First sharia-based mutual fund launched

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)