The 30% slide in Indonesia’s benchmark stock index this year has prompted one overseas fund to invest in the country for the first time.

Sweden’s Coeli Asset Management has begun buying shares in the world’s worst-performing market, betting the market is now good value and that President Prabowo Subianto is prepared to listen to investors concerned about some of his policies.

“We’ve been looking at Indonesia for a number of years, but quite simply, it’s just been too expensive,” James Bannan, a fund manager at Stockholm-based Coeli Asset Management, said in an interview. “Ninety-nine times out of 100, when the market sells off for political or geopolitical events, then it’s a buying opportunity.”Indonesian shares have tumbled this year as questions about market transparency, concentrated ownership and insufficient free floats spurred MSCI Inc. to warn in January it may downgrade the country to frontier-market status. While MSCI is yet to act on its threat, the index compiler’s warning was enough to trigger an outflow by overseas investors, with global funds selling a net $4.7 billion of the nation’s stocks this year.

Higher oil prices and the threat of faster inflation have also weighed on the asset class. The rupiah has declined 7% against the greenback since the end of December, making it Asia’s worst-performing currency, eroding returns for dollar-based investors.

Some 35% of global fund managers said they were underweight Indonesian stocks, the most bearish reading in Asia Pacific, according to a survey by Bank of America published last month.

The outflow from Indonesian shares helped make them more attractive to Bannan’s fund — the Coeli Frontier Markets Fund — which seeks to invest in countries that have per capita income less than $10,000 and are neglected by overseas investors.

The fund, which has its biggest holdings in Vietnam and Kazakhstan, has returned 13% this year, beating 66% of its competitors, according to data compiled by Bloomberg. Its annualized three-year return of 23% puts it ahead of 83% of its peers.

Bannan said he traveled to Jakarta last month to assess conditions on the ground and the direction of Prabowo’s policies.

“What we found out when we were there is that, even though he does have some populist tendencies, at the end of the day he also seems to be listening to the market,” he said.

This year’s selloff pushed the shares of many Indonesian companies more than two standard deviations below their historical averages, bringing them closer to fair value, Bannan said.

Stocks that Coeli has bought include ride-hailing firm GoTo Gojek Tokopedia and Bank Central Asia, boosting its Indonesian allocation to almost 6% of the fund.

“For us, that’s quite a big initial allocation,” Bannan said.

Prabowo has recently made changes at the finance ministry and central bank after months of concern over the direction of economic policy. Money managers including Invesco Ltd. and PPM America Inc. have both said they trimmed underweight positions in Indonesian assets.

“We’re not at all scared of investing in turbulent political situations,” Bannan said. “As long as you can find some companies that are able to navigate through that, and that you know there’s no risk of a massive devaluation or nationalization, then usually it’s OK.”