The Performance of Protected Mutual Funds in Indonesia During Covid-19 Period

Abstract

Mutual funds are considered the right choice for investors who have limited time, ability, and knowledge in calculating the risk of investing. The more widely disclosed information obtained is inseparable from the application of digital technology related to the marketing strategy of mutual fund products by investment managers. The net asset value of mutual funds until the end of 2019 can be achieved as much as 555 trillion rupiahs. In the last 20 years, total assets under management of mutual funds (AUM) have increased from 5.14 trillion rupiahs in 1999 to 543.76 trillion rupiahs in 2019, with the largest contributor to managed funds coming from protected funds with a total of 153.91 trillion rupiahs. Amid the Covid-19 pandemic, as of March 2020, the mutual fund industry experienced pressure as seen from the decline in AUM, followed by a decrease in participation units. The decrease in AUM occurred in al-most all mutual funds. However, the smallest reduction in AUM occurred in protected funds. Therefore, the protected mutual fund instrument is a preferred product compared to other mutual funds, especially fixed-income funds, because the worst-case scenario occurs only when bond issuing companies experience defaults. Through literature study, this research aims to determine whether protected mutual funds in Indonesia will continue to share an upward trend in the future even though the covid-19 period is not over. The likelihood that can occur is whether protected mutual funds will be outperformed or underperformed