Why credit risk funds saw redemptions in 2020
Jan 15, 10:01

Credit risk funds—that invest at least 65 percent money in AA-rated or lower bonds—had more money leaving than what they collected in all months of 2020. The difference between inflows and outflows, called net redemptions in mutual fund industry parlance, was Rs 35,703 crore, according to AMFI data. Why? Economic conditions worsened due to Covid-19 and companies struggled to repay loans. Credit funds—that had invested in such companies—suffered. The closure of some Franklin Templeton Mutual Fund debt schemes spooked investors more. According to Value Research, these funds barely returned money. The 0.21 percent return as of January 11, 2020, was the least among debt funds.

mc mini credit risk funds