What do 12b-1 fees pay for?

1. A 12b-1 fee is paid out of fund assets, so shareholders bear it indirectly and continuously. 2. It covers distribution, meaning marketing and selling fund shares, including compensation to brokers and printing of prospectuses. 3. It sometimes also covers shareholder services, such as answering investor inquiries. 4. Custody and clearing charges fall in the Other Expenses line, not in the 12b-1 line. 5. A sales load is a shareholder fee paid at purchase or redemption, not an annual operating expense. _Source: US SEC Office of Investor Education and Advocacy, "Mutual Funds and ETFs: A Guide for Investors", section Fee Table: Annual Fund Operating Expenses_