Small investors help DIIs overtake foreign funds

Mumbai: Amidst heavy inflow of funds from small investors across the country, the domestic mutual funds have toppled foreign portfolio investors (FPI) to become the largest investor in the Indian equity market in 2015.

The mutual find industry has invested a total of Rs 64,414.50 crore in equities in 2015 till date, almost three times the amount invested by overseas investors. During this period, foreign investors were net buyers of domestic equities worth just Rs 21,983.70 crore. Market experts said that the domestic fund houses had acted as a strong counterbalance to heavy selling by FPIs in this calendar year.

For instance, MFs pumped in Rs 10,533 crore and Rs 9,320 crore in August and September respectively, when overseas investors turned heavy sellers amidst fears about a Chinese-led global economic slowdown. During these two months, overseas investors offloaded domestic shares worth Rs 23,352.42 crores.

According to market participants, the markets would have witnessed a sharp fall and panic selling in the absence of strong buying from domestic fund houses. “We saw that in 2008 post Lehman Brothers crisis. The markets witnessed a sharp slide and panic selling,” observed Gopal Agrawal, chief investment officer (CIO), Mirae Asset Global Investment.

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