Abstract
This study aims to determine whether conventional money market mutual funds perform better than sharia money market mutual funds or vice versa during the COVID-19 pandemic in Indonesia. This research method is descriptive with a quantitative comparison approach. This study employed secondary data obtained from IDX, Indonesian Bank, and Pasar Dana website. The research employed the money market mutual funds data, Net Asset Value, BI 7 Days Repo rate during year 2020. Sharpe ratio utilized in this research to determine the money market mutual funds performance. Then, the result compared by using Independent sample T-test on SPSS. The result uncovers that in general the performance of conventional money market mutual funds performance superior the sharia money market mutual funds performance during covid-19 in Indonesia. However, both mutual funds average Sharpe ratio show the negative number during 2020. Moreover, there are no significant difference between conventional and sharia money market mutual funds returns during the period 2020. The high different return on the maximum return due to some conventional mutual fund perform exceptional during 2020.
Highlights
Modern society is currently starting to invest to meet their needs
For prospective investors who do not have sufficient funds to invest in the capital market, one alternative that can be done is to invest in mutual funds
The steps taken in analyzing the performance of mutual funds using the Sharpe method are as follows: 1) Collecting the return on each mutual fund; 2) determining the standard deviation of mutual fund returns; 3) determine risk-free investment returns; 4) calculating the money market mutual fund performance by using Sharpe method; 5) Performing a different T-test on the value of the Sharpe ratio; and 6) Analyzing the results of the tests
Summary
A wide variety of alternatives are available for investors to invest their money in. In addition to investing in bank deposits and tangible investments such as gold, investors can invest in the capital market. For prospective investors who do not have sufficient funds to invest in the capital market, one alternative that can be done is to invest in mutual funds. Mutual funds are an alternative investment for the beginner investor community. An investment manager will assist the transaction process, suitable for investors who lack the time and expertise to invest in mutual fund instruments. The ongoing COVID-19 pandemic situation around the world affects world economic conditions. Global investors choose to sell risky assets, and their funds are placed in the safer instrument during the covid-19 pandemic (CNN, 2020). Investors prefer to place their funds in money market mutual funds and mixed mutual funds
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