Credit Risk Mutual Funds

Credit Risk Mutual Funds are a category of debt mutual funds that primarily invest in lower-rated corporate bonds and securities. These funds aim to earn higher returns by taking on credit risk. Unlike traditional debt funds that focus on high-rated instruments, credit risk mutual funds strategically allocate assets to instruments rated below AA. While they offer the potential for better yields, they also carry greater risk. Investors seeking enhanced returns from the debt segment may find credit risk mutual funds an intriguing option, if they're comfortable with the trade-off.

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List of Credit Risk Mutual Funds

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Features of Credit Risk Mutual Funds

  • Credit Risk Premium - These funds offer attractive returns through credit risk premiums, which are directly linked to the riskiness of the bonds they hold. The lower the credit rating of the bond, the higher the potential premium, rewarding investors for taking on added risk.
  • Potential for Capital Appreciation - Credit risk funds often invest in bonds that have room for credit rating upgrades. If and when such upgrades occur, they can lead to capital appreciation, offering an added advantage to long-term investors.
  • Accrual Income - A notable Credit Risk Mutual Fund feature is the regular income from interest-bearing securities. This accrual income is factored into the bond’s market price, which in turn pushes up the fund’s NAV over time.
  • Not Suited for All - These funds carry a higher default and liquidity risk compared to traditional debt funds. This Credit Risk Mutual Fund feature makes them more suitable for investors who are comfortable with volatility and seeking better returns—not for those prioritising capital safety.
     

Popular Credit Risk Mutual Funds

  • Min SIP Investment Amt
  • ₹ 100
  • AUM (Cr.)
  • ₹ 206
  • 3Y Return
  • 15.45%

  • Min SIP Investment Amt
  • ₹ 100
  • AUM (Cr.)
  • ₹ 1,092
  • 3Y Return
  • 12.83%

  • Min SIP Investment Amt
  • ₹ 1000
  • AUM (Cr.)
  • ₹ 512
  • 3Y Return
  • 11.84%

  • Min SIP Investment Amt
  • ₹ 1000
  • AUM (Cr.)
  • ₹ 156
  • 3Y Return
  • 10.51%

  • Min SIP Investment Amt
  • ₹ 100
  • AUM (Cr.)
  • ₹ 5,920
  • 3Y Return
  • 9.10%

  • Min SIP Investment Amt
  • ₹ 100
  • AUM (Cr.)
  • ₹ 1,016
  • 3Y Return
  • 9.04%

  • Min SIP Investment Amt
  • ₹ 500
  • AUM (Cr.)
  • ₹ 2,175
  • 3Y Return
  • 8.66%

  • Min SIP Investment Amt
  • ₹ 1000
  • AUM (Cr.)
  • ₹ 368
  • 3Y Return
  • 8.62%

  • Min SIP Investment Amt
  • ₹ 500
  • AUM (Cr.)
  • ₹ 185
  • 3Y Return
  • 8.58%

  • Min SIP Investment Amt
  • ₹ 100
  • AUM (Cr.)
  • ₹ 707
  • 3Y Return
  • 8.48%

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