Letter of Intent vs. Rights of Accumulation

A letter of intent or LOI, is an agreement which states the investor's intentions to purchase a specified amount of mutual funds shares at a lower sales charge over a period of up to 13 months. This letter may be back dated up to 90 days.

Rights of accumulation or ROA, is the opportunity to purchase mutual fund shares at a reduced sales charge when the customer's balance with the fund's family exceeds the breakpoint. The fund applies the investor's past purchases toward the breakpoint on future purchases. If a purchase meets or exceeds the breakpoint, the entire amount of the purchase receives the breakpoint.

Rights of accumulation is different than the letter of intent, which applies the lower charges to the entire amount invested. Mutual funds have the choice of using the greater of total purchases by the investor, the NAV or the public offering price when calculating the dollars to be accumulated toward the breakpoint.


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