(Falls Church, Virginia, 9/16/14) – Azzad Asset Management today 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.
“We are often asked how Islamic investment criteria might affect portfolio performance,” said Azzad investment advisor and co-author Omar Ezz, CFP®. “This research sheds some light on that subject. We think stakeholders and interested parties alike will appreciate our findings.”
In addition to comparing long-term results that demonstrate the favorability of Shari’ah portfolios, 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. Financial services is the top asset class in conventional indices, both in the United States and globally.
Azzad’s findings follow other research indicating that socially responsible investing strategies can deliver competitive risk-adjusted returns over the long run. A 2012 study by Deutsche Bank found that incorporating environmental, social, and governance data in investment analysis is correlated with relative outperformance of conventional strategies.
Azzad is an outspoken advocate of the Seven Tenets of Halal Investing, which include screening out stocks of companies in unethical lines of business. The firm regularly educates investors on how to invest in accordance with Shari’ah guidelines.
Video: Ethically Screening Your Portfolio
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.
Investments, including the investments of the Ethical Wrap Program are not FDIC insured, so you may lose money. For more information please read the Firm’s ADV Part 2 and Wrap Brochure. These documents contain more information about the Program’s objectives, risks, and performance. 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 888-350-3369. Read the prospectus carefully before investing or sending money. The Azzad Funds are self-distributed. Azzad Asset Management serves as the Investment Advisor. The opinions expressed herein do not constitute investment advice and are provided solely for informational purposes. Past performance does not guarantee future results. Applying social restrictions to a portfolio excludes securities of certain issuers for non-financial reasons. Therefore, investors may forgo some market opportunities available to those who do not use these criteria.
Contact: Investment Communications Director, Joshua Brockwell, 703-207-7005, ext. 109, joshua@azzad.net; Chief Compliance Officer, Manal Fouz, 703-207-7005, ext. 115, manal@azzad.net
