Performance of Equity Mutual Fund in Indonesia: The Effect of Mutual Fund and Macroeconomic Factors
- March 17, 2021
- Posted by: RSIS
- Categories: IJRSI, Management
International Journal of Research and Scientific Innovation (IJRSI) | Volume VIII, Issue II, February 2021 | ISSN 2321–2705
Performance of Equity Mutual Fund in Indonesia: The Effect of Mutual Fund and Macroeconomic Factors
Nurul Wahyuni Wulandari, Zaenal Arifin
Department of Management, Universitas Islam Indonesia
Abstract- This study examines the influence of mutual fund factors and macroeconomic factors on the performance of equity funds in Indonesia. This study uses fund size, expense ratio, turnover ratio, and market timing ability as mutual fund factors. Meanwhile, the macroeconomic factor use inflation, economic growth, and the money supply. Mutual fund performance is measured using actual return and Jensen alpha. The sample used in this study is equity funds listed on the Indonesia Stock Exchange (IDX) from June 2016 to May 2020. There are 53 equity mutual funds obtained as a sample. This study uses panel data regression to analyze data. The results showed that mutual fund factors and macroeconomic factors as a whole affect the performance of equity funds in Indonesia. Meanwhile, the test results for each variable show that the expense ratio, market timing ability, economic growth, and money supply have significant effects on the performance of equity funds in Indonesia. On the other side, fund size, turnover ratio, and inflation variables do not have a significant effect on the performance of equity funds in Indonesia.
Keywords- Equity Mutual Fund, Mutual Fund Factors, Macroeconomic Factors, Mutual Fund Performance
I. INTRODUCTION
Every investor needs to anticipate the uncertainty of the future. Risk and expected return are two variables that must be considered in investment activities (Simu, 2019). High expected returns will be followed by high risks.
Beginner investors face difficulty understanding the expected return and investment risk. Therefore, many beginner investors choose an easy and practical investment like mutual funds. Mutual funds are instruments used to collect public funds to be invested in securities portfolios by investment managers. Funds in mutual funds comes from investors, and the investment manager is the party entrusted to managing the fund.
Indonesia mutual fund performance was quite good from 2015 to 2019. However, in 2020, mutual funds experienced a decline in performance. Many factors influence the movement or fluctuation of mutual funds values. The following is the performance of Indonesian mutual funds:
