Investment Objective & Strategies
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Our objective | Allied Asset Advisors generally seeks growth of capital while adhering to Islamic principles. All portfolios are, of course, customized to meet the investors' objectives, time frames and tolerance for risk.
Investment Strategies
- AAA seeks to achieve its capital growh investment objectives by investing in common stocks and equity-related securities of domestic and foreign issuers. Each of our investments must first meet Islamic principles. In addition, we select only those securities that the we believe will increase over the long term.
- Islamic principles generally prohibit investing in certain businesses such as alcohol, pornography, gambling, weapons and defense, pork, financial services and banking, and companies under considerable debt, among other things, as well as investments in interest-bearing debt obligations or businesses that derive interest income as their primary source of income.
- We believe a portfolio that is actively managed by a seasoned and expert portfolio manager enables the Fund to take advantage of opportunities in the market while staying true to Islamic principles. Among those securities that meet Islamic principles, we determine a security’s attractiveness based on a number of factors, including its anticipated value, record of earnings growth, and possible turn around, among other things. Although we make every effort, there can be no guarantee that a portfolio will achieve its investment objective.
- We may invest in “growth” or “value” stocks, but anticipate that a majority of our investments will be of the growth type.
- We may invest in companies of all sizes (market capitalizations).
- We believe diversification may enable better outcomes on investments. As a result, our portfolios typically hold more than 100 shari’ah-compliant companies in diverse business sectors. Diversification helps increase investment options as well as offer balance within the portfolio, although diversification does not guarantee a profit or protect against a loss.
- We may sell portfolio securities at any time when, in our judgment, their price has reached the intended target, their
fundamentals have deteriorated, or there are better investment opportunities. - AAA normally does not invest in emerging markets securities except for those traded on U.S. exchanges.
- Any uninvested cash will be held in non-interest bearing deposits or invested in a manner following Islamic principles.
Continuous Monitoring
Our portfolio manager and team continually monitor qualified companies to ensure they maintain good, ethical performance and ongoing shari’ah compliance. We conduct formal quarterly reviews of the portfolio with the guidance of the Shar’iah Board.
Daily, we monitor markets and client investments using performance monitoring software. This allows us to examine price movements, liquidity, trading events, industry trends, and overall market status to make strategic decisions for your portfolio. Furthermore, it allows us an opportunity for rebalancing to ensure we stay true to our investment philosophy and make tactical decisions as required.
