Monthly Investor Update June 2026
June 2026 market update from Simpan Asset Management covering market highlights, fund performance, portfolio positioning, and key investment trades.
June was another challenging month for Indonesian financial markets. The IHSG declined 7.90%, extending its year-to-date decline to 27.88%, while foreign investors recorded approximately Rp30 trillion in net outflows from Indonesian equities. Persistent concerns over fiscal policy, capital outflows, and Rupiah weakness continued to weigh on investor sentiment.
Despite the difficult backdrop, several important developments during the month have begun to reshape the investment outlook.
Market Highlights
Indonesia Retains Emerging Market Status
A major positive development came on 24 June, when MSCI confirmed that Indonesia will retain its Emerging Market classification. This removes a key structural overhang that has weighed on foreign investor sentiment since the beginning of the year and reduces the risk of further passive outflows linked to index reclassification.
Fiscal Discipline Shows Early Progress
The government’s discussions to reduce budget allocations for the Free Nutritious Meal (MBG) and Village Cooperative (Kopdes) programs represent an encouraging first step toward strengthening fiscal discipline. While policy execution remains important, markets generally viewed this development positively.
Macroeconomic Pressures Continue
Indonesia recorded its first monthly trade deficit in six years, driven primarily by higher oil and gas import costs and softer export revenues following April’s tariff-related frontloading.
Meanwhile, continued foreign capital outflows kept pressure on the Rupiah, leading Bank Indonesia to raise the BI Rate by 50 basis points to 5.75%. This marked the second consecutive rate hike and resulted in higher government bond yields across the curve, particularly in shorter maturities.
How Did Simpan Funds Perform?
June remained a difficult month for risk assets.
Our equity-oriented funds continued to face pressure alongside the broader market correction. Simpan Sustainable Equity Fund and Simpan Balanced Fund underperformed their respective benchmarks during the month as equity markets experienced sustained foreign selling and heightened volatility.
Within fixed income, rising interest rates weighed on bond prices, resulting in negative monthly performance for Simpan Bond Fund. While higher yields create short-term price pressure, they also improve future income opportunities for long-term investors.
Our Money Market Funds remained resilient, delivering steady positive returns and continuing to outperform their benchmarks over longer investment horizons.
Across our Actively Managed Portfolio (AMP) strategies, Risk Levels 2 through 5 continued to outperform their benchmarks on both a three-month and since-inception basis, reflecting the long-term benefits of active asset allocation despite recent market volatility.
Market Outlook & Portfolio Positioning
While market volatility may continue in the near term, we remain cautiously constructive on Indonesian markets.
With the MSCI uncertainty now resolved and the IHSG trading at approximately 14.5x P/E—levels comparable to the COVID-era market lows—we believe much of the negative sentiment has already been reflected in current valuations.
During June, we increased equity allocations across AMP Risk Levels 2 through 5, reflecting our view that market valuations have become increasingly attractive following the sharp correction.
For Risk Level 1, we continued rotating allocations from cash into fixed income as rising government bond yields have made short-to-medium tenor bonds increasingly attractive relative to money market instruments.
Looking ahead, we continue to monitor several important market catalysts, including:
The upcoming S&P sovereign outlook decision.
The direction of the USD/IDR exchange rate.
Indonesia’s current account developments.
Corporate earnings for the second quarter.
These factors will help determine whether investor confidence begins to recover during the second half of the year.
Key Trades This Month
Equities
We re-entered Adaro Andalan Indonesia (AADI) following greater policy clarity surrounding Indonesia’s commodity export framework. We believe the company combines attractive fundamentals, operational efficiency, and resilient earnings potential within a more stable regulatory environment.
At the same time, we reduced our position in XLSMART Telecom Sejahtera (EXCL). While the company’s fundamentals remain solid, limited near-term catalysts led us to reallocate capital toward opportunities offering a more attractive risk-reward profile.
Fixed Income
Our fixed income portfolios maintained an average duration of 5.43 years, slightly above the benchmark duration of 5.30 years.
As we enter July, we continue to take a measured approach toward duration positioning while selectively adding exposure to short-to-medium tenor government bonds, where higher yields have created increasingly attractive investment opportunities.
Thank you for your continued trust and confidence in Simpan Asset Management. As always, our investment team will continue actively monitoring market developments and positioning portfolios to navigate changing market conditions while staying focused on long-term investment objectives.