Economic fluctuations due to the pandemic still have a significant impact on Indonesia’s investment dynamics. The government stimulus in several countries, including Indonesia, has in fact not fully revitalise the economy. The US dollar value in the money market continues to fluctuate, and in turn affects commodity prices.
On the other hand, income from interest on savings and fixed deposits also shows stagnant trend. This is due to the interest rates reduction policy from the central banks of several countries. A lot of people are starting to look for other investment instruments to ensure regular income.
If you are considering new investment alternatives with significant benefits in the current pandemic, you can start investing in money market mutual funds. In addition to having a relatively small risk, investing in money market mutual funds gives you the convenience of asset management by experienced investment managers.
In general, mutual funds are investment products sourced from a pool of investor funds, which are then allocated into investments in various forms of portfolios such as stocks, bonds, money markets, or other securities. When you choose to invest through mutual funds, you don't have to manage your allocation, as the Investment Managers will do it for you.
Currently, there are several types of mutual fund investments, namely money market mutual funds, fixed income mutual funds, capital protected mutual funds, balanced mutual funds, index mutual funds (RDI), and equity funds. Money market mutual funds are investments which portfolio consists of high-quality short-term assets or less than one year.Money market mutual funds also have a stable profitability and are less affected by global economic conditions. So if you aim for short-term investment income, try to venture into money market mutual funds.
Why Money Market Mutual Funds?
For those of you who seek a relatively high investment return but with a low risk, investing in money market mutual funds can be a great choice. Investment Managers will usually place your funds in money market instruments that have high quality and liquid debt such as deposits, Bank Indonesia Certificates (SBI), or bonds.
The interesting thing about investing in money market mutual funds is that 100% of the funds you give to the Investment Manager are fully allocated into investments, leading to maximum profit. This is a safe way to invest in mutual funds. Diversification into several investment instruments can reduce investment risk.
Here are some benefits of money market mutual funds investments.
- Higher Yield
Investing through money market mutual funds offers relatively higher interest compared to fixed deposits and savings. This is based on the significant difference in profit from the value of the assets invested. The higher the increase in asset value, the higher the mutual fund profits can be.
This is different from investing through fixed deposits because the interest rate is set by the bank. The interest rate on fixed deposits has been set initially, so there will be no increase in profits. - Liquid
One of the advantages of investing in money market mutual funds is its liquid nature. You can withdraw your assets at any time without any penalty. This flexibility allows you to withdraw your funds or profits without having to wait for the maturity date as in the case of fixed deposits. Mutual funds holders can sell their holdings based on the net asset value price on the same day.Its liquid nature allows you to use money market mutual fund investments as additional emergency funds. Since it is only used in certain conditions, the potential for increasing assets is greater as the profits continue to grow.
- Flexible amount
You can freely decide the amount of investment fund, and you can still invest and participate in investments that may be available only to investors with larger funds because the funds you deposit into the Investment Manager will be managed simultaneously with funds from other investors.
What is even more beneficial is that the calculation of interest on money market mutual funds does not depend on the amount of fund. The return earned remains the same. - Safe and Transparent
Money market mutual funds are safe as it is regulated by the government. In addition, all mutual funds are required to report the same information to investors, so it is easier for investors to make comparisons between one another.
Money market mutual funds is also considered low-risk as it is managed by an investment manager who has a good portfolio to oversee the investment of funds. So that the level of security is higher and the risk is lower, you need to choose a trusted, professional investment manager registered with the Financial Services Authority (OJK).
You can also get the suite of benefits of investing in money market mutual funds through the UT Savings Plan investment facility from DBS Treasure. Here, your funds will be managed by professionals through diversified investments.
At least, you will experience three main benefits when investing in mutual funds through DBS Treasures, namely:
- Investment management by professionals
Investment options in DBS Treasures are managed by renowned Investment Managers to ensure optimal performance. - Gain insights to guide your investment strategy
- Reducing risk through diversification
Diversification to reduce risk in investing is needed, by spreading your fund allocation in various types of investment assets. So, if in certain cases an instrument shows decreasing return value, your funds can still grow through other investment instruments. At DBS Treasures, the Investment Manager will choose a trusted investment product with low risk for you.
DBS Treasures will proactively support you in developing an intuitive wealth management strategy. You will be assisted by a team of financial experts in planning asset management based on the latest market data. You can gain analysis of opportunities and market developments as early as possible through Daily Updates, monthly Market Updates, and eTalk Series webinars.
To support investors, DBS Treasures is supported by a reliable team of experts consisting of Market Intelligence, Data Scientist, Product Specialist, and certified Relationship Manager, who are dynamically working to sharpen your investment strategy. In addition, these experts are also supported by market data from the DBS Research Group to optimise your assets.
Moreover, for those of you who want to invest in money market mutual funds, digibank by DBS app makes it much more practical and easier, as part of continuous digital innovation so you can make the right move at the right time confidently.
