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Mahindra Credit Risk Yojana - An Ideal Debt Fund for Moderate Term in 2018

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Credit risk funds are particularly known as debt mutual fund schemes that focus on yielding regular returns & capital appreciation by investing in non-convertible debenture such as AA or below rated corporate bonds. These bonds deliver comparatively much higher returns to the investors than short-term debt funds.

As per the yielding perspective of credit risk scheme, Mahindra Mutual Fund launches an NFO scheme ‘Mahindra Credit Risk Yojana’ targeting those investors who’re seeking an alternative to traditional investment method. This scheme also aims to yield high returns for the investors having moderate risk profile by investing in slightly lower rated bonds. Like other credit risk funds, Mahindra Credit Risk Yojana if managed properly by your fund advisor then definitely it will be going to yield high returns in the medium term for investors.

Credit Risk Rating of Debt Funds

Before investing in any credit risk funds, investors should ensure to have a rational and clear understanding of risk factors involved during the investment period. Though such funds are suitable for only investors with moderate or his risk portfolio, yet investors should also discuss with their fund manager about how they’ll manage the credit risk fund under negative market conditions and unpredictable fluctuations. Credit risk funds are mainly categorized under different grades which are usually indicated by the credit rating of the bonds. ‘AAA’ comes at the first position in terms of safety followed by ‘AA’ as the second highest credit rating bond and other credit rating funds like ‘A’, ‘BBB’, ‘BB’, ‘B’ etc. denoting a degree of safety in descending order. The following table will give an overview of the risk factor involved in the varying category of credit risk funds.

How Fund Manager Manages Credit Risk?

Credit rating of Non Convertible Debentures (NCD) usually changes with time. In fact, under changing market conditions, sometimes you may realize that any specific credit rating NCD is downgraded or upgraded in terms of rating. The price of bond is directly linked with the changes in rating and if a bond gets downgraded or upgraded then their price may fall or rise depend on the current position of a bond. A professional financial advisor always applies tactics to optimize both risk and yields by allocating a major share of their portfolio to highly rated papers.

As per the current market condition, your fund manager may allocate a lower rated paper as it will sufficiently generate good returns in your portfolio.

Mahindra Credit Risk Yojana aims to generate high returns for the investors by properly maintaining the optimum balance of liquidity, yield and safety. As Mahindra Company has already proven itself in managing debt mutual funds with this robust risk management and monitoring mechanism, as an investor you don’t require to worry about the performance of this new fund offer.


Mahindra Credit Risk Scheme seems to meet the expectations of investors like acquiring attractive returns in the medium term. The past performance of the credit risk fund category can give investors the confidence that this NFO is suitable for their investment needs. But, before investing, it is better for you to consult with your financial planner like Swaraj Wealth to trace your suitability for this product.

Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

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