|
Idaho
Tax-Exempt Fund
November
30, 1999 Report
Fellow Shareowners:
For the twelve month period ending November 30, 1999, the Idaho Tax-Exempt Fund provided a total return of 2.18%. The current 30-day yield on your Fund is 4.80%, tax-free. This tax-free yield converts to a fully-taxable equivalent yield of 8.73% for top-bracket Idaho taxpayers. During the year, Fund assets decreased 2.2% to $ 6.15 million while the Fund's expense ratio held steady at 0.80%.
The booming expansion of the US economy set the tone for bond markets in 1999. Record employment, rising wages and a near tripling of oil prices kept Federal Reserve Bank policy on the defensive all year. The Federal Reserve Bank raised its target for Fed Funds by .75% to prevent an increase in the US inflation rate. To date, the increase in rates appears to have restrained inflation without hurting the economy.
The damaging potential of these events inspired us to keep the Fund's effective average maturity close to its five year minimum to reduce risk. As a result, Idaho Tax-Exempt Fund's 2.18% one-year return compares favorably, for example, with the 3.63% one-year return of comparable U.S. Treasuries. We have now extended the effective average maturity to 10.2 years to take advantage of higher rates. We were able to improve the average credit quality of the Fund slightly.
Since 1993, the interest rates have moved within a well-defined range. Today, intermediate term yields rest at the mid-point of that range. For the next year, we expect inflation to remain modest. With today's higher rates, the potential for positive real returns in Idaho Tax-Exempt Fund appear brighter than one year ago.
As always, our staff and 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. We appreciate your investing with us.
Nicholas
Kaiser,
|
Phelps
McIlvaine,
|
President
|
Vice President, Portfolio Manager |
December 15, 1999
Morningstar Mutual Funds has awarded Idaho Tax-Exempt Fund a "four star" rating as of November 30, 1999. The Morningstar rating is a widely respected measure of 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 3-month Treasury Bill returns. Twenty percent of the funds in a Morningstar investment category receive four stars, the second-highest rating. The adviser has waived a portion of its fee in past years, resulting in higher returns. Naturally, past performance may not indicate future results.
IDAHO
TAX-EXEMPT FUND
|
November
30, 1999 Annual Report
|
|
November 30, 1999 |
Investments
|
Rating |
Issuer
|
Coupon/Maturity | Face Amount | Market Value |
Airport Parking (1.9%) | ||||
AAA | Boise City Airport Revenue COP | 5.40% due 8/1/2011 | $115,000 | $114,954 |
Electric Power (2.7%) | ||||
AAA | Idaho Falls Electric Revenue | 6.75% due 4/1/2019 | 160,000 | 168,952 |
General Obligations (51.0%) | ||||
AA- | Ada & Canyon Counties | 5.50% due 7/30/2011 | 175,000 | 179,638 |
JSD #2 Meridian | 5.50% due 7/30/2015 | 100,000 | 98,590 | |
AAA | Adams County GO | 5.00% due 8/1/2014 | 110,000 | 102,223 |
A+ | Bannock County GO Jail | 5.05% due 9/1/2012 | 95,000 | 89,879 |
A+ | Bannock County SD #25 | 4.80% due 8/1/2008 | 90,000 | 88,398 |
A | " | 4.90% due 8/1/2009 | 90,000 | 88,182 |
" | 5.25% due 8/1/2016 | 110,000 | 103,411 | |
AA- | Boise City Revenue Bonds | 5.10% due 2/1/2011 | 110,000 | 108,185 |
AAA | Boise City GO ISD | 5.50% due 7/30/2011 | 95,000 | 95,494 |
AA- | " | 5.50% due 7/30/2016 | 150,000 | 145,860 |
A | Boise County SD #73 | 5.15% due 7/31/2010 | 125,000 | 124,064 |
AAA | Canyon Co. SD #131 Nampa | 5.50% due 7/30/2013 | 50,000 | 50,338 |
AAA | Canyon County SD #132 | 5.40% due 7/30/2011 | 100,000 | 97,970 |
" | 5.40% due 7/30/2012 | 100,000 | 99,180 | |
A | Canyon County SD #135 Notus | |||
Series 1994 | 6.00% due 8/1/2007 | 50,000 | 50,643 | |
AAA | Cassia, Twin Falls JSD #151 | 5.10% due 8/1/2009 | 90,000 | 89,262 |
" | 5.375% due 8/1/2013 | 85,000 | 83,360 | |
" | 5.375% due 8/1/2015 | 75,000 | 71,670 | |
AAA | Elmore County SD #193 | 4.75% due 7/31/2007 | 250,000 | 243,600 |
AAA | Gem & Boise JSD #221 Emmetsville | 4.40% due 8/1/2011 | 100,000 | 89,660 |
" | 4.50% due 8/1/2012 | 75,000 | 66,945 | |
" | 4.75% due 8/1/2016 | 140,000 | 122,850 | |
AAA | Kootenai County SD #273 | 4.85% due 7/31/2013 | 200,000 | 183,580 |
" | 5.00% due 7/30/2016 | 70,000 | 63,276 | |
AAA | Kuna Sch/Comm Library Dist. | 4.9% due 8/1/2013 | 75,000 | 68,625 |
AAA | Madison County SD #321 | 5.60% due 2/1/2010 | 100,000 | 101,671 |
AA | Payette County SD #372 | 6.50% due 7/31/2008 | 80,000 | 84,440 |
" | 6.75% due 7/31/2009 | 155,000 | 165,199 | |
" | 6.75% due 7/31/2010 | 100,000 | 106,580 | |
AAA | Teton County SD #401 GO | 5.50% due 8/1/2012 | 75,000 | 73,777 |
SUB-TOTAL | 3,220,000 | 3,136,550 | ||
Housing (5.7%) | ||||
AA | Idaho Housing Authority | |||
Single Fam Mortgage, B-1 | 6.85% due 7/1/2012 | 90,000 | 90,337 | |
AA | Idaho Housing Authority | |||
Refunding Series A | 6.15% due 7/1/2024 | 150,000 | 149,294 | |
AA+ | Idaho Housing Authority | |||
Single Fam Mort Mezz-E-1 | 6.60% due 7/1/2011 | 80,000 | 77,126 | |
AA | Idaho Housing Authority | |||
Single Fam Mort Rev Ser B1 | 8.00% due 1/1/2020 | 10,000 | 10,443 | |
AA | Idaho Housing Authority | |||
Single Fam Mort SR Series C1 | 7.70% due 7/1/2017 | 20,000 | 20,057 | |
SUB-TOTAL | 350,000 | 347,257 | ||
Irrigation (0.8%) | ||||
AA | Boise Kuna Irrigation Dist. | 6.00% due 7/1/2008 | 50,000 | 51,137 |
Medical/Hospitals (4.8%) | ||||
A | Idaho Health Facility | |||
Hospital Rev - Elks Rehab | 5.125% due 7/15/2013 | 250,000 | 231,200 | |
AAA | Idaho Health Facility | |||
Holy Cross Rev Refunding | 5.25% due 12/1/2011 | 65,000 | 63,619 | |
SUB-TOTAL | 315,000 | 294,819 |
Page 2
November
30, 1999 Annual Report
|
IDAHO
TAX-EXEMPT FUND
|
|
Investments,
continued
|
Rating |
Issuer
|
Coupon/Maturity | Face Amount | Market Value |
Real Estate (3.1%) | ||||
AAA | Idaho State Bldg Authority Series C | 5.70% due 9/1/2007 | $100,000 | $103,170 |
AAA | Idaho State Building Authority | 5.00% due 9/1/2021 | 100,000 | 88,530 |
200,000 | 191,700 | |||
Roads (2.9%) | ||||
A | Payette L.I.D. #89-1 | 7.60% due 5/1/2005 | 30,000 | 29,833 |
A | Post Falls, Kootenai County | 7.40% due 4/15/2000 | 15,000 | 14,959 |
L.I.D. #91-1 | 7.60% due 4/15/2001 | 15,000 | 14,927 | |
" | 7.75% due 4/15/2002 | 20,000 | 19,718 | |
" | 7.95% due 4/15/2003 | 20,000 | 19,894 | |
" | 7.95% due 4/15/2004 | 20,000 | 19,898 | |
L.I.D. #91-4 | 7.95% due 4/15/2005 | 20,000 | 19,865 | |
" | 7.95% due 4/15/2006 | 20,000 | 19,871 | |
" | 7.95% due 4/15/2007 | 20,000 | 19,870 | |
SUB-TOTAL | 180,000 | 178,835 | ||
State Education (11.7%) | ||||
AAA | Boise State University | |||
Student Univ. & Housing Sys. | 5.10% due 4/1/2014 | 300,000 | 285,900 | |
AAA | Idaho State University | |||
Student Fee Revenue | 4.90% due 4/1/2017 | 150,000 | 134,295 | |
AAA | University of Idaho | |||
Student Fee Revenue-Elmwood Apts. | 5.25% due 4/1/2014 | 120,000 | 115,452 | |
AAA | University of Idaho | |||
Student Fee Revenue | 5.60% due 4/1/2015 | 185,000 | 183,242 | |
SUB-TOTAL | 755,000 | 718,889 | ||
Sewer (2.4%) | ||||
A | Troy, Sewer Revenue | 7.20% due 2/1/2000 | 10,000 | 9,960 |
" | 7.30% due 2/1/2001 | 10,000 | 9,960 | |
" | 7.40% due 2/1/2002 | 10,000 | 9,962 | |
" | 7.50% due 2/1/2003 | 10,000 | 9,963 | |
" | 7.60% due 2/1/2004 | 10,000 | 9,965 | |
" | 7.70% due 2/1/2005 | 15,000 | 14,950 | |
" | 7.80% due 2/1/2006 | 15,000 | 14,952 | |
" | 7.90% due 2/1/2007 | 15,000 | 14,953 | |
" | 8.00% due 2/1/2008 | 15,000 | 14,954 | |
" | 8.00% due 2/1/2009 | 20,000 | 19,941 | |
" | 8.00% due 2/1/2010 | 20,000 | 19,941 | |
SUB-TOTAL | 150,000 | 149,501 | ||
Water Supply (10.5%) | ||||
A- | American Falls Reservoir, Refunding A | 7.25% due 5/1/2004 | 70,000 | 72,250 |
" | 7.625% due 5/1/2021 | 150,000 | 155,460 | |
A | Coeur d' Alene Water Revenue | 5.00% due 6/1/2006 | 100,000 | 100,710 |
A | McCall Water Rev., Series 1994 | 6.25% due 9/1/2008 | 200,000 | 208,938 |
A | McCall Water Revenue | 6.375% due 9/1/2014 | 70,000 | 73,221 |
A | Ucon Water & Sewer Rev. Refunding | 7.75% due 12/1/2002 | 35,000 | 34,827 |
SUB-TOTAL | 625,000 | 645,406 | ||
Total Investments (97.5%) | (Cost = $6,162,073) | $6,120,000 | $5,998,000 | |
Other Assets (net of liabilities) (2.5%) | 153,459 | |||
Total Net Assets (100%) | $6,151,459 | |||
* These unaudited
bond ratings reflect the adviser's current rating of each bond, as determined
using Standard & Poor's and Moody's ratings. |
Page 3
IDAHO
TAX-EXEMPT FUND
|
November
30, 1999 Annual Report
|
|
Financial
Highlights
|
Selected data per share of capital stock outstanding throughout the year:
For Year Ended November 30
|
|||||||
1999
|
1998
|
1997
|
1996
|
1995
|
|||
Net asset value at beginning of year | |||||||
Income from Investment Operations |
$5.36
|
$5.28
|
$5.25
|
$5.28
|
$4.76
|
||
Net Investment Income |
0.24
|
0.25
|
0.26
|
0.27
|
0.26
|
||
Net gains or losses on securities (both realized & unrealized) |
(0.35)
|
0.12
|
0.03
|
(0.03)
|
0.52
|
||
Total From Investment Opernations |
(0.11)
|
0.37
|
0.29
|
0.24
|
0.78
|
||
Less Distributions | |||||||
Dividends (from net investment income) |
(0.24)
|
(0.25)
|
(0.26)
|
(0.27)
|
(0.26)
|
||
Distributions (from capital gains) |
0.00
|
(0.04)
|
0.00
|
0.00
|
0.00
|
||
Total Distributions |
(0.24)
|
(0.29)
|
(0.26)
|
(0.27)
|
(0.26)
|
||
Net asset value at end of year |
$5.01
|
$5.36
|
$5.28
|
$5.25
|
$5.28
|
||
Total Return |
(2.18)%
|
7.27%
|
5.69%
|
4.66%
|
16.68%
|
||
Ratios/Supplemental data | |||||||
Net assets ($000), end of period |
$6,151
|
$6,264
|
$5,255
|
$5,064
|
$5,220
|
||
Ratio of expenses to average net assets |
0.80%
|
0.76%
|
0.80%
|
0.79%
|
0.75%
|
||
Ratio of net investment income to average net assets |
4.55%
|
4.69%
|
4.99%
|
5.10%
|
5.07%
|
||
Portfolio turnover rate |
13%
|
23%
|
20%
|
10%
|
28%
|
||
For each of the above years, all or a portion of the expenses were waived. If these costs had not been waived, the result to the ratio of expenses to average net assets would be .05%, .07%, .16%, .27%, .26%, respectively. |
(The accompanying notes are an integral part of these financial statements)
Page 4
As of November 30, 1999 | ||||
Assets |
||||
Investments (cost $6,162,073) |
$5,998,000
|
|||
Cash |
40,962
|
|||
Interest receivable |
115,481
|
|||
Insurance Reserve Premium |
2,473
|
|||
Total Assets |
$6,156,916
|
|||
Liabilities |
||||
Other Liabilities |
4,957
|
|||
Total Liabilities |
4,957
|
|||
Net Assets |
$6,151,959
|
|||
Fund shares outstanding |
1,227,482 |
|||
Analysis of Net Assets |
||||
Paid in capital (unlimited shares authorized, without par value) |
$6,316,784
|
|||
Undistributed net investment income |
400
|
|||
Accumulated net realized gain (loss) on investments |
(1,152)
|
|||
Unrealized net appreciation to Fund shares outstanding |
(164,073)
|
|||
Net Assets applicable to Fund shares outstanding |
$6,151,959
|
|||
Net Asset Value, Offering and Redemption price per share |
$5.01
|
Statement of Operations
For the year ended November 30, 1999 | ||||
Investment income |
|
|
||
Interest income |
$347,876
|
|||
Amortization of bond premiums |
(5,919)
|
|||
Accretion |
857
|
|||
Miscellaneous income |
150
|
|||
Gross investment income |
$342,964
|
|||
Expenses |
|
|
||
Investment adviser and administration fee |
31,859
|
|||
Professional fees |
9,490
|
|||
Shareholder Service Fees |
4,049
|
|||
Printing and postage |
3,297
|
|||
Other expenses |
2,813
|
|||
Custodian fees |
1,867
|
|||
Filing and registration fees |
815
|
|||
Total gross expenses |
54,190
|
|||
Less: Advisor fee waived |
(1,052)
|
|||
Less: Custodian fee waived |
(1,867)
|
|||
Net expenses |
51,271
|
|||
Net investment income |
$291,693
|
|||
Net realized loss on investments |
|
|
||
Proceeds from sales |
834,411
|
|||
Less: cost of securities sold based on identified cost |
835,913
|
|||
Realized net loss |
(1,502)
|
|||
Unrealized gain (loss) on investments |
|
|
||
End of period |
(164,073)
|
|||
Beggining of period |
267,836
|
|||
Decrease in unrealized gain for the period |
(431,909)
|
|||
Net realized and unrealized gain (loss) on investments |
(433,411)
|
|||
Net decrease in net assets resulting from operations
|
$(141,718)
|
(The accompanying notes are an integral part of these financial statements)
Page 5
Statement
of Changes in Net Assets
Year Ended |
Year Ended
Nov. 30,1998 |
||
INCREASE IN NET ASSETS | |||
From Operations |
|||
Net investment income (loss) |
$291,693
|
$271,306
|
|
Net realized gain (loss) on investments |
(1,502)
|
74,592
|
|
Net increase (decrease) in unrealized appreciation |
(431,909)
|
59,710
|
|
Net increase in net assets from operations |
(141,718)
|
405,608
|
|
Dividends to Shareoweners from | |||
Net investment income |
(291,771)
|
(270,610)
|
|
Capital gains distributions |
0
|
(52,202)
|
|
(291,771)
|
(322,812)
|
||
Fund Share Transactions | |||
Proceeds from sales of shares |
1,306,810
|
1,495,612
|
|
Value of shares issued in reinvestment of dividends |
234,362
|
247,973
|
|
1,541,172
|
1,743,585
|
||
Cost of shares redeemed |
(1,219,443)
|
(817,660)
|
|
Net increase in net assets from share transactions |
321,729
|
925,925
|
|
Total increase (decrease) in net assets |
$(111,760)
|
1,008,721
|
|
NET ASSETS | |||
Beginning of period |
6,263,719
|
5,254,998
|
|
End of period |
$6,151,959
|
$6,263,719
|
|
Shares of the Fund Sold and Redeemed | |||
Number of shares sold |
249,151
|
280,787
|
|
Number of shares issued in reinvestment of dividends |
45,232
|
46,374
|
|
293,383
|
327,161
|
||
Number of shares redeemed |
(236,298)
|
(153,071)
|
|
Net increase in Number of Shares Outstanding |
58,085
|
174,090
|
(The accompanying notes are an integral part of these financial statements)
Page 6
DISCUSSION
of FUND PERFORMANCE
(unaudited)
For the year ending November 30, 1999, Idaho Tax-Exempt Fund returned shareowners -2.18%, our worst year since 1994. As of November 30, 1999 the thirty-day yield for the Fund was 4.80% or 0.79% higher than one year ago. Fund assets decreased 2% to $6.15 million, and the Fund's expense ratio remained at 0.80%.
1999, like 1994, was a year when the Federal Reserve Bank pursued aggressive anti-inflationary policies. High U.S. economic growth, rising employment, rising wages and a near tripling of oil prices left few alternatives. The economy was not going to slow down on it's own. The Federal Reserve increased its target for federal funds by 3/4% despite a surge in productivity and highly competitive global pricing.
The primary objective of the Fund is current income exempt from federal and Idaho personal income taxes. As the yield advantage and supply of uninsured bonds continues to dwindle, we have continued to increase the average credit quality of the Fund. 13% of the portfolio remains invested in non-rated bonds, down slightly from 14% twelve months ago. 46% of the Fund is now invested in insured bonds.
The secondary objective of the Fund is capital preservation. The average maturity of the Fund is the most important factor affecting principal values in the portfolio. Having recognized the potential for higher rates early in the year, we kept the average effective average maturity of the fund close to it's five-year minimum to reduce risk. However, municipal rates have now risen as much as 0.90% and we believe the 8-12 year area of the yield curve now offers the best combination of risk and return. We have lengthened the effective average maturity of the Fund to 10 years. We expect to maintain an average effective portfolio maturity in the same range over the next year.
The economy of Idaho recovered in 1999 after a soft 1998 and weak 1997. The state's diversification away from resource based industries into high technology, communications, services, tourism and new areas in agriculture all helped. Commercial and residential construction turned out to be less susceptible to rising interest rates than expected. Employment, personal income and population all show improvement. Growth continues concentrated along the corridor between Boise and Idaho Falls.
Idaho's high state personal income taxes create a substantial appetite among residents for tax-exempt bonds. Idaho municipal bonds benefit from an imbalance between the number of buyers and the number of issues available. This imbalance is important in weak markets like 1999 and 1994, when Idaho bonds outperform issues from other states. The Fund's -2.18% one-year return compares favorably, for example, with the -3.63% one-year return of intermediate U.S. Treasury notes. Idaho's record of repaying municipal debt remains unblemished, which also adds to investors' appetites.
Page 7
Though the Fund does not try to "beat" the Lehman Brothers Municipal Bond Index or any other specific index, the Fund's returns, considering the lower price fluctuation, compare well to that of the Index for the fiscal year. The graph compares the Idaho Tax-Exempt Fund's performance to the performance of the Lehman Brothers Composite 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. The Fund stands ready to buy and sell its own shares on a daily basis, and provides numerous investor services. Few investors are able to invest in an exact index portfolio because of the large amount of securities required to model such an index.
Were the Fund to target the index as an objective, the Fund might take greater risk by extending the average maturity of its portfolio to take advantage of the greater price fluctuation (for better or worse) available in such a portfolio. However, maintaining the stability of capital is an objective of the portfolio, and we believe the Fund has performed well considering its investment restrictions.
The graph shows that $10,000 invested in the Idaho Tax-Exempt Fund ten years ago (end of November 1989) would have grown to $17,153 at the end of November 1999. If the $10,000 could have been invested in the Lehman Brothers Composite Municipal Bond Index at the end of November 1989, it would have grown to $19,781.
Idaho Tax Exempt Fund vs. Lehman Composite Municipal Bond Index
(graph omitted)
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 matrices based on maturity, quality, industry, yield,
call features 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 basis from purchase date to maturity or expected call date,
whichever is earlier.
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 distrib
Page 9
uted 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 shareowners 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 0.50% of average daily net
assets. For the year ended November 30, 1999, the Fund incurred advisory fee
expenses of $31,859.
Saturna Capital has volunteered to reimburse the Fund to the extent that total expenses of the Fund (excluding interest, brokerage commissions and taxes) exceeds 0.80% through March 31, 2000. Accordingly, for the year ended November 30, 1999, Saturna Capital waived $1,052 of the advisory fee.
In accordance with the Fund's agreement with its custodian bank, National City Bank of Indiana, for the year ended November 30, 1999, custodian fees incurred by the Fund amounted to $1,867. The custodian waived its fees for earnings credits.
One trustee and shareowner also serves as president of the Trust and is a director and president 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, where it 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, 1999, the Fund paid such a fee of $4,049.
Unaffiliated trustees receive a fee of $100 per meeting attended, allocated pro-rata to the five Funds of Saturna Investment Trust. On November 30, 1999, the trustees, officers and their immediate families as a group owned 0.1% of the outstanding shares of the Fund.
Note 4--Investments
At November 30, 1999, the net unrealized depreciation of investments
for the Fund of $164,073 comprised gross unrealized gains of $61,374 and gross
unrealized losses of $225,447.
During the year ended November 30, 1999, the Fund purchased $1,150,067 of securities and sold/matured $834,411 of securities.
Page 10
To the Shareowners and Board of Trustees
Idaho Tax-Exempt Fund
We have audited the accompanying statement of assets and liabilities of the Idaho Tax-Exempt Fund, a series of shares of the Saturna Investment Trust, including the schedules of investments as of November 30, 1999, and the related statements of operations for the year then ended, the changes in net assets for each of the two years then ended, and the financial highlights for the three years then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial statements and financial highlights presented for the year ended November 30, 1996 and prior were audited by other auditors whose report dated December 16, 1996, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of November 30, 1999, by correspondence with the custodian. Our audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion the 1999 financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Idaho Tax-Exempt Fund as of November 30, 1999, the results of its operations for the year then ended, the changes in net assets for each of the two years then ended, and the financial highlights for each of the three years then ended, in conformity with generally accepted accounting principles.
Tait, Weller & Baker
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Philadelphia, Pennsylvania
December 15, 1999
Page 11
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Saturna Capital
Mutual Funds
1-800/SATURNA
(800/728-8762)
This report is issued for the information of the shareoweners 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
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ANNUAL
REPORT
November 30, 1999
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