The number
The median credit risk fund returned 7.55% over the year to 1 October 2026. The median corporate bond fund returned 4.78%, the median banking and PSU fund 4.75% and the median short duration fund 5.15%.
All figures are for the Direct plan, Growth option, computed from daily NAVs to 1 October 2026. Returns over a year are compounded annual rates. There are 12 credit risk funds with a year of history. We left out 53 segregated portfolio ("side pocket") entries in the category, which are listed separately and carry NAVs that are not comparable. Our May post covered this group earlier.
The 12 funds
| Fund | 6 months | 1 year | 3 years (a year) | 5 years (a year) | Volatility | Worst 3-year fall |
|---|---|---|---|---|---|---|
| Bank of India | 8.77% | 17.20% | 10.05% | 27.80% | 4.37% | 0.21% |
| Aditya Birla Sun Life | 4.66% | 11.97% | 13.04% | 10.86% | 3.45% | 0.38% |
| DSP | 9.82% | 10.85% | 16.68% | 13.35% | 7.67% | 1.77% |
| Axis | 4.51% | 7.85% | 8.71% | 7.62% | 0.89% | 0.42% |
| SBI | 4.61% | 7.77% | 8.45% | 7.68% | 1.03% | 0.50% |
| Invesco India | 4.86% | 7.55% | 9.43% | 8.37% | 1.77% | 0.37% |
| ICICI Prudential | 4.41% | 7.54% | 9.01% | 7.95% | 1.18% | 0.37% |
| HDFC | 4.08% | 6.89% | 8.13% | 7.07% | 0.99% | 0.40% |
| Kotak | 3.97% | 6.60% | 8.50% | 6.67% | 1.56% | 1.46% |
| HSBC | 3.66% | 6.36% | 11.68% | n/a | 6.57% | 0.38% |
| UTI | 3.52% | 6.33% | 7.68% | 7.06% | 0.86% | 0.44% |
| Bandhan | 3.42% | 5.58% | 7.24% | 6.31% | 0.94% | 0.45% |
Against the other credit categories
| Category | Funds | 1-year median | 3-year median (a year) | 5-year median (a year) |
|---|---|---|---|---|
| Credit Risk | 12 | 7.55% | 8.86% | 7.68% |
| Short Duration | 22 | 5.15% | 7.37% | 6.42% |
| Corporate Bond | 21 | 4.78% | 7.18% | 6.24% |
| Banking and PSU | 20 | 4.75% | 7.05% | 6.21% |
The credit risk median is ahead over every window, by 2.4 to 2.8 points over a year and 1.5 to 1.8 over three years.
What happens without the three biggest returns
Three funds stand apart: Bank of India (17.20%), Aditya Birla Sun Life (11.97%) and DSP (10.85%). Remove them and the other nine have a median of 6.89%, still above the corporate bond median, with a range of 5.58% to 7.85%. Credit risk funds were ahead of the safer categories even without the big three.
The big three are also not steady. Bank of India's five-year return of 27.80% a year and DSP's three-year return of 16.68% a year are far above anything in other debt categories, and DSP's volatility of 7.67% is more than eight times Axis's 0.89%. DSP earned most of its one-year gain more than three months ago: its six-month return is 9.82% but its three-month return only 1.01%. That pattern fits a jump in NAV rather than steady accrual, though the NAV history cannot say what caused it.
Reading the funds
- Quiet funds earned the median. Axis (0.89%), SBI (1.03%), UTI (0.86%) and HDFC (0.99%) have volatility close to short-duration funds and returned between 6.33% and 7.85%.
- High volatility did not mean a larger one-year return. HSBC's volatility is 6.57% and its one-year return 6.36%, below the median.
- Worst falls were small, with two exceptions. Ten of the 12 funds had a worst three-year fall of 0.50% or less. DSP's was 1.77% and Kotak's 1.46%.
What this does not tell you
Jumps can be one-off. A return driven by a single large move in one holding is not a rate that repeats. The funds with the largest returns are the ones to read most carefully.
Credit risk is real. These funds hold lower-rated paper; a default or downgrade can cut the NAV. The segregated portfolios we excluded exist because of such events.
Twelve funds is a small group. One fund moves the median by a visible amount.
This is not advice to buy. The figures are a record of the past year and the longer windows.
Where to go from here
The credit risk fund category page ranks the funds on these measures. The guide to credit risk and yield to maturity explains what the extra return pays for, and our debt category comparison puts these funds beside the other debt categories.
Frequently asked questions
How much did credit risk funds return in the last year?
The median of 12 credit risk funds (Direct plan, Growth option) returned 7.55% in the year to 1 October 2026. Returns ran from 5.58% (Bandhan) to 17.20% (Bank of India). The median corporate bond fund returned 4.78%.
Why is the range so wide?
Several funds had large one-off moves. Bank of India returned 17.20% over a year, Aditya Birla Sun Life 11.97% and DSP 10.85%, while eight funds returned between 6.33% and 7.85%. The NAV record shows the jumps but not what caused them.
Are credit risk funds riskier than corporate bond funds?
On volatility, usually. The median credit risk fund's volatility was 1.37%, but it ran from 0.86% to 7.67%. The funds with the largest returns were also the most volatile: DSP at 7.67%, HSBC 6.57% and Bank of India 4.37%.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are as of the dates stated and can be revised by their source.
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