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For mutual funds, the point at which the amount invested reduces the sales charge is called the "breakpoint." Each mutual fund may have several breakpoints; the larger the investment, the greater the discount. Note that the actual reduction in the sales charge is known as the "breakpoint discount". Also, the term "breakpointing" is sometimes used to refer to the offering of breakpoint discounts. The practice of soliciting mutual fund purchases just below the breakpoint (to earn more commissions) is considered unethical and in violation of NASD rules. See: right of accumulation.


In loaded mutual funds, a dollar amount an investor must buy into the fund in order to be eligible for a reduced load or sales fee. For example, if the breakpoint for a certain mutual fund is $50,000, and investments beyond that amount will halve the load, it becomes advantageous for an investor to invest $50,000 instead of, say, $45,000, because this will entitle him/her to half the load for the entire investment, and not just for the amount invested past $50,000. Mutual funds that allow investors to buy at just below the breakpoint may run afoul of Financial Industry Regulatory Authority regulations. An investment need not come all at once to pass the breakpoint; an investor putting two tranches of $25,000 into the above mutual fund will usually find his excess load refunded. See also: Right of accumulation.


The cumulative level of purchases of shares in a mutual fund that is required before an individual purchaser can qualify for a reduced sales commission. Compare letter of intent. See also right of accumulation.


A breakpoint is the level at which your account balance in a mutual fund company or the size of a new investment in the company's funds qualifies you to pay a reduced sales charge.

Fund companies that charge a percentage of the amount you invest as a front-end load, or sales charge, may offer this cost saving. They are not required to do so, but if they do use breakpoints, they must ensure that all clients who qualify get the discount.

In most cases, the first breakpoint is $25,000, with further reductions for each additional $25,000 or $50,000 purchase. For example, if the standard load were 5.5%, it might drop to 5.25% at $25,000, to 5% at $50,000, and perhaps to as low as 2.5% with an investment of $250,000.

In calculating breakpoints, some fund companies will combine the value of all of your investments in the mutual funds they offer. Other companies count the investments of all the members of your household or give you credit for purchases you intend to make in the future.

References in periodicals archive ?
It could be a wise to treat the early season form of those whose break-point ratings are significantly higher than their 2005 averages with a degree of caution as lucky breaks at the key moments of matches may have contributed to these successes.
Andre Agassi is a master at converting break-point chances
In a set devoid of any break-point opportunities until the 12th game, Mirnyi seized on a sloppy Rochus service game and wrapped up the match with a flashing cross-court forehand that left his opponent floundering
But Djokovic had other ideas and following a first set in which he had been unable to create any break-point opportunities, he opened up by first saving a crucial break-point after his forehand volley clipped the baseline and then taking the lead in the sixth game, as Murray was forced to play a backhand return off his feet, and then missed a mid-court volley at the net.
Consequently, being aware of who is more likely to stave off, or take, break-point opportunities can increase your chances of landing a touch in-running by forecasting a break of serve before it actually happens.
After missing an early break-point chance, he then had to save two against him before an overhead smash finally secured the fifth game.
However, with the score poised in Rusedski's favour with a second break-point at advantage, Rusedski's return from the baseline bounced on the top of the net, away from Clavet, who then faded under Rusedski's serve.
Serving to put the opening set into a tiebreaker, Washington mis-hit a backhand wide on break-point to drop the set 7-5.
When and where it counted most, in the first-set tiebreaker and on his break-point chances, Sampras was nearly flawless.
Nadal took the next game and he had a great chance to level the scores up at 3-3 when he earned four break-points on Murray's serve, but the Scot dug deep to win the game and take a 4-2 advantage.