 |
Definition of '12B-1 Plan'
A no-load mutual fund that is allowed to use fund assets to pay for its distribution costs. The 12B-1 plan mutual fund is an alternative to paying the sales fees encountered in loaded funds. By charging an annual percentage based on the current value of the investment on an annual basis, investors avoid paying a front-end or back-end load when purchasing or redeeming the fund.
|
 |
Investopedia explains '12B-1 Plan'
The government typically restricts 12B-1 fees to 1% of the current value of the investment on an annual basis, but they generally fall somewhere between 0.25-1%. This fee must be voted on by the mutual fund's directors, and must be disclosed in the mutual fund prospectus. Because this fee is a little less obvious (not an upfront charge like the 12B-1 fee), investors should read mutual fund documentation thoroughly to understand the fees they are paying.
|
-
Wing it or re-balance? Discover some common strategies to devise a plan and maintain your holdings to relect that plan.
Read More »
-
Learn how to evaluate mutual funds and find the right one for you.
Read More »
-
Learn about the basics - and the pitfalls - of investing in mutual funds.
Read More »
-
-
Be a couch potato! This passive, but diversified, investing strategy could be for you.
Read More »
-
The growth of mutual funds isn't always cause for celebration. Read on to find out why not.
Read More »
-
Unhappy with your mutual fund's returns and thinking of investing elsewhere? Read this article first.
Read More »
-
This investment provides security, but its returns may not be adequate for long-term investors.
Read More »
-
Read More »
-
Discover how investment strategies and expense ratios impact your mutual fund's returns.
Read More »
|
|
