Effect of Consumer Confidence Index, Interest Rate, Stock Market Composite Index, and Inflation on the Net Asset Value of Indonesian Mutual Funds

Abstract

The growth of the mutual fund industry will continue to grow positively in line with the condition of the national economy, which is starting to recover from the crisis caused by the pandemic. It is essential to study the factors that influence this phenomenal growth to carry out risk mitigation. This research focuses on the factors that affect the NAV fluctuation by considering macroeconomic dimensions such as the consumer confidence index, interest rates, the stock market composite indexes, and inflation as independent variables. The study uses monthly time series data with the period from January 2013 to December 2020. The VAR model performed in the study proved that only the Composite Stock Price Index variable in the previous month significantly affects the Net Asset Value prices in the short- term. The impulse response function also confirms a strong relationship. The Composite Stock Price Index can influence the fluctuations to the Net Asset Value of Indonesia mutual funds. The composite stock price index can be used as a particular consideration when assessing the Indonesian mutual funds.

Keywords: Mutual Funds; Consumer Confidence Index; Interest rate; stock market composite indexes, mutual funds

DOI: 10.7176/EJBM/13-21-01

Publication date: November 30^th 2021