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Sextant Global High Income Fund

Overview

Fund Facts

As of September 30, 2014
Net Assets: $7.84 Million
Ticker Symbol: SGHIX
CUSIP: 804096709
Inception Date: March 30, 2012
Minimum Initial Investment: $1,000
30-Day Yield¹: 3.77%

Portfolio Managers

Bryce Fegley Bryce Fegley CFA, CIPM

Portfolio manager since 2012

John Scott John Scott CFA

Portfolio manager since 2012

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
  • No hedges, credit default swaps, or other transactions involving leverage or borrowings

Principal Risks of Investing in the Fund

The value of Global High Income Fund shares rises and falls as the value of the securities in which the Fund invests goes up and down. Only consider investing in the Fund if you are willing to accept the risk that you may lose money. Fund share prices, yields, and total returns will change with market fluctuations as well as the fortunes of the countries, currencies, industries, and companies in which the Fund invests.

Investment in the Fund entails the risks of both equity and debt securities, although it seeks to mitigate these risks through a widely diversified portfolio that includes foreign and domestic stocks and bonds. Security prices are subject to market risk, and common stocks in particular may be subject to price declines that are steep, sudden, and/or prolonged.

Foreign investing involves risks not normally associated with US securities. These 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 are typically greater in less developed or emerging countries.

Bonds have interest rate risk, generally falling in price when rates increase. The longer a bond's maturity, the more sensitive the bond is to interest rate changes. Bonds also entail credit risk, which is the possibility that a bond will not pay interest or principal when due. If a bond's credit quality is perceived to decline, investors will demand a higher yield, which means a lower price.

Issuers of high-yield securities are generally not as strong financially as those issuing higher quality securities. These issuers are more likely to encounter financial difficulties and are more vulnerable to changes in the relevant economy that could affect their ability to make interest, principal, and dividend payments as expected. Investments in high-yield securities can be speculative in nature. High-yield bonds may have low or no ratings, and may be considered "junk bonds." The prices of high-yield securities generally fluctuate more than those of higher quality. High-yield securities are generally more illiquid (harder to sell) and harder to value.

Performance

Daily Price and Stats

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As of November 21, 2014 Ticker Price Change YTD 30-Day Yield¹ Dividend
October 31, 2014
Sextant Global High Income SGHIX $11.10 $0.10 5.21% 4.34% n/a

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Average Annual Total Returns

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Month-end, as of October 31, 2014 Ticker 1 Year 3 Year 5 Year 10 Year Expense
Ratio²
30-Day
Yield¹
Sextant Global High Income SGHIX 4.43% n/a n/a n/a 1.25% 4.24%
S&P Global 1200 Index 9.24% 14.93% 11.94% 7.70% n/a n/a
Bloomberg Global High Yield Corporate Bond Index 4.05% 8.77% n/a n/a n/a n/a
Quarter-end, as of September 30, 2014 Ticker 1 Year 3 Year 5 Year 10 Year Expense
Ratio²
30-Day
Yield¹
Sextant Global High Income SGHIX 8.88% n/a n/a n/a 1.25% 3.77%
S&P Global 1200 Index 12.88% 18.54% 11.40% 7.90% n/a n/a
Bloomberg Global High Yield Corporate Bond Index 5.79% 10.60% n/a 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 September 30, 2014

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 September 30, 2014

Top Ten Holdings

 Whistler Blackcomb Holdings  Equity 2.7%
 Grupo Bimbo Bond 2.5%
 Microchip Technology  Equity 2.4%
 SK Telecom ADR  Equity 2.4%
 Rent A Center  Bond 2.4%
 San Miguel   Bond 2.4%
 Novartis ADR  Equity 2.3%
 CNOOC ADR  Equity 2.2%
 Itau Unibanco Holding ADR  Equity 2.2%
 Daimler  Equity 2.1%
Total 23.6%

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

Sector Allocation

Consumer Discretionary 16.5% 19.9% Sextant Global High Income Fund Sector Allocation
Financials 12.6% color box key
Energy 10.9% color box key
Materials 9.8% color box key
Consumer Staples 9.3% color box key
Communications 8.3% color box key
Technology 5.8% color box key
Utilities 5.4% color box key
Foreign Government 5.0% color box key
Health Care 4.1% color box key
Municipal Bonds 3.7% color box key
Industrials 2.0% color box key
Cash and equivalents 6.6% color box key

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

Ratings

Morningstar Ratings™

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Month-end Ratings

As of October 31, 2014 Overall 1 Year 3 Year 5 Year 10 Year
Sextant Global High Income — "Tactical Allocation" Category
(SGHIX) n/a n/a n/a n/a n/a
% Rank in Category n/a 54 n/a n/a n/a
Funds in Category n/a 301 n/a n/a n/a

Quarter-end Ratings

As of September 30, 2014 Overall 1 Year 3 Year 5 Year 10 Year
Sextant Global High Income — "Tactical Allocation" Category
(SGHIX) n/a n/a n/a n/a n/a
% Rank in Category n/a 25 n/a n/a n/a
Funds in Category n/a 297 n/a n/a n/a

Source: Morningstar, Inc. Morningstar, Inc. is an independent fund performance monitor. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return™ measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% in each category receive 5 stars, the next 22.5% 4 stars, the next 35% 3 stars, the next 22.5% 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a fund is derived from a weighted average of performance figures associated with its 3, 5, and 10 year (if applicable) Morningstar Rating™ metrics.

A fund's % Rank in Category is the total-return percentile rank for the specified time period relative to all funds that have the same Morningstar category. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1. Percentile ranks within categories are most useful in those categories that have a large number of funds.

Distributions

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Record Date Ex, Pay and
Reinvest Date
Ordinary
Income
Short-Term
Capital Gains
Long-Term
Capital Gains
Taxable
Income
Total Distributions
(per share)
Sextant Global High Income (SGHIX)
11/27/2013 11/29/2013 $0.21990 $0.00 $0.00 $0.16588 $0.38578
11/29/2012 11/30/2012 $0.08100 $0.00 $0.00 $0.09500 $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 Fees 0.51%
Distribution (12b-1) Fees 0.25%
Other Expenses 0.49%
Total Annual Fund Operating Expenses 1.25%
Fee Waiver and Expense Reimbursement -0.35%
Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement‡ 0.90%

‡The adviser has committed through March 31, 2015, 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 is calculated by dividing the net investment income per share during the preceding 30 days by the net asset value per share on the last day of the period. 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 of the Fund's most recent prospectus or summary prospectus dated March 27, 2014.

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-SATURNA. 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.