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Tuesday, November 3, 2009

Return of 71 equity fund declined: Investors recommended starting buying investment product


as published in Bisnis Indonesia daily
Selasa, 03/11/2009 00:00 WIB

Return of 71 equity fund declined
Investors recommended starting buying investment product

JAKARTA: Some 71 equity funds booked the average return drop of 4.89 percent in October or higher than the plummet of Jakarta Composite Index (JCI) of 4.45 percent.

JCI on October 1, 2009, was on the level of 2,477.97 and declined 4.45 percent into 2,367.70 per October 30.

Amidst the falling participating units of mutual fund value due to the stock price drop which becomes the investment product portfolio, some investment managers recommended investors with long term investment horizon to buy mutual fund.

President Director of PT Fortis Investments Eko Priyo Pratomo said when the capital market condition is fluctuating like now, investor conversely enters and buys investment instruments when the price is low.

"Particularly for new investor, it'd better for them to play with mixed mutual fund which provide quite significant return and could maintain the falling price on the plummet," he said to press last week.

Director of PT Paramitra Alfa Sekuritas Ukie Jaya Mahendra said the investors needs no worry about the performance drop last month as mutal fund performance could not simply be seen from a month performance.

Daily data of mutual fund from Bisnis in October shows the Paramitra Premium, Makinta Mantap, Batasa Equity Syariah, BNI Dana Berkembang, and Jakarta Blue Chip booked the largest drop among the similar mutual funds.

Paramitra Premium booked negative return of 17.58 percent, Makinta Mantap 14.66 percent as from early October.

Investors are recommended to buy mutual fund unit with the assumption of better capital market.

"Optimistically this will be the beginning of next bullish trend, and it is time to buy."

Ukie said comparing to the return of April of about 79 percent a month, he was optimistic that the mutual fund here could provide returns amidst the better capital market this year.

Eko said for the new investors with long term investment horizon are recommended to buy mixed mutual funds product noting that the stock price drop will be limited by the bond portfolio which has more price resistance than stocks.

Based on data of the Finance Minister Debt Management directorate general, government bonds ownership of the investment managers October 2-30, 2009 increased IDR3 trillion from IDR42.21 trillion into IDR44.21 trillion.

Stock investment instrument as part of the portfolio could provide lucrative return to the investors when there is bullish pricing.

"So, there will be no missing momentum of the price drop or rise."

For investors with long term investment horizon, investors could opt for dollar cost averaging (DCA) method prioritizing periodical investment with fixed amount.

So, investor buys mutual fund once in large amount and continues to buy at standardized amount in fixed and discipline ways so that it would not miss the chance when the market is bullish or bearish.

Manager Mutual Fund Sales of PT Schroder Investment Management Indonesia Liza Lavina said mixed mutual fund with almost balance combination could help new investors to start their investment at capital market.

"Let alone when the condition is still unstable and unpredictable such as the current situation."

Liza said to prevent from investment risk investors should diversify their mutual fund product.
"Investors could adjust the product by adapting to the investment horizon." (Bisnis/21/rni)

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