Amana Semi-Annual Report, November 1999

EX-19 2 0002.htm AMANA ANNUAL REPORT Amana Semi-Annual Report, November 1999

INCOME FUND • GROWTH FUND			ANNUAL
May 31, 2000			REPORT

GRAPHIC OMITTED

It's been another good year for stock market investors. Amana Trust's assets are over $45 million, up 34% for the year. Our 4,729 active shareowner accounts are spread to 45 states and 29 foreign countries. Inside, please find the details of our fiscal year's operations and the year-end portfolios.

For the fiscal year ended May 31, Amana's Growth Fund total return was 47.1% - a great performance. The Income Fund, which involves less risk and is more affected by rising interest rates, appreciated 3.0%.

The strong markets of the last several years have pushed prices in some market sectors to rich levels by most historical standards. Our expectation is that near-term returns for the Growth Fund are unlikely to be as good, as earnings growth weakens. Income Fund's appreciation potential is now stronger, as interest rates get closer to a cyclical peak.

We continue to focus the Funds' investments in value-based businesses, which have become more attractive to investors recently.

Your board is proud to note Amana Income Fund's 14 years of successful operation. One of the lessons of the marketplace is that experience matters. Demonstrated capability to provide successful management and quality service in good times and bad is highly important in the volatile financial markets.

During the course of this year, transaction volume has increased with more investors taking advantage of our true "no-load" structure. Our free Automatic Investment Plan and free retirement plans are increasingly utilized. More shareowners are investing with Amana to save for Hajj, retirement, and education. As always, we appreciate your continued support. If you have any questions or suggestions, please call us at 1-800/SATURNA.

GRAPHIC OMITTED

	Respectfully,
	Nicholas Kaiser, President	M. Yaqub Mirza, Chairman

June 17, 2000

Average Annual Returns (as of 3/31/2000, per regulatory requirement)

1 year

3 years

5 years

10 years

Amana Income Fund 102.46% 43.47%
31.92%

24.81%

Amana Growth Fund 12.95% 15.01%
15.80%

11.25%

*since inception, 2/3/94

DISCUSSION OF FUND PERFORMANCE

Stocks continue their upward trend. The good returns for the four previous fiscal years continued for the year ended May 31, 2000. Amana Growth Fund's total return was 47.1%, and Amana Income Fund's total return was 3.0%. As one benchmark, the new Dow Jones Islamic Index (US component, consisting of 241 large-cap equities) showed a gain of 10.1% (dividends excluded) for the fiscal year. As usual, market results varied by sector. The big technology companies did the best, as evidenced by the twelve-month (ending May 31, 2000) total return for the NASDAQ Composite (+58.3%). The more general S&P 500 Index appreciated +11.1% while the "old economy" Dow Jones Industrials were essentially unchanged (+0.8%). Since these unmanaged, expense-free indices are not directly comparable to an actively managed portfolio that has transaction and other costs (including advisory fees), it is useful to consider the performance of other mutual funds. Comparable Morningstar mutual fund investment objective averages are Growth funds (+21.4%) and Equity-Income funds (+0.3%). When evaluating the performance of the Amana Funds, it is important to remember their specialized nature, as well as a number of factors applicable to mutual funds in general. Amana Income Fund's primary objective is current income, with preservation of capital being the secondary objective. In following these objectives, the Income Fund buys income-producing equity securities. Amana Growth Fund's primary objective is long-term capital growth. The Funds may also hold cash when market conditions appear uncertain. It is not the objective of either Fund to "beat" any specific market index. All mutual funds have investment restrictions that affect investment performance. In addition to these other restrictions, Amana's Funds are restricted to buying only U.S.-traded equity securities of companies whose primary business operations are generally consistent with Islamic principles. This special restriction affects performance in a number of ways. The Funds, for example, do not earn interest on cash balances. Neither do the Funds invest in businesses that have substantial earnings from interest, such as banks. COMPARISON TO MARKET INDICES The following line graphs compare Fund performances to representative market indices. The index returns include reinvested dividends and don't allow for operating expenses such as those paid by all mutual funds. The first graph shows that $10,000 invested in Amana Income ten years ago (May 1990) would have grown to $27,554 at the end of May 2000. While not strictly comparable, the S&P 500 Composite Index is a traditional U.S. securities market benchmark. If $10,000 could have been invested in the S&P 500 at the end of May 1990, that would have grown to $47,719 over the same 10 years.

GRAPHIC OMITTED

This graph shows that $10,000 invested in Amana Growth at inception (Feb. 1994) would have grown to $30,633 at the end of May 2000. If $10,000 could have been invested in the Russell 2000 (an index of mid- and smaller-cap equities) at the beginning of February 1994, that would have grown to $19,465 over that same period.

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees Amana Mutual Funds Trust We have audited the accompanying statement of assets and liabilities of the Amana Income Fund and the Amana Growth Fund, each a series of shares of the Amana Mutual Funds Trust, including the schedules of investments as of May 31, 2000, and the related statements of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights presented for the year ended May 31, 1996 were audited by other auditors whose report dated June 20, 1996, expressed an unqualified opinion on those statements. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 2000, by correspondence with the custodian. Our audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Amana Income Fund and Amana Growth Fund as of May 31, 2000, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and their financial highlights for each of the four years in the period then ended, in conformity with generally accepted accounting principles. TAIT, WELLER & BAKER Philadelphia, Pennsylvania June 23, 2000

I N C O M E INVESTMENTS
GRAPHIC OMITTED

Issue

Number of Shares

Cost

Market Value

COMMON STOCKS (95.8%)

Automotive (1.2%)

Genuine Parts
11,000 $355,744 $264,000

Building (1.2%)

Plum Creek Timber
10,000 271,509 263,125

Business Services (.9%)

Dun & Bradstreet
6,500 112,923 199,875

Chemicals (1.1%)

RPM
25,390 182,267 247,553

Machinery (2.6%)

Manitowoc
17,250 95,638 563,859

Medical (12%)

American Home Products
15,200 193,026 818,900

Bristol-Myers Squibb
18,560 206,069 1,021,960

Glaxo Wellcome plc ADS
10,000 260,426 563,125

IMS Health
13,000 148,605 214,500

SUB-TOTAL
808,126 2,618,485

Metals (3.4%)

Phelps Dodge
4,200 147,435 188,475

Rio Tinto plc ADS
9,000 521,085 552,937

SUB-TOTAL
668,520 741,412

Oil & Gas Production (19.3%)

BP Amoco PLC ADS
25,662 1,002,926 1,395,371

Enron
10,000 201,429 728,750

Exxon Mobil
19,241 702,384 1,603,016

Fletcher Challenge Energy ADR
20,000 493,562 530,000

SUB-TOTAL
2,400,301 4,257,137

Publishing (.7%)

McGraw-Hill
3,000 172,917 154,313

Real Estate (4%)

Duke Weeks Realty
20,000 434,493 431,250

Shurgard Storage Centers
20,000 526,956 458,750

SUB-TOTAL
961,449 890,000

INVESTMENTS I N C O M E

Issue
Number of Shares

Cost

Market Value

GRAPHIC OMITTED

Steel (2.1%)

USX-U.S. Steel Group
20,000 $489,611 $451,250

Telecommunications (27.8%)

BCE
19,600 324,207 450,800

Cable & Wireless plc ADS
16,000 310,930 794,000

GTE
10,000 410,441 632,500

Nortel Networks
30,779 1,806,857 1,662,066

SBC Communications
20,480 375,305 894,720

Tele Danmark A/S ADS
10,000 261,452 351,875

Telefonica SA ADS*
21,877 189,073 1,331,762

SUB-TOTAL
3,678,265 6,117,723

Tools (1.5%)

Regal-Beloit
20,000 357,762 335,000

Transportation (2.8%)

Canadian Pacific Ltd.
26,000 611,349 627,250

Utilities (15.2%)

Duke Energy
5,000 296,509 291,250

Edison International
13,000 287,969 277,875

FPL Group
10,000 344,875 495,000

Idacorp
10,000 320,332 350,625

NiSource
24,000 469,159 433,500

PG & E Corporation
20,000 458,942 517,500

Piedmont Natural Gas
11,400 198,575 339,150

Puget Sound Energy
10,000 285,991 230,625

Sempra Energy
22,300 501,563 419,519

SUB-TOTAL
3,163,915 3,355,044

TOTAL INVESTMENTS (95.8%) $14,330,296 21,086,026

Other Assets (net of liabilities) (4.2%)
918,255

TOTAL NET ASSETS (100%) $22,004,281

*Non-income producing security

I N C O M E
FINANCIAL
HIGHLIGHTS

Selected data per share of outstanding capital stock throughout each period. GRAPHIC OMITTED

For Year Ended May 31

2000 1999 1998 1997 1996

Net asset value at beginning of year $20.30 $19.76 $16.61 $13.93 $12.92

Income from investment operations

Net investment income
1.88 0.25 0.26 0.38 0.42

Net gains or losses on securities
(both realized and unrealized) (1.28) 1.02 3.58 2.86 1.76

Total from investment operations (0.60) 1.27 3.84 3.24 2.18

Less distributions

Dividends (from net investment income)
(1.88) (0.29) (0.22) (0.42) (0.41)

Distributions (from capital gains)
(0.63) (0.44) (0.47) (0.14) (0.76)

Total distributions
(2.51) (0.73) (0.69) (0.56) (1.17)

Net asset value at end of year $18.39 $20.30 $19.76 $16.61 $13.93

Total return 2.96% 6.56% 23.51% 23.62% 17.03%

Ratios / Supplemental Data

Net assets ($000), end of year $22,004 $22,734 $19,886 $16,332 $12,464

Ratio of gross expenses to average net assets 1.55% 1.33% 1.36% 1.44% 1.57%

Ratio of net investment income to average net assets 9.25% 1.30% 1.43% 2.51% 3.06%

Portfolio turnover rate 1% 17% 8% 14% 24%

GRAPH OMITTED

(The accompanying notes are an integral part of these financial statements)

STATEMENT OF ASSETS AND LIABILITIES			I N C O M E
As of May 31, 2000				GRAPHIC OMITTED
*Assets*
Common stocks (cost $14,330,296)		$21,086,026
Cash		904,316
Dividends receivable		51,378
Insurance reserve premium		7,763
	Total Assets		$22,049,483
*Liabilities*
Payable to affiliate		32,165
Redemption payable		13,037
	Total liabilities		45,202
*Net Assets*			$22,004,281
Fund shares outstanding			1,196,346
*Analysis of Net Assets*
Paid in capital (unlimited shares authorized, without par value)		$15,302,411
Accumulated net realized loss		(53,860)
Unrealized net appreciation on investments		6,755,730
	Net assets applicable to fund shares outstanding		$22,004,281

*Net Asset Value, Offering and Redemption price per share*			$18.39

(The accompanying notes are an integral part of these financial statements)

I N C O M E STATEMENT OF OPERATIONS

Year Ended May 31, 2000 GRAPHIC OMITTED

Investment income

Dividends (net of foreign taxes of $15,982)

$2,408,935

Miscellaneous income

259

Gross investment income

$2,409,194

Expenses

Investment adviser and administration fees 212,866

Shareowner servicing 60,499

Professional fees 32,996

Filing and registration fees 12,500

Other expenses 14,500

Printing and postage 9,550

Custodian fees 2,481

Total gross expenses 345,392

Less custodian fees waived

(2,481)

Net expenses
342,911

Net investment income

2,066,283

Net realized gain on investments

Proceeds from sales 2,034,134

Less cost of securities sold

(based on identified cost)

1,527,451

Realized net gain

506,683

Unrealized gain on investments

End of period
6,755,730

Beginning of period 8,642,803

Decrease in unrealized gain for the period

(1,887,073)

Net realized and unrealized loss on investments

(1,380,390)

Net increase in net assets resulting from operations
$685,893

(The accompanying notes are an integral part of these financial statements)

STATEMENT OF CHANGES IN NET ASSETS I N C O M E
Year ended Year ended

INCREASE IN NET ASSETS
May 31, 2000 May 31, 1999

From Operations

Net investment income $2,066,283 $277,914

Net realized gain on investments 506,683 696,066

Net increase (decrease) in unrealized appreciation
(1,877,073) 537,109

Net increase in net assets
685,893 1,511,089

Dividends to Shareowners From

Net investment income (2,060,804) (325,348)

Capital gains distributions
(685,002) (484,450)

(2,745,806) (809,798)

From Fund Share Transactions

Proceeds from sales of shares 4,626,950 6,347,245

Value of shares issued in reinvestment of dividends
2,688,511 795,322

7,315,461 7,142,567

Cost of shares redeemed
(5,985,001) (4,996,336)

Net increase in net assets from share transactions
1,330,460 2,146,231

Total increase (decrease) in net assets (729,453) 2,847,522

Net Assets

Beginning of year 22,733,734 19,886,212

End of year $22,004,281 $22,733,734

Shares of the Fund Sold and Redeemed

Number of shares sold 249,786 325,475

Number of shares issued in reinvestment of dividends 141,869 40,174

391,655 365,649

Number of shares redeemed (315,247) (252,381)

Net increase in number of shares outstanding 76,408 113,268

(The accompanying notes are an integral part of these financial statements)

G R O W T H
INVESTMENTS

GRAPHIC OMITTED
Issue
Number of Shares

Cost

Market Value

COMMON STOCKS (90.8%)

Appliances (1.4%)

Maytag
10,000 $357,822 $328.125

Auto Parts (.7%)

Genuine Parts
5,000 159,450 120,000

Supreme Industries*
6,945 64,632 35,159

SUB-TOTAL
224,082 155,159

Building (1.3%)

Building Materials Holding*
10,000 102,771 93,125

Champion Enterprises*
20,000 235,068 113,750

Huttig Building Products*
20,000 88,355 93,750

SUB-TOTAL
426,194 300,625

Business Services (3.7%)

Convergys*
10,000 185,962 449,375

Gartner Group Cl B*
10,000 119,331 110,000

Hutchison Whampoa ADR
5,500 294,743 308,000

SUB-TOTAL
600,036 867,375

Computer Hardware (9.9%)

Advanced Digital Information*
24,000 33,778 306,000

Apple Computer*
2,000 200,775 168,000

Compaq Computer
4,500 63,129 118,125

Hewlett-Packard
3,000 233,143 360,375

Intel
4,000 265,043 498,500

International Business Machines
4,000 265,793 429,250

Symbol Technologies
10,125 97,435 446,133

SUB-TOTAL
1,159,096 2,326,383

Computer Software (18.5%)

America Online*
8,000 87,618 424,000

Adobe Systems
8,400 167,688 945,525

Business Objects ADS*
12,000 104,592 960,000

Intuit*
15,000 305,029 543,750

Microsoft*
5,000 219,370 312,812

Oracle *
15,600 116,668 1,121,250

SUB-TOTAL
1,000.965 4,307,337

Electronics (12.3%)

Cisco Systems*
18,000 194,369 1,026,000

Qualcomm*
28,000 121,548 1,858,500

SUB-TOTAL
315,917 2,884,500

INVESTMENTS G R O W T H
Issue
Number of Shares

Cost

Market Value
GRAPHIC OMITTED

Food Production (.7%)

Potash Corp of Saskatchewan
2,700 $184,568 $156,262

Machinery (1.4%)

Crane
7,000 143,636 184,625

Manitowoc
4,500 104,324 147,094

SUB-TOTAL
247,960 331,719

Medical Services (1.1%)

IMS Health
4,000 118,696 66,000

Thermo Cardiosystems*
20,000 250,512 196,250

SUB-TOTAL
369,208 262,250

Metals (2.1%)

Alcoa
3,000 215,736 175,312

Rio Tinto plc ADS
5,000 280,819 307,188

SUB-TOTAL
496,555 482,500

Oil & Gas (5.9%)

BP Amoco plc ADS
7,544 298,395 410,205

Noble Drilling*
6,000 124,826 260,250

Repsol-YPF SA ADS
10,000 206,465 210,625

Williams Companies
12,000 358,981 498,750

SUB-TOTAL
988,667 1,379,830

Paper & Publishing (3.2%)

Fletcher Challenge Paper ADR
25,000 171,985 273,438

IDG Books Worldwide*
10,000 127,471 90,000

McGraw-Hill
4,000 89,379 205,750

Wiley (John) & Sons, Cl A
10,000 150,265 178,125

SUB-TOTAL
539,100 747,313

Pharmaceuticals (13.1%)

Affymetrix*
3,000 104,150 356,250

American Home Products
5,360 248,080 288,770

Bone Care International*
10,000 116,370 196,875

Cryolife*
7,500 145,226 128,906

Genentech*
4,000 263,192 429,500

Glaxo Wellcome plc ADS
2,500 55,379 140,781

Immunex Corp*
24,000 172,289 621,000

Johnson & Johnson
4,000 249,078 358,000

Ligand Pharmaceuticals*
6,000 90,709 64,125

Lilly (Eli)
2,000 127,124 152,250

Novo-Nordisk A/S ADS
4,000 243,206 328,750

SUB-TOTAL
1,814,803 3,065,207

G R O W T H INVESTMENTS
GRAPHIC OMITTED
Issue
Number of Shares

Cost

Market Value

Photographic Supplies (.9 %)

Fuji Photo Film ADR
6,000 $205,568 $216,000

Real Estate (1.1%)

Intrawest
14,000 236,476 256,375

Retail (3.3%)

Gap
11,812 111,606 414,158

Whole Foods Market*
10,000 323,084 347,500

SUB-TOTAL
434,690 761,658

Steel (1%)

AK Steel Holding
25,000 333,788 242,188

Tools (.4%)

Regal-Beloit
6,000 107,448 100,500

Telecommunications (3.6%)

Leap Wireless International*
5,000 26,449 220,000

SBC Communications
10,000 478,342 436,875

Telefonica S.A. ADS*
3,182 41,081 193,704

SUB-TOTAL
545,872 850,579

Transportation (4.5%)

Airborne Freight
10,000 285,707 201,875

Alaska Air Group*
10,000 322,470 311,250

Lan Chile ADS
20,000 200,510 158,750

Southwest Airlines
16,875 132,585 323,789

Trinity Industries
3,000 117,089 66,188

SUB-TOTAL
1,058,361 1,061,852

Utilities (.7%)

Avista
7,000 226,676 156,625

TOTAL INVESTMENTS (90.8%) $11,873,852 21,240,362

Other Assets (net of liabilities) (9.2%) 2,152,646

TOTAL ASSETS (100%) $23,393,008

*Non-Income producing security

FINANCIAL HIGHLIGHTS				G R O W T H
Selected data per share of outstanding capital stock throughout each year.
			Year Ended May 31
	2000	1999	1998	1997	1996
Net asset value at beginning of year	$9.95	$7.78	$7.07	$6.86	$5.04
Income from investment operations
Net investment income	(0.10)	(0.06)	(0.03)	(0.02)	(0.05)
Net gains or losses on securities (both realized and unrealized)	4.82	2.23	0.90	0.32	1.95
Total from investment operations	4.72	2.17	0.87	0.30	1.90
Less distributions
Dividends (from net investment income)	0.00	0.00	0.00	0.00	0.00
Distributions (from capital gains)	(0.22)	0.00	(0.16)	(0.09)	(0.08)
Total distributions	(0.22)	0.00	(0.16)	(0.09)	(0.08)
Net asset value at end of year	$14.45	$9.95	$7.78	$7.07	$6.86
Total return	47.09%	27.89%	12.39%	4.46%	37.20%

Ratios / Supplemental Data
Net assets ($000), end of year	$23,393	$11,721	$10,080	$5,924	$4,151
Ratio of gross espenses to average. net assets	1.45%	1.53%	1.54%	1.69%	1.94%
Ratio of net investment income to average net assets	-0.74%	-0.74%	-0.40%	-0.60%	-0.79%
Portfolio turnover rate	14%	20%	25%	25%	22%




GRAPH OMITTED

(The accompanying notes are an integral part of these financial statements)

G R O W T H STATEMENT OF ASSETS AND LIABILITIES

As of May 31, 2000 GRAPHIC OMITTED

Assets

Common stocks (cost $11,873,852)
$21,240,362

Cash
2,166,164

Dividends receivable
17,221

Total Assets
$23,423,747

Liabilities

Payable to affiliate 30,130

Total liabilities
30,130

Net Assets $23,393,617

Fund shares outstanding 1,619,494

Analysis of Net Assets

Paid in capital (unlimited shares authorized, without par value)
$14,082,050

Accumulated net realized gains
(54,943)

Unrealized net appreciation on investments
9,366,510

Net assets applicable to fund shares outstanding
$23,393,617

Net Asset Value, Offering and Redemption price per share
$14.45

(The accompanying notes are an integral part of these financial statements)

STATEMENT OF OPERATIONS G R O W T H
Year ended May 31, 2000

Investment income

Dividends (net of foreign taxes of $4,735)
$127,759

Miscellaneous income
4,158

Gross investment income
$131,917

Expenses

Investment adviser and administration fees
180,776

Shareowner servicing
33,500

Professional fees
27,004

Filing and registration fees
13,000

Other expenses
11,050

Printing and postage
8,200

Custodian fees
3,683

Total gross expenses
277,213

Less custodian fees
(3,683)

Net expenses
273,530

Net investment income
(141,613)

Net realized gain on investments

Proceeds from sales
2,410,845

Less cost of securities sold based on identified cost
2,106,613

Realized net gain
304,232

Unrealized gain on investments

End of period
9,366,510

Beginning of period
4,393,454

Increase in unrealized gain for the period 4,973,056

Net realized and unrealized gain on investments
5,277,288

Net increase in net assets resulting from operations
$5,135,675

(The accompanying notes are an integral part of these financial statements)

G R O W T H STATEMENT OF CHANGES IN NET ASSETS

GRAPHIC OMITTED

Year Ended Year ended

INCREASE IN NET ASSETS May 31, 2000 May 31,1999

From operations

Net investment income (loss)
($141,613) ($71,969)

Net realized gain on investments
304,232 (80,750)

Net increase in unrealized appreciation
4,973,056 2,555,424

Net increase in net assets
5,135,675 2,402,705

Dividends to shareowners from:

Net investment income
0 0

Capital gains distributions
(278,425) 0

(278,425) 0

Fund Share Transactions

Proceeds from sales of shares
10,588,245 3,474,952

Value of shares issued in reinvestment of dividends
278,415 0

10,866,660 3,474,952

Cost of shares redeemed (4,051,573) (4,236,089)

Net increase in net assets from share transactions
6,815,087 (761,137)

Total increase in net assets
11,672,337 1,641,568

Net Assets

Beginning of year
11,721,280 10,079,712

End of year
$23,393,617 $11,721,280

Shares of the Fund Sold and Redeemed

Number of shares sold 745,563 410,770

Number of shares issued in reinvestment of dividends
16,272 0

761,835 410,770

Number of shares redeemed
(320,902) (527,296)

Net increase (decrease) in Number of Shares Outstanding
440,933 (116,526)

(The accompanying notes are an integral part of these financial statements)

NOTES TO FINANCIAL
STATEMENTS

NOTE 1 - Organization
Amana Mutual Funds Trust (the "Trust") was established under Indiana Law as a Business Trust on July 26, 1984. The Trust is registered as a no-load, open-end, diversified series 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. Two 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.

NOTE 2 - Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Funds.

Investments:
Securities traded on a national exchange and NASDAQ's National Market are valued at the price carried by the composite tape of all national exchanges at 4 p.m. New York time or, in the absence of any sale on that date, the 4 p.m. bid price. Securities traded in the over-the-counter market are valued at the closing bid price.

The cost of securities is the same for accounting and Federal income tax purposes. Realized gains and losses are recorded on the identified cost basis.

Cash dividends from equity securities are recorded as income on the ex-dividend date. 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.

Federal income taxes:
The Funds have elected to be taxed as regulated investment companies under the Internal Revenue Code and distribute substantially all of their taxable net investment income and realized net gains on investments. Therefore, no provision for Federal income taxes is required.

Dividends and distributions to shareowners:
Dividends and distributions to shareowners are recorded on the ex-dividend date. Dividend payable dates are the end of May and December. Shareowners electing to reinvest dividends and distributions purchase additional shares at the net asset value on the payable date.

Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 3 - Transactions with Affiliated Persons
Under a contract approved by shareowners on December 28, 1989, Saturna Capital Corporation provides investment advisory services and certain other administrative and distribution services and facilities required by each Fund to conduct its business. For such services, each Fund pays an annual fee equal to .95% of its average daily net assets. For the year ended May 31, 2000, Income Fund and Growth Fund paid advisory fee expenses of $212,866 and $180,776, respectively.

Saturna Capital also acts as transfer agent for the Trust, for which it was paid $41,000 and $33,500 for the Income and Growth Fund, respectively, for the year ended May 31, 2000.

The Trust acts as distributor of its own shares, except in those states where Investors National Corporation (a subsidiary of Saturna Capital) is registered as a broker-dealer and is willing to act as distributor without compensation. Investors National Corporation is the primary stockbrokerage used to effect portfolio transactions for the Trust, and was paid $14,442 in commissions at discount rates during the year ended May 31, 2000.

The Fiqh Council of North America is the religious consultant to Saturna regarding Islamic principles. The Islamic Society of North America provides Saturna with advice regarding the provision of Amana's services to its members. From its advisory fee, Saturna pays each of these consultants a fee equal to .10% of the average daily net assets of each Fund. This fee

TRUSTEES AND
OFFICERS

amounted to $39,269 for the period January 2000 to May 2000. North American Islamic Trust, prior religious consultant for Saturna, earned $43,726 for the time period from June 1999 to December 1999.

All trustees serve without compensation. The Trustees, officers and their immediate families, and NAIT as a group owned 5.34% of the Income Fund's and 3.57% of the Growth Fund's outstanding shares on May 31, 2000.

NOTE 4 - Dividends
Income Fund dividends from net investment income were $.113 per share paid December 31, 1999, and $1.773 per share paid May 31, 2000. Income Fund distributions from net realized long-term capital gains were $.634 per share paid December 31, 1999. Growth Fund distributions from net realized long-term capital gains were $.22 per share, paid December 31, 1999.

During the year, the Income Fund received a distribution from BCE, Inc. of shares of Nortel Networks. This distribution reflecting the market value of Nortel Networks in the amount of $1,806,857 is taxable as an ordinary dividend and is included in dividend income in the Fund's statement of operations.

NOTE 5 - Investments
At May 31, 2000, for Income Fund the net unrealized appreciation of investments of $6,755,730 comprised gross unrealized gains of $7,441,648 and gross unrealized losses of $685,918. During the year ended May 31, 2000, the Income Fund purchased $7,213,700 of securities and sold $2,410,845 of securities.

At May 31, 2000, for Growth Fund the net unrealized appreciation of investments of $9,366,510 comprised gross unrealized gains of $10,443,782 and gross unrealized losses of $1,077,272. During the period ended May 31, 2000, the Fund purchased $7,213,700 of securities and sold $2,410,845 of securities.

NOTE 6 - Custody Credits
Under an agreement with the custodian bank, custody fees are reduced by credits for cash balances. Such reduction amounted to $2,481 and $3,683 for the Income Fund and Growth Fund, respectively, for the year ended May 31, 2000.

Jamal M. Barzinji, PhD

Chairman, Mar--Jac Poultry, Inc.
Director, Safa Trust, Inc.

Nicholas Kaiser, MBA

President, Saturna Capital Corporation

M. Yaqub Mirza, Ph.D.

President, Sterling Management Group, Inc.
Director, Lynux Works
Chairman, Jugos Concentrados SA

Bassam Osman, MD

Neurologist

Iqbal Unus, PhD

Director, The International Islamic Forum for Science, Technology & Human Resources Development

Clifford J. Alexander

Kirkpatrick & Lockhart LLP

T. K. Anderson, MBA, CMA

Saturna Capital Corporation

Brian D. Ingram

Saturna Capital Corporation

S. M. Parker, MA

Saturna Capital Corporation

(Lead) Independent Trustee

President, Trustee

Chairman, Independent Trustee

Independent Trustee

Independent Trustee

Assistant Secretary

Treasurer

Secretary

Assistant Secretary

STATEMENT OF CHANGES IN NET ASSETS

Amana Mutual Funds Trust began operations in 1986. Saturna Capital Corporation, with extensive experience in mutual funds, invests the Fund portfolios and handles daily operations by direction of the Board of Trustees.

GRAPHIC OMITTED

Investment Advisor and Administrator Saturna Capital Corporation AMANA MUTUAL FUNDS TRUST

Religious Consultant Fiqh Council of North America

Member Services Consultant Islamic Society of North America

Custodian National City Bank of Indiana

Auditors Tait, Weller & Baker, Philadelphia

Legal Counsel Kirkpatrick & Lockhart LLP, Washington

This report is for the information of the shareowners of the Trust. It is not authorized for distribution to prospective investors unless it is accompanied or preceded by an effective prospectus.

GROWTH • INCOME

1300 N. State Street
Bellingham, WA 98225-4730
1-800/SATURNA
(1-800/728-8762)
Daily prices at 1-888/72-AMANA
www.saturna.com/amana ANNUAL REPORT
May 31, 2000


Average Annual Returns (as of 3/31/2000, per regulatory requirement)
	1 year	3 years	5 years	10 years
Amana Income Fund	102.46%	43.47%	31.92%	24.81%
Amana Growth Fund	12.95%	15.01%	15.80%	11.25%
				*since inception, 2/3/94

I N C O M E			INVESTMENTS
GRAPHIC OMITTED
	*Issue*	Number of Shares	Cost	Market Value

	COMMON STOCKS (95.8%)

	*Automotive (1.2%)*
	Genuine Parts	11,000	$355,744	$264,000

	*Building (1.2%)*
	Plum Creek Timber	10,000	271,509	263,125

	*Business Services (.9%)*
	Dun & Bradstreet	6,500	112,923	199,875

	*Chemicals (1.1%)*
	RPM	25,390	182,267	247,553

	*Machinery (2.6%)*
	Manitowoc	17,250	95,638	563,859
	Medical (12%)
	American Home Products	15,200	193,026	818,900
	Bristol-Myers Squibb	18,560	206,069	1,021,960
	Glaxo Wellcome plc ADS	10,000	260,426	563,125
	IMS Health	13,000	148,605	214,500
	SUB-TOTAL		808,126	2,618,485


	*Metals (3.4%)*
	Phelps Dodge	4,200	147,435	188,475
	Rio Tinto plc ADS	9,000	521,085	552,937
	SUB-TOTAL		668,520	741,412

	*Oil & Gas Production (19.3%)*
	BP Amoco PLC ADS	25,662	1,002,926	1,395,371
	Enron	10,000	201,429	728,750
	Exxon Mobil	19,241	702,384	1,603,016
	Fletcher Challenge Energy ADR	20,000	493,562	530,000
	SUB-TOTAL		2,400,301	4,257,137
	*Publishing (.7%)*
	McGraw-Hill	3,000	172,917	154,313

	*Real Estate (4%)*
	Duke Weeks Realty	20,000	434,493	431,250
	Shurgard Storage Centers	20,000	526,956	458,750
	SUB-TOTAL		961,449	890,000

I N C O M E				FINANCIAL HIGHLIGHTS
Selected data per share of outstanding capital stock throughout each period.						GRAPHIC OMITTED
	For Year Ended May 31
	2000	1999	1998	1997	1996
Net asset value at beginning of year	$20.30	$19.76	$16.61	$13.93	$12.92
Income from investment operations
Net investment income	1.88	0.25	0.26	0.38	0.42
Net gains or losses on securities (both realized and unrealized)	(1.28)	1.02	3.58	2.86	1.76
Total from investment operations	(0.60)	1.27	3.84	3.24	2.18
Less distributions
Dividends (from net investment income)	(1.88)	(0.29)	(0.22)	(0.42)	(0.41)
Distributions (from capital gains)	(0.63)	(0.44)	(0.47)	(0.14)	(0.76)
Total distributions	(2.51)	(0.73)	(0.69)	(0.56)	(1.17)
Net asset value at end of year	$18.39	$20.30	$19.76	$16.61	$13.93
Total return	2.96%	6.56%	23.51%	23.62%	17.03%

Ratios / Supplemental Data
Net assets ($000), end of year	$22,004	$22,734	$19,886	$16,332	$12,464
Ratio of gross expenses to average net assets	1.55%	1.33%	1.36%	1.44%	1.57%
Ratio of net investment income to average net assets	9.25%	1.30%	1.43%	2.51%	3.06%
Portfolio turnover rate	1%	17%	8%	14%	24%




GRAPH OMITTED

I N C O M E			STATEMENT OF OPERATIONS
Year Ended May 31, 2000				GRAPHIC OMITTED
*Investment income*
Dividends (net of foreign taxes of $15,982)		$2,408,935
Miscellaneous income		259
Gross investment income			$2,409,194

*Expenses*
Investment adviser and administration fees		212,866
Shareowner servicing		60,499
Professional fees		32,996
Filing and registration fees		12,500
Other expenses		14,500
Printing and postage		9,550
Custodian fees		2,481
Total gross expenses		345,392
	Less custodian fees waived	(2,481)
Net expenses			342,911
	Net investment income		2,066,283

*Net realized gain on investments*
Proceeds from sales		2,034,134
Less cost of securities sold
	(based on identified cost)	1,527,451
	Realized net gain		506,683

*Unrealized gain on investments*
End of period		6,755,730
Beginning of period		8,642,803
Decrease in unrealized gain for the period			(1,887,073)
	Net realized and unrealized loss on investments		(1,380,390)

Net increase in net assets resulting from operations			$685,893

STATEMENT OF CHANGES IN NET ASSETS	I N C O M E
	Year ended	Year ended
INCREASE IN NET ASSETS	May 31, 2000	May 31, 1999
From Operations
Net investment income	$2,066,283	$277,914
Net realized gain on investments	506,683	696,066
Net increase (decrease) in unrealized appreciation	(1,877,073)	537,109
Net increase in net assets	685,893	1,511,089

Dividends to Shareowners From
Net investment income	(2,060,804)	(325,348)
Capital gains distributions	(685,002)	(484,450)
	(2,745,806)	(809,798)
From Fund Share Transactions
Proceeds from sales of shares	4,626,950	6,347,245
Value of shares issued in reinvestment of dividends	2,688,511	795,322
	7,315,461	7,142,567
Cost of shares redeemed	(5,985,001)	(4,996,336)
Net increase in net assets from share transactions	1,330,460	2,146,231
Total increase (decrease) in net assets	(729,453)	2,847,522

Net Assets
Beginning of year	22,733,734	19,886,212
End of year	$22,004,281	$22,733,734
Shares of the Fund Sold and Redeemed
Number of shares sold	249,786	325,475
Number of shares issued in reinvestment of dividends	141,869	40,174
	391,655	365,649
Number of shares redeemed	(315,247)	(252,381)
Net increase in number of shares outstanding	76,408	113,268

INVESTMENTS			G R O W T H
Issue	Number of Shares	Cost	Market Value	GRAPHIC OMITTED
*Food Production (.7%)*
Potash Corp of Saskatchewan	2,700	$184,568	$156,262
*Machinery (1.4%)*
Crane	7,000	143,636	184,625
Manitowoc	4,500	104,324	147,094
SUB-TOTAL		247,960	331,719

Medical Services (1.1%)
IMS Health	4,000	118,696	66,000
Thermo Cardiosystems*	20,000	250,512	196,250
SUB-TOTAL		369,208	262,250
*Metals (2.1%)*
Alcoa	3,000	215,736	175,312
Rio Tinto plc ADS	5,000	280,819	307,188
SUB-TOTAL		496,555	482,500
Oil & Gas (5.9%)
BP Amoco plc ADS	7,544	298,395	410,205
Noble Drilling*	6,000	124,826	260,250
Repsol-YPF SA ADS	10,000	206,465	210,625
Williams Companies	12,000	358,981	498,750
SUB-TOTAL		988,667	1,379,830

*Paper & Publishing (3.2%)*
Fletcher Challenge Paper ADR	25,000	171,985	273,438
IDG Books Worldwide*	10,000	127,471	90,000
McGraw-Hill	4,000	89,379	205,750
Wiley (John) & Sons, Cl A	10,000	150,265	178,125
SUB-TOTAL		539,100	747,313

Pharmaceuticals (13.1%)
Affymetrix*	3,000	104,150	356,250
American Home Products	5,360	248,080	288,770
Bone Care International*	10,000	116,370	196,875
Cryolife*	7,500	145,226	128,906
Genentech*	4,000	263,192	429,500
Glaxo Wellcome plc ADS	2,500	55,379	140,781
Immunex Corp*	24,000	172,289	621,000
Johnson & Johnson	4,000	249,078	358,000
Ligand Pharmaceuticals*	6,000	90,709	64,125
Lilly (Eli)	2,000	127,124	152,250
Novo-Nordisk A/S ADS	4,000	243,206	328,750
SUB-TOTAL		1,814,803	3,065,207

Investment Advisor and Administrator	Saturna Capital Corporation	AMANA MUTUAL FUNDS TRUST
Religious Consultant	Fiqh Council of North America
Member Services Consultant	Islamic Society of North America
Custodian	National City Bank of Indiana
Auditors	Tait, Weller & Baker, Philadelphia
Legal Counsel	Kirkpatrick & Lockhart LLP, Washington

This report is for the information of the shareowners of the Trust. It is not authorized for distribution to prospective investors unless it is accompanied or preceded by an effective prospectus.	GROWTH • INCOME
1300 N. State Street Bellingham, WA 98225-4730 1-800/SATURNA (1-800/728-8762) Daily prices at 1-888/72-AMANA www.saturna.com/amana	ANNUAL REPORT May 31, 2000