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How much do DII's own in the BSE 500 companies?
Jul 13, 2015

Analysis of domestic institutional (DII) ownership patterns gives interesting insight pertaining to sentiments prevailing amongst retail investors. Since DIIs typically consist of mutual funds as well as insurance companies, an increase in DII stake indirectly suggests an increase in retail participation.

Today's chart of the day shows that DII's stake in 96 of the BSE 500 companies stood at 9.36% in the June ending quarter. This is considered to be highest in the last 25 quarters indicating that local investors have been significant buyers in the June quarter. Further, a consistent increase in DII stake reveals that the trend of flows has been quite buoyant despite volatility in markets.

Such a phenomenal rise is attributable to the rising money inflows in the domestic fund houses. Sentiments amongst the retail participants are so positive that the average asset under management (AUM) for the mutual fund industry is at an all time high. And this money has found its way into equities via the DII route. This is certainly a good sign for the mutual fund industry since rising AUM will yield higher fee for them. As for domestic investors, if they are willing to show some patience and stay invested for the long term, even they shall be benefitted by higher returns.

Data Source: Mint
Note:- The data pertains to 96 of the BSE 500 companies

This Chart Of The Day was published in The 5 Minute WrapUp - A simple thumb rule to avoid toxic wealth destroyers!

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