% Poorly rated bonds
A metric relevant for debt mutual funds, This represents the portion of the portfolio invested into poor credit quality bonds that include the following ratings : C & D.
Debt mutual funds are a collection of several individual bonds/securities, each with its own credit quality & other unique features.
High credit quality bonds are safer but provide a lower yield (YTM). These should be preferred by investors who are looking for the least possible credit risk.
Low credit quality bonds have higher credit risk involved but offer a higher yield than bonds with better ratings, These are preferred by investors who are fine with taking additional risk for the additional yield.
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