Credit risk funds once again back on investors' radar, shows data

After witnessing sharp outflows in 2020, credit risk funds are once again back on investor radar.

In 2021, they experienced net inflows of Rs 917 crore, compared to net outflows of Rs 35,710 crore in the preceding year.

The sharp outflows in 2020 came amid a spate of downgrades and defaults in corporate paper, leading to risk aversion. Also, Franklin Templeton Mutual Fund’s decision to wind up six of its schemes led to further panic.

“After a long time, the category has once again started experiencing net positive flows, albeit not high in quantum, which could lead one to conclude that perhaps the