OJK Promotes Gold ETFs as Hedge Against Stock Market Volatility

Deputy Commissioner for Insurance, Guarantee, and Pension Fund Supervision at OJK, Iwan Pasila, explained that gold ETFs often move in the opposite direction of stocks. This countercyclical trend makes gold ETFs a potential tool to reduce the impact of stock declines on investment portfolios.

“Gold ETFs tend to move counter to stocks: when stocks fall, gold often rises. We hope institutions such as BPJS Ketenagakerjaan, Asabri, TASPEN, and employer pension funds, as well as financial institution pension funds (DPLK), can use gold ETFs to mitigate stock market volatility,” Iwan said after attending the 2026 Pension Fund Month Kick‑off in Jakarta on Sunday, September 6.

He noted that the gold ETF ecosystem already has regulations covering physical gold storage, pricing mechanisms, and trading procedures to ensure compliance.

“It acts as a hedge to offset stock declines. At the very least, when stocks fall, there is an asset that rises, helping to balance the impact,” he added.

OJK is also encouraging the insurance and pension fund industries to consider gold ETFs as a long‑term investment alternative. The use of such instruments is expected to improve returns while maintaining portfolio risk balance.

Gold ETFs are investment instruments in the form of mutual funds traded on the Indonesia Stock Exchange. They are backed by physical gold as the underlying asset supporting their value.

OJK ensures that each unit of a gold ETF is supported by an equivalent amount of physical gold, making the product a physically backed investment traded through the exchange mechanism. (Gusti Panji)