Market Sell-Off: Panic or Opportunity?
As geopolitical tensions drive volatility, we break down where opportunities lie and how portfolios are positioned.
Dear Clients,
Over the Ramadan break, markets remained under pressure as geopolitical tensions in the Middle East continued to dominate headlines. Iran launched further missile attacks on Israel, even as President Donald Trump signaled efforts to initiate a peace plan to end the conflict.
These developments have driven further spikes in the oil market and continued volatility across equity markets, both globally and domestically. For investors, periods of market turmoil like this often prompt the question: what should I do with my portfolio: hold, buy the dip, or sell?
Volatility Can Create Opportunity
History shows that periods of heightened market stress often present compelling entry points. While sell-offs can feel uncomfortable, markets have typically recovered over time.
A recent example can be seen during the tariff-driven volatility in April last year. The VIX (volatility index) surged to around 50, reflecting elevated fear, and major U.S. indices fell to early-year lows. However, investors who stayed the course saw a strong rebound, with the S&P 500 eventually reaching new highs by year-end.
Where Are the Opportunities Today?
While the duration of the current conflict remains uncertain, certain sectors are showing resilience.
Since early 2026, our Investment Team at Simpan has anticipated a rise in geopolitical tensions and has taken necessary actions to position our portfolios accordingly. We have increased exposure to commodity-linked sectors especially coal, which tend to benefit from supply disruptions and rising resource prices, but have also been holding higher levels of cash.
Simpan’s Portfolio Positioning as of March 10, 2026
Our internal analysis of JCI sector performance across different oil price environments (since 2021) reinforces this view. When oil prices exceed USD 100 per barrel, the Energy sector has consistently emerged as the strongest performer across multiple time horizons. In the most recent cycle, the sector delivered approximately 29% forward returns over six months, highlighting its sensitivity to higher commodity prices.
Coal, in particular, remains a key area of focus. With Brent Crude Oil currently trading around USD $109 per barrel, inflationary pressures are rising—especially for oil-importing countries like Indonesia. As energy costs increase, demand for alternative sources such as coal tends to follow.
This trend is also reflected in market flows. In March, foreign investors recorded net outflows of approximately ~IDR 7.14T, largely concentrated in banking names such as BBCA, BBRI, BBNI, and BMRI. At the same time, inflows have been directed toward commodity-related stocks, including gold exposure (EMAS) and coal names such as AADI, ITMG, PTBA, and ADRO.
Portfolio Performance
As of March 27, our equity-oriented portfolios have declined on a year-to-date basis. However, they have still meaningfully outperformed the broader JCI, reflecting the effectiveness of our defensive positioning.
So, What Should You Do?
There is no simple answer. The trajectory and length of the conflict remains uncertain and beyond our control. What is within our control is our investment strategy and how we position portfolios in response.
For now, we recommend maintaining a cautious approach, holding a higher level of cash while gradually rotating into equities as opportunities arise. This allows investors to capture upside when the equity market recovers, without taking on too much risk as the situation is still evolving.
As we approach month-end, our AMP portfolios will undergo their scheduled rebalancing on the first trading day of April, incorporating recent market developments and our updated outlook.
For clients invested in AMP, we recommend staying invested and allowing our team to actively monitor the markets and manage the portfolio on your behalf. The updated allocation will be reflected in the Simpan app once the rebalancing is completed.