Saturna Capital Executive Vice President Monem Salam joined Steve Darling from Proactive to discuss the Saturna Al-Kawthar Global Focused Equity UCITS ETF. This ETF is listed on several European exchanges, including the London, Deutsche, and Swiss exchanges. The fund invests in 35 to 40 companies, balancing exposure between developed and emerging markets, particularly in technology sectors in Asia.
The fund employs a rigorous screening process, focusing on Sharia-compliant stocks that adhere to Islamic principles. This involves excluding industries such as alcohol, tobacco, gambling, and banking due to the prohibition of interest in Islam. Financial ratio screens further ensure limited exposure to debt and interest. The fund also incorporates Environmental, Social, and Governance (ESG) criteria, assessing companies on sustainability factors and ranking them across various parameters.
The portfolio is diversified across sectors like technology and pharmaceuticals, with significant holdings in companies like Novo Nordisk (NYSE:NVO) and Eli Lilly. The fund avoids oil and gas investments, which can impact performance variably based on market conditions. Despite this, it has achieved an inception-to-date return of about 9%. Salam highlighted the fund's appeal to both Muslim and non-Muslim investors, noting its ethical investment approach and strong downside protection during financial crises. This aspect attracts investors seeking stability and consistent long-term performance.