"The rapid growth in population and a young and educated workforce continue to underscore the strong demographics of South-East Asia's largest economy," said Lampl.
"An expanding middle class has supported domestic demand, with banks and financial services benefitting from this positive trend."
"Loans to consumers grew 32 per cent for the end of 2010, compared to the previous year."
Performance of indices over 3-yrs
Source: FE Analytics
According to data from FE Analytics, the MSCI Indonesia index has grown by 121 per cent in the last three years, compared with 44 per cent from MSCI Emerging Markets.
Barings lists Indonesia, along with China, as its largest overweight in emerging markets.
The region is currently rated BB+ by both Fitch and Standard & Poor's, with both bureaus upgrading their outlook from stable to positive recently.
"We believe that Indonesia's macroeconomic fundamentals are sound enough to see its sovereign rating upgraded to investment grade and possibly within the next year," said Lampl. "This will be part of the process that should see the country's interest rate trend lower."
"In our view, Indonesia's credit profile has also been supported by a government committed to moderating inflation and driving down debt-to-GDP levels, whilst being careful not to stymie GDP growth, which is currently running at 6.5 per cent."
Fast-growing economies rely on natural resources to boost the industrial and manufacturing sectors that stimulate growth. One of the major considerations for emerging market investors is the current volatility in commodity prices.
However, Lampl says that Indonesia is largely immune from this problem.
"The economy has also been insulated from recent volatility in soft commodity prices because it has a rich commodity base of its own," he explained. "For example, Indonesia remains a leading rice producer and is a major exporter of crude oil and gas, especially to markets like Japan, China and India."
"In terms of hard commodities, Indonesian coal miners are benefiting from rising thermal coal exports and by 2015 this industry could account for 39 per cent of global increases, making it the largest producer ahead of Australia."
Investors looking to gain access to Indonesian growth can do so through a regional fund such as Baring ASEAN Frontiers or Fidelity Emerging Asia. Alternatively, investors can get more diversified exposure though a general emerging markets fund like Neptune Emerging Markets or Aberdeen Emerging Markets.
Performance of funds vs sector over 1-yr
Source: FE Analytics
Baring ASEAN Frontiers has more than 20 per cent of its £328m assets under management invested in Indonesia. Since its launch in August 2008, it has returned 93.82 per cent, more than any other Global Emerging Market fund over the period.
Aberdeen Emerging Markets has a 2.8 per cent weighting to the region and has returned 145 per cent over the last five years, compared with 82 per cent from the average emerging markets fund.