Why assets of corporate bond funds are rising
Jan 08, 04:01

Assets that corporate bond funds manage have been rising steadily. Corporate bond funds invest at least 80 percent of the money in high-quality bonds issued by corporates. The assets under management (AUM) rose Rs 1,49,604 crore on November 30, 2020, compared with Rs 77,393 on November 30, 2019, according to the Association of Mutual Funds in India. Why? Rising credit risk made many investors prefer safety to returns. Economic slowdown triggered by lockdowns and restrictions to combat the Covid-19 pandemic worldwide has accelerated inflows in these schemes. According to Value Research, corporate bond funds have given 10.4 percent returns in CY2020 – the highest among accrual focused bond funds.

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