First US halal fixed-income mutual fund celebrates 4th anniversary
Shariah-compliant Azzad Wise Capital Fund lets American Muslims ‘invest with faith’
FALLS CHURCH, Va., April 21, 2014 — The Azzad Wise Capital Fund (NASDAQ: WISEX), America’s first halal, socially responsible fixed-income mutual fund turned four years old this month. Falls Church, Virginia-based Azzad Asset Management launched the interest-free fund in 2010.
“It wasn’t easy to do, but we were determined to create a fixed-income solution for our clients who wanted to observe the tenets of their faith,” said Bashar Qasem, Azzad president and CEO, on starting the fund. “Today, the Azzad Wise Capital Fund has a following among retail investors and financial advisors alike. They also appreciate the fund’s exposure to emerging markets and an alternative asset class like sukuk.”
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 the giving and taking of usury, or interest. Although it does not deal with debt instruments created from interest-based lending, the Azzad Wise Capital Fund shares in the gains from its ventures, which include Islamic bank deposits and sukuk.
Qasem started Azzad Asset Management in 1997 after discovering a lack of financial solutions and investment options that aligned with his Muslim faith. Traveling the globe to learn from scholars in Islamic law and earning credentials to teach and consult on compliance with Islamic finance, he returned to the US and became licensed to work in the investment industry. In 2000, Qasem and his colleagues oversaw the launch of Azzad’s Shariah-compliant stock fund, the Azzad Ethical Fund (NASDAQ: ADJEX). The firm grew its financial planning and wealth management lines of business for the next decade, ultimately creating the Azzad Wise Capital Fund to diversify client accounts.
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.
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.
Resource: A Sukuk Primer
See also: Azzad analysis featured in 2014 Thomson Reuters Sukuk Report (PRNewswire)
Azzad Asset Management, investment advisor to the Azzad Funds and sponsor of the Azzad Ethical Wrap Program, is committed to providing investment services designed to help people enjoy optimum performance without compromising their values. Azzad is a member of the Forum for Sustainable and Responsible Investment (US SIF) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The firm, based outside Washington, D.C., is a registered investment advisor with the U.S. Securities and Exchange Commission.
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.
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