, introduced Jan. 20.
Most investors didn’t realize this fund existed until a few weeks ago, when word got around that Indonesia has been one of the best-performing markets in 2009. The fund has rallied 69% since its inception, tripling the 22% gain of the Morgan Stanley Capital International EAFE Index.
Some analysts don’t think the run is over. JPMorgan Chase(JPM Quote) upgraded the country on May 18, advising clients to expand their holdings. The Asian country’s 4.4% gross domestic product growth in the first quarter lifted expectations. The resource-endowed country has benefited from more stable commodity prices.
The country, along with other Southeast Asian nations, learned a valuable lesson from the region’s financial crisis in the mid-1990s. Unlike developed nations that binged on debt, Indonesia has worked to reduce its government debt to GDP ratio. In 1999, government debt exploded to 100% of GDP from 25%. Since then, debt has declined to about 30% of GDP.
Presidential elections on July 8 should reinforce the nation’s development plans. President Susilo BambangYudhoyono’s Democrat Party won nearly 21% of the vote in parliamentary elections held in March, 50% higher than the next two parties.