Difference between foreign institutional investment and foreign direct investment?

Here is a good link at Investopedia.com
http://www.investopedia.com/ask/answers/...

Generally, a institutional investment is with or by institutions, say a Mutual Fund or Retirement Fund. It could be institutions owning parts of each other's investments. I may run a Mutual Fund, but have no exposure to foreign investments, so I may invest part of my fund in a different fund that does have investments in a foreign country.

Foreign direct investment would require that I open an account with a firm or company in the foreign country I wish to invest in. In olden days, it required a trip to that country to get it done. Only then could I invest directly in that country.

Forex is a good example. Prior to the year 2000, if you wanted to buy Swiss Francs, you had to get on a plane and fly to Switzerland and deposit money there to open an account. Only then could you trade Francs. This would be a direct foreign investment. Prior to 2000, your only recourse was to invest in a US institution or fund that had Swiss currency exposure. That institution had already set up an account in Switzerland in order to trade foreign currency, and I would be able to invest indirectly in Switzerland's currency, through the institution or fund.

Check out the link. It is much more explanatory.

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