Credit risk funds back on investors' radar as debt paper spreads widen

Despite the turmoil in the debt market, savvy investors are reconsidering their stance on credit risk funds, thanks to widening of the spreads between AA- and AAA-rated papers in the last few months.
 
The spreads between one-year and three-year AAA and AA-rated papers have widened to 100-150 basis points (bps), according to experts. The spreads differ depending on the sector and companies that issue the papers -- for instance, it could be as low as 50 bps for papers issued by manufacturing companies and 100-150 bps for non-banking financial companies (NBFC) papers.
 
MFs don't go below the long-term