File No. 2-96924
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT X
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OF 1933
POST-EFFECTIVE AMENDMENT NO. 14
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REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
X
POST-EFFECTIVE AMENDMENT NO. 17
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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 98225-4730
(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, 1997 was filed on July
23, 1997.
<PAGE>
CROSS REFERENCE SHEET
FORM N-1A
Item
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PART A PROSPECTUS
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1. Cover Page AMANA MUTUAL FUNDS TRUST
2. Synopsis Not applicable
3. Condensed Financial Information FINANCIAL HIGHLIGHTS
4. General Description of Registrant ABOUT THE FUND;
INVESTMENT OBJECTIVES
5. Management of the Fund INVESTMENT ADVISER;
RELIGIOUS CONSULTANT;
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
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10. Cover Page Cover Page
11. Table of Contents TABLE OF CONTENTS
12. General Information and History Not applicable (in Part A)
13. Investment Objectives & Policies INVESTMENT OBJECTIVES AND
POLICIES OF THE FUNDS
14. Management of the Registrant MANAGEMENT OF THE TRUST
<PAGE>
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 (in Part A)
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
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<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 con-tin-uing
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]
AMANA
MUTUAL FUNDS TRUST
GROWTH FUND
INCOME FUND
You should read this Prospectus before investing in the Funds. Please read it
carefully and keep it for future reference. A Statement of Additional
Infor-ma-tion dated August 22, 1997, was filed with the Securities and
Exchange Com-mission and is incorporated by reference into this Prospectus.
You may obtain a free copy at the SEC website (www.sec.gov) or the Saturna
website (www.saturna.com), or by contacting Saturna Capital directly.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DIS-AP-PROVED BY THE SECURITIES AND
EXCHANGE COM-MISSION OR ANY STATE SECURITIES AUTHORITY NOR HAS THE COMMIS-SION
OR ANY STATE AUTHORITY PAS-SED UPON THE ACCURACY OR ADE-QUACY OF THIS
PROSPECTUS. ANY REP-RESEN-TA-TION TO THE CONTRARY IS A CRIMINAL OF-FENSE.
PROSPECTUS
August 22, 1997
<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 illus-trates operating
expenses of the Funds for the fiscal year ending May 31, 1997.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<S> <C> <C>
INCOME GROWTH
------- -------
Management and Administrative Fees 0.95% 0.95%
12b-1 Expenses NONE NONE
Other Expenses 0.59% 0.74%
Total Fund Operating Expenses 1.44% 1.69%
</TABLE>
<TABLE>
<CAPTION>
For Example:
<S> <C> <C> <C>
Each Fund estimates paying 1 year-- $ 15 $ 18
these expenses on a $1,000 3 years-- $ 48 $ 57
investment, assuming a 5% 5 years-- $ 85 $100
annual return 10 years-- $193 $227
<FN>
This information is to help you in understand the various (both direct and
- ------------------------------------------------------------------------------
indirect) expenses that an investor bears. This table is not a
- ----------------------------------------------------------------------------
representation of past or future expenses. Actual expenses are likely to be
- ------------------------------------------------------------------------------
more or less than those shown. See Financial Highlights and Investment Adviser
- ------------------------------------------------------------------------------
for more details.
- -------------------
</FN>
</TABLE>
ABOUT THE FUND
Amana Mutual Funds Trust is de-signed to meet the needs of various investors,
and the particular needs of Muslims by invest-ing in ac-cordance with Islamic
principles.
The Trust is open to any investor and of-fers the op-portunity to select one
or more sep-arate "mutual funds," each of which has different investment
ob-jectives.
Amana Mutual Funds Trust was orga-nized as an Indiana Business Trust on July
26, 1984. The Trust is techni-cally known as an "open-end diversi-fied
man-agement in-vest-ment com-pany." The Trust is designed as a "series trust"
that may offer several sepa-rate funds for in-vestors. 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
capi-tal the secondary objective.
(continued on page 3)
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest in each Fund outstanding
throughout each period. The following schedules for 1997 were audited by
Tait, Weller & Baker (and for earlier periods by Price Waterhouse LLP),
independent accountants, whose report is included in the Annual Report
(incorporated by reference into the Statement of Additional Information).
These schedules should be read with the other financial statements and notes
in the Annual Report (available without charge from the Trust), which also
includes management's discussion of each Fund's performance.
INCOME FUND
<TABLE>
<CAPTION>
For Year Ended May 31
------------------------
1997 1996 1995 1994 1993 1992 1991 1990
------------------------ -------- -------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
AT BEGINNING OF PERIOD $ 13.93 $ 12.92 $ 12.18 $ 12.86 $11.94 $11.36 $10.86 $10.39
------------------------ -------- -------- -------- ------- ------- ------- -------
Income from investment operations
Net investment income 0.38 0.42 0.38 0.30 0.32 0.32 0.39 0.38
Net gains or losses on securities
(both realized and unrealized) 2.86 1.76 0.80 (0.36) 0.92 0.58 0.46 0.53
------------------------ -------- -------- -------- ------- ------- ------- -------
Total from investment operations 3.24 2.18 1.18 (0.06) 1.24 0.90 0.85 0.91
------------------------ -------- -------- -------- ------- ------- ------- -------
Less distributions
Dividends (from net investment Income) (0.42) (0.41) (0.44) (0.30) (0.32) (0.32) (0.35) (0.44)
Distributions (from capital gains) (0.14) (0.76) 0.00 (0.32) 0.00 0.00 0.00 0.00
------------------------ -------- -------- -------- ------- ------- ------- -------
Total distributions (0.56) (1.17) (0.44) (0.62) (0.32) (0.32) (0.35) (0.44)
------------------------ -------- -------- -------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD $ 16.61 $ 13.93 $ 12.92 $ 12.18 $12.86 $11.94 $11.36 $10.86
======================== ======== ======== ======== ======= ======= ======= =======
TOTAL RETURN 23.62% 17.03% 9.95% (0.63%) 10.26% 7.88% 8.11% 8.85%
RATIOS / SUPPLEMENTAL DATA
- --------------------------------------
Net assets ($000), end of period $ 16,332 $12,464 $10,708 $10,432 $9,398 $6,913 $5,868 $4,760
Ratio of gross expenses
to average net assets 1.44% 1.57% 1.56% 1.58% 1.58% 1.58% 1.66% 1.76%
Ratio of net investment income
to average net assets 2.51% 3.06% 3.11% 2.22% 2.65% 2.75% 3.73% 3.67%
Portfolio turnover rate 14% 24% 29% 21% 29% 19% 29% 19%
Average commission rate paid $ 0.0336 $0.0460
1989 1988
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<S> <C> <C>
NET ASSET VALUE
AT BEGINNING OF PERIOD $ 9.11 $ 10.73
------- ---------
Income from investment operations
Net investment income 0.38 0.30
Net gains or losses on securities
(both realized and unrealized) 1.29 (1.65)
------- ---------
Total from investment operations 1.67 (1.35)
------- ---------
Less distributions
Dividends (from net investment Income) (0.39) (0.27)
Distributions (from capital gains) 0.00 0.00
------- ---------
Total distributions (0.39) (0.27)
------- ---------
NET ASSET VALUE AT END OF PERIOD $10.39 $ 9.11
======= =========
TOTAL RETURN 18.86% (12.68)%
RATIOS / SUPPLEMENTAL DATA
- --------------------------------------
Net assets ($000), end of period $3,645 $ 3,559
Ratio of gross expenses
to average net assets 1.88% 2.07%
Ratio of net investment income
to average net assets 3.85% 3.17%
Portfolio turnover rate 71% 66%
Average commission rate paid
</TABLE>
<TABLE>
<CAPTION>
GROWTH FUND
Year Ended May 31,1997 Year Ended May 31,1996 Year Ended 2/3/1994
May 31,1995 Inception to
May 31,1994
- -----------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $ 6.86 $ 5.04 $ 4.69 $ 5.00
------------------------ ------------ ------------------ ----------
Income from investment operations
Net investment income (0.02) (0.05) (0.04) (0.00)
Net gains or losses on securities
(both realized and unrealized) 0.32 1.95 0.39 (0.30)
------------------------ ------------ ------------------ ----------
Total from investment operations 0.30 1.90 0.35 (0.30)
------------------------ ------------ ------------------ ----------
Less distributions
Dividends (from net investment income) 0.00 0.00 0.00 (0.01)
Distributions (from capital gains) (0.09) (0.08) 0.00 0.00
------------------------ ------------ ------------------ ----------
Total distributions (0.09) (0.08) 0.00 (0.01)
------------------------ ------------ ------------------ ----------
NET ASSET VALUE AT END OF PERIOD $ 7.07 $ 6.86 $ 5.04 $ 4.69
======================== ============ ================== ==========
TOTAL RETURN 4.46% 37.20% 7.46% (6.20)%
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------
Net assets ($000), end of period $ 5,924 $ 4,151 $ 1,974 $ 952
Ratio of gross expenses to average net assets 1.69% 1.94% 2.00% 0.62%*
Ratio of net investment income to average net assets (0.60)% (0.79)% (0.82)% (0.35)%*
Portfolio turnover rate 25% 22% 38% 6%*
Average commission rate paid $ 0.0396 $ 0.0596 (*not annualized)
</TABLE>
<PAGE>
Invest-ment decisions for both Funds are made in accordance with Islamic
princi-ples. There is no as-surance that specific invest-ment ob-jectives
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 pro-ceeds in a portfolio of
securi-ties chosen accor-ding 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 inclina-tion, the back-ground,
ex-perience and sufficient resources to spread his invest-ments among many
busi-nesses.
Amana Mutual Funds Trust sells shares di-rectly to investors, without a sales
"load." Since no sales "load" is deducted, the en-tire amount paid for shares
is in-vested. Distribution ex-penses are paid by the Adviser (see Investment
Adviser).
INVESTMENT OBJECTIVES
The primary objective of the GROWTH FUND is long-term capital growth,
consis-tent with Islamic principles. The objec-tives of the INCOME FUND are
cur-rent in-come and preservation of capi-tal, consis-tent with Islamic
principles; current in-come is its pri-mary objective.
In accor-dance with Islamic principles, the Funds shall not make any
invest-ments which pay interest. The in-vestment ob-jec-tives of the Funds
cannot be changed without share-owner approval.
These objectives are pursued by in-vest-ing in equity securities, including
foreign securities. While the Funds may pur-chase preferred stocks and engage
in covered op-tion writ-ing, they cur-rently do not do so. The Funds also
have the power to use short-term income produc-ing invest-ments (see
Investment Policies).
Investing in securities entails both market risk and risk of price variation
in individ-ual securities. By diversify-ing its invest-ments, each Fund
re-duces the risk of owning one or a few individual securi-ties. There can be
no guar-antee that the particular invest-ment objec-tives of either Fund will
be realized.
INVESTMENT POLICIES AND RISK CONSIDERATIONS
AMANA MUTUAL FUNDS TRUST is de-signed to provide investment alterna-tives that
are consistent with Islamic princi-ples. Gen-erally, Islamic princi-ples
re-quire that investors share in profit and loss, that they receive no usury
or inter-est, and that they do not invest in a busi-ness that is not
permit-ted by Islamic principles. Some of the businesses not permitted are
liquor, wine, casinos, pornography, gam-bling, and banks or loan associations
that are not based on Islamic princi-ples. (The Adviser is not aware of any
Islamic banks or loan as-socia-tions whose securities are US-traded.)
<PAGE>
These criteria limit the investment selection opportuni-ties more than is
customary for other mu-tual 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 con-sulting 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
par-ticular investment objectives of each sep-arate fund of Amana. The
consultant (NAIT) advises only on is-sues of the ap-plication 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 cur-rent Trustee of Amana is also a
Trustee of NAIT.
The Adviser selects investments in com-panies which to its knowledge do not
vio-late 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 acquisi-tion 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 ad-verse impact on the investment
per-for-mance of a fund.
The policy of the Income Fund is to invest at least 80% of its assets in
in-come-pro-ducing equity securities, such as divi-dend-paying common stocks.
Some as-sets 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 produc-ing securi-ties 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 commensurably greater opportunity for reward, than some
other investments, such as investments in short-term bonds and money market
in-stru-ments. The value of investments in common stocks fluc-tuates and may
be greater than or less than the investment made. The Growth Fund selects
investments primar-ily on the expecta-tion of increases in earnings and share
price, and not cur-rent dividend-paying ability.
Both Funds are diversified, and do not in-vest more than 5% of total as-sets
in the securities of any one is-suer. The Funds will not in-vest more than
25% of its as-sets in any par-ticu-lar industry.
The Trust has adopted certain restric-tions, as out-lined in the next section.
The policies outlined in this section can be changed if deemed appropri-ate by
a majority of the Board of Trustees.
<PAGE>
The Funds may use short-term in-come producing investments to the extent the
Board of Trustees and the consultant on Islamic principles agree that those
in-vestments are consistent with Islamic principles. Short-term in-vestments
are securities which ma-ture or have a re-main-ing maturity of twelve months
or less from the date of purchase. The Adviser does not know of any
short-term invest-ments 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 princi-ples prohibit the
use of these interest-producing in-vest-ments. If short-term Islamic
invest-ments become avail-able 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 US, but cur-rently limit such investments to 5%. The Funds
in-tend to invest only in foreign securities available for trading and
settlement in the US, primarily in American Depository Receipts (ADRs) for
foreign securities.
During uncertain market or economic conditions, the Funds may adopt a
tem-porary, defensive position. The Funds cannot invest in interest-pay-ing
instru-ments fre-quently used by mutual funds for this pur-pose. When markets
are unattractive, the Adviser chooses be-tween continuing to follow the Funds'
in-vestment policy or con-verting securities to cash for tempo-rary, defensive
pur-poses. This choice is based on the Adviser's evaluation of mar-ket
conditions and the Funds' portfolio holdings. While cash assets do not
con-tribute to the Income Fund's primary objective of cur-rent income, they do
assist its secondary ob-jective of capital stability.
INVESTMENT RESTRICTIONS
In accordance with Islamic principles, the Funds shall not purchase bonds,
debentures, or other interest paying obli-gations of indebtedness.
The Funds may not make loans, lend portfolio securities, make short sales,
borrow money, or purchase or sell op-tions, except that they may sell covered
call options and purchase call options for the purpose of termi-nating call
options previ-ously sold. The Funds currently do not purchase or sell options.
The above restrictions are fundamen-tal policies and may not be changed
without prior approval by a majority of the out-standing shares of a Fund.
INVESTMENT RESULTS
Shareholders receive a financial re-port 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.
<PAGE>
PERFORMANCE DATA
The Funds may publish current yield and average annual total return in
advertisements or other publications. In comparing a Fund investment with
alternatives, 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 fu-ture
perfor-mance.
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 aver-age
number of shares eligible to re-ceive 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) annual-iz-ing the results.
To compute average annual total re-turn of a Fund for any specified period (i)
as-sume an in-vestment of $1,000 made at net asset value on the first day of
the period and that all div-i-dends paid during the period are rein-vested in
addi-tional shares at net as-set 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 be-ginning balance. For a more com-plete de-scription of the method of
computation, see the Statement of Ad-ditional Information.
CAPITAL STOCK & DIVIDENDS
Each Fund of Amana Mutual Funds Trust is divided into shares of benefi-cial
inter-est. The shares of each sep-arate Fund of the Trust have equal voting
rights. All shares are fully paid, non-assessable, transferable and with
rights of redemp-tion, 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 pur-poses as electing or remov-ing 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 distribu-tions for each Fund shall be
dis-tributed to shareown-ers in proportion to the number of shares owned.
Each Fund intends to distribute sub-stan-tially all its net investment in-come
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 dis-tri-bu-tions are automatically
rein-vested in addi-tional full and fractional shares of the Fund owned. At
your option, you may receive dividends or capital gain distri-butions in cash.
The shares purchased with divi-dends or with capital gains dis-tributions may
be redeemed by using any method for re-
<PAGE>
demption of shares of the fund (see How to Redeem Shares). You are notified
of each divi-dend and capital gains distribu-tion when paid.
The Funds intend to continue to qualify as regu-lated investment companies
under the Internal Revenue Code and to distribute sub-stantially all their net
in-come and real-ized net gains on in-vestments. Under such circum-stances, a
Fund is not re-quired to pay federal in-come 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 divi-dends and
capital gains distributions. Dividend amounts represent the pro-portionate
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% fed-eral withholding tax on dividends and
distri-bu-tions, you must furnish your cor-rect Social Security or Tax
Identification Number.
Share-owners who are not US tax-payers may be subject to a 30% with-hold-ing
tax un-der US provisions applicable to foreign investors, unless a reduced
rate or ex-emption is pro-vided under a tax treaty. Capital gain
distributions paid by the Funds are not subject to foreign with-holding.
NET ASSET VALUE
Each Fund computes its net asset value per share each business day by
di-vid-ing (i) the value of all of its se-curities and other as-sets, less
liabili-ties, by (ii) the num-ber of shares out-standing. The Funds compute
their net as-set values as of the close of trading on the New York Stock
Exchange (generally 4 p.m. New York time) on each day the Ex-change is open
for trading. The Funds' shares are not priced on any custom-ary na-tional
busi-ness holiday that US se-curities markets are closed. The net asset value
appli-ca-ble to purchases or redemp-tions of shares of each Fund is the net
asset value next com-puted after receipt of a purchase or re-demption order.
The Funds use the price carried by the composite tape of all US ex-changes
after 4 p.m. New York time to determine the value of stocks in their
portfolios. Securities traded on a US ex-change or the NASDAQ mar-ket sys-tem
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 val-ued at their fair val-ue
as determined in good faith by the Board of Trustees.
<PAGE>
HOW TO BUY SHARES
You may open an account and pur-chase shares by sending a com-pleted
Application with a check for $100 (US only) or more ($25 under a group or
retirement plan) made payable to the Fund of your choice. The Trust does not
ac-cept ini-tial orders unaccom-pa-nied by payment nor by telephone. The price
you receive is the net asset value (see Net Asset Value) next determined
after receipt of a pur-chase 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, pur-chases can be made by check, by electronic
funds transfer, or by wire.
You may autho-rize the use of the Auto-mated Clearing House ("ACH") to
pur-chase or redeem shares by completing the appropriate section of the
applica-tion. The autho-rization must be received at least two weeks before
ACH can be used. ACH is a system for electronic funds transfer. To use ACH
to pur-chase or redeem shares, simply call the trans-fer agent. You also may
wire money to purchase shares, though typi-cally your wiring bank charges a
fee for this service. Call the transfer agent for the in-formation you will
need before request-ing 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 bal-ances are computed in full and frac-tional shares,
expressed to three decimal places.
At the end of each calendar year, you will re-ceive a complete annual
state-ment, which you should retain for tax purposes.
The Amana Funds offer several op-tional plans and services, including a
prototype defined contribution plan and Individual Retirement Accounts.
Ma-terials describ-ing these plans and applica-tions may be obtained from the
Adviser or the transfer agent.
Other plans offered by the Funds in-clude: (1) an auto-matic investment plan,
(2) a sys-tem-atic with-drawal plan to provide regular pay-ments to you, and
(3) the right to ex-change your shares without charge for any other no-load
mutual fund for which Saturna Capital is the in-vestment ad-viser.
The Funds may be appropriate for a wide range of investors, including
corporations, part-ner-ships, associa-tions and other or-ga-ni-za-tions.
Ac-counts may be estab-lished by trusts and fiduciaries. You also may make
invest-ments as custo-dian for mi-nor children under the Uniform Gifts [or
Transfers] to Minors Act of your state of residence.
<PAGE>
HOW TO REDEEM SHARES
You may redeem your shares on any business day of the Trust. The Funds pay
redemptions in US dol-lars, and the amount you receive is the net asset value
per share next determined after receipt of your re-demption request. The
amount re-ceived will depend on the value of the in-vestments 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 re-demption constitutes a
sale for federal income tax purposes, and you may realize a capital gain or
loss on the re-demp-tion.
The Funds normally pay for shares redeemed or exchanged within three days
after a proper instruction is re-ceived. To allow time for clearing,
re-demption of in-vestments made by check may be re-stricted 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 follow-ing
options for the proceeds:
(A) Redemption check (no mini-mum) sent to registered owner(s).
(B) Redemption check (no mini-mum) sent as directed if the signa-ture(s) are
guaranteed. If pro-ceeds are to be sent to other than the regis-tered owner(s)
at the last ad-dress, the signa-tures on the request must be guaran-teed by a
national bank or trust com-pany or by a member of a national se-curities
ex-change.
(C) Federal funds wire. The pro-ceeds ($5000 minimum) may be wired to any
bank designated in the re-quest if the signa-ture(s) are guar-an-teed as
explained above.
TELEPHONE REQUEST
Call: 800/728-8762 or
360/734-9900
You may redeem shares by a tele-phone request and choose one of the following
options for the proceeds:
(A) Redemption check (no mini-mum) sent to registered owner(s).
(B) ACH transfer ($100 minimum) with proceeds trans-ferred to your bank
ac-count as desig-nated by the ACH au-thorization on your applica-tion. The
ACH authori-za-tion must be received by the transfer agent at least two weeks
before ACH transfer can be used.
(C) Exchange (in at least the mini-mum estab-lished by the Fund being
purchased) for shares of any other Fund for which Saturna Capital is adviser.
If the ex-change is your initial in-vestment into this Fund, the new ac-count
will au-tomatically have the
<PAGE>
same registration as your original ac-count. Of course, shares must be
registered for purchase in your state before an ex-change 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 min-imum) may be wired only to the
bank previously designated, or as di-rected in a prior written instruc-tion
with signatures guar-anteed, as explained above.
For telephone requests the Funds will en-deavor 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 per-son making the request, (2) the name and
address of the regis-tered owner(s), (3) the account number, (4) the amount to
be withdrawn, and (5) the method for payment of the pro-ceeds. The Funds also
may require a form of personal identification, and provide writ-ten
confirmation of transactions. The Funds will not be responsible for the
re-sults of transactions they rea-sonably be-lieve genuine.
CHECK WRITING
You may also redeem shares in your account by drawing checks on your ac-count
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 re-deemed at the net as-set
value next de-termined after re-ceipt by the transfer agent. If you wish to
use this feature, you should request the Check Writing Privi-lege on the
Application at the time you open an account. Note that, as with any
redemption, each check is a closing capital transac-tion for tax re-porting
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 cor-porate restructuring or
sale. Combining common and Class A stockholdings, as of August 1, 1997, the
Adviser was owned 29% by Nicholas Kaiser, 14% by Brian A. Anderson, 13% by
Phelps McIlvaine, 12% by James D. Winship and 11% by Vern Clemenson. No other
shareowner owns more than 10%. The Adviser's wholly-owned subsidiary,
Investors National Corporation, is a dis-count brokerage firm and acts as
distribu-tor for the Trust without compen-sation.
Saturna Capital is also the adviser to Saturna Investment Trust, an $12
mil-lion five-portfolio mutual fund. Mr.
Kaiser has managed mutual funds since 1976 and has been the principal manager
of the Amana Mutual
<PAGE>
Funds since 1990. Mr. Anderson and Mr. Kaiser also manage private accounts
for Saturna Capital Corporation.
Each Fund pays the Adviser an advi-sory and administration fee of 0.95%
annually of average daily net assets. Although higher than that of most
funds, this fee also cov-ers certain administrative services and is warranted,
in the opinion of the Trustees.
Under its respective investment advi-sory agreement each Fund pays its own
taxes, bro-kerage commissions, any trustees' fees (currently none), legal and
ac-counting fees, insurance premi-ums, cus-todian, transfer agent, registrar
and divi-dend disbursing agent fees, ex-penses in-curred in complying with
state and federal laws regulating the issue and sale of its shares, and
mailing and print-ing costs for prospectuses, reports and notices to
shareowners. The Adviser, at its own ex-pense, furnishes office space,
of-fice facili-ties and equipment, personnel (including executive offi-cers)
and clerical and book-keeping services required to conduct the business of
each Fund. Total ex-penses of the Income Fund and Growth Fund for the fiscal
year ended May 31, 1997 amounted to 1.44% and 1.69% of each Fund's average net
assets, respectively. The advisory agreements also provide in the event that
the total ex-penses 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 share-owner 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 re-ligious consultant to Saturna
Capital re-garding issues of Islamic principles relating to the Funds un-der a
sub-advisory agreement with the Ad-viser. From the advisory fee, NAIT is paid
for consulting services an an-nual fee of 0.2% of the aver-age 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 affili-ated organizations and Islamic cen-ters. ISNA and MSA
are sepa-rate, non-profit organiza-tions that provide religious, educational,
cultural, and community services.
<PAGE>
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, de-termine the amount of
any dividend or capital gain distribution and serve on any committees of the
Trust.
Managers of the Funds and other in-vestment personnel are permitted to engage
in securities transactions for their own accounts but only in accor-dance with
Saturna Capital's code of ethics that, among other things, requires ad-vance
approval of all trades and dis-closure of all holdings. It also pro-hibits a
number of transactions, and contains other provisions.
<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 US 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 endeavors 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. The Fund
also provides 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.
AUTOMATIC INVESTMENT PLAN
Invest $ into o Growth Fund and/or $ into o Income 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.
CHECK WRITING PRIVILEGE ($500 per check minimum) ($10 checkbook charge)
I (We) request the Custodian to honor checks drawn by me (us) on my (our) o
Growth Fund and/or o Income Fund 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>
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 888-73-AMANA
(26262).
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>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
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 22, 1997
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 22,
1997 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 8
Investment Advisory and Other Services 8
Brokerage Allocation 10
Purchase, Redemption and Pricing of Securities Being Offered 11
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 cur-rent income and preservation of capital consistent with Islamic
principles (Income Fund) and long-term capital growth consistent with Islamic
principles (Growth Fund). This sec-tion 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 ac-cording 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
in-crease 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
secu-rities not traded publicly in the US 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 set-tlement 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 corre-spondent 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 part-nerships (excepting master limited
partnerships that are publicly traded on a na-tional security exchange or
NASDAQ's National Market System); commodities or com-modity contracts; borrow,
lend, or issue senior securities; act as a securities underwriter; purchase
se-curities 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 in-vestments 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 offi-cers 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 in-vestment 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.
<PAGE>
(iv) The Funds' investments in warrants, valued at the lower of cost or
mar-ket, 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
invest-ments 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, 1997, 1996, and 1995, was 14%, 24%, and 29%,
respectively. The turnover rate for the Growth Fund for the fiscal years ended
May 31, 1997, 1996 and 1995, was 25%, 22%, and 38%.
PERFORMANCE DATA
Average annual Total Return and Current Yield information may be useful to
in-vestors 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
distribu-tions. 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, 1996 through May 30, 1997 was
23.62%. Its average annual total return for the three years ended May 30,
1997 was 16.73%. Average annual total return for the five years ended May 30,
1997 was 11.75%. Average annual total return for the ten years ended May 30,
1997 was 8.65%.
Total Return for Growth Fund for the one year from May 31, 1996 through May
30, 1997 was 4.46% and average annual total return from February 3, 1994
(commencement of operations) through May 30, 1997 was 11.81%.
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 accord-ing 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.
<PAGE>
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 cur-rent yield on the Income Fund and the Growth Fund for the
30 day period ending May 30, 1997 was 1.65% and (0.47)%, 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
<PAGE>
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. Also
Chairman of North American Islamic Trust, 2622 East Main St., Plainfield,
Indiana 46168.
* Nicholas Kaiser, MBA. - President and Trustee; President of Saturna Capital
Corporation, 1300 N. State Street, Bellingham, Washington 98225.
Jamal M. al-Barzinji, PhD. - Trustee; Director, Mena Estates, Inc. Also
Secretary and Trustee since 1983 of SAAR Foundation, Inc., a charitable
organization. 555 Grove Street, Herndon, Virginia 22070. Chairman of
Mar-Jac Poultry, Inc., 1020 Aviation Boulevard, Gainesvlle, GA 30503.
Director, Safa Trust, Inc., 555 Grove St., Suite #114, Herndon, VA 20170.
M. Yaqub Mirza, PhD. - Treasurer and Trustee; President of Mar-Jac
Investments, Inc., Vice-President of SAAR Foundation, and Director and
Secretary, Mylex Corporation. 555 Grove Street, Herndon, Virginia 22070.
Chairman, Jugos Concentrados S.A., (JUCOSA), Parque Industrial s/n, Casilla
91, San Fernando, Chile.
Iqbal Unus, PhD. - Trustee; Dean of Students/Registrar, School of Islamic and
Social Sciences, 750-A Miller Drive, SE, Leesburg, VA 20176.
<PAGE>
M. Naziruddin Ali - Vice President; General Manager of North American Islamic
Trust, 2622 East Main St., Plainfield, Indiana 46168.
Pandora Larner -Secretary; Saturna Capital Corporation, 1300 N. State Street,
Bellingham WA 98225, since September, 1996. Employed by Doncaster Sales,
2115 37th. Street, Bellingham, WA 98226, and Consultants in Medicine,
Supervisor, Cordata Parkway, Bellingham, WA. 98225 from 1991 to 1993.
Teresa K. Anderson, MBA. -Asst. Treasurer; Director of Funds and Operations,
Saturna Capital Corporation, 1300 N. State Street, Bellingham WA 98225, since
December, 1993. Student at Western Washington University and part-time
instructor at Whatcom Community College from 1987 to 1993.
* Messrs. Kaiser and Osman are "interested persons" of the Trust as de-fined
in the Investment Company Act of 1940. Mr. Kaiser is president of the
ad-viser 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 reim-bursement of travel expense. For the fiscal year ended May
31, 1997, no Trustees' ex-penses were incurred, as set forth below:
Pension or Total Aggregate Retirement
Compensation
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
- -------- ---------- -------- ---------- ----------------
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
<PAGE>
As of July 30, 1997, officers and trustees (plus affiliated family members and
entities), as a group, owned 29,975 shares, being 3.0% of the outstanding
shares of the Income Fund. Also as of that date, the similar figures for
Growth Fund were 16,813 shares and 2.0% of the Growth Fund.
PRINCIPAL HOLDERS OF SECURITIES
As of July 30, 1997, the principal holders (those with more than 5% of the
outstanding shares) of securities of Income Fund were:
Name Shares Percentage of Class
---- ------ -------------------
SAAR Foundation Inc. 59,080 5.95%
As of July 30,1997, 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 87,550 10.00%
Paradise Valley AZ
Mohammad G. Reda 62,655 7.15%
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 consul-tation services are limited to the application of
Islamic principles and the propriety of investments or types of investments
under Islamic principles. NAIT does not pro-vide advice about the value of
securities or the advisability of investing in, purchas-ing or selling
securities or other property. As Adviser, Saturna Capital has sole
re-sponsibility for selection of the specific investments of the fund. NAIT
is not in-volved 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
divi-dend disbursing agent fees, expenses incurred in complying with state and
federal laws regulating the issue and sale of
<PAGE>
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 reim-burse 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, broker-age 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 di-rectors and principal executive offi-cers 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 Pandora Larner,
Secretary. Prior to December 1989, the Income Fund's ad-viser was Unified
Management Corpora-tion 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 $15.60 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, 1997, 1996, and 1995, the Income Fund paid fees to its
transfer agent of $22,194, $17,102, and $16,197, , respectively. Similarly,
for the fiscal years ended May 31, 1997, 1996 and 1995, Growth Fund paid
$10,964, $9,934 and $10,000.
For the fiscal years ended May 31, 1997, 1996, and 1995, Saturna Capital was
paid $136,282, $109,078, and $99,571, respectively as the Income Fund's
investment adviser and administrator. Similarly, for the fiscal years ended
May 31, 1997 and 1996, Saturna Capital was paid $49,056 and $25,375,
respectively, as the Growth Fund's investment adviser and administrator.
<PAGE>
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.
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 trans-actions, receives money from sale of shares and on order of
the Funds pays the autho-rized expenses of the Funds. When Fund shares are
redeemed by investors, the pro-ceeds are paid to the shareowner from an
account at the custodian bank.
Tait, Weller and Baker, Two Penn Center Plaza, Suite 700, Philadelphia, PA
19102-1707 are the indepen-dent 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 as-sist 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 supple-mental 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 ac-count
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 at-tainable 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 commis-sions at a rate in excess of the
amount another broker would have charged if it de-termines 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 gen-eral brokerage business. Investors National Corporation is
a "deep-discount" bro-kerage, 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, 1997, 1996, and 1995, the Income Fund paid
Investors National $6,702,$6,906, and $9,915, respectively, in deep discount
commissions. For the fiscal years ended May 31, 1997, 1996 and 1995, Growth
Fund paid Investors National a total of $6,832, $4,783, and $5,657 in deep
discount commissions. The Trustees review brokerage activity in detail at
each regular meeting. Meetings are held on a quarterly schedule.
<PAGE>
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 eco-nomic 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 credi-tors 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 dis-tribution 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 contin-ually 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 capi-tal 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
share-owners 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
<PAGE>
gains regardless of the length of time a shareowner has held shares of a Fund
and are not eligible for the dividends re-ceived deduction. Distributions and
dividends may also be subject to state and local taxes. Shareowners will be
taxed, as described above, whether the shares automati-cally 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
ad-vising 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
with-hold 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 with-holding tax under the existing provisions of
the code applicable to foreign individu-als 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>
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, 1997. Filed as Exhibit A hereto:
Report of Tait, Weller & Baker, Independent Accountants.
Statement of Assets and Liabilities as of May 31, 1997.
Statement of Operations - Year ended May 31, 1997.
Statements of Changes in Net Assets - years ended May 31, 1997, and 1996.
Investments - as of May 31, 1997.
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 De
<PAGE>
cember 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 Consents dated August 18, 1997, 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.
<PAGE>
(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, 1997 is computed to be 9.28% using the values of $2,641.32 as the ERV
of $1,000 invested on June 23, 1986, and 10.94 years for n.
The Total Return since the inception of Growth Fund on February 3, 1994
through May 31, 1997 is computed to be 11.81% using the values of $1,448.83 as
the ERV of $1,000 invested on February 3, 1994 and 3.32 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 July 30, 1997 the following information is furnished for Amana Mutual
Funds Trust:
(1) (2)
Title of Class Number of Record Holders
----- -- ----- ------ -- ------ -------
Income Fund Shares 1,569
Growth Fund Shares 887
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:
<PAGE>
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 in
<PAGE>
demnification 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, 1997
------
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, 1997
- -----------------
Nicholas F. Kaiser (Principal Executive Officer)
/s/ Teresa K. Anderson Asst. Treasurer
- -------------------------
August 16, 1997
- -----------------
Teresa K. Anderson (Principal Financial Officer)
** Bassam Osman All other TrusteesAugust 16, 1997
-----------------
** Jamal M. al-Barzinji
** M. Yaqub Mirza
** Iqbal Unus
** By /s/ Nicholas F. Kaiser
-------------------------
Nicholas F. Kaiser, Attorney-in-fact
AMANA
INCOME FUND GROWTH FUND
ANNUAL REPORT
MAY 31, 1997
(Graphic Omitted)
It's been another very good year for stock market investors. Amana Trust's
assets are now $22.5 million, up a healthy 35% for the year. Our 2,300
shareowner accounts are spread to 44 states and 22 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 23.6% -
a good performance considering its income-oriented nature. For the past five
years, total return has averaged 11.8% per year.
Smaller companies underperformed the large-cap market during the last year,
and the GROWTH FUND appreciated just 4.5%. For the past three years, Amana
Growth Fund's total return has averaged 15.6% per year. In comparison, the
S&P 500 (large caps) provided a total return of 28.9% and the Russell 2000
(smaller caps), 7.4% for the last year.
Our POSITIVE OUTLOOK for the next year is based upon an improving US economy.
GDP should continue to increase at 2-3%, and inflation worries are remote.
Consumer confidence is high, fueled by increasing real incomes and
productivity. World economies are improving. 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 Amana Income Fund's 11 years of successful
operation. One of the lessons of the marketplace is that experience matters.
Demonstrated capability to provide successful administration 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 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 23, 1997
<PAGE>
DISSCUSSION OF FUND PERFORMANCE
(GRAPHIC OMMITTED)
Stocks continue to do well. The excellent returns for the 1996 fiscal year
continued for the year ended May 31, 1997. Amana Income Fund's total return
was 23.6% (vs. 17.0% in 1996), and Amana Growth Fund's total return was 4.5%
(vs. 37.2% in 1996).As usual, market results varied by sector. The bigger
companies did best, as evidenced by twelve-month total return for the S&P 500
Composite (+28.9%). Smaller companies fared less well, as shown by the
Russell 2000 (+7.4%) and the S&P 600 SmallCap Index (+12.6%). 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 (+22.2%),
Utility Funds (+13.2%), and Growth Funds (+20.0%).
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. For the year ended May 31, 1997, the S&P Banks Composite Index
provided a total return of 43%.
COMPARISON TO MARKET INDICES
The following line graphs compare Fund performances to representative market
indices. The index returns include reinvested dividends and don't allow for
operating expenses such as those paid by all mutual funds.
The first graph shows that $10,000 invested in Amana Income ten years ago (May
1987) would have grown to $22,927 at the end of May 1997. While not strictly
comparable because Islamic restrictions prevent the Fund
<PAGE>
ANNUAL REPORT
(Graphic Omitted)
from investing in some of the its largest market sectors, the S&P 500
Composite Index is the traditional U.S. securities market benchmark. If
$10,000 could have been invested in the S&P 500 at the end of May 1987, that
would have grown to $37,716 over the same 10 years.
VALUE OF A 10-YEAR $10,000 INVESTMENT IN AMANA INCOME FUND COMPARED TO S & P
500
Average Annual Return
- ----------------------
1 year 5 year 10 year
- ------ ------- --------
+23.6 +11.8 +8.7
Date S&P 500 Amana
May-87 $10,000 $10,000
May-97 $37,716 $22,927
(Graph Omitted)
The second graph shows that $10,000 invested in Amana Growth at inception
(February 1994) would have grown to $14,488 at the end of May 1997. Amana
Growth is switching its comparison to the Russell 2000 Index this year, as the
Russell 2000 Index is more representative of the mid- and smaller-cap growth
companies that make up the Amana Growth Fund. If $10,000 could have been
invested in the Russell 2000 at the beginning of February 1994, that would
have grown to $14,967 over that same period. If $10,000 could have been
invested in the S&P 500 Composite Index, an average of large-cap stocks
previously used as comparison by Amana Growth, the value would have grown to
$19,123 over the same period.
VALUE OF $10,000 INVESTMENT ATINCEPTION IN AMANA GROWTH FUND COMPARED TO
RUSSEL 2000 INDEX
Average Annual Return
- ----------------------
1 year Life of Fund
- ------- ------------
+4.8 +15.6
Date Russell 2000 Amana
2/3/94 $10,000 $10,000
2/3/94 $14,967 $14,488
(Graph Omitted)
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
Amana Mutual Funds Trust
We have audited the accompanying statement of assets and liabilities of the
Amana Income Fund and the Amana Growth Fund, each a series of shares of the
Amana Mutual Funds Trust, including the schedules of investments as of May 31,
1997, and the related statements of operations and changes in net assets and
the financial highlights for the year then ended. These financial statements
and financial highlights are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial statements and
financial highlights presented for the year ended May 31, 1996 and prior were
audited by other auditors whose report dated June 20, 1996, expressed an
unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of May 31, 1997, by correspondence with the custodian. Our audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion the 1997 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Amana Income Fund and Amana Growth Fund as of May 31, 1997, the results of
their operations, the changes in their net assets and their financial
highlights for the year then ended, in conformity with generally accepted
accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
June 13, 1997
<PAGE>
INCOME
INVESTMENTS
ANNUAL REPORTS
(GRAPHIC OMITTED)
<TABLE>
<CAPTION>
Number Market
Issue of Shares Cost Value
- ------------------------------------------ --------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCKS (97.3%)
BUSINESS SERVICES (2.5%)
Dun & Bradstreet 6,500 123,900 169,812
Cognizant 6,500 177,891 240,500
----------- -----------
SUB-TOTAL - 301,791 410,312
CHEMICALS (5.1%)
ARCO Chemical 6,500 238,792 300,625
Chemed 10,000 356,116 365,000
Lawter International 14,738 116,591 169,487
----------- -----------
SUB-TOTAL - 711,499 835,112
DIVERSIFIED OPERATIONS (1.6%)
Canadian Pacific Ltd. 10,000 266,577 265,000
MACHINERY (5.0%)
Manitowoc Company 18,000 276,657 805,500
MEDICAL (12.5%)
American Home Products 10,000 242,862 762,500
Bristol-Myers Squibb 12,000 261,835 880,500
Glaxo-Wellcome plc ADR 10,000 260,427 402,500
----------- -----------
SUB-TOTAL - 765,124 2,045,500
MINING (6.6%)
ASARCO 20,000 578,558 622,500
RTZ Corp PLC ADS 6,500 386,557 453,375
----------- -----------
SUB-TOTAL - 965,115 1,075,875
OIL & GAS PRODUCTION (12.0%)
Atlantic Richfield 4,000 447,255 582,000
Exxon 10,000 307,279 592,500
Mobil 3,500 395,105 489,563
Enron 7,000 282,000 285,250
----------- -----------
SUB-TOTAL - 1,431,639 1,949,313
PAPER & PAPER PRODUCTS (4.3%)
Consolidated Papers 4,000 218,215 218,000
Boise Cascade 13,000 426,205 494,000
----------- -----------
SUB-TOTAL - 644,420 712,000
PAINT AND ALLIED PRODUCTS (2.4%)
R P M, Inc 20,312 182,267 385,928
TELECOMMUNICATIONS (17.7%)
BCE, Inc 26,000 436,370 689,000
Cable & Wireless PLC ADR 20,000 408,073 502,500
GTE 10,000 410,441 441,250
SBC Communications 10,240 375,304 599,040
Telefonica de Espana, ADR 7,500 202,956 655,313
----------- -----------
SUB-TOTAL - 1,833,144 2,887,103
TOOLS (3.2%)
Regal-Beloit Corporation 20,000 357,762 532,500
UTILITIES - ELECTRIC (18.3%)
Edison International 10,000 201,570 233,750
Enova Corporation 22,000 482,336 519,750
FPL Group 10,000 344,874 465,000
Idaho Power 15,000 405,839 450,000
NIPSCO Industries 10,000 362,973 405,000
Pacific Gas & Electric 20,000 458,942 462,500
Washington Water Power 25,000 441,582 450,000
----------- -----------
SUB-TOTAL - 2,698,116 2,986,000
UTILITIES -WATER & GAS (6.1%)
Peoples Energy 14,000 380,014 497,000
Piedmont Natural Gas 20,200 286,927 492,375
----------- -----------
SUB-TOTAL - 666,941 989,375
TOTAL INVESTMENTS (97.3%) - $11,101,052 $15,879,518
=========== ===========
Other Assets (net of liabilities) (2.7%) - - 452,060
-----------
TOTAL NET ASSETS (100%) - - $16,331,578
===========
</TABLE>
<PAGE>
INCOME
FINANCIAL HIGHLIGHTS
ANNUAL REPORT
(GRAPHIC OMITTED)
For Year Ended May 31
<TABLE>
<CAPTION>
Selected data per share of outstanding capital stock outstanding throughout each period.
Jun.23
For Year Ended May 31 1986 (in-
- ------------------------------------------
ception) to
1997 1996 1995 1994 1993 1992 1991 1990 1989
----------- -------- -------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING
OF PERIOD $ 13.93 $ 12.92 $ 12.18 $ 12.86 $11.94 $11.36 $10.86 $10.39 $ 9.11
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.37 0.42 0.38 0.30 0.32 0.32 0.39 0.38 0.38
Net gains or losses on securities
(both realized and unrealized) 2.88 1.76 0.80 (0.36) 0.92 0.58 0.46 0.53 1.29
----------- -------- -------- -------- ------- ------- ------- ------- -------
Total from investment operations 3.25 2.18 1.18 (0.06) 1.24 0.90 0.85 0.91 1.67
LESS DISTRIBUTIONS
Dividends (from net investment
income) (0.43) (0.41) (0.44) (0.30) (0.32) (0.32) (0.35) (0.44) (0.39)
Distributions (from capital gains) (0.14) (0.76) 0.00 (0.32) 0.00 0.00 0.00 0.00 0.00
----------- -------- -------- -------- ------- ------- ------- ------- -------
Total distributions (0.57) (1.17) (0.44) (0.62) (0.32) (0.32) (0.35) (0.44) (0.39)
NET ASSET VALUE AT END
OF PERIOD $ 16.61 $ 13.93 $ 12.92 $ 12.18 $12.86 $11.94 $11.36 $10.86 $10.39
TOTAL RETURN 23.62% 17.03% 9.95% (0.63)% 10.26% 7.88% 8.11% 8.85% 18.86%
RATIOS / SUPPLEMENTAL DATA
- ------------------------------------------
Net assets ($000), end of period $ 16,332 $12,464 $10,708 $10,432 $9,398 $6,913 $5,868 $4,760 $3,645
Ratio of expenses to ave. net
assets (not annualized) 1.54% 1.57% 1.56% 1.58% 1.58% 1.58% 1.66% 1.76% 1.88%
Ratio of net investment income to
ave. net assets (not annualized) 2.19% 3.06% 3.11% 2.22% 2.65% 2.75% 3.73% 3.67% 3.85%
Portfolio turnover rate 14% 24% 29% 21% 29% 19% 29% 19% 71%
Average commission rate paid $ 0.0336 $0.0460
For Year Ended May 31
- ------------------------------------------
ception) to
1988 5/31/1987
--------- -----------
<S> <C> <C>
NET ASSET VALUE AT BEGINNING
OF PERIOD $ 10.73 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.30 0.28
Net gains or losses on securities
(both realized and unrealized) (1.65) 1.24
--------- -----------
Total from investment operations (1.35) 1.52
LESS DISTRIBUTIONS
Dividends (from net investment
income) (0.27) (0.28)
Distributions (from capital gains) 0.00 (0.51)
--------- -----------
Total distributions (0.27) (0.79)
NET ASSET VALUE AT END
OF PERIOD $ 9.11 $ 10.73
TOTAL RETURN (12.68)% 15.21%
RATIOS / SUPPLEMENTAL DATA
- ------------------------------------------
Net assets ($000), end of period $ 3,559 $ 3,189
Ratio of expenses to ave. net
assets (not annualized) 2.07% 1.81%
Ratio of net investment income to
ave. net assets (not annualized) 3.17% 3.53%
Portfolio turnover rate 66% 55%
Average commission rate paid
</TABLE>
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.)
(GRAPH OMITTED)
To illustrate investment risk, the chart shows total return for each of the
last 10 fiscal years. While the average annual return has been 8.7%, returns
in individual years varied from -12.6% (1988) to +23.6% (1997).
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
INCOME
(GRAPHIC OMITTED)
As of May 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
Investments, at value
Common stocks (cost $11,101,053) $ 15,879,518
Cash 398,423
Dividends receivable 71,494
Insurance deposit 2,529
----------------------
Total Assets - $16,351,964
-----------
LIABILITIES
Payable to affiliate 15,473
Other liabilities 4,913
----------------------
Total liabilities - 20,386
-----------
NET ASSETS - $16,331,578
===========
FUND SHARES OUTSTANDING - 983,352
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares authorized, without par) $ 11,489,829
Undistributed net realized gain (loss) on investments 63,284
Unrealized net appreciation on investments 4,778,465
----------------------
Net Assets applicable to Fund shares outstanding - $16,331,578
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE - $ 16.61
===========
</TABLE>
<PAGE>
INCOME
STATMENT OF OPERATIONS
Year Ended May 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 576,318
Miscellaneous income 438
-----------
Gross investment income - $ 576,756
EXPENSES
Investment adviser and administration fee 136,282
Shareowner servicing 22,194
Filing and registration fees 17,981
Miscellaneous taxes 15,949
Professional fees 13,623
Printing and postage 8,561
Other expenses 4,436
Custodial fees 2,525
-----------
Total gross expenses 221,551
Less earnings credits (2,525)
-----------
Net expenses - 219,026
----------
Net investment income - 357,730
----------- ----------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from sales 1,888,481
Less cost of securities sold based on identified cost 1,699,543
-----------
Realized net gain - 188,938
-----------
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period 4,778,465
Beginning of period 2,191,604
-----------
Increase in unrealized gain for the period - 2,586,861
----------- ----------
Net realized and unrealized gain on investments - 2,775,799
----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS - $3,133,529
==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS Year ended Year ended
May 31, 1997 May 31, 1996
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 357,730 $ 345,592
Net realized (loss) gain on investments 188,938 640,173
Net increase (decrease) in unrealized appreciation 2,586,861 793,854
-------------- --------------
Net increase (decrease) in net assets 3,133,529 1,779,619
DIVIDENDS TO SHAREOWNERS FROM
Net investment income (410,453) (341,768)
Capital gains distributions (135,100) (630,728)
-------------- --------------
(545,553) 807,123
-------------- --------------
FUND SHARE TRANSACTIONS
Proceeds from sales of shares 3,573,470 2,282,709
Value of shares issued in reinvestment of dividends 533,571 950,785
-------------- --------------
4,107,041 3,233,494
Cost of shares redeemed (2,827,835) (2,284,062)
-------------- --------------
Net increase (decrease) in net assets from share transactions 1,279,206 949,432
-------------- --------------
Total increase (decrease) in net assets 3,867,182 1,756,555
NET ASSETS
Beginning of period 12,464,396 10,707,841
-------------- --------------
End of period $ 16,331,578 $ 12,464,396
============== ==============
(including undistributed net income of (43,360) for May 31, 1997)
Shares of the Fund Sold and Redeemed
Number of shares sold 338,478 165,713
Number of shares issued in reinvestment of dividends 34,497 67,575
-------------- --------------
372,975 233,288
Number of shares redeemed (284,180) (167,597)
-------------- --------------
Net Increase (Decrease) in Number of Shares Outstanding 88,795 65,691
============== ==============
</TABLE>
(The accompanying notes are an integral part of these financial statements.)
<PAGE>
GROWTH
(GRAPHIC OMITTED)
INVESTMENTS
<TABLE>
<CAPTION>
Number Market
Issue of Shares Cost Value
- -------------------------------- --------- -------- --------
<S> <C> <C> <C>
COMMON STOCKS (95.0%)
AUTO PARTS (1.7%)
Genuine Parts 3,000 $ 89,355 $100,500
BUILDING (2.3%)
BMC West* 6,000 95,997 79,500
Champion Enterprises* 3,000 60,485 55,125
-------- --------
SUB-TOTAL - 156,482 134,625
CHEMICALS (1.5%)
RPM, Inc. 4,625 71,869 87,875
COMPUTER HARDWARE (10.5%)
Advanced Digital Information* 5,000 15,230 77,500
Apple Computer* 3,000 76,382 49,875
Compaq Computer* 2,000 92,663 216,000
Hewlett-Packard 2,000 41,638 103,000
Microsoft* 1,400 70,040 173,600
-------- --------
SUB-TOTAL - 295,953 619,975
COMPUTER SOFTWARE (8.0%)
Adobe Systems 3,000 115,558 133,875
Intuit* 2,500 94,298 67,813
Olicom A/S* 3,000 50,357 52,875
Oracle* 2,400 78,773 111,900
Phamis* 5,000 59,622 106,250
-------- --------
SUB-TOTAL - 398,608 472,713
ELECTRONICS (12.8%)
FLIR* 8,000 109,013 128,000
GaSonics International* 12,000 110,311 142,500
Merix* 5,500 101,978 89,375
Micron Technology 3,000 96,873 127,500
Motorola 1,800 98,916 119,475
Qualcomm* 2,500 72,970 120,625
World Access* 2,000 18,819 33,250
-------- --------
SUB-TOTAL - 608,880 760,725
</TABLE>
<PAGE>
GROWTH
(GRAPHIC OMITTED)
AMANA
INVESTMENTS
<TABLE>
<CAPTION>
Number Market
Issue of Shares Cost Value
- ----------------------------------- --------- -------- --------
<S> <C> <C> <C>
FINANCIAL INFORMATION (2.5%)
Hutchison Whampoa ADR 2,000 $ 62,091 $ 81,250
Reuters Holdings PLC-ADR 1,000 43,333 68,453
-------- --------
SUB-TOTAL - 105,424 149,703
FOOD PRODUCTION (3.0%)
Pioneer Hi-Bred International 1,100 77,929 76,725
Potash Corp of Saskatchewan 1,200 87,709 98,550
-------- --------
SUB-TOTAL - 165,638 175,275
MACHINERY (6.6%)
Crane 3,000 76,234 123,000
Deere & Co. 3,000 117,166 153,375
Valley Forge 7,000 105,321 114,625
-------- --------
SUB-TOTAL - 298,721 391,000
MINING (3.3%)
Cyprus Amax Minerals 4,000 96,600 97,500
Freeport McMoran Copper & Gold B 2,000 70,595 58,250
RTZ Corp PLC ADS 600 30,466 41,850
-------- --------
SUB-TOTAL - 197,661 197,600
OIL & GAS PRODUCTION (7.7%)
Atlantic Richfield 900 104,880 130,950
Noble Drilling* 5,000 35,832 108,750
Williams Companies 1,800 60,536 79,425
YPF S.A. ADB 4,500 99,630 134,438
-------- --------
SUB-TOTAL - 300,878 453,563
PAPER & PUBLISHING (1.8%)
McGraw-Hill 2,000 89,380 109,250
PHARMACEUTICALS (10.3%)
Amgen* 1,200 32,403 80,250
Glaxo Wellcome plc ADR 2,500 55,379 100,625
Johnson & Johnson 2,000 91,871 119,750
Ligand Pharmaceuticals* 4,000 58,132 47,500
Liposome* 4,000 21,665 102,000
Novo-Nordisk A/S ADR 2,000 111,090 109,750
Urologix* 3,000 48,106 50,250
-------- --------
SUB-TOTAL - 418,646 610,125
</TABLE>
<PAGE>
GROWTH
(GRAPHIC OMITTED)
INVESTMENTS
ANNUAL REPORT
<TABLE>
<CAPTION>
Number Market
Issue of Shares Cost Value
- ------------------------------------------ --------- ---------- ----------
<S> <C> <C> <C>
PHOTOGRAPHIC SUPPLIES (1.3%)
Fuji Photo Film ADR 2,000 $ 46,837 $ 77,250
REAL ESTATE (0.8%)
Intrawest* 3,000 41,728 50,250
RETAIL (5.7%)
Gap 3,500 111,606 119,875
Nike, Class B 1,200 68,493 68,700
Seattle Film Works* 12,500 131,576 146,875
---------- ----------
SUB-TOTAL - 311,675 335,450
TELECOMMUNICATIONS (4.8%)
PT Indostat ADR 2,000 69,719 59,750
Tele Danmark A/S ADR 3,000 76,615 74,250
Telefonica de Espana ADS 1,700 70,376 148,537
---------- ----------
SUB-TOTAL - 216,710 282,537
TOOLS (2.7%)
Regal-Beloit 6,000 107,448 159,750
TRANSPORTATION (6.5%)
Fritz Companies* 8,500 101,197 92,438
Halter Marine Group* 1,044 18,511 24,533
Mesa Airlines* 10,000 87,781 50,000
Southwest Airlines 5,000 132,586 128,750
Trinity Industries 3,000 83,987 90,000
---------- ----------
SUB-TOTAL - 424,062 385,721
WATER TREATMENT (1.2%)
Ionics* 1,500 69,467 71,625
TOTAL INVESTMENTS (95.0%) - $4,415,462 5,625,512
==========
Other Assets (net of liabilities) (5.0%) - - 298,540
----------
TOTAL NET ASSETS (100%) - - $5,924,052
==========
<FN>
*Non-Income producing security
</FN>
</TABLE>
(The accompanying notes are an integral part of these financial statements)
<PAGE>
GROWTH
FINANCIAL HIGHLIGHTS
FOR YEAR ENDED MAY 31
SELECTED DATA PER SHARE OF OUTSTANDING CAPITAL STOCK OUTSTANDING THROUGHOUT
EACH PERIOD.
<TABLE>
<CAPTION>
Selected data per share of outstanding capital stock outstanding throughout each period.
Year Year Year 2/3/1994
Ending Ending Ending (Inception)
May 31, 1997 May 31, 1996 May 31, 1995 May 31, 1994
- --------------------------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $ 6.86 $ 5.04 $ 4.69 $ 5.00
-------------- -------------- -------------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (0.02) (0.05) (0.04) -
Net gains or losses on securities
(both realized and unrealized) 0.32 1.95 0.39 (0.30)
-------------- -------------- -------------- --------
Total from investment operations 0.30 1.90 0.35 (0.30)
-------------- -------------- -------------- --------
LESS DISTRIBUTIONS
Dividends (from net investment income) 0.00 0.00 0.00 (0.01)
Distributions (from capital gains) (0.09) (0.08) 0.00 0.00
-------------- -------------- -------------- --------
Total distributions (0.09) (0.08) 0.00 (0.01)
-------------- -------------- -------------- --------
NET ASSET VALUE AT END OF PERIOD $ 7.07 $ 6.86 $ 5.04 $ 4.69
============== ============== ============== ========
TOTAL RETURN 4.46% 37.20% 7.46% (6.20)%
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------
Net assets ($000), end of period $ 5,924 $ 4,151 $ 1,974 $ 952
Ratio of gross expenses to average net assets (not annualized) 1.62% 1.94% 2.00% 0.62%
Ratio of net investment income to average net assets (not annualized) (0.60)% (0.79)% (0.82)% (0.35)%
Portfolio turnover rate (not annualized) 25% 22% 38% 6%
Average commission rate paid $ 0.0396 $ 0.0596
</TABLE>
(The accompanying notes are an integral part of these financial statements)
(GRAPH OMITTED)
1995 7.46
1996 37.2
1997 4.46
To illustrate investment risk, the chart shows total return for each of the
last 3 fiscal years. While the three-year average annual return is 15.8%,
returns in individual years varied greatly from +4.46% (this year) to +37.20%
(last year). Amana Growth Fund has provided both a higher average return and
more volatility than Amana Income Fund.
<PAGE>
GROWTH
STATEMENT OF ASSETS AND LIABILITIES
ANNUAL REPORT
(GRAPHIC OMITTED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
Investments, at value
Common stocks (cost $4,415,462) $ 5,625,512
Cash 301,309
Dividends receivable 6,669
Organization expense, unamortized 708
----------------------
Total Assets - $5,934,198
----------
LIABILITIES
Payable to affiliate 7,422
Other liabilities 2,724
----------------------
Total Liabilities - 10,146
----------
NET ASSETS - $5,924,052
==========
FUND SHARES OUTSTANDING - 837,389
==========
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares authorized, without par) $ 4,707,299
Undistributed net realized gain (loss) on investments 6,703
Unrealized net appreciation on investments 1,210,050
----------------------
Net Assets applicable to Fund shares outstanding - $5,924,052
==========
NET ASSET VALUE,OFFERING AND REDEMPTION PRICE PER SHARE - $ 7.07
==========
</TABLE>
(The accompanying notes are an integral part of these financial statements)
<PAGE>
GROWTH
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 1997
(GRAPHIC OMITTED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME
Dividends (Net of Foreign Taxes of $2,374) $ 52,735
Miscellaneous Income 406
-----------
Gross investment income - $ 53,141
EXPENSES
Investment adviser and administration fee 49,056
Filing and registration 11,388
Shareowner servicing 10,964
Professional 6,477
Printing and postage 3,467
Other expenses 3,314
Custodial fees 3,182
-----------
Total gross expenses 87,848
Less earnings credits (3,182)
-----------
Net expenses - 84,666
---------
Net investment income (loss) - (31,525)
----------- ---------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from sales 1,180,750
Less cost of securities sold based on identified cost 1,100,344
-----------
Realized net gain - 80,406
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period 1,210,050
Beginning of period 884,447
-----------
Increase in unrealized gain for the period - 325,603
----------- ---------
Net realized and unrealized gain on investments - 406,009
----------- ---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS - $374,484
=========
</TABLE>
(The accompanying notes are an integral part of these financial statements)
<PAGE>
GROWTH
STATEMENT OF CHANGES IN NET ASSETS
ANNUAL REPORT
(GRAPHIC OMITTED)
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS Year ended Year ended
May 31, 1997 May 31, 1996
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (31,525) $ (20,616)
Net realized (loss) gain on investments 80,406 102,232
Net increase (decrease) in unrealized appreciation 325,603 746,721
-------------- --------------
Net increase (decrease) in net assets 374,484 828,337
-------------- --------------
DIVIDENDS TO SHAREOWNERS FROM
Net investment income 0 0
Capital gains distributions (74,024) (44,764)
-------------- --------------
(74,024) (44,764)
-------------- --------------
FUND SHARE TRANSACTIONS
Proceeds from sales of shares 3,083,797 2,282,028
Value of shares issued in reinvestment of dividends 71,472 44,134
-------------- --------------
3,155,269 2,326,162
Cost of shares redeemed (1,682,459) (933,301)
-------------- --------------
Net increase (decrease) in net assets from share transactions 1,472,810 1,392,861
-------------- --------------
Total increase (decrease) in net assets 1,773,270 2,176,434
NET ASSETS
Beginning of period 4,150,782 1,974,348
-------------- --------------
End of period $ 5,924,052 $ 4,150,782
============== ==============
Shares of the Fund Sold and Redeemed
Number of shares sold 497,832 370,342
Number of shares issued in reinvestment of dividends 11,116 6,452
-------------- --------------
508,948 376,794
Number of shares redeemed (276,621) (163,437)
-------------- --------------
Net Increase (Decrease) in Number of Shares Outstanding 232,327 213,357
============== ==============
</TABLE>
(The accompanying notes are an integral part of these financial statements)
<PAGE>
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 in-vestment company under the Investment Company
Act of 1940, as amended. The Trust restricts its in-vestments 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 Funds.
Investments:
Securities traded on a national ex-change and NASDAQ's National Market are
valued at the price carried by the composite tape of all na-tional 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 clos-ing 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 secu-rities are recorded as income on the
ex-div-idend 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 sub-stantially all of their taxable net
invest-ment income and realized net gains on in-vest-ments. Therefore, no
provision for Federal income taxes is required.
Dividends and distributions to shareowners:
Dividends and distributions to share-owners are recorded on the ex-dividend
date. Dividend payable dates are the end of May and December. Shareowners
electing to reinvest dividends and distributions pur-chase 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 cer-tain other
administrative and distribu-tion 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 aver-age daily net assets. For the year ended May 31,
1997, the Income Fund and Growth Fund paid advisory fee expenses of $136,282
and $49,056, respectively.
Saturna Capital also acts as transfer agent for the Trust, for which it was
paid $22,194 and $10,964 for the Income and Growth Fund, respectively, for the
year ended May 31, 1997.
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 $13,534 in commissions at deep-discount rates during the year ended May
31, 1997.
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 $38,943 for the year ended May 31, 1997. One trustee of the
Trust is also a trustee of North American Islamic Trust.
At inception, the Growth Fund reimbursed Saturna Capital $6,375 for
organizational expenses, which should be fully amortized in 1997. An initial
shareholder has agreed not to redeem more
<PAGE>
(GRAPHIC OMITTED)
ANNUAL REPORT
shares than any remaining unamortized organizational expenses.
All trustees serve without compen-sation. The Trustees, officers and their
immediate families, and North American Islamic Trust as a group owned 3.40% of
the Income Fund's and 1.95% of the Growth Fund's outstanding shares on May 31,
1997.
NOTE 4 - DIVIDENDS
Income Fund dividends from net investment income were $.234 per share paid
December 31, 1996, and $.19 per share paid May 31, 1997. Income Fund
distributions from net realized long-term capital gains were $.14 per share
paid December 31, 1996. The Growth Fund distributions from net realized
long-term capital gains were $.087 per share paid December 31, 1996.
From its inception to May 31, 1997, the Income Fund has realized net long-term
gains from sales of securities of $1,288,659 and has distributed realized net
long-term gains of $1,225,375, while the Growth Fund has realized net
long-term gains from sales of securities of $125,490 and has distributed
realized net long-term gains of $118,787.
NOTE 5 - INVESTMENTS
At May 31, 1997, for Income Fund the net unreal-ized appreciation of
investments of $4,778,465 comprised gross unrealized gains of $4,853,371 and
gross unrealized losses of $74,906. During the year ended May 31, 1997, the
Income Fund purchased $3,166,830 of securities and sold $1,888,481 of
securities.
At May 31, 1997, for Growth Fund the net unreal-ized appreciation of
investments of $1,210,050 comprised gross unrealized gains of $1,399,899 and
gross unrealized losses of $189,844. During the period ended May 31,1997, the
Fund purchased $2,527,501 of securities and sold $1,180,750 of securities.
NOTE 6 - CUSTODY CREDITS
Under an agreement with the custodian bank, custody fees are reduced by
credits for cash balances. Such reduction amounted to $2,525 and $3,182 for
the Income Fund and Growth Fund, respectively, for the year ended May 31,
1997.
TRUSTEES AND OFFICERS
(GRAPHIC OMITTED)
Bassam Osman, MD
Chairman, Trustee
Neurologist
Chairman, North American Islamic Trust
Nicholas Kaiser, MBA
President, Trustee
President, Saturna Capital Corporation
M. Yaqub Mirza, PhD
Treasurer, Independent Trustee
President, Mar-Jac Investments, Inc.
Director and Secretary, Mylex Corporation
Chairman, Jugos Concentrados SA
Jamal M. al-Barzinji, PhD
Independent Trustee
Chairman, Mar--Jac Poultry, Inc.
Director, Safa Trust, Inc.
Iqbal Unus, PhD
Independent Trustee
Dean of Students/Registrar,
School of Islamic and Social Sciences
M. Naziruddin Ali
Vice President
General Manager, North American Islamic Trust
P. Larner
Secretary
Saturna Capital Corporation
T. K. Anderson, MBA
Assistant Treasurer
Saturna Capital Corporation
Amana Mutual Funds Trust began operations in 1986. Saturna Capital
Corporation, with extensive experience in mutual funds, invests the Fund
portfolios and handles daily operations by direction of the Board of Trustees
(see reverse side).
Investment Advisor and Saturna Capital Corporation
Administrator
- -
- -------
Religious Consultant North American Islamic
Trust
- -
- -------
Custodian National City Bank
of Indiana
- -
- -------
Auditors Tait, Weller &
Baker, Philadelphia
- -
- -------
Legal Counsel Sommer & Barnard,
Indianapolis
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.
1300 N. State Street
Bellingham, WA 98225-4730
1-800/SATURNA
(1-800/728-8762)
email: [email protected]
(GRAPHIC OMITTED)
AMANA MUTUAL FUNDS TRUST
- -------------------------------------------------
GROWTH INCOME
(GRAPHIC OMITTED)
ANNUAL REPORT
MAY 31, 1997
Consent of Independent Certified Public Accountants (A)
We consent to the references to our firm in the Post Effective Amendment No.
14 to the Registration Statement on Form N-1A of Amana Mutual Funds Trust and
to the use of our report dated June 13, 1997 on the financial statements and
financial highlights of Amana Income Fund and Amana Growth Fund, each a series
of shares of Amana Mutual Funds Trust. Such financial statements and
financial highlights appear in the 1997 Annual Report to Shareholders which
are incorporated by reference in the Registrations Statement and Prospectus.
Tait, Weller & Baker
/s/ Tait, Weller & Baker
Philadelphia, Pennsylvania
August 18, 1997
Consent of Independent Certified Public Accountants (B)
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of the Post-Effective
Amendment No. 14 to the Registration Statement on Form N-1A (the Registrations
Statement) of our report dated June 20,1996 with respect to the statement of
changes in net assets for the year ended May 31, 1996 and the financial
highlights for each of the four years in the period then ended for the Amana
Income Fund and with respect to the statement of changes in net assets for
the year ended May 31, 1996 and the financial highlights for each of the two
years in the period then ended and the period February 3, 1994 to May 31, 1994
for the Amana Growth Fund. Such financial statements and financial highlights
were referred to in the Report of Independent Certified Public Accountants
dated June 13, 1997 appearing in the May 31, 1997 Annual Report to Shareowners
of Amana Mutual Funds Trust, which is also incorporated by reference into the
Registration Statement.
Price, Waterhouse LLP
/S/ Price, Waterhouse LLP
Seattle, Washington
August 18, 1997
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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