Various Syariah Investment Products in Indonesia's Capital Market

The Syariah capital market in Indonesia has shown significant growth over the past two decades. The beginning of this market was marked by the issuance of the first Syariah mutual fund by Danareksa Investment Management (DIM) in 1997. However, the development of the Syariah capital market became more evident after the issuance of a fatwa by the National Syariah Council of the Indonesian Ulema Council (DSN-MUI) and the launch of the Indonesia Syariah Stock Index (ISSI) on the Indonesia Stock Exchange (IDX).

Today, Indonesia's Syariah capital market offers a variety of investment products that comply with Syariah principles. Here are some Syariah investment products available to investors:

Syariah Stocks
Syariah stocks are stocks listed in the Syariah Securities List (DES), which is regularly evaluated by the Financial Services Authority (OJK). These stocks are selected based on certain criteria that do not violate Syariah principles, such as avoiding involvement in gambling, alcohol production, or other prohibited activities in Islam. On the IDX, out of 924 listed stocks, 641 have been included in the DES. Syariah stocks provide an option for investors who want to participate in the stock market without violating Syariah principles.

Sukuk
Sukuk is a Syariah-compliant security that represents ownership of certain assets, such as land, buildings, or projects operated according to Syariah principles. Sukuk is often equated with conventional bonds because both fall into the category of fixed-income assets. However, sukuk has a different structure, where the issuance of sukuk must be backed by underlying assets that comply with Syariah principles. Sukuk allows the government or companies to raise funds from the public, which are then used for Syariah-compliant projects or purposes.

Syariah Mutual Funds
Syariah mutual funds are collective investment vehicles managed by Investment Managers, which invest managed funds in Syariah-compliant securities such as Syariah stocks, sukuk, or other Syariah instruments. Additionally, there are Syariah mutual funds traded on the stock exchange, known as Syariah Exchange Traded Funds (ETFs). These products allow investors to diversify their portfolios while adhering to Syariah principles.

Syariah Asset-Backed Securities (EBA Syariah)
EBA Syariah is a security issued based on a pool of Syariah-compliant assets. This product offers an attractive investment option, especially for those who want to invest in a portfolio of Syariah-based assets. The first example of EBA Syariah in Indonesia is the EBAS-SP, issued by PT Sarana Multigriya Finansial (Persero) and backed by home financing assets. This product can be traded on the IDX, providing additional flexibility for investors.

With the increasing variety of Syariah investment products, investors now have the opportunity to invest in compliance with Syariah principles. The Syariah capital market in Indonesia continues to grow, offering a range of instruments that not only promise potential returns but also adhere to Syariah regulations.