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Mutual Funds FAQs

Mutual funds are funds that pool the money of several investors to invest in equity or debt markets. Mutual Funds could be Equity funds,Debt fund or balanced funds.

The reason that mutual funds are so popular is that they offer the ability to easily invest in increasingly more complicated financial markets. A large part of the success of mutual funds is also the advantages they offer in terms of diversification, professional management and liquidity.

  • Flexibility: Mutual Fund investments offer you a lot of flexibility with features such as systematic investment plans,systematic withdrawal plans &dividend reinvestment.
  • Affordability: They are available in units so this makes it very affordable. Because of the large corpus, even a small investor can benefit from its investment strategy.
  • Liquidity: In open ended schemes, you have the option of withdrawing or redeeming your money at any point of time at the current Net Asset Value (NAV)
  • Diversification: Risk is lowered with Mutual Funds as they invest across different industries & stocks.
  • Professional Management: Expert Fund Managers of the Mutual Fund analyze all options based on experience & research
  • Potential of return: The fund managers who take care of your Mutual Fund have access to information and statistics from leading economists and analysts around the world. Because of this, they are in a better position than individual investors to identify opportunities for your investments to flourish.
  • Low Costs: The benefits of scale in brokerage, custodial and other fees translate into lower costs for investors.
  • Regulated for investor protection: The Mutual Funds sector is regulated to safeguard the investor's interests.
Systematic Investment Plan(SIP) is a mode of investing in mutual funds at regular intervals (monthly, quarterly, etc.).
  • Disciplined investment at regular intervals.
  • Minimum investment as low as Rs 500.
  • Wealth creation by the power of compounding.
  • Inflation protection.
  • Advantage of Rupee cost averaging without having to time the market.

As per SEBI circular:SEBI/IMD/CIR No. 4/168230/09, following are the details of the comparative commission earned by Karnataka Bank Ltd from various fund-houses, whose products are being distributed:

Fund Schemes (Lumpsum) Upfront Brokerage/Upfront Commission Trail year 1
Equity and Balanced 0.00% to 1.75% 0.00% to 1.25%
Index 0% to 0.75% 0.00% to 0.75%
ELSS 0% to 5.50% 0% to 1.00%
Asset Allocation 0% to 1.50% 0% to 1.25%
Arbitrage Funds 0% to 0.40% 0% to 0.75%
Monthly Income Plans 0% to 1.50% 0% to 1.25%
Gilt 0% to 1.00% 0% to 1.00%
Income 0% to 1.50% 0% to 1.00%
Short Term 0% to 1.00% 0% to 1.00%
Liquid & Floating Rate 0% to 0.10% 0.05% to 0.90%

Karnataka Bank Ltd could also get reimbursements towards promotion and marketing related activities conducted by Karnataka Bank Ltd on behalf of AMCs. These reimbursements are event based and the same may or may not be received from AMCs in a particular period. Further, since such activities may be carried out at AMC level, reimbursement amount received cannot be attributed to any specific scheme being offered by such AMC.

This is on a best effort basis and rates are updated as and when actual rates are received from AMCs

Note : With effect from 1st November 2011, Karnataka Bank Ltd has "Opted-in" for transaction charge as per the SEBI circular no. Cir/ IMD/ DF/13/ 2011 dated August 22,2011.