DSP Credit Risk Fund Analyst Review: NAV, Returns and Key Insights 2026

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What Is the DSP Credit Risk Fund?

The DSP Credit Risk Fund is a debt-oriented credit risk fund investing a significant portion of its assets in below-AA rated bonds and corporate papers, targeting higher yield income compared to conventional debt funds. Credit risk funds carry a higher probability of default-related losses and suit only investors with moderate-to-high risk tolerance and a medium-term horizon. The fund carries a Moderately High risk rating.

DSP Credit Risk Fund NAV and AUM

The current NAV of the DSP Credit Risk Fund Direct Growth plan is Rs 58.93. NAV is updated each trading day and reflects the closing market prices of the fund’s underlying securities. Always verify the most recent NAV on the AMC website or a registered mutual fund platform before placing any transaction.

With an AUM of Rs 249.62 crore, the fund is relatively nimble. This can be advantageous for portfolio agility and the ability to take positions without significant market impact. Investors should track AUM trends alongside performance metrics when evaluating this fund.

DSP Credit Risk Fund Returns: Performance Snapshot

Period	Returns
1 Month	-0.44%
3 Months	6.61%
1 Year	10.02%
3 Years (Annualised)	16.35%
5 Years (Annualised)	12.85%

Return generation has been subdued for the DSP Credit Risk Fund with a 1-year return of 10.02% and a 3-month figure of 6.61%. Investors already holding this fund should assess whether the underlying investment thesis remains intact. Those considering a new entry should evaluate the fundamental outlook and wait for a clearer performance trend before making a commitment.

Expense Ratio and Cost Efficiency

With an expense ratio of 0.34% per annum, the DSP Credit Risk Fund Direct Growth plan offers a cost-competitive entry into its market segment. The direct plan eliminates intermediary commissions and, combined with the low expense ratio, creates a meaningful compounding advantage over the regular plan equivalent. Investors should always opt for the direct plan for superior long-term net returns.

Who Should Invest in DSP Credit Risk Fund?

The DSP Credit Risk Fund is suitable for investors seeking higher income returns from the debt segment who understand the credit risk implications. The fund carries a Moderately High risk rating and requires a minimum 2 to 3-year horizon. The minimum SIP is Rs 100 and minimum lumpsum is Rs 100. Conservative investors seeking capital preservation should consider safer debt fund alternatives instead.

Key Risks to Consider

Liquidity Risk: Lower-rated debt instruments typically have limited secondary market liquidity, making it difficult to exit positions quickly during periods of financial stress.

Concentration Risk: Credit risk funds often have concentrated exposure to a small number of issuers. Adverse developments at a single issuer can disproportionately impact the overall fund NAV.

Recovery Uncertainty: Recovery proceedings on defaulted bonds can be lengthy and uncertain. The actual recovery amount may be significantly lower than the face value of the defaulted instrument.

Valuation Risk: Elevated valuations in the underlying investment universe can reduce future return potential even if the fundamental business performance of portfolio companies remains strong.

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Conclusion

The DSP Credit Risk Fund has delivered modest returns in a challenging environment, but its expense ratio of 0.34% and AUM of Rs 249.62 crore reflect a cost-efficient and investor-supported structure. Those already holding this fund should review the underlying investment thesis. New investors should ensure they have a sufficient horizon before committing capital. Consult a SEBI-registered investment advisor before any allocation change.

Investments in securities are subject to market risk. This content is for educational purposes only and does not constitute investment advice.

Frequently Asked Questions

What is the current NAV of DSP Credit Risk Fund?

Ans. The current NAV of the DSP Credit Risk Fund Direct Growth plan is Rs 58.93. NAV is updated each trading day and reflects the closing market value of the fund’s underlying holdings. Always verify the most recent NAV on the AMC website or a SEBI-registered mutual fund platform before transacting.

What are the returns of DSP Credit Risk Fund?

Ans. The fund has delivered a 1-year return of 10.02% and a 3-month return of 6.61%. The 3-year annualised return is 16.35% and the 5-year annualised return is 12.85%. Past performance does not guarantee future results and should be evaluated alongside the fund’s risk profile and benchmark comparison.

What is the expense ratio of DSP Credit Risk Fund Direct Growth?

Ans. The expense ratio of the DSP Credit Risk Fund Direct Growth plan is 0.34% per annum. The direct plan eliminates distributor commissions and is more cost-efficient than the regular plan. Investors should always opt for the direct plan to maximise long-term net returns through the compounding advantage of lower costs.

Is this fund suitable for conservative investors?

Ans. No. This fund carries a Very High risk rating due to credit default risk from below-AA rated instruments. It is not suitable for conservative investors or those with short investment timelines. A minimum 5 to 7-year horizon and a high risk tolerance are required prerequisites. Consult a SEBI-registered investment advisor before investing.

What is the minimum SIP amount for this fund?

Ans. The minimum monthly SIP is Rs 100 and the minimum lumpsum investment is Rs 100. The low entry thresholds make the fund accessible across income levels. A regular SIP approach is recommended to average out entry costs over time, particularly given the high-volatility nature of this fund’s category.

What category and sub-category does this fund belong to?

Ans. This fund is a credit risk debt fund targeting higher yields through below-AA rated corporate bonds. It falls under the Credit Risk Fund sub-category and is available as a direct growth plan, which eliminates distributor commissions and typically offers superior net returns compared to the regular plan.