Is the Amana Growth Fund Halal? The 2026 Shariah Verdict for US Muslim Investors

The verdict, up front

The Amana Growth Fund passes the screen. It isn’t a conventional fund that happens to look clean — it was built halal on purpose. Saturna Capital has run the Amana funds under an explicit Islamic-investment mandate since the Income fund launched in 1986 and the Growth fund (AMAGX) in 1994, which makes them the longest-running US Islamic mutual funds by a wide margin.

When you run the AAOIFI Standard 21 screen on its current portfolio, nothing trips. The fund holds 0% in the financials sector — no JPMorgan, no Bank of America, no Berkshire, no insurers. There are no interest-bearing bonds or conventional debt instruments in the book. The top-10 holdings (as of 05/29/2026) are entirely technology, health care, and industrials: Apple, Alphabet, Taiwan Semiconductor, Broadcom, ASML, NVIDIA, Microsoft, Eli Lilly, Johnson Controls, and AMD.

So the question isn’t really “is it halal.” It is. The question that actually costs you money is whether AMAGX’s 0.86% expense ratio is worth paying when you can get a similar screened US-equity exposure through the SPUS ETF at 0.45% — roughly half the annual cost. That’s the decision this article settles.

How the AAOIFI screen actually works on a fund

Most “is X halal” answers online skip the methodology and just assert a verdict. Here’s the screen used by AAOIFI Shari’ah Standard 21, applied stock by stock and then weighted across the portfolio:

Stage 1 — business activity. A company fails if more than 5% of its revenue comes from interest-based finance, alcohol, tobacco, gambling, pork, adult entertainment, weapons, or conventional media. This is the screen that knocks conventional banks and insurers out instantly — their entire business is interest.

Stage 2 — financial ratios. Even a clean-business company fails if its balance sheet is too leveraged with interest:

For a fund, you run that screen on every holding and check the weighted result. Amana doesn’t leave this to chance — the fund only buys names that already clear the activity and ratio tests, with ongoing Shariah advisory oversight rather than a one-time pass. That’s the difference between AMAGX and a conventional growth fund that occasionally happens to look clean: the screen is the mandate, not an accident.

What AMAGX actually holds in 2026

Here is the current top-10, pulled from Saturna’s fund page (as of 05/29/2026). Note what isn’t here: any bank, insurer, or financing company.

By sector, the fund runs roughly 53% technology, 14.9% industrials, 13.4% health care, and 5.6% consumer, with 0% financials. That sector profile is itself a halal signal — the absence of financials isn’t a coincidence, it’s the screen doing its job. A conventional S&P 500 fund like VOO carries 13–14% in financials, which is exactly why VOO fails the screen and AMAGX doesn’t.

The part most people miss: compliant isn’t the same as cheap

Here’s where the real money decision lives. Confirming AMAGX is halal is the easy part. What most Muslim investors don’t do is compare the cost of getting halal exposure — and over a 30-year holding period, the fee gap compounds into real dollars.

The 0.41-point gap between AMAGX (0.86%) and SPUS (0.45%) sounds trivial. It isn’t. On a $100,000 balance held for 30 years at a 7% gross return, the extra 0.41% in annual fees costs you roughly $30,000–$40,000 in foregone, compounded growth versus the cheaper ETF — money that left your account quietly, every year, as a management fee.

That doesn’t make AMAGX a bad choice. Active management can earn its fee: AMAGX posted a 5-year annualized return of 13.92% and a 10-year annualized return of 17.56% (as of 05/29/2026), driven by its concentrated big-tech and semiconductor positioning. The honest framing is a trade: you’re paying 0.86% for a manager’s stock selection and a 30-plus-year halal track record, versus paying 0.45% to mechanically track a screened index. Both are compliant. Only one is actively betting it can beat the index after fees.

When AMAGX is the right call

• You want a mutual fund (not an ETF) inside a 401(k) or IRA menu that offers Amana but not SPUS.
• You value the longest US halal track record and active Shariah oversight over the lowest possible fee.
• You’re comfortable with a concentrated, tech-heavy growth tilt rather than broad-market diversification.

When SPUS or HLAL wins

• You’re fee-sensitive and want the cheapest screened S&P-500-style exposure (SPUS at 0.45%).
• You prefer the tax efficiency and intraday liquidity of an ETF over a mutual fund.
• You want broader diversification than AMAGX’s concentrated top-10 (which is over 60% of the fund).

Holding AMAGX inside a Roth IRA, 401(k), or HSA

A common point of confusion: people ask whether a Roth IRA is halal. The account is a tax wrapper, not an investment — it’s permissible by itself, and the halal question is entirely about what you put inside it. AMAGX is a compliant holding, so pairing it with a Roth IRA is a clean combination: Shariah-screened growth that also compounds tax-free, with qualified withdrawals after 59½ never taxed.

Practical notes for 2026:

1. Roth IRA contribution limit: $7,500 ($8,500 with the age-50 catch-up). Roth phases out at $150K–$165K (single) / $236K–$246K (MFJ) modified income; above that, use a backdoor Roth.
2. 401(k): If your employer plan has no halal fund, you usually can’t force AMAGX in. Two fixes: a self-directed brokerage window inside the 401(k), or routing new money to an IRA where you control the menu. Avoid the default target-date fund — those hold interest-bearing bonds.
3. HSA: An HSA is also just a wrapper. Many HSA custodians let you invest in mutual funds once you clear a cash threshold — AMAGX qualifies as a compliant holding there too.

A note on purification

Even a screened fund can earn a sliver of incidental interest — from cash balances or holdings that carry a small permissible amount of interest income. AAOIFI methodology says you purify that share by donating it to charity (it is not tax-deductible since it was never truly your income to keep). AMAGX is a low-yield growth fund, so the purification amount is typically small, and Saturna manages compliance within its Islamic mandate. If you want to be precise, check the fund’s distributions and set aside the impermissible-income portion. For the screened ETFs, SP Funds publishes a quarterly purification calculator and Wahed publishes purification reports for HLAL.

The decision lever

If you’ve confirmed AMAGX is halal — and it is — the only question left is cost-versus-conviction. Pay the 0.86% if you specifically want active management, the longest halal track record in the US, and a mutual-fund format your plan supports. Drop to SPUS at 0.45% if you’d rather keep the fee gap (and the $30K–$40K it represents over decades) in your own account and accept index-tracking instead of stock-picking. Both clear the screen; your fee tolerance and your view on active management decide it.