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Home > Financial Services > Mutual Funds > Amana
Amana
The Amana Funds invest according to Islamic principles. Generally, these principles require that investors avoid interest and investments in businesses such as liquor, pornography, gambling, and banks. The Funds avoid bonds and other fixed-income securities. The Funds seek protection against inflation by making long-term equity investments.
The primary objective of the Growth Fund is long-term capital growth. It favors companies expected to grow earnings and stock prices faster than the economy. Growth investing offers greater opportunity for long-term gain, with a related increase in price volatility.
There are two types of fund which are Amana Income Fund and Amana Growth Fund. In Amana Income Fund, the objectives are current income and preservation of capital, consistent with Islamic principles; current income is its primary objective. In Amana Growth Fund, the primary objective is long-term capital growth, consistent with Islamic principles.
Amana Mutual Funds Trust is designed to provide investment alternatives that are consistent with Islamic principles. Generally, Islamic principles require that investors share in profit and loss, that they receive no usury or interest, and that they do not invest in a business that is not permitted by Islamic principles. The Funds do not make any investments that pay interest. In accordance with Islamic principles, the Funds shall not purchase bonds, debentures, or other interest paying obligations of indebtedness.
Investing in securities entails both market risks and risk of price variation in individual securities. Common stock investments involve greater risk, and commensurably greater opportunity for reward, than some other investments, such as investments in short-term bonds and money market instruments. Islamic principles restrict the Funds’ ability to invest in certain stocks and market sectors, such as financial companies and fixed-income securities. This may limit opportunities and in-crease the risk of loss during market declines.
By diversifying its investments, each Fund reduces the risk of owning a few securities. The Growth Fund typically invests in smaller and less seasoned companies than the Income Fund, which may lead to greater variability in Growth Fund’s returns. The Growth Fund is suitable for investors seeking higher returns and willing to accept greater fluctuations in value (risk) than Income Fund investors.
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