NASD Unveils Breakpoint and Expense Tools
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Wednesday, November 16, 2005

NASD Unveils Breakpoint and Expense Tools

Fund investors and brokers have a simpler way to research fund fees and breakpoints thanks to the NASD. The self-regulatory organization unveiled two Web-based tools on Wednesday that provide information from multiple funds and ETFs.

NASD Chairman and CEO Robert Glauber promised that the new online tools ensure that "getting expense and breakpoint information has never been faster or easier."

The NASD site uses breakpoint data provided by the NSCC while NewRiver provides and maintains the expense data.

The NASD has been developing the tools since an SEC sweep in 2003 that found that many brokerage firms were not properly crediting breakpoints on sales of class A mutual fund shares. For fund firms, the new tools also provide a new channel to get information about their products and how to purchase them into the hands of investors.

The NASD's Mutual Fund Breakpoint Search Tool provides breakpoint schedules and linkage rules for mutual funds with front-end sales charges. The site also provides information on whether a fund allows for Rights of Accumulation (ROA) or Letters of Intent (LOI), and whether 529 Plan assets, investments in annuities, unit investment trusts and individual retirement accounts can be used toward the ROA or LOI.

The tools are based on recommendations made by the Joint NASD/Industry Task Force on Breakpoints.

The NASD's Mutual Fund Expense Analyzer covers fee and expense information for more than 18,000 mutual funds and 160 Exchange Traded Funds (ETFs). It will also estimate and graph a fund's value over time -- for any holding period specified by the user, as well as over a 20-year period -- providing a running total of expenses the investor would pay during each period.

The tool will compare the expenses of up to three ETFs, mutual funds, or share classes of the same mutual fund simultaneously.

The tool's Fund Details tab shows the Investment Objective, Ticker Symbol, Minimum Purchase Information, Fund Class, Load Structure, Web Site and Phone contact information, and Average Rate of Return Data.

In the past, investors had to manually enter sales charges, operating expenses and additional information in order to use the NASD's calculator.

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