Values-Based Global Asset Managers Contact1-800-728-8762

Following Principles of Islamic Finance

Amana Participation Fund

Overview

Fund Facts

As of June 30, 2016
Net Assets: $16.37 Million
Investor Shares
Ticker Symbol: AMAPX
CUSIP: 022865703
Inception Date: September 28, 2015
Minimum Initial Investment: $5,000
30-Day Yield¹: 2.34%
Institutional Shares
Ticker Symbol: AMIPX
CUSIP: 022865802
Inception Date: September 28, 2015
Minimum Initial Investment: $100,000
30-Day Yield¹: 2.60%

Portfolio Managers

Patrick Drum MBA, CFA, CFP®

Portfolio Manager since 2015

Patrick T. Drum, Research Analyst, and Saturna Sustainable Bond Fund and Amana Participation Fund Portfolio Manager joined Saturna Capital in October 2014. He is an adjunct professor of finance for the Sustainable MBA Program at the Bainbridge Graduate Institute (BGI) at Pinchot. Mr. Drum holds a BA in economics from Western Washington University and an MBA from Seattle University Albers School of Business. He is a Chartered Financial Analyst Charterholder and a Certified Financial Planner®.

Prior to joining Saturna Capital, Mr. Drum led environmental, social, and governance (ESG) research and was director of fixed income portfolio management since 2007 at The Arbor Group, a member of UBS Institutional Consulting Services specializing in investment management for global conservation and national wildlife park endowments as well as sustainable-social screened private client portfolios.

Mr. Drum's past experience also includes business valuation at Moss Adams and portfolio management at Washington Mutual Bank. He lives in Bellingham and is a proud father of two. He enjoys sea kayaking, hiking, and being part of the Pacific Northwest community.

Bryce Fegley CFA, CIPM®

Deputy Portfolio Manager since 2015

Bryce Fegley, CFA, CIPM, Tactician, Investment Analyst & Sextant Global High Income Fund Portfolio Manager, joined Saturna Capital in 2001 and worked in brokerage/trading and later as an investment analyst. Beginning in 2010, he spent two years as President of our Malaysian subsidiary, Saturna Sdn Bhd, directing its research and fund management operations. In 2012 he returned to Saturna Capital headquarters. Prior to joining Saturna, Mr. Fegley worked in brokerage operations in Seattle from 1997-2000. Originally from upstate New York, he studied at the University of Colorado at Boulder earning his BA in English Literature. Mr. Fegley earned a Certificate in Computational Finance and Risk Management from the University of Washington in 2015. His volunteer activities include a board role with the Whatcom Family YMCA. His hobbies include reading and playing piano, traveling with his family, bicycling, and cooking.

Investment Style

Targeted to investors seeking current income and preservation of capital

Invests in short-term and intermediate-term Islamic income-producing securities (sukuk, murabaha, wakala)

Global scope with a minimum of 50% US dollar denominated securities and no more than 10% in any other currency

Actively managed by the award-winning, values-based, global expertise of Saturna Capital

Investment Objective

Capital preservation and current income, consistent with Islamic principles. Capital preservation is its primary objective.

Principal Investment Strategies

Under normal conditions, the Participation Fund invests at least 80% of its assets in short and intermediate-term Islamic income producing investments. The Fund invests primarily in notes and certificates issued for payment by foreign governments, their agencies, and financial institutions in transactions structured to be in accordance with Islamic principles. Examples of these notes and certificates include (a) sukuk, which link the returns and cash flows of financing to the assets purchased, or the returns generated from an asset purchased, (b) murabaha, which involves a purchase and sale contract, and (c) wakala, in which accounts are operated under the Islamic finance principle of wakala (an agency agreement).

These investments typically involve the purchase of financial certificates representing investments in tangible assets, project financing, sale and leaseback arrangements, and similar transactions, and the distribution of profits (as opposed to the payment of interest) related to the underlying asset or project. Unlike an investment in a conventional bond that represents a promise to pay interest, these investments involve the sharing of profits and losses in the assets or projects financed by the Fund's investment in the notes and certificates. In addition, the Fund may invest in time deposits with banks that involve underlying purchase and sale agreements to generate the return on the deposit.

Generally, Islamic principles require that investors participate in profit and loss, that they receive no usury or interest, and that they do not invest in a prohibited business. Some of the businesses not permitted are liquor, wine, casinos, pornography, insurance, gambling, pork processing, and interest-based banks or finance associations.

In accordance with Islamic principles, the Fund shall not purchase conventional bonds, debentures, or other interest-paying obligations of indebtedness. Islamic principles discourage speculation, and the Fund tends to hold investments for several years. Under normal circumstances the Fund maintains a dollar-weighted average maturity of two to five years.

The Participation Fund restricts its investments so that at least 50% are denominated in US dollars, with no more than 10% in any other currency.

Under normal conditions, the Fund invests at least 65% of its assets in securities rated within the four highest grades (Aaa, Aa, A, Baa) by a nationally-recognized rating agency and may invest up to 35% in unrated and high-yield notes and certificates, which may be considered equivalent to "junk bonds."

Principal Risks of Investing

Market risk: The value of Participation Fund shares rises and falls as the value of the securities in which the Fund invests goes up and down. Consider investing in the Fund only if you are willing to accept the risk that you may lose money. Fund share prices, yields, and total returns will change with the fluctuations in the securities and currency markets as well as the fortunes of the countries, industries, and companies in which the Fund invests.

Diversification and concentration risks: The Fund is non-diversified and may invest a larger percentage of its assets in fewer issuers, which may cause the Fund to experience more volatility than diversified funds. In addition, the Fund may concentrate its investments within the financial services industry and real estate sector.

Strategy risk: The Fund's restricted ability to invest in certain market sectors, such as non-Islamic financial companies and conventional fixed-income securities, limits opportunities and may adversely affect the Fund's performance. Because Islamic principles preclude the use of interest-paying instruments, cash reserves do not earn income.

Liquidity risk: Liquidity risk exists when particular investments are difficult to sell. Investments by the Fund in foreign securities and those that are thinly traded, such as lower quality issuers, tend to involve greater liquidity risk. The market for certain investments may become illiquid under adverse market or economic conditions.

Foreign investing risk: The Participation Fund involves risks not typically associated with investing in US securities. Investments in the securities of foreign issuers may involve risks in addition to those normally associated with investments in the securities of US issuers. All foreign investments are subject to risks of: (1) foreign political and economic instability; (2) adverse movements in foreign exchange rates; (3) currency devaluation; (4) the imposition or tightening of exchange controls or other limitations on repatriation of foreign capital; (5) changes in foreign governmental attitudes towards private investment, including potential nationalization, increased taxation, or confiscation of assets, and (6) differing reporting, accounting, and auditing standards of foreign countries. The risks of foreign investing are generally magnified in the smaller and more volatile securities markets of the Participation Fund.

Sukuk risk: Sukuk are specifically structured to adhere to Islamic investment principles, but also must be engineered to be economically feasible in order to attract investment. Sukuk structures may be significantly more complicated than conventional bonds and often include a series of entities created specifically to support the sukuk structure. In addition, sukuk are largely created in or otherwise subject to the risks of developing economies, many of which have weak or inconsistent accounting, legal, and financial infrastructure. The structural complexity of sukuk, along with the weak infrastructure of the sukuk market, increases risks of investing in sukuk, including operational, legal, and investment risks. In addition, adherence to Islamic investment principles increases the risk of loss in the event of a default. As compared to rights of conventional bondholders, holders of sukuk may have limited ability to pursue legal recourse to enforce the terms of the sukuk or to restructure the sukuk in order to seek recovery of principal. Sukuk are also subject to the risk that some Islamic scholars may deem certain sukuk as not meeting Islamic investment principles subsequent to the sukuk being issued and therefore classify the investments as noncompliant with Islamic principles.

Interest rate risk: Changes in interest rates developments in the capital markets impact prices of fixed-income investments. When interest rates rise, the value of fixed-income investments (paying a lower rate of interest) generally will fall. Investments with shorter terms may have less interest rate risk, but generally have lower returns and, because of the more frequent maturity dates, may involve higher re-investment costs.

Credit risk: Corporate and sovereign issuers of the notes and certificates in which the Fund invests may not be able or willing to make payments when due, which may lead to default or restructuring of the investment. In addition, if the market perceives deterioration in the creditworthiness of an issuer, the value and liquidity of the issuer's securities may decline.

High-yield risk: Securities that are rated below investment grade may have greater price fluctuations and have a higher risk of default than investment grade securities. Below investment grade securities may be difficult to sell at an acceptable price, especially during periods of increased market volatility or significant market decline.

Performance

Daily Price and Stats

Scroll right to see more.   >   >

As of July 26, 2016 Ticker Price Change YTD 30-Day Yield¹ Dividend
June 30, 2016
Amana Participation Investor Shares AMAPX $10.13 $-0.01 2.96% 2.22% $0.02133 INC
Amana Participation Institutional Shares AMIPX $10.17 $0.00 3.14% 2.49% $0.02089 INC

Scroll right to see more.   >   >

Average Annual Total Returns

Scroll right to see more.   >   >

Month-end, as of June 30, 2016 Ticker 1 Year 3 Year 5 Year 10 Year Expense
Ratio²
30-Day
Yield¹
Amana Participation Investor Shares AMAPX n/a n/a n/a n/a 1.10% 2.34%
Amana Participation Institutional Shares AMIPX n/a n/a n/a n/a 0.85% 2.60%
Citi Sukuk Index 4.28% 4.82% 4.45% 4.55% n/a n/a
Quarter-end, as of June 30, 2016 Ticker 1 Year 3 Year 5 Year 10 Year Expense
Ratio²
30-Day
Yield¹
Amana Participation Investor Shares AMAPX n/a n/a n/a n/a 1.10% 2.34%
Amana Participation Institutional Shares AMIPX n/a n/a n/a n/a 0.85% 2.60%
Citi Sukuk Index 4.28% 4.82% 4.45% 4.55% n/a n/a

The Amana Participation Fund began operations on September 28, 2015 and consequently has no historical standardized returns to report.

Scroll right to see more.   >   >

Growth of $10,000

Growth of $10,000Growth of $10,000

This chart illustrates the performance of a hypothetical $10,000 invested at the beginning of the period and redeemed at the end of the period, and assumes reinvestment of all dividends and capital gains.

Annual Total Returns

As of June 30, 2016

Annual Total ReturnsAnnual Total Returns

The Citi Sukuk Index measures the performance of global Islamic fixed income securities, also known as sukuk.

Holdings

As of June, 2015

Top Ten Holdings

Majid Al Futtaim 8.0%
Dubai Islamic Bank 7.6%
Sharjah 6.4%
Perusahaan Penerbit SBSN 6.4%
Saudi Electric Global 6.3%
Dubai DOF 6.3%
Qatar Islamic Bank 6.1%
RAK Capital 6.1%
TF Varlik Kiralama 4.8%
Emirates Madina Group 4.8%
Total 62.8%

View full month-end portfolio schedule. This link will open a new browser window.

Sector Allocation

Foreign Government 36.3% color box key Amana Participation Fund Sector Allocation
Financials¹ 35.8% color box key
Consumer Discretionary 8.0% color box key
Utilities 6.3% color box key
Energy 4.6% color box key
Industrials 3.2% color box key
Consumer Staples 3.0% color box key
Cash and equivalents 2.7% color box key

¹ Financials includes investment certificates (sukuk) issued by Islamic participation banks.

Security and sector weightings are shown as a percentage of total net assets.

Distributions

Scroll right to see more.   >   >

Record Date Ex, Pay and
Reinvest Date
Ordinary
Income
Qualified
Income
Short-Term
Capital Gains
Long-Term
Capital Gains
Total Distributions
(per share)
Investor Shares (AMAPX)
06/29/2016 06/30/2016 $0.02133 $0.00 $0.00 $0.00 $0.02133
05/27/2016 05/31/2016 $0.01923 $0.00 $0.00 $0.00 $0.01923
04/28/2016 04/29/2016 $0.02184 $0.00 $0.00 $0.00 $0.02184
03/30/2016 03/31/2016 $0.02044 $0.00 $0.00 $0.00 $0.02044
02/26/2016 02/29/2016 $0.00752 $0.00 $0.00 $0.00 $0.00752
01/28/2016 01/29/2016 $0.00187 $0.00 $0.00 $0.00 $0.00187
Institutional Shares (AMIPX)
06/29/2016 06/30/2016 $0.02089 $0.00 $0.00 $0.00 $0.02089
05/27/2016 05/31/2016 $0.01772 $0.00 $0.00 $0.00 $0.01772
04/28/2016 04/29/2016 $0.01689 $0.00 $0.00 $0.00 $0.01689
03/30/2016 03/31/2016 $0.01645 $0.00 $0.00 $0.00 $0.01645
02/26/2016 02/29/2016 $0.00705 $0.00 $0.00 $0.00 $0.00705
01/28/2016 01/29/2016 $0.00155 $0.00 $0.00 $0.00 $0.00155

Scroll right to see more.   >   >

The Amana Participation Fund intends to declare dividends daily and pay income distributions monthly. Distributions from net capital gains, if any, are paid at the end of December and May.

Dividends paid by the Fund with respect to each class of shares are calculated in the same manner and at the same time.

Both dividends and capital gain distributions are paid in additional full and fractional shares of the share class owned. At your option, you may receive dividends and/or capital gain distributions in cash. You are notified of each dividend and capital gain distribution when paid. Returned dividend payments will be automatically reinvested into your account and invested in additional shares of the Fund; future dividends in such accounts will continue to be reinvested until the shareowner is located or the account is closed.

Distributions for the last two years are listed in the table above. For prior distributions, please contact a Saturna representative.

Regulations regarding distributions can be complex, and there are several methods for managing your tax liability. Please consult a tax advisor about your particular circumstances. You also may obtain helpful information by calling the Internal Revenue Service at 1-800-829-1040 or visiting www.irs.gov.

If applicable, distribution information will appear on Form 1099-DIV, typically sent in late January. For more information on tax documentation, please visit our Tax Documentation page.

The Fund pays per-share distributions to shareowners invested on the Record Date. On the Payable Date, the fund's share price is reduced by the amount of its distribution.

Fees and Expenses

The following tables describe the fees and expenses mutual fund shareowners may pay. There are no shareowner fees (fees paid directly from an investment). The Fund imposes no sales charge (load) on purchases or reinvested dividends, or any deferred sales charge (load) upon redemption. There are no exchange fees or account fees. Investments in mutual funds are subject to ongoing expenses. Saturna endeavors to keep these fees low. We encourage you to compare the following fees with similar fees of other no-load mutual funds:

Shareowner Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price): 0%
Maximum Deferred Sales Charge (Load): 0%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends/Distributions: 0%
Redemption fee (as a percentage on shares held less than 182 calendar days): 2%
Exchange Fee (between Saturna's affiliated funds): 0%
Maximum Account Fee: 0%
Annual Fund Operating Expenses (expenses deducted from Fund Assets)²
Amana Participation Fund Investor Shares (AMAPX) Institutional Shares (AMIPX)
Management Fees 0.50% 0.50%
Distribution (12b-1) Fees 0.25% None
Other Expenses 0.35% 0.35%
Total Annual Fund Operating Expenses 1.10% 0.85%

Literature

Amana Participation Fund
Fact Sheet This link will download a PDF. PDF
Application This link will download a PDF. PDF
Summary Prospectus This link will download a PDF. PDF
Prospectus This link will download a PDF. PDF
Annual Report This link will download a PDF. PDF
Semi-Annual Report This link will download a PDF. PDF
SAI This link will download a PDF. PDF
Learn more about the Amana Particiaption Fund

Download the Amana Participation Fund Brochure This link will download a PDF to learn more about the Fund including:

  • Strategies and Risks
  • What are sukuk?
  • What makes sukuk halal?
  • The Fund's potential role in a your portfolio

¹ A Fund's 30-Day Yield, sometimes referred to as "standardized yield" or "SEC yield,” is expressed as an annual percentage rate using a method of calculation adopted by the Securities and Exchange Commission (SEC). The 30-Day Yield provides an estimate of a Fund's investment income rate, but may not equal the actual income distribution rate.

² Expense ratios shown are as stated in the Fund's most recent prospectus or summary prospectus dated September 28, 2015.

Performance data quoted represents past performance which is no guarantee of future results. 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. Current performance may be higher or lower than performance data quoted. Standardized returns current to the most recent month-end can be obtained by visiting our Month-End Returns Page or by calling toll free 1-800-728-8762. The Fund cannot guarantee that its investment objective will be met. Securities of the Fund are offered and sold only through the prospectus or summary prospectus.

Check out the background of Saturna Brokerage Services, Inc. or any firm or investment professional on FINRA's BrokerCheck.