Morningstar Advisor - February/March 2009 - (Page 48) Undiscovered Managers Heavenly Returns By David Kathman Nick Kaiser’s Amana funds, which invest according to Islamic law, are trouncing their large-cap competition. The trip up Interstate 5 from Seattle to Bellingham, Wash., features some of the most glorious scenery in the Pacific Northwest. Nick Kaiser grew up in Bellingham, and he founded Saturna Capital here in 1989 after selling his previous investment firm in Indianapolis. As we enjoy a seafood lunch at an outdoor café overlooking Bellingham Bay and Kaiser regales his guests with stories about the history of the bay and the nearby islands, it’s not hard to see why he came back. “You can put a crab trap in the water, and an hour later, you have dinner,” he says. Kaiser is an avid boater and a student of maritime history, and a few years ago, he built his dream house in Bellingham, with a study full of books and a winding path down to a boat dock. Bellingham may seem to be an unlikely setting for one of the world’s leading centers of Islamic finance, but that’s what Saturna has become under Kaiser’s leadership. In an unassuming building downtown, Kaiser manages the $750 million Amana Trust Growth AMAGX and the $500 million Amana Trust Income AMANX, by far the largest mutual funds that invest according to Islamic law. Although Muslims living in the United States are the funds’ target audience, lots of non-Muslims attracted by the funds’ stellar track records have jumped on board over the past few years. Both funds have trounced the S&P 500 Index over the past decade and rank among the best performers of any large-cap stock funds during that period. A Tight-Knit Group Kaiser’s journey to the top of the Islamic finance world began in Indianapolis, where he and a partner were running Unified Manage- 48 Morningstar Advisor February/March 2009
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