Are Credit Risk Funds back?
Jan 29, 01:01

After a disastrous two-year period, credit risk funds--those that invest in lower-rated bonds--appear to be bouncing back. As per ACE MF, they gave 1.87 percent returns in three months ended January 25, 2021. This was next in line to long-duration funds, the top performer during this period. Recent performance is attributed to relatively high yields on credit risk funds' portfolios and increased liquidity gradually pulling down yields on AA-rated papers selectively. Credit risk funds were at the bottom of the performance charts as they lost 1.63 percent over the last year after investors redeemed investments in these funds to avoid possible defaults in a pandemic-hit contracting economy.

credit risk fund mc mini graphic