Breakpoint

Breakpoint - For mutual funds it is the point the amount authorized reduces sales charge called the breakpoint. Every mutual fund may have multiple breakpoints, the larger the investment, the greater the discount. The actual reduction in the amount of sales charged is the breakpoint discount. It is a term used to refer to the offering of breakpoint discounts. The increasing level of purchases of shares in a mutual fund that is required before an individual purchaser can qualify for a reduced sales commission. The practice of petitioning mutual fund purchases just below the breakpoint considered unethical and in violation of rules.