Monday, 5 June 2017

Birla Sun Life Mutual Fund bets on RBI overestimating inflation threat

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One of India's largest bond investors, Birla Sun Life Mutual Fund, has stacked up holdings of longer-dated paper in a bold, contrarian bet that central bank policy makers are wrong to expect an acceleration in inflation.

Valued at around 13 trillion rupee ($201.68 billion), Birla's "dynamic debt" fund now holds 40 percent of its portfolio in government bonds maturing in 2045, up from 35.9 percent in February, according to its website.

The bias towards the long-end becomes even more pronounced as the second and third biggest holdings are in bonds maturing in 2044 and 2029, that account for 15 and 7 percent of its portfolio, respectively. Birla does not disclose how profitable its holdings have been.

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