Best Guide to Mutual Funds
Fundamentals of Mutual Funds
Types of Mutual Funds
Investment and Money market
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Breakpoint level

In mutual funds that charge sales fees or "front-end loads" a point or investment level will be set at which point the load or sales charge is reduced. That investment level is referred to as the "breakpoint." For example, a given fund may charge a load of 3 percent for investors up to $15,000, which is a breakpoint. For investments of $15,000 to $25,000 the load may be reduced to 2 percent. If $25,000 is also a breakpoint, the load may fall to 1 percent on investments higher than that figure.

The Securities and Exchange Commission does not require a fund to establish breakpoint limits, however, if breakpoints have been established, the SEC does require that said breakpoints be disclosed to investors. Each individual mutual fund will have its own method for determining breakpoints and this is information that a potential investor should acquire before buying stocks in a given fund.

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