Garuda Satu mutual fund to target retail investors

JAKARTA (JP): Gunawan Jusuf, the managing director of PT Makindo Securities, said Saturday he was upbeat the Garuda Satu mutual fund would attract individual investors.

He said that the open-end mutual fund launched by Makindo's subsidiary PT Intru Nusantara, was designed to tap retail investors.

Gunawan said the Garuda Satu fund was expected to generate around Rp 1 trillion (US$422 million) from the public in two years and so far PT Intru Nusantara, the fund's management company, had collected around Rp 220 billion from the public.

Around 95 percent of investors in Garuda Satu were retail investors and the remaining 5 percent were institutions.

"We really want 99 percent of investors to be retail investors," he said.

Agus Dharma, president of PT Intru Nusa, said around 75 percent of Garuda Satu would be invested in fixed income instruments and 25 percent in equity.

Mutual funds are often more attractive to retail investors as they are less risky than equity investments.

"The investors do not need to think about how to manage the investment because the fund managers will take care of it," said an analyst from a joint venture securities firm.

In addition, most mutual funds in Indonesia invest the bulk of their funds in fixed income securities such as bonds and certificates of deposit.

Fixed income instruments are generally the most preferred investment instruments for their relatively high returns.

Of the current total of Rp 3.4 trillion funds managed by the management companies here, around 80 percent are invested in fixed income instrument and 20 percent in stocks, he said. (09)