Economic Growth Drives Mutual Fund Investment

15 May, 2013

Indonesia`s economic growth and the number of the middle-class that has continued to grow has been one of the factors driving the growing need for mutual fund investments in Indonesia.



"Majority of Indonesia`s middle class are educated people who have started to realize the importance of investment and the condition has provided an opportunity for the mutual fund industry to increase its investment funds," said President Director of PT Trimegah Asset Management, Denny R Thaher here Tuesday.

Denny said that McKinsey Global Institute predicted the Indonesian middle class will reach 135 million by 2030. Currently the number of the middle class in Indonesia is still around 50 million people.

McKinsey`s definition of the middle class is individuals who earn a minimum of 3,600 dollars per year.

While based on the Indonesian Central Statistics Agency (BPS) in 2012, Indonesia`s per capita income has reached 3,562 U.S. dollars.

The conditions have encouraged PT Trimegah Asset Management to issue a new mutual fund investment product to provide more choices for the public to take, called "TRAM ALPHA".

TRAM ALPHA is a product that is intended for corporate and retail customers who have moderate character and risk profile.

"Therefore, the `underlying asset` for investment in the new fund is a combination of equity securities, debt securities and money market," he explained.

He added that the TRAM ALPHA main focus is on the equity securities up to 79 percent of the net asset value (NAV), but when the stock market conditions is dissatisfying then it would be directed to debt securities and money market instruments portfolio.

"To maintain the product to stay positive, it will be invested in large cap and intermediate stocks listed in the Indonesia Stock Exchange (BEI)," he said.

Head of Trimegah Asset Management Research, Ivan Chamdani said the new product is quite suitable for the current market condition which is full of uncertainty. The swelling subsidized fuel oil could affect the financial condition of the government with a potential deficit of close to 2.7 percent.

"The Composite Stock Price Index (CSPI) on the Stock Exchange which has touched 5,000 points can be realized consistently due to decisions taken by the government," he said.

 

The Indonesian government plans to issue savings sukuk (Islamic bonds), series ST007, to expand the base of retail investors in the domestic financial market and finance green projects in the state budget (APBN).
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