Credit risk debt funds invest in below-highest-rated corporate bonds. They don't follow a tenure-based specification. But they have to invest a minimum of 65% of total assets in corporate bonds.
These funds aim to provide higher returns than normal corporate bond funds by investing primarily in corporate bonds with low credit ratings.
These funds are suitable for moderate to high risk investors looking to generate higher returns by investing in risky debt assets These funds are the riskiest among debt funds. But we believe that investors should avoid this category. if investors want to take high risk then some portion of the portfolio can be allocated to equity. If they want debt exposure, then liquid funds and short-duration funds are the two most suitable choices.