Credit Risk Funds
Credit Risk funds invest over 65% of their assets in low-credit quality debt securities with a high risk of default.
At least 3-5 years
14 Funds
₹20,880 Cr Total AUM
Credit Risk funds invest over 65% of their assets in low-credit quality debt securities with a high risk of default.
At least 3-5 years
14 Funds
₹20,880 Cr Total AUM
Sort By
| Fund name | Fund size | Expense Ratio | 3Y Returns  |
|---|---|---|---|
 Bank of India Credit Risk Fund Direct Growth Credit Risk Moderately High risk | ₹114 Cr | 1.03% | 40.1% |
 DSP Credit Risk Fund Direct Growth Credit Risk Moderately High risk | ₹188 Cr | 0.4% | 11.6% |
 Aditya BSL Credit Risk Fund Direct Growth Credit Risk Moderately High risk | ₹920 Cr | 0.67% | 9.5% |
 Invesco India Credit Risk Fund Direct Growth Credit Risk Moderately High risk | ₹141 Cr | 0.28% | 8.2% |
 ICICI Prudential Credit Risk Fund Direct Growth Credit Risk High Risk | ₹6,325 Cr | 0.76% | 7.5% |
 Baroda BNP Paribas Credit Risk Fund Direct Growth Credit Risk Moderately High risk | ₹170 Cr | 0.79% | 7.5% |
 SBI Credit Risk Fund Direct Growth Credit Risk High Risk | ₹2,285 Cr | 0.89% | 7.5% |
 Nippon India Credit Risk Fund Direct Growth Credit Risk High Risk | ₹993 Cr | 0.69% | 7.4% |
 Axis Credit Risk Fund Direct Growth Credit Risk Moderately High risk | ₹415 Cr | 0.8% | 7.1% |
 UTI Credit Risk Fund Direct Growth Credit Risk Moderately High risk | ₹313 Cr | 1% | 6.9% |
Identify red flags in your mutual funds and how to fix them
Credit risk is the risk that the borrower of money may not be able to repay the interest and principal. Credit risk is indicated by credit rating which ranges from AAA (highest credit rating among corporations) to D (imminent risk of default).
In debt investing, credit risk is a significant risk as well as source of returns. Simply put, the potential returns from a low-rated, high-risk debt instrument is higher than a high-rated, low-risk instrument.
Credit risk funds expose your money to credit risk to generate potentially higher returns than, say, investing in government bonds which are considered to be quite low risk.
As per SEBI’s classification, credit risk funds are required to invest at least 65% of their assets in corporate bonds which are rated AA and below.
If you are aiming for high returns but don’t want to invest in equity, an asset class more volatile and riskier than debt, then credit risk funds may fit in your portfolio.
Credit risk funds and fixed deposits are not exactly comparable. However, investors who can afford to take slightly higher risk then credit risk funds may be right for them.
Debt mutual fund taxation changed on 1st April, 2023. So taxation of capital gains arising from credit risk funds depends on when the investment was made.
Dividends are received from these mutual funds when you invest in their IDCW (Income Distribution Cum Withdrawal) option.
Dividends received are taxed at your marginal income tax rate.
TDS (Tax Deducted at Source) at 10% is applicable on dividends received in excess of Rs 5,000 per AMC per financial year.
By Duration
By Credit Quality
By Investment Style
Funds having a maturity of 3 to 4 years
Mirror an index of long-term debt instruments.
Funds having a maturity of 6 to 12 months
Funds having a maturity of 5 years or more
Funds having a maturity of 3 to 6 months.
Low risk, high liquidity with a maturity of 1 Day
Funds having a maturity of 1 week to 3 months
Funds having a maturity of 1 year to 3 years.
Hybrid funds are a combination of equity and debt investments. The blend of these asset classes varies based on the fund's investment goals.
Equity funds mainly invest in stocks of different companies, making investors partial owners of those companies when they invest in such funds.
