About a decade since Saturna Capital last introduced new funds, back in 2015, this US asset management firm is currently exploring an asset diversification model in public equity markets and aiming to add new products.
Executive Vice-President Monem Salam told IFN Investor: “We might not be the first adopter. But with consciousness and deliberation, we do end up being the best at whatever we do. We like to take our time to come up with what we feel will be the best products for the customer.”
Monem emphasized that the firm’s expertise is that of Shariah compliant management of assets in public markets. As such, recent developments in the fintech arena — like crowdfunding and tokenization — are not relevant for Saturna.
“These are not in our area of fund management in public equity markets and these are not things we want to focus on.” Monem added that the firm does not see fintech offerings as competition right now.
Still, there is a technological advancement that Saturna is considering. Aiming to improve interaction with clients, the initial robo-advisory model was not good enough without human interaction. So, the firm is looking for another system that provides a combination of both.
Reflecting on how the firm’s operational strategy has so far been successful — compared to funds valued at US$3.5 million almost three years ago, Monem said: “I would never have guessed then we would be at around US$8 billion now. The market has helped us as well.”
Monem noted that Saturna’s strength and fund flows have all been on the Islamic side, with less than 5% coming from conventional while 95% of its business is Islamic. Over that period, Saturna had garnered a healthy volume of net subscriptions into its funds — from both Muslims and non-Muslims.
Running four Halal funds under the Amana branding, with the first launched in 1986, total assets under management as at 10th May 2024 stood at US$7.32 billion. Multi-year tracking saw two funds outperforming the matching indices while the others came close.
“They are coming because of our solid returns. There are not only Muslim investors but those seeking ethical investments and are seeking good returns. It’s safe to say that from the investors’ religious standpoint, it’s about a 50:50 split.”
Monem praised Malaysia for having a good infrastructure and ecosystem for Islamic financing and investing, with Saturna using the learnings from its Malaysian unit to be translated into the US regulatory system. Mandates coming out of the OIC are also being invested through Malaysia.
Aiming to continue this geographical reach via Malaysia, Monem said Saturna now only has one fund run out of Europe — an exchange-traded fund with a company called HANetf. Looking forward, Monem wants Saturna to be viewed as a top-tier fund manager which also does Shariah business — to avoid being pigeon-holed or limited in its market reach.
