US Dollar Strengthens, Investors Turn to AI-Based USD Mutual Funds
The strengthening of the US Dollar against the Rupiah has recently become a primary focus for investors. Amidst global market dynamics, many market participants are seeking US Dollar-based investment instruments as part of a portfolio diversification strategy.
USD-denominated fixed-income mutual funds have become an option for Indonesian investors seeking stability from fixed-income instruments. However, investors can now access opportunities for higher performance through a ‘booster’ from US equities. Furthermore, the integration of artificial intelligence (AI) technology can optimise mutual fund returns while providing a more measurable approach to risk management.
This opportunity for portfolio flexibility is found in the STAR Fixed Income NEO AI Dollar, a USD-denomlaninated fixed-income mutual fund that combines a defensive approach with measured growth opportunities. As a fixed-income fund, the majority of the STAR Fixed Income NEO AI Dollar portfolio is placed in fixed-income instruments to maintain its relatively defensive character. However, the product also includes an allocation to US equities with a maximum proportion of up to 15% of the portfolio. This US equity exposure is intended to act as a potential performance booster amidst global market momentum, particularly when technology stocks show strength.
This strategy provides a more flexible approach compared to conventional fixed-income mutual funds, which generally focus solely on bonds. Nevertheless, investors must understand that US equity exposure carries a higher risk of fluctuation. Global stock market movements can be influenced by various factors, ranging from Federal Reserve interest rate policies and US inflation to global economic conditions and sentiment towards the technology sector. Therefore, the equity portion in the portfolio is kept limited to ensure the product’s risk profile remains measurable.
In terms of performance, the STAR Fixed Income NEO AI Dollar recorded an increase of approximately 3.35% over the last month (as of 13 May 2026, according to Bareksa data). Since its launch, the Net Asset Value (NAV) per unit has been around US$1.0241, representing an increase of approximately 2.41% (period 7 January - 13 May 2026). When viewed in Rupiah, following the 1.93% appreciation of the US Dollar, the performance of this fund reached 5.28% in a single month.
The fund employs a tactical portfolio strategy, balancing bond stability with equity boosters. The core portfolio consists primarily of fixed-income instruments, specifically US Dollar-denominated Indonesian government bonds (INDOIS). Approximately 70% of assets are placed in the INDOIS 4.5% 12/01/30 series, serving as a stable foundation for medium-term returns. Over the past year, the volatility of INDOIS bond prices has remained relatively controlled, staying within a 3% fluctuation range, helping to maintain a more defensive risk profile compared to pure equity instruments.
On the other hand, the product maintains a tactical exposure to US equities of around 10–15% during ‘risk-on’ global market conditions. Conversely, when AI models detect a shift towards ‘risk-off’ sentiment, the equity weight can be reduced to below 5% to help mitigate downside risk. This strategy ensures the fund does not rely solely on carry and bond stability but also possesses the potential for additional returns from global equity market momentum.
As of the Fund Fact Sheet dated 30 April, the selected equity themes focus on high-quality global companies with exposure to the technology, AI, and defensive economic sectors. Holdings such as Alphabet, Micron, and Western Digital represent growth themes in technology, data centres, and the structural demand for data storage. Meanwhile, Exxon Mobil and Johnson & Johnson provide exposure to the energy and healthcare sectors, offering defensive balance amidst global market dynamics.
In today’s rapidly changing global market, information regarding inflation, central bank policies, geopolitics, and technology company earnings can impact markets almost instantly. Consequently, investment analysis processes must become increasingly fast and adaptive. Some investment managers have begun utilising artificial intelligence (AI) as an analytical tool. For instance, AI can provide signals based on specific parameters determined by investment managers to assist in portfolio management.
In the STAR Fixed Income NEO AI Dollar fund, AI is used to assist in data processing and to accelerate the screening process of various market information. This technology also helps in identifying investment opportunities and risks across various global instruments. Despite the use of AI, investment decisions are still made by the investment management team at STAR Asset Management; the AI serves as a supporting tool for the analysis and decision-making process.