On Tuesday November 9, 2010, 4:49 pm EST
67 WALL STREET, new York – November 9, 2010 – the Wall Street Transcript has just published its Socially Responsible Investing Report offering a timely review of this portfolio management philosophy to serious investors and asset managers. this special feature contains expert commentary through in-depth interviews with high performing Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Socially Responsible, Sustainable Investment Philosophy – Green, Environmental Investing – Alternative Investments
Companies include: Akamai (AKAM); BP (BP); Becton Dickinson (BDX); Bristol-Myers Squibb (BMY); Cardinal Health (CAH); Cisco Systems (CSCO); Citibank ©; Edwards Lifesciences (EW); EnCana (ECA); Exterran Holdings (EXH); Gardner Denver (GDI); Goldman Sachs (GS); Honda Motor (HMC); IBM. (IBM); Intel (INTC); Johnson & Johnson (JNJ); M&T Bank Corporation (MTB); Sharp (6753); Tyco (TYC); U.S. Bancorp (USB); Unit Corporation (UNT); Washington Mutual (WAMUQ).
In the following brief excerpt from just one of the in depth interviews in this special report, a portfolio manager discusses his market outlook and investment philosophy for investors.
Jamal Elbarmil has served as the Vice President of Azzad Asset Management since April 2000, as Portfolio Manager for the Azzad Ethical Mid Cap Fund since October 2008 and as Portfolio Manager for the Wise Capital Fund since its inception. he also manages Azzad’s international and other portfolio models for institutional investors.
For Azzad Mr. Elbarmil developed ISFA, a software program designed to screen securities for compliance with socially responsible guidelines. he holds a master’s degree in information systems from American University, in Washington, D.C., and he is a Ph.D. candidate at George Mason University, in Virginia. Prior to joining Azzad, mr. Elbarmil was Vice President of Technology for Information Policy & Administration, Inc., in Virginia, where he supervised the development of software systems. he has over 10 years of investment management experience.
TWST: please start with an overview and history of Azzad Asset Management.
Mr. Elbarmil: Azzad Asset Management is a registered investment adviser founded in 1997 in Falls Church, Va. we started by launching a hedge fund for affluent investors and followed that product in 2000 with the Azzad Funds. Today the Azzad Funds consist of the Azzad Ethical Mid Cap Fund (ADJEX) and Wise Capital Fund (WISEX). In 2003 we launched our separately managed program called the Azzad Ethical Wrap Program for affluent clients who desire a more comprehensive asset management solution. we also provide our clients with a separate financial planning service and manage several model portfolios for institutional clients. our company, our products and our services all incorporate our socially responsible investment philosophy.
TWST: you mentioned your socially responsible investing philosophy. What does that mean to you and why is that important?
Mr. Elbarmil: for us, socially responsible investing, or sustainable investing, is the only reason our firm was founded. obviously it incorporates negative screening, such as avoiding companies whose main revenue is derived from alcohol, tobacco, gambling, pornography, nuclear weapons, meat products and interest-based lending. we also do not invest in financial services firms, like Goldman Sachs (GS), because these companies make most of their money by investing in the very things I just mentioned.
What makes our firm unique, however, is that avoiding companies with high debt is a part of our socially responsible, sustainable investment philosophy. we believe that sustainable companies must also be fiscally responsible. Imagine if corporations had implemented this philosophy in their business practices; we probably wouldn’t be where we find ourselves today, with all these bailouts and burdened with so much debt. Our socially responsible investing philosophy is important because it “A” helps us to identify companies that are sustainable, meaning they have low business risk and will potentially thrive, and “B” helps us to identify companies operating in line with our values. we and our clients are very cognizant of the fact that our investment decisions have a strong impact on the world we live in. after we apply our screens, our analysts then go about using various quantitative and qualitative analysis to identify promising securities to add to our portfolios.
TWST: so you start with the ethical screens, apply quantitative and then qualitative analysis?
Mr. Elbarmil: yes, after we identify that a particular company is in line with our socially responsible investment guidelines, we rank companies according to their earnings yield and return on capital. we then conduct more extensive analysis of the top 15% to 20% of securities in the ranking. this involves examining a company’s financial statements.
After a company passes all our quantitative criteria, we analyze it for qualitative analysis, meaning we look at management, competitive position, barrier to entry and so forth. We’re basically looking for companies that can potentially deliver promising returns with sound business practices.
TWST: How would you describe your investment philosophy overall?
Mr. Elbarmil: we believe that sustainable companies operating responsibly and in ethical lines of business offer the best opportunities for shareholder returns. the Azzad Ethical Mid Cap Fund concentrates on mid-cap growth stocks that are well positioned for long-term growth.
TWST: Do you have both international and domestic stocks in your fund?
Mr. Elbarmil: yes, the fund holds about 80% in domestic stocks and 20% in international stocks. right now we have a large percentage of our international portion invested in emerging markets, such as Asia and Latin America. we believe that the emerging and developing markets offer attractive opportunities for our fund.
TWST: What are the main goals of your fund?
Mr. Elbarmil: the fund’s main goal is to deliver competitive returns to our shareholders by investing in companies operating sustainably and according to the values we espouse.
The Wall Street Transcript is a unique service for investors and industry researchers – providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. this special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
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