Investment Counsel

Financial Strength

Saturna Capital derives its income from two main business activities:

  • Investment management and distribution fees from affiliated mutual funds and private accounts (73%); and
  • Administration fees from servicing affiliates (27%).

For the fiscal year ended June 30, 2010, Saturna Capital operated profitably with revenues of $30,642,681. At June 30, 2010, Saturna had shareholder equity of $12,419,756, most of which is invested in Saturna’s affiliated mutual funds. Saturna’s common stock and/or common stock options are owned by 77 employees and related parties. Conservative in our finances, Saturna Capital has no debt or other forms of financial leverage.

Saturna Capital Corporation’s, Saturna Brokerage Services’ and Saturna Trust Company’s June 30, 2010 annual reports, with audited financial statements, are available free upon request. Saturna Sdn. Bhd.’s financial statements are independently audited in Malaysia.

Compliance

Saturna Capital’s business operations are subject to rules and regulations for investment advisers, mutual funds, transfer agents, and broker-dealers. We devote substantial resources to meeting these requirements, which can be summarized as (1) always putting client interests first and (2) making full disclosure of practices and any potential conflicts.

Mr. James Winship (JD, MBA) serves Saturna Capital as General Counsel and Chief Compliance Officer, Adviser and Funds. He has more than 30 years experience in the securities and financial businesses, with almost 20 years dedicated to the mutual fund and advisory businesses. He is assisted by Mr. G. Scott Stroh (JD), an attorney and Chief Compliance Officer for Saturna Brokerage, and Mr. Jacob Stewart, Legal/Compliance Clerk. Mr. Lim Yew-Meng (MBA) is the compliance officer for Saturna Sdn. Bhd. in Malaysia.

Recordkeeping

Saturna believes that comprehensive account information is key to quality service. We continue to develop our own computerized investment administration system, NEPTUNE©. In addition to Saturna’s use, this software is licensed to unaffiliated mutual fund sponsors.

Investment management clients may elect to go paperless. In an effort to reduce cost and waste, we offer the option for clients to receive performance reporting electronically. Certain regulatory and brokerage correspondence continues to be sent on paper.

Saturna Capital’s investment management clients receive integrated GALAXY month-end statements, reporting their account valuations. Each position is reported with such additional information as the current yield and annual average return. We also act as administrator for IRA plans and provide certain recordkeeping services for 401(k) plans.

We do not vote proxies for private accounts, but will assist clients with questions regarding the voting of proxies they receive.

Code of Ethics

All Saturna employees are subject to a strict Code of Ethics, common to Saturna Capital, Saturna Brokerage Services, Saturna Trust Company, Saturna Sdn. Bhd. and the affiliated mutual funds. Transactions for clients have priority over employee transactions and personal transactions cannot operate adversely to clients' interests. Pre-clearance of employee trading in securities may be required to give clients adequate opportunity to act on recommendations before employees may act. Saturna Capital Corporation, as well as its employees and affiliates, are encouraged to invest in the Saturna mutual funds. Mr. Kaiser maintains substantial positions in the Saturna mutual funds, and does not trade securities for his own account.

A copy of the Code of Ethics is available to any client or prospective client free upon request, and on the Saturna website here. All transactions by Saturna employees are reported under the Code of Ethics and monitored by its Chief Compliance Officer. Violations of the Code of Ethics may result in censure, fines and/or dismissal of any employee.