Best Sharia Mutual Funds 2026: Product List and How to Buy
List of best sharia mutual funds 2026 in Indonesia: equity, fixed income, and money market. Comparison of returns, expense ratios, and buying platforms.
Note: This article discusses Indonesian financial products and markets. The principles apply globally, though specific products, regulations, and tax treatments vary by country.
Sharia Mutual Funds: Complete Guide
Indonesia is the country with the world’s largest Muslim population. Not surprisingly, demand for investments compliant with sharia principles continues to grow. Sharia mutual funds answer this need — allowing you to invest without violating Islamic principles.
The good news: You don’t need to sacrifice returns to invest in compliance with sharia.
What Are Sharia Mutual Funds?
Sharia mutual funds are mutual funds whose management and portfolio follow Islamic sharia principles. This means:
- Not investing in haram businesses — alcohol, tobacco, gambling, pornography, weapons, conventional banking (riba/usury)
- Not using riba-based instruments — conventional bonds replaced by sukuk (Islamic bonds), conventional deposits replaced by sharia deposits
- Supervised by DPS (Dewan Pengawas Syariah / Sharia Supervisory Board) — each sharia mutual fund has a DPS ensuring compliance
- Refers to the DES (Daftar Efek Syariah / Sharia Securities List) issued by OJK (Otoritas Jasa Keuangan / Financial Services Authority)
How is Sharia Screening Done?
OJK issues the Daftar Efek Syariah (DES) twice a year.* Stocks included in DES must meet these criteria:
Qualitative Criteria (Business)
Companies may not conduct business activities contrary to sharia:
- Gambling and games classified as gambling
- Prohibited trading (gharar/excessive uncertainty, maysir/speculation)
- Riba-based financial services (conventional banks/insurance)
- Trading risks containing uncertainty elements
- Producing/distributing haram goods
- Transactions containing bribery elements
Quantitative Criteria (Financial)
| Ratio† | Maximum Limit |
|---|---|
| Total interest-based debt / total assets | 45% |
| Non-halal income / total revenue | 10% |
Companies with interest-based debt ratios that are too high or haram income exceeding 10% are not included in DES.
How Many Stocks Pass?
Of the approximately 900+ stocks listed on BEI (Bursa Efek Indonesia / Indonesia Stock Exchange), about 500+ stocks are included in the Daftar Efek Syariah.‡ This includes many large companies like Telkom, Unilever, Astra, and sharia banks.
Types of Sharia Mutual Funds
Like conventional mutual funds, sharia mutual funds are available in various types:
| Type | Composition | Risk | Suitable For |
|---|---|---|---|
| Sharia Money Market | Sharia deposits, sukuk ≤ 1 year | Low | Emergency funds, short-term |
| Sharia Fixed Income | Government/corporate sukuk | Low-medium | Medium-term (1-3 years) |
| Sharia Mixed/Balanced | Sharia stocks + sukuk | Medium | Medium-term (3-5 years) |
| Sharia Equity | Stocks from DES | High | Long-term (5+ years) |
| Sharia Index | Follows sharia index (JII, ISSI) | High | Long-term passive investors |
Sharia Stock Indices in Indonesia
BEI has several sharia stock indices:
| Index | Number of Stocks | Description |
|---|---|---|
| ISSI (Indonesia Sharia Stock Index) | ~500 | All stocks included in DES |
| JII (Jakarta Islamic Index) | 30 | 30 most liquid sharia stocks |
| JII70 | 70 | 70 most liquid sharia stocks |
JII is the most well-known sharia index and is often used as a benchmark for sharia index mutual funds.
Examples of Sharia Mutual Fund Products
Here are some fairly popular sharia mutual funds (not recommendations, just for illustration):
Sharia Index Mutual Funds
| Product | Benchmark | Investment Manager |
|---|---|---|
| Bahana ISFI Syariah | JII | Bahana TCW |
| Simas Syariah Unggulan | JII | Sinarmas AM |
| MNC Dana Syariah | JII | MNC AM |
Sharia Equity Mutual Funds (Active)
| Product | Investment Manager | AUM |
|---|---|---|
| Mandiri Investa Atraktif Syariah | Mandiri Manajemen Investasi | Large |
| Manulife Syariah Sektoral Amanah | Manulife AMII | Large |
| BNP Paribas Pesona Syariah | BNP Paribas AM | Medium |
Sharia Money Market Mutual Funds
| Product | Investment Manager |
|---|---|
| Mandiri Investa Pasar Uang Syariah | Mandiri MI |
| Bahana Likuid Syariah | Bahana TCW |
| Sucorinvest Sharia Money Market | Sucorinvest AM |
All products above are available on platforms like Bibit, Bareksa, and Tanamduit.
Are Sharia Mutual Fund Returns Lower?
This is a frequently asked question. The answer: not always.
In theory, investment restrictions (sharia screening) could reduce diversification and potential returns. But in practice:
- Sharia stocks tend to avoid companies with high debt — this can actually reduce risk
- Many of Indonesia’s largest and best companies are included in DES
- Historically, JII and IHSG performance are relatively comparable
| Period§ | IHSG Return | JII Return |
|---|---|---|
| 5 years (average) | ~6-8% p.a. | ~5-8% p.a. |
| 10 years (average) | ~7-9% p.a. | ~6-9% p.a. |
Historical data varies and is not a guarantee of future performance. Return data from IDX and industry publications.
Return differences are usually not significant in the long term. Other factors like costs (expense ratio), investment consistency, and asset allocation have much more impact.
Beware of “Best Sharia Mutual Fund” Lists
Many fintech platforms and investment blogs publish “Best Sharia Mutual Funds 2026” lists based on 1-year or 3-year past returns. Don’t trust them immediately.
Problems with Rankings Based on Past Returns
1. Survivorship Bias
“Best” lists usually only display mutual funds still active. Mutual funds with poor performance are often liquidated or merged with other funds — and disappear from the data.
Result: The displayed list looks better than reality.
2. Data Mining & Cherry-Picking Periods
Platforms can choose specific periods that make their products look good:
- “Best 1-year return!” → that year the market happened to rise drastically
- “Top 3-year return!” → the chosen period favors certain products
3. Past Performance ≠ Future Performance
Global SPIVA (S&P Indices Versus Active) research consistently shows:
70-90% of active mutual funds fail to beat the index over the long term (10+ years).
For sharia mutual funds specifically, the SPIVA Global Islamic Equity Report shows:
| Period | % Active Sharia Funds That Underperform Benchmark |
|---|---|
| 3 years | ~65-75% |
| 5 years | ~70-80% |
| 10 years | ~80-90% |
Data from S&P Global SPIVA Islamic Equity Scorecard. Benchmark: relevant sharia index per country.
This means: Mutual funds on this year’s “best” list most likely won’t consistently win in subsequent years.
Why Do Fintech Platforms Promote Certain Mutual Funds?
Conflicts of Interest You Should Know:
- Fee-sharing agreements — platforms receive higher commissions from certain investment managers
- AUM bonuses — bonuses for successfully gathering large funds in certain products
- Marketing campaigns — investment managers pay to be “featured” on homepages
This doesn’t mean platforms are lying, but you should be aware there are incentives that may not align with your interests.
Safer Alternatives
Instead of chasing this year’s “best sharia mutual fund”:
✅ Choose sharia index mutual funds
- Lower costs (expense ratio ~0.5-1% vs 2-3% for active)
- Transparent (you know exactly what’s being bought)
- Consistently follows JII or ISSI
- Historically beats the majority of active funds over the long term
✅ Focus on costs, not past returns
- Low expense ratio = more returns go into your pocket
- Cost is the only factor you can control
✅ Diversify
- Don’t put everything in one “best” mutual fund
- Combine several types (money market, fixed income, equity)
Sharia Mutual Fund Taxes
Tax treatment for sharia mutual funds is exactly the same as conventional mutual funds:
| Aspect | Treatment |
|---|---|
| Capital gain | 0% (tax-free) |
| Tax when buying | None |
| Tax when selling | None |
This is a huge advantage. You can invest according to sharia principles and get maximum tax efficiency.
How to Choose Sharia Mutual Funds
1. Determine type based on goals
| Goal | Type of Sharia Mutual Fund |
|---|---|
| Emergency fund | Sharia money market |
| Savings 1-3 years | Sharia fixed income |
| Investment 5+ years | Sharia equity / sharia index |
2. Pay attention to expense ratio
Choose those with low expense ratios. Sharia index mutual funds are usually cheaper than active sharia equity funds.
3. Check AUM (Asset Under Management)
Mutual funds with larger AUM tend to be more stable and liquid. Avoid mutual funds with very small AUM (under IDR 50 billion).
4. Make sure it’s registered with OJK
All legitimate sharia mutual funds must be registered with OJK. Check on the OJK website or make sure it’s available on official platforms (Bibit, Bareksa, etc).
How to Buy Sharia Mutual Funds
The process is exactly the same as conventional mutual funds:
- Open an account on an investment platform (Bibit, Bareksa, Tanamduit, IPOT)
- Search for sharia mutual funds (usually there’s a “Syariah” filter)
- Select a product
- Determine investment amount (starting from IDR 10,000)
- Confirm purchase
On Bibit, there’s a special feature to filter only sharia products in their robo-advisor. This makes it easy if you only want to invest in sharia instruments.
Summary
| Item | Description |
|---|---|
| What is sharia mutual fund? | Mutual fund following Islamic sharia principles |
| Supervised by | OJK + DPS (Dewan Pengawas Syariah / Sharia Supervisory Board) |
| Return vs conventional | Comparable in the long term |
| Tax | 0% (tax-free) — same as conventional |
| Minimum investment | Starting from IDR 10,000 |
| Where to buy? | Bibit, Bareksa, Tanamduit, IPOT |
Sharia investing in Indonesia is not a compromise. With 500+ sharia stocks, various mutual fund products, and the same tax treatment, you can build an efficient passive portfolio and align with your beliefs.
Sources & References:
* Daftar Efek Syariah (DES) is published by OJK every May and November. Access at OJK - Daftar Efek Syariah.
† DES quantitative criteria refer to POJK (OJK Regulation) No. 35/POJK.04/2017 concerning Criteria and Issuance of Sharia Securities List. Maximum debt ratio 45% and maximum non-halal income 10%.
‡ Number of stocks in DES varies per review period. As of 2024-2025, approximately 500+ of ~900 stocks listed on BEI are included in DES. Check the latest list on OJK website.
§ Historical return data JII vs IHSG from IDX — Market Data and various capital market research publications. Actual returns vary by period and are not a guarantee of future performance.
Regulations:
- POJK No. 35/POJK.04/2017 concerning Criteria and Issuance of Sharia Securities List
- POJK concerning Sharia Mutual Funds
- DSN-MUI (National Sharia Board - Indonesian Ulema Council) Fatwa regarding sharia capital markets
Sharia Indices:
- JII (Jakarta Islamic Index): 30 most liquid sharia stocks
- ISSI (Indonesia Sharia Stock Index): all stocks in DES
- Index data: IDX — Market Data
Active vs Passive Fund Performance Research:
- S&P SPIVA Global Islamic Equity Scorecard — Annual report comparing active sharia fund performance against sharia index benchmarks. Data shows 70-90% of active funds underperform benchmarks over 10-year long term. Access at S&P Dow Jones Indices — SPIVA Reports.
- Vanguard — “The Case for Index-Fund Investing” (2023) — Research shows cost (expense ratio) is the best predictor for long-term returns, not past performance. Vanguard Research.
- Survivorship Bias in Mutual Funds — Academic research shows 20-40% of mutual funds are liquidated within 10 years, and these disappeared funds on average underperform. This makes “best mutual fund” lists look better than reality (Elton, Gruber, Blake — “Survivorship Bias and Mutual Fund Performance”, 1996, Review of Financial Studies).
Disclaimer: This article is for educational purposes only, not investment advice. Sharia status of a security may change according to DES review by OJK. For accurate sharia compliance, consult with sharia experts or scholars. SPIVA data and performance research refer to global and regional studies; results for the Indonesian market may vary.