Domestic Mutual Funds, Private Investors Now Bigger Shareholders Than FPIs: MS

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Combined holdings of domestic mutual funds and direct households in equities have increased by more than 720 basis points since 2015, while that of foreign portfolio investors (FPI) dropped about 230 fps, Morgan Stanley said in a report.



In the last quarter alone, domestic ownership increased by nearly 90 basis points, while FPI ownership of a sample of 75 companies fell by 84 basis points on a quarterly basis. At 25.6 percent owned by IndiaThe largest 75 companies, domestic investors are now larger holders than FPIs for the first time since 2010, the report said.

Average sector positions rose in the last quarter, led by domestic institutions, although FPIs continue to manage more active portfolios.

FPIs are overweight financials and increased relative position 40 basis points during the quarter after declining for five consecutive quarters. The position is still 540 bp below the September 19 peak. The largest FPI sales have been in technology, where they have been underweight during the quarter, Morgan Stanley said.

“FPIs are also underweight in consumer discretionary and industrials, contrary to our recommendations. While domestic institutions added to technology during the quarter, they remain underweight. They also added financials and consumer discretionary, but were not overweight in any of them. both. They are overweight in communications services, consumer staples and utilities differ from our view. The only sector where we are in sync is manufacturing, where we recently increased our weighting,” said Morgan Stanley.

Of the top 20 aggregate institutional positions, active positions (relative to the MSCI index) rose the most ITC and refused most for to trust during QE June 2022.

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