E&R Indonesia Reaches New High While MCAP Indonesia Stagnates

We are bullish on Indonesia for the next decade. Despite being one of the worst-performing emerging markets, Indonesia continues to stagnate for more than a decade. The MSCI Indonesia has delivered only 3.8% annualized returns since 1994. MSCI Indexes, which are based on the MCAP indexing methodology, are biased towards winners and concentrated in a few stocks. If you examine MSCI Indonesia, you might become hopeless regarding the emergence of Indonesia. This is the result of basing Index Funds and ETFs on an 1871 methodology that has consistently failed indexing tests, leading to lagging signals.

AlphaBlock’s 3N methodology, which powers the Exceptional & Rich Indexes, does not suffer from the weight obsession of MCAP nor from the drag when large companies stagnate and pull down the entire market. Since its inception, the E&R Indonesia Indexes have emerged from its slumber, delivering 14.85% annualized excess returns since January 2022 and reaching a new high for the period. Nothing stagnates forever; when you avoid the MCAP drag, the pitfalls of poor recovery and concentration, the alpha becomes yours to claim. In the table below you can see the significant alpha E&R has created compared to its MCAP counterpart, all with negative excess volatility and tracking error under 10%.

Join the Future of Investing:

By choosing AlphaBlock, you’re not just embracing innovative wealth generation; you’re also embracing responsible and sustainable practices. Together, we can forge a brighter financial future for both you and the planet. Take the next step in your investment journey—contact AlphaBlock today and become a part of the revolution. Unlock alpha. Embrace the future. Choose AlphaBlock.

Check out the Exceptional & Rich Smart Beta codebase, simulations, validations, research and a lot more on our Github Sandbox.

Check out our research library.