Domestic institutional investors
Also called: DII · Topic: Financial Markets, Instruments, Insurance and Pensions · NCERT: Beyond NCERT
Meaning
Domestic institutional investors (DIIs) are Indian institutions that invest in Indian financial markets. They include mutual funds, insurers (above all LIC), banks and pension funds such as EPFO and NPS. Because they invest large sums, their buying and selling can move the market. DIIs matter because they reduce the market's dependence on foreign money. When foreign investors sell, DIIs can buy and soften the fall.
Example
Households now invest steadily in mutual funds through monthly SIPs (Systematic Investment Plans). This regular inflow has let DIIs absorb heavy selling by foreign portfolio investors (FPIs). DII ownership of listed Indian shares has recently moved past FPI ownership.
Don't confuse with
- Foreign portfolio investors (FPIs): foreign entities investing in Indian shares and bonds. The older term Foreign Institutional Investors (FIIs), which is still used in NCERT, was merged into the FPI regime in 2014.
Related concepts
- Mutual fund
- Net Asset Value
- Systematic Investment Plan
- Index fund
- Exchange-Traded Fund
- Gold ETF
- Fund of funds
- Real Estate Investment Trust
- Infrastructure Investment Trust
- Participatory notes