OJK Encourages Insurance and Pension Funds to Capitalise on Gold ETF Investment Opportunities

Gold ETFs can assist particularly in long-term insurance and pension funds by mitigating the impact of stock market fluctuations. Jakarta (ANTARA) - The Financial Services Authority (OJK) is encouraging the insurance and pension fund industries to capitalise on investment opportunities in Gold Exchange Traded Funds (ETFs) as an alternative long-term instrument to improve returns while maintaining portfolio risk balance. “Products based on gold ETFs will emerge that can be purchased by insurance companies and pension funds, allowing pension and insurance fund allocations to enter the capital market due to their attractive alternative returns,” said Ogi Prastomiyono, Executive Head of the Insurance, Guarantee, and Pension Fund Supervision (PPDP) at OJK, following the PPDP Regulatory Dissemination Day event in Jakarta on Monday. Ogi added that OJK is discussing with various parties, including investment managers, to promote the issuance of capital market products with guaranteed return schemes, particularly for pension funds, to mitigate risks more measurably. Meanwhile, Iwan Pasila, Deputy Commissioner for PPDP Supervision at OJK, stated that from a regulatory perspective, OJK aims to ensure existing rules not only strengthen risk management but also support industry growth by adjusting hindering provisions and promoting necessary policies. In this way, said Iwan, shares and Gold ETFs are expected to complement each other, reducing portfolio volatility. “Gold ETFs can help particularly in long-term insurance and pension funds by attempting to mitigate the impact of stock market fluctuation movements,” he said. From a supervisory perspective, added Iwan, OJK is also developing a more proactive supervision model to ensure companies can manage risks better, including examining the linkage between offered products and the characteristics of formed liabilities. “We will look not only at the investment results you (industry players) achieve in the reporting period, but whether the investments you make relate to the liabilities you are covering,” said Iwan. For information, Gold ETFs are investment instruments in the form of mutual funds whose performance refers to gold prices and participation units, traded on the Stock Exchange like shares. Through Gold ETFs, investors can gain exposure to gold price movements without needing to store, insure, or secure physical gold directly. “On the supply side, we have recently issued and implemented provisions related to the issuance of Gold ETFs, which are now in the implementation stage,” said Hasan Fawzi, Executive Head of Capital Market, Derivative Finance, and Carbon Exchange Supervision at OJK, in Jakarta on Thursday (2/4). Meanwhile, the Indonesia Stock Exchange (BEI) is optimistic that the Gold ETF investment instrument can be launched in the second quarter of 2026, in line with its current products being prepared by investment managers. “It should be this second quarter; we are also waiting from investment manager friends who are currently processing to create the product. We are optimistic that this second quarter (Gold ETF) can be issued,” said Jeffrey Hendrik, Acting President Director of BEI, in Jakarta on Monday (6/4).