SIE practice questionmediumMutual Funds — Rights of Accumulation
Rights of accumulation (ROA) allow a mutual fund investor to:
- ARedeem shares without paying contingent deferred sales charges
- BDefer all taxes on fund distributions
- CReceive shares without paying any sales charges
- DQualify for breakpoint discounts based on the cumulative value of existing holdings plus new purchases✓ Correct answer
Explanation
Why D — Qualify for breakpoint discounts based on the cumulative value of existing holdings plus new purchases
Rights of accumulation let investors count their existing fund holdings (at current value) plus new purchases toward breakpoint thresholds. For example, if an investor already holds $40,000 in the fund and adds $15,000, the $55,000 total may qualify for the $50,000 breakpoint level. Unlike a letter of intent, ROA uses actual accumulated value rather than a pledge of future investments.
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