The Performance of Protected Mutual Funds in Indonesia during Covid-19 period
Tinjung Desy Nursanti (a*), Nugraha (b), Ikaputera Waspada (c), Maya Sari (d)

a) Universitas Pendidikan Indonesia
Jl. Dr Setiabudi Np 229 Bandung 40154 Indonesia
tinjungdesy[at]upi.edu

b) Universitas Pendidikan Indonesia
Jl. Dr Setiabudi Np 229 Bandung 40154 Indonesia
nugraha[at]upi.edu

c) Universitas Pendidikan Indonesia
Jl. Dr Setiabudi Np 229 Bandung 40154 Indonesia
ikaputerawaspada[at]upi.edu

d) Universitas Pendidikan Indonesia
Jl. Dr Setiabudi Np 229 Bandung 40154 Indonesia
mayasari[at]upi.edu

Abstract

Mutual funds are considered as the right choice for investment for investors who have limited time, ability and knowledge in calculating the risk of investing. Mutual funds are managed by two parties, the Investment Manager and the Custodian Bank. The more widely disclosed information obtained is inseparable from the application of digital technology related to the marketing strategy of mutual fund products by investment managers. The net asset value of mutual funds until the end of 2019 can be achieved as much as 555 trillion rupiah. At least in the last 20 years, total assets under management of mutual funds (AUM) has increased from 5.14 trillion rupiah in 1999 to 543.76 trillion rupiah in 2019 with the largest contributor to managed funds coming from protected funds with total of 153.91 trillion rupiah. Furthermore, in the midst of the Covid-19 pandemic, as of March 2020 the mutual fund industry experienced pressure as seen from the decline in AUM, which was also followed by a decrease in participation units. The decrease in AUM occurred in almost all types of mutual funds, however, the smallest decrease in AUM occurred in protected funds. Therefore, the protected mutual fund instrument is a preferred product compared to other types of mutual funds, especially fixed income funds, because the worst-case scenario occurs only when bond issuing companies experience defaults. It is important to analyze the performance of protected mutual funds during Covid-19 period since the Indonesian government announced started March 2020-May 2020. Through literature study, this research aims to determine whether protected mutual funds in Indonesia will continue to experience an upward trend in the future even though the covid-19 period is not over. The likelihood that can occur is whether protected mutual funds will be outperformed or underperformed, especially when benchmarked to the Composite Stock Price Index.

Keywords: protected mutual funds; outperform or underperform; investment during Covid-19

Topic: Financial Management and Accounting