What the tiers mean
Real comparison across 6 debt funds
CHART
Credit Quality Composition - 6 real debt funds
% of portfolio by rating tier. Stacked to 100% (or close to it) per fund - a fund skewed toward the right two segments is taking on more credit risk for its yield.
Funds compared: Quantum Liquid Fund - Direct Plan - Growth · Canara Robeco Medium to Long Term Fund - Direct Plan - Growth · Canara Robeco Ultra Short to Short Term Fund - Direct Plan - Growth · Canara Robeco Conservative Hybrid Fund - Direct Plan - Growth · Canara Robeco Short Term Fund - Direct Plan - Growth · Bandhan Liquid Fund - Direct Plan - Growth
How to use it in practice
Credit quality shows how the bonds a debt fund holds are rated, from government securities and AAA down to lower ratings. A portfolio that is mostly sovereign and AAA has very low default risk. Use the split to see whether a fund’s higher yield comes with weaker credit, and to check that it matches the fund’s stated aim.
Common mistakes
A rating is an opinion that can change, and downgrades often come after the market has already reacted. A small share in lower-rated paper may look minor but can do real damage if it defaults. Look at the rating mix alongside the fund’s Potential Risk Class and its yield.
Frequently asked questions
What does AAA mean in a debt fund?
It is the highest credit rating, meaning the issuer has a very strong capacity to repay. Government securities are treated as the safest, with no credit risk.
Does high credit quality remove all risk?
No. Highly rated debt still carries interest rate risk, and ratings can be lowered over time.
Where does the credit quality split come from?
From the fund’s portfolio disclosure, grouped by rating bucket, as a percentage of the fund’s net assets.
WHAT THIS MEANS FOR YOU Two debt funds can show a similar YTM for very different reasons - one earning it from Sovereign/AAA paper and duration, the other from lower-rated credit. Check credit quality alongside YTM before assuming a higher-yielding debt fund is simply “better” - it may just be taking more credit risk to get there.
METHODOLOGY Rating-tier weights from the fund’s latest disclosed portfolio, holdings-weighted by market value. “Other” folds in everything rated below AA plus cash and non-rated instruments - the source data doesn’t split that tier further. Data: July-2026 disclosure via Punji. Not investment advice.