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Q: In lots of reference, mutual fund is said to give more profit or atleast equals as deposit. However, why do there is mutual fund's return that is smaller than deposit return? (esucipto2000 @yahoo.com)
A: If we see the history, the statement which said that "Mutual fund gives more return than banking instrument" was taken from historical record in offshores capital market, especially in US. The result is proven to happen again and accurate in bull market period and in a long period of time, above five years.
Mutual fund in Indonesia has a short history, it starts to begin in the medio of 96-97. Unfortunatelly, the newly established mutual fund industry was hit by bad economic crises in the end of 1997. As a result, the average of mutual fund return in that period was sharply decrease. As a result, investor's interest on mutual fund also decrease.
However, with the recovering Indonesian economy, Indonesian mutual fund starts to result in positive returns. So, the bad mutual fund in Indonesia is mostly contributed by the not conducive Indonesian macro economy. But along with the increasing economy, mutual fund will be a more interesting investment media than the conventional banking instruments.
(ws-fi/mh-tr) (R)
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