Federated to sub-advise first US halal fixed-income fund
WASHINGTON, D.C., June 17, 2014 — 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 U.S. 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 U.S.-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 firstname.lastname@example.org 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.
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