Simulations of a dynamical portfolio consist of stocks and options for investment during the COVID-19 pandemic

The rapid development of technology and information has made the Indonesian capital market a popular alternative investment in society. One of the popular investment instruments is the mutual fund. However, the Covid-19 pandemic has been giving negative effects on the real economic and financial sectors, where there is a large decline in stock prices. This research aims to compare the performance of mutual fund reconstruction using the Markowitz portfolio optimization method and Black Litterman method, to the actual performance of a chosen mutual fund in Indonesia. The main objective of this method is to maximize the return and minimize the investment risk. We also simulate the existence of Call and Put Options in the Indonesia Financial Market, so the analysis of performance can be made. The research can provide valuable insights into how investors can manage risk and adapt to uncertain market conditions, especially during the Covid-19 Pandemic. Using historical data of 10 stocks of Indonesian companies with the highest composition in the Dana Istimewa mutual fund, a dynamics of optimal portfolio simulation is carried out in the non-pandemic year 2018, and pandemic year 2021. The result shows that the performance of our portfolio simulation is better than the reported performance of the actual mutual fund. Due to the declining trend of the underlying stocks, the portfolio on Call options gives negative returns, but the portfolio on Put options gives significantly high returns, especially in the dynamic portfolio with a monthly update.