Indonesian mutual fund market grew tremendously during the three years
period of 2003-2005. This condition boosted Indonesian domestic mutual fund
market. Through this paper, the writers confront an issue that is important and
critical to investment in this economy. The issue is what caused Indonesian stock
market performed that great during the period of 2003-2005. Whether the increase
in its performance was merely caused by normal phenomenon or it was caused by
the other unrealized domestic and overseas factors. Mutual fund industry also
heavily influenced by the stock exchange in a particular country. Whether t.he
phenomenon growth in stock market affects all mutual fund in the same
proportion or not.