(Falls Church, Virginia, 8/13/14) – Azzad Asset Management today announced the launch of an online tool intended to help American Muslims observe halal investing guidelines.
Using input provided by shareholders of the Azzad Mutual Funds, an online purification calculator will provide a user-specific dollar amount that represents unintentional earnings that were potentially derived from religiously impermissible sources (e.g., interest income). Purification totals are calculated on a per share basis using Azzad’s methodology for calculating unethical income. Azzad advises shareholders to give the indicated amounts to the charity or charities of their choice in order to avoid profiting from any activities deemed potentially harmful to society. Clients may think of their donations as akin to the practice of purchasing carbon offsets to alleviate environmental harm.
Azzad already maintains daily records for all Fund accounts, batch data downloads, and point-in-time purification calculations in order to report purification totals on an annual basis to wealth management clients. As in previous years, the firm released annual totals to clients this year during the holy month of Ramadan (early July). Azzad’s new calculator allows shareholders to access their totals at any time, year-round. The online tool will also be useful to shareholders who own the Azzad Funds through a financial intermediary and therefore do not receive annual reports from the company.
Azzad is an outspoken advocate of the Seven Tenets of Halal Investing, which includes purification (Tenet 6). The firm regularly educates the American Muslim community on how to invest in accordance with their faith.
Video: Ethically Screening Your Portfolio (YouTube)
See also: Calculating Zakah on Modern Financial Assets (YouTube)
About Azzad’s purification methodology
Purification is an essential aspect of halal investing. It involves the donation of income earned from any unintended and unacceptable business activities by companies in which a shareholder is invested. Although Azzad follows strict guidelines when investing for clients, the firm advises them that it is possible to unintentionally earn small amounts of income that are deemed prohibited. Financial data vendors do not typically identify lines of business making up less than 5 percent of a company’s revenue. As such, 5 percent of company revenues for all Fund holdings are tallied and earmarked for purification by Azzad. Clients are advised to give away this income in order to purify their accounts of any potentially sinful dealings.
Azzad follows best practices and guidelines issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). AAOIFI is a consortium of Islamic scholars who convene to issue guidelines on Islamic investing and financial matters. AAOIFI Standard Number 21, which outlines the principles of Islamic investing and includes specific guidance on purification, is considered the authority for Islamic financial services firms.
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.
Contact: Investment Communications Director, Joshua Brockwell, 703-207-7005, ext. 109, firstname.lastname@example.org; Chief Compliance Officer, Manal Fouz, 703-207-7005, ext. 115, email@example.com.