Marketwire

The rise of mutual funds

Mutual funds are becoming dominant in the Indian market, unseating foreign institutions

Mutual funds are becoming dominant in the Indian market, unseating foreign institutions

It was once said that Indian markets were run by foreign institutional investors (FIIs). FIIs dictated the rise and fall of the market. Any uncertainty in the world economy severely impacted the Indian market, even when it had nothing to do with India, because FIIs would start to pull their money out of the Indian market. Domestic institutions, such as mutual funds, had limited influence on the market.

But thanks to the increasing participation of Indian investors in the stock market, this trend is reversing. In the last three years, mutual funds have pumped in twice the amount as compared to that invested by FIIs.

Increased awareness among retail investors regarding systematic investments has played a major role in the transfer of retail savings to financial markets. This trend may continue due to decreasing interest rates, increasing investor-education initiatives and an expected rebound in corporate earnings.

See the accompanying 15-year graph of FII and mutual fund investments in India.

The rise of mutual funds

The table below gives the lists of companies across market caps where mutual funds have increased their holdings during previous five years.

The rise of mutual funds

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