By Lawrence Carrel
TheStreet.com Senior Writer
12/24/2007 6:13 AM EST
While the S&P 500 remained up 4.9% for the year through Friday, a number of funds that invest according to the Koran have significantly outperformed the benchmark. The Amana Trust Income Fund (AMANX) return of 13.3% through Dec. 21, beating the S&P 500 by 8.4 percentage points, while its sibling, the Amana Trust Growth Fund (AMAGX), gained 11.7%.
The Amana funds, managed by Saturna Capital of Bellingham, Wash., are also ahead of the S&P 500's annualized return for the past three and five years, earning them five-star ratings from Morningstar.
The Amana Trust Income Fund, with $339 million in assets, posted the fourth highest return this year of large-cap value funds tracked by Morningstar, helped by its large holdings of technology, healthcare, and commodity stocks.
But since 1984 Nicholas Kaiser, founder and president of Saturna Capital in Bellingham, Wash., has managed two highly rated socially responsible mutual funds guided by Islamic tenets: Amana Growth and Amana Income.
Personal finance reporter Mark Schwanhausser talked about the delicate balance of principles and profit when Kaiser visited Palo Alto to speak to investors this month.