RETAIL FUNDS | Cesar Tordesillas, Indonesia

Mutual funds gain 10% value in Indonesia

Indonesia’s mutual funds industry booked a 10.19 percent rise in total net asset values in 2012.

The net asset value of the country’s mutual funds industry rose to Rp 223 trillion or US $23 billion in 2012 from Rp 202.4 trillion in 2011.

There is a growing number of mutual funds in Indonesia with improving interest and increasing in value.

Equity-based funds contributed the most with Rp 69.2 trillion recorded. It was followed by fixed income funds (Rp 34.4 trillion), mixed asset funds (Rp 22.01 trillion) and money market funds (Rp 12.2 trillion).

Meanwhile, the total funds managed by fund managers in Indonesia amounted Rp 172.2 trillion as of October, which represented a 9 percent year-on-year increase.

Despite the increase, Indonesia’s mutual funds sector remains small compared to the banking industry.

Such a situation is a result of an old habits and mind-sets, where people opt to save money in banks instead of investing it. The total assets managed by 119 commercial banks stood at Rp 4,000 trillion as of September, data from the central bank showed.

The demand is expected to come from Indonesia’s young population, which is thirsty to taste benefits of the new investment instruments.

Legowo Kusumonegoro, president director of Manulife Aset Manajemen Indonesia, the country’s second-largest fund manager, said on Nov. 13 that he was upbeat on the industry’s growth.

He said MAMI is eyeing a 20 percent growth in funds under its management in 2013 amid optimism that capital markets will grow and the increase in middle-income households will spur investment.

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