Simply Save podcast | Are credit risk funds misunderstood?

In the past five odd years, increasingly many investors invested in them, and some distributors also distributed them without really understanding the risks that these funds brought with them. They were chasing yields.

The IL&FS crisis broke out in September 2018 and all hell broke loose. In the last nine months, nearly Rs 43,000 crore went out of credit risk funds. In just the months of March to May 2020, a little over Rs 30,000 crore went out due to the lockdown, illiquidity, and also Franklin Templeton crisis. But is the fear well-founded or are credit risk funds misunderstood?

In today’s Simply Save podcast, Moneycontrol's Kayezad Adajania talks to Amit Bhosale, head of risk management at ICICI Prudential mutual fund. He explains the true nature of credit risks, how he and his team evaluate credits, what’s acceptable and what’s not, and how investors and advisors should look at credit risk funds.