The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), on December 8, decided to leave the repo rate unchanged at 6.5 percent for the fifth time in a row. Experts say that this is good news for debt funds. As and when interest rates start to go down - which many experts say would begin in the middle of 2024- debt funds’ net asset value (NAV) would go up. Interest rates and prices of debt securities move in opposite directions. A fall in interest rates pushes up the prices of debt securities and thereby, the NAVs of debt funds.
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