Sub-par returns in over half the schemes plague credit risk funds: Report
Updated: 20 Sep 2022, 12:06 PM IST
TL;DR.Credit risk funds command around a 1 percent expense ratio, against a modest 0.3 percent for corporate bond funds, noted the brokerage. As a result, the net yield (YTM minus expense ratio) of both scheme categories is now nearly similar at around 7 percent, leaving little incentive for investors to take higher risks, it pointed out.
The BS report informed that credit risk funds have been spurned by investors since the pandemic breakout. In 2020, these schemes witnessed net outflows of ₹35,710 crore.