Series 24: Breakpoints

Taken from our Series 24 Online Guide

Breakpoints

Mutual funds often reward customers for investing larger amounts in a fund or a family of funds. The reward is a discount on a front-end sales charge if they reach a certain dollar amount. The dollar amount is called a breakpoint.

Example: MegaFund charges a 5% sales charge on investments under $25,000, but charges 4.25% on investments above $25,000. The breakpoint in this case would be $25,000.

FINRA offers the following sample breakpoint schedule:

Sample Breakpoint Schedule

Class A Shares (Front-end Sales Load)

Investment Amount

Sales Load

Less than $25,000

5.0%

$25,000 but less than $50,000

4.25%

$50,000 but less than $100,000

3.75%

$100,000 but less than $250,000

3.25%

$250,000 but less than $500,000

2.75%

$500,000 but less than $1 million

2.0%

$1 million or more

0.0%

As an investor

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