First sharia-based mutual fund launched

The Jakarta Post, Jakarta

Asset management and financial services firm PT Insight Investments Management introduced on Monday Indonesia's first sharia-based fund management service in Indonesia called the i- Hajj Syariah Fund.

"The i-Hajj Syariah Fund will offer investors not only financial yields but also an opportunity to put aside 1 percent of their net assets to help finance middle to low income people to go on the haj pilgrimage to Mecca," director Siti Arimbi Pulungan told a press conference.

She said the company would use a minimum of 40 percent of investors' money for the purchase of sharia-based bonds and medium-term notes and a maximum of 60 percent for the purchase of sharia-based money market instruments, such as Bank Indonesia's sharia promissory notes (SWBI), sharia interbank promissory notes (SIMA) and deposits in sharia banks.

The company, she said, expected to sell one billion participation units at Rp 1,000 (11 U.S. cents) each during the first three years of operation. Each investor can buy a minimum of Rp 500,000 worth of units.

Pulungan did not explain whether or not the i-Hajj Syariah Fund would be listed on the capital market. But the company prospectus said the Capital Market Supervisory Board (Bapepam) had not issued a statement on the approval of the fund.

Company vice president Tony Henri said that if the company could generate Rp 200 billion in investment this year, funds to finance 30 people on the pilgrimage would be set aside.

"In the future, we expect to send approximately 300 people on the pilgrimage per year," he said.

Pulungan said that in order to guarantee transparency in fund management, all the money for financing people on the pilgrimage would be placed in one account at custodian Bank Niaga Syariah and would be audited by a public accountant.

To guarantee that management of the fund was in line with sharia law, the investment manager would work under the supervision of the Sharia Supervisory Board.

For the operation of the i-Hajj Syariah Fund, Insight Investments Management received Rp 14.4 billion in financial support from PT Taspen, PT Jamsostek, PT Bank Syariah Mandiri, BII Syariah Platinum, Krakatau Steel Pension Plan and four businesspeople. (004)