Credit risk funds top league table with 8.4% returns, shows data

This is thanks to economic revival, improving upgrades to downgrades ratio, say experts

Over the past year, even as returns of most debt fund categories have slipped below 5 per cent, credit risk funds – which invest in lower-rated papers – have generated returns of 8.4 per cent.
 
A revival in the economy, better corporate health, and improving upgrades-downgrades ratio have aided returns, said experts. The mutual fund industry has not seen any major defaults in the past year since the IL&FS and YES Bank episodes, which hit these funds from 2018.
 
“The yield-to-maturity (YTM) of credit risk funds was always higher than the regular funds. So, as long as there