Funds collected from 12b-1 fees cannot be used for which of the following expenses?

Funds collected from 12b-1 fees are primarily meant to cover distribution and marketing expenses associated with a mutual fund. This includes costs related to acquiring new investors, maintaining shareholder relationships, and other promotional activities aimed at increasing sales of fund shares.

Commissions paid for executing trades in the fund's portfolio do not fall under the category of expenses covered by 12b-1 fees. These commissions, often referred to as brokerage fees, are related to the transactional costs of buying and selling securities within the fund's investment portfolio. As such, they are typically paid directly from the fund's assets and are accounted for separately from the 12b-1 fees designated for distribution and marketing.

In contrast, the other listed expenses, such as marketing and advertising, shareholder services, and legitimate distribution expenses, directly relate to the purpose of 12b-1 fees. Therefore, the correct answer highlights a clear distinction between the types of expenses that can legitimately be paid out of 12b-1 fees and those that are unrelated to fund distribution and investor marketing.