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Indonesia mutual fund industry assets rise 0.52% in August

September 30, 2019

Indonesia’s mutual fund industry assets rose 0.52% in August, primarily from gains in money market funds.

The industry had 538.38 trillion rupiah (US$37.94 billion) of total assets under management at the end of August, up from 535.62 trillion rupiah in July, according to latest figures published on the website of the Financial Services Authority of Indonesia. Assets were up 6.17% from 507.09 trillion rupiah at the end of 2018.

The regulator typically posts the data without providing analysis.

Money market funds and mixed asset funds were the only ones with higher assets in August.

Net asset value (NAV) of money market funds, which invest in treasuries and short-term debt securities, rose 9.6% month-on-month to 66.61 trillion rupiah and soared 46.17% from January.

According to a fund manager at an asset management firm in Malaysia, demand for safer assets such as money market funds is likely to grow in coming months because of market uncertainty.

"Market is very volatile and uncertain right now. So, I expect investors to continue to cash out their earnings from the Indonesian equity market and invest into safer assets like bond and money market funds," the Kuala Lumpur-based manager tells Asia Asset Management, speaking on condition of anonymity.

NAV of stock funds dropped 2.6% month-on-month to 148.84 trillion rupiah in August, and fell 9.92% from January.

NAV of mixed asset funds, which invest in both stocks and bonds, climbed 0.89% to 30.56 trillion rupiah last month and was up 7.41% since January.

Bond funds were little changed at 114.09 trillion rupiah in August, and were up 5.92% since the beginning of the year.

Capital protected funds fell 1.1% month-on-month to 148.08 trillion rupiah and rose 3.24% from January. These are bond funds that guarantee investors their initial investment plus any capital gains, provided they are held for the full contractual term.