File No. 2-96924
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT X
OF 1933
POST-EFFECTIVE AMENDMENT NO. 13
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 X
POST-EFFECTIVE AMENDMENT NO. 16
AMANA MUTUAL FUNDS TRUST
(Exact Name of Registrant as Specified in Charter)
1300 N. State Street
Bellingham, Washington 98225-4730
(Address of Principal Executive Offices)
Registrant's Telephone Number- (360) 734-9900
Nicholas F. Kaiser
1300 N. State Street
Bellingham, Washington 98225-4701
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
___X___ Immediately upon filing pursuant to paragraph (b) of rule 485
on _______ pursuant to paragraph (b) of Rule 485 ______ 60 days after
filing pursuant to paragraph (a)(1) of Rule 485 ______ on _______pursuant to
paragraph (a)(1) of rule 485 ______ 75 days after filing pursuant to paragraph
(a)(2) of Rule 485 _______ on _______ pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
____this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The above issuer has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 of the Investment Company Act of
1940. No filing fee is due because of reliance on Rule 24f-2. The Notice
required by such Rule for the fiscal year ended May 31, 1996 was filed on July
29, 1996.
<PAGE>
Cross Reference Sheet
Form N-1A
Item
Part A Prospectus Captions
1. Cover Page Amana Mutual Funds Trust
2. Synopsis Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant About the Fund
5. Management of the Fund Trust Management
6. Capital Stock and Other Securities Capital Stock & Dividends
7. Purchase of Securities Being Offered Net Asset Value;
How to Buy Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Not applicable
Part B Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not applicable
13. Investment Objectives & Policies Investment Objectives and
Policies
14. Management of the Registrant Management of the Trust
15. Control Persons and Principal Principal Holders of
Holders of Securities Securities
16. Investment Advisory and Other Investment Advisory
Services and other services
17. Brokerage Allocation and Other Brokerage Allocation;
Practices Portfolio Turnover
18. Capital Stock and Other Securities Not applicable
19. Purchase, Redemptions and Pricing Purchase, Redemption and
of Securities Being Offered Pricing of Securities
Being Offered
20. Tax Status Tax Status
21. Underwriters Not applicable
22. Calculations of Performance Data Performance Data
23. Financial Statements Financial Statements
Part C
<PAGE>
PART A
PROSPECTUS
<PAGE>
Amana Mutual Funds Trust presently offers investors two Funds: Growth and
Income. There is no load (commission), redemption charge, or continuing
distribution (12b-1) fee.
The Growth Fund seeks long-term capital growth. The Income Fund seeks current
income and preservation of capital from a portfolio of equity securities. All
investments are consistent with Islamic principles.
Trustees:
Bassam Osman, Chairman
N. F. Kaiser, President
M. Yaqub Mirza, Treasurer
Jamal M. al-Barzinji
Iqbal Unus
[GRAPHIC OMITTED]
1300 N. State Street
Bellingham, Washington 98225
http://www.saturna.com
360-734-99OO
800-SATURNA
[800-728-8762]
<PAGE>
AMANA
MUTUAL FUNDS TRUST
GROWTH FUND
INCOME FUND
This Prospectus, which should be retained for future reference, sets forth
information that you should know before you invest. A Statement of Additional
Information dated August 23, 1996, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus. A
copy of the Statement may be obtained without charge upon request to Saturna
Capital by mail or telephone, and at the Securities and Exchange Commission Web
site (http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES AUTHORITY NOR HAS THE COMMISSION OR
ANY STATE AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS
August 23, 1996
<PAGE>
Expenses
The Trust imposes no sales load on purchases or reinvested dividends, no "12b-1"
fees, nor any deferred sales load upon redemption. There are no redemption fees
or exchange fees. The following table illustrates operating expenses of the
Funds for the fiscal year ending May 31, 1996.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
INCOME GROWTH
<S> <C> <C>
Management and Administrative Fees......................0.95% 0.95%
12b-1 Expenses...........................................NONE NONE
Other Expenses ........................................0.62% 0.99%
Total Fund Operating Expenses...........................1.57% 1.94%
<CAPTION>
For Example:
<S> <C> <C> <C>
Each Fund estimates paying 1 year-- $17 $21
these expenses on a $1,000 3 years-- $53 $65
investment, assuming a 5% 5 years-- $93 $115
annual return 10 years-- $211 $261
<FN>
The preceding information is intended to assist you in understanding the various
(both direct and indirect) expenses that an investor will bear. The table should
not be considered a representation of past or future expenses and actual
expenses are likely to be more or less than those shown. See Financial
Highlights and Investment Adviser for more information on expenses.
</FN>
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
About the Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Amana Mutual Funds Trust is designed to meet the needs of various investors, and
the particular needs of Muslims by investing in accordance with Islamic
principles.
The Trust is open to any investor and offers the opportunity to select one or
more separate "mutual funds," each of which has different investment objectives.
Amana Mutual Funds Trust was organized as an Indiana Business Trust on July 26,
1984. The Trust is technically known as an "open-end diversified management
investment company." The Trust is designed as a "series trust" that may offer
several separate funds for investors. The Income Fund commenced operations on
June 23, 1986. The Growth Fund began operations on February 3, 1994.
The primary objective of the Growth Fund is long-term capital growth. The
primary objective of the Income Fund is current income, with preservation of
capital the secondary objective.
(continued on page 3)
<PAGE>
- -------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
Financial Highlights
Selected data for a share of beneficial interest in each Fund outstanding
throughout each period. The following schedules for the periods indicated have
been audited by Price Waterhouse L.L.P., independent accountants, whose report
thereon is included in the Annual Report to Shareowners which is incorporated by
reference into the Statement of Additional Information. These schedules should
be read in conjunction with the other financial statements and notes thereto
included in the Trust's Annual Report which also includes Management's
Discussion of each Fund's performance. The Trust's Annual Report is available
without charge from the Trust.
INCOME FUND - Selected data per share of outstanding capital stock
outstanding throughout each period.
<TABLE>
<CAPTION>
For Year Ended May 31 Jun.23 1986
-------------------------------------------------------------------------(inception)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
to
1996 1995 1994 1993 1992 1991 1990 1989 1988 5/31/87
---- ---- ---- ---- ---- ---- ---- ---- ---- -------
Net asset value at beginning
of period $12.92 $12.18 $12.86 $11.94 $11.36 $10.86 $10.39 $9.11 $10.73 $10.00
Income from investment
operations
Net investment income 0.42 0.38 0.30 0.32 0.32 0.39 0.38 0.38 0.30 0.28
Net gains or losses on
securities
(both realized and 1.76 0.80 (0.36) 0.92 0.58 0.46 0.53 1.29 (1.65) 1.24
unrealized) ---- ----- ----- ----- ----- ------ ---- --- ----- -----
Total from investment
operations 2.18 1.18 (0.06) 1.24 0.90 0.85 0.91 1.67 (1.35) 1.52
Less distributions
Dividends (from net
investment
income) (0.41) (0.44) (0.30) (0.32) (0.32) (0.35) (0.44) (0.39) (0.27) (0.28)
Distributions (from (0.76) 0.00 (0.32) 0.00 0.00 0.00 0.00 0.00 0.00 (0.51)
capital gains) ------ ----- ---- ----- ----- ----- ----- ----- ----- -----
Total distributions (1.17) (0.44) (0.62) (0.32) (0.32) (0.35) (0.44) (0.39) (0.27) (0.79)
Net asset value at end
of period $13.93 $12.92 $12.18 $12.86 $11.94 $11.36 $10.86 $10.39 $9.11 $10.73
Total return 17.03% 9.95% (0.63)% 10.26% 7.88% 8.11% 8.85% 18.86% (12.68)% 15.21%
Ratios / Supplemental Data
Net assets ($000), end of $12,464 $10,708 $10,432 $9,398 $6,913 $5,868 $4,760 $3,645 $3,559 $3,189
period
Ratio of expenses to
average net
assets (not annualized) 1.57% 1.56% 1.58% 1.58% 1.58% 1.66% 1.76% 1.88% 2.07% 1.81%
Ratio of net investment income to
ave.
net assets (not 3.06% 3.11% 2.22% 2.65% 2.75% 3.73% 3.67% 3.85% 3.17% 3.53%
annualized)
Portfolio turnover rate 24% 29% 21% 29% 19% 29% 19% 71% 66% 55%
Average commission rate paid $0.0460
</TABLE>
GROWTH FUND
[GRAPHIC OMITTED]
<PAGE>
- --------------------------------------------------------------------------------
Investment decisions for both Funds are made in accordance with Islamic
principles. There is no assurance that specific investment objectives will be
achieved.
- -------------------------------------------------------------------------------
A mutual fund is a company engaged in the business of investing. It sells its
own shares to the public and invests the proceeds in a portfolio of securities
chosen according to established objectives.
The value of fund shares fluctuates as the value of the securities in which the
funds invest fluctuates. A mutual fund seeks to do for the individual what he
might do if he had the time, the inclination, the background, experience and
sufficient resources to spread his investments among many businesses.
Amana Mutual Funds Trust sells shares directly to investors, without a sales
"load." Since no sales "load" is deducted, the entire amount paid for shares is
invested. Distribution expenses are paid by the Adviser (see Investment
Adviser).
Investment Objectives
The primary objective of the Growth Fund is long-term capital growth, consistent
with Islamic principles. The objectives of the Income Fund are current income
and preservation of capital, consistent with Islamic principles; current income
is its primary objective.
In accordance with Islamic principles, the Funds shall not make any investments
which pay interest. The investment objectives of the Funds cannot be changed
without shareowner approval.
These objectives are pursued by investing in equity securities, including
foreign securities. While the Funds may purchase preferred stocks and engage in
covered option writing, they currently do not do so. The Funds also have the
power to use short-term income producing investments (see Investment Policies).
Investing in securities entails both market risk and risk of price variation in
individual securities. By diversifying its investments, each Fund reduces the
risk of owning one or a few individual securities. There can be no guarantee
that the particular investment objectives of either Fund will be realized.
Investment Policies and Risk Considerations
Amana Mutual Funds Trust is designed to provide investment alternatives that are
consistent with Islamic principles. Generally, Islamic principles require that
investors share in profit and loss, that they receive no usury or interest, and
that they do not invest in a business that is not permitted by Islamic
principles. Some of the businesses not permitted are liquor, wine, casinos,
pornography, gambling, and banks or loan associations that are not based on
Islamic principles. (The Adviser is not aware of any Islamic banks or loan
associations whose securities are U.S.-traded.) These criteria limit the
investment selection opportunities more than is customary for other mutual
funds.
Investments are selected by the Adviser, Saturna Capital Corporation. To insure
that investments meet the requirements of the Islamic faith, the Adviser has a
consulting agreement on Islamic issues with the North American Islamic Trust
(NAIT), a non-profit organization serving the Muslim community.
The Adviser has sole responsibility for selection of investments to meet the
particular investment objectives of each separate fund of Amana. The consultant
(NAIT) advises only on issues of the application of Islamic principles and not
on the selection of specific investments. If the consultant cannot resolve an
issue, the Adviser will rely on the Board of Trustees for a final determination.
A current Trustee of Amana is also a Trustee of NAIT.
The Adviser selects investments in companies which to its knowledge do not
violate the requirements of the Islamic faith at the time of investment.
Whenever the Adviser learns that a company whose stock is owned by a fund has
activities (through acquisition or otherwise) that it believes are not permitted
by Islamic principles, the Adviser notifies the Board of Trustees. The Board
determines whether the stock of that company should be divested by the fund.
Immediate divesting may have an adverse impact on the investment performance of
a fund.
The policy of the Income Fund is to invest at least 80% of its assets in
income-producing equity securities, such as dividend-paying common stocks. Some
assets may be held as cash to cover short-term needs such as redemptions.
Including cash for short-term needs, the Income Fund may invest up to 20% of its
assets in non-income producing securities for use in covered option writing to
earn premium income.
Under normal circumstances, it is the policy of the Growth Fund to invest at
least 80% of assets in common stocks. Investments in common stocks involve
greater risk, and commensurately greater opportunity for reward, than some other
investments, such as investments in short-term bonds and money market
instruments. The value of investments in common stocks fluctuates and may be
greater than or less than the investment made. The Growth Fund selects
investments primarily on the expectation of increases in earnings and share
price, and not current dividend-paying ability.
Both Funds are diversified, and do not invest more than 5% of total assets in
the securities of any one issuer. The Funds will not invest more than 25% of its
assets in any particular industry.
The Trust has adopted certain restrictions, as outlined in the next section. The
policies outlined in this section can be changed if deemed appropriate by a
majority of the Board of Trustees.
The Funds may use short-term income producing investments to the extent the
Board of Trustees and the consultant on Islamic principles agree that those
investments are consistent with Islamic principles. Short-term investments are
securities which mature or have a remaining maturity of twelve months or less
from the date of purchase. The Adviser does not know of any short-term
investments which meet Islamic requirements that are currently available in the
United States. Most ordinary mutual funds use a variety of interest investments
for short-term needs. Islamic principles prohibit the use of these
interest-producing investments. If short-term Islamic investments become
available in the future, the Funds have the power to use them.
Each Fund may invest up to 10% of its assets in foreign securities not traded
publicly in the U.S., but currently limit such investments to 5%. The Funds
intend to invest only in foreign securities available for trading and settlement
in the U.S., primarily in American Depository Receipts (ADRs) for foreign
securities.
During uncertain market or economic conditions, the Funds may adopt a temporary,
defensive position. The Funds cannot invest in interest-paying instruments
frequently used by mutual funds for this purpose. When markets are unattractive,
the Adviser chooses between continuing to follow the Funds' investment policy or
converting securities to cash for temporary, defensive purposes. This choice is
based on the Adviser's evaluation of market conditions and the Funds' portfolio
holdings. While cash assets do not contribute to the Income Fund's primary
objective of current income, they do assist its secondary objective of capital
stability.
Investment Restrictions
In accordance with Islamic principles, the Funds shall not purchase bonds,
debentures, or other interest paying obligations of indebtedness.
The Funds may not make loans, lend portfolio securities, make short sales,
borrow money, or purchase or sell options, except that they may sell covered
call options and purchase call options for the purpose of terminating call
options previously sold. The Funds currently do not purchase or sell options.
The above restrictions are fundamental policies and may not be changed without
prior approval by a majority of the outstanding shares of a Fund.
Investment Results
Shareholders receive a financial report showing the investments, income and
expenses of your Fund every six months. You may obtain current share values any
time by calling the adviser at 800-SATURNA (800/728-8762) or accessing the
Internet at www.saturna.com.
Performance Data
The Funds may advertise or publish current yield and average annual total return
in advertisements or in information furnished to publications and to investors.
In any comparison of a Fund's return with that of alternative investments, you
should consider differences between the Fund and the alternative investment, and
the periods and methods used in calculation of the returns. Of course, past
results are not necessarily indicative of future performance.
You may compute current yield by (i) dividing net investment income over the
rolling 30 day period for which the yield is being computed by the average
number of shares eligible to receive dividends for the period and (ii) dividing
that figure by the Fund's net asset value per share on the last day of the
period, and then (iii) annualizing the results.
To compute average annual total return of a Fund for any specified period (i)
assume an investment of $1,000 made at net asset value on the first day of the
period and that all dividends paid during the period are reinvested in
additional shares at net asset value and then (ii) divide the ending balance
(i.e., the number of shares now held multiplied by the ending net asset value)
by the beginning balance. For a more complete description of the method of
computation, see the Statement of Additional Information.
Capital Stock & Dividends
Each Fund of Amana Mutual Funds Trust is divided into shares of beneficial
interest. The shares of each separate Fund of the Trust have equal voting
rights. All shares are fully paid, non-assessable, transferable and with rights
of redemption, and are not subject to preemptive rights. The Trust is not
required to hold annual shareowner meetings. However, special meetings may be
called for such purposes as electing or removing Trustees, changing fundamental
policies, or voting on approval of an advisory contract. On issues relating
solely to a single Fund, only the shareowners of that Fund are entitled to vote.
All dividends and distributions for each Fund shall be distributed to
shareowners in proportion to the number of shares owned.
Each Fund intends to distribute substantially all its net investment income and
net realized capital gains, if any, to its shareowners. Distributions from
capital gains, if any, are paid at the end of December; income dividends are
paid in December and May for the Income Fund and in December for the Growth
Fund.
Both dividends and capital gains distributions are automatically reinvested in
additional full and fractional shares of the Fund owned. At your option, you may
receive dividends or capital gain distributions in cash. The shares purchased
with dividends or with capital gains distributions may be redeemed by using any
method for redemption of shares of the fund (see How to Redeem Shares). You are
notified of each dividend and capital gains distribution when paid.
The Funds intend to continue to qualify as regulated investment companies under
the Internal Revenue Code and to distribute substantially all their net income
and realized net gains on investments. Under such circumstances, a Fund is not
required to pay federal income taxes on amounts it distributes.
At year-end, the transfer agent reports to the shareowner and to the l.R.S. the
amount of each redemption transaction and the amount of dividends and capital
gains distributions. Dividend amounts represent the proportionate share the
shareowner is to report on a tax return for the year (even though the shareowner
may not have a tax liability in that year). Distributions may also be subject to
state and local taxes.
To avoid being subject to a 31% federal withholding tax on dividends and
distributions, shareowners must furnish the transfer agent with their correct
Social Security or Tax Identification Number.
Shareowners who are not U.S. taxpayers may be subject to a 30% withholding tax
under U.S. provisions applicable to foreign investors, unless a reduced rate or
exemption is provided under a tax treaty. However, capital gain distributions
paid by the Funds are not subject to foreign withholding.
Net Asset Value
Each Fund computes its net asset value per share each business day by dividing
(i) the value of all of its securities and other assets, less liabilities, by
(ii) the number of shares outstanding. The Funds compute their net asset values
as of the close of trading on the New York Stock Exchange (generally 4 p.m. New
York time) on each day the Exchange is open for trading. The Funds' shares are
not priced on any customary national business holiday that U.S. securities
markets are closed. The net asset value applicable to purchases or redemptions
of shares of each Fund is the net asset value next computed after receipt of a
purchase or redemption order.
The Funds use the price carried by the composite tape of all U.S. exchanges
after 4 p.m. New York time to determine the value of stocks in their portfolios.
Securities traded on a U.S. exchange or the NASDAQ market system are valued at
the last sale price or, in the absence of any sale on that date, the closing bid
price. Other securities traded in the over-the-counter market are valued at the
last bid price. Securities for which there are no readily available market
quotations and other assets are valued at their fair value as determined in good
faith by the Board of Trustees.
How To Buy Shares
You may open an account and purchase shares by sending a completed Application
with a check for $100 (U.S. only) or more ($25 under a group or retirement plan)
made payable to the Fund of your choice. The Trust does not accept initial
orders unaccompanied by payment nor by telephone. The price you receive is the
net asset value (see Net Asset Value) next determined after receipt of a
purchase order. There are no sales charges or loads.
You may purchase additional shares at any time in minimum amounts of $25. Once
your account is open, purchases can be made by check, by electronic funds
transfer, or by wire.
You may authorize the use of the Automated Clearing House ("ACH") to purchase or
redeem shares by completing the appropriate section of the application. The
authorization must be received at least two weeks before ACH can be used. ACH is
a system for electronic funds transfer. To use ACH to purchase or redeem shares,
simply call the transfer agent. You also may wire money to purchase shares,
though typically your wiring bank charges a fee for this service. Call the
transfer agent for the information you will need before requesting your bank to
wire funds.
Each time you purchase or redeem shares, you will receive a statement showing
the details of the transaction as well as the current number and value of shares
you hold. Share balances are computed in full and fractional shares, expressed
to three decimal places.
At the end of each calendar year, you will receive a complete annual statement,
which you should retain for tax purposes.
The Amana Funds offer several optional plans and services, including a prototype
defined contribution plan and Individual Retirement Accounts. Materials
describing these plans and applications may be obtained from the Adviser or the
transfer agent.
Other plans offered by the Funds include: (1) an automatic investment plan, (2)
a systematic withdrawal plan to provide regular payments to you, and (3) the
right to exchange your shares without charge for any other no-load mutual fund
for which Saturna Capital is the investment adviser.
The Funds may be appropriate for a wide range of investors, including
corporations, partnerships, associations and other organizations. Accounts may
be established by trusts and fiduciaries. You also may make investments as
custodian for minor children under the Uniform Gifts [or Transfers] to Minors
Act of your state of residence.
How to Redeem Shares
You may redeem your shares on any business day of the Trust. The Funds pay
redemptions in U.S. dollars, and the amount you receive is the net asset value
per share next determined after receipt of your redemption request. The amount
received will depend on the value of the investments in that Fund at the time of
your redemption, and the amount you receive may be more or less than the cost of
the shares you are redeeming. A redemption constitutes a sale for federal income
tax purposes, and you may realize a capital gain or loss on the redemption.
The Funds normally pay for shares redeemed or exchanged within three days after
a proper instruction is received. To allow time for clearing, redemption of
investments made by check may be restricted for up to ten calendar days.
There are several methods you may choose to redeem shares.
Written request
Write: Amana Mutual Funds Trust
Box 2838
Bellingham WA 98227-2838
Fax: 360/734-0755
You may redeem shares by a written request and choose one of the following
options for the proceeds:
(A) Redemption check (no minimum) sent to registered owner(s).
(B) Redemption check (no minimum) sent as directed if the signature(s) are
guaranteed. If proceeds are to be sent to other than the registered owner(s) at
the last address, the signatures on the request must be guaranteed by a national
bank or trust company or by a member of a national securities exchange.
(C) Federal funds wire. The proceeds ($5000 minimum) may be wired to any bank
designated in the request if the signature(s) are guaranteed as explained above.
Telephone request
Call: 800/728-8762 or
360/734-9900
You may redeem shares by a telephone request and choose one of the following
options for the proceeds:
(A) Redemption check (no minimum) sent to registered owner(s).
(B) ACH transfer ($100 minimum) with proceeds transferred to your bank
account as designated by the ACH authorization on your application. The ACH
authorization must be received by the transfer agent at least two weeks before
ACH transfer can be used.
(C) Exchange (in at least the minimum established by the Fund being
purchased) for shares of any other Fund for which Saturna Capital is adviser. If
the exchange is your initial investment into this Fund, the new account will
automatically have the same registration as your original account. Of course,
shares must be registered for purchase in your state before an exchange may be
made. Exchanging shares may have tax consequences, because an exchange
redemption is considered a closing capital transaction for tax purposes.
(D) Federal funds wire. Proceeds ($5000 minimum) may be wired only to the
bank previously designated, or as directed in a prior written instruction with
signatures guaranteed, as explained above.
For telephone requests the Funds will endeavor to confirm that instructions are
genuine and may be liable for losses if they do not. The caller must provide (1)
the name of the person making the request, (2) the name and address of the
registered owner(s), (3) the account number, (4) the amount to be withdrawn, and
(5) the method for payment of the proceeds. The Funds also may require a form of
personal identification, and provide written confirmation of transactions. The
Funds will not be responsible for the results of transactions they reasonably
believe genuine.
Check Writing
You may also redeem shares in your account by drawing checks on your account for
amounts of $500 or more.
Upon request, your Fund provides a small book of blank checks for a $10 fee,
which you may then write to any payee. Checks are redeemed at the net asset
value next determined after receipt by the transfer agent. If you wish to use
this feature, you should request the Check Writing Privilege on the Application
at the time you open an account. Note that, as with any redemption, each check
is a closing capital transaction for tax reporting purposes.
Investment Adviser
Saturna Capital Corporation, 1300 N. State Street, Bellingham, Washington 98225
is the Investment Adviser and Administrator (the "Adviser") for the Trust. The
Adviser, a Washington State corporation established in 1989, has two classes of
common stock outstanding: common ("voting") and Class A ("non-voting"). The two
classes of stock are identical, except that the Class A stock has voting rights
only in the case of a corporate restructuring or sale. Combining common and
Class A stockholdings, as of August 1, 1996, the Adviser was owned 30% by
Nicholas Kaiser, 15% by Brian A. Anderson, 14% by Phelps McIlvaine, and 12% by
James D. Winship. No other shareowner owns more than 10%. The Adviser's
wholly-owned subsidiary, Investors National Corporation, is a discount brokerage
firm and acts as distributor for the Trust without compensation.
Saturna Capital is also the adviser to Saturna Investment Trust, an $11 million
five-portfolio mutual fund. Mr. Kaiser has managed mutual funds since 1976
and has been the principal manager of the Amana Mutual Funds since 1990.
Mr. Anderson and Mr. Kaiser also manage private accounts for Saturna Capital
Corporation.
Each Fund pays the Adviser an advisory and administration fee of 0.95% annually
of average daily net assets. Although higher than that of most funds, this fee
also covers certain administrative services and is warranted, in the opinion of
the Trustees.
Under its respective investment advisory agreement each Fund pays its own taxes,
brokerage commissions, any trustees' fees (currently none), legal and accounting
fees, insurance premiums, custodian, transfer agent, registrar and dividend
disbursing agent fees, expenses incurred in complying with state and federal
laws regulating the issue and sale of its shares, and mailing and printing costs
for prospectuses, reports and notices to shareowners. The Adviser, at its own
expense, furnishes office space, office facilities and equipment, personnel
(including executive officers) and clerical and bookkeeping services required to
conduct the business of each Fund. Total expenses of the Income Fund and Growth
Fund for the fiscal year ended May 31, 1996 amounted to 1.57% and 1.94% of each
Fund's average net assets, respectively. The advisory agreements also provide in
the event that the total expenses of either Fund (excluding taxes, commissions
and extraordinary items) for any fiscal year exceed 2% of average daily net
assets, the Fund shall be reimbursed for such excess.
Saturna Capital Corporation, Box 2838, Bellingham, WA 98227 acts as transfer
agent, maintaining all shareowner records, for which it is paid a fee per
account.
Religious Consultant
The North American Islamic Trust, Inc. (NAIT), 2622 East Main Street,
Plainfield, Indiana 46168, acts as the religious consultant to Saturna Capital
regarding issues of Islamic principles relating to the Funds under a
sub-advisory agreement with the Adviser. From the advisory fee, NAIT is paid for
consulting services an annual fee of 0.2% of the average daily net asset value
of each Fund.
NAIT is a non-profit organization serving Muslim organizations and communities.
NAIT operates and manages a variety of service activities for the Islamic
Society of North America (ISNA), the Muslim Student Association (MSA), and other
affiliated organizations and Islamic centers. ISNA and MSA are separate,
non-profit organizations that provide religious, educational, cultural, and
community services.
Trust Management
The Trust is managed by a Board of five Trustees: Bassam Osman, Nicholas Kaiser,
Jamal M. al-Barzinji, M. Yaqub Mirza, and Iqbal Unus. The Trustees establish
policies, as well as review and approve contracts and their continuance. The
Trustees also elect the officers, determine the amount of any dividend or
capital gain distribution and serve on any committees of the Trust.
Managers of the Funds and other investment personnel are permitted to engage in
securities transactions for their own accounts but only in accordance with
Saturna Capital's code of ethics that, among other things, requires advance
approval of all trades and disclosure of all holdings. It also prohibits a
number of transactions, and contains other provisions.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMANA MUTUAL FUNDS TRUST
<PAGE>
- -------------------------------------------------------------------------------
Please Save this Quick Guide to
- -------------------------------------------------------------------------------
AMANA MUTUAL FUNDS TRUST
ACCOUNTS
Open your account by sending a completed Application to the Trust,
indicating your Fund selection. For convenience, you may have your
account consolidated with others of your household or other group. We
will appoint a representative, responsible for all questions on your
account(s). Extra forms will be sent for certain accounts, such as
IRA's.
INVESTMENTS
Initial investments are $100 or more ($25 under a group or retirement
plan), and are to be accompanied by an Application. Additional
investments may be made for $25 or more at any time. There are no sales
commissions or other charges.
REDEMPTIONS
You may sell your shares any time. As with purchases, you may choose
from several methods including telephone, written instructions, and
checkwriting. You will be paid the market price for your shares on the
day we receive your instructions, and there are no redemption fees or
charges. If we receive your redemption request by one p.m. Pacific
time, your check is normally mailed to you the same day.
STATEMENTS
On the date of each transaction, you are mailed a confirmation, showing
the details of the transaction and your account balance. At year-end
and at selected points during the year we mail a statement showing all
transactions for the period. Monthly consolidated statements are
available for an extra fee.
DIVIDENDS AND PRICES
The Income Fund pays income dividends twice annually, at the end of May
and December. The Growth Fund pays dividends at the end of December.
Most shareowners reinvest all dividends in additional shares. The
Income Fund's price is carried in major newspapers. Both Funds are
quoted on electronic systems (AMANX and AMAGX), and prices are
available by calling 800-SATURNA.
FREE RETIREMENT PLANS
We offer a defined contribution Profit-Sharing / Money Purchase plan
and an Individual Retirement Account. There are no extra fees or
charges for these plans.
FOR MORE INFORMATION
Please consult the applicable pages of this Prospectus for additional
details on Amana Mutual Funds Trust and the services to its
shareowners. You may also call 800-SATURNA (800-728-8762) with any
questions, and visit Saturna Capital on the Internet: www.saturna.com.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Amana Mutual Funds Trust
INVESTMENT APPLICATION
Mail application and check to: For assistance, call:
AMANA MUTUAL FUNDS TRUST 800-SATURNA or 360/734-9900
BOX 2838, Bellingham WA 98227-2838 FAX 360/734-0755
ACCOUNT TYPE AND NAME
o Individual
First Middle Initial Last
Social Security Number Date of Birth
Month/Day/Year
o Joint with
First Middle Initial Last
Joint Owner's Social Security Number
(Joint accounts are presumed to be "Joint Tenancy with Right of Survivorship"
unless indicated)
o Gifts to Minor as Custodian for
Name of Custodian Name of Minor
under the oUnif.Gifts to Minors Act
State oUniform Transfers Minor's Birthdate Minor's Soc.Sec. No.
to Minors Act
o Other
Indicate name of corporation, organization or fiduciary capacity.
Tax Id. Number
If a trust, include name(s) of trustees and date of trust instruments.
Name(s) of person(s) authorized to transact business for the
above entity.
MAILING
ADDRESS Street Apt., Suite, Etc.
City State ZIP (+4)
TELEPHONE ( ) ( )
------------------------------------------ ---------
Daytime Home
CITIZENSHIP o U.S. o Resident Alien o Non-Resident Alien
Country
INVESTMENT SELECTION Growth Fund for $
Minimum $100 per Fund. Income Fund for $
Make check(s) payable to each Fund selected.
<PAGE>
TELEPHONE REDEMPTION PRIVILEGES
You automatically have telephone redemption by check and telephone exchange
privileges unless you strike this line. Each Fund will endeavor to confirm
that instructions are genuine and it may be liable for losses if it does not.
(Procedures may include requiring a form of personal identification, and
providing written confirmation of transactions.)
ACH TELEPHONE TRANSFER PRIVILEGE
o To transfer funds by ACH at no charge to or from my (our) bank account, I
(we) authorize electronic fund transfers through the Automated Clearing
House (ACH) for my (our) bank account designated. Please attach a voided
check or deposit slip.
AUTOMATIC INVESTMENT PLAN
o Invest $ into the selected Fund on the _____ day of each month (the 15th
unless another date is chosen) by ACH transfer from my (our) bank account.
This plan may be canceled at any time. Please attach a voided check or
deposit slip.
CHECK WRITING PRIVILEGE ($500 per check minimum) ($10 checkbook charge)
o I (We)hereby request the Custodian to honor checks drawn by me (us) on my
(our) account subject to acceptance by the Trust, with payment to be made
by redeeming sufficient shares in my (our) account. None of the custodian
bank, Saturna Capital Corporation nor Amana Mutual Funds Trust shall incur
any liability to me (us) for honoring such checks, for redeeming shares to
pay such checks, or for returning checks which are not accepted.
oSingle Signature Authority -- Joint Accounts Only: (Checks for joint
accounts require both signatures unless this box is marked to authorize
checks with a single signature.) By our signatures below, we agree to
permit check redemptions upon the single signature of a joint owner. The
signature of one joint owner is on behalf of himself and as attorney in
fact on behalf of each other joint owner by appointment. We hereby agree
with each other, with the Trust and with Saturna Capital Corporation that
all moneys now or hereafter invested in our account are and shall be owned
as Joint Tenants with Right of Survivorship, and not as Tenants in Common.
The undersigned warrants(s) that I (we) have full authority to make this
Application, am (are) of legal age, and have received and read a current
Prospectus and agree to be bound by its terms. Unless this sentence is struck, I
(we) certify, under penalties of perjury, that I (we) am (are) not subject to
backup withholding under the provisions of section 3406(a)(1)(C) of the Internal
Revenue Code. This application is not effective until it is received and
accepted by the Trust.
Date Signature of Individual (or Custodian)
Date Signature of Joint Registrant, if any
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
- -------------------------------------------------------------------------------
1
- -------------------------------------------------------------------------------
AMANA MUTUAL FUNDS TRUST
GROWTH FUND
INCOME FUND
1300 N. State Street
Bellingham, Washington 98225
360/734-9900
800/SATURNA
STATEMENT OF ADDITIONAL INFORMATION
August 23, 1996
This Statement of Additional Information is not a Prospectus. It merely
furnishes additional information concerning the Trust, the Income Fund and the
Growth Fund that is not included in the Prospectus. It should be read in
conjunction with the Prospectus. You may obtain a Prospectus dated August
23, 1996 from the Trust at the address shown above.
<PAGE>
TABLE OF CONTENTS
Page
Investment Objectives and Policies............................................3
Portfolio Turnover............................................................4
Performance Data .............................................................4
Management of the Trust.......................................................6
Principal Holders of Securities...............................................7
Investment Advisory and Other Services........................................8
Brokerage Allocation..........................................................10
Purchase, Redemption and Pricing of Securities Being Offered..................10
Tax Status....................................................................11
Financial Statements..........................................................12
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS
The Prospectus describes the types of securities purchased by the Funds of the
Amana Mutual Funds Trust in an effort to achieve their investment objectives of
current income and preservation of capital consistent with Islamic principles
(Income Fund) and long-term capital growth consistent with Islamic principles
(Growth Fund). This section is provided only for the purpose of expanding or
outlining certain policies and restrictions not thoroughly covered in the
Prospectus.
All investments are subject to the overall policy of making investment decisions
according to Islamic principles. Investments are selected by the Adviser,
Saturna Capital. To insure that investments meet the requirements of the Islamic
faith, the Adviser has a consulting agreement on Islamic issues with the North
American Islamic Trust (NAIT), a non-profit organization serving the Muslim
community.
(i) Each Fund has the power to use covered call options as a method to increase
the income received from common and preferred stocks owned by that Fund.
The Funds may sell (write) covered call options and purchase call options
to close out call options previously written. The Trustees currently have,
by policy, suspended the use of call options.
(ii) Each Fund has authority to invest up to 10% of its assets in foreign
securities not traded publicly in the U.S. While the Funds may occasionally
invest in such foreign securities, current policy limits such investments
to 5% of fund assets.
The Funds intend to invest only in foreign securities available for trading
and settlement in the United States, primarily in American Depository
Receipts (ADRs) for foreign securities. These are certificates issued by
United States banks, representing the right to receive securities of the
foreign issuer deposited in that bank or a correspondent bank. The Adviser
does not plan to invest fund assets in foreign securities that are not
traded and settled domestically.
(iii)In addition to the restrictions stated in the Prospectus, the Funds shall
not purchase securities on margin; purchase "restricted securities" (those
which are subject to legal or contractual restrictions on resale or are
otherwise not readily marketable); nor invest in oil, gas or other mineral
exploration leases and programs. In addition, the Funds shall not purchase
real estate; real estate limited partnerships (excepting master limited
partnerships that are publicly traded on a national security exchange or
NASDAQ's National Market System); commodities or commodity contracts;
borrow, lend, or issue senior securities; act as a securities underwriter;
purchase securities of any issuer in excess of 5% of the value of a Fund;
purchase more than 10% of the outstanding voting securities of any issuer
or concentrate their investments in a single industry beyond 25% of the
total value of a Fund. Also, no Fund of the Trust shall purchase or retain
securities of any issuer if the officers or trustees of the Trust or its
adviser owning beneficially more than one half of one percent of the
securities of an issuer together own beneficially more than five percent of
the securities of that issuer; the Trust shall not invest in the securities
of other investment companies, except by purchase in the open market where
no commission or profit results from the purchase other than the customary
broker's commission or except when the purchase is part of a plan of
merger, consolidation, reorganization or acquisition; and no Fund of the
Trust shall invest more than 10% of its assets in the securities of issuers
which together have a record of less than three years continuous operation
or securities of issuers which are restricted as to disposition.
(iv) The Funds' investments in warrants, valued at the lower of cost or market,
shall not exceed 5% of the value of a Fund's net assets. Included within
that amount, but not to exceed 2% of the value of a Fund's net assets, may
be warrants which are not listed on the New York or American Stock
Exchange. Warrants acquired by a Fund in units or attached to securities
may be deemed to be without value.
(v) The Trustees have also instructed that investments not be made in preferred
stocks.
(vi) The Trustees have also instructed that the Funds should favor no-debt and
low-debt companies.
PORTFOLIO TURNOVER
The Trust places no restrictions on portfolio turnover and will buy or sell
investments according to the Adviser's appraisal of the factors affecting the
market and the economy. The portfolio turnover rate for the Income Fund for the
fiscal years ended May 31, 1996, 1995, and1994, was 24%, 29%, and 21%,
respectively. The turnover rate for the Growth Fund for the fiscal years ended
May 31, 1996 and1995 and for the period February 3, 1994 through May 31, 1994,
was 22%, 38% and 6% (the latter figure not being annualized.).
PERFORMANCE DATA
Average annual Total Return and Current Yield information may be useful to
investors in reviewing a Fund's performance. However, certain factors should be
taken into account before using the information as a basis for comparison with
alternative investments. No adjustment is made for taxes payable on
distributions. The performance for any given past period is not an indication of
future rates of return or yield on its shares. Total return for the Income Fund
for one year from May 31, 1995 through May 31, 1996 was 17.03%. Its average
annual total return for the three years ended May 31, 1996 was 8.54%. Average
annual total return for the five years ended May 31, 1996 was 8.75%. Average
annual total return from June 23, 1986 (inception of the Income Fund) through
May 31, 1996 was 7.93%.
Total Return for Growth Fund for the one year from May 31, 1995 through May
31, 1996 was 37.20% and average annual total return from February 3, 1994
(commencement of operations) through May 31, 1996 was 14.98%.
Average annual Total Return quotations for various periods illustrated are
computed by finding the average annual compounded rate of return over the period
quoted that would equate the initial amount invested to the ending redeemable
value according to the following formula:
P (l + T)n = ERV
Where P = a hypothetical initial Payment of $1,000 T = average
annual Total return n = Number of years ERV = Ending
Redeemable Value of the $1,000 payment
made at the beginning of the period.
To solve for average Total Return, the formula is as follows:
T = ( ERV/P)1/n - 1
Current Yield is computed by dividing the net investment income, as defined by
the Securities and Exchange Commission, over a rolling 30 day period for which
the yield is presented by the average number of shares eligible to receive
dividends for the period over the maximum offering price per share on the last
day of the period, and annualize the results. The formula used is:
Yield=2[( a-b/cd +1)6 -1]
Where a = dividends accrued during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends d = the price per share on
the last day of the period
The Income Fund has no interest income. For the purpose of computing yield, it
recognizes dividend income by accruing 1/360 of the stated annual dividend rate
of the security each day in the last 30 days that the security is in the
portfolio. The current yield on the Income Fund and the Growth Fund for the 30
day period ending May 31, 1996 was 4.60% and 0.07%, respectively.
In advertising and sales literature, a Fund may compare its performance with
that of other mutual funds, indexes or averages of other mutual funds, indexes
or data, and other competing investment and deposit products. The composition of
these indexes or averages differs from that of the Funds. Comparison of a Fund
to an alternative investment should be made with consideration of the
differences in features and expected performance of the investments.
All of the indexes and averages noted below will be obtained from the indicated
sources or reporting services, which the Trust believes to be generally
accurate. A Fund may also note its mention or recognition in other newspapers,
magazines or media from time to time. However, the Trust assumes no
responsibility for the accuracy of such data. Among the newspapers and magazines
that might mention the Trust or the Funds are:
Barron's Money Mutual Fund Letter
Business Week Morningstar
Changing Times New York Times
Consumer Digest Pensions and Investments
Financial World USA Today
Forbes US News and World Report
Fortune Wall Street Journal
Investor's Business Daily
The Funds may also compare themselves to the Consumer Price Index, a widely
recognized measure of inflation, and to other indexes and averages such as:
Dow Jones Industrials Lipper Growth & Income Funds
Standard & Poor's 500 Stocks Lipper Growth Funds
Standard & Poor's 400 Industrials Lipper Utility Funds
Wilshire 5000 Lipper Equity Income Funds
Dow Jones Utilities Lipper General Equity Funds
New York Stock Exchange Composite Lipper Balanced Funds
NASDAQ Composite Ibbotson Common Stocks
Russell 2000
The indexes and averages are measures of performance of stocks and mutual funds
that are classified, calculated and published by these independent services. The
Funds may also use comparative performance as computed in a ranking by these or
other independent services.
A Fund may also cite its rating or other mention by Morningstar or another
entity. Morningstar's ratings are based on risk-adjusted total return
performance, as computed by Morningstar by subtracting a Fund's risk score as
computed by Morningstar, from the fund's total return score. This numerical
score is then translated into rating categories.
MANAGEMENT OF THE TRUST
Trustees and Officers of the Trust
The principal occupation of the Trustees and officers for the last five years is
as follows:
* Bassam Osman, MD - Chairman and Trustee; Neurologist, Mercy Hospital & Medical
Center, Stevenson Expy. at King Drive, Chicago,Illinois 60616.
* Nicholas Kaiser, M.B.A., C.F.A. - President and Trustee; President of Saturna
Capital Corporation, 1300 N. State Street, Bellingham, Washington 98225.
Jamal M. al-Barzinji, Ph.D. - Trustee; Director, Mena Estates, Inc. Also
Secretary and Trustee since 1983 of SAAR Foundation, Inc., a charitable
organization. 555 Grove Street, Herndon, Virginia 22070.
M. Yaqub Mirza, Ph.D. - Treasurer and Trustee; Executive Vice President of
Mar-Jac Investments, Vice-President of SAAR Foundation, and Director and
Secretary, Mylex Corporation. 555 Grove Street, Herndon, Virginia 22070.
Iqbal Unus, Ph.D. - Trustee; Manager, Department of Human Development,
SAAR Foundation; Secretary General, Islamic Society of North America. 555
Grove Street, Herndon, Virginia 22070.
M. Naziruddin Ali - Vice President; General Manager of North American Islamic
Trust, 2622 East Main St., Plainfield, Indiana 46168
Phelps McIlvaine -Secretary; Director and Vice-President, Saturna Capital
Corporation, 1300 N. State Street, Bellingham WA 98225, since
December, 1993. Pooled commodity fund manager, Hickey Financial
Services, Chicago and London, from 1987 to 1993.
Teresa K. Anderson, C.M.A., M.B.A. -Asst. Treasurer; Director of Funds and
Operations, Saturna Capital Corporation, 1300 N. State Street, Bellingham WA
98225, since December, 1993. Student and part-time instructor from 1987 to 1993.
* Messrs. Kaiser and Osman are "interested persons" of the Trust as
defined in the Investment Company Act of 1940. Mr. Kaiser is president of the
adviser to the Trust. Dr. Osman is Chairman of North American Islamic Trust
(a non-profit organization) which advises Saturna on Islamic principles.
The Board has authority to establish an Executive Committee with the power to
act on behalf of the Board between meetings and to exercise all powers of the
Trustees in the management of the Trust. No Executive Committee has been
established at this time.
The salaries of officers of the Trust are paid by their respective employers,
not by the Trust. The Trustees are paid no compensation or fees by the Trust,
other than reimbursement of travel expense. For the fiscal year ended May 31,
1996, no Trustees' expenses were incurred, as set forth below:
<TABLE>
Total
Compensation Aggregate Pension or Retirement
Name of Compensa- Benefits Accrued Estimated Annual From Registrant
Person; tion From As Part of Fund Benefits Upon and Fund Complex
Position Registrant Expenses Retirement Paid to Trustees
<S> <C> <C> <C> <C>
Bassam Osman, $0 $0 $0 $0
Trustee
Jamal M. al-Barzinji 0 0 0 0
Trustee
M. Yaqub Mirza, 0 0 0 0
Trustee
Iqbal Unus, 0 0 0 0
Trustee
Nicholas F. Kaiser 0 0 0 0
Trustee
</TABLE>
As of August 6, 1996, officers and trustees as a group owned 28,654 shares,
being 3.0% of the outstanding shares of the Income Fund. Also as of that date,
the similar figures for Growth Fund were 23,854 shares and 3.3% of the Fund.
PRINCIPAL HOLDERS OF SECURITIES
As of August 6, 1996 no shareholder owned more than 5% of the outstanding shares
of Income Fund.
As of that date, the principal holders (those with more than 5% of the
outstanding shares) of securities of Growth Fund were:
Name Shares Percentage of Class
Salaheddine Tomeh 67,805 9.49%
Paradise Valley AZ
Mohammad G. Reda 37,702 5.28%
Weston MA
INVESTMENT ADVISORY AND OTHER SERVICES
North American Islamic Trust, Inc. ("NAIT"), 2622 East Main Street, Plainfield,
Indiana 46168, provides religious advice and consultation services on issues of
Islamic principles as consultant under an agreement with the Adviser. These
consultation services are limited to the application of Islamic principles and
the propriety of investments or types of investments under Islamic principles.
NAIT does not provide advice about the value of securities or the advisability
of investing in, purchasing or selling securities or other property. As Adviser,
Saturna Capital has sole responsibility for selection of the specific
investments of the fund. NAIT is not involved in investment selection and has no
responsibility for investment results.
NAIT is a non-profit organization, incorporated in 1973, for the purpose of
serving the best interests of Islam, the Islamic community, and other Islamic
organizations. The Trustees of NAIT are Bassam Osman, Chairman; Ahmad Zaki
Hammad, Abdalla Idris Ali, Sala Obeidallah, and Muzammil Siddiqi. NAIT has no
stock or ownership interests and no membership other than its Board of Trustees.
NAIT provides religious, charitable, and educational services to the Islamic
Society of North America (ISNA), the Muslim Student Association (MSA), and other
affiliates. The services of NAIT include holding and managing properties and
Islamic Centers of Muslim organizations in trust, managing projects and
programs, administrating funds of Islamic Centers for religious, charitable and
educational purposes, and publishing books and materials.
Each Fund pays its own taxes, brokerage commissions, trustees' fees, legal and
accounting fees, insurance premiums, custodian, transfer agent, registrar and
dividend disbursing agent fees, expenses incurred in complying with state and
federal laws regulating the issue and sale of its shares, and mailing and
printing costs for prospectuses, reports and notices to shareowners. The
Adviser, at its own expense and without additional cost to the Funds, furnishes
office space, office facilities and equipment, personnel (including executive
officers) and clerical and bookkeeping services required to conduct the business
of the Funds.
Each Fund is obligated to pay Saturna Capital monthly an advisory fee at the
rate of 0.95% of average daily net asset value annually. Saturna is obligated to
reimburse a Fund monthly if non-extraordinary expenses exceed an annual rate of
2% of average daily net asset value.
The laws and regulations of various states set expense limitations for mutual
funds as a condition for registration to offer and sell shares in that state.
Usually, the expense limitation requires reimbursement if, and to the extent
that, the aggregate operating expenses including the advisory fee but generally
excluding interest, taxes, brokerage commissions and extraordinary expenses, are
in excess of a specified percentage of the average net assets of a fund for its
fiscal year. The Board of Trustees determines the states in which the Funds
shall register to offer and sell shares. The Board anticipates that the Funds
shall register only in states where the lowest limitation applicable to the fund
is 2% of average net assets.
The directors and principal executive officers of the Adviser are Nicholas
Kaiser, President and Director; Brian A. Anderson, Vice President and Director;
Phelps S. McIlvaine, Vice President and Director; Markell F. Kaiser, Treasurer
and Director; and Meredith Ross, Vice President and Secretary. Prior to December
1989, the Income Fund's adviser was Unified Management Corporation of
Indianapolis, Indiana. Prior to June 1989, Nicholas Kaiser was the president of
Unified of which Markell Kaiser was Executive Vice President. Mr. McIlvaine
entered the investment business in 1976 and managed bond hedge funds from 1987
to 1993. Before joining Saturna in 1995, Mr. Anderson was President of Leuthold
& Anderson an investment counseling firm that he co-founded.
Saturna Capital also provides services as the transfer agent and dividend-paying
agent for the Funds. As transfer agent, Saturna furnishes to each shareowner a
statement after each transaction, an historical statement at the end of each
year showing all transactions during the year, and Form 1099 tax forms. Saturna
also, on behalf of the Trust, responds to shareowners' questions or
correspondence. Further, the transfer agent regularly furnishes the Funds with
current shareowner lists and information necessary to keep the shares in balance
with the Trust's records. The mailing of all financial statements, notices and
prospectuses to shareowners is performed by the transfer agent. The transfer
agent maintains records of contributions, disbursements and assets as required
for IRAs and other qualified retirement accounts.
As compensation for services as transfer agent and dividend disbursement agent,
the Funds pay Saturna an annual fee of $13.20 per shareowner account plus $5 per
Saturna-custodianed retirement plan account, subject to a minimum monthly fee of
$833. The Funds reimburse Saturna for any out-of-pocket expense for forms and
mailing costs used in performing its functions. For the fiscal years ended May
31, 1996, 1995, and 1994, the Income Fund paid fees to its transfer agent of
$17,102, $16,197, and $14,715, respectively. Similarly, for the fiscal years
ended May 31, 1996 and 1995, Growth Fund paid $9,934 and $10,000, and for the
period from February 3, 1994 (commencement of operations) through May 31, 1994,
$1,667.
For the fiscal years ended May 31, 1996, 1995, and 1994, Saturna Capital was
paid $109,078, $99,571, and $97,821, respectively as the Income Fund's
investment adviser and administrator. Similarly, for the fiscal year ended May
31, 1996, Saturna Capital was paid $25,375 as the Growth Fund's investment
adviser and administrator. And for the fiscal year ended May 31, 1995, Saturna
Capital was paid a gross fee of $14,042 of which $7,502 was waived, for a net
fee of $6,540. For the period from February 3, 1994 (commencement of operations)
through May 31, 1994, Saturna Capital was paid a gross fee of $2,044, of which
$1,824 was waived, or a net fee of $220, as adviser and administrator for Growth
Fund.
National City Bank, Indiana, of Indianapolis, One Merchants Plaza, Indianapolis,
Indiana 46255 is the custodian of the Funds. As custodian for the Funds, the
bank holds in custody all securities and cash, settles for all securities
transactions, receives money from sale of shares and on order of the Funds pays
the authorized expenses of the Funds. When Fund shares are redeemed by
investors, the proceeds are paid to the shareowner from an account at the
custodian bank.
Price Waterhouse L.L.P., 1001 Fourth Avenue Plaza, Suite 4200, Seattle,
Washington 98154 are the independent accountants for the Trust and the Funds.
The accountants conduct an annual audit of the Funds as of May 31 each year,
prepare the tax returns of the Funds and assist the Adviser in any accounting
matters throughout the year.
BROKERAGE ALLOCATION
The placing of purchase and sale orders as well as the negotiation of
commissions is performed by the Adviser and is reviewed by the Board of
Trustees. The Adviser may make allocation of brokerage to any broker in return
for research or services and for selling shares of any fund of Amana Mutual
Funds Trust. Brokers may provide research or statistical material to the
Adviser, but this information is only supplemental to the research and other
statistics and material accumulated and maintained through the Adviser's own
efforts. Any such supplemental information may or may not be of value or used in
making investment decisions for the Trust or any other account serviced by the
Adviser.
The primary consideration in effecting securities transactions for the Funds is
to obtain the best price and execution which in the judgment of the Adviser is
attainable at the time and which would bring the best net overall economic
result to the fund. Factors taken into account in the selection of brokers
include the price of the security, commissions paid on the transaction, the
efficiency and cooperation with which the transaction is effected, the
expediency of making settlement and the financial strength and stability of the
broker. The Adviser may negotiate commissions at a rate in excess of the amount
another broker would have charged if it determines in good faith that the
overall net economic result is favorable to the Fund, and is not required to
execute trades in "over-the-counter" securities with primary market-makers if
similar terms are available elsewhere. The Adviser evaluates whether brokerage
commissions are reasonable based upon available information about the general
level of commissions paid by similar mutual funds for comparable services.
Brokerage is generally directed to Investors National Corporation, a
wholly-owned subsidiary of the adviser, which is qualified as a broker-dealer to
engage in a general brokerage business. Investors National Corporation is a
"deep-discount" brokerage, generally executing stock trades for a commission of
3 or 4 cents per share plus the price of one share. For the fiscal years ended
May 31, 1996, 1995, and 1994, the Income Fund paid Investors National $6,906,
$9,915, and $9,267, respectively, in deep discount commissions. For the fiscal
years ended May 31, 1996 and 1995 and for the period February 3, 1994
(commencement of operations) through May 31, 1994, Growth Fund paid Investors
National a total of $4,783, $5,657 and $2,549 in deep discount commissions. The
Trustees review brokerage activity in detail at each regular meeting.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
See How to Buy Shares, How to Redeem Shares and Net Asset Value in the
Prospectus for an explanation about the ways to purchase or redeem shares.
In addition to normal purchases or redemptions, the shares of the Funds may be
exchanged for shares of other funds of Amana Mutual Funds Trust. Exchanges will
be made at no charge upon written request or by telephone if the shareowner has
previously authorized telephone privileges on the application. A gain or loss
for federal tax purposes will be realized upon redemption of any shares for the
purposes of an exchange as described above.
Net asset value per share is determined by dividing the value of all securities
and other assets, less liabilities, by the number of shares outstanding. The net
asset value is determined for each Fund as of the close of trading on the New
York Stock Exchange (generally 4 p.m. New York time) on each day the Exchange is
open for trading. The Exchange is generally closed on: New Year's Day,
Washington's Birthday/President's Day, Good Friday, Memorial Day, Independence
Day (observance), Labor Day, Thanksgiving Day and Christmas Holiday.
TAX STATUS
The Trust is organized as a "series" investment company. Each Fund of the Trust
is a separate economic entity with separate assets and liabilities and separate
income streams. The shareowners of each separate Fund may look only to that fund
for income, capital gain or loss, redemption, liquidation, or termination. Each
Fund has separate arrangements with the Adviser. Assets of each Fund are
segregated. The creditors and shareowners of each Fund are limited to the assets
of that fund for recovery of charges, expenses and liabilities. Each Fund of the
Trust conducts separate voting on issues relating solely to that fund, except as
required by the Investment Company Act. The tax status and tax consequences to
shareowners of each Fund differ, depending upon the investment objectives,
operations, income, gain or loss, and distributions from each Fund.
Each Fund intends to distribute to shareowners substantially all of its net
investment income and net realized capital gains, if any, and to comply, as
Income Fund has since its inception, with the provisions of the Internal Revenue
Code applicable to regulated investment companies, which relieve funds of
federal income taxes on the amounts so distributed. The Income Fund pays
dividends from net investment income and distribution of any capital gains at
the end of the fiscal year in May and at the end of the calendar year in
December. The Growth Fund pays distributions at the end of December.
The amount of investment income and capital gains, if any, which will be
available for distribution by the Funds in the future cannot be predicted due to
continually changing economic conditions and market prices.
Dividends and distributions from capital gains are normally reinvested in
additional full and fractional shares of the Funds. Shares purchased with
dividends or capital gains distributions may be redeemed using any of the
methods for redemption of shares.
Distributions of investment income and short-term capital gains are taxable to
shareowners as ordinary income and may be eligible for the dividends received
deduction for corporations. Distributions designated as capital gain
distributions are taxable to shareowners as long-term capital gains regardless
of the length of time a shareowner has held shares of a Fund and are not
eligible for the dividends received deduction. Distributions and dividends may
also be subject to state and local taxes. Shareowners will be taxed, as
described above, whether the shares automatically purchased with dividends and
distributions are left in a Fund or are redeemed by the shareowner.
Shortly after the end of each calendar year shareowners are mailed a Form 1099
advising of the gross income and investment expense allocated to the shareowner
for the year.
If you do not furnish the transfer agent with a valid Social Security or Tax
Identification Number and in certain other circumstances, we are required to
withhold 31% of income from your account. Dividends and capital gains
distributions to shareowners who are nonresident aliens may be subject to a 30%
United States foreign withholding tax under the existing provisions of the code
applicable to foreign individuals and entities unless a reduced rate of
withholding or a withholding exemption is provided under applicable treaty law.
If the IRS determines that the Trust should be fined or penalized for inaccurate
or missing or otherwise inadequate reporting of a Tax Identification Number, the
amount of the IRS fee or penalty will be directly assessed to the shareowner
account involved.
FINANCIAL STATEMENTS
The most recent audited annual report accompanies this Statement of Additional
Information. Portions are considered a part of the Statement of Additional
Information and are incorporated by reference.
<PAGE>
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
PART C
OTHER INFORMATION
<PAGE>
Financial Statements and Exhibits
(a) Financial Statements
There is incorporated into Part B of this Registration Statement the
following financial information in the Annual Report to shareowners for the
fiscal year ended May 31, 1996. Filed as Exhibit A hereto:
Report of Price Waterhouse L.L.P., Independent Accountants. Statement
of Assets and Liabilities as of May 31, 1996. Statement of Operations -
Year ended May 31, 1996. Statements of Changes in Net Assets - years
ended May 31, 1996, and 1995.
Investments - as of May 31, 1996.
Notes to Financial Statements.
Included in Part C:
Consent of Independent Accountants.
(b) Exhibits included with this filing:
Items marked with an asterisk (*) are incorporated by reference
from exhibits previously filed with the Registration Statement for
Amana Mutual Funds Trust and amendments thereto.
(l)* (a) Agreement and Declaration of Trust of Amana Mutual Funds Trust,
filed July 26, 1984 with Secretary of State of Indiana. Incorporated
by Reference. Filed as Exhibit No. 1 to initial filing of Form N-8A
and Form N-1A on April 4, 1985. File Nos. 811-4276 and 2-96924.
(b) Resolution of the Board of Amana Mutual Funds Trust creating series
Amana Growth Fund. Incorporated by Reference. Filed as Exhibit 1-2
to Post-Effective Amendment No. 10 to Registration Statement on
Form N-1A filed December 3, 1993.
(2)* Bylaws of Amana Mutual Funds Trust. Incorporated by Reference. Filed
as Exhibit No. 2 to initial filing of Form N-8A and Form N-1A on
April 4, 1985. File Nos. 811-4276 and 2-96924.
(3) Not applicable.
(4)* Specimen of Certificate of Capital Stock, included as Section 2.05 of
Bylaws, Exhibit 2 above.
(5)* (a) Agreement for Investment Advisory and administrative Services for
the Income Fund of Amana Mutual Funds Trust,effective December 28,
1989, between the Fund and Saturna Capital Corporation. Filed as
Exhibit A to filing of Proxy Statement dated November 30, 1989.
File Nos. 8114276 and 2-96924.
(b) Agreement for Investment Advisory and Administrative Services for
the Growth Fund of Amana Mutual Funds Trust, between the Trust and
Saturna Capital Corporation dated December 3, 1993. Incorporated by
reference. Filed as Exhibit 5-2 to Post-Effective Amendment No. 11 to
Registration Statement on Form N-1A filed August 5, 1994..
(c) Sub-advisory Agreement, effective December 28, 1989, between
Saturna Capital Corporation and North American Islamic Trust, Inc.
Incorporated by Reference. Filed as Exhibit B to Proxy Statement
dated November 30, 1989. File Nos. 811-4276 and 2-96924.
(d) Sub-advisory Agreement between Saturna Capital Corporation and
North American Islamic Trust, Inc. for services to Growth Fund series
of Amana Mutual Funds Trust, dated December 3, 1993. Incorporated by
reference. Filed as Exhibit 5-3 to Post-Effective Amendment No. 11 to
Registration Statement on Form N-1A filed August 5, 1994.
(e) Consent of North American Islamic Trust, Inc. as religious
consultant, dated December 19, 1985. Incorporated by Reference.
Filed as Exhibit No. 5 in Pre-effective Amendment No. 2 to
Registration Statement on Form N-1A filed January 24, 1986. File
Nos. 811-4276 and 2-96924.
(6) Not applicable.
(7) Not applicable.
(8)* (a) Custodian Agreement between Income Fund of Amana Mutual Funds
Trust and National City Bank, Indiana effective October 22, 1993,
incorporated by reference. Filed as Exhibit 8-1 to Post-Effective
Amendment No. 10 to Registration Statement on Form N-1A filed December
3, 1993.
(b) Custodian Agreement between Growth Fund of Amana Mutual Funds Trust
and National City Bank, Indiana, dated December 3, 1993, incorporated
by reference. Filed as Exhibit 8-2 to Post-Effective Amendment No 11 to
Registration Statement on Form N-1A filed August 5, 1994.
(9)* Agreement for Transfer Agent and Dividend Disbursement Agent Services
for the Amana Mutual Funds Trust between the Trust and Saturna Capital
Corporation, dated September 1, 1990. Incorporated by Reference.
Filed as Exhibit No. 9 to filing of Amendment No. 6 of Form N-1A in
September, 1990.
(10)* (a) Opinion of Counsel dated January 7, 1986. Incorporated by Reference.
Filed as Exhibit No. 10 in Pre-effective Amendment No.2 to
Registration Statement on Form N-1A and Form N-8A on January 24, 1986.
File Nos. 8114276 and 2-96924.
(b) Opinion of counsel dated December 1, 1993 for Growth Fund series.
Incorporated by Reference. Filed as Exhibit 10-2 to Post-Effective
Amendment No. 10 to Registration Statement on Form N-1A filed December
3, 1993.
(11) (a) Accountant's Consent dated August 19, 1996, attached as Exhibit
No. 11-1.
*(b) Copies of Powers of Attorney. Incorporated by reference. Filed as
Exhibit No. 11-2 to Post-Effective Amendment No. 8 on Form N-1A in
July, 1992.
(12) Not applicable.
(13)* Form of Subscription Agreement and Investment Letter. Incorporated by
Reference. Filed as Exhibit 13-1 to Post-Effective Amendment No. 10
to Registration Statement on Form N-1A filed December 3, 1993.
(14)* (a) Prototype Paired Defined Contribution Money Purchase Pension and
Profit Sharing Plan. Incorporated by reference. Filed as Exhibit
14-1 to Post-Effective Amendment No. 8 on Form N-1A in July 1992.
(b) Defined Contribution Trust, Incorporated by reference. Filed as
Exhibit 14-2 to Post-Effective Amendment No. 8 on Form N-1A in
July 1992.
(c) Money Purchase Pension Adoption Agreement.Incorporated by reference.
Filed as Exhibit 14-3 to Post-Effective Amendment No. 8 on Form N-1A
in July 1992.
(d) Profit Sharing Adoption Agreement. Incorporated by reference.
Filed as Exhibit 14-4 to Post-Effective Amendment No. 8 on Form
N-1A in July 1992.
(15) Not applicable.
(16) Computation of Performance.
The Average Annual Total Return since the inception of the Income Fund
through May 31, 1996 is computed to be 7.93% using the values of
$2,136.61 as the ERV of $1,000 invested on June 23, 1986, and 9.94
years for n.
The Total Return since the inception of Growth Fund on February 3, 1994
through May 31, 1996 is computed to be 14.98% using the values of
$1,382.99 as the ERV of $1,000 invested on February 3, 1994 and 2.32
years for n.
Persons Controlled by or Under Common Control with Registrant
No person or persons are directly or indirectly controlled by or under common
control with the Registrant.
Number of Holders of Securities
As of August 6, 1996 the following information is furnished for Amana Mutual
Funds Trust:
(1) (2)
Title of Class Number of Record Holders
Income Fund Shares 1,251
Growth Fund Shares 567
Indemnification
There is no provision for indemnification of the officers and trustees of the
Trust except as provided by Article III, Section 3.18, and Article V, Section
5.3 of the Agreement and Declaration of Trust of Amana Mutual Funds Trust, which
provisions are set forth below:
ARTICLE III
SECTION 3.18. Indemnification
In addition to the mandatory indemnification provided for in Article V hereof,
the Trustees shall have power to the extent permitted by law to indemnify or
enter into agreements with any person with whom the Trust or its Portfolios has
dealings, including, without limitation, any investment adviser or subadviser,
including the Adviser, to such extent as the Trustees shall determine.
ARTICLE V
SECTION 5.3. Indemnification
Any person (and his heirs, executors and administrators) shall be indemnified by
the Trust against reasonable costs and expenses incurred by him in connection
with any action, suit or proceeding to which he may be made a party by reason of
his being or having been a trustee, officer or employee of the Trust, or of
another corporation if the Trust requested him to serve as such, except in
relation to any actions, suits or proceedings in which he has been adjudged
liable because of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office. In the absence of
an adjudication which expressly absolves such person of liability to the Trust
or its shareowners for willful misfeasance, bad faith, gross negligence and
reckless disregard of the duties involved in the conduct of his office, or in
the event of a settlement, each such person (and his heirs, executors and
administrators) shall be indemnified by the Trust against payments made,
including reasonable costs and attorneys' fees, provided that such indemnity
shall be conditioned upon the prior determination made by a written opinion of
independent counsel that such person has no liability by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. Amounts paid in settlement shall not
exceed costs, fees and expenses which would have been reasonably incurred if the
action, suit or proceeding had been litigated to a conclusion. Such a
determination by independent counsel, and the payments of amounts by the Trust
on the basis thereof, shall not prevent a shareowner from challenging such
indemnification by appropriate legal proceedings on the grounds that the person
indemnified was liable to the Trust or its shareowners by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The foregoing rights and indemnification
shall not be exclusive of any other rights to which such persons may be entitled
according to law.
Undertaking as to Indemnification Provisions
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Business and Other Connections of Investment Adviser
The answer to this item is fully disclosed in Part A and Part B of the Form
N-1A.
Principal Underwriters
The broker-dealer subsidiary of the Adviser, Investors National Corporation,
acts where efficient for the Trust as "distributor," without fee or compensation
of any kind, under authority of a resolution by the Trustees. The Trust has no
formal underwriters as the shares technically are sold directly by the Trust
without a sales charge.
Location of Accounts and Records
With the exception of those records maintained by the Custodian, National City
Bank, Indiana, 101 W. Washington Street, Indianapolis, Indiana, 46255, all
records of the Trust are physically in the possession of the Trust and
maintained at the offices of Saturna Capital Corporation, 1300 N. State Street,
Bellingham, Wash 98225.
Management Services
There are no management-related contracts in which service is provided to the
Trust other than those discussed in Parts A and B of this Form N-1A.
Undertakings
The Fund hereby undertakes pursuant to Section 16(c) of the 1940 Act, that, in
the event of shareholder application pursuant to such Section, it will assist
such shareholders as set forth in such Section.
The Fund hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Fund's latest annual report to shareholders, upon
request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment to Registration Statement to be duly signed on its behalf by the
undersigned thereunto duly authorized in the City of Bellingham, State of
Washington, on the 16th day of August, 1996
AMANA MUTUAL FUNDS TRUST
By /s/ Nicholas F. Kaiser
Nicholas F. Kaiser,
President
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this amendment has been signed below by the
following persons in the capacities and on the date indicated.
Signature Title Date
/s/ Nicholas F. Kaiser President; Trustee August 16, 1996
- ---------------------------- ---------------
Nicholas F. Kaiser (Principal Executive Officer)
/s/ Teresa K. Anderson Asst. Treasurer August 16, 1996
- ---------------------------- ---------------
Teresa K. Anderson (Principal Financial Officer)
** Bassam Osman All other Trustees August 16, 1996
-----------------
** Jamal M. al-Barzinji
** M. Yaqub Mirza
** Iqbal Unus
** By /s/ Nicholas F. Kaiser
Nicholas F. Kaiser, Attorney-in-fact
<PAGE>
INDEX TO EXHIBITS
` Amana Mutual Funds Trust
File No. 2-96924
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933
POST-EFFECTIVE AMENDMENT NO.13
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
POST-EFFECTIVE AMENDMENT NO.16
EXHIBIT NO. DOCUMENT NAME
1A Annual Report to Shareholders for the fiscal year
ended May 31, 1996
11-1 Consent of Price Waterhouse L.L.P. dated August
19, 1996
FDS (type 27) FDS for Amana Mutual Funds Trust
AMANA MUTUAL FUNDS TRUST
May 31, 1996 Report Income Fund
Growth Fund
Fellow Shareowners:
It's been another very good year for stock market investors. Amana Trust's
assets are now $16.6 million, up a healthy 31% for the year. Our almost 1,800
shareowner accounts are spread to 41 states and 8 foreign countries. Inside
please find the details of the fiscal year's operations and current portfolios
For the fiscal year ended May 31, Amana's Income Fund total return was 17% --a
strong performance considering its conservative, income-oriented nature. For the
past five years, total return has averaged 8.75% per year. Those shareowners
willing to assume full market risk were well rewarded, as the Growth Fund
appreciated over 37%in this strong bull market. In comparison, the S&P 500
provided a total return of 28% and the Dow Jones 30 Industrials 29% for the last
year. Since inception in 1994, Amana Growth Fund's total return has averaged 15%
per year. Our positive outlook for the next year is based upon a healthy US
economy. GDP should continue to increase at 2-3%, and inflation worries are
remote. Consumer confidence is rising, fueled by increasing real incomes and
productivity. World economies are recovering based upon the US leadership. We
continue to focus the Funds investments in value-based businesses, in part to
avoid the froth apparent in some market sectors. Your board is proud to note
that on June 23, the Amana Income Fund completed 10 years of operation. One of
the lessons of the marketplace is that experience matters. Demonstrated
capability to provide successful management and quality service in good times
and bad is highly important in the volatile financial markets. During the course
of this year, transaction volume has increased with
more investors taking advantage of our true "no-load" structure. Our free
Automatic Investment Plan and free retirement plans are increasingly popular.
And Saturna Capital's new site on the Internet's World Wide Web is an excellent
source of information (http://www.saturna.com/amana). As always, we appreciate
your investing with us. If you have any questions or need help, please call us
at 1-800/SATURNA.
Respectfully,
Nicholas Kaiser, President Bassam Osman, Chairman
June 24, 1996
INVESTMENTS
May 31, 1996
<TABLE>
<CAPTION>
Number Market
Issue of Shares Cost Value
- -----------------------------------------------------------------------------------------------------
COMMON STOCKS (94.9%)
<S> <C> <C> <C>
Building (1.9%)
Hanson Trust plc ADR
16,000 240,655 234,000
Business Services (5.9%)
Dun & Bradstreet
6,500 331,020 415,188
H&R Block
9,000 328,185 313,875
SUB-TOTAL
659,205 729,063
Chemicals (7.1%)
ARCO Chemical
6,500 238,792 337,188
Chemed
10,000 356,116 376,250
Lawter International
14,738 116,591 169,487
SUB-TOTAL
711,499 882,925
Machinery (3.6%)
Manitowoc Company
12,000 276,657 445,500
Medical (10.5%)
American Home Products
10,000 242,862 535,000
Bristol-Myers Squibb
6,000 261,835 512,250
Glaxo-Wellcome plc ADR
10,000 260,427 261,250
SUB-TOTAL
765,124 1,308,500
Mining (5.0%)
ASARCO
10,000 330,433 313,750
RTZ Corp PLC ADS
5,000 279,565 316,250
SUB-TOTAL
609,998 630,000
Oil & Gas Production (9.5%)
Atlantic Richfield
4,000 447,256 478,500
Exxon
5,000 307,279 423,750
Mobil
2,500 282,713 282,187
SUB-TOTAL
1,037,248 1,184,437
Paper & Paper Products (3.4%)
Consolidated Papers
4,000 218,215 209,000
Georgia-Pacific
3,000 228,196 216,750
SUB-TOTAL
446,411 425,750
Paint and Allied Products (2.7%)
R P M, Inc
20,313 182,267 337,695
Telecommunications (17.6%)
BCE, Inc
13,000 436,370 516,750
Cable & Wireless PLC ADR
16,000 310,930 330,000
Pacific Telesis Group
14,000 375,305 467,250
Telecom Corp New Zealand ADS
7,500 358,258 492,188
Telefonica de Espana, ADR
7,500 202,956 392,813
SUB-TOTAL
1,683,819 2,199,001
Utilities - Electric (17.7%)
Enova Corporation
18,300 399,878 398,025
FPL Group
10,000 344,874 427,500
Idaho Power
10,000 250,658 292,500
NIPSCO Industries
10,000 362,973 372,500
Pacific Gas & Electric
15,000 356,897 348,750
Washington Water Power
19,900 343,236 368,150
SUB-TOTAL
2,058,516 2,207,425
Utilities -Water & Gas (10.0%)
American Water Works
10,000 295,430 356,250
Peoples Energy
14,000 380,014 448,000
Piedmont Natural Gas
20,200 286,923 436,824
SUB-TOTAL
962,367 1,241,074
TOTAL INVESTMENTS (94.9%) $9,633,766 11,825,370
Other Assets (net of liabilities) (5.1%) =========
639,026
TOTAL NET ASSETS (100%) $12,464,396
</TABLE>
<TABLE>
<CAPTION>
============
FINANCIAL HIGHLIGHTS
Selected data per share of outstanding capital stock outstanding throughout
each period.
Jun.23
For Year Ended May 31 1986
(in-
------------------------------------------------------------------------ception)
to
1996 1995 1994 1993 1992 1991 1990 1989 1988 5/31/87
Net asset value at beginning
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
of period $12.92 $12.18 $12.86 $11.94 $11.36 $10.86 $10.39 $9.11 $10.73 $10.00
Income from investment
operations
Net investment income 0.42 0.38 0.30 0.32 0.32 0.39 0.38 0.38 0.30 0.28
Net gains or losses on
securities
(both realized and
unrealized) 1.76 0.80 (0.36) 0.92 0.58 0.46 0.53 1.29 (1.65) 1.24
Total from investment
operations 2.18 1.18 (0.06) 1.24 0.90 0.85 0.91 1.67 (1.35) 1.52
Less distributions
Dividends (from net
investment
income) (0.41) (0.44) (0.30) (0.32) (0.32) (0.35) (0.44) (0.39) (0.27) (0.28)
Distributions (from
capital gains) (0.76) 0.00 (0.32) 0.00 0.00 0.00 0.00 0.00 0.00 (0.51)
Total distributions (1.17) (0.44) (0.62) (0.32) (0.32) (0.35) (0.44) (0.39) (0.27) (0.79)
Net asset value at end
of period $13.93 $12.92 $12.18 $12.86 $11.94 $11.36 $10.86 $10.39 $9.11 $10.73
Total return 17.03% 9.95% (0.63)% 10.26% 7.88% 8.11% 8.85% 18.86% (12.68)% 15.21%
Ratios / Supplemental Data
Net assets ($000), end of
period $12,464 $10,708 $10,432 $9,398 $6,913 $5,868 $4,760 $3,645 $3,559 $3,189
Ratio of expenses to ave. net
assets (not annualized) 1.57% 1.56% 1.58% 1.58% 1.58% 1.66% 1.76% 1.88% 2.07% 1.81%
Ratio of net investment
income to
ave. net assets (not 3.06% 3.11% 2.22% 2.65% 2.75% 3.73% 3.67% 3.85% 3.17% 3.53%
annualized)
Portfolio turnover rate 24% 29% 21% 29% 19% 29% 19% 71% 66% 55%
Average commission rate paid $0.0460
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
As of May 31, 1996
Assets
Investments, at value
<S> <C>
Common stocks (cost $9,633,766) $11,825,370
Cash 607,333
Dividends receivable 45,921
Insurance deposit 2,528
Total Assets $12,481,152
Liabilities
Payable to affiliate 11,797
Other liabilities 4,959
Total liabilities 16,756
NET ASSETS $12,464,396
============
Fund shares outstanding 894,550
Analysis of Net Assets
Paid in capital (unlimited shares authorized, without par) $10,257,826
Undistributed net investment income (loss) 2,892
Undistributed net realized gain (loss) on 12,074
investments
Unrealized net appreciation on investments 2,191,604
Net Assets applicable to Fund shares outstanding $12,464,396
============
Net Asset Value per share $13.93
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
Year Ended May 31, 1996
Investment income
<S> <C>
Dividends $523,211
Miscellaneous income
155
Gross investment income $523,366
Expenses
Investment adviser and administration fee 109,078
Shareowner servicing 17,102
Miscellaneous taxes 16,057
Professional fees 15,233
Filing and 10,444
registration fees
Printing and postage 6,542
Custodial fees 3,308
Other expenses 3,318
Total gross expenses 181,082
Less earnings (3,308)
credits
Net expenses 177,774
Net investment 345,592
income
Net realized gain (loss) on investments
Proceeds from sales 2,542,959
Less cost of securities sold based on identified cost (1,902,786)
Realized net gain 640,173
Unrealized gain (loss) on investments
End of period 2,191,604
Beginning of period 1,397,750
Increase in unrealized gain for the period 793,854
Net realized and unrealized gain on investments 1,434,027
Net increase in net assets resulting from operations $1,779,619
==========
</TABLE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS Year ended Year ended
May 31, 1996 May 31, 1995
From Operations
<S> <C> <C>
Net investment income $ 345,592 $325,747
Net realized (loss) gain on investments 640,173 42,419
Net increase (decrease) in unrealized appreciation 793,854 637,606
Net increase (decrease) in net assets 1,779,619 1,005,772
Dividends to Shareowners From
Net investment income (341,768) (371,430)
Capital gains distributions (630,728) -
807,123 634,342
Fund Share Transactions
Proceeds from sales of shares 2,282,709 1,844,615
Value of shares issued in reinvestment of dividends 950,785 368,278
3,233,494 2,212,893
Cost of shares redeemed (2,284,062) (2,571,123)
Net increase (decrease) in net assets from share transactions 949,432 (358,230)
Total increase (decrease) in net assets 1,756,555 276,112
Net Assets
Beginning of period 10,707,841 10,431,729
End of period $12,464,396 $ 10,707,841
Shares of the Fund Sold and Redeemed
Number of shares sold 165,713 153,971
Number of shares issued in reinvestment of dividends 67,575 29,409
233,288 183,380
Number of shares redeemed (167,597) (210,643)
Net Increase (Decrease) in Number of Shares Outstanding 65,691 (27,263)
====== =======
</TABLE>
INVESTMENTS
May 31, 1996
<TABLE>
<CAPTION>
Number Market
Issue of Cost Value
Shares
- ------------------------------------------------------------------------------------------------------
COMMON STOCKS (93.3%)
<S> <C> <C> <C>
Building (4.2%)
BMC West $4,500 $ 74,188 $78,750
Butler Manufacturing 2,500 60,890 94,375
SUB-TOTAL 135,078 173,125
Chemicals (0.6%)
RPM, Inc. 1,625 23,763 27,016
Computers (10.0%)
Apple Computer 1,000 32,551 26,125
Compaq Computer 1,000 36,201 48,625
Hewlett-Packard 1,000 41,638 106,750
Microsoft 700 70,040 83,125
Oracle 2,400 78,773 79,500
Quarterdeck Corp. 5,000 70,583 72,500
SUB-TOTAL 329,786 416,625
Computer Software (8.4%)
Adobe Systems 2,000 84,122 74,250
Informix 4,000 78,967 91,000
Intuit 1,500 56,731 78,000
Shiva 1,400 24,546 104,650
SUB-TOTAL 244,366 347,900
Food (1.6%)
Coca-Cola FEMSA S.A. ADR 2,400 57,093 69,300
Electric Utilities (2.3%)
Enersis S.A. ADR 3,200 91,624 94,000
Electronics (11.5%)
FLIR 3,200 41,655 44,800
GaSonics International 5,000 52,711 66,250
Interpoint 2,500 20,108 74,375
Merix 2,500 56,373 77,813
Motorola 1,200 65,543 80,250
Qualcomm 2,500 72,970 136,094
SUB-TOTAL 309,360 479,582
Financial Information (3.9%)
McGraw-Hill 2,000 89,380 93,750
Reuters Holdings PLC-ADR 1,000 43,333 69,625
SUB-TOTAL 132,713 163,375
Healthcare (2.4%)
United Healthcare 800 35,376 43,900
Cardinal Health 900 33,941 57,488
SUB-TOTAL 69,317 101,388
Machinery (4.5%)
Deere & Co. 2,000 79,849 83,250
Valley Forge 7,000 105,321 103,250
SUB-TOTAL 185,170 186,500
Medical Technology (7.6%)
Amgen 1,200 32,403 71,400
Johnson & Johnson 1,000 91,871 97,375
Liposome 4,000 21,665 80,000
Glaxo Wellcome plc ADR 2,500 55,379 65,313
SUB-TOTAL 201,318 314,088
Mining & Precious Metals (3.2%)
Cyprus Amax Minerals 1,100 33,054 26,400
Freeport McMoran Copper & Gold B 2,000 70,595 66,500
RTZ Corp PLC ADS 600 30,446 37,950
SUB-TOTAL 134,095 130,850
Oil & Gas Production (9.3%)
Atlantic Richfield 900 104,880 107,663
Noble Drilling 8,750 60,832 117,031
Williams Companies 1,200 60,536 60,300
YPF S.A. ADB 4,500 99,632 99,000
SUB-TOTAL 325,880 383,994
Paper & Paper Products (1.2%)
Aracruz Cellulose SA ADR 5,600 45,915 50,400
Photographic Supplies (1.5%)
Fuji Photo Film ADR 1,000 46,837 62,000
Retail (2.6%)
Nordstrom 2,100 85,980 107,100
Steel Producers (3.8%)
Nucor 1,200 64,623 66,000
Schnitzer Steel Industries 3,300 79,380 93,225
SUB-TOTAL 144,003 159,225
Telecommunications (6.9%)
Cincinnati Bell 2,400 43,614 127,500
PT Indostat ADR 2,000 69,719 68,500
Telefonica de Espana ADS 1,700 70,376 89,038
SUB-TOTAL 183,709 285,038
Transportation (6.0%)
Mesa Airlines 7,000 56,180 92,750
Southwest Airlines 3,100 86,905 85,250
Fritz Companies 2,000 29,732 69,000
SUB-TOTAL 172,817 247,000
Water Treatmment (1.8%)
Ionics 1,500 69,482 74,247
TOTAL INVESTMENTS (93.3%) $2,988,306 3,872,753
==========
Other Assets (net of liabilities) (6.7%) 278,029
TOTAL NET ASSETS (100%) $4,150,782
===========
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data per share of outstanding capital stock outstanding throughout each
period.
Year Year 2/3/94
Ending Ending (Inception)
May 31, May 31, May 31,
1996 1995 1994
<S> <C> <C> <C>
Net asset value at beginning of period $5.04 $4.69 $5.00
Income from investment operations
Net investment income (0.05) (0.04) (0.01)
Net gains or losses on
securities
(both realized and unrealized) 1.95 0.39 (0.30)
Total from investment operations 1.90 0.35 (0.31)
Less distributions
Dividends (from net investment income) 0.00 0.00 (0.01)
Distributions (from capital gains) (0.08) 0.00 0.00
Total distributions (0.08) 0.00 (0.01)
Net asset value at end of period $6.86 $5.04 $4.69
Total return 37.20% 7.46% (6.20)%
Ratios/supplemental data
Net assets ($000), end of period $4,151 $1,974 $952
Ratio of expenses to average net assets (not annualized) 1.94% 2.00% 0.62%
Ratio of net investment income to average net assets (not (0.79)% (0.82)% (0.35)%
annualized)
Portfolio turnover rate (not annualied) 22% 38% 6%
Average commission rate paid $0.0596
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996
Assets
Investments, at value
<S> <C>
Common stocks (cost $2,988,306) $3,872,753
Cash 278,078
Dividends receivable 6,084
Organization expense, unamortized 2,401
Total Assets $4,159,316
Liabilities
Payable to affiliate 6,192
Other liabilities 2,342
Total Liabilities 8,534
Net assets $4,150,782
========
Fund Shares Outstanding 605,062
Analysis of Net Assets
Paid in capital (unlimited shares authorized, without par) $3,297,266
Undistributed net investment income (loss) (35,765)
Undistributed net realized gain (loss) on investments 4,834
Unrealized net appreciation on investments 884,447
Net Assets applicable to Fund shares $4,150,782
==========
Net Asset Value per Share $6.86
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended May 31, 1996
Investment income
<S> <C>
Dividends $30,163
Miscellaneous Income 149
Gross investment income $30,312
Expenses
Investment adviser and administation fee 25,375
Shareowner servicing 9,984
Filing and registration 5,883
Custodial Expenses 4,013
Professional 3,017
Miscellaneous taxes 2,410
Printing and postage 1,658
Other expenses 2,601
Total gross expenses 54,941
Less earnings credits (4,013)
Net expenses 50,928
Net investment income (loss) (20,616)
Net realized gain (loss) on investments
Proceeds from sales 564,467
Less cost of securities sold based on identified cost (462,235)
Realized net gain 102,232
Unrealized gain (loss) on investments
End of period 884,447
Beginning of period 137,726
Increase in unrealized gain for the period 746,721
Net realized and unrealized gain on investments 848,953
Net increase in net assets resulting from operations $828,337
=======
</TABLE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS Year ended Year ended
May 31, 1996 May 31, 1995
From Operations
<S> <C> <C>
Net investment income $(20,616) (12,307)
Net realized (loss) gain on investments 102,232 (41,304)
Net increase (decrease) in unrealized appreciation 746,721 170,599
Net increase (decrease) in net assets 828,337 116,988
Dividends to Shareowners From
Net investment income 0 0
Capital gains distributions (44,764) -
783,573 116,988
Fund Share Transactions
Proceeds from sales of shares 2,282,028 1,440,053
Value of shares issued in reinvestment of dividends 44,134 -
2,326,162 1,440,053
Cost of shares redeemed (933,301) (534,515)
Net increase (decrease) in net assets from share transactions 1,392,861 905,538
Total increase (decrease) in net assets 2,176,434 1,022,526
Net Assets
Beginning of period 1,974,348 951,822
End of period $4,150,782 $1,974,348
Shares of the Fund Sold and Redeemed
Number of shares sold 370,342 302,223
Number of shares issued in reinvestment of dividends 6,452 -
376,794 302,223
Number of shares redeemed (163,437) (113,544)
Net Increase (Decrease) in Number of Shares Outstanding 213,357 188,679
======= ========
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Organization
Amana Mutual Funds Trust (the "Trust") was established under Indiana Law as a
Business Trust on July 26, 1984.The Trust is registered as a no-load, open-end
diversified series investment company under the Investment Company Act of 1940,
as amended. The Trust restricts its investments to those acceptable to Muslims
by investing in accordance with Islamic principles. Two portfolio series have
been created to date, the Income Fund and the Growth Fund (collectively, the
"Funds").
NOTE 2 - Significant Accounting Policies
The following is a summary of the significant accounting policies followed by
the Trust.
Investments:
Securities traded on a national exchange and NASDAQ's National Market are valued
at the price carried by the composite tape of all national exchanges after 4
p.m. New York time or, in the absence of any sale on that date, the 4 p.m. bid
price. Securities traded in the over-the-counter market are valued at the
closing bid price.
The cost of securities is the same for accounting and Federal income tax
purposes. Realized gains and losses are recorded on the identified cost basis.
Cash dividends from equity securities are recorded as income on the ex-dividend
date. Expenses incurred by the Trust on behalf of the Funds (e.g.,
professional fees) are allocated to the Funds on the basis of relative daily
average net assets.
Federal income taxes:
The Funds have elected to be taxed as regulated investment companies under the
Internal Revenue Code and distribute substantially all of their taxable net
investment income and realized net gains on investments. Therefore, no provision
for Federal income taxes is required.
Dividends and distributions to shareowners:
Dividends and distributions to shareowners are recorded on the ex-dividend date.
Dividend payable dates are the end of May and December. Shareowners electing to
reinvest dividends and distributions purchase additional shares at the net asset
value on the payable date.
Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
NOTE 3 - Transactions with Affiliated Persons
Under a contract approved by shareowners on December 28, 1989, Saturna Capital
Corporation provides investment advisory services and certain other
administrative and distribution services and facilities required by the Trust to
conduct its business. For such services, each Fund pays an annual fee equal to
.95% of its average daily net assets. For the year ended May 31, 1996, the
Income Fund and Growth Fund paid advisory fee expenses of $109,078 and $25,375,
respectively.
Saturna Capital acts as transfer agent for the Trust, for which it was paid
$17,102 and $9,934 for the Income and Growth Fund, respectively, for the year
ended May 31, 1996.
In the event that total expenses of a Fund in any one year (excluding interest,
brokerage commissions and federal and state taxes) exceed 2% of average daily
net assets, Saturna Capital is required to reimburse the Fund the amount of any
such excess. No waived or reimbursement was required for the Income and Growth
Fund.
The Trust acts as distributor of its own shares, except in those states in which
Investors National Corporation (a subsidiary of Saturna Capital Corporation) is
itself registered as a broker-dealer and acts as distributor without
compensation. Investors National Corporation is the primary stockbrokerage used
to effect portfolio transactions for the Trust, and was paid $11,690 in
commissions at deep-discount rates during the year ended May 31, 1996.
North American Islamic Trust, Inc., is the religious consultant to Saturna
regarding issues of Islamic principles under an agreement with Saturna as
adviser. From its advisory fee, Saturna pays a fee to North American Islamic
Trust, Inc. equal to .20% of the average daily net assets of the Trust. This fee
amounted to $28,348 for the year ended May 31, 1996. One trustee of the Trust is
also a trustee of North American Islamic Trust.
At inception, Amana Growth Fund reimbursed Saturna Capital $6,375 for
organizational expenses, which amount is being amortized evenly over 60 months.
An initial shareholder has agreed not to redeem more shares than any remaining
unamortized organizational expenses.
All trustees serve without compensation. The Trustees, officers and their
immediate families, and North American Islamic Trust as a group owned 7.49% of
the Income Fund's and 4.3% of the Growth Fund's outstanding shares on May 31,
1996.
NOTE 4 - Dividends
Income Fund dividends from net investment income were $.264 per share paid
December 31, 1995, and $.157 per share paid May 31, 1996. Income Fund
distributions from net realized long-term capital gains were $.066 per share
paid December 31, 1995, and $.696 per share paid May 31, 1996. The Growth Fund
distributions from net realized long-term capital gains were $.075 per share
paid May 31, 1996.
From its inception to May 31, 1996, the Income Fund has realized net gains from
sales of securities of $1,052,463 and has distributed realized net gains of
$1,040,390, while the Growth Fund has realized net gains from sales of
securities of $49,598 and has distributed realized net gains of $44,764.
NOTE 5 - Investments
At May 31, 1996, for Amana Income Fund the net unrealized appreciation of
investments of $2,191,604 comprised gross unrealized gains of $2,295,934 and
gross unrealized losses of $104,330. During the year ended May 31, 1996, the
Income Fund purchased $2,749,717 of securities and sold $2,542,959 of
securities. At May 31, 1996, for Amana Growth Fund the net unrealized
appreciation of investments of $884,447 comprised gross unrealized gains of
$967,047 and gross unrealized losses of $82,600. During the period ended May 31,
1996,the Fund purchased $1,713,603 of securities and sold $564,467 of
securities.
- -------------------------------------------------------------------------------
REPORT OF
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Board of Trustees and
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shareowners of
- -------------------------------------------------------------------------------
Amana Mutual Funds Trust
- -------------------------------------------------------------------------------
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments,and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Income Fund and the Growth Fund
(constituting Amana Mutual Funds Trust, hereafter referred to as the "Trust") at
May 31, 1996, the results of each of their operations for the period then ended,
the changes in each of their net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits,which included confirmation of securities at May 31,
1996 by correspondence with the custodian, provide a reasonable basis for the
opinion expressed above.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
/s/ Price Waterhouse
Seattle, Washington
June 20, 1996
DISCUSSION OF FUND PERFORMANCE
(Unaudited)
Following the varied 1994 market, 1995 was generally a very strong year. In
1995, prices of both stocks and bonds rose, and continued upward in early 1996.
For the 12-month period ended May 31, 1996, Amana Income Fund provided
shareowners with a total return of 17.03%. Amana Growth provided a total return
of 37.20%.
Some comparable market index twelve-month total returns are the S&P 500
Composite (+28.44%), the Dow Jones Utility Index (-7.96%), and the S&P 400
MidCap Index (+28.44%). Since these unmanaged, expense-free indices are not
directly comparable to an actively managed portfolio that has transaction and
other costs (including advisory fees), it is useful to consider the performance
of other mutual funds. Comparable Lipper mutual fund averages are Equity-Income
Funds (+22.34%), Utility Funds (+15.38%), and Growth Funds (+27.34%).
When evaluating the performance of the Amana Funds, it is important to remember
their specialized nature, as well as a number of factors applicable to mutual
funds in general.
Amana Income Fund's primary objective is current income, with preservation of
capital the secondary objective. In following these objectives, the Income Fund
buys income-producing equity securities. Amana Growth Fund's primary objective
is long-term capital growth. The Funds may also hold cash when market conditions
appear uncertain. It is not the objective of either Fund to "beat" any specific
market index.
All mutual funds have investment restrictions that affect investment
performance. In addition to these other restrictions, Amana's Funds are
restricted to buying only U.S.-traded equity securities of companies whose
business operations are generally consistent with Islamic principles. This
special restriction affects performance in a number of ways. The Funds, for
example, are not allowed to earn interest on cash balances. Neither do the Funds
invest in businesses that have substantial earnings from interest, such as
banks.
The difficult environment for utility stocks had an adverse impact on the Income
Fund, which emphasizes income and contains a number of utility stocks to meet
that objective. On the other hand, the Growth Fund has no income requirements
and is able to focus more heavily on growth issues, which performed better in
the bull market of 1995-1996.
Comparison to S & P 500; Discussion
The following line graphs compare the Funds' performance to the Standard &
Poor's 500 Composite Index, a broad-based securities market index. To be
comparable, the S&P 500 data includes reinvested dividends. It is difficult to
compare an unmanaged expense-free index against actively managed portfolios
bearing expenses for management and transaction costs, such as the Amana Funds.
Chart (Grpahic) Omitted
S & P 500 Amana
Jun-86 $10,000 $10,000
Jul-86 $9,431 $9,870
Aug-86 $10,136 $10,500
Sep-86 $9,303 $10,020
Oct-86 $9,820 $10,430
Nov-86 $10,072 $10,610
Dec-86 $9,806 $10,399
Jan-87 $11,123 $11,313
Feb-87 $11,582 $11,685
Mar-87 $11,897 $11,746
Apr-87 $11,793 $11,644
May-87 $11,914 $11,521
Jun-87 $12,509 $11,875
Jul-87 $13,132 $12,154
Aug-87 $13,637 $12,326
Sep-87 $13,337 $12,056
Oct-87 $10,467 $9,636
Nov-87 $9,610 $9,181
Dec-87 $10,319 $9,615
Jan-88 $10,760 $9,931
Feb-88 $11,265 $10,269
Mar-88 $10,925 $9,874
Apr-88 $11,043 $10,017
May-88 $11,129 $10,060
Jun-88 $11,646 $10,458
Jul-88 $11,599 $10,591
Aug-88 $11,215 $10,491
Sep-88 $11,691 $10,814
Oct-88 $12,010 $10,992
Nov-88 $11,839 $10,748
Dec-88 $12,053 $10,905
Jan-89 $12,925 $11,402
Feb-89 $12,603 $11,233
Mar-89 $12,901 $11,233
Apr-89 $13,566 $11,631
May-89 $14,112 $11,938
Jun-89 $14,035 $11,892
Jul-89 $15,296 $12,512
Aug-89 $15,591 $12,742
Sep-89 $15,530 $12,742
Oct-89 $15,168 $12,442
Nov-89 $15,484 $12,592
Dec-89 $15,849 $12,907
Jan-90 $14,786 $12,284
Feb-90 $14,976 $12,355
Mar-90 $15,370 $12,544
Apr-90 $14,992 $12,201
May-90 $16,454 $12,994
Jun-90 $16,339 $13,042
Jul-90 $16,286 $13,078
Aug-90 $14,816 $12,216
Sep-90 $14,087 $11,893
Oct-90 $14,035 $11,833
Nov-90 $14,939 $12,479
Dec-90 $15,348 $12,469
Jan-91 $16,026 $12,811
Feb-91 $17,174 $13,533
Mar-91 $17,583 $13,717
Apr-91 $17,632 $13,680
May-91 $18,386 $14,047
Jun-91 $17,546 $13,565
Jul-91 $18,367 $14,047
Aug-91 $18,799 $14,406
Sep-91 $18,491 $14,517
Oct-91 $18,738 $14,690
Nov-91 $17,981 $14,381
Dec-91 $20,037 $15,417
Jan-92 $19,664 $15,066
Feb-92 $19,916 $15,154
Mar-92 $19,525 $14,803
Apr-92 $20,093 $15,166
May-92 $20,202 $15,154
Jun-92 $19,909 $14,951
Jul-92 $20,711 $15,471
Aug-92 $20,293 $15,243
Sep-92 $20,526 $15,116
Oct-92 $20,600 $15,027
Nov-92 $21,295 $15,471
Dec-92 $21,573 $15,706
Jan-93 $21,731 $15,642
Feb-93 $22,024 $15,950
Mar-93 $22,498 $16,504
Apr-93 $21,947 $16,362
May-93 $22,539 $16,709
Jun-93 $22,598 $16,540
Jul-93 $22,502 $16,631
Aug-93 $23,342 $17,294
Sep-93 $23,154 $17,190
Oct-93 $23,628 $17,554
Nov-93 $23,391 $17,086
Dec-93 $23,666 $17,528
Jan-94 $24,464 $17,980
Feb-94 $23,788 $17,422
Mar-94 $22,744 $16,664
Apr-94 $23,031 $16,771
May-94 $23,392 $16,604
Jun-94 $22,819 $15,991
Jul-94 $23,567 $16,591
Aug-94 $24,534 $16,959
Sep-94 $23,935 $16,959
Oct-94 $24,471 $16,986
Nov-94 $23,580 $16,359
Dec-94 $23,929 $16,396
Jan-95 $24,559 $16,730
Feb-95 $25,514 $17,091
Mar-95 $26,267 $17,493
Apr-95 $27,039 $18,021
May-95 $28,118 $18,257
Jun-95 $28,770 $18,426
Jul-95 $29,674 $18,638
Aug-95 $29,748 $18,709
Sep-95 $31,003 $19,232
Oct-95 $30,892 $19,528
Nov-95 $32,249 $20,277
Dec-95 $32,871 $20,899
Jan-96 $33,985 $21,058
Feb-96 $34,301 $20,827
Mar-96 $34,630 $21,116
Apr-96 $35,139 $21,261
May-96 $36,043 $21,365
This graph shows that $10,000 invested in Amana Income at inception (June 1986)
would have grown to $21,365 at the end of May 1996. If $10,000 could have been
invested in the S&P 500 at the end of June 1986, that would have grown to
$36,043.
S & P 500 Amana
2/3/94 $10,000 $10,000
Feb-94 $9,742 $10,140
Mar-94 $9,317 $9,680
Apr-94 $9,437 $9,480
May-94 $9,591 $9,380
Jun-94 $9,356 $9,080
Jul-94 $9,663 $9,500
Aug-94 $10,059 $9,720
Sep-94 $9,814 $9,360
Oct-94 $10,034 $9,940
Nov-94 $9,669 $9,520
Dec-94 $9,812 $9,360
Jan-95 $10,070 $9,340
Feb-95 $10,461 $9,520
Mar-95 $10,770 $9,800
Apr-95 $11,087 $9,940
May-95 $11,529 $10,080
Jun-95 $11,796 $10,940
Jul-95 $12,167 $11,560
Aug-95 $12,197 $11,700
Sep-95 $12,712 $11,860
Oct-95 $12,667 $11,820
Nov-95 $13,223 $12,340
Dec-95 $13,478 $12,640
Jan-96 $13,935 $12,520
Feb-96 $14,064 $12,840
Mar-96 $14,199 $12,820
Apr-96 $14,408 $13,620
May-96 $14,778 $13,830
The second graph shows that $10,000 invested in Amana Growth at inception
(February 1994) would have grown to $13,830 at the end of May 1996. If $10,000
could have been invested in the S&P 500 at the beginning of February 1994, that
would have grown to $14,778 over that same period.
EXPERIENCE IS IMPORTANT
Amana Mutual Funds Trust began operations in 1986. Saturna Capital, with
extensive experience in mutual funds,invests the Fund portfolios and handles
their operations.
The Trust is managed by a Board of five Trustees, all serving without
compensation:
Trustees
Bassam Osman, MD, Chairman
Nicholas Kaiser, MBA, President
M. Yaqub Mirza, Ph.D., Treasurer
Jamal M. al-Barzinji, Ph.D
Iqbal Unus, Ph.D.
Officers
Bassam Osman, Chairman
Nicholas Kaiser, President
M. Naziruddin Ali, Vice President
James D. Winship, Secretary
M. Yaqub Mirza, Treasurer
Meredith Ross, Asst. Treasurer
Iqbal Unus, Asst. Secretary
Saturna Capital
Mutual Funds
Investment Adviser
and
Administrator
NORTH AMERICAN ISLAMIC TRUST
Religious Consultant
This report is for the information of the shareowners of the Trust. It is not
authorized for distribution to prospective investors unless it is accompanied or
preceded by an effective prospectus.
AMANA
MUTUAL FUNDS TRUST
INCOME FUND
GROWTH FUND
MAY 31, 1996
REPORT
1300 No. State Street
Bellingham WA 98225-4730
1-800/SATURNA
(1-800/728-8762)
e-mail: [email protected]
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-effective
Amendment No.16 to the Registration Statement on Form N-1A (the Registration
Statement) of our report dated June 20, 1996, relating to the financial
statements and selected per share data and ratios (incorporated under the
heading "Financial Highlights") appearing in the May 31, 1996 Annual Report to
Shareowners of Amana Mutual Funds Trust, which is also incorporated by reference
into the Registration Statement. We also consent to the references to us under
the heading "Financial Highlights" in the Prospectus and under the headings
"Investment Advisory and Other Services" and "Financial Statements" in the
Statement of Additional Information.
Price Waterhouse LLP
/s/ Price Waterhouse LLP
Seattle, Washington
August 19, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF THE FUND AND IS QUALIFIED IN ITS ENTITY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 766285
<NAME> Amana Mutual Funds Trust
<SERIES>
<NUMBER> 1
<NAME> Amana Income Fund
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 9633766
<INVESTMENTS-AT-VALUE> 11825370
<RECEIVABLES> 45921
<ASSETS-OTHER> 609861
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12481152
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16756
<TOTAL-LIABILITIES> 16756
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10257826
<SHARES-COMMON-STOCK> 894550
<SHARES-COMMON-PRIOR> 828860
<ACCUMULATED-NII-CURRENT> 2,892
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,074
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2191604
<NET-ASSETS> 12464396
<DIVIDEND-INCOME> 523211
<INTEREST-INCOME> 0
<OTHER-INCOME> 155
<EXPENSES-NET> 177774
<NET-INVESTMENT-INCOME> 345,592
<REALIZED-GAINS-CURRENT> 640173
<APPREC-INCREASE-CURRENT> 793854
<NET-CHANGE-FROM-OPS> 1779619
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 341768
<DISTRIBUTIONS-OF-GAINS> 630728
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 165713
<NUMBER-OF-SHARES-REDEEMED> 167597
<SHARES-REINVESTED> 67575
<NET-CHANGE-IN-ASSETS> 65,691
<ACCUMULATED-NII-PRIOR> 1,696
<ACCUMULATED-GAINS-PRIOR> 1397750
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 109078
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 181082
<AVERAGE-NET-ASSETS> 11287814
<PER-SHARE-NAV-BEGIN> 12.92
<PER-SHARE-NII> 0.42
<PER-SHARE-GAIN-APPREC> 1.76
<PER-SHARE-DIVIDEND> 0.41
<PER-SHARE-DISTRIBUTIONS> 0.76
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.93
<EXPENSE-RATIO> 1.57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SUCH A FUND AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 766285
<NAME> Amana Mutual Funds Trust
<SERIES>
<NUMBER> 1
<NAME> Amana Growth Fund
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 2988306
<INVESTMENTS-AT-VALUE> 3872753
<RECEIVABLES> 6084
<ASSETS-OTHER> 280479
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4159316
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8534
<TOTAL-LIABILITIES> 8534
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3297266
<SHARES-COMMON-STOCK> 605062
<SHARES-COMMON-PRIOR> 391,705
<ACCUMULATED-NII-CURRENT> (35,765)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,834
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 884447
<NET-ASSETS> 4150782
<DIVIDEND-INCOME> 30163
<INTEREST-INCOME> 0
<OTHER-INCOME> 149
<EXPENSES-NET> 50928
<NET-INVESTMENT-INCOME> (20,616)
<REALIZED-GAINS-CURRENT> 102232
<APPREC-INCREASE-CURRENT> 746721
<NET-CHANGE-FROM-OPS> 828337
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 44764
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 370342
<NUMBER-OF-SHARES-REDEEMED> 163437
<SHARES-REINVESTED> 6452
<NET-CHANGE-IN-ASSETS> 213,357
<ACCUMULATED-NII-PRIOR> (15,150)
<ACCUMULATED-GAINS-PRIOR> (52633)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 25375
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 54941
<AVERAGE-NET-ASSETS> 2623734
<PER-SHARE-NAV-BEGIN> 5.04
<PER-SHARE-NII> (0.05)
<PER-SHARE-GAIN-APPREC> 1.95
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.08
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.86
<EXPENSE-RATIO> 1.94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
