JAKARTA, thekabarnews.com—The Indonesia Stock Exchange (IDX) launched a Sharia-compliant gold exchange-traded fund on Monday, August 10. This introduces an investment instrument that combines exposure to physical gold with the trading convenience of exchange-listed securities.

IDX unveiled the instrument at its headquarters in Jakarta during the 49th anniversary of Indonesia’s reactivated capital market.

Authorities designed the gold ETF to connect the stock exchange with the country’s expanding bullion ecosystem. At the same time, the gold ETF broadens investment options for both retail and institutional investors.

An ETF pools investors’ money in a managed fund whose units trade on an exchange like shares. A gold ETF enables investors to track movements in the underlying metal without personally buying, transporting or storing gold bars.

Financial Services Authority (OJK) chief Friderica Widyasari Dewi said regulators and market participants had spent more than a decade preparing the product.

“The gold ETF has actually been a shared aspiration for perhaps the past 10 to 15 years, supported by studies, research and other work. At the time, conditions did not allow us to realize it,” Friderica said at the launch.

Before Monday’s event, seven investment managers had submitted preliminary listing applications to IDX. Investors should still verify each fund’s prospectus, ticker, management fees, custodian and trading date before purchasing units.

The new instrument forms part of Indonesia’s broader effort to develop an integrated domestic gold market. OJK previously authorized state-owned pawnshop company Pegadaian and Bank Syariah Indonesia to conduct bullion activities under OJK Regulation No. 17 of 2024.

The regulator described those approvals as a starting point for building an integrated national bullion ecosystem.

Deputy Finance Minister Juda Agung said the ETF would strengthen the gold ecosystem and deepen Indonesia’s financial market. He stressed that credible storage, valuation and governance would determine investor confidence.

“A gold ETF is a financial product. Behind that product, however, is gold as its underlying asset—real gold. Investors must therefore trust that the gold exists. They must trust how it is stored and valued, and they must trust that transactions and governance are conducted accountably and transparently,” Juda said.

The ETF offers easier gold-market access and potentially stronger liquidity, but it does not eliminate investment risk.

Its value can decline as gold prices fluctuate, while investors may also face management costs, tracking differences and market-liquidity risks.

For that reason, transparent custody records, independent audits and regular disclosure of the fund’s gold holdings will remain essential. These measures are required as Indonesia develops its first generation of exchange-traded gold products.