Mutual Funds: Domestic Investors Vs Foreign Investors

Mutual Funds: Domestic Investors Vs Foreign Investors

Investors Ownerships in BSE500 Stocks

At the end of September, the S&P BSE500 Index was at 18.77 which is at 11.61 percent in the past four years. In January 2015, mutual funds have invested about Rs 4.16 lakh crore in the domestic equities. It is more than three times higher than the foreign investor inflows of Rs 1.21 lakh crore in the same period.

In Indian equities, the financial product inflows are between Rs 10,000 crore to Rs 12,000 crore a month specifically the SIP investment inflows held over Rs 8,000 crore a month from the last 10 months.

 Ownership among public shareholders in BSE500 stocks (%)
 Investors  Sep – 2015  2016, Sep  Sep ‘2017  Sep – 2018  2019, Sep
 Banks  3.24  4.02  3.53  2.79  2.32
 FPI  53.26  51.89  49.21  48.54  48.16
 Insurance  11.92  12.20  14.04  12.48  11.44
 Mutual funds  11.61  11.51  14.04  16.14  18.77
 Retail  19.97  20.38  21.55  20.04  19.30

As of the report, the fund advisors noted the collective influence in the continuous investment progress was visible in the ability of the Indian stock market. Markets and large-caps have led to increasing the new highs in spite of heavy selling by foreign portfolio investors. 

Assume that if foreign portfolio investors (FPIs) sold Indian equities worth Rs 35,800 crore in 2018. At the same time, domestic mutual funds bought nearly Rs 1.18 lakh crore. As of result, the Sensex has gained 6 percent from domestic funds. This is the ability of retail investors. This has led to a significant change in activity in capital markets from offshore players to onshore ones. In the past few years, a stronger dollar, a delayed earnings recovery and reduced returns consolidated to stimulate foreign funds out of India.

The investor’s ownership in BSE500 stocks decreased from 53.26 percent in September 2015 to 48.16 percent in September 2019.

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