Franklin Templeton's $40 billion global bond fund has increased its holding of India debt, attracted by one of the highest yields in the region.
The fund's India allocation went up to 7.72 percent in June-end, from 4.9 percent in March, according to its website. The investment has propelled the South East Asian country to the fourth spot in the fund's country holdings.
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Franklin Templeton's bond-fund manager Michael Hasenstab told Bloomberg last month that structural reforms by Prime Minister Narendra Modi, relatively high yields and a stable exchange rate make India a “sweet spot” among emerging markets.
The nation's 10-year sovereign bond yields 6.44 percent, the highest among major Asian markets after Indonesia and Pakistan.
Foreigners have raised holdings of local government and corporate bonds by Rs 16,600 crore in July -- a sixth month of inflows -- lifting this year's total purchases to Rs 1.33 lakh crore, data compiled by Bloomberg show.
India's gain was South Korea's loss. Templeton Global Bond Fund cut its holdings in South Korea to 4.73 percent in June, from 8.9 percent in March. Mexico remained the biggest holding for the fund with its weight increasing to 15.3 percent from 14.8 percent earlier.
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