FUNDS IGNORED BY INVESTORS
FUNDS WHICH ARE IGNORED BY INVESTORS SAFELY. A couple of years back, the market regulator Sebi standardised the categories for mutual fund schemes and defined its characteristics. Among the five broad categories, it bunched schemes into further sub-categories to bring uniformity in their features. Such classifications have made comparisons easier for investors. However, there are some fund types that investors can safely ignore. Credit Risk Funds It is an open-ended debt scheme that invests in lower rated corporate bonds . Sebi defines that a fund should invest at least 65 percent of their assets in below the highest rated bonds to be called a credit risk fund. Therefore, these funds invest majorly in bonds rated below ‘AAA’ – that is ‘AA’, ‘A’ or lower rate bonds. Where is the kicker? However, these funds have given lower growth rates than that that of a relatively safer corporate bond fund that invests at least 80 percent in high...