Page 2 - Credit Risk Funds
MF industry will grow at 20% CAGR for the next five years: Amfi CEO
In a Q&A, N S Venkatesh says there are enough inefficiencies in the market right now, which will help fund managers generate alpha over the index
 "MF industry will grow at 20% CAGR for the next five years: Amfi CEO")
Credit risk fund outflow reduces as yields rise on rally in rates
Offer significant spread over 'AAA' corporate bond funds over 3-yr period
 "Credit risk fund outflow reduces as yields rise on rally in rates")
Consider well-diversified credit risk funds with limited exposure
Investors should observe a few precautions, despite the likely higher returns
 "Consider well-diversified credit risk funds with limited exposure")
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
 "Credit risk erosion likely to weigh on debt business of mutual funds")
Credit funds could see unlisted exposure rise over high redemptions
Shrinking asset size has added to challenges in bringing down levels of such investments
 "Credit funds could see unlisted exposure rise over high redemptions")
As investor exits continue, credit risk funds lose half of their asset base
Fear of worsening credit profile, economic uncertainty, trigger investor exits
 "As investor exits continue, credit risk funds lose half of their asset base")
HNIs steer clear of illiquid investments after Covid-19 outbreak
Market-linked debentures and credit risk funds - two products to have grown popular in the past two years - have fallen out of favour since the outbreak
 "HNIs steer clear of illiquid investments after Covid-19 outbreak")
MFs investing in fixed-income securities see Rs 28,000 crore outflow in Feb
A total of Rs 43,825 crore was taken out from liquid funds, which invest in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon.
 "MFs investing in fixed-income securities see Rs 28,000 crore outflow in Feb")
Credit risk funds: A good investment bet if you pick and choose wisely
Credit risk funds, by their nature, aim to earn higher returns for investors by taking credit risk
ICICI Prudential AMC invests Rs 334 crore in credit risk fund in Q3
Credit risk funds invest mainly in corporate bonds that are below the highest rating assigned by credit rating agencies
 "ICICI Prudential AMC invests Rs 334 crore in credit risk fund in Q3")
Prefer short-duration bond funds to credit-risk funds for safer investment
However, SEBI does not specify the credit profile of the funds
 "Prefer short-duration bond funds to credit-risk funds for safer investment")
Tipping Point: Should you invest in credit risk funds?
Investors should take limited exposure in credit risk funds
 "Tipping Point: Should you invest in credit risk funds?")
