IHSG vs SBN: Which is Right for Indonesian Investors?

As Indonesian investors look to diversify their portfolios in 2026, two popular investment options are stocks represented by the Indonesia Composite Index (IHSG) and Government Bonds (SBN). The IHSG is projected to reach 10,000, while SBN offers stability amid inflation risks and limited BI Rate cuts. This article compares IHSG and SBN to help investors make informed decisions.

Quick Comparison Table

What is IHSG?

IHSG, or the Indonesia Composite Index, is a stock market index that represents the overall performance of the Indonesian stock market. It includes major stocks listed on the Indonesia Stock Exchange.

Pros

• Potential for high returns
• Liquidity is high

Cons

• High volatility
• Risk of losses due to market downturns

What is SBN?

SBN, or Surat Berharga Negara, are government bonds issued by the Indonesian government to finance its budget. They offer fixed returns and are considered low-risk investments.

Pros

• Low risk
• Fixed returns

Cons

• Returns may not keep pace with inflation
• Interest rate risk

Head-to-Head Comparison

Risk Tolerance

IHSG is suitable for investors with high risk tolerance as it involves investing in stocks that can be volatile. SBN, on the other hand, is more appropriate for conservative investors seeking stable returns.

Return Expectations

IHSG has the potential for higher returns compared to SBN, especially in a growing economy. However, SBN provides predictable returns, which can be attractive during times of economic uncertainty.

Market Conditions

The performance of IHSG is closely tied to the overall stock market conditions and economic outlook. SBN's performance is more stable and less affected by market fluctuations.

Which Should You Choose?

Choose IHSG if:

• You have a high risk tolerance
• You are looking for potentially high returns

Choose SBN if:

• You prefer stable, low-risk investments
• You are seeking predictable income

The Bottom Line

Both IHSG and SBN have their advantages and disadvantages. IHSG offers the potential for high returns but comes with higher risk. SBN provides stability and predictable returns but with lower potential gains. Indonesian investors should consider their risk tolerance and investment goals when deciding between IHSG and SBN for portfolio diversification in 2026.

For more on investment strategies, see our investment guide.