BCA will act as selling agent to distribute the Batavia Technology Sharia Equity USD (Shutterstock).

Islamic Finance

Indonesian Sharia-compliant fund targets tech sector

Investments will be made in cloud computing, Internet of Things (IoT), and e-commerce, with a focus on ESG and sustainability values.


Jakarta: Responding to investor interest in tech companies, Indonesia’s Batavia Prosperindo Asset Management and Bank Central Asia (BCA) have issued a technology-focused Islamic mutual fund.

BCA will act as selling agent to distribute the Batavia Technology Sharia Equity USD, while Franklin Templeton, a US investment firm, acted as technical advisor for Batavia Prosperindo.

Lilis Setiadi, Batavia Prosperindo CEO, told the media on Monday that the technology sector has attracted more investors and that global digital transformation is estimated to reach trillions of dollars. 

"The presence of Batavia Technology Sharia Equity USD is believed to be able to meet the needs of those investors and can be the right vehicle for them to participate in enjoying growth in the technology sector," said Setiadi.

According to Setiadi, the technology industry is attracting public attention and has a very high success trajectory, especially in light of the pandemic when people relied heavily on technology. She added that Batavia Technology Sharia Equity USD specifically allocates investment funds to fast-growing technology industries, such as cloud computing, Internet of Things (IoT), and e-commerce. The mutual fund product also focuses on technology development that implements ESG (Environment, Social, Governance) sustainability values.

“It offers a number of advantages. First, using the stronger US dollar currency. Secondly, it isn't subject to tax at all and lastly Sharia-compliant which means it is suitable for anyone,” she added.

Christine Setyabudhi, BCA Senior EVP Wealth Management said that this mutual fund will be attractive to customers who want to diversify their portfolio. The product will be sold through their mobile app Welma and at their branches starting February 16. 

According to BCA, around 1% of its 27 million customers use wealth management services through mobile apps and branches.

“Our assets under management, including mutual funds and bonds, reached 87 trillion rupiah ($6 billion) last year, increasing by 50% compared to 2020,” Setyabudhi said. 

Since it is a Sharia-based equity mutual fund, all of its principles and management are supervised by the Sharia Supervisory Board. The fund’s constituents are also subject to accounting-based Sharia screens that have a threshold of 33% for certain ratios

The Islamic mutual fund index’s sector-based screens also automatically eliminates companies that are engaged directly in non-halal businesses or those that have 5% or more (accumulatively) of income derived from prohibited businesses such as alcohol, products containing pork, weapons, gambling, and adult entertainment.

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