RBI's pause on rate cuts brings credit opportunity funds under spotlight

Assets of these funds are up 50% in 2017 at Rs 1.1 trillion

With interest rates likely to rise or remain on hold in the near future, debt funds that look beyond AAA-rated paper for higher yields are back in the limelight. These include credit opportunity and corporate bond opportunity funds.

In the previous 11 months, assets of these funds have grown nearly 50 per cent to Rs 1.1 trillion from Rs 745 billion, data from Value Research shows. In the past year, these funds have given returns of 7.4 per cent. HDFC Corporate Debt Opportunities Fund is the largest fund in this category, with assets  more than Rs 130 billion.

The pause in the