Who are Domestic Institutional Investors?

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DII refers to ‘Domestic Institutional Investors’. DIIs invest in financial assets and securities of their home country. They use pooled funds to trade in securities and assets. These investments are are influenced by political and economic trends in the country. In addition to foreign Institutional investors (FII), the DIIs also play a decisive role in the performance of the stock markets and affect the net investment flows into the economy.

Institutional investment means the investment made by institutions such as banks, insurance companies and mutual funds in the financial or real assets of the country.

Types of DIIs in India are listed below:

Mutual Funds

Mutual funds invest shareholders’ pooled investments in a range of assets and securities. There are several types of funds available for purchase depending on the risk tolerance and needs of the investor. Mutual funds are flexible and versatile which make them ideal for beginners. DIIs have the option to pick and choose their funds based on their financial goals and risk tolerance.

Insurance Companies

Insurance companies are huge contributor to the overall DII equity holdings. They invest the premium paid by policy holders to cover their risks.

Local Pension Funds

India’s government-run pension schemes like the National Pension Scheme, Provident Public Fund, and Employees’ Provident Fund Organisation are massive contributors to the India’s DIIs.

Banking and Financial Institutions

India’s banks and financial institutions also contribute to the domestic institutional investment.