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This section will discuss the actual asset allocation for each of the asset segments that
b. Liquidity of the individual equities or funds. Not all equities in Indonesian are
shares only. The risk otherwise would be that James once he wants to liquidate
analyzed through the current P/E ratio, and how this P/E ratio compares with
peers. Also some real analysis might be needed with regards to business
opportunity and market growth for the particular industry a company is operating
in and how well that particular company is positioned to take advantage of those
opportunities.
manager, as managing an equity portfolio would require James to define his own trading
strategy and/or execute is consistently. Also since he does not have any technical skills or
tools to monitor and make investment decisions, he’s more likely to make a higher return
on his investment despite the cost he has to pay for the service.
There is a number of quality fund manager operational in Jakarta that have equity fund
because ….
Consideration in the actual allocation of assets in the fixed income portfolio are
b. Liquidity of the individual bonds; some corporate bonds in Indonesia are highly
illiquid, which can be a concern unless the duration is fit to hold to maturity; if
this is not the case James might have a risk of not being able to sell the bond
quickly when needed. It needs to be remarked here that the illiquidity of bonds is
d. Credit risk of each individual bond, measured through the rating that is attached to
it by the local rating agencies. Since yields on corporate bonds in Indonesia are
already quite attractive, there seems no need to buy anything below investment
grade.
manager, as managing a bond portfolio might be hard due to the relative steep
requirement on minimum lot sizes on each particular bond, which might make it hard for
There is a number of quality fund manager operational in Jakarta that have bond fund
because ….
Property
and a concern would be that due to continued high volumes of construction that might
actually lead to oversupply there would be concern whether buying an apartment would
provide the optimal capital appreciation over time. A house and particularly ownership of
land in a strategically picked location will likely be more effective in that respect.
Foreign Equity
Consideration in the actual allocation of assets in the foreign equity portfolio are
g. Liquidity of the individual equities or funds. This will be less of a problem than it
is with the local equities, as the range of liquid foreign equities is much broader.
analyzed through the current P/E ratio, and how this P/E ratio compares with
peers. Also some real analysis might be needed with regards to business
opportunity and market growth for the particular industry a company is operating
in and how well that particular company is positioned to take advantage of those
opportunities.
manager, as managing an equity portfolio would require James to define his own trading
strategy and/or execute is consistently. Also since he does not have any technical skills or
tools to monitor and make investment decisions, he’s more likely to make a higher return
on his investment despite the cost he has to pay for the service.
There is a many quality fund manager operational in different territories that offer have
Cash
The cash and money market instruments are recommended to be invested in high
quality banks as well as in money market mutual funds. The money market mutual funds
offer the advantage that capital gains and interest income is exempted from withholding
tax, which is charged on deposits or money market instruments that are directly held be
an individual investor. For this reason investing through a mutual fund might give higher
expected returns.