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Stock Index Falls at the Beginning of the Year, Index Mutual Funds Remain Attractive in 2024
Minggu, 28 Januari 2024
KONTAN.CO.ID - JAKARTA. The performance of the stock index, which is often used as a reference for index mutual funds, looks negative at the beginning of 2024. As of Thursday (25/1), LQ45 was recorded to have fallen 1.11% year to date (ytd), IDX30 had fallen 1.70%, and SRI-KEHATI minus 0.43%.
Even so, throughout 2024, these indices are predicted to still record positive performance. BNI Asset Management (BNI-AM) Investment Director Putut Endro Andanawarih assesses that the reduction in global interest rates this year will boost stock market performance.
Investors will tend to be more aggressive in conditions of low interest rates. That way, the stock market will again become an attractive investment instrument choice.
Apart from that, a decrease in global interest rates could have a positive impact on the rupiah currency. This has the potential to attract inflows of funds from foreign investors into the Composite Stock Price Index (IHSG).
"In terms of performance per sector, we estimate that sectors that are sensitive to interest rates, banking, telecommunications and consumer will still drive positive performance in the index," said Putut when contacted by Kontan.co.id, Friday (26/1).
According to him, index mutual funds are still a suitable option for investors with a long-term investment horizon. The reason is that this product gives investors exposure to the stock market without any additional active risk because index mutual funds follow the performance of their reference index.
In 2023, the performance of index mutual funds managed by BNI-AM will record positive returns, except for BNI-AM IDX Sharia Growth because it does not have a banking sector. "However, all BNI-AM index mutual fund performance is outperformed by its reference index," said Putut.
For example, the BNI-AM IDX High Dividend 20 Class I1 Index recorded a return of 10.07% and the BNI-AM IDX Growth30 Class I2 Index of 6.83% throughout 2023. Meanwhile, IDX High Dividend 20 and IDX Growth30 were the The respective reference indices only recorded returns of 3.37% and 1.45%.
Putut estimates that BNI-AM index mutual funds have the potential to continue to record positive performance in 2024. Market volatility will still be a risk along with various global risks.
However, BNI-AM is confident that it can produce good performance in line with the index that is the product benchmark. The way to do this is by managing mutual funds as efficiently as possible, keeping the mutual fund weight allocation as similar as possible to the allocation in the reference index, and rebalancing the underlying in the portfolio every quarter according to the reference index.
