Monem Salam:
Welcome to Halal Money Matters, sponsored by Saturna Capital. I'm Monem Salam. You know, when a lot of people talk about the fact that when they're making investments, do they only go into 100% equities? Do they get bitcoin? Do they get gold? And what typically ends up happening is that, whatever the latest craze is, whatever's in the news, whatever's going up, they always ask me the question, should I really be in this asset class. And so today we're joined by Demba Ndiaye. He's Saturna Capital’s head of wealth management. He's going to be talking about asset allocation. Right. We'll take it from both perspectives. Number one is why it's important for you to have all your assets maybe allocated not just in one basket but in multiple baskets, what those baskets look like and how they perform over time. And then towards the end of it, we'll try to get into a little bit about the mechanics and really talk to Demba about how these kinds of asset allocations are created. So I'm really excited to have Demba on this podcast. And I welcome Demba. Assalamu alaikum.

Papa Demba Ndiaye:
Wa alaikum assalam, and thank you so much for having me. I am really excited about the conversation. As a practitioner in this industry for a long time, I think asset allocation gets overlooked oftentimes, and it's actually one of the foundations of investing. So I'm glad we're having this conversation today.

Monem Salam:
Absolutely. And you did talk about your extensive background, because just briefly, if you can tell us a little bit about, you know, your experience at Capital One, maybe before that or after that, that'd be great.

Papa Demba Ndiaye:
Appreciate that. So yes, I have been in the industry for about 25 odd years. I actually started with Deloitte and Touche in 2002, the accounting firm, which, so happened had a wealth management practice in the tax department. So, really started there in the early 2000s. As you mentioned, I joined Capital One in ‘06 right before the crisis. If you remember, and spent the better part of the last 15 or 16 years in wealth management providing investment solutions for our investor base. Yeah.

Monem Salam:
That's great. So thanks for the background. So let's jump right in. You know, I mean I think that probably my first question would be, you know, is like I we always tell people or, you know, whenever I'm talking to people, I always tell them, you know, if they're young, like, basically open up a Roth account, open up a taxable account, whatever it is, just buy some funds and just keep, you know, investing every single year because that's going to grow over the long term. So, you know, is asset allocation important very, very early on as well as later. Or does it come later and when do you need to start thinking about asset allocation?

Papa Demba Ndiaye:
I think you should from the beginning. And the reason why I say that is that your circumstances are going to change. Yes. That, younger investor starting out is probably going to have exposures that are going to be different from someone later in life, but that asset allocation consideration should be paramount from the start on. Yes.

Monem Salam:
And so then in that case let's define what asset allocation is then.

Papa Demba Ndiaye:
So the idea here is and maybe if I go back to the portfolio theory is based on the fact that investing in assets that are, that behave differently is a good idea. But the simple fact that if you take a particular asset class, it may be risky on itself, but marrying that with something that behaves differently will reduce risk. So it's important that at the onset you know, of, select which asset classes you want to invest in, and determining how you're going to allocate your funds.

Monem Salam:
So I mean I think and then the studies that are there always talk about you know if you invest your assets for 100 years this would have been the rate of return, you know those type of things. But you know, to be honest, no one lives 100 years. And so like that's probably not a good measure of what you're supposed to be doing. The second thing is that after 2008, or maybe even if you want to go back as we get into the zero interest rate environment, it seemed like all asset classes were performing in lockstep and were highly correlated. They call it, when something's going up, everything goes up. And when something goes down, everything goes down. So is that still important? Even in an environment where everything's going up or everything is going down at the same time?

Papa Demba Ndiaye:
Well, so actually that's very key because, the key insight is that diversification benefits from low correlation or not being in a single asset class. Having said that, yes, there's been a correlation. If you take equities and fixed income more than historically. But investments don't just stop at those two broad asset classes. There are others that add low volatility to the portfolio that should be considered. Yes. So to answer your question, there has been greater correlation in recent memory compared to historically. But that doesn't hide the fact that diversification still matters when it comes to investing.

Monem Salam:
So Papa, when we're talking about asset allocation, I mean, I think we should go back and really define, you know, what are the different types of assets and what do they actually look like. So, you know, you might have equities which are like just basically buying stocks in the market. You know, for, you know, different publicly traded companies. You can have fixed income, which for Muslims looks like a sukuk. It's an income certificate where you're, you know, either exposed to real estate or some kind of commodity and those type of things. But what other asset classes are there that you can put into a portfolio?

Papa Demba Ndiaye:
That's a very good question. So, yeah, obviously, you know, equities, as you mentioned, and fixed income are the fundamentals of portfolio construction. But one thing that we should always keep in mind is the assets themselves that don't need to be, low risk on an individual basis, they just need to move differently at different times to add value to the portfolio. So that's where, some illiquid assets, for example, such as real estate, private equity, venture capital, can add value to a portfolio. Commodities is another example. Having gold or other sort of similar asset classes, that have low volatility, that don't move as much as equities and fixed income do, are other asset classes that one could consider.

Monem Salam:
Yeah. And so I think for an investor I mean I think one thing to look at is like for example, you might have jewelry at home, gold. Your house itself if you're owning it or you're on a, on a mortgage that's considered your real estate, you know, all of these things have to be looked into from a totality. When you're thinking about your asset allocation, correct?

Papa Demba Ndiaye:
That is correct. And then so, as you know, one of the first things we do when we speak to a prospect or a client is, talk about doing a financial plan that gives us an overall or holistic picture of all of their assets. We may not manage all of it, at Saturna, but we want to take that into consideration when we make a recommendation. So all of the assets that you have, whether physical or illiquid, are taken into consideration when making recommendations to how you allocate your funds.

Monem Salam:
So, you know, when we're talking about asset allocation, we talked about like, equities and stocks or fixed income and sukuk. One way to do it is to be able to buy individual stocks. But you probably need a larger portfolio to do that. So what's another way that people can get exposure to stocks and also sukuk without having to individually go and buy?

Papa Demba Ndiaye:
A very good question, especially when it comes to the latter, the sukuk fixed income side. You know, it's very difficult for an individual going to the market and doing that themselves with their portfolio. So it's important that we have the proper vehicle to give you those exposures. Alhamdulillah, today you can have mutual funds or ETFs or other pooled vehicles that you can use as a means of actually fulfilling that allocation. And on the equity side also. So having those pooled vehicles that are very liquid, readily tradable is an important part of actually implementing those asset allocation decisions.

Monem Salam:
Yeah. So I guess another way to look at it is saying like, you know what small amounts of money you can get into a basket of stocks like, rather than just one, you can do all of them. And then on the sukuk side, it's actually even more important because I think the minimum like sometimes to buy a sukuk is like $250,000. So how are you going to do that with 5,000 or 10,000 or even 25,000? So using a vehicle like a mutual fund actually helps you to be able to get that diversification to have an asset allocation, but with small amounts of money.

Papa Demba Ndiaye:
Totally. And that's what our fixed income team here at Saturna, for example, does. They'll create the pool vehicle using, you know, the funds that are put together and are able to build within their mutual funds or ETFs, portfolios that are fully diversified, that we can in turn use to implement our asset allocation decisions. Yes.

Monem Salam:
Yeah. Great. And one last thing, since you mentioned this, I will mention also is that, well, maybe not the last thing, but just definitely something I want to mention is that I think you brought up a good point. I think it's important for us, maybe in a future episode, to talk about the differences between mutual funds and ETFs, which are called exchange traded funds. So thank you for reminding me about that. And hopefully our listeners can look forward to that episode as well.

Monem Salam:
Okay. So what does a portfolio for somebody who's just starting off, let's say they got their first job right now they're going to open up a kind of like a, let's say a Roth or a 401(k). And we're talking just different asset classes. Let's not talk about specific investments, but just different asset classes. What does it look like for a person starting off, person in the middle of their career .and now approaching retirement?

Papa Demba Ndiaye:
So for someone just starting to invest, it may very well be appropriate to be very high in equities. And the reason why we say that is that their investment horizon, if you look at the time they're going to spend working 30, 40 odd years, the time they're going to spend in retirement, they do have enough, a long enough time horizon to survive through different market cycles. It may very well be appropriate for them to be heavily invested in equities. As your career progresses and your income also increases, it may be appropriate to start, adding other asset classes that are going to govern how your portfolio is going to behave. As you get closer to retirement, it may be that, heavy exposures to equities is not as appropriate as it has been in the past.

Monem Salam:
So like for example, I know, I remember when I was an advisor way back when you know there was a rule that said, you know, take your age and that's how much should be in fixed income or cash and then the rest of it should be in equities. And then, but even then I find and now I'm in the market. So maybe I'm a little bit more aggressive. But I find even that part of it let's say if I'm 22 and I'm just getting a job, you know, 20% in fixed income when you're 22 years old. It seems pretty high.

Papa Demba Ndiaye:
It does seem pretty high. And I would, agree with that. I think that for an investor starting out, it's a matter of, first of all, establishing your willingness to accept risk because of that. But at that age, I think most of the asset allocation decisions should be driven by your ability to take on risk and then go back to your investment horizon. Being 50 or 60 years, that should really be driving your asset allocation decisions moreso than your willingness to take risks or any other sort of combinations.

Monem Salam:
And I think the other thing to remember is that asset allocation is not only, for example, we talked about it in your Roth account or 401(k), but really it's your overall financial picture, right? So for example, you might be in your Roth 100% in equities, but then have real estate that you have because you're, you know, owning a house and you might have a bank account that has cash in it. So you should look at it on an overall basis. Correct. Rather than just your stock portfolio or your investment account.

Papa Demba Ndiaye:
Totally agree with that. And that's something that oftentimes gets overlooked. And we refer to it as asset location. Where should you have your portfolio. So yes. You may have a 401(k) at work, you may invest in an IRA. Those are tax advantaged accounts. There's certain securities and portion of your portfolios that should be located there. As we look at your full financial picture, for example, your house, if you own a business, you may want to have an LLC. So where you locate your assets, depending on your own sort of investment objectives, goals and your situation matters also, just as asset allocation itself does.

Monem Salam:
So you can technically have 100% equity portfolio in your retirement account because you have other assets that are lying somewhere else in another location, as you mentioned.

Papa Demba Ndiaye:
Absolutely. And all of that has to be considered by your advisor in sort of making a recommendation. It's very important. Yes. Asset allocation is part of the equation, but asset location is equally as important.

Monem Salam:
So and then on the other part of this which I get questions all the time is, you know, it's like you have a, let's say an asset allocated portfolio. So you have some equity, maybe you have a little bit of fixed income in the form of sukuk and maybe have some cash, maybe some alternatives like commodities or real estate, stuff like that. Right. But then what people tend to do is like let's say, oh my God, look, the S&P is up like 25% and my portfolio is only up 12%. What are you doing wrong? And so it's a constant kind of a back and forth with clients and people to talk about a difference between asset allocation and what the S&P is doing, because that's what most people, you know, remember when the markets are going up and down. So how would you kind of talk to somebody about you know how to look at those two differences.

Papa Demba Ndiaye:
So and this is the part where I think we as a sort of, as an industry, need to do a better job as educators because, having someone look at a single equity benchmark and comparing the portfolio is not really, how they should look at it. Again, for example, if someone has a diversified portfolio. Their blended returns is going to be vastly different, from a pure equity portfolio. Now, the way I would address that, and it's, it may sound counterintuitive is that, markets do go up, markets do go down. The benefit of having that diversification is when things don't always go up. And, your portfolio is, if it's properly built, will give you that protection that maybe a pure equity portfolio won't give you. So part of the education is, having this conversation about the entire cycle, not only not always when markets go up. That's a conversation we need to have with our clients more often.

Monem Salam:
And when you have these how receptive are clients to that.?

Papa Demba Ndiaye:
So it's interesting, what I've noted is that our investor base, especially in the Muslim community, are, more loss averse than risk averse. And the way I see it is that they don't mind the upside. They want to participate as much as possible, but then when things turn down, they were like, well, why didn't you tell me I was exposed to this risk? Yeah. So they don't like the loss part as much as they appreciate the upside.

Monem Salam:
Yeah, I think that's pretty much across the board. That's human beings. No, everybody wants the good stuff. Nobody wants the bad stuff. So I mean that's pretty common. But I think that's really important to keep in mind is that, you know, actually asset allocation is a lot about risk mitigation. Right. It's about, you know, when what happens when the markets are going down, not only when they're going up. And so that's really important. And it's kind of a constant reminder that needs to take place with the, you know, with the clients and stuff like that, from doing that. Okay. So, you know, so now we talked a little bit about, you know, the importance of the asset allocation. We talked a little bit about, you know, maybe from younger to middle to older. Can you give us some ballparks of what you think younger person versus a middle aged person versus someone you know, closer to retirement or in retirement, roughly what the numbers look like as far as asset allocation is concerned?

Papa Demba Ndiaye:
Sure. But, you know, I also have to preface this with the fact that, you know, every individual circumstances is different. But for someone that's just starting out investing, having a portfolio that's close to 90% in equity is okay. Because like I said, they will go through different market cycle. They'll have the time to benefit from upsides and then the rebound from the downside. And the interesting part I also say is that even deep into your career, one can also have, exposure to equity that's above average. The reason why I say that is that we live longer. We have needs into retirement that are going to be, substantial. So having that equity exposure, is also important to maintain. I was just speaking recently to someone who is in his early 50s who was thinking about starting to downgrade or de-risk their portfolio by adding fixed income, at that age. But yet that person still has 30 years of investment in front of them on average. So, that equity exposure should not automatically decline just based on age. There's room for people to have more exposure that maybe they're willing to take. And again, we need to explain that to them and give them the reasons why they should stay invested in equities, even at, what someone might consider an advanced age.

Monem Salam:
Yeah. I mean, the other way to look at this is to be able to say when you're young, you can afford to think, you know, more about asset growth than asset protection. Right. And then as you get older and older, you know, that shift begins to happen where you're now, you're thinking about, hey, how do I preserve my assets more than try to grow them and hit it out of the ballpark every single year? So that's kind of like an individual kind of decision that needs to be made. And there's really, you know, no wrong answer because it all depends on or it's no standard answer, I should say, because it all depends on what your individual risk tolerance is, what makes you stay up at night, at what levels, you know, those type of things.

Monem Salam:
So now that we've talked a little bit about asset allocation from a client perspective I really want to know about what you do on a daily basis on the back end. Right. How do you construct that asset allocation model. And I know now it's going to get a little bit more technical. So let's try to keep it as simple as possible if we can. But how do you know like for a client that has let's say a low risk rather than high risk. What type of portfolio and what percentages to build into that portfolio?

Papa Demba Ndiaye:
Yeah. Talking about what keeps me up at night. So now we're getting into that. So yeah, once you've selected your asset classes. So the premise of modern portfolio theory is that when these individual asset classes, as risky as they may be individually, when put in the pot together and optimized, they may give you something that's more, palatable to an investor. So, having a mix of equities, fixed income and other classes, may produce a portfolio that is less risky than the asset classes taken individually. The difficulty is in optimizing those portfolios. Really, I'll give you a very good example in that, if someone was asked to flip a coin, so heads you get $90, tails you get $10, your expected sort of return is 50: 90 plus 10 divided by two. But let's say, the flip side of that is, you flip a coin, heads you get 50, tails you get 50 again, your expected return is 50. But those are very different proposition. And any investor in their right mind would take the latter because, you know, I'm sure to get 50 at the end. That's my expected return. So that's the exercise we go through. And we optimize a portfolio and saying, what outcome are we going to get on average when we mix these portfolios? Now that's really the interesting part of mean-variance optimization, as we call it.

Monem Salam:
And you basically go back and look at like what each of the asset classes has done historically. And you kind of try to, which is more of like a science slash art, to predict the future. Okay.

Papa Demba Ndiaye:
So, I wish we could do that because as we know, history does not tell us much about what's going to happen. So we need to forecast, these asset classes as a first step. And that is hard. Forecasting anything is difficult by nature. But we do have different methods and methodology that we use to forecast returns before we actually optimize the different asset classes to determine what's appropriate.

Monem Salam:
So give me an example of that.

Papa Demba Ndiaye:
So if you look at equities, for example, one of the key components of forecasting return is the price to earnings and expansion of price to earnings. So the difficulty lately is that, earnings multiples have been increasing, have been growing way ahead of historical averages. I think the P/E ratio used to be around, 18 to 20. It's now running at 25. So using that as an input in forecasting returns is going to sort of skew your forecast. And we have to take that into consideration for example.

Monem Salam:
Yeah. And so just so that everybody knows, a price-to-earnings ratio basically means you take the price of the stock that you want to buy, and you divide it by the earnings and you get some type of a ratio. And if you do that for all of the S&P 500, same thing for every single price and then be able to come up with a number that historically was running between 17 to 19, and now you're saying it's about 25 or so. So it's higher than normal. It is what it is. Right.

Papa Demba Ndiaye:
And using that as an input and like I said, in any type of sort of mathematical process that you use, the inputs are quite important. And if these inputs are not grounded in reality, then you may have results that are not sort of usable.

Monem Salam:
So how do you ground yourself in reality. Because the tendency would be to say, wow, equities have done so well over the past 5 or 10 years that, you know, you can have different assumptions based on your mood that day of what the markets are doing.

Papa Demba Ndiaye:
Yeah. So this is where the benefits of being a practitioner matters because, I mean, someone has not been, for example, through the 2000 crisis or 2008 crisis may just think that the markets just only have one direction—they go up. So having practitioners that have the experience that have been exposed through different macro cycles allows us to be more grounded when we make our assumptions. So maybe we may not realize as much as we may have in the past. And certain metrics that we feel like have run ahead of themselves. So being a practitioner allows us to sort of get more grounded on these assumptions that we make.

Monem Salam:
Yeah. So basically you're going to a professional to say, I've already done the research for you, done the kind of mathematical formulas for it. And this is kind of the expected rates of return for each of the different asset classes that are there, right. And you can do that on all different types; you can do it on art and other things that are illiquid as well.

Papa Demba Ndiaye:
So the methodology is a little bit different depending on the asset classes. Now for most of those more illiquid asset classes may not be a straightforward formula. For that. You may need to appraise art and just look at what that industry looks like. So it is not always a mathematical formula. But there are ways of sort of, not only making reasonable assumptions, but also taking into consideration what we don't know. And again, I don't want to, get too technical here. We refer to it as dragon risk. So basically, I think someone famously coined the phrase we know about the unknown: there are known unknowns, there are unknown unknowns. Dragon risk falls into that category of unknown unknowns. So. And we have to factor that in when we make capital market assumptions.

Monem Salam:
Okay. And then so when you're also looking at these asset allocations, I mean, you know, you can have like we talked a little bit about equities which are stocks. Then you can do international stocks. Then within international or in domestic you could do large cap mid-cap small cap maybe sometimes micro cap. Sometimes you can do private. So I mean at some point in time you're getting over diversified right. So what's the one piece of advice you would give somebody to be able to say, keep it simple. You don't have to get complicated. Or maybe you do. What's your advice?

Papa Demba Ndiaye:
I think you don't want to keep it overly complicated. And the way we address that is by putting constraints in the optimization process itself. By that, I mean, if you just look again at individual, asset classes, you mentioned mid-cap small cap and large cap just in the US. Unconstrained, your portfolio would probably be 100% mid-cap stocks because they probably would do better over the long term because they've done better in the past. So the way we address that is putting constraints. A good example of that is US versus international. So obviously a US-based investor probably wants to have a portfolio close to home. So we will constrain a portfolio and say, hey, make sure at least 80% of the allocation is US based. If you didn't do that, you probably will have a portfolio that's overexposed to emerging markets or other risky sort of part of the world. So having those constraints is part of what we do in the sort of optimizing a portfolio.

Monem Salam:
Okay. And then now that you've done that, you've kind of done your homework. You know what the client risk profile looks like. Walk me through a conversation you'll have with the client to say, you know what? You shouldn't be. Even though the markets have done well. You shouldn't be 100% in stocks. You really need to have this. Walk me through that conversation.

Papa Demba Ndiaye:
So, the way we really address that is by educating our investors on diversification, the merits of diversification. The one thing I like to quote is that, 90% of a portfolio return can be attributed to asset allocation. So that is very important to keep in mind. And that was based on a study done in the early 90s by Brinson Emco that examined, you know, pension fund returns that determined that 90% of, a portfolio, the variability in the portfolio return to be correct. Can be traced back to asset allocation. That is how important it is to have.

Monem Salam:
Now, can you just break that down a little bit. Like what does that really mean. Like, does that mean like my returns that I'm getting overall 90% of that is like where I'm invested asset wise rather than what stock I'm actually in.

Papa Demba Ndiaye:
So, thank you for the question, because there was a later study in the early 2000 by Ibbotson and Kaplan that sort of clarified that that's the first question that people come back. So the way that study was framed was that is it 40%? Is it 90%? Is it 100% of return now? If you compare two portfolios, portfolio A and B, the variability returns between these two. 40% of that is explained by asset allocation decision, which means that, you know, the security selection process and active management and all that and transaction costs account for 60% of the return variability. But if you take a single portfolio and you make a decision, should I be 100% equity or should I be 100% cash. Well, 90% of that portfolio return is really determined by that asset allocation. And sometimes it's closer to 100% because if you take into consideration transaction costs and so on and so forth. They kind of offset. So, up to 100% of that asset allocation decision determines your return. If you're looking at a single portfolio. So that's really what the study shows.

Monem Salam:
Yeah. So basically in my portfolio. Right I would say that my determination of whether to be in equities or fixed income like sukuk or gold, whatever it is, 90% of my return is going to come from these choices rather than the actual what stocks I'm buying or what sukuk I'm buying or what you know. Well, there's only one type of gold. But anyway, generally that's the case. Right.

Papa Demba Ndiaye:
Exactly. And then the 40% question, if you will, it will answer whether within that decision. Now am I 60/40, 70/30, 80/20 that accounts for the rest of it. But like I said, the initial decision really 90% of that is driven by that asset allocation decision. And it's quite important for us.

Monem Salam:
That's great. And so now stepping back also you know we've come when it comes to Islamic investing or just Islamic finance in general. We've come a long way. Before, if you looked at it, let's say even like 25 years ago, maybe even 20 years ago, there were very limited choices when it came to halal asset allocation. Right. Is that still the case now? Or do you think we can have a proper asset allocation like let's say the big guys do like pensions or high net worth individuals. Can somebody do that on a complete halal basis?

Papa Demba Ndiaye:
Totally, totally. So just on the sukuk and fixed income side, if you will. The industry has come so far in the last or I would say 15, 20 years. So it is possible to build a diversified portfolio by allocating to sukuk. Because I mean, if you look at sort of the Southeast Asia, the Middle East and so on and so forth. There are a lot more issuers than 10 or 15 years ago. So you are able to source securities in that part of the world and have a proper allocation. And then when it comes to equities, again, I think at Saturna Capital, we screen about 5,000 names on the equity side and sort of whittle down to maybe an approved list that's significantly shorter, but again gives you an exposure worldwide to build a portfolio. Yes, absolutely. You can build a totally halal portfolio fully diversified in this sense. Yes.

Monem Salam:
Yeah. Now and now you have like cash alternatives there. Halal private equity venture capital. They're small yet you can find those as well. And in fact you can also find REIT, real estate investment trusts that are giving you real estate exposure that could be halal as well. So the I guess the point is the industry has developed. So no longer can you say the excuse of, well, we don't have any halal assets to be able to allocate. So I'll just put all of my money in equities.

Papa Demba Ndiaye:
Totally, totally. And then the other thing I would remind folks is that, you know, that asset allocation decision is not a one time and forget it. It's a framework that evolves. So as the industry also evolve, we can participate in more and more exposure within your portfolio. Worry there in terms of diversification. But it's not a static decision. We continue to improve and fine-tune it.

Monem Salam:
That's great. And so you know sometimes they say that doctors make the worst patients. So I'll ask you the question that probably every listener is waiting for. Do you asset allocate your portfolio?

Papa Demba Ndiaye:
Oh, absolutely. So like I said, that is the fundamental of investing, having that exposure to different asset classes, just because they behave differently is a very important decision that every practitioner and every investor should make.

Monem Salam:
Great. Papa, thank you so much for being with us. I mean, I think we cover a lot, right? We talked about what asset allocation is, you know, what does it look like in different times of your life? And it's dependent upon risk. And then we did a little bit of a deeper dive as to what you do behind the scenes to be able to come up with an asset allocation model. And finally, kind of summed it up with saying that, hey, nowadays, in this day and age, you can as a Muslim do a complete asset allocation in a halal way. So I really thank you for your time and look forward to maybe a future podcast where you can come on.

Papa Demba Ndiaye:
Absolutely. Thank you so much for having me. And I look forward to continuing the conversation, I appreciate it. Thank you.

Monem Salam:
Thank you. As-salaam alaikum.

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Disclosures ready by narrator:
The thoughts and opinions expressed on Halal Money Matters do not necessarily reflect the views of Saturna Capital, Amana Mutual Funds, or their affiliates. This podcast is prepared based on information Saturna Capital deems reliable; however, Saturna Capital does not warrant the accuracy or completeness of the information. We do not provide tax, accounting, or legal advice to our clients, and all investors are advised to consult with their tax, accounting, or legal advisers regarding any potential investment. Investors should not assume that investments in the securities and/or sectors described were or will be profitable. Investors should consult with a financial adviser prior to making an investment decision. The views and information discussed in this commentary are at a specific point in time, are subject to change, and may not reflect the views of the firm as a whole. All material presented in this publication, unless specifically indicated otherwise, is under copyright to Saturna. No part of this publication may be altered in any way, copied, or distributed without the prior express written permission of Saturna Capital.

Performance data quoted herein represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an Investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be significantly higher or lower than data quoted herein. Performance current to the most recent month-end can be obtained by visiting www.amanafunds.com or by calling toll-free 1-800-728-8762. Please consider an investment’s objectives, risks, charges and expenses carefully before investing. To obtain this and other important information, which you should carefully consider before investing, about the Amana Funds in a free prospectus or summary prospectus, please visit www.amanafunds.com or call 1-800-728-8762. The Amana Funds limit the securities they purchase to those consistent with Islamic principles. This limits opportunities and may affect performance. The Amana Funds are distributed by Saturna Brokerage Services, member FINRA/SIPC and a wholly-owned subsidiary of Saturna Capital, investment adviser to the Amana Funds.