Federated to sub-advise 1st Shariah-compliant, US fixed-income fund
6/16/2014 9:50:38 AM
Federated to sub-advise 1st Shariah-compliant, US fixed-income fund
Azzad Asset Management introduces new manager for Azzad Wise Capital Fund
WASHINGTON, D.C., June 17, 2014 /PRNewswire/ -- Representatives from Azzad Asset Management announced today the selection of Federated Investment Management Company, a subsidiary of Federated Investors, Inc., as sub-advisor for the Azzad Wise Capital Fund (NASDAQ: WISEX), America's first Halal, socially responsible fixed-income mutual fund.
“We understand the trust given to us as managers of this unique portfolio," said Ihab Salib, Federated Vice President and Head of International Fixed Income, in a statement delivered at the National Press Club. “We look forward to bringing the knowledge and resources of Federated’s global fixed-income team and our firm’s more than half a century of investing experience to this exciting opportunity,” Salib added.
Over its four-year history, the Azzad Wise Capital Fund has proven to be an important diversification and income-generating tool for investors who observe the Islamic prohibition on usury, as well as for conventional investors in search of a socially responsible vehicle with exposure to alternatives and emerging market yield. Although it does not deal with debt instruments tied to interest-based lending, the Azzad Wise Capital Fund invests in Sukuk and Islamic bank deposits, which are designed to share profits and generate returns similar to conventional bonds.
Azzad representatives noted challenges in the search for a sub-advisor suited to the unique needs of an interest-free fixed-income fund. After interviewing several candidates, the due diligence team identified Federated as the best candidate.
“The Federated team has researched and purchased Sukuk, a significant holding in the Azzad Wise Capital Fund, for US and European mutual funds, as well as in separately managed accounts for large pension and institutional clients,” said Azzad Senior Investment Strategist Fatima Iqbal. “In addition, they have extensive experience managing fixed-income securities, generally. Much of the same analysis will be implemented in their management of the Azzad Wise Capital Fund.”
Fund shareholders approved the sub-advisory proposal in late May, and the registration statement was filed with the Securities and Exchange Commission on June 16th, Iqbal added.
Earlier this month, the Azzad Wise Capital Fund won a Lipper Fund Award for Best Global Bond (Sukuk) Fund for the one-year period ending 12/31/13.
The Azzad Wise Capital Fund also invests in US-dollar denominated investment grade Sukuk. Sometimes referred to as “Islamic bonds,” Sukuk are financial instruments issued to obtain an up-front payment in exchange for an income stream generated from tangible assets or services, often through leasing. According to Thomson Reuters, the value of global aggregate Sukuk for the period between January 1996 and September 2013 stood at more than $488 billion. A major distinction between conventional bonds and Sukuk is that the latter are linked to an asset, allowing investors to be equity stakeholders.
See: A Sukuk Primer (Azzad Asset Management White Paper Series)
See also: Azzad analysis featured in 2014 Thomson Reuters Sukuk Report (PRNewswire)
About Islamic bank deposits
The Azzad Wise Capital Fund invests in Islamic banks as part of its socially responsible investing mandate. Acting as an agent, Islamic banks bundle profit- and loss-sharing account holder assets together and channel capital into community development projects like Halal microfinance and infrastructure projects. Account holders make a return by investing in real economic projects globally.
See: Making Fixed Income Socially Responsible (YouTube)
About Federated Investment Management Company
Federated Investors, Inc. (NYSE: FII) is one of the largest investment managers in the United States, managing $366.2 billion in assets as of March 31, 2014. With 134 funds, as well as a variety of separately managed account options, Federated provides comprehensive investment management worldwide to approximately 6,100 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. For more information, visit FederatedInvestors.com.
About Azzad Asset Management
Since 1997, Azzad Asset Management, investment advisor to the Azzad Funds and sponsor of the Azzad Ethical Wrap Program, has provided investment services designed to help clients enjoy optimum performance without compromising their values. Azzad is a member of the Forum for Sustainable and Responsible Investment and the Accounting and Auditing Organization for Islamic Financial Institutions. The firm is a registered investment advisor based in Falls Church, Virginia.
About the 2014 Lipper Fund Awards
The Lipper Fund Awards are part of the Thomson Reuters Awards for Excellence, a global family of awards that celebrate exceptional performance throughout the professional investment community. The Thomson Reuters Awards for Excellence recognize the world's top funds, fund management firms, sell-side firms, research analysts, and investor relations teams. The Thomson Reuters Awards for excellence also include the Extel Survey Awards, the StarMine Analyst Awards, and the StarMine Broker Rankings. For more information, please contact email@example.com or visit excellence.thomsonreuters.com. The 2014 Lipper Fund Award winners are selected based on the highest risk-adjusted performance among funds within a given category for the 1-, 2-, 3-, 5-, and 10-year periods ending 12/31/13. The Azzad Wise Capital Fund is the winner of the Lipper Global Islamic Fund Award for the 1-year period in the Bond Global (Sukuk) category. A high Lipper rating does not necessarily imply that the fund had the best total performance or that the fund achieved positive results for the period. Past performance is no guarantee of future results.
Please consider a Fund's objectives, risks, charges and expenses carefully before you invest. The prospectus contains this and other important information. For a hard copy, please call 1-888-350-3369. Read the prospectus carefully before investing or sending money. The Azzad Funds are self-distributed. Azzad Asset Management serves as investment advisor.
Contact: Investment Communications Director, Joshua Brockwell, 703-207-7005, ext. 109, firstname.lastname@example.org; Chief Compliance Officer, Manal Fouz, 703-207-7005, ext. 115, email@example.com.
Opinions expressed are those of the author or fund manager, are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security and should not be considered investment advice.
Fund holdings and sector allocations are subject to change and are not a recommendation to buy or sell any security. Click here for Azzad Ethical Fund current top 10 holdings. Click here for the Azzad Wise Capital Fund current top 10 holdings.
Past performance does not guarantee future results.
The Azzad Ethical Fund is non-diversified and may invest a larger percentage of its assets in fewer companies exposing it to more volatility and/or market risk than diversified funds. The Fund may not achieve its objective and/or could lose money on your investment in the Fund. Stock markets and investments in individual stocks can decline significantly in response to issuer, market, economic, political, regulatory, geographical, and other conditions. Investments in mid-cap companies can be more volatile than investments in larger companies. Investments in growth companies can be more sensitive to the company’s earnings and more volatile than the stock market in general. Because the portfolio may invest substantial amount of its asset in issuers located in a single country or in a limited number of countries, it may be more volatile that a portfolio that is more geographically diversified. See the prospectus for more details about risks.
Investments in smaller and medium sized companies involve additional risks such as limited liquidity and greater volatility. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower rated and non-rated securities present a great risk of loss to principal and interest than higher rated securities.
The Azzad Wise Capital Fund is non-diversified with a high concentration of securities in the financial sector which can expose the Fund to more volatility and/or market risk than diversified funds. The Fund may not achieve its objective and/or could lose money on your investment in the Fund. The Fund mainly invests in securities issues by foreign entities which expose the Fund to country specific risks such as market, economic, political, regulatory, geographical, and other risks. The Fund intends to invest in certain instruments that may be illiquid. As a result, if the Fund receives large amount of redemptions, the Fund may be forced to sell such illiquid investments at a significant loss to be able to meet such redemption requests. See the prospectus for more details about risks.