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Finance: What is a Breakpoint? 28 Views

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What is a Breakpoint? Breakpoints are used in conjunction with the purchase of mutual funds. If an investor buys enough shares of the fund, they will hit what’s called the breakpoint and won’t have to pay as much in sales fees.

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Transcript

00:00
Finance a la shmoop what is a break point?
00:05
well waltz into a store willing to buy a lot and you can usually expect a [Man in a store holding stack of cash]
00:10
discount or a freebie well the more you spend the more discounts stores are
00:14
usually willing to pile on keep you buy-in and it works the same way with
00:18
mutual funds buyers of mutual funds can get discounts once they get past break

00:23
points like the minimum level where certain discounts are activated go past
00:28
a certain break point and the commission on the buy might get slashed by a
00:31
percent go above another break point and the commission will go even lower or [Bar rises above break points]
00:36
disappear entirely..... buying shares of one-eyed man mutual fund company's
00:44
flagship fund might cost you commission of 5.5 percent if you buy
00:50
less than twenty five grand worth but if you buy five hundred thousand dollars
00:55
worth of that mutual fund well, then the commission might be just one percent
00:58
by over a million bucks and the commission might be free the broker will
01:02
be paid out of the management fee of the company over time ie one-eyed pays the
01:08
broker so yeah very important not to confuse a break point with this...That did [People watching Point Break movie]
01:13
not win the Academy Award
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