Business and Personal Finance Dictionary

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• BREAKPOINT
  
  Mutual funds that charge a percentage of the amount you invest as a front-end load, or sales charge, when you buy shares may reduce that percentage if you make a large investment. The dollar amount at which the reduction applies is known as a breakpoint. 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. So, for example, if you had $45,000 invested in various funds and added $5,000 to one of them, you might qualify for the reduced sales charge because the total value of your investment reached the breakpoint of $50,000.
  
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