Credit Quality Rating / Mutual Fund Rating

The analysis of the investment portfolios of debt mutual funds involves measuring a portfolio’s aggregate credit quality through a review of the credit quality of each underlying debt security. A portfolio’s weighted average credit quality is then measured against the appropriate benchmark credit score. Separate benchmark credit scores are used for liquid and bond funds. Short-term debt funds have weighted average portfolio maturities of up to one year and are typically liquid/cash funds. Long-term debt funds, on the other hand, have weighted average maturity of more than one year and are typically bond funds. Infomerics benchmarks short-term debt funds including liquid/cash funds against a 12-month benchmark credit score, while long-term debt funds are benchmarked against the long-term benchmark credit score. Infomerics generally assigns short-term MF Credit Risk Ratings to short-term/liquid funds, but gives an option to these funds to seek long-term MF Credit Risk Rating. Similarly, Infomerics generally assigns long-term MF Credit Risk Ratings to bond funds, but gives an option to these funds with weighted average maturity of less than 12 months to seek short-term MF Credit Risk Ratings.