Indonesia’s fund management industry assets fell 5.91% in January through September with domestic stock funds plunging more than 26% amid foreign selling as the coronavirus pandemic roiled global markets.
The industry had 510.15 trillion rupiah (US$36.66 billion) of total assets under management at the end of September, down from 542.17 trillion rupiah at the end of 2019, according to latest figures published on the website of the Financial Services Authority of Indonesia.
The regulator typically posts the data without providing analysis.
Stock funds plummeted 26.13% to 102.79 trillion rupiah as the benchmark Jakarta Composite Index shed 22.49% between January and September.
Bond funds dropped 1.1% to 120.66 trillion rupiah over the nine-month period, but gained 6.07% between July and September.
According to a fund manager at an Indonesian fund management company, foreign investors are shifting into less risky assets such as bonds and capital protected funds. He doesn’t expect domestic stocks to recover their losses until there’s a vaccine for Covid-19, the disease caused by the coronavirus.
“Until a vaccine is available, the local stock market is not going to regain its lost ground, and we will continue to see foreign funds reducing exposure to equity funds, and increasing exposure to bond funds,” the Jakarta-based manager tells Asia Asset Management, speaking on condition of anonymity.
Capital protected funds, which are bond funds that guarantee investors their initial investment plus any capital gains provided they are held for the full contractual term, were up 2.21% to 154.11 trillion rupiah in the nine months through September, and rose 4.14% in the third quarter.