Best Credit Opportunities Mutual funds to invest in 2017

Best Credit Opportunities Mutual funds to invest in 2017Best Credit Opportunities Mutual funds to invest in 2017

Debt mutual funds provide stable returns for low risk investors. However, if you still want to invest in debt mutual funds, but willing to take some risk and get higher returns, you should try for Credit Opportunities Mutual Funds in India. These are catching investors' attention as they tend to provide higher returns compared to other debt funds. What are these Credit Opportunities Mutual funds? Which are the best Credit Opportunities Mutual funds to invest in 2016-2017? What risk an investor should consider before investing in such mutual funds?

Also Read: Top 10 SIP Mutual Funds to invest in India in 2017

What are credit Opportunities Mutual funds?

Credit opportunities funds are those which generate income by investing in debt and money market securities across the credit spectrum (irrespective of credit rating). Such funds provide liquidity and high returns to investors as they invest in debt related instruments.

Opportunity mutual funds look for opportunities in various sectors in equity segment. However Credit Opportunities Mutual funds on the other hand, look for opportunities in the fixed income segment.

How do Credit Opportunties Funds work exactly?

Credit Opportunities Mutual funds invest across the credit spectrum. They aim to provide good returns and invest in low rated debt instruments typically below “AA” rated credit category. Low credit rated debt instruments provide high returns as these are high risk investments.

Are Credit Opportunities Funds better than Short Term Debt Funds?

Short term mutual funds invest in debt and money market instruments which are short term in nature. However, they invest in top rated debt instruments. These generally carry low interest rates. On the other hand, Credit Opportunities funds invests in low credit rated instruments which would provide high returns if an investor invests for 3 months to 3 year time frame.

Are Credit Opportunities Funds better than Long Term Debt Funds?

Long term funds invest in debt related instruments which provide good benefit in the long term. However, even these funds invest in top and high rated instruments. They provide less opportunities for higher returns. Credit Opportunities in other hand, invests in medium term debt options and aims to generate more turns in the medium term of 2 to 3 years. However, in terms of safety, short term funds or long term debt funds score high compared to Credit Opportunities Funds.

How does Credit Opportunities Funds compared with liquid funds?

Liquid funds invest money in very short term instruments that can be liquidated within a day. However, on the other hand Credit Opportunities mutual funds invests in credit instruments that gets matured over 6 months or 1 year period. Hence Credit Opportunities funds score high in terms of returns. However, liquid funds are almost safe. On other hand Credit Opportunities funds invests in low rated corporate debt instruments which are high risk. Hence, liquid funds are high safe compared to credit opps funds.  

Also Read: FundsIndia Vs Scribox – Which is better investment platform?

How does Credit Opportunities Fund's returns taxed?

Credit Opportunities funds invest majority of its portfolio in debt instruments, hence the taxation part is treated like debt funds taxation.

In case of short term capital gain <  3  year – Returns / Capital gain are added to individual income and income tax is paid based on individual tax slab.

In case of long term capital gain >= 3 Year – Returns would be taxed based on indexation – Income tax of 10% without indexation or income tax of 20% after indexation.

Best Credit Opportunities Mutual Funds to invest in 2017

List of Best Credit Opportunities Mutual Funds to invest for 2017

Also Read:  Ways to maximise returns from SIP in Mutual Funds

Who can invest in Credit Opportunities Mutual funds?

These mutual fund schemes invest in credit spectrum, which contains high, medium and low rated debt instruments. It invests in corporate securities and Govt securities. Since it also invests in low rated corporate securities, it poses a high risk. Investors who are willing to take some risk and invest the money for 6 months to 3 year period and want to earn higher returns compared to bank FD’s can invest in these credit opportunities mutual funds.

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Best Credit Opportunities Mutual funds to invest in 2017

Suresh KP


  1. Hi Suresh, I have a capital of 30 lakhs, how do i divide this for short term and few long term returns, short term i want to withdraw and invest in equities at the correct time otherwise i am happy the capital stay invested. Can you please provide me the right options. I am already  investing 20 K in SIP on your suggested Equity MFs and ELSS for tax benefits. I want to reach 1 Cr mark ASAP , with all my investments. Please advise.

  2. Thanks a lot for providing valuable information in lucid language.

    Can you pease provide information of possibly launching of tax free bonds this year. Not launched yet, unlike last year. Thanks and regards.

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