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Amana Mutual Funds Trust – ‘N-CSR’ for 5/31/07

On:  Monday, 7/30/07, at 3:37pm ET   ·   Effective:  7/30/07   ·   For:  5/31/07   ·   Accession #:  766285-7-20   ·   File #:  811-04276

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  As Of                Filer                Filing    For·On·As Docs:Size

 7/30/07  Amana Mutual Funds Trust          N-CSR       5/31/07    2:346K
          → Amana Income Fund ⇒ Amana Growth Fund (AMAGX) — Amana Income Fund Investor Shares (AMANX)

Document/Exhibit                   Description                      Pages   Size 

 1: N-CSR       Amana Mutual Funds Annual Report                    HTML    168K 
 2: EX-99.CERT  Certification of Officers                           HTML     13K 

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 2-96924

AMANA MUTUAL FUNDS TRUST
(Exact Name of Registrant as Specified in Charter)

1300 N. State Street
Bellingham, Washington 98225-4730
(Address of Principal Executive Offices, including ZIP Code)

Nicholas F. Kaiser
1300 N. State Street
Bellingham, Washington 98225-4730
(Name and Address of Agent for Service)

Registrant’s Telephone Number- (360) 734-9900

Date of fiscal year end: May 31, 2007
Date of reporting period: May 31, 2007

Fellow Shareowners:

This June 23rd marked Amana Income Fund's 21st anniversary, at the end of the best year of its history. Amana Income Fund provided a stellar 24.31% return for the fiscal year ended May 31, 2007, attracting thousands of new investors. Total assets more than tripled to $234 million, and Amana Income is now a true "grown up."

Younger but bigger "little brother" Amana Growth Fund's total return was also robust, at 21.54%. It was, of course, a good year for the markets, as the S&P 500 Index returned 22.79% and the Dow Jones Islamic Market US Index returned 22.09% [dividends omitted] for the same period.

Mutual fund rating services, such as Lipper and Morningstar, focus on returns over the last 3, 5 and 10 years rather than just one year. Please refer to the next page for the awards earned by Amana Income and Saturna Capital in this past year for excellent longer-term performance results.

Helped by new investors plus market appreciation, total Trust assets grew dramatically: 158% to $748 million at May 31. This compares with 205% and 65% in each of the two previous fiscal years. Please find details of each Fund's operations and May 31 investment portfolios on the following pages.

Higher assets benefit shareowners as fixed expenses are spread over more accounts. The Income Fund's operating expense ratio declined to 1.37%, and the larger Growth Fund's expense ratio dropped to 1.36%. Effective this August, new "breakpoint" provisions in the Funds' advisory contracts will help lower expense ratios further as assets grow.

Remember that all mutual fund total returns are after their operating expenses. Payments to third-party intermediaries increased sharply, as investors took advantage of their services. The low portfolio turnover ratios and the waiver of all portfolio brokerage commissions continue, to the benefit of fund performance.

The higher assets allowed the Funds to increase their investments in many solid companies as well as pursue greater portfolio diversification. Both Funds favor companies with strong financial histories and robust outlooks for the future. This year, companies in the Energy, Mining, Steel, Technology, and Health industries favored by the Funds all did well.

The Funds also diversify globally with approximately 23% of each portfolio invested in non-USA equities. The international exposure benefited both Funds during the year, but does add an element of risk from currency fluctuations.

Stock markets worldwide performed very well for the last 5 years, and many indices are in record territory. This makes us nervous, and investors need to ask if the markets are overpriced. In general, we think prices will still advance. Price-multiples are about equal to the average since the 1930's, and while dividends are slightly below historical means the amounts continue to be broadly increased as profit levels remain high. There are storm clouds in every forecast, of course, and the slide in both housing prices and the US dollar could derail the economy.

While garnering awards and accolades brings with it a sense of accomplishment and pride, Fund management's primary focus remains long-term, value investing. The Amana Funds benefited this year by adhering to this approach. However, shareowners are cautioned that these exceptional results may not continue in the future. The Funds discourage speculation with a 30-day early redemption fee. It is crucial for investors to understand that long-term growth comes with risk and volatility.

We welcome your questions, and invite you to visit www.amanafunds.com or call 1-888/73-AMANA.

Respectfully,

(Graphic omitted) Nicholas Kaiser,
President & Portfolio Manager

(Graphic omitted) Talat Othman,
Independent Board Chairman

Graphics omitted

(unaudited)

Fund Ratings & Awards:

The last year provided much excitement for Amana's shareowners. Between the Income Fund's Lipper Fund Award¹ and Best U.S. Equity Fund 2006 Failaka Award², Saturna Capital's Failaka Award and so much press even we could hardly believe it, we still found time to remain Sharia compliant and provide solid returns.

As of May 31, 2007, the U.S. mutual fund rating service, Morningstar, honored Amana by awarding both Funds their highest rating: * * * * * Overall. The strong performance history of both Funds is also illustrated in their high "% Rank in category" standings. Here are the details³:

Amana continued to garner high marks with Lipper Inc. (A Reuters Company). We are especially pleased that the Amana Income Fund received the 2007 Lipper Fund Award in the Equity Income category for its 3 year performance:

(unaudited)

Management's Discussion of Fund Performance:

The performance of each Fund is determined by its investments as well as general market conditions. Islamic restrictions impact the types of investments available to the Funds, as do the objectives of capital preservation and current income (Amana Income) and long-term capital growth (Amana Growth). The Funds do not receive interest on cash balances. Neither do the Funds invest in businesses that have material earnings from interest (such as financial institutions) or other prohibited activities. The Funds tend to "buy and hold" portfolio securities, in part because rapid trading could be seen as gambling.

Amana Income Fund:

For the year ended May 31, 2007, Amana Income Fund's total return was +24.31% (versus +21.17% the year before). Two income dividends totaling 19.7¢ per share and two capital gain distributions totalling 40.7¢ per share were paid during the year. Higher assets reduced the operating expense ratio to 1.37% from 1.49%.

The Fund is concentrated in basic and cyclical industries. Energy (EnCana, Exxon Mobil) and resource (BHP, Rio Tinto) issues performed very well, reflecting higher commodity prices. Steel (Nucor, US Steel) and railroad (Burlington Northern) companies, boosted by continuing world-wide economic expansion, also did well. The largest industry is still utilities, but its percentage of the portfolio (10%) declined as new issues were added. FPL, a large producer of electricity from renewable sources, remains a favorite. Telecommunications (especially foreign companies like Telus and Vodafone) continues to benefit from world economic expansion. The Fund only buys equity securities paying dividends, primarily of larger and more established companies. The rising interest rates of the last three years have not hurt the Fund as much as other income funds because we avoid financial issues like banks and favor low-debt companies in our selections.

Amana Growth Fund:

The Amana Growth Fund's total return was +21.54% (vs. + 20.95% the year before). By policy, the Fund seeks to avoid paying income dividends. Markedly higher assets reduced the operating expense ratio to 1.36% from 1.41%.

Amana Growth's portfolio is weighted towards technology. Medical companies, where R & D is a big part of the business, are our largest industry (Genentech, Amgen, VCA Antech). Prosperous computer companies (especially Apple, but also Hewlett-Packard and IBM) contributed a huge part to our success. We have increased allocation in retailing (Best Buy, American Eagle Outfitters) and food production (Potash Corp. of Saskatchewan, PepsiCo), consistent with our balanced, value approach.

Higher interest rates are cooling sectors of the economy, such as construction, where we remain exposed because of the solid values and expectation that the rate cycle is nearing a peak. Worldwide productivity has kept inflation low for several years, but higher energy prices and labor costs are beginning to impact expectations. Growing corporate earnings and high market liquidity, the foundations of rising stock prices, both foretell long-term stock appreciation.

(unaudited)

Amana Income Fund: Performance Summary

Growth of $10,000

Past performance is no guarantee of future performance. The "Growth of $10,000" graph and "Average Annual Returns" performance table assume the reinvestment of dividends and capital gains. They do not reflect the deduction of taxes that a shareowner might pay on fund distributions or the redemption of fund shares, nor do they reflect the potential deduction of a 2% redemption fee on shares held less than 30 calendar days. The S&P 500 Total Return Index is a widely recognized index of common stock prices, which reflects no deductions for management fees, expenses or taxes.

Fund Objective

The objectives of the Income Fund are current income and preservation of capital, consistent with Islamic principles; current income is its primary objective.

Top Ten Holdings			Industry Allocation
Issue	% of Fund Assets		Industry weightings are shown as a percentage of net assets
FPL Group	2.0%
E.ON AG ADR	2.0%
Honeywell International	1.9%
Procter & Gamble	1.9%
EnCana	1.9%
Kimberly-Clark	1.9%
3M	1.9%
Exxon Mobil	1.8%
AT&T	1.8%
Pfizer	1.8%

(unaudited)

Amana Growth Fund: Performance Summary

Growth of $10,000

Past performance is no guarantee of future performance. The "Growth of $10,000" graph and "Average Annual Returns" performance table assume the reinvestment of dividends and capital gains. They do not reflect the deduction of taxes that a shareowner might pay on fund distributions or the redemption of fund shares, nor do they reflect the potential deduction of a 2% redemption fee on shares held less than 30 calendar days. The Russell 2000 Index® is a widely recognized index of common stock prices of 2000 mid- and small-market capitalization companies which reflects no deductions for managements fees, expenses or taxes.

Fund Objective

The primary objective of the Growth Fund is long-term capital growth consistent with Islamic principles.

Top Ten Holdings			Industry Allocation
Issue	% of Fund Assets		Industry weightings are shown as a percentage of net assets
Apple Inc.	3.5%
Anglo-American plc ADR	2.0%
Rio Tinto plc ADS	1.9%
Potash Corp. of Saskatchewan	1.9%
Manitowoc	1.8%
EnCana	1.8%
Hewlett-Packard	1.8%
American Movil ADS Series L	1.8%
International Business Machines	1.7%
Adobe Systems	1.7%

Income Fund

Schedule of Investments

Continued on next page.

Continued on next page.

Income Fund

Schedule of Investments (continued)

Financial Highlights

Statements of Changes in Net Assets

Income Fund

Growth Fund

Schedule of Investments

Continued on next page.

Growth Fund

Schedule of Investments (continued)

Continued on next page.

Growth Fund

Financial Highlights

Statements of Changes in Net Assets

(unaudited)

Expenses
All mutual funds have operating expenses. As an Amana mutual fund shareowner, you incur ongoing costs, including management fees; 12b-1 fees for distribution; and other fund expenses such as shareowner reports (like this one). Operating expenses, which are deducted from a fund's gross earnings, directly reduce the investment return of a fund. All mutual funds (unlike some other financial investments) only report their results after deduction of operating expenses.

With the Amana funds, unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends, or other distributions. You do not incur exchange fees or fees related to Individual Retirement Accounts. However, to discourage speculation, you may incur a fee for redemption of shares held less than 30 days. You may incur fees related to extra services requested by you for your account, such as a checkbook to use for redemptions or bank wires.

Examples
The examples, one for each Fund, are based on an investment of $1,000 invested for the semi-annual period ended May 31, 2007 [Friday, December 1, 2006 to Thursday, May 31, 2007].

Actual Expenses
The first line of each table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under heading entitled "Expenses Paid During Year" to estimate the expenses you paid on your account during this fiscal year. The Funds also charge the following fees for extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery.

Hypothetical Example For Comparison Purposes
The second line of each table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the year. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of the other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no IRA fees with the Amana Funds), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees (note that the Amana Funds do not have any such transactional costs). Therefore, the second line of each table is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.

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 under the Investment Company Act of 1940 as a no-load, open-end, diversified series management investment company. 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 investment objective of the Income Fund is current income and preservation of capital. The Growth Fund began operations on February 3, 1994. The investment objective of the Growth Fund is long-term capital growth.

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

Security valuation:
Investments in securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation; other securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price. Restricted securities and other securities for which quotations are not readily available are valued at a fair value as determined pursuant to procedures established by the Board.

The cost of securities is the same for accounting and Federal income tax purposes. Security transactions are recorded on trade date. 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. Withholding taxes on foreign dividends have been provided for in accordance with the Funds' understanding of the applicable country's tax rules and rates.

Share valuation:
The net asset value ("NAV") per share of each Fund is calculated by dividing the sum of the value of the securities held by each Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for each Fund, rounded to the nearest cent. The Funds' shares are not priced or traded on days the NYSE is closed. The offering and redemption price per share for each Fund is equal to each Fund's NAV.

To discourage speculation, a 2% early redemption fee on Fund shares held less than thirty calendar days was initiated effective August 18, 2004. These fees are deducted from the redemption proceeds otherwise payable to the shareowner and retained by the Funds as paid-in capital and included in the daily NAV calculation.

Federal income taxes:
As a qualified investment companies under Subchapter M of the Internal Revenue Code, the Funds are not subject to income taxes to the extent that they distribute all of their taxable income. It is the Funds' policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all taxable income to shareowners.

At May 31, 2007 the Growth Fund had utilized $933,799 of capital loss carryforwards.

Net capital losses incurred after October 31 and within the taxable year are deemed to arise on the first business day of the next taxable year.

Capital Accounts:
The Funds account and report for distributions to shareholders in accordance with the American Institute of Certified Public Accountants' Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of Income, Capital and Return of Capital Distributions by Investment Companies.

Reclassification of Capital Accounts:
Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent difference be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or NAV. For the year ended May 31, 2007, Income Fund decreased undistributed net investment loss by $42,812, decreased accumulated net realized gain by $45,491 and increased paid-in capital by $2,679. For the year ended May 31, 2007, the Growth Fund decreased undistributed net investment loss by $1,387,645, decreased accumulated net realized gain by $260,096 and decreased paid in capital by $1,127,549.

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 net asset value on the payable date.

Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates.

New Accounting Pronouncements:
In June 2006, the Financial Accounting Standards Board ("FASB") released FASB Interpretation No. 48 - Accounting for Uncertainty in Income Taxes ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Funds, which, pursuant to a delay granted by the U.S. Securities and Exchange Commission, is expected to be on the last business day of the Funds' semi-annual period, November 30, 2007.

In September 2006, FASB issued FASB Statement No. 157, "Fair Value Measurement" ("FAS 157"), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management is currently evaluating the impact, if any, the adoption of FAS 157 will have on the Fund's financial statement disclosures.

Note 3 - Transactions with Affiliated Persons
Under a contract approved annually by independent trustees, 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 0.95% of its average daily net assets. For the year ended May 31, 2007, Income Fund and Growth Fund paid advisory fee expenses of $1,178,904 and $3,086,467, respectively. Certain officers and trustees of Amana are also officers and directors of the investment adviser.

Saturna Capital also acts as transfer agent for the Trust, for

which it was paid $117,644 and $288,805 for the Income and Growth Fund, respectively, for the year ended May 31, 2007.

Saturna Brokerage Services, Inc. ("SBS," a subsidiary of Saturna Capital) is registered as a broker-dealer and distributes Fund shares. The Funds have adopted a Distribution Plan in accordance with Rule 12b-1 under the 1940 Act. The plan provides that the Funds will pay a fee to SBS at an annual rate of up to .25% of the average net assets of the Funds. The fee is paid to SBS as reimbursement for expenses incurred for distribution-related activity. For the year ended May 31, 2007 Income Fund and Growth Fund paid $310,239 and $813,569, respectively, to the Distributor. SBS is the primary stockbrokerage used to effect portfolio transactions for the Trust. Since the beginning of calendar 2005, SBS executes portfolio transactions for the Trust for free (no commissions).

For the year ended May 31, 2007, the Income Fund and the Growth Fund incurred $13,839 and $34,487, respectively, of expense for the Chief Compliance Officer.

Note 4 - Dividends
The tax characteristics of distributions paid for the years ending May 31, 2007 and 2006 were as follows:

Growth Fund paid no dividends in fiscal 2007 or 2006.

As of May 31, 2007, the components of distributable earnings on a tax basis were as follows:

Note 5 - Investments
At May 31, 2007, for Income Fund the net unrealized appreciation of investments of $44,892,444 comprised gross unrealized gains of $46,178,948 and gross unrealized losses of $1,286,504. During the year ended May 31, 2007, the Income Fund purchased $151,980,475 of securities and sold $16,498,035 of securities.

At May 31, 2007, for Growth Fund the net unrealized appreciation of investments of $102,167,978 comprised gross unrealized gains of $111,696,872 and gross unrealized losses of $9,528,894. During the year ended May 31, 2007, the Fund purchased $256,368,834 of securities and sold $27,655,660 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 $11,349 and $11,744 for the Income Fund and Growth Fund, respectively, for the year ended May 31, 2007.

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Amana Mutual Funds Trust

We have audited the accompanying statements of assets and liabilities of Amana Income Fund and Amana Growth Fund, each a series of Amana Mutual Funds Trust (the "Trust"), including the schedules of investments, as of May 31, 2007, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five 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.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of May 31, 2007, by correspondence with the custodian and brokers. 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, 2007, 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Philadelphia, Pennsylvania
July 13, 2007

Tait, Weller & Baker LLP

Term of Office: Trustees serve for the lifetime of the Trust or until death, resignation, removal, or non re-election by the shareowners. Officers serve one-year terms subject to annual reappointment by the Trustees.

Amana's Statement of Additional Information, available without charge by calling Saturna Capital at 800/SATURNA, includes additional information about Trustees. As of May 31, 2007, officers and trustees (plus affiliated entities, such as Saturna Capital Corporation), as a group, owned 1.16% and 0.63% of the outstanding shares of the Income Fund and the Growth Fund, respectively.

Mr. Kaiser is an interested person of the Trust by reason of his positions with the Trust's adviser (Saturna Capital Corporation) and underwriter (Saturna Brokerage Services), and is the primary manager of the Trust's portfolios. As portfolio manager, he is paid a bonus by Saturna Capital for each month an Amana portfolio earns a 4 or 5 star rating from Morningstar (see page 4). The Independent Trustees elect to serve without compensation. Officers are paid by Saturna Capital Corporation (the adviser) and not the Trust, except for the Chief Compliance Officer whose compensation is paid by the Trust.

* Holds the same position with Saturna Investment Trust.

(unaudited)

Availability of Amana Portfolio Information
(1) The Amana Funds file complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q.
(2) The Funds' Forms N-Q are available on the SEC's website at www.sec.gov.
(3) The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800/SEC-0330.
(4) The Funds' make a complete schedule of portfolio holdings after the end of each month available at www.amanafunds.com.

(unaudited)

Availability of Proxy Voting Information
(1) A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (a) without charge, upon request, by calling Saturna Capital at 1-888/73-AMANA; (b) on the Funds' website at www.amanafunds.com; and (c) on the SEC's website at www.sec.gov.
(2) Information regarding how each Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (a) without charge, upon request, by calling Saturna Capital at 1-888/73-AMANA; (b) on the Funds' website at www.amanafunds.com; and (c) on the SEC's website at www.sec.gov.

(unaudited)

Privacy Statement
At Saturna Capital, we understand the importance of maintaining the privacy of your financial information. To that end, we want to ensure that we protect the confidentiality of any personal information you share with us.

We collect personal information about you from information we receive from you on applications and other forms and from transactions or trades placed with us. Please be assured that except to administer a transaction with an affiliated third party upon your request, we do not disclose any personal information about our customers, or our former customers, to anyone, except as may be required by law. We maintain our own technology resources to minimize the use of outside service providers.

Additionally, Saturna Capital restricts access to personal information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with regulations to guard your personal information. If you have further questions or concerns about the security or privacy of the information we receive from you, please call us at 1-888/73-AMANA.

(unaudited)

Householding Policy
To reduce expenses, we may mail only one copy of the Fund's prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please call us at 888/73-AMANA. We will begin sending you individual copies thirty days after receiving your request.

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 under supervision of the Board of Trustees.	Investment Adviser and Administrator	Saturna Capital Corporation
	Custodian	National City Bank of Indiana
	Independent Registered Public Accounting Firm	Tait, Weller & Baker LLP Philadelphia, PA
	Legal Counsel	Kirkpatrick & Lockhart Preston Gates Ellis LLP Seattle, WA
(Graphics omitted)
1300 N. State Street Bellingham, WA 98225 1-800/728-8762 Daily prices at 1-888/73-AMANA www.amanafunds.com   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.

Code Of Ethics

Registrant has adopted a code of ethics, which is posted on the Fund’s Internet website at www.amanafunds.com. Requests may be made via telephone at 1-800/728-8762, and will be processed within one business day of receiving such request.

Audit Committee Financial Expert

(a)(1)(i) The Trustees of Amana Mutual Funds Trust determined, at their quarterly meeting of June 12, 2003, that the Trust has at least one audit committee financial expert serving on its audit committee.

(a)(2) Mr. Samir Salah, an independent Trustee (as defined for investment companies), was deemed qualified and agreed to serve.

Principal Accountant Fees and Services

(a) Audit Fees
For the fiscal years ending May 31, 2006 and 2007, the aggregate audit fees billed for professional services rendered by the principal accountant was $25,000 and $32,000, respectively.

(b) Audit-Related Fees
For the fiscal years ending May 31, 2006 and 2007, the aggregate audit-related fees were $21,000 and $27,000, respectively. The nature of the services are: (1) auditing of the statements of assets and liabilities, related statements of operations and changes in net assets, and the financial highlights of each of the Funds; (2) auditing and reporting on the financial statements to be included in the Amendment to the Funds’ Registration Statement, Form N-1A, to be filed with the Securities and Exchange Commission; (3) review of the Amendment to the Registration Statement; and (4) issuance of a Report on Internal Control Structure for inclusion in Form N-SAR.

(c) Tax Fees
For the fiscal years ending May 31, 2006 and 2007, the aggregate tax fees billed for professional tax preparation services rendered by the principal accountant were $4,000 and $5,000 respectively.

(d) All Other Fees
There were no other fees billed by the principal accountant for the fiscal years ending May 31, 2006 and 2007.

(e)(1) Audit Committee Pre-Approval Policies and Procedures
The following is an excerpt from the Amana Mutual Funds Trust Audit Committee Charter:

D. Oversight of Independent Auditors

3. Pre-approval of Audit and Non-Audit Services. Except as provided below, the Committee’s prior approval is necessary for the engagement of the independent auditors to provide any audit or non-audit services for the Trust and any non-audit services for any entity controlling, controlled by or under common control with Saturna that provides ongoing services to the Trust (Saturna and each such entity, an “Adviser Affiliate”) where the engagement relates directly to the operations or financial reporting of the Trust. Non-audit services that qualify under the de minimis exception described in the Securities Exchange Act of 1934, as amended, and applicable rules thereunder, that were not pre-approved by the Committee, must be approved by the Committee prior to the completion of the audit. Pre-approval by the Committee is not required for engagements entered into pursuant to (a) pre-approval policies and procedures established by the Committee, or (b) pre-approval granted by one or more members of the Committee to whom, or by a subcommittee to which, the Committee has delegated pre-approval authority, provided in either case, that the Committee is informed of each such service at its next regular meeting.

(e)(2) Percentages of Services
One hundred percent of the services described in each of paragraphs (b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) Aggregate nonaudit fees
For the fiscal years ending May 31, 2006 and 2007, the aggregate nonaudit fees billed for professional tax preparation services rendered by the principal accountant to Amana Mutual Funds Trust were $4,000 and $5,000 respectively. For the fiscal years ending June 30, 2006 and 2007, the aggregate nonaudit fees billed for professional tax preparation services rendered by the principal accountant to Saturna Capital Corporation (and subsidiary), the investment adviser and distributor for Amana Mutual Funds Trust, were not material and not specified separately.

(h) Not applicable.

Submission of Matters to a Vote of Security Holders

Not applicable.

Controls and Procedures

Internal control over financial reporting is under the supervision of the principal executive and financial officers. On July 18, 2007, Mr.Nicholas Kaiser (President) and Mr. Christopher Fankhauser (Treasurer), reviewed the internal control procedures for Amana Mutual Funds Trust and found them reasonable and adequate.

Exhibits

Exhibits included with this filing:
(a) Certifications.

(1) Nicholas Kaiser, President, Amana Mutual Funds Trust
(2) Christopher Fankhauser, Treasurer, Amana Mutual Funds Trust

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMANA MUTUAL FUNDS TRUST

By:
/s/ Nicholas Kaiser
President
July 30, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:
/s/ Nicholas Kaiser
President
July 30, 2007

By:
/s/ Christopher Fankhauser
Treasurer
July 30, 2007

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘N-CSR’ Filing		Date		Other Filings
		11/30/07		N-CSRS,  N-CSRS/A,  NSAR-A
		11/15/07
Filed on / Effective on:		7/30/07		NSAR-B
		7/18/07
		7/13/07
		6/30/07		N-PX
For Period End:		5/31/07		24F-2NT,  N-CSR/A,  NSAR-B
		12/1/06
		8/15/06		485BPOS
		6/30/06		N-PX
		5/31/06		24F-2NT,  N-CSR,  N-CSR/A,  NSAR-B
		8/18/04		485BPOS,  497J
		6/12/03
		2/3/94
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Filing Submission 0000766285-07-000020   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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