SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-CSRS/A
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, 2007
Date of reporting period: May 31, 2007
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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 Core Fund | Page 12 |
Sextant Growth Fund | Page 18 |
Sextant International Fund | Page 23 |
Expense Examples | Page 28 |
Notes To Financial Statements | Page 29 |
Privacy Statement | Page 31 |
Average Annual Returns | |||||
(as of 6/30/2007) | 1 Year | 3 Year | 5 Year | 10 Year | Expense Ratio¹ |
Sextant Short-Term Bond Fund | 5.13% | 2.65% | 2.97% | 4.54% | 1.59% |
Sextant Bond Income Fund | 4.91% | 3.08% | 4.14% | 5.83% | 1.48% |
Sextant Core Fund² | N/A | N/A | N/A | N/A | 1.35% |
Sextant Growth Fund | 17.43% | 16.99% | 13.21% | 10.32% | 1.46% |
Sextant International Fund | 32.63% | 24.73% | 18.61% | 10.00% | 1.30% |
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. Performance and Morningstar™ rating data current to the most recent month-end is published online at www.saturna.com and is available by calling toll free (800) SATURNA. 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. 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. ¹ By regulation, the expense ratios shown in this table are as of the Funds' most recent prospectus dated March 30, 2007, incorporating results from the 2006 fiscal year. The semi-annual expense ratios shown elsewhere in this report (see page 28) differ from those in this table and represent the most recent semi-annual fiscal period. ² The Sextant Core Fund began operations March 30, 2007 and does not yet have annualized returns to report. 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 12 months because the Sextant Funds' performance fees are based on the same period. |
2 | May 31, 2007 Semi-Annual Report |
Fellow Shareowners:
For the six months ended May 31, 2007, the five Sextant funds continued to reflect the markets where they invest. Sextant International Fund did the best, up 16.52% as its non-US stock portfolio grew in value with the continuing US dollar decline. Sextant Growth Fund, up 9.16%, reflected a rising US stock market (the S&P 500 gained 10.29% for the 6 months). The two Sextant bond funds continued to suffer from the steady rise in interest rates, with Sextant Short-Term Bond Fund returning 1.33% and Sextant Bond Income Fund returning -0.39%.
The new Sextant Core Fund, combining domestic and international stocks as well as long and short-term bonds, appreciated a respectable 4.30% since beginning operations on March 30th. This Fund well meets the needs of investors seeking a balanced portfolio where one decision can meet many requirements.
Looking forward, the increase in most interest rates appears to be nearing conclusion, meaning bonds may finally shine. Lower-quality ("high yield") bonds are suffering most as the excesses in subprime mortgage lending are being pressured by the weak real estate market. The US economy and business profits march constantly up, greatly boosting income tax receipts and reducing pressure on the federal deficit. The once over-heated and leveraged housing sector is cooling fast, meaning "burnt finger" speculators in real estate will again be considering the security markets. Corporate profits should continue growing at 6 to 9% annually, meaning the equity markets are likely to go even higher.
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. Last summer, the Trustees and shareowners approved a simple 12b-1 plan to pay distribution expenses intended to help the Sextant funds grow in size. As fixed costs are spread over more investor assets, all investors can benefit from a lower expense ratio. Its pleasing to note, therefore, that total Sextant Fund assets have grown 99% in the 18 months since November 30, 2005. 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 months (our performance fee computation period) ended May 31, 2007, 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 | 4.88% | Short-term Bond | 4.85% | 51 (434) |
Bond Income | 5.13% | Long-term Bond | 8.38% | 90 (35) |
Growth | 18.76% | Mid-Cap Growth | 19.47% | 58 (983) |
International | 31.01% | Foreign Large Blend | 25.66% | 4 (696) |
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; Co-manager, Sextant Core Fund)
Phelps McIlvaine, Vice President
(Manager, Sextant Short-Term Bond, Sextant Bond Income; Co-manager, Sextant Core Fund)
July 17, 2007
† The 12-month Rank shows how each Fund ranks in its Morningstar™ peer category for the year ended May 31, 2007. See page 2 for more information on Morningstar™ Rankings.
May 31, 2007 Semi-Annual Report | 3 |
Sextant Short-Term Bond Fund
Schedule of Investments
Rating¹ | Issuer | Coupon/Maturity | Face Amount | Market Value | Percentage of Assets |
Cosmetics & Toiletries | |||||
A | Avon Products Inc. | 6.55% due 8/1/2007 | $95,000 | $94,792 | 3.3% |
Finance & Insurance | |||||
AAA | HSBC Finance Corp. | 6.375% due 10/15/2011 | 100,000 | 103,219 | 3.6% |
AAA | Lehman Brothers Holdings | 5.75% due 4/25/2011 | 100,000 | 100,793 | 3.5% |
200,000 | 204,012 | 7.1% | |||
Food & Beverages | |||||
BBB | Fortune Brands | 5.125% due 1/15/2011 | 120,000 | 117,460 | 4.1% |
A+ | WM Wrigley Jr. Co. | 4.30% due 7/15/2010 | 100,000 | 96,935 | 3.4% |
220,000 | 214,396 | 7.5% | |||
Machinery | |||||
A | Caterpillar Inc. | 7.25% due 9/15/2009 | 100,000 | 103,760 | 3.6% |
A- | Rockwell Automation Int'l | 6.15% due 1/15/2008 | 95,000 | 94,858 | 3.3% |
195,000 | 198,618 | 6.9% | |||
Medical Drugs | |||||
A | Amgen | 6.50% due 12/1/2007 | 90,000 | 89,829 | 3.1% |
Oil & Gas | |||||
A- | ConocoPhillips | 8.75% due 5/25/2010 | 100,000 | 109,084 | 3.8% |
Retail-Discount & Variety | |||||
A- | TJ X Companies Inc. | 7.45% due 12/15/2009 | 95,000 | 98,808 | 3.4% |
Telecommunications | |||||
BBB+ | Southwestern Bell Telephone | 6.625% due 7/15/2007 | 95,000 | 94,700 | 3.3% |
U.S. Government | |||||
AAA | U.S. T-Note | 4.00% due 6/15/2009 | 200,000 | 196,500 | 6.9% |
AAA | U.S. T-Note | 4.00% due 4/15/2010 | 200,000 | 195,344 | 6.8% |
400,000 | 391,844 | 13.7% | |||
U.S. Government Agency | |||||
AAA | Federal Farm Credit Bank | 4.62% due 12/7/2009 | 100,000 | 98,513 | 3.4% |
AAA | Federal Farm Credit Bank | 5.79% due 6/5/2013 | 200,000 | 200,632 | 7.0% |
AAA | Federal Home Loan Bank | 4.60% due 5/18/2009 | 120,000 | 118,560 | 4.1% |
AAA | Federal Home Loan Bank | 4.00% due 8/15/2007 | 300,000 | 299,099 | 10.4% |
AAA | Federal Home Loan Mortgage Corp. | 4.125% due 11/6/2009 | 120,000 | 117,137 | 4.1% |
AAA | Federal National Mortgage Assoc. | 4.00% due 2/23/2007 | 120,000 | 119,460 | 4.2% |
960,000 | 953,401 | 33.2% | |||
Utilities | |||||
BBB+ | PSI Energy | 7.85% due 10/15/2007 | 90,000 | 90,503 | 3.1% |
BBB+ | Scottish Power PLC | 4.91% due 3/15/2010 | 100,000 | 97,297 | 3.4% |
190,000 | 187,800 | 6.5% | |||
Continued on next page. |
4 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Short-Term Bond Fund
Rating¹ | Issuer | Coupon/Maturity | Face Amount | Market Value | Percentage of Assets |
Total Investments | (Cost = $2,659,049) | $2,640,000 | $2,637,283 | 91.8% | |
Other Assets (net of liabilities) | 235,572 | 8.2% | |||
Total Net Assets | $2,872,855 | 100.0% | |||
¹Ratings are the lesser of S&P or Moody's. |
Ratings Established | By Adviser | By Standard & Poor's | By Moody's Investor Services |
AAA | 46.8% | 46.8% | 46.8% |
AA | 3.6% | 3.6% | 3.6% |
A | 30.8% | 33.9% | 27.5% |
BBB | 10.6% | 7.5% | 10.6% |
Unrated | 0.0% | 0.0% | 3.3% |
Other Assets | 8.2% | 8.2% | 8.2% |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 5 |
Sextant Short-Term Bond Fund
Financial Highlights | Period ended | Year Ended November 30, | ||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2007 | 2006 | 2005 | 2004 | 2003 | 2002 |
Net asset value at beginning of period | $4.90 | $4.85 | $4.97 | $5.09 | $5.07 | $5.10 |
Income from investment operations | ||||||
Net investment income | 0.08 | 0.16 | 0.17 | 0.19 | 0.23 | 0.27 |
Net gains or losses on securities (both realized and unrealized) | (0.02) | 0.05 | (0.12) | (0.12) | 0.02 | (0.02) |
Total from investment operations | 0.06 | 0.21 | 0.05 | 0.07 | 0.25 | 0.25 |
Less distributions | ||||||
Dividends (from net investment income) | (0.08) | (0.16) | (0.17) | (0.19) | (0.23) | (0.28) |
Total distributions | (0.08) | (0.16) | (0.17) | (0.19) | (0.23) | (0.28) |
Paid-in capital from early redemption fees¹ | *0.00 | *0.00 | *0.00 | - | - | - |
Net asset value at end of period | $4.88 | $4.90 | $4.85 | $4.97 | $5.09 | $5.07 |
Total Return | 1.33% | 4.41% | 0.96% | 1.41% | 5.00% | 4.90% |
Ratios / Supplemental Data | ||||||
Net assets ($000), end of period | $2,873 | $2,937 | $2,557 | $2,255 | $2,259 | $2,177 |
Ratio of expenses to average net assets | ||||||
Before fee waivers and custody fee credits | 0.80% | 1.39% | 1.23% | 1.14% | 1.17% | 1.14% |
After fee waivers and custody fee credits | 0.38% | 0.57% | 0.59% | 0.58% | 0.60% | 0.93% |
Ratio of net investment income after waivers and custody credits to average net assets | 1.70% | 3.41% | 3.35% | 3.80% | 4.47% | 5.23% |
Portfolio turnover rate | 0% | 41% | 33% | 37% | 22% | 28% |
¹Early redemption fee adopted March 29, 2005 | *Amount is less than $0.01 |
Statement of Change in Net Assets | Period ended May 31, 2007 | Year ended Nov. 30, 2006 |
Increase (Decrease) In Net Assets | ||
From Operations | ||
Net investment income | $49,891 | $87,091 |
Net realized gain (loss) on investments | 1,675 | (10,899) |
Net increase (decrease) in unrealized appreciation | (12,012) | 34,663 |
Net increase in net assets | $39,554 | $110,855 |
Dividends to shareowners from | ||
Net investment income | (49,900) | (85,431) |
Fund Share transactions | ||
Proceeds from sales of shares | 311,790 | 828,422 |
Value of shares issued in reinvestment of dividends | 46,118 | 84,144 |
Early redemption fees retained | 9 | 64 |
Cost of shares redeemed | (412,088) | (557,227) |
Net increase (decrease) in net assets | (54,171) | 355,403 |
Total increase (decrease) in net assets | (64,517) | 380,827 |
Net Assets | ||
Beginning of period | 2,937,372 | 2,556,545 |
End of period | $2,872,855 | $2,937,372 |
Undistributed net investment income | $ - | $1,660 |
Shares of the fund sold and redeemed | ||
Number of shares sold | 63,746 | 170,721 |
Number of shares issued in reinvestment of dividends | 9,432 | 17,342 |
Number of shares redeemed | (84,328) | (114,974) |
Net increase (decrease) in number of shares outstanding | (11,150) | 73,089 |
6 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Short-Term Bond Fund
Statement of Operations
For the semi-annual period ended May 31, 2007 | |
Investment Income | |
Interest income | $60,717 |
Gross Investment Income | 60,717 |
Expenses | |
Investment adviser and administration fees | 8,607 |
Filing and registration fees | 4,549 |
Distribution fees | 3,586 |
Custodian fees | 1,677 |
Audit fees | 1,649 |
Insurance | 930 |
Chief compliance officer expenses | 748 |
Printing and postage | 542 |
Trustee fees | 319 |
Legal fees | 234 |
Other expenses | 140 |
Total gross expenses | 22,981 |
Less adviser fees waived | (10,478) |
Less custodian fees waived | (1,677) |
Net expenses | 10,826 |
Net investment income | 49,891 |
Net realized gain on investments | |
Proceeds from sales | 180,970 |
Less cost of securities sold (based on identified cost) | 179,295 |
Realized net gain | 1,675 |
Unrealized gain on investments | |
End of period | (21,766) |
Beginning of period | (9,754) |
Decrease in unrealized gain for the period | (12,012) |
Net realized and unrealized loss on investments | (10,337) |
Net Increase in net assets resulting from operations | $39,554 |
Statement of Assets and Liabilities
As of May 31, 2007 | |
Assets | |
Bond investments (Cost $2,659,049) | $2,637,283 |
Cash | 200,330 |
Interest Receivable | 39,354 |
Receivable for Fund shares sold | 1,200 |
Total Assets | 2,878,167 |
Liabilities | |
Payable for Fund shares redeemed | 5,228 |
Other liabilities | (1,238) |
Distribution Payable | 707 |
Accrued 12b-1 Fees | 615 |
Total Liabilities | 5,312 |
Net Assets | 2,872,855 |
Analysis of Net Assets | |
Paid in Capital (unlimited shares authorized, without par value) | 2,941,903 |
Undistributed net investment income | 1,660 |
Accumulated net realized loss | (48,942) |
Unrealized net depreciation on investments | (21,766) |
Net Assets applicable to Fund shares outstanding | $2,872,855 |
Fund shares outstanding | 588,928 |
Net Asset Value, Offering and Redemption price per share | $4.88 |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 7 |
Sextant Bond Income Fund
Schedule of Investments
Rating¹ | Issuer | Coupon/Maturity | Face Amount | Market Value | Percentage of Assets |
Agricultural | |||||
A | Archer Daniels Midlands | 7.00% due 2/1/2031 | $100,000 | $110,319 | 3.5% |
Automotive | |||||
BBB | Auto Zone Inc. | 5.50% due 11/15/2015 | 95,000 | 90,596 | 2.9% |
Banking | |||||
AA- | Citicorp | 7.25% due 10/15/2011 | 50,000 | 53,685 | 1.7% |
A | Comerica Bank | 7.125% due 12/1/2013 | 50,000 | 50,182 | 1.6% |
AA+ | Norwest Financial | 6.85% due 7/15/2009 | 50,000 | 51,048 | 1.6% |
150,000 | 154,915 | 4.9% | |||
Building Products | |||||
BBB+ | Masco Corporation | 7.125% due 8/15/2013 | 60,000 | 63,218 | 2.0% |
Chemicals | |||||
A | Air Products & Chemicals | 8.75% due 4/15/2021 | 50,000 | 63,079 | 2.0% |
Diversified Financial Services | |||||
AAA | General Electric Captial Corp. | 8.125% due 5/15/2012 | 60,000 | 66,657 | 2.1% |
Electric Utilities | |||||
BBB- | Commonwealth Edison | 7.50% due 7/1/2013 | 50,000 | 52,768 | 1.7% |
A | Florida Power & Light | 5.95% due 10/1/2033 | 100,000 | 98,868 | 3.1% |
150,000 | 151,636 | 4.8% | |||
Electronics | |||||
A- | Koninlijke Phillips Electronics | 7.25% due 8/15/2013 | 50,000 | 52,961 | 1.7% |
BBB+ | Sempra Energy Corp. | 7.95% due 3/1/2010 | 50,000 | 52,630 | 1.6% |
100,000 | 105,591 | 3.3% | |||
Food | |||||
BBB | Conagra | 7.875% due 9/15/2010 | 33,000 | 35,040 | 1.1% |
A+ | Hershey Foods Co. | 6.95% due 8/15/2012 | 50,000 | 52,445 | 1.7% |
BBB | HJ Heinz | 6.00% due 3/15/2012 | 75,000 | 75,868 | 2.4% |
158,000 | 163,353 | 5.2% | |||
Insurance | |||||
A+ | Allstate | 7.50% due 6/15/2013 | 50,000 | 54,370 | 1.7% |
A+ | Progressive Corp. | 7.00% due 10/1/2013 | 75,000 | 79,472 | 2.5% |
A- | XL Capital (Europe) | 6.50% due 1/15/2012 | 90,000 | 92,538 | 3.0% |
215,000 | 226,380 | 7.2% | |||
Investment Finance | |||||
A+ | Bear Stearns Co. | 3.50% due 6/27/2008 | 154,000 | 143,535 | 4.6% |
A+ | Morgan Stanley Dean Witter | 6.75% due 10/15/2013 | 50,000 | 52,297 | 1.7% |
AAA | Paine Webber Group | 7.625% due 2/15/2014 | 50,000 | 54,753 | 1.7% |
254,000 | 250,585 | 8.0% | |||
Machinery | |||||
A | Caterpillar Inc. | 9.375% due 8/15/2011 | 40,000 | 45,075 | 1.4% |
A | Deere & Co. | 8.10% due 5/15/2030 | 95,000 | 117,951 | 3.8% |
135,000 | 163,026 | 5.2% | |||
Continued on next page. |
8 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Bond Income Fund
Rating¹ | Issuer | Coupon/Maturity | Face Amount | Market Value | Percentage of Assets |
Medical Supplies | |||||
A | Becton Dickinson | 7.15% due 10/1/2009 | $40,000 | $41,141 | 1.3% |
Oil & Gas | |||||
A | Baker Hughes Inc. | 6.00% due 2/15/2009 | 20,000 | 20,087 | 0.6% |
AA | Texaco Capital | 8.625% due 6/30/2010 | 40,000 | 43,396 | 1.4% |
60,000 | 63,483 | 2.0% | |||
Office Supplies | |||||
A- | Avery Dennison Corp. | 6.00% due 1/15/2033 | 95,000 | 90,824 | 2.9% |
Real Estate | |||||
BBB+ | Archstone Smith Opr Trust | 5.625% due 8/15/2014 | 50,000 | 49,768 | 1.6% |
Retailing | |||||
A+ | Dayton Hudson (Target Stores) | 10.00% due 1/1/2011 | 50,000 | 56,586 | 1.8% |
A+ | Lowe's Corp. | 8.25% due 6/1/2010 | 50,000 | 53,528 | 1.7% |
BBB | May Department Stores Corp. | 8.00% due 7/15/2012 | 50,000 | 54,130 | 1.7% |
AA | Wal-Mart Stores | 7.25% due 6/1/2013 | 45,000 | 48,495 | 1.5% |
195,000 | 212,739 | 6.7% | |||
Transportation | |||||
BBB+ | Southwest Airlines | 6.50% due 3/1/2012 | 75,000 | 76,990 | 2.4% |
BBB- | U.S. Freightways Corp. | 8.50% due 4/25/2010 | 50,000 | 52,461 | 1.7% |
125,000 | 129,451 | 4.1% | |||
U.S. Government | |||||
AAA | U.S. Treasury Note | 5.25% due 2/15/2029 | 145,000 | 148,081 | 4.7% |
U.S. Government Agency | |||||
AAA | Federal Farm Credit Bank | 5.09% due 2/17/2015 | 120,000 | 116,552 | 3.7% |
AAA | Federal Farm Credit Bank | 6.25% due 8/18/2021 | 150,000 | 150,034 | 4.7% |
AAA | Federal Home Loan Bank | 5.55% due 4/13/2015 | 100,000 | 98,613 | 3.1% |
AAA | Federal Home Loan Mortgage Corp. | 5.00% due 8/1/2009 | 100,000 | 97,820 | 3.1% |
AAA | Federal National Mortgage Assoc. | 5.00% due 4/10/2015 | 100,000 | 96,709 | 3.1% |
570,000 | 559,728 | 17.7% | |||
Total Investments | (Cost = $2,902,408) | $2,807,000 | $2,904,570 | 92.1% | |
Other Assets (net of liabilities) | 248,982 | 7.9% | |||
Total Net Assets | $3,153,552 | 100.0% | |||
¹Ratings are the lesser of S&P or Moody's |
Ratings Established | By Adviser | By Standard & Poor's | By Moody's Investor Services |
AAA | 26.3% | 21.6% | 21.6% |
AA | 6.2% | 6.2% | 11.0% |
A | 40.5% | 42.9% | 35.7% |
BBB | 19.1% | 16.7% | 19.1% |
Unrated | 0.0% | 4.7% | 4.7% |
Other Assets | 7.9% | 7.9% | 7.9% |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 9 |
Sextant Bond Income Fund
Financial Highlights | Period ended | Year ended November 30, | ||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2007 | 2006 | 2005 | 2004 | 2003 | 2002 |
Net asset value at beginning of period | $4.92 | $4.92 | $5.06 | $5.07 | $4.97 | $4.81 |
Income from investment operations | ||||||
Net investment income | 0.11 | 0.22 | 0.21 | 0.22 | 0.22 | 0.26 |
Net gains or losses on securities (both realized and unrealized) | (0.13) | 0.00 | (0.14) | (0.01) | 0.10 | 0.16 |
Total from investment operations | (0.02) | 0.22 | 0.07 | 0.21 | 0.32 | 0.42 |
Less distributions | ||||||
Dividends (from net investment income) | (0.11) | (0.22) | (0.21) | (0.22) | (0.22) | (0.26) |
Total distributions | (0.11) | (0.22) | (0.21) | (0.22) | (0.22) | (0.26) |
Paid-in capital from early redemption fees¹ | *0.00 | *0.00 | *0.00 | - | - | - |
Net asset value at end of period | $4.79 | $4.92 | $4.92 | $5.06 | $5.07 | $4.97 |
Total Return | (0.39)% | 4.73% | 1.40% | 4.26% | 6.52% | 9.02% |
Ratios / Supplemental data | ||||||
Net assets ($000), end of period | $3,154 | $3,384 | $3,050 | $2,643 | $2,272 | $2,105 |
Ratio of expenses to average net assets | ||||||
Before fee waivers and custody credits | 0.66% | 1.27% | 0.97% | 0.89% | 1.15% | 1.06% |
After fee waivers and custody credits | 0.45% | 0.90% | 0.94% | 0.87% | 0.97% | 0.72% |
Ratio of net investment income after waiver and custody credits to average net assets | 2.29% | 4.64% | 4.26% | 4.47% | 4.29% | 5.40% |
Portfolio turnover rate | 0% | 36% | 4% | 0% | 0% | 29% |
¹Early redemption fee adopted March 29, 2005 | *Amount is less than $0.01 |
Statement of Change in Net Assets | Period ended May 31, 2007 | Year ended Nov. 30,2006 |
Increase (Decrease) In Net Assets | ||
From Operations | ||
Net investment income | $74,704 | $142,386 |
Net realized gain (loss) on investments | 3,516 | (14,375) |
Net increase (decrease) in unrealized appreciation | (93,854) | 21,936 |
Net increase(decrease) in net assets | (15,634) | 149,947 |
Dividends to shareowners from | ||
Net investment income | (74,750) | (142,386) |
From fund share transactions | ||
Proceeds from sales of shares | 158,202 | 541,154 |
Value of shares issued in reinvestment of dividends | 66,189 | 141,047 |
Early redemption fees retained | 6 | 40 |
Cost of shares redeemed | (364,887) | (355,481) |
Net increase (decrease) in net assets | (140,490) | 326,760 |
Total increase (decrease) in net assets | (230,874) | 334,321 |
Net Assets | ||
Beginning of period | 3,384,426 | 3,050,105 |
End of period | $3,153,552 | $3,384,426 |
Shares of the fund sold and redeemed | ||
Number of shares sold | 32,699 | 111,347 |
Number of shares issued in reinvestment of dividends | 13,688 | 29,113 |
Number of shares redeemed | (75,295) | (73,143) |
Net increase (decrease) in number of shares outstanding | (28,908) | 67,317 |
10 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Bond Income Fund
Statement of Operations
For the semi-annual period ended May 31, 2007 | |
Investment Income | |
Interest income | $89,433 |
Gross investment income | 89,433 |
Expenses | |
Investment adviser and administration fee | 7,677 |
Filing and registration fees | 4,503 |
Distribution fees | 4,070 |
Audit fees | 1,637 |
Chief compliance officer expenses | 892 |
Insurance | 791 |
Legal fees | 690 |
Custodian fees | 552 |
Printing and postage | 429 |
Trustee fees | 339 |
Other expenses | 68 |
Total gross expenses | 21,648 |
Less adviser fees waived | (6,367) |
Less custodian fees waived | (552) |
Net expenses | 14,729 |
Net investment income | 74,704 |
Net realized gain on investments | |
Proceeds from sales | 277,276 |
Less cost of securities sold (based on identified cost) | 273,760 |
Realized net gain | 3,516 |
Unrealized gain on investments | |
End of period | 2,162 |
Beginning of period | 96,016 |
Decrease in unrealized gain for the period | (93,854) |
Net realized and unrealized loss | (90,338) |
Net decrease in net assets resulting from operations | $(15,634) |
Statement of Assets and Liabilities
As of May 31, 2007 | |
Assets | |
Bond investments (Cost $2,902,408) | $2,904,570 |
Cash | 198,978 |
Interest receivable | 49,117 |
Insurance reserve premium | 400 |
Receivable for fund shares sold | 200 |
Total Assets | 3,153,265 |
Liabilities | |
Accrued expenses | (2,691) |
Distributions Payable | 1,733 |
Accrued 12b-1 fees | 671 |
Total Liabilities | (287) |
Net Assets | 3,153,552 |
Analysis of Net Assets | |
Paid in Capital (unlimited shares authorized, without par value) | 3,184,373 |
Accumlated net realized loss | (32,983) |
Unrealized net appreciation on investments | 2,162 |
Net Assets applicable to Fund shares outstanding | $3,153,552 |
Fund Shares Outstanding | 658,676 |
Net Asset Value, Offering and Redemption price per share | $4.79 |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 11 |
Sextant Core Fund
Schedule of Investments
Equities - 59.1% Issue | Number of Shares | Tax Cost | Market Value | Country¹ | Percentage of Assets | |||
Aerospace | ||||||||
Rockwell Collins | 400 | $26,697 | $28,268 | 0.9% | ||||
United Technologies | 325 | 21,135 | 22,929 | 0.8% | ||||
47,832 | 51,197 | 1.7% | ||||||
Automotive | ||||||||
Toyota Motor ADS | 200 | 25,376 | 24,152 | Japan | 0.8% | |||
Banking | ||||||||
Australia & New Zealand Banking ADS | 150 | 18,075 | 17,982 | Australia | 0.6% | |||
Frontier Financial | 1,200 | 29,944 | 27,912 | 1.0% | ||||
Nomura Holdings ADR | 700 | 14,469 | 14,385 | Japan | 0.5% | |||
Toronto-Dominion Bank | 350 | 21,035 | 24,178 | Canada | 0.8% | |||
83,523 | 84,457 | 2.9% | ||||||
Building | ||||||||
CRH plc ADS | 600 | 26,439 | 29,646 | Ireland | 1.0% | |||
Lowe's Companies | 900 | 28,519 | 29,538 | 1.0% | ||||
RPM | 1,000 | 23,110 | 22,720 | 0.8% | ||||
Washington Group International³ | 400 | 26,568 | 33,600 | 1.1% | ||||
104,636 | 115,504 | 3.9% | ||||||
Chemicals | ||||||||
BASF AG ADS | 200 | 22,550 | 24,740 | Germany | 0.9% | |||
Praxair | 700 | 44,349 | 47,663 | 1.6% | ||||
66,899 | 72,403 | 2.5% | ||||||
Computers | ||||||||
Adobe Systems³ | 800 | 34,264 | 35,248 | 1.2% | ||||
Apple Inc.³ | 400 | 37,660 | 48,476 | 1.6% | ||||
Hewlett-Packard | 1,000 | 41,025 | 45,710 | 1.6% | ||||
112,949 | 129,434 | 4.4% | ||||||
Consumer Products | ||||||||
General Mills | 450 | 26,100 | 27,558 | 0.9% | ||||
Nike, Cl B | 500 | 26,700 | 28,375 | 1.0% | ||||
PepsiCo | 700 | 45,405 | 47,831 | 1.6% | ||||
Proctor & Gamble | 650 | 41,180 | 41,308 | 1.4% | ||||
Unileverplc ADS | 500 | 15,150 | 15,395 | United Kingdom | 0.5% | |||
154,535 | 160,467 | 5.4% | ||||||
Diversified Operations | ||||||||
3M | 375 | 28,665 | 32,985 | 1.1% | ||||
Honeywell International | 600 | 27,678 | 34,746 | 1.2% | ||||
Tomkins plc ADS | 750 | 15,945 | 15,952 | United Kingdom | 0.5% | |||
72,288 | 83,683 | 2.8% | ||||||
Continued on next page. |
12 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Core Fund
Equities - 59.1% Issue | Number of Shares | Tax Cost | Market Value | Country¹ | Percentage of Assets | |||
Electronics | ||||||||
Taiwan Semiconductor ADS | 1,500 | $16,215 | $16,365 | Taiwan | 0.6% | |||
Instruments - Control | ||||||||
Parker-Hannifin | 300 | 25,890 | 30,408 | 1.0% | ||||
Insurance | ||||||||
Chubb | 750 | 39,270 | 41,152 | 1.4% | ||||
ING Groep NV ADS | 400 | 16,992 | 17,776 | Netherlands | 0.6% | |||
56,262 | 58,928 | 2.0% | ||||||
Medical | ||||||||
GlaxoSmithKline plc ADR | 300 | 16,569 | 15,654 | United Kingdom | 0.5% | |||
Johnson & Johnson | 500 | 30,130 | 31,635 | 1.1% | ||||
Lilly (Eli) | 650 | 36,199 | 38,103 | 1.3% | ||||
Novartis AG ADR | 300 | 16,506 | 16,854 | Switzerland | 0.6% | |||
Novo-Nordisk A/S ADS | 200 | 18,098 | 21,046 | Denmark | 0.7% | |||
Pfizer | 1,400 | 36,105 | 38,486 | 1.3% | ||||
153,607 | 161,778 | 5.5% | ||||||
Metals & Mining | ||||||||
Alcoa | 950 | 32,376 | 39,216 | 1.3% | ||||
Anglo-American plc ADR | 900 | 24,222 | 27,288 | South Africa | 0.9% | |||
BHP Billiton Ltd ADS | 650 | 31,866 | 34,216 | Australia | 1.2% | |||
Freeport-McMoran Copper Gold, Cl B | 200 | 13,324 | 15,740 | 0.5% | ||||
Nucor | 500 | 32,375 | 33,770 | 1.2% | ||||
134,163 | 150,230 | 5.1% | ||||||
Office Equipment | ||||||||
Canon ADS | 600 | 32,481 | 35,316 | Japan | 1.2% | |||
Oil & Gas Production | ||||||||
ConocoPhillips | 500 | 34,615 | 38,715 | 1.3% | ||||
Noble | 400 | 31,580 | 36,956 | 1.3% | ||||
Norsk Hydro ADS | 700 | 23,030 | 24,962 | Norway | 0.8% | |||
Petro-Canada | 400 | 15,708 | 20,248 | Canada | 0.7% | |||
104,933 | 120,881 | 4.1% | ||||||
Paper Products | ||||||||
Kimberly-Clark | 425 | 29,117 | 30,158 | 1.0% | ||||
Publishing-Books | ||||||||
McGraw-Hill | 600 | 37,937 | 42,186 | 1.4% | ||||
Pearson plc ADS | 1,100 | 19,151 | 19,558 | United Kingdom | 0.7% | |||
57,088 | 61,744 | 2.1% | ||||||
Real Estate | ||||||||
Duke Realty | 400 | 17,416 | 16,048 | 0.5% | ||||
Continued on next page. |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 13 |
Sextant Core Fund
Equities - 59.1% Issue | Number of Shares | Tax Cost | Market Value | Country¹ | Percentage of Assets | |||
Telecommunications | ||||||||
AT&T | 700 | $27,804 | $28,938 | 1.0% | ||||
China Mobil Ltd ADR | 500 | 23,058 | 23,210 | China | 0.8% | |||
Harris | 550 | 28,139 | 27,456 | 0.9% | ||||
Telefonica SA ADS | 250 | 16,790 | 17,110 | Spain | 0.6% | |||
Telefonos de Mexico, Cl L ADS | 900 | 31,878 | 36,396 | Mexico | 1.2% | |||
127,669 | 133,110 | 4.5% | ||||||
Tools | ||||||||
Black & Decker | 350 | 29,654 | 33,051 | 1.1% | ||||
Transportation | ||||||||
Canadian National Railways | 550 | 26,345 | 30,024 | Canada | 1.0% | |||
Fedex | 400 | 42,220 | 44,648 | 1.5% | ||||
LAN Airlines SA ADS | 200 | 13,752 | 16,084 | Chile | 0.6% | |||
82,317 | 90,756 | 3.1% | ||||||
Utilities-Electric | ||||||||
EnelASpA ADS | 300 | 16,302 | 17,082 | Italy | 0.6% | |||
FPL Group | 600 | 36,752 | 38,358 | 1.3% | ||||
IDACORP | 900 | 30,463 | 29,889 | 1.0% | ||||
83,517 | 85,329 | 2.9% | ||||||
Total Equities | 1,618,367 | 1,745,399 | 59.1% | |||||
Bonds - 40.1% | Maturity | Face Value | Tax Cost | Market Value | Percentage of Assets | |||
Rating² | Issuer | |||||||
Beverages | ||||||||
BBB+ | Panamerican Beverages | 7.25% due 7/1/2009 | $94,000 | $97,595 | $96,308 | 3.3% | ||
Building | ||||||||
BBB | Centex | 7.875% due 2/1/2011 | 100,000 | 106,433 | 105,583 | 3.6% | ||
Insurance | ||||||||
BBB | Berkley | 5.875% due 2/15/2013 | 100,000 | 101,591 | 99,639 | 3.4% | ||
Office Equipment | ||||||||
BBB+ | Staples | 7.375% due 10/1/2012 | 90,000 | 98,283 | 96,712 | 3.3% | ||
Real Estate | ||||||||
BBB+ | Archstone Smith | 5.25% due 12/10/2010 | 97,000 | 97,153 | 95,780 | 3.2% | ||
Telecommunications | ||||||||
BBB+ | Motorola | 6.50% due 11/15/2028 | 100,000 | 101,060 | 95,636 | 3.2% | ||
Transportation | ||||||||
BBB | CSX | 6.75% due 3/15/2011 | 95,000 | 98,952 | 98,364 | 3.3% | ||
Continued on next page. |
14 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Core Fund
Bonds - 40.1% | Maturity | Face Value | Tax Cost | Market Value | Percentage of Assets | |||
Rating² | Issuer | |||||||
U.S. Government | ||||||||
AAA | U.S. T Bond | 5.25% due 11/15/2028 | $187,000 | $195,357 | $190,915 | 6.5% | ||
AAA | U.S. T Note | 4.50% due 11/30/2011 | 98,000 | 97,786 | 96,576 | 3.3% | ||
AAA | U.S. T Note | 4.875% due 5/31/2008 | 98,000 | 98,032 | 97,832 | 3.3% | ||
AAA | U.S. T Note | 4.875% due 5/15/2009 | 110,000 | 110,368 | 109,863 | 3.7% | ||
501,543 | 495,186 | 16.8% | ||||||
Total Bonds | 1,202,610 | 1,183,208 | 40.1% | |||||
Total Investments | $2,820,977 | $2,928,607 | 99.2% | |||||
Other Assets (net of liabilities) | 24,511 | 0.8% | ||||||
Total Net Assets | $2,953,118 | 100.0% | ||||||
¹Equities are issued from U.S. Domestic companies where no country is listed. | ||||||||
²Ratings are the lesser of S&P or Moody's. | ||||||||
³Non-income producing | ||||||||
ADS: American Depositary Share | ||||||||
ADR: American Depositary Receipt |
Top Ten Equity Holdings | % of Net Assets | Industry Allocation | |
Apple Inc. | 1.6% | ![]() Industry weightings are shown as a percentage of Net Assets. | |
PepsiCo | 1.6% | ||
Praxair | 1.6% | ||
Hewlett-Packard | 1.6% | ||
Fedex | 1.5% | ||
McGraw-Hill | 1.4% | ||
Proctor & Gamble | 1.4% | ||
Chubb | 1.4% | ||
Alcoa | 1.3% | ||
ConocoPhillips | 1.3% | ||
Ratings Established | By Adviser | By Standard & Poor's | By Moody's Investor Services |
AAA | 16.8% | 16.8% | 16.8% |
AA | 0.0% | 0.0% | 0.0% |
A | 0.0% | 3.2% | 3.3% |
BBB | 23.3% | 20.1% | 20.0% |
Unrated | 0.0% | 0.0% | 0.0% |
Equities | 59.1% | 59.1% | 59.1% |
Other Assets | 0.8% | 0.8% | 0.8% |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 15 |
Sextant Core Fund
Financial Highlights | Period ended |
Selected data per share of capital stock outstanding throughout the period: | May 31, 2007 |
Net asset value at beginning of period | $10.00 |
Income from investment operations | |
Net investment income | 0.03 |
Net gains or losses on securities (both realized and unrealized) | 0.40 |
Total from investment operations | 0.43 |
Paid-in-capital from early redemption fees | *0.00 |
Net asset value at end of period | $10.43 |
Total Return | **4.3% |
Ratios / Supplemental data | |
Net assets ($000), end of period | $2,953 |
Ratio of expenses to average net assets | |
Before fee waivers and custody credits | 0.32% |
After fee waivers and custody credits | 0.21% |
Ratio of net investment income after fee waiver and custody credits to average net assets | 0.37% |
Portfolio turnover rate | 0% |
**Total Return is since inception date 3/31/07 and is not annualized. | *Amount is less than $0.01 |
Statement of Changes in Net Assets | Period ended May 31,2007 |
Increase in Net Assets | |
From Operations | |
Net investment income | $9,483 |
Net realized gain on investments | - |
Net increase in unrealized appreciation | 107,630 |
Net increase in net assets | 117,113 |
From fund share transactions | |
Proceeds from sales of shares | 2,838,478 |
Value of shares issued in reinvestment of dividends | - |
Early redemption fees retained | 0* |
Cost of shares redeemed | (2,473) |
Net increase in net assets | 2,836,005 |
Total increase in net assets | 2,953,118 |
Net Assets | |
Beginning of period | - |
End of period | $2,953,118 |
Shares of the fund sold and redeemed | |
Number of shares sold | 283,270 |
Number of shares issued in reinvestment of dividends | - |
Number of shares redeemed | (240) |
Net increase in number of shares outstanding | 283,030 |
*Amount is less than $1.00 |
16 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Core Fund
Statement of Operations
For the semi-annual period ended May 31, 2007 | |
Investment Income | |
Dividend income (net of foreign tax of $470) | $7,367 |
Interest income | 7,636 |
Gross investment income | 15,003 |
Expenses | |
Custodian fees | 2,708 |
Investment adviser and administration fee | 2,693 |
Distribution fees | 1,122 |
Audit fees | 490 |
Chief compliance officer expenses | 276 |
Filing and registration fees | 244 |
Insurance | 244 |
Printing and postage | 196 |
Trustee fees | 118 |
Legal fees | 86 |
Other expenses | 51 |
Total gross expenses | 8,228 |
Less: custodian fees waived | (2,708) |
Net expenses | 5,520 |
Net investment income | 9,483 |
Net realized gain on investments | |
Proceeds from sales | - |
Less cost of securities sold (based on identified cost) | - |
Realized net gain | 0 |
Unrealized gain on investments | |
End of period | 107,630 |
Beginning of period | - |
Increase in unrealized gain for the period | 107,630 |
Net realized and unrealized gain | 107,630 |
Net increase in net assets resulting from operations | $117,113 |
Statement of Assets and Liabilities
As of May 31, 2007 | |
Assets | |
Investments in securities at value (Cost $2,820,977) | $2,928,607 |
Cash | 20,908 |
Dividends and interest receivable | 16,679 |
Total Assets | 2,966,194 |
Liabilities | |
Payable for securities purchased | 10,826 |
Due to affiliates | 1,523 |
Accrued 12b-1 Fees | 619 |
Accrued expenses | 108 |
Total Liabilities | 13,076 |
Net Assets | 2,953,118 |
Analysis of Net Assets | |
Paid in Capital (unlimited shares authorized, without par value) | 2,845,488 |
Unrealized net appreciation on investments | 107,630 |
Net Assets applicable to Fund shares outstanding | $2,953,118 |
Fund Shares Outstanding | 283,030 |
Net Asset Value, Offering and Redemption price per share | $10.43 |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 17 |
Sextant Growth Fund
Schedule of Investments
Equities - 86.6% Issue | Quantity | Tax Cost | Market Value | Percentage of Assets |
Auto/Truck | ||||
Oshkosh Truck | 3,000 | $160,448 | $185,070 | 1.2% |
Banking | ||||
Frontier Financial | 15,000 | 220,751 | 348,900 | 2.2% |
Washington Banking Company | 6,250 | 83,121 | 96,812 | 0.6% |
Washington Mutual | 6,750 | 44,124 | 295,110 | 1.9% |
347,996 | 740,822 | 4.7% | ||
Computers | ||||
3Com* | 30,000 | 167,836 | 140,400 | 0.9% |
Adobe Systems* | 7,600 | 39,971 | 334,857 | 2.1% |
Apple Computer* | 8,000 | 67,473 | 969,528 | 6.2% |
Hewlett-Packard | 7,000 | 157,040 | 319,970 | 2.0% |
Intuit* | 9,000 | 197,624 | 274,500 | 1.8% |
Oracle* | 15,000 | 115,139 | 290,700 | 1.9% |
745,083 | 2,329,955 | 14.9% | ||
Construction | ||||
KB Home | 5,000 | 302,781 | 229,450 | 1.5% |
Lowe's Companies | 6,500 | 109,802 | 213,330 | 1.3% |
Weyerhaeuser | 4,200 | 246,845 | 344,232 | 2.2% |
659,428 | 787,012 | 5.0% | ||
Diversified Operations | ||||
Honeywell International | 3,500 | 131,966 | 202,685 | 1.3% |
Electronics | ||||
Advanced Micro Devices* | 10,000 | 41,708 | 142,700 | 0.9% |
Agilent Technologies* | 8,000 | 218,552 | 305,360 | 2.0% |
Harman International Industries | 1,900 | 157,285 | 225,435 | 1.4% |
417,545 | 673,495 | 4.3% | ||
Food | ||||
Performance Food Group* | 3,000 | 96,917 | 106,500 | 0.7% |
PepsiCo | 4,500 | 248,326 | 307,485 | 2.0% |
345,243 | 413,985 | 2.7% | ||
Hotels & Motels | ||||
Red Lion Hotels* | 21,000 | 150,354 | 270,060 | 1.7% |
Investments | ||||
Chubb | 5,000 | 224,705 | 274,350 | 1.7% |
Schwab (Charles) | 25,000 | 79,726 | 561,750 | 3.6% |
304,431 | 836,100 | 5.3% | Continued on next page. |
18 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Growth Fund
Equities - 86.6% Issue | Quantity | Tax Cost | Market Value | Percentage of Assets |
Machinery | ||||
Regal-Beloit | 4,000 | $104,006 | $194,440 | 1.2% |
Lincoln Electric Holdings | 4,000 | 180,617 | 281,160 | 1.8% |
284,623 | 475,600 | 3.0% | ||
Medical | ||||
Abott Laboratories | 4,000 | 171,114 | 225,400 | 1.5% |
Amgen* | 3,700 | 111,703 | 208,865 | 1.3% |
Barr Pharmaceuticals* | 4,500 | 159,489 | 239,940 | 1.5% |
Ligand Pharmaceuticals* | 10,000 | 112,072 | 66,100 | 0.4% |
Lilly (Eli) | 3,500 | 249,361 | 205,170 | 1.3% |
Pharmaceutical Product Development | 15,000 | 67,174 | 547,500 | 3.5% |
VCA Antech* | 8,000 | 209,048 | 316,640 | 2.0% |
1,079,961 | 1,809,615 | 11.5% | ||
Metal Ores | ||||
Alcoa | 6,000 | 189,042 | 247,680 | 1.6% |
Freeport-McMoran Copper Gold, Cl B | 1,782 | 109,766 | 140,243 | 0.9% |
298,808 | 387,923 | 2.5% | ||
Oil & Gas Production | ||||
Devon Energy | 3,000 | 185,020 | 230,340 | 1.5% |
Noble Drilling | 4,000 | 125,240 | 369,560 | 2.3% |
310,260 | 599,900 | 3.8% | ||
Publishing | ||||
Wiley (John) & Sons, Class A | 5,000 | 134,777 | 229,250 | 1.5% |
Retail | ||||
Amazon.com* | 5,000 | 201,410 | 345,700 | 2.2% |
Bed Bath & Beyond* | 5,000 | 176,186 | 203,300 | 1.3% |
Best Buy | 4,000 | 223,149 | 193,160 | 1.2% |
Build-A-Bear-Workshop* | 7,000 | 177,548 | 209,300 | 1.3% |
Restoration Hardware* | 15,203 | 94,239 | 95,779 | 0.6% |
Staples | 6,000 | 144,720 | 150,360 | 1.0% |
1,017,252 | 1,197,599 | 7.6% | ||
Steel | ||||
Nucor | 4,000 | 189,851 | 270,160 | 1.7% |
Telecommunications | ||||
Trimble Navigation* | 14,000 | 202,081 | 408,660 | 2.6% |
Transportation | ||||
Norfolk Southern | 4,500 | 185,235 | 260,460 | 1.7% |
UAL Corp* | 5,500 | 183,800 | 215,930 | 1.4% |
United Parcel Service, Cl B | 2,500 | 189,469 | 179,925 | 1.1% |
558,504 | 656,315 | 4.2% | ||
Continued on next page. |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 19 |
Sextant Growth Fund
Equities - 86.6% Issue | Quantity | Tax Cost | Market Value | Percentage of Assets |
Utility | ||||
Duke Energy | 10,000 | $172,211 | $195,400 | 1.2% |
FPL Group | 7,000 | 244,409 | 447,510 | 2.9% |
IDACorp | 6,000 | 159,539 | 199,260 | 1.3% |
Spectra Energy | 3,000 | 84,750 | 79,890 | 0.5% |
Sempra Energy | 3,000 | 116,395 | 183,960 | 1.2% |
777,304 | 1,106,020 | 7.1% | ||
Total Investments | $8,115,915 | $13,580,226 | 86.6% | |
Other Assets (net of liabilities) | 2,094,516 | 13.4% | ||
Total Net Assets | $15,674,742 | 100% | ||
*Non-income producing |
Top Ten Equity Holdings | % of Net Assets | Industry Allocation | |
Schwab (Charles) | 3.6% | ![]() Industry weightings are shown as a percentage of Net Assets. | |
Pharmaceutical Product Development | 3.5% | ||
FPL Group | 2.9% | ||
Trimble Navigation | 2.6% | ||
Noble Drilling | 2.3% | ||
Frontier Financial | 2.2% | ||
Amazon.com | 2.2% | ||
Weyerhauser | 2.2% | ||
Adobe Systems | 2.1% | ||
Hewlett-Packard | 2.0% | ||
20 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant Growth Fund
Financial Highlights | Period ended | For Year Ended November 30, | ||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2007 | 2006 | 2005 | 2004 | 2003 | 2002 |
Net asset value at beginning of period | $18.66 | $17.11 | $14.20 | $12.91 | $10.64 | $11.90 |
Income from investment operations | ||||||
Net investment income | 0.01 | (0.02) | (0.02) | 0.01 | (0.04) | (0.05) |
Net gains or losses on securities (both realized and unrealized) | 1.70 | 1.74 | 2.96 | 1.45 | 2.31 | (1.21) |
Total from investment operations | 1.71 | 1.72 | 2.94 | 1.46 | 2.27 | (1.26) |
Less distributions | ||||||
Dividends (from net investment income) | - | - | *(0.00) | (0.01) | - | - |
Distributions (from capital gains) | - | (0.17) | (0.03) | (0.16) | - | - |
Total distributions | 0.00 | (0.17) | (0.03) | (0.17) | 0.00 | 0.00 |
Paid-in capital from early redemption fees¹ | *0.00 | *0.00 | *0.00 | - | - | - |
Net asset value at end of period | $20.37 | $18.66 | $17.11 | $14.20 | $12.91 | $10.64 |
Total Return | 9.16% | 10.06% | 20.76% | 11.35% | 21.31% | (10.51)% |
Ratios / Supplemental Data | ||||||
Net assets ($000), end of period | $15,675 | $13,728 | $9,006 | $5,331 | $4,732 | $3,373 |
Ratio of expenses to average net assets | ||||||
Before fee waivers and custody credits | 0.64% | 1.25% | 1.28% | 0.80% | 1.20% | 1.17% |
After fee waivers and custody credits | 0.62% | 1.21% | 1.24% | 0.78% | 1.14% | 1.11% |
Ratio of net investment income after waiver and custody credits to average net assets | 0.07% | (0.12)% | (0.17)% | 0.12% | (0.40)% | (0.48)% |
Portfolio turnover rate | 1% | 11% | 4% | 8% | 12% | 15% |
¹Early redemption fee adopted March 29, 2005 | *Amount is less than $0.01 |
Statement of Changes in Net Assets | Period ended May 31,2007 | Year ended Nov. 30, 2006 |
Increase in Net Assets | ||
From Operations | ||
Net investment income (loss) | $9,443 | $(16,447) |
Net realized gain on investments | 463,593 | 125,411 |
Net increase in unrealized appreciation | 791,412 | 1,108,048 |
Net Increase in net assets | $1,264,448 | $1,217,012 |
Dividends to shareowners from | ||
Capital gains distributions | - | (125,371) |
From Fund share transactions | ||
Proceeds from sales of shares | 2,109,147 | 5,675,771 |
Value of shares issued in reinvestment of dividends | - | 123,360 |
Early redemption fees retained | 374 | 1,423 |
Cost of shares redeemed | (1,426,916) | (2,170,902) |
Net increase in net assets | 682,605 | 3,629,652 |
Total increase in net assets | 1,947,053 | 4,721,293 |
Net Assets | ||
Beginning of period | 13,727,689 | 9,006,396 |
End of period | $15,674,742 | $13,727,689 |
Shares of the Fund sold and redeemed | ||
Number of shares sold | 109,588 | 186,540 |
Number of shares issued in reinvestment of dividends | - | 844 |
Number of shares redeemed | (75,801) | (36,600) |
Net increase in number of shares outstanding | 33,787 | 150,784 |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 21 |
Sextant Growth Fund
For the semi-annual period ended May 31, 2007 | |
Investment income | |
Dividend income | $95,919 |
Other income | 38 |
Gross investment income | 95,957 |
Expenses | |
Investment adviser and administration fees | 40,564 |
Distribution fee | 17,379 |
Filing and registration fees | 9,895 |
Audit fees | 5,647 |
Insurance | 4,352 |
Chief compliance officer expenses | 3,848 |
Custodian fees | 2,516 |
Printing and postage | 2,331 |
Legal fees | 1,187 |
Trustee fees | 1,091 |
Other expenses | 220 |
Total gross expenses | 89,030 |
Less custodian fees waived | (2,516) |
Net expenses | 86,514 |
Net investment income | 9,443 |
Net realized gain on investments | |
Proceeds from sales | 1,096,091 |
Less: cost of securities sold (based on identified cost) | 632,498 |
Realized net gain | 463,593 |
Unrealized gain on investments | |
End of period | 5,464,311 |
Beginning of period | 4,672,899 |
Increase in unrealized gain for the period | 791,412 |
Net realized and unrealized gain | 1,255,005 |
Net increase in net assets resulting from operations | $1,264,448 |
As of May 31, 2007 | |
Assets | |
Investments (Cost $8,115,915) | $13,580,226 |
Cash | 2,090,238 |
Dividends receivable | 6,483 |
Insurance reserve premium | 1,214 |
Receivable for Fund shares sold | 238 |
Total Assets | 15,678,399 |
Liabilities | |
Due to affiliates | 6,998 |
Accrued expenses | (3,341) |
Total Liabilities | 3,657 |
Net Assets | 15,674,742 |
Analysis of Net Assets | |
Paid in Capital (unlimited shares authorized, without par value) | 9,746,798 |
Accumulated net realized gain | 463,633 |
Unrealized net appreciation on investments | 5,464,311 |
Net Assets applicable to Fund shares outstanding | $15,674,742 |
Fund shares outstanding | 769,385 |
Net Asset Value, Offering and Redemption price per share | $20.37 |
22 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant International Fund
Schedule of Investments
Equities - 87.8% Issue | Number of Shares | Tax Cost | Market Value | County | Percentage of Assets |
Aircraft | |||||
Embraer Aircraft ADR | 3,400 | $105,058 | $164,832 | Brazil | 1.4% |
Automotive | |||||
Nissan Motor ADR | 5,500 | 106,770 | 122,760 | Japan | 1.0% |
Banking | |||||
Australia & New Zealand Banking ADS | 1,000 | 84,500 | 119,880 | Australia | 1.0% |
AXA ADS | 4,200 | 98,136 | 183,498 | France | 1.6% |
Banco Bilbao Vizcaya ADS | 7,500 | 105,518 | 189,300 | Spain | 1.6% |
Mitsubishi Financial Group ADR | 10,000 | 131,800 | 115,300 | Japan | 1.0% |
Nomura Holdings ADR | 10,000 | 187,836 | 205,500 | Japan | 1.8% |
Toronto-Dominion Bank | 2,400 | 70,709 | 165,792 | Canada | 1.4% |
678,499 | 979,270 | 8.4% | |||
Building | |||||
CRH plc ADS | 4,000 | 81,159 | 197,640 | Ireland | 1.7% |
Hanson plc ADR | 2,100 | 88,247 | 223,251 | United Kingdom | 1.9% |
James Hardie Industries NV ADS | 3,000 | 83,041 | 115,440 | Netherlands | 1.0% |
Ritchie Bros. | 3,000 | 171,741 | 176,970 | Canada | 1.5% |
424,188 | 713,301 | 6.1% | |||
Business Services | |||||
51job ADR* | 8,000 | 117,920 | 147,680 | Cayman Islands | 1.3% |
Chemicals | |||||
BASF AG ADS | 1,700 | 120,102 | 210,290 | Germany | 1.8% |
Computers | |||||
Business Objects ADS* | 7,000 | 60,510 | 287,770 | France | 2.4% |
Dassault Systems ADR | 3,000 | 146,427 | 182,340 | France | 1.6% |
Satyam | 6,000 | 108,750 | 152,040 | India | 1.3% |
315,687 | 622,150 | 5.3% | |||
Consumer Products | |||||
Coca-Cola Femsa ADS | 4,300 | 82,844 | 172,860 | Mexico | 1.5% |
Cadbury Schweppes ADR | 4,000 | 181,580 | 225,440 | United Kingdom | 1.9% |
264,424 | 398,300 | 3.4% | |||
Electronics | |||||
Sony | 3,000 | 116,940 | 173,100 | Japan | 1.5% |
Epcos AG ADS | 2,500 | 57,307 | 54,850 | Germany | 0.5% |
Infineon Technologies AG* | 5,000 | 45,900 | 77,850 | Germany | 0.6% |
220,147 | 305,800 | 2.6% | |||
Hotels & Motels | |||||
Orient-Express Hotels CI A | 3,500 | 110,528 | 187,495 | Bermuda | 1.6% |
Continued on next page. |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 23 |
Sextant International Fund
Equities - 87.8% Issue | Number of Shares | Tax Cost | Market Value | County | Percentage of Assets |
Insurance | |||||
Aegon NiV ADS | 5,096 | $93,853 | $104,213 | Netherlands | 0.9% |
ING Groep ADS | 4,000 | 118,530 | 177,760 | Netherlands | 1.5% |
212,383 | 281,973 | 2.4% | |||
Machinery-Electrical | |||||
Nidec | 5,000 | 89,122 | 76,100 | Japan | 0.6% |
Medical-Drugs | |||||
American Oriental Bioengineering* | 15,000 | 72,300 | 160,500 | China | 1.4% |
GlaxoSmithKline plc ADA | 3,000 | 145,938 | 156,540 | United Kingdom | 1.3% |
Novartis AG ADR | 1,600 | 77,283 | 89,888 | Switzerland | 0.8% |
Shire | 2,000 | 92,860 | 139,500 | United Kingdom | 1.2% |
388,381 | 546,428 | 4.7% | |||
Metals & Mining | |||||
Anglo-American plc ADR | 7,500 | 138,371 | 227,399 | United Kingdom | 1.9% |
Potash Corp of Saskatchewan | 3,000 | 34,234 | 212,850 | Canada | 1.8% |
Rio Tinto plc ADS | 750 | 74,825 | 219,713 | United Kingdom | 1.9% |
Tenaris SA ADR | 2,500 | 95,290 | 124,125 | Luxembourg | 1.1% |
342,720 | 784,087 | 6.7% | |||
Oil & Gas Production | |||||
EnCana | 3,000 | 84,990 | 184,200 | Canada | 1.6% |
Norsk Hydro ADS | 6,000 | 122,808 | 213,960 | Norway | 1.8% |
Petro-Canada | 2,000 | 95,990 | 101,240 | Canada | 0.8% |
Repsol-YPF ADR | 3,500 | 87,962 | 128,415 | Spain | 1.1% |
Total Fina Elf ADR | 2,600 | 121,935 | 196,170 | France | 1.7% |
513,685 | 823,985 | 7.0% | |||
Paper Products | |||||
Metso ADS | 2,100 | 22,802 | 116,886 | Finland | 1.0% |
UPM-Kymmene Oyj | 3,500 | 64,384 | 90,650 | Finland | 0.8% |
Votorantim Celulose ADS | 8,000 | 102,000 | 173,040 | Brazil | 1.5% |
189,186 | 380,576 | 3.3% | |||
Photographic Equipment | |||||
Canon, Inc ADR | 3,300 | 95,606 | 194,238 | Japan | 1.7% |
Publishing-Books | |||||
Pearson plc ADS | 7,000 | 84,430 | 124,460 | United Kingdom | 1.1% |
Telecommunications | |||||
American Movil | 6,000 | 29,725 | 363,300 | Mexico | 3.1% |
Audiocodes* | 8,000 | 103,899 | 42,560 | Israel | 0.4% |
BCE | 5,490 | 135,460 | 202,581 | Canada | 1.7% |
China Mobil Ltd | 5,500 | 119,327 | 255,310 | China | 2.2% |
PT Indosat ADR | 2,500 | 64,962 | 97,000 | Indonesia | 0.8% |
SK Telecom ADS | 5,000 | 100,161 | 134,300 | South Korea | 1.2% |
Telcom Corp New Zealand ADS | 2,500 | 76,174 | 71,550 | New Zealand | 0.6% |
Telefonica ADS | 3,200 | 152,981 | 219,008 | Spain | 1.9% |
Continued on next page. |
24 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant International Fund
Equities - 87.8% Issue | Number of Shares | Tax Cost | Market Value | County | Percentage of Assets |
Telecommunications (cont.) | |||||
Telefonos de Mexico ADS | 5,000 | $107,470 | $202,200 | Mexico | 1.7% |
Telus | 2,000 | 63,219 | 120,340 | Canada | 1.0% |
953,378 | 1,708,149 | 14.6% | |||
Transportation | |||||
Candian Pacific LTD | 3,200 | 109,246 | 228,704 | Canada | 2.0% |
Lan Airlines ADS | 3,500 | 24,636 | 281,470 | Chile | 2.4% |
Air France-KLM ADR | 4,000 | 196,528 | 203,920 | France | 1.7% |
Copa Holdings SA | 5,000 | 221,586 | 316,450 | Panama | 2.7% |
551,996 | 1,030,544 | 8.8% | |||
Utilities-Electric | |||||
Enel ADR | 1,300 | 58,877 | 74,022 | Italy | 0.6% |
Enersis ADR | 9,000 | 97,125 | 165,420 | Chile | 1.4% |
Korea Electric Power ADS | 10,000 | 189,061 | 218,400 | Korea | 1.9% |
345,063 | 457,842 | 3.9% | |||
Utilities-Gas | |||||
Transport de Gas del Sur ADR* | 1,500 | 18,807 | 12,375 | Argentina | 0.1% |
Total Investments | $6,248,080 | $10,272,635 | 87.8% | ||
Other Assets (net of liabilities) | 1,425,279 | 12.2% | |||
Total Net Assets | $11,697,914 | 100.0% | |||
* Non-income producing | ADS: American Depositary Share | ADR: American Depositary Receipt |
Top Ten Equity Holdings | % of Net Assets | Industry Allocation | |
American Movil | 3.1% | ![]() Industry weightings are shown as a percentage of Net Assets. | |
Copa Holdings SA | 2.7% | ||
Business Objects ADS | 2.4% | ||
LAN Airlines ADS | 2.4% | ||
China Mobil Ltd. | 2.2% | ||
Canadian Pacific Ltd. | 2.0% | ||
Anglo-American plc ADR | 1.9% | ||
Cadbury Schweppes ADR | 1.9% | ||
Hanson plc ADR | 1.9% | ||
Rio Tinto plc ADS | 1.9% | ||
Countries | % of Net Assets |
Canada | 11.8% |
United Kingdom | 11.1% |
France | 9.1% |
Japan | 7.7% |
Chile | 7.4% |
Mexico | 6.3% |
Spain | 4.5% |
Panama | 3.8% |
Netherlands | 3.4% |
Germany | 3.0% |
Brazil | 2.9% |
Other < 2% | 16.8% |
Other Assets | 12.2% |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 25 |
Sextant International Fund
Financial Highlights | Period ended | For the Year Ended November 30, | ||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2007 | 2006 | 2005 | 2004 | 2003 | 2002 |
Net asset value at beginning of period | $13.56 | $11.22 | $9.40 | $8.05 | $6.07 | $7.24 |
Income from investment operations | ||||||
Net investment income | 0.07 | 0.11 | 0.05 | 0.03 | 0.05 | 0.02 |
Net gains or losses on securities (both realized and unrealized) | 2.17 | 2.34 | 1.83 | 1.35 | 1.97 | (1.16) |
Total from investment operations | 2.24 | 2.45 | 1.88 | 1.38 | 2.02 | (1.14) |
Less distributions | ||||||
Dividends (from net investment income) | - | (0.11) | (0.06) | (0.03) | (0.04) | (0.03) |
Total distributions | 0.00 | (0.11) | (0.06) | (0.03) | (0.04) | (0.03) |
Paid-in capital from early redemption fees¹ | *0.00 | *0.00 | *0.00 | - | - | - |
Net asset value at end of period | $15.80 | $13.56 | $11.22 | $9.40 | $8.05 | $6.07 |
Total Return | 16.52% | 21.85% | 19.95% | 17.11% | 33.23% | (15.80)% |
Ratios / supplemental data | ||||||
Net assets ($000), end of period | $11,698 | $9,266 | $3,671 | $2,053 | $1,650 | $1,150 |
Ratio of expenses to average net assets | ||||||
Before fee waiver and custody credits | 0.58% | 1.09% | 1.36% | 1.22% | 1.29% | 1.36% |
After fee waiver and custody credits | 0.56% | 1.02% | 1.25% | 1.10% | 1.10% | 1.17% |
Ratio of net investment income after waiver and custody credits to average net assets | 0.46% | 0.94% | 0.52% | 0.31% | 0.75% | 0.20% |
Portfolio turnover rate | 3% | 9% | 5% | 7% | 4% | 4% |
¹Early redemption fee adopted March 29, 2005 | *Amount is less than $0.01 |
Statement of Changes in Net Assets | Period ended May 31,2007 | Year ended Nov. 30, 2006 |
Increase in Net Assets | ||
From operations | ||
Net investment income | $46,542 | $76,757 |
Net realized gain on investments | 18,639 | 122,914 |
Net increase in unealized appreciation | 1,494,567 | 1,341,965 |
Net increase in net assets from operations | 1,559,748 | 1,541,636 |
Dividends to shareowners from | ||
Net investment income | - | (76,618) |
From fund share transactions | ||
Proceeds from sales of shares | 1,787,263 | 4,867,747 |
Value of shares issued in reinvestment of dividends | - | 75,626 |
Early redemption fees retained | 45 | 80 |
Cost of shares redeemed | (915,639) | (813,073) |
Net increase in assets | 871,669 | 4,130,380 |
Total increase in net assets | 2,431,417 | 5,595,398 |
Net Assets | ||
Beginning of period | 9,266,497 | 3,671,099 |
End of period | $11,697,914 | $9,266,497 |
Undistributed net investment income | - | 139 |
Shares of the fund sold and redeemed | ||
Number of shares sold | 121,983 | 415,042 |
Number of shares issued in reinvestment of dividends | - | 5,577 |
Number of shares redeemed | (64,833) | (64,517) |
Net increase in number of shares outstanding | 57,150 | 356,102 |
26 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Sextant International Fund
Statement of Operations
For the semi-annual period ended May 31, 2007 | |
Investment income | |
Dividend income (net of foreign tax of $15,659) | $103,189 |
Other income | 25 |
Gross investment income | 103,214 |
Expenses | |
Investment adviser and administration fees | 23,299 |
Distribution fees | 12,665 |
Filing and registration fees | 8,238 |
Audit fees | 4,578 |
Custodian fees | 2,527 |
Chief compliance officer expenses | 2,412 |
Insurance | 2,164 |
Printing and postage | 1,356 |
Trustee fees | 961 |
Legal fees | 797 |
Other expenses | 202 |
Total gross expenses | 59,199 |
Less custodian fees waived | (2,527) |
Net expenses | 56,672 |
Net investment income | 46,542 |
Net realized gain on investments | |
Proceeds from sales | 287,717 |
Less cost of securities sold (based on identified cost) | 269,078 |
Realized net gain | 18,639 |
Unrealized gain on investments | |
End of period | 4,024,555 |
Beginning of period | 2,529,988 |
Increase in unrealized gain for the period | 1,494,567 |
Net realized and unrealized gain | 1,513,206 |
Net increase in net assets resulting from operations | $1,559,748 |
Statement of Assets and Liabilities
As of May 31, 2007 | |
Assets | |
Investments (Cost $6,248,080) | $10,272,635 |
Cash | 1,400,703 |
Dividends receivable | 25,668 |
Receivable for fund shares sold | 534 |
Total Assets | 11,699,540 |
Liabilities | |
Due to affiliates | 4,616 |
Accrued expenses | (2,990) |
Total Liabilities | 1,626 |
Net Assets | 11,697,914 |
Analysis of Net Assets | |
Paid in Capital (unlimited shares authorized, without par value) | 7,685,773 |
Accumlated net realized loss | (12,414) |
Unrealized net appreciation on investments | 4,024,555 |
Net Assets applicable to Fund shares outstanding | $11,697,914 |
Fund shares outstanding | 740,528 |
Net Asset Value, Offering and Redemption price per share | $15.80 |
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 27 |
Expenses
As a Sextant shareowner, you incur ongoing costs, including management fees, 12b-1 fees and other fund expenses. With the Sextant Funds, unlike with many other mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends or other distributions. Nor do you incur exchange fees or fees related to Individual Retirement Accounts. However, to discourage speculation, you may incur a 2% fee for redemption of shares held less than 30 calendar 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. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (Friday, December 1, 2006 to Thursday, May 31, 2007).
Actual Expenses
The first line for each Fund 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 Period" to estimate the expenses you paid on your account during this period. The Funds also charge 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; 2% fee for redemptions of shares held less 30 calendar days.
Hypothetical Example For Comparison Purposes
The second line for each Fund 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 fees. 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 (December 1, 2006) | Ending Account Value (May 31, 2007) | Expenses Paid During Period¹ | Annualized Expense Ratio | |
Short-Term Bond Fund | ||||
Actual | $1,000 | $1,013.30 | $3.81 | 0.76% |
Hypothetical (5% return before expenses) | $1,000 | $1,021.14 | $3.83 | 0.76% |
Bond Income Fund | ||||
Actual | $1,000 | $996.10 | $4.48 | 0.90% |
Hypothetical (5% return before expenses) | $1,000 | $1,020.44 | $4.53 | 0.90% |
Core Fund² | ||||
Actual | $1,000 | $1,043.00 | $2.24 | 0.44% |
Hypothetical (5% return before expenses) | $1,000 | $1,022.74 | $2.22 | 0.44% |
Growth Fund | ||||
Actual | $1,000 | $1,091.60 | $6.47 | 1.24% |
Hypothetical (5% return before expenses) | $1,000 | $1,018.75 | $6.24 | 1.24% |
International Fund | ||||
Actual | $1,000 | $1,165.20 | $6.05 | 1.12% |
Hypothetical (5% return before expenses) | $1,000 | $1,019.35 | $5.64 | 1.12% |
¹Expenses are equal to the annualized expense ratio indicated above (based on the most recent semi-annual period of December 1, 2006 through May 31, 2007), multiplied by the average account value over the period multiplied by 182/365 (to reflect the one-half year period). ²Expenses for the Core Fund are based on data from the period March 30, 2007 through May 31, 2007 |
28 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Notes To Financial Statements
Note 1 - Organization
Saturna Investment 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. Six portfolio series have been created to date: Sextant Short-Term Bond Fund, Sextant Bond Income Fund, Sextant Core Fund, Sextant Growth Fund, and Sextant International Fund (the "Funds"), and Idaho Tax-Exempt Fund, distributed through a separate prospectus and the results of which are contained in a separate report.
The investment goal of the Growth and International Funds is long-term capital growth. The investment goals of the Core Fund are long-term appreciation and capital preservation. The investment goal of the Bond Income and Short-Term Bond Funds is current income, with Short-Term Bond having the additional goal of capital preservation.
NOTE 2 - Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Funds.
Security Valuation:
Investments in securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation; other securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price. Restricted securities and other securities for which quotations are not readily available are adjusted to fair value as determined pursuant to procedures established by the Board.
Fixed-income securities for which there are no publicly available market quotations are valued using matrices based on maturity, quality, yield , call features 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:
The Funds' policies are to continue to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all their taxable income to their shareowners. Therefore, no provisions for Federal income taxes are required.
Dividends and distributions to shareowners:
Dividends and distributions to shareowners, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. For the Sextant Short-Term Bond Fund and Sextant Bond Income Fund, dividends are paid daily and distributed on the last business day of each month. For the Sextant Core Fund, Sextant Growth Fund and Sextant International Fund, dividends are payable at the end of each November. Shareowners electing to reinvest dividends and distributions purchase additional shares at the net asset value on the payable date.
Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
Other:
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.
Interest income is recognized on an accrual basis. Discounts and premiums on securities purchased are amortized, over the lives of the respective securities. Cash dividends from equity securities are recorded as income on the ex-dividend date. Withholding on foreign dividends have been provided for in accordance with the Funds' understanding of the applicable country's tax rules and rates.
Expenses incurred by the Trust on behalf of a 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 fee (payable to the Fund) when redeemed.
New Accounting Pronouncements:
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released FASB Interpretation No. 48 - Accounting for Uncertainty in Income Taxes ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Funds' net assets, results of operations and finan cial statement disclosures.
In September 2006, FASB issued FASB Statement No. 157, "Fair Value Measurement" ("SFAS 157"), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
NOTE 3 - Transactions with Affiliated Persons
Under a contract approved by shareowners on September 28, 1995, Saturna Capital Corporation provides investment advisory services and certain other administrative and distribution services to conduct Trust business. Each of the Funds pays the Adviser a base Investment Advisory and Administrative Services Fee of .60% of average net assets per annum, payable monthly.
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:
- For each month in which either of these Funds' total investment return (change in net asset value plus all distributions reinvested) for the one year period through that month outperforms or underperforms the total return of a specified index for that period by 1% or more but less than 2%, the Base Fee is increased or decreased by the annual rate of .10% of the Fund's average daily net assets for the preceding year.
- If the outperformance or underperformance is 2% or more, then the adjustment is at the annual rate of .20%.
Performance adjustment for Sextant Core, Sextant Growth Fund and Sextant International Fund:
- For each month in which either of these Fund's total investment return (change in net asset value plus all distributions reinvested) for the one year period through that month outperforms or underperforms the total return of a specified index for that period by 1% or more but less than 2%, the Base Fee is increased or decreased by the annual rate of .10% of the Fund's average daily net assets for the preceding year.
- If the outperformance or underperformance is 2% or more but less than 4%, then the adjustment is at the annual rate of .20%.
- If the outperformance or underperformance is 4% or more, the adjustment is at an annual rate of .30%.
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 29 |
Notes To Financial Statements (continued)
The Adviser has voluntarily undertaken to limit expenses of Sextant Short-Term Bond Fund to 0.75%, and Sextant Bond Income Fund to 0.90%, through March 31, 2008. It waives its investment advisory and administrative fee to Sextant Short-Term Bond Fund and Sextant Bond Income Fund completely should assets of such Fund be less than $2 million. For the semi-annual period ended May 31, 2007, Sextant Short-Term Bond and Sextant Bond Income Funds incurred advisory and administration expenses of $8,607 and $7,677 respectively. Sextant Core Fund incurred administrative and advisory expenses of $2,693. Sextant Growth Fund and Sextant International incurred advisory and administration expenses of $40,564 and $23,299, respectively. In accordance with the expense waiver noted above, for the semi-annual period ended May 31, 2007, Saturna Capital waived $10,478 and $6,367 of the Sextant Short-Term Bond Fund and Sextant Bond Income Fund advisory fees, respectively. The adviser cannot recoup previously waived fees.
In accordance with the Funds' custodian agreements with National City Bank Indiana, for the semi-annual period ended May 31, 2007, custodian fees for Short-Term Bond, Bond Income, Core, Growth, and International were $1,677; $552; $ 2,708; $2,516; and $2,527; respectively. The custodian waived these fees based on earnings credits for the current year.
Trustee Nicholas Kaiser, who also serves as the president of the Trust, is a director and president of the Adviser. On May 31, 2007, the trustees, officers and their related accounts as a group owned 26.0%, 27.4%, 53.5%, 28.2% and 40.4% of the outstanding shares of Short-Term Bond, Bond Income, Core, Growth and International, respectively.
The four unaffiliated trustees receive $400 per Board or committee meeting attended, plus travel expenses, allocated pro-rata to the six Funds of Saturna Investment Trust. The Trust incurred expenses for the independent trustees of $3,832 to attend meetings during the period. Regulations require the Trust to designate a Chief Compliance Officer: Mr. James Winship was retained by the Trust and paid $10,809 during the period. The other officers are paid by Saturna Capital, and not the Trust.
Saturna Brokerage Services, Inc. (a discount brokerage subsidiary of Saturna Capital Corporation) is a registered as a broker-dealer and acts as distributor. A Rule 12b-1 distribution plan took effect on October 3, 2006, and during the six-month period ended May 31, 2007, the Trust paid the Distributor $38,822.
The adviser has undertaken to waive all brokerage commissions charged by its affiliate in calendar 2007.
NOTE 4 - Investments
During the semi-annual period ended May 31, 2007, Short-Term Bond purchased $0 of securities and sold $180,970 of securities. Comparable figures for Bond Income are $0 purchased and $277,276 sold; for Core $2,621,817 purchased and $0 sold; for Growth $191,468 purchased and $1,096,091 sold; and for International, $898,385 purchased and $287,717 sold.
NOTE 5 - Distributions to shareholders
The tax character of distributions paid during the semi-annual period ended May 31, 2007 and years ended November 30, 2006 and 2005 were as follows:
Period ended May 31, 2007 | Year ended 2006 | Year ended 2005 | |
Short-Term Bond Fund | |||
Ordinary income | $49,900 | $85,431 | $83,151 |
Bond Income Fund | |||
Ordinary income | $74,750 | $142,386 | $126,361 |
Core Fund | |||
Ordinary income | - | N/A | N/A |
Growth Fund | |||
Ordinary income | - | - | $2,289 |
Capital gains¹ | - | $125,371 | $12,474 |
International Fund | |||
Ordinary income | - | $76,618 | $17,930 |
¹Long-Term Capital Gain dividend designated pursuant to Section 852(b)(3) of the Internal Revenue Code. |
As of May 31, 2007, components of distributable earnings on a tax basis were as follows:
Short-Term Bond | Bond Income | |
Cost of investments | $2,659,050 | $2,902,408 |
Gross tax unrealized appreciation | 4,748 | 58,039 |
Gross tax unrealized depreciation | (26,514) | (55,877) |
Net tax unrealized appreciation (depreciation) | (21,766) | 2,162 |
Undistributed ordinary income | - | - |
Undistributed long-term capital gain (loss) | (48,942) | (32,983) |
Total distributable earnings | (48,942) | (32,983) |
Total accumulated earnings (losses) | $(70,708) | $(30,821) |
Core | ||
Cost of investments | $2,820,977 | |
Gross tax unrealized appreciation | 135,043 | |
Gross tax unrealized depreciation | (27,413) | |
Net tax unrealized appreciation (depreciation) | 107,630 | |
Undistributed ordinary income | - | |
Undistributed long-term capital gain (loss) | - | |
Total distributable earnings | - | |
Total accumulated earnings (losses) | $107,630 | |
Growth | International | |
Cost of investments | $8,115,915 | $6,248,080 |
Gross tax unrealized appreciation | 5,743,986 | 4,164,481 |
Gross tax unrealized depreciation | (279,675) | (139,926) |
Net tax unrealized appreciation (depreciation) | 5,464,311 | 4,024,555 |
Undistributed ordinary income | - | - |
Undistributed long-term capital gain (loss) | 463,633 | (12,414) |
Total distributable earnings | 463,633 | (12,414) |
Total accumulated earnings (losses) | $5,927,944 | $4,012,141 |
30 | May 31, 2007 Semi-Annual Report | (The accompanying notes are an integral part of these financial statements.) |
Availability of 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.
Householding Policy
To reduce expenses, we may mail only one copy of a Fund's prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please call us at 800/SATURNA (or contact your financial institution). We will begin sending you individual copies thirty days after receiving your request.
(The accompanying notes are an integral part of these financial statements.) | May 31, 2007 Semi-Annual Report | 31 |
![]() | 1300 North State Street Bellingham, WA 98225 www.saturna.com sextant@saturna.com (800) SATURNA | 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 a series of Saturna Investment Trust. Saturna Brokerage Services, Distributor |
![Idaho Tax-Exempt Fund Semi-Annual Report Cover](https://capedge.com/proxy/N-CSRSA/0000811860-08-000052/itecover.jpg)
![Idaho Tax-Exempt Fund Elk Logo](https://capedge.com/proxy/N-CSRSA/0000811860-08-000052/elk.jpg)
Fellow Shareowners:
For the six months ended May 31, 2007, Idaho Tax-Exempt Fund provided a total return of +0.16%. The net asset value was $5.24 per share compared to $5.32 at November 30, 2006. Total Fund assets increased 6% to $9.31 million. The annualized expense ratio was 0.84%.
For the twelve months ended May 31, 2007, the Fund provided a total return of +3.87%. Additional performance information is provided below.
The Federal Funds rate stayed at 5.25% for the reporting period while European and Asian central bank rates climbed in a range of 0.25% to 1.25%. Over the last year, US municipal bond yields were narrowly mixed, masking a move to lower rates and the subsequent recent rebound. The yield advantage of long municipal bonds over short municipal bonds fell from about 0.6% to 0.3% over the period. In general, the highest returns were generated by long maturity, non-investment grade and non-US securities. Fixed income investors continue to accept more risk in their search for yield, especially on high yield speculative grade bonds. The relatively high quality of municipal bonds means they are little affected by the recent declines in the sub-prime mortgage market and related bond derivatives. Illustrating the Fund’s quality, Moody’s Investor Services rates 87.4% of the Fund’s portfolio at the highest “AAA” grade.
We expect the global economy to grow solidly and the US economy to continue modest expansion in 2007. US corporate profits will rise 6% to 9%. We expect the Federal Reserve to keep a floor under short-term rates for another six months to support the US dollar. We expect municipal rates to rise slightly, favoring intermediate maturities of five to ten years. Portfolio dollar weighted average maturity is 8.2 years.
The Idaho economy, population and State employment continue to grow above the national average. The State budget is in balance. Idaho issuer credit worthiness remains secure. The fiscal discipline and pro-business policies of Idaho's state and local governments give Idaho a sharp competitive edge.
Conservative investors choose the Idaho Fund for high quality double tax-free municipal bonds and low price volatility. Today more than forty states (including Idaho) do not tax interest income paid by municipal bonds issued within the state but do tax interest income paid by municipal bonds issued in other states. However, the US Supreme Court, under the dormant Commerce Clause, accepted the Davis vs. Kentucky case, to determine if these tax policies are unconstitutional under the Commerce clause of the US Constitution. The Court may allow tax policies like Idaho’s to remain unchanged. Or the Court may require states to tax residents on in-state municipal bond income, ending the double-tax exemption on in-state municipal bonds which will hurt prices of single-state bonds as they are forced to compete in a national market of tax exempt bonds. Another result could be that states could be allowed to continue exemptions for in-state bond income if they also exempt interest income earned on out-of-state municipal bonds. As the Court’s decision could impact the value of your Fund shares, we wish to note this extra market uncertainty.
We invite you to review the advantages of the Idaho Tax-Exempt Fund, including low expenses, income presently 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
Additional Performance Information: | ||||
Average Annual Returns (as of 6/30/2007) | ||||
1 Year | 3 Years | 5 Years | 10 Years | Expense Ratio¹ |
3.25% | 2.82% | 3.09% | 4.18% | 0.87% |
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 and you may lose money. Returns above do not reflect the potential deduction of a 2% redemption fee on shares held less than 30 days. Current performance may be higher or lower than performance data quoted herein. Performance data current to the most recent month-end is available online at www.saturna.com or by calling toll free (800) SATURNA. ¹ By regulation, the expense ratio shown in this table is as of the Fund's most recent prospectus dated March 30, 2007 and differs from expense ratios shown elsewhere in this report as they each reflect different fiscal periods. Please consider an investment's objectives, risks, charges and expenses carefully before investi ng. To obtain the Fund's prospectus that contains this and other important information please visit www.saturna.com or call toll free (800) SATURNA. Please read the prospectus carefully before investing. |
2 | Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2007 |
Schedule of Investments | Ratings are lesser of Moody's Investor Services or Standard & Poor's. | ||||
Rating | Issue | Coupon/Maturity | Face Amount | Market Value | Percentage |
Building | |||||
AAA | Idaho State Building Authority | 4.50% due 9/1/2023 | $110,000 | $111,104 | 1.2% |
Electric Power | |||||
AAA | Idaho Falls Electric Revenue | 6.75% due 4/1/2019 | 145,000 | 146,299 | 1.6% |
Financial Services | |||||
AAA | Boise City General Fund Revenue | 5.20% due 12/1/2017 | 160,000 | 168,944 | 1.8% |
AAA | Boise City General Fund Revenue | 5.25% due 12/1/2018 | 100,000 | 105,336 | 1.1% |
260,000 | 274,280 | 2.9% | |||
General Obligation | |||||
AA- | Ada & Canyon JSD #2 Meridian | 5.50% due 7/30/2015 | 50,000 | 55,115 | 0.6% |
AAA | Ada & Canyon JSD #2 Meridian | 5.00% due 8/15/2020 | 165,000 | 175,242 | 1.9% |
AAA | Ada & Canyon JSD #2 Meridian | 5.00% due 8/15/2021 | 155,000 | 164,116 | 1.8% |
AAA | Adams & Washington | 4.00% due 8/15/2019 | 100,000 | 99,025 | 1.1% |
AAA | Bingham County SCD #55 Blackfoot | 4.65% due 8/1/2017 | 285,000 | 294,710 | 3.2% |
AAA | Blaine County Idaho Series A | 4.05% due 8/1/2023 | 150,000 | 143,871 | 1.5% |
A | Boise County SCD #73 Horseshoe Bend | 5.15% due 7/31/2010 | 125,000 | 126,539 | 1.4% |
AAA | Bonneville & Bingham Co JSD #93 GO | 4.50% due 9/15/2017 | 150,000 | 153,963 | 1.6% |
AAA | Boundary County SCD #101 | 5.10% due 8/1/2022 | 130,000 | 138,607 | 1.5% |
AAA | Caldwell, Idaho | 5.30% due 5/15/2014 | 150,000 | 155,684 | 1.7% |
AAA | Canyon County SCD #139 Vallivue | 4.05% due 8/15/2016 | 80,000 | 81,220 | 0.9% |
AAA | Canyon County SCD #139 Vallivue | 4.35% due 9/15/2025 | 350,000 | 344,897 | 3.7% |
AAA | Canyon County SCD #131 Nampa | 4.75% due 8/15/2019 | 325,000 | 335,761 | 3.6% |
AAA | Canyon County SCD #134 Middleton | 4.65% due 7/31/2016 | 170,000 | 175,163 | 1.9% |
A | Canyon County SCD #135 Notus | 6.00% due 8/1/2007 | 50,000 | 49,839 | 0.5% |
AAA | Idaho Housing & Finance Association | 4.80% due 6/1/2017 | 100,000 | 104,214 | 1.1% |
AAA | Jerome Lincoln Gooding Co's JSD #261 | 3.75% due 9/15/2018 | 125,000 | 121,243 | 1.3% |
AAA | Jerome Lincoln Gooding Co's JSD #261 | 5.00% due 9/15/2022 | 250,000 | 266,617 | 2.9% |
AAA | Kootenai-Shonshone Area Library | 4.25% due 8/1/2021 | 220,000 | 221,054 | 2.4% |
AAA | Lakeland ID JSD #272 | 4.00% due 8/15/2015 | 100,000 | 100,010 | 1.1% |
AAA | Lemhi County | 4.20% due 8/1/2015 | 100,000 | 101,258 | 1.1% |
AAA | Madison Co. ID SCD #321 Rexburg | 4.50% due 8/15/2024 | 160,000 | 160,902 | 1.7% |
AAA | Madison Co. SCD #321 Rexburg UTGO | 4.50% due 8/15/2026 | 250,000 | 250,075 | 2.7% |
AAA | Meridian Free Library District | 5.00% due 8/1/2015 | 200,000 | 200,438 | 2.1% |
AAA | Minidoka & Jerome JSD #331 | 4.50% due 8/15/2018 | 75,000 | 77,398 | 0.8% |
AAA | Minidoka & Jerome JSD #331 | 4.50% due 8/15/2020 | 75,000 | 76,591 | 0.8% |
AAA | Minidoka & Jerome JSD #331 | 4.50% due 8/15/2025 | 160,000 | 160,333 | 1.7% |
AAA | Nampa Idaho Series B | 5.00% due 8/1/2020 | 200,000 | 213,708 | 2.3% |
AAA | Oneida County SCD #351 Malad City | 4.00% due 8/15/2015 | 150,000 | 151,137 | 1.6% |
AAA | Owyhee & Canyon Cos. JSD #370 | 4.55% due 8/15/2016 | 160,000 | 168,771 | 1.8% |
AAA | Payette Co ID SCD #373 | 5.00% due 9/15/2024 | 100,000 | 103,911 | 1.1% |
AAA | Valley & Adams Co JSD #421 | 4.50% due 8/1/2024 | 290,000 | 291,415 | 3.1% |
AAA | Valley & Adams JSD #421 McCall | 4.50% due 8/1/2022 | 135,000 | 136,723 | 1.5% |
5,285,000 | 5,399,550 | 58.0% | |||
Housing | |||||
AA+ | Idaho Housing Agency Refunding Series A | 6.15% due 7/1/2024 | 5,000 | 4,962 | * 0.0% |
AAA | Idaho Housing Agency Single Family Mort Mezz-E-1 | 6.60% due 7/1/2011 | 5,000 | 4,965 | 0.1% |
10,000 | 9,927 | 0.1% |
Continued on next page.
The accompanying notes are an integral part of these financial statements.
Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2007 | 3 |
Schedule of Investments (continued) | |||||
Rating | Issue | Coupon/Maturity | Face Amount | Market Value | Percentage |
Medical/Hospitals | |||||
AAA | Idaho Health Facility Auth. Ref. Holy Cross Sys Corp. Rev | 5.25% due 12/1/2014 | $110,000 | $111,719 | 1.2% |
AAA | Idaho Health Facility Auth. Corp. Holy Cross Rev Refunding | 5.00% due 12/1/2022 | 115,000 | 116,987 | 1.3% |
AAA | Madison CO Hospital COP | 5.00% due 12/1/2018 | 105,000 | 106,979 | 1.1% |
330,000 | 335,685 | 3.6% | |||
Pollution Control | |||||
AAA | Idaho Bond Bank Authority | 4.30% due 9/1/2022 | 135,000 | 134,275 | 1.4% |
Real Estate | |||||
AAA | Idaho State Bldg Authority | 5.05% due 9/1/2018 | 95,000 | 95,646 | 1.0% |
AAA | Idaho State Bldg Authority | 5.00% due 9/1/2021 | 100,000 | 101,017 | 1.1% |
A | Jerome Urban Renewal District | 5.40% due 9/1/2013 | 200,000 | 200,992 | 2.2% |
A | Post Falls LID | 5.00% due 5/1/2021 | 300,000 | 300,231 | 3.2% |
695,000 | 697,886 | 7.5% | |||
State Education | |||||
AAA | Boise State University Rev | 5.00% due 4/1/2019 | 295,000 | 313,145 | 3.4% |
AAA | Idaho State Building Authority | 4.00% due 9/1/2016 | 105,000 | 104,252 | 1.1% |
AAA | Idaho State University Ref & Impt | 4.90% due 4/1/2017 | 150,000 | 151,767 | 1.7% |
AAA | Idaho State University Rev | 4.625% due 4/1/2024 | 220,000 | 225,491 | 2.4% |
AAA | University of Idaho Student Fee Rev | 5.00% due 4/1/2019 | 200,000 | 213,642 | 2.3% |
AAA | University of Idaho Student Fee Rev | 5.00% due 4/1/2020 | 160,000 | 170,341 | 1.8% |
1,130,000 | 1,178,638 | 12.7% | |||
Sewer | |||||
A | Troy ID Sewer System | 8.00% due 2/1/2008 | 15,000 | 14,888 | 0.2% |
A | Troy ID Sewer System | 8.00% due 2/1/2009 | 20,000 | 19,857 | 0.2% |
A | Troy ID Sewer System | 8.00% due 2/1/2010 | 20,000 | 19,883 | 0.2% |
55,000 | 54,628 | 0.6% | |||
Urban Renewal | |||||
AAA | Boise City Urban Renewal Agency Pk Rev & RA | 5.00% due 9/1/2012 | 65,000 | 66,091 | 0.7% |
AAA | Boise City Urb Ren Lease Rev | 5.00% due 8/15/2020 | 160,000 | 169,454 | 1.8% |
AAA | Boise City Urb Ren Agy Lease Rev | 5.00% due 8/15/2021 | 90,000 | 94,489 | 1.0% |
315,000 | 330,034 | 3.5% | |||
Water Supply | |||||
AAA | Blackfoot COP Series 2000 | 5.80% due 9/1/2018 | 135,000 | 143,177 | 1.5% |
AAA | Idaho Bond Bank Authority | 5.00% due 9/15/2026 | 250,000 | 264,325 | 2.8% |
AAA | Ketchum Water Revenue | 4.75% due 9/1/2013 | 60,000 | 60,502 | 0.7% |
445,000 | 468,004 | 5.0% | |||
Total Investments | (Total Cost=$9,128,786) | $8,915,000 | $9,140,310 | 98.1% | |
Other Assets (net of liabilities) | 172,302 | 1.9% | |||
Total Net Assets (100%) | $9,312,612 | 100.0% | |||
*Amount is less than 0.01% |
Ratings Established | By Adviser | By Standard & Poor's | By Moody's Investor Services |
AAA | 86.0% | 30.9% | 87.4% |
AA | 0.6% | 4.2% | 0.6% |
A | 11.5% | 3.6% | 0.0% |
BBB | 0.0% | 0.0% | 0.0% |
Unrated | 0.0% | 59.4% | 10.1% |
Other Assets | 1.9% | 1.9% | 1.9% |
The accompanying notes are an integral part of these financial statements.
4 | Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2007 |
Financial Highlights | Period ended | For Year Ended November 30, | ||||
Selected data per share of capital stock outstanding throughout period: | May 31, 2007 | 2006 | 2005 | 2004 | 2003 | 2002 |
Net asset value at beginning of period | $5.32 | $5.27 | $5.39 | $5.46 | $5.37 | $5.28 |
Income from investment operations | ||||||
Net investment income | 0.09 | 0.18 | 0.19 | 0.19 | 0.21 | 0.22 |
Net gains (losses) on securities (both realized and unrealized) | (0.08) | 0.06 | (0.10) | (0.07) | 0.09 | 0.09 |
Total from investment operations | 0.01 | 0.24 | 0.09 | 0.12 | 0.30 | 0.31 |
Less distributions | ||||||
Dividends (from net investment income) | (0.09) | (0.18) | (0.19) | (0.19) | (0.21) | (0.22) |
Distributions (from capital gains) | - | (0.01) | (0.02) | - | - | - |
Total distributions | (0.09) | (0.19) | (0.21) | (0.19) | (0.21) | (0.22) |
Paid-in capital from early redemption fees¹ | - | *0.00 | *0.00 | - | - | - |
Net asset value at end of period | $5.24 | $5.32 | $5.27 | $5.39 | $5.46 | $5.37 |
Total Return | 0.16% | 4.66% | 1.66% | 2.29% | 5.40% | 5.98% |
Ratios / Supplemental Data | ||||||
Net assets ($000), end of period | $9,313 | $8,783 | $8,531 | $8,472 | $7,692 | $6,943 |
Ratio of expenses to average net assets | ||||||
Before fee waivers | 0.43% | 0.87% | 0.91% | 0.95% | 0.88% | 0.88% |
After fee waivers | 0.42% | 0.83% | 0.88% | 0.93% | 0.85% | 0.80% |
Ratio of net investment income after fee waiver to average net assets | 1.68% | 3.40% | 3.58% | 3.56% | 3.78% | 4.14% |
Portfolio turnover rate | 1% | 24% | 21% | 15% | 6% | 11% |
¹Early redemption fee adopted March 29, 2005 | *Amount is less than $0.01 |
Statements of Changes in Net Assets | Period ended May 31, 2007 | Year ended Nov. 30, 2006 |
Increase in Net Assets | ||
From Operations | ||
Net investment income | $149,933 | $291,745 |
Net realized gain (loss) on investments | (2,791) | 19,527 |
Net increase (decrease) in unrealized appreciation | (125,629) | 67,593 |
Net increase in net assets from operations | $21,513 | $378,865 |
Dividends to shareowners from | ||
Net investment income | (150,060) | (291,745) |
Capital gains distributions | - | (19,527) |
Net dividends to shareowners | (150,060) | (311,272) |
Fund Share transactions | ||
Proceeds from sales of shares | 967,213 | 1,123,133 |
Value of shares issued in reinvestment of dividends | 117,161 | 241,424 |
Early redemption fees retained | - | 2 |
Cost of shares redeemed | (425,988) | (1,180,827) |
Net increase in net assets from share transactions | 658,386 | 183,732 |
Total increase in net assets | $529,839 | $251,325 |
Net Assets | ||
Beginning of period | 8,782,773 | 8,531,448 |
End of period | $9,312,612 | $8,782,773 |
Shares of the fund sold and redeemed | ||
Number of shares sold | 183,458 | 225,928 |
Number of shares issued in reinvestment of dividends | 22,206 | 45,798 |
Number of shares redeemed | (80,541) | (237,777) |
Net increase in number of shares outstanding | 125,123 | 33,949 |
The accompanying notes are an integral part of these financial statements.
Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2007 | 5 |
Statement of Assets & Liabilities
For the period ended May 31, 2007 | |
Investment Income | |
Interest income | $204,204 |
Amortization of bond premium | (16,546) |
Gross investment income | 187,658 |
Expenses | |
Investment adviser and administration fees | 22,276 |
Audit fees | 4,119 |
Chief compliance officer expenses | 2,633 |
Insurance | 2,057 |
Shareholder service fee | 1,907 |
Filing and Registration fees | 1,409 |
Printing and postage | 1,108 |
Trustee fees | 1,004 |
Legal fees | 1,004 |
Custodian fees | 896 |
Other expenses | 208 |
Total gross expenses | 38,621 |
Less: Custodian fees waived | (896) |
Net expenses | 37,725 |
Net investment income | $149,933 |
Net realized loss on investments | |
Proceeds from sales | 95,000 |
Less cost of securities sold based on identified cost | 97,791 |
Realized net loss | (2,791) |
Unrealized gain on investments | |
End of period | 11,523 |
Beginning of period | 137,152 |
Decrease in unrealized gain for the period | (125,629) |
Net realized and unrealized loss on investments | $(128,420) |
Net increase in net assets resulting from operations | $21,513 |
Statement of Assets & Liabilities
As of May 31, 2007 | |
Assets | |
Bond Investments (Cost $9,128,786) | $9,140,310 |
Cash | 374,212 |
Interest receivable | 116,900 |
Insurance reserve premium | 801 |
Total Assets | $9,632,223 |
Liabilities | |
Payable for securities purchased | 306,599 |
Distributions payable | 5,001 |
Due to affiliates | 4,043 |
Accrued expenses | 2,429 |
Payable for fund shares redeemed | 1,539 |
Total Liabilities | 319,611 |
Net Assets | $9,312,612 |
Analysis of Net Assets | |
Paid in Capital (unlimited shares authorized, without par value) | 9,301,088 |
Unrealized net appreciation on investments | 11,524 |
Net Assets applicable to Fund shares outstanding | 9,312,612 |
Fund Shares Outstanding | 1,777,132 |
Net Asset Value, Offering and Redemption price per share | $5.24 |
Notes To Financial Statements
Note 1 — Organization
Saturna Investment 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. Five portfolios have been created to date in addition to Idaho Tax-Exempt Fund (the “Fund”). The other five portfolios distribute through a separate prospectus and the results of those funds are contained in a separate report.
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
The following is a summary of the significant accounting policies followed by the Fund.
Security valuation:
Fixed-income securities for which there are no publicly available market quotations are valued using matrices based on maturity, quality, yield, call features 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 Fund to meet their obligations may be affected by economic and political developments in the State of Idaho.
Income taxes:
The Fund’s policy is to continue to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all its taxable income to its shareowners. Therefore, no provision for Federal income taxes is required. Further, the Fund intends to meet 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, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Dividends are paid daily and distributed on the last business day of each month. Shareowners electing to reinvest dividends and distributions purchase additional shares at the net asset value on the payable date.
Use of estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
6 | Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2007 |
Expenses
As an Idaho Tax-Exempt mutual fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, the Idaho tax-Exempt Fund does not impose sales charges (loads) on purchase payments, reinvested dividends or other distributions. Nor do you incur exchange fees or fees related to Individual Retirement Accounts. 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.
The Idaho Tax-Exempt Fund, unlike many mutual funds, does not impose sales charges (loads) on purchases, reinvested dividends or distributions. You do not incur exchange fees, or fees related to Individual Retirement Accounts. However, to discourage speculative trading, you may incur a 2% redemption fee on 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 [Friday, December 1, 2006 to Thursday, May 31, 2007].
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, such as charges for extra services like 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 fees¹, 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 [Friday, December 1, 2006] | Ending Account Value [Thursday, May 31, 2007] | Expenses Paid During Period* | |
Actual | $1,000.00 | $1,001.60 | $4.19 |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.74 | $4.23 |
* Expenses are equal to Idaho Tax-Exempt Bond Fund's annualized expense ratio of 0.84% (based on the most recent semi-annual period of December 1, 2006 through May 31, 2007, multiplied by the average account value of $1,000.80 over the period multiplied by 182/365 (to reflect the one-half year period). |
Notes To Financial Statements (continued)
and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
Other:
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.
Interest income is recognized on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities.
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 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 fee (payable to the Fund) when redeemed.
New Accounting Pronouncements:
On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48 - Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Funds’ net assets, results of operations and fin ancial statement disclosures.
In September 2006, FASB issued FASB Statement No. 157, “Fair Value Measurement” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund’s financial statement disclosures.
Idaho Tax-Exempt Fund Semi-Annual Report May 31, 2007 | 7 |
Notes To Financial Statements (continued)
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 .50% of average daily net assets. For the semi-annual period ended May 31, 2007, the Fund incurred advisory fee expenses of $22,276.
In accordance with the Fund’s agreement with its custodian, National City Bank of Indiana, for the semi-annual period ended May 31, 2007, custodian fees incurred by the Fund amounted to $896. The custodian waived $896 of its fees for earnings credits for the current year.
Saturna Brokerage Services, Inc. (a subsidiary of Saturna Capital Corporation) is 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 semi-annual period ended May 31, 2007, the Fund paid shareholder servicing fees of $1,907.
Trustee Nicholas Kaiser, who also serves as the president of the Trust, is a director and president of the Adviser. On May 31, 2007, the trustees, officers and their immediate families as a group owned 0.05% of the outstanding shares of the Fund. Mr. Kaiser owned 845 shares.
The four unaffiliated trustees receive $400 per Board or committee meeting attended, plus travel expenses, allocated pro-rata to the six Funds of Saturna Investment Trust. The Trust paid the Independent Trustees $3,832 to attend meetings during the period. Regulations require the Trust to designate a Chief Compliance Officer; Mr. James Winship was retained by the Trust and paid $10,809 during the period. The other officers are paid by Saturna Capital, and not the Trust.
Note 4 — Investments
During the semi-annual period ended May 31, 2007, the Fund purchased $868,652 of securities and sold/matured $95,000 of securities.
Note 5 — Distributions to shareowners:
The tax character of distributions paid during the semi-annual period ended May 31, 2007 and years ended November 30, 2006 and 2005 were as follows:
Period ended May 31, 2007 | 2006 | 2005 | |
Tax-Exempt Income | $150,060 | $291,026 | $302,222 |
Taxable Income | - | $702 | - |
Capital Gains¹ | - | $19,527 | $25,992 |
¹Long-Term Capital Gain dividend designated pursuant to Section 852(b)(3) of the Internal Revenue Code. |
As of May 31, 2007 the components of distributable earnings on a tax basis were as follows:
Cost of investments | $9,128,786 |
Gross unrealized appreciation | 71,279 |
Gross unrealized depreciation | (59,755) |
Net unrealized appreciation | $11,524 |
Total accumulated earnings/losses | $11,524 |
Availability of Fund Portfolio Information
(1) The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q.
(2) The Fund's Forms N-Q is available on the SEC's website at www.sec.gov., and at www.saturna.com.
(3) The Fund's 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 Fund makes a complete schedule of portfolio holdings after the end of each month available to investors at www.saturna.com.
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.
Householding Policy
To reduce expenses, we may mail only one copy of the Fund’s prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please call us at 800/SATURNA. We will begin sending you individual copies thirty days after receiving your request.
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. | ![]() | 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, 2007, 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
April 3, 2008
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
April 3, 2008
By:
/s/ Christopher Fankhauser
Treasurer
April 3, 2008