Indonesia Bond Market and Outlook 2015-2016: The Silver Lining

Nearing the end of year, HSBC hosted a seminar on 2016 economic and capital market outlook on October 6th, 2015 at Hotel Mulia, Senayan, Jakarta Selatan. In the seminar titled “Indonesia Bond Market and Outlook 2015-2016: Silver Lining””, HSBC customers received exclusive updates and advices from  Arief Wana, as the Director of PT Ashmore Asset Management Indonesia and Destry Damayanti, as the member of Dewan Komisioner Lembaga Penjamin Simpanan (LPS). 

Other than discussing on the latest economic and capital market development in Indonesia, on this occasion, Ashmore also introduced their fixed income fund called Ashmore Dana Obligasi Nusantara (ADON) which has been officially distributed by HSBC Indonesia. Ashmore group is an asset management firm, with more than 20 years of experience, which focuses on investing in emerging market countries. ADON is a fixed income mutual fund which invested in Indonesia Government bond which denominated in Rupiah. Hence, investors are not exposed to exchange rate risk and fluctuations.

Ashmore Dana Obligasi Nusantara was launched in 24 April 2013 with multi-duration investment strategy. This active duration management is an advantage as the fund is more agile in adjusting to developments in market and economy. When investing in Government bonds (Obligasi Negara), duration is an important indicator as it indicates the aggressiveness of the fund’s investment strategy. Thus, Ashmore fixed income fund offers duration agility within your Government bond portfolio.

Several advantages by investing in fixed income fund rather than direct Government bond, i.e. lower minimum investment requirement in comparison to investing in direct Government bond (FR series), fund offers agility as it invests in multiple series of bonds rather than just investing in one bond series. Additionally, fixed income fund is also taxed lower (at 5%) rather than direct Government bond (at 15%). The tax calculation has been embedded into the Net Asset Value (NAV) or unit price published on daily basis and received by the customer.

As an investor, it is important to remember that no single asset class can always outperform the market or other investments. Investors has to be aware with recent market development and perform diversification within their investment portfolio. Be it direct Government bond or fixed income funds investing in Government bond give diversification benefit to the investors.

Haven’t had any investment diversification? Ashmore Dana Obligasi Nusantara may serve as an alternative to diversify your investment portfolio. Please do not hesitate to contact our HSBC Premier Relationship Manager or visit your nearest HSBC branch to obtain further information on one of HSBC wealth management solutions.