AS THE NUMBER of investmentgrade bond issuances has been on a steady rise indicating overall buoyancy in the credit segment, individuals are looking at credit risk funds for higher returns. With the investment cycle picking up steam and much of the private capex yet to be committed, one can expect a series of high-quality issuances in the sub-AAA category. However, investors must be cautious as returns in isolation may not be the best metric to go by.
Credit risk funds are debt funds that invest at least 65% of the portfolio in bonds rated AA and below. Investors who want to generate additional returns along with some risk opt for such funds. Even liquidity is an issue as the secondary market for lower rated debt securities has not yet developed in India.
Nirav Karkera, head, Research, Fisdom, says an investment into a credit risk fund must be a subject matter of one's investment profile and risk appetite."However, for those with suitable attributes, now could be a good time to allocate selectively towards credit risk funds. It is imperative to understand the risk management framework, fund management style and risks associated with every issuance held in the portfolio."
Diese Geschichte stammt aus der July 10, 2023-Ausgabe von Financial Express Mumbai.
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Diese Geschichte stammt aus der July 10, 2023-Ausgabe von Financial Express Mumbai.
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