03 December 2024
Higher Yield
In November 2024, the global bond market experienced a correction driven by the U.S. election outcome and shifting expectations regarding Federal Reserve rate cuts. President-elect Trump plans to lower the corporate tax rate from 21% to 15%. However, these proposals could increase the deficit by $7.5 trillion over the next decade, pushing U.S. debt to 142% of GDP. Rising government debt led to higher bond yields, while investor optimism about future U.S. economic growth encouraged a shift from bonds to equities.
Additionally, stable macroeconomic data prompted the Federal Reserve chairman to signal a slower pace of rate cuts. The strengthening U.S. dollar put pressure on emerging market currencies, with the Indonesian Rupiah depreciating by about 5%. In response, Bank Indonesia maintained its benchmark rate and offered competitive SRBI rates to support Rupiah stability.
Emerging market bond yields, including Indonesian government Rupiah bonds, adjusted to the rise in U.S. Treasury yields. The yield spread between Indonesian government bonds (IndoGBs) and U.S. Treasuries stood at around 250 basis points. Recent bond issuance in Indonesia has been reduced as the government met its issuance target for the year. Pre-funding initiatives have also resulted in attractive yields, suggesting continued strong investor interest in Indonesian bonds.
Product Recommendation
| FIXED INCOME FUND | |
|---|---|
| MIDU | MIDU invests in Bond Instruments with a Medium-Term segment and is categorized as low to medium risk. Investors bear the risk associated with the Bond Portfolio. |
| IDAMAN | IDAMAN invests in Indonesian Government USD Bonds with a short duration and is categorized as medium risk. Investors bear the risk associated with the Bond Portfolio. |
| MIDO2 | MIDO2 invests in Indonesian Government Rupiah Bonds with a long duration and is categorized as high risk. Investors bear the risk associated with the Bond Portfolio. |
| BALANCED FUND | |
| MIA | MIA invests in Equities, Bonds and Money Market with Medium Term and categorized Medium Risk. Investors bear the risk associated with the equity portfolio. |
| MISB | MISB invests in Sharia Equities, Sukuk and Money Market Sharia with Medium Term and categorized Medium Risk. Investors bear the risk associated with the equity portfolio. |
For More Information
Contact Mandiri Investasi – (021) 526 3505
Mandiri Investasi Whatsapp – 0816 86 0003
Mandiri Investasi Email – [email protected]
Mandiri Investasi Website – www.mandiri-investasi.co.id
Moinves Website – www.moinves.co.id
DISCLAIMER
The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for individuals or specific mutual fund or investment products. It is intended solely to provide education about the financial industry. Views reflected in the content may change at any time without notice. All performance data and investment returns mentioned in this article cannot be used as a basis for calculation to buy or sell a mutual fund. This data is performance records based on historical data and is not a guarantee of future mutual fund performance. Investment through mutual funds carries risks. Investors are required to read and understand the prospectus before deciding to invest through mutual funds.
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