S&P Releases Updated Data on Closed Funds Still Charging 12b-1 Fees
NEW YORK, NY, December 16, 2003 -- Standard & Poor's, a leading provider of independent investment research, ratings and indices released today updated data on closed mutual funds still charging a 12b-1 fee to investors. According to Standard & Poor's database of over 15,000 domestic mutual funds, as of December 8 th 2003, 605 funds were listed as being closed to new investments. Of those, 153 funds with a total of 274 share classes were listed as charging an average 12b-1 fee of 0.64% to investors with 94 of them imposing the Securities and Exchange Commission's (SEC) enforced maximum rate of 1% of the fund's net assets annually.
According to Standard & Poor's database, equity funds continue to represent the highest percentage of closed funds still charging a 12b-1 fee 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%. Standard & Poor's data also shows that 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 its investors a 12b-1 fee even though their prospectuses state that they can.
12b-1 fees are fees paid by a mutual fund out of the fund's assets to cover distribution expenses and shareholder service expenses. According to the SEC definition on 12b-1 fees, distribution fees include fees paid for marketing and selling fund shares, such as compensating brokers and others who sell fund shares, and paying for advertising, the printing and mailing of prospectuses to new investors, and the printing and mailing of sales literature. Under NASD rules, 12b-1 fees that are used to pay marketing and distribution expenses (as opposed to shareholder service expenses) cannot exceed 0.75% of a fund's average net assets per year.
A full list of updated data on closed mutual funds still charging a 12b-1 fee can be found by accessing Standard & Poor's Web site www.standardandpoors.com .
About Standard & Poor's
As a recognized authority in institutional-quality financial research, Standard & Poor's has 65 fund analysts located in nine offices around the world offering in-depth mutual fund reports on over 15,000 U.S. domestic mutual funds and ratings on over 1800 funds worldwide. In addition, company's custom-designed client solutions provide access to performance data on nearly 80,000 investment funds in the U.S., European, Asian, and Offshore universe.
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research, data and valuations. With 5000 employees located in 20 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit www.standardandpoors.com .
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