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Jakarta Post

Mandiri Investasi, DBS offer dollar-denominated sharia mutual fund

  • Yunindita Prasidya

    The Jakarta Post

Jakarta   /   Fri, September 25, 2020   /   08:21 am
Mandiri Investasi, DBS offer dollar-denominated sharia mutual fund An employee of a foreign exchange outlet in Jakarta shows US dollar banknotes on March 19. (Antara/Indrianto Eko Suwarso)

Fund manager PT Mandiri Manajemen Investasi (Mandiri Investasi) is partnering with Bank DBS Indonesia to offer dollar-denominated mutual fund Mandiri Global Sharia Equity Dollar (MGSED) as it aims to increase the total funds under its management. 

Alvin Pattisahusiwa, president director of Mandiri Investasi, a subsidiary of state-owned Bank Mandiri group, said the company expected to increase its assets under management (AUM) by US$100 million by the end of the year through the mutual fund. 

The product has been gaining traction in the market as Alvin reported that it had collected Rp 598 billion in AUM by the end of August, which had grown to Rp 1.1 trillion as of Sept. 22. 

“In terms of Mandiri Investasi’s total AUM, we are targeting for it to be around Rp 58 trillion by the end of 2020,” Alvin said during a virtual media briefing on Wednesday. As of August, Mandiri Investasi booked Rp 57.81 trillion in AUM. 

MGSED is an equity fund that invests in foreign sharia equity securities and focuses on investing in new economies which include the themes of digitization, financial evolution, feel-good businesses, healthcare innovation as well as energy revolution. 

Mandiri Investasi shifted its priority into investing into those emerging sectors in mid-2019 to better align itself with global technological disruption, which has seen new economy stocks outperform old economy stocks.

“Since last year, we saw an opportunity to invest in sectors that can create disruption to how we do businesses,” Alvin noted, adding that the equity fund consisted of 30 to 50 stocks of companies within those sectors. 

Almost 40 percent of the stocks are of companies within the sector of information technology, making up the biggest share of the portfolio. Consumer and healthcare stocks come second and third at 19.78 percent and 18.57 percent, respectively. 

Among its top holdings are American multinational tech company Apple Inc, American social media conglomerate Facebook and Chinese tech with a foothold in e-commerce and retail, Alibaba Group Holdings. 

The equity fund mostly invests in US-based companies, which account for almost 70 percent of its portfolio. Meanwhile, investment in Asian countries, European countries and others account for 16.2 percent, 11.25 percent and 4.2 percent, respectively.

“This product provides an option and opportunity for clients who want to diversify their wealth by placement in the global market,” Bank DBS Indonesia director of consumer banking Rudy Tandjung said during the media briefing. 

Bank DBS Indonesia targets sales of up to Rp 300 billion from the equity fund in the next 12 months, according to the bank’s head of unit trust and treasures private client product Mus Hidayat. So far, the bank has booked $6.7 million in sales. 

As of Aug. 31, MGSED has outperformed its index benchmark, the Dow Jones Islamic World (DJIW) index, as it recorded a return of 23.5 percent year-to-date (ytd), while the DJIW booked a return of 12.37 percent. 

“This trend is not a temporary trend. We believe that this will be sustained and will reconfigure the structure of the economy in the future,” Mus said. 

He explained that continuous growth would be supported by rapidly evolving technological innovation, demographic changes that saw a rise in the aging population and the middle class that will boost expenses in the care sector, and lastly, rising awareness of environmental concerns among consumers, which would drive a revolution in the energy sector. 

He expressed optimism that investors were now choosing mutual funds to grow their portfolio amid falling interest rates and greater access to information.