Several investment managers are creating more defensive mutual fund portfolios and selecting high dividend yield stocks to navigate the current global dynamics. Samuel Kesuma, CFA, Chief Investment Officer at PT Manulife Asset Management Indonesia (MAMI), forecasts that the market will remain volatile in the short term. Therefore, MAMI has adopted a more cautious strategy while observing global developments, focusing on companies with a domestic-oriented business model and solid growth potential.

"We maintain a relatively high cash level and take advantage of market corrections to add positions in leading stocks at lower prices," he said in an interview with Bisnis on Monday (May 5, 2025). MAMI’s preferred sectors for 2025 are financials and consumer goods. However, portfolio management is active, meaning the allocation of leading sectors could change based on market conditions.

MAMI’s flagship mutual fund product, Manulife Equity Fund (MDS), remains the top choice despite market pressures. As of March 2025, MDS reported a 19.04% year-on-year decline but still outperformed the benchmark, which fell 25.50%. Samuel advises investors to have a diversified and liquid portfolio in today’s dynamic market conditions to minimize risk and capitalize on opportunities. He also noted that the current valuation of the IHSG stock market is historically low, providing opportunities for long-term investors.

Meanwhile, Martin Aditya, Investment Analyst at Capital Asset Management, explained that in the midst of a volatile market, they also prefer sectors that are defensive and offer high dividend yields. However, he mentioned that they are also open to choosing high dividend yield stocks in mid-cap companies as there are many mid-cap stocks that also offer high yields besides large-cap stocks.

"Our focus for 2025 remains on defensive stocks [with less volatility] that offer high dividend yields," he said. This strategy may change if global conditions improve, especially if the Fed adopts a more dovish stance. "Investors might consider waiting and staying in low-risk, easily liquidated assets that offer competitive returns, like money market funds and fixed income," he added.

Investors can also gradually start investing in large-cap stocks like banks that are showing attractive valuations and dividend yields. Additionally, the IHSG’s price-to-earnings (P/E) ratio is now below the level seen during the Covid-19 pandemic.

This gives hope that BPJSTK and Danantara will soon enter the domestic capital markets, boosting liquidity. Martin projects that the IHSG at the end of 2025 will still be affected by global economic uncertainty, impacting the domestic economy, especially as the rupiah exchange rate has not fully recovered. "I believe the equity mutual fund index will likely continue to weaken in 2025 if the IHSG does not close above the 7,000 level," he said.