Q:  Would you provide a brief history of the company and the fund? A : Azzad Asset Management is a registered investment advisor founded in 1997 in Falls Church, Virginia. 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 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. Azzad Ethical Mid Cap Fund was launched in December 2000 and is now available through numerous brokerages including Charles Schwab, Fidelity, TD Ameritrade, Scottrade and others. Q:  What core beliefs guide your investment philosophy? A : We seek companies that have strong fundamentals and avoid activities that are potentially harmful to society. We avoid companies with significant revenue from tobacco, alcohol, meat products, gambling, pornography, interest, insurance, and weapons of mass destruction. We also prefer companies that are fiscally responsible and have low to no debt. We believe that sustainable companies operating responsibly and in ethical lines of business offer the best opportunities for shareholder returns. Q:  What is your investment process? A : The Fund primarily invests in equity securities of mid-cap growth companies with market capitalizations of $500 million to $10 billion at the time of investment. We believe that a disciplined and systemic stock selection process is essential to long-term success. We use quantitative screens and qualitative analysis to provide a matrix for selecting stocks for the Fund. Our investment process employs a four-step process. The first step involves the screening for ethical and socially responsible companies and the generation of an approved list of primarily mid cap growth companies that meet our ethical screens. This is conducted using our proprietary software. Even after a company has been added to the Fund, we continue to monitor it for compliance with our screens. The next step involves screening those approved companies for quantitative analysis. We exclude companies with debt ratios greater than 33% and accounts receivable ratios greater than 45%. We rank companies according to their earnings yield and return on capital. We then conduct more extensive analysis of the top 15-20% of securities in the ranking. 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. The last step involves making sure the Fund’s portfolio is diversified among industry sectors to reflect its benchmark and that its risk exposure and growth desire criteria are appropriate. Q:  Are there any additional criteria that impact your investment process? A : Yes, we are bullish on the international markets specifically Latin America and developing Asia. Therefore, the portfolio tries to maintain a 20% exposure to international companies who meet our guidelines. Another factor that we focus on is the sector allocation. If we are not bullish or favorably disposed to a sector, we are likely to avoid all companies. We do not try to pick a company that may be doing better in that sector and hope that somehow it will avoid the pitfalls in the sector or the industry. Moreover, our process is dynamic as sectors go in and out of favor. For example, airlines were not in favor when oil prices were on the ascent and industry was rife with overcapacity. But as the industry began the process of cutting the excess capacity and conducted better fuel management, the air transportation sector was no longer out of favor. Q:  Could you give one or two examples? A : We hold Akamai Technologies, Inc., a company that provides a distributed computing platform for global internet content and application delivery. Akamai is very strong in how it is positioned in the internet delivery market and in providing certain delivery mechanisms. In my opinion, Akamai is a leader in content delivery space on the internet and widespread embrace of its platform by many large companies is expected to continue. I believe this is a very strong company, and, in my estimate, management is well focused and competent. Another company we’ve held for a long time is Priceline, an online travel company. Even though its stock price dropped significantly (15% to 20%) during the volcanic ash eruption in Iceland, we knew that the volcanic eruption was a temporary phenomenon, so we increased our stake in the company. We feel Priceline is on a very strong footing. We think of their unique auction based travel products as very sustainable models, and we believe that the company has several years of growth in front of it. We are still holding the stock but have trimmed it down to one third of what we held in the past. Q:  What is your sell discipline? A : A stock is immediately removed from Azzad Ethical Mid Cap Fund’s portfolio when it falls out of line with our socially responsible investment guidelines. It may also be removed when we feel that it’s reached its full valuation, its financials show signs of deceleration or a more attractive investment presents itself. Q:  What are the benchmarks for your portfolio? A : Azzad Ethical Mid Cap Fund’s benchmarks is the S&P 400, but we also use the Morningstar Mid Growth Index to measure its performance. Q:  How do you measure and control risk? A : The Fund has a portfolio that typically holds around 50 companies. Our goal is to maintain a convictions-based portfolio. We try to deliver excess return (alpha) to our shareholders through our disciplined, stock picking process. We look for, what we believe are, the most promising companies in various sectors. We believe that our stringent criteria in selecting high quality companies that, are sold at a discount, protect the Fund from the permanent loss of capital. We also reflect the Fund’s benchmark by diversifying across various sectors. Our sector and position size limits help us protect the Fund from getting too exposed to a certain sector or company. We will not take any balance sheet risks either. We avoid companies with high debt or dangerously low cash flows.