In February, Bond Fund (BF), Cash Fund (CF), and Cash Fund Syariah (CFS) outperformed.

What You Need to Know

  1. The JCI fell -11.8% in February, largely driven by foreign outflows from blue-chip stocks. Key factors behind the sell-off included MSCI index rebalancing, governance concerns surrounding Danantara (the state’s new sovereign wealth fund), deepening corruption scandals, and Trump’s escalating tariff policies.
  2. These pressures contributed to the Rupiah weakening to an all-time low against the USD. Despite the sharp decline, we view this correction as sentiment-driven, not reflective of underlying fundamentals.
  3. To stabilize the Rupiah, Bank Indonesia intervened by purchasing bonds in the secondary market, leading to a bond price rally. The 10-year government bond yield fell to 6.91% from 6.99%, after peaking at 7.06% earlier in the month. Despite a 2% Rupiah depreciation, foreign investors increased their holdings by Rp. 8.86 trillion, maintaining approximately 14% of total outstanding issuance.

What This Means for Your Portfolio

  • ‍Fixed Income: We reduced portfolio duration by selling longer-term bonds, focusing on high-yield opportunities to capture accrued interest. With better risk-reward in shorter-tenor yields, we are maintaining a conservative stance while monitoring further developments.
  • Equities: February’s market correction allowed us to increase exposure to quality blue chips at attractive valuations. We funded this by trimming defensive stocks and adopting a tactical approach to market volatility. Across our Balanced Funds, we have increased equity allocation, seizing opportunities in blue chips and momentum-driven stocks.

Access the English version of the full report here.

Access the Indonesian version of the full report here.