SEXTANT
MUTUAl FUNDS
(GRAPHIC OMITTED)
JUNE 23, 1997
FELLOW SHAREHOLDERS
A 20-year bull market has convinced every investor that the way to riches is
The Market. Because our experience goes back even longer, we want to warn you
that it's just not that easy. There have been few comparable periods in world
history, and the conditions that produced the current success will be
difficult to duplicate in the future. Sharp increases in corporate profits
combined with historic drops in inflation and interest rates cannot be
repeated indefinitely. Present trends now suggest an era of mild economic
growth with low inflation. The result is 5 to 10 percent forecasted returns
for both stocks and bonds.
Your no-load Sextant Funds address a spectrum of investment needs. In light
of our forecast, for example, you may wish to favor quality bonds. All
Sextant Funds stress low operating expenses and employ a "fulcrum" advisory
fee structure that rewards or penalizes Saturna Capital for investment
results. The four Funds pay increased or decreased monthly advisory fees
depending on relative performance over the prior 12 months. For the twelve
months ended May 31, 1997, comparative total returns are:
<TABLE>
<CAPTION>
Sextant Fund Total Return vs. Morningstar Total Return
- --------------- ------------- ---------------- -------------
<S> <C> <C> <C>
Short-Term Bond 5.91% Short-Term Bonds 6.33%
Bond Income 8.54% Long-Term Bonds 8.47%
Growth 17.03% Domestic Growth 15.38%
International 22.76% Foreign Stock 11.86%
</TABLE>
For the year, the high-quality Sextant bond funds essentially matched their
Morningstar peer categories. No bonus or penalty was due the advisor. With a
6.3% current yield, Short-Term Bond Fund is a great alternative to
money-market funds for the risk-adverse investor.
The Growth Fund's excellent results in 1997 means it is now outperforming the
Morningstar Domestic Growth category. As long-term investors, our faith in
value investing is providing above-average results. Saturna Capital, which
had its advisory fee slashed when the Growth Fund trailed, is now earning a
bonus for the good results.
We believe investors should look outside the U.S. for a material portion of
their portfolio, being unwise to insulate oneself from foreign events and
opportunities. We are pleased that the 22.76% return earned by the Sextant
International Fund for the last 12 months far outdistanced the Foreign Stock
category and is earning Saturna Capital the maximum bonus for above-average
performance.
Information on each Fund's operation is found on the following pages. With
the good results, incentive advisory fee, and low operating expenses of the
Sextant Funds, you might conclude that these Funds can provide real investment
value. You won't be wrong: if you read the footnotes carefully, you will find
that the "insiders" own an average 32% of each Sextant Fund.
RESPECTFULLY,
NICHOLAS KAISER, PRESIDENT PHELPS MCILVAINE, VICE PRESIDENT
(Manager, Sextant Growth; (Manager, Sextant Bond Income;
Sextant International ) Sextant Short-Term Bond)
<PAGE>
(GRAPHIC OMITTED)
SEXTANT SHORT-TERM BOND FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
MAY 31, 1997
INVESTMENTS
<TABLE>
<CAPTION>
Rating* Issuer Coupon/Maturity Face Amount Market Value
- ------- --------------------------------------- ----------------- ------------ -------------
<S> <C> <C> <C> <C>
- - Appliances (5.7)
A- Whirlpool 9.5% 6/15/2000 $ 100,000 $ 107,323
- - Banking (15.9%)
A- Bankers Trust-NY 9.5% 6/14/2000 75,000 80,274
A- Chase Manhattan 9.05% 2/1/2002 40,000 39,726
BBB+ First Interstate Bank 8.625% 4/1/1999 75,000 77,449
AA- Norwest Financial 6.23% 9/1/1998 100,000 99,625
------------ -------------
- - - - 290,000 297,074
- - Consumer Finance (7.6%)
AA- Associates Corp NA 8.35% 12/22/1998 100,000 102,590
A- GMAC 5.95% 12/28/1998 40,000 39,448
------------ -------------
- - - - 140,000 142,038
- - Electric Utilities (14.0%)
A+ Mississippi Power 6.625% 8/01/2000 60,000 59,451
A Pacific Gas & Electric 6.75% 12/01/2000 100,000 99,153
A- Public Service Enterprise Group 8.75% 7/1/1999 100,000 102,610
------------ -------------
- - - - 260,000 261,214
- - Food (7.8%)
A+ H.J. Heinz Co. 6.75% 10/15/1999 65,000 65,121
BBB+ Supervalue 7.25% 7/15/1999 80,000 80,328
------------ -------------
- - - - 145,000 145,449
- - Gas Distribution (6.4)
A+ Consolidated Natural Gas 5.875% 10/1/1998 120,000 118,640
- - Investment Finance (17.2%)
BBB+ Finovia Capital 5.98% 2/27/2001 75,000 72,303
AA- Merrill Lynch 6.00% 1/15/2001 100,000 97,156
BBB Salomon Inc. 6.70% 12/1/1998 100,000 99,955
A- Smith Barney Holding 7.98% 3/1/2000 50,000 51,133
------------ -------------
- - - - 325,000 320,547
- - Retailing (9.6%)
BBB Limited 8.875% 8/15/1999 75,000 77,818
BBB+ Dayton Hudson 7.50% 3/1/1999 100,000 101,340
------------ -------------
- 175,000 179,158
- - Tobacco (4.2%)
A Phillip Morris 9.75% 02/15/00 75,000 79,168
- - U.S. Government Obligations (8.1%)
AAA U.S. Treasury Note 7.00% 4/15/99 150,000 152,133
- - Total Investments (96.5%) Cost = $1,818,200 1,780,000 1,802,744
============ =============
- - Other Assets (net of liabilities) 3.5%) - - 66,143
-------------
- - Total Net Assets (100%) - - $ 1,868,887
=============
<FN>
*Ratings are the lesser of S&P or Moody's
</FN>
</TABLE>
<PAGE>
(GRAPHIC OMITTED)
SEXTANT SHORT-TERM BOND FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Selected data per share of capital stock outstanding throughout the period:
For the Six Months For the year Sept. 28. '95 (incep-
ended May 31, 1997 ended Nov. 30, '96 tion) to Nov. 30 '95*
-------------------- -------------------- -----------------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 5.00 $ 5.03 $ 5.00
-------------------- -------------------- -----------------------
Income From Investment Operations
Net Investment Income 0.14 0.25 0.03
Net gains or losses on securities
(both realized and unrealized) (0.05) (0.03) 0.03
-------------------- -------------------- -----------------------
Total From Investment Operations 0.09 0.22 0.06
-------------------- -------------------- -----------------------
Less Distributions
Dividends (from net investment income) (0.14) ($0.25) ($0.03)
Distributions (from capital gains) 0.00 0.00 0.00
-------------------- -------------------- -----------------------
Total Distributions (0.14) (0.25) (0.03)
-------------------- -------------------- -----------------------
Net asset value at end of period $ 4.95 $ 5.00 $ 5.03
0.01 0.01
Total Return 1.84% 4.85% 1.05%
Ratios / Supplemental Data
Net assets ($000), end of period $ 1,869 $ 2,016 $ 878
Ratio of expenses to average net assets 0.26% 0.85% 0.23%
Ratio of net investment income to average net assets 2.83% 6.30% 0.68%
Portfolio turnover rate 15% 100% 0%
<FN>
For the above periods, all or a portion of the operating expenses were waived. If costs had not been waived, the
resulting increase to expenses per share in each period would have been $ .01, $.02 and $.007. The increase to the ratio
of expenses to average monthly net assets would be .25%, .52% and .16%, respectively.
* not annualized
</FN>
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
As of May 31, 1997
<S> <C> <C>
Assets
Bond investments (cost $1,818,199) $1,802,744
Cash 27,520
Interest receivable 39,282
-----------
Total Assets - $1,869,546
----------
Liabilities
Payable to affiliate 659
-----------
Total Liabilities - 659
----------
Net Assets - 1,868,887
----------
Fund shares outstanding - 377,722
Analysis of Net Assets
Paid in capital (unlimited shares authorized, without par) 1,907,096
Undistributed net investment income 22
Accumulated net realized gain (loss) on investments (22,775)
-----------
Unrealized net appreciation on investments (15,456)
-----------
Net Assets applicable to Fund shares outstanding - $1,868,887
==========
Net Asset Value per share - $ 4.95
==========
</TABLE>
<PAGE>
SEXTANT SHORT-TERM BOND FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the six months ended May 31, 1997
<S> <C> <C>
Investment income
Interest income $ 69,765
Amortization of bond premiums (9,002)
Accretion 23
---------
Gross investment income - $60,786
Expenses
Investment adviser and administration fee 5,887
Professional fees 2,267
Custodian Fees 1,034
Filing and registration fees 790
Printing and postage 743
Other expenses 311
---------
Total gross expenses 11,032
Less earnings credits (1,034)
Less advisory fee waived (4,883)
---------
Net expenses - 5,115
--------
Net investment income - 55,671
--------
Net realized gain (loss) on investments
Proceeds from sales 394,520
Less cost of securities sold based on identified cost 396,170
---------
Realized net gain (loss) - (1,650)
Unrealized gain (loss) on investments
End of period (15,456)
Beginning of period 4,435
---------
Decrease in unrealized gain for the period (19,891)
---------
Net realized and unrealized gain (loss) on investments (21,541)
---------
Net increase in net assets resulting from operations $ 34,130
---------
</TABLE>
<PAGE>
SEXTANT SHORT-TERM BOND FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(GRAPHIC OMITTED)
<TABLE>
<CAPTION>
Six Months ended Year ended
May 31, 1997 Nov. 30, 1996
------------------ ---------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment Income $ 55,671 $ 133,032
Net realized gain (loss) on investments (1,650) (21,126)
Net increase in unrealized appreciation (19,891) 698
------------------ ---------------
Net increase in net assets from operations 34,130 112,604
------------------ ---------------
Dividends to Shareowners from:
Net investment income (55,671) (133,010)
------------------ ---------------
Capital gains distributions - -
------------------ ---------------
Fund Share Transactions:
Proceeds from sales of shares 178,680 3,700,165
Value of shares issued in reinvestment of dividends 54,812 129,365
------------------ ---------------
233,492 3,829,530
Cost of shares redeemed (359,862) (2,670,058)
------------------ ---------------
Net Increase in net assets from share transactions (126,370) 1,159,472
------------------ ---------------
Total increase (decrease) in net assets (147,911) 1,139,066
NET ASSETS
Beginning of period 2,016,798 877,732
------------------ ---------------
End of period $ 1,868,887 $ 2,016,798
================== ===============
Shares of the Fund Sold and Redeemed
Number of shares sold 41,091 740,752
Number of shares issued in reinvestment of dividends 11,065 26,037
Number of shares redeemed (77,775) (538,054)
------------------ ---------------
Net Increase (decrease) in
Number of Shares Outstanding (25,619) 228,735
================== ===============
</TABLE>
<PAGE>
SEXTANT BOND INCOME FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
MAY 31, 1997
INVESTMENTS
<TABLE>
<CAPTION>
Rating* Issuer Coupon/Maturity Face Amount Market Value
- ------- ---------------------------------------- ----------------- ------------ -------------
<S> <C> <C> <C> <C>
- - Aerospace (5.2%)
A United Technology Corp. 8.875% 11/15/2019 $ 50,000 $ 56,828
- - Automotive (4.6%)
A- General Motors 8.125% 4/15/2016 50,000 49,825
- - Banking (4.3%)
A- Comerica Bank 7.125% 12/1/2013 50,000 46,725
- - Beverages (4.8%)
A- Seagram Co. Ltd 8.35% 1/15/2022 50,000 52,589
- - Building (4.1%)
A+ Lowes Corp 7.00% 10/15/2023 50,000 44,581
- - Electric Utilities (21.5%)
A+ Alabama Power 7.75% 2/1/2023 50,000 47,756
BBB Commonwealth Edison 7.50% 7/1/2013 50,000 47,980
BBB New Orleans Public Service 8.00% 3/1/2023 50,000 48,080
A Southern California Edison 6.90% 10/1/2018 50,000 44,782
BBB Texas Utilities 8.50% 8/1/2024 45,000 45,864
------------ -------------
- - - - 245,000 234,462
- - Electronics (4.4%)
BBB+ Phillips Electronics 7.25% 8/15/2013 50,000 47,540
- - Food (4.4%)
BBB Nabisco Holdings 7.55% 6/15/2015 50,000 48,512
- - Investment Finance (12.9%)
A Dean Witter Discover 6.75% 10/15/2013 50,000 45,354
A+ Morgan Stanley Group 7.50% 2/1/2024 50,000 46,513
BBB+ Paine Webber Group 7.625% 2/15/2014 50,000 48,672
------------ -------------
- - - - 150,000 140,539
- - Paper Products (4.5%)
BBB- Georgia Pacific 7.70% 6/15/2015 50,000 48,691
- - Retailing (4.2%)
BBB+ Rite Aid Corporation 6.875% 8/15/2013 50,000 45,819
- - U.S. Government Obligations (20.0%)
AAA U.S. Treasury Bond 7.50% 11/15/2016 100,000 105,375
AAA U.S. Treasury Bond 8.125% 8/15/2019 100,000 112,422
------------ -------------
- - - - 200,000 217,797
- -------
- - Total Investments (94.9%) Cost = $1,106,358 1,045,000 1,033,908
------------ -------------
- - Other Assets (net of liabilities) (5.1%) - - 56,021
-------------
- - Total Net Assets (100%) - - $ 1,089,929
=============
<FN>
*RATINGS ARE THE LESSER OF S&P OR MOODY'S
</FN>
</TABLE>
<PAGE>
SEXTANT BOND INCOME FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Selected data per share of capital stock outstanding throughout the period:
Period
3/1/93 (In-
Six Months Ended Year ended Nov. 30, ception) to
---------------------
May 31 1997 1996 1995 1994 11/30/93*
- ----------------------------------------------------- --------------------- ------------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 4.76 $ 4.91 $ 4.39 $ 5.03 $ 5.00
--------------------- ------------- -------- ----------- --------
Income from investment operations
Net investment income 0.15 0.30 0.24 0.25 0.16
Net gains or losses on securities
(both realized and unrealized) (0.21) (0.12) 0.52 (0.64) 0.04
--------------------- ------------- -------- ----------- --------
Total From Investment Operations (0.06) 0.18 0.76 (0.39) 0.20
--------------------- ------------- -------- ----------- --------
Less distributions
Dividends (from net investment income)
Non-taxable - - (0.236) (0.25) (0.167)
Taxable (0.15) (0.30) (0.004)
Distributions (from capital gains) - (0.03) 0.00 0.00 (0.003)
--------------------- ------------- -------- ----------- --------
Total Distributions (0.15) (0.33) (0.24) (0.25) (0.17)
--------------------- ------------- -------- ----------- --------
Net asset value at end of period $ 4.55 $ 4.76 $ 4.91 $ 4.39 $ 5.03
Total return (1.20)% 4.04% 17.69% (8.24)% 4.86%
Ratios/supplemental data
Net assets ($000), end of period $ 1,090 $ 1,201 $ 1,096 $ 1,456 $ 1,662
Ratio of expenses to average net assets 0.27% 0.63% 0.54% 0.41% 0.35%
Ratio of net investment income to average net assets 3.41% 5.96% 5.15% 5.48% 3.28%
Portfolio turnover rate 9% 75% 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 $.01, $.03, $0.22, $0.13,and $.03
respectively. The increase to the ratio of expenses to average monthly net assets would be .33%, .70%, .60%, .51%, and 26%,
respectively.
* not annualized
</FN>
</TABLE>
STATEMENT OF ASSETS ANE LIABILITIES
<TABLE>
<CAPTION>
For the Six Months Ended May 31, 1997
<S> <C> <C>
Assets
Bond investments (cost $1,106,358) $1,033,908
Cash 33,575
Interest receivable 21,087
Insurance deposit 400
-----------
Total Assets - 1,088,970
-----------
Liabilities
Payable to affiliate (959)
-----------
Total Liabilities - (959)
-----------
Net Assets - $1,089,929
===========
Fund shares outstanding - 239,779
Analysis of Net Assets
Paid in capital (unlimited shares authorized, without par) 1,235,693
Undistributed net investment loss (1,222)
Accumulated net realized gain (loss) on investments (74,167)
Unrealized net depreciation on investments (70,375)
-----------
Net Assets applicable to Fund shares outstanding - $1,089,929
===========
Net Asset Value per share - $ 4.55
</TABLE>
<PAGE>
SEXTANT BOND INCOME FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the six months ended May 31, 1997
<S> <C> <C>
Investment income
Interest income 40,538
Amortization of bond premiums (776)
Accretion 418
--------
Gross investment income - $ 40,180
Expenses
Investment adviser and administration fee 3,373
Professional fees 1,332
Printing and postage 698
Other expenses 511
Filing and registration fees 430
Custodial fees 175
--------
Total gross expenses 6,519
Less earnings credits (175)
Less advisory fee waived (3,373)
--------
Net expenses - 2,971
--------
Net investment income - 37,209
-------- ---------
Net realized gain on investments
Proceeds from sales 133,706
Less cost of securities sold based on identified cost 137,774
--------
Realized net gain (loss) - (4,068)
--------
Unrealized gain (loss) on investments
End of period (70,375)
Beginning of period (22,635)
--------
Decrease in unrealized gain for the period - (47,740)
-------- ---------
Net realized and unrealized gain (loss) on investments - (51,808)
-------- ---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS - $(14,599)
=========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months ended Year ended
31-May-97 Nov. 30, 1996
- --------------------------------------------------------------- ---------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 37,209 $ 71,541
Net realized gain (loss) on investments (4,068) 7,358
Net increase (decrease) in unrealized appreciation (47,740) (35,266)
--------------------- ------------
Net increase (decrease) in net assets from operations (14,599) 43,633
Dividends to Shareowners From:
Net investment income (37,209) (72,347)
Capital gains distributions - - (7,240)
--------------------- ------------
Fund Share Transactions:
Proceeds from sales of shares 11,125 303,624
Value of shares issued in reinvestment of dividends 36,512 77,813
--------------------- ------------
47,637 381,437
Cost of shares redeemed (106,823) (240,384)
--------------------- ------------
Net increase (decrease) in net assets from share transactions (59,186) 141,053
--------------------- ------------
Total increase (decrease) in net assets (110,994) 105,099
NET ASSETS
Beginning of period 1,200,923 1,095,824
--------------------- ------------
End of period $ 1,089,929 $ 1,200,923
===================== ============
(Including undistributed net investment income of
(1222) for May 31, 1997
Shares of the Fund Sold and Redeemed
Number of shares sold 2,479 65,268
Number of shares issued in reinvestment of dividends 7,995 16,726
Number of shares redeemed (23,079) (52,815)
Net Increase (decrease) in Number of Shares Outstanding (12,605) 29,179
===================== ============
</TABLE>
<PAGE>
SEXTANT GROWTH FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
INVESTMENTS
<TABLE>
<CAPTION>
Issue Number of Shares Cost Market Value
- ------------------------------- ---------------- -------- -------------
<S> <C> <C> <C>
Common Stocks
Banking (8.9%)
Washington Mutual Savings Bank 3,000 $ 44,124 $ 166,875
Construction (5.1%)
BMC West* 4,500 54,533 59,625
Butler Manufacturing 1,000 31,071 35,875
-------- -------------
- - - 85,604 95,500
Computers (15.1%)
Adobe Systems 1,200 50,490 53,550
Award Software International 2,500 29,148 33,750
Hewlett-Packard 800 42,650 41,200
Microsoft* 800 14,897 99,200
Oracle 1,200 37,879 55,950
-------- -------------
- - - 175,064 283,650
Electronics (12.7%)
FLIR Systems 2,500 27,611 40,000
Gasonix International 3,000 31,631 35,625
Merix 1,000 31,822 16,250
Micron Technology 1,000 32,312 42,500
Motorola 700 40,511 46,462
US Robotics 700 29,726 58,800
-------- -------------
- - - 193,613 239,637
Investments (14.7%)
Franklin Resources 1,200 13,562 77,700
McDonald & Co. 2,000 34,347 76,750
Schwab, Charles 3,025 9,117 122,891
-------- -------------
- - - 57,026 277,341
Medical (7.8%)
Genentech* 1,000 37,225 58,625
Ligand Pharmaceuticals 4,000 49,132 47,500
Rotech Medical 2,400 33,976 40,500
-------- -------------
- - - 120,333 146,625
Metal Ores (2.8%)
Cyprus Amax Minerals 2,200 54,541 53,625
Oil & Gas Production (6.9%)
Atlantic Richfield 450 51,620 65,475
Noble Drilling 3,000 21,322 65,250
-------- -------------
- - - 3,000 21,322
Paper & Products (1.2%)
Boise Cascade 600 15,409 22,800
Pollution Control (2.3%)
Ionics 900 36,864 42,975
Retail (2.1%)
Albertson's 1,200 26,255 40,200
</TABLE>
<PAGE>
SEXTANT GROWTH FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
INVESTMENTS, CONT.
<TABLE>
<CAPTION>
Issue Number of Shares Cost Market Value
- ---------------------------------------- ---------------- ---------- -------------
<S> <C> <C> <C>
Transportation (11.6%)
Airborne Freight 3,000 69,116 114,750
Fritz Companies* 4,000 51,640 43,500
Halter Marine Group 556 9,967 13,066
Trinity Industries 1,600 45,315 48,000
---------- -------------
- - - 176,038 219,316
Utilities (1.9%)
Washington Water Power 2,000 37,079 36,000
Total Investments (93.1%) 57,031 $1,024,950 $ 1,645,866
========== =============
Other Assets (net of liabilities) (6.9%) - 129,716
----------
Total Net Assets (100%) - $1,775,582
==========
<FN>
*non-income producing
</FN>
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Selected data per share of capital stock outstanding throughout the period:
Six Months Ended For Year Ended November 30,
-----------------------------
May 31, 1997 1996 1995 1994 1993 1992 1991
- ---------------------------------------- ------------------ ----------------------------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 7.92 $ 7.42 $ 5.82 $ 6.38 $ 5.93 $ 5.55
------------------ ----------------------------- -------- ------- ------- -------
Income From Investment Operations
Net Investment Income 0.01 0.00 (0.03) (0.03) 0.01 0.01
Net gains or losses on securities
(both realized and unrealized) 1.28 0.50 1.82 (0.53) 0.45 0.38
------------------ ----------------------------- -------- ------- ------- -------
Total From Investment Operations 1.29 0.50 1.79 (0.56) 0.46 0.39
Less Distributions
Dividends (from net investment income) 0.00 0.00 0.00 0.00 (0.01) (0.01)
Distributions (from capital gains) 0.00 0.00 (0.19) 0.00 0.00 0.00
------------------ ----------------------------- -------- ------- ------- -------
Total Distributions 0.00 0.00 (0.19) 0.00 (0.01) (0.01)
------------------ ----------------------------- -------- ------- ------- -------
Net asset value at end of period $ 9.21 $ 7.92 $ 7.42 $ 5.82 $ 6.38 $ 5.93
Total Return 16.29% 6.74% 30.76% 8.78% 7.76% 7.01%
Ratios / Supplemental Data
- ----------------------------------------
Net assets ($000), end of period $ 1,885 $ 1,616 $ 1,137 $1,010 $1,425 $1,321
Ratio of expenses to average net assets 0.34% 0.95% 1.63% 1.50% 1.40% 1.60%
Ratio of net investment income to
average net assets 0.13% 0.01% 0.45% 0.43% 0.15% 0.17%
Portfolio turnover rate 5% 32% 40% 12% 25% 46%
Average commission rate paid $ 0.0488 $ 0.0458 $0.0572
May 31, 1997 1990 1989 1988
- ---------------------------------------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 4.93 $ 4.88 $ 4.88 $ 4.96
------- ------- ------- -------
Income From Investment Operations
Net Investment Income 0.04 0.27 0.28 0.30
Net gains or losses on securities
(both realized and unrealized) 0.60 0.01 0.00 (0.08)
------- ------- ------- -------
Total From Investment Operations 0.64 0.28 0.28 0.22
Less Distributions
Dividends (from net investment income) (0.02) (0.23) (0.28) (0.30)
Distributions (from capital gains) 0.00 0.00 0.00 0.00
------- ------- ------- -------
Total Distributions (0.02) (0.23) (0.28) (0.30)
------- ------- ------- -------
Net asset value at end of period $ 5.55 $ 4.93 $ 4.88 $ 4.88
Total Return 11.79% 7.37% 5.22% 5.12%
Ratios / Supplemental Data
- ----------------------------------------
Net assets ($000), end of period $ 947 $ 53 $1,356 $1,365
Ratio of expenses to average net assets 1.93% 1.06% 0.89% 0.25%
Ratio of net investment income to
average net assets 0.60% 5.25% 5.60% 5.86%
Portfolio turnover rate 16% 29% 19% 20%
Average commission rate paid
<FN>
For 1996, 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 and $.02, respectively. The increase to the ratio of expenses to average net assets would have been 0.18, 0.21,
0.76, 1.02, 1.28, 2.02, and 0.17, respectively.
*not annualized
</FN>
</TABLE>
<PAGE>
SEXTANT GROWTH FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
For the six months ended May 31, 1997
<S> <C> <C>
Assets
Common stock investments (cost $1,094,892) $1,755,269
Cash 129,528
Dividends receivable 1,261
Insurance deposit 1,214
----------
Total Assets - $1,887,272
-----------
Liabilities
Payable to affiliate 2,287
----------
Total Liabilities - 2,287
-----------
Net Assets - 1,884,985
===========
Fund shares outstanding - 204,694
Analysis of Net Assets
Paid in capital (unlimited shares authorized, without par)- 1,244,827
Undistributed net investment income (loss) - (6,872)
Accumulated net realized gain on investments - (13,346)
Unrealized net appreciation on investments - 660,376
-----------
Net Assets applicable to Fund shares outstanding $1,884,985
==========
Net Asset Value per share - $ 9.21
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the six months ended May 31, 1997
<S> <C> <C>
Investment income
Dividends 8,236
--------
Gross investment income - 8,236
Expenses
Investment adviser and administration fee 2,571
Custodial fees 1,191
Professional fees 1,632
Printing and postage 639
Filing and registration fees 623
Other expenses 337
--------
Total gross expenses 6,993
Less earnings credits (1,191)
Net expenses - 5,802
-------- --------
Net investment income - 2,434
-------- --------
Net realized gain (loss) on investments
Proceeds from sales 63,386
Less cost of securities sold based on identified cost 67,202
--------
Realized net gain (loss) - (3,816)
--------
Unrealized gain on investments
End of period 660,376
Beginning of period 398,808
--------
Increase in unrealized gain for the period - 261,568
-------- --------
Net realized and unrealized gain on investments - 257,752
-------- --------
Net increase in net assets resulting from operations - 260,186
========
</TABLE>
<PAGE>
SEXTANT GROWTH FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months ended Year ended
May. 31, 1997 Nov. 30, 1996
------------------ ---------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment Income $ 2,434 $ 115
Net realized gain (loss) on investments (3,816) (5,688)
Net increase in unrealized appreciation 261,568 109,794
------------------ ---------------
Net increase in net assets from operations 260,186 104,221
------------------ ---------------
Dividends to Shareowners From:
Net investment income - -
------------------ ---------------
Capital gains distributions - -
------------------ ---------------
Fund Share Transactions:
Proceeds from sales of shares 162,589 676,224
Value of shares issued in reinvestment of dividends - -
------------------ ---------------
162,589 676,224
Cost of shares redeemed (153,346) (301,892)
------------------ ---------------
Net Increase in net assets from share transactions 9,243 374,332
------------------ ---------------
Total increase in net assets 269,429 478,553
NET ASSETS
Beginning of period 1,615,556 1,137,003
------------------ ---------------
End of period $ 1,884,985 $ 1,615,556
================== ===============
Shares of the Fund Sold and Redeemed
Number of shares sold 21,947 90,055
Number of shares issued in reinvestment of dividends - -
Number of shares redeemed (21,127) (39,396)
------------------ ---------------
Net Increase (decrease) in
Number of Shares Outstanding 820 50,659
================== ===============
</TABLE>
<PAGE>
SEXTANT INTERNATIONAL FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
INVESTMENTS
<TABLE>
<CAPTION>
Issue Number of Shares Cost Market Value Country
- ----------------------------------- ---------------- ------ ------------ --------------
<S> <C> <C> <C> <C>
Common Stocks
Banking and Financial (14.3%)
Australia & New Zealand Bank ADR 500 10,875 17,125 Australia
Aegon NV ADR 303 11,513 22,384 Netherlands
Banco Bilbao Vizcaya ADS 400 15,505 28,150 Spain
Banco Latinoamericano de Export SA 200 9,325 9,425 Panama
Hutchison Whampoa ADR 500 17,826 20,313 Hong Kong
Toronto Dominion Bank 700 18,159 21,175 Canada
---------------- ------ ------------
- - 2,603 83,203 118,572
Building Materials (3.4%)
C R H plc ADR 300 15,661 15,562 Ireland
Hanson plc ADR 500 12,090 12,813 United Kingdom
---------------- ------ ------------
- - 800 27,751 28,375
Chemicals (1.9%)
Phone Poulenc SA ADR 500 15,859 16,125 France
Computers (3.4%)
Dassault Systems SA ADR 200 13,875 12,700 France
Olicom A/S 900 16,246 15,863 Denmark
---------------- ------ ------------
- - 1,100 30,121 28,563
Consumer Products (4.1%)
Gucci Group NV 200 10,925 13,950 Italy
Coca Cola FEMSA S.A. ADR 500 9,750 20,187 Mexico
---------------- ------ ------------
- - 700 20,675 34,137
Closed End Country Funds (7.2%)
Austria Fund 1,000 7,923 9,500 Austria
New Germany Fund 1,000 12,417 15,500 Germany
Irish Investment Fund 900 10,238 14,400 Ireland
Malaysia Fund 600 9,750 8,775 Malaysia
Singapore Fund 1,000 13,777 11,500 Singapore
---------------- ------ ------------
- - 4,500 54,105 59,675
Electrical Equipment (1.6%)
ABB AB ADR 100 10,000 13,619 Sweden
Medical-Drugs (4.9%)
Glaxo Wellcome plc ADR 400 9,800 16,100 United Kingdom
Novo-Nordisk A/S ADR 450 14,702 24,694 Denmark
---------------- ------ ------------
- - 850 24,502 40,794
Metals & Mining (5.1%)
Broken Hill Proprietary ADR 400 11,700 11,550 Australia
Potash Corp of Saskatchewan 200 14,675 16,425 Canada
RTZ Corp PLC ADS 200 11,375 13,950 United Kingdom
---------------- ------ ------------
- - 800 37,750 41,925
</TABLE>
<PAGE>
SEXTANT INTERNATIONAL FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
INVESTMENTS
<TABLE>
<CAPTION>
Issue Number of Shares Cost Market Value Country
- ----------------------------------------- ---------------- ------- ------------ ---------------
<S> <C> <C> <C> <C>
Oil & Gas Production (7.4%)
Numac Energy 2,000 8,853 8,375 Canada
Petroleum Geo-Services A/S 500 10,979 21,375 Norway
Total S.A. ADR 307 8,812 14,007 France
YPF SA ADS 600 12,344 17,925 Argentina
---------------- ------- ------------
- - 3,407 40,988 61,682
Paper Products (3.4%)
Abitibi-Price 800 11,847 14,400 Canada
Fletcher Challenge Paper ADR 600 12,939 13,800 New Zealand
---------------- ------- ------------
- - 1,400 24,786 28,200
Photographic Equipment (3.4%)
Canon ADR 100 8,687 12,688 Japan
Fuji Photo Film ADR 400 10,050 15,450 Japan
---------------- ------- ------------
- - 500 18,737 28,138
Telecommunications (16.8%)
BCE Inc 900 15,830 23,850 Canada
British Sky Broadcasting ADS 300 11,063 17,100 United Kingdom
Cable & Wireless plc ADS 600 13,021 15,075 Hong Kong
PT Indosat ADR 300 10,584 8,962 Indonesia
Telebras ADS 300 15,051 41,212 Brazil
Telecom Corp New Zealand ADS 300 10,050 11,512 New Zealand
-------
Telefonica de Espana ADS 250 10,250 21,844 Spain
---------------- ------- ------------
- - 2,950 85,849 139,555
Transportation (6.1%)
British Airways 150 10,931 17,644 United Kingdom
Canadian Pacific Ltd. 500 8,164 13,250 Canada
Daimler-Benz ADS 250 16,406 19,812 Germany
---------------- ------- ------------
- - 900 35,501 50,706
Utilities-Electric (3.4%)
Enersis S.A. ADR 400 10,100 13,900 Chile
Energy Group plc ADR 400 14,390 14,300 United Kingdom
---------------- ------- ------------
- - 800 24,490 28,200
Utilities-Gas (2.3%)
Transport de Gas del Sur SA ADR 1,500 18,808 18,938 Argentina
Total Investments (88.7%) 23,410 553,125 737,204
Other Assets (net of liabilities) (11.3%) - 93,600
---------------
Total Net Assets (100%) - $ 830,804
===============
</TABLE>
<PAGE>
SEXTANT INTERNATIONAL FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Selected data per share of capital stock outstanding throughout the period:
Sept. 28, '95
For the Six Months Year ended (Inception) to
ended May 31, 1997 Nov. 30, '96 Nov. 30, '95*
-------------------- -------------- ----------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 5.87 $ 4.99 $ 5.00
-------------------- -------------- ----------------
Income from investment operations
Net investment income 0.05 0.03 (0.02)
Net gains or losses on securities (both realized and unrealized) 0.68 0.88 0.01
-------------------- -------------- ----------------
Total from investment operations 0.73 0.91 (0.01)
-------------------- -------------- ----------------
Less distributions
Dividends (from net investment income) 0.00 (0.03) 0.00
Distributions (from capital gains) 0.00 0.00 0.00
-------------------- -------------- ----------------
Total distributions 0.00 (0.03) 0.00
-------------------- -------------- ----------------
Net asset value at end of period $ 6.60 $ 5.87 $ 4.99
Total return 12.44% 18.16% (0.20)%
Ratios/supplemental data
- ------------------------------------------------------------------
Net assets ($000), end of period $ 831 $ 695 $ 328
Ratio of expenses to average net assets 0.88% 1.80% 0.49%
Ratio of net investment income to average net assets 0.84% 0.60% 0.38%
Portfolio turnover rate 10% 11% 12%
Average commission rate paid $ 0.1293 $ 0.0827 $ 0.0192
<FN>
For the year ended Nov. '96 and the period ended Nov. '95, all or a portion of the operating expenses were waived. n
these periods would have been $.03 and $.01, respectively. The increase to the ratio of expenses to average monthly net
assets would be .50% and .21 %, respectively.
* not annualized
</FN>
</TABLE>
<PAGE>
SEXTANT INTERNATIONAL FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
For the Six Months Ended May 31, 1997
<S> <C> <C>
Assets
Common stock investments (cost $553,125) $737,203.00
Cash 93,427
Dividends receivable 2,067
------------
Total Assets - $832,697
--------
Liabilities
Payable to affiliate 1,893
- -------------------------------------------------------------- ------------
Total Liabilities - 1,893
--------
Net assets - $830,804
========
Fund Shares Outstanding - 125,825
Analysis of Net Assets
Paid in capital (unlimited shares authorized, without par) 652,423
Undistributed net investment income (loss) 5,004
Accumulated net realized gain (loss) on investments (10,701)
Unrealized net appreciation on investments 184,078
------------
Net Assets applicable to Fund shares outstanding - 830,804
========
Net Asset Value per Share - $ 6.60
========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Six Months Ended, May 31, 1997
<S> <C> <C>
Investment income
Dividends (net of $1,080 in foreign taxes) $ 11,457
---------
Gross investment income - $11,457
Expenses
Investment adviser and administration fee 3,284
Custodian fees 1,262
Professional fees 861
Filing and registration fees 508
Printing and postage 347
Other expenses 314
---------
Total gross expenses 6,576
Less earnings credits (1,262)
---------
Net expenses - 5,314
--------- --------
Net investment income - 6,143
--------- --------
Net realized gain (loss) on investments
Proceeds from sales 60,297
Less cost of securities sold based on identified cost 64,645
---------
Realized net loss - (4,348)
---------
Unrealized gain on investments
End of period 184,078
Beginning of period 96,586
---------
Increase in unrealized gain for the period - 87,492
--------- --------
Net realized and unrealized gain on investments - 83,144
--------- --------
Net increase in net assets resulting from operations $ 89,287
=========
</TABLE>
<PAGE>
SEXTANT INTERNATIONAL FUND 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months ended Year ended
May 31, 1997 Nov 30, 1996
------------------ --------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment Income $ 6,143 $ 3,070
Net realized gain (loss) on investments (4,348) (5,169)
Net increase in unrealized appreciation 87,492 94,408
------------------ --------------
Net increase (decrease) in net assets from operations 89,287 92,309
------------------ --------------
Dividends to Shareowners From:
Net investment income - (3,068)
Capital gains distributions - -
------------------ --------------
Fund Share Transactions:
Proceeds from sales of shares 105,181 440,062
Value of shares issued in reinvestment of dividends - 3,068
------------------ --------------
105,181 443,130
Cost of shares redeemed (59,158) (165,015)
------------------ --------------
Net increase in net assets from share transactions 46,023 278,115
------------------ --------------
Total increase in net assets 135,310 367,356
NET ASSETS
Beginning of period 695,494 328,138
------------------ --------------
End of period $ 830,804 $ 695,494
================== ==============
(Including undistributed net investment income of
($1,138) for Nov. 30,1996)
Shares of the Fund sold and redeemed
Number of shares sold 21,405 83,056
Number of shares issued in reinvestment of dividends - 523
Number of shares redeemed (14,116) (30,837)
------------------ --------------
Net Increase in
Number of Shares Outstanding 7,289 52,742
================== ==============
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
(GRAPHIC OMITTED)
NOTE 1 - ORGANIZATION
Saturna Investment Trust (the "Trust") was established under Washington State
Law as a Business Trust on February 20, 1987. The Trust's name was changed
from Northwest Investors Trust on July 11, 1995. The Trust is registered as a
no-load, open-end series invest-ment 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 sig-nificant accounting policies followed by
the Funds.
INVESTMENTS:
Securities traded on a national ex-change 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 quo-tations are
valued using a matrix based on maturity, quality, yield and similar factors,
which are compared periodically to multiple dealer bids and ad-justed by the
adviser under policies established by the Trustees.
The cost of securities is the same for accounting and Federal income tax
purposes. Securities trans-actions 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
con-stant yield-to-maturity basis from pur-chase date to maturity. Interest
income is increased by accretion only for bonds underwritten as original issue
discounts. Market dis-counts are recorded as realized gains upon disposition.
Cash dividends from equity secu-
rities are recorded as income on the ex-div-idend date.
Expenses incurred by the Trust on be-half 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 ex-penses, as described
below.
INCOME TAXES:
The Funds have elected to be taxed as regulated investment companies under the
Internal Revenue Code and distribute sub-stantially all of their taxable net
invest-ment income and realized net gains on in-vest-ments. Therefore, no
provision for Federal income taxes is required.
DIVIDENDS AND DISTRIBUTIONS TO SHAREOWNERS:
Dividends and distributions to share-owners 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 pur-chase additional shares at the net asset value
on the payable date.
NOTE 3-TRANSACTIONS WITH AFFILIATED PERSONS
Under a contract approved by shareowners on September 28, 1995, (the
"Contract"), Saturna Capital Corporation provides investment ad-vi-sory
services and certain other adminis-tra-tive and distribution services to
conduct Trust busi-ness. Each of the Funds pays the Adviser an Investment
Advisory and Administrative Services Fee (the "Base Fee") of .60% of average
net assets per annum, payable monthly. The Base Fee is subject to adjustment
up or down depending on the investment performance of the Fund relative to a
specified index (the "Performance Adjustment"). No performance adjustment is
applicable during the first year any Agreement is in place. The Adviser has
voluntrily undertaken to limit expenses of Sextant Bond Income Fund and
Sextant Short-Term Bond Fund to 0.60% through March 31, 1997 and waives its
investment advisory and administrative fee as to either Fund completely so
long as assets of that Fund are less than $2 million.
<PAGE>
NOTES TO FINANCIAL STATEMENTS 1997 SEMI-ANNUAL REPORT
- -----------------------------------------------------------------
For the six months ended May 31, 1996, Sextant Bond Income Fund and Sextant
Growth Fund incurred advisory expenses of $3,357 and $3,912, respectively.
Sextant International Fund incurred advisory expenses of $1,466 and Sextant
Short-Term Bond Fund incurred advisory expenses of $7,609.
In accordance with the expense waiver noted above, for the six months ended
May 31, 1996, Saturna Capital waived $3,768 of the Sextant Short-Term Bond
Fund advisory fee and $3,357 of that of Sextant Bond Income Fund.
In accordance with the Funds' agreement with their custodian bank, National
City Bank, for the six months ended May 31, 1996, custodian fees of Sextant
Short-Term Bond Fund, Sextant Bond Income Fund, Sextant Growth Fund and
Sextant International Fund, amounted to $1,059, $622, $950 and $972,
respectively. Bank earnings credits eliminated these charges.
One trustee, who also serves as the president of the Trust, is a di-rector
and president of the Adviser. Prior to January 1, 1996, all trustees served
without compensa-tion. Since that date, unaffiliated trustees began to receive
$100 per Board or committee meeting attended. On May 31, 1996, trustees,
officers and their immediate families as a group owned 14%, 30% 14% and 34% of
the outstanding shares of Sextant Short-Term Bond Fund, Sextant Bond Income
Fund, Sextant Growth Fund and Sextant International Fund, respectively.
The Trust acts as a distributor of its own shares, except in those states in
which Investors National Corporation (a sub-si-diary of Saturna Capital
Corporation) is itself registered as a broker-dealer and acts as dis-tributor
without compensation.
Investors National Corporation is the primary stockbroker used to effect
portfolio transactions for Sextant Growth Fund and Sextant International Fund,
and was paid $1,381 and $962, respectively in commissions at deep discount
rates during the six months ended May 31, 1996.
NOTE 4-INVESTMENTS
At May 31, 1996, the net unrealized appreciation of investments for Sextant
Bond Income Fund of ($93,780) comprised net unrealized gains of $0 and
unrealized losses of ($93,780). Additionally, the net unrealized appreciation
of investments for Sextant Growth Fund, Sextant Short-Term Bond Fund and
Sextant International Fund were $356,504, ($37,205), and $43,443, which
consist of gains of $375,244, $9,012, and $52,934, and unrealized losses of
($18,740), ($46,217) and ($9,491), respectively.
During the six months ended May 31, 1996, Sextant Short-Term Bond Fund
purchased $2,715,477 of securities and sold $461,020. Comparable figures for
Bond Income Fund are $853,224 and $802,093; for Growth Fund $412,818, and
$160,404, and for International Fund $175,247 and $20,563. Included in the
above amounts for Sextant Short-Term Bond Fund and Sextant Bond Income Fund
are purchases of $619,792 and $197,320, and sales of $311,021 and $104,008 of
U.S. Government securities, respectively.
<PAGE>
(GRAPHIC OMITTED)
SATURNA CAPITAL
Mutual Funds
1300 No. State Street
Bellingham, WA 98225-4730
800/SATURNA
(800/728-8762)
www.saturna.com
This report is issued for the information of the shareowners of the Funds. It
is not authorized for distribution to prospective investors unless it is
accompanied or preceded by an effective prospectus relating to the securities
of the Trust. The Sextant Funds are series of Saturna Investment Trust
SEXTANT
Mutual Funds
(GRAPHIC OMITTED)
SHORT-TERM BOND
BOND INCOME
GROWTH
INTERNATIONAL
SEMI-ANNUAL REPORT
MAY 31, 1997
(GRAPHIC OMITTED)
