Advantages of Credit Risk Mutual Fund
1. Better Returns: Credit risk mutual funds carry the potential to earn better returns as compared to other debt mutual funds investing in higher-rated bonds. These funds may also offer fairly regular and constant dividends when the fund’s underlying securities perform well. They carry the potential to help investors achieve their short or medium-term financial goals.
2. Diversification of Capital: As Credit risk Mutual Funds invest the capital in a ratio of 65:35 among the different asset classes, this gives exposure to different asset classes to the investor and balances the portfolio by investing in both low-rated securities and other asset classes.
3. Steady Returns: Credit Risk Mutual Fund, being diversified in nature has the main advantage of gaining returns even in volatile market conditions. Investors who have risk-bearing capability, prefer Credit Risk Mutual Fund for steady returns.
4. Flexibility: Credit Risk Mutual Funds have a high degree of flexibility associated with them, as at any time the fund can change its invested asset class within the 35% of the assets proceeds to manage his/her holding between the prevailing market condition if it is not favourable to the portfolio. Also, two different investment routes are available for investors i.e. SIP or lumpsum investment plan.
5. Expert Opinion: A Credit Risk Mutual Fund being managed by an experienced fund manager gives investors the best choice of asset class, Investors can avail the benefit of different classes of assets by selecting only one fund.