FII in Indian Mutual Funds
- In this article I trace out the FII’s investment in the Indian Mutual Funds (INMF) from 2014 to 2019. The Assets Under Management (AUM) figures are used to present the graphs and all figures are in crores in INR. The data for the year 2019 is only till the end of third quarter(Dec 2019) The data used has been down loaded from the site of Association of Mutual Funds in India, from https://www.amfiindia.com/.
AUM of All Categories
- There are five categories of investors who invest in INMF and their status over the years from 2014 is as below:-
- The largest investors in INMF are the corporate’s, followed by HNI’s(people investing more than 5 Lakhs are considered as HNI’s) and FII’s and Banks take up the last two positions.
Investment Patterns
- Below graphs show the investment pattern of corporate’s (the largest category of investors in INMF) and HNI’s. Corporate’s have increased their AUM in Liquid/Money market and decreased it in Debt oriented schemes. However, the HNI’s, which is a different category in terms of investment targets and time lines, parks more funds in equity oriented schemes. Also, both, the corporate’s and HNI’s are also investing in Solution Oriented schemes.
- The investment pattern of FII’s indicates an increase in investment in Balanced Funds, Equity Oriented Schemes and in ETF’s(other than gold) and a reduction of investment in Debt oriented schemes.
- The investment pattern of Banks/FI’s is visibly different from the other categories with the largest AUM being in Liquid/Money Market. Also there has been a reduction of AUM in Debt oriented schemes and an increase in investment in Solution oriented schemes.
Conclusion
- Different categories of investors invest in different types of schemes/funds as their time lines of investments and their need for liquidity is different. The shift of investments in respect of Banks/FI’s towards Liquid Money Market may be an indicator of the need of the banks to have more liquid funds available, but it definitely comes at a cost of the amount of return they would be getting.
