing-service commision fee which is capped at 1% under investment act of 1940. Load fund with no annual 12b-1 fee can have service charge fees up to 8.5% however due to competition practicalities this service charge has been coming down in recent times. A no-load fund meaning no need to pay a service charge, however, a 1% of 12b-1 fee has to be paid annually. Therefore a Simple trick is that if the investment horizon targeting is smaller than 12 years usually go for a no-load fund with a 12b-1 fee if greater than 12 years stick to load funds with least service charges if you want to choose from these two.
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