Active debt funds gain edge over passives as rates peak: Vikas Garg

Passive debt funds have played a critical role over the last couple of years by providing steady returns even in the backdrop of rising interest rates

The repo rate is expected to remain high for a longer period as the domestic growth-inflation dynamics may not provide any room for rate cuts in 2023, says Vikas Garg, head of fixed income at Invesco Mutual Fund. In an email interaction with Abhishek Kumar, Garg adds that in the current scenario, the 3-7 year yield curve range is more attractive from a risk-reward perspective. Edited excerpts:

How has the Reserve Bank of India’s (RBI’s) latest policy announcement impacted yields?

RBI maintained a status quo on policy rates on expected lines drawing comfort from improved external resilience over the last