12B-1 Plan

A 12b-1 plan is a type of mutual fund fee that allows the fund to charge a fee to pay for marketing and distribution costs. These fees are typically paid by the fund's shareholders and can be a significant expense.

There are a few things to keep in mind when considering a fund with a 12b-1 plan. First, you should understand how the fee is calculated. The fee is typically expressed as a percentage of the fund's assets under management (AUM). Second, you should consider how the fee is used. The fee can be used to pay for a variety of marketing and distribution costs, such as advertising, sales commissions, and research.

Third, you should compare the 12b-1 fee to the fees of other funds in the same category. It is important to make sure that you are getting a good value for your money. Finally, you should be aware that 12b-1 fees can be waived. Some funds offer a "no-load" option, which means that there is no 12b-1 fee.

If you are considering a fund with a 12b-1 plan, it is important to do your research and understand how the fee will impact your investment. You should also compare the fee to the fees of other funds in the same category.