What would happen if FIIs remove their money from equity mutual funds? Would we still be able to get long-term returns?
-Ranjan
It is true that equity markets decline when FIIs remove their money. We saw this in 2008 when the markets suffered because FIIs continue to sell their equity investments for 3 months at a stretch. But we don’t believe that the state of the Indian markets are such that foreign investors would take away their money and never come back. The markets might fall down if foreign investors redeem their investments, but it won't be a permanent situation.
This article was originally published on May 10, 2012.
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