New Delhi, June 22 -- Credit risk funds recorded a net inflow of around Rs.1,318 crore in April, breaking a run of monthly outflows that had stretched for nearly three years. This flow can be attributed to institutional money, according to industry insiders.

Experts say retail investors should exercise greater caution in this category, even as stronger corporate balance sheets augur well for it.

Securities and Exchange Board of India (Sebi) rules require a credit risk fund to hold at least 65% of its portfolio in corporate bonds rated AA or below. This is after keeping 10% of the portfolio in highly liquid debt securities, such as cash, government securities, T-bills and repo on government securities, as required per regulation. The liq...