BNI Asset Management launched the BNI-AM Nusantara ETF MSCI Indonesia Index Mutual Fund

To meet market and investor needs, PT BNI Asset Management (hereinafter referred to as BNI-AM) launched the BNI-AM Nusantara Index Mutual Fund ETF MSCI Indonesia Equity Index (hereinafter referred to as XBNI), namely Mutual Funds whose participation units are traded on the Indonesian Stock Exchange through the primary market and secondary market. XBNI's Initial Listing was held on May 23 2018 on the Indonesia Stock Exchange (IDX) and was categorized as the 4th ETF Index Mutual Fund listed on the IDX throughout 2018. The public offering of the BNI-AM Nusantara ETF MSCI Indonesia Index Mutual Fund was held on 23 May 2018 at the Indonesia Stock Exchange Gallery.

The purpose of launching this type of XBNI is to accommodate the needs of investors who want mutual fund products that are actively traded with an investment strategy that refers to certain indices that are traded on the stock exchange. For XBNI it refers to the MSCI Indonesia index. Another goal is for investors to obtain long-term investment growth in line with Indonesia's economic growth as reflected in the performance of the MSCI Indonesia index.

"We launched the BNI-AM Nusantara Index Mutual Fund MSCI Indonesia ETF to provide a product variant for investors interested in investments that are liquid and searchable on the Indonesian Stock Exchange because XBNI is traded through the primary market and secondary market on the IDX," explained Reita. Farianti – Main Director of BNI-AM.

In the last 25 years, Exchange Traded Funds (ETFs) have become increasingly popular as an investment vehicle for both institutional and individual investors. The world's first stock index mutual fund was the Vanguard 500 Index Fund, which was launched in the United States in 1976. Meanwhile, the world's first ETF was the S&P Depository Receipt Trust Series 1, which was launched in 1993 in the United States. ETF Mutual Funds have been traded in Indonesia since 2007. "Especially for ETFs with the MSCI reference index, which are well known globally, only BNI-AM has issued them so we hope this ETF can be an attractive investment choice in the passive mutual fund category," added Reita.

The MSCI index is an index that represents approximately 80% of Indonesian stock market capitalization and has a high free float. This criterion was set by Morgan Stanley Capital International Limited (MSCI), an international independent institution providing investment analysis services. The shares listed on the MSCI Indonesia Index, for the period Nov 2017 - May 2018, consist of 29 shares of issuers with large caps and those with high free float liquidity. Stocks on the MSCI Indonesia index are widely traded by global fund managers.

Each unit of this mutual fund participation is offered at the same price as the initial Net Asset Value of IDR 1,000 (one thousand rupiah) on the first delivery date determined by BNI-AM as the investment manager of the MSCI Indonesia ETF mutual fund issuer. For investors who buy this mutual fund product, they will then invest in a portfolio with a minimum investment composition of 80% -100% of the Net Asset Value placed in 29 stocks included in the MSCI Indonesia index, and the remaining 0% -20% will be invested in money market instruments in country with a maturity of not more than 1 (one) year or deposits in accordance with the applicable laws and regulations.

The advantage of XBNI is that it has a diversification of shares at once, because it consists of 29 issuers included in the MSCI Indonesia index; managed by a professional fund manager; has international selection standards; and affordable for even retail investors. For purchases on the primary market, the minimum transaction is the value of 1 creation unit which is equivalent to 100,000 units of participation. While purchases on the secondary market can be made starting from 1 lot or the equivalent of 100 units of participation. Investors interested in buying or selling XBNI in the primary market can do so through participating dealers, namely Indo Premier Sekuritas. As for the buying and selling of XBNI on the secondary market, it can be done through a trading mechanism on the IDX through exchange member brokers.

"It is hoped that through the launch of XBNI we can enrich our product variants and provide access to all levels of investors to invest in cheap and affordable capital market products, so we call it an investment-saving package to get optimal returns," said Reita.