Request to add the Azzad Funds to your 401(k) - Letter Template
8/15/2013 10:13:53 AM
Dear Benefits Director,
I would like to request that our company include the Azzad Ethical Fund (NASDAQ: ADJEX) and the Azzad Wise Capital Fund (NASDAQ: WISEX) as investment options in our 401(k) plan. These mutual funds invest in line with halal, Islamic principles, which are a requirement of my religious faith. As a Muslim, I am required to consider the social and ethical consequences of a business, not just profitability.
Halal investing, which is sometimes referred to as Islamic investing, means using money in a way that promotes sustainability and avoids harmful societal practices. Specifically, it means abstaining from companies with lines of business that run afoul of Islamic ethics, including alcohol, tobacco, gambling, pork, pornography, banking/financial services that profit from lending in interest, and weapons of mass destruction. It also means avoiding companies that have debt ratios above specific thresholds and whose income from interest exceeds a minimal amount. The Azzad Funds abide by strict criteria to make sure that these principles are followed.
The Azzad Funds are also members of the US Forum on Sustainable and Responsible Investment. As such, they are part of a growing movement in the mutual fund industry that promotes the incorporation of social, environmental, corporate governance, and faith-based screens into an investment methodology.
Most funds labeling themselves as “socially responsible,” however, still invest in financial/insurance companies as well as companies with high debt levels. The Azzad Funds are one of the few boutique mutual fund options for American Muslims who wish to “invest with faith.”
I believe that the inclusion of the Azzad Funds in our plan would likely make a significant difference in the retirement that I can look forward to. Currently, none of our plan’s choices offers me an investment option that reflects my religious beliefs, preventing me from fully participating. The Azzad Funds incorporate halal investing screens into their investment process. They reflect my values and would allow me the opportunity to take advantage our company’s retirement plan.
The Funds are already available through several brokerage platforms, making it easier to add to our company’s investment options. I believe it is an obligation of our plan’s trustees to ensure that the available investment options provide for a reasonable accommodation of participants’ faith-based investment guidelines.
I am happy to provide more information, if needed. Thank you for your attention to this matter.
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.