our Investment
Philosophy and Approach
We believe in investing with integrity and purpose, and that investments should generate value for all people involved, not just the investors.
Islamic Principles and Ethics
Islamic ethics and values are the foundation of our investment philosophy. This means that we invest in high quality, clean industries that are considered ethical both in terms of the “category” of business, and the “practices” of that business. Our experts engage in ongoing, meticulous research thoroughly examining each potential asset to qualify it as “halal” or Islamically permissible and ready for investment.
During this process, we also exclude companies that generate substantial income from manufacturing, production, and sales of products or services such as alcohol, pork, adult entertainment, banking industry, gambling, weapons, and defense.
Our Philosophy
The four goals of our investment philosophy are:
1. Produce long-term equity-like returns with less volatility than equities
2. Minimize frequency and magnitude of losses
3. Maintain a consistent portfolio philosophy of broad diversification and rebalancing
4. Adhere completely to Islamic investing principles
Screening and Diversification
The principle of diversification of depth and breadth is at the core of our investment decisions. We include indepth analysis of the ethical and financial standing, cash flow, and market capitalization of the companies we select. If a company earns a substantial income from interest or is under considerable debt, we remove it as a potential investment opportunity.
We seek to invest in large-cap stocks with a blend of some mid-and small-cap securities to offer a balance of company sizes. (Please note, the Fund does not include any fixed-income securities.) Under normal circumstances, we aim to fully invest the your portfolios’ assets in securities, however, in certain cases, any uninvested cash may be held in non-interest bearing deposits or invested back when appropriate.
Discipline
We take a highly-disciplined approach toward selecting securities, focusing on those high-quality ones that are, in our opinion, positioned as more resilient. In our experience, companies involved in ethical businesses and business practices tend to be more sustainable and offer better potential outcomes and growth opportunities.
Among the securities that meet Islamic principles, our portfolio manager carefully determines a security’s attractiveness based on a long-term value potential and history of growth rather than following short-term trends.
Monitoring and Scrutiny
On behalf of our investors, we continually and closely monitor our portfolio to ensure that every company in it maintains its halal qualification status over time, while also offering competitive market value.
