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Previous: SMITH BARNEY ARIZONA MUNICIPALS FUNDS INC, 497, 1996-07-12 |
Next: SATURNA INVESTMENT TRUST, N-30D, 1996-07-12 |
PAGE 2 NOVEMBER 30, 1995 REPORT
[GRAPHIC OMITTED]GRAPHIC OF SEXTANT OMITTED
MAY 31, 1996 REPORT
FELLOW SHAREOWNERS:
For quite a while we have been positive on our outlook for the financial
markets. Those shareowners who agree with our outlook and who have been willing
to assume full market risk continue to be well rewarded. Six-month total return
for Sextant Growth Fund was 6.1%, and 8.2% for Sextant International. Yet, bond
investors have faced a struggle. Six month total return for Sextant short-Term
Bond Fund was 0.8% and -5.3% for Sextant Bond Income. These outcomes have been
the result of the same event: a healthy economy that caused interest rates to
increase while fueling stock market gains. We continue to hold our positive
outlook for the next year, based upon a stable US economy. Inflation worries
continue remote and consumer confidence is rising, fueled by increasing real
incomes and productivity. World economies are recovering based upon US
leadership. We continue to focus the stock Funds' investments in value-based
businesses. Internationally, we avoid markets that have reached excess and
concentrate on fundamentally sound markets and companies. Diversification is the
name of the game, both for our portfolios, and any investor looking at his or
her own situation. Our International Fund remains an important part of any
investment portfolio. The Sextant bond funds remain conservative in approach.
The price declines in longer term bonds has increased the current yield on
Sextant Bond Income Fund to 7.1%. Short-term Bond Fund (current yield 6.1%)
remains a great alternate or complement to a money fund as a place for temporary
cash reserves. As always, we appreciate your investing with us, and welcome your
comments and suggestions
RESPECTFULLY
NICHOLAS KAISER, PHELPS MCILVAINE,
PRESIDENT VICE PRESIDENT
Manager, Growth Manager, Short-Term Bond
and International Funds and Bond Income Fund
JUNE 21, 1996
INVESTMENTS
MAY 31, 1996
<TABLE>
<CAPTION>
RATING* ISSUER COUPON/MATURITY FACE AMOUNT MARKET
VALUE
- ------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS (35.4%)
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS (28.8%) 7.875% 4/15/98 $ 140,000 144,025
U.S. Treasury Note 7.125% 10/15/98 170,000 172,922
7.00% 4/15/99 225,000 228,269
7.125% 9/30/99 100,000 101,765
7.50% 10/31/99 155,000 159,553
6.00% 8/31/97 100,000 99,922
SUB-TOTAL 890,000 906,456
AGENCY OBLIGATIONS (6.6%)
Federal Farm Credit Bank 6.32% 4/1/99 200,000 209,012
CORPORATE OBLIGATIONS (61.9%)
AEROSPACE (3.1%)
BBB McDonnell Douglas Corp. 8.625% 4/15/97 95,000 96,929
BANKS (9.1%)
A- Chase Manhattan Corp. 9.05% 2/1/02 100,000 101,580
BBB- First USA Bank 5.75% 1/15/99 85,000 82,433
AA- Norwest Financial Inc. 6.23% 9/1/98 100,000 99,102
SUB-TOTAL 285,000 283,115
BANKS-SUPRA-NATIONAL (6.6%)
AAA Asian Development Bank 10.75% 6/01/97 100,000 104,200
AAA European Investment Bank 8.875% 2/15/99 100,000 104,522
SUB-TOTAL 200,000 208,722
CHEMICALS-PHOTOGRAPHY (3.0%)
A Eastman Kodak Corp. 7.25% 4/15/97 95,000 95,589
FINANCE-CONSUMER LOANS (8.6%)
AA- Associates Corp. N.A. 6.125% 2/1/98 35,000 34,780
AA- Associates Corp. N.A. 8.35% 12/22/98 100,000 103,318
A General Motors Acceptance Corp. 5.95% 12/28/98 40,000 39,186
BBB+ Heller Financial Corp. 8.00% 12/15/98 90,000 92,412
SUB-TOTAL 265,000 269,696
FINANCE-INVESTMENT BANKS (6.0%)
BBB+ Lehman Brothers Holdings 6.875% 6/8/98 90,000 89,977
BBB Salomon Inc. 6.70% 12/1/98 100,000 99,330
SUB-TOTAL 190,000 189,307
INSURANCE (1.1%)
A- TransAmerica Financial Corp. 6.75% 6/1/00 35,000 34,546
RETAILING-DEPARTMENT STORES (9.3%)
BBB Dayton Hudson Co. 7.50% 3/1/99 100,000 101,200
A J.C. Penny & Co. 5.375% 11/15/98 100,000 97,031
BBB Sears Roebuck Co. 9.25% 4/15/98 90,000 94,050
SUB-TOTAL 290,000 292,281
RETAILING-DISCOUNT (5.5%)
A- Supervalue Inc. 7.25% 7/15/99 80,000 80,616
AA Wal-Mart Stores 6.125% 10/1/99 95,000 93,101
SUB-TOTAL 175,000 173,717
TRANSPORTATION (1.3%)
A+ CSX Transportation Inc. 7.05% 3/15/98 40,000 40,074
UTILITIES (8.3%)
AA Central Illinois Public Service 5.875% 5/1/97 40,000 39,832
A+ Consolidated Nat. Gas 5.875% 10/1/98 120,000 117,408
A- Public Service Enterprise Group 8.75% 7/1/99 100,000 104,750
SUB-TOTAL 260,000 261,990
TOTAL INVESTMENTS (97.3%) $3,020,000 3,061,434
========= =========
Other Assets (net of liabilities) (2.7%) 84,733
Total Net Assets (100%) $3,146,167
=========
*These bond ratings reflect the adviser's current rating of each bond
as determined using Standard & Poor's and Moody's ratings.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Six Months Sept.28.'95
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT Ended (inception)
May 31, 1996 to Nov.30 '95
<S> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $5.03 $5.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.12 0.03
Net gains or losses on securities
(both realized and unrealized) (0.09) 0.03
------ ----
Total from investment operations 0.03 0.06
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.12) (0.03)
Distributions (from capital gains) 0.00 0.00
----- ----
Total distributions (0.12) (0.03)
NET ASSET VALUE AT END OF PERIOD $4.94 $5.03
TOTAL RETURN 0.83% 1.05%
RATIOS / SUPPLEMENTAL DATA
Net assets ($000), end of period $3,146 $878
Ratio of expenses to average net assets (not annualized)+ 0.41% 0.23%
Ratio of net investment income to average net assets (not annualized)+ 2.65% 0.68%
Portfolio turnover rate 18% 0.00%
<FN>
+ For the above periods, all or a portion of the operating expenses were
waived. If costs had not been waived, the resulting increase to expenses
per share in the period would have been $.009 and $.007. The increases to
the ratio of expenses to average monthly net assets would be .20% and .16%.
</FN>
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
AS OF MAY 31, 1996
ASSETS
Investments, at value
<S> <C>
Bonds (cost $3,098,639) $3,061,434
Receivable for securities sales 185,984
Cash (151,372)
Interest receivable 51,699
--------
Total Assets $3,147,745
==========
LIABILITIES
Payable to affiliate 1,578
Total Liabilities 1,578
NET ASSETS $3,146,167
==========
FUND SHARES OUTSTANDING 635,789
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares authorized, without par) $3,185,500
Undistributed net investment income (loss) (1)
Accumulated net realized gain (loss) on investments (2,182)
Unrealized net appreciation on investments (37,150)
---------
Net Assets applicable to Fund shares outstanding $3,146,167
===========
NET ASSET VALUE PER SHARE $4.94
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
SIX MONTHS ENDED MAY 31, 1996
INVESTMENT INCOME
<S> <C> <C>
Interest income $87,541
Amortization of bond premiums (15,151)
Accretion of bond discount 50
Gross investment income 72,440
EXPENSES
Investment adviser and administration fee 7,609
Professional fees 3,789
Filing and registration fees 1,112
Custodian fees 1,059
Printing and postage 704
Other expenses 173
----
Total gross expenses 14,446
Less earnings credits (1,059)
Less advisory fee waived (3,768)
-------
Net expenses 9,619
Net investment income 62,821
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from sales 456,625
Less cost of securities sold based on identified cost 458,807
-------
Realized net gain (2,182)
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period (37,205)
Beginning of period 3,737
Increase in unrealized gain for the period (40,942)
Net realized and unrealized gain on investments (43,124)
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $19,697
=======
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six Months Sept. 28,1995
Ended (inception)to
May 31,1996 Nov. 30,1995
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C>
Net investment loss $62,821 $4,320
Net realized gain (loss) on investments (2,182) 0
Net increase (decrease) in unrealized appreciation (40,942) 3,737
-------- -----
Net increase (decrease) in net assets from operations 19,697 8,057
------- -----
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income (62,768) (4,320)
Capital gains distributions 0 0
-- -
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares 2,852,791 892,239
Value of shares issued in reinvestment of dividends 62,080 4,321
------- -----
2,914,871 896,560
Cost of shares redeemed (603,365) (22,565)
--------- --------
Net increase in net assets from share transactions 2,311,506 873,995
---------- -------
Total increase in net assets 2,268,435 877,732
NET ASSETS
Beginning of period 877,732 0
-------- -
End of period $ 3,146,167 $877,732
========== =======
(Including undistributed net investment income of
($1) for May 31, 1996)
Shares of the Fund sold and redeemed
Number of shares sold 570,255 178,249
Number of shares issued in reinvestment of dividends 12,455 862
------- ----
Number of shares redeemed (121,527) 4,505
--------- -----
Net Increase in Number of Shares Outstanding 461,183 174,606
======= =======
</TABLE>
<TABLE>
<CAPTION>
INVESTMENTS
MAY 31, 1996
RATING* ISSUER COUPON/MATURITY FACE MARKET
AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS (20.4%)
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (20.4%)
U.S. Treasury Bond 7.5% due 11/15/2016 $ 100,000 $ 103,438
8.125% due 8/15/2019 100,000 110,453
SUB-TOTAL 200,000 213,891
CORPORATE OBLIGATIONS (75.7%)
AUTOMOTIVE (4.7%)
A- General Motors Corp. 8.125% due 4/15/2016 50,000 49,545
BANKS (4.3%)
A- Comerica Bank 7.125% due 12/1/2013 50,000 45,211
BUILDING PRODUCTS (4.2%)
A+ Lowes Corp. 7.00% due 10/15/2023 50,000 43,340
ELECTRIC UTILITIES (22.3%)
A- Alabama Power 7.75% due 2/1/2023 50,000 48,200
BBB Commonwealth Edison 7.5% due 7/1/2013 50,000 47,655
BBB New Orleans Public Service 8.00% due 3/1/2023 50,000 47,195
A+ Southern California Edison 6.9% due 10/12018 50,000 44,685
BBB Texas Utilities Corp. 8.5% due 8/1/2024 45,000 44,654
------- ------
SUB-TOTAL 245,000 232,389
ELECTRONICS (4.5%)
A- Phillips Electronics Corp. 7.25% due 2013 50,000 46,710
FINANCE (13.2%)
A Dean Witter Discover Corp. 6.75% due 10/15/2013 50,000 44,950
A+ Morgan Stanley Group 7.50% due 2/1/2024 50,000 45,795
BBB Paine Webber Group 7.625% due 2/15/2014 50,000 46,980
------- ------
SUB-TOTAL 150,000 137,725
FOOD & BEVERAGES (9.6%)
BBB- Nabisco Holdings (Convertible) 7.55% due 6/15/2015 50,000 47,854
A- Seagram Co. Ltd. 8.35% due 1/15/2022 50,000 52,355
------- ------
SUB-TOTAL 100,000 100,209
GLASS PRODUCTS (4.2%)
A Corning Glass 8.875% due 3/15/2016 40,000 44,452
RETAIL DRUGS (4.3%)
A- Rite Aid Corporation 6.875% due 8/15/2013 50,000 44,830
TELECOMMUNICATIONS (4.4%)
AA- US West Communications 7.20% due 11/10/2026 50,000 45,530
TOTAL INVESTMENTS (96.1%) 1,035,000 1,003,832
========= =========
Other Assets (net of liabilities) (3.9%) 40,416
Total Net Assets (100%) $1,044,248
=========
*These bond ratings reflect the adviser's current
rating of each bond as determined using Standard & Poor's and Moody's ratings.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Fund shareowners changed the investment objectives and approved a new investment
advisory contract on September 28, 1995. Earlier data in this table are unlikely
to be indicative of future operations of the Fund.
Six Year ended Year ended 3/1/93
Months November November (Inception)
Selected data per share of capital outstanding throughout period Ended 30, 1995 30, 1994 to 11/30/93
May 31, 1996
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $4.91 4.39 5.03 5.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.15 0.24 0.25 0.16
Net gains or losses on securities
(both realized and unrealized) (0.41) 0.52 (0.64) 0.04
------ ----- ------ ----
Total from investment operations (0.26) 0.76 (0.39) 0.20
LESS DISTRIBUTIONS
Dividends (from net investment income)
Non-taxable 0.00 (0.236) (0.250) (0.167)
Taxable (0.15) (0.004) n/a n/a
Distributions (from capital gains) 0.00 0.00 0.00 (0.003)
----- ----- ----- -------
Total distributions (0.15) (0.24) (0.25) (0.17)
NET ASSET VALUE AT END OF PERIOD $4.50 $4.91 $4.39 $5.03
TOTAL RETURN (5.30)% 17.69% 8.24% 4.86%
RATIOS/SUPPLEMENTAL DATA
Net assets ($000), end of period $1,044 $ 1,096 1,456 1,662
Ratio of expenses to average net assets (not annualized)+ 0.21% 0.54% 0.41% 0.35%
Ratio of net investment income to average net assets (not 3.48% 5.15% 5.48% 3.28%
annualized)+
Portfolio turnover rate 77% 77% 74% 36%
<FN>
+ For the above periods, all or a portion of the operating expenses were
waived. If these costs had not been waived, the resulting increases to
expenses per share in each of the above periods would be $0.02, $.03,
$0.22 and $0.13, respectively. The increase to the ratio of expenses to
average monthly net assets would be 39%, .60%, .51% and .26%,
respectively.
</FN>
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
AS OF MAY 31, 1996
ASSETS
Investments, at value
<S> <C>
Bonds (cost $1,097,162) $1,003,832
Cash 16,455
Interest receivable 20,305
Insurance deposit 400
---
Total Assets $1,040,992
LIABILITIES
Payable to affiliate (3,256)
Total Liabilities (3,256)
NET ASSETS $1,044,248
=========
FUND SHARES OUTSTANDING 232,159
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares authorized, without par) 1,203,192
Undistributed net investment loss (1,069)
Accumulated net realized gain (loss) on investments (64,095)
Unrealized net appreciation on investments (93,780)
--------
Net Assets applicable to Fund shares outstanding $1,044,248
=========
NET ASSET VALUE PER SHARE $4.50
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1996
INVESTMENT INCOME
<S> <C> <C>
Tax-free interest income $ 893
Taxable interest income 38,822
Amortization of bond premiums (1,222)
Accretion 26
Gross investment income $38,519
EXPENSES
Investment adviser and administration fee 3,357
Professional fees 1,133
Custodian fees 622
Filing and registration fees 415
Printing and postage 300
Other expenses 285
---
Total gross expenses 6,112
Less earnings credits (622)
Less advisory fee waived (3,357)
-------
Net expenses 2,133
Net investment income 36,386
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from sales 808,214
Less cost of securities sold based on identified cost (802,092)
---------
Realized net gain 6,122
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period (93,780)
Beginning of period 12,631
------
Increase in unrealized gain for the period (106,411)
---------
Net realized and unrealized gain on investments (100,289)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (63,903)
========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
MAY 31, 1996 NOV. 30, 1995
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C>
Net investment income 36,386 57,535
Net realized gain (loss) on investments 6,122 (15,110)
Net increase (decrease) in unrealized appreciation (106,411) 170,684
Net increase (decrease) in net assets from operations (63,903) 213,109
-------- -------
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income (37,204) (57,308)
-------- --------
Capital gains distributions 0 0
-- -
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares 193,612 623,415
Value of shares issued in reinvestment of dividends 36,043 52,937
------- ------
229,655 676,352
Cost of shares redeemed (180,124) (1,192,060)
--------- ---------
Net increase (decrease) in net assets from share transactions 49,531 (515,708)
------- ---------
Total decrease in net assets (51,576) (359,907)
NET ASSETS
Beginning of period 1,095,824 1,455,731
---------- ---------
End of period $1,044,248 $1,095,824
========= =========
(Including undistributed net investment income of
($1,069) at May 31,1996 and ($26) for Nov. 30,1995)
Shares of the Fund Sold and Redeemed
Number of shares sold 40,757 165,574
Number of shares issued in reinvestment of dividends 7,660 11,132
Number of shares redeemed (39,463) (285,218)
-------- ---------
Net Increase (Decrease) in Number of Shares Outstanding 8,954 (108,512)
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
INVESTMENTS
MAY 31, 1996
NUMBER MARKET
ISSUE OF SHARES COST VALUE
- ---------------------------------------------------------------------------------------------------
COMMON STOCKS
<S> <C> <C> <C>
BANKING (9.0%)
Washington Mutual Savings Bank 3,000 $ 44,124 86,063
Northwest Saving Bank 3,000 36,519 36,750
------- ------
SUB-TOTAL 80,643 122,813
COMPUTERS AND SOFTWARE (12.8%)
Adobe Systems 1,200 50,490 44,550
Hewlett Packard 400 42,650 42,700
Microsoft 400 14,897 47,500
Oracle 1,200 37,879 39,750
------- ------
SUB-TOTAL 145,916 174,500
CONSTRUCTION (5.7%)
BMC West 2,250 27,453 39,375
Butler Manufacturing 1,000 31,071 37,750
------- ------
SUB-TOTAL 58,524 77,125
ELECTRONICS (4.8%)
FLIR Systems 2,500 27,611 35,000
Merix 1,000 31,822 31,125
------- ------
SUB-TOTAL 59,433 66,125
FINANCIAL (11.7%)
Franklin Resources 800 13,562 46,900
McDonald & Co. 2,000 34,347 39,000
Schwab, Charles 3,025 9,117 73,356
------ ------
SUB-TOTAL 57,026 159,256
MEDICAL/HEALTHCARE (12.1%)
Cardinal Health 500 26,135 31,938
Genentech 1,000 37,225 52,625
Humana 1,300 30,300 28,600
Rotech Medical 2,400 33,976 51,600
------- ------
SUB-TOTAL 127,636 164,763
MINING (3.4%)
ASARCO 1,500 $50,517 47,062
OIL & GAS PRODUCTION (6.9%)
Atlantic Richfield 450 51,620 53,831
Noble Drilling 3,000 21,322 40,125
------- ------
SUB-TOTAL 72,942 93,956
PAPER & PRODUCTS (1.8%)
Boise Cascade 600 15,409 25,200
POLLUTION CONTROL (3.3%)
Ionics 900 36,864 44,550
RETAIL (7.3%)
Nordstrom 1,000 37,703 51,000
Albertson's 1,200 26,255 47,850
------- ------
SUB-TOTAL 63,958 98,850
STEEL (3.8%)
Geneva Steel 4,000 28,667 23,500
Schnitzer Steel Industries 1,000 29,500 28,250
------- ------
SUB-TOTAL 58,167 51,750
TECHNOLOGY (6.4%)
GaSonics International 3,000 31,631 39,750
Motorola 700 40,511 46,813
------- ------
SUB-TOTAL 72,142 86,563
TRANSPORTATION (11.3%)
Airborne Freight 1,000 25,784 25,250
Fritz Companies 2,000 29,069 69,000
Greenbrier Companies 3,000 44,229 48,000
------- ------
SUB-TOTAL 99,082 142,250
TOTAL INVESTMENTS (99.4%) $ 998,259 $1,354,763
========
Other Assets (net of liabilities) (0.6%) $ 7,778
Total Net Assets (100%) $1,362,541
=========
*Non Income Producing Investments
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
FUND SHAREOWNERS CHANGED THE INVESTMENT OBJECTIVES AND APPROVED A NEW INVESTMENT
ADVISORY CONTRACT ON OCTOBER 12, 1990 AND AGAIN ON SEPTEMBER 28, 1995. EARLIER
DATA IN THIS TABLE ARE UNLIKELY TO BE INDICATIVE OF FUTURE OPERATIONS OF THE
FUND.
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING
THROUGHOUT THE PERIOD
Six Sept. 4,
Months (commence-
Ended ment of
May 31 For Year Ended November 30, operations)
-------------------------------------------------------- to
1996 1995 1994 1993 1992 1991 1990 1989 1988 Nov. 30 '87
---- ---- ---- ---- ---- ---- ---- ---- ---- -------
NET ASSET VALUE AT BEGINNING
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OF PERIOD $7.42 $5.82 $6.38 $5.93 $5.55 $4.93 $4.88 $4.88 $4.96 $5.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (0.01) (0.03) (0.03) 0.01 0.01 0.04 0.27 0.28 0.30 0.06
Net gains or losses on
securities
(both realized and 0.46 1.82 (0.53) 0.45 0.38 0.60 0.01 0.00 (0.08) (0.04)
unrealized) ----- ----- ------ ----- ----- ----- ----- ----- ------ ------
Total from investment operations 0.45 1.79 (0.56) 0.46 0.39 0.64 0.28 0.28 0.22 0.02
LESS DISTRIBUTIONS
Dividends (from net
investment income) 0.00 0.00 0.00 (0.01) (0.01) (0.02) (0.23) (0.28) (0.30) (0.06)
Distributions (from capital 0.00 (0.19) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
gains) ----- ------ ----- ----- ----- ----- ----- ----- ----- ----
Total distributions 0.00 (0.19) 0.00 (0.01) (0.01) (0.02) (0.23) (0.28) (0.30) (0.06)
NET ASSET VALUE AT END
OF PERIOD $7.87 $7.42 $5.82 $6.38 $5.93 $5.55 $4.93 $4.88 $4.88 $4.96
TOTAL RETURN 6.07% 30.76% 8.78% 7.76% 7.01% 11.79% 7.37% 5.22% 5.12% 2.17%
RATIOS / SUPPLEMENTAL DATA
Net assets ($000), end of period $1,362 $1,137 $1,010 $1,425 $1,321 $947 $53 $1,356 $1,365 $315
Ratio of expenses to ave. net
assets+ 0.53% 1.63% 1.50% 1.40% 1.60% 1.93% 1.06% 0.89% 0.25% .06%*
Ratio of net investment income to
ave. net assets+ (0.069)% 0.45% 0.43% 0.15% 0.17% 0.60% 5.25% 5.60% 5.86% .85%*
Portfolio turnover rate 0.17% 40.00% 12.00% 25.00% 46.00% 16.00% 29.00% 19.00% 20.00% 0.00%
Average commission rate paid $.0518 $.0572 *not
annualized
<FN>
+ For 1995 and for each of the above years prior to 1992, all or a portion of
the operating expenses were waived. If these costs had not been waived, the
resulting increase to expenses per share in each of the above periods would
be $.01, $.01, $.05, .$.05, $.10, $.16 and $.02, respectively. The increase
to the ratio of expenses to average net assets would have been 0.78%, 0.21%,
0.76%, 1.02%, 1.28%, 2.02%, and 0.17%.
</FN>
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
AS OF MAY 31, 1996
ASSETS
Investments, at value
<S> <C>
Common stocks (cost $998,259) $ 1,354,763
Cash 12,420
Dividends receivable 675
Insurance deposit 1,214
-----
Total Assets 1,369,072
LIABILITIES
Payable to affiliate 6,531
Total Liabilities 6,531
NET ASSETS $ 1,362,541
=========
FUND SHARES OUTSTANDING 173,109
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares authorized, without par) 1,000,311
Undistributed net investment income (loss) (10,258)
Accumulated net realized gain (loss) on 15,984
investments
Unrealized net appreciation on investments 356,504
-------
Net Assets applicable to Fund shares outstanding $1,362,541
============
NET ASSET VALUE PER SHARE $7.87
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1996
INVESTMENT INCOME
<S> <C>
Dividends $ 5,567
Gross investment income $ 5,567
EXPENSES
Investment adviser and administration fee 3,912
Professional fees 1,230
Custodial fees 950
Printing and postage 492
Filing and 469
registration fees
Other expenses 301
---
Total gross expenses 7,354
Less earnings credits (950)
Net expenses 6,404
Net investment (837)
(loss)
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from sales 180,229
Less cost of securities sold based on identified cost 160,404
-------
Realized net gain 19,825
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period 356,504
Beginning of period 289,014
-------
Increase in unrealized gain for the period 67,490
------
Net realized and unrealized gain on investments 87,315
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $86,478
======
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
MAY 31, 1996 NOV. 30, 1995
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C>
Net investment loss $ (837) (4,386)
Net realized gain (loss) on investments 19,825 54,724
Net increase (decrease) in unrealized appreciation 67,490 214,185
------- -------
Net increase (decrease) in net assets from operations 86,478 264,523
------- -------
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income 0 0
-- -
Capital gains distributions 0 (28,392)
-- --------
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares 361,097 306,751
Value of shares issued in reinvestment of dividends 0 28,060
-- ------
361,097 334,811
Cost of shares redeemed (222,037) (444,025)
-------- ---------
Net decrease in net assets from share transactions 139,060 (109,214)
-------- ---------
Total increase (decrease) in net assets 225,538 126,917
NET ASSETS
Beginning of period 1,137,003 1,010,086
---------- ---------
End of period 1,362,541 1,137,003
========== =========
(Including undistributed net investment income of
($10,258) for May 31,1996 and ($9,420) for Nov. 30,1995)
Shares of the Fund Sold and Redeemed
Number of shares sold 48,379 43,111
Number of shares issued in reinvestment of dividends 0 3,782
Number of shares redeemed (28,485) (67,343)
-------- --------
Net Decrease in Number of Shares Outstanding 19,894 (20,450)
====== ========
</TABLE>
<TABLE>
<CAPTION>
INVESTMENTS
MAY 31, 1996
NUMBER MARKET
ISSUE OF SHARES COST VALUE
- ----------------------------------------------------------------------------------------
COMMON STOCKS
AUTOMOTIVE MFG. (2.0%)
<S> <C> <C> <C>
Volvo AB ADS 500 $ 11,687 $ 10,500
BANKING AND FINANCIAL (13.7%)
Aegon NV ADR 300 11,513 14,400
Australia and New Zealand Bank ADR 500 10,875 12,000
Banco Bilbao Vizcaya 400 15,505 14,850
Banco de A. Edwards ADS 500 10,907 9,875
Banco Latinoamericano de Export SA 200 10,907 9,875
Hutchison Whampoa ADR 300 9,325 11,475
------ ------
SUB-TOTAL 68,032 72,162
CONSTRUCTION (5.4%)
ASEA AB ADS 100 10,000 10,244
BCE Inc. 450 15,830 17,887
------- ------
SUB-TOTAL 25,830 28,131
CONSUMER PRODUCTS (5.3%)
Coca Cola FEMSA S.A. ADR 500 9,750 14,437
Gucci Group NV 200 10,925 13,400
------- ------
SUB-TOTAL 20,675 27,837
CLOSED END COUNTRY FUNDS (10.3%)
Austria Fund 1,000 7,923 8,875
Irish Investment Fund 900 10,238 11,700
Malaysia Fund 600 9,750 11,250
Singapore Fund 1,000 13,777 13,000
Turkish Investment Fund 1,400 9,163 8,575
------ -----
SUB-TOTAL 50,851 53,400
ELECTRICAL EQUIPMENT (3.5%)
Electrolux AB ADR 200 8,800 10,200
NEC Corp ADR 150 10,219 8,288
------- -----
SUB-TOTAL 19,019 18,488
MEDICAL-DRUGS (5.0%)
Glaxo Wellcome plc ADR 400 9,800 10,450
Novo-Nordisk A/S ADR 450 14,701 15,581
------- ------
SUB-TOTAL 24,501 26,031
NATURAL RESOURCE PRODUCTION (16.3%)
Barrick Gold 400 9,600 12,600
Broken Hill Proprietary ADR 200 11,700 12,075
RTZ Corp PLC ADS 200 11,375 12,650
Numac Energy 2,000 8,853 8,875
Petroleum Geo-Services A/S 500 10,979 15,313
Total S.A. ADR 300 8,813 10,800
YPF S.A. ADS 600 12,345 13,200
------- ------
SUB-TOTAL 73,665 85,513
PAPER PRODUCTS (3.8%)
Abitibi-Price 800 11,847 10,900
Aracruz Cellulose S.A. ADR 1,000 9,875 9,000
------ -----
SUB-TOTAL 21,722 19,900
PHOTOGRAPHIC EQUIPMENT (4.2%)
Canon, Inc. ADR 100 $ 8,687 9,800
Fuji Photo Film ADR 200 10,050 12,400
------- ------
SUB-TOTAL 18,737 22,200
TELECOMMUNICATIONS (14.7%)
British Sky Broadcasting ADS 300 11,062 12,450
Cable & Wireless plc ADR 600 13,020 12,375
PT Indosat ADR 300 15,051 10,275
------- ------
Telebras ADS 300 15,052 19,313
Telecom Corp New Zealand ADS 150 10,050 9,844
Telefonica de Espana ADS 250 10,250 13,094
------- ------
SUB-TOTAL 70,017 77,351
TRANSPORTATION (6.5%)
British Airways 150 10,931 13,012
Canadian Pacific Ltd. 500 8,164 10,250
KLM Royal Dutch Airlines 300 10,650 10,650
------- ------
SUB-TOTAL 29,745 33,912
UTILITIES-ELECTRIC (4.2%)
Enersis S.A. ADR 400 10,100 11,750
Korea Electric Power ADR 400 9,500 10,350
------ ------
SUB-TOTAL 19,600 22,100
TOTAL INVESTMENTS (94.9%) $454,081 $ 497,525
======== =======
Other Assets (net of liabilities)(5.1%) 36,573
------
Total Net Assets (100%) $ 524,098
=======
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Six Months Sept. 28,'95
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT Ended (Inception)to
May 31,1996 Nov. 30,'95
<S> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $4.99 $5.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 (0.02)
Net gains or losses on securities (both realized and unrealized) 0.39 0.01
----- ----
Total from investment operations 0.41 (0.01)
LESS DISTRIBUTIONS
Dividends (from net investment income) 0.00 0.00
Distributions (from capital gains) 0.00 0.00
----- ----
Total distributions 0.00 0.00
NET ASSET VALUE AT END OF PERIOD $5.40 $4.99
TOTAL RETURN 8.20% (0.20)%
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets ($000), end of period $524 $328
Ratio of expenses to average net assets (not annualized) 1.10% 0.49%
Ratio of net investment income to
Average net assets (not annualized) 0.33% (0.38)%
Portfolio turnover rate (not annualized) 6% 12%
Average commission rate paid $0.0972 $0.0192
<FN>
For the above periods, all or a portion of the operating expenses were
waived. If costs had not been waived and directly assumed, the resulting
increase to expenses per share in the period would have been $.01 and $.01.
The increase to the ratio of expenses to average monthly net assets would
be .21% and .21%
</FN>
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
AS OF MAY 31, 1996
ASSETS
Investments, at value
<S> <C>
Common stocks (cost $454,081) $ 497,525
Cash 26,805
Dividends receivable 1,568
Total Assets 525,898
LIABILITIES
Payable to affiliate 1,800
Total Liabilities 1,800
NET ASSETS $524,098
=======
FUND SHARES OUTSTANDING 96,983
Paid in capital (unlimited shares authorized, without par) 482,838
Undistributed net investment income (loss) 585
Accumulated net realized gain (loss) on investments (2,768)
Unrealized net appreciation on investments 43,443
------
Net Assets applicable to Fund shares outstanding $524,098
=======
NET ASSET VALUE PER SHARE $5.40
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1996
INVESTMENT INCOME
<S> <C>
Dividends $ 6,885
Gross investment income $6,885
EXPENSES
Investment adviser and administration fee 1,466
Professional fees 1,259
Filing and registration fees 1,023
Custodian fees 972
Foreign taxes paid 941
Printing and postage 238
Other expenses 232
Total gross expenses 6,131
Less earnings credits (972)
Net expenses 5,159
Net investment income 1,726
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from sales ` 18,979
Less cost of securities sold based on identified cost 20,563
Realized net loss (1,584)
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period 43,443
Beginning of period 2,178
Increase in unrealized gain for the period 41,265
Net realized and unrealized gain on investments 39,681
------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS 41,407
======
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six Months Period 9/28/95
Ended (inception) to
5/31/96 11/30/96
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C>
Net investment loss $ 1,726 (1,140)
Net realized gain (loss) on investments (1,584) (1,184)
Net increase (decrease) in unrealized appreciation 41,265 2,178
------- -----
Net increase (decrease) in net assets from operations 41,407 (146)
------- -----
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income 0 0
Capital gains distributions 0 0
-- -
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares 296,691 328,284
Value of shares issued in reinvestment of dividends 0 0
-- -
296,691 328,284
Cost of shares redeemed (142,138) 0
--------- -
Net increase in net assets from share transactions 154,553 328,284
-------- -------
Total increase in net assets 195,960 328,138
NET ASSETS
Beginning of period 328,138 0
-------- -
End of period $ 524,098 328,138
======== =======
(Including undistributed net investment income of
($1,140) for Nov. 30,1995)
Shares of the Fund sold and redeemed
Number of shares sold 57,714 65,795
Number of shares issued in reinvestment of dividends 0 0
-- -
Number of shares redeemed (26,525) 0
-------- -
Net Increase in Number of Shares Outstanding 31,189 65,795
======= ======
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
Saturna Investment Trust (the "Trust") was established under Washington State
Law as a Business Trust on February 20, 1987. The Trust's name was changed from
Northwest Investors Trust on July 11, 1995. The Trust is registered as a
no-load, open-end series investment company under the Investment Company Act of
1940, as amended. Five portfolio series have been created to date: Sextant
Short-Term Bond Fund, Sextant Bond Income Fund, Sextant Growth Fund, and Sextant
International Fund (the "Funds"), and Idaho Tax-Exempt Fund, distributed through
a separate prospectus and the results of which are contained in a separate
report.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Funds.
INVESTMENTS:
Securities traded on a national exchange or the national over-the-counter market
system are valued at the last sale price or, in the absence of any sale on that
date, the closing bid price. Other securities traded in the over-the-counter
market are valued at the last bid price. Fixed-income securities for which there
are no publicly available market quotations are valued using a matrix based on
maturity, quality, yield and similar factors, which are compared periodically to
multiple dealer bids and adjusted by the adviser under policies established by
the Trustees.
The cost of securities is the same for accounting and Federal income tax
purposes. Securities transactions are recorded on trade date. Realized gains and
losses are recorded on the identified cost basis.
INCOME AND EXPENSES:
Interest income is reduced by the amortization of bond premiums, on a constant
yield-to-maturity basis from purchase date to maturity. Interest income is
increased by accretion only for bonds underwritten as original issue discounts.
Market discounts are recorded as realized gains upon disposition. 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.
The Adviser has agreed to certain limits on expenses, as described below.
INCOME TAXES:
The Funds have elected to be taxed as regulated investment companies under the
Internal Revenue Code and distribute substantially all of their taxable net
investment income and realized net gains on investments.
Therefore, no provision for Federal income taxes is required.
DIVIDENDS AND DISTRIBUTIONS TO SHAREOWNERS:
Dividends and distributions to shareowners are recorded on the ex-dividend date.
For the Sextant Short-Term Bond Fund and Sextant Bond Income Fund, dividends are
paid daily and distributed on the last business day of each month. For the
Sextant Growth Fund and Sextant International Fund, dividends are payable at the
end of each November. Shareowners electing to reinvest dividends and
distributions purchase additional shares at the net asset value on the payable
date.
NOTE 3--TRANSACTIONS WITH AFFILIATED PERSONS
Under a contract approved by shareowners on September 28, 1995, (the
"Contract"), Saturna Capital Corporation provides investment advisory services
and certain other administrative and distribution services to conduct Trust
business. Each of the Funds pays the Adviser an Investment Advisory and
Administrative Services Fee (the "Base Fee") of .60% of average net assets per
annum, payable monthly. The Base Fee is subject to adjustment up or down
depending on the investment performance of the Fund relative to a specified
index (the "Performance Adjustment"). No performance adjustment is applicable
during the first year any Agreement is in place. The Adviser has voluntrily
undertaken to limit expenses of Sextant Bond Income Fund and Sextant Short-Term
Bond Fund to 0.60% through March 31, 1997 and waives its investment advisory and
administrative fee as to either Fund completely so long as assets of that Fund
are less than $2 million.
For the six months ended May 31, 1996, Sextant Bond Income Fund and Sextant
Growth Fund incurred advisory expenses of $3,357 and $3,912, respectively.
Sextant International Fund incurred advisory expenses of $1,466 and Sextant
Short-Term Bond Fund incurred advisory expenses of $7,609.
In accordance with the expense waiver noted above, for the six months ended May
31, 1996, Saturna Capital waived $3,768 of the Sextant Short-Term Bond Fund
advisory fee and $3,357 of that of Sextant Bond Income Fund.
In accordance with the Funds' agreement with their custodian bank, National City
Bank, for the six months ended May 31, 1996, custodian fees of Sextant
Short-Term Bond Fund, Sextant Bond Income Fund, Sextant Growth Fund and Sextant
International Fund, amounted to $1,059, $622, $950 and $972, respectively. Bank
earnings credits eliminated these charges.
One trustee, who also serves as the president of the Trust, is a director and
president of the Adviser. Prior to January 1, 1996, all trustees served without
compensation. Since that date, unaffiliated trustees began to receive $100 per
Board or committee meeting attended. On May 31, 1996, trustees, officers and
their immediate families as a group owned 14%, 30% 14% and 34% of the
outstanding shares of Sextant Short-Term Bond Fund, Sextant Bond Income Fund,
Sextant Growth Fund and Sextant International Fund, respectively.
The Trust acts as a distributor of its own shares, except in those states in
which Investors National Corporation (a subsidiary of Saturna Capital
Corporation) is itself registered as a broker-dealer and acts as distributor
without compensation.
Investors National Corporation is the primary stockbroker used to effect
portfolio transactions for Sextant Growth Fund and Sextant International Fund,
and was paid $1,381 and $962, respectively in commissions at deep discount rates
during the six months ended May 31, 1996.
NOTE 4--INVESTMENTS
At May 31, 1996, the net unrealized appreciation of investments for Sextant Bond
Income Fund of ($93,780) comprised net unrealized gains of $0 and unrealized
losses of ($93,780). Additionally, the net unrealized appreciation of
investments for Sextant Growth Fund, Sextant Short-Term Bond Fund and Sextant
International Fund were $356,504, ($37,205), and $43,443, which consist of gains
of $375,244, $9,012, and $52,934, and unrealized losses of ($18,740), ($46,217)
and ($9,491), respectively.
During the six months ended May 31, 1996, Sextant Short-Term Bond Fund purchased
$2,715,477 of securities and sold $461,020. Comparable figures for Bond Income
Fund are $853,224 and $802,093; for Growth Fund $412,818, and $160,404, and for
International Fund $175,247 and $20,563. Included in the above amounts for
Sextant Short-Term Bond Fund and Sextant Bond Income Fund are purchases of
$619,792 and $197,320, and sales of $311,021 and $104,008 of U.S. Government
securities, respectively.
[GRAPHIC OMITTED]GRAPHIC OF SEXTANT OMITTED
Saturna Capital
MUTUAL FUNDS
1300 No. State Street
Bellingham WA 98225-4730
1-800/SATURNA
(800/728-8762)
[WWW.SATURNA.COM]
This report is issued for the information of the shareowners of the Funds. It is
not authorized for distribution to prospective investors unless it is
accompanied or preceded by an effective prospectus relating to the securities of
the Trust. The Sextant Funds are series of Saturna Investment Trust.
Graphic of ship omitted SHORT-TERM BOND
Graphic of anchor omitted BOND INCOME
Graphic of lighthouse omitted GROWTH
Graphic of globe omitted INTERNATIONAL
MAY 31, 1996 REPORT
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