Credit risk funds: A good investment bet if you pick and choose wisely

Over the past year-and-a-half, since the IL&FS episode occurred, the magnitude of credit events that have taken place in our country has been unprecedented. Many investors have burnt their fingers in a variety of debt funds due to delays and defaults in repayment of debt by corporate entities. One category that has borne the brunt of these developments is credit risk funds, whose asset under management (AUM) has got depleted by about 27 per cent over the past year.

Know your fund: Credit risk funds, by their nature, aim to earn higher returns for investors by taking credit risk. According