Faith and money

The Amana Income Fund is one of the top mutual funds around -- religious or not. It received the 2007 Lipper Fund Award for the best equity income fund over three years and has a five-star rating from Morningstar.

One of the reasons Amana has done so well recently is that it avoids investing in financial institutions -- one of the worst-performing sectors amid the recent credit crunch and mortgage meltdown. That's because usury is forbidden according to Islamic law, called Sharia.

Fund manager Nicholas Kaiser, who is not a Muslim, only invests in companies that get 5% or less of their revenues from actions prohibited by Sharia, such as interest-lending or the sale of alcohol or pork. The fund's largest holding is natural gas producer Encana Corp.

"Not investing in financials proved to be good for us recently," said Kaiser. "But there is also a risk of not being in safe financial services [firms] when they are performing well."

But even when financials weren't mired in a slump, Amana still performed well. In 2003 for example, a year when many bank stocks surged, Amana Income returned 28.6%.

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