Credit risk has assumed more importance for investors in the aftermath of the credit events faced by debt funds.
Morningstar website offers a handy tool for investors and advisers to check the credit quality of funds.
This feature is available under the Tools navigation tab > Mutual Funds > Portfolio > Indian Credit Quality as shown below.
Type the name of the fund in the search box. You can add up to five funds.
We looked at five funds from five different categories: Ultra Short, Credit Risk, Gilt, Banking & PSU and Corporate Bond.
Credit Risk Fund: These funds invest a minimum of 65% of total assets only in only in AA* and below rated corporate bonds. (*excludes AA+ rated corporate bonds)
Government Bond: These funds invest a minimum of 80% of assets in government securities across maturity.
Banking and PSU Fund: These funds invest a minimum of 80% of assets in debt instruments of Banks, Public Sector Undertakings, Public Financial Institutions and Municipal Bonds.
Corporate Bond Fund: These funds invest a minimum of 80% of total assets only in AA+ and above rated corporate bonds.
Ultra-Short: These funds invest in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 months - 6 months.
HDFC Credit Risk Debt Fund
(As on June 2021)
ICICI Prudential Gilt Fund
As per the fund’s mandate, it has invested 98.15% of net assets in government securities as on May 2021.
IDFC Banking & PSU Debt Fund
(As on May 2021)
SBI Corporate Bond Fund
(As on May 2021)
Aditya Birla Sun Life Savings Fund
(As on June 2021)
CRISIL – AAA (Highest Safety)
Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry the lowest credit risk.
CRISIL – AA (High Safety)
Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
CRISIL – A (Adequate Safety)
Instruments with this rating are considered to have an adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.
CRISIL - AAA(SO) Structured Obligation
Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry the lowest credit risk.
CRISIL - AA(CE) Credit enhancement
Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
CRISIL - A1+
Instruments with this rating are considered to have a very strong degree of safety regarding the timely payment of financial obligations. Such instruments carry the lowest credit risk.
CRISIL AA+
Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
CRSIL - AA-
Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
('+' (plus) or '-' (minus) signs for ratings from 'CRISIL AA' to 'CRISIL C' reflect comparative standing within the category.)
