As an asset management and research firm, we tailor investment programmes to our clients' objectives. We are primarily long-term investors, seeking to preserve and grow clients' capital over time. We have two decades of shariah compliant investing experience, with particular expertise in the U.S., Global, Emerging, and ASEAN markets.
Our normal investment horizon is one to four years. The annual portfolio turnover in the portfolios we manage rarely exceeds 25%. We believe that clients can obtain sufficient diversification with 25 to 75 stocks, and, as a rule, portfolios are not loaded with a large number of names.
In making investments, we are value-oriented; we are reluctant to pay a premium for a stock and endeavour to buy stocks when they are out of favour with the market. We try not to 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 favour companies in which management has a considerable stake, and often sell those issues and industries in which the insiders are liquidating.
We advocate ethical investing, believing that companies with effective corporate responsibility policies are better positioned to avoid crises that could lead to reputation damage, higher costs, lost production, and fraudulent operations. We favour companies with stable earnings and strong balance sheets. Because we are moderately risk-averse, our performance may trail the averages in rising markets, as we seek to minimise losses during falling markets. We believe the largest stocks are so widely researched and traded, they rarely present opportunities for uncovering hidden value.
We believe that values more often may be found among the smaller second and third tier companies. Analytical responsibility is divided among our investment staff, in both the U.S. and Malaysia. Portfolio managers select issues from our "recommended list" which we limit to approximately 250 equities.
Saturna gathers investment information from many sources. We maintain our own primary research files on hundreds of actively followed companies. Our analysts regularly read numerous financial and market publications, and also review securities and markets with independent analytical services.