Investopedia

Continue to Site »

Cumulative Discount Privilege

Filed Under »
Dictionary Says

Definition of 'Cumulative Discount Privilege'

A way that an investor in a mutual fund can qualify for lowered fees by totaling transactions in several funds from the same fund family to obtain a reduced fee. Generally, fees for investing in a mutual fund decrease as the amount that a person invests increases; therefore, if there is a required minimum investment that allows an investor to receive the fee discount, the investor can receive the discount without having to invest all of that minimum in the same fund. Investors can also qualify for lower fees by committing to make several investments in a fund over a defined period.
Investopedia Says

Investopedia explains 'Cumulative Discount Privilege'

If a mutual fund's fees are 4.5% for $5,000 invested, but 3.5% for $10,000 invested, the cumulative discount privilege means that you won't need to invest $10,000 in one fund to get the reduced fee. Instead, you can invest $10,000 in several different funds from the same fund family to get the rate. You can also set up an agreement to invest the $10,000 into the fund in smaller increments over an allotted amount of time. As long as you follow the agreement, you will be charged the lower fee.

Articles Of Interest

  1.

    The Advantages Of Mutual Funds

    Learn how to get diversification, liquidity and professional management at an affordable price.

  2. Published Mutual Fund Returns Not Always What They Appear

    Survivorship bias erases substandard performers, distorting overall mutual fund returns.

  3. Mutual Funds Are Awesome - Except When They're Not

    This investment is very popular, but that doesn't mean it comes without risk.

  4. Mutual Fund Basics Tutorial

    Learn about the basics - and the pitfalls - of investing in mutual funds.

  5. Women: Invest In Your Financial Literacy

    Learning about money may seem intimidating, but it's not as hard as it looks.

  6. 4 Behavioral Biases And How To Avoid Them

    Here are four common common behavioral biases for traders and how to minimize their effects on your portoflio.

  7. Mutual Fund Ratings: Crucial or Insignificant?

    Mutual fund ratings can help investors, but they have their drawbacks as well.

  8. Multi-Asset Funds Or Your Own Mix?

    The underlying concept of mixed funds is very appealing. Discover if you're better off with professional management or creating a mixed fund of your own.

  9. 5 ETFs Flaws You Shouldn't Overlook

    Despite their popularity, exchange traded funds have some drawbacks that investors should know about.

  10. Which Mutual Fund Market Cap Suits You?

    Different funds invest in companies with different market caps. Find out which is right for you.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  2. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  3. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  4. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  5. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.

  6. Lease To Own

    An arrangement where an individual enters into a lease agreement with an owner with the inclusion of a clause that typically gives the individual the right, but not the obligation, to purchase the item leased at a predefined price and time.
Trading Center