What is the meaning of Breakpoint?

Mutual funds that charge a percentage of the amount you invest as a front-end load, or sales charge, when you buy shares may reduce that percentage if you make a large investment. The dollar amount at which the reduction applies is known as a' Breakpoint'. In most cases, the first breakpoint is $25, 000, with further reductions for each additional $25, 000 or $50, 000 purchase. For example, if the standard load were 5. 5, it might drop to 5. 25% at $25, 000, to 5% at $50, 000, and perhaps to as low as 2. 5% with an investment of $250, 000. In calculating breakpoints, some fund companies will combine the value of all of your investments in the mutual funds they offer. So, for example, if you had $45, 000 invested in various funds and added $5, 000 to one of them, you might qualify for the reduced sales charge because the total value of your investment reached the breakpoint of $50, 000.