Bashar Qasem is the most outspoken voice among Muslim investors in the United States. He was the only Islamic financial representative among religious shareholder advocates who sent a letter in February to protest U.S. President Donald Trump’s travel ban. Qasem's Azzad Asset Management firm started its work in 2005, weighing in on issues like worker safety, climate change and lobbying disclosures. This direct advocacy will test whether U.S. Muslim investors will support the sort of faith-based shareholder activism common among other religious groups. Qasem's strategy appears to be helping to differentiate his firm from other asset management firms. Azzad's assets increased 11% in 2016 to US$487 million (£393 million) at year-end. Growth included US$5.7 million into the firm’s mutual funds, the third consecutive year of inflows.
Faith-based advisors assist clients with financial planning, investment management, insurance, and other aspects of wealth management that their secular counterparts do. But according to Kingdom Advisors President Rob West, faith-based advisors generally help clients determine "what’s enough" for them to live on and use the rest to "serve others". One example is Ronald Blue & Co., a US$65-billion multi-branch advisory firm that incorporates religious values and laws into financial plans. While some faith-based advisory firms cater to lower-value investors, many serve relatively high-net-worth clients and charge higher than the standard 1% of assets per year. At Islam-oriented Azzad Asset Management, fees start at 1.75% to 2% of assets and decline with increasing asset values. The high fees are justified by labour-intensive services such as screening out certain stocks and calculating the zakat.
Azzad Asset Management has joined other socially responsible investment institutions in signing a coalition letter to the 19 CEOs who are members of President Trump's Strategic and Policy Forum. The letter asks to oppose the president's recent executive order barring refugees and certain immigrants from seven majority-Muslim countries. In addition to public outcry against the ban on humanitarian and constitutional grounds, many have pointed out the negative impact of barring international workers on the economy. The letter was signed by 64 socially responsible investment firms and human rights and religious organizations. The Strategic and Policy Forum's first meeting is scheduled for February 3.
Azzad Asset Management has joined a consortium of responsible investors in support of a United Nations' call to end antibiotic use in global food supply chains. The UN statement calls member nations to bring clarity to antibiotic use through national and regional regulations. Antibiotics are frequently used for rapid growth promotion in livestock and poultry and to prevent illness in animals living in cramped and unhealthy conditions. Experts say that the overuse and misuse of antibiotics in the meat industry has contributed to the rise of antibiotic resistance in the US and across the world. It is estimated that this public health issue is responsible for 2 million infections and 23,000 deaths each year.
Azzad Asset Management today announced that it has further magnified the social impact of its flagship mutual fund by adding investments in ethical trade finance deals. These investments may provide returns for investors while helping underserved populations in Asia and Africa obtain reasonable financing to grow businesses and cooperatives. The Azzad Wise Capital Fund (WISEX) invests primarily in sukuk and community development banks. Through WISEX, the Virginia-based investment firm is participating in a group of syndicated ethical trade finance deals arranged by the International Islamic Trade Finance Corporation (ITFC). The ITFC is charged with advancing trade and improving the economic conditions of people around the world.
A delegation from Azzad Asset Management joined representatives from the Saudi Arabian and U.S. business communities in Washington, D.C., for a conference designed to foster trade ties between the two nations. Azzad has investments in Saudi Arabia through its international fixed-income fund. The U.S.-Saudi Investment Forum, organized by the Saudi Arabian General Investment Authority in conjunction with the Council of Saudi Chambers and the U.S.-Saudi Business Council, served as an opportunity for executives and officials to explore investments in energy, transportation, health, education, and financial services. Signing ceremonies between U.S. and Saudi businesses were a feature of the event.
Islamic financial institutions have $2 trillion in assets under management, and this is likely to grow to $3 trillion in the next three to five years. The Shariah-compliant Azzad Wise Capital Fund offers an investment opportunity not only to Muslim investors but to anyone looking to invest in an alternative, non-correlated fixed-income fund with less volatility. The Fund currently has almost $100 million in assets under management. It pursues long-term income and capital preservation by investing primarily in Islamic Bonds 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.
US-based Azzad Asset Management has welcomed Pope Francis' encyclical calling for swift worldwide action to combat climate change, protect the environment, and move toward economic equality. In the encyclical released 'Laudato Si' the pope issues an urgent invitation to people of all faiths to reduce their consumption of resources and make changes in their daily lives in order to safeguard the earth for future generations. He calls for sweeping government and economic reforms to counter environmental destruction and economic injustice. Azzad added its voice to that of the Interfaith Center on Corporate Responsibility (ICCR) which welcomed the pope's statement. Azzad joined ICCR earlier this year, becoming the first Muslim member of the shareholder coalition.
Representatives from the Interfaith Center on Corporate Responsibility (ICCR) and Azzad Asset Management have announced that Azzad will join ICCR as its newest member—the first Islamic firm to be affiliated with the group. As a member organization focused on corporate social responsibility and environmental advocacy, ICCR leverages the influence of its shareowner members to enact change. The two organizations expressed optimism about the opportunities this collaboration affords. Azzad representatives reportedly hope to bring a fresh, Islamically inspired perspective to the many corporate and social issues confronted by ICCR.
Sukuk, Islamic equivalent bonds, are beyond the boundaries of many portfolio managers of advanced economies. But in the Islamic finance world, it's the non-Islamic sukuk issuers that are non-conventional, and this is where Azzad Asset Management sees value. Ihab Salib, the lead portfolio manager for the firm's sukuk fund, the Azzad Wise Capital Fund (WISEX) said, "Currently we see value in some of the non-conventional issuers". "As maiden issuers in the market, they need to price the sukuk generously so as to tempt investors," he commented. South Africa's September issuance was a case in point.
Azzad Asset Management has announced the release of a white paper detailing the impact of Halal investing guidelines on investment performance. Examining historical data over the last two decades, the white paper offers evidence that Shari'ah-screened indices, which favor industries like information technology and health care and exclude financial services, can outperform their broad-based conventional counterparts over the long term. The paper also shows that the most significant divergence between conventional and Shari'ah-screened indices is the almost complete lack of financials in the latter due to the Islamic prohibition on interest. Azzad's findings follow other research indicating that socially responsible investing strategies can deliver competitive risk-adjusted returns over the long run.
Azzad Asset Management has announced the launch of an online tool intended to help American Muslims observe Halal investing guidelines. Using input provided by shareholders of the Azzad Mutual Funds, an online Purification Calculator will provide a user-specific dollar amount that represents unintentional earnings that were potentially derived from religiously impermissible sources. Purification totals are calculated on a per share basis using Azzad's methodology for calculating unethical income. Azzad advises shareholders to give the indicated amounts to the charity or charities of their choice in order to avoid profiting from any activities deemed potentially harmful to society.
Representatives from Azzad Asset Management announced the selection of Federated Investment Management Company as sub-advisor for the Azzad Wise Capital Fund, America's first Halal fixed-income mutual fund. The Federated team has researched and purchased Sukuk, a significant holding in the Azzad Wise Capital Fund, for US 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.
Azzad Asset Management has announced the launch of a series of estate planning seminars across the United States aimed at helping congregants at mosques and Islamic centers create inheritance plans that comply with both U.S. and Islamic law. It is the 1st Islamically compliant waqf model consistent with U.S. law. The Azzad estate planning seminars began in early September in the Southeastern United States. As part of those sessions, certified financial planners explain the fundamentals of Islamic inheritance law, the importance of wills, and the implications of bequests—in addition to the role each plays in conjunction with a family endowment.
Representatives from Azzad Asset Management met with His Excellency Ebrahim Rasool, Ambassador of the Republic of South Africa to the United States, to discuss potential investment in South Africa as part of the portfolio held by the Azzad Wise Capital Fund. The Azzad Wise Capital Fund is America's first halal fixed-income mutual fund and invests in Sukuk as well as deposits and notes from Islamic banks that comply with specific socially responsible and halal financial guidelines. In recent years, South Africa has made strides in Islamic finance although the Muslim community represents only 3% of the population. Ambassador Rasool noted that South Africa's regulatory and legislative structures, strict risk management frameworks, as well as governance and compliance structures make it a possible springboard for companies into the rest of the continent.
Azzad Asset Management recently hosted Dr. Mehmet Yesilyaprak of Turkiye Finans Bank at its headquarters in Washington, D.C. Yesilyaprak gave the Azzad staff an update on the banking sector in Turkey and met afterwards with Azzad management to discuss areas of future collaboration. The Azzad Wise Capital Fund invests in deposits and notes from Turkiye Finans Bank, among other Islamic banks. The Fund also invests in sukuk. As of March 31, 2013, deposits from Turkiye Finans Bank represented approximately 13% of the Fund's holdings. Portfolio Manager Jamal Elbarmil recently highlighted the contribution of Turkey's Islamic banking sector to the Azzad Wise Capital Fund's first quarter results, stating that exposure to bank deposits from the four Turkish Participation Banks, including Turkiye Finans Bank, helped the Fund outperform its benchmark for the period.