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Saturna Capital

PRI reporting framework 2019

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You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

In selecting investments, we are value-oriented; we are reluctant to pay a premium for a stock and endeavor to buy stocks when they are out of favor with the market. One of our Core Values is to make investments only when the expected returns outweigh the risks: we do not chase "fad" stocks or fashionable investment trends. We seek companies that represent high-quality operations, with large free cash flows, sustainable growth rates, increasing dividends, and low price volatility. We favor companies in which management has a considerable stake.

We serve a variety of special client needs, such as those of Islamic investors; our first and largest client is the Amana Mutual Funds Trust, which follows Islamic principles that impose restrictions on the securities in which the Trust may invest. We also manage sustainable investing strategies, such as those of the Saturna Sustainable Funds. We favor sustainable issuers because they are generally larger, more established, consistently profitable, and financially strong, with low risks in areas of the environment, social responsibility, and governance ("ESG").

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Saturna Capital has been investing responsibly through a faith-based lens for 30 years, placing a primary emphasis on social and governance considerations. As responsible/sustainable investing has evolved, so has our approach: we view the consideration of environmental, social, and governance (ESG) factors as essential in forming portfolios of high-quality companies that are better positioned to reduce risk and identify opportunities. By examining material ESG factors in conjunction with overall financial performance metrics, we believe the added due diligence better serves the interest of our clients by driving long-term performance.

Saturna's screening process excludes firms engaged in tobacco, alcohol, exploitative media, pork, and gambling. We positively screen for issuers with low environmental, social, and governance risk profiles - which, in addition to material and non-financial ESG considerations, includes firms that show management stability, low debt, strong balance sheets, high quality operations, and a long-term focus.

Saturna's Amana equity funds, Sustainable Equity and Sustainable Bond funds support the divestment campaign by avoiding investment in the energy extraction and refining industries. 

01.6. Additional information [Optional].
I confirm I have read and understood the Accountability tab for SG 01 I confirm I have read and understood the Accountability tab for SG 01

SG 01 CC. Climate risk (Not Applicable)

SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL https://www.saturna.com/about/our-philosophy

URL/Attachment

URL https://www.saturna.com/amana/investment-process

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

URL/Attachment

URL https://www.saturna.com/sustainable/investment-process

URL/Attachment

URL https://www.saturna.com/system/tdf/sustainable_process.pdf?file=1&type=document

URL/Attachment

URL https://www.saturna.com/about/our-philosophy

02.3. Additional information [Optional].

SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Saturna approaches FINRA and SEC regulations very conscientiously. Each fund is subject to an annual audit by an independent public accountant, as well as unnannounced annual examinations. We do not pay for research or allow soft-dollar arrangements, and our compliance department oversees employee trading, flagging trades that may constitute front running.

We recognize potential conflicts of interest can arise in cases where a portfolio manager holds the same security in both the Saturna portfolio and the manager's personal account. Therefore, Saturna has procedures in place to specifically avoid conflicts of interest such as these.

Saturna Brokerage Services, a wholly-owned subsidiary of Saturna Capital, clears all transactions through Pershing. We carefully track and publish a best execution report on our website. We do not charge commission, custody, or transfer agency fees to customers using SBS. 

For more information regarding Saturna's policies, procedures, and approach to risk management, please refer to the most recent SEC Form ADV Part 2. 

03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios (Private)

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