Islamic Investment Advisor Hosts Session on Ethical Portfolio Screening

2/11/2014 11:44:01 AM

 

Islamic Investment Advisor Hosts Session on Ethical Portfolio Screening
Azzad Asset Management webcast examines impact of Halal investment criteria on portfolio returns

(Falls Church, Virginia, 2/6/14) – In a webcast recorded live on Wednesday, February 5, 2014, representatives from Azzad Asset Management offered a candid look at the impact of socially responsible and Islamic screening criteria on investment portfolios. Azzad Equity Analyst Haris Anwaar, CFA®, and Portfolio Manager Christian Greiner, CFA®, of Ziegler Capital Management guided the discussion.

Watch: Ethically Screening Your Portfolio Webcast (YouTube)

During the webcast, Azzad offered the first public overview of its proprietary, in-house Investment Screening/Filtering Application, or ISFA. Launched in 2000, ISFA is a software program used to filter the stock market for candidates that meet Azzad’s strict investment requirements. It is used by Azzad’s team of institutional partners, including Ziegler Capital Management, which manage portfolios on behalf of Azzad clients.

See also: Meet the Managers

“It does constrain our universe in certain ways,” said Greiner about using Azzad’s investment screens. “But there can be advantages to working with a smaller number of candidates for investment. We expect the high-quality, low-debt names that remain to be a stronger crop of stocks. Our stock selection methodology works well in conjunction with Azzad’s social restrictions.”

The webcast also outlined Azzad’s mandate to promote Halal investing, which is sometimes referred to as Islamic investing, or Islamic finance, more generally. As the presenters explained, the term refers to using money in a way that promotes sustainability and avoids practices deemed harmful to society. Halal investing avoids companies with lines of business that run afoul of Islamic ethics, including alcohol, tobacco, gambling, pork, pornography, banking/financial services that profit from interest-based lending, and weapons of mass destruction. Due to other Islamic restrictions, companies with high debt ratios or whose income from interest exceeds a minimal amount are also avoided.

See: The Seven Tenets of Halal Investing

In a statement, Azzad Asset Management said:

In an industry where principles are sometimes sacrificed in order to close a deal or make a quick buck, we remain dedicated to the notion that values still matter. And nowhere is that more evident than in our rigorous screening methodology. It remains at the core of our company’s mission, which is to provide investment services designed to help clients enjoy optimum performance without compromising their values. At Azzad, we are also determined to find the highest quality portfolio managers who are committed to our process—those who bring their unique, highly specialized skill set to select investments for our clients.

In recent years, Azzad has furthered the cause of Islamic finance in America, creating a suite of custom financial planning products for clients, formulated in conjunction with experts in law, finance, and tax policy. This includes the first Halal endowment (waqf) for mosques and community centers designed to help grow the assets of American Muslim institutions in a tax-efficient vehicle. Azzad also built an estate planning package to help preserve family wealth for future generations in a sustainable, authentic, and Islamically certified manner. 

Azzad Asset Management, advisor to the Azzad Funds and sponsor of the Azzad Ethical Wrap Program, is a registered investment advisor with the U.S. Securities and Exchange Commission. The company’s offices are located in suburban Washington, D.C.

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 the Investment Advisor.

Contact: Investment Communications Director, Joshua Brockwell, 703-207-7005, ext. 109, joshua@azzad.net; Chief Compliance Officer, Manal Fouz, 703-207-7005, ext. 115, manal@azzad.net.

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.