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Sextant Global High Income Fund

Overview

Fund Facts

As of March 31, 2016
Net Assets: $7.01 Million
Ticker Symbol: SGHIX
CUSIP: 804096709
Inception Date: March 30, 2012
Minimum Initial Investment: $1,000
30-Day Yield¹: 7.68%

Portfolio Managers

Bryce Fegley CFA, CIPM®

Deputy Portfolio Manager since 2012

Bryce Fegley, CFA, CIPM, Tactician, Investment Analyst & Sextant Global High Income Fund Portfolio Manager, joined Saturna Capital in 2001 and worked in brokerage/trading and later as an investment analyst. Beginning in 2010, he spent two years as President of our Malaysian subsidiary, Saturna Sdn Bhd, directing its research and fund management operations. In 2012 he returned to Saturna Capital headquarters. Prior to joining Saturna, Mr. Fegley worked in brokerage operations in Seattle from 1997-2000. Originally from upstate New York, he studied at the University of Colorado at Boulder earning his BA in English Literature. Mr. Fegley earned a Certificate in Computational Finance and Risk Management from the University of Washington in 2015. His volunteer activities include a board role with the Whatcom Family YMCA. His hobbies include reading and playing piano, traveling with his family, bicycling, and cooking.

Patrick Drum MBA, CFA, CFP®

Deputy Portfolio Manager since 2015

Patrick T. Drum, Research Analyst, and Saturna Sustainable Bond Fund and Amana Participation Fund Portfolio Manager joined Saturna Capital in October 2014. He is an adjunct professor of finance for the Sustainable MBA Program at the Bainbridge Graduate Institute (BGI) at Pinchot. Mr. Drum holds a BA in economics from Western Washington University and an MBA from Seattle University Albers School of Business. He is a Chartered Financial Analyst Charterholder and a Certified Financial Planner®.

Prior to joining Saturna Capital, Mr. Drum led environmental, social, and governance (ESG) research and was director of fixed income portfolio management since 2007 at The Arbor Group, a member of UBS Institutional Consulting Services specializing in investment management for global conservation and national wildlife park endowments as well as sustainable-social screened private client portfolios.

Mr. Drum's past experience also includes business valuation at Moss Adams and portfolio management at Washington Mutual Bank. He lives in Bellingham and is a proud father of two. He enjoys sea kayaking, hiking, and being part of the Pacific Northwest community.

Investment Style

Targeted to investors seeking high current income

Flexible allocation of stocks and bonds

Global scope, with a maximum of 50% US issuers

Diversified across markets, asset classes, countries, currencies, and industries

Balanced approach moderated by secondary objective of capital preservation

Actively managed by the award-winning, values-based, global expertise of Saturna Capital

Investment Objective

High income, with a secondary objective of capital preservation.

Principal Investment Strategies

The Global High Income Fund invests in a globally diversified portfolio of income-producing debt and equity securities. It applies a consistent, value-oriented approach to security selection, basing investment decisions on current income and expected total return, adjusted for risk. It adjusts allocations to individual securities to manage the portfolio’s fundamental risks, such as industry, country, currency, inflation, interest rate, liquidity, and credit cycle risks. In addition, the Fund will attempt to capitalize on periodic stress in leveraged credit markets, which may result in more volatile current income in exchange for more attractive long-term, risk-adjusted total return consistent with its investment objective. The Fund normally includes securities from at least three countries outside the US.

Under normal circumstances, the Fund invests its assets as follows:

  • No more than 50% in common stocks
  • No more than 50% in securities of US issuers
  • No more than 50% in bonds rated A3 or higher
  • No more than 33% in securities of emerging market issuers

Principal Risks of Investing

Market risk: The value of the Fund's shares rises and falls as the market value of the securities in which the Fund invests goes up and down. The market value of securities will fluctuate, sometimes significantly and unpredictably, with stocks generally being more volatile than bonds. When you redeem your shares, they may be worth more or less than what you paid for them. Only consider investing in the Fund if you are willing to accept the risk that you may lose money.

Equity securities risk: Equity securities may experience significant volatility in response to economic or market conditions or adverse events that affect a particular industry, sector, or company. Although the Fund may invest in companies of all sizes, the Fund tends to favor larger companies and, to a lesser extent, midsize companies. Larger companies may have slower rates of growth as compared to smaller, faster-growing companies. Mid size companies may have more limited financial resources, products, or services, and tend to be more sensitive to changing economic or market conditions.

Interest rate risk: Investing in bonds includes the risk that as interest rates rise, bond prices will fall. Conversely, during periods of declining interest rates bond prices generally rise, but bond issuers may call or prepay the bond and reissue debt at lower interest rates. The longer a bond's maturity, the more sensitive the bond is to interest rate changes.

Credit risk: Investing in bonds includes the risk that an issuer will not pay interest or principal when due, or the issuer may default altogether. If an issuer's credit quality is perceived to decline, the value and liquidity of the issuer's bonds may also decline.

High yield risk: Investing in bonds that are unrated or rated below investment grade, which are known as "junk bonds" typically offer higher yields to compensate investors for increased credit risk. Issuers of high-yield securities generally are not as strong financially and are more vulnerable to changes that could affect their ability to make interest and principal payments. High-yield securities generally are more volatile and less liquid (harder to sell), which may make such securities more difficult to value.

Foreign investing risk: Foreign investing involves risks not normally associated with US securities. These risks include fluctuations in currency exchange rates, less public information about securities, less governmental market supervision, and lack of uniform financial, social, and political standards. Foreign investing heightens the risk of confiscatory taxation, seizure or nationalization of assets, currency controls, or adverse political or social developments that affect investments.

The risks of investing in foreign securities typically are greater in less developed or emerging countries.

Liquidity risk: Liquidity risk exists when particular investments are difficult to sell and may be more difficult to value. If the Fund is forced to sell these investments during unfavorable conditions to meet redemptions or for other cash needs, the Fund may lose money on its investments. As a result, the Fund may be unable to achieve its objective.

Performance

Daily Price and Stats

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As of June 29, 2016 Ticker Price Change YTD 30-Day Yield¹ Dividend
May 31, 2016
Sextant Global High Income SGHIX $9.41 $0.12 10.06% 4.06% n/a

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Average Annual Total Returns

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Month-end, as of May 31, 2016 Ticker 1 Year 3 Year 5 Year 10 Year Expense
Ratio²
30-Day
Yield¹
Sextant Global High Income SGHIX -6.62% 0.96% n/a n/a 1.06%³ 4.34%
S&P Global 1200 Index -3.66% 6.70% 6.88% 5.25% n/a n/a
Bloomberg Global High Yield Corporate Bond Index 0.22% 2.23% 4.52% n/a n/a n/a
Quarter-end, as of March 31, 2016 Ticker 1 Year 3 Year 5 Year 10 Year Expense
Ratio²
30-Day
Yield¹
Sextant Global High Income SGHIX -7.69% 0.06% n/a n/a 1.06%³ 7.68%
S&P Global 1200 Index -2.80% 7.18% 6.92% 5.02% n/a n/a
Bloomberg Global High Yield Corporate Bond Index -1.18% 1.63% 4.26% n/a n/a n/a

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Growth of $10,000

Growth of $10,000Growth of $10,000

This chart illustrates the performance of a hypothetical $10,000 invested at the beginning of the period and redeemed at the end of the period, and assumes reinvestment of all dividends and capital gains.

Annual Total Returns

As of March 31, 2016

Annual Total ReturnsAnnual Total Returns

The S&P Global 1200 Index is a global stock market index covering nearly 70% of the world's equity markets. The Bloomberg Global High Yield Corporate Bond Index is a rules-based, market-value weighted index engineered to measure the non-investment grade, fixed-rate, taxable, global corporate bond market. Investors cannot invest directly in the indices.

Holdings

As of March 31, 2016

Top Ten Holdings

Jefferies Group Bond 3.6%
Burlington Northern Santa Fe Bond 3.3%
Outerwall Bond 3.0%
Microchip Technology Equity 2.8%
San Miguel Bond 2.7%
Grupo Bimbo Bond 2.6%
Orange ADS Equity 2.5%
Rent-A-Center Bond 2.5%
Total ADS Equity 2.5%
Itau Unibanco ADS Equity 2.5%
Total 28.0%

View full month-end portfolio schedule. This link will open a new browser window.

Sector Allocation

Consumer Discretionary 15.3% 19.9% Sextant Global High Income Fund Sector Allocation
Energy 14.0% color box key
Materials 13.3% color box key
Financials 11.7% color box key
Industrials 7.2% color box key
Foreign Government 7.0% color box key
Consumer Staples 5.8% color box key
Communications 4.3% color box key
Technology 4.2% color box key
Municipal Bonds 3.8% color box key
Health Care 3.7% color box key
Utilities 3.6% color box key
Cash and equivalents 6.1% color box key

Security and sector weightings are shown as a percentage of total net assets.

Distributions

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Record Date Ex, Pay and
Reinvest Date
Ordinary
Income
Qualified
Income
Short-Term
Capital Gains
Long-Term
Capital Gains
Total Distributions
(per share)
Sextant Global High Income (SGHIX)
11/27/2015 11/30/2015 $0.37170 $0.14455 $0.00 $0.00 $0.51625
11/26/2014 11/28/2014 $0.20340 $0.28970 $0.00 $0.00 $0.49310
11/27/2013 11/29/2013 $0.16588 $0.21990 $0.00 $0.00 $0.38578
11/29/2012 11/30/2012 $0.09500 $0.08100 $0.00 $0.00 $0.17600

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The Sextant Global High Income Fund intends to distribute its net investment income and net realized capital gains, if any, to its shareowners. Distributions from income dividends and net capital gains are paid at the end of November.

The Sextant Global High Income Fund began operations on March 30, 2012. Its entire dividend history is listed above.

Regulations regarding distributions can be complex, and there are several methods for managing your tax liability. Please consult a tax advisor about your particular circumstances. You also may obtain helpful information by calling the Internal Revenue Service at 1-800-829-1040 or visiting www.irs.gov.

If applicable, distribution information will appear on Form 1099-DIV, typically sent in late January. For more information on tax documentation, please visit our Tax Documentation page.

The Fund pays per-share distributions to shareowners invested on the Record Date. On the Payable Date, the fund's share price is reduced by the amount of its distribution.

Fees and Expenses

The following tables describe the fees and expenses mutual fund shareowners may pay. There are no shareowner fees (fees paid directly from an investment). The Fund imposes no sales charge (load) on purchases or reinvested dividends, or any deferred sales charge (load) upon redemption. There are no exchange fees or account fees. Investments in mutual funds are subject to ongoing expenses. Saturna endeavors to keep these fees low. We encourage you to compare the following fees with similar fees of other no-load mutual funds:

Shareowner Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price): 0%
Maximum Deferred Sales Charge (Load): 0%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends/Distributions: 0%
Early Redemption Fee: 0%
Exchange Fee (between Saturna's affiliated funds): 0%
Maximum Account Fee: 0%
Annual Fund Operating Expenses (expenses deducted from Fund Assets)²
Sextant Global High Income SGHIX
Management Fees3 0.41%
Distribution (12b-1) Fees 0.25%
Other Expenses 0.40%
Total Annual Fund Operating Expenses3 1.06%
Fee Waiver and Expense Reimbursement -0.17%
Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement‡ 0.89%

‡The adviser has committed through March 31, 2016, to waive fees and/or reimburse expenses to the extent necessary to ensure that the Fund's net operating expenses, excluding brokerage commissions, interest, taxes, and extraordinary expenses do not exceed the net operating expense ratio of 0.90%. The committed net operating expense ratio may be changed or terminated only with approval of the Board of Trustees.

¹ A Fund's 30-Day Yield, sometimes referred to as "standardized yield" or "SEC yield,” is expressed as an annual percentage rate using a method of calculation adopted by the Securities and Exchange Commission (SEC). The 30-Day Yield provides an estimate of a Fund's investment income rate, but may not equal the actual income distribution rate.

² Expense ratios shown are as stated in the Fund's most recent prospectus or summary prospectus dated March 29, 2016.

³ Please see the Statement of Additional Information for the actual amount of fees paid to the adviser for the most recent fiscal year.

Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance data quoted. Standardized returns current to the most recent month-end can be obtained by visiting our Month-End Returns Page or by calling toll free 1-800-728-8762. The Fund cannot guarantee that its investment objective will be met. Securities of the Fund are offered and sold only through the prospectus or summary prospectus.

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