S&P Divulges Closed Mutual Funds 12b-1 Fees

December 16, 2003 (PLANSPONSOR.com) - Standard & Poor's has released information on closed mutual funds charging 12b-1 fees.

As of December 8, 605 funds were listed as being closed to new investments, of which 153 funds with a total of 274 share classes were listed as charging an average 12b-1 fee of 0.64% to investors.   Further, 94 of these funds were imposing the US Securities and Exchange Commission’s (SEC) enforced maximum rate of 1% of the fund’s net assets annually, according to S&P’s database of domestic mutual funds.

Equity funds represent the highest percentage of closed funds still charging a 12b-1 fee – fees paid by a mutual fund out of the fund’s assets to cover distribution expenses and shareholder service expenses – with 196 charging an average of 0.65%.  Fixed income funds were a distant second with 24 imposing an average 12b-1 of 0.54%.  On the other end, 306 mutual funds do not charge a 12b-1 fee as their prospectuses state that the fund does not allow it.  Additionally, 15 closed funds have opted not to charge their investors a 12b-1 fee even though their prospectuses state that they can.