Invest in Indonesia with ETFs
There may be quite a few reasons and investor would want exposure to Indonesia in a portfolio. It could be a potential hedge strategy against risk in that region, it could be a way to diversify an international portfolio, or there may be a potential investing opportunity – bullish or bearish.
However, trying to create an Indonesia portfolio with commodities, companies in a certain Indonesian sector, and foreign currency-related assets can be a tough task. But what if I told you there was an easier way?
Enter Indonesia ETFs. Pre-packaged miniature portfolio, specifically created to give investors immediate exposure to the Indonesian market. This allows an investor to make one transaction and gain instant access to this country without crushing the commission bill. Also, you gain the many advantages associated with ETFs, including the tax benefits.
So if this sounds like the right investing plan for you, then you may want to check out this list of Indonesia ETFs. Currently, there are only three funds on the market, one of which focuses on small cap companies, but as the selection grows, I will add to this list. Also, if any of the funds are delisted, I’ll update this article as well. In the meantime, here is what you have available…
List of Indonesia ETFs
- EIDO - iShares MSCI Indonesia Investable Market Index ETF
This fund tracks the MSCI Indonesia Investable Market Index, which targets the top 99% of equity securities listed on stock exchanges in Indonesia based on market capitalization. Some of the top holdings include Astra International (ASII), Central Bank of Asia (BBCA), Bank Rakyat Indonesia (BBRI), and Telekomunikasi Indonesia (TLKM), which are four of the 93 companies in this fund.
And the main sector represented in IDXJ is financials, followed by consumer staples, consumer discretionary, materials, energy, telecommunication services, utilities, health care, IT services companies and industrials.
- IDX - Market Vectors Indonesia ETF
This Indonesia ETF correlates with the Market Vectors Indonesia Index and targets companies that are either physically located in Indonesia or conduct at least 50% of their business in the region. Some of its top holdings include Astra International (ASII), Central Bank of Asia (BBCA), Bank Rakyat Indonesia (BBRI) and Semen Indonesia (SMGR), which are four of the 40 companies in this fund.
And the main sector represented in IDXJ is financials, followed by consumer staples, consumer discretionary, materials, energy, telecommunication services, utilities, health care and industrials.
- IDXJ - Market Vectors Indonesia Small Cap ETF
This is another Indonesia fund from Market Vectors, but this ETF has a specific focus on small cap companies. It tracks the Market Vectors Indonesia Small Cap Index and some of its top holdings include Sentul City (BKSL), Trada Maritime (TRAM), and Surya Semesta Internusa (SSIA), which are three of the 24 companies in this fund.
And the main sector represented in IDXJ is financials, followed by industrials, consumer staples, energy, and materials.
As I said above, I will update this list when need be, but in the meantime, you can research each fund individually to see if it’s a fit for your investing strategy. Right now we have three Indonesia funds on the market and no ETNs as of now, but hopefully, that will change in the future. If so, I will let you know.
And if you are interested in any funds on the above list, watch how the fund reacts to different market conditions, learn what is actually in the fund and if you have any questions or concerns, be sure to consult a financial professional such as your broker or an advisor.
When investing, no fund, stock, index, or asset is without risk. So it’s important to conduct your due diligence before making any trades. However, once you are ready, good luck with your newest financial venture in Indonesia ETFs.
Disclaimer: At the time of publication for this article, I do not have any open positions in any of the three Indonesia ETFs on this list.