Currency Exchange Rate Volatility as a Moderating Effect of the Gold and Coal Price Against Fund Age and Mutual Fund in Indonesia

Azis Musdalifah, Hidayati Tetra (), Abidin Zainal and Jaafar Muhamad Sukor
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Azis Musdalifah: Universitas Mulawarman, Faculty of Economics and Business, Department of Management, Indonesia
Hidayati Tetra: Universitas Mulawarman, Faculty of Economics and Business, Department of Management, Indonesia
Abidin Zainal: Universitas Mulawarman, Faculty of Economics and Business, Department of Management, Indonesia
Jaafar Muhamad Sukor: UiTM Malaysia, Faculty of Business and Management, Malaysia

Economics, 2024, vol. 12, issue 3, 257-278

Abstract: Shifts in gold and coal prices have a crucial impact on the macro economy, especially investment growth. On a financial scale, there is still little discussion of the relationship between gold and coal prices and stock mutual funds. Also, the role of exchange rates and interest rates in moderating this relationship has not been examined. This research reviews the performance of exchange-traded funds (ETFs) in the scope of fund age and Indonesian stock mutual funds which are influenced by gold and coal prices with the moderating effect of interest rates and exchange rates. Core data was obtained from 20 companies as mutual fund owners officially registered with the Financial Services Authority (OJK) throughout 2019–2022. By operating Moderated Regression Analysis (MRA) into SmartPLS 4, there are interactions between prices and exchange rates, prices and interest rates, and prices and gold prices. As with the relationship between the age of ETF mutual funds traded on the Indonesian Stock Exchange (IDX) and the gold price, these two variables have a strong and positive correlation. This implies that relatively small changes in gold prices over the monitoring period may impact the fund age ETF. This positive association shows that an ETF investment can have its life extended by a relatively small increase in gold prices. This research indicates a strong causality, which improves the ETF’s performance on the IDX as fund age rises. Furthermore, the second model examines how fund age, gold, and coal have a direct impact on ETF mutual fund performance. It also looks closely at how indirectly coal, gold, and fund age affect ETF performance. The age of the fund, gold, coal, and exchange rates affect the performance of ETFs. While the effect is not statistically significant, interest rates, gold, coal, and fund age have a beneficial impact on ETF performance. Implications for policy makers to monitor and re-evaluate commodity price fluctuations using mining production regulation scenarios that are balanced with quality. Weaknesses of the current study such as the observation period need to be taken into consideration in future research.

Keywords: coal price; gold price; fund age; exchange traded funds (search for similar items in EconPapers)
JEL-codes: B17 G32 Q41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:econom:v:12:y:2024:i:3:p:257-278:n:1016

DOI: 10.2478/eoik-2024-0041

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