Can Mutual Funds Lose Money? Why Is My Mutual Fund Going Down?
Yes, mutual funds can lose money. A fund's price, its NAB per unit, moves with the market value of the stocks, bonds and other instruments it holds, so when those prices fall, the NAB falls too, and no type of mutual fund guarantees returns. Your fund is going down because the value of what it holds has dropped, which can be driven by a falling stock market, rising interest rates that push bond prices down, government economic policy, the country's economic conditions or, for USD funds, the exchange rate. A loss only becomes real when you sell: if you sell while the NAB is below your average purchase price, you get back less than you paid. The Profit or Loss Estimation on the fund's asset page in the Pluang app shows what you would gain or lose if you sold now. Some apparent changes come from timing instead, because the NAB updates only once a day and a new purchase is priced at an estimate until it is verified.
Common reasons a mutual fund's value goes down
| Reason | What happens |
|---|---|
| Falling stock prices | Equity and balanced funds hold stocks, so a stock market fall lowers their NAB. |
| Rising interest rates | Bond prices generally fall when interest rates rise, which lowers the NAB of fixed income and balanced funds. |
| Economic conditions and policy | Government economic policy, the country's economic conditions and the gap between demand and supply affect the value of a fund's assets. |
| Exchange rate (USD funds) | A weaker US dollar lowers the rupiah value of a USD fund's units. |
| Dividend distribution | A fund's NAB per unit generally falls after it distributes a dividend, because that amount leaves the fund. On Pluang, dividends are paid as additional units, so check your Number of Units. |
| Timing of the price | The NAB updates once per exchange trading day, between 21:00 and 24:00 WIB, and a new purchase uses the previous trading day's NAB as an estimate until it is verified. |
How your profit or loss is estimated
- Formula: Profit or Loss Estimation = (today's midday price − your average purchase price) × the units you own.
- Example: With an average purchase price of Rp1,300, a midday price today of Rp1,250 and 2,000 units, the estimate is (Rp1,250 − Rp1,300) × 2,000 = −Rp100,000.
- Estimate only: An actual sale is priced at the NAB of the trading day set by the 13:00 WIB cut-off time.
- Fund costs: Already included in the NAB, so they are not deducted from your holding as a separate charge.
What you can do
- Check the fund: Open its asset page for its Risk Level and Max Drawdown 1Y, and read its Fund Fact Sheet to compare its performance with a benchmark and with similar funds over several periods.
- Keep holding: Your units stay in your account, and their value can rise or fall further.
- Sell: From Portfolio, choose the fund and tap Sell (minimum Rp100,000). Proceeds reach your registered mutual fund bank account within a maximum of 7 business days. Step-by-step guide: "Cara Menjual Reksa Dana".
- Switch: Move to another fund from the same investment manager, free of charge, for example a lower-risk type. USD mutual funds cannot be switched yet.
- Your choice: Which option suits you depends on your goals, horizon and risk tolerance. Past performance does not guarantee future returns.
Related questions:
Q: Can a money market fund lose money or go down?
Yes. A money market fund holds short-term instruments and carries the lowest risk of the four mutual fund types, but its NAB per unit is not guaranteed and can still dip when the value of those instruments falls. Lower risk means smaller expected swings, not a promise that the value only rises. Compare its return with bank deposit interest over several periods rather than judging it on a single day.
Q: Is my money gone if my mutual fund is showing a minus?
No. A mutual fund can show a loss on paper without your money being gone. As long as you have not sold, you still own the same number of units, and a loss on paper only becomes a realised loss when you sell below your average purchase price. The fund's NAB can recover, but it can also fall further, and there is no guarantee either way. The Profit or Loss Estimation on the asset page shows what you would gain or lose if you sold at today's price.
Q: Why does my mutual fund look lower right after I bought it?
Usually because of timing. When you buy, the app shows the previous trading day's NAB as an estimate, and your final NAB is set only after the transaction is verified. The NAB itself updates once per trading day, between 21:00 and 24:00 WIB. Until the purchase is completed, it appears under On Going Purchase and Transaction in Progress rather than in your Number of Units.
Q: Why did my fund's NAB drop after a dividend?
When a fund distributes a dividend, that amount is paid out of the fund's assets, so its NAB per unit generally falls by a similar amount. On Pluang, mutual fund dividends are paid as additional units of the same fund, added to your holding no later than one day after the payment date, so your Number of Units increases. You can see the dividend as a "Buy" entry in the fund's Transaction History.
Q: Why can a fixed income mutual fund go into the minus?
Because a fixed income fund invests mainly in debt securities such as bonds, and bond prices generally fall when interest rates rise. When the bonds it holds lose value, its NAB per unit falls too, so your holding can drop below your average purchase price and show a minus. Its bonds often have longer maturities than a money market fund's instruments, which is why its NAB reacts more to interest rate changes. To judge the fall, compare the fund with the bond index it uses as its benchmark, shown in its Fund Fact Sheet, over several periods.