Observing Sheen Money Market Mutual Funds
Who would have thought, among all types of mutual funds, money market mutual fund products has scored an increase in Net Asset Value (NAV) the highest so far this year, which amounted to 49.47%.
Of the nine products that are classified together with mutual funds, six of which NAB decreased, while the two others accompanying money market funds notch gains.
As a note for the uninitiated, what NAB is the position of customer assets under management. This term is used to name the position of the customer portfolio.
Well, based on data from Information Centre, published Mutual Funds Capital Market Supervisory Agency & Financial Institutions Supervisory Agency. which recently reopened after being closed for 2 years for no apparent reason, the champion of the highest NAV increases until last week was the product of mutual money market funds.
In total, the position of the entire product mutual fund NAV per weekend was recorded at Rp 117.291 trillion, edged up 0.47% from the end of 2009 amounting to Rp 116.732 billion.
While the number of units of mutual funds that bought up last week as much as 71.350 billion units, up 1.96% from the position late last year as much as 69.978 billion units.
Looking at the ratio of the growth units are much higher than the increase in NAV which only rose slightly, indicating that most of the assets under management decreased a lot.
Sure enough, when translated it turns out most of the NAV per types of mutual funds has decreased.
Bapepam-LK classifies nine types of managed funds products namely
1. Mutual fund shares.
2. Money market funds.
3. Mutual funds are a mixture.
4. Fixed-income mutual funds.
5. Mutual funds are protected.
6. Index mutual funds.
7. Exchange Trade Fund (ETF) shares.
8. Fixed income ETF.
9. Sharia.
Of the nine types of products managed funds, the NAV 6 are decreased, while the ride is only 3 products. Fixed income ETF products recorded the highest percentage reduction in NAB this year, which amounted to 34.18% from Rp 629.33 billion at the end of 2009 to Rp 414.194 billion at the end of last week.
Product index mutual funds came in second place with a reduced NAV worst of 28.63% from Rp 290.190 billion at the end of 2009 to Rp 207.093 billion at the end of last week.
Then type ETF shares decreased 11.46% from Rp 45.130 billion at the end of last year to USD 39.958 billion at the end of last week.
Product fixed-income mutual funds NAV decreased by 5.81% from Rp 20.087 trillion at the end of 2009 to Rp 18.919 trillion at the end of last week.
Mutual funds are also protected in total NAV decreased by 4.19% from the end of 2009 amounting to Rp 34.623 trillion to Rp 33.170 trillion at the end of last week.
Finally, the product mix of mutual funds that declined by 2.49% of NAV of Rp 15.657 trillion at the end of 2009, to Rp 15.267 trillion at the end of last week.
If the total, NAB position 6 of the above products at Rp 68.017 trillion at the end of last week, down 4.64% or Rp 3.314 trillion from the end of the year 2009 amounted to Rp 71.331 trillion.
Fortunately, the increase in NAV 3 other products managed to lift the total NAV of funds under management of products, mainly supported by the increase in NAV money market mutual fund products to become champions.
Meanwhile, shares of mutual fund products and managed funds contributed to the increase NAB sharia, though not for money market funds.
NAV of funds under management in Islamic weekend was recorded at Rp 3.675 trillion, edged up 0.1%, or USD 4 billion from the end of 2009 amounted to Rp 3.671 trillion.
Then the position of an equity fund NAV at the end of last week stood at Rp 37.795 trillion, up 3.53% or Rp 1.288 trillion from the end of 2009 amounting to Rp 36.507 trillion.
Finally, the product of money market funds recorded NAV of Rp 7.801 trillion at the end of last week, soared 49.47% or Rp 2.582 trillion from the end of the year 2009 amounted to Rp 5.219 trillion.
NAV total 3 products are recorded at Rp 49.271 trillion at the end of last week, up 8.53% or Rp 3.874 trillion compared to the position late last year was Rp 45.397 trillion.
The increase in NAV money market funds, either from its nominal value and the percentage increase in sustain success throughout the NAB product funds under management, at least until last week.
For the record, the position of NAB entire product funds under management now amounting to Rp 117.291 billion was the highest in the history of the Indonesian capital market.
So, why money market mutual fund products incise sheen so big this year?
Mutual fund money market funds under management which is a product placement of funds allocated most (80%) in savings deposits, time deposits and certificates of Bank Indonesia (SBI), while the rest in debt instruments of short term (less than a year).
In simple terms it can be concluded, that the increase in NAV money market mutual fund products is due to the substantial amount in this product portfolio and increased customer value in these instruments.
The question then, why is there a massive interest in investing in savings instruments, deposits, SBI and short-term debt?
The answer is simple. Recent economic projections indicate that global economic recovery “scheduled” to start the second half of 2010.
Economic recovery, usually accompanied by a demand or purchasing power at odds with the production or supply of which is known as inflation. The greater the ratio of inflation, within the context of economic recovery means that an increase in demand rather than supply position.
Well, projections indicate an increase in inflation will always increase the benchmark interest rate of Bank Indonesia (BI Rate). Therefore, the ethics of economics, the interest rate the bank can not lower than inflation.
Therefore, easily be concluded that the recommendations of the economic recovery led to expectations of an increase in Bank Rate in the second half of 2010, as many analysts had projected, even though the BI officials pitched the same.
The increase in the BI Rate, of course, will make the interest rates of savings and bank deposits and SBI have increased. And it certainly will provide increased margin (yield) on such products.
So naturally, when some market participants are now chasing money market mutual fund products, driven by expectations of an increase in the BI Rate, hoping to reap profits amid the global economic recovery sentiment.