Greetings,

In March our Cash Fund (CF), and Cash Fund Syariah (CFS) outperformed. Read our full investor update here.

‍What You Need to Know

  1. The JCI rebounded by 3.8%, attributed largely to blue-chip and a number of large-cap stocks. However, plaguing domestic issues relatively muted the rebound from February’s significant outflows. Therefore, our conviction towards companies with strong domestic fundamentals and attractively valued blue-chip stocks determined our equity strategy.
  2. Government Bond yields were volatile, increasing to 7.00%. Rupiah remained relatively stable while foreign investors added holdings. As the yield spread tightens, we continue to favor mid-tenor bonds, which offer attractive current yields.
  3. In the U.S., February’s core PCE inflation rose to 2.8%, beating expectations. However, we believe April’s CPI reading should give us more clarity on Trump’s tariff impacts before any rate-related decisions.
  4. Trump’s April reciprocal tariff announcement turned out to be the global markets’ worst-case scenario. As a result, US Treasury (UST) long-term yields increased to a YTD high. Fears revolving around re-inflation startled market participants (i.e. China and/or Japan), which likely triggered a selloff. If a selloff continues, we see signs of a broader shift away from US investments.

📊 What This Means for Our Portfolio

  • In Fixed Income, maintain our duration target and aim to be fully invested by focusing on short-to-medium bonds with high current yields to capture better accrued interest. We believe there is a more favorable risk-reward balance in mid-tenor yields.
  • In Equities, we are exploring greater exposure to domestic-focused businesses, given uncertain global macro conditions for equities. Our emphasis on attractively valued companies proved beneficial against momentum in February. We may increase momentum holdings upon improved flows. Our strategy favors domestic stability over volatile external sentiment.

Access the English version of the full report here.

Access the Indonesian version of the full report here.