A breakpoint sale is a type of sale in which the sales commission is decreased as the amount of money invested in the fund increases. For example, if you invest $10,000 in a mutual fund with a 5% breakpoint, you would pay a sales commission of $500. If you then increased your investment in the fund to $20,000, the sales commission would be reduced to 4%.
What is a breakpoint sale violation?
A breakpoint sale violation is when a mutual fund company sells shares to an investor at a price that is lower than the price that the investor would have paid if they had purchased a larger number of shares. This can happen when an investor buys shares of a mutual fund at different times, and the fund company offers them a lower price for the second purchase. Which single purchase amount is a breakpoint sale? There is no such thing as a "breakpoint sale" in the context of mutual funds. How do you calculate breakpoints? The calculation of breakpoints is a bit more complicated for mutual funds than it is for other investments, but the basic idea is the same. You start by looking at the fund's performance over time and identifying the point where the fund's performance starts to decline. This is the first breakpoint. The second breakpoint is the point where the fund's performance starts to rebound. How does a breakpoint work? A breakpoint is a price at which an investor can buy shares of a mutual fund without paying a sales charge. The breakpoint is usually based on the number of shares purchased, and the amount of the investment.
Which of the following customers is allowed a breakpoint on mutual fund purchase?
The customer is allowed a breakpoint on mutual fund purchase if the customer meets all of the following criteria:
-The customer is an accredited investor, as defined in Rule 501 of Regulation D of the Securities and Exchange Commission.
-The customer has purchased the mutual fund through a registered broker-dealer.
-The customer has held the mutual fund for at least six months.