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 policymakers are wrong to expect an acceleration in inflation.
Valued at around Rs13 lakh crore ($201.68 billion), Birla’s “dynamic debt” fund now holds 40% of its portfolio in government bonds maturing in 2045, up from 35.9% 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% of its portfolio, respectively. Birla does not disclose how profitable its holdings have been.
