Investing in credit funds based on past returns would be foolhardy: Experts

Credit risk funds are showing a category average return of 13.2 per cent for the past year. This is an exceptional figure for a debt fund category. According to experts, however, investing in these funds based on past returns would be foolhardy.
 
Improved credit environment
 
After the outbreak of Covid-19, the Reserve Bank of India (RBI) directed credit to stressed sectors, and made enhanced liquidity available within the banking system. The government provided emergency credit to stave off defaults. The fiscal support it provided boosted demand, which led to an improvement in the credit cycle. “A strong recovery