The term “12b-1 fund” refers to a mutual fund that charges 12b-1 fees. Let me break down what this means:

### 12b-1 Fees:

1. **Definition:** 12b-1 fees are a type of fee that mutual funds charge to cover marketing, distribution, and sometimes shareholder services. The term “12b-1” comes from the Securities and Exchange Commission (SEC) rule that authorizes these fees—Rule 12b-1 under the Investment Company Act of 1940.

2. **Purpose:** The primary purpose of 12b-1 fees is to allow mutual funds to use a portion of their assets to cover the costs associated with promoting and selling fund shares. This includes expenses related to advertising, distributing marketing materials, and compensating intermediaries (such as financial advisors) who sell the fund.

3. **Components:** 12b-1 fees are part of a fund’s overall expense ratio, which represents the total percentage of a fund’s assets used to cover operating expenses. The 12b-1 fee is one component of this ratio.

### 12b-1 Fund:

– A “12b-1 fund” is not a distinct type of mutual fund but rather a fund that charges 12b-1 fees. Investors may encounter funds that have 12b-1 fees when reviewing mutual fund options. These fees are disclosed in the fund’s prospectus.

– When evaluating mutual funds, investors should be aware of the fees associated with each fund, including the 12b-1 fees. The total expense ratio, which includes management fees, 12b-1 fees, and other expenses, gives investors an understanding of the overall cost of owning the fund.

It’s important for investors to carefully review the prospectus of a mutual fund to understand its fee structure and consider how these fees may impact their investment returns over time. Different funds may have varying fee structures, and investors should align their investment choices with their financial goals and preferences.