PT Ashmore Asset Management Indonesia Tbk (AAMI) recorded total assets under management at the end of March 2021, amounting to Rp34.97 trillion or a 9.4% decrease compared to the same period last year.

President Director of Ashmore Indonesia, Ronaldus Gandahusada, said that the decline in funds under management during the first quarter of this year was triggered by an outflow of funds of Rp2.6 trillion and a lower investment performance of around Rp1 trillion.

The majority of the outflow of funds came from fixed income which contributed nearly 80% of the total funds' outflow.

"Against the backdrop of strong market performance at the end of 2020, the end of profit-taking throughout this quarter is not surprising and especially with rising inflation expectations in the United States related to rising bond yields," he said in a report to the Exchange, Friday (16/4).

Ronaldus added that after experiencing a substantial increase in the last quarter of 2020, where the reference index for fixed income and stocks rose by 5.2% and 21.3%, respectively, investors took profit-taking actions during the three months ending in March 2021. The increased yields on global bonds and the strengthening of the United States dollar drove the profit takings.

During the quarter, the yield on Indonesian 10-year bonds increased by 89bp, while the Rupiah depreciated by 3.1% QoQ.

The Indonesian stock market did not change much even though the large-capitalization stocks represented by LQ45 experienced a 3.4% QoQ decline.

He assessed that, despite short-term market volatility, Ashmore Indonesia's managed funds are still in a much higher position than the previous year and are well-positioned to take advantage of global economic improvements and economic policy reforms in Indonesia.

"The combination of Bank Indonesia policies that support economic recovery, the establishment of a Sovereign Wealth Fund in the quarter, and improvement in financial literacy are positive indications for the future of the asset management industry in Indonesia," he said.