Waves of foreign portfolio investments worth over Rs 51,000 crore splashed into the Indian market in 2021 as overseas investors turned net buyers of domestic securities for the third straight year while excess global liquidity and other factors steered the ebb and flow of their investing ways. With the global financial system still flush with liquidity, emerging market assets, especially equities, might well remain the preferred investment avenue for many more months to come, experts opined. As the equities sizzled during most of 2021, that also saw economy slowly coming back into the recovery path, Foreign Portfolio Investors (FPIs) turned net buyers but their investment is much less compared to net inflows of Rs 1.03 lakh crore in 2020.
Increasing awareness about mutual funds, ease of transactions through digitisation and sharp surge in equity markets have aided asset management companies to add a staggering 3.17 crore investor accounts in 2021-22, with experts saying the trend is likely to continue this fiscal as well. This was a significant rise from 2020-21 when 81 lakh accounts (or folios in mutual fund parlance) were opened, data with the Association of Mutual Funds in India (Amfi) showed. The ongoing financial year too appears to be promising in terms of folios as increase in investor accounts will enable people to move beyond fixed deposits and savings accounts, said Priti Rathi Gupta, founder of LXME, a financial platform for women.
MFs have benefited from a shift to financial assets from physical assets like real estate and gold.
Polarisation and the increase in index weight of a few a stocks have weighed on performance. The worst performers include Nippon India Large Cap and HDFC Top 100 (2.6 per cent).
Several of the mutual fund schemes have plans like dividend, growth and bonus.
'The good news is that money continues to flow into India-focussed offshore funds.'
Taking credit risks in shorter-tenure funds can help jack up returns considerably, boosting sales.
Experts believe FPIs will keep a close watch on coronavirus pandemic, its spread and likely impact on the economy while making decisions about investment into India.
Contributions to mutual fund schemes through systematic investment plans or SIPs remain unfazed from the market volatility in 2022 with inflow growing to Rs 1.5 lakh crore in 2022, a surge of 31 per cent from a year earlier, due to higher retail participation. In comparison, an inflow of Rs 1.14 lakh crore through the route was registered in 2021 and Rs 97,000 crore in 2020, data with the Association of Mutual Funds in India (AMFI) showed. Going ahead, SIP numbers are expected to continue to remain strong in 2023 as investors are increasingly appreciating the importance of regular investing through the route, Kaustubh Belapurkar, director - manager research at Morningstar Investment Adviser India, said.
Outflows are likely to continue, experts say, till such time as the markets see a significant correction.
The unlocking of the economy since June led to a significant recovery in various macro, micro and high-frequency data points, resulting in the equity markets surpassing their previous lifetime highs.
India-focused offshore funds and exchange-traded funds (ETFs) witnessed a net outflow of $376 million in three months ended March 2021, making it the twelfth consecutive quarter of withdrawal, according to a Morningstar report released on Wednesday. This was markedly lower than the net outflows of $986 million registered during the quarter ended December 2020. India-focused offshore funds and ETFs are some of the prominent investment vehicles through which foreign investors invest in Indian equity markets.
Fundraising via equity NFOs highest since 2008; Over Rs 11K cr collected in first eight months of 2017, says Chandan Kishore Kant
The mid-cap universe - comprising firms that rank 101-250 in terms of m-cap - could see as many as 17 new stocks move out. Similarly, over half a dozen stocks could exit the large-cap universe, which is defined as the top 100 entities in terms of m-cap.
Issuing guidelines for enhanced disclosures by CRAs, the watchdog has called for having a uniform Standard Operating Procedure in respect of tracking and timely recognition of default.
The assets under management of the 44-players mutual fund industry stood at Rs 24.55 lakh crore in May-end from Rs 23.93 lakh crore in April-end.
Don't exit from growth-style funds as they may benefit next from a shift in investor preference.
Of the 280-odd equity schemes that have been in existence for five years or more, 190 funds or about 70 per cent of those funds have outperformed their respective benchmark indices.
While the number of international MF schemes is increasing, so is the confusion for investors.
Equity mutual funds witnessed an outflow of Rs 9,253 crore in January, making it the seventh consecutive monthly withdrawal, primarily due to profit booking and portfolio rebalancing amid markets touching new highs. The pace of outflows from equities has however slowed for the third month and Gautam Kalia, head - Investment Solutions, Sharekhan by BNP Paribas said that it will likely turn positive soon as investors get used to the new normal. In addition, investors pulled out Rs 33,409 crore from debt mutual funds last month after investing Rs 13,863 crore in December, data from the Association of Mutual Funds in India showed on Tuesday.
The Rs 38-trillion mutual fund (MF) industry is going through a new fund offer (NFO) rush. Since July 1, the industry has launched close to 70 NFOs. This follows the completion of a near three-month embargo period when the industry had vowed to not launch any new offerings till the time it implemented norms around pooling of investor accounts. As a result, between April and June 2022, the industry was able to launch just three NFOs.
Market regulator, the Securities and Exchange Board of India, has set out five broad categories for mutual fund schemes, including equity, debt and hybrid funds that will benefit investors, says Ashley Coutinho
Market players say following the tax cuts, the market mood had changed from bearish to positive, which should help sustain the rally.
'Investors need to understand that these schemes may not do well in the market that is in a bull run, but quality stocks would protect the downside.'
After the rationalisation and categorisation of mutual fund schemes undertaken by the Sebi in October 2017, overnight funds have emerged as a distinct category.
A large proportion of passive funds has beaten actively managed large-cap funds with average one-year category returns for large-cap at 10.2 per cent
Money flowing into the equity schemes of mutual funds is back at a level last seen before the 2008 financial crisis, when the stock market tanked 60 per cent.
In the 52 newly listed companies since 2014, fund managers have a total investment of a mere 2.5 per cent of their assets under management.
The value of foreign portfolio investors' (FPI) holdings in domestic equities reached $654 billion in three months ended December 2021, a drop of nearly 2 per cent from the preceding quarter, according to a Morningstar report. This was largely on the back of a massive sell-off by foreign investors and a correction in the Indian equity markets, especially in the large and mid-cap sectors. "At the end of the quarter ended December 2021, the value of FPI investments in Indian equities fell to $654 billion, which was lower than $667 billion recorded in the previous quarter, a fall of around 2 per cent," the report noted.
This could be attributed to the attractive valuation of the Indian equities after the sharp correction during the first quarter of calendar year 2020 and significant depreciation of the Indian rupee against USD, which provided them a rather good entry point.
ICICI Bank, HDFC Bank, Infosys, SBI and L&T among fund managers' preferred bets.
Top officials said asking employees other than the fund management team to mandatorily invest a fifth of their salary goes against the principle of natural justice.
Overseas investors have pumped in $6.3 billion in Indian equity markets in three months ended September on attractive valuations, opening-up of the economy and resumption in business activities, says a Morningstar report. This comes following a net inflow of $3.9 billion in June quarter and a net withdrawal of $6.38 billion in March quarter. Apart from inflow, the value of FPI investments in Indian equities swelled further during the quarter under review largely on the back of robust net inflows, coupled with a strong performance of the Indian equity markets.
Investors across age groups and risk appetite can invest in these schemes.
Overseas investors had put in a net sum of Rs 45,981 crore in March and Rs 11,182 crore in February in the capital markets
The uncertainty over the gravity of the pandemic's impact on the global economy and financial markets worldwide triggered a flight to safety among foreign investors as they rushed to exit from relatively riskier investment destinations, such as emerging markets like India, a report said.
The value of the foreign portfolio investors (FPI) holdings in the domestic equities reached $592 billion in three months ended June 2021, a surge of 7 per cent from the preceding quarter, according to a Morningstar report. This was largely on the back of robust net inflows from FPIs, coupled with the strong performance of the Indian equity markets. "As of the quarter ended June 2021, the value of FPI investments in Indian equities stood at $592 billion, which was considerably higher than the $552 billion recorded in the previous quarter, a spike of around 7 per cent," the report noted. As of June 2020, the value of FPI investments in Indian equities had been $344 billion.
The value of the foreign portfolio investors' (FPI) holdings in the domestic equities reached $667 billion in three months ended September 2021, a surge of 13 per cent from the preceding quarter, according to a Morningstar report. This was largely on the back of strong performance by the Indian equity markets along with net inflows from FPIs at the later part of the quarter. "At the end of the quarter ended September 2021, the value of FPI investments in Indian equities shot up sharply to $667 billion, which was considerably higher than the $592 billion recorded in the previous quarter, a spike of around 13 per cent," the report noted.
They help diversify portfolio and are less risky.
If a retail investor wants exposure to a healthcare ETF, it should be a part of his satellite portfolio, suggests Sanjay Kumar Singh.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances