Making Fixed Income Socially Responsible Joshua Brockwell, Investment Communications Director 1 The following presentation is the copyright of Azzad Asset.
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Making Fixed Income Socially Responsible
Joshua Brockwell, Investment Communications Director
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The following presentation is the copyright of Azzad Asset Management, Inc. Any unauthorized broadcasting, public performance, copying, or re-recording will constitute an infringement of copyright.
• Three Asset Classes Sukuk (Islamic Bonds) Participation Bank Deposits Dividend-Paying Stocks
WISEX Highlights
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The performance quoted represents past performance, which does not guarantee future results.The Bank of America Merrill Lynch US Corporate and Government Master Index tracks the performance of US dollar-denominated investment grade Government and Corporate public debt issued in the US domestic bond market, excluding collateralized products. The index does not reflect the deduction of expenses, which have been deducted from the Fund’s returns. The index’s returns assume reinvestment of all distributions and dividends; you cannot invest directly in an index. The Fund’s inception date was 04/1/2010.
WISEX Performance and Allocation
All data reported as of 9/30/13
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Sukuk
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Definition
• Certificates of equal value representing undivided shares in ownership of tangible assets, services, or (in the ownership of) the assets of particular projects. (AAOIFI)
• Focus: Asset- ownership
Result: Cash flow with an ownership obligation
Sukuk (Islamic Bonds)
Conventional Bonds
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Sukuk vs. Conventional Bonds
Conventional
· Lending in interest
· Primacy of debt financing
· Debt financing is interest-based and does not require assets
· No ownership
· Claim to cash flow ONLY
· Unlimited debt potential
Sukuk
· Interest-free (rent)
· Primacy of equity financing
· Debt financing must be asset-based/backed and interest-free
· Proportionate beneficial ownership in the underlying asset
Participation Banking Assets• Global participation banking assets with commercial banks expected to reach
$1.8 trillion in 2013• Average annual growth = 19% over the past 4 years
Source:World Islamic Competitive Report 2012-2013, Ernst &
Young
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Participation Bank Structure
Deposit Investment
Capital + profit/loss
Investment Account Holders
Return
Real Economic Projects
Participation Bank
P&L Distribution Ratios90%-10%
85%-15%
80%-20%
95%-5%
90%-10%
85%-15%
80%-20%
95%-5%
P&L Distribution Ratios
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Indonesia Case Study
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Making an Impact on Society
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Making an Impact on Society
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Making an Impact on Society
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Making an Impact on Society
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The material, views, and opinions expressed in this presentation are solely those of the presenter and may not be reflective of those held by Azzad Asset Management.
The presentation is provided for general information purposes only and should not be considered an individualized recommendation or advice. Azzad Asset Management makes no representations or warranties with respect to the accuracy or completeness of the information provided.
Mutual fund investments, including the Azzad Funds, are not FDIC-insured, so you may lose money. The Azzad Funds are available by prospectus only, which includes more information about the Funds’ objectives, risks, charges, and expenses. Please read the prospectus before sending any money. To request a free copy, please call 1-888-862-9923, or visit us online at www.azzadfunds.com. Azzad Asset Management serves as the investment advisor to the Azzad Funds, which are self-distributed.