Amana Mutual Funds Trust
Encyclopedia
Amana Mutual Funds Trust (Ticker symbols: AMANX, AMAGX, and AMDWX), headquartered in Bellingham, Washington
, is a mutual fund
company offering investment products consistent with Islamic banking principles.
Traditional mutual funds are off-limits to Muslims, because they typically contain securities that are forbidden by sharia law
. Accordingly, the Amana Funds are managed under strict guidelines to comply with Islamic principles. Examples of forbidden (haram
) investments are companies that:
The funds were created and are still managed under the value investment style
. Nicholas Kaiser has been portfolio manager of the funds since 1990. Monem Salam is the deputy portfolio manager of the funds.
The Amana Funds are unique in that they were specifically conceived to meet the needs of Muslims investors. One of the reasons Muslims are motivated to save and invest is to make financial preparations necessary to make the Hajj
, a sacred form of a self-presentation before God
(Allah
in Arabic) that is considered within Islam to be one of life's primary duties. In order to make the Hajj, a Muslim must first get his financial house in order, which presents special challenges if the money is to be invested in compliance Shari'ah
-oriented financial principles. According to Amana's founding chairman Dr. M. Yaqub Mirza
,
The ticker symbols for the funds are:
Saturna Sdn. Bhd., located in Kuala Lumpur, Malaysia is a wholly owned subsidiary of Saturna Capital Corporation.
Saturna Brokerage Services is the distributor of the Amana Funds Trust and is a wholly owned subsidiary of Saturna Capital Corporation.
Saturna Trust Company, headquartered in Reno, NV is a wholly owned subsidiary of Saturna Capital Corporation.
Interested Trustee:
Officers who are not trustees:
Bellingham, Washington
Bellingham is the largest city in, and the county seat of, Whatcom County in the U.S. state of Washington. It is the twelfth-largest city in the state. Situated on Bellingham Bay, Bellingham is protected by Lummi Island, Portage Island, and the Lummi Peninsula, and opens onto the Strait of Georgia...
, is a mutual fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
company offering investment products consistent with Islamic banking principles.
Founding principles
The Amana Income Fund, founded by Unified Management Corporation, Indianapolis, IN, in 1986, was the Trust’s first fund. The Amana Growth Fund was created in 1994. The Amana Developing World Fund was created in 2009. All three funds are managed according to Islamic principles.Traditional mutual funds are off-limits to Muslims, because they typically contain securities that are forbidden by sharia law
Sharia
Sharia law, is the moral code and religious law of Islam. Sharia is derived from two primary sources of Islamic law: the precepts set forth in the Quran, and the example set by the Islamic prophet Muhammad in the Sunnah. Fiqh jurisprudence interprets and extends the application of sharia to...
. Accordingly, the Amana Funds are managed under strict guidelines to comply with Islamic principles. Examples of forbidden (haram
Haraam
Haraam is an Arabic term meaning "forbidden", or "sacred". In Islam it is used to refer to anything that is prohibited by the word of Allah in the Qur'an or the Hadith Qudsi. Haraam is the highest status of prohibition given to anything that would result in sin when a Muslim commits it...
) investments are companies that:
- Produce or sell alcohol, tobacco or pornography
- Process or sell pork products
- Generate revenue from gambling or interest (ribaRibaRiba means one of the senses of "usury" . Riba is forbidden in Islamic economic jurisprudence fiqh and considered as a major sin...
) - Maintain a debt ratio of greater than one-third of assets
The funds were created and are still managed under the value investment style
Value investing
Value investing is an investment paradigm that derives from the ideas on investment and speculation that Ben Graham and David Dodd began teaching at Columbia Business School in 1928 and subsequently developed in their 1934 text Security Analysis...
. Nicholas Kaiser has been portfolio manager of the funds since 1990. Monem Salam is the deputy portfolio manager of the funds.
The Amana Funds are unique in that they were specifically conceived to meet the needs of Muslims investors. One of the reasons Muslims are motivated to save and invest is to make financial preparations necessary to make the Hajj
Hajj
The Hajj is the pilgrimage to Mecca, Saudi Arabia. It is one of the largest pilgrimages in the world, and is the fifth pillar of Islam, a religious duty that must be carried out at least once in their lifetime by every able-bodied Muslim who can afford to do so...
, a sacred form of a self-presentation before God
God
God is the English name given to a singular being in theistic and deistic religions who is either the sole deity in monotheism, or a single deity in polytheism....
(Allah
Allah
Allah is a word for God used in the context of Islam. In Arabic, the word means simply "God". It is used primarily by Muslims and Bahá'ís, and often, albeit not exclusively, used by Arabic-speaking Eastern Catholic Christians, Maltese Roman Catholics, Eastern Orthodox Christians, Mizrahi Jews and...
in Arabic) that is considered within Islam to be one of life's primary duties. In order to make the Hajj, a Muslim must first get his financial house in order, which presents special challenges if the money is to be invested in compliance Shari'ah
Sharia
Sharia law, is the moral code and religious law of Islam. Sharia is derived from two primary sources of Islamic law: the precepts set forth in the Quran, and the example set by the Islamic prophet Muhammad in the Sunnah. Fiqh jurisprudence interprets and extends the application of sharia to...
-oriented financial principles. According to Amana's founding chairman Dr. M. Yaqub Mirza
Yaqub Mirza
M. Yaqub Mirza is a Herndon, VA -based businessman and Islamic activist.- Background :Mirza holds a M.Sc. from University of Karachi , a Ph.D. in Physics and M.A. in Teaching Science from University of Texas at Dallas...
,
- In order to make the Hajj, muslims must first pay off their debts, including the zakatZakatZakāt , one of the Five Pillars of Islam, is the giving of a fixed portion of one's wealth to charity, generally to the poor and needy.-History:Zakat, a practice initiated by Muhammed himself, has played an important role throughout Islamic history...
due on their wealth; to return whatever was given them in trust; and have enough savings to bear the expenses of the journey (such as travel, Hajj tax, and lodging) and the sacrifice (of an animal). Besides this, they also have to provide for their families and dependents during their absence. They must have earned and saved enough to cover these expenses. No Hajj is valid if it is performed "on credit."
Performance
Performance of the Amana Funds is best evaluated by consulting a variety of sources.The ticker symbols for the funds are:
- The Amana Income Fund: AMANX (Inception: June 23, 1986)
- The Amana Growth Fund: AMAGX (Inception: Feb. 3, 1994)
- The Amana Developing World Fund: AMDWX (Inception: Sept. 28, 2009)
Organization and structure
Saturna Capital Corporation is the investment adviser and administrator of the Amana Mutual Funds Trust and the Saturna Investment Trust. Saturna Capital Corporation, established in 1989, is administrator to $3.4 billion in assets under management as of February 2011.Saturna Sdn. Bhd., located in Kuala Lumpur, Malaysia is a wholly owned subsidiary of Saturna Capital Corporation.
Saturna Brokerage Services is the distributor of the Amana Funds Trust and is a wholly owned subsidiary of Saturna Capital Corporation.
Saturna Trust Company, headquartered in Reno, NV is a wholly owned subsidiary of Saturna Capital Corporation.
Board of Trustees and Officers
Independent Trustees:- Talat M. Othman, Chairman (since 2001)
- Iqbal Unus, Ph.D. (since 1986)
- Abdul Wahab (since 2005)
- Abid Malik (since 2006)
- Salim Manzar, MS (since 2008)
- Miles Davis, Ph.D. (since 2008)
- Herbert G. Grubel, Ph.D. (since 2008)
- Yaqub Mirza, Ph.D. (since 2009)
Interested Trustee:
- Nicholas F. Kaiser, CFA, Trustee (since 1989)
Officers who are not trustees:
- Monem A. Salam, MBA, Vice President (since 2003)
- Christopher R. Fankhauser, Treasurer (since 2002)
- Ethel B. Bartholome, Secretary (since 2003)
- James D. Winship, JD, MBA, Chief Compliance Officer (since 2004)
History
The concept for the Amana Funds emerged in 1984 when two members of the North American Islamic Trust, Yaqub Mirza and Bassam Osman, presented the idea of a mutual fund for Muslim investors to Nicholas Kaiser, who was then portfolio manager of multiple mutual funds at Unified Management Corporation, based in Indianapolis, IN.Portfolio Managers
The Amana Funds' portfolios have been managed since 1989 by Nicholas Kaiser, MBA, CFA, (Chairman and controlling shareowner of the Amana Funds’ Adviser, Saturna Capital Corporation). Mr. Kaiser founded Saturna Capital in 1989 after selling his controlling interest in Unified Management Corporation. His educational background includes an economics degree from Yale College and a master’s degree in business administration from the University of Chicago (1968) with dual majors in economics and finance. Monem Salam, MBA, has been the deputy portfolio manager of the Amana Funds since 2008.Alumni
Amana's past board membership has included the following interesting individuals:- Yaqub MirzaYaqub MirzaM. Yaqub Mirza is a Herndon, VA -based businessman and Islamic activist.- Background :Mirza holds a M.Sc. from University of Karachi , a Ph.D. in Physics and M.A. in Teaching Science from University of Texas at Dallas...
, co-founder, trustee 1986-2003. - Jamal M. BarzinjiJamal al BarzinjiDr. Jamal al Barzinji is a Muslim Arab-American businessman, associated with the International Institute of Islamic Thought, the World Assembly of Muslim Youth, and the SAAR Foundation....
, trustee, 1984-2001.