THE APPLICATION OF DIVIDEND YIELD-BASED INVESTMENT STRATEGY IN THE INDONESIA STOCK EXCHANGE (CASE STUDY OF IDX HIGH DIVIDEND 20 FOR THE PERIOD 2018-2022)
The growth of the stock market in Indonesia has been rapid, and with the country's improved investment rating by companies like Moody's and S&P, it has become an attractive option for investors worldwide. In 2017, 1.1 million investors counted based on KSEI, in 2022 5 years later it ju...
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| Format: | Theses |
| Language: | Indonesia |
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| Online Access: | https://digilib.itb.ac.id/gdl/view/74415 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | The growth of the stock market in Indonesia has been rapid, and with the country's improved investment rating by companies like Moody's and S&P, it has become an attractive option for investors worldwide. In 2017, 1.1 million investors counted based on KSEI, in 2022 5 years later it jumped into 10.3 million investors. To maximize their portfolios, investors seek simple and applicable investment strategies. One such strategy, based on dividend yield, is gaining popularity in the United States but remains underutilized in Indonesia.
This final project aims to analyze the application of dividend yield-based investment strategies on the Indonesian stock exchange, particularly in the IDX High Dividend 20 stock index, to determine if it can produce results similar to the Dow Jones stock index. Historical data from 2018 to 2022 on IDX High Dividend 20 stocks, including closing prices at the end of the year and annual dividends, were used to calculate dividend yield and form a portfolio consisting of the top 10 stocks with the highest yield. This approach is called The Dogs of the Dow, where in this research, the other variants of the Dog of the Dows such as Dog of the Dows X (Dow 7), Top Low 5 (Dow 5), Top Low 4 (Dow 4), and Fund allocation 4 (Foolish 4) were utilized.
Results show that dividend yield-based investment strategies can outperform the market (IHSG), with DOW 4 and Foolish 4 Variance are the best performer based on the Sharpe ratio. The dividend yield-based investment strategies are simple to apply and can provide high performance, making them a profitable option for investors. This research could also attract investment companies to offer products based on this strategy, and individual investors can maximize their profits by developing their portfolios using this approach.
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