Federated to sub-advise first Shariah-compliant, US fixed-income fund
Azzad Asset Management has selected Federated Investment Management Company as sub-advisor for the Azzad Wise Capital Fund, America's first Halal, socially responsible fixed-income mutual fund.
"We understand the trust given to us as managers of this unique portfolio," says Ihab Salib, Federated vice president and head of international fixed income. "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.”
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.
"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," says 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 16 June.
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