Systematic investment plans or SIPs of mutual funds have played a big role in driving the domestic equity market in the past one year, as this inflow has largely cushioned the market amid strong outflow of foreign portfolio investor money.
This flow has continued unabated through the toughest of times in the domestic stock market, as retail investors surprisingly kept their patience to stay put despite the turmoil that at times made one feel as if the markets were going to fall into rock bottom.
In fact, calendar year 2015 proved to be the best year in terms of net inflows from domestic institutional investors. The Indian market witnessed net inflows of close to Rs 70,000 crore crore from DIIs during the year even as the Sensex declined 7.6 per cent. This is the best performance since 2008 when DIIs bought equities worth Rs 71,683.85 crore. In calendar 2016, DII inflow into equities is projected to touch $15 billion.
The whole of 2015 saw Indian households warming up to financial assets, read equities and mutual funds, and the share of their wealth invested in equities has been rising. The inflows to mutual funds have ensured that despite outflows from FIIs, the market has remained more or less stable.
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