SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-05071 or 33-13247
SATURNA INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
1300 N. State Street
Bellingham, Washington 98225-4730
(Address of Principal Executive Offices, including ZIP Code)
Nicholas F. Kaiser
1300 N. State Street
Bellingham, Washington 98225-4730
(Name and Address of Agent for Service)
Registrant’s Telephone Number- (360) 734-9900
Date of fiscal year end: November 30, 2006
Date of reporting period: May 31, 2006
Sextant
Mutual Funds
(Graphic Omitted)
(Graphic Omitted) Short-Term Bond
(Graphic Omitted) Bond Income
(Graphic Omitted) Growth
(Graphic Omitted) International
Semi-Annual Report
May 31, 2006
Table of Contents
Additional Performance Information | Page 2 |
Letter To Shareowners | Page 3 |
Sextant Short-Term Bond Fund | Page 4 |
Sextant Bond Income Fund | Page 8 |
Sextant Growth Fund | Page 13 |
Sextant International Fund | Page 19 |
Notes To Financial Statements | Page 25 |
Additional Performance Information | |||
Average Annual Returns (as of 6/30/2006) | 1-Year | 5-Years | 10-Years |
Sextant Short-Term Bond Fund | 0.87% | 3.48% | 4.64% |
Sextant Bond Income Fund | -2.17% | 5.24% | 6.24% |
Sextant Growth Fund | 17.05% | 7.40% | 11.05% |
Sextant International Fund | 19.01% | 10.08% | 9.54% |
Performance data quoted in this report represents past performance, is before any taxes payable by shareowners, and is no guarantee of future performance. Mutual fund performance changes over time and currently may be significantly higher or lower than stated. Recent performance and Morningstar rating data is published online at each month’s end. Please visit saturna.com or call Saturna Capital for current performance figures. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Share price, yield and return will vary and you may have a gain or loss when you sell your shares. See individual Fund performance discussions for further information. Funds that invest in foreign securities may involve greater risk, including political and economic uncertainties of foreign countries as well as the risk of currency fluctuations.
2 | May 31, 2006 Semi-Annual Report |
Fellow Shareowners:
For the six months ended May 31, 2006, the four Sextant funds continued to reflect the markets where they invest. Sextant International Fund did the best, up 8.38% as its non-US stock portfolio grew in value as expected when the US dollar was declining. Sextant Growth Fund, up 1.17%, reflected a volatile US stock market that ended almost unchanged (the S&P 500 index total return was 1.74% for the six months). The two Sextant bond funds continued to suffer from the steady rise in short-term interest rates, with Sextant Short-Term Bond Fund returning 0.88% and Sextant Bond Income Fund returning - -0.76%.
Looking forward, the Fed’s steady increase in short-term interest rates appears to be nearing conclusion, meaning bonds may finally shine. The US economy and business profits march constantly up, greatly boosting income tax receipts and reducing pressure on the federal deficit. The over-heated and leveraged housing sector is cooling, meaning investors will again be considering the security markets.
The no-load Sextant Funds are designed to address a broad spectrum of investment needs. All Sextant Funds stress low operating expenses and employ a “fulcrum” advisory fee structure that rewards or penalizes Saturna Capital for investment results. Contrary to popular wisdom, a higher fund advisory fee that results from superior investment performance under a fulcrum advisory fee structure and consequently a higher fund expense ratio is actually in the best interests of shareowners.
In early July, the Trustees directed that the shareowners be asked to approve a new distribution plan (under SEC Rule 12b-1) designed to help the Sextant funds grow in size. For the last 10 years, the funds have provided good investment results at relatively low expense, but this has failed to attract significant new assets. The historically low expenses have meant the funds cannot afford to be offered through intermediaries, such as brokerage firms, where almost 90% of mutual fund sales take place. While the 0.25% annual additional expense for the 12b-1 plan seems like a wrong choice, the Trustees believe it is necessary if the funds are to grow in size - which can dramatically reduce the expense ratio as fixed costs are spread over more investor assets. And regardless of the 12b-1 plan, the voluntary waiver of fees by the advisor effectively caps the expense ratio in Sextant Short-Term Bond and Sextant Bond Income at 0.75% and 0.90%, respectively.
For the twelve-month period ended May 31, 2006, comparative total returns and percentile Morningstar category rankings (1 is best)† are:
Sextant Fund | Total Return | vs. Morningstar* | Total Return | Rank (category size) |
Short-Term Bond | 1.19% | Short-term Bond | 1.46% | 62 (419) |
Bond Income | -1.82% | Long-term Bond | -2.39% | 61 (63) |
Growth | 17.63% | Mid-Cap Growth | 15.42 | 31 (953) |
International | 21.59% | Foreign Large Blend | 28.92% | 95(638) |
Further information on each Fund is found in its section of this report. Perhaps uniquely, equity portfolio brokerage commission expenses are entirely borne by the adviser. Consequently, the Sextant Funds can not use portfolio brokerage to pay any expenses of the Funds or the adviser. Another unusual feature of the Sextant funds: on average, over one-third of each Sextant Fund is owned by the trustees, officers, and their related accounts.
Our portfolio managers welcome your comments and suggestions. We invite you to invest your money with ours.
Nicholas Kaiser, President (Manager, Sextant Growth, Sextant International) | Phelps McIlvaine, Vice President (Manager, Sextant Short-Term Bond, Sextant Bond Income) |
July 18, 2006
*The 12-month Rank shows how each Fund ranks in its Morningstar peer category for the year ended May 31, 2006. Morningstar, Inc. is an independent fund performance monitor. Rankings are determined monthly from total returns by Morningstar, by category as determined by Morningstar. The average total return for a category is determined by Saturna Capital, utilizing the Morningstar database. Results are shown for twelve months because the Sextant Funds’ performance fees are computed monthly.
May 31, 2006 Semi-Annual Report | 3 |
(Graphic omitted) Sextant Short-Term Bond Fund
Investments
Rating* | Issuer | Coupon/Maturity | Face Amount | Market Value | Percentage |
Cosmetics & Toiletries | |||||
A | Avon Products | 6.55% due 8/1/2007 | $95,000 | $95,881 | 3.9% |
Diversified Operations | |||||
A | First Data Corp | 4.50% due 6/15/2010 | 100,000 | 95,461 | 3.8% |
Finance & Insurance | |||||
A | Alliance Capital Management | 5.625% due 8/15/2006 | 65,000 | 64,742 | 2.6% |
AAA | Federal Farm Credit Bank | 4.62% due 2/7/2009 | 100,000 | 97,250 | 3.9% |
AAA | Federal Home Loan Bank | 4.60% due 5/18/2009 | 120,000 | 117,260 | 4.7% |
AAA | Federal Home Loan Mortgage | 4.125% due 11/6/2009 | 120,000 | 115,406 | 4.6% |
AAA | Federal National Mortgage Assoc. | 4.00% due 2/23/2007, 5.00% due 2/23/2010 | 120,000 | 117,074 | 4.7% |
A+ | International Finance AIG | 5.75% due 10/15/2006 | 95,000 | 96,135 | 3.9% |
SUBTOTAL | 620,000 | 607,867 | 24.4% | ||
Machinery | |||||
A | Caterpillar Inc. | 7.25% due 9/15/2009 | 100,000 | 104,497 | 4.2% |
A- | Rockwell Automation Int'l | 6.15 due 1/15/2008 | 95,000 | 96,122 | 3.9% |
SUBTOTAL | 195,000 | 200,619 | 8.1% | ||
Medical Drugs | |||||
A | Amgen | 6.50% due 12/1/2007 | 90,000 | 90,679 | 3.6% |
Publishing | |||||
BBB- | Tribune Company | 6.875% ue 11/1/2006 | 45,000 | 44,925 | 1.8% |
Retail-Discount & Variety | |||||
A- | TJ X Companies | 7.45% due 12/15/2009 | 95,000 | 100,627 | 4.1% |
Telecommunications | |||||
A | Southwestern Bell Telephone | 6.625% due 7/15/2007 | 95,000 | 95,579 | 3.8% |
A- | Verizon Wireless Capital | 5.375% due 12/15/2006 | 82,000 | 81,439 | 3.3% |
SUBTOTAL | 177,000 | 177,018 | 7.1% | ||
U.S. Government | |||||
AAA | U.S. Treasury Note | 3.25% due 8/15/2008 | 225,000 | 216,633 | 8.7% |
AAA | U.S. Treasury Note | 4.00% due 6/15/2009 | 425,000 | 412,715 | 16.6% |
AAA | U.S. Treasury Note | 4.00% due 4/15/2010 | 200,000 | 192,750 | 7.7% |
SUBTOTAL | 850,000 | 822,098 | 33.0% | ||
Utilities | |||||
BBB | PSI Energy | 7.85% due 10/15/2007 | 90,000 | 91,413 | 3.7% |
Total Investments | (Cost = $2,388,820) | $2,357,000 | $2,326,588 | 93.5% | |
Other Assets (net of liabilities) | 162,229 | 6.5% | |||
Total Net Assets | $2,488,817 | 100.0% |
*Ratings are the lesser of S&P or Moody's (unaudited)
4 | May 31, 2006 Semi-Annual Report |
Sextant Short-Term Bond Fund (Graphic omitted)
Financial Highlights | Period ended | Year ended November 30, | ||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2006 | 2005 | 2004 | 2003 | 2002 | 2001 |
Net asset value at beginning of period | $4.85 | $4.97 | $5.09 | $5.07 | $5.10 | $4.95 |
| ||||||
| 0.07 | 0.17 | 0.19 | 0.23 | 0.27 | 0.26 |
| (0.03) | (0.12) | (0.12) | 0.02 | (0.02) | 0.14 |
Total from investment operations | 0.04 | 0.05 | 0.07 | 0.25 | 0.25 | 0.40 |
| ||||||
| (0.07) | (0.17) | (0.19) | (0.23) | (0.28) | (0.25) |
Total distributions | (0.07) | (0.17) | (0.19) | (0.23) | (0.28) | (0.25) |
Paid-in capital from early redemption penalties | *0.00 | *0.00 | - | - | - | - |
Net asset value at end of period | $4.82 | $4.85 | $4.97 | $5.09 | $5.07 | $5.10 |
Total Return | 0.88% | 0.94% | 1.41% | 5.00% | 4.90% | 8.37% |
Ratios/supplemental data | ||||||
Net assets ($000), end of period | $2,489 | $2,557 | $2,255 | $2,259 | $2,177 | $2,189 |
Ratio of expenses to average net assets | ||||||
| 0.62% | 1.23% | 1.14% | 1.17% | 1.14% | 0.94% |
| 0.37% | 0.59% | 0.58% | 0.60% | 0.93% | 0.51% |
Ratio of net investment income after wiaver to average net assets | 1.57% | 3.35% | 3.80% | 4.47% | 5.23% | 5.45% |
Portfolio turnover rate | 13% | 33% | 37% | 22% | 28% | 28% |
*Amount is less than $0.01 |
Statement of Assets and Liabilities | As of May 31, 2006 | ||
Assets | |||
Investments (Cost: $2,388,820) | $2,326,588 | ||
Cash | 123,274 | ||
Interest Receivable | 36,429 | ||
Receivable for Fund shares sold | 784 | ||
| $2,487,075 | ||
Liabilities | |||
Accrued expenses | (1,922) | ||
Due to affiliates | 95 | ||
Distribution Payable | 85 | ||
| (1,742) | ||
Net Assets | $2,488,817 | ||
Fund shares outstanding | 516,334 | ||
Analysis of Net Assets | |||
Paid-in Capital (unlimited shares authorized, without par value) | 2,591,534 | ||
Accumulated net realized loss | (40,485) | ||
Unrealized net depreciation on investments | (62,232) | ||
Net Assets applicable to Fund shares outstanding | $2,488,817 | ||
Net Asset Value, Offering and Redemption price per share | $4.82 |
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 5 |
(Graphic omitted) Sextant Short-Term Bond Fund
Statement of Operations | For the period ended May 31, 2006 | |
Investment Income | ||
| $48,758 | |
| 22 | |
| $48,780 | |
Expenses | ||
| 7,527 | |
| 3,249 | |
| 1,382 | |
| 1,050 | |
| 823 | |
| 613 | |
| 365 | |
| 317 | |
| 144 | |
| 72 | |
| 15,542 | |
| (4,686) | |
| (1,487) | |
| 9,369 | |
| 39,411 | |
Net realized gain on investments | ||
| 357,000 | |
| (357,000) | |
| 0 | |
Unrealized loss on investments | ||
| (62,232) | |
| (44,417) | |
| (17,815) | |
| (17,815) | |
Net increase in net assets resulting from operations | $21,596 |
Statement of Changes in Net Assets | ||
Period ended May 31, 2006 | Year ended Nov. 30, 2005 | |
INCREASE (DECREASE) IN NET ASSETS | ||
From Operations: | ||
| $39,411 | $82,195 |
| 0 | (6,540) |
| (17,815) | (49,766) |
| $21,596 | $25,889 |
Dividends to shareowners from: | ||
| (37,812) | (83,151) |
Fund share transactions: | ||
| 293,157 | 570,038 |
| 37,122 | 81,918 |
330,279 | 651,956 | |
| 62 | 59 |
| (381,853) | (293,595) |
| (51,512) | 358,400 |
Total increase (decrease) in net assets | ($67,728) | $301,138 |
NET ASSETS | ||
| 2,556,545 | 2,255,407 |
| $2,488,817 | $2,556,545 |
Shares of the Fund sold and redeemed | ||
| 60,526 | 115,934 |
| 7,668 | 16,765 |
68,194 | 132,699 | |
| (78,849) | (59,815) |
Net increase (decrease) in number of shares outstanding | (10,655) | 72,884 |
6 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
Sextant Short-Term Bond Fund (Graphic omitted)
Expenses
As a Sextant Short-Term Bond Fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends or other distributions. Nor do you incur redemption fees, exchange fees or fees related to Individual Retirement Accounts. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Example
The following example is based on an investment of $1,000 invested at the beginning of the semi-annual period and held for six months (Thursday, December 1, 2005 to Wednesday, May 31, 2006).
Actual Expenses
The first line provides information about actual account values and expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses you have paid over the period. Simply divide your account value by $1,000 (for example, a $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges for these extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery, 2% penalty for redemptions within 30 days.
Hypothetical Example For Comparison Purposes
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending balance or expenses you paid for the year. You may use this information to compare ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no fees on Saturna Capital IRAs, ESAs or HSAs), and charges for extra services such as check writing and bank wires.
Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees, or possible early redemption penalties. Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.
Short-Term Bond Fund | Beginning Account Value (Thursday, December 1, 2005) | Ending Account Value (Wednesday, May 31, 2006) | Expenses Paid During Period* |
Actual (0.88% return after expenses) | $1,000 | $1,008.80 | $3.71 |
Hypopthetical (5% return before expenses) | $1,000 | $1,021.24 | $3.73 |
*Expenses are equal to the Sextant Short-Term Bond Fund’s annualized expense ratio of 0.74% (based on the most recent semi-annual period of December 1, 2005 through May 31, 2006), multiplied by the average account value of $1,004.40 over the period multiplied by 182/365 (to reflect the one-half year period).
Portfolio Composition
Ratings Established | By Adviser | By Standard & Poor's | By Moody's Investor Services |
AAA | 50.4% | 42.7% | 46.5% |
AA | 0.0% | 6.4% | 0.0% |
A | 32.8% | 30.2% | 32.8% |
BBB | 9.2% | 5.4% | 9.2% |
Unrated | 0.0% | 7.7% | 3.9% |
Cash | 7.6% | 7.6% | 7.6% |
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 7 |
(Graphic omitted) Sextant Bond Income Fund
Investments
Rating* | Issuer | Coupon/Maturity | Face Amount | Market Value | Percentage |
Automotive | |||||
BBB | Auto Zone Inc. | 5.50% due 11/15/2015 | $95,000 | $87,012 | 2.8% |
Banking | |||||
A | Chase Manhattan | 7.125% due 6/15/2009 | 50,000 | 51,450 | 1.7% |
A+ | Citicorp | 7.25% due 10/15/2011 | 50,000 | 52,553 | 1.8% |
A- | Comerica Bank | 7.125% due 12/1/2013 | 50,000 | 50,999 | 1.7% |
AA- | Norwest Financial | 6.85% due 7/15/2009 | 50,000 | 51,538 | 1.7% |
SUBTOTAL | 200,000 | 206,540 | 6.9% | ||
Building Products | |||||
BBB+ | Masco Corporation | 7.125% due 8/15/2013 | 60,000 | 64,111 | 2.1% |
Chemicals | |||||
A | Air Products & Chemicals | 8.75% due 4/15/2021 | 50,000 | 62,068 | 2.1% |
Diversified Financial Services | |||||
AAA | General Electric Capital Corp. | 8.125% due 5/15/2012 | 60,000 | 66,293 | 2.2% |
Electric Utilities | |||||
A- | Commonwealth Edison | 7.50% due 7/1/2013 | 50,000 | 52,235 | 1.8% |
BBB+ | Sempra Energy Corp. | 7.95% due 3/1/2010 | 50,000 | 53,060 | 1.8% |
SUBTOTAL | 100,000 | 105,295 | 3.6% | ||
Electronics | |||||
BBB+ | Koninlijke Phillips Electronics | 7.25% due 8/15/2013 | 50,000 | 53,853 | 1.8% |
Food | |||||
BBB | Conagra | 7.875% due 9/15/2010 | 33,000 | 34,901 | 1.2% |
A+ | Hershey Foods Co. | 6.95% due 8/15/2012 | 50,000 | 52,751 | 1.8% |
BBB+ | HJ Heinz | 6.00% due 3/15/2012 | 75,000 | 73,969 | 2.5% |
SUBTOTAL | 158,000 | 161,621 | 5.5% | ||
Insurance | |||||
A+ | Allstate | 7.50% due 6/15/2013 | 50,000 | 53,870 | 1.8% |
A+ | Progressive Corp. | 7.00% due 10/1/2013 | 75,000 | 79,535 | 2.7% |
A- | XL Capital (Europe) | 6.5% due 1/15/2012 | 90,000 | 90,671 | 3.0% |
SUBTOTAL | 215,000 | 224,076 | 7.5% | ||
Investment Finance | |||||
A | Bear Stearns Co. | 3.50% due 6/27/2008, 5.00% due 6/27/2013, 8.00% due 6/27/2018 | 154,000 | 138,803 | 4.7% |
A+ | Morgan Stanley Dean Witter | 6.75% due 10/15/2013 | 50,000 | 51,857 | 1.7% |
AA | Paine Webber Group | 7.625% due 2/15/2014 | 50,000 | 54,984 | 1.8% |
SUBTOTAL | 254,000 | 245,644 | 8.2% |
(Continued on next page)
8 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
Sextant Bond Income Fund (Graphic omitted)
Investments (continued)
Rating* | Issuer | Coupon/Maturity | Face Amount | Market Value | Percentage |
Machinery | |||||
A | Caterpillar Inc. | 9.375% due 8/15/2011 | $40,000 | $46,286 | 1.6% |
A | Dover Corp. | 6.25% due 6/1/2008 | 70,000 | 70,308 | 2.4% |
SUBTOTAL | 110,000 | 116,594 | 4.0% | ||
Medical Supplies | |||||
A | Becton Dickinson | 7.15% due 10/1/2009 | 40,000 | 41,375 | 1.4% |
Oil & Gas | |||||
A | Baker Hughes Inc. | 6.00% due 2/15/2009 | 70,000 | 69,539 | 2.3% |
AA | Texaco Capital | 8.625% due 6/30/2010 | 40,000 | 43,951 | 1.5% |
SUBTOTAL | 110,000 | 113,490 | 3.8% | ||
Real Estate | |||||
BBB+ | Archstone Smith Opr Trust | 5.625% due 8/15/2014 | 50,000 | 48,504 | 1.6% |
Retailing | |||||
A | Dayton Hudson (Target Stores) | 10.00% due 1/1/2011 | 50,000 | 58,058 | 2.0% |
A | Lowe's Companies | 8.25% due 6/1/2010 | 50,000 | 54,366 | 1.8% |
BBB | May Department Stores Corp. | 8.00% due 7/15/2012 | 50,000 | 54,078 | 1.8% |
AA | Wal-Mart Stores | 7.25% due 6/1/2013 | 45,000 | 47,512 | 1.6% |
SUBTOTAL | 195,000 | 214,014 | 7.2% | ||
Telecommunications | |||||
A- | GTE | 6.90% due 11/1/2008 | 50,000 | 50,575 | 1.7% |
Transportation | |||||
BBB+ | Southwest Airlines | 6.50% due 3/1/2012 | 75,000 | 75,967 | 2.5% |
BBB- | US Freightways Corp. | 8.5% due 4/25/2010 | 50,000 | 52,278 | 1.8% |
SUBTOTAL | 125,000 | 128,245 | 4.3% | ||
U.S. Government | |||||
AAA | Federal Farm Credit Bank | 5.09% due 2/17/2015 | 120,000 | 113,637 | 3.8% |
AAA | Federal Home Loan Bank | 5.55% due 4/13/2015 | 100,000 | 96,703 | 3.2% |
AAA | Federal Home Loan Mortgage | 5.00% due 8/26/2009, 6.25% due 8/26/2014, 8.00% due 8/26/2019 | 100,000 | 96,264 | 3.2% |
AAA | Federal National Mtge. Assoc. | 5.00% due 4/10/2015 | 100,000 | 94,467 | 3.2% |
AAA | U.S. Treasury Note | 4.125% due 5/15/2015 | 470,000 | 436,145 | 14.6% |
SUBTOTAL | 890,000 | 837,216 | 28.0% | ||
Total Investments | (Cost = $2,840,091) | $2,812,000 | $2,826,526 | 94.7% | |
Other Assets (net of liabilities) | 157,537 | 5.3% | |||
Total Net Assets | $2,984,063 | 100.0% |
*Ratings are the lesser of S&P or Moody's (unaudited)
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 9 |
(Graphic omitted) Sextant Bond Income Fund
Financial Highlights | Period ended | Year ended November 30, | ||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2006 | 2005 | 2004 | 2003 | 2002 | 2001 |
Net asset value at beginning of period | $4.92 | $5.06 | $5.07 | $4.97 | $4.81 | $4.56 |
| ||||||
| 0.11 | 0.21 | 0.22 | 0.22 | 0.26 | 0.30 |
| (0.15) | (0.14) | (0.01) | 0.10 | 0.16 | 0.25 |
Total from investment operations | (0.04) | 0.07 | 0.21 | 0.32 | 0.42 | 0.55 |
| ||||||
| (0.11) | (0.21) | (0.22) | (0.22) | (0.26) | (0.30) |
Total distributions | (0.11) | (0.21) | (0.22) | (0.22) | (0.26) | (0.30) |
Paid-in capital from early redemption penalties | *0.00 | *0.00 | - | - | - | - |
Net asset value at end of period | $4.77 | $4.92 | $5.06 | $5.07 | $4.97 | $4.81 |
Total Return | -0.76% | 1.40% | 4.26% | 6.52% | 9.02% | 12.40% |
Ratios/supplemental data | ||||||
Net assets ($000), end of period | $2,984 | $3,050 | $2,643 | $2,272 | $2,105 | $1,965 |
Ratio of expenses to average net assets | ||||||
| 0.47% | 0.97% | 0.89% | 1.15% | 1.06% | 1.06% |
| 0.45% | 0.94% | 0.87% | 0.97% | 0.72% | 0.34% |
Ratio of net investment income after wiaver to average net assets | 2.33% | 4.26% | 4.47% | 4.29% | 5.40% | 6.71% |
Portfolio turnover rate | 12% | 4% | 0% | 0% | 29% | 30% |
*Amount is less than $0.01 |
Statement of Assets and Liabilities | As of May 31, 2006 | ||
Assets | |||
Investments (Cost $2,840,091) | $2,826,526 | ||
Cash | 110,842 | ||
Interest Receivable | 44,250 | ||
Insurance reserve premium | 401 | ||
Receivable for Fund shares sold | 25 | ||
| $2,982,044 | ||
Liabilities | |||
Accrued expenses | (2,330) | ||
Due to affiliates | 228 | ||
Distribution payable | 83 | ||
| (2,019) | ||
Net Assets | $2,984,063 | ||
Fund shares outstanding | 625,985 | ||
Analysis of Net Assets | |||
Paid-in Capital (unlimited shares authorized, without par value) | 3,025,614 | ||
Accumulated net realized loss | (27,986) | ||
Unrealized net depreciation on investments | (13,656) | ||
| $2,984,0623 | ||
Net Asset Value, Offering and Redemption price per share | $4.77 |
10 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
Sextant Bond Income Fund (Graphic omitted)
Statement of Operations | For the period ended May 31, 2006 | |
Investment Income | ||
| $84,210 | |
| $84,210 | |
Expenses | ||
| 5,897 | |
| 3,675 | |
| 1,340 | |
| 871 | |
| 766 | |
| 480 | |
| 387 | |
| 357 | |
| 328 | |
| 57 | |
| 14,158 | |
| (583) | |
| 13,575 | |
| 70635 | |
Net realized loss on investments | ||
| 392,893 | |
| 398,755 | |
| (5,862) | |
Unrealized loss on investments | ||
| (13,565) | |
| 74,080 | |
| (87,645) | |
| (93,507) | |
Net decrease in net assets resulting from operations | ($22,872) |
Statement of Changes in Net Assets | ||
Period ended May 31, 2006 | Year ended Nov. 30, 2005 | |
INCREASE (DECREASE) IN NET ASSETS | ||
From Operations: | ||
| $70,635 | $126,312 |
| (5,862) | 826 |
| (87,645) | (86,448) |
| (22,872) | 40,690 |
Dividends to shareowners from: | ||
| (70,684) | (126,361) |
Fund share transactions: | ||
| 233,150 | 787,201 |
| 69,779 | 124,959 |
302,929 | 912,160 | |
| 30 | 12 |
| (275,445) | (418,996) |
| 27,514 | 493,176 |
Total increase (decrease) in net assets | ($66,042) | $407,505 |
NET ASSETS | ||
| 3,050,105 | 2,642,600 |
| $2,984,063 | $3,050,105 |
Shares of the Fund sold and redeemed | ||
| 47,791 | 155,844 |
| 14,391 | 24,894 |
62,182 | 180,738 | |
| (56,463) | (83,147) |
Net increase in number of shares outstanding | 5,719 | 97,591 |
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 11 |
(Graphic omitted) Sextant Bond Income Fund
Expenses (unaudited)
As a Sextant Bond Income Fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends or other distributions. Nor do you incur redemption fees, exchange fees or fees related to Individual Retirement Accounts. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Example
The following example is based on an investment of $1,000 invested at the beginning of the semi-annual period and held for six months (Thursday, December 1, 2005 to Wednesday, May 31, 2006).
Actual Expenses
The first line provides information about actual account values and expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses you have paid over the period. Simply divide your account value by $1,000 (for example, a $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges for these extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery, 2% penalty for redemptions within 30 days.
Hypothetical Example For Comparison Purposes
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending balance or expenses you paid for the year. You may use this information to compare ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no fees on Saturna Capital IRAs, ESAs or HSAs), and charges for extra services such as check writing and bank wires.
Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees, or possible early redemption penalties. Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.
Bond Income Fund | Beginning Account Value (Thursday, December 1, 2005) | Ending Account Value (Wednesday, May 31, 2006) | Expenses Paid During Period* |
Actual (-0.76% return after expenses) | $1,000 | $992.40 | $4.47 |
Hypopthetical (5% return before expenses) | $1,000 | $1,020.44 | $4.53 |
*Expenses are equal to the Sextant Bond Income Fund’s annualized expense ratio of 0.90% (based on the most recent semi-annual period of December 1, 2005 through May 31, 2006), multiplied by the average account value of $996.20 over the period multiplied by 182/365 (to reflect the one-half year period).
Portfolio Composition
Ratings Established | By Adviser | By Standard & Poor's | By Moody's Investor Services |
AAA | 30.2% | 30.2% | 30.2% |
AA | 6.6% | 6.6% | 11.8% |
A | 35.9% | 42.6% | 30.7% |
BBB | 21.7% | 14.9% | 21.7% |
Unrated | 0.0% | 0.0% | 0.0% |
Cash | 5.6% | 5.6% | 5.6% |
12 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
Sextant Growth Fund (Graphic omitted)
Investments
Issue | Quantity | Tax Cost | Market Value | Percentage |
Common Stocks | ||||
Auto/Truck | ||||
Accuride* | 10,000 | $134,466 | $114,800 | 0.8% |
Oshkosh Truck | 3,000 | 160,448 | 158,550 | 1.2% |
SUBTOTAL | 294,914 | 273,350 | 2.0% | |
Banking | ||||
Frontier Financial | 10,000 | 220,751 | 341,800 | 2.5% |
Washington Banking Company | 5,000 | 83,121 | 95,000 | 0.7% |
Washington Mutual | 6,750 | 44,124 | 309,893 | 2.3% |
SUBTOTAL | 347,996 | 746,693 | 5.5% | |
Computers | ||||
3Com* | 30,000 | 167,836 | 135,300 | 1.0% |
Adobe Systems* | 9,600 | 50,490 | 274,848 | 2.0% |
Apple Computer* | 11,000 | 97,170 | 657,470 | 4.8% |
Hewlett-Packard | 7,000 | 157,040 | 226,660 | 1.7% |
Intuit* | 5,500 | 248,693 | 304,095 | 2.2% |
MapInfo* | 8,000 | 114,181 | 108,960 | 0.8% |
Oracle* | 15,000 | 115,139 | 213,300 | 1.6% |
Symbol Technologies | 10,092 | 122,340 | 119,792 | 0.9% |
United Online | 8,000 | 118,060 | 95,360 | 0.7% |
SUBTOTAL | 1,190,949 | 2,135,785 | 15.7% | |
Construction | ||||
KB Home | 3,500 | 234,513 | 179,200 | 1.3% |
Lowe's Companies | 4,000 | 135,141 | 249,120 | 1.8% |
Weyerhaeuser | 4,200 | 246,845 | 268,632 | 2.0% |
SUBTOTAL | 616,499 | 696,952 | 5.1% | |
Diversified Operations | ||||
Honeywell | 3,500 | 131,966 | 144,130 | 1.1% |
Electronics | ||||
Advanced Micro Devices* | 10,000 | 41,708 | 308,900 | 2.3% |
Agilent Technologies* | 8,000 | 231,954 | 279,120 | 2.0% |
Harman International Industries | 2,800 | 248,605 | 237,244 | 1.7% |
SUBTOTAL | 522,267 | 825,264 | 6.0% | |
Food | ||||
Performance Food Group* | 3,000 | 96,917 | 97,770 | 0.7% |
PepsiCo | 4,500 | 248,326 | 272,070 | 2.0% |
SUBTOTAL | 345,243 | 369,840 | 2.7% | |
Hotels & Motels | ||||
Red Lion Hotels* | 21,000 | 150,354 | 241,080 | 1.8% |
(Continued on next page)
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 13 |
(Graphic omitted) Sextant Growth Fund
Investments (continued)
Issue | Quantity | Tax Cost | Market Value | Percentage |
Common Stocks | ||||
Investments | ||||
Chubb | 6,000 | $266,300 | $303,180 | 2.2% |
Schwab (Charles) | 25,000 | 79,726 | 416,500 | 3.0% |
SUBTOTAL | 346,056 | 719,680 | 5.2% | |
Machinery | ||||
Regal-Beloit | 4,000 | 104,006 | 191,720 | 1.4% |
Lincoln Electric Holdings | 4,000 | 180,617 | 219,840 | 1.6% |
SUBTOTAL | 284,623 | 411,560 | 3.0% | |
Medical | ||||
Abott Laboratories | 4,000 | 171,114 | 170,800 | 1.2% |
Affymetrix* | 4,000 | 109,131 | 110,040 | 0.8% |
Amgen* | 3,700 | 111,703 | 250,083 | 1.8% |
Barr Laboratories* | 4,500 | 159,489 | 237,150 | 1.7% |
Bristol-Meyers Squibb* | 6,000 | 158,987 | 147,300 | 1.1% |
Caremark Rx | 5,000 | 139,942 | 239,850 | 1.7% |
Genentech | 2,000 | 179,816 | 165,920 | 1.2% |
Ligand Pharmaceuticals* | 10,000 | 112,072 | 109,500 | 0.8% |
Lilly (Eli) | 3,500 | 249,361 | 180,740 | 1.3% |
Pharmaceutical Product Development | 15,000 | 67,174 | 544,950 | 4.0% |
VCA Antech* | 8,000 | 209,048 | 240,960 | 1.8% |
SUBTOTAL | 1,667,837 | 2,397,293 | 17.4% | |
Metal Ores | ||||
Alcoa | 6,000 | 189,043 | 190,320 | 1.4% |
Phelps Dodge | 2,660 | 76,218 | 227,935 | 1.7% |
SUBTOTAL | 265,261 | 418,255 | 3.1% | |
Oil & Gas Production | ||||
Devon Energy | 3,000 | 185,020 | 172,080 | 1.3% |
Noble Drilling | 4,000 | 125,240 | 278,120 | 2.0% |
Patterson UTI Energy | 7,000 | 237,978 | 209,300 | 1.5% |
SUBTOTAL | 548,238 | 659,500 | 4.8% | |
Publishing | ||||
Wiley (John) & Sons, Class A | 5,000 | 134,777 | 174,150 | 1.3% |
Retail | ||||
Amazon.com* | 3,500 | 152,945 | 121,135 | 0.9% |
Bed Bath & Beyond* | 5,000 | 176,186 | 175,850 | 1.3% |
Best Buy | 4,000 | 223,149 | 212,000 | 1.5% |
Build-A-Bear Workshop* | 7,000 | 177,548 | 207,900 | 1.5% |
Restoration Hardware* | 15,203 | 94,239 | 98,515 | 0.7% |
Staples | 6,000 | 144,720 | 140,820 | 1.0% |
SUBTOTAL | 968,787 | 956,220 | 6.9% |
(Continued on next page)
14 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
Sextant Growth Fund (Graphic omitted)
Investments (continued)
Issue | Quantity | Tax Cost | Market Value | Percentage |
Common Stocks | ||||
Steel | ||||
Nucor | 2,000 | $189,851 | $210,540 | 1.5% |
Telecommunications | ||||
Trimble Navigation* | 7,000 | 202,081 | 321,580 | 2.3% |
Transportation | ||||
Norfolk Southern | 4,500 | 185,235 | 237,420 | 1.7% |
UAL Corp* | 2,500 | 99,710 | 73,575 | 0.5% |
United Parcel Service, Cl B | 2,500 | 189,469 | 201,375 | 1.5% |
SUBTOTAL | 474,414 | 512,370 | 3.7% | |
Utilities | ||||
Duke Energy | 6,000 | 175,259 | 169,320 | 1.2% |
FPL Group | 7,000 | 244,409 | 278,810 | 2.0% |
IDACORP | 6,000 | 159,539 | 200,460 | 1.5% |
Sempra Energy | 3,000 | 116,395 | 134,910 | 1.0% |
USEC | 16,000 | 195,956 | 192,960 | 1.4% |
SUBTOTAL | 891,558 | 976,460 | 7.1% | |
Total Investments | $9,573,671 | $13,190,702 | 96.2% | |
Other Assets (net of liabilities) | 519,150 | 3.8% | ||
Total Net Assets | $13,709,852 | 100.0% |
*Non-income producing
Portfolio Composition
Industries | |
Medical | 17.4% |
Computers | 15.7% |
Utilities | 7.1% |
Retail | 6.9% |
Electronics | 6.0% |
Banking | 5.5% |
Investments | 5.2% |
Construction | 5.1% |
Oil & Gas | 4.8% |
Cash | 3.8% |
Transportation | 3.7% |
Metal Ores | 3.1% |
Machinery | 3.0% |
Food | 2.7% |
Telecommunications | 2.3% |
Auto / Truck | 2.0% |
Miscellaneous < 2% | 5.7% |
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 15 |
(Graphic omitted) Sextant Growth Fund
Financial Highlights | Period ended | Year ended November 30, | |||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |
Net asset value at beginning of period | $17.11 | $14.20 | $12.91 | $10.64 | $11.90 | $13.16 | |
| |||||||
| *0.00 | (0.02) | 0.01 | (0.04) | (0.05) | (0.02) | |
| 0.20 | 2.96 | 1.45 | 2.31 | (1.21) | (1.24) | |
Total from investment operations | 0.20 | 2.94 | 1.46 | 2.27 | (1.26) | (1.26) | |
| |||||||
| - | *(0.00) | (0.01) | - | - | - | |
| - | (0.03) | (0.16) | - | - | - | |
Total distributions | - | (0.03) | (0.17) | - | - | - | |
Paid-in capital from early redemption penalties | *0.00 | *0.00 | - | - | - | - | |
Net asset value at end of period | $17.31 | $17.11 | $14.20 | $12.91 | $10.64 | $11.90 | |
Total Return | 1.17% | 20.76% | 11.35% | 21.31% | (10.51)% | (9.57)% | |
Ratios/supplemental data | |||||||
Net assets ($000), end of period | $13,710 | $9,006 | $5,331 | $4,732 | $3,373 | $3,792 | |
Ratio of expenses to average net assets | |||||||
| 0.54% | 1.28% | 0.80% | 1.20% | 1.17% | 0.84% | |
| 0.50% | 1.24% | 0.78% | 1.14% | 1.11% | 0.78% | |
Ratio of net investment income after wiaver to average net assets | **0.00% | (0.17%) | 0.12% | (0.40%) | (0.48%) | (0.18%) | |
Portfolio turnover rate | ***0% | 4% | 8% | 12% | 15% | 8% | |
*Amount is less than $0.01 | **Amount is less than 0.01% | ***Amount is less than 1% |
Statement of Assets and Liabilities | As of May 31, 2006 | ||
Assets | |||
Investments (Cost $9,573,671) | $13,190,702 | ||
Cash | 484,107 | ||
Receivable for Fund shares sold | 16,617 | ||
Dividends receivable | 10,786 | ||
Insurance reserve premium | 1,214 | ||
| $13,703,426 | ||
Liabilities | |||
Accrued expenses | (14,032) | ||
Due to affiliates | 7,346 | ||
Payable for Fund shares redeemed | 260 | ||
| (6,426) | ||
Net Assets | $13,709,852 | ||
Fund shares outstanding | 791,867 | ||
Analysis of Net Assets | |||
Paid-in Capital (unlimited shares authorized, without par value) | 10,092,821 | ||
Unrealized net appreciation on investments | 3,617,031 | ||
| $13,709,852 | ||
Net Asset Value, Offering and Redemption price per share | $17.31 |
16 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
Sextant Growth Fund (Graphic omitted)
Statement of Operations | For the period ended May 31, 2006 | |
Investment Income | ||
| $67,243 | |
| $67,243 | |
Expenses | ||
| 47,481 | |
| 7,181 | |
| 4,117 | |
| 4,001 | |
| 3,016 | |
| 2,581 | |
| 1,090 | |
| 857 | |
| 773 | |
| 206 | |
| 71,303 | |
| (4,178) | |
| 67,125 | |
| 118 | |
Net realized loss on investments | ||
| 19,412 | |
| 29,148 | |
| (9,736) | |
Unrealized gain on investments | ||
| 3,617,031 | |
| 3,564,851 | |
| 52,180 | |
| 42,444 | |
Net increase in net assets resulting from operations | $42,562 |
Statement of Changes in Net Assets | ||
Period ended May 31, 2006 | Year ended Nov. 30, 2005 | |
INCREASE (DECREASE) IN NET ASSETS | ||
From Operations: | ||
| $118 | ($11,402) |
| (9,736) | 12,474 |
| 52,180 | 1,494,285 |
| $42,562 | $1,495,357 |
Dividends to shareowners from: | ||
| 0 | (2,289) |
| 0 | (12,474) |
0 | (14,763) | |
Fund share transactions: | ||
| 5,218,938 | 2,709,260 |
| 0 | 14,444 |
5,218,938 | 2,723,704 | |
| 286 | 53 |
| (558,330) | (528,970) |
| 4,660,894 | 2,194,787 |
Total increase in net assets | $4,703,456 | $3,675,381 |
NET ASSETS | ||
| 9,006,396 | 5,331,015 |
| $13,709,852 | $9,006,396 |
Shares of the Fund sold and redeemed | ||
| 303,365 | 186,540 |
| 0 | 844 |
303,365 | 187,384 | |
| (37,810) | (36,600) |
Net increase in number of shares outstanding | 265,555 | 150,784 |
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 17 |
(Graphic omitted) Sextant Growth Fund
Expenses (unaudited)
As a Sextant Growth Fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends or other distributions. Nor do you incur redemption fees, exchange fees or fees related to Individual Retirement Accounts. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Example
The following example is based on an investment of $1,000 invested at the beginning of the semi-annual period and held for six months (Thursday, December 1, 2005 to Wednesday, May 31, 2006).
Actual Expenses
The first line provides information about actual account values and expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses you have paid over the period. Simply divide your account value by $1,000 (for example, a $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges for these extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery, 2% penalty for redemptions within 30 days.
Hypothetical Example For Comparison Purposes
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending balance or expenses you paid for the year. You may use this information to compare ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no fees on Saturna Capital IRAs, ESAs or HSAs), and charges for extra services such as check writing and bank wires.
Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees, or possible early redemption penalties. Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.
Growth Fund | Beginning Account Value (Thursday, December 1, 2005) | Ending Account Value (Wednesday, May 31, 2006) | Expenses Paid During Period* |
Actual (1.17% return after expenses) | $1,000 | $1,011.70 | $5.02 |
Hypopthetical (5% return before expenses) | $1,000 | $1,019.95 | $5.04 |
*Expenses are equal to the Sextant Growth Fund’s annualized expense ratio of 1.00% (based on the most recent semi-annual period of December 1, 2005 through May 31, 2006), multiplied by the average account value of $1,005.85 over the period multiplied by 182/365 (to reflect the one-half year period).
18 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
(Graphic omitted) Sextant International Fund
Investments
Issue | Number of Shares | Cost | Market Value | Country | Percentage |
Common Stocks | |||||
Aircraft | |||||
Embraer Aircraft ADR | 3,400 | $105,058 | $113,730 | Brazil | 1.4% |
Audio Video | |||||
Sony ADS | 3,000 | 116,940 | 135,510 | Japan | 1.6% |
Automotive | |||||
Nissan Motor ADR | 5,500 | 106,770 | 133,375 | Japan | 1.6% |
Banking | |||||
Australia & New Zealand Banking ADS | 1,000 | 84,500 | 100,570 | Australia | 1.2% |
AXA ADS | 4,200 | 98,136 | 145,950 | France | 1.7% |
Banco Bilbao Vizcaya ADS | 7,500 | 105,518 | 155,625 | Spain | 1.9% |
ING Groep ADS | 4,000 | 118,530 | 156,840 | Netherlands | 1.9% |
Mitsubishi OFC Financial Group | 10,000 | 131,800 | 137,600 | Japan | 1.6% |
Nomura Holdings | 10,000 | 187,836 | 197,000 | Japan | 2.4% |
Toronto-Dominion Bank | 2,400 | 70,709 | 130,152 | Canada | 1.6% |
SUBTOTAL | 797,029 | 1,023,737 | 12.3% | ||
Building Materials | |||||
C R H plc ADR | 4,000 | 81,159 | 137,120 | Ireland | 1.6% |
Hanson plc ADR | 2,100 | 88,247 | 128,079 | United Kingdom | 1.5% |
James Hardie Industries NV ADS | 3,000 | 83,041 | 96,600 | Netherlands | 1.2% |
SUBTOTAL | 252,447 | 361,799 | 4.3% | ||
Chemicals | |||||
Arkema ADS* | 65 | 1,857 | 2,405 | France | **0.0% |
BASF AG ADS | 1,700 | 120,102 | 138,380 | Germany | 1.7% |
BOC Group plc ADS* | 2,000 | 102,749 | 117,760 | United Kingdom | 1.4% |
SUBTOTAL | 224,708 | 258,545 | 3.1% | ||
Computers | |||||
Business Objects ADS* | 7,000 | 60,510 | 206,430 | France | 2.5% |
Dassault Systems ADR | 3,000 | 146,427 | 156,360 | United Kingdom | 1.9 |
Satyam Computor Services | 3,000 | 108,750 | 96,510 | India | 1.2% |
SUBTOTAL | 315,687 | 459,300 | 5.6% | ||
Consumer Products | |||||
Coca-Cola Femsa ADS | 4,300 | 82,844 | 132,913 | Mexico | 1.6% |
Cadbury Schweppes plc ADR | 2,500 | 102,335 | 96,350 | United Kingdom | 1.2% |
SUBTOTAL | 185,179 | 229,263 | 2.8% | ||
Electronics | |||||
Epcos AG ADS* | 2,500 | 57,307 | 36,900 | Germany | 0.4% |
Infineon Technologies AG* | 5,000 | 45,900 | 56,850 | Germany | 0.7% |
SUBTOTAL | 103,207 | 93,750 | 1.1% |
(Continued on next page)
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 19 |
Sextant International Fund (Graphic omitted)
Investments (continued)
Issue | Number of Shares | Cost | Market Value | Country | Percentage |
Common Stocks | |||||
Hotels & Motels | |||||
Orient-Express Hotels, Cl A | 3,500 | $110,528 | $134,260 | Bermuda | 1.6% |
Machinery-Electrical | |||||
Nidec | 5,000 | 89,122 | 94,750 | Japan | 1.1% |
Medical | |||||
American Oriental Bioengineering* | 15,000 | 72,300 | 84,150 | China | 1.0% |
Glaxo Smith Kline plc AADR | 2,000 | 90,792 | 110,600 | United Kingdom | 1.3% |
Novartis AG ADR | 1,600 | 77,283 | 88,768 | Switzerland | 1.1% |
Serono SA ADR | 5,000 | 88,661 | 79,650 | Switzerland | 1.0% |
Shire plc ADR | 2,000 | 92,860 | 88,380 | United Kingdom | 1.1% |
SUBTOTAL | 421,896 | 451,548 | 5.5% | ||
Metals & Mining | |||||
Anglo-American plc ADR | 7,500 | 138,371 | 151,049 | United Kingdom | 1.8% |
Potash Corp. of Saskatchewan | 1,000 | 34,234 | 91,300 | Canada | 1.1% |
Rio Tinto plc ADS | 750 | 74,825 | 166,500 | United Kingdom | 2.0% |
Tenaris | 2,500 | 95,290 | 92,225 | Luxebourg | 1.1% |
SUBTOTAL | 342,720 | 501,074 | 6.0% | ||
Oil & Gas Production | |||||
EnCana | 3,000 | 84,990 | 151,620 | Canada | 1.8% |
Norsk Hydro | 6,000 | 122,808 | 169,200 | Norway | 2.0% |
Petro-Canada | 2,000 | 95,990 | 91,940 | Canada | 1.1% |
Repsol-YPF ADR | 3,500 | 87,962 | 98,175 | Spain | 1.2% |
Total SA ADR | 2,600 | 121,935 | 169,546 | France | 2.0% |
SUBTOTAL | 513,685 | 680,481 | 8.1% | ||
Paper Products | |||||
Metso ADS | 2,100 | 22,802 | 75,075 | Finland | 0.9% |
UPM-Kymmene Oyj | 3,500 | 64,384 | 75,005 | Finland | 0.9% |
Votorantim Celulose ADS | 8,000 | 102,000 | 113,840 | Brazil | 1.4% |
SUBTOTAL | 189,186 | 263,920 | 3.2% | ||
Photographic Equipment | |||||
Canon, Inc ADR | 2,200 | 95,607 | 154,440 | Japan | 1.8% |
Publishing | |||||
Pearson plc ADS | 7,000 | 84,430 | 95,200 | United Kingdom | 1.1% |
Real Estate | |||||
Intrawest | 4,600 | 119,659 | 149,408 | Canada | 1.8% |
Telecommunications | |||||
American Movil | 6,000 | 29,725 | 195,960 | Mexico | 2.3% |
Audiocodes* | 8,000 | 103,899 | 96,560 | Israel | 1.1% |
BCE | 6,000 | 135,459 | 145,440 | Canada | 1.7% |
(Continued on next page)
20 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
(Graphic omitted) Sextant International Fund
Investments (continued)
Issue | Number of Shares | Cost | Market Value | Country | Percentage |
Common Stocks | |||||
Telecommunications (continued) | |||||
China Mobil Ltd. | 5,500 | $119,327 | $142,175 | China | 1.7% |
PT IndosatADR | 2,500 | 64,962 | 65,100 | Indonesia | 0.8% |
SK Telecom ADS | 5,000 | 100,161 | 130,500 | South Korea | 1.6% |
Telecom Corp. New Zealand ADS | 2,500 | 76,174 | 57,275 | New Zealand | 0.7% |
Telefonica ADS | 2,200 | 85,949 | 108,108 | Spain | 1.3% |
Telefonos de Mexico ADS | 5,000 | 107,470 | 98,950 | Mexico | 1.2% |
Telus | 2,000 | 63,219 | 80,900 | Canada | 1.0% |
SUBTOTAL | 886,345 | 1,120,968 | 13.4% | ||
Transportation | |||||
Canadian Pacific Ltd. | 3,200 | 109,246 | 167,360 | Canada | 2.0% |
GOL-Linhas Aereas Intel ADS | 6,000 | 178,560 | 187,560 | Brazil | 2.2% |
Lan Airlines SA | 3,500 | 24,636 | 119,175 | Chile | 1.4% |
SUBTOTAL | 312,442 | 474,095 | 5.6% | ||
Utilities-Electric | |||||
Enel ADR | 1,300 | 58,877 | 58,188 | Italy | 0.7% |
Enersis ADR | 9,000 | 97,125 | 104,940 | Chile | 1.3% |
Korea Electric Power ADS | 7,000 | 120,661 | 142,030 | South Korea | 1.7% |
SUBTOTAL | 276,663 | 305,158 | 3.7% | ||
Utilities-Gas | |||||
Transport de Gas del Sur ADR* | 1,500 | 18,807 | 7,305 | Argentina | 0.1% |
Total Investments | $5,668,115 | $7,241,616 | 86.8% | ||
Other Assets | 1,104,291 | 13.2% | |||
Total Net Assets | $8,345,907 | 100.00% |
* Non-income producing
** Amount is less than 0.1%
ADS = American Depositary Share
ADR = American Depositary Receipt
Portfolio Composition
Industries | Countries | |||
Telecommunications | 13.4% | Other Assets | 13.2% | |
Other Assets | 13.2% | Canada | 12.1% | |
Banking | 12.3% | Japan | 10.2% | |
Oil & Gas | 8.1% | United Kingdom | 9.6% | |
Metals & Mining | 6.0% | France | 8.2% | |
Transportation | 5.6% | Mexico | 5.1% | |
Computers | 5.6% | Brazil | 5.0% | |
Medical | 5.5% | Spain | 4.3% | |
Building Materials | 4.3% | South Korea | 3.3% | |
Utilities | 3.8% | Germany | 2.8% | |
Paper Products | 3.2% | China | 2.7% | |
Chemicals | 3.1% | Chile | 2.7% | |
Miscellaneous <2% | 15.9% | Australia | 2.4% | |
Miscellaneous <2% | 18.4% |
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 21 |
Sextant International Fund (Graphic omitted)
Financial Highlights | Period ended | Year ended November 30, | |||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |
Net asset value at beginning of period | $11.22 | $9.40 | $8.05 | $6.07 | $7.24 | $8.52 | |
| |||||||
| 0.08 | 0.05 | 0.03 | 0.05 | 0.02 | 0.04 | |
| 0.86 | 1.83 | 1.35 | 1.97 | (1.16) | (1.30) | |
Total from investment operations | 0.94 | 1.88 | 1.38 | 2.02 | (1.14) | (1.26) | |
| |||||||
| - | (0.06) | (0.03) | (0.04) | (0.03) | (0.02) | |
Total distributions | - | (0.06) | (0.03) | (0.04) | (0.03) | (0.02) | |
Paid-in capital from early redemption penalties | *0.00 | *0.00 | - | - | - | - | |
Net asset value at end of period | $12.16 | $11.22 | $9.40 | $8.05 | $6.07 | $7.24 | |
Total Return | 8.38% | 19.95% | 17.11% | 33.23% | -15.80% | -14.80% | |
Ratios/supplemental data | |||||||
Net assets ($000), end of period | $8,346 | $3,671 | $2,053 | $1,650 | $1,150 | $1,445 | |
Ratio of expenses to average net assets | |||||||
| 0.49% | 1.36% | 1.22% | 1.29% | 1.36% | 1.37% | |
| 0.46% | 1.25% | 1.10% | 1.10% | 1.17% | 1.17% | |
Ratio of net investment income after wiaver to average net assets | 0.62% | 0.52% | 0.31% | 0.75% | 0.20% | 0.34% | |
Portfolio turnover rate | 6% | 5% | 7% | 4% | 4% | 6% | |
*Amount is less than $0.01% |
Statement of Assets and Liabilities | As of May 31, 2006 | ||
Assets | |||
Investments (Cost $5,668,115) | $7,241,616 | ||
Cash | 1,075,704 | ||
Dividends receivable | 19,615 | ||
Receivable for Fund shares sold | 2,161 | ||
| $8,339,096 | ||
Liabilities | |||
Accrued expenses | (11,057) | ||
Due to affiliates | 4,246 | ||
| (6,8,11) | ||
Net Assets | $8,345,907 | ||
Fund shares outstanding | 686,367 | ||
Analysis of Net Assets | |||
Paid-in Capital (unlimited shares authorized, without par value) | 6,879,566 | ||
Accumulated net realized loss | (107,160) | ||
Unrealized net appreciation on investments | 1,573,501 | ||
| $8,345,907 | ||
Net Asset Value, Offering and Redemption price per share | $12.16 |
22 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
(Graphic omitted) Sextant International Fund
Statement of Operations | For the period ended May 31, 2006 | |
Investment Income | ||
| $83,290 | |
| $83,290 | |
Expenses | ||
| 21,848 | |
| 7,155 | |
| 2,721 | |
| 2,176 | |
| 1,427 | |
| 1,199 | |
| 593 | |
| 576 | |
| 315 | |
| 115 | |
| 38,125 | |
| (2,781) | |
| 35,344 | |
| 47,946 | |
Net realized loss on investments | ||
| 340,615 | |
| 274,813 | |
| 65,802 | |
Unrealized gain on investments | ||
| 1,573,501 | |
| 1,188,023 | |
| 385,478 | |
| 451,280 | |
Net increase in net assets resulting from operations | $499,226 |
Statement of Changes in Net Assets | ||
Period ended May 31, 2006 | Year ended Nov. 30, 2005 | |
INCREASE (DECREASE) IN NET ASSETS | ||
From Operations: | ||
| $47,946 | $14,949 |
| 65,802 | 21,377 |
| 385,478 | 495,498 |
| 499,226 | 531,824 |
Dividends to shareowners from: | ||
| - | (17,930) |
Fund share transactions: | ||
| 4,421,890 | 1,203,188 |
| - | 17,356 |
4,421,890 | 1,220,544 | |
| 8 | 45 |
| (246,316) | (115,946) |
| 4,175,582 | 1,104,643 |
Total increase ) in net assets | $4,674,808 | $1,618,537 |
NET ASSETS | ||
| 3,671,099 | 2,052,562 |
| $8,345,907 | $3,671,099 |
Shares of the Fund sold and redeemed | ||
| 378,696 | 118,463 |
| - | 1,547 |
378,696 | 120,010 | |
| (19,604) | (10,994) |
Net increase in number of shares outstanding | 359,092 | 109,016 |
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 23 |
(Graphic omitted) Sextant International Fund
Expenses (unaudited)
As a Sextant International Fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends or other distributions. Nor do you incur redemption fees, exchange fees or fees related to Individual Retirement Accounts. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Example
The following example is based on an investment of $1,000 invested at the beginning of the semi-annual period and held for six months (Thursday, December 1, 2005 to Wednesday, May 31, 2006).
Actual Expenses
The first line provides information about actual account values and expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses you have paid over the period. Simply divide your account value by $1,000 (for example, a $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges for these extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery, 2% penalty for redemptions within 30 days.
Hypothetical Example For Comparison Purposes
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending balance or expenses you paid for the year. You may use this information to compare ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no fees on Saturna Capital IRAs, ESAs or HSAs), and charges for extra services such as check writing and bank wires.
Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees, or possible early redemption penalties. Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.
International Fund | Beginning Account Value (Thursday, December 1, 2005) | Ending Account Value (Wednesday, May 31, 2006) | Expenses Paid During Period* |
Actual (8.38% return after expenses) | $1,000 | $1,083.80 | $4.78 |
Hypopthetical (5% return before expenses) | $1,000 | $1,020.34 | $4.63 |
*Expenses are equal to the Sextant International Fund’s annualized expense ratio of 0.92% (based on the most recent semi-annual period of December 1, 2005 through May 31, 2006), multiplied by the average account value of $1,041.90 over the period multiplied by 182/365 (to reflect the one-half year period).
24 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
Notes To Financial Statements
Note 1 - Organization The investment goals of the Growth and International Funds are long-term capital growth. The investment goals of the Bond Income and Short-Term Bond Funds are current income, with Short-Term Bond having the additional goal of capital preservation. NOTE 2 - Significant Accounting Policies Security Valuation: 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 fair value policies established by the trustees. The ability of issuers of debt securities held by the Funds to meet their obligations may be affected by economic and political developments in a specific country or region. Federal income taxes: Dividends and distributions to shareowners: Use of Estimates: Other: 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. The Trustees have adopted certain policies and procedures with respect to frequent trading of Fund shares. The Funds are intended for long-term investment and do not permit rapid trading of their shares. Shares held less than 30 calendar days, including those held in omnibus accounts at intermediaries, will be assessed a 2% early-redemption | penalty (payable to the Fund). NOTE 3 - Transactions with Affiliated Persons The base Advisory Fee is subject to adjustment up or down depending on the investment performance of the Fund relative to a specified index. Performance Adjustment for Sextant Short-Term Bond Fund and Sextant Bond Income Fund:
Performance adjustment for Sextant Growth Fund and Sextant International Fund:
The Adviser has voluntarily undertaken to limit expenses of Sextant Short-Term Bond Fund to 0.75% and Sextant Bond Income to 0.90% through March 31, 2007. The Adviser waives its investment advisory and administrative fee for Sextant Short-Term Bond Fund and Sextant Bond Income Fund completely so long as assets of either Fund are less than $2 million. For the semi-annual period ended May 31, 2006, Sextant Short-Term Bond Fund incurred advisory and administration expenses of $7,527. Sextant Bond Income Fund and Sextant Growth Fund incurred advisory and administration expenses of $5,897 and $47,481, respectively. Sextant International Fund incurred advisory and administration expenses of $21,848. In accordance with the expense waiver noted above, for the semi-annual period ended May 31, 2006, Saturna Capital waived $4,686 of the Sextant Short-Term Bond Fund advisory fee. In accordance with the Funds’ custodian agreements with National City Bank Indiana, for the semi-annual period ended May 31, 2006, custodian fees for Short-Term Bond, Bond Income, Growth, and International were $1,382, $480, $4,001, and $2,721, respectively. The custodian waived $1,487, $583, $4,178 and $2,781 of its fees for earnings credits for Short-Term Bond, Bond Income, Growth and International respectively. One trustee, who also serves as the president of the Trust, is a director and president of the Adviser. On May 31, 2006, the trustees, officers and their related accounts as a group owned 22.8%, 23.6%, 37.2% and 50.6% of the outstanding shares of Short-Term Bond, Bond Income, Growth and International, respectively. The four unaffiliated trustees receive $300 per Board or committee meeting attended, plus travel expenses. The Trust incurred expenses for the independent trustees of $3,713 to attend meetings during the fiscal semi-annual period. Regulations require the Trust to designate a Chief Compliance Officer; Mr. Winship was retained by the Trust and paid $8,697 during the fiscal semi-annual period. The other officers are paid by Saturna Capital, and not the Trust.
(Continued on next page) |
May 31, 2006 Semi-Annual Report | 25 |
Notes To Financial Statements
Saturna Brokerage Services, Inc. (a discount brokerage subsidiary of Saturna Capital Corporation) is a registered as a broker-dealer and acts as distributor without compensation.
Saturna Brokerage Services is the primary stockbroker used to effect portfolio transactions for Sextant Growth Fund and Sextant International Fund. The adviser has undertaken to waive all brokerage commissions charged by its affiliate.
NOTE 4 - Investments
During the semi-annual period ended May 31, 2006, Short-Term Bond pur-chased $306,787 of securities and sold $357,000 of securities. Comparable figures for Bond Income are $359,652 purchased and $392,893 sold; for Growth $5,169,305 and $19,412; and for International, $4,065,433 and $340,615.
NOTE 5 - Distribution to shareholders
The tax character of distributions paid during the semi-annual period ended May 31, 2006 and November 30, 2005 were as follows:
2006 | 2005 | ||
Short-Term Bond Fund | |||
Ordinary income | $37,812 | $83,151 | |
Bond Income Fund | |||
Ordinary income | 70,684 | 126,361 | |
Growth Fund | |||
Ordinary income | 0 | (2,289) | |
Capital gains | 0 | (12,474) | |
International Fund | |||
Ordinary income | $0 | $17,930 |
As of May 31, 2006, components of distributable earnings on a tax basis were as follows:
Short-Term Bond | Bond Income | Growth | International | |
Cost of investments | $2,388,820 | $2,840,091 | $9,573,671 | $5,668,115 |
Gross tax unrealized appreciation | 1,035 | 53,830 | 4,120,918 | 1,763,892 |
Gross tax unrealized depreciation | (63,267) | (67,395) | (503,887) | (190,391) |
Net tax unrealized appreciation (depreciation) | 62,232 | (13,565) | 3,617,031 | 1,573,501 |
Undistributed ordinary income | - | - | - | - |
Undistributed long-term capital gain (loss) | (40,485) | (27,986) | - | (107,160) |
Total distributable earnings | (40,485) | (27,986) | - | (107,160) |
Total accumulated earnings (losses) | $(102,717) | $(41,551) | $3,617,031 | $1,466,341 |
26 | (The accompanying notes are an integral part of these financial statements) | May 31, 2006 Semi-Annual Report |
Availability of Sextant Portfolio Information
(1) The Sextant Funds file complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q.
(2) The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov., and at www.saturna.com.
(3) The Funds’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
(4) The Funds make a complete schedule of portfolio holdings after the end of each month available to investors at http://www.saturna.com.
Availability of Proxy Voting Information
(1) A description of the policies and procedures that the Funds use to determine how to vote proxies in relation to portfolio securities is available (a) without charge, upon request, by calling Saturna Capital at (800) 728-8762; (b) on the Funds’ website at www.saturna.com; and (c) on the SEC’s website, www.sec.gov.
(2) Information regarding how each Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (a) without charge, upon request, by calling Saturna Capital at (800) 728-8762; (b) on the Fund’s website at www.saturna.com; and (c) on the SEC’s website, www.sec.gov.
Privacy Statement
At Saturna Capital, we understand the importance to you in maintaining the privacy of your financial information. To that end, we want to assure you that we protect the confidentiality of any personal information you share with us.
We collect personal information about you from information we receive from you on applications and other forms and from transactions or trades placed with us. Please be assured that except to administer a transaction with an affiliated third party upon your request, we do not disclose any personal information about our customers, or our former customers, to anyone, except as may be required by law. We maintain our own technology resources to minimize the use of outside service providers.
Additionally, Saturna Capital restricts access to personal information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with regulations to guard your personal information. If you have further questions or concerns about the security or privacy of the information we receive from you, please call us at 800 / SATURNA.
May 31, 2006 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements) | 27 |
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 Funds. The Sextant Funds are series of Saturna Investment Trust. Saturna Brokerage Services, Distributor |
Saturna Capital
1300 North State Street
Bellingham, WA 98225
www.saturna.com
sextant@saturna.com
(800) SATURNA
(Graphics omitted)
Idaho Tax-Exempt Fund (Graphic omitted)
(Graphic omitted)
May 31, 2006
Semi-Annual Report (Graphic omitted)
(Graphic omitted) Fellow Shareowners:
For the six months ended May 31, 2006, Idaho Tax-Exempt Fund provided a total return of +0.93%. The net asset value was $5.23 per share compared to $5.27 at November 30, 2005. Fund assets decreased slightly to $8.31 million. The expense ratio continues at the annual rate of 0.88%.
For the twelve months ending May 31, 2006, global bond prices suffered as major central banks acted in concert to restrain the simultaneous resurgence of growth and inflation in the US, Pan European and Asian economies. Long US Treasury, agency, and corporate bonds returned -5.5% and lower. Most Intermediate US Treasury, agency, and corporate bonds also produced negative returns. However, intermediate general obligation municipal bonds again outperformed taxable bonds during a bear market with a positive return of 1.06%. Historically, rising municipal bond yields increase the demand for municipal bonds. In turn, that acts to support municipal bond prices during bear markets.
Looking ahead, we expect the Federal Reserve to move the Federal funds rate up to 6%. The flat yield curve is already anticipating the end of the current tightening cycle and a peak in short-term rates. We are less concerned about long term U.S. inflation risk and have extended the weighted average maturity of the Fund at current yields. We expect better returns for the Idaho Tax-Exempt Fund in 2007, and we view any further increase in short-term rates as an excellent opportunity to increase fixed-income allocations and especially allocations to municipal bonds.
Conservative investors choose the Idaho Tax-Exempt Fund for high quality tax-free municipal bonds and low price volatility when they reallocate assets from higher-risk common stocks to the relative safety of municipal bonds. Should restrictive monetary policy produce soft equity prices and an economic slowdown in 2007, the bond markets could have a good year. We recommend a balanced portfolio diversified with both common stocks and Idaho Tax-Exempt Fund. Idaho has many new residents (i.e., taxpayers) who can benefit from a tax-exempt bond portfolio.
The Idaho economy, population and State employment are once again growing above the national average. Construction spending has defied all expectations and remains strong. The State is forecasting a second multi-million dollar budget surplus. Idaho issuer credit worthiness remains healthy and improving. The government’s fiscal discipline and pro-business policies still give the State a sharp competitive edge.
We invite you to review the advantages of the Idaho Tax-Exempt Fund, including low expenses, income free from Idaho and federal income taxes, a high-quality diversified bond portfolio and daily supervision by professional managers. We welcome your suggestions. Only with your help can we be certain that we are meeting your investment needs — our primary objective.
Nicholas Kaiser, President | Phelps McIlvaine, Vice President, Portfolio Manager |
________________________________
1 All returns above from Lehman Brothers Global Family of Indexes May 31, 2006. By authors Jack Malvey, CFA, and Joseph Di Censo, CFA
One Year | 5 Years | 10 Years |
+0.01% | +3.69% | +4.63% |
Performance data for years ended 6/30/2006 |
Performance data quoted in this report represents past performance and is no guarantee of future performance. The investment return and principal value of investments in the Fund fluctuate daily, and an investor’s shares when redeemed may be worth more or less than the original cost.
2 | Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2006 |
Investments | As of May 31, 2006 | ||||
Rating* | Issue | Coupon/Maturity | Face Amount | Market Value | Percentage |
Building | |||||
AAA | Idaho State Building Authority | 4.50% due 9/1/2023 | $110,000 | $109,893 | 1.3% |
Electirc Power | |||||
AAA | Idaho Falls Electric Revenue | 6.75% due 4/1/2019 | 150,000 | 151,370 | 1.8% |
Financial Services | |||||
AAA | Boise City General Fund Revenue | 5.20% due 12/1/2017 | 160,000 | 169,626 | 2.0% |
AAA | " | 5.25% due 12/1/2018 | 100,000 | 105,737 | 1.3% |
SUBTOTAL | 260,000 | 275,363 | 3.3% | ||
General Obligation | |||||
AA- | Ada & Canyon JSD #2 Meridian | 5.50% due 7/30/2015 | 50,000 | 55,081 | 0.7% |
AAA | Ada & Canyon JSD #2 Meridian | 5.00% due 8/15/2020 | 165,000 | 175,182 | 2.1% |
AAA | Ada & Canyon JSD #2 Meridian | 5.00% due 8/15/2021 | 155,000 | 164,183 | 2.0% |
AAA | Adams & Washington | 4.00% due 8/15/2019 | 100,000 | 97,811 | 12.% |
AAA | Bingham County SD #55 Blackfoot | 4.65% due 8/1/2017 | 285,000 | 293,966 | 3.5% |
A | Boise County SD #73 Horseshoe Bend | 5.15% due 7/31/2010 | 125,000 | 127,475 | 1.5% |
AAA | Boundary County SD #101 | 5.10% due 8/1/2022 | 130,000 | 137,728 | 1.7% |
AAA | Caldwell, Idaho | 5.30% due 5/15/2014 | 150,000 | 157,597 | 1.9% |
AAA | Canyon County SD #139 Valley View | 4.05% due 8/15/2016 | 80,000 | 80,504 | 1.0% |
AAA | Canyon County SD #139 Valley View | 4.35% due 9/15/2025 | 350,000 | 342,311 | 4.1% |
A | Canyon County SD #131 Nampa | 4.75% due 8/15/2019 | 325,000 | 334,357 | 4.0% |
AAA | Canyon County SD #134 Middleton | 4.65% due 7/31/2016 | 170,000 | 177,482 | 2.1% |
A | Canyon County SD #135 | 6.00% due 8/1/2007 | 50,000 | 49,841 | 0.6% |
AAA | Clark County SD #161 Dubois | 5.00% due 8/1/2015 | 270,000 | 282,726 | 3.4% |
AAA | Idaho Housing & Finance Association | 4.80% due 6/1/2017 | 100,000 | 104,576 | 1.3% |
AAA | Jerome Lincoln Gooding Co.'s JSD #261 | 3.75% due 9/15/2018 | 125,000 | 119,539 | 1.4% |
AAA | " | 5.00% due 9/15/2022 | 250,000 | 264,495 | 3.2% |
AAA | Kootenai-Shonshone Area Library | 4.25% due 8/1/2021 | 220,000 | 218,652 | 2.6% |
AAA | Lakeland ID JSD #272 | 4.00% due 8/15/2015 | 100,000 | 99,593 | 1.2% |
AAA | Lemhi County | 4.20% due 8/1/2015 | 100,000 | 100,506 | 1.2% |
AAA | Meridian Free Library District | 5.00% due 8/1/2015 | 200,000 | 199,359 | 2.4% |
AAA | Nampa Idaho Series B | 5.00% due 8/1/2020 | 200,000 | 208,694 | 2.5% |
AAA | Oneida County SD #351 Malad City | 4.00% due 8/15/2015 | 150,000 | 150,464 | 1.8% |
AAA | Owyhee & Canyon Cos. JSD #370 | 4.55% due 8/15/2016 | 160,000 | 168,799 | 2.0% |
SUBTOTAL | 4,010,000 | 4,110,921 | 49.4% | ||
Housing | |||||
AA | Idaho Housing Agency Single Family Mortgage, B-1 | 6.85% due 7/1/2012 | 5,000 | 4,963 | 01.% |
AA+ | Idaho Housing Agency Refunding Series A | 6.15% due 7/1/2024 | 15,000 | 14,899 | 0.2% |
AAA | Idaho Housing Agency Single Mort Mezz E-1 | 6.60% due 7/1/2011 | 10,000 | 9,958 | 0.1% |
AAA | Valley County Jail Project Ref | 4.70% due 8/1/2014 | 125,000 | 127,148 | 1.5% |
SUBTOTAL | 155,000 | 156,968 | 1.9% | ||
Medical/Hospitals | |||||
AAA | Idaho Health Facility Auth. Ref. Holy Cross Sys Corp. Rev | 5.25% due 12/1/2014 | 110,000 | 113,045 | 1.4% |
AAA | Idaho Health Facility Auth. Corp. Holy Cross Rev Refunding | 5.00% due 12/1/2022 | 115,000 | 117,651 | 1.4% |
(The accompanying notes are an integral part of these financial statements)
(Continued on next page)
Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2006 | 3 |
Investments | As of May 31, 2006 | ||||
Rating* | Issue | Coupon/Maturity | Face Amount | Market Value | Percentage |
Medical/Hospitals (continued) | |||||
AAA | Madison CO Hospital COP | 5.00% due 12/1/2018 | $105,000 | $108,082 | 1.3% |
SUBTOTAL | 330,000 | 338,778 | 4.1% | ||
Pollution Control | |||||
AAA | Idaho Bond Bank Authority | 4.30% due 9/1/2022 | 135,000 | 132,810 | 1.6% |
Real Estate | |||||
AAA | Idaho State Building Association | 5.05% due 9/1/2018 | 95,000 | 96,695 | 1.2% |
AAA | Idaho State Building Authority | 5.00% due9/1/2021 | 100,000 | 101,602 | 1.2% |
A | Jerome Urban Renewal District | 5.40% due9/1/2013 | 200,000 | 201,474 | 2.4% |
A | Post Falls LID | 5.00% due 5/1/2021 | 300,000 | 301,245 | 3.6% |
SUBTOTAL | 695,000 | 701,016 | 8.4% | ||
Roads | |||||
A | Post Falls ID | 7.95% due 4/15/2007 | 20,000 | 20,147 | 0.3% |
State Education | |||||
AAA | Boise State University Rev | 5.00% due 4/1/2019 | 295,000 | 310,255 | 3.7% |
AAA | Idaho State Building Authority | 4.00% due 9/1/2016 | 105,000 | 103,579 | 1.3% |
AAA | Idaho State Universtiy Ref. & Improvement | 4.90% due 4/1/2017 | 150,000 | 153,196 | 1.9% |
AAA | Idaho State Universtiy Rev | 4.625% due 4/1/2024 | 220,000 | 223,886 | 2.7% |
AAA | University of Idaho Student Fee Rev | 5.00% due 4/1/2019 | 200,000 | 210,342 | 2.5% |
AAA | University of Idaho Student Fee Rev | 5.00% due 4/1/2020 | 160,000 | 167,766 | 2.0% |
SUBTOTAL | 1,130,000 | 1,169,024 | 14.1% | ||
Sewer | |||||
A | Troy ID Sewer System | 7.90% due 2/1/2007 | 15,000 | 14,893 | 0.2% |
A | " | 8.00% due 2/1/2008 | 15,000 | 14,900 | 0.2% |
A | " | 8.00% due 2/1/2009 | 20,000 | 19,873 | 0.2% |
A | " | 8.00% due 2/1/2010 | 20,000 | 19,898 | 0.2% |
SUBTOTAL | 70,000 | 69,564 | 0.8% | ||
Urbal Renewal | |||||
AAA | Boise City Urban Renewal Agency Pk Rev & RA | 5.00% due 9/1/2012 | 65,000 | 66,939 | 0.8% |
AAA | Boise City Urban Renewal Lease Rev | 5.00% due 8/15/2020 | 190,000 | 199,198 | 2.4% |
AAA | Boise City Urban Renewal Agency Lease Rev | 5.00% due 8/15/2021 | 110,000 | 115,023 | 1.4% |
SUBTOTAL | 365,000 | 381,160 | 4.6% | ||
Water Supply | |||||
AAA | Blackfoot COP Series 2000 | 5.80% due 9/1/2018 | 135,000 | 145,563 | 1.8% |
AAA | Idaho Bond Bank Authority | 5.00% due 9/15/2026 | 250,000 | 259,786 | 3.1% |
AAA | Ketchum Water Revenue | 4.75% due 9/1/2013 | 60,000 | 60,658 | 0.7% |
SUBTOTAL | 445,000 | 466,007 | 5.6% | ||
Total Investments | (Total Cost = $8,095,453) | $7,875,000 | $8,083,021 | 97.2% | |
Other Assets (net of liabilities | 234,095 | 2.8% | |||
Total Net Assets (100%) | $8,317,116 | 100.0% |
(The accompanying notes are an integral part of these financial statements)
4 | Bond ratings reflect the adviser’s current rating of each bond, as determined using Standard & Poor’s and Moody’s Ratings | Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2006 |
Financial Highlights | Period ended | Year ended November 30, | |||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |
Net asset value at beginning of period | $5.27 | $5.39 | $5.46 | $5.37 | $5.28 | $5.13 | |
| |||||||
| 0.09 | 0.19 | 0.19 | 0.21 | 0.22 | 0.22 | |
| (0.04) | (0.10) | (0.07) | 0.09 | 0.09 | 0.15 | |
Total from investment operations | 0.05 | 0.09 | 0.12 | 0.30 | 0.31 | 0.37 | |
| |||||||
| (0.09) | (0.19) | (0.19) | (0.21) | (0.22) | (0.22) | |
| - | (0.02) | - | - | - | - | |
Total distributions | (0.09) | (0.21) | (0.19) | (0.21) | (0.22) | (0.22) | |
Paid-in capital from early redemption penalties | *0.00 | *0.00 | - | - | - | - | |
Net asset value at end of period | $5.23 | $5.27 | $5.39 | $5.46 | $5.37 | $5.28 | |
Total Return | 0.93% | 1.66% | 2.29% | 5.40% | 5.98% | 7.40% | |
Ratios/supplemental data | |||||||
Net assets ($000), end of period | $8,317 | $8,531 | $8,472 | $7,692 | $6,943 | $6,650 | |
Ratio of expenses to average net assets | |||||||
| 0.46% | 0.91% | 0.95% | 0.88% | 0.88% | 0.90% | |
| 0.44% | 0.88% | 0.93% | 0.85% | 0.80% | 0.79% | |
Ratio of net investment income after wiaver to average net assets | 1.69% | 3.58% | 3.56% | 3.78% | 4.14% | 4.21% | |
Portfolio turnover rate | 18% | 21% | 15% | 6% | 11% | 13% | |
*Amount is less than $0.01% |
Statement of Assets and Liabilities | As of May 31, 2006 | ||
Assets | |||
Investments (Cost $8,095,453) | $8,083,021 | ||
Cash | 138,281 | ||
Interest receivable | 108,809 | ||
Receivable for Fund shares sold | 1,200 | ||
Insurance reserve premium | 801 | ||
| $8,332,112 | ||
Liabilities | |||
Distributions payable | 6,600 | ||
Due to affiliates | 4,729 | ||
Accrued expenses | 3,667 | ||
| 14,996 | ||
Net Assets | $8,317,116 | ||
Fund shares outstanding | 1,589,703 | ||
Analysis of Net Assets | |||
Paid-in Capital (unlimited shares authorized, without par value) | 8,329,548 | ||
Unrealized net depreciation on investments | (12,432) | ||
| $8,317,116 | ||
Net Asset Value, Offering and Redemption price per share | $5.23 |
Portfolio Holdings
Ratings established | By Adviser | By Standard & Poor's | By Moody's Investor Services |
AAA | 83.1% | 36.7% | 85.1% |
AA | 0.9% | 0.7% | 0.9% |
A | 13.3% | 4.0% | - |
unrated | - | 55.8% | 11.3% |
cash | 2.7% | 2.7% | 2.7% |
(The accompanying notes are an integral part of these financial statements)
Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2006 | 5 |
Statement of Operations | For the 6-month period ended May 31, 2006 | |
Investment Income | ||
| $198,476 | |
| (15,222) | |
| $183,254 | |
Expenses | ||
| 21,472 | |
| 4,599 | |
| 2,788 | |
| 2,300 | |
| 2,274 | |
| 1,576 | |
| 1,256 | |
| 1,112 | |
| 1,083 | |
| 838 | |
| 156 | |
| 39,454 | |
| (1,583) | |
| 37,871 | |
| 145,383 | |
Net realized loss on investments | ||
| 1,591,798 | |
| 1,579,801 | |
| 11,997 | |
Unrealized loss on investments | ||
| (12,432) | |
| 69,559 | |
| (81,991) | |
| (69,994) | |
Net increase in net assets resulting from operations | $75,389 |
Statement of Changes in Net Assets | Period ended May 31, 2006 | Year ended Nov. 30, 2005 |
INCREASE (DECREASE) IN NET ASSETS | ||
From Operations: | ||
| $145,383 | $302,302 |
| 11,997 | 60,461 |
| (81,991) | (224,149) |
| $75,389 | $138,614 |
Dividends to shareowners from: | ||
| (145,497) | (302,222) |
| - | (17,930) |
(145,497) | (328,214) | |
Fund share transactions: | ||
| 781,519 | 1,076,370 |
| 113,653 | 264,076 |
895,172 | 1,340,446 | |
| 1 | 28 |
| (1,039,397) | (1,091,850) |
| (144,224) | 248,624 |
Total increase (decrease) in net assets | $(214,332) | $59,024 |
NET ASSETS | ||
| 8,531,448 | 8,472,424 |
| $8,317,116 | $8,531,448 |
| $0 | $80 |
Shares of the Fund sold and redeemed | ||
| 148,472 | 218,971 |
| 21,606 | 49,415 |
170,078 | 268,386 | |
| (198,434) | (221,568) |
Net increase (decrease) in number of shares outstanding | (28,356) | 46,818 |
Notes To Financial Statements (These notes are an integral part of the above financial statements)
Note 1—Organization The investment objective of the Fund is to provide income free from federal income, federal alternative minimum and Idaho state income taxes, with a secondary objective of capital preservation. Note 2—Significant Accounting Policies Security valuation: | factors, which are compared periodically to multiple dealer bids and adjusted by the adviser under fair value policies established by the Trustees. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic and political developments in the State of Idaho. Income taxes: Dividends and distributions to shareowners: |
6 | Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2006 |
Expenses (unaudited)
All mutual funds have operating expenses. As an Idaho Tax-Exempt mutual fund shareowner, you incur ongoing costs, including management fees; and other fund expenses such as shareowner reports (like this one). Operating expenses, which are deducted from a fund’s gross earnings, directly reduce the investment return of a fund. All mutual funds (unlike some other financial investments) only report their results after deduction of operating expenses.
With the Idaho Tax-Exempt fund, unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends, or other distributions. You do not incur redemption fees, exchange fees, or fees related to Individual Retirement Accounts. However, to discourage speculation, you may incur a 2% penalty for redemption of shares held less than 30 days. You may incur fees related to extra services requested by you for your account, such as a checkbook to use for redemptions or bank wires.
EXAMPLE
The example is based on an investment of $1,000 invested at the beginning of the fiscal year and held for six months [Thursday, December 1, 2005 to Wednesday, May 31, 2006].
ACTUAL EXPENSES
The first line provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges the following fees for extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the year. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of the other funds. You may wish to add other fees that are not included in the expenses shown in the table and charges for extra services such as check writing and bank wires.
Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees (note that the Idaho Tax-Exempt Fund does not have any such transaction costs). Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.
Beginning Account Value (Thursday, December 1, 2005) | Ending Account Value (Wednesday, May 31, 2006) | Expenses Paid During Period* | |
Actual (0.93% return after expenses) | $1,000 | $1,009.30 | $4.61 |
Hypopthetical (5% return before expenses) | $1,000 | $1,020.34 | $4.63 |
* Expenses are equal to Idaho Tax-Exempt Bond Fund’s annualized expense ratio of 0.92% (based on the most recent semi-annual period of December 1, 2005 through May 31, 2006, multiplied by the average account value of $1,004.65 over the period multiplied by 182/365 (to reflect the one-half year period).
Use of estimates: Other: The Trustees have adopted certain policies and procedures with respect | to frequent trading of Fund shares. The Funds are intended for long-term investment and do not permit rapid trading of their shares. Shares held less than 30 calendar days, including those held in omnibus accounts at intermediaries, will be assessed a 2% early-redemption penalty (payable to the Fund). Note 3—Transactions with Affiliated Persons In accordance with the Fund’s agreement with its custodian, National City Bank of Indiana, for the 6-month period ended May 31, 2006, custodian fees incurred by the Fund amounted to $1,256. The custodian waived $1,583 of its fees for earnings credits. Saturna Brokerage Services, Inc. (a subsidiary of Saturna Capital Corporation) is |
Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2006 | 7 |
Notes To Financial Statements (continued)
a broker-dealer and acts as distributor without compensation. Saturna Capital Corporation acts as shareowner servicing agent for the Fund, for a monthly fee plus certain expenses. For the 6-month period ended May 31, 2006, the Fund paid shareholder servicing fees of $2,300. One trustee, who also serves as the president of the Trust, is a director and president of the Adviser. On May 31, 2006, the trustees, officers and their immediate families as a group owned 0.05% of the outstanding shares of the Fund. The four unaffiliated trustees receive $300 per Board or committee meeting attended, plus travel expenses, allocated pro-rata to the five Funds of Saturna Investment Trust. The Trust paid the Independent Trustees $3,713 to attend meetings during the period covered by this report. Regulations require the Trust to designate a Chief Compliance Officer; Mr. James Winship was retained by the Trust and paid $8,697 during the period. The other officers are paid by Saturna Capital, and not the Trust. Note 4—Investments Distributions to shareowners: | 2006 and the year ended November 30, 2005 were as follows: | ||
2006 | 2005 | ||
Tax-Exempt Income | $145,497 | $302,222 | |
Taxable Income | 0 | 0 | |
Capital Gains | 0 | $25,992 | |
As of May 31, 2006 the components of capital on a tax basis were as follows: | |||
Cost of investments | $8,095,453 | ||
Gross unrealized appreciation | 67,764 | ||
Gross unrealized depreciation | (80,196) | ||
Net unrealized depreciation | $(12,432) | ||
Undistributed ordinary income | 0 | ||
Capital loss carryforward | ( 0 ) | ||
Total distributable earnings | $ 0 | ||
Total accumulated earnings (losses) | $(12,432) | ||
Availability of Fund Portfolio Information
Availability of Proxy Voting Information
| Privacy Statement At Saturna Capital, we understand the importance to you in maintaining the privacy of your financial information. To that end, we want to assure you that we protect the confidentiality of any personal information you share with us. We collect personal information about you from information we receive from you on applications and other forms and from transactions or trades placed with us. Please be assured that except to administer a transaction with an affiliated third party upon your request, we do not disclose any personal information about our customers, or our former customers, to anyone, except as may be required by law. We maintain our own technology resources to minimize the use of outside service providers. Additionally, Saturna Capital restricts access to personal information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with regulations to guard your personal information. If you have further questions or concerns about the security or privacy of the information we receive from you, please call us at 800 / SATURNA.
(Graphic omitted) |
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.
Saturna Capital
1300 N. State Street
Bellingham, WA 98225
www.saturna.com
(800) SATURNA
Submission of Matters to a Vote of Security Holders
Not applicable.
Controls and Procedures
Internal control over financial reporting is under the supervision of the principal executive and financial officers. On July 6, 2006, Mr. Nicholas Kaiser (President) and Mr. Christopher Fankhauser (Treasurer), reviewed the internal control procedures for Saturna Investment Trust and found them reasonable and adequate.
Exhibits
Exhibits included with this filing:
Certifications.
- Nicholas Kaiser, President, Saturna Investment Trust
- Christopher Fankhauser, Treasurer, Saturna Investment Trust
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SATURNA INVESTMENT TRUST
By
/s/ Nicholas Kaiser
President
July 21, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By:
/s/ Nicholas Kaiser
President
July 21, 2006
By:
/s/ Christopher Fankhauser
Treasurer
July 21, 2006