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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 ?
Conversely, the server is the one who feels the heat when needing to save a break point against a top returner as he knows that unless he delivers a heavy and accurate serve his slick-returning rival will punish him and consequently classy returners convert more break-point chances.
So the ultimate performer in break-point situations is one who saves and converts a high percentage, and adding the two percentages together gives us a breakpoint rating for each player by which we can compare and contrast their performance in these situations.
THE table shows that Andre Agassi recorded the highest break-point rating on the tour last season of 113.
So Agassi's ability to deliver a telling serve, or blistering return, his mental toughness and his shrewd shot selection in break-point situations probably account for his massive break-point rating.
Dmitry Tursunov, despite finishing 59th in last year's Champions Race, also has the joint second highest break-point rating of 112 and anybody who witnessed him taking out Tim Henman in the Australian Open will realise why as this attack minded Russian goes for broke on every point and therefore enters break-point situations without fear.
Andre Agassi is a master at converting break-point chances
Fortunately Rebound Ace is a medium-paced terrain so this season's break-points stats should measure up pretty well with players' 2005 averages.
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.
At 0-30 down in the fourth, Murray's game appeared to be unravelling, and again as he fought his way back into the contest, he presented Djokovic with a break-point opportunity, which the five-time major champion wasted with a long forehand.
A thrilling rally, with the match at 4-2, saw Djokovic slip while sliding for a slice-forehand, but still recovered to eventually set up a break-point chance.
Signs Murray's service game had become disrupted were early in coming in the third, as Djokovic created three break-points in the third game, taking the second break chance and then holding his serve for a 3-1 lead.