SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 002-96924
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, including ZIP Code)
Nicholas F. Kaiser
1300 N. State Street
Bellingham, Washington 98225-4730
(Name and Address of Agent for Service)
Registrant's Telephone Number — (360) 734-9900
Date of fiscal year end: May 31, 2014
Date of reporting period: November 30, 2013
Item 1. Semi-Annual Report
Amana Mutual Funds TrustSemi-Annual ReportNovember 30, 2013 | Income Fund Growth Fund Developing World Fund |
Performance Summary (as of December 31, 2013)
Average Annual Returns (before any taxes paid by shareowners) | 10 Year | 5 Year | 3 Year | 1 Year | Expense Ratio¹ |
Amana Income Fund Investor Shares (AMANX) | 11.16% | 14.98% | 13.18% | 29.72% | 1.19% |
Amana Growth Fund Investor Shares (AMAGX) | 10.74% | 15.52% | 10.27% | 22.83% | 1.11% |
Amana Developing World Fund Investor Shares (AMDWX) | n/a | n/a | -0.84% | -0.65% | 1.54% |
Morningstar™ Ratings² | Overall | 10 Year | 5 Year | 3 Year | 1 Year |
Amana Income Fund — "Large Blend" Category | |||||
Investor Shares (AMANX) | ★ ★ ★ ★ | ★ ★ ★ ★ ★ | ★ ★ | ★ ★ ★ | n/a |
Institutional Shares (AMINX) | ☆ ☆ ☆ ☆ | ☆ ☆ ☆ ☆ ☆ | ☆ ☆ | ☆ ☆ ☆ | n/a |
Number of Funds in Category | 1,355 | 794 | 1,215 | 1,355 | 1,559 |
Amana Growth Fund — "Large Growth" Category | |||||
Investor Shares (AMAGX) | ★ ★ ★ | ★ ★ ★ ★ ★ | ★ ★ | ★ | n/a |
Institutional Shares (AMIGX) | ☆ ☆ ☆ | ☆ ☆ ☆ ☆ ☆ | ☆ ☆ | ☆ | n/a |
Number of Funds in Category | 1,486 | 903 | 1,303 | 1,486 | 1,712 |
Amana Developing World Fund — "Diversified Emerging Markets" Category | |||||
Investor Shares (AMDWX) | ★ ★ ★ ★ | n/a | n/a | ★ ★ ★ ★ | n/a |
Institutional Shares (AMIDX) | ☆ ☆ ☆ ☆ | n/a | n/a | ☆ ☆ ☆ ☆ | n/a |
Number of Funds in Category | 399 | n/a | n/a | 399 | 614 |
Lipper Quintile Rankings³ | 10 Year | 5 Year | 3 Year | 1 Year |
Amana Income Fund Investor Shares (AMANX) — "Equity Income" Category | ||||
Quintile Rank | 1st | 4th | 4th | 2nd |
Absolute Rank (Number of Funds) in Category | 4 (143) | 173 (264) | 213 (295) | 143 (398) |
Amana Growth Fund Investor Shares (AMAGX) — "Multi-Cap Growth" Category | ||||
Quintile Rank | 1st | 5th | 5th | 5th |
Absolute Rank (Number of Funds) in Category | 23 (252) | 371 (393) | 430 (447) | 510 (521) |
Amana Developing World Fund Investor Shares (AMDWX) — "Emerging Markets" Category | ||||
Quintile Rank | n/a | n/a | 2nd | 3rd |
Absolute Rank (Number of Funds) in Category | n/a | n/a | 125 (390) | 269 (600) |
Performance data quoted in this report represents past performance, is before any taxes payable by shareowners, and is no guarantee of future results. Current performance may be higher or lower than that stated herein. Performance current to the most recent month-end is available by calling toll-free 888/73-AMANA or visiting www.amanafunds.com. Average annual total returns are historical and include change in share value as well as reinvestment of dividends and capital gains, if any. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Amana Funds limit the securities they purchase to those consistent with Islamic principles, which limits opportunities and may increase risk.
Please consider an investment's objective, risks, charges, and expenses carefully before investing. To obtain a free prospectus or summary prospectus that contains this and other important information on the Amana Funds, please call toll-free 888/73-AMANA or visit www.amanafunds.com. Please read the prospectus or summary prospectus carefully before investing.
¹ By regulation, expense ratios shown in this table are as of the Funds' most recent prospectus which is dated September 25, 2013, and incorporates results for the fiscal year ended May 31, 2013. Ratios presented in this table differ from the expense ratios shown elsewhere in this report as they represent different fiscal periods. Also by regulation, the performance in this table represents the most recent calendar quarter-end performance rather than performance through the Funds' most recent fiscal period.
² Source: Morningstar December 31, 2013. Morningstar, Inc. is an independent fund performance monitor. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% in each category receive 5 stars, the next 22.5% 4 stars, the next 35% 3 stars, the next 22.5% 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted average of performance figures associated with its 3, 5, and 10 year (if applicable) Morningstar Rating metrics. Morningstar ratings represented as unshaded stars are based on extended performance, which includes adjusted historical returns (pre-inception returns).
³ Source: Lipper Inc., A Thomson Reuters Company, December 31, 2013. Lipper Inc. is a nationally recognized organization that ranks performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are based on past performance with capital gains and dividends reinvested.
Amana Funds Institutional Shares began operations September 25, 2013, and are not yet rated by Lipper.
Fellow Shareowners:
Fueled by a recovering economy and stimulative government policies, US equity markets appreciated nicely for Amana's six-month fiscal period ended November 30, 2013. Total return for the S&P 500 Index was 11.91% and the Dow Jones Islamic Market US Total Return Index was 12.07%. Smaller US companies benefited too, with the Russell 1000 Index up 12.24% for the period. Foreign markets didn't fare as well, with the MSCI Emerging Markets Index returning 2.33%. Amana Growth Investor returned 10.44%, Amana Income Investor returned 11.58%, and Amana Developing World Investor returned -1.19%, during the same period.
The Amana Funds follow Islamic principles, which preclude most investments in the banking and financial sectors. We favor companies with low debt levels and strong balance sheets. These companies tend to underperform during times of low interest rates caused by monetary stimulus.
Top Long-Term Results
As experienced investors, we know that gains or losses over a short interval tell an incomplete story compared to performance evaluated over a lengthier time span. That's why the recognition that Amana continues to receive for superlative long-term performance is so important to our shareowners.
As of November 30, 2013, Amana Income Investor and Amana Growth Investor maintained strong performance rankings in their respective mutual fund categories. Amana Income Investor ranked #3 (out of 140 similar funds) in Lipper's Equity Income category for 10-year performance. Amana Growth Investor ranked #21 (out of 252 similar funds) in the Multi-Cap Growth category for 10-year performance.
Also as of November 30, 2013, Amana Income Investor and Amana Developing World Investor earned "Four Star" Morningstar Overall ratings. Morningstar's analysts continue to award both Amana Income and Amana Growth "Silver Shield" ratings. The shield ratings evaluate mutual funds based on five key pillars that Morningstar believes indicate funds that are more likely to outperform over the long term on a risk-adjusted basis. Please refer to the preceding page and following page for Amana's December 31 and November 30 longer-term performance data, respectively.
Institutional Shares
Amana's shareowners approved its reorganization into a Delaware trust, allowing the introduction of Institutional Shares for all three Funds on September 25. This is the first report reflecting both the new Institutional share class and the legacy Investor Shares. Without 12b-1 distribution expenses, Institutional Shares are proving popular. By December 31, Amana's Institutional shares attracted more than $151 million.
Going Forward
The US economy is notably improving: unemployment is declining, construction is back, and consumer spending is rising. US manufacturing is strengthening, with exports rising. Consumer confidence has recovered, with low interest rates boosting auto sales and housing. Significant federal government tax increases are collecting more than expected, at least in the short-term. Sequestration actually worked to moderate federal spending, and the Congress agreed to a rare budget compromise that projects less spending. Corporate earnings for 2014 may not improve over a healthy 2013, but the outlook for every industry varies.
The future is always different from the past, and we vigilantly watch for significant changes in major trends. Inflation, for example, looks to be dead for years to come. After a fifty-year expansion built on ever-increasing credit, we welcome deleveraging by governments and consumers. Governments are making progress at strengthening the global financial system. More efficient, web-based organizations are deflationary, meaning the internet's main effect on business is broadly lower prices and less need for employment. Yet, regardless of the trend, Amana will consistently invest in companies with histories of solid revenues, earnings, dividends, and balance sheets.
During the six months ended in November 2013, Amana's assets increased 2%. The impact of asset growth on fund expense ratios is twofold. Not only do higher assets help by spreading fixed expenses, but a fund's advisory fees may also be lowered (for example, to just 0.65% of individual fund assets over $1.5 billion). We watch expenses carefully and are pleased to report declines in the annualized expense ratios of all three Funds. For the six months, Amana Income Investor reports an expense ratio of 1.14%, Amana Growth Investor 1.07% and Amana Developing World Investor 1.45%. Without a year of operations, the expense ratios of the Institutional Shares are not fully established, but they can be expected to be about 0.25% annually less than the Investor Shares.
Amana Mutual Funds embody basic principles of sound finance: good governance, transparency, fairness, and risk sharing. The Trustees are active, taking seriously their responsibilities to shareowners. For more information, please visit www.amanafunds.com or call 1-888/73-AMANA.
Respectfully,
(photo omitted)
Nicholas Kaiser,
President & Portfolio Manager
(photo omitted)
Talat Othman,
Independent Board Chairman
Semi-Annual Report November 30, 2013 | 3 |
Performance Summary (as of November 30, 2013)
Morningstar™ Ratings¹ | Overall | 10 Year | 5 Year | 3 Year | 1 Year |
Amana Income Fund — "Large Blend" Category | |||||
Investor Shares (AMANX) | ★ ★ ★ ★ | ★ ★ ★ ★ ★ | ★ ★ ★ | ★ ★ ★ | n/a |
Institutional Shares (AMINX) | ☆ ☆ ☆ ☆ | ☆ ☆ ☆ ☆ ☆ | ☆ ☆ ☆ | ☆ ☆ ☆ | n/a |
Number of Funds in Category | 1,347 | 778 | 1,208 | 1,347 | 1,535 |
Amana Growth Fund — "Large Growth" Category | |||||
Investor Shares (AMAGX) | ★ ★ ★ | ★ ★ ★ ★ ★ | ★ ★ | ★ | n/a |
Institutional Shares (AMIGX) | ☆ ☆ ☆ | ☆ ☆ ☆ ☆ ☆ | ☆ ☆ | ☆ | n/a |
Number of Funds in Category | 1,482 | 891 | 1,303 | 1,482 | 1,696 |
Amana Developing World Fund — "Diversified Emerging Markets" Category | |||||
Investor Shares (AMDWX) | ★ ★ ★ ★ | n/a | n/a | ★ ★ ★ ★ | n/a |
Institutional Shares (AMIDX) | ☆ ☆ ☆ ☆ | n/a | n/a | ☆ ☆ ☆ ☆ | n/a |
Number of Funds in Category | 379 | n/a | n/a | 379 | 598 |
Lipper Quintile Rankings² | 10 Year | 5 Year | 3 Year | 1 Year |
Amana Income Fund Investor Shares (AMANX) — "Equity Income" Category | ||||
Quintile Rank | 1st | 4th | 4th | 2nd |
Absolute Rank (Number of Funds) in Category | 3 (140) | 175 (262) | 215 (293) | 113 (389) |
Amana Growth Fund Investor Shares (AMAGX) — "Multi-Cap Growth" Category | ||||
Quintile Rank | 1st | 5th | 5th | 5th |
Absolute Rank (Number of Funds) in Category | 21 (252) | 367 (392) | 432 (445) | 503 (513) |
Amana Developing World Fund Investor Shares (AMDWX) — "Emerging Markets" Category | ||||
Quintile Rank | n/a | n/a | 3rd | 3rd |
Absolute Rank (Number of Funds) in Category | n/a | n/a | 167 (372) | 295 (587) |
Performance data quoted above represents past performance and is no guarantee of future results. Current performance may be higher or lower than that stated herein. Performance current to the most recent month-end is available by calling toll-free 888/73-AMANA or visiting www.amanafunds.com.
¹ Source: Morningstar November 30, 2013. Morningstar, Inc. is an independent fund performance monitor. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return™ measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% in each category receive 5 stars, the next 22.5% 4 stars, the next 35% 3 stars, the next 22.5% 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a fund is derived from a weighted average of performance figures associated with its 3, 5, and 10 year (if applicable) Morningstar Rating™ metrics. Morningstar ratings represented as unshaded stars are based on extended performance, which includes adjusted historical returns (pre-inception returns).
² Source: Lipper Inc., A Thomson Reuters Company, November 30, 2013. Lipper Inc. is a nationally recognized organization that ranks performance of mutual funds within a universe of funds that have similar investment objectives. Quintile Rankings are based on past performance with capital gains and dividends reinvested.
Amana Funds Institutional Shares began operations September 25, 2013, and are not yet rated by Lipper.
The Morningstar Analyst Rating is not a credit or risk rating. It is a subjective evaluation performed by the mutual fund analysts of Morningstar, Inc. Morningstar evaluates funds based on five key pillars, which are process, performance, people, parent, and price. Morningstar's analysts use this 5 pillar evaluation to identify funds they believe are more likely to outperform over the long term on a risk-adjusted basis. Analysts consider quantitative and qualitative factors in their research, but the assessment of each pillar and how they are combined is driven by the analyst's overall assessment and overseen by Morningstar's Analyst Rating Committee. The approach serves not as a formula but as a framework to ensure consistency across Morningstar's global coverage universe.
The Analyst Rating scale ranges from Gold to Negative, with Gold being the highest rating and Negative being the lowest rating. A fund with a "Gold" rating distinguishes itself across the five pillars and has garnered the analysts' highest level of conviction. A fund with a "Silver" rating has notable advantages across several, but perhaps not all, of the five pillars — strengths that give the analysts a high level of conviction. A "Bronze"-rated fund has advantages that outweigh the disadvantages across the five pillars, with sufficient level of analyst conviction to warrant a positive rating. A fund with a "Neutral" rating isn't seriously flawed across the 5 pillars, nor does it distinguish itself very positively. A "Negative"-rated fund is flawed in at least one pillar, if not more, and is considered an inferior offering to its peers. Analyst Ratings are re-evaluated every 14 months. For more detailed information about Morningstar's Analyst Rating, including its methodology, please go to www.morningstar.com.
The Morningstar Analyst Rating should not be used as the sole basis in evaluating a mutual fund. Morningstar Analyst Ratings are based on Morningstar's current expectations about future events; therefore, in no way does Morningstar or Amana Mutual Funds represent ratings as a guarantee, nor should they be viewed by an investor as such. Morningstar Analyst Ratings involve unknown risks and uncertainties, which may cause Morningstar's expectations not to occur or to differ significantly from what was expected.
4 | Semi-Annual Report November 30, 2013 |
Amana Income Fund: Performance Summary
Average Annual Returns (as of November 30, 2013)
10 Year | 5 Year | 1 Year | Expense Ratio¹ | |
Investor Shares (AMANX) | 11.92% | 14.90% | 28.87% | 1.19% |
Institutional Shares (AMINX)² | n/a | n/a | n/a | 0.94% |
S&P 500 Index | 7.68% | 17.58% | 30.30% | n/a |
Growth of $10,000
Comparison of any mutual fund to a market index must be made bearing in mind that the index is unmanaged and expense-free. Conversely, the Fund will (1) be actively managed; (2) have an objective other than mirroring the index, such as limiting risk; (3) bear transaction and other operational costs; (4) stand ready to buy and sell its securities to shareowners on a daily basis; and (5) provide a wide range of services. The graph compares $10,000 invested in Investor Shares of the Fund on November 30, 2003, to an identical amount invested in the S&P 500 Index, a broad-based stock market index. The graph shows that an investment in Investor Shares of the Fund would have risen to $30,849 versus $20,970 in the Index. | |
Past performance does not guarantee future results. The "Growth of $10,000" graph and "Average Annual Returns" performance table assume the reinvestment of dividends and capital gains. They do not reflect the deduction of taxes that a shareowner might pay on fund distributions or the redemption of fund shares. ¹ By regulation, expense ratios shown in this table are as of the Funds' most recent prospectus, which is dated September 25, 2013, and incorporates results for the fiscal year ended May 31, 2013. Ratios presented in this table differ from the expense ratios shown elsewhere in this report as they represent different fiscal periods. ² Institutional shares of the Amana Income Fund began operations September 25, 2013, and consequently have no returns to report. |
Fund Objective
The objectives of the Income Fund are current income and preservation of capital, consistent with Islamic principles; current income is its primary objective.
Top Ten Holdings | Portfolio Diversification | ||
% of Fund Assets | |||
Nike | 3.1% | ||
Bristol-Myers Squibb | 2.6% | ||
Illinois Tool Works | 2.5% | ||
Colgate-Palmolive | 2.5% | ||
W.W. Grainger | 2.4% | ||
Microsoft | 2.4% | ||
Pfizer | 2.4% | ||
Canadian National Railway | 2.4% | ||
Honeywell International | 2.3% | ||
Rockwell Automation | 2.3% | ||
Industry weightings are shown as a percentage of total net assets. |
Semi-Annual Report November 30, 2013 | 5 |
Amana Income Fund: Schedule of Investments
Common Stocks — 97.6% | Number of Shares | Cost | Market Value | Percentage of Assets |
Communications | ||||
Local Media | ||||
Pearson ADS | 300,000 | $4,106,896 | $6,633,000 | 0.4% |
Telecom Carriers | ||||
Chunghwa Telecom ADS | 555,154 | 12,616,984 | 17,276,393 | 1.1% |
Telstra ADR | 150,000 | 2,505,532 | 3,450,000 | 0.2% |
Telus | 168,000 | 3,783,808 | 5,945,520 | 0.4% |
Vodafone Group ADS | 250,000 | 6,685,242 | 9,272,500 | 0.6% |
25,591,566 | 35,944,413 | 2.3% | ||
29,698,462 | 42,577,413 | 2.7% | ||
Consumer Discretionary | ||||
Apparel, Footwear, Accessory Design | ||||
Nike | 620,000 | 18,670,511 | 49,066,800 | 3.1% |
Auto Parts | ||||
Johnson Controls | 600,000 | 17,273,567 | 30,306,000 | 1.9% |
Automotive Wholesale | ||||
Genuine Parts | 400,000 | 15,835,680 | 33,136,000 | 2.1% |
Home Improvement | ||||
Stanley Black & Decker | 100,000 | 6,793,209 | 8,139,000 | 0.5% |
58,572,967 | 120,647,800 | 7.6% | ||
Consumer Staples | ||||
Beverages | ||||
PepsiCo | 400,000 | 25,131,621 | 33,784,000 | 2.1% |
Food Manufacturing | ||||
General Mills | 600,000 | 19,156,589 | 30,258,000 | 1.9% |
JM Smucker | 250,000 | 13,340,013 | 26,060,000 | 1.6% |
Kellogg | 465,000 | 23,220,878 | 28,197,600 | 1.8% |
McCormick & Co | 300,000 | 14,110,805 | 20,700,000 | 1.3% |
69,828,285 | 105,215,600 | 6.6% | ||
Household Products Manufacturing | ||||
Colgate-Palmolive | 600,000 | 21,167,901 | 39,486,000 | 2.5% |
Kimberly-Clark | 300,000 | 19,381,392 | 32,748,000 | 2.1% |
Procter & Gamble | 400,000 | 23,489,880 | 33,688,000 | 2.1% |
Unilever ADS | 325,000 | 8,850,327 | 13,162,500 | 0.8% |
72,889,500 | 119,084,500 | 7.5% | ||
167,849,406 | 258,084,100 | 16.2% | ||
Energy | ||||
Exploration & Production | ||||
EnCana | 432,000 | 12,073,139 | 8,290,080 | 0.5% |
Continued on next page. |
6 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Income Fund: Schedule of Investments
Common Stocks — 97.6% | Number of Shares | Cost | Market Value | Percentage of Assets |
Energy (continued) | ||||
Integrated Oils | ||||
Cenovus | 400,000 | $10,078,223 | $11,684,000 | 0.8% |
ConocoPhillips | 330,000 | 13,482,952 | 24,024,000 | 1.5% |
Exxon Mobil | 350,000 | 23,656,109 | 32,718,000 | 2.1% |
Total ADS | 375,000 | 20,975,783 | 22,620,000 | 1.4% |
68,193,067 | 91,046,000 | 5.8% | ||
Refining & Marketing | ||||
Phillips 66 | 210,000 | 6,845,517 | 14,618,100 | 0.9% |
87,111,723 | 113,954,180 | 7.2% | ||
Health Care | ||||
Health Care Supplies | ||||
Becton, Dickinson & Co. | 210,000 | 15,293,814 | 22,803,900 | 1.4% |
Large Pharmaceuticals | ||||
Abbott Laboratories | 350,000 | 8,392,885 | 13,366,500 | 0.8% |
AbbVie | 350,000 | 9,148,094 | 16,957,500 | 1.1% |
AstraZeneca ADS | 260,000 | 11,239,304 | 14,869,400 | 0.9% |
Bristol-Myers Squibb | 800,000 | 19,124,096 | 41,104,000 | 2.6% |
Eli Lilly | 620,000 | 22,314,728 | 31,136,400 | 2.0% |
GlaxoSmithKline ADS | 600,000 | 23,543,156 | 31,752,000 | 2.0% |
Johnson & Johnson | 331,500 | 22,804,119 | 31,379,790 | 2.0% |
Novartis ADS | 450,000 | 22,518,080 | 35,604,000 | 2.2% |
Pfizer | 1,200,000 | 22,076,629 | 38,076,000 | 2.4% |
161,161,091 | 254,245,590 | 16.0% | ||
176,454,905 | 277,049,490 | 17.4% | ||
Industrials | ||||
Aerospace & Defense Parts | ||||
United Technologies | 250,000 | 14,326,612 | 27,715,000 | 1.8% |
Flow Control Equipment | ||||
Parker Hannifin | 275,000 | 12,527,667 | 32,406,000 | 2.0% |
Industrial Automation Controls | ||||
Emerson Electric | 450,000 | 20,934,219 | 30,145,500 | 1.9% |
Honeywell International | 420,000 | 18,292,580 | 37,174,200 | 2.3% |
39,226,799 | 67,319,700 | 4.2% | ||
Industrial Machinery Manufacturing | ||||
Regal-Beloit | 100,000 | 4,068,804 | 7,358,000 | 0.5% |
Industrial Supply Distribution | ||||
W.W. Grainger | 150,000 | 14,706,937 | 38,688,000 | 2.4% |
Measurement Instruments | ||||
Rockwell Automation | 325,000 | 15,208,967 | 36,913,500 | 2.3% |
Post & Courier Services | ||||
United Parcel Service | 300,000 | 19,152,084 | 30,714,000 | 1.9% |
Continued on next page. |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 7 |
Amana Income Fund: Schedule of Investments
Common Stocks — 97.6% | Number of Shares | Cost | Market Value | Percentage of Assets |
Industrials (continued) | ||||
Rail Freight Transportation | ||||
Canadian National Railway | 332,000 | $15,888,044 | $37,350,000 | 2.4% |
135,105,914 | 278,464,200 | 17.5% | ||
Materials | ||||
Agricultural Chemicals | ||||
Potash Corp of Saskatchewan | 250,000 | 8,113,615 | 7,912,500 | 0.5% |
Base Metals | ||||
Freeport-McMoRan Copper & Gold | 440,000 | 15,495,689 | 15,263,600 | 1.0% |
Basic & Diversified Chemicals | ||||
Air Products & Chemicals | 250,000 | 16,422,819 | 27,207,500 | 1.7% |
Methanex | 300,000 | 5,849,587 | 18,420,000 | 1.2% |
PPG Industries | 200,000 | 13,211,578 | 36,812,000 | 2.3% |
Praxair | 220,000 | 16,103,769 | 27,777,200 | 1.7% |
51,587,753 | 110,216,700 | 6.9% | ||
Containers & Packaging Manufacturing | ||||
3M | 260,000 | 19,087,244 | 34,712,600 | 2.2% |
Illinois Tool Works | 500,000 | 23,226,178 | 39,790,000 | 2.5% |
42,313,422 | 74,502,600 | 4.7% | ||
Roofing Materials Manufacturing | ||||
Carlisle | 460,000 | 14,269,102 | 33,814,600 | 2.1% |
Specialty Chemicals | ||||
BASF ADR | 140,000 | 5,118,606 | 14,971,600 | 0.9% |
E.I. du Pont de Nemours | 500,000 | 23,186,120 | 30,690,000 | 1.9% |
RPM International | 180,000 | 3,642,493 | 7,128,000 | 0.5% |
31,947,219 | 52,789,600 | 3.3% | ||
Steel Producers | ||||
Nucor | 250,000 | 11,530,574 | 12,765,000 | 0.8% |
Tenaris ADS | 110,000 | 3,439,736 | 4,929,100 | 0.3% |
14,970,310 | 17,694,100 | 1.1% | ||
178,697,110 | 312,193,700 | 19.6% | ||
Technology | ||||
Information Services | ||||
Dun & Bradstreet | 150,000 | 11,599,030 | 17,527,500 | 1.1% |
Infrastructure Software | ||||
Microsoft | 1,000,000 | 24,161,315 | 38,130,000 | 2.4% |
Semiconductor Devices | ||||
Intel | 1,200,000 | 21,854,225 | 28,608,000 | 1.8% |
Microchip Technology | 600,000 | 17,526,721 | 25,974,000 | 1.6% |
39,380,946 | 54,582,000 | 3.4% | ||
Semiconductor Manufacturing Services | ||||
Taiwan Semiconductor ADS | 1,500,000 | 16,043,323 | 26,595,000 | 1.7% |
91,184,614 | 136,834,500 | 8.6% | ||
Continued on next page. |
8 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Income Fund: Schedule of Investments
Common Stocks — 97.6% | Number of Shares | Cost | Market Value | Percentage of Assets |
Utilities | ||||
Utility Networks | ||||
Enersis ADS | 100,000 | $2,020,000 | $1,564,000 | 0.1% |
National Fuel Gas | 170,000 | 7,593,521 | 11,471,600 | 0.7% |
9,613,521 | 13,035,600 | 0.8% | ||
Total Common stocks | $934,288,622 | $1,552,840,983 | 97.6% | |
Halal Income — 0.3% | Coupon/Maturity | Face Amount | Market Value | Percentage of Assets |
Sukuk | ||||
Malaysian Government | ||||
1Malaysia Sukuk | 3.928% due 06/04/2015 | $5,000,000 | $5,198,485 | 0.3% |
Total investments | (Cost = $939,417,036) | 1,558,039,468 | 97.9% | |
Other assets (net of liabilities) | 34,067,701 | 2.1% | ||
Total net assets | $1,592,107,169 | 100.0% | ||
ADS: American Depositary Share ADR: American Depositary Receipt |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 9 |
Amana Income Fund
Statement of Assets and Liabilities | |
As of November 30, 2013 | |
Assets | |
Investments in securities, at value (Cost $939,417,036) | $1,558,039,468 |
Cash | 29,554,925 |
Dividends and Income | 5,481,830 |
Receivable for Fund shares sold | 506,409 |
Prepaid expenses | 17,016 |
Insurance reserve premium | 2,529 |
Total assets | 1,593,602,177 |
Liabilities | |
Payable to affiliates | 1,136,482 |
Payable for Fund shares redeemed | 253,509 |
Accrued distribution fee | 105,017 |
Total liabilities | 1,495,008 |
Net Assets | $1,592,107,169 |
Analysis of Net Assets | |
Paid-in capital (unlimited shares authorized, without par value) | $967,655,739 |
Undistributed net investment income | 11,094,274 |
Accumulated net realized loss | (5,265,276) |
Unrealized net appreciation on investments | 618,622,432 |
Net assets applicable to Fund shares outstanding | $1,592,107,169 |
Net asset value per Investor share | AMANX |
Net assets, at value | $1,531,441,476 |
Shares outstanding | 35,386,276 |
Net asset value, offering and redemption price per share | $43.28 |
Net asset value per Institutional share | AMINX |
Net assets, at value | $60,665,693 |
Shares outstanding | 1,401,208 |
Net asset value, offering and redemption price per share | $43.30 |
Statement of Operations | |
Period ended November 30, 2013 | |
Investment income | |
Dividends (Net of foreign taxes of $504,485) | $19,393,862 |
Halal income | 56,310 |
Miscellaneous income | 246 |
Gross investment income | 19,450,418 |
Expenses | |
Investment adviser fees | 6,338,409 |
Distribution fees — Investor Shares | 1,851,570 |
Printing and postage | 118,904 |
Custodian fees | 36,166 |
Shareowner servicing fees | |
Investor Shares | 32,677 |
Institutional Shares | 12 |
Professional fees | 27,360 |
Chief Compliance Officer expenses | 20,420 |
Trustee fees | 16,731 |
Filing and registration fees | 15,351 |
Other expenses | 15,162 |
Retirement plan custodial fees | |
Investor Shares | 14,418 |
Institutional Shares | 47 |
Total gross expenses | 8,487,227 |
Less custodian fee credits | (36,166) |
Net expenses | 8,451,061 |
Net investment income | $10,999,357 |
Net realized loss from investments and foreign currency | $(304,164) |
Net increase in unrealized appreciation on investments | 154,464,007 |
Net gain on investments | $154,159,843 |
Net increase in net assets resulting from operations | $165,159,200 |
10 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Income Fund
Statements of Changes in Net Assets | Period ended November 30, 2013 | Year ended May 31, 2013 |
Increase (decrease) in net assets from operations | ||
From operations | ||
Net investment income | $10,999,357 | $21,035,226 |
Net realized loss on investments | (304,164) | (4,956,393) |
Net increase in unrealized appreciation | 154,464,007 | 271,061,832 |
Net increase in net assets | 165,159,200 | 287,140,665 |
Distributions to shareowners from | ||
Net investment income | ||
Investor Shares | - | (21,284,665) |
Institutional Shares | - | - |
Capital gains distribution | ||
Investor Shares | - | (431,052) |
Institutional Shares | - | - |
Total distributions | - | (21,715,717) |
Capital share transactions | ||
Proceeds from the sale of shares | ||
Investor Shares | 149,248,011 | 225,299,456 |
Institutional Shares | 60,437,379 | - |
Value of shares issued in reinvestment of dividends and distributions | ||
Investor Shares | - | 20,913,224 |
Institutional Shares | - | - |
Cost of shares redeemed | ||
Investor Shares | (215,025,774) | (375,198,470) |
Institutional Shares | (1,174,686) | - |
Early redemption fees retained | 2,219 | 23,580 |
Net decrease in net assets | (6,512,851) | (128,962,210) |
Total increase in net assets | 158,646,349 | 136,462,738 |
Net assets | ||
Beginning of period | 1,433,460,820 | 1,296,998,082 |
End of period | 1,592,107,169 | 1,433,460,820 |
Undistributed net investment income | $11,094,274 | $94,917 |
Shares of the Fund sold and redeemed | ||
Investor Shares (AMANX) | ||
Number of shares sold | 3,696,656 | 6,350,555 |
Number of shares issued in reinvestment of dividends and distributions | - | 577,079 |
Number of shares redeemed | (5,262,903) | (10,798,292) |
Net decrease in number of shares outstanding | (1,566,247) | (3,870,658) |
Institutional Shares (AMINX) | ||
Number of shares sold | 1,428,425 | - |
Number of shares issued in reinvestment of dividends and distributions | - | - |
Number of shares redeemed | (27,217) | - |
Net increase in number of shares outstanding | 1,401,208 | - |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 11 |
Amana Income Fund: Financial Highlights
Investor Shares (AMANX) | ||||||
Selected data per share of outstanding capital stock throughout each period: | Period ended | Year ended May 31, | ||||
Nov. 30, 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
Net asset value at beginning of period | $38.79 | $31.77 | $33.91 | $27.28 | $24.27 | $31.49 |
Income from investment operations | ||||||
Net investment income | 0.31 | 0.58 | 0.49 | 0.44 | 0.35 | 0.34¹ |
Net gains (losses) on securities (both realized and unrealized) | 4.18 | 7.03 | (1.98) | 6.63 | 3.01 | (7.28) |
Total from investment operations | 4.49 | 7.61 | (1.49) | 7.07 | 3.36 | (6.94) |
Less distributions | ||||||
Dividends (from net investment income) | - | (0.58) | (0.49) | (0.44) | (0.35) | (0.28) |
Distributions (from capital gains) | - | (0.01) | (0.17) | - | - | (0.01) |
Total distributions | - | (0.59) | (0.66) | (0.44) | (0.35) | (0.29) |
Paid-in capital from early redemption fees | 0.00² | 0.00² | 0.01 | 0.00² | 0.00² | 0.01 |
Net asset value at end of period | $43.28 | $38.79 | $31.77 | $33.91 | $27.28 | $24.27 |
Total Return | 11.58%³ | 24.08% | (4.36)% | 25.97% | 13.80% | (22.01)% |
Ratios / supplemental data | ||||||
Net assets ($000), end of period | $1,531,441 | $1,433,461 | $1,296,998 | $1,399,997 | $1,067,854 | $691,412 |
Ratio of expenses to average net assets | ||||||
Before custodian fee credits | 1.14%4 | 1.19% | 1.20% | 1.21% | 1.26% | 1.33% |
After custodian fee credits | 1.14%4 | 1.18% | 1.20% | 1.20% | 1.25% | 1.32% |
Ratio of net investment income after custodian fee credits to average net assets | 1.47%4 | 1.58% | 1.52% | 1.47% | 1.33% | 1.39% |
Portfolio turnover rate | 0%³ | 1% | 3% | 3% | 5% | 6% |
¹ Calculated using average shares outstanding ² Amount is less than $0.01 ³ Not Annualized 4 Annualized |
Institutional Shares (AMINX) | |
Selected data per share of outstanding capital stock throughout each period: | Period ended¹ |
Nov. 30, 2013 | |
Net asset value at beginning of period | $40.66 |
Income from investment operations | |
Net investment income | 0.10 |
Net gains on securities (both realized and unrealized) | 2.54 |
Total from investment operations | 2.64 |
Less distributions | |
Dividends (from net investment income) | - |
Distributions (from capital gains) | - |
Total distributions | - |
Paid-in capital from early redemption fees | 0.00² |
Net asset value at end of period | $43.30 |
Total Return | 6.49%³ |
Ratios / supplemental data | |
Net assets ($000), end of period | $60,666 |
Ratio of expenses to average net assets | |
Before custodian fee credits | 0.90%4 |
After custodian fee credits | 0.90%4 |
Ratio of net investment income after custodian fee credits to average net assets | 2.43%4 |
Portfolio turnover rate | 0%³ |
¹ Operations commenced on 09/25/2013 ² Amount is less than $0.01 ³ Since inception 09/25/2013; not annualized 4 Since inception 09/25/2013; annualized |
12 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Growth Fund: Performance Summary
Average Annual Returns (as of November 30, 2013)
10 Year | 5 Year | 1 Year | Expense Ratio¹ | |
Investor Shares (AMAGX) | 10.82% | 15.60% | 20.88% | 1.11% |
Institutional Shares (AMIGX)² | n/a | n/a | n/a | 0.86% |
S&P 500 Index | 7.68% | 17.58% | 30.30% | N/A |
Growth of $10,000
Comparison of any mutual fund to a market index must be made bearing in mind that the index is unmanaged and expense-free. Conversely, the Fund will (1) be actively managed; (2) have an objective other than mirroring the index, such as limiting risk; (3) bear transaction and other operational costs; (4) stand ready to buy and sell its securities to shareowners on a daily basis; and (5) provide a wide range of services. The graph compares $10,000 invested in Investor Shares of the Fund on November 30, 2003, to an identical amount invested in the S&P 500 Index, a broad-based stock market index. The graph shows that an investment in Investor Shares of the Fund would have risen to $27,926 versus $20,970 in the Index. | |
Past performance does not guarantee future results. The "Growth of $10,000" graph and "Average Annual Returns" performance table assume the reinvestment of dividends and capital gains. They do not reflect the deduction of taxes that a shareowner might pay on fund distributions or the redemption of fund shares. ¹ By regulation, expense ratios shown in this table are as of the Funds' most recent prospectus, which is dated September 25, 2013, and incorporates results for the fiscal year ended May 31, 2013. Ratios presented in this table differ from the expense ratios shown elsewhere in this report as they represent different fiscal periods. ² Institutional shares of the Amana Growth Fund began operations September 25, 2013, and consequently have no returns to report. |
Fund Objective
The primary objective of the Growth Fund is long-term capital growth, consistent with Islamic principles.
Top Ten Holdings | Portfolio Diversification | ||
% of Fund Assets | |||
4.3% | |||
Adobe Systems | 3.5% | ||
Amgen | 3.2% | ||
Intuit | 2.9% | ||
Qualcomm | 2.8% | ||
Johnson & Johnson | 2.7% | ||
TJX Companies | 2.7% | ||
Apple | 2.7% | ||
Trimble Navigation | 2.6% | ||
Church & Dwight | 2.5% | ||
Industry weightings are shown as a percentage of total net assets. |
Semi-Annual Report November 30, 2013 | 13 |
Amana Growth Fund: Schedule of Investments
Common Stocks — 98.3% | Number of Shares | Cost | Market Value | Percentage of Assets |
Communications | ||||
Internet Media | ||||
Google¹ | 85,000 | $38,721,713 | $90,065,150 | 4.3% |
Local Media | ||||
John Wiley & Sons | 75,000 | 2,444,560 | 3,822,000 | 0.2% |
Telecom Carriers | ||||
Akamai Technologies¹ | 1,000,000 | 21,444,890 | 44,720,000 | 2.2% |
62,611,163 | 138,607,150 | 6.7% | ||
Consumer Discretionary | ||||
Auto Parts | ||||
Gentex | 700,000 | 14,110,974 | 20,867,000 | 1.0% |
Automotive Wholesale | ||||
Genuine Parts | 125,000 | 5,729,519 | 10,355,000 | 0.5% |
General Merchant Wholesalers | ||||
Fastenal | 800,000 | 20,471,439 | 37,224,000 | 1.8% |
Home Product Stores | ||||
Lowe's | 790,000 | 18,730,150 | 37,509,200 | 1.8% |
Other Specialty Retail — Discretionary | ||||
PetSmart | 660,000 | 18,606,975 | 48,912,600 | 2.4% |
Specialty Apparel Stores | ||||
TJX Companies | 900,000 | 18,957,770 | 56,592,000 | 2.7% |
Urban Outfitters¹ | 500,000 | 18,775,643 | 19,510,000 | 0.9% |
37,733,413 | 76,102,000 | 3.6% | ||
Toys & Games | ||||
Mattel | 200,000 | 5,478,474 | 9,254,000 | 0.4% |
120,860,944 | 240,223,800 | 11.5% | ||
Consumer Staples | ||||
Beverages | ||||
Monster Beverage¹ | 350,000 | 5,883,355 | 20,713,000 | 1.0% |
PepsiCo | 600,000 | 36,524,584 | 50,676,000 | 2.4% |
42,407,939 | 71,389,000 | 3.4% | ||
Household Products Manufacturing | ||||
Church & Dwight | 800,000 | 31,059,800 | 52,200,000 | 2.5% |
Clorox | 475,000 | 28,611,552 | 44,255,750 | 2.1% |
Estee Lauder | 640,000 | 26,422,283 | 47,974,400 | 2.3% |
86,093,635 | 144,430,150 | 6.9% | ||
128,501,574 | 215,819,150 | 10.3% | ||
Energy | ||||
Integrated Oils | ||||
Cenovus | 500,000 | 11,367,923 | 14,605,000 | 0.7% |
11,367,923 | 14,605,000 | 0.7% | ||
Continued on next page. |
14 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Growth Fund: Schedule of Investments
Common Stocks — 98.3% | Number of Shares | Cost | Market Value | Percentage of Assets |
Health Care | ||||
Biotech | ||||
Amgen | 585,000 | $32,516,786 | $66,736,800 | 3.2% |
Celgene¹ | 100,000 | 7,547,036 | 16,177,000 | 0.8% |
40,063,822 | 82,913,800 | 4.0% | ||
Health Care Facilities | ||||
VCA Antech¹ | 620,000 | 17,290,742 | 18,569,000 | 0.9% |
Health Care Supply Chain | ||||
Express Scripts¹ | 650,000 | 22,597,762 | 43,777,500 | 2.1% |
Large Pharmaceuticals | ||||
Eli Lilly | 650,000 | 23,224,550 | 32,643,000 | 1.6% |
Johnson & Johnson | 600,000 | 36,611,701 | 56,796,000 | 2.7% |
Novartis ADS | 650,000 | 30,201,783 | 51,428,000 | 2.5% |
Novo Nordisk ADS | 220,000 | 10,428,308 | 39,320,600 | 1.9% |
100,466,342 | 180,187,600 | 8.7% | ||
Managed Care | ||||
Humana | 300,000 | 8,676,855 | 31,197,000 | 1.5% |
Medical Equipment | ||||
Dentsply International | 675,000 | 21,272,192 | 32,103,000 | 1.5% |
Orthopedic Devices | ||||
Stryker | 300,000 | 15,657,168 | 22,326,000 | 1.1% |
226,024,883 | 411,073,900 | 19.8% | ||
Industrials | ||||
Building Sub-Contractors | ||||
EMCOR | 700,000 | 14,885,660 | 27,811,000 | 1.3% |
Flow Control Equipment | ||||
Crane | 300,000 | 10,212,899 | 18,693,000 | 0.9% |
Industrial Machinery Manufacturing | ||||
Regal-Beloit | 300,000 | 17,345,995 | 22,074,000 | 1.1% |
Measurement Instruments | ||||
Agilent Technologies | 900,000 | 22,797,417 | 48,213,000 | 2.3% |
Trimble Navigation¹ | 1,700,000 | 20,463,059 | 54,230,000 | 2.6% |
43,260,476 | 102,443,000 | 4.9% | ||
Metalworking Machinery Manufacturing | ||||
Lincoln Electric | 500,000 | 13,126,984 | 35,740,000 | 1.7% |
Post & Courier Services | ||||
United Parcel Service | 500,000 | 33,511,923 | 51,190,000 | 2.5% |
Rail Freight Transportation | ||||
Norfolk Southern | 500,000 | 26,797,903 | 43,845,000 | 2.1% |
Union Pacific | 276,327 | 30,102,567 | 44,776,027 | 2.2% |
56,900,470 | 88,621,027 | 4.3% | ||
189,244,407 | 346,572,027 | 16.7% | ||
Continued on next page. |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 15 |
Amana Growth Fund: Schedule of Investments
Common Stocks — 98.3% | Number of Shares | Cost | Market Value | Percentage of Assets |
Materials | ||||
Agricultural Chemicals | ||||
Potash Corp. of Saskatchewan | 900,000 | $20,854,762 | $28,485,000 | 1.4% |
20,854,762 | 28,485,000 | 1.4% | ||
Technology | ||||
Application Software | ||||
Adobe Systems¹ | 1,300,000 | 40,019,763 | 73,814,000 | 3.5% |
Intuit | 814,000 | 25,827,086 | 60,423,220 | 2.9% |
SAP ADS | 600,000 | 34,841,094 | 49,632,000 | 2.4% |
100,687,943 | 183,869,220 | 8.8% | ||
Communications Equipment | ||||
Apple | 100,000 | 2,876,770 | 55,607,000 | 2.7% |
Cisco Systems | 2,000,000 | 39,273,610 | 42,500,000 | 2.0% |
Harris | 410,000 | 12,592,772 | 26,449,100 | 1.3% |
54,743,152 | 124,556,100 | 6.0% | ||
Information Services | ||||
Gartner¹ | 300,000 | 8,580,120 | 19,395,000 | 0.9% |
Infrastructure Software | ||||
Oracle | 800,000 | 16,168,350 | 28,232,000 | 1.3% |
IT Services | ||||
Convergys | 690,000 | 9,993,745 | 14,158,800 | 0.7% |
Infosys ADS | 500,000 | 21,031,185 | 27,010,000 | 1.3% |
International Business Machines | 250,000 | 26,711,857 | 44,920,000 | 2.2% |
57,736,787 | 86,088,800 | 4.2% | ||
Semiconductor Capital Equipment | ||||
ASML | 462,000 | 17,639,136 | 43,141,560 | 2.1% |
Semiconductor Devices | ||||
Intel | 1,325,000 | 24,432,415 | 31,588,000 | 1.5% |
Qualcomm | 800,000 | 30,482,851 | 58,864,000 | 2.8% |
SanDisk | 370,000 | 15,992,445 | 25,215,500 | 1.2% |
Xilinx | 600,000 | 14,947,540 | 26,658,000 | 1.3% |
85,855,251 | 142,325,500 | 6.8% | ||
Semiconductor Manufacturing Services | ||||
Taiwan Semiconductor ADS | 1,243,297 | 12,977,323 | 22,043,656 | 1.1% |
354,388,062 | 649,651,836 | 31.2% | ||
Total investments | $1,113,853,718 | 2,045,037,863 | 98.3% | |
Other assets (net of liabilities) | 36,299,553 | 1.7% | ||
Total net assets | $2,081,337,416 | 100.0% | ||
¹ Non-income producing security ADS: American Depositary Share ADR: American Depositary Receipt |
16 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Growth Fund
Statement of Assets and Liabilities | |
As of November 30, 2013 | |
Assets | |
Investments in securities, at value (Cost $1,113,853,718) | $2,045,037,863 |
Cash | 34,576,029 |
Dividends and Income | 3,840,401 |
Receivable for Fund shares sold | 301,984 |
Total assets | 2,083,756,277 |
Liabilities | |
Payable to affiliates | 1,414,319 |
Payable for Fund shares redeemed | 795,666 |
Accrued distribution fee | 137,041 |
Accrued expenses | 71,835 |
Total liabilities | 2,418,861 |
Net Assets | $2,081,337,416 |
Analysis of Net Assets | |
Paid-in capital (unlimited shares authorized, without par value) | $1,088,048,296 |
Undistributed net investment income | 13,016,067 |
Accumulated net realized gain | 49,088,908 |
Unrealized net appreciation on investments | 931,184,145 |
Net assets applicable to Fund shares outstanding | $2,081,337,416 |
Net asset value per Investor share | AMAGX |
Net assets, at value | $2,003,896,525 |
Shares outstanding | 62,504,140 |
Net asset value, offering and redemption price per share | $32.06 |
Net asset value per Institutional share | AMIGX |
Net assets, at value | $77,440,891 |
Shares outstanding | 2,414,018 |
Net asset value, offering and redemption price per share | $32.08 |
Statement of Operations | |
Period ended November 30, 2013 | |
Investment income | |
Dividends (Net of foreign taxes of $339,057) | $16,017,037 |
Miscellaneous income | 1,585 |
Gross investment income | 16,018,622 |
Expenses | |
Investment adviser fees | 8,382,793 |
Distribution fees — Investor Shares | 2,630,278 |
Printing and postage | 104,853 |
Shareowner servicing fees | |
Investor Shares | 52,187 |
Institutional Shares | 19 |
Custodian fees | 52,069 |
Professional fees | 39,466 |
Chief Compliance Officer expenses | 30,339 |
Trustee fees | 26,962 |
Retirement plan custodial fees | |
Investor Shares | 25,419 |
Institutional Shares | 51 |
Other expenses | 20,280 |
Filing and registration fees | 14,694 |
Total gross expenses | 11,379,410 |
Less custodian fee credits | (52,069) |
Net expenses | 11,327,341 |
Net investment income | $4,691,281 |
Net realized gain from investments and foreign currency | $52,651,873 |
Net increase in unrealized appreciation on investments | 150,020,423 |
Net gain on investments | $202,672,296 |
Net increase in net assets resulting from operations | $207,363,577 |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 17 |
Amana Growth Fund
Statements of Changes in Net Assets | Period ended November 30, 2013 | Year ended May 31, 2013 |
Increase (decrease) in net assets from operations | ||
From operations | ||
Net investment income | $4,691,281 | $9,842,579 |
Net realized gain on investments | 52,651,873 | 2,915,443 |
Net increase in unrealized appreciation | 150,020,423 | 295,691,218 |
Net increase in net assets | 207,363,577 | 308,449,240 |
Distributions to shareowners from | ||
Net investment income | ||
Investor Shares | - | (5,476,978) |
Institutional Shares | - | - |
Total distributions | - | (5,476,978) |
Capital share transactions | ||
Proceeds from the sale of shares | ||
Investor Shares | 101,999,631 | 347,428,774 |
Institutional Shares | 77,615,861 | - |
Value of shares issued in reinvestment of dividends and distributions | ||
Investor Shares | - | 5,284,345 |
Institutional Shares | - | - |
Cost of shares redeemed | ||
Investor Shares | (488,701,139) | (665,717,222) |
Institutional Shares | (2,166,685) | - |
Early redemption fees retained | 4,687 | 28,484 |
Net decrease in net assets | (311,247,645) | (312,975,619) |
Total decrease in net assets | (103,884,068) | (10,003,357) |
Net assets | ||
Beginning of period | 2,185,221,484 | 2,195,224,841 |
End of period | 2,081,337,416 | 2,185,221,484 |
Undistributed net investment income | $13,016,067 | $8,324,786 |
Shares of the Fund sold and redeemed | ||
Investor Shares (AMAGX) | ||
Number of shares sold | 3,409,064 | 12,798,528 |
Number of shares issued in reinvestment of dividends and distributions | - | 196,517 |
Number of shares redeemed | (16,171,831) | (24,437,795) |
Net decrease in number of shares outstanding | (12,762,767) | (11,442,750) |
Institutional Shares (AMIGX) | ||
Number of shares sold | 2,482,274 | - |
Number of shares issued in reinvestment of dividends and distributions | - | - |
Number of shares redeemed | (68,256) | - |
Net increase in number of shares outstanding | 2,414,018 | - |
18 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Growth Fund: Financial Highlights
Investor Shares (AMAGX) | ||||||
Selected data per share of outstanding capital stock throughout each period: | Period ended | Year ended May 31, | ||||
Nov. 30, 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
Net asset value at beginning of period | $29.03 | $25.32 | $26.07 | $21.19 | $17.69 | $23.26 |
Income from investment operations | ||||||
Net investment income | 0.07 | 0.13 | 0.06 | 0.02 | (0.01) | (0.02) |
Net gains (losses) on securities (both realized and unrealized) | 2.96 | 3.65 | (0.80) | 4.88 | 3.51 | (5.48) |
Total from investment operations | 3.03 | 3.78 | (0.74) | 4.90 | 3.50 | (5.50) |
Less distributions | ||||||
Dividends (from net investment income) | - | (0.07) | (0.01) | (0.02) | - | - |
Distributions (from capital gains) | - | - | - | - | - | (0.07) |
Total distributions | - | (0.07) | (0.01) | (0.02) | - | (0.07) |
Paid-in capital from early redemption fees | 0.00¹ | 0.00¹ | 0.00¹ | 0.00¹ | 0.00¹ | 0.00¹ |
Net asset value at end of period | $32.06 | $29.03 | $25.32 | $26.07 | $21.19 | $17.69 |
Total Return | 10.44%² | 14.94% | (2.84)% | 23.10% | 19.79% | (23.63)% |
Ratios / supplemental data | ||||||
Net assets ($000), end of period | $2,003,897 | $2,185,221 | $2,195,225 | $2,210,268 | $1,596,487 | $1,046,881 |
Ratio of expenses to average net assets | ||||||
Before custodian fee credits | 1.08%³ | 1.11% | 1.13% | 1.14% | 1.21% | 1.31% |
After custodian fee credits | 1.07%³ | 1.11% | 1.13% | 1.14% | 1.20% | 1.30% |
Ratio of net investment income after custodian fee credits to average net assets | 0.44%³ | 0.44% | 0.23% | 0.07% | (0.05)% | (0.16)% |
Portfolio turnover rate | 0%² | 1% | 12% | 5% | 5% | 6% |
¹ Amount is less than $0.01 ² Not Annualized ³ Annualized |
Institutional Shares (AMIGX) | |
Selected data per share of outstanding capital stock throughout each period: | Period ended¹ |
Nov. 30, 2013 | |
Net asset value at beginning of period | $30.45 |
Income from investment operations | |
Net investment income | 0.03 |
Net gains (losses) on securities (both realized and unrealized) | 1.60 |
Total from investment operations | 1.63 |
Less distributions | |
Dividends (from net investment income) | - |
Distributions (from capital gains) | - |
Total distributions | - |
Paid-in capital from early redemption fees | 0.00² |
Net asset value at end of period | $32.08 |
Total Return | 5.35%³ |
Ratios / supplemental data | |
Net assets ($000), end of period | $77,441 |
Ratio of expenses to average net assets | |
Before custodian fee credits | 0.85%4 |
After custodian fee credits | 0.84%4 |
Ratio of net investment income after custodian fee credits to average net assets | 1.22%4 |
Portfolio turnover rate | 0%³ |
¹ Operations commenced on 09/25/2013 ² Amount is less than $0.01 ³ Since inception 09/25/2013; not annualized 4 Since inception 09/25/2013; annualized |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 19 |
Amana Developing World Fund: Performance Summary
Average Annual Returns as of November 30, 2013
10 Year | 5 Year | 1 Year | Expense Ratio¹ | |
Investor Shares (AMDWX) | n/a | n/a | 4.44% | 1.54% |
Institutional Shares (AMIDX)² | n/a | n/a | n/a | 1.29% |
MSCI Emerging Markets Index | 12.10% | 16.85% | 3.66% | n/a |
Growth of $10,000
The Amana Developing World Fund commenced operations September 28, 2009. | Comparison of any mutual fund to a market index must be made bearing in mind that the index is unmanaged and expense-free. Conversely, the Fund will (1) be actively managed; (2) have an objective other than mirroring the index, such as limiting risk; (3) bear transaction and other operational costs; (4) stand ready to buy and sell its securities to shareowners on a daily basis; and (5) provide a wide range of services. The graph compares $10,000 invested in Investor Shares of the Fund on September 28, 2009, to an identical amount invested in the MSCI Emerging Markets Index, a broad-based international equity index. The graph shows that an investment in Investor Shares the Fund would have risen to $10,818 versus $12,299 in the Index. |
Past performance does not guarantee future results. The "Growth of $10,000" graph and "Average Annual Returns" performance table assume the reinvestment of dividends and capital gains. They do not reflect the deduction of taxes that a shareowner might pay on fund distributions or the redemption of fund shares. ¹ By regulation, expense ratios shown in this table are as of the Funds' most recent prospectus, which is dated September 25, 2013, and incorporates results for the fiscal year ended May 31, 2013. Ratios presented in this table differ from the expense ratios shown elsewhere in this report as they represent different fiscal periods. ² Institutional shares of the Amana Developing World Fund began operations September 25, 2013, and consequently have no returns to report. |
Fund Objective
The primary objective of the Developing World Fund is long-term capital growth, consistent with Islamic principles.
Top Ten Holdings | Portfolio Diversification | ||
% of Fund Assets | |||
Baidu ADS | 3.0% | ||
MercadoLibre | 2.8% | ||
VF | 2.6% | ||
Western Digital | 2.5% | ||
Telenor | 2.5% | ||
Aspen Pharmacare | 2.4% | ||
Genomma Lab Internacional | 2.3% | ||
Dr. Reddy's Laboratories ADS | 2.2% | ||
M. Dias Branco | 2.1% | ||
Telekomunikasi Indonesia ADS | 2.0% | ||
Industry weightings are shown as a percentage of total net assets. |
20 | Semi-Annual Report November 30, 2013 |
Amana Developing World Fund: Schedule of Investments
Common Stocks — 86.9% | Number of Shares | Cost | Market Value | Country¹ | Percentage of Assets |
Communications | |||||
Internet Media | |||||
Baidu ADS² | 5,000 | $411,115 | $832,850 | China³ | 3.0% |
Telecom Carriers | |||||
Advanced Info Service | 30,000 | 281,981 | 212,757 | Thailand | 0.8% |
Axiata Group | 195,000 | 394,272 | 406,382 | Malaysia | 1.5% |
Millicom International | 2,500 | 220,520 | 225,074 | Luxembourg | 0.8% |
MTN Group | 16,000 | 259,470 | 311,537 | South Africa | 1.1% |
Telefonica Brasil ADS | 15,000 | 371,442 | 291,900 | Brazil | 1.1% |
Telekomunikasi Indonesia ADS | 15,000 | 540,800 | 548,100 | Indonesia | 2.0% |
Telenor | 28,000 | 583,414 | 673,120 | Malaysia³ | 2.5% |
Turk Telekomunikasyon | 100,000 | 455,786 | 323,655 | Turkey | 1.2% |
3,107,685 | 2,992,525 | 11.0% | |||
3,518,800 | 3,825,375 | 14.0% | |||
Consumer Discretionary | |||||
Apparel, Footwear, Accessory Design | |||||
VF | 3,000 | 310,438 | 703,740 | United States | 2.6% |
Automobile OEM | |||||
Ford Otomotiv Sanayi | 40,000 | 378,513 | 513,640 | Turkey | 1.9% |
Department Stores | |||||
Robinson Department Store | 175,000 | 340,943 | 296,532 | Thailand | 1.1% |
E-Commerce Discretionary | |||||
MercadoLibre | 7,000 | 500,586 | 774,970 | Brazil³ | 2.8% |
Passenger Transportation | |||||
Garuda Indonesia Persero² | 2,000,000 | 113,678 | 82,732 | Indonesia | 0.3% |
1,644,158 | 2,371,614 | 8.7% | |||
Consumer Staples | |||||
Food Manufacturing | |||||
Danone ADS | 37,000 | 510,811 | 541,310 | France | 2.0% |
Indofood CBP Sukses Makmur | 250,000 | 250,542 | 208,679 | Indonesia | 0.8% |
IOI | 300,000 | 507,970 | 525,487 | Malaysia | 1.9% |
M. Dias Branco | 13,000 | 368,812 | 590,340 | Brazil | 2.1% |
Tiger Brands | 6,000 | 199,013 | 167,366 | South Africa | 0.6% |
1,837,148 | 2,033,182 | 7.4% | |||
Household Products Manufacturing | |||||
Colgate-Palmolive | 8,000 | 348,011 | 526,480 | United States | 1.9% |
Kimberly-Clark de Mexico | 160,000 | 488,255 | 472,019 | Mexico | 1.7% |
Unilever ADS | 12,500 | 500,899 | 506,250 | United Kingdom | 1.9% |
1,337,165 | 1,504,749 | 5.5% | |||
Pharmacies & Drug Stores | |||||
Clicks Group | 60,000 | 355,423 | 379,939 | South Africa | 1.4% |
3,529,736 | 3,917,870 | 14.3% | |||
Continued on next page. |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 21 |
Amana Developing World Fund: Schedule of Investments
Common Stocks — 86.9% | Number of Shares | Cost | Market Value | Country¹ | Percentage of Assets |
Energy | |||||
Exploration & Production | |||||
CNOOC ADS | 2,500 | $457,585 | $511,700 | China | 1.9% |
Integrated Oils | |||||
China Petroleum & Chemical ADS | 1,040 | 69,690 | 89,731 | China | 0.3% |
Petroleo Brasileiro ADS | 25,000 | 523,255 | 398,500 | Brazil | 1.5% |
Sasol ADS | 10,000 | 494,222 | 495,400 | South Africa | 1.8% |
1,087,167 | 983,631 | 3.6% | |||
1,544,752 | 1,495,331 | 5.5% | |||
Financials | |||||
Islamic Banking | |||||
BIMB Holdings | 280,000 | 365,209 | 389,969 | Malaysia | 1.4% |
Multi Asset Class Real Estate Ownership & Development | |||||
SM Prime Holdings | 730,000 | 277,159 | 272,642 | Philippines | 1.0% |
642,368 | 662,611 | 2.4% | |||
Health Care | |||||
Cardiovascular Devices | |||||
Mindray Medical International ADS | 13,000 | 440,442 | 517,530 | China³ | 1.9% |
Generic Pharmaceuticals | |||||
Aspen Pharmacare² | 25,000 | 371,659 | 645,179 | South Africa | 2.4% |
Dr. Reddy's Laboratories ADS | 15,000 | 457,465 | 611,250 | India | 2.2% |
Richter Gedeon | 20,000 | 367,156 | 405,515 | Hungary | 1.5% |
1,196,280 | 1,661,944 | 6.1% | |||
Health Care Facilities | |||||
Bangkok Dusit Medical Services | 125,000 | 368,757 | 511,451 | Thailand | 1.9% |
IHH Healthcare² | 300,000 | 391,875 | 377,003 | Malaysia | 1.4% |
KPJ Healthcare | 220,000 | 270,186 | 416,262 | Malaysia | 1.5% |
1,030,818 | 1,304,716 | 4.8% | |||
Specialty Pharmaceuticals | |||||
Genomma Lab Internacional² | 220,000 | 493,318 | 639,470 | Mexico | 2.3% |
Kalbe Farma | 4,500,000 | 400,361 | 458,032 | Indonesia | 1.7% |
Mead Johnson Nutrition | 6,000 | 352,781 | 507,060 | United States | 1.8% |
1,246,460 | 1,604,562 | 5.8% | |||
3,914,000 | 5,088,752 | 18.6% | |||
Industrials | |||||
Infrastructure Construction | |||||
Companhia de Concessoes Rodoviarias | 32,000 | 192,106 | 252,792 | Brazil | 0.9% |
Jasa Marga | 700,000 | 432,059 | 298,346 | Indonesia | 1.1% |
624,165 | 551,138 | 2.0% | |||
Materials | |||||
Agricultural Chemicals | |||||
Quimica y Minera de Chile ADS | 17,000 | $689,167 | $425,170 | Chile | 1.5% |
Continued on next page. |
22 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Developing World Fund: Schedule of Investments
Common Stocks — 86.9% | Number of Shares | Cost | Market Value | Country¹ | Percentage of Assets |
Materials (continued) | |||||
Base Metals | |||||
Freeport-McMoRan Copper & Gold | 15,000 | $584,100 | $520,350 | Indonesia³ | 1.9% |
Cement & Aggregates | |||||
PT Semen | 350,000 | 400,687 | 374,109 | Indonesia | 1.4% |
Precious Metal Mining | |||||
Alamos Gold | 32,500 | 500,025 | 417,817 | Mexico³ | 1.5% |
Impala Platinum ADR | 16,000 | 343,235 | 184,176 | South Africa | 0.7% |
843,260 | 601,993 | 2.2% | |||
Raw Material Suppliers | |||||
Vale ADS | 12,500 | 341,208 | 191,500 | Brazil | 0.7% |
Steel Producers | |||||
Tenaris ADS | 7,000 | 282,964 | 313,670 | Argentina³ | 1.1% |
3,141,386 | 2,426,792 | 8.8% | |||
Technology | |||||
Application Software | |||||
AutoNavi Holdings ADS² | 25,000 | 318,248 | 379,500 | China | 1.4% |
Computer Storage | |||||
Western Digital | 9,000 | 363,962 | 675,360 | China | 2.5% |
682,210 | 1,054,860 | 3.9% | |||
Utilities | |||||
Power Generation | |||||
Aboitiz Power | 450,000 | 378,383 | 341,895 | Philippines | 1.3% |
PGE | 60,000 | 300,164 | 363,646 | Poland | 1.3% |
678,547 | 705,541 | 2.6% | |||
Utility Networks | |||||
Enersis ADS | 10,000 | 215,250 | 156,400 | Chile | 0.6% |
Hong Kong & China Gas ADS | 200,000 | 495,666 | 482,000 | China | 1.8% |
Mania Electric | 80,000 | 517,224 | 507,740 | Philippines | 1.8% |
Petronas Gas | 70,000 | 449,259 | 518,016 | Malaysia | 1.9% |
1,677,399 | 1,664,156 | 6.1% | |||
2,355,946 | 2,369,697 | 8.7% | |||
Total investments | $21,597,521 | 23,764,040 | 86.9% | ||
Other assets (net of liabilities) | 3,598,115 | 13.1% | |||
Total net assets | $27,362,155 | 100.0% | |||
¹ Country of domicile unless otherwise indicated ² Non-Income producing security ³ Denotes a country or region of primary exposure ADS: American Depositary Share ADR: American Depositary Receipt |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 23 |
Amana Developing World Fund: Schedule of Investments
Countries
24 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Developing World Fund
Statement of Assets and Liabilities | |
As of November 30, 2013 | |
Assets | |
Investments in securities, at value (Cost $21,597,521) | $23,764,040 |
Cash | 3,552,501 |
Receivable for Fund shares sold | 27,010 |
Dividends and Income | 25,608 |
Prepaid expenses | 24,947 |
Total assets | 27,394,106 |
Liabilities | |
Payable to affiliates | 28,368 |
Payable for Fund shares redeemed | 2,080 |
Accrued distribution fee | 1,503 |
Total liabilities | 31,951 |
Net Assets | $27,362,155 |
Analysis of Net Assets | |
Paid-in capital (unlimited shares authorized, without par value) | $26,445,908 |
Undistributed net investment income | 67,857 |
Accumulated net realized loss | (1,317,960) |
Unrealized net appreciation on investments | 2,166,350 |
Net assets applicable to Fund shares outstanding | $27,362,155 |
Net asset value per Investor share | AMDWX |
Net assets, at value | $22,053,556 |
Shares outstanding | 2,040,860 |
Net asset value, offering and redemption price per share | $10.81 |
Net asset value per Institutional share | AMIDX |
Net assets, at value | $5,308,599 |
Shares outstanding | 490,766 |
Net asset value, offering and redemption price per share | $10.82 |
Statement of Operations | |
Period ended November 30, 2013 | |
Investment income | |
Dividends (Net of foreign taxes of $12,385) | $165,421 |
Miscellaneous income | 25 |
Gross investment income | 165,446 |
Expenses | |
Investment adviser fees | 124,415 |
Distribution fees — Investor Shares | 30,465 |
Filing and registration fees | 13,858 |
Printing and postage | 8,635 |
Custodian fees | 5,967 |
Retirement plan custodial fees | |
Investor Shares | 3,951 |
Institutional Shares | 5 |
Professional fees | 2,758 |
Shareowner servicing fees | |
Investor Shares | 2,373 |
Institutional Shares | 6 |
Chief Compliance Officer expenses | 601 |
Trustee fees | 263 |
Other expenses | 211 |
Total gross expenses | 193,508 |
Less custodian fee credits | (5,967) |
Net expenses | 187,541 |
Net investment loss | $(22,095) |
Net realized loss from investments and foreign currency | $(634,765) |
Net increase in unrealized appreciation on investments and foreign currency | 365,647 |
Net loss on investments | $(269,118) |
Net decrease in net assets resulting from operations | $(291,213) |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 25 |
Amana Developing World Fund
Statements of Changes in Net Assets | Period ended November 30, 2013 | Year ended May 31, 2013 |
Increase (decrease) in net assets from operations | ||
From operations | ||
Net investment income (loss) | $(22,095) | $138,279 |
Net realized loss on investments | (634,765) | (242,839) |
Net increase in unrealized appreciation | 365,647 | 2,064,454 |
Net increase (decrease) in net assets | (291,213) | 1,959,894 |
Distributions to shareowners from | ||
Net investment income | ||
Investor Shares | - | - |
Institutional Shares | - | - |
Capital gains distribution | ||
Investor Shares | - | - |
Institutional Shares | - | - |
Total distributions | - | - |
Capital share transactions | ||
Proceeds from the sale of shares | ||
Investor Shares | 5,462,350 | 8,373,705 |
Institutional Shares | 5,360,170 | - |
Value of shares issued in reinvestment of dividends and distributions | ||
Investor Shares | - | - |
Institutional Shares | - | - |
Cost of shares redeemed | ||
Investor Shares | (8,077,404) | (3,498,897) |
Institutional Shares | - | |
Early redemption fees retained | 116 | 326 |
Net increase in net assets | 2,745,232 | 4,875,134 |
Total increase in net assets | 2,454,019 | 6,835,028 |
Net assets | ||
Beginning of period | 24,908,136 | 18,073,108 |
End of period | 27,362,155 | 24,908,136 |
Undistributed net investment income | $67,857 | $89,952 |
Shares of the Fund sold and redeemed | ||
Investor Shares (AMDWX) | ||
Number of shares sold | 508,245 | 781,899 |
Number of shares issued in reinvestment of dividends and distributions | - | - |
Number of shares redeemed | (744,365) | (329,859) |
Net increase (decrease) in number of shares outstanding | (236,120) | 452,040 |
Institutional Shares (AMIDX) | ||
Number of shares sold | 490,766 | - |
Number of shares issued in reinvestment of dividends and distributions | - | - |
Number of shares redeemed | - | - |
Net increase in number of shares outstanding | 490,766 | - |
24 | Semi-Annual Report November 30, 2013 | The accompanying notes are an integral part of these financial statements. |
Amana Developing World Fund: Financial Highlights
Investor Shares (AMDWX) | |||||
Selected data per share of outstanding capital stock throughout each period: | Period ended | Year ended May 31, | Period ended May 31, | ||
Nov. 30, 2013 | 2013 | 2012 | 2011 | 2010 | |
Net asset value at beginning of period | $10.94 | $9.90 | $10.88 | $10.16 | $10.00 |
Income from investment operations | |||||
Net investment income | (0.01) | 0.06 | (0.01) | (0.06) | (0.05) |
Net gains (losses) on securities (both realized and unrealized) | (0.12) | 0.98 | (0.96) | 0.78 | 0.21 |
Total from investment operations | (0.13) | 1.04 | (0.97) | 0.72 | 0.16 |
Less distributions | |||||
Dividends (from net investment income) | - | - | (0.01) | - | - |
Total distributions | - | - | (0.01) | - | - |
Paid-in capital from early redemption fees | 0.00¹ | 0.00¹ | 0.00¹ | 0.00¹ | 0.00¹ |
Net asset value at end of period | $10.81 | $10.94 | $9.90 | $10.88 | $10.16 |
Total Return | (1.19)%4 | 10.51% | (8.94)% | 7.09% | 1.60%² |
Ratios / supplemental data | |||||
Net assets ($000), end of period | $27,362 | $24,908 | $18,073 | $15,839 | $9,096 |
Ratio of expenses to average net assets | |||||
Before custodian fee credits | 1.49%5 | 1.54% | 1.63% | 1.61% | 1.59%³ |
After custodian fee credits | 1.45%5 | 1.51% | 1.61% | 1.60% | 1.58%³ |
Ratio of net investment income after custodian fee credits to average net assets | (0.18)%5 | 0.67% | (0.10)% | (0.63)% | (1.14)%³ |
Portfolio turnover rate | 8%4 | 4% | 12% | 2% | 5%² |
¹ Amount is less than $0.01 ² Since inception 09/28/2009; not annualized ³ Since inception 09/28/2009; annualized 4 Not annualized 5 Annualized |
Institutional Shares (AMIDX) | |
Selected data per share of outstanding capital stock throughout each period: | Period ended¹ |
Nov. 30, 2013 | |
Net asset value at beginning of period | $10.87 |
Income from investment operations | |
Net investment income | - |
Net gains (losses) on securities (both realized and unrealized) | (0.05) |
Total from investment operations | (0.05) |
Less distributions | |
Dividends (from net investment income) | - |
Total distributions | - |
Paid-in capital from early redemption fees | 0.00² |
Net asset value at end of period | $10.82 |
Total Return | (0.46)%³ |
Ratios / supplemental data | |
Net assets ($000), end of period | $5,309 |
Ratio of expenses to average net assets | |
Before custodian fee credits | 1.34%4 |
After custodian fee credits | 1.29%4 |
Ratio of net investment income after custodian fee credits to average net assets | 0.03%4 |
Portfolio turnover rate | 8%³ |
¹ Operations commenced on 09/25/2013 ² Amount is less than $0.01 ³ Since inception 09/25/2013; not annualized 4 Since inception 09/25/2013; annualized |
The accompanying notes are an integral part of these financial statements. | Semi-Annual Report November 30, 2013 | 27 |
Notes To Financial Statements
Note 1 — Organization
Amana Mutual Funds Trust (the "Trust") was organized as a Delaware Statutory Trust March 11, 2013, and is the successor to Amana Mutual Funds Trust, an Indiana Business Trust ("Prior Trust") organized on July 26, 1984, pursuant to a reorganization on July 19, 2013. Each Fund is a series of the Trust and the successor to the corresponding series of the Prior Trust. The Trust is registered as a no-load, open-end, diversified series management investment company under the Investment Company Act of 1940, as amended. The Trust restricts its investments to those acceptable to Muslims by investing in accordance with Islamic principles. Three portfolio series have been created. The Income Fund was first authorized to sell shares of beneficial interest to the public on June 23, 1986. The Growth Fund began operations on February 3, 1994. The Developing World Fund began operations on September 28, 2009. Institutional shares of each Fund were first offered September 25, 2013.
Each class of shares of a Fund represents an interest in the same portfolio of investments of the Fund and has in all respects the same rights and obligations as each other class of the Fund, except as otherwise provided herein. Each class of shares may be subject to different investment minimums and other conditions of eligibility as may be described in the prospectus for the particular class of shares, as from time to time in effect.
Income, realized and unrealized capital gains and losses, and expenses to be paid by a Fund and not allocated to a particular Class as provided below, shall be allocated to each Class on the basis of relative net assets. Expenses allocable to a specific Class are expenses specifically incurred by or for such Class including the following:
- Rule 12b-1 expenses; and
- Any applicable service fees.
Net investment income dividends and capital gain distributions paid by the Fund on each class of its shares will be calculated in the same manner on the same day and at the same time.
Note 2 — Unaudited Information
The information in this interim report has not been subject to independent audit.
Note 3 — Significant Accounting Policies
The following is a summary of the significant accounting policies, in conformity with accounting principles generally accepted in the United States of America, which are consistently followed by the Funds in preparation of their financial statements.
Security valuation:
Investments in securities traded on a national securities exchange and over-the-counter securities for which sale prices are available are valued at that price. Securities for which there are no sales are valued at latest bid price.
Foreign markets may close before the time as of which the Funds' share prices are determined. Because of this, events occurring after the close and before the determination of the Funds' share prices may have a material effect on the values of some or all of the Funds' foreign securities. To account for this, the Funds may use outside pricing services for valuation of their non-US securities.
In cases in which there is not a readily available market price, a fair value for such security is determined in good faith by or under the direction of the Board of Trustees.
Security transactions are recorded on trade date. Realized gains and losses on sales of securities are recorded on the identified cost basis.
Foreign currency:
Investment securities and other assets and liabilities denominated in foreign currencies are translated into US dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into US dollar amounts on the respective dates of such transactions.
The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds' books and the US dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
Share valuation:
Each Fund computes the share price of each share class by dividing the net assets attributable to each share class by the outstanding shares of that class. Each share class represents an interest in the same investment portfolio. Each share class is identical in all respects except that each class bears its own class expenses, and each class has exclusive voting rights. As a result of the differences in the expenses borne by each share class, the share price will vary among a Fund's share classes.
Fair value measurements:
Accounting Standards Codification (ASC) 820-10 establishes a three-tier framework for measuring fair value based on a hierarchy of inputs. The hierarchy distinguishes between market data obtained from independent sources (observable inputs) and the Funds' own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds' investments and are summarized below.
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
Level 2 — Observable inputs other than quoted prices in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.
Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Trust's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for
28 | Semi-Annual Report November 30, 2013 |
Notes To Financial Statements (continued)
Share Valuation Inputs as of November 30, 2013 | ||||
Funds | Total | Level 1 Quoted Price | Level 2 Significant Observable Input | Level 3 Significant Unobservable Input |
Income Fund | ||||
Common Stocks | $1,552,840,983 | $1,552,840,983 | $- | $- |
Halal Income | 5,198,485 | - | 5,198,485 | - |
Total Assets | $1,558,039,468 | $1,552,840,983 | $5,198,485 | $- |
Growth Fund | ||||
Common Stocks | $2,045,037,863 | $2,045,037,863 | $- | $- |
Total Assets | $2,045,037,863 | $2,045,037,863 | $- | $- |
Developing World Fund | ||||
Common Stocks | $23,764,040 | $11,184,897 | $12,579,143 | $- |
Total Assets | $23,764,040 | $11,184,897 | $12,579,143 | $- |
During the period ended November 30, 2013, no Fund had transfers between Level 1 and Level 2. |
example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The table above is a summary of the inputs used as of November 30, 2013, in valuing the Funds' investments carried at fair value.
Derivative instruments and hedging activities:
The Funds have adopted the financial accounting reporting rules required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification. The Funds are required to include enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity's results of operations and financial position.
During the fiscal period ended November 30, 2013, the funds held positions in Rights Offerings as a result of actions taken by the board of directors of the underlying companies. Rights offerings are issued to existing shareowners of companies and allow shareowners to purchase additional company shares, generally at a discount to the current market price, prior to a set expiration date.
The effects of these derivative instruments on the Fund's financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations are presented in the tables below. The fair values of derivative instruments as of November 30, 2013, by risk category are as follows:
Developing World Fund | ||
Statement of Asset and Liabilities Location | Derivatives not designated as hedging instruments | Asset Derivatives |
Investments in securities, at value | Rights offerings | $- |
Total | $- |
Statement of Operations effects
Developing World Fund | |
Derivatives not designated as hedging instruments | Realized Gains |
Rights offerings | $- |
Total | $- |
Developing World Fund | |
Derivatives not designated as hedging instruments | Unrealized Gains |
Rights offerings | $- |
Total | $- |
Investment concentration:
The fundamental policies of the Funds prohibit earning interest, in accordance with Islamic principles. Consequently, cash is held in non-interest-bearing deposits with the Funds' custodian or other banks. "Other assets (net of liabilities)" in the Funds' Schedules of Investments primarily represents cash on deposit with the custodian. Cash on deposit will vary widely over time. Accounting Standards Codification ("ASC") 825, "Financial Instruments," identifies these items as a concentration of credit risk, requiring disclosure regardless of the degree of risk. The risk is managed by careful financial analysis and review of the custodian's operations, resources, and protections available to the Trust. This process includes evaluation of other financial institutions providing investment company custody services.
Federal income taxes:
The Funds intend to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and to make the requisite distributions of income and capital gains to its shareowners sufficient to relieve it from all or substantially all federal income taxes. Therefore, no federal income tax provision is required.
Semi-Annual Report November 30, 2013 | 29 |
Notes To Financial Statements (continued)
The Funds recognize the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. Management has analyzed the Funds' tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years (2010 — 2012) or expected to be taken in the Funds' 2013 tax returns. The Funds identify their major tax jurisdiction as US federal and foreign jurisdictions where the Funds make significant investments; however, the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
Reclassification of capital accounts:
Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or NAV. These reclassifications were due to over-distribution and a net investment loss.
Income Fund | Growth Fund | Developing World Fund | |
Undistributed net income | $(169,625) | $3,539 | $(45,420) |
Accumulated gains (losses) | 169,625 | (3,539) | 11,409 |
Paid-in capital | $- | $- | $34,011 |
Distributions to shareowners:
Dividends from equity securities and distributions to shareowners, which are determined in accordance with income tax regulations, are recorded as income on the ex-dividend date.
Dividends and distributions are payable at the end of December and May. As a result of their investment strategies, the Growth and Developing World Funds do not expect to pay income dividends. Dividends are paid in shares of the Funds, at the net asset value on the payable date. Shareowners may elect to take dividends in cash.
Use of estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates.
Other:
The Funds record security transactions based on a trade date. Dividend income is recognized on the ex-dividend date, and interest income is recognized on an accrual basis.
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. Net investment losses may not be utilized to offset net investment income in future periods for tax purposes. Withholding taxes on foreign dividends have been provided for in accordance with the Funds' understanding of the applicable country's tax rules and rates.
Note 4 — Transactions with Affiliated Persons
Under a contract approved annually by Amana's independent trustees, Saturna Capital provides investment advisory services and certain other administrative and distribution services and facilities required to conduct Trust business. For such services, each Fund pays an advisory fee of 0.95% on the first $500 million of a fund's average daily net assets, 0.85% on the next $500 million, 0.75% on the next $500 million, and 0.65% on assets over $1.5 billion. For the fiscal period ended November 30, 2013, the Funds paid the following advisory fees to Saturna Capital:
Advisory Fees | |
Income Fund | $6,338,409 |
Growth Fund | 8,382,793 |
Developing World Fund | $124,415 |
Certain officers and one trustee of Amana are also officers and directors of the investment adviser.
Saturna Capital also acts as transfer agent for the Trust for which each class of a Fund pays $0.25 per account per month. For the fiscal period ended November 30, 2013, the Funds paid the following transfer agent ("shareowner servicing") fees to Saturna Capital:
Shareowner Servicing Fees | |
Income Fund Investor Shares (AMANX) | $32,677 |
Income Fund Institutional Shares (AMINX) | 12 |
Growth Fund Investor Shares (AMAGX) | 52,187 |
Growth Fund Institutional Shares (AMIGX) | 19 |
Developing World Fund Investor Shares (AMDWX) | 2,373 |
Developing World Fund Institutional Shares (AMIDX) | $6 |
Saturna Brokerage Services, Inc. ("SBS"), a subsidiary of Saturna Capital, is registered as a broker-dealer and acts as distributor. The Funds have adopted a Distribution Plan in accordance with Rule 12b-1 under the 1940 Act applicable to the Investor Shares of each Fund. The plan provides that the Funds will pay a fee to SBS at an annual rate of up to 0.25% of the average net assets applicable to Investor Shares of each Fund. The fee is paid to SBS as reimbursement for expenses incurred for distribution-related activity. For the fiscal period ended November 30, 2013, the Funds paid the following distribution fees to SBS:
Distribution (12b-1) Fees | |
Income Fund Investor Shares (AMANX) | $1,851,570 |
Income Fund Institutional Shares (AMINX) | n/a |
Growth Fund Investor Shares (AMAGX) | 2,630,278 |
Growth Fund Institutional Shares (AMIGX) | n/a |
Developing World Fund Investor Shares (AMDWX) | $30,465 |
Developing World Fund Institutional Shares (AMIDX) | n/a |
For the fiscal period ended November 30, 2013, Saturna Capital spent $1,907,430 from additional resources of its own, and not part of the 12b-1 expense of the Funds, to compensate broker-dealers or other financial intermediaries, or their affiliates, in connection with the sale, distribution, retention, and/or servicing of Fund shares. To the extent that these resources are derived from advisory fees paid by the Funds, these payments could be considered "revenue sharing." Any such payments will not change the net asset value or the price of a Fund's shares.
30 | Semi-Annual Report November 30, 2013 |
Notes To Financial Statements (continued)
SBS is the primary broker used to effect portfolio transactions for the Trust and currently executes portfolio transactions for the Trust for free (no commissions). Should any change occur in this policy, shareowners would be notified. Transactions effected through other brokers may be subject to a commission payable to that broker.
Saturna Trust Company ("STC"), a subsidiary of Saturna Capital, acts as retirement plan custodian for Fund shareowners. Each class of a Fund pays an annual fee of $10 per account for retirement plan services to Saturna Trust Company. For the fiscal period ended November 30, 2013, the Funds paid the following retirement plan custodial fees to STC:
Retirement plan custodial fees | |
Income Fund Investor Shares (AMANX) | $14,418 |
Income Fund Institutional Shares (AMINX) | 47 |
Growth Fund Investor Shares (AMAGX) | 25,419 |
Growth Fund Institutional Shares (AMIGX) | 51 |
Developing World Fund Investor Shares (AMDWX) | 3,951 |
Developing World Fund Institutional Shares (AMIDX) | $5 |
Mr. Nicholas Kaiser serves as a trustee and president of the Trust. He is also a director and the chairman of Saturna Capital, Saturna Brokerage Services, and Saturna Trust Company. He is not compensated by the Trust. For the fiscal period ended November 30, 2013, the Trust incurred compensation expenses of $36,000, which is included in $43,956 of total expenses for the independent Trustees.
Income Fund | Growth Fund | Developing World Fund | |
Trustee Fees | $13,158 | $22,625 | $217 |
Other Trustee expenses | $3,573 | $4,337 | $46 |
The officers of the Trust are paid by Saturna Capital, and not the Trust, except for the Chief Compliance Officer, who is partially compensated by the Trust. For the fiscal period ended November 30, 2013, the Trust incurred the following related to the expense of its Chief Compliance Officer:
Income Fund | Growth Fund | Developing World Fund | |
Chief Compliance Officer | $20,420 | $30,339 | $601 |
On November 30, 2013, the trustees, officers, and their affiliates as a group, owned the following percentages of outstanding shares:
Trustees, officers, and affiliates' ownership | |
Income Fund Investor Shares (AMANX) | 0.04% |
Income Fund Institutional Shares (AMINX) | 7.16% |
Growth Fund Investor Shares (AMAGX) | 0.05% |
Growth Fund Institutional Shares (AMIGX) | 4.13% |
Developing World Fund Investor Shares (AMDWX) | 1.42% |
Developing World Fund Institutional Shares (AMIDX) | 49.88% |
Note 5 — Distributions to Shareowners
The tax characteristics of distributions paid for the fiscal period ended November 30, 2013, and the year ended May 31, 2013, were as follows (note: short-term capital gains are considered ordinary income for federal tax purposes):
Income Fund | November 30, 2013 | May 31, 2013 |
Ordinary income | $- | $21,715,717 |
Long-term capital gain¹ | $- | $- |
Growth Fund | November 30, 2013 | May 31, 2013 |
Ordinary income² | $- | $5,476,978 |
Developing World Fund | November 30, 2013 | May 31, 2013 |
Ordinary income² | $- | $- |
¹ Long-term capital gain dividend designated pursuant to Section 852(b)(3) of the Internal Revenue Code.
² By policy, the Growth and Developing World Funds seek to avoid paying income dividends.
The cost basis of investments for federal income tax purposes at November 30, 2013, were as follows:
Income Fund | Growth Fund | Developing World Fund | |
Cost of investments | $939,417,036 | $1,113,853,718 | $21,597,521 |
Gross unrealized appreciation | 626,457,739 | 938,461,081 | 3,937,236 |
Gross unrealized depreciation | (7,835,307) | (7,276,936) | (1,770,717) |
Net unrealized appreciation | $618,622,432 | $931,184,145 | $2,166,519 |
As of May 31, 2013, the components of distributable earnings on a tax basis were as follows:
Income Fund | |
Undistributed ordinary income | $94,917 |
Tax accumulated earnings | 94,917 |
Other accumulated losses | (4,961,112) |
Unrealized appreciation | 464,158,425 |
Total accumulated earnings | $459,292,230 |
Growth Fund | |
Undistributed ordinary income | $8,324,786 |
Tax accumulated earnings | 8,324,786 |
Accumulated capital losses | (2,857,825) |
Other accumulated losses | (705,140) |
Unrealized appreciation | 781,163,722 |
Total accumulated earnings | $785,925,543 |
Developing World Fund | |
Undistributed ordinary income | $103,663 |
Tax accumulated earnings | 103,663 |
Accumulated capital and other losses | (480,134) |
Other accumulated losses | (216,772) |
Unrealized appreciation | 1,801,345 |
Other unrealized losses | (642) |
Total accumulated earnings | $1,207,460 |
Semi-Annual Report November 30, 2013 | 31 |
Notes To Financial Statements (continued)
Note 6 — Federal Income Taxes
At May 31, 2013, the Funds had the following capital loss carryforwards, subject to regulation. Prior to their expiration, such loss carryforwards may be used to offset future net capital gains realized for federal income tax purposes.
Income Fund | Growth Fund | Developing World Fund | |
Capital loss carryforwards expiring 2018 | $- | $- | $- |
Capital loss carryforwards expiring 2019 | - | 2,857,825 | 19,458 |
Short-term loss carryforwards unlimited expiration | - | - | 178,023 |
Long-term loss carryforwards unlimited expiration | - | - | 282,653 |
Post-October loss deferral¹ | $4,961,112 | $705,140 | $216,772 |
¹ Net capital losses incurred after October 31 and within the taxable year are deemed to arise on the first business day of a fund's next taxable year.
Income Fund | Growth Fund | Developing World Fund | |
Utilized capital loss carryforward expiring 2018 | $- | $1,658,283 | $- |
Utilized capital loss carryforward expiring 2019 | - | 1,958,761 | - |
Total capital loss carryforward utilized at May 31, 2013 | $- | $3,617,044 | $- |
Note 7 — Investments
During the fiscal period ended November 30, 2013, the Funds purchased and sold the following amounts of securities.
Purchases | Sales | |
Income Fund | $19,163,449 | $1,211,641 |
Growth Fund | - | 270,667,849 |
Developing World Fund | $6,018,680 | $1,653,319 |
Note 8 — Custodian
Under agreements in place with the Trust's custodian, Bank of New York Mellon, custody fees are reduced by credits for cash balances. For the fiscal period ended November 30, 2013, such reductions were as follows:
Income Fund | Growth Fund | Developing World Fund | |
Custodian Fee Credits | $36,166 | $52,069 | $5,967 |
Note 9 — Subsequent Events
In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. The following distributions occurred subsequent to the date of this report:
Dec. 31, 2013 Distributions (amounts per share) | Short-term capital gain |
Income Fund Investor Shares (AMANX) | n/a |
Income Fund Institutional Shares (AMINX) | n/a |
Growth Fund Investor Shares (AMAGX) | $0.01973 |
Growth Fund Institutional Shares (AMIGX) | $0.01973 |
Developing World Fund Investor Shares (AMDWX) | n/a |
Developing World Fund Institutional Shares (AMIDX) | n/a |
Dec. 31, 2013 Distributions (amounts per share) | Long-term capital gain |
Income Fund Investor Shares (AMANX) | n/a |
Income Fund Institutional Shares (AMINX) | n/a |
Growth Fund Investor Shares (AMAGX) | $0.81974 |
Growth Fund Institutional Shares (AMIGX) | $0.81974 |
Developing World Fund Investor Shares (AMDWX) | n/a |
Developing World Fund Institutional Shares (AMIDX) | n/a |
Dec. 31, 2013 Distributions (amounts per share) | Ordinary income |
Income Fund Investor Shares (AMANX) | $0.33233 |
Income Fund Institutional Shares (AMINX) | $0.39500 |
Growth Fund Investor Shares (AMAGX) | $0.19080 |
Growth Fund Institutional Shares (AMIGX) | $0.24203 |
Developing World Fund Investor Shares (AMDWX) | $0.04070 |
Developing World Fund Institutional Shares (AMIDX) | $0.04070 |
32 | Semi-Annual Report November 30, 2013 |
Expenses
All mutual funds have operating expenses. As an Amana Mutual Fund shareowner, you incur ongoing costs, including management fees, distribution (or service) 12b-1 fees, and other Fund expenses such as shareowner reports (like this one). Operating expenses, which are deducted from a fund's gross earnings, directly reduce the investment return of a fund. Mutual funds (unlike other financial investments) only report their results after deduction of operating expenses.
With the Amana Funds, unlike many mutual funds, you do not incur sales charges (loads) on purchases, reinvested dividends, or other distributions. You do not incur redemption fees or exchange fees related to Saturna Individual Retirement Accounts. You may incur fees related to extra services requested by you for your account, such as bank wires. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
Examples
The following examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period (June 1, 2013 to November 30, 2013).
Actual Expenses
The first line for each Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. The Funds may charge for extra services (such as domestic bank wires, international bank wires, or overnight courier delivery of redemption checks) rendered on request, which you may need to estimate to determine your total expenses.
Hypothetical Example For Comparison Purposes
The second line for each Fund provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of other mutual funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees charged by custodians other than Saturna Trust Company (note that Saturna does not charge such fees to shareowners directly on Saturna IRAs, ESAs, or HSAs with the Amana Funds), and charges for extra services such as check writing and bank wires.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or exchange fees (note that the Amana Funds do not assess any such transactional costs). Therefore, the "Hypothetical" line of each fund is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.
Beginning Account Value [June 1, 2013] | Ending Account Value [November 30, 2013] | Expenses Paid During Period | Annualized Expense Ratio | |
Income Fund | ||||
Investor Shares (AMANX), Actual | $1,000.00 | $1,115.80 | $6.05¹ | 1.14% |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.35 | $5.77¹ | 1.14% |
Institutional Shares (AMINX), Actual | $1,000.00 | $1,064.90 | $4.66² | 0.90%² |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.56 | $4.56² | 0.90%² |
Growth Fund | ||||
Investor Shares (AMAGX), Actual | $1,000.00 | $1,104.40 | $5.64¹ | 1.07% |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.70 | $5.42¹ | 1.07% |
Institutional Shares (AMIGX), Actual | $1,000.00 | $1,053.50 | $4.32² | 0.84%² |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.86 | $4.26² | 0.84%² |
Developing World Fund | ||||
Investor Shares (AMDWX), Actual | $1,000.00 | $988.10 | $7.23¹ | 1.45% |
Hypothetical (5% return before expenses) | $1,000.00 | $1,017.80 | $7.33¹ | 1.45% |
Institutional Shares (AMIDX), Actual | $1,000.00 | $995.40 | $6.45² | 1.29%² |
Hypothetical (5% return before expenses) | $1,000.00 | $1,018.60 | $6.53² | 1.29%² |
¹ Expenses for Investor Shares are equal to annualized expense ratios indicated above (based on the most recent semi-annual period of June 1, 2013, through November 30, 2013), multiplied by the average account value over the period, multiplied by 183/365 to reflect the semi-annual period.
² Expenses for Institutional Shares are based on data for the period since inception September 25, 2013, through November 30, 2013, and annualized.
Semi-Annual Report November 30, 2013 | 33 |
Renewal of Investment Advisory Contract
During their meeting of September 19, 2013, Amana's trustees discussed the Trust's various operating agreements. They focused on renewing the agreements of the three Funds of the Trust with Saturna Capital Corporation, discussing the nature, extent, and quality of the services provided by Saturna. The Trustees took into consideration that the Funds of the Trust offer a full range of high-quality investor services, including unique services for Islamic investors, and that these services had been enhanced, rather than scaled back, during recent economic difficulties. The Trustees discussed Saturna's experience, ability, and commitment to quality service through performing internally such functions as shareowner servicing, administration, retirement plan and trust services, accounting, marketing, and distribution — all in addition to investment management.
The Trustees took into consideration Saturna's continued avoidance of significant operational problems, plus its substantial investments in premises, personnel, training, and equipment to meet investor needs. They recognized Saturna's efforts to recruit and retain increasingly qualified, experienced, and specialized staff and improve the capital base on which Saturna operates, which the Trustees believe is important to the long-term success of the Funds. They appreciate Saturna's focus on investors, avoiding potential conflicts of interest.
The Trustees found that the long-term investment performance of the Growth and Income Funds, both in absolute numbers and relative to peers, continued to be good in a volatile period, reflecting Saturna's cautious investment style. The Trustees also took into consideration Saturna's investment style in considering the Funds' short and intermediate term performance and noted that the Funds were managed for the long term. The Trustees found that Saturna managed the Funds to continue to be an acceptable investment for Muslims as well as being highly attractive to all kinds of equity investors. They understood that Islamic restrictions increase Saturna's research expenses and obligations, and impose major constraints on Saturna's selection of portfolio investments.
The Trustees noted, in particular, that the strong performance of the Funds has been recognized by independent advisory organizations. As of May 31, 2013, Amana Income and Amana Growth maintained strong performance rankings in their respective mutual fund categories. Amana Income Fund ranked #1 (out of 119 similar funds) in Lipper's Equity Income category for 10-year performance. Amana Growth Fund ranked #13 (out of 254 funds) in the Multi-Cap Growth category for 10-year performance.
The Trustees noted that as of May 31, 2013, Amana Income maintained Morningstar's top "Five Star" Overall rating while Amana Growth received a "Four Star" Overall rating, and Developing World received a "Three Star" Overall rating. Morningstar's analysts continue to award both Amana Growth and Amana Income "Silver Shield" ratings.
The Trustees reviewed the fees and expenses of the Funds. They found each Fund's expense ratio to be comparable to retail funds in its peer group and to be fair given the size of each Fund, the services provided and expenses incurred by the adviser. They noted that "revenue sharing" (payments from Saturna's own resources) paid to unaffiliated intermediaries help make the Funds widely available and popular with investors, making it Saturna's largest expense in distributing the Funds. The Trustees recognized that the Funds' positive performance record had likely contributed to their growth in asset size, which resulted in lower expense ratios due to rising costs being spread over a larger asset base. The Trustees also took note of the costs borne by Saturna in creating and subsidizing operations of the Amana Developing World Fund.
The Trustees reviewed Saturna's financial information and discussed the issue of Saturna's profitability as related to management and administration of the Funds. They discussed the reasonableness of Saturna's profitability with respect to each of the Funds as part of their evaluation of whether the advisory fees bear a reasonable relationship to the mix of services provided by Saturna, including the nature, extent and quality of such services. The Trustees noted the more than twenty years of dedicated service provided to Amana shareowners by Saturna Capital.
The Trustees considered the extent to which advisory fees paid to the Adviser reflect economies of scale. The Trustees noted that as the Funds have grown, the Adviser has, on two occasions, voluntarily undertaken to include additional breakpoints within the Growth and the Income Funds' advisory fee structures. Fee breakpoints result in lowering operating expenses of the Funds and lower expense ratios. They also demonstrate that economies of scale are being shared with shareowners.
The Trustees considered the fees charged by Saturna to other kinds of accounts and the different services provided to those accounts, as well as the ways in which Saturna's investment management, research, and customer service operations performed for other accounts benefit the Funds.
The Trustees considered potential benefits to Saturna from acting as investment adviser and noted that there were no soft dollar arrangements with respect to trading in the Funds' portfolios. In fact, Saturna voluntarily waives brokerage commissions for Fund portfolio trades executed through its affiliated broker at a considerable cost to Saturna. This commission waiver results in savings to Fund shareowners.
The Trustees concluded that the fees paid by the Funds to Saturna were reasonable in light of the services provided, comparative performance, expense and advisory fee information, costs of services provided and profits to be realized and benefits derived or to be derived by Saturna from its relationship with the Funds. Following this discussion, the Trustees unanimously agreed to renew the Amana Growth Fund, Amana Income Fund, and Amana Developing World Funds' investment Advisory and Administration Agreements.
34 | Semi-Annual Report November 30, 2013 |
Availability of Quarterly Portfolio Information
(1) The Amana Funds file complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q.
(2) The Funds' Forms N-Q are available on the SEC's website at www.sec.gov.
(3) The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800/SEC-0330.
(4) The Funds make a complete schedule of portfolio holdings after the end of each month available at www.amanafunds.com.
Availability of Proxy Voting Information
(1) A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (a) without charge, upon request, by calling Saturna Capital at 1-888/73-AMANA; (b) on the Funds' website at www.amanafunds.com; and (c) on the SEC's website at www.sec.gov.
(2) Information regarding how each Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (a) without charge, upon request, by calling Saturna Capital at 1-888/73-AMANA; (b) on the Funds' website at www.amanafunds.com; and (c) on the SEC's website at www.sec.gov.
Householding Policy
To reduce expenses, we may mail only one copy of the Funds' prospectus, each annual and semi-annual report, and proxy statements, when necessary, to those addresses shared by two or more accounts. If you wish to receive individual and/or more copies of these documents, please call us at 888/73-AMANA or write to us at Saturna Capital/Amana Mutual Funds, P.O. Box N, Bellingham, WA 98227. We will begin sending you individual copies thirty days after receiving your request.
If you are currently receiving multiple copies and wish to receive only one copy, please call us at 888/73-AMANA or write to us at Saturna Capital/Amana Mutual Funds, P.O. Box N, Bellingham, WA 98227. We will begin sending you a single copy with subsequent report mailings.
Privacy Statement
At Saturna Capital and the Amana Mutual Funds Trust, we understand the importance of maintaining the privacy of your financial information. We want to assure you that we protect the confidentiality of any personal information that you share with us. In addition, we do not sell information about our current or former customers.
In the course of our relationship, we gather certain non-public information about you, including your name, address, investment choices, and account information. We do not disclose your information to unaffiliated third parties unless it is necessary to process a transaction; service your account; deliver your account statements, shareholder reports and other information; or as required by law. When we disclose information to unaffiliated third parties, we require a contract to restrict the companies' use of customer information and from sharing or using it for any purposes other than performing the services for which they were required.
We may share information within the Saturna Capital family of companies in the course of informing you about products or services that may address your investing needs.
We maintain our own technology resources to minimize the need for any third party services, and restrict access to information within Saturna. We maintain physical, electronic, and procedural safeguards to guard your personal information. If you have any questions or concerns about the security or privacy of your information please call us at 1-800/SATURNA (1-800-728-8762).
Semi-Annual Report November 30, 2013 | 35 |
Amana Mutual Funds Trust began operations in 1986. Saturna Capital Corporation, with extensive experience in mutual funds, invests the Trust's portfolios and handles daily operations under supervision of Amana's Board of Trustees. Saturna Capital | Investment Adviser, Administrator, and Transfer Agent | Saturna Capital Corporation Bellingham, WA |
Custodian | Bank of New York Mellon Brooklyn, NY | |
Independent Registered Public Accounting Firm | Tait, Weller & Baker LLP Philadelphia, PA | |
Legal Counsel | K & L Gates LLP Washington, DC |
This report is for the information of the shareowners of the Funds. It is not authorized for distribution to prospective investors unless it is accompanied or preceded by an effective prospectus.
Item 2. Code of Ethics
Registrant has adopted a code of ethics and is included with this submission as Exhibit (a)(1). It may also be found on Registrant's website at http://www.amanafunds.com/retail/ethics.shtml.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Not applicable.
(b) Not applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not appllicable.
Item 11. Controls and Procedures
(a) Internal control over financial reporting is under the supervision of the principal executive and financial officers. On December 17, 2013, Mr. Nicholas Kaiser (President) and Mr. Christopher Fankhauser (Treasurer) reviewed the internal control procedures for Amana Mutual Funds Trust and found them reasonable and adequate.
(b) No change.
Item 12. Exhibits
Exhibits included with this filing:
(a)(1) Code of Ethics.
(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMANA MUTUAL FUNDS TRUST
By:
/s/ Nicholas Kaiser
Signature
Nicholas Kaiser, President
Printed name and Title
January 17, 2014
Date
Pursuant to the requirements of the Securities Exchange Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.
By:
/s/ Nicholas Kaiser
Signature
Nicholas Kaiser, President
Printed name and Title
January 17, 2014
Date
By:
/s/ Christopher Fankhauser
Signature
Christopher Fankhauser, Treasurer
Printed name and Title
January 17, 2014
Date