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Everything You Need to Know about Sharia Mutual Funds

Summary of information about sharia mutual funds for those of you who want to invest in a halal way.

You want to invest but doubt whether investment includes usury or not? If so, you can try this alternative, namely sharia mutual funds. This sharia mutual fund is suitable for those of you who consider the elements of halal and blessing.

In fact, this Islamic mutual fund has an average growth rate market cap highest, lol! Then, what is the meaning of Islamic mutual funds and how are they different from conventional mutual funds? Keep reading this article and find out the answer!

What is a Sharia Mutual Fund?

Sharia mutual funds were first initiated by PT Danareksa Investment Management in 1997. Sharia mutual funds then received a warm welcome from the public until finally, the National Sharia Council of the Indonesian Ulema Council (DSN-MUI) issued a fatwa governing the implementation of sharia mutual funds.

Almost similar to the general definition, sharia mutual funds are a place to collect funds managed by investment managers, then invested in securities that do not conflict with sharia principles.

Sharia principles themselves are emphasized on the selection of securities by investment managers who are registered in the bank List of Sharia Securities (DES). DES itself is issued by the Financial Services Authority (OJK) periodically, which is effective every June 1 and December 1. Examples of securities in sharia mutual funds are sharia shares, sukuk, and other sharia securities.

Differences in How Sharia and Conventional Mutual Funds Work

Application of Sharia Principles

This difference is definitely very obvious where mutual funds adopt sharia principles in the implementation of investments. The sharia principles can be seen from the following aspects.

  1. Selection of securities based on the latest DES that has been effective and avoids non-halal effects such as cigarettes, alcoholic beverages, non-halal foods, buying and selling potential for gambling, etc.
  2. There is a power transfer process wakalah bin ujrah from investors to investment managers and custodian banks to manage investments. The investment manager and custodian bank will be rewarded or ujrah of the investment management services.
  3. There is a process cleansing by the investment manager. According to the OJK, cleansing means cleaning wealth from non-halal income or things that can interfere with the halalness of money while investing.
  4. There are many choices of products and the first foreign sharia-based securities in Indonesia.
  5. All units in charge of managing and supervising investments adhere to sharia principles.

Supervised by Sharia Supervisory Board (DPS)

The entire implementation of Islamic mutual funds must be supervised by the DPS where investors place their investments. The appointment of DPS itself must go through several specified requirements DSN-MUI, for example by having a letter of recommendation from the local MUI and passing competence as a sharia supervisor.

The task of the DPS is to ensure that investment products comply with sharia principles. DPS can also go directly to provide recommendations for halal investment products to investment managers.

Sharia Mutual Fund Benefits

Lower Risk

According to OJK regulations, only companies that are included in the DES are those with interest-based debt of less than 45 percent of total assets.

This means that the companies that enter are considered to have healthy finances. This also indicates that the opportunity return stock is quite high and the risk of unpaid debt is small.

Can Be a Charity Tool

Previously, it was mentioned that in Islamic mutual funds there is a process cleansing or cleansing wealth from non-halal elements. Generally, process cleansing This is done to separate the interest from the deposited funds and the increase in the share price of the securities.

The results of the separation will then be distributed to charitable activities. Indirectly, using sharia mutual funds also has the potential as a means for investors to do charity to the community. Very interesting isn't it?

Best Sharia Mutual Fund Recommendations

After learning the advantages of mutual funds, now is the time for you to invest. To get started, don't forget to understand how to invest with mutual funds, OK! In addition, you must also be able to determine the best mutual fund product.

Currently, there are many sharia mutual fund products that you can use, for example, sharia mutual funds issued by national banks such as Bank Mandiri, Bank BSI, etc. However, you certainly want to choose the best product, right?

Check out the list of the 5 best mutual funds according to Qoala for 2020-2021 below.

  1. Mandiri Syariah Mutual Funds
  2. BNI Syariah Mutual Funds
  3. CIMB Niaga Mutual Funds
  4. Sharia Fund MNC
  5. Featured Simas Syariah

 

Thus a brief discussion of Islamic mutual funds. What do you think of this information? We hope this article can help inspire your heart to invest in sharia. See you in another discussion!

Image source headers: Unsplash


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