Saturna strives to deliver superior performance to our investors. We tailor our advisory service to the specific needs of each client by first conducting a thorough analysis of the client's financial situation, goals, and risk tolerance. We are primarily long-term investors, seeking to preserve and grow clients' capital over time. We believe that for the long-term investor equity securities are the investment of choice, but we recognize that bonds or cash equivalents may be better suited in certain circumstances. Therefore, we also offer advice on most securities commonly held in US investment accounts: domestic and foreign common and preferred stocks; government, corporate, and municipal bonds; mutual funds; convertible securities; warrants; exchange-traded options contracts; and partnership interests.
- Earnings growth
- Increasing dividends
- Strong balance sheets
The annual portfolio turnover rarely exceeds 25%. We occasionally use stock and index options, but normally do not engage in short-term trading, short sales, or margin transactions.
In selecting investments, we are value-oriented; we are reluctant to pay a premium for a stock and endeavor to buy stocks when they are out of favor with the market. One of our Core Values is to make investments only when the expected returns outweigh the risks: we do not chase "fad" stocks or fashionable investment trends. We seek companies that represent high-quality operations, with large free cash flows, sustainable growth rates, increasing dividends, and low price volatility. We favor companies in which management has a considerable stake.
We serve a variety of special client needs, such as those of Islamic investors; our first and largest client is the Amana Mutual Funds Trust, which follows Islamic principles that impose restrictions on the securities in which the Trust may invest. We also manage sustainable investing strategies, such as those of the Saturna Sustainable Funds. We favor sustainable issuers because they are generally larger, more established, consistently profitable, and financially strong, with low risks in areas of the environment, social responsibility, and governance ("ESG").
In advocating ethical investing, we believe that companies with effective corporate responsibility policies are better positioned to avoid crises that could lead to reputation damage, higher costs, lost production, and fraudulent operations. We favor companies with stable earnings and strong balance sheets free of excessive debt.
Because we are moderately risk-averse, our performance may trail the averages in rising markets, as we seek to minimize losses during falling markets.
We look for investment opportunities globally. Note that all foreign investments are subject to risks of: (1) political and economic instability; (2) adverse movements in exchange rates; (3) currency devaluation; (4) the imposition or tightening of exchange controls or other limitations on repatriation of capital; (5) changes in governmental attitudes towards private investment, including potential nationalization, increased taxation or confiscation of assets; and (6) differing reporting, accounting, and auditing standards of countries.
Analytical responsibility is divided among our investment staff by sectors and industries. Portfolio managers select issues that meet client objectives from our "recommended list," which we limit to approximately 325 securities.
In fixed-income accounts, we try to reduce risk by focusing on quality and income. When a client's objective is income, we generally use higher-quality short- to medium-term bonds, either taxable or tax-exempt, and high-yield equities.
Saturna gathers investment information from many sources. We maintain our own networked files on hundreds of actively followed companies. We maintain our own securities database for reports, stock screening and evaluations. Our analysts regularly read numerous financial and market publications and also review securities and markets with independent analytical services. Our analysts travel domestically and internationally to investigate economic conditions, participate in investment conferences and meet with company management.