• The Foreign Portfolio Investment (FPI) consists of securities and other financial assets held by investors in another country. It does not provide the investor with direct ownership of a company’s assets and is relatively liquid depending on the volatility of the market.

• Along with Foreign Direct Investment (FDI), FPI is one of the common ways to invest in an overseas economy. FDI and FPI are both important sources of funding for most economies.

In brief:

– Foreign Portfolio Investment (FPI) involves holding financial assets from a country outside of the investor’s own.

– FPI holdings can include stocks; American depositary receipts (ADRs), bonds, mutual funds and exchange-traded funds.

– Along with Foreign Direct Investment (FDI), FPI is one of the common ways for investors to participate in an overseas economy, especially retail investors.

– Unlike FDI, FPI consists of passive ownership; investors have no control over ventures or direct ownership of the property or a stake in a company.