Limit credit fund exposure to 10%-15% of portfolio, advise experts

Go with a fund manager who negotiated the past 5 years without default or downgrade

Credit risk funds outperformed all other debt fund categories over the past year, with an average return of 8.6 per cent (for regular plans). The category, which was earlier shunned, received net inflows worth Rs 796.5 crore between May and July.
 
What led to the outperformance 
 
Franklin Templeton’s decision to close six of its debt funds had led to a run on the credit risk category.
 
“The event resulted in heightened risk aversion, which led to a spike in bond yields of select good quality AA-rated corporate bonds. As the yields cooled off, investors who stayed