The fund's flexible mandate capitalizes on and responds to demographic trends
Bryce Fegley CFA
Investment Analyst, Tactician,
Bellingham, WA (April 10, 2012) — Saturna Capital Corporation, investment adviser to the Amana, Sextant, and Idaho Tax-Exempt Mutual Funds, announces the launch of the Sextant Global High Income Fund (SGHIX), which seeks high income from a globally diversified portfolio of debt and equity securities. The fund's flexible mandate is uncommon among its high income/high yield fund peer group in that it permits investments in US and foreign bonds as well as common and preferred stocks. Also distinctive is the fund's secondary objective of capital preservation, which integrates risk exposure constraints into its fundamental strategy.
The fund is co-managed by Bryce Fegley, CFA, and John Scott, CFA, who have been members of the Saturna investment team since 2001 and 2009, respectively, working closely with Saturna's chief investment officer and highly-regarded portfolio manager Nicholas Kaiser.
Sextant Global High Income Fund is expected to appeal to risk-averse, income-seeking investors who appreciate Saturna's trademark conservative, value-oriented style.
The fund's focus on global asset diversification allows it to serve as a core holding in a balanced, income-oriented portfolio. Also, having capital preservation as its secondary objective, the fund is sensitive to the post-financial crisis mindset.
"The baby boomer generation is expected to face challenges in generating income for retirement, due to lower economic growth, lower yields on US government bonds, and potential inflation," said Bryce Fegley. "On top of that, the ratio of retirees to workers in the US will increase by 75% over the next 15 years, potentially triggering a generational wave of market sell-offs as retirees draw on their 401(k)s. Our new fund is a solution to the downward pressure we expect to negatively impact US security values," he added.
John Scott pointed out, "Investors need to look beyond the US for inflation protected investments. The flexible mandate of the fund permits the team to hunt for high income-producing assets globally, wherever the long-term growth outlook and demographics are more attractive."
The fund's global investment universe includes the 1200 largest dividend-paying common stocks, targeting yields above 4%; global high yield bonds, including sovereigns and US high-yield corporates; and, to a lesser extent, preferred stocks. Constraints embedded in the fund's design promote diversification and reduced exposure to potential risk. The fund may hold no more than 50% of its assets in common stocks, no more than 50% in securities of US issuers, no more than 50% in bonds rated A- or higher, and no more than 33% in securities of emerging market issuers. In addition, the fund is not permitted to engage in hedges, credit default swaps, or other transactions that involve leverage or borrowing.
The Sextant Funds are series of the Saturna Investment Trust, consisting of Sextant International, Sextant Growth, Sextant Core, Sextant Bond Income, Sextant Short-Term Bond, and Sextant Global High Income. The Idaho Tax-Exempt Fund is a separate series of Saturna Investment Trust offered by different prospectus.
For more information about the Sextant Global High Income Fund, visit www.sextantfunds.com/sghix.