Mumbai: A recent analysis reveals that more than 60% of the top 20 Foreign Institutional Investors (FIIs) in India have underperformed market benchmarks during the ongoing market downturn. Despite their significant influence and investment in the Indian stock market, these major institutional players have struggled to generate returns that match or exceed the broader indices, such as the Nifty 50 and Sensex.
The downturn, which has been marked by high volatility and global economic uncertainties, has seen many FIIs facing challenges in navigating the turbulent market environment. Several large players, including top global asset managers and hedge funds, have posted negative returns or returns that are below the market average, leading to a reassessment of their investment strategies in the Indian market.
While some FIIs have faced challenges due to sectoral underperformance or a lack of exposure to rising market segments, others are adjusting their portfolios to mitigate losses. Analysts suggest that a combination of global macroeconomic factors, such as rising interest rates and geopolitical tensions, has affected the performance of many foreign investors in India.
This underperformance contrasts with the resilience shown by the broader Indian market, with key indices maintaining a relatively strong footing compared to global peers. As a result, many market observers are closely monitoring the ongoing investment strategies of these FIIs, which have historically been seen as major drivers of market trends in India.
The downturn has also raised questions about the sustainability of FII investments in the Indian market in the medium to long term, particularly as they face headwinds in an increasingly challenging global environment.
In response to this trend, some FIIs have reportedly been diversifying their investments, focusing on domestic-focused sectors such as consumer goods, infrastructure, and pharmaceuticals, which have continued to perform better amidst the downturn. The coming months will likely see a continued shift in strategies as these institutional investors navigate the complexities of the current market conditions.