Saturna Investment Trust offers four NO-LOAD Sextant Funds:
Sextant Growth Fund seeks long-term growth through investment
in U.S. common stocks
Sextant International Fund seeks long-term growth through
investment in foreign stocks
Sextant Short-Term Bond Fund seeks capital stability and a
high level of current income by investing in short-term debt securities
Sextant Bond Income Fund seeks a high level of current income
by investing in long-term debt securities
A Statement of Additional Information dated March 29, 1996 has been filed
with the Securities and Exchange Commission and is incorporated by
reference into this Prospectus. You may obtain a free copy by writing or
calling:
Saturna Capital
1300 N. State Street
Bellingham, WA 98225
800/ SATURNA [800/ 728-8762]
E-mail: [email protected]
This Prospectus contains information you should read before investing in
the Funds. Please read it carefully and keep it for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES AUTHORITY NOR HAS THE COMMISSION
OR ANY STATE AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
GRAPHIC OF SEXTANT OMITTED
From
SATURNA CAPITAL
Mutual Funds
No-Load,
No Sales Charge,
No 12b-1
PROSPECTUS
March 29, 1996
Expenses
The Sextant Funds impose no sales load on purchases or reinvested
dividends, no 12b-1 fees, nor any deferred sales load upon redemption.
There are no redemption fees or exchange fees.
The following table illustrates each Funds' estimated operating expenses.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Sextant
Sextant Intern- Sextant
Sextant Bond ational Short-Term
Growth Income Fund Bond
Fund Fund (4) Fund
(2) (3) (5)
<S> <C> <C> <C> <C> <C>
Management Fees (after waive0.64%)(6) 0.00% 0.09% 0.00%
12b-1 Expenses NONE NONE NONE NONE
Other Expenses 0.99 0.54% 0.40% 0.23%
Total Fund Operating 1.63% 0.54% 0.49% 0.23%
Expenses(6)
</TABLE>
<TABLE>
For example:
Each Fund estimates
<S> <C> <C> <C> <C> <C>
paying these 1 year $17 $6 $5 $2
expenses on a
$1,000 investment 3 yrs-- $55 $19 $16 $8
assuming a 5% 5 yrs-- $96 $33 $29 $13
net annual return: 10 yrs-- $219 $74 $265 $30
<FN>
(1) Each Sextant Fund pays an Investment Advisory and Administrative Services Fee of 0.60%
annually. This base fee is then subject to a plus or minus performance adjustment of up to
0.20% (Sextant Bond Income and Sextant Short-Term Bond) or 0.30% (Sextant Growth and
Sextant International). The table reflects the maximum fees, which may be subject to fee
waivers.
(2) Prior to September 28, 1995, Sextant Growth Fund operated as Northwest Growth Fund with
different fee arrangements and investment objectives. Total Operating Expenses were 1.84%
but voluntary fee waivers (Note 6) reduced expenses to 1.63%.
(3) Prior to September 28, 1995, Sextant Bond Income Fund operated as Washington Tax-Exempt
Fund with different fee arrangements and investment objectives. Total Operating Expenses
were 1.16% but voluntary fee waivers (Note 6) reduced expenses to 0.54%.
(4) The Sextant International Fund began operations on September 28, 1995. Expense figures
based on its short operating history may not be indicative of future results. Total
Operating Expenses were 0.70% but voluntary fee waivers (Note 6) reduced expenses to 0.49%.
(5) The Sextant Short-Term Bond Fund began operations on September 28, 1995. Expense figures
based on its short operating histor may not be indicative of future results. Total
Operating Expenses were 0.28% but voluntary fee waivers (Note 6) reduced expenses to 0.23%.
(6) The Adviser voluntarily waives its
Management Fees to limit the expenses of the Sextant Bond Funds to 0.60% annually through
March 31, 1997 and to waive its management fee when assets are less than $2 million. The
Funds custodian also waives a portion of its fees for all four Funds. Without these
limitations, Management Fees of the Bond Funds might be as high as 0.80%, and Total
Operating Expenses 1.20%. The example assumes a continuation of this expense limit for the
3, 5 and 10 year periods.
</FN>
</TABLE>
The preceding information is intended to help you in understanding the
various (both direct and indirect) expenses that an investor will bear.
This table should not be considered a representation of past or future
expenses and actual expenses are likely to be more or less than those
shown. See Financial Highlights and Investment Adviser for more details.
1
Financial Highlights
The following schedules set forth selected data for a share of
beneficial interest of each of the Sextant Funds as set forth below. The
following schedules have been audited by Price Waterhouse LLP, independent
accountants, whose report thereon is included in the Annual Report to
Shareowners (available without charge from the Trust), which is
incorporated by reference into the Statement of Additional Information.
These schedules should be read with the other financial statements and
notes thereto included in the Trust's Annual Report which also includes
Management's Discussion of the Fund's performance.
[GRAPHIC OMITTED]
Sextant Bond Income Fund
Selected data for a share of Sextant Bond Income Fund beneficial interest
outstanding from March 1, 1993 (commencement of operations) through November 30,
1995.
<TABLE>
<CAPTION>
Period
Year Year March 1,
Ended Ended 1993 to
November November November
30, 1995 30, 1994 30, 1993
--------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period $4.39 $5.03 $5.00
Income From Investment Operations
Net Investment Income 0.24 0.25 0.16
Net gains or losses on securities (both realized
and unrealized) 0.52 (0.64) 0.04
Total From Investment Operations 0.76 (0.39) 0.20
Less Distributions
Dividends (from net investment income)
Non-taxable (0.236) (0.25) (0.167)
Taxable (0.004) n/a n/a
Distributions (from capital gains) 0.00 0.00 (0.003)
Total Distributions (0.24) (0.25) (0.17)
Net asset Value at end of period $4.91 $4.39 $5.03
Total Return 17.69% (8.24)% 4.86%
Ratios/Supplemental Data
Net Assets (000), End of Period $1,096 $1,456 $1,662
Ratio of Expenses to Average Net Assets* 0.54% .41% .35%*
Ratio of Net Investment Income to Average Net Assets*5.15% 5.48% 3.28%*
Portfolio Turnover Rate 77% 74% 36%*
*Not annualized
<FN>
*For each of 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 $.03, $0.22, and $0.13,
respectively. The increase to the ratio of expenses to average monthly net assets
would be .60%, .51% and .26%, respectively.
</FN>
</TABLE>
<TABLE>
[GRAPHIC OMITTED]
Sextant Growth Fund
<CAPTION>
Selected data for a share of Sextant Growth Fund (previously Northwest Growth
Fund). The following schedule for each of the six years ended November 30, 1995
has been audited by Price Waterhouse LLP, independent accountants, whose report
thereon is included in the Annual Report to Shareowners. The data for each of
the two years in the period ended November 30, 1989 and for the period September
4, 1987 (commencement of operations) through November 30, 1987 were audited by
other independent accountants whose report dated January 19, 1990 expressed an
unqualified opinion on those data. [GRAPHIC OMITTED]Fund shareowners agreed to
change the investment objectives on September 28, 1995, and had previously done
so on October 12, 1990. Consequently, data in this table are unlikely to be
indicative of future operations of the Fund.
------------------------------------------------------------------
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>
of period $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 (0.03) (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 1.82 (0.53) 0.45 0.38 0.60 0.01 0.00 (0.08) (0.04)
----- ------ ----- ----- ----- ----- ----- ------ ------
unrealized)
Total From Investment Operations 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 (0.01) (0.01) (0.02) (0.23) (0.28) (0.30) (0.06)
Distributions (from capital (0.19) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------ ----- ----- ----- ----- ----- ----- ----- ----
gains)
Total Distributions (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 $7.42 $5.82 $6.38 $5.93 $5.55 $4.93 $4.88 $4.88 $4.96
====== ====== ====== ====== ====== ====== ====== ====== =====
Total Return 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 $1,137 $1,010 $1,425 $1,321 $947 $53 $1,356 $1,365 $315
Ratio of expenses to ave. net
assets+ 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+ (0.45)% (0.43)% 0.15% 0.17% 0.60% 5.25% 5.60% 5.86% .85%*
Portfolio turnover rate 40% 12% 25% 46% 16% 29% 19% 20% 0%
Average commission rate paid $.0572
<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, $.05, .$.05, $.10, $.16 and $.02, respectively. The increase to the ratio
of expenses to average net assets would have been 0.21%, 0.76%, 1.02%, 1.28%,
2.02%, and 0.17%. *not annualized
</FN>
</TABLE>
<TABLE>
<CAPTION>
Sextant Short-Term Bond Fund
Selected data for a share of Sextant Short-Term Bond Fund beneficial interest
outstanding from September 28, 1995 (commencement of operations) through
November 30, 1995.
September 28,
1995 (Inception)
30, 1995
<S> <C>
Net asset value at beginning of period $5.00
Income From Investment Operations
Net Investment Income
Net gains or losses on securities (both realized
and unrealized) 0.03
Total From Investment Operations 0.06
Less Distributions
Dividends (from net investment income) ($0.03)
Distributions (from capital gains) 0.00
Total Distributions (0.03)
Net asset Value at end of period $5.03
Total Return 1.05%
Ratios/Supplemental Data
Net Assets ($000), End of Period $878
Ratio of Expenses to Average Net Assets (not annualized)* .23%
Ratio of Net Investment Income to Average Net Assets* 0.68%
Portfolio Turnover Rate 0%
<FN>
*For the above period, all or a portion of the operating expenses were waived.
If costs had not been waived, the resulting increases to expenses per share in
the period would have been $.007. The increase to the ratio of expenses to
average monthly net assets would be .16%.
</FN>
</TABLE>
[GRAPHIC OMITTED]
Sextant International Fund
Selected data for a share of Sextant International Fund beneficial interest
outstanding from September 28, 1995 (commencement of operations) through
November 30, 1995.
<TABLE>
<CAPTION>
September 28,
1995 (Inception)
to November
30, 1995
--- ----
<S> <C>
Net asset value at beginning of period $5.00
Income From Investment Operations
Net Investment Income (0.02)
Net gains or losses on securities (both realized
and unrealized) 0.01
----
Total From Investment Operations (0.01)
Less Distributions
Dividends (from net investment income) 0.00
Distributions (from capital gains) 0.00
----
Total Distributions 0.00
Net asset Value at end of period $4.99
=====
Total Return (0.20)%
Ratios/Supplemental Data
Net Assets ($000), End of Period $328
Ratio of Expenses to Average Net Assets (not annualized)* 0.49%
Ratio of Net Investment Income to Average Net Assets* (0.38)%
Portfolio Turnover Rate 12%
Average Commission rate Paid $0.0192
<FN>
*For the above period, 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
$.01. The increase to the ratio of expenses to average monthly net assets would be .21%.
</FN>
</TABLE>
=====================================================
About the Sextant Funds
=======================================================
The Sextant Funds are intended to provide investors the basic
elements of a balanced investment program. The Funds are
"no-load" funds, meaning that there are no sales or redemption
charges, nor do the Funds have so-called 12b-1 charges.
The Sextant Growth Fund and Sextant International Fund seek
long-term growth. Growth Fund pursues its objective through
investment in common stocks and other equity-type securities,
principally of U.S. issuers. The International Fund, by
contrast, invests primarily in a diversified portfolio of
foreign common stocks and other equity-type securities.
Sextant Short-Term Bond Fund and Sextant Bond Income Fund both
seek a high level of current income. Short-Term Bond Fund also
attempts to preserve capital and does so by investing
primarily in short-term debt securities. Bond Income Fund, on
the other hand, invests primarily in long-term debt
securities, which have the potential for greater income but
the risk of greater price fluctuation.
[GRAPHIC OMITTED]
Mutual funds enable you to invest as you might do for yourself
if you had the time, experience and resources to research and
diversify your own investments. Mutual funds do so by selling
their own shares to the public and investing those proceeds in
a portfolio of securities. The value of the funds' own shares
fluctuates as the value of their portfolio securities
fluctuates over time.
You may purchase shares of the Sextant Funds directly from the
Funds without any sales charge or "load." Because no charges
are deducted from your investment, the entire amount you pay
for shares is invested in the Fund you choose.
Investment Objectives and Policies
[GRAPHIC OMITTED]
Sextant Growth Fund seeks long-term capital appreciation. The
Fund invests primarily in a diversified portfolio of U.S.
common stocks, securities convertible into common stocks, and
preferred stocks, but may invest in other securities that are
suited for the Fund's investment objective. Although income
is considered when making an investment , the Fund is not
designed for investors seeking income. The Fund ordinarily
will not invest in straight debt securities. The Fund may
invest in securities of smaller or newer companies as well as
those of well-seasoned companies of any size, and to a limited
extent in foreign companies. The policy of investing for
long-term capital appreciation cannot be changed without
shareholder approval.
Sextant International Fund's objective is to seek long-term
capital appreciation by investing primarily in a diversified
portfolio of foreign diversified portfolio of foreign common
stocks and other equity-type securities (e.g., securities
convertible into common stock and preferred stocks). Under
normal market conditions, the Fund will invest at least 65% of
its total assets (taken at market value) in foreign securities
(securities of non-U.S. issuers.) The Fund ordinarily invests
in securities of at least three countries outside the U.S.
Although income is considered, the Fund is not designed for
investors seeking income. The Fund ordinarily will not invest
in straight debt securities.
[GRAPHIC OMITTED]
The Fund diversifies its investments among several countries
and does not concentrate in any particular industry. The Fund
varies its investments geographically and by type of
securities in which it invests based on the adviser's
evaluation of economic, market, and political trends
throughout the world. The adviser considers the relative
political and economic stability of a company's home and
operating countries in evaluating the potential rewards and
risks of an investment opportunity. The Fund may invest in
securities traded in mature markets (such as Canada and the
United Kingdom) in less developed markets (for example, Chile
and Mexico), and in emerging markets (for example Peru).
Investments in foreign securities, especially those in less
developed and emerging markets present additional risk. (See
"Investment Policies and Risk Considerations.")
Although the Fund may invest throughout the world outside the
U.S. as a matter of operating policy (that can be changed by
the Board of Trustees), the Fund presently limits its
investments to those securities of foreign issuers that are
traded and settled in the U.S. or to American Depository
Receipts ("ADR's") that represent underlying shares of foreign
issuers.*
The Fund's policy of seeking long-term capital appreciation by
investing primarily in a diversified portfolio of foreign
securities cannot be changed without shareholder approval.
The objective of Sextant Short-Term Bond Fund is to provide a
high level of current income, consistent with the preservation
of capital. The Fund invests primarily in marketable
short-term debt securities. Under normal circumstances the
Fund's dollar-weighted average maturity will not exceed three
years.
Short-Term Bond Fund is appropriate for investors who seek
yields that are typically higher than are usually available
from money market instruments with relatively stable prices
and shorter maturities, but who also want less price
fluctuation than is likely from a longer term fund, such as
the Bond Income Fund, which also may be expected to reflect a
higher yield. In contrast to money market funds, Short-Term
Bond Fund does not seek to maintain a fixed net asset value,
and an investor may receive more or less than the price paid
for his shares at redemption.
[GRAPHIC OMITTED]
Sextant Bond Income Fund has the objective of providing a high
level of current income. The Fund invests primarily in
marketable long-term debt securities. As an operating policy
that may be changed by the Board of Trustees, under normal
market conditions the Fund maintains a dollar-weighted average
effective maturity in excess of ten years.*
Bond Income Fund is intended for investors who seek a higher
level of income than is generally available from a
shorter-term fund, yet who can accept greater levels of
interest rate and other risks associated with investment in
longer-term securities
Under normal market conditions, each of Sextant Short-Term
Bond Fund and Sextant Bond Income Fund will invest at least
65% of the value of its total assets (taken at market value at
the time of investment) in "bonds", meaning:
(1) Marketable debt securities payable in U.S. dollars, rated
within the three highest grades assigned by Moody's Investors
Service, Inc. ("Moody's") (Aaa, Aa or A) or by Standard &
Poor's Corporation ("S&P") (AAA, AA or A);
(2) U.S. Government Securities;
(3) High quality commercial paper; and
(4) Bank obligations, including repurchase agreements* of
banks, having total assets in excess of $1 billion.
These Funds may not invest in a security rated at time of
purchase below the fourth highest grade assigned by Moody's
(Baa) or S&P (BBB). These securities are considered medium
grade, and represent obligations of issuers with less capacity
to pay interest and repay principal than those rated more
highly. Investment in these debt securities involves somewhat
greater investment risk, including the possibility of issuer
default or bankruptcy. An economic downturn could adversely
affect the value of outstanding bonds and the ability of
issuers to repay principal and interest. During a period of
adverse economic changes, including a period of rising
interest rates, issuers of such bonds may experience
difficulty in servicing their principal and interest payment
obligations.
Should a security's rating fall below the minimum qualifying
it for purchase by the Fund, the Adviser will not be required
to dispose of it, but will consider that factor in connection
with deciding whether to continue to hold it for the Fund's
portfolio.
Short-Term Bond Fund's policy of seeking a high level of
current income, consistent with the preservation of capital
cannot be changed without shareholder approval.
Similarly, the policy of Bond Income Fund's policy of pursuing
a high level of current income cannot be changed without
shareholder approval.
Investment Policies and Risk Considerations
Investing in securities entails both market risk and risk of
price variation in individual securities. By diversifying its
investments, a Fund reduces the risk of owning one or a few
individual securities. There can be no guarantee that the
investment objectives of any Fund will be realized.
Sextant Short-Term Bond Fund and Sextant Bond Income Fund
The risks inherent in the Short-Term Bond Fund and Bond Income
Fund depend primarily on the terms and quality of the
obligations in each Fund's portfolio, as well as on market
conditions. Interest rate fluctuations will affect a Fund's
net asset value, but not the income received by the Fund from
its portfolio securities. However, because yields on debt
securities available for purchase by a Fund vary over time,
the Fund's yield will also vary.
Sextant Growth Fund and Sextant International Fund
Both of these Funds may invest in smaller companies. Smaller
companies involve higher investment risks in that they often
have limited product lines, markets and resources, or their
securities may trade less frequently and have greater price
fluctuation than those of larger companies. These factors may
be particularly applicable in smaller or emerging foreign
markets.
Investment in Foreign Securities
You should understand and carefully consider the risks
involved in foreign investing. Investing in foreign securities
or instruments involves risks and opportunities not typically
associated with investing in U.S. securities. These include
fluctuations in exchange rates of foreign currencies; less
public information with respect to issuers of securities; less
governmental supervision of exchanges, issuers, brokers; lack
of uniform accounting, auditing, and financial reporting
standards. There is also a risk of adverse political, social
or diplomatic developments that could affect investment in
these nations. Refer to the Statement of Additional
Information available from the Fund at no charge for a more
complete discussion of the risks of foreign investments.
All Funds
Under normal market conditions, the Funds expect to be
invested in accordance with their objectives, but under
unusual circumstances any of the Sextant Funds may adopt a
temporary defensive position and invest without limitation in
high-quality debt obligations, U.S. government debt
obligations or cash equivalents.
All of the Sextant Funds are diversified. No Fund will invest
more than 5% of total assets in the securities of any one
issuer, nor more than 25% of its assets in any particular
industry (other than U.S. Government securities.)
Except as explained above, all of the policies outlined in
this section can be changed by a majority of the Board of
Trustees. The Funds have also adopted certain restrictions for
each Fund, as outlined in the Statement of Additional
Information.
[GRAPHIC OMITTED]
Investment Results
You will receive a financial report showing the investments,
income and expenses of your Fund every six months. You may
obtain current share values any time by calling the adviser at
800-SATURNA (800/728-8762).
Performance Data
The Funds may advertise or publish current yield and average
annual total return in advertisements or in information
furnished to publications and to investors. In any comparison
of a Fund's return with that of alternative investments, you
should consider differences between the Fund and the
alternative investment, and the periods and methods used in
calculation of the returns. Of course, past results are not
necessarily indicative of future performance.
You may compute current yield by (i) dividing net investment
income over the rolling 30 day period for which the yield is
being computed by the average number of shares eligible to
receive dividends for the period and (ii) dividing that figure
by the Fund's net asset value per share on the last day of the
period, and then (iii) annualizing the results.
To compute average annual total return of a Fund for any
specified period (i) assume an investment of $1,000 made at
net asset value on the first day of the period and that all
dividends paid during the period are reinvested in additional
shares at net asset value and then (ii) divide the ending
balance (i.e., the number of shares now held multiplied by the
ending net asset value) by the beginning balance. For a more
complete description of the method of computation, see the
Statement of Additional Information.
Capital Stock; Dividends
Saturna Investment Trust, an open-end "series trust" was
organized as a Washington Business Trust on February 20, 1987.
The Trust is an open-end "series trust" that now offers five
separate Funds: the four Sextant Funds and Idaho Tax-Exempt (a
fund investing in municipal securities in the State of Idaho,
and offered through a separate prospectus). The Trust was
formerly known as Northwest Investors Trust, and began
operations on September 4, 1987. The current investment
advisory agreements of the Sextant Funds became effective in
connection with changes in their objectives approved at a
shareholder meeting on September 28, 1995.
Each Fund is divided into shares of beneficial interest, with
equal voting rights. All shares are fully paid,
non-assessable, transferable and have rights of redemption, and
are not subject to preemptive rights. The Trust is not
required to hold annual shareowner meetings, but special
meetings may be called for such purposes as electing or
removing Trustees, changing fundamental policies, or voting on
approval of an advisory contract. On issues relating solely
to a single Fund, only the shareowners of that Fund are
entitled to vote.
All dividends and distributions for each Fund are distributed
pro rata to shareowners in proportion to the number of shares
owned.
Each Fund intends to distribute substantially all its net
investment income and net realized capital gains, if any, to
its shareowners. The Growth Fund and International Fund expect
to pay a dividend from net investment income annually, at the
end of November. The bond funds declare dividends from
investment income daily and pay dividends monthly. Dividends
from capital gains, if any, are declared and paid at the end
of November.
Both dividends and capital gains distributions are
automatically reinvested in additional full and fractional
shares of the Fund that pays them, unless a shareholder has
elected to receive either or both in cash.
The Funds intend to qualify as regulated investment companies
under the Internal Revenue Code and to distribute
substantially all net income and realized net gains on
investments. A Fund is then relieved of paying federal income
taxes on amounts it distributes.
At year-end, the Fund's transfer agent reports to you and to
the I.R.S. the amount of each redemption you made during the
year, as well as the amount of dividends and capital gain
distributed to you. Each Fund accounts for its distributions
as either taxable capital gains (originating from net realized
gains on portfolio transactions), or taxable income
(originating from dividends, taxable interest and certain other
types of gains). Fund distributions may be subject to state
and local taxes.
To avoid being subject to a 31% federal withholding tax on
dividends and distributions, you must furnish the transfer
agent your correct Social Security or Tax Identification
Number.
Shareowners who are not U.S. taxpayers may be subject to a 30%
withholding tax under U.S. provisions applicable to foreign
investors, unless a reduced rate or exemption is provided
under a tax treaty. However, capital gain distributions paid
by the Funds are not subject to foreign withholding.
Net Asset Value
Each Fund computes its net asset value per share each business
day by dividing (i) the value of all of its securities and
other assets, less liabilities, by (ii) the number of shares
outstanding. The Funds compute their net asset values as of
the close of trading on the New York Stock Exchange (generally
4 p.m. New York time) on each day the Exchange is open for
trading. The Funds' shares are not priced on any customary
national business holiday that securities markets are closed.
The net asset value applicable to purchases or redemptions of
shares of each Fund is the net asset value next computed after
receipt of a purchase or redemption order.
The Funds use the price carried by the composite tape of all
national exchanges after 4 p.m. New York time to determine the
value of stocks in their portfolios. 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. Securities for which there are no readily
available market quotations and other assets are valued at
their fair value as determined in good faith by the Board of
Trustees.
Because daily bid prices are not available for many bond
issues, the Funds use a matrix of bond yields for various
maturities and qualities. Prices are adjusted for factors
unique to each bond that are known to the adviser, such as
marketability and odd-lot discounts. To verify its knowledge
of market factors, the adviser periodically obtains appraisals
from independent sources.
How To Buy Shares
You may open an account and purchase shares by sending a
completed Application with a check for $1,000 (U.S. only) or
more ($25 under a group or retirement plan) to the Fund of
your choice. The Trust does not accept initial orders
unaccompanied by payment nor by telephone. The price you
receive is the net asset value (see "Net Asset Value") next
determined after receipt of a purchase order. There are no
sales charges or loads.
You may purchase additional shares at any time in minimum
amounts of $25. Once your account is open, purchases can be
made by check, by electronic funds transfer, or by wire.
You may authorize the use of the Automated Clearing House
("ACH") to purchase or redeem shares by completing the
appropriate section of the application. The authorization
must be received at least two weeks before ACH can be used.
ACH is a system for electronic funds transfer. To use ACH to
purchase or redeem shares, simply call the transfer agent. You
also may wire money to purchase shares (minimum wire purchase
$500), though typically your wiring bank will charge you a fee
for this service. Call the transfer agent for the information
you will need before requesting your bank to wire funds.
Each time you purchase or redeem shares, you will receive a
statement showing the details of the transaction as well as
the current number and value of shares you hold. Share
balances are computed in full and fractional shares, expressed
to three decimal places.
At the end of each calendar year, you will receive a complete
annual statement, which you should retain for tax purposes and
a complete historical record of all transactions.
The Sextant Funds offer several optional plans and services,
including a prototype defined contribution plan and Individual
Retirement Accounts. Materials describing these plans and
applications may be obtained from the Adviser or the transfer
agent.
Other plans offered by the Funds include: (1) an automatic
investment plan, (2) a systematic withdrawal plan to provide
regular payments to you, and (3) the right to exchange your
shares without charge for any other no-load mutual fund for
which Saturna Capital is the investment adviser.
The Funds may be appropriate for a wide range of investors,
including corporations, partnerships, associations and other
organizations. Accounts may be established by trusts and
fiduciaries. You also may make investments as custodian for
minor children under the Uniform Gifts [or Transfers] to
Minors Act of your state of residence.
How to Redeem Shares
You may redeem your shares on any business day of the Funds.
The Funds pay redemptions in U.S. dollars, and the amount you
receive is the net asset value per share next determined after
receipt of your redemption request. The amount received will
depend on the value of the investments in that Fund at the
time of your redemption, and the amount you receive may be
more or less than the cost of the shares you are redeeming. A
redemption constitutes a sale for federal income tax purposes,
and you may realize a capital gain or loss on the redemption.
The Funds normally pay for shares redeemed or exchanged within
three days after a proper instruction is received. To allow
time for clearing, redemption of investments made by check may
be restricted for up to ten calendar days.
There are several methods you may choose to redeem shares.
Written request
Write: Sextant Funds
Box 2838
Bellingham WA 98227-2838
Fax: 360-734-0755
You may redeem shares by a written request and choose one of
the following options for the proceeds:
(A) Redemption check (no minimum) sent to registered owner(s).
(B) Redemption check (no minimum) sent as directed if the
signature(s) are guaranteed. If proceeds are to be sent to
other than the registered owner(s) at the last address, the
signatures on the request must be guaranteed by a national
bank or trust company or by a member of a national securities
exchange.
(C) Federal funds wire. The proceeds ($5000 minimum) may
be wired to any bank designated in the request if the
signature(s) are guaranteed as explained above.
Telephone request
Call: 800-728-8762 or
360-734-9900
You may redeem shares by a telephone request and choose one of
the following options for the proceeds:
(A) Redemption check (no minimum) sent to registered
owner(s).
(B) ACH transfer ($100 minimum) with proceeds transferred
to your bank account as designated by the ACH authorization
on your application. The ACH authorization must be received
by the transfer agent at least two weeks before ACH transfer
can be used.
(C) Exchange ($25 minimum) for shares of any other Fund for
which Saturna Capital is adviser. If the exchange is your
initial investment into this Fund, the new account will
automatically have the same registration as your original
account. Of course, shares must be authorized and registered
for purchase in your state before an exchange may be made.
Exchanging shares may have tax consequences, because an
exchange is considered a closing capital transaction for tax
purposes.
(D) Federal funds wire. Proceeds ($5000 minimum) may be
wired only to the bank previously designated, or as directed
in a prior written instruction with signatures guaranteed, as
explained above.
For telephone requests the Funds will endeavor to confirm that
instructions are genuine and may be liable for losses if they
do not. The caller must provide (1) the name of the person
making the request, (2) the name and address of the registered
owner(s), (3) the account number, (4) the amount to be
withdrawn, and (5) the method for payment of the proceeds. The
Funds also may require a form of personal identification, and
provide written confirmation of transactions. The Funds will
not be responsible for the results of transactions they
reasonably believe genuine.
Check Writing
You may also redeem shares in your account by drawing checks
on your account for amounts of $500 or more.
The Funds will provide you a small book of blank checks for a
$7 fee, which may be payable to any payee. Checks are
redeemed at the net asset value next determined after receipt
by the transfer agent. If you wish to use this feature, you
should request the Check Writing Privilege on the Application
at the time you open an account. Note that, as with any
redemption, each check is a closing capital transaction for
tax reporting purposes.
Trust Management
Saturna Investment Trust is managed by a Board of five
Trustees: Gary Goldfogel, John E. Love, John S. Moore,
Nicholas F. Kaiser and James D. Winship. The Trustees
establish policies, as well as review and approve contracts
and their continuance. The Trustees also elect the officers,
determine the amount of any dividend or capital gain
distribution and serve on any committees of the Trust. For
other information concerning the officers and Trustees, see
the Statement of Additional Information.
Investment Adviser
Saturna Capital Corporation, 1300 N. State Street, Bellingham,
Wash. 98225 (the "Adviser") is the Investment Adviser to the
Trust. The Adviser is a Washington State corporation formed in
July 1989. Shareholders owning more than 10% of the common
stock are: Nicholas F. Kaiser, Phelps S. McIlvaine, James D.
Winship, and Brian A. Anderson. The directors of the Adviser
are Nicholas Kaiser (President), James D. Winship (Vice
President and Secretary), Phelps S. McIlvaine (Vice
President), Brian A. Anderson (Vice President) and Markell F.
Kaiser (Treasurer).
Saturna Capital Corporation acts as investment adviser to
three other investment companies: Idaho Tax-Exempt Fund
(another series of the Trust, offered through another
prospectus) with assets of approximately $5 million; Amana
Income Fund, which has assets of approximately $12 million and
Amana Growth Fund, with approximately $3 million in assets.
The advisory fee for Idaho Tax-Exempt Fund is .50% annually
and both of the Amana Funds have an advisory and
administration fee of .95%. Saturna also manages individual
advisory accounts. The Adviser's wholly-owned subsidiary,
Investors National Corporation, is a discount brokerage firm
and acts as distributor for the Funds without compensation.
Each of the Sextant Funds pays the Adviser an Investment
Advisory and Administrative Services Fee (the Base "Fee.")
The Base Fee covers compensation for portfolio management,
advice and recommendations on securities to be purchased, held or
sold. The Base Fee is also compensation for certain administrative
services such as portfolio accounting, shareholder and
financial reporting, shareholder servicing and transfer agency
services. The Base Fee is 0.60% of average net assets of the
Fund per annum, and is payable monthly. However, 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").
For each month in which either Bond Income Fund's or
Short-Term Bond Fund's total investment return (change in net
asset value plus all distributions reinvested) for the one
year period through that month outperforms or underperforms
the total return of a specified index for that period by 1% or
more but less than 2%, the Base Fee is increased or decreased
by the annual rate of .10% of the Fund's average daily net
assets for the preceding year. If the outperformance or
underperformance is 2% or more, then the adjustment is at the
annual rate of .20%.
For each month in which either Growth Fund or International
Fund's total investment return (change in net asset value plus
all distributions reinvested) for the one year period through
that month outperforms or underperforms the total return of a
specified index for that period by 1% or more but less than
2%, the Base Fee is increased or decreased by the annual rate
of .10% of the Fund's average daily net assets for the
preceding year. If the outperformance or underperformance is
2% or more but less than 4%, then the adjustment is at the
annual rate of .20%. If the outperformance or underperformance
is 4% or more, the adjustment is at an annual rate of .30%. No
performance adjustment is applicable during the first year any
Agreement is in place.
Selected total return investment performance as published by
Morningstar, Inc. will be used as the index for comparison
purposes. Each Fund and the Morningstar group to be used are:
Sextant Growth Fund:
"Growth Funds"
Sextant International Fund: "Foreign Stock Funds"
Sextant Bond Income Fund: "Corporate Bond Funds-High
Quality"
Sextant Short-Term Bond Fund: "Corporate Bond Funds-High
Quality"
If a particular index is no longer available or becomes
unavailable or inappropriate, in the opinion of the Board, it
may select another.
Each Fund pays its own taxes, brokerage commissions, trustees'
fees, legal and accounting fees, insurance, expenses incurred
in complying with state and federal laws regulating the issue
and sale of its shares, and mailing and printing costs for
prospectuses, reports and notices to shareowners, and certain
other expenses.
The Adviser furnishes office space, facilities and equipment,
personnel and clerical and bookkeeping services to conduct
the business of the Funds, as well as other expenses.
The Adviser*s subsidiary, Investors National Corporation
("INC"), is a broker-dealer engaged in a general brokerage
business and conducts all its transactions on an agency basis
for "deep discount" commissions. Most stock brokerage for the
Trust is conducted through INC. The Adviser may allocate
brokerage to any broker in return for research or services and
for selling shares of any Fund.
The Adviser voluntarily limits expenses of Bond Income Fund
and Short-Term Bond Fund to 0.60% through March 31, 1997. The
Adviser waives all its fee as to either of these Funds so long
as assets of that Fund are less than $2 million. A waiver has
the effect of subsidizing the yield for the period it is in
effect.
Nicholas Kaiser, primary manager of the Growth and
International Funds, has managed mutual funds since 1976.
Phelps McIlvaine, manager of Bond Income and Short-Term Bond
Funds, entered the investment business in 1976 and managed
bond hedge funds from 1987 to 1993. He managed the predecessor
to Bond Income Fund from 1994, and manages Idaho Tax-Exempt
Fund, another series of the Trust.
Managers of the Funds and other investment personnel are
permitted to engage in securities transactions for their own
accounts in accordance with a code of ethics that requires
advance approval of all trades and disclosure of all holdings.
It also contains other provisions.
===============================================================
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[GRAPHIC OMITTED]
INVESTMENT APPLICATION for
q Sextant Growth Fund
q Sextant International Fund
q Sextant Bond Income Fund
q Sextant Short-Term Bond Fund
Mail application and check to: For assistance, call:
SATURNA INVESTMENT TRUST (800) SATURNA or (360)734-9900
Box 2838, Bellingham WA 98227-2838 FAX (360) 734-0755
ACCOUNT TYPE AND NAME
q Individual
First Middle Initial Last
Social Security Number Date of Birth___________
q Joint with
First Middle Initial Last
Joint Owner's Social Security Number
(Joint accounts are presumed to be "Joint Tenancy with Right of
Survivorship" unless otherwise indicated)
q Gifts to Minor as Custodian for
Name of Custodian Name of Minor
q Uniform Gifts to Minors Act
under the q Uniform Transfers /
/
State to Minors Act Minor's Soc. Sec. No. Minor's Birthdate
q Other
Indicate name of corporation, other organization or fiducTax capacity.
Identification Number
If a trust, include name(s) of trustees and date of trust instruments.
Name(s) of person(s) authorized to transact business for the above
entity.
MAILING
ADDRESS Street Apt., Suite, Etc.
City State ZIP
TELEPHONE ( ) ( )
Daytime Home
CITIZENSHIP q U.S. q Resident Alien q Non-Resident Alien
Country
INITIAL INVESTMENT $
(Minimum $1000) Make check payable to the Fund being purchased.
TELEPHONE REDEMPTION PRIVILEGES You automatically have telephone redemption by
check and telephone exchange privileges unless you strike this line. Each Fund
will endeavor to confirm that instructions are genuine and it may be liable for
losses if it does not. (Procedures may include requiring a form of personal
identification, and providing written confirmation of transactions.) ACH
TELEPHONE TRANSFER PRIVILEGE q To transfer funds by ACH at no charge to or from
my (our) bank account, I (we) authorize electronic fund transfers through the
Automated Clearing House (ACH) for my (our) bank account designated. Please
attach a voided check or deposit slip. AUTOMATIC INVESTMENT PLAN q Invest $
_______ into this Fund on the _____ day of each month (the 15th unless another
date is chosen) by ACH transfer from my (our) bank account. This plan may be
canceled at any time. Please attach a voided check or deposit slip. CHECK
WRITING PRIVILEGE ($500 per check minimum) ($7 checkbook charge) q I (We)hereby
request the Custodian to honor checks drawn by me (us) on my (our) account
subject to acceptance by the Trust, with payment to be made by redeeming
sufficient shares in my (our) account. None of the custodian bank, Saturna
Capital Corporation, nor any Sextant Mutual Fund shall incur any liability to me
(us) for honoring such checks, for redeeming shares to pay such checks, or for
returning checks which are not accepted. q Single Signature Authority -- Joint
Accounts Only: (Checks for joint accounts require both signatures unless this
box is marked to authorize checks with a single signature). By our signatures
below, we agree to permit check redemptions upon the single signature of a joint
owner. The signature of one joint owner is on behalf of himself and as attorney
in fact on behalf of each other joint owner by appointment. We hereby agree with
each other, with the Funds and with Saturna Capital Corporation that all moneys
now or hereafter invested in our account are and shall be owned as Joint Tenants
with Right of Survivorship, and not as Tenants in Common. The undersigned
warrants(s) that I (we) have full authority to make this Application, am (are)
of legal age, and have received and read a current Prospectus and agree to be
bound by its terms. Unless this sentence is struck, I (we) certify, under
penalties of perjury, that I (we) am not subject to backup withholding under the
provisions of section 3406(a)(1)(C) of the Internal Revenue Code. This
application is not effective until it is received and accepted by the Trust.
Date Signature of Individual (or Custodian) Date Signature of Joint Registrant,
if any [GRAPHIC OMITTED] No-Load Mutual Funds
==============================================================
1
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Please Save this Quick Guide to
THE SEXTANT MUTUAL FUNDS
ACCOUNTS
Open your account by sending a completed Application to the Trust,
indicating your Fund selection. For convenience, you may have your
account consolidated with others of your household or other group.
We will appoint a representative to whom you may refer all questions
regarding your account(s). Extra forms will be sent for certain
accounts, such as IRA's.
INVESTMENTS
Initial investments are $1,000 or more ($25 under a group or
retirement plan), and must be accompanied by an Application.
Additional investments may be made for $25 or more at any time.
There are no sales commissions or other charges.
REDEMPTIONS
You may sell your shares any time. As with purchases, you may
choose from several methods including telephone, written
instructions, and checkwriting. You will be paid the market price
for your shares on the day we receive your instructions, and there
are no redemption fees or charges. If we receive your redemption
request by one p.m. Pacific time, your check is normally mailed to
you the same day.
STATEMENTS
On the date of each transaction, you are mailed a confirmation,
showing the details of the transaction and your account balance. At
year-end and at selected points during the year we mail a statement
showing all transactions for the period. Monthly consolidated
statements are available for an extra fee.
DIVIDENDS AND PRICES
Sextant Bond Income Fund and Sextant Short-Term Bond Fund declare
dividends daily and pay them monthly. Sextant Growth Fund and
Sextant International Fund pay dividends at the end of November. The
Funds' prices are available by calling the Funds at 800-SATURNA.
FREE RETIREMENT PLANS
We offer a defined contribution Profit-Sharing / Money Purchase plan
and an Individual Retirement Account. There are no extra fees or
charges for these plans.
FOR MORE INFORMATION
Please consult the applicable pages of this Prospectus for
additional details on the Sextant Funds and their shareholder
services. You may also call 1-800-SATURNA (1-800-728-8762) with any
questions.
- -------- * ADRs are receipts typically issued by an American bank or trust
company evidencing ownership of the underlying securities. Positions in these
securities are generally valued in U.S. dollars, and not necessarily denominated
in the same currency as the underlying security into which they may be
converted.
* The "effective maturity" of a debt instrument is the weighted
average period over which the Adviser expects the principal to be paid. It
differs from the stated maturity in that it estimates the effect of expected
principal prepayments and call provisions.
* A repurchase agreement involves the sale of securities to the Fund, with the
concurrent agreement of the seller to repurchase the securities at the same
price plus an amount equal to an agreed-upon interest rate, within a specifed
time. In the event of a bankruptcy or other default of a seller of a repurchase
agreement, the Fund could experience both delays in liquidating the underlying
securities and losses.
