Mutual Funds Investment Strategy Based on Business Cycle in Indonesia

Investment condition in Indonesia gets better year by year. One of the most interested instruments in Indonesia is mutual funds, mostly conventional mutual funds. Investor put their money in a mutual funds with an expectation to get a maximum return. However, a mutual funds does not always perform well for every time frame. There is an economics or macro condition that affects the time frame of investment activities in one country. To figure out the macro circumstance in a country, it can be seen from the business cycle pattern. Authors use an average return data from mutual funds index in Indonesia to cover all mutual funds for each category; equity, balance, and fixed income. Then, all the data will be divided based on the business cycle phase to be analyzed. Finally, from those analysis will be made an optimal portfolio for each phase as the strategy. Authors find out that equity mutual funds is better both on expansion phase and proportional weight of equity and fixed-income funds is better for recession phase.

Autorentext

Wirata Adi Dharma,S.Mn, QWP. He is an alumni of School of Business and Management Bandung Institute of Technology. His got into management faculty with finance as the major concern. He has an interest especially in investment and capital market area. Further learning and research about this fields will be the main consideration.