JURNAL
Riset Akuntansi dan Keuangan Indonesia URL : http://journals.
id/index.
php/reaksi/index Stocks vs Mutual Funds in An Election Year:
Which is More Profitable? Leonny Noviyana Sakti Pamungkas1.
Anni Aryani2.
Doddy Setiawani3 Accounting Departement.
Faculty of Bussines and Economic.
University of Sebelas Maret
1,2,3
email: leonnynoviyana@student.
id1, y_anniaryani@staff.
id2, doddy.
setiawan@staff.
Keywords:
Volatility.
Political Event.
Market
Reaction
ABSTRACT
This study analyzes the reaction of stock markets and mutual funds to political events using a sample of 15 countries that held elections.
In general, we document the returns before and after the elections and use t-test to determine the effect and f-test to measure the volatility of both.
The results show that the short-term effect is significant for all mutual funds and only a few stocks are significant.
In addition, with the same conditions, it does not necessarily have the same impact on the two instruments.
However, we only found the shortterm impact.
While the explanation is not too clear, investors may want to observe the economic impact on stocks and mutual funds arising from longer time horizons.
A 2025 The Author.
This work licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 0 International License.
Vol.
10 No.
2 September 2025
JURNAL Riset Akuntansi dan Keuangan Indonesia
INTRODUCTION
We recently observed the reaction of financial markets to political events.
These events generate uncertainty that triggers concern among investors due to erratic market price movements(Kedia & Satpathy, 2.
Our observations found that politics triggers yield instability during such events (Changwatchai & Aumpon, 2024.
Upadhyaya et al.
However, whether investment instruments in financial markets have the same impact under the same conditions requires further research.
The emergence of price volatility due to political events is of particular concern among investors.
The decision to withdraw and add funds from or into such investment instruments is often influenced by the perception of risk and potential expected This will be considered by investors in determining the right strategy to minimize risk and take advantage of certain connectivity to become an opportunity amid unstable conditions (Hartwell & Zadorozhna, 2.
Not only that, but as a place where investors can choose a balanced and highquality portfolio (Fan et al.
, 2.
This concern raises the question of how the stock market and mutual funds react amid political uncertainty.
An in-depth analysis is required to determine the impact of politics on both instruments.
With a clear understanding of the differences in their volatility and resilience, investors can develop more effective investment strategies to overcome the political challenges and achieve their investment goals more optimally.
A look at the market reaction with political events will explain how investors react in case of external shocks.
To measure this, we use the event futures methodology by dividing it into short-term, medium-term and long-term.
After that, we use t-test to determine the I mpact after the event.
then use the f-test to compare the variance between pre- and post-election returns.
We take a total of 15 countries that held elections to determine the difference in impact and volatility between stocks and mutual funds.
There is an interesting pattern to the cumulative abnormal returns.
We observe volatility prior to the election, which indicates that investors have already felt the effects of the event.
We find different impacts of political events on returns.
Therefore, this study aims to look at the reaction of the stock Stock Vs MutualA p-ISSN:1411-6510 e-ISSN :2541-6111 market and mutual funds to political events.
This study uses the daily stock return formula combined with a t-test to measure the prices of stocks and mutual funds in 15 countries that hold elections.
The results of this study can provide insights into the volatility of stocks and mutual funds during political uncertainty, allowing them to develop more effective investment strategies and better manage risks.
LITERATURE REVIEW AND HYPOTHESIS
DEVELOPMENT
Prospect Theory Prospect Theory, developed by Daniel Kahneman and Amos Tversky, explains how investors make decisions under conditions of risk and uncertainty (Kumari et al.
, 2024.
Srinivasan & Karthikeyan, 2.
The theory suggests that investors are not always rational and are often affected by cognitive biases.
In the context of market volatility.
Prospect Theory is used to investigate the asymmetry in volatility used for decision-making under risk (Skoglund, 2.
During periods of political or economic uncertainty, such as election years, investors may be more reactive to bad news than good news, causing greater price fluctuations and increased volatility.
Impact Political Election Politics has an impact on financial market Kedia & Satpathy .
found that political uncertainty, such as elections, creates economic uncertainty that generates financial market volatility.
Volatility tends to overreact in the pre-election period and post-election shows a reversal (Benson & Kong, 2.
The post-election reversal reaction is a significant decrease in implied volatility (Shaikh, 2.
Therefore, some investors believe that elections are Bearish (Shaikh, 2.
, although some believe elections are Bullish.
The emergence of these price dynamics is referred to as the direct impact of political events (Volodin et , 2.
Baig et al.
also revealed in their research that political uncertainty is a factor in the high degree of price clustering.
Based on previous research, it shows a different impact on the influence of political events.
Studies conducted by Lehrer .
show that the impact of politics is very small on cumulative returns.
Balaji et p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia .
also revealed that political events have no significant effect on daily stock returns.
However, research conducted by Afnan et al.
found that political connections have a significant effect on inflation volatility and government instability reduces its volatility.
Therefore, further research is needed to better understand how the stock market and mutual funds react to political events.
Several studies have been conducted to determine the impact of politics on stock prices.
However, it is still rare to conduct research on mutual funds.
The purpose of this study focuses on the reaction of stocks and mutual funds in the political year by using daily returns, t test and F test.
By asking the question, how do stocks and mutual funds react in the face of political uncertainty during pre and post elections.
The hypothesis of this study is formulated as follows:
H01 : There is no significant impact of elections on stock and mutual fund returns.
H02 : All stocks and mutual funds have the same impact on pre- and post-election volatility whether significant or insignificant.
H1 : All or some stocks and mutual funds have a significant impact in either the short term or medium term or long term.
H2 : Stocks and mutual funds have different Vol.
10 No.
2 September 2025 impacts on pre- and post-election volatility whether significant or insignificant.
Research Frame Work
RESEARCH METHODS
Our research uses the composite stock price index and mutual fund index obtained from Yahoo Finance.
Our main objective is to examine the reaction of stock and mutual fund markets to political events.
We found that 36 countries held elections in the 2019-2024 period.
We limit the sample with the criteria of having their own stock market and mutual funds listed on Yahoo Finance with random sampling of each instrument.
As a result, we found 15 countries that fit the criteria with one sample per instrument.
Table 1.
List of Stock and Mutual Fund Samples Stock
Mutual Funds BEL
BEL 20
Value Square Fd Equity Belgium C Cap
UK(GBR)
FTSE 250
PIMCO GIS UK Corporate Bd Instl GBP Inc
IND
NIFTY 50
Hdfc Balanced Advantage Fund Direct Plan Payout Inc Dist
Cum Cap Wdrl Opt
USA
Dow Jones Industrial Average Vanguard Total Stock Mkt Idx Inv
DEU
Dax Performance-Index
Acatis Value Event Fonds B
ZAF
JSE Limited Sanlam Global Investment XV AZA ZAR
CAN
S&P/TSX Composite index
RBC Select Balanced Portfolio O
AUT
Austrian Traded Index in EUR
Raiffeisen-Nachhaltigkeit-Mix R T FRA
CAC 40
Ostrum SRI Money I1
DNK
OMX Copenhagen 20
Nordea Invest Aktier Ansvarlig KL 1
FIN
OMX Helsinki Alandsbanken Global Aktie S INA
IDX Composite Reksa Dana Indeks Premier ETF Index IDX30
PRT
PSI20
IMGA AyyAes Portugal A FIAA
TWN
TSEC WEIGHTED INDEX
Yuanta Taiwan High-yield Leading Co A KOR KOSPI Composite Index NH-Amundi Korea No.
1 S-M Cap Conv Eq 2 A Pamungkas et al.
Vol.
10 No.
2 September 2025 p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia After collecting the data, we examined the market reaction using daily returns to separate the pre and post election periods, the daily return method examines the events that occur and draws conclusions regarding the impact of these events.
We separate it into 3 periods namely 14 days, 21 days and 28 days .
re and post election perio.
Furthermore, following Cheng et al.
to calculate the stock time series data, by comparing the rate of return across various time periods.
The daily rate of return is calculated as follows:
Rt= Pt/Pt-1 After that we looked for the relationship between variables through the t-test.
The t test is used to test whether the two samples are different and is usually used when the variances are also Here is the formula for the t test as follows:
From here we use t-values and significance levels to find the relationship between variables.
The t test will find volatility with significant and insignificant results.
Hence the F test is required to compare the variance between the pre and post election period returns.
Below is the formula of the F test:
In the test.
X1.
X2 and X3 are pre-election sample periods, while Y1.
Y2 and Y3 are postelection time periods.
Then we look for the effect by involving the long-term pre-election variable (X.
with the short-term (X.
, medium-term (X.
and long-term post-election (X.
RESULTS AND DISCUSSION
Our assumption is that political events have a significant influence that causes great concern for investors.
Political events are unpredictable, so the results of this study can be a consideration for investors choosing between stocks and mutual funds to ensure the right investment.
Table 2.
Daily Average Return in Stock
CTR
PRA
PASCA
Last 28 Days Last 21 Days Last 14 Days Next 14 Days Next 21 Days Next 28 Days BEL
-0,162
0,459
-0,039
-0,019
-0,007
0,021
-0,040
-0,196
-0,127
0,240
0,161
0,119
IND
0,002
-0,003
0,142
0,077
0,068
0,034
USA
-0,097
-0,199
-0,200
0,350
0,258
0,187
DEU
-0,096
-0,085
-0,273
0,198
0,100
0,031
ZAF
0,009
-0,020
-0,095
0,051
-0,075
-0,012
CAN
0,017
-0,023
-0,077
-0,022
0,040
0,092
AUT
-0,156
-0,162
0,038
0,030
0,193
0,263
FRA
0,098
-0,032
-0,004
0,027
-0,007
-0,109
DNK
0,150
0,184
0,161
0,180
0,126
0,147
FIN
-0,001
-0,013
-0,021
-0,202
-0,102
-0,056
INA
-0,011
-0,021
0,013
0,064
0,051
0,074
PRT
0,010
-0,021
-0,061
0,028
0,062
0,025
TWN
-0,097
-0,073
-0,021
0,118
0,089
0,089
KOR
0,019
0,053
-0,083
-0,047
-0,015
0,027
Source: Data processed with excel, 2024 Stock Vs MutualA p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia Vol.
10 No.
2 September 2025 Table 3.
Daily Average Return in Funds PRA
CTR
PASCA
Last 28 Days Last 21 Days Last 14 Days Next 14 Days Next 21 Days Next 28 Days -0,062 0,007 0,047 0,026 0,041 BEL
-0,062
0,010
0,011
-0,004
0,056
0,011
0,005
IND
-0,022
-0,001
0,124
0,056
0,053
0,046
USA
-0,059
-0,185
-0,155
0,333
0,249
0,214
DEU
-0,025
-0,043
-0,020
-0,016
0,019
0,018
ZAF
0,029
0,052
0,034
0,114
0,083
-0,033
CAN
0,017
0,013
-0,001
-0,099
-0,059
-0,015
AUT
-0,091
-0,078
-0,019
-0,078
0,024
0,009
FRA
-0,001
0,000
0,000
-0,001
-0,001
-0,001
DNK
0,083
0,109
0,166
0,067
0,046
0,028
FIN
0,160
0,191
0,152
0,018
-0,025
-0,003
INA
-0,018
0,043
0,131
0,016
0,034
0,028
PRT
0,016
-0,016
-0,073
0,044
0,077
0,044
TWN
-0,050
-0,037
-0,114
0,047
0,042
0,039
KOR
-0,016
0,034
-0,127
-0,227
-0,145
-0,030
Source: Data processed with excel, 2024 Tables 2 and 3 report daily returns by splitting them into three different time horizons.
The preand post-election panels test for differences in returns across instruments.
We find that the impact of elections on stock and mutual fund prices varies across countries and has different patterns in the short, medium and long term.
These results only provide a visual comparison but do not provide information on the magnitude of the effect.
Hence, a t-test is used to compare them.
Here are the results of the t-test:
Tabel 4.
Stock Return T Test
SHORT TERM PERIOD
BEL
UK(GBR)
IND
USA
DEU
ZAF
CAN
MEDIUM PERIODE
LONG TERM PERIODE
X3 & Y1
X2 & Y1
X1 & Y1
X3 & Y2
X2 & Y2
X1 & Y2
X3 & Y3
X2 & Y3
X1 & Y3
Actual
4,953
4,617
3,179
3,903
2,886
3,179
3,137
2,886
3,179
Sig.
0,001
0,001
0,011
0,002
0,012
0,011
0,006
0,012
0,011
Actual
0,434
0,438
0,240
-9,721
-6,946
-6,312
-10,027
-8,848
-6,312
Sig.
0,674
0,672
0,815
0,000
0,000
0,000
0,000
0,000
0,000
Actual
-4,966
-5,784
-7,080
-7,130
-6,924
-6,255
-5,318
-6,508
-6,255
Sig.
0,005
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
Actual
-3,698
-2,628
-3,638
-5,336
-4,410
-3,638
-5,423
-4,410
-3,638
Sig.
0,005
0,027
0,005
0,000
0,001
0,005
0,000
0,001
0,005
Actual
5,194
6,275
0,060
6,297
0,781
0,060
3,198
0,781
0,060
Sig.
0,001
0,000
0,954
0,000
0,448
0,954
0,005
0,448
0,954
Actual
-3,120
-5,301
-4,952
-1,667
-2,525
-4,952
-0,390
-2,525
-4,952
Sig.
0,012
0,000
0,001
0,118
0,024
0,001
0,701
0,024
0,001
Actual
4,739
8,352
8,040
6,324
8,114
8,040
3,115
8,114
8,040
Sig.
0,001
0,000
0,000
0,000
0,000
0,000
0,006
0,000
0,000
Pamungkas et al.
Vol.
10 No.
2 September 2025 p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia Table 4.
SHORT TERM PERIOD
AUT
FRA
DNK
FIN
INA
PRT
TWN
KOR
MEDIUM PERIODE
LONG TERM PERIODE
X3 & Y1
X2 & Y1
X1 & Y1
X3 & Y2
X2 & Y2
X1 & Y2
X3 & Y3
X2 & Y3
X1 & Y3
Actual
4,210
0,290
-1,977
1,131
-0,613
-1,977
-0,341
-0,962
-1,977
Sig.
0,002
0,779
0,079
0,278
0,550
0,079
0,737
0,352
0,079
Actual
-1,096
1,901
1,944
1,134
3,068
2,322
2,831
3,314
2,322
Sig.
0,309
0,099
0,093
0,279
0,010
0,045
0,012
0,005
0,045
Actual
-17,061
-20,729
-11,973
-16,681
-11,085
-11,973
-19,196
-11,085
-11,973
Sig.
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
Actual
3,059
5,320
0,458
4,219
7,212
0,458
4,099
7,327
0,458
Sig.
0,012
0,000
0,658
0,001
0,000
0,658
0,001
0,000
0,658
Actual
-11,831
-7,911
-5,275
-9,963
-5,935
-5,275
-12,057
-5,935
-5,275
Sig.
0,000
0,000
0,001
0,000
0,000
0,001
0,000
0,000
0,001
Actual
3,032
2,942
2,563
0,980
1,511
2,563
-0,402
0,847
2,563
Sig.
0,013
0,015
0,031
0,345
0,155
0,031
0,693
0,411
0,031
Actual
1,285
0,434
-0,380
-0,951
-0,782
-0,380
-1,322
-0,782
-0,380
Sig.
0,231
0,674
0,712
0,358
0,448
0,712
0,206
0,448
0,712
Actual
4,059
6,099
6,419
5,690
6,364
6,419
5,821
6,134
6,419
Sig.
0,003
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
Source: Data processed with SPSS version 25, 2024 Table 5.
Mutual Fund Return T-Test
SHORT TERM PERIOD
MEDIUM PERIODE
LONG TERM PERIODE
X3 & Y1
X2 & Y1
X1 & Y1
X3 & Y2
X2 & Y2
X1 & Y2
X3 & Y3
X2 & Y3
X1 & Y3
Actual
3,325
3,248
1,885
2,509
1,463
0,909
0,629
0,156
0,909
Sig.
0,013
0,014
0,101
0,029
0,171
0,387
0,538
0,879
0,387
Actual
-8,101
-4,082
-3,692
-1,748
-1,713
-1,660
-2,011
-2,110
-1,660
Sig.
0,000
0,005
0,008
0,111
0,117
0,131
0,063
0,053
0,131
IND
Actual
-1,813
-4,176
-8,402
-3,849
-5,976
-7,801
-3,331
-5,853
-7,801
Sig.
0,107
0,003
0,000
0,002
0,000
0,000
0,004
0,000
0,000
USA
Actual
-5,380
-3,587
-4,555
-5,380
-5,037
-4,555
-6,133
-5,037
-4,555
Sig.
0,000
0,006
0,001
0,000
0,000
0,001
0,000
0,000
0,001
DEU
Actual
8,156
5,368
4,060
5,335
3,311
4,060
2,273
3,311
4,060
Sig.
0, 000
0,000
0,003
0,000
0,005
0,003
0,035
0,005
0,003
Actual
1,378
1,487
2,419
3,207
3,429
2,419
4,475
3,429
2,419
Sig.
0,202
0,171
0,039
0,006
0,004
0,039
0,000
0,004
0,039
CAN
Actual
2,927
4,895
5,564
4,689
7,124
5,564
6,604
7,124
5,564
Sig.
0,017
0,001
0,001
0,000
0,000
0,001
0,000
0,000
0,001
AUT
Actual
7,722
4,803
6,027
4,468
4,253
6,027
3,005
4,253
6,027
Sig.
0,000
0,001
0,000
0,001
0,001
0,000
0,008
0,001
0,000
FRA
Actual
22,361
10,328
9,045
18,921
10,987
10,606
17,737
12,608
10,606
Sig.
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
Actual
-3,639
-8,231
-5,823
-5,133
-8,337
-5,823
-6,661
-8,313
-5,823
Sig.
0,005
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
Actual
-21,557
-14,392
-9,921
-20,297
-15,691
-9,921
-14,210
-15,691
-9,921
BEL
UK(GBR)
ZAF
DNK
FIN
Stock Vs MutualA p-ISSN:1411-6510 e-ISSN :2541-6111 Vol.
10 No.
2 September 2025 JURNAL Riset Akuntansi dan Keuangan Indonesia Table 5.
SHORT TERM PERIOD
MEDIUM PERIODE
LONG TERM PERIODE
X3 & Y1
X2 & Y1
X1 & Y1
X3 & Y2
X2 & Y2
X1 & Y2
X3 & Y3
X2 & Y3
X1 & Y3
Sig.
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
Actual
-13,198
-5,627
-8,165
-6,798
-4,997
-8,165
-8,015
-4,997
-8,165
Sig.
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
Actual
2,338
3,031
2,523
0,915
1,150
2,523
-0,200
1,150
2,523
Sig.
0,048
0,016
0,040
0,380
0,274
0,040
0,844
0,274
0,040
TWN
Actual
5,702
1,368
0,127
1,969
0,554
0,127
1,507
0,554
0,127
Sig.
0,000
0,205
0,901
0,069
0,589
0,901
0,153
0,589
0,901
KOR
Actual
10,387
11,633
17,120
14,424
12,421
17,120
11,640
12,421
17,120
Sig.
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
0,000
INA
PRT
Source: Data processed with SPSS version 25, 2024 The t-test is conducted to evaluate whether there is a statistically significant difference between the returns of the pre- and post-election periods.
The results from table 1 and table 2 show that the t-test results have varying relationships.
We find that all mutual funds experience volatility in the short term with variables X3 and Y1, but for stocks, some have no effect in that time frame.
This finding accepts H1 that there is a significant impact in the short run for all funds and most stocks.
Table 6.
F Test Comparing Pre- And Post-Election Stock Variances And Returns X3 & Y1
X3 & Y2
X3 & Y1
F-Test Sig.
F-Test Sig.
F-Test Sig.
BEL
0,405
0,806
3,208
3,374
1,542
0,133
IND
0,335
0,016
3,254
USA
5,144
0,326
1,674
DEU
2,967
4,114
14,925
ZAF
0,319
8,110
16,791
CAN
3,825
3,835
4,178
AUT
4,665
35,049
13,529
FRA
2,048
0,077
0,000
DNK
0,073
0,686
5,437
FIN
1,972
0,838
0,067
INA
7,692
1,353
8,361
PRT
4,674
1,306
0,768
TWN
10,492
1,352
0,717
KOR
0,008
0,316
0,781
Source: Data processed with SPSS version 25, 2024 Table 7.
F Test Comparing The Variance And Return Of Pre- And Post-Election Mutual Funds X3 & Y1
X3 & Y2
X3 & Y1
F-Test Sig.
F-Test Sig.
F-Test Sig.
BEL
23,324
33,329
29,683
0,000
15,150
9,097
IND
1,757
9,827
0,263
USA
2,818
0,378
4,903
DEU
7,996
18,254
40,997
Pamungkas et al.
Vol.
10 No.
2 September 2025 p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia Table 7.
X3 & Y1
X3 & Y2
F-Test Sig.
X3 & Y1
F-Test Sig.
F-Test Sig.
ZAF
0,319
8,110
16,79062
CAN
48,984
60,186
45,403
AUT
0,016
4,738
11,866
FRA
136,125
171,372
54,785
DNK
4,403
4,187
0,180
FIN
12,399
16,396
9,902
INA
10,046
0,162
0,183
PRT
0,118
0,118
0,222
TWN
11,353
0,939
0,483
KOR
0,101
0,886
0,016
Source: Data processed with SPSS version 25, 2024 Table 6 and Table 7 show the specific F-test values that have compared the variance of returns in the short-term, medium-term and long-term pre- and post-election periods.
Here we find results that vary across countries, some significant and some insignificant.
These results accept the H2 that stocks and mutual funds have a different impact on pre- and post-election volatility.
investments ahead of political events, especially since politics affects the short term of investment In addition, investors do not assume that the same conditions will yield similar returns.
A deeper understanding of volatility and market dynamics during political periods can help investors make more informed and strategic decisions.
This study found that based on political events in 15 countries, each country has a different impact on election events.
In addition, the market reaction of stocks and mutual funds does not always have the same impact.
There are times when stocks provide high returns while mutual funds experience a decline, and vice versa.
CONCLUSION
We find in the t-test that mutual funds in 15 countries are significantly affected by political events in the short term as indicated by the X3 and Y1 variables.
As for stocks, they are mostly influenced by the time horizon.
This means that the 28-day pre-election daily return is very influential on the 14-day short-term daily return.
However, when viewed from the overall test, political events provide high and low levels of returns.
In line with research from Afnan et al.
political instability has both positive and negative impacts.
This sends a signal for investors to be careful in choosing Stock Vs MutualA The results show that there is a significant shortterm impact across all funds and most stocks and elections have different impacts on volatility.
Therefore, investors need to be cautious in choosing investments ahead of political events and not assume that the same conditions will result in similar returns.
Investors are advised to conduct an in-depth analysis of volatility and market dynamics before making investment decisions, especially ahead of political events.
More adaptive and informed investment strategies are needed to minimize risk and optimize returns in volatile market conditions.
Further research can explore specific factors that affect volatility across different countries and investment types, as well as conduct longitudinal studies to observe the long-term impact of political events on investment performance.
p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia Vol.
10 No.
2 September 2025
REFERENCE