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>
IDAHO TAX-EXEMPT FUND
ANNUAL REPORT
WE ARE GREATLY PLEASED TO INFORM YOU THAT MORNINGSTAR MUTUAL FUNDS HAS AWARDED
YOUR FUND ITS COVETED FIVE-STAR RATING AS OF NOVEMBER 30, 1995. THE MORNINGSTAR
RATING IS A WIDELY RESPECTED MEASURE OF RISK-ADJUSTED PERFORMANCE.* WE ARE PROUD
OF THIS ACCOMPLISHMENT AND WORK HARD TO CONTINUE THE FUND'S TO PERFORMANCE.
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. In the
fiscal year just ended, your Fund brought you a total return of 16.68%. At
November 30, the 30-day yield on your Fund was 4.6%, tax-free.
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. For bond
investors, we continue to believe this trend means slow growth and low interest
rates.
During 1995, concerns over the possibility of a flat (or at least flatter) tax
structure put some pressure on bond prices by increasing the return that holders
of municipal bonds demanded. This phenomenon produced an opportunity for buying
quality bonds cheaply. We capitalized on that opportunity when we could.
The Fund remains conservative in approach, positioned to serve as an anchor in
your investment portfolio. We employ no leverage, purchase no derivatives or
employ any other risk-enhancing techniques.
Our staff and portfolio managers always welcome your comments and suggestions.
Only with your help can we be certain that we are meeting your investment
needs--our primary objective. We appreciate your investing with us.
With best wishes for the New Year,
NICHOLAS KAISER, PHELPS MCILVAINE,
PRESIDENT VICE PRESIDENT,
PORTFOLIO MANAGER
*Morningstar's proprietary ratings reflect historical risk-adjusted performance.
The ratings are subject to change each month, and are calculated from a fund's 3
and 5-year average annual returns with sales charge adjustments (if any) and a
risk factor that reflects performance relative to three month Treasury bill
returns. Ten per cent of the funds in a Morningstar investment category receive
five stars. From time to time the adviser has waived all or a portion of fees or
expenses, resulting in higher returns. Naturally, past performance may not
indicate future results.
<TABLE>
<CAPTION>
<PAGE>
INVESTMENTS
November 30, 1995
RATING ISSUER COUPON/MATURITY FACE AMOUNT MARKET
VALUE
- ---------------------------------------------------------------------------------------------
---
GENERAL OBLIGATION (2.0)%
<S> <C> <C> <C>
A Bannock County Jail 6.00% due $100,000 $105,966
Bond 9/1/2012
HOUSING (11.6%)
AA Idaho Housing
Authority
Single Fam Mortgage, 6.85% due 110,000 114,695
B-1 7/1/2012
AA Idaho Housing
Authority
Refunding Ser A 6.15% due 250,000 257,950
7/1/2024
AA Idaho Housing
Authority
Single Fam Mort 6.60% due 125,000 131,718
Mezz-E-1 7/1/2011
AA Idaho Housing
Authority
Single Fam Mort Rev 8.125% due 5,000 5,222
Ser B1 7/1/2019
8.00% due 30,000 31,519
1/1/2020
AA Idaho Housing
Authority
Single Fam Mort SR 7.70% due 60,000 62,791
------- ------
Ser C1 7/1/2017
SUB-TOTAL 580,000 603,895
IRRIGATION (5.1%)
AA Boise Kuna Irr. Dist. 6.00% due 250,000 265,838
7/1/2008
MEDICAL/HOSPITALS (3.6%)
A Idaho Health Facility
St. Alphonsus Med. 6.25% due 175,000 184,216
Ctr. 12/1/2012
REAL ESTATE (6.3%)
A Idaho Falls
Redevel. Agency Rev. 8.05% 100,000 112,549
due10/1/2006
8.125% due 100,000 112,940
10/1/2008
AAA Idaho Bldg. Authority
Rev. Ref. Ser C 5.70% due 100,000 104,905
-------- -------
9/1/2007
SUB-TOTAL 300,000 330,394
ROADS (7.5%)
A Payette L.I.D. 7.60% due 30,000 30,593
5/1/2005
A Post Falls, Kootenai 6.50% due 10,000 9,963
County 4/15/1996
L.I.D. #91-1 6.75% due 10,000 9,976
4/15/1997
7.00% due 10,000 9,982
4/15/1998
7.20% due 15,000 14,982
4/15/1999
7.40% due 15,000 14,996
4/15/2000
7.60% due 15,000 15,002
4/15/2001
7.75% due 20,000 20,008
4/15/2002
7.95% due 20,000 20,018
4/15/2003
7.95% due 20,000 20,018
4/15/2004
7.95% due 20,000 20,018
4/15/2005
7.95% due 20,000 20,016
4/15/2006
7.95% due 20,000 20,015
4/15/2007
A Post Falls L.I.D. 4.75% due 30,000 29,942
#91-4 9/1/1999
5.00% due 30,000 30,092
9/1/2000
5.20% due 35,000 35,223
9/1/2001
5.40% due 35,000 35,077
9/1/2002
5.60% due 35,000 35,084
9/1/2003
SUB-TOTAL 390,000 391,005
SCHOOL (GO'S) (28.6%)
AA Ada and Canyon 6.65% 100,000 109,566
Counties due1/30/2011
Joint School Dist #2 7.375% due 100,000 111,947
Meridian 7/30/2000
AAA Bonneville/Bingham 5.40% due 150,000 153,558
Counties 7/30/2008
Jt Schl Dist #93 Ref 5.50% due 100,000 102,178
Ser A 7/30/2010
A Bonneville County
School Dist #91 7.00% due 155,000 167,216
8/1/2008
A Canyon County 5.90% due 50,000 52,355
8/1/2005
School Dist. #135 6.00% due 50,000 53,131
8/1/2006
6.00% due 50,000 52,783
8/1/2007
AAA Gooding Co.(Wendell)
School Dist. #232 6.00% due 55,000 58,289
8/1/2008
AAA Kootenai County
School Dist #273 6.00% due 100,000 106,041
8/1/2012
AAA Madison County
School Dist. #321 5.60% due 150,000 155,496
2/1/2010
AA Payette County 6.50% due 80,000 86,514
7/31/2008
School Dist. #372 6.75% due 155,000 173,017
7/31/2009
6.75% due 100,000 111,128
7/31/2010
SUB-TOTAL 1,395,000 1,493,219
STATE EDUCATION (14.2%)
AAA Boise St. Univ. 6.20% due 200,000 215,580
4/1/2010
Fee Revenue 6.30% due 100,000 108,367
4/1/2014
A Idaho State University
Student Fee 6.40% due 250,000 268,191
4/1/2014
AAA University of Idaho
Student Fee Rev. 7.70% due 85,000 91,922
4/1/2010
A University of Idaho
Revenue 6.85% due 50,000 55,547
------- ------
4/1/2016
SUB-TOTAL 685,000 739,607
UTILITY-ELECTRIC POWER (1.9%)
AAA Idaho Falls
Elec. Rev. 6.75% due 100,000 103,205
4/1/2019
UTILITY-SEWER (5.0%)
A Hayden Lake L.I.D. #1 6.00% due 60,000 59,991
9/1/2004
A Troy Sewer Rev.
6.80% due 10,000 9,995
2/1/1996
6.90% due 10,000 10,121
2/1/1997
7.00% due 10,000 10,256
2/1/1998
7.10% due 10,000 10,449
2/1/1999
7.20% due 10,000 10,541
2/1/2000
7.30% due 10,000 10,593
2/1/2001
7.40% due 10,000 10,672
2/1/2002
7.50% due 10,000 10,659
2/1/2003
7.60% due 10,000 10,676
2/1/2004
7.70% due 15,000 16,076
2/1/2005
7.80% due 15,000 16,016
2/1/2006
7.90% due 15,000 16,019
2/1/2007
Troy Sewer Rev. 8.00% due 15,000 15,948
cont'd. 2/1/2008
8.00% due 20,000 21,416
2/1/2009
8.00% due 20,000 21,408
2/1/2010
SUB-TOTAL 250,000 260,836
UTILITY-WATER SUPPLY (10.9%)
A- American Falls Res. 7.25% due 70,000 78,379
5/1/2004
Ref. Series A 7.625% due 150,000 169,303
5/1/2021
A McCall Water Rev., 6.25% due 200,000 210,249
Ser 1994 9/1/2008
A McCall Water Revenue 6.375% due 70,000 73,380
9/1/2014
A Ucon Water & Sewer 7.75% due 35,000 39,009
------- ------
Rev. Ref. 12/1/2002
SUB-TOTAL 525,000 570,320
-------- -------
TOTAL INVESTMENTS (96.7%) $4,750,000 $5,048,501
==========
Other Assets (net of liabilities) (3.3%) 171,813
-------
Total Net Assets (100%) $5,220,314
===========
<FN>
These unaudited bond ratings reflect the adviser's current rating of each bond,
as determined using Standard & Poor's and Moody's
ratings.
</FN>
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data per share of capital stock outstanding throughout the period:
Sept.4, '87
(commence-
ment
of op-
erations)
For Year Ended November 30 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 $4.76 $5.23 $5.16 $5.10 $5.03 $5.07 $4.98 $5.03 $5.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income 0.26 0.27 0.25 0.28 0.30 0.33 0.35 0.35 0.02
Net gains or
losses on
securities
(both realized
and unrealized) 0.52 (0.46) 0.12 0.09 0.07 (0.04) 0.09 (0.05) (0.02)
---- ----- ---- ---- ---- ----- ---- ----- -----
Investment Operations 0.78 (0.19) 0.37 0.37 0.30 0.29 0.44 0.30 0.04
LESS DISTRIBUTIONS
Dividends (from
net investment
income $(0.26)$(0.27) $(0.25)$(0.285)$(0.30)$(0.33)$(0.35) $(0.35) $(0.01)
Distributions
(from capital
gains) 0.00 (0.01) (0.05) (0.025) 0.00 0.00 0.00 0.00 0.00
---- ----- ----- ------ ---- ---- ---- ---- ----
Total Distributions(0.26) (0.28) (0.30) (0.31) (0.30) (0.33) (0.35) (0.35) (0.01)
NET ASSET VALUE AT
END OF PERIOD $5.28 $4.76 $5.23 $5.16 $5.10 $5.03 $5.07 $4.98 $5.03
TOTAL RETURN 16.68% (3.76)% 7.35% 7.49% 7.63 5.94% 9.17% 6.45% 3.20%
RATIOS /
SUPPLEMENTAL DATA
Net assets ($000),
end of period $5,220 $6,841 $7,367 $5,808 $3,803 $2,540 $808 $335 $29
Ratio of expenses
to average
net assets* 0.75% 0.75% 0.75% 0.75% 0.75% 0.97% 0.90% 0.28% 0.11%
Ratio of net
investment income
to average net 5.07% 5.28% 4.79% 5.64% 6.08% %6.74% 6.51% 6.58% 0.56%
assets*
Portfolio turnover 28% 36% 31% 17% 15% 17% 13% 100% 0%
rate
<FN>
* Not Annualized
For each of the above years, all or a portion of the 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 $.016, $.007, $.009, $.008, $.02, $.02, $.05,
$.10, $.19, and $.01, respectively. The increase to the ratio of expenses to
average monthly net assets would be .26%, .14%, .18%, .17%, .54%, 1.01%, 1.25%,
2.24% and .11%, respectively. (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>
Municipal Bonds (cost $4,797,276) $5,048,501
Cash 78,340
Interest receivable 97,090
Insurance deposit 800
---
Total Assets $5,224,731
----------
LIABILITIES
Payable to affiliate 4,417
-----
Total Liabilities 4,417
-----
NET ASSETS 5,220,314
=========
FUND SHARES OUTSTANDING 988,761
ANALYSIS OF NET ASSETS
Paid in capital (unlimited shares authorized, no
par value) 5,033,109
Undistributed netinvestment income (loss) (26)
Accumulated net realized gain (loss)
on investments
(63,994)
Unrealized net appreciation
on investments 251,225
-------
Net Assets applicable to
Fund shares outstanding $5,220,314
==========
NET ASSET VALUE PER SHARE $5.28
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Year ended November 30, 1995
INVESTMENT INCOME
<S> <C> <C>
Interest income $368,984
Amortization of bond premiums (12,119)
Accretion 1,154
Miscellaneous 221
------
Gross investment income $358,240
EXPENSES
Investment adviser and administration fee 30,862
Professional fees 13,612
Shareowner servicing 5,205
Printing and postage 4,954
Filing and registration fees 2,155
Other expenses 5,618
-----
Total gross expenses 62,406
Less earnings credits (2,041)
Less advisory fee waived (14,048)
-------
Net expenses 46,317
------
Net investment income 311,923
-------
NET REALIZED GAIN (LOSS) ON
INVESTMENTS
Proceeds from sales 3,446,364
Less cost of securities sold
based on identified cost 3,510,768
---------
Realized
net loss (64,404)
-------
UNREALIZED GAIN (LOSS) ON INVESTMENTS
End of period
251,225
Beginning of period (500,262)
---------
Increase in unrealized gain for
the period 751,487
-------
Net realized and unrealized
gain on investments 687,083
-------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $999,006
--------
</TABLE>
(The accompanying notes are an integral part of these financial statements)
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS Year Year
ended ended
Nov. 30, Nov. 30,
1995 1994
OPERATIONS:
<S> <C> <C>
Net investment income $ 311,923 $381,688
Net realized (loss) gain on investments (64,404) 19,224
Net increase (decrease) in unrealized
appreciation 751,487 (692,425)
-------- ---------
Net increase (decrease) in net assets 999,006 (291,513)
------- --------
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income (311,941) (383,476)
-------- --------
Capital gains distributions
- (20,015)
------- -------
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares
793,990 2,393,405
Value of shares issued in reinvestment of
dividends 226,992 287,510
-------- -------
1,020,982 2,680,915
Cost of shares redeemed (3,329,049)(2,512,371)
Net increase (decrease) in net assets from
share transactions (2,308,067) 168,544
----------- -------
Total (decrease) in net assets (1,621,002) (526,460)
NET ASSETS
Beginning of period
6,841,316 7,367,776
--------- ---------
End of period $5,220,314 $6,841,316
========== ==========
(Including undistributed net investment income
of ($26) for Nov. 30,1995 and ($8) for Nov.
30,1994)
Shares of the Fund Sold and Redeemed
Number of shares sold 225,327 466,823
Number of shares issued in reinvestment of
dividends 44,240 57,107
Number of shares redeemed (717,954) (495,726)
-------- --------
Net Increase (Decrease) in Number of Shares
Outstanding (448,387) 28,204
======== ======
</TABLE>
(The accompanying notes are an integral part of these financial statements)
DISCUSSION OF FUND PERFORMANCE
(UNAUDITED)
For the twelve-month period ending November 30, 1995, Idaho Tax-Exempt Fund
returned shareholders 16.68%. At November 30, the 30-day yield on the Fund was
4.6% and the share price had risen to $5.28 from $4.76 at the beginning of the
fiscal year.
Although the bond market enjoyed a substantial recovery from the bear market of
fiscal 1994, concerns about a possible flat (or flatter) federal income tax
meant the municipal bond market maintained a fairly high level of interest rates
relative to taxable securities. While this high relative yield presented an
opportunity to buyers of municipal bonds generally, it did restrain somewhat the
rally in price experienced by some issues in the marketplace.
The primary objective of the Fund is income exempt from federal and Idaho
personal income taxes, with the secondary objective of capital preservation.
Although Idaho has a relatively high personal income tax, the fact that its per
capita outstanding municipal debt is only one-third the national average and
that it has a high income tax means Idaho debt is relatively dear in the market
because of the excess of demand over supply. These factors reduce the yield on
Idaho bonds compared to similar issues of other states, but also contribute to
relative stability of principal.
The Fund's secondary policy of preservation of capital drives it to maintain a
moderate portfolio maturity in the intermediate 5-to-15 year range. While the
Fund's policies limit price risk normally associated with longer maturities,
when compared to a general bond index, such as the Lehman Municipal Index, or
funds with policies more like the Index, the Fund typically will experience both
less price decline and appreciation than the Index. Though the Fund does not try
to "beat" the Lehman or any other specific index, the Fund's returns,
considering lower price fluctuation, compared favorably to that of the Index for
the fiscal year, as shown in the accompanying chart.
The line graph below compares Idaho Tax-Exempt Fund's performance to the Lehman
Brothers Municipal Bond Index, a broad-based municipal bond market index. To be
comparable, the Municipal Index data includes reinvested income (as computed by
Lehman Brothers Fixed Income Research). Note that this graph compares an
unmanaged, expense-free index to an actively managed fund that has transaction
and other costs and stands ready to buy and sell its securities to shareholders
on a daily basis, as well as providing s a wide range of services to them.
Additionally, it should be noted that few if any investors are able to invest in
such a portfolio because of the large amount of securities involved to model
such a portfolio.
Were the Fund to target the Index as an objective, the Fund might take greater
risk in a longer term maturity in its portfolio to take advantage of the
fluctuation--for better or for worse--available in such a portfolio. However,
maintaining the stability of capital is an objective of the Fund, so we believe
the Fund has performed well within expectations.
The graph shows that $10,000 invested in Idaho Tax-Exempt Fund at the end
of September 1987 would have grown to $17,225 at the end of November 1995. If
$10,000 could have been invested in the Lehman Brothers Municipal Bond Index at
the end of September 1987, that would have grown to $20,678.
Date The Fund Lehman
Index
Sep-87 $10,000 $10,000
11/30/88 10679 11391
11/30/89 11658 12644
11/30/90 12351 13620
11/29/91 13294 15019
11/30/92 14290 16525
11/30/93 15341 18356
11/30/94 14763 17392
11/30/95 17225 20678
(Graph omitted)
NOTES TO FINANCIAL STATEMENTS
Note 1-Organization
Saturna Investment Trust, (formerly Northwest Investors Trust) Trust (the
"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. Four
portfolios have been created to date in addition to Idaho Tax-Exempt Fund (the
"Fund.") The other four portfolios distribute through a separate prospectus and
the results of those funds are contained in a separate report.
Note 2--Significant Accounting
Policies
The following is a summary of the significant accounting policies followed by
the Fund.
INVESTMENTS:
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.
Expenses incurred by the Trust on behalf of the Fund (e.g., professional fees)
are allocated to the Fund and the other Funds of the Trust on the basis of
relative daily average net assets. The Adviser has agreed to certain limits on
expenses, as described below.
INCOME TAXES:
The Fund has elected to be taxed as a regulated investment company under the
Internal Revenue Code and distribute substantially all of its taxable net
investment income and realized net gains on investments. Therefore, no provision
for Federal income taxes is required. Further, the Fund intends to meet IRS
requirements for tax-free income dividends, and requirements of the Idaho
Department of Revenue for income dividends free of Idaho state income tax.
DIVIDENDS AND DISTRIBUTIONS TO SHAREOWNERS:
Dividends and distributions to shareowners are recorded on the ex-dividend date.
Dividends are paid daily and distributed on the last business day of each month.
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 share-owners on October 12, 1990, Saturna Capital
Corporation provides investment advisory services and certain other
administrative and distribution services to conduct the Fund's business. For
such services, the Fund pays an annual fee equal to .50% of average daily net
assets. For the year ended November 30, 1995, the Fund incurred advisory fee
expenses of $30,862.
Saturna Capital has volunteered to reimburse the Fund to the extent that total
expenses of the Fund, (excluding interest, brokerage commissions and taxes)
exceeds 0.75% through November 30, 1995 and .80% througn March 31, 1997.
Accordingly, for the year ended November 30, 1995, Saturna Capital waived
$14,048 of the advisory fee.
In accordance with the Fund's agreement with its custodian bank, National City
Bank, for the year ended November 30, 1995, custodian fees incurred by the Fund,
amounted to $2,041.
Two trustees, who also serve as officers of the Trust, are directors and
officers of Saturna Capital Corporation.
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. Saturna Capital Corporation acts as shareowner servicing
(transfer) agent for the Fund, for a monthly fee plus certain expenses. For the
fiscal year ended November 30, 1995, the Fund paid such a fee of $5,205.
All trustees have served to date without compensation; however, effective
January 1, 1996 the unaffiliated trustees will begin to receive a fee of $100
per meeting attended each. On November 30, 1995, the trustees, officers and
their immediate families as a group owned none of the outstanding shares of the
Fund.
Note 4--Federal Income Taxes
At November 30, 1995, theFund had capital loss carryforwards of $64,404 which
expire in 2003. 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 the
Fund of $251,225 comprised gross unrealized gains of $259,531 and gross
unrealized losses of $8,306.
During the year ended November 30, 1995, the Fund purchased $1,643,866 of
securities and sold/matured $3,446,364 of securities.
REPORT OF
INDEPENDENT ACCOUNTANTS
To the Board of Trustees
and Shareowners of
Saturna Investment Trust
In our opinion, the accompanying statement of assets and liabilities, including
the schedule 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 Idaho Tax-Exempt Fund, a series
of Saturna Investment Trust, (formerly Northwest Investors Trust; hereafter
referred to as the "Trust") at November 30, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the six years
in the period then ended, 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.
Seattle, Washington
December 15, 1995
IDAHO TAX-EXEMPT FUND,
A PORTFOLIO OF SATURNA INVESTMENT TRUST
SATURNA CAPITAL
MUTUAL FUNDS
1-800/SATURNA
(800/728-8762)
This report is issued for the information of the shareowners of the Fund.
It is not authorized for distribution to prospective investors unless it is
accompanied or preceded by an effective prospectus relating to the
securities of the Fund. Idaho Tax-Exempt Fund is a series of Saturna
Investment Trust.
(GRAPHIC OF IDAHO MAP OMITTED)
ANNUAL REPORT
NOVEMBER 30, 1995
