What is a break point schedule in a mutual fund?
What is a break point schedule in a mutual fund?
Breakpoint schedules are levels set by the mutual fund that allows an investor to receive a sales load discount. Breakpoint discounts often begin at $25,000, with discounts increasing incrementally to a maximum level. Beyond the mutual fund’s maximum breakpoint level, investors will no longer incur sales load charges.
How do breakpoints work in mutual funds?
A breakpoint is the dollar amount for the purchase of a load mutual fund’s shares that qualifies the investor for a reduced sales charge. Breakpoints offer investors a discount for making larger investments. The purchase may either be made in a lump sum or by staggering payments within a specified period of time.
What does break point mean for American funds?
What is a breakpoint? A breakpoint is the total value that your American Funds account must have to qualify for a lower sales charge on Class A, Class 529-A and ABLE-A shares. The amount of your current investment is taken into account when determining the breakpoint at which the investment will be priced.
When does a mutual fund have a Roa breakpoint?
The Financial Industry Regulatory Authority (FINRA) provides the following guide for mutual fund ROA breakpoints. ROA breakpoints may come into effect when an investor’s holdings reach $25,000. Investment and Sales Charge: Less than $25,000 5.00%
Do you get a breakpoint discount on a mutual fund?
A mutual fund may offer rights of accumulation (ROA) that allow you a breakpoint discount on your current front-end load mutual fund purchase by combining your current fund purchase with previous purchases that you made in the same mutual fund or other funds within the fund family.
What do breakpoints mean for load mutual funds?
Breakpoints for load mutual funds are the dollar amounts for the purchase of the fund’s shares that qualifies the investor for a reduced sales charge. While common, not all funds offer ROAs, so check before purchasing if you plan to accumulate a sizable position.
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