Wednesday, December 29, 2010

Breakpoints

A breakpoint is part of a fee structure in mutual funds with front-end loads or sales charges. Essentially it refers to stepped fee scale where the higher your investment the lower your fee rate. The levels where the fee rate decreases are called breakpoints, and the specific details of these will be outlined in the fund prospectus. It is important for investors to understand the fee structures of investments they are considering or are already invested in.

Synonyms: Fee structure, Stepped fee scale

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