RBI's Operation Twist has just delivered a windfall to some MF investors

Long-duration and dynamic bond funds are likely to be the biggest beneficiaries of the Reserve Bank of India’s (RBI) surprise decision to emulate the Federal Reserve’s ‘Operation Twist’.

RBI on Thursday said it will conduct a simultaneous sale and purchase of bonds, in a move seen by market participants as an attempt to bring down long-term yields. “The long-tenor funds category was witnessing a lot of heat because of fiscal deficit overshoot. That category has been a big winner of yesterday’s RBI announcement. Dynamic bond funds may be a better bet too,” said Lakshmi Iyer, Chief Investment Officer for Fixed Income at Kotak Mahindra Asset Management.
 

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