INCOME TAX5 Sept 2026
Credit-risk funds deliver 8.97% 3-year returns, highest among debt funds. Should you invest? Experts flag key risks | Mint
Credit-risk funds have delivered 8.97% returns over three years, becoming the best-performing debt mutual fund category. Stronger corporate balance sheets, lower leverage and fewer default worries helped performance. But these funds invest in lower-rated bonds, bringing higher credit, downgrade and liquidity risks. Recent returns don't guarantee similar results, so check portfolio quality and your own risk appetite before investing.
Key Statutory Highlights
- Credit-risk funds returned 8.97% over three years, the best among debt mutual fund categories.
- Their returns were helped by stronger corporate balance sheets, lower defaults and the RBI's 125 basis point repo rate cut through 2025.
- Experts caution these funds carry higher credit, downgrade and liquidity risks because they invest in lower-rated corporate bonds.
Actionable Advice for Taxpayers / Founders:Before investing, review the fund's portfolio quality and its exposure to AA and below-rated bonds, and confirm the higher risk matches your own risk appetite.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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