If Samuel Johnson was right that "when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully", maybe the recent wild market volatility will have the beneficial effect of concentrating our attention on some important concerns in assessing securities backed by 12b-1 fees.

The 12b-1 fees are a 0.75% annual charge on the asset values of B-share mutual fund programs. These asset-based sales charges are always paired with a declining back-end charge, a contingent deferred sales charge (CDSC). Although the fees are small, the assets are substantial. Current estimates for this year at $2 billion in new issues are quite reasonable, while the value untapped in existing B-share programs could be twenty times that or more. The value comes with a cost: the complexity of analyzing the assets and securities backed by them can be daunting.

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