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Saturna Sustainable Funds

Saturna Sustainable Bond Fund


Fund Facts

As of December 31, 2016
Net Assets: $8.75 million
Ticker Symbol: SEBFX
CUSIP: 804096881
Inception Date: March 27, 2015
Minimum Initial Investment: $10,000
30-Day Yield¹: 4.14%

Portfolio Managers

Patrick Drum MBA, CFA, CFP®

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® (CFA®) 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.

Bryce Fegley CFA, CIPM®

Deputy Deputy Portfolio Manager since 2015

Bryce Fegley, 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.

Investment Style

Targeted to investors seeking capital preservation and current income

Globally diversified across industries, companies, and countries

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

Investment Objective

Current income and capital preservation.

Principal Investment Strategies

Under normal conditions, the Fund invests at least 80% of its assets in bonds of issuers located throughout the world that the Fund's adviser believes demonstrate sustainable characteristics. For purposes of this investment policy, the Fund's adviser considers issuers with sustainable characteristics to be those issuers that are generally larger, more established, consistently profitable, and financially strong, and with low risks in the areas of the environment, social responsibility and corporate governance ("ESG"). The Fund's adviser uses an internally developed ESG rating system to identify issuers that the Fund's adviser believes present low ESG risks.

Under normal conditions, the Fund invests at least 65% of its assets in bonds within the four highest grades (Aaa, Aa, A, or Baa) and may invest up to 35% in unrated and high-yield bonds.

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.

Investment strategy risk: The adviser believes that sustainable investing may mitigate security-specific risk, but the screens used in connection with sustainable investing reduces the investable universe, which limits opportunities and may increase the risk of loss during market declines. In addition, the Fund has a relatively limited operating history, having commenced investment operations in March 2015, and its limited performance history does not provide extensive information on how the Funds may perform in different 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.

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.


The Saturna Sustainable Equity Fund began operations on March 27, 2015 and consequently has no historical returns to report. In the future, this page will be updated to show how the Fund's average annual total returns and other performance metrics compare with the Citigroup World BIG Bond Index.

Daily Price and Stats

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As of January 23, 2017 Ticker Price Change YTD 30-Day Yield¹
Saturna Sustainable Bond SEBFX $9.66 $0.03 0.62% 4.21%

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Average Annual Total Returns

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Month-end, as of December 31, 2016 Ticker 1 Year 3 Year 5 Year 10 Year Expense
Saturna Sustainable Bond SEBFX 1.85% n/a n/a n/a 1.02% 4.14%
Citi World BIG Bond Index 1.95% -0.18% 0.29% 3.36% n/a n/a
Quarter-end, as of December 31, 2016 Ticker 1 Year 3 Year 5 Year 10 Year Expense
Saturna Sustainable Bond SEBFX 1.85% n/a n/a n/a 1.02% 4.14%
Citi World BIG Bond Index 1.95% -0.18% 0.29% 3.36% 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 December 31, 2016

Annual Total ReturnsAnnual Total Returns

The Citigroup World BIG Bond Index is a multi-asset, multi-currency benchmark, which provides a broad-based measure of the global fixed income markets.


As of December 31, 2016

Top Ten Holdings

NextEra Energy Capital 5.2%
Chubb 5.2%
Mexico Bonos Desarrollo 4.6%
Canadian Imperial Bank 4.3%
Nokia 4.2%
New Zealand Government 4.0%
Flextronics International 3.9%
Koninklijke Philips 3.9%
BRF 3.8%
Telecom Italia 3.8%
Total 42.9%

Sector Allocation

Financials 20.7% color box key Saturna Sustainable Fund Sector Allocation
Consumer Discretionary 18.7% color box key
Communications 12.9% color box key
Technology 9.3% color box key
Foreign Government 8.6% color box key
Health Care 6.9% color box key
Energy 5.2% color box key
Consumer Staples 3.8% color box key
Industrials 3.8% color box key
Sectors < 2% 4.0% color box key
Cash and equivalents 6.1% color box key

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

Country Allocation

Annual Total ReturnsAnnual Total Returns

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


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Record Date Ex, Pay and
Reinvest Date
Capital Gains
Capital Gains
Total Distributions
(per share)
Saturna Sustainable Bond (SEBFX)
12/29/2016 12/30/2016 $0.01991 $0.00 $0.00973 $0.00501 $0.03465
11/29/2016 11/30/2016 $0.01743 $0.00 $0.00 $0.00 $0.01743
10/28/2016 10/31/2016 $0.02326 $0.00 $0.00 $0.00 $0.02326
09/29/2016 09/30/2016 $0.01950 $0.00 $0.00 $0.00 $0.01950
08/30/2016 08/31/2016 $0.02162 $0.00 $0.00 $0.00 $0.02162
07/28/2016 07/29/2016 $0.01928 $0.00 $0.00 $0.00 $0.01928
06/29/2016 06/30/2016 $0.01885 $0.00 $0.00 $0.00 $0.01885
05/27/2016 05/31/2016 $0.02179 $0.00 $0.00 $0.00 $0.02179
04/28/2016 04/29/2016 $0.01726 $0.00 $0.00 $0.00 $0.01726
03/30/2016 03/31/2016 $0.02037 $0.00 $0.00 $0.00 $0.02037
02/26/2016 02/29/2016 $0.01896 $0.00 $0.00 $0.00 $0.01896
01/28/2016 01/29/2016 $0.01743 $0.00 $0.00 $0.00 $0.01743
12/30/2015 12/31/2015 $0.01878 $0.00 $0.00 $0.00 $0.01878
11/27/2015 11/30/2015 $0.01673 $0.00 $0.00 $0.00 $0.01673
10/29/2015 10/30/2015 $0.01751 $0.00 $0.00 $0.00 $0.01751
09/29/2015 09/30/2015 $0.01681 $0.00 $0.00 $0.00 $0.01681
08/28/2015 08/31/2015 $0.01677 $0.00 $0.00 $0.00 $0.01677
07/30/2015 07/31/2015 $0.01672 $0.00 $0.00 $0.00 $0.01672
06/29/2015 06/30/2015 $0.01608 $0.00 $0.00 $0.00 $0.01608
05/28/2015 05/29/2015 $0.01553 $0.00 $0.00 $0.00 $0.01553
04/29/2015 04/30/2015 $0.00471 $0.00 $0.00 $0.00 $0.00471

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The Saturna Sustainable Bond Fund intends to distribute its net investment income and net realized capital gains, if any, to its shareowners. The Fund pays income dividends daily, which are reinvested or distributed monthly. Distributions from net capital gains, if any, are paid at the end of November.

Both dividends and capital gain distributions are paid in additional full and fractional shares of the share class owned. At your option, you may receive dividends and/or capital gain distributions in cash. You are notified of each dividend and capital gain distribution when paid. Returned dividend payments will be automatically reinvested into your account and invested in additional shares of the Fund; future dividends in such accounts will continue to be reinvested until the shareowner is located or the account is closed.

Distributions for the last five years are listed in the table above. For prior distributions, please contact a Saturna representative.

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

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
Saturna Sustainable Bond (SEBFX)
Management Fees 0.55%
Distribution (12b-1) Fees 0.25%
Other Expenses † 0.22%
Total Annual Fund Operating Expenses 1.02%
Fee Waiver and Expense Reimbursement -0.13%
Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement‡ 0.89%

† The "Other Expenses" are based on estimated amounts for the initial fiscal year.

‡ The investment 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 0.89%. 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.

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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