Have you ever heard of the concept of investing while giving alms? Although it seems confusing, there are investment mechanisms that allow investors to invest and donate simultaneously, one of which is investing in this donation fund. Let’s take a full look:
Understanding provident funds
Mutual funds provident funds are profitable investment tools and operating expenses intended for financing activities in non-profit organizations.
Linguistically, endowment is an English word meaning donation. In Indonesian, the Permanent Fund means donation.
The non-profits here may vary in cooperation between the parties. investment manager and related institutions Some of these tools are made to save the environment. while some of the profits will go to universities and other humanitarian institutions.
The concept of this tool really and almost similar to the concept of clean in Islamic mutual funds, but according to Rudiyanto (Director of Panin Asset Management)The difference lies in the type of money sent. in this tool Money paid to NGOs is part of their income or operating expenses. While in the Shariah mutual fund Income is distributed from non-halal sources. so that donations are always in the permanent fund but not in Islamic mutual funds
How does the Government Pension Fund work?
There are two mechanisms for purchasing a provident fund. The first is that you must contact the relevant non-profit organization or investment manager to register as a mutual fund donor. Your investments will be managed by an investment manager. The amount of contributions and benefits you will receive will be adjusted based on the contract you previously signed.
The second mechanism is to purchase this instrument in the mutual fund market application. Like the previous mechanism The money you invest in this mutual fund will be managed by the relevant investment manager. However, there is no complete description of the profits and investments made through this mechanism.
Provident Fund Type
1. Long-term capital
Term endowment is a type of fund in which the associated non-profit cannot use its principal investment until a certain period of time or when something happens. The provisions regarding this period and event are set out in the contract signed by the investor/donor.
2. Limited donations
As the name suggests This type of perpetual fund can only be used by the relevant non-profit organization for certain purposes as required by the investor/donor. May be used for scholarships only. It cannot be used for any other purpose.
3. Unlimited donations
In contrast to the second type unlimited donations The relevant non-profit is allowed to use investor funds for any purpose. This type is somewhat more common than the second type.
4. Virtual donation
Generally, non-profit institutions and investment managers create permanent funds that have an indefinite period (forever). Perpetual funds are established to finance certain projects previously designated by the relevant non-profit organization. Therefore, there is a policy to withdraw investment in this type of provident fund.
provident fund mutual fund benefits
1. Invest along with making merit
The main advantage of investing in this tool is that you can invest while doing charity. Because some of the profits from the investment can be used for various social activities.
Endowment funds are also a source of income for non-profit organizations. The reason is because they are not for profit. Organizations like this often find it difficult to finance their operations. with this type of mutual fund They will receive financial assistance to continue to operate and help the community.
2. Earn passive income
Just like any other investment tool Investing in this tool also opens up opportunities. passive income for you. passive income This may come from investment gains. (as a result of sales in the secondary market) or a portion of the profit received from dividends and coupons (depending on investment component)
Example of a mutual fund mutual fund in Indonesia
It can be said that the concept of permanent funds is not very popular in Indonesia. And they can be bought very little in the mutual fund supermarket application. However, here are some examples of these types of investment tools in Indonesia:
- State’s First PEKA Indoequity Fund Issued by PT First State Investments Indonesia, investments in this instrument are allocated to equity and part of the profits for various humanitarian and environmental projects.
- Panin Model Fund Issued by PT Panin Asset Management Co., Ltd. Same as No. 1, Panin Dana is a role model. stock fundBut the profits will be allocated to higher education.
- Prime now This instrument is issued by the Indonesian University Alumni Association (ILUNI UI) in collaboration with PT Bahana TCW Investment Management. Most of the investment allocation for this instrument will be for bonds. while the profits will be used for scholarships and campus development projects. at the University of Indonesia
- Ganesha Eternal Dr. This tool is managed by PT Bahana TCW Investment Management in partnership with the ITB Alumni Association. Profits from this tool will be allocated for development and scholarship on the respective campuses.
- sustainable care In addition to publishing the Sri-Kehati Index, the Kehati Foundation also publishes the Kehati Lestari Mutual Fund in conjunction with PT Bahana TCW Investment Management to support environmental conservation projects.
- Bahana MES Syariah FundThe Bahana MES Syariah Fund is the result of a collaboration between PT Bahana TCW Investment Management and the Islamic Economic Community (MES). Profits from investments in this instrument will be used to develop the Islamic economy in Indonesia.
- Bahana PTS Generation Gemilang Syariah Mutual Fund In addition to UI and ITB, PT Bahana TCW Investment Management also collaborates with IPB Alumni Foundation (Bokor Agricultural University) to issue a donation fund.. Most of the money raised from these instruments is allocated to sukuk and other Islamic investments.
That was a discussion about provident fund mutual funds. In addition to using this tool You can also allocate a portion of your investment income in the form of: Zakat sharesSo the idea of investing while giving alms is no longer a myth.