Investment in Focus: Amana Mutual Funds Trust Income Fund (AMANX)

Sep 22, 2025
6 min read

There are few funds whose identity is as intimately tied to values as to returns. AMANX — the Amana Income Fund (Investor Shares) — is one of them: a fund born out of desire, not just profit; a mutual fund that aims to provide income and preserve capital, but only on terms that align with Islamic principles.

Imagine investors in the mid-1980s, looking for ways to put their savings to work in the U.S. stock market — but unable to accept companies heavily indebted, or profit derived from interest, or firms violating other ethical restrictions. Into this gap stepped Amana, one of the earliest mutual fund trusts explicitly designed with Sharia-friendly screens. For its first decades, Amana Income was more niche — valued by those who saw finance as not only numbers, but ethics. Yet over time, its performance and disciplined strategy have elevated it into a fund many value even beyond faith lines.

Origins & Philosophy

Founding: The Amana Income Fund (AMANX) was launched on June 23, 1986. It was the first fund in the Amana Mutual Funds Trust.
Management / Adviser: Saturna Capital is the adviser. The fund is managed in accordance with Islamic (Sharia) principles.
Ethical / Halal constraints: The fund avoids earnings from interest, gambling, alcohol, tobacco, etc. It also limits leverage/debt exposure. It must invest in companies that satisfy ethical screens; there is oversight via a Sharia advisory board (Amanie Advisors).
Style: Large-cap blend / value-tilted equity, with a strong income orientation (dividends) rather than interest or speculative gains.

What the Fund Does / Strategy

Objective: Seek current income and preserve capital, consistent with Islamic principles. Income is from dividend-paying common stocks (including foreign). Under normal circumstances, invest at least 80% of net assets in income-producing securities (mostly dividend-paying common stocks).
Avoiding fixed income interest: Because Islamic principles discourage interest, the fund avoids securities which generate interest. That means less exposure to bonds or interest-bearing instruments.
Turnover: Relatively low turnover — about 10% portfolio turnover according to one source. That suggests longer holding periods, consistent with income orientation and ethical screening.
Dividend policy / yield: The fund pays dividends (from its holdings in dividend-paying stocks). The trailing-12-month yield is around 0.60% (30-day SEC yield) in one data point, but the “distribution yield” or income yield may be higher.

Performance Snapshot

Here’s how AMANX has performed historically, and how that stacks up:

Period	AMANX (Investor Shares) Annualised Return	Notes / Context
1 Year (as of 30 June 2025)	~ 9.45% Saturna Capital
3 Years	~ 14.02% Saturna Capital
5 Years	~ 12.88% Saturna Capital
10 Years	~ 10.66% Saturna Capital+1

Some additional figures:

YTD as of end-June 2025: ~ 8.98% for Investor shares, ~9.11% Institutional shares.
Expense ratio: 1.01% for Investor shares.
Assets under management: roughly US$2.06 billion (Investor class)
Number of holdings: about 34 stocks in the portfolio.

It is worth noting that its returns generally lag pure growth-oriented indices (e.g. S&P 500) especially during bull runs, but performance is comparatively smoother given its income focus and ethical screens.

Key Individuals & Governance

Portfolio Managers: Monem Salam (Director; portfolio manager since ~2003), Scott Klimo (Chief Investment Officer since 2012), Bryce Fegley (Quantitative Lead / Portfolio Manager)
Advisory Oversight: Amanie Advisors advise on Sharia compliance.
Governance: Saturna Capital as investment adviser; fund overseen by prospectus rules, regulatory compliance etc.

Strengths & Risks

Strengths:

Ethical / values-based investing: appealing to investors who want alignment with faith or ethical principles.
Income focus and conservative style: prioritises dividend-paying companies; avoidance of debt and interest keeps certain risks lower.
Long track record (since 1986), giving credibility and history.
Low portfolio turnover tends to reduce transaction costs and possibly tax impacts.
Relatively stable performance and less volatile compared to pure growth funds in down markets.

Risks:

Lags growth during momentum and tech-led bull markets due to its value tilt and avoidance of certain sectors.
Relatively high expense ratio (1.01%) compared to many index / passive funds. Fees eat into returns over long horizons.
Ethical screens limit the universe of investable companies; some opportunities excluded, which may reduce upside.
For non-domestic investors, currency risk or tax inefficiencies (dividends, foreign holdings) may apply.
Dividend yield is modest; for those seeking high income, this may not be sufficient.

How It Compares with Benchmarks & Peers

Against the S&P 500 Total Return Index, AMANX underperforms during strong growth cycles. For example, 1-yr returns of ~9-10% vs S&P 500 often higher in bull years.
Compared to broad large-blend or large value funds with less strict screens: performance is competitive but often slightly lower total returns, with lower exposure to high-flying growth.
On sustainability and fossil fuel exposure: The fund has 0% fossil fuel stock holdings per one fossil-free funds analysis, which is rare and can appeal to ESG / sustainability oriented investors.

Where AMANX Fits in a Portfolio

Income-oriented portfolios: As part of an income sleeve, especially where dividend income and ethical constraints matter.
Faith-based / ESG portfolios: For investors seeking Sharia-compliance, lower exposure to interest-bearing investments, and ethical screening.
Moderate growth + stability: When combined with growth-oriented funds or international exposure, AMANX can provide ballast.
Risk‐aware investors: Those who accept moderate returns in exchange for less exposure to speculative sectors or highly leveraged companies.

Narrative / Story Component

Success in investing often has two narratives: what you gain and what you forgo. AMANX is not for chasing the latest tech bubble. It is for those who believe that returns are not the only measure — how returns are earned matters.

Imagine someone in 1986, a devout investor wanting to participate in U.S. markets but unwilling to compromise on religious principles. AMANX was their answer. As markets lurch forward — during the roaring 1990s, the dot-com boom, the crash, the 2008 financial crisis, the bouncing back — AMANX stayed true to its guardrails. In some years it lagged peers; in others, it outperformed in relative stability. In recent years, its income and value orientation has offered refuge during periods of overvaluation of growth, and given meaningful returns over time.

For many investors, this isn’t just a fund. It’s a statement: that investment can be both profitable and principled. That what you're invested in matters — not only how much you make, but how.

Verī Platform & What We Do

At Verī, we believe deeply in bringing transparency, clarity, and alignment to investors. With funds like AMANX, here’s how we help:

Alignment Checking: We help clients see how well a fund like AMANX aligns with their values, ethical constraints, or faith-based criteria (e.g. Sharia compliance).
Performance & Risk Analytics: We show not just returns, but volatility, downside capture, and comparisons in both “good” and “bad” years — including what you give up (opportunity cost) when growth is surging.
Income Modelling: Especially for income-seeking investors, we model expected dividend reflows, after fees, taxes, and in different scenarios.
Portfolio Construction: We find the right weight for AMANX in diversified portfolios depending on risk tolerance, yield requirements, growth expectations.

MPS (Model Portfolio Solution) & AMANX

Within our MPS framework, here’s how AMANX would typically be used:

Income or Conservative Portfolios: A higher allocation, especially where ethical/income objectives dominate.
Balanced Portfolios: AMANX may serve as part of the equity income component, blended with growth and international equity.
Growth Portfolios with Value Tilt: Even growth-seeking clients may benefit from a smaller allocation to AMANX, to smooth performance and add income.
Rebalancing Role: Because of its low turnover and dividend income, it works well as part of ongoing portfolio rebalancing — helping to reduce reliance on capital gains alone.

Conclusion

AMANX — the Amana Income Investor fund — is not the flashiest mutual fund, but it is one of enduring character. It represents a confluence of income, ethical investing, value orientation, and long-term patience. For investors who care not only about how much but how returns are earned; for those wanting exposure to dividend paying U.S. large blend equities under ethical constraints, AMANX is a compelling option.

If you accept that some years you’ll trail the big growth winners, AMANX offers a pathway of principled participation in markets, with income, transparency, and a history behind it.

Disclaimer

This article is provided for informational purposes only. It is not intended as investment advice, financial advice, or a recommendation to buy, sell, or hold any security, fund, or other financial instrument. The information reflects publicly available data and analysis at the time of writing and may change without notice.

Verī Platform does not provide personal investment recommendations. Investors should carefully consider their own objectives, risk tolerance, and financial circumstances before making any investment decisions. Where necessary, seek independent advice from a licensed financial adviser.

Past performance is not indicative of future results. All investments involve risk, including the potential loss of capital.

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