---
title: "Credit quality"
description: "Credit quality describes the creditworthiness of the bonds a fund holds, shown as a breakdown by rating bucket from AAA down to below BBB or as an average rating."
canonical: https://fundfactsapi.com/glossary/credit-quality
published: 2026-09-04
updated: 2026-09-04
publisher: FundFacts API
---

# Credit quality (Credit rating breakdown, Rating allocation, Average credit rating)

> Credit quality describes the creditworthiness of the bonds a fund holds, shown as a breakdown by rating bucket from AAA down to below BBB or as an average rating.

## Definition

**Credit quality** measures how likely the issuers of a bond fund's holdings are to pay interest and principal on time. It is expressed with letter ratings from the major rating agencies: AAA is the strongest, then AA, A and BBB, which together make up **investment grade**. BB, B, CCC and below are **high yield** (sub-investment grade). Fund houses publish a table of portfolio weight per rating bucket and often an average rating for the whole portfolio.

## Why it matters

Lower credit quality generally means higher yield and higher default risk, and a larger fall in stressed markets. Two funds with the same [duration](https://fundfactsapi.com/glossary/duration) and [yield to maturity](https://fundfactsapi.com/glossary/yield-to-maturity) can behave very differently if one holds government bonds and the other high yield. Mandates frequently set minimum credit quality limits, which look-through analysis needs to check.

## In the API

The breakdown is in `creditQuality` and a summary label in `profile.creditQuality`. Example values:

```json
{
  "profile": { "creditQuality": "investment-grade" },
  "creditQuality": [
    { "label": "AAA", "weight": 12.5 },
    { "label": "A", "weight": 34.1 },
    { "label": "BBB", "weight": 41.0 },
    { "label": "Not rated", "weight": 2.3 }
  ]
}
```

## Common pitfalls

When agencies disagree, fund houses apply a rule such as the lowest, the middle or the highest of the available ratings, and it is not always the same rule. Averages are computed on a numeric scale and can mask a barbell of AAA and CCC holdings. "Not rated" is not the same as low quality; it often includes cash and unrated but sound issuers.

## In the FundFacts API payload

- `creditQuality`
- `profile.creditQuality`

## About FundFacts API

FundFacts turns any fund or ETF ISIN into one dated factsheet (fees and KID costs, the 1–7 risk indicator, holdings, sector and country exposure, returns) read from the fund house's own documents: as a client-ready PDF under your firm's name for advisers and wealth managers, as JSON through its API for developers, or inside ChatGPT and Claude through its MCP server.

FundFacts works inside ChatGPT and Claude as a connector (a remote MCP server): ask about any fund or ETF by ISIN, ticker or name and the assistant answers from FundFacts' dated figures, fees, risk, holdings, exposure and returns, with fund cards, side-by-side comparisons, holdings overlap and portfolio look-through.

- Free API key, no card: https://fundfactsapi.com/signup
- Documentation: https://fundfactsapi.com/docs (OpenAPI: https://fundfactsapi.com/openapi.json)
- MCP server: https://fundfactsapi.com/api/mcp (set-up for every client: https://fundfactsapi.com/mcp-server)
- Pricing: https://fundfactsapi.com/pricing
- Site index for AI assistants: https://fundfactsapi.com/llms.txt
- Informational data, not investment advice.