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Credit risk erosion likely to weigh on debt business of mutual funds

Credit risk funds usually fetch between 1.5 per cent and 1.9 per cent expense ratio, depending on the fund house and size of the scheme

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The total expense ratio (TER) structure laid down by the Securities and Exchange Board of India (Sebi) allows higher TERs on smaller-sized schemes.

Jash Kriplani Mumbai

3 min read Last Updated : Jul 26 2020 | 6:37 PM IST

The sharp erosion in assets managed under credit risk funds is likely to lead to cut in incomes in the debt business of mutual funds (MFs).

“Among the debt basket of products, credit risk funds fetch higher management fee. However, following the Franklin Templeton MF episode, the category has seen sharp erosion of assets,” said a senior executive of a fund house.

According to the data from Association of Mutual Funds in India (Amfi), at the end of June, credit risk funds managed Rs 29,423 crore of assets, which was 53 per cent less than the assets managed at the

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