Indonesian stock fund manager Agus Yanuar has trounced his peers and the Jakarta Composite Index over the past year by riding a rebound in commodity prices. Now, the chief investment officer at PT Samuel Aset Manajemen says heâ€™s sticking to his guns.
Yanuarâ€™s SAM Indonesian Equity Fund has returned 39 percent in 12 months, more than double its closest rival and beating a 12 percent advance in the JCI. With coal, metal and palm
oil priced in dollars and much of the costs of Indonesian producers in rupiah, theyâ€™ve benefited from both the rally in commodities and the strengthening US currency.
Theyâ€™re likely to continue to do well whether or not US President Donald Trump disrupts global trade, according to Yanuar. If Trump cuts taxes and builds infrastructure that will boost the dollar, while if heâ€™s more protectionist and aggressive in his foreign policy that will increase geopolitical risk, lifting the price of oil and other raw materials, he said in an interview in Jakarta.
â€œWhatever the outcome, commodities remain the rational choice,â€ said Yanuar. â€œWeâ€™ll keep overweighting commodities on the back of higher prices and expectations for a stronger dollar.â€
The Bloomberg Commodity Index has risen 21 percent from a record low in January 2016, while coal has climbed around 90 percent in 12 months. Thatâ€™s helped drive a 77 percent gain in the Jakarta Mining Index, which is dominated by coal companies.
Based on historical trends, the current rally in raw-material prices will probably continue for at least another year, said Yanuar. Mining stocks make up around 27 percent of his portfolio at the moment and agricultural shares around 3 percent, he said. Yanuar said he would add to his holdings of these equities and also focus on some more general defensive stocks.
Adaro, United Tractors and Telekom are among Yanuarâ€™s five biggest individual holdings, along with PT Astra International, an auto to plantations conglomerate, and instant noodle-maker PT Indofood Sukses Makmur. His 2.5 trillion rupiah ($188 million) SAM Indonesian fund is more than 80 percent equities, with the rest cash and money-market instruments.