5.9 in Large Blend
U.S. News evaluated 544 Large Blend Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
| Scorecard | |
|---|---|
| Morningstar | 4 / 5 Stars |
| Lipper | 4 3 5 2 5 |
| Zacks Investment Research | 4 (Sell) |
| Standard & Poor's | 3 / 5 Stars |
| TheStreet.com | D+ (Sell) |
Fund Overview
Amana Trust Income's focus may be narrow, but its appeal is broad.
As of April 04, 2012, the fund has assets totaling almost $1.40 billion invested in 66 different holdings. Its portfolio consists of domestic and international stocks.
Amana Trust Income is a socially responsible large-cap value fund that invests according to Islamic principles. As a result, it avoids investing in companies that derive more than 5 percent of their revenue from the liquor, pornography, gambling, and banking industries. In 2008, these restrictions came in handy. By staying away from financial stocks, the fund emerged comparatively unscathed when the sector imploded. During the downturn, the fund also benefitted strongly from its avoidance of highly leveraged companies. In 2008 though, the fund stalled a bit as the risky picks it tends to pass over came roaring back. But even with a slow 2009, as of the end of the first quarter, the fund's trailing 10-year returns landed it in the top 1 percent of Morningstar's large value category. In other words, while Amana Trust Income was designed for a niche set of customers, its record suggests that Islamic investors aren't the only ones who should consider owning it. The fund has returned 3.57 percent over the past year and 17.44 percent over the past three years.
The fund's basic philosophy is simple: "Be sure you know your business, and invest for the long term," says co-manager Nicholas Kaiser. Over time, this has translated into a strong buy-and-hold discipline. Notably, the fund's turnover ratio (a measure of how much trading management does) is just 5 percent. This long-term approach corresponds with the fund's distaste for risk-taking and speculation, and management's patience has rewarded investors handsomely. Through the years, the fund has also distinguished itself through its preference for cyclical sectors. "These companies tend to work with low debt levels and have to constrain their borrowings because their earnings history doesn't allow them to be prolific [borrowers]," says Kaiser. These low-debt companies tend to hold up better than the competition in rough times. The fund has returned 4.79 percent over the past five years and 8.57 percent over the past decade.
| Trailing Returns | Updated 03.31.2012 |
|---|---|
| Year to date | 6.2% |
| 1 Year | 3.6% |
| 3 Years (Annualized) | 17.4% |
| 5 Years (Annualized) | 4.8% |
| 10 Years (Annualized) | 8.6% |
Investment Strategy
The fund screens out companies in the liquor, pornography, gambling, and banking industries. It also avoids companies that take on a lot of debt. The fund gravitates toward established, dividend-paying names with clear business models and attractive prices. Conversely, it stays away from speculative picks (such as IPOs). Management has a strong buy-and-hold discipline, as evidenced by the fund's rock-bottom turnover ratio.
Role in Portfolio
Morningstar calls this fund a "core" holding.
Management
The fund is advised by Saturna Capital. Nicholas Kaiser has managed the fund since its inception. Monem Salam has been a co-manager since 2008.
Performance
The fund has returned 3.57 percent over the past year, 17.44 percent over the past three years, 4.79 percent over the past five years, and 8.57 percent over the past decade.
Hypothetical Growth of $10,000
Updated 03.31.2012
Holdings
The fund invests in stocks of companies, both foreign and domestic, that pass its various screens.
Asset Allocation
| % Long | % Net | |
|---|---|---|
| Cash | 12.88 | 12.88 |
| Stocks | 68.6 | 68.6 |
| Bonds | 0.0 | 0.0 |
| Other | 0.0 | 0.0 |
| Foreign Bonds | 0.38 | 0.38 |
| Foreign Stocks | 18.14 | 18.14 |
| Convertible | 0.0 | 0.0 |
| Preferred | 0.0 | 0.0 |
Updated 02.29.2012
Top Holdings
Performance as of 03.31.2012
Portfolio as of 02.29.2012
| Ticker | YTD Return % | % Net Assets | |
|---|---|---|---|
| Nike, Inc. B | NKE | 13.5 | 2.42 |
| Intel Corp | INTC | 17.9 | 2.33 |
| Microsoft Corporation | MSFT | 25.15 | 2.3 |
| W.W. Grainger, Inc. | GWW | 16.91 | 2.26 |
| Exxon Mobil Corporation | XOM | 3.28 | 2.19 |
Fees
Amana Mutual Funds Trust Income Fund has an expense ratio of 1.20 percent.
Risk
Like all stock funds, this one comes with some risks. One of the more notable ones is the chance that the fund's restrictions could cause it to lag when there is a rally in any of the sectors of the market in which it is not allowed to invest.
