JAKARTA. Assets under management (AUM) of mutual funds have been growing significantly. The bonds-based AUM of multi funds grew rapidly, after the bonds market was bullish in 2016.

According to Infovesta Utama, the amount of mutual funds’ AUM grew by 26.70% or Rp 69.27 trillion to Rp 328.65 trillion during the end of 2015-2016. During the period, the AUM of protected mutual funds recorded the most significant increase by 49.76% to Rp 88.21 trillion, followed by fixed income funds, financial market mutual funds, mixed mutual funds, and stock mutual funds that grew by 44.69% to Rp 63.43 trillion, 23.47% to Rp 29.30 trillion, 11.03% to Rp 21.74 trillion, and 10.52% to Rp 118.05 trillion.

Head of Research and Consulting Services Infovesta Utama Edbert Suryajaya said that typically, Indonesian investors prefer to invest in safer instruments.

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Therefore, protected mutual funds contributed to the largest increase in AUM. Let alone, protected mutual funds offer periodical yields in three months and six months periods.

The increases in bonds based mutual funds’ AUM, such as protected mutual funds and fixed-income mutual funds, were also supported by the investment obligations of government securities (SBN) to the non-bank financial industry (IKNB) as much as 10% -20%. The standard has been increased to 20% -30% this year.

Director of Bahana TCW Investment Management Soni Wibowo added that the trend of low interest rates led investors to shift from deposits to bond market, including the bond-based mutual funds.

Edbert predicts that the amount of mutual funds’ AUM may increase by 15%-20% in 2017, while Jakarta Composite Index (JCI) increase to 5,800-5,900 and the yield of government bonds with 10 year tenor will be about 7,5%-7,8%. (Muhammad Farid/translator)