January 15, 1996
Fellow Shareholders:
This has been an important year for the Funds. As earlier reported, following
the special shareholders meeting on September 28, the Sextant Funds were
launched, new trustees were elected and other significant steps were taken.
These proposals were contained in the proxy statement we forwarded to you at the
end of August.
The following is an official report of the results. For investment results and
other information about the Funds, we urge you to read the remainder of the
Report.
As always, we appreciate your participation in the Funds and look forward to a
long and mutually rewarding association with you.
ATTENDANCE
Shares entitled
Name of Series to vote Shares present
Idaho 1,032,867.080 602,773.681
Washington 190,004.237 120,153.290
Northwest 131,055.262 86,794.841
----------- ----------
Total Shares 1,353,926.579 809,721.812
NEW BOARD OF TRUSTEES
The shareholders also elected a new slate of Trustees. Continuing are: John
Love, John Moore and Nicholas Kaiser. Joining them are newly elected
Trustees Gary Goldfogel and James D. Winship.
For Withhold
Gary Goldfogel 527,875.466 13,842.597
Nicholas F. Kaiser 536,614.069 5,103.994
John Love 538,530.426 3,187.637
John S. Moore 534,302.917 7,415.146
James D. Winship 540,673.148 1,044.915
NORTHWEST GROWTH FUND BECOMES SEXTANT GROWTH FUND
Shareholders voted to amend the Northwest's investment objective from long-term
capital growth through investment primarily in Northwest securities to long term
growth from investment in equity and equity-type securities whether in the
region or not, and to change the name of the series to Sextant Growth Fund.
Number Per Cent
For 84,989.275 97.92%
Against 1,805.566 2.08%
Shareholders voted to replace Northwest Growth Fund's existing Investment
Advisory and Administrative Services Agreement and Transfer Agent Agreement with
a single Investment Advisory and Administrative Services Agreement.
Number Per Cent
------ --------
For 86,794.841 100%
Against 0 0%
WASHINGTON TAX-EXEMPT FUND BECOMES SEXTANT BOND INCOME FUND
Shareholders voted to amend the Fund's investment objective and fundamental
policies from pursuit of income exempt from federal and any Washington State
income taxes to high current income through the purchase of bonds that may
produce taxable income, and to change the name of the series to Sextant Bond
Income Fund
Number Per Cent
For 115,009.485 95.72
Against 5,143.805 4.28%
Shareholders voted to replace the Fund's existing Investment Advisory and
Administrative Services Agreement and Transfer Agent Agreement with a single
Investment Advisory and Administrative Services Agreement.
Number Per Cent
For 115,009.485 95.72
Against 5,143.805 4.28%
IDAHO TAX-EXEMPT FUND REMAINED UNCHANGED.
This very successful Fund continues with no change in policy or its investment
contract.
<PAGE>
Sextant Mutual Funds
Graphic of Sextant omitted
NOVEMBER 30, 1995
FELLOW SHAREOWNERS::
Where do we go from here? Our last letter was very optimistic about the
potential returns from financial assets for the remainder of the century.
Throughout fiscal 1995 we were correct and our positive outlook remains
As shown in the financial statements in this annual report, the two Sextant
Funds that were in existence for all of the fiscal year ended November 30
sported strong returns:
Nov. 30, 1994
Fund to Nov. 30, 1995
---- ----------------
Sextant Growth +30.76%
Sextant Bond Income +17.69%
Sextant International and Sextant Short-Term Bond Funds both began operations on
September 28. As detailed later in this report, both Funds have insignificant
figures to report for the short period of their existence.
Why do we remain optimistic? We continue to see slow growth and flat interest
rates. Politically, the climate is still favorable though not as bullish as last
fall: lower taxes and higher speed limits. The debate has shifted from
increasing government expenditures to whether, where and how much to cut.
Technological change is exploding, lowering costs and greatly increasing
productivity. We believe that we are entering a new industrial age, driven by
the information technologies in which America excels. As such a scenario
develops, we should be the beneficiaries of an important long-term trend from
which American investors are uniquely positioned to benefit. Watch this space.
Internationalization of business both spurs and is spurred by the information
revolution that daily seems to pick up speed. We believe that investors should
look overseas for at least a portion of their portfolio, as it is no longer
possible to insulate oneself from events abroad. Similarly, a successful company
no longer can operate in one national market. We created Sextant International
Fund to focus on non-U.S. equity opportunities
The Sextant bond funds will remain conservative in approach. There is a role for
bonds in most portfolios, as an anchor for a diversified portfolio. Both Bond
Income Fund and Short-Term Bond Fund will continue their quality focus.
Short-term Bond Fund remains a great alternate or complement to a money fund as
a place for temporary cash reserves.
We employ no leverage, purchase no derivatives or employ any other
risk-enhancing techniques.
The Sextant Funds are designed to address your investment needs. All employ our
unique "fulcrum" fee structure that stresses low cost to you and only rewards us
for superior investment results. We invite you to call or write for a free
information kit and to read it carefully before investing. Our portfolio
managers welcome your comments and suggestions. Only with your help can we be
certain that we are meeting your investment needs--our primary objective.
As always, we appreciate your investing with us, and welcome your comments and
suggestions
Respectfully
Nicholas Kaiser, President Phelps McIlvaine, Vice President
(Manager, Sextant Growth; (Manager, Sextant Bond Income;
Sextant International ) Sextant Short-Term Bond)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareowners
of Saturna Investment Trust
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Sextant Short-Term Bond Fund,
Sextant Bond Income Fund (formerly Washington Tax-Exempt Fund), Sextant Growth
Fund (formerly Northwest Growth Fund) and Sextant International Fund, four of
the series of Saturna Investment Trust, (formerly Northwest Investors Trust,)
hereafter referred to as the "Trust" at November 30, 1995, the results of their
operations, the changes in their net assets, and the financial highlights, for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at November 30, 1995 by correspondence with the
custodian and a broker, provide a reasonable basis for the opinion expressed
above. The financial statements of the Trust 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 statements.
Price Waterhouse
Seattle, Washington
December 15, 1995
<PAGE>
<TABLE>
<CAPTION>
SHORT-TERM BOND FUND
INVESTMENTS
NOVEMBER 30, 1995
RATING*ISSUER COUPON/MATURITY FACE AMOUNT MARKETVALUE
- --------------------------------------------------- --------------------------------------------
U.S. GOVERNMENT OBLIGATIONS
(71.1%)
<S> <C> <C> <C> <C> <C>
U.S. Treasury Note 8.00% 1/15/97 $120,000 $123,300
U.S. Treasury Note 6.00% 8/31/97 100,000 100,953
U.S. Treasury Note 7.875% 4/15/98 180,000 189,675
U.S. Treasury Note 7.00% 4/15/99 100,000 104,578
U.S. Treasury Note 7.125% 9/30/99 100,000 105,469
------- -------
600,000 623,975
CORPORATE OBLIGATIONS (27.0%)
A GMAC 5.95% 12/28/98 40,000 39,813
A+ Consolidated Nat. Gas 5.875% 10/1/98 40,000 39,940
AA- Association Corp. N.A. 6.125% 2/1/98 35,000 35,175
A+ CSX Transportation 7.05% 3/15/98 40,000 40,705
AA Central Illinois P.S. 5.875% 5/1/97 40,000 39,920
A- Chase Manhattan 9.05%2/1/02 40,000 41,277
------- ------
235,000 236,830
TOTAL INVESTMENTS (98.1%) $835,000 860,805
-------- 16,927
$877,732
Other Assets (net of liabilities) (1.9%) --------
Total Net Assets (100%)
<FN>
*Ratings are the lesser of S&P
or Moody's
</FN>
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD
SEPT. 28.
'95 (INCEP-
TION) TO
NOV. 30 '95
<S> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $5.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03
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)+ 0.23%
Ratio of net investment income to Average
net assets(not annualized)+ 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 increase 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%.
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
</FN>
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
AS OF NOVEMBER 30, 1995
ASSETS
Investments, at value
<S> <C>
Bonds (cost $857,068) $860,805
Cash 5,064
Interest receivable 12,494
------
Total Assets 878,363
LIABILITIES
Payable to affiliate 631
---
Total Liabilities 631
---
NET ASSETS $877,732
========
FUND SHARES OUTSTANDING
174,606
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares authorized, without par) 873,995
Undistributed net investment income (loss) -
Accumulated net realized gain (loss) on investments -
Unrealized net appreciation on investments 3,737
------
Net Assets applicable to Fund shares outstanding 877,732
=======
NET ASSET VALUE PER SHARE $5.03
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
PERIOD ENDED NOVEMBER 30, 1995
INVESTMENT INCOME
<S> <C> <C>
Interest income $7,011
Amortization of bond premiums (1,251)
-------
Gross investment income $5,760
EXPENSES
Investment adviser and administration fee 605
Professional fees 850
Printing and postage 40
Filing and registration fees 500
Other expenses
441
---
Total grossexpenses 2,436
Less earnings credits (391)
Less advisory fee waived (605)
----
Net expenses
1,440
-----
Net investment income
4,320
-----
NET REALIZED GAIN (LOSS) ON
INVESTMENTS
Proceeds from sales -
Less cost of securities sold based on identified cost -
-------
Realized net gain -
-------
UNREALIZED GAIN (LOSS) ON
INVESTMENTS
End of period
3,737
Beginning of period -
-------
Increase in unrealized gain for the period 3,737
-----
Net realized and unrealized gain on investments 3,737
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $8,057
======
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Period Sept.
28,1995
(Inception)
to Nov.
30, 1995
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C>
Net investment income $4,320
Net realized gain (loss) on investments -
Net increase in unrealized appreciation 3,737
-----
Net increase in net assets from operations 8,057
-----
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income (4,320)
------
Capital gains distributions -
------
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares
892,239
Value of shares issued in reinvestmentof dividends 4,321
-----
896,560
Cost of shares redeemed (22,565)
-------
Net increase in net assets from share transactions 873,995
-------
Total increase in net assets
877,732
NET ASSETS
Beginning of period
-
End of period $877,732
========
Shares of the Fund Sold and Redeemed
Number of shares sold 178,249
Number of shares issued in reinvestmentof dividends 862
Number of shares redeemed (4,505)
------
Net Increase in Number of Shares Outstanding 174,606
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
</TABLE>
<TABLE>
<CAPTION>
BOND INCOME FUND
INVESTMENTS
NOVEMBER 30, 1995
RATING* ISSUER COUPON/MATURITY FACE AMOUNT MARKET VALUE
- -------------------------------------------------------------------------------------------
U.S. FEDERAL OBLIGATIONS
U.S. GOVERNMENT OBLIGATIONS(9.5%)
<S> <C> <C> <C>
U.S. Treasury Bond 8.125% due 8/15/2019 $85,000 $104,284
WASHINGTON STATE MUNICIPAL OBLIGATIONS
GENERAL OBLIGATION (14.2%)
AAA Aberdeen 5.80% due 12/1/2012 50,000 51,121
AAA Marysville 5.875% due 12/1/2012 25,000 25,479
A+ Seattle Met. 5.625% due 1/1/2012 40,000 39,621
Municipality
AAA Stevens Co. Ltd Tax G.O. 5.5% due 12/1/2009 40,000 39,314
------- ------
SUB-TOTAL 155,000 155,535
GENERAL OBLIGATION (6.2)%
AAA Eastern Wash. Univ. Rev 6.25% due 10/1/2012 25,000 25,948
.
AAA Univ. Wash. Jr. Lien
Hsg and Din. Rev. 6.125% due 12/1/2012 40,000 42,157
------- ------
SUB-TOTAL 65,000 68,105
HEALTH CARE (3.6%)
AAA WA St. Healthcare Fac.Rev.Ref.
Dominican Health Serv.Spokane 5.75% due 6/1/2020 40,000 38,900
SCHOOLS (9.2%)
A+ King County #408 Auburn 6.25% due 12/1/2006 40,000 43,050
AA- King County #415 Kent 6.00% due 12/1/2008 40,000 42,044
A Skagit County #317 Conway 5.90% due 12/1/2007 15,000 15,749
------- ------
SUB-TOTAL 95,000 100,843
STATE EDUCATION (4.6%)
AAA Washington Higher Education
Fac. Auth. Rev.(Seattle U.) 5.70% due 11/1/2010 50,000 50,610
TRANSPORTATION (4.6%)
A Port of Tacoma Ser.A Ltd.G.O. 6.00% due 6/1/2011 50,000 50,806
UTILITY -ELECTRIC POWER (13.6%)
A Lewis County P.U.D #1
Elec. Rev. 6.10% due 6/1/2004 40,000 42,785
A Mason County P.U.D. #3
Elec. Rev. 6.30% due 1/1/2010 50,000 52,975
AAA Tacoma Elec. Sys. Rev. 6.25% due 1/1/2011 50,000 52,542
------- ------
SUB-TOTAL 140,000 148,302
UTILITY -WATER SUPPLY (4.1%)
AAA Asotin County P.U.D. #1 5.50% due 3/1/2009 20,000 20,066
A Spokane County Water
Dist.#3 Rev. Ref. 5.90% due 1/1/2014 25,000 25,040
------- ------
SUB-TOTAL 45,000 45,106
CORPORATE OBLIGATIONS(27.1%)
A- Aetna Life & Casualty 7.25% due 8/15/2023 50,000 49,219
A- Alabama Power 7.75% due2/1/2023 50,000 51,859
A- Comerica Bank 7.125% due 12/1/2013 50,000 50,308
A-2 Corning Glass 8.875% due 3/15/2016 40,000 48,520
A-1 Loews Corp. 7.00% due 10/15/2023 50,000 47,469
AA- US West Communications 7.20% due11/10/2026 50,000 49,922
------- ------
290,000 297,297
TOTAL INVESTMENTS (96.7%) $1,015,000 $1,059,788
===========
Other Assets (net of 36,036
------
liabilities) (3.3%)
Total Net Assets (100%) $1,095,824
==========
<FN>
*These unaudited bond ratings reflect the adviser's current rating of each bond,
as determined using Standard & Poors and Moody's ratings. All issues are rated
"A" or better by S&P or Moody's.
</FN>
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD:
Period
Year Year 3/1/93
ended ended (Incep
November November tion)to
30, 1995 30, 1994 11/30/93
--- ---- --- ---- -- -- --
<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 netassets (not annualized)+ 0.54% 0.41% 0.35%
Ratio of net investment income to average
net assets (not annualized)+ 5.15% 5.48% 3.28%
Portfolio turnover rate 77% 74% 36%
<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>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
AS OF NOVEMBER 30, 1995
ASSETS
Investments, at value
<S> <C>
Bonds (cost $1,047,157) $1,059,788
Cash 12,298
Interest receivable 22,895
Insurance deposit 400
Total Assets 1,095,381
---------
LIABILITIES
Payable to affiliate (443)
----
Total Liabilities (443)
----
NET ASSETS $1,095,824
==========
FUND SHARES OUTSTANDING 223,204
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares
authorized,without par) 1,153,661
Undistributed net investment loss (251)
Accumulated net realized gain (loss) on
investments (70,217)
Unrealized net appreciation on investments 12,631
------
Net Assets applicable to Fund shares
outstanding $ 1,095,824
===========
NET ASSET VALUE PER SHARE $4.91
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995
INVESTMENT INCOME
<S> <C> <C>
Tax-free interest income $63,693
Taxable interest income 978
Amortization of bond premiums (1,119)
Accretion 63
-----
Gross investment income $ 63,615
EXPENSES
Investment adviser and administration fee 5,838
Professional fees 1,658
Shareowner servicing 842
Printing and postage 1,005
Insurance 1,508
Custodial fees 841
Filing and registration fees ` 503
Other expenses 564
---
Total gross expenses 12,759
Less earnings credits (841)
Less advisory fee waived (5,838)
------
Net expenses
6,080
Net investment income
57,535
------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from sales 1,309,408
Less cost of securities sold based onidentified cost (1,324,518)
-----------
Realized net (loss) (15,110)
-------
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period 12,631
Beginning of period (158,053)
---------
Increase in unrealized gain for the period 170,684
-------
Net realized and unrealized gain oninvestments 155,574
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $213,109
========
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOV. 30, 1995 NOV. 30, 1994
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C>
Net investment income $57,535 $87,317
Net realized gain (loss) on investments (15,110) (55,107)
Net increase (decrease) in unrealized appreciation 170,684 (171,284)
-------- ---------
Net increase (decrease) in net assets from operations 213,109 (139,074)
-------- ---------
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income (57,308) (87,796)
Capital gains distributions - -
-------- --------
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares 623,415 840,168
Value of shares issued in reinvestment of dividends 52,937 73,082
------- ------
676,352 913,250
Cost of shares redeemed (1,192,060) (893,178)
---------- --------
Net increase (decrease) in net assets from
share transactions (515,708) 20,072
--------- ------
Total decrease in net assets (359,907) (206,798)
NET ASSETS
Beginning of period 1,455,731 1,662,529
--------- ---------
End of period $1,095,824 $1,455,731
========= =========
(Including undistributed net investment
income of($251)at Nov.30,1995 and ($478) for Nov.
30,1994)
Shares of the Fund Sold and Redeemed
Number of shares sold 165,574 167,886
Number of shares issued in reinvestment of
dividends 11,132 15,358
Number of shares redeemed (285,218) (182,274)
-------- --------
Net Increase (Decrease) in Number of Shares
Outstanding (108,512) 970
======== ========
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
</TABLE>
DISCUSSION OF FUND PERFORMANCE
(UNAUDITED)
FISCAL YEAR 1995
During its latest fiscal year, through November 30, 1995, the Sextant Bond
Income Fund returned 17.69% to its shareholders. Its net asset value rose from
$4.39 to $4.91 during this period.
The Fund's shareholders voted in September to change the objective of the Fund
from a Washington State tax-exempt bond fund to its current objective of taxable
income. Therefore, the Fund's fiscal 1995 performance is a combination of the
Fund's operation under both objectives. Previous performance was under its prior
single state tax-exempt fund objective.
FACTORS AFFECTING PAST PERFORMANCE
The Fund's share value rose strongly throughout the year, under the influence of
a rising bond market. However, earlier in the year, as a result of the market's
concern over the possibility of a flat or flatter income tax, the performance of
the municipal bond market was restrained compared to taxables.
An additional factor involved in the Fund's earlier performance was that the
Fund was created in anticipation of a Washington State income tax. The
anticipation of such a tax raised bond prices early in the Fund's life, but
created an extra drag on performance as that premuium dissipated when it became
clear such a tax would not be passed.
During its operation as a municipal fund, as a matter of policy, the Fund
restricted its portfolio maturity to the intermediate 5-to-15 year range. These
bonds have lower coupons (interest payments) than do those of longer maturities.
This factor, and the fact that the Fund was started in an environment of low and
declining interest rates, left the Fund with a portfolio of lower coupon issues
that fell in price more quickly in a rising interest rate environment than might
have been expected in a portfolio with higher coupons.
These factors mean that in comparisons of its performance the Fund will be at a
disadvantage when compared to an index of taxable bonds, or funds, none of which
were subject to such considerations.
LOOKING FORWARD
After September 28, when the Fund's new objective was in place, the Fund began
to sell its portfolio of municipal securities, being mindful of market and tax
considerations. As the fiscal year ended, the Fund still held some tax-exempt
securities, with a rally in the municipal market making them relatively more
atractive to hold.
Perhaps the most important factors influencing its performance relative to an
index of bonds or other funds will be the Fund's emphasis on quality and a
tendency to avoid the very longest bonds in the market. These factors may limit
the Fund's price fluctuations compared to broad unmanaged bond market indexes.
COMPARISON TO INDEX Comparison of any fund to an index must be made bearing in
mind that the index is unmanaged, AND EXPENSE-FREE. On the other hand the fund
likely will (1) be actively managed, (2) have an objective other than mirroring
the index, such as limiting risk, (3) bear transaction and other costs, (4)
stand ready to buy and sell its securities to shareholders on a daily basis, and
(5) provide a wide range of services.
The graph below compares $10,000 invested in the Fund at its inception, compared
to a similar amount invested in The Salomon Brothers Broad Investment-Grade Bond
Index. The graph shows that the investment at the beginning of March, 1993 would
have risen to $11,228 in the Fund and $12,032 in the Index. The relatively short
history of the Fund, and the change its policy limit the usefulness of this
comparison. Past performance is not indicative of future results.
Fund Index
Feb-93 $10,000 $10,000
Nov-93 $10,397 $10,534
Nov-94 $9,540 $10,214
Nov-95 $1,128 $12,032
graphic depiction omitted
<TABLE>
<CAPTION>
GROWTH FUND
INVESTMENTS
NUMBER MARKET
ISSUE OF SHARES COST VALUE
- ------------------------------------------------------------------------------------
COMMON STOCKS
BANKING (7.7%)
<S> <C> <C> <C>
Washington Mutual 3,000 $44,124 $84,750
Savings Bank
Northwest Saving Bank 100 2,539 2,525
------ -----
46,663 87,275
CONSTRUCTION (5.4%)
BMC West* 2,250 27,453 27,844
Butler Manufacturing 1,000 31,071 34,500
------- ------
58,524 62,344
MEDICAL/HEALTHCARE (9.9%)
Cardinal Health 500 26,135 27,000
Genentech* 1,000 37,225 51,125
Humana 1,300 30,300 34,612
------- ------
93,660 112,737
CHEMICALS (2.4%)
Lawter International 2,500 27,298 27,188
COMPUTERS (6.4%)
Apple Computer 1,000 28,067 38,125
Microsoft* 400 14,897 34,850
------- ------
42,964 72,975
ELECTRONICS (7.4%)
FLIR Systems 3,700 39,669 48,100
Merix 1,000 31,822 36,250
------- ------
71,491 84,350
FINANCIAL (13.2%)
Franklin Resources 800 13,562 42,300
McDonald & Co. 2,000 34,347 35,000
Schwab, Charles 3,025 9,117 73,356
------ ------
57,026 150,656
STEEL (6.1%)
Geneva Steel 4,000 28,667 29,000
Nucor 800 38,380 39,900
------- ------
67,047 68,900
OIL & GAS PRODUCTION (4.8%)
Atlantic Richfield 300 34,125 32,512
Noble Drilling 3,000 21,322 21,750
------- ------
55,447 54,262
PAPER & PRODUCTS (6.3%)
Boise Cascade 1,900 44,586 70,775
POLLUTION CONTROL (3.4%)
Ionics 900 36,864 38,925
RETAIL (6.7%)
Nordstrom 1,000 37,703 39,250
Albertson's 1,200 26,255 36,900
------- ------
63,958 76,150
TRANSPORTATION (11.3%)
Airborne Freight 1,000 25,784 28,125
Fritz Companies* 2,000 29,069 77,500
Mesa Airlines 2,500 25,423 22,656
------- ------
80,276 128,281
TOTAL INVESTMENTS (91.0%) $745,804 $1,034,818
=========
Other Assets (net of liabilities) (9.0%) 102,185
-------
Total Net Assets (100%) $1,137,003
==== ==========
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD:
Sept. 4, '87
(commence-
ment of op-
For Year Ended November 30, erations)to
------- ------ --------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 Nov.30 '87
---- ---- ---- ---- ---- ---- ---- ---- --- --
NET ASSET VALUE AT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BEGINNING 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 InvestmentIncome (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 unrealized) 1.82 (0.53) 0.45 0.38 0.60 0.01 0.00 (0.08) (0.04)
---- ----- ---- ---- ---- ---- ---- ----- -----
Total From Investment 1.79 (0.56) 0.46 0.39 0.64 0.28 0.28 0.22 0.02
Operations
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 gains) (0.19) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
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 pd.$1,137 $1,010 $1,425 $1,321 $947 $53 $1,356 $1,365 $315
Ratio of expenses to
ave. net assets+ 1.63% 1.50% 1.40% 1.60% 1.93% 1.06% 0.89% 0.25% .06%*
Ratio of netinvestment
income to ave. net assets+ (0.45)% (0.43)% 0.15% 0.17% 0.60% 5.25% 5.60% 5.86% .85%*
Portfolio turnover rate 40% 12% 25% 46% 16% 29% 19% 20% 0%
Average commission rate paid$.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>
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
AS OF NOVEMBER 30, 1995
ASSETS
Investments, at value
<S> <C> <C>
Common stocks (cost $745,804) $1,034,818
Cash 109,186
Dividends receivable 608
Insurance deposit 1,214
-----
Total Assets 1,145,826
---------
IABILITIES
Payable to affiliate:
8,823
-----
Total Liabilities 8,823
-----
NET ASSETS $1,137,003
==========
FUND SHARES OUTSTANDING 153,216
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares authorized,
without par) 861,250
Undistributed netinvestment income (loss) (9,420)
Accumulated net realized gain (loss) on investments (3,841)
Unrealized net appreciation
on investments 289,014
-------
Net Assets applicable to Fund shares outstanding $1,137,003
=========
NET ASSET VALUE PER SHARE $7.42
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995
INVESTMENT INCOME
<S> <C> <C>
Dividends $11,685
-------
Gross investment income $11,685
EXPENSES
Investment adviser and administration fee 7,255
Professional fees 3,325
Shareowner servicing 1,272
Printing and postage 959
Filing and registration fees 1,500
Insurance 1,330
Custodial fees 2,110
Other expenses 430
---
Total gross expenses 18,181
Less earnings credits (2,110) 16,071
------ ------
Net expenses 16,071
------
Net investment (loss) (4,386)
------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from sales 591,258
Less cost of securities sold based on identified cost 536,534
-------
Realized net gain 54,724
------
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period 289,014
Beginning of period 74,829
------
Increase in unrealized gain for the period 214,185
-------
Net realized and unrealized gain on investments 268,909
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $264,523
=======
</TABLE>
<TABLE>
<CAPTION>
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOV. 30, NOV. 30, 1994
1995
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C>
Net investment loss $ (4,386) $(5,263)
Net realized gain (loss) on investments 54,724 (4,125)
Net increase (decrease) in unrealizedappreciation 214,185 (83,179)
-------- --------
Net increase (decrease) in net assets from operations 264,523 (92,567)
-------- --------
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income - -
-------- --------
Capital gains distributions (28,392) -
------- -------
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares 306,751 192,628
Value of shares issued in reinvestment of dividends 28,060 -
------- -------
334,811 192,628
Cost of shares redeemed (444,025) (513,818)
-------- --------
Net decrease in net assets from share transactions (109,214) (321,190)
Total increase (decrease) in net assets 126,917 (413,757)
NET ASSETS
Beginning of period 1,010,086 1,423,843
--------- ---------
End of period 1,137,003 1,010,086
========== =========
(Including undistributed net investment
income of($9,420) for Nov. 30,1995 and $(5,034)
for Nov. 30,1994)
Shares of the Fund Sold and Redeemed
Number of shares sold 43,111 30,663
Number of shares issued in reinvestment
of dividends 3,782 -
Number of shares redeemed (67,343) (80,295)
------- -------
Net Decrease in Number of Shares Outstanding (20,450) (49,632)
======= =======
</TABLE>
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
DISCUSSION OF FUND PERFORMANCE
(UNAUDITED)
FISCAL YEAR 1995
During the year ended November 30, 1995, the Fund's total return to its
shareholders was +30.76%. The Fund's net asset value per share rose to $7.42
from $5.82, with a 19(cent) capITAL gain dividend paid at fiscal year end.
FACTORS AFFECTING PERFORMANCE
In September, 1995, the Fund's shareholders voted to broaden its objective from
that of investing primarily in growth type securities of companies linked only
to the Northwest. Following the change, the Fund may now seek investments
wherever in the U.S. it finds them appropriate, and is no longer limited to the
Northwest. Additionally, the new advisory contract resulted in lower expenses to
shareholders.
The Fund began operations as a growth stock fund in December 1990 (prior to that
time it had been invested in short-term Idaho municipal bonds, and the
performance during that period is not relevant). For the first year of
operations, Northwest stocks and the national stock markets grew in close
proximity. However, during 1992 the recession that had earlier cycled through
other parts of the nation spread to the Northwest, and stocks of this region
considerably underperformed the national averages. This phenomenon lasted into
the mid-90's, at which time the change in policy was recommended by the Fund's
adviser.
Coincidentally with the decision to change the Fund's policy, the market for
companies in which the Fund invested more heavily as a result of its geographic
limitations began to perform considerably better. The Fund has maintained
significant investment in technology oriented investments, and these stocks were
among the market leaders for much of the year 1995.
LOOKING FORWARD
Although the Fund is free to invest outside the Northwest region, the Fund's
change in policy is not expected to result in great change in the character of
the Fund.
COMPARISON TO INDEX
The line graph compares Sextant Growth Fund's performance to that of a
broad-based stock market index, the Standard & Poor's 500 Index. To be
comparable, the S&P 500 Index data includes reinvested income. Comparison of any
fund to an index must be made bearing in mind that the index is unmanaged, AND
EXPENSE-FREE. On the other hand the fund likely will (1) be actively managed,
(2) have an objective other than mirroring the index, such as limiting risk, (3)
bear transaction and other costs, (4) stand ready to buy and sell its securities
to shareholders on a daily basis, and (5) provide a wide range of services.
The graph shows that $10,000 invested in Sextant Growth Fund at the end of
December 1990 (when it was Northwest Growth Fund) would have grown to $15,469 at
the end of November 1995. If $10,000 could have been invested in the S&P 500
Index at the end of December 1990, that would grown to $21,526. Past performance
is not indicative of future results.
Date Sextant S&P 500
Growth Index
Dec-90 10000 10000
Nov-91 11246 11917
Nov-92 12035 14115
Nov-93 12969 15579
Nov-94 11830 15741
Nov-95 15469 21526
(GRAPHIC OMITTED)
<TABLE>
<CAPTION>
INTERNATIONAL FUND
INVESTMENTS
NOVEMBER 30, 1995
NUMBER MARKET
ISSUE OF SHARES COST VALUE
COMMON STOCKS
AUTOMOTIVE MFG. (3.2%)
<S> <C> <C> <C>
Volvo AB ADS 500 $11,686 $10,500
BANKING AND FINANCIAL (7.2%)
Aus.& New Zea. Bk. ADR 500 10,875 11,125
Aegon NV ADR 300 11,513 12,300
------- ------
22,388 23,425
COMPUTERS (2.2%)
Scitex Corp. Ltd. 500 9,250 7,188
CONSUMER PRODUCTS
(3.1%)
Coca Cola FEMSA S.A. 500 9,750 10,250
ADR
CLOSED END COUNTRY FUNDS (15.4%)
Austria Fund 1,000 7,923 8,000
Chile Fund 500 11,313 12,125
Irish Investment Fund 900 10,238 10,800
Malaysia Fund 600 9,750 10,275
Singapore Fund 700 9,538 9,362
------ -----
48,762 50,562
ELECTRICAL EQUIPMENT
(8.5%)
ASEA AB ADS 100 10,000 9,650
Electrolux AB ADR 200 8,800 8,600
NEC Corp ADR 150 10,219 9,619
------- -----
29,019 27,869
MEDICAL-DRUGS (6.1%)
Glaxo Wellcome plc ADR 400 9,800 10,700
Novo-Nordisk A/S ADR 300 9,712 9,300
------ -----
19,512 20,000
NATURAL RESOURCE PRODUCTION (9.6%)
Barrick Gold 400 9,600 10,550
RTZ Corp PLC ADS 200 11,375 11,700
Total S.A. ADR 300 8,812 9,262
------ -----
29,787 31,512
PAPER PRODUCTS (2.7%)
Aracruz Cellulose S.A. 1,000 9,876 9,000
ADR
PHOTOGRAPHIC EQUIPMENT (5.7%)
Canon, Inc. ADR 100 8,687 8,863
Fuji Photo Film ADR 200 10,050 9,900
------- -----
18,737 18,763
TELECOMMUNICATIONS
(12.9%)
BCE Inc 300 9,922 10,050
British Sky 300 11,063 12,000
Broadcasting ADS
Telecom Corp New 150 10,050 10,050
Zealand ADS
Telefonica de Espana ADS 250 10,250 10,375
------- ------
41,285 42,475
TRANSPORTATION (9.2%)
British Airways 150 10,931 10,556
Canadian Pacific Ltd. 500 8,164 9,125
KLM Royal Dutch Airlines 300 10,650 10,350
------- ------
29,745 30,031
------- ------
UTILITIES-ELECTRIC
(6.1%)
Enersis S.A. ADR 400 10,100 10,250
Korea Electric Power ADR 400 9,500 9,750
------ -----
19,600 20,000
------- ------
TOTAL INVESTMENTS (91.9%) $299,397 $301,575
=========
Other Assets (net of liabilities) (8.1%) 26,563
Total Net Assets (100%) $328,138
</TABLE>
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD:
Sept.28,'95
(Inception)to
Nov.30,'95
---- --
NET ASSET VALUE AT BEGINNING OF PERIOD $5.00
INCOME FROM INVESTMENT OPERATIONS
<S> <C>
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 0.49%
(not annualized)
Ratio of net investment income to Average net assets (not annualized) (0.38)%
Portfolio turnover rate (not annualized) 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 have waived and directly assumed, 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>
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
AS OF NOVEMBER 30, 1995
ASSETS
Investments, at value
<S> <C>
Common stocks (cost $299,397) 301,575
Cash 26,757
Dividends receivable 295
------
Total Assets
328,627
LIABILITIES
Payable to affiliate
489
------
Total Liabilities 489
------
NET ASSETS $328,138
========
FUND SHARES OUTSTANDING 65,795
Paid in capital (unlimited shares authorized, without par) 328,284
Undistributed netinvestment income (loss) (1,140)
Accumulated net realized gain (loss) on investments (1,184)
Unrealized net appreciation on investments 2,178
-------
Net Assets applicable to Fund shares outstanding $328,138
========
NET ASSET VALUE PER SHARE $4.99
</TABLE>
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
PERIOD ENDED NOVEMBER 30, 1995
INVESTMENT INCOME
<S> <C> <C>
Dividends $332
----
Gross investment income $332
EXPENSES
Investment adviser and administration fee 296
Professional fees 550
Printing and postage 40
Filing and registration fees 500
Custodial fees 636
Other expenses 86
-----
Total gross expenses 2,108
Less earnings credits (636)
----
Net expenses
1,472
-----
Net investment income
(1,140)
------
NET REALIZED GAIN (LOSS) ON
INVESTMENTS
Proceeds from sales 30,542
Less cost of securities sold based on identified cost 31,726
------
Realized net loss (1,184)
------
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period 2,178
Beginning of period -
-------
Increase in unrealized gain for the period 2,178
-----
Net realized and unrealized gain on investments 994
---
NET DECREASE IN NET ASSETS RESULTING $(146)
=======
FROM OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Period Sept.
28,1995(in-
ception) to
Nov. 30,
1995
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C>
Net investment loss $(1,140)
Net realized gain (loss) on investments (1,184)
Net increase (decrease) in unrealized appreciation 2,178
-----
Net increase (decrease) in net assets from operations (146)
-------
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income -
Capital gains distributions -
------
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares 328,284
Value of shares issued in reinvestment of dividends -
------
328,284
Cost of shares redeemed -
-------
Net increase in net assets from share transactions 328,284
-------
Total increase in net assets $328,138
=======
NET ASSETS
Beginning of period -
-------
End of period $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 65,795
Number of shares issued in reinvestment of dividends -
--------
Number of shares redeemed -
--------
Net Increase in Number of Shares Outstanding 65,795
</TABLE>
(THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS)
NOTES TO FINANCIAL STATEMENTS
Note 1-ORGANIZATION
Saturna Investment Trust (the "Trust") (formerly Northwest Investors Trust) was
established under Washington State Law as a Business Trust on February 20, 1987.
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, ("Contract")
Saturna Capital Corporation provides investment advisory services and certain
other administrative and distribution services to conduct Trust business,
including shareholder servicing and transfer agency services. 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 voluntarily undertaken to limit expenses of Sextant Bond
Income Fund and Sextant Short-Term Bond Fund to 0.80% 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 year ended November 30, 1995, Sextant Bond Income Fund and Sextant
Growth Fund incurred advisory expenses of $5,838 and $7,255, respectively, which
include expenses incurred under the advisory contract in effect prior to
September 28, 1995. Sextant International incurred advisory expenses of $296,
and Sextant Short-Term Bond Fund incurred advisory expenses of $605, each
incurring no such expenses under the agreement in effect prior to September 28,
1995.
In accordance with the expense waiver noted above, for the year ended November
30, 1995, Saturna Capital waived $605 of the Sextant Short-Term Bond Fund
advisory fee and $5,838 of that of Sextant Bond Income Fund.
Prior to adoption of the Contract, Saturna provided shareholder servicing under
a separate agreement pursuant to which Sextant Growth Fund and Sextant Bond
Income Fund paid $1,272 and $842, respectively during the fiscal year ended
November 30, 1995.
In accordance with the Funds' agreement with their custodian bank, National City
Bank, for the year ended November 30 1995, custodian fees incurred by Sextant
Short Term Bond Fund, Sextant Bond Income Fund, Sextant Growth Fund, and Sextant
International Fund, and subsequently waived, amounted to $391, $841, $2110, and
$636, respectively.
One trustee, who also serves as the president of the Trust, is a director and
president of the Adviser. Another is vice president and director of the Adviser.
All trustees have served to date without compensation; beginning January 1,
1996, the unaffiliated trustees will begin to receive $100 per Board or
committee meeting attended. On November 30, 1995, the trustees, officers and
their immediate families as a group owned 56%, 31%, 16% and 59% 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 paid $3,188 and $266, respectively in commissions at
deep-discount rates during the year ended November 30, 1995.
Note 4--FEDERAL INCOME TAXES
At November 30, 1995, Sextant International Fund had capital loss carryforwards
of $1,184 which expire in 2003 and Sextant Bond Income Fund had capital loss
carryforwards of $70,216 which expire in 2002 and 2003, subject to regulation.
Prior to their expiration, such loss carryforwards may be used to offset future
net capital gains realized for Federal income tax purposes.
Note 5--INVESTMENTS
At November 30, 1995, the net unrealized appreciation of investments for Sextant
Bond Income Fund of $12,631 comprised net unrealized gains of $14,398 and
unrealized losses of $1,767. Additionally, the net unrealized appreciation of
investments for Sextant Growth Fund, Sextant Short-Term Bond Fund and Sextant
International Fund were $289,014, $3,737, and $2,178, which consist of gains of
$293,516, $4,584, and $8,864 and unrealized losses of $4,502, $847, and $6,686
respectively.
During the year ended November 30, 1995, Sextant Short Term Bond Fund purchased
$858,319 of securities and sold/matured none. Comparable figures for Bond Income
Fund are $822,908 and $1,309,408; for Growth Fund $371,870 and $591,258; and for
International Fund, $331,123 and $30,542. Included in the above amounts for
Sextant Short-Term Bond Fund and Sextant Bond Income Fund are purchases of
$620,575 and $102,717 and sales of $0 and $0 of U.S. Government securities,
respectively.
SEXTANT MUTUAL FUNDS (GRAPHIC)
(GRAPHIC)
SHORT-TERM BOND
BOND INCOME
GROWTH
INTERNATIONAL
SATURNA CAPITAL
MUTUAL FUNDS
1300 No. State Street
Bellingham WA 98225-4730
1-800/SATURNA
(800/728-8762)
ANNUAL REPORT
NOVEMBER 30, 1995
This report is issued for the information of the shareowners of the Funds. It
is not authorized fordistribution to prospective investors unless it is accom-
panied or preceded by an effective prospectus relating to the securities of the
Trust. The Sextant Funds are series of Saturna Investment Trust.
