Asset Rotations Likely Ahead of Expected Rate Cuts

Aside from bets on rate cuts, expectations of a smooth election and favorable macroeconomics give investors more confidence in the capital market.

Rizqi Rajendra & Duwi Setiya Ariyanti

7 Feb 2024 - 19.47
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Asset Rotations Likely Ahead of Expected Rate Cuts

Illustration - Stock market.

Bisnis, JAKARTA — Asset rotation is projected to occur during the transition period to maximize portfolio performance in the financial market. The current high interest rates, which drive the increase in bond yields, will shift to a more bullish stock market, in line with expectations of rate cuts.

According to Beben Feri Wibowo, Head of Research Analyst at Pasardana.id, investors didn’t seem to be active in the market at the beginning of the year. However, he believes that transferring funds across various financial assets is inevitable in line with expectations of rate cuts starting soon.

“Reallocation from money market mutual funds to stock mutual funds and fixed income mutual funds is possible, and there may even be additional capital from deposits to income or stock mutual funds,” Feri told Bisnis on Tuesday (2/6/2024).

Aside from bets on rate cuts, expectations of a smooth election and favorable macroeconomics give investors more confidence in the capital market. Mutual funds may yield more returns from the positive stock market performance expectation.

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© Copyright 2024, Hak Cipta Dilindungi Undang - Undang.