Investment Strategies

We offer a full range of mutual funds and equity strategies managed by institutional money managers specialized in their asset class.

STRATEGIES

ASSET CLASS

OVERVIEW

Large-Cap Growth

The Large Cap Growth Portfolio seeks to achieve a rate of return equal to or greater than the Russell 1000 Growth Index. Historically, large cap stocks have achieved a rate of return higher than bonds, money market accounts and certificates of deposits with less volatility than small or mid cap stocks.

The Large Cap Growth Portfolio invests primarily in companies valued at $10 billion or higher at the time of investment. Investments are chosen from a universe of securities passing Azzad’s ethical screens. ZCM’s strategy is relatively sector neutral. They seek to identify undervalued stocks that have already traded at a discount to their fair value. They combine a quantitative model with discounted cash flow analysis to score and rank stocks within the universe. They then apply a fundamental evaluation to confirm a stock’s attractiveness.

Equity

Large-Cap Value

The Large Cap Value Portfolio seeks to achieve a rate of return equal to or greater than the Russell 1000 Value Index. The portfolio was created on April 1, 2011. The Manager seeks to achieve long-term capital appreciation by investing in undervalued equity securities, which meet Azzad’s ethical values screening criteria. The strategy uses a bottom-up, fundamental research process and invests in large cap stocks (generally having a market capitalization of greater than $1 billion at the time of purchase) identified by the manager’s Relative Dividend Yield valuation discipline. Only companies that pay a dividend and have a dividend yield greater than that of the S&P 500 are considered for possible inclusion in the portfolio.

Equity

Mid-Cap Growth

The Azzad Ethical Fund seeks total return, which includes income from dividends and capital appreciation of stocks. The Fund invests in mid-cap companies included in the Russell Midcap® Growth Index and screened for compliance with the firm’s ethical investment restrictions. [Summary prospectus]

Equity

Small-Cap Growth

The Small Cap Growth Portfolio seeks to achieve a return equal to or greater than the Russell 2000 Growth Index. The Portfolio was created on August 1, 2013. Kayne, Anderson Rudnick Investment Management (“KAR”) is the Manager of the Small Cap Growth Portfolio since its inception. KAR’s investment philosophy focuses on the “high-quality” subset of the small cap asset class. The Manager believes that this emphasis on high-quality businesses, anchored by fundamental, bottom-up research, will achieve attractive risk-adjusted returns for its clients over a complete market cycle. KAR defines “high quality” as a business characteristic that represents a company’s ability to control its market. This investment philosophy leads KAR to companies which it believes have low business risk as identified by certain financial characteristics, such as consistent and profitable growth, high returns on capital, strong free cash flow, and low organic need for external financing. KAR applies a
“business analyst” approach to its research as they strive toward developing deep conviction in each of the portfolio holdings and, over time, an information advantage. KAR believes that owning a focused, yet diversified, portfolio of companies with low business risk, purchased at attractive valuations, and prudently managed as dictated by changes in fundamentals or valuation, will lead to repeatable and successful investment results.

Equity

Small-Cap Value

The Small-Cap Value Portfolio seeks to achieve a return equal to or greater than the Russell 2000® Value index. The Portfolio was created on August 14, 2012 with the objective to achieve long-term, above-average performance with below-average risk (as measured by standard deviation). The managers try to identify quality companies that they believe will enhance shareholder value over time. Using a fundamentally, research-driven process, their focus is primarily on stock selection. They analyze and value stocks as partial ownership interests in businesses and their long-term investment time horizon reflects this mindset. They believe that a bottom-up stock selection is the highest quality source of excess return.

Equity

Dividend

The Portfolio seeks to achieve investment returns that correspond to the S&P 500® Dividend Aristocrats® index. The S&P 500® Dividend Aristocrats® index captures sustainable dividend income and capital appreciation potential, which are both key factors in investors’ total return expectations. Since 1926, dividends have produced roughly a third of total equity return whereas capital gains have contributed the remaining two thirds.

Companies included in the portfolio have increased their dividends annually for the last 25 consecutive years, demonstrating their commitment to shareholders. They have a market capitalization of at least $3 billion and have an average daily value traded of at least $5 million over the last 3 months. They must also pass Azzad’s socially responsible investment criteria. The portfolio is sought after by investors who are looking for investment income in the stock market. It generally holds fewer than 40 U.S. domestic stocks and is designed to have a relatively low turnover of less than 30%. The Portfolio was created on January 1, 2013.

Equity

International Developed

The International Portfolio consists primarily of American Depository Receipts (ADRs) with market capitalizations greater than $10 billion, of established companies either domiciled outside the United States or whose primary business is conducted outside the United States. The portfolio aims to achieve a return equal or greater than the MSCI All Country World Index (ACWI) (ex-U.S.). A top-down global analysis combines with a bottom up security selection approach to construct a diversified portfolio. A global analysis of prevailing economic market and political conditions drives investment themes as well as country and sector allocations. Fundamental analysis identifies quality companies with durable business models and sustainable competitive advantages. Of course, stocks must also pass Azzad’s socially responsible investment criteria. The portfolio generally holds less than 50 stocks and was created on December 3, 2012.

Equity

Real Estate Investment Trusts

The REIT (Real Estate Investment Trust) Portfolio seeks to achieve a return equal to or greater than the Dow Jones US Select REIT Index. Historically, real estate investment trusts have done well when interest rates were low and occupancy rates at commercial and residential properties were high. They also historically have been uncorrelated to the broader stock market, and, therefore, provide a valuable contribution to a diversified investment plan. REIT securities tend to pay high dividends because the majority of earnings must be distributed—by law—to shareholders. The portfolio generally holds less than 25 stocks and, therefore, is highly concentrated with low leveraged stocks.

The portfolio was created on March 24, 2004. It is managed by an internal investment team at Azzad. After screening the entire universe for Azzad’s ethical screens, the investment team employs quantitative criteria to assess a company’s future earnings growth potential. The portfolio is constructed with a bias to large cap REITs. Non REIT stocks that are concentrated in the real estate industry may also be added to the portfolio where the managers believe they may potentially provide alpha and greater diversification.

Equity

Short-Term Fixed Income

The Azzad Wise Capital Fund pursues long-term income and capital preservation by investing primarily in Islamic Bonds (Sukuk) and interest-free bank deposits and notes issued primarily by overseas banks in developing countries. A small portion of the Fund’s assets may be invested in dividend yielding stocks. Using a thorough due diligence process, the investment team seeks to identify fixed income investments that are suitable for more conservative investors and in line with the Adviser’s investment philosophy. [Summary prospectus]

Alternative fixed income