A credit opportunities fund is also a type of debt fund. This kind of debt fund will invest in debt securities that give high interest payments. They adopt what is known as an ‘accrual strategy’. Using this strategy, instead of trading in securities, the fund will hold securities to receive interest payments. However, note that these funds invest in low rated debt securities to generate higher returns. Usually, these funds invest in securities that are rated less than “AA”. So, this fund is riskier than other debt funds such as gilt funds.