As of 20/09/2021
The Shariah ETF is an active fund managed by Sanlam Investment Managers that invests in best of class, high quality companies with strong growth prospects, durable business models, sustainable revenue and free cash flow.
It focuses on 20-35 companies with high returns on capital, low leverage, enduring businesses with a sustainable competitive advantage that produce significant free cash flow after capital expenditure.
The fund aims to achieve capital growth over the medium to long term, whilst complying with the Principles of Shariah Investment.
Stock Analysis: Quantitative Screening
Bottom-up stock selection with a focus on high quality businesses
Income and cashflow:
- High free cash flow conversion
- Attractive gross & operating margins
- Sustainable revenue growth profile
- Secular growth industry
- Low leverage
- Low capital requirements
- High returns on capital
- Dynamic capital allocation
- Exclude companies which are directly active or derive > 5% revenues from alcohol, tobacco, pork products, conventional financial services, defence, weapons, gambling or adult entertainment
- The total amount of interest-bearing debt does not exceed 33.33% of the total assets of the company;
- The total amount of interest-bearing deposits does not exceed 33.33% of the total assets of the company;
- The total amount of receivables and cash does not exceed 33.33% of the total assets of the company
- High conviction, benchmark agnostic, bottom-up approach
- Core ethos of Active Management
- Position sizes typically range from 3%-6%
- Team culture of debate and discussion, with decisions implemented by Portfolio Manager
- Position sizes determined by risk vs reward
- Sell/trim based on valuation or change in fundamentals
Socially Responsible Investing:
We believe that over the long term, integration of robust ESG policies make good business sense.
- As long term fundamental investors, we always carefully consider issues which may have an impact on the sustainability of returns over the medium to long term
- With the primary objective of producing superior financial returns for our clients, our investment process takes ESG issues into account when they may have a material impact on investment risk or return
- Our partnership with Sustainalytics, a global ESG and corporate governance information provider, helps to formalise our ESG analysis
- All fund managers have access to the detailed ESG reports from Sustainalytics and therefore include this risk analysis as part of their due diligence
- Comparable company scores allow for best-in-class analysis at the subindustry, sector and regional level
To view the Methodology