Nifty 50
Sensex
US Tech 100
Dow Jones
FTSE
Dax
CAC
Nikkei 225
Hang Seng
SSE Composite
TAIEX
KOSPI
Gift Nifty
Strategy Indices
Broad Market Indices
Sectoral Indices
Thematic Indices
Home
Finance GlossaryForeign Portfolio Investment
Foreign Portfolio Investment
Definition of Foreign Portfolio Investment
A Foreign Portfolio Investment includes stocks, bonds, ETFs, derivatives, and other financial instruments from another country. Generally, FPIs do not give an investor the right to ownership or a controlling stake in any organization.
Instead, FPIs act as a passive income vehicle. That’s why FPIs are different to Foreign Direct Investment (FDI) in which an ownership stake is acquired with the intention of controlling and influencing business decisions.
Related Terms
Mid-Cap
Mid-Cap companies are those ranked 101 to 250 by market capitalisation in the overall market. They are generally larger and more stable than small-cap companies while still offering higher growth potential than large-cap stocks. Mid-cap stocks often appeal to investors seeking a balance between growth opportunities and risk.
Securities Lending
Securities Lending is a process through which investors can lend their shares to borrowers, usually for short selling. In return, they receive interest or fees. The lender continues to be the owner of the assets. The borrower needs to return the securities later. Securities lending helps in improving liquidity in the market. Long-term investors can also earn extra income on holdings that remain idle for a while.
Box Spread
A box spread is a trading strategy that involves buying a bull call spread and a matching bear put spread. The components of a box spread are designed as so:
- Bull call spread : two call options with a lower and upper strike price
- Bear put spread : buying and selling puts at different strike prices of the same underlying asset with the same expiration
Net Asset Value (NAV)
Net Asset Value (NAV) indicates the value of one unit of an investment fund at a given point in time. It reflects the fund’s total assets after expenses, spread across all outstanding units, and helps investors track how the fund’s value changes from day to day.
P/E Ratio (Trailing)
The Trailing Price-to-Earnings (Trailing P/E) Ratio is the most common version of the P/E ratio, where the historical earnings of the company are used to calculate it. It compares the current stock price to the actual earnings per share (EPS) over the last four quarters (12 months) of the company. The formula for this is: Trailing P/E = Current Share Price / EPS for the last 12 months. Trailing P/E is based on concrete, reported financial results and is therefore reliable for historical comparison, but may not fully reflect a company's current or future prospects.
Bombay Stock Exchange
Established in 1875, Bombay Stock Exchange or simply BSE is a place where stockbrokers and traders can buy and sell securities like stocks, bonds, ETFs, and more. 5000+ securities are listed on BSE, which is the oldest stock exchange in India and Asia.
Invest & Trade with a Trading
Platform That's #MadeForTrade
Open your Dhan Account in minutes!
