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Indonesia pension fund BPJamsostek shifts to bonds amid pandemic risk

BPJamsostek
July 23, 2021

Indonesia’s state-run pension fund, Badan Penjamin Jasa Asuransi Ketenagakerjaan (BPJamsostek) is repositioning its portfolio and opting for more investments in bonds in the wake of the coronavirus crisis, according to Edwin Michael Ridwan, its head of investments.

As a liability driven investor, he says the pension fund’s investment management takes into account the dynamics and outlook of the economy and business, both domestic and global. This includes interest rate trends, inflation, the rupiah exchange rate and corporate profits, among other things.

“Considering the Covid-19 pandemic that is sweeping across the world and is having a structural impact on the economy and the business world, we deem it necessary to rebalance our portfolio, to adjust our investment profile to the New Normal that is taking place and to the rising investment risks,” Ridwan says in an interview with Asia Asset Management.

BPJamsostek, which covers some 50.6 million registered workers, had around 501.77 trillion rupiah (US$34.54 billion) of assets as of end-June 2021.

Its investment fund comprises bank deposits, bonds, shares, mutual funds, real estate and direct investment.

In the rebalancing plan, Ridwan says allocations for deposits, shares and mutual funds will mostly be shifted to corporate or state bonds and direct investments.

He did not specify the composition but earlier this year, BPJamsostek President Director Anggoro Eko Cahyo said that in 2020, 63% was in bonds, 15% in equities, 13% in deposits, 8% percent in mutual funds and 1% in direct investments.

Note: The full interview will be published in the August issue of Asia Asset Management.