Mutual funds beat a retreat from lower-rated papers: Value Research data

Investors have continued to pull out their monies from credit risk funds

Mutual funds have retreated from AA- and below-rated papers, signifying a flight to safety in the aftermath of the IL&FS crisis that unfolded last year.

As a percentage of overall debt assets, investments in AAA-rated and sovereign papers has surged 10.3 percentage points in the past year to 38 per cent, data from Value Research shows. Conversely, investment in AA- and below-rated papers has reduced 9.6 percentage points to 62 per cent.

Corporate India has stepped up due diligence of its mutual fund investments, which has compelled fund houses to tweak their portfolios to include more AAA-rated companies and sovereign public sector