Documents | Saturna Capital

 

 

Navigating Today's Volatile Markets

 

 

Sextant Bond Income Fund Summary Prospectus

Beginning on January 29, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Sextant Mutual Funds' annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds' website (www.saturna.com/reports), and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 800-SATURNA (800-728-8762) or by sending an e-mail request to Sextant Mutual Funds at info@saturna.com.

Beginning on January 2, 2019, you may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can call 800-SATURNA (800-728-8762) or send an e-mail request to Sextant Mutual Funds at info@saturna.com to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with the Funds.

 

Sextant Bond Income Fund

Ticker Symbol: SBIFX

March 27, 2019

SUMMARY PROSPECTUS

Before you invest, you may want to review Sextant Bond Income Fund's prospectus, which contains more information about the Fund and its risks. You can find the Fund's prospectus and other information about the Fund, including the statement of additional information and most recent reports to shareowners, online at www.saturna.com/prospectus. You can also get this information at no cost by calling 1-800-728-8762 or by sending an email request to info@saturna.com. The Fund's prospectus and statement of additional information, both dated March 27, 2019, are incorporated by reference into this Summary Prospectus.


Sextant Bond Income Fund

SBIFX

Investment Objective

Current income.

Fees and Expenses

This section describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareowner Fees

None.

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fees (vary with performance) 0.41%
Other Expenses 0.43%
Total Annual Fund Operating Expenses 0.84%
Fee Waiver and Expense Reimbursement 0.19%
Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement 0.65%

The adviser has committed through March 31, 2020, 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 0.65%. This expense limitation agreement may be changed or terminated only with approval of the Board of Trustees.

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The Example assumes you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions, your costs would be:

1 year 3 years 5 years 10 years
$88 $274 $477 $1,061

When you buy shares through a financial intermediary, that intermediary may charge a transaction fee or commission which is not reflected in the expenses table or example. Purchases and redemptions of Fund shares will be made at the daily net asset value established by the Fund (before imposition of a commission).

Portfolio Turnover

The Fund may have transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 0.00% of the average value of its portfolio.

Principal Investment Strategies

The Fund invests at least 80% of its net assets in bonds, including corporate and government bonds. Under normal circumstances, the Fund maintains a dollar-weighted average maturity of 10 years or more. The Fund invests at least 65% of net assets in bonds rated within the three highest grades (AAA, AA, or A) and may not invest in a bond rated at the time of purchase below the fourth highest grade (BBB).

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.

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.

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.


Sextant Bond Income Fund

SBIFX

Performance

Annual Total Return

The following bar chart presents the calendar year total returns of the Fund before taxes. The bar chart provides an indication of the risks of investing in the Fund by showing changes in performance from year to year. A fund's past performance (before and after taxes) is not a guarantee of how a fund will perform in the future.

Performance data current to the most recent month-end and quarter-end are available on www.sextantfunds.com.

Sextant Bond Income Fund Annual Total Returns
Best Quarter Q3 2009 5.35%
Worst Quarter Q2 2013 -4.27%

Average Annual Total Returns

The table below presents the average annual returns for the Fund and provides an indication of the risks of investing in the Fund by showing how the Fund's average annual returns for 1, 5, and 10 years compare to those of a broad-based market index.

Periods ended December 31, 2018
  1 Year 5 Year 10 Year
Return before taxes -1.13% 2.95% 4.13%
Return after taxes on distributions -2.42% 1.60% 2.76%
Return after taxes on distributions and sale of Fund shares -1.42% 1.59% 2.59%
FTSE US Broad Investment-Grade Bond Index
(reflects no deduction for fees, expenses or taxes)
-0.01% 2.51% 3.36%

After-tax returns are calculated using the historical highest individual federal marginal income tax rates but do not reflect the impact of any state or local taxes. Actual after-tax returns depend on an investor's tax situation and likely differ from those shown. After-tax illustrations are not relevant to retirement plans, corporations, trusts, or other investors that are tax-deferred, tax-exempt, or taxed at special rates.

In loss periods, the average after-tax total return may be higher than average annual total return because of an assumed deduction of losses from other income.

Investment Adviser

Saturna Capital Corporation is the Fund's investment adviser.

Portfolio Managers

Mr. Phelps S. McIlvaine, a vice president and portfolio manager of Saturna Capital Corporation, is the person primarily responsible for the day-to-day management of the Fund, which he has managed since 1995. Mr. Patrick T. Drum MBA, CFA®, a portfolio manager and fixed income analyst of Saturna Capital Corporation, is the deputy portfolio manager, a role he assumed in 2015.

Purchase and Sale of Fund Shares

You may open an account and purchase shares by sending a completed application, a photocopy of a government-issued identity document, and a check made payable to the Sextant Bond Income Fund.

The minimum initial investment is $1,000 (for tax-sheltered accounts, there is no minimum).

Shareowners may purchase additional shares at any time in minimum amounts of $25.

Shareowners may redeem shares on any business day by several methods:

Written request

Write:   Sextant Mutual Funds
            Box N
            Bellingham, WA 98227-0596

Or Fax: 360-734-0755

Telephone request

Call: 800-728-8762 or 360-734-9900

Online

Visit: www.sextantfunds.com


Sextant Bond Income Fund

SBIFX

Tax Information

Any distributions you receive from the Fund may be taxed as ordinary income or capital gains.

Financial Intermediary Compensation

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

 

Sextant Mutual Funds Prospectus March 27, 2019

Beginning on January 29, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Sextant Mutual Funds' annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds' website (www.saturna.com/reports), and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 800-SATURNA (800-728-8762) or by sending an e-mail request to Sextant Mutual Funds at info@saturna.com.

Beginning on January 2, 2019, you may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can call 800-SATURNA (800-728-8762) or send an e-mail request to Sextant Mutual Funds at info@saturna.com to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with the Funds.

Sextant Growth Fund
Investor
Z
(SSGFX)
(SGZFX)
Sextant International Fund
Investor
Z
(SSIFX)
(SIFZX)
Sextant Core Fund
(SCORX)
Sextant Short-Term Bond Fund
(STBFX)
Sextant Bond Income Fund
(SBIFX)
Sextant Global High Income Fund
(SGHIX)

Sextant Mutual Funds

Prospectus

March 27, 2019

Please read this Prospectus and keep it for future reference. It is designed to provide important information and to help investors decide if the Funds' goals match their own.

Neither the Securities and Exchange Commission nor any state securities authority has approved or disapproved these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The Sextant Funds are series of Saturna Investment Trust.


Table of Contents:

Sextant Growth Fund 3
Sextant International Fund 6
Sextant Core Fund 9
Sextant Short-Term Bond Fund 12
Sextant Bond Income Fund 15
Sextant Global High Income Fund 18
Investment Objectives 21
Principal Investment Strategies 21
Principal Risks 22
Investment Information 24
Investment Adviser 24
Fund Share Pricing 25
Purchase and Sale of Fund Shares 26
Purchase and Sale of Fund Shares Through Financial Intermediaries 28
Distributions 28
Frequent Trading Policy 28
Tax Consequences 29
Distribution Arrangements 29
Financial Highlights 31

2


Sextant Growth Fund

SSGFX/SGZFX

Investment Objective

Long-term capital growth.

Fees and Expenses

This section describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareowner Fees

None.

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
  Investor Shares Z Shares
Management Fees (vary with performance) 0.42% 0.42%
Distribution (12b-1) Fees 0.25% None
Other Expenses 0.25% 0.28%
Total Annual Fund Operating Expenses 0.92% 0.70%

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The Example assumes you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions, your costs would be:

1 year 3 years 5 years 10 years
Investor Shares
$94 $293 $509 $1,131
Z Shares
$72 $224 $390 $871

When you buy shares through a financial intermediary, that intermediary may charge a transaction fee or commission which is not reflected in the expenses table or example. Purchases and redemptions of Fund shares will be made at the daily net asset value established by the Fund (before imposition of a commission).

Portfolio Turnover

The Fund may have transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 17.04% of the average value of its portfolio.

Principal Investment Strategies

The Fund seeks long-term capital growth by investing in common stocks of US companies. The Fund diversifies its investments across industries and companies. The Fund looks for companies with growing revenues and earnings, favoring companies trading for less than the adviser's assessment of intrinsic value, which typically means companies with low price/earning multiples, low price to cash flow, and higher dividend yields. The Fund principally invests in securities of companies with market capitalizations greater than $1 billion.

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. Larger companies may have slower rates of growth as compared to smaller, faster-growing companies. Smaller companies may have more limited financial resources, products, or services, and tend to be more sensitive to changing economic or market conditions.

Growth investing risk: The Fund may invest in growth stocks, which may be more volatile than slower-growing value stocks, especially when market expectations are not met.

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.

3


Sextant Growth Fund

SSGFX/SGZFX

Performance

Annual Total Return

The following bar chart presents the calendar year total returns of the Fund's Investor Shares before taxes. The bar chart provides an indication of the risks of investing in the Fund by showing changes in performance from year to year. A fund's past performance (before and after taxes) is not a guarantee of how a fund will perform in the future.

Performance data current to the most recent month-end and quarter-end are available on www.sextantfunds.com.

Sextant Growth Fund Annual Total Returns
Best Quarter Q1 2012 12.31%
Worst Quarter Q4 2018 -16.00%

Average Annual Total Returns

The table below presents the average annual returns for the Fund and provides an indication of the risks of investing in the Fund by showing how the Fund's average annual returns for 1, 5, and 10 years compare to those of a broad-based market index.

Periods ended December 31, 2018
  1 Year 5 Year 10 Year
Investor Shares SSGFX
Return before taxes 0.42% 6.28% 10.48%
Return after taxes on distributions -0.75% 4.94% 9.52%
Return after taxes on distributions and sale of Fund shares 0.23% 4.43% 9.04%
S&P 500 Index
(reflects no deduction for fees, expenses or taxes)
-4.38% 8.49% 13.11%
  1 Year Since Inception
June 2, 2017
Z Shares   SGZFX
Return before taxes 0.67% 5.66%

After-tax returns are calculated using the historical highest individual federal marginal income tax rates but do not reflect the impact of any state or local taxes. Actual after-tax returns depend on an investor's tax situation and likely differ from those shown. After-tax illustrations are not relevant to retirement plans, corporations, trusts, or other investors that are tax-deferred, tax-exempt, or taxed at special rates.

4


Sextant Growth Fund

SSGFX/SGZFX

Investment Adviser

Saturna Capital Corporation is the Fund's investment adviser.

Portfolio Managers

Mr. Scott F. Klimo CFA®, a portfolio manager and chief investment officer of Saturna Capital Corporation, is the person primarily responsible for the day-to-day management of the Fund, which he has managed since 2015. Mr. Christopher E. Paul MBA, CFA®, a portfolio manager and senior investment analyst of Saturna Capital Corporation, is the deputy portfolio manager, a role he assumed in 2018.

Purchase and Sale of Fund Shares

You may open an account and purchase shares by sending a completed application, a photocopy of a government-issued identity document, and a check made payable to the Sextant Growth Fund. Z Shares will be purchased by default if no share class is specified at the time of purchase.

The minimum initial investment for both Investor Shares and Z Shares is $1,000 (for tax-sheltered accounts, there is no minimum).

Shareowners may purchase additional shares at any time in minimum amounts of $25.

Shareowners may redeem shares on any business day by several methods:

Written request

Write:   Sextant Mutual Funds
            Box N
            Bellingham, WA 98227-0596

Or Fax: 360-734-0755

Telephone request

Call: 800-728-8762 or 360-734-9900

Online

Visit: www.sextantfunds.com

Tax Information

Any distributions you receive from the Fund may be taxed as ordinary income, qualified dividend income, or capital gains.

Financial Intermediary Compensation

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

5


Sextant International Fund

SSIFX/SIFZX

Investment Objective

Long-term capital growth.

Fees and Expenses

This section describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareowner Fees

None.

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
  Investor Shares Z Shares
Management Fees (vary with performance) 0.58% 0.58%
Distribution (12b-1) Fees 0.25% None
Other Expenses 0.22% 0.26%
Total Annual Fund Operating Expenses 1.05% 0.84%

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The Example assumes you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions, your costs would be:

1 year 3 years 5 years 10 years
Investor Shares
$107 $334 $579 $1,283
Z Shares
$86 $268 $466 $1,037

When you buy shares through a financial intermediary, that intermediary may charge a transaction fee or commission which is not reflected in the expenses table or example. Purchases and redemptions of Fund shares will be made at the daily net asset value established by the Fund (before imposition of a commission).

Portfolio Turnover

The Fund may have transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 2.38% of the average value of its portfolio.

Principal Investment Strategies

The Fund diversifies its investments among many countries, predominantly those with mature markets (such as Europe and Canada). The Fund invests at least 65% of its net assets in companies with their headquarters, and at least half of their assets and earnings, outside the US. The Fund diversifies its investments across industries, companies, and countries. The Fund looks for companies with growing revenues and earnings, favoring companies trading for less than the adviser's assessment of intrinsic value, which typically means companies with low price/earning multiples, low price to cash flow, and higher dividend yields. The Fund principally invests in securities of companies with market capitalizations greater than $1 billion.

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. Larger companies may have slower rates of growth as compared to smaller, faster-growing companies. Smaller companies may have more limited financial resources, products, or services, and tend to be more sensitive to changing economic or market conditions.

6


Sextant International Fund

SSIFX/SIFZX

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.

Emerging markets risk: In emerging markets and less developed countries, the risks of investing in foreign securities can be magnified by less mature political systems and weaker corporate governance standards than typically found in the developed world.

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

Annual Total Return

The following bar chart presents the calendar year total returns of the Fund Investor Shares before taxes. The bar chart provides an indication of the risks of investing in the Fund by showing changes in performance from year to year. A fund's past performance (before and after taxes) is not a guarantee of how a fund will perform in the future.

Performance data current to the most recent month-end and quarter-end are available on www.sextantfunds.com.

Sextant International Fund Annual Total Returns
Best Quarter Q3 2010 12.85%
Worst Quarter Q3 2011 -14.18%

Average Annual Total Returns

The table below presents the average annual returns for the Fund and provides an indication of the risks of investing in the Fund by showing how the Fund's average annual returns for 1, 5, and 10 years compare to those of a broad-based market index.

Periods ended December 31, 2018
  1 Year 5 Year 10 Year
Investor Shares SSIFX
Return before taxes -3.94% 3.26% 5.55%
Return after taxes on distributions -5.58% 2.31% 4.98%
Return after taxes on distributions and sale of Fund shares -3.18% 2.27% 4.71%
MSCI EAFE Index
(reflects no deduction for fees, expenses or taxes)
-13.36% 1.00% 6.81%
  1 Year Since Inception
June 2, 2017
Z Shares   SIFZX
Return before taxes -3.71% 4.22%

After-tax returns are calculated using the historical highest individual federal marginal income tax rates but do not reflect the impact of any state or local taxes. Actual after-tax returns depend on an investor's tax situation and likely differ from those shown. After-tax illustrations are not relevant to retirement plans, corporations, trusts, or other investors that are tax-deferred, tax-exempt, or taxed at special rates.

In loss periods, the average after-tax total return may be higher than average annual total return because of an assumed deduction of losses from other income.

7


Sextant International Fund

SSIFX/SIFZX

Investment Adviser

Saturna Capital Corporation is the Fund's investment adviser.

Portfolio Managers

Mr. Nicholas F. Kaiser MBA, CFA®, chairman of Saturna Capital Corporation, is the person primarily responsible for the day-to-day management of the Fund, which he has managed since 1995. Mr. Scott F. Klimo CFA®, a portfolio manager and chief investment officer of Saturna Capital Corporation, has been the deputy portfolio manager since 2014.

Purchase and Sale of Fund Shares

You may open an account and purchase shares by sending a completed application, a photocopy of a government-issued identity document, and a check made payable to the Sextant International Fund. Z Shares will be purchased by default if no share class is specified at the time of purchase.

The minimum initial investment for both Investor Shares and Z Shares is $1,000 (for tax-sheltered accounts, there is no minimum).

Shareowners may purchase additional shares at any time in minimum amounts of $25.

Shareowners may redeem shares on any business day by several methods:

Written request

Write:   Sextant Mutual Funds
            Box N
            Bellingham, WA 98227-0596

Or Fax: 360-734-0755

Telephone request

Call: 800-728-8762 or 360-734-9900

Online

Visit: www.sextantfunds.com

Tax Information

Any distributions you receive from the Fund may be taxed as ordinary income, qualified dividend income, or capital gains.

Financial Intermediary Compensation

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

8


Sextant Core Fund

SCORX

Investment Objective

Long-term appreciation and capital preservation.

Fees and Expenses

This section describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareowner Fees

None.

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fees (vary with performance) 0.51%
Other Expenses 0.37%
Total Annual Fund Operating Expenses 0.88%

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The Example assumes you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions, your costs would be:

1 year 3 years 5 years 10 years
$90 $281 $488 $1,084

When you buy shares through a financial intermediary, that intermediary may charge a transaction fee or commission which is not reflected in the expenses table or example. Purchases and redemptions of Fund shares will be made at the daily net asset value established by the Fund (before imposition of a commission).

Portfolio Turnover

The Fund may have transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 30.01% of the average value of its portfolio.

Principal Investment Strategies

The Fund invests in a mix of equity and debt securities. It normally invests 40% of its assets in equity securities of US companies, 20% in foreign equity securities, and 40% in investment grade fixed income securities (those rated BBB or higher, including government and convertible bonds) including money market instruments and cash. When selecting equities, the Fund follows a value investment style and principally invests in income-producing securities of companies with market capitalizations greater than $5 billion.

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. Larger companies may have slower rates of growth as compared to smaller, faster-growing companies. Smaller 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.

9


Sextant Core Fund

SCORX

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.

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.

Performance

Annual Total Return

The following bar chart presents the calendar year total returns of the Fund before taxes. The bar chart provides an indication of the risks of investing in the Fund by showing changes in performance from year to year. A fund's past performance (before and after taxes) is not a guarantee of how a fund will perform in the future.

Performance data current to the most recent month-end and quarter-end are available on www.sextantfunds.com.

Sextant Core Fund Annual Total Returns
Best Quarter Q2 2009 9.85%
Worst Quarter Q3 2011 -8.54%

Average Annual Total Returns

The table below presents the average annual returns for the Fund and provides an indication of the risks of investing in the Fund by showing how the Fund's average annual returns for 1, 5, and 10 years compare to those of a broad-based market index.

Periods ended December 31, 2018
  1 Year 5 Year 10 Year
Return before taxes -4.62% 2.91% 6.08%
Return after taxes on distributions -4.88% 2.33% 5.58%
Return after taxes on distributions and sale of Fund shares -3.47% 2.21% 5.45%
Dow Jones Moderate Portfolio Index
(reflects no deduction for fees, expenses or taxes)
-5.21% 4.11% 8.21%

After-tax returns are calculated using the historical highest individual federal marginal income tax rates but do not reflect the impact of any state or local taxes. Actual after-tax returns depend on an investor's tax situation and likely differ from those shown. After-tax illustrations are not relevant to retirement plans, corporations, trusts, or other investors that are tax-deferred, tax-exempt, or taxed at special rates.

In loss periods, the average after-tax total return may be higher than average annual total return because of an assumed deduction of losses from other income.

10


Sextant Core Fund

SCORX

Investment Adviser

Saturna Capital Corporation is the Fund's investment adviser.

Portfolio Managers

Mr. Christopher E. Paul MBA, CFA® and Mr. Phelps S. McIlvaine, both portfolio managers and investment analysts of Saturna Capital Corporation, are the persons jointly and primarily responsible for the day-to-day management of the Fund, which they have managed since 2016. Mr. Paul is responsbile for the equity portion of the portfolio. Mr. McIlvaine is responsible for the bond portion of the portfolio.

Purchase and Sale of Fund Shares

You may open an account and purchase shares by sending a completed application, a photocopy of a government-issued identity document, and a check made payable to the Sextant Core Fund.

The minimum initial investment is $1,000 (for tax-sheltered accounts, there is no minimum).

Shareowners may purchase additional shares at any time in minimum amounts of $25.

Shareowners may redeem shares on any business day by several methods:

Written request

Write:   Sextant Mutual Funds
            Box N
            Bellingham, WA 98227-0596

Or Fax: 360-734-0755

Telephone request

Call: 800-728-8762 or 360-734-9900

Online

Visit: www.sextantfunds.com

Tax Information

Any distributions you receive from the Fund may be taxed as ordinary income, qualified dividend income, or capital gains.

Financial Intermediary Compensation

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

11


Sextant Short-Term Bond Fund

STBFX

Investment Objective

Capital preservation and current income.

Fees and Expenses

This section describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareowner Fees

None.

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fees (vary with performance) 0.47%
Other Expenses 0.44%
Total Annual Fund Operating Expenses 0.91%
Fee Waiver and Expense Reimbursement 0.31%
Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement 0.60%

The adviser has committed through March 31, 2020, 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 0.60%. This expense limitation agreement may be changed or terminated only with approval of the Board of Trustees.

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The Example assumes you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions, your costs would be:

1 year 3 years 5 years 10 years
$93 $290 $504 $1,120

When you buy shares through a financial intermediary, that intermediary may charge a transaction fee or commission which is not reflected in the expenses table or example. Purchases and redemptions of Fund shares will be made at the daily net asset value established by the Fund (before imposition of a commission).

Portfolio Turnover

The Fund may have transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 36.22% of the average value of its portfolio.

Principal Investment Strategies

The Fund invests at least 80% of its net assets in short-term bonds, including corporate and government bonds. Under normal circumstances, the Fund's dollar-weighted average maturity does not exceed three years. The Fund invests at least 65% of net assets in bonds rated within the three highest grades (AAA, AA, or A); and may not invest in a bond rated at the time of purchase below the fourth-highest grade (BBB).

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.

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.

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.

12


Sextant Short-Term Bond Fund

STBFX

Performance

Annual Total Return

The following bar chart presents the calendar year total returns of the Fund before taxes. The bar chart provides an indication of the risks of investing in the Fund by showing changes in performance from year to year. A fund's past performance (before and after taxes) is not a guarantee of how a fund will perform in the future.

Performance data current to the most recent month-end and quarter-end are available on www.sextantfunds.com.

Sextant Short-Term Bond Fund Annual Total Returns
Best Quarter Q2 2009 2.79%
Worst Quarter Q2 2013 -0.90%

Average Annual Total Returns

The table below presents the average annual returns for the Fund and provides an indication of the risks of investing in the Fund by showing how the Fund's average annual returns for 1, 5, and 10 years compare to those of a broad-based market index.

Periods ended December 31, 2018
  1 Year 5 Year 10 Year
Return before taxes 1.08% 1.01% 1.78%
Return after taxes on distributions 0.47% 0.49% 1.15%
Return after taxes on distributions and sale of Fund shares 0.57% 0.53% 1.07%
FTSE USBIG Govt/Corp 1-3 Year Bond Index
(reflects no deduction for fees, expenses or taxes)
1.56% 0.98% 1.49%

After-tax returns are calculated using the historical highest individual federal marginal income tax rates but do not reflect the impact of any state or local taxes. Actual after-tax returns depend on an investor's tax situation and likely differ from those shown. After-tax illustrations are not relevant to retirement plans, corporations, trusts, or other investors that are tax-deferred, tax-exempt, or taxed at special rates.

In loss periods, the average after-tax total return may be higher than average annual total return because of an assumed deduction of losses from other income.

Investment Adviser

Saturna Capital Corporation is the Fund's investment adviser.

Portfolio Managers

Mr. Phelps S. McIlvaine, a vice president and portfolio manager of Saturna Capital Corporation, is the person primarily responsible for the day-to-day management of the Fund, which he has managed since 1995. Mr. Patrick T. Drum MBA, CFA®, a portfolio manager and fixed income analyst of Saturna Capital Corporation, is the deputy portfolio manager, a role he assumed in 2015.

Purchase and Sale of Fund Shares

You may open an account and purchase shares by sending a completed application, a photocopy of a government-issued identity document, and a check made payable to the Sextant Short-Term Bond Fund.

The minimum initial investment is $1,000 (for tax-sheltered accounts, there is no minimum).

Shareowners may purchase additional shares at any time in minimum amounts of $25.

Shareowners may redeem shares on any business day by several methods:

Written request

Write:   Sextant Mutual Funds
            Box N
            Bellingham, WA 98227-0596

Or Fax: 360-734-0755

Telephone request

Call: 800-728-8762 or 360-734-9900

Online

Visit: www.sextantfunds.com

13


Sextant Short-Term Bond Fund

STBFX

Tax Information

Any distributions you receive from the Fund may be taxed as ordinary income or capital gains.

Financial Intermediary Compensation

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

14


Sextant Bond Income Fund

SBIFX

Investment Objective

Current income.

Fees and Expenses

This section describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareowner Fees

None.

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fees (vary with performance) 0.41%
Other Expenses 0.43%
Total Annual Fund Operating Expenses 0.84%
Fee Waiver and Expense Reimbursement 0.19%
Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement 0.65%

The adviser has committed through March 31, 2020, 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 0.65%. This expense limitation agreement may be changed or terminated only with approval of the Board of Trustees.

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The Example assumes you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions, your costs would be:

1 year 3 years 5 years 10 years
$88 $274 $477 $1,061

When you buy shares through a financial intermediary, that intermediary may charge a transaction fee or commission which is not reflected in the expenses table or example. Purchases and redemptions of Fund shares will be made at the daily net asset value established by the Fund (before imposition of a commission).

Portfolio Turnover

The Fund may have transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 0.00% of the average value of its portfolio.

Principal Investment Strategies

The Fund invests at least 80% of its net assets in bonds, including corporate and government bonds. Under normal circumstances, the Fund maintains a dollar-weighted average maturity of 10 years or more. The Fund invests at least 65% of net assets in bonds rated within the three highest grades (AAA, AA, or A) and may not invest in a bond rated at the time of purchase below the fourth highest grade (BBB).

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.

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.

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.

15


Sextant Bond Income Fund

SBIFX

Performance

Annual Total Return

The following bar chart presents the calendar year total returns of the Fund before taxes. The bar chart provides an indication of the risks of investing in the Fund by showing changes in performance from year to year. A fund's past performance (before and after taxes) is not a guarantee of how a fund will perform in the future.

Performance data current to the most recent month-end and quarter-end are available on www.sextantfunds.com.

Sextant Bond Income Fund Annual Total Returns
Best Quarter Q3 2009 5.35%
Worst Quarter Q2 2013 -4.27%

Average Annual Total Returns

The table below presents the average annual returns for the Fund and provides an indication of the risks of investing in the Fund by showing how the Fund's average annual returns for 1, 5, and 10 years compare to those of a broad-based market index.

Periods ended December 31, 2018
  1 Year 5 Year 10 Year
Return before taxes -1.13% 2.95% 4.13%
Return after taxes on distributions -2.42% 1.60% 2.76%
Return after taxes on distributions and sale of Fund shares -1.42% 1.59% 2.59%
FTSE US Broad Investment-Grade Bond Index
(reflects no deduction for fees, expenses or taxes)
-0.01% 2.51% 3.36%

After-tax returns are calculated using the historical highest individual federal marginal income tax rates but do not reflect the impact of any state or local taxes. Actual after-tax returns depend on an investor's tax situation and likely differ from those shown. After-tax illustrations are not relevant to retirement plans, corporations, trusts, or other investors that are tax-deferred, tax-exempt, or taxed at special rates.

In loss periods, the average after-tax total return may be higher than average annual total return because of an assumed deduction of losses from other income.

Investment Adviser

Saturna Capital Corporation is the Fund's investment adviser.

Portfolio Managers

Mr. Phelps S. McIlvaine, a vice president and portfolio manager of Saturna Capital Corporation, is the person primarily responsible for the day-to-day management of the Fund, which he has managed since 1995. Mr. Patrick T. Drum MBA, CFA®, a portfolio manager and fixed income analyst of Saturna Capital Corporation, is the deputy portfolio manager, a role he assumed in 2015.

Purchase and Sale of Fund Shares

You may open an account and purchase shares by sending a completed application, a photocopy of a government-issued identity document, and a check made payable to the Sextant Bond Income Fund.

The minimum initial investment is $1,000 (for tax-sheltered accounts, there is no minimum).

Shareowners may purchase additional shares at any time in minimum amounts of $25.

Shareowners may redeem shares on any business day by several methods:

Written request

Write:   Sextant Mutual Funds
            Box N
            Bellingham, WA 98227-0596

Or Fax: 360-734-0755

Telephone request

Call: 800-728-8762 or 360-734-9900

Online

Visit: www.sextantfunds.com

16


Sextant Bond Income Fund

SBIFX

Tax Information

Any distributions you receive from the Fund may be taxed as ordinary income or capital gains.

Financial Intermediary Compensation

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

17


Sextant Global High Income Fund

SGHIX

Investment Objective

High income, with a secondary objective of capital preservation.

Fees and Expenses

This section describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareowner Fees

None.

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fees (vary with performance) 0.58%
Other Expenses 0.39%
Total Annual Fund Operating Expenses 0.97%
Fee Waiver and Expense Reimbursement 0.22%
Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement 0.75%

The adviser has committed through March 31, 2020, 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 0.75%. This expense limitation agreement may be changed or terminated only with approval of the Board of Trustees.

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

The Example assumes you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions, your costs would be:

1 year 3 years 5 years 10 years
$99 $309 $536 $1,190

When you buy shares through a financial intermediary, that intermediary may charge a transaction fee or commission which is not reflected in the expenses table or example. Purchases and redemptions of Fund shares will be made at the daily net asset value established by the Fund (before imposition of a commission).

Portfolio Turnover

The Fund may have transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 9.90% of the average value of its portfolio.

Principal Investment Strategies

The Fund invests at least 80% of its net assets in a globally diversified portfolio of income-producing debt and equity securities, including preferred stocks, depositary receipts, and high yield bonds ("junk bonds"). 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. When selecting equities, the Fund principally invests in income-producing securities of companies with market capitalizations greater than $5 billion.

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.

18


Sextant Global High Income Fund

SGHIX

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. Larger companies may have slower rates of growth as compared to smaller, faster-growing companies. Smaller 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.

Emerging markets risk: In emerging markets and less developed countries, the risks of investing in foreign securities can be magnified by less mature political systems and weaker corporate governance standards than typically found in the developed world.

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

Annual Total Return

The following bar chart presents the calendar year total returns of the Fund before taxes. The bar chart provides an indication of the risks of investing in the Fund by showing changes in performance from year to year. A fund's past performance (before and after taxes) is not a guarantee of how a fund will perform in the future.

Performance data current to the most recent month-end and quarter-end are available on www.sextantfunds.com.

Sextant Global High Income Fund Annual Total Returns

* For the period 3/30/2012 (the Fund's inception) through 12/31/2012, and not annualized.

Best Quarter Q3 2016 7.68%
Worst Quarter Q3 2015 -10.38%

Average Annual Total Returns

The table below presents the average annual returns for the Fund and provides an indication of the risks of investing in the Fund by showing how the Fund's average annual returns for 1 and 5 years and for the Life of the Fund compare to those of a broad-based market index.

Periods ended December 31, 2018
  1 Year 5 Year Life of Fund
Since 3/30/2012
Return before taxes -1.23% 4.11% 4.67%
Return after taxes on distributions -2.35% 2.73% 3.43%
Return after taxes on distributions and sale of Fund shares -1.25% 2.50% 3.14%
S&P Global 1200 Index
(reflects no deduction for fees, expenses or taxes)
-8.17% 5.29% 8.19%

After-tax returns are calculated using the historical highest individual federal marginal income tax rates but do not reflect the impact of any state or local taxes. Actual after-tax returns depend on an investor's tax situation and likely differ from those shown. After-tax illustrations are not relevant to retirement plans, corporations, trusts, or other investors that are tax-deferred, tax-exempt, or taxed at special rates.

19


Sextant Global High Income Fund

SGHIX

Investment Adviser

Saturna Capital Corporation is the Fund's investment adviser.

Portfolio Managers

Mr. Bryce R. Fegley CFA®, a portfolio manager and senior investment analyst of Saturna Capital Corporation, is the person primarily responsible for the day-to-day management of the Fund, which he has managed since 2012. Mr. Patrick T. Drum MBA, CFA®, a portfolio manager and fixed income analyst of Saturna Capital Corporation, is the deputy portfolio manager, a role he assumed in 2015.

Purchase and Sale of Fund Shares

You may open an account and purchase shares by sending a completed application, a photocopy of a government-issued identity document, and a check made payable to the Sextant Global High Income Fund.

The minimum initial investment is $1,000 (for tax-sheltered accounts, there is no minimum).

Shareowners may purchase additional shares at any time in minimum amounts of $25.

Shareowners may redeem shares on any business day by several methods:

Written request

Write:   Sextant Mutual Funds
            Box N
            Bellingham, WA 98227-0596

Or Fax: 360-734-0755

Telephone request

Call: 800-728-8762 or 360-734-9900

Online

Visit: www.sextantfunds.com

Tax Information

Any distributions you receive from the Fund may be taxed as ordinary income, qualified dividend income, or capital gains.

Financial Intermediary Compensation

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

20


Investment Objectives

The Growth Fund seeks long-term capital growth.

The International Fund seeks long-term capital growth.

The Core Fund seeks long-term appreciation and capital preservation.

The Short-Term Bond Fund seeks capital preservation and current income.

The Bond Income Fund seeks current income.

The Global High Income Fund seeks high income with a secondary objective of capital preservation.

There can be no guarantee that the investment objectives of a Fund will be realized. These investment objectives may only be changed with approval by vote of a majority of the outstanding shares of a Fund.

Principal Investment Strategies

The Sextant Funds provide basic elements to build a low-expense, balanced investment program. All Sextant Funds seek tax efficiency for their shareowners and reduced trading expenses through low portfolio turnover.

Sextant Growth, International, Core, and Global High Income Funds stock investments emphasize a value approach to investing. The adviser looks for securities it believes offer favorable possibilities for capital appreciation over the next one to four years. In selecting equities, the adviser considers factors such as growth in revenues and earnings, relative price-to-earnings and price to book value ratios, industry position and outlook, and its assessment of management.

Sextant Core, Short-Term Bond, Bond Income, and Global High Income Funds bond investments include:

  • Corporate bonds, meaning marketable bonds payable in US dollars, rated at the time of purchase within the four highest grades assigned by a national bond rating agency (e.g., Standard & Poor's: AAA, AA, A, or BBB); except Global High Income Fund, which may invest in higher-yielding, lower-rated bonds ("junk bonds");
  • Collateralized or securitized bonds, such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities;
  • Government and municipal securities;
  • High-quality commercial paper; and
  • Bank obligations, including repurchase agreements, of banks having total assets in excess of $1 billion.

Sextant Funds may, from time to time, take temporary defensive positions that are inconsistent with the Funds' principal investment strategies in attempting to respond to adverse market, economic, political, or other conditions. Temporary defensive positions that are inconsistent with a Fund's principal investment strategies may protect principal in adverse market conditions but could reduce returns if security prices are increasing. Taking a temporary defensive position may keep a Fund from attaining its investment objective.

Growth Fund

The Growth Fund seeks capital growth by investing in common stocks of US companies. The Fund diversifies its investments across industries and companies. The Fund looks for companies with growing revenues and earnings, favoring companies trading for less than the adviser's assessment of intrinsic value, which typically means companies with low price/earning multiples, low price to cash flow, and higher dividend yields. The Fund principally invests in securities of companies with market capitalizations greater than $1 billion.

International Fund

The International Fund invests in a diversified portfolio of foreign equities of companies with market capitalizations greater than $1 billion, including American Depository Receipts and American Depositary Shares for foreign stocks. The Fund diversifies its investments geographically and by type of securities based on the adviser's evaluation of economic, market, and political trends outside the US. The Fund ordinarily invests in securities of companies representing at least three countries outside the US.

Core Fund

The Core Fund invests in a mix of common stocks and other equity securities of companies with market capitalizations greater than $5 billion, plus bonds and other debt securities including short-term (money market) instruments. Under normal circumstances, the Core Fund invests approximately 40% of its net assets in equities of US companies, 20% in foreign equities, including American Depository Receipts and American Depositary Shares, and 40% in investment grade fixed income securities (those rated BBB or higher, including government and convertible bonds) including money market instruments and cash.

Short-Term Bond Fund

The Short-Term Bond Fund invests at least 80% of its net assets in short-term bonds, including corporate and government bonds, under normal circumstances. Its dollar-weighted average effective maturity (the sum of the market value of each bond multiplied by its number of years to anticipated maturity, divided by the portfolio's total market value) normally does not exceed three years. Because of the short maturities, it has limited credit risk and interest rate risk. The Fund invests at least 65% of net assets in bonds rated within the three highest grades (AAA, AA, or A); and may not invest in a bond rated at time of purchase below the fourth-highest grade (BBB).

Bond Income Fund

The Bond Income Fund invests at least 80% of its net assets in bonds, including corporate and government bonds, generating current

21


income under normal circumstances. Its dollar-weighted average effective maturity normally exceeds 10 years. Because of its longer average portfolio maturity, the Bond Income Fund may decline substantially should interest rates increase. It also has greater credit risk than the Short-Term Bond Fund. The Fund invests at least 65% of net assets in bonds rated within the three highest grades (AAA, AA, or A) and may not invest in a bond rated at time of purchase below the fourth highest grade (BBB).

Global High Income Fund

The Global High Income Fund invests at least 80% of its net assets in a globally diversified portfolio of income-producing debt and equity securities of companies with market capitalizations greater than $5 billion, including preferred stocks, depositary receipts, and high yield bonds ("junk bonds"). 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 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

As with any investment in a mutual fund, the value of a Fund's shares rises and falls as the market value of the securities in which the Fund invests goes up and down. When you redeem your shares, they may be worth more or less than what you paid for them. Before you invest in a Fund, you should carefully evaluate the Fund's investment risks in light of your investment goals. Only consider investing in a Fund if you are willing to accept the risk that you may lose money. An investment in a Fund held for longer periods over full market cycles typically provides the best potential for favorable investment returns. The Funds' principal investment strategies include the following principal investment risks.

Sextant Growth, Sextant International, Sextant Core, Sextant Short-Term Bond, Sextant Bond Income, Sextant Global High-Income Funds

Market risk: The market value of securities will fluctuate, sometimes significantly and unpredictably, with stocks generally being more volatile than bonds. The securities markets are also susceptible to data imprecision, technology malfunctions, operational errors, and similar factors that may adversely affect a single issuer, a group of issuers, an industry, or the market as a whole. A slow growing economy or a recessionary environment may adversely impact securities markets and prices of securities in which the Funds invest. Economies and financial markets throughout the world are becoming increasingly interconnected. As a result, events or conditions that impact the economies or securities markets may adversely impact the Funds even if they are not invested primarily in those economies or markets.

Liquidity risk: Liquidity risk exists when particular investments are difficult to sell and may be more difficult to value. If a Fund is forced to sell these investments during unfavorable conditions to meet redemptions or for other cash needs, a Fund may lose money on its investments. The risk of loss may increase depending on the size and frequency of redemptions and whether redemptions occur during market turmoil or declining prices. The Fund may be unable to sell its less liquid securities at its desired price. The purchase price and subsequent valuation of less liquid securities typically reflect a discount, which may be significant, from the market price of comparable securities for which a liquid market exists. Reduced liquidity may result from a drop in overall market trading volume, an inability to find a ready buyer, or legal restrictions on the securities' resale.

22


Sextant Growth, Sextant International, Sextant Core, Sextant Global High Income Funds

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. Larger companies may have slower rates of growth as compared to smaller, faster-growing companies. Smaller companies may have more limited financial resources, products, or services, and tend to be more sensitive to changing economic or market conditions. Growth stocks, which tend to trade based on future earnings expectations, may be more volatile than slower-growing value stocks, especially when market expectations are not met.

Growth investing risk: The Funds may invest in growth stocks, which may be more volatile than slower-growing value stocks. Growth stocks typically trade at higher multiples of current earnings than other stocks, which may lead to inflated prices. Growth stocks often are more sensitive to market fluctuations than other securities because their market prices are highly sensitive to future earnings expectations. At times when it appears that these expectations may not be met, growth stocks' prices typically fall and declines may be significant when a stock had been supported by significant investor speculation. During market cycles when growth investing is out of favor, selling growth stocks at desired prices may be more difficult.

Sextant Core, Sextant Short-Term Bond, Sextant Bond Income, Sextant Global High-Income Funds

Interest rate risk: Investing in bonds includes the risk that as interest rates rise, bond prices will fall. The longer a bond's maturity, the more sensitive the bond is to interest rate changes. A bond's sensitivity to interest rate changes often is measured by a bond's duration.

As levels of interest rates fluctuate, bonds with longer duration generally have larger price changes than bonds with shorter duration.

A wide variety of market factors can cause interest rates to rise, including central bank monetary policy, rising inflation, and changes in general economic conditions. Interest rates are currently extremely low, even negative, as government policies artificially inflate bond prices. Future changes in governments and their fiscal and monetary policies could lessen bond prices.

Call risk: Bonds with embedded callable options also contain an element of prepayment or call risk. When interest rates decline, issuers can retire their debt and reissue bonds at a lower interest rate. This hurts investors because yields available for reinvestment will have declined and upward price mobility on callable bonds is generally limited by the call price.

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. The perceived credit of a bond issuer, and hence the price of its bonds, varies for many reasons, including profits of a business, the willingness of government units to pay their obligations, and unforeseen liabilities such as increased pension plan obligations resulting from low interest rate earnings assumptions.

Sextant International

Regional focus risk: The Fund may invest a significant portion of its assets in companies in a specific region subjecting the Fund to greater risks of adverse developments in that region and/or the surrounding regions than a fund that is more broadly diversified geographically. Political, social, or economic disruptions in the region, even in countries in which the Fund is not invested, may adversely affect the value of investments held by the Fund. This risk increases to the extent the Fund focuses on issuers in a limited number of countries in a region.

Sextant International, Sextant Core, Sextant Global High-Income Funds

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.

Sextant International, Sextant Global High-Income Fund

Emerging markets risk: In emerging markets and less developed countries, the risks of investing in foreign securities can be magnified by less mature political systems and weaker corporate governance standards than typically found in the developed world.

Sextant Global High-Income Fund

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 economic and market changes that could affect their ability to make interest and principal payments as expected. High-yield securities generally are more volatile and less liquid (harder to sell), which may make such securities more difficult to value.

23


Operational Risk (All Funds)

Cybersecurity risk: The risk of a cybersecurity incident arises as a result of an overall increase in deliberate attacks and the rapidly evolving nature of such attacks. Such an attack may seek to gain unauthorized access to electronic systems for purposes of obtaining nonpublic personally identifiable information or proprietary information or causing operational disruption. Saturna cannot control the cybersecurity systems of third party service providers or issuers and, therefore, a cybersecurity incident that impacts a company with which Saturna or the Funds do business may also impact Fund shareowners. While Saturna has established internal risk management measures designed to identify, protect against, detect, respond to, and recover from cybersecurity incidents, no program can guarantee that all threats and vulnerabilities have been eliminated. There currently is no insurance policy available to cover all of the potential risk of loss that may result from or is associated with a cyber attack. Unless specifically agreed by Saturna Capital separately or as may be required by law, Saturna and the Funds are neither guarantors against, nor obligors for, any damages resulting from a cyber-related incident.

Please refer to the Trust's Statement of Additional Information for further details about the risks of investing in the Funds.

Investment Information

Shareowners receive a Sextant Mutual Funds financial report showing the investment returns, portfolios, income, and expenses of each Fund every six months. The audited financial statements of each Fund for the year ended November 30, 2018, included in the Funds' Annual Report, are available upon request. Investors may obtain current share prices daily on financial information websites, by calling toll-free 1-800-728-8762, on electronic quotation systems, and at www.sextantfunds.com. The following symbols can be used to obtain quotations and other information:

Sextant Growth Fund
Investor Shares SSGFX   Z Shares SGZFX
 
Sextant International Fund
Investor Shares SSIFX   Z Shares SIFZX
 
Sextant Core Fund SCORX
 
Sextant Short-Term Bond Fund STBFX
 
Sextant Bond Income Fund SBIFX
 
Sextant Global High Income Fund SGHIX

This prospectus, financial reports, performance information, month-end portfolio holdings, proxy voting records, and other useful information are also available without charge at www.sextantfunds.com. Portfolio holdings are provided each month-end online (see the Statement of Additional Information for a description of portfolio disclosure policies).

Investment Adviser

Saturna Capital Corporation, 1300 N. State Street, Bellingham, Washington 98225 is Saturna Investment Trust's (the "Trust") investment adviser and administrator ("Saturna Capital" or the "adviser"). Founded in 1989, Saturna Capital has approximately $3.4 billion in assets under management (as of December 31, 2018). It is also the adviser to other funds of the Saturna Investment Trust, the Amana Mutual Funds Trust, and to separately managed accounts. Saturna Capital's wholly-owned subsidiary in Malaysia manages separate accounts and investment funds. Another wholly-owned subsidiary, Saturna Environmental Corporation, owns an environmental education camp.

Mr. Nicholas F. Kaiser MBA, CFA®, portfolio manager of Sextant International Fund, is chairman, director, and a controlling shareowner of Saturna Capital Corporation. Mr. Kaiser has managed equity mutual funds since 1976; he has managed equity portfolios for the adviser since founding the firm in 1989. He has been the manager of the Sextant International Fund since 1995. Mr. Kaiser is also the portfolio manager of the Amana Income and Amana Growth Funds, and deputy portfolio manager of the Saturna Sustainable Equity Fund.

Mr. Scott F. Klimo CFA®, portfolio manager of Sextant Growth Fund and deputy portfolio manager of Sextant International Fund, joined Saturna Capital in 2012 as director of research. Mr. Klimo is also Saturna's chief investment officer, the portfolio manager of the Amana Developing World Fund, and the deputy portfolio manager of the Amana Income and Amana Growth Funds. As Saturna Capital's chief investment officer, he oversees Saturna's portfolio management and investment analyst staff worldwide. From 2001 to 2011, he served as a senior investment analyst, research director, and portfolio manager at Avera Global Partners/Security Global Investors.

Mr. Phelps S. McIlvaine, portfolio manager of Sextant Short-Term Bond Fund and Sextant Bond Income Fund, and bond portfolio manager of Sextant Core Fund, has been a vice president and director of Saturna Capital since 1994. Mr. McIlvaine also manages the Idaho Tax-Exempt Fund, another fund of the Trust.

Mr. Bryce R. Fegley CFA®, portfolio manager of Sextant Global High Income Fund, joined Saturna Capital in 2001. Mr. Fegley is also the deputy portfolio manager of Saturna Sustainable Bond Fund. For Saturna Capital he has worked in brokerage, investment research, and its Malaysian investment advisory subsidiary.

Mr. Christopher E. Paul MBA, CFA®, deputy portfolio manager of Sextant Growth Fund and equity portfolio manager of Sextant Core Fund, joined Saturna Capital in 2016. From 2008 to 2015, Mr. Paul served as the Director of Research with Cannell Capital. Mr. Paul's experience includes research and management positions at asset management firms and investment banks, as well as finance and operations roles at technology companies.

Mr. Patrick T. Drum MBA, CFA®, CFP®, deputy portfolio manager of Sextant Short-Term Bond Fund, Sextant Bond Income Fund, and Sextant Global High Income Fund, joined Saturna Capital in 2014.

24


He is also portfolio manager of Saturna Sustainable Bond Fund and Amana Participation Fund and deputy portfolio manager of Idaho Tax-Exempt Fund. From 2007 to 2014, Mr. Drum was a senior portfolio manager with UBS Financial Services specializing in the investment of non-US fixed income portfolios employing an ESG screening process.

See the Statement of Additional Information for a discussion of their compensation, other accounts managed, and ownership of the Sextant Funds. Portfolio managers may maintain substantial positions in the Saturna mutual funds and generally do not purchase individual securities for their own accounts.

Advisory Fee

Each of the Sextant Funds pays the adviser an Advisory and Administrative Services Fee (the "Base Fee"). The Base Fee is compensation for portfolio management, advice, and recommendations on securities to be purchased, held, or sold. The Base Fee also covers certain administrative services such as portfolio accounting, shareowner and financial reporting, shareowner servicing, and transfer agency services. The Base Fee is currently computed at the annual rate of 0.50% of average daily net assets of each Fund, paid monthly, and is subject to a maximum adjustment of up to 0.20%, up or down, depending on the investment performance of the Fund relative to its Morningstar-specified benchmark.

For each month in which any Fund's total investment return (change in net asset value plus all distributions reinvested) for the one year period through that month outperforms or underperforms the total return of a specified benchmark for that period by 1% or more but less than 2%, the Base Fee is increased or decreased by the annual rate of 0.10% based on the Fund's average net assets over the performance period (one year).

  • If the outperformance or underperformance is 2% or more then the adjustment is at the annual rate of 0.20%.

The Sextant Funds are assigned by Morningstar into appropriate categories, which are the benchmarks used for the performance fee computation:

Sextant Growth Large Growth
Sextant International Foreign Large Blend
Sextant Core Allocation – 50% to 70% Equity
Sextant Short-Term Bond Short-Term Bond
Sextant Bond Income Long-Term Bond
Sextant Global High Income World Allocation

For the fiscal year ended November 30, 2018, the aggregate advisory fee paid (after performance adjustments and fee waivers) was 0.42%, 0.58%, 0.51%, 0.16%, 0.22%, and 0.36% of average net assets for Growth, International, Core, Short-Term Bond, Bond Income, and Global High Income Funds, respectively.

A discussion regarding the basis for the Board of Trustees renewing the advisory contracts is available in the Funds' Annual Report for the fiscal year ended November 30, 2018.

Fund Share Pricing

Each Fund computes its daily share price (net asset value) using market prices as of the close of trading on the New York Stock Exchange (generally 4 p.m. Eastern time). Fund shares are not priced on the days when New York Stock Exchange trading is closed (typically weekends and US national holidays). Equity securities traded on a national securities exchange and over-the-counter securities are valued at the last reported sale price on the valuation day. Bonds and other fixed-income securities are valued at prices supplied by one or more independent pricing services, which generally reflect valuations provided by securities broker-dealers and analysis conducted by the independent pricing service. Securities for which there are no sales are valued at the latest bid price. Occasionally there may be days without a readily available market price for a security. These may happen when trading in a security is suspended, the market on which a security is principally traded closes early, or trading volume is insufficent to produce a reliable quoted or computed price. When this occurs, a fair value for such security is determined in good faith using fair value procedures approved by and administered under the supervision of the Board of Trustees. Using fair value to price a security may result in a value different from the security's most recent closing price and from the prices used by other mutual funds to calculate their share prices.

Foreign markets may close before the time as of which the share price is computed. Because of this, events occurring after the close of a foreign market and before the share price computation may have a material effect on foreign security prices. To account for this, the Funds use evaluations provided by an independent pricing service for bonds and foreign securities. Such evaluations are based on the foreign securities' most recent closing market prices as of 4 p.m. Eastern time and correlations with broad market indices, sector indices, equity index futures contracts, American Depositary Receipts, and other factors. Foreign securities may trade on weekends or other days when the Funds do not price their shares. As a result, the share price may change on days when you will not be able to purchase or redeem shares.

A Fund computes the share price of share classes by dividing the net assets attributable to each share class by the outstanding shares of that class. Each share class represents an interest in the same investment portfolio. Each share class is identical in all respects except that each class bears its own class expenses, and each class has exclusive voting rights. As a result of the differences in the expenses borne by each share class the share price will vary among a Fund's share classes.

Additional information about portfolio security valuation, including foreign securities, is contained in the Funds' Statement of Additional Information (SAI).

25


Purchase and Sale of Fund Shares

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT: To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. For most accounts, we will ask for a photocopy of your driver's license or other identifying documents.

You may open an account and purchase shares by sending a completed application, a photocopy of a government-issued identity document, and a check made payable to the Fund(s) of your choice. Certain account types may be opened online. The minimum initial investment for each Fund is $1,000. The Funds do not accept initial orders via telephone or unaccompanied by payment.

A broker-dealer or other financial intermediary that maintains an account with a Fund in the intermediary's name as nominee for the benefit of the intermediary's clients may aggregate client orders to meet the $1,000 initial minimum investment. In addition, shares of the Funds are available for purchase without any minimum initial investment by:

  • Qualified and non-qualified employer-sponsored retirement or benefit plans, including 401(k) plans, 457 plans, 403(b) plans, profit-sharing plans, and deferred compensation plans;
  • Qualified retirement or benefit plans, including IRA, ESA, and HSA plans serviced as trustee by Saturna Trust Company; and
  • Fee-based advisory programs (including mutual fund wrap programs) sponsored by financial intermediaries that provide bundled services for a fee.

The price applicable to purchases and redemptions of Fund shares is the price next computed after receipt of a purchase or redemption request in proper order. There are no sales charges or loads. The Funds may reject purchases for any reason, such as excessive trading. In addition, anti-money laundering regulations limit acceptance of third-party checks and money orders.

Shareowners may purchase additional shares at any time in minimum amounts of $25. Once an account is open, purchases can be made by check, by electronic funds transfer, or by wire.

With prior authorization, orders can be entered at
www.sextantfunds.com.

Shareowners may authorize the purchase or redemption of shares via electronic funds transfer ("EFT") by completing the appropriate section of the application. To use EFT to purchase or redeem shares, simply call 800-728-8762 (800-SATURNA). Investors may also wire money to purchase shares, though the wiring bank typically charges a fee for this service. Please notify Saturna Capital when you are wiring money.

Each time shares are purchased or redeemed, a confirmation is sent showing the details of the transaction as well as the current number and value of shares held. Share balances are computed in full and fractional shares, expressed to three decimal places.

Shareowners may request a redemption of all or part of their investment on any business day of the Funds. The Funds pay redemption proceeds in US dollars, and the amount per share received is the price next determined after receipt of a redemption request in proper order. The amount received depends on the value of the investments of a Fund on that day and may be more or less than the cost of the shares being redeemed.

If you are redeeming shares that you recently purchased by check, the Funds may delay sending your redemption proceeds until your check has cleared. This may take up to 15 calendar days after your check is received. If you are redeeming shares that you have recently purchased by EFT, those shares may be subject to a 60-day waiting period during which such shares may only be redeemed by EFT to the same bank account from which the funds were initially withdrawn. Such shares may not be redeemed online during the 60-day waiting period.

There are several methods you may choose to redeem shares:

Written request

Write:   Sextant Mutual Funds
            Box N
            Bellingham, WA 98227-0596

Or Fax: 360-734-0755

You may redeem shares by a written request and choose one of the following options for the proceeds:

  • Redemption check (no minimum)
  • Federal funds wire ($5,000 minimum)

Note: Signatures on written requests, such as payments directed to a third party, may need to be guaranteed by a national bank, trust company, or by a member of a national securities exchange.

Prevailing rates apply to federal funds wires and expedited courier service for redemption checks. Delivery times cannot be guaranteed by the Funds.

26


Telephone request

Call: 1-800-728-8762 or 1-360-734-9900

Unless Saturna is notified in advance that you do not want this privilege, you may redeem shares by a telephone request and choose one of the following options for the proceeds:

  • Redemption check (no minimum) sent to registered owner(s) at the account address of record. Note: Redemption checks sent to other than registered owners may require a written request with a signature guarantee.
  • Electronic Funds Transfer ($100 minimum) with proceeds transferred to your bank account as designated by the EFT authorization on your application. The transfer agent must receive the EFT authorization at least two weeks before EFT transfer can be used.
  • Exchange (in at least the minimum initial amount established by the Fund being purchased) for shares of any other Fund for which Saturna Capital is adviser. If the exchange is your initial investment into this Fund, the new account will automatically have the same registration as your original account.

For telephone requests, the Funds will endeavor to confirm that instructions are genuine. The caller must provide:

  • the name of the person making the request,
  • the name and address of the registered owner(s),
  • the account number,
  • the amount to be redeemed, and
  • the method for remittance of the proceeds.

Online

Visit: www.sextantfunds.com

To initiate transactions online, shareowners must first complete an Online Access and E-Delivery form available on www.sextantfunds.com or by calling toll-free 1-800-728-8762. When accessing their account, users must provide the username and password, and possible security prompts.

As the transfer agent, Saturna may also require a form of personal identification. Neither the transfer agent nor the Funds will be responsible for the results of transactions they reasonably believe genuine.

The shares and/or uncashed checks of redemptions, dividends, or distributions may be transferred to your state of residence if no activity occurs within your account during an "inactivity period" specified in your state's laws. The shareowner's last known address of record determines which state has jurisdiction. Some states, such as Texas, allow shareowners to designate a representative to receive escheatment (transfer) notifications if their account is being transfered to a state government.

The Funds may restrain any account and suspend account services when: the Funds believe that there may exist a dispute between the registered or beneficial account owners; the Funds believe that a transaction may be fraudulent; in cases of abusive or threatening conduct or suspected illegal activity; or if the Funds are unable to verify the identity of the person(s) or entity opening an account or requesting a transaction.

The Funds normally send redemption proceeds within one day, however if the Funds reasonably believe that a cash redemption would negatively impact the operations of a Fund or that the shareowner may be engaged in market-timing or frequent trading, the Funds reserve the right delay payment of the redemption proceeds for up to seven calendar days. The Funds' investment team continually monitors portfolio liquidity and adjusts the Funds' cash levels based on market outlook, portfolio and investor transactions, and other relevant criteria. Unlike many mutual funds, the Sextant Funds do not maintain a bank line of credit that could be used to meet short-term liquidity needs. There can be no assurance that the Fund will be able to manage liquidity successfully in all market environments. Under stressed conditions, the Funds may not pay redemption proceeds in a timely fashion.

The Funds reserve the right to change the terms of purchasing shares and services offered.

Converting Shares

At no charge, you may convert one class of shares of a Fund directly to another class of shares of the same Fund, subject to the eligibility requirements and the fees and expenses of the share class of the Fund you convert into.

If you purchased shares directly from the Funds, you may initiate this process by contacting Saturna Capital. If you have purchased your shares through an intermediary, you should contact your intermediary to initiate this process. Your ability to conduct a share class conversion through an intermediary will depend on the share classes your intermediary makes available on the platform or program through which you own shares.

In addition, your intermediary may permit or require you to exchange your shares in a Fund into shares of a different class of the Fund if you elect to change the platform or program through which you own shares at the intermediary (e.g., advisory or retail brokerage), depending on the share classes your intermediary makes available on its platforms. The Fund share class you exchange into may have higher or lower fees than the share class you held. Contact your intermediary for more information.

Conversions will occur at the next available respective net asset values of the share classes. A conversion between share classes of a Fund is not normally a taxable event. You may only convert shares between accounts with identical registrations (i.e., the same names and addresses).

27


Purchase and Sale of Fund Shares Through Financial Intermediaries

The Funds have authorized financial intermediaries (such as securities brokers or dealers, retirement plan recordkeepers, banks, and trust companies) to receive purchase, redemption, and exchange orders on behalf of the Funds. These authorized intermediaries may designate other intermediaries to receive such orders. A Fund will be deemed to have received a purchase, redemption, or exchange order when an authorized intermediary (or its designee) receives the transaction request in good order.

If you purchase shares through an intermediary, the transfer agent may not have your account information. If so, you must contact your intermediary to perform transactions. Investors should be aware that intermediaries might have policies different than the Funds' policies regarding purchases, redemptions, or exchanges and these may be in addition to or in place of the Funds' policies. For more information about these restrictions and policies, please contact your broker, retirement plan administrator, or other intermediary.

Distributions

The Funds intend to distribute their net investment income and net realized capital gains, if any, to their shareowners. Distributions from capital gains are paid annually, typically by the end of the year. Growth Fund, International Fund, Core Fund, and Global High Income Fund pay income dividends annually, typically by the end of the year. Short-Term Bond and Bond Income Funds declare income dividends daily, which are reinvested or distributed (paid) monthly. As a result of their investment strategies, Short-Term Bond and Bond Income Funds expect that their dividends will consist primarily of ordinary income.

Dividends paid by each Fund with two share classes are calculated in the same manner and at the same time.

Both dividends and capital gain distributions are paid in additional full and fractional shares of the Fund owned. At your option, you may receive dividends and/or capital gain distributions greater than $10 in cash. Dividends or capital gains in amounts less than $10 will be reinvested. If you do not indicate any choice on your application, your dividends will be reinvested. You are notified of each dividend and capital gain distribution at the end of the month when paid.

Returned dividend checks and dividend checks that remain uncashed for six months will be automatically reinvested into your account and invested in additional shares of the Fund owned; future dividends in such accounts will continue to be reinvested until the shareowner is located or the account is closed.

Frequent Trading Policy

The Funds are intended for long-term investment and do not permit rapid trading. The Funds' Board of Trustees has adopted a Frequent Trading Policy that attempts to identify and limit rapid trading. Rapid trading may lead to higher portfolio turnover, which may negatively affect performance or increase costs, thereby adversely affecting other shareowners.

To the extent reasonably practicable, the Funds monitor trading in their shares in an effort to identify trading patterns that appear to indicate frequent purchases and redemptions that might violate the Frequent Trading Policy. If the Funds believe that they have identified a pattern of such trading (whether directly through a Fund, indirectly through an intermediary, or otherwise), they may, in their sole discretion, temporarily or permanently bar future purchases of shares of the Funds (or any other fund managed by the adviser) by the account holder, or any accounts under common control (such as those advised by an investment manager or any other type of asset allocator).

In making such a judgment, factors considered may include the size of the trades, the frequency and pattern of trades, the methods used to communicate orders, and other factors considered relevant.

Although this process involves judgments that are inherently subjective, the Funds seek to make decisions that are consistent with the interests of the Funds' shareowners. The Funds reserve the right to refuse or revoke any purchase order for any reason a Fund believes to be contrary to the Frequent Trading Policy.

The Funds often receive orders through financial intermediaries who trade Fund shares through omnibus accounts (i.e., a single account in which the transactions of individual shareowners are combined). When possible, the Funds obtain contractual agreements with intermediaries to enforce the Funds' redemption policies, and rely on intermediaries to have reasonable procedures in place to detect and prevent excessive trading or market timing of Fund shares. The Funds cannot always identify all intermediaries, or detect or prevent trading that violates the Frequent Trading Policy through intermediaries or omnibus accounts. Some intermediaries trade shares of several Funds and cannot always enforce a particular Fund's policies.

28


Tax Consequences

Dividends and capital gain distributions may be subject to income tax, whether they are paid in cash or reinvested in additional Fund shares, depending on the type of distribution, the type of your account, and your city, state, and country of tax residence. Income dividends paid by the Funds (other than Sextant Short-Term Bond and Sextant Bond Income) are normally eligible for the "qualified dividend income" tax rate.

An exchange of a Fund's shares for shares of another fund will be treated as a sale of the Fund's shares and any gain on the transaction may be subject to income tax.

Shareowners receive quarterly statements. The year-end statement should be retained for tax accounting. Saturna Capital Corporation keeps each account's entire investment transaction history and helps shareowners maintain the tax records needed to determine reportable capital gains and losses as well as dividend income.

Each February, the Funds' transfer agent reports to each shareowner (consolidated by US taxpayer identification number) and to the Internal Revenue Service ("IRS") the amount of each redemption transaction of the shareowner and the amount of dividends and capital gain distributions he or she received for the preceding calendar year. Capital gains a Fund distributes may be taxed at different rates, depending on the length of time a Fund held its investments on which the gains were realized.

Tax regulations require reporting cost basis information to you and the IRS on Form 1099-B. This information is reported using a cost basis method selected by you or, in the event no cost basis method was selected, our default method (FIFO — First In, First Out). Please note that the cost basis information reported to you may not always be the same as what you report on your tax return as different rules may apply. You should save your transaction records to make sure the information reported on your tax return is accurate.

To avoid being subject to federal backup withholding tax on dividends and other distributions, you must furnish your correct Social Security or other tax payer identification number when you open an account.

Distributions to shareowners who are not US taxpayers may be subject to withholding tax unless an applicable tax treaty provides for a reduced rate or exemption. Capital gain distributions paid by the Funds are not subject to foreign withholding.

The Funds place no formal restrictions on portfolio turnover and the investment adviser will buy or sell investments per its appraisal of the factors affecting each investment, such as its business, its industry, and the market. The Sextant International Fund historically has had low portfolio turnover, and its portfolio turnover is expected to be lower than that of comparable actively-managed equity funds. The portfolio manager seeks to minimize income taxes paid by taxable shareowners, which includes: (1) a "buy and hold" strategy with low portfolio turnover, (2) offsetting capital gains with losses, and (3) selling highest-cost tax-lots first. Thus, the Fund's portfolio investments may have a higher level of unrealized capital appreciation than if the Fund did not use these strategies. During periods of net redemptions of Fund shares or when market conditions warrant, the portfolio manager may sell these investments, generating a higher level of capital gain distributions than would occur if the Fund had not used these low-turnover strategies.

Distribution Arrangements

The Sextant Funds intend to comply with with the concept of Clean Shares as defined by the United States Securities and Exchange Commission. Clean Shares are characterized by a lack of any ongoing distribution expenses, sub-transfer agency, or recordkeeping fees, and that financial intermediaries transact shares solely on an agency basis. When you purchase Clean Shares through a financial intermediary, such as a broker-dealer or financial adviser, you may be charged a transaction fee or commission to purchase the shares.

Shares of the Sextant Core Fund, Sextant Short-Term Bond Fund, Sextant Bond Income Fund, Sextant Global High Income Fund, and Sextant Growth Fund Z Shares and Sextant International Fund Z Shares are Clean Shares. Sextant Growth Fund and Sextant International Fund also offer Investor Shares, which have different fees and expenses.

Sextant Growth Fund Investor Shares and Sextant International Fund Investor Shares have distribution plans under Rule 12b-1 that allow each Fund to pay distribution and other costs for the sale of Investor Shares and shareowner services. Under the plan, Investor Shares of Sextant Growth and International Funds pay 0.25% annually of their average daily net assets to the distributor, Saturna Brokerage Services, Inc., a wholly-owned subsidiary of Saturna Capital. Because these costs are paid out of Investor Share net assets on an ongoing basis, over time these costs will increase the cost of your investment and may cost you more than paying other types of sales charges.

Shares may be purchased and sold through intermediaries, such as broker-dealers, financial advisers, and retirement plan administrators, having agreements with the Funds. These intermediaries may require the adviser/distributor to the Funds to share revenues to compensate the intermediaries for their services. Any such payments could be characterized as "revenue sharing." An intermediary's receipt or expectation of receipt of revenue sharing payments could influence an intermediary's recommendation of the Funds. You should review your intermediary's compensation practices for that information. For more information, see the Funds' Statement of Additional Information.

29


Except for this legend, this page has been left blank intentionally.

30


Financial Highlights

The tables on the following pages can help you understand each Fund's financial performance. The top section of each table reflects financial results for a single Fund share. The total returns represent the rate that an investor earned (or lost) on an investment in each Fund, assuming reinvestment of all dividends and distributions and without regard to income taxes. Tait, Weller & Baker LLP, the independent registered public accounting firm for the Funds, audited this information. Their report and each Fund's financial statements are in the Funds' annual report (available free upon request from the Funds at www.sextantfunds.com or by calling 800-728-8762).


Sextant Growth Fund: Financial Highlights

Investor Shares (SSGFX) For year ended November 30,
Selected data per share of outstanding capital stock throughout each year: 2018 2017 2016 2015 2014
Net asset value at beginning of year $27.51 $22.52 $24.03 $26.36 $23.92
Income from investment operations
Net investment income 0.07A 0.15A 0.11 0.03 0.02
Net gains (losses) on securities (both realized and unrealized) 2.53 4.93 (0.88) (0.25) 3.88
Total from investment operations 2.60 5.08 (0.77) (0.22) 3.90
Less distributions
Dividends (from net investment income) (0.07) (0.09) (0.02) (0.04) (0.01)
Distributions (from capital gains) (1.34) - (0.72) (2.07) (1.45)
Total distributions (1.41) (0.09) (0.74) (2.11) (1.46)
 
Net asset value at end of year $28.70 $27.51 $22.52 $24.03 $26.36
 
Total return 9.95% 22.64% (3.22)% (0.87)% 16.29%
 
Ratios / supplemental data
Net assets ($000), end of year $5,037 $5,962 $34,561 $55,867 $45,863
Ratio of expenses to average net assets
Before custodian fee credits 0.92% 0.76% 0.76% 0.90% 1.05%
After custodian fee credits 0.92% 0.76% 0.76% 0.90% 1.05%
Ratio of net investment income after custodian fee credits to average net assets 0.25% 0.60% 0.39% 0.13% 0.07%
Portfolio turnover rate 17% 18% 25% 68% 23%

 

Z Shares (SGZFX) Year ended Period ended
Selected data per share of outstanding capital stock throughout each period: November 30, 2018 November 30, 2017B
Net asset value at beginning of period $27.50 $25.54
Income from investment operations
Net investment income 0.13A 0.16A
Net gains on securities (both realized & unrealized) 2.53 1.82
Total from investment operations 2.66 1.98
Less distributions
Dividends (from net investment income) (0.17) (0.02)
Distributions (from capital gains) (1.34) -
Total distributions (1.51) (0.02)
 
Net asset value at end of period $28.65 $27.50
 
Total return 10.20% 7.73%C
 
Ratios / supplemental data
Net assets ($000), end of period $34,191 $32,017
Ratio of expenses to average net assets
Before custodian fee credits 0.70% 0.51%D
After custodian fee credits 0.70% 0.51%D
Ratio of net investment income after custodian fee credits to average net assets 0.47% 0.89%D
Portfolio turnover rate 17% 18%C

 

A Calculated using average shares outstanding
B Operations commenced on June 2, 2017
C Not annualized
D Annualized

32


Sextant International Fund: Financial Highlights

Investor Shares (SSIFX) For year ended November 30,
Selected data per share of outstanding capital stock throughout each year: 2018 2017 2016 2015 2014
Net asset value at beginning of year $17.98 $14.37 $14.35 $15.47 $15.80
Income from investment operations
Net investment income 0.15A 0.16A 0.22 0.25 0.65
Net gains (losses) on securities (both realized and unrealized) 0.14 3.65 (0.15) (1.11) (0.35)
Total from investment operations 0.29 3.81 0.07 (0.86) 0.30
Less distributions
Dividends (from net investment income) (0.17) (0.20) (0.05) (0.25) (0.63)
Distributions (from capital gains) (1.27)        
Distributions (from return of capital) - - - (0.01) -
Total distributions (1.44) (0.20) (0.05) (0.26) (0.63)
 
Net asset value at end of year $16.83 $17.98 $14.37 $14.35 $15.47
 
Total return 1.63% 26.76% 0.49% (5.58)% 1.88%
 
Ratios / supplemental data
Net assets ($000), end of year $41,688 $46,321 $62,412 $78,296 $103,450
Ratio of expenses to average net assets
Before custodian fee credits 1.05% 1.04% 1.00% 1.05% 0.80%
After custodian fee credits 1.04% 1.04% 1.00% 1.04% 0.79%
Ratio of net investment income after custodian fee credits to average net assets 0.89% 1.00% 1.36% 1.49% 3.58%
Portfolio turnover rate 2% 2% 0% 0% 3%

 

Z Shares (SIFZX) Year ended Period ended
Selected data per share of outstanding capital stock throughout each period: November 30, 2018 November 30, 2017B
Net asset value at beginning of period $18.00 $16.55
Income from investment operations
Net investment income 0.19A 0.13A
Net gains on securities (both realized & unrealized) 0.14 1.41
Total from investment operations 0.33 1.54
Less distributions
Dividends (from net investment income) (0.19) (0.09)
Distributions (from capital gains) (1.27) -
Total distributions (1.46) (0.09)
 
Net asset value at end of period $16.87 $18.00
 
Total return 1.83% 9.32%C
 
Ratios / supplemental data
Net assets ($000), end of period $20,692 $21,031
Ratio of expenses to average net assets
Before custodian fee credits 0.84% 0.79%D
After custodian fee credits 0.82% 0.78%D
Ratio of net investment income after custodian fee credits to average net assets 1.13% 0.53%D
Portfolio turnover rate 2% 2%C

 

A Calculated using average shares outstanding
BOperations commenced on June 2, 2017
C Not annualized
D Annualized

33


Sextant Core Fund (SCORX)

Financial Highlights For year ended November 30,
Selected data per share of outstanding capital stock throughout each year: 2018 2017 2016 2015 2014
Net asset value at beginning of year $12.99 $11.45 $11.25 $12.43 $11.78
Income from investment operations
Net investment income 0.18 0.16 0.18 0.18 0.21
Net gains (losses) on securities (both realized and unrealized) (0.16) 1.55 0.02 (0.72) 0.78
Total from investment operations 0.02 1.71 0.20 (0.54) 0.99
Less distributions
Dividends (from net investment income) (0.17) (0.17) - (0.18) (0.21)
Distributions (from capital gains) - - - (0.46) (0.13)
Total distributions (0.17) (0.17) - (0.64) (0.34)
 
Net asset value at end of year $12.84 $12.99 $11.45 $11.25 $12.43
 
Total return 0.16% 15.15% 1.78% (4.38)% 8.41%
 
Ratios / supplemental data
Net assets ($000), end of year $12,851 $12,980 $8,563 $8,435 $8,656
Ratio of expenses to average net assets
Before custodian fee credits 0.88% 0.84% 1.05% 1.02% 1.17%
After custodian fee credits 0.87% 0.83% 1.04% 1.01% 1.16%
Ratio of net investment income after custodian fee credits to average net assets 1.41% 1.52% 1.52% 1.44% 1.88%
Portfolio turnover rate 30% 34% 39% 24% 14%

Sextant Short-Term Bond Fund (STBFX)

Financial Highlights For year ended November 30,
Selected data per share of outstanding capital stock throughout each year: 2018 2017 2016 2015 2014
Net asset value at beginning of year $5.00 $5.02 $5.02 $5.04 $5.05
Income from investment operations
Net investment income 0.07 0.06 0.05 0.05 0.06
Net gains (losses) on securities (both realized and unrealized) (0.06) (0.02) 0.00A (0.02) (0.01)
Total from investment operations 0.01 0.04 0.05 0.03 0.05
Less distributions
Dividends (from net investment income) (0.07) (0.06) (0.05) (0.05) (0.06)
Capital gains distribution (0.00)A - - - -
Total distributions (0.07) (0.06) (0.05) (0.05) (0.06)
 
Net asset value at end of year $4.94 $5.00 $5.02 $5.02 $5.04
 
Total return 0.26% 0.87% 1.06% 0.67% 0.94%
 
Ratios / supplemental data
Net assets ($000), end of year $10,276 $10,705 $10,326 $7,488 $7,674
Ratio of expenses to average net assets
Before fee waivers and custodian fee credits 0.91% 1.01% 1.15% 1.21% 1.29%
After fee waivers 0.61% 0.68% 0.76% 0.76% 0.76%
After fee waivers and custodian fee credits 0.60% 0.68% 0.75% 0.75% 0.75%
Ratio of net investment income after fee waivers and custodian fee credits to average net assets 1.44% 1.26% 1.05% 1.06% 1.14%
Portfolio turnover rate 36% 31% 11% 13% 14%
A Amount is less than $0.01

34


Sextant Bond Income Fund (SBIFX)

Financial Highlights For year ended November 30,
Selected data per share of outstanding capital stock throughout each year: 2018 2017 2016 2015 2014
Net asset value at beginning of year $5.14 $5.07 $5.07 $5.26 $5.05
Income from investment operations
Net investment income 0.16 0.16 0.15 0.17 0.16
Net gains (losses) on securities (both realized and unrealized) (0.25) 0.07 0.00A (0.19) 0.21
Total from investment operations (0.09) 0.23 0.15 (0.02) 0.37
Less distributions
Dividends (from net investment income) (0.16) (0.16) (0.15) (0.17) (0.16)
Total distributions (0.16) (0.16) (0.15) (0.17) (0.16)
 
Net asset value at end of year $4.89 $5.14 $5.07 $5.07 $5.26
 
Total return (1.78)% 4.51% 2.91% (0.47)% 7.40%
 
Ratios / supplemental data
Net assets ($000), end of year $10,933 $9,496 $9,703 $7,998 $7,967
Ratio of expenses to average net assets
Before fee waivers and custodian fee credits 0.86% 0.98% 1.01% 1.03% 1.27%
After fee waivers 0.66% 0.78% 0.89% 0.90% 0.91%
After fee waivers and custodian fee credits 0.65% 0.78% 0.88% 0.90% 0.90%
Ratio of net investment income after fee waivers and custodian fee credits to average net assets 3.20% 3.05% 2.85% 3.21% 3.07%
Portfolio turnover rate 0% 4% 11% 4% 13%
A Amount is less than $0.01

Sextant Global High Income Fund (SGHIX)

Financial Highlights For year ended November 30,
Selected data per share of outstanding capital stock throughout each year: 2018 2017 2016 2015 2014
Net asset value at beginning of year $11.12 $10.11 $8.89 $10.57 $10.51
Income from investment operations
Net investment income 0.40 0.35 0.45 0.52 0.48
Net gains (losses) on securities (both realized and unrealized) (0.15) 1.11 0.77 (1.68) 0.07
Total from investment operations 0.25 1.46 1.22 (1.16) 0.55
Less distributions
Dividends (from net investment income) (0.30) (0.45) - (0.52) (0.49)
Total distributions (0.30) (0.45) - (0.52) (0.49)
 
Net asset value at end of year $11.07 $11.12 $10.11 $8.89 $10.57
 
Total return 2.31% 15.01% 13.72% (11.01)% 5.27%
 
Ratios / supplemental data
Net assets ($000), end of year $8,827 $9,373 $7,570 $6,952 $7,707
Ratio of expenses to average net assets
Before fee waivers 0.97% 1.18% 1.17% 1.06% 1.41%
After fee waivers 0.75% 0.83% 0.91% 0.90% 0.91%
After fee waivers and custodian fee credits 0.75% 0.82% 0.90% 0.89% 0.90%
Ratio of net investment income after fee waivers and custodian fee credits to average net assets 3.43% 3.34% 4.78% 4.87% 4.75%
Portfolio turnover rate 10% 8% 26% 40% 11%

35


 

Additional information about each Fund's investments is available in the Funds' annual and semi-annual shareowner reports. The Funds' annual report includes a discussion of the market conditions and investment strategies that significantly affected each Fund's performance during its last fiscal year. The Statement of Additional Information contains additional information and is incorporated in this Prospectus by reference. To request a free copy of the Statement of Additional Information, any reports or other information associated with the Sextant Funds, and to make shareowner inquiries, please contact us at:

Saturna Investment Trust – Sextant Mutual Funds
1300 N. State St., Bellingham, WA 98225
1-800-728-8762 [1-800-SATURNA]
www.sextantfunds.com

The Statement of Additional Information, the Annual and Semi-Annual Reports, this Prospectus, and other documents are available to download from our website, www.sextantfunds.com and/or from your financial intermediary.

Information about the Funds (including the SAI) can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. (call 202-551-8090 for information). Reports and other information about the Funds are also available on the SEC's EDGAR database (www.sec.gov), and copies may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, Washington, D.C. 20549-1520 or sending email to publicinfo@sec.gov.

The Sextant Funds are series of Saturna Investment Trust.

(logo omitted)

Saturna Capital
1300 N. State Street
Bellingham, WA 98225
1-800-728-8762
www.saturna.com

Saturna Investment Trust's Investment Company Act file number is 811-05071.

Sextant Mutual Funds Annual Report Cover

 


 
     
Performance Summary (as of December 31, 2019)    (unaudited)

 

                                                         
                                                    Expense Ratio1  
               

Average Annual Total Returns

     1 Year        3 Year        5 Year        10 Year        15 Year        Gross        Net  
               

Sextant Short-Term Bond Fund (STBFX)

     4.01%        1.85%        1.62%        1.54%        2.30%        0.91%        0.60%  
               

FTSE USBIG Govt/Corp 1-3 Year Index

     4.00%        2.11%        1.64%        1.50%        2.44%                 n/a  
               

Sextant Bond Income Fund (SBIFX)

     10.22%        4.64%        3.24%        4.20%        4.00%        0.84%        0.65%  
               

FTSE US Broad Investment-Grade Bond Index

     8.86%        4.08%        3.08%        3.73%        4.22%                 n/a  
               

Sextant Core Fund (SCORX)

     19.99%        9.46%        5.52%        6.11%        n/a                 0.88%  
               

Dow Jones Moderate US Portfolio Index

     18.60%        8.98%        6.60%        7.75%        6.43%                 n/a  
               

Sextant Global High Income Fund (SGHIX)

     11.47%        8.32%        5.74%        n/a        n/a        0.97%        0.75%  
               

S&P Global 1200 Index

     28.22%        13.39%        9.50%        9.99%        7.63%                 n/a  
               

Sextant Growth Fund Investor Shares (SSGFX)

     36.38%        18.78%        10.29%        11.68%        8.81%                 0.92%  
               

Sextant Growth Fund Z Shares (SGZFX)

     36.77%        n/a        n/a        n/a        n/a                 0.70%  
               

S&P 500 Index

     31.49%        15.26%        11.69%        13.55%        8.99%                 n/a  
               

Sextant International Fund Investor Shares (SSIFX)

     26.85%        15.20%        9.00%        5.83%        6.69%                 1.05%  
               

Sextant International Fund Z Shares (SIFZX)

     27.19%        n/a        n/a        n/a        n/a                 0.84%  
               

MSCI EAFE Index

     22.66%        10.10%        6.18%        5.99%        5.33%                 n/a  

Performance data quoted above represents past performance, is before any taxes payable by shareowners, and is no guarantee of future results. Current performance may be higher or lower than that stated herein. Performance current to the most recent month-end is available by calling toll-free 1-800-728-8762 or visiting www.sextantfunds.com. Average annual total returns are historical and include change in share value as well as reinvestment of dividends and capital gains, if any. The 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. Funds that invest in foreign securities may involve greater risk, including political and economic uncertainties of foreign countries as well as the risk of currency fluctuations.

Z Shares of Sextant Growth and International Funds began operations June 2, 2017.

A note about risk: Please see Notes to Financial Statements beginning on page 54 for a discussion of investment risks. For a more detailed discussion of the risks associated with each Fund, please see the Funds’ prospectus or each Fund’s summary prospectus.

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.

 

1 

By regulation, expense ratios shown in this table are as stated in the Funds’ most recent prospectus, which is dated March 27, 2019, and incorporate results for the fiscal year ended November 30, 2018. Ratios presented in this table differ from the expense ratios shown elsewhere in this report as they represent different periods. Also by regulation, the performance in this table represents the most recent quarter-end performance rather than performance through the Funds’ most recent fiscal period.

The S&P 500 Index is an index comprised of 500 widely held common stocks considered to be representative of the US stock market in general. The MSCI EAFE Index is an international index focused on Europe, Australasia, and the Far East. The S&P Global 1200 Index is a global stock market index covering nearly 70% of the world’s equity markets. The Dow Jones Moderate Portfolio Index is a broad-based index of stock and bond prices. The FTSE USBIG Govt/Corp Index 1-3 Year is a broad-based index of shorter-term investment grade US government and corporate bond prices. The FTSE US Broad Investment-Grade Bond Index is a broad-based index of medium and long-term investment grade bond prices. Investors cannot invest directly in the indices.

 

 

Please consider an investment’s objectives, risks, charges, and expenses carefully before investing. To obtain this and other important information about the Sextant Funds in a prospectus or summary prospectus, ask your financial advisor, visit www.sextantfunds.com, or call toll-free 1-800-728-8762. Please read the prospectus or summary prospectus carefully before investing.

 

 

             
 
       
2                  November 30, 2019   Annual Report

 


 
     

Fellow Shareowners:

   January 24, 2020

Following a mixed performance in 2018, US equity markets posted substantial returns for the year ended November 30, 2019. The S&P 500 Index rose 16.11%, while the Dow Jones Moderate US Portfolio Index gained 11.53%. Foreign markets were also positive, with the MSCI EAFE Index returning 13.04% and the S&P Global 1200 Index climbing 14.97%. Fixed-income markets were more subdued but still well into positive territory, with the FTSE USBIG Bond Index gaining 8.55% and the shorter-term FTSE USBIG Government/Corporate 1-3 Year Index gaining 4.53%.

The Sextant Funds performed respectably compared to these indices, with most funds outperforming their respective benchmarks. For the year ended November 30, 2019, Sextant Growth Fund Investor Shares gained 21.81%, Sextant International Fund Investor Shares gained 18.82%, Sextant Core Fund gained 13.04%, Sextant Global High Income Fund gained 7.06%, Sextant Bond Income Fund gained 12.45%, and Sextant Short-Term Bond Fund gained 4.64%.

The annualized expense ratios of the six no-12b-1 fee Sextant Fund share classes range from 0.55% to 0.90%. Saturna Capital helped by capping expenses for the Sextant Short-Term, Sextant Bond Income, and Sextant Global High Income Funds. Overall assets were up 34.36% to $194.16 million.

Morningstar Awards Sextant Top Sustainability Ratings

The Morningstar Sustainability Rating for funds gives investors around the world a way to compare fund portfolios based on a standardized measure of sustainability. These ratings are calculated using fund holdings data underpinned with company-level environmental, social, and governance (ESG) information from Sustainalytics, a leading provider of ESG research. Of the four Sextant funds Morningstar rated, one received the top “5 Globe” Sustainability Rating and two received a “4 Globe” above average rating, reflecting Saturna Capital’s emphasis on sustainability when making portfolio investment decisions. Investors are cautioned, however, that more than 200 vendors offer “sustainable” investments data, and that no single global measurement prevails. See page 5 for the details.

 

Sextant

Going Forward

2019 was a great year for equity markets, with the S&P 500 Index returning 31.49% through December 31, 2019 – the best annual profit since 2013. At Saturna, we’re not forecasting 2020 to generate the outsized gains seen in 2019. Still, we enter the new decade optimistically.

It’s rare for the market to experience downturns or big profits following a year when returns exceed 25%. Since 1927, the S&P 500 experienced downturns in only 8% of the years following a year with returns in excess of 25%. Over this same period, only three years saw repeated returns greater than 25%. While statistics may support our forecast, we note “past returns may not indicate future performance.” Why then do we believe 2020 will follow a similar course of decent returns? Four reasons: the four-year US presidential election cycle, calming global trade tensions, a reduction of Brexit’s uncertainties, and accommodative yet stretched global monetary policies. The economy continues in a “goldilocks” state: low unemployment, low inflation, low interest rates, and lower taxes.

After minimal debate, both parties in the US Congress agreed to bigger spending and deficits, and the economy is roaring. Presidential election politicking gets our juices flowing from all sides of the spectrum. Then, as the country moves from primaries to the general election, an incumbent’s narrative always pulls the opposition toward the middle.

Also awaiting the election returns, the US-China trade war should see reduced agitations. As President Trump looks to claim victory and President Xi takes advantage of US election related pressures, the two sides were compelled to sign an agreement. The truce calls for China to increase imports of US farm goods and the US to decrease tariffs on Chinese products.

Brexit will also have continued impact through 2020. The UK leaving the European Union on January 31, 2020, will not mark the end of the process. As the UK “gets Brexit done” this month, we should notice bounces in their economy. However, details of the trade agreement, and uncertainty related to it, will likely produce volatility in 2020 as the December deadline approaches.

 

2019 marked a year of renewed expansionary monetary policy as fears of recession sprouted across the globe. These fears led the Federal Reserve to cut interest rates while

 

 

 

             
 
       
Annual Report   November 30, 2019                  3

 


 

central banks elsewhere amassed record levels of negative yielding debt during the summer of 2019. In turn, low to negative interest rates injected fuel into equities, igniting the record bull market. Although the amount of negative yielding debt has since been cut, central banks are operating with less dry powder to reignite the economy should fear of recession renew. We expect that in 2020 central banks will play the part of observer as they balance the need to keep tools on hand for an economic downturn with the want to see 2019’s stimulus work its way through the financial system.

Going forward, the Sextant Funds continue to offer investors a broad mix of investment vehicles: growth equities, international exposure, and a blended portfolio, plus global high income, short-term, and long-term fixed income options. This array of portfolios serves our investors in both bull and bear markets by seeking to provide steady, long-term growth with a focus on preservation of capital. Please review the following pages for more in-depth information about each Fund.

Respectfully,

(photo omitted)

Jane Carten,

President

(photo omitted)

Gary Goldfogel,

Independent Board Chairman

 

                     
     
    Sextant Funds Portfolio Management    
           
    (photo omitted)   

Nicholas Kaiser MBA, CFA®

 

Sextant International Fund

Portfolio Manager

     (photo omitted)   

Phelps McIlvaine

 

Sextant Short-Term Bond Fund

Sextant Bond Income Fund

Sextant Core Fund

Portfolio Manager

   
           
    (photo omitted)   

Scott Klimo CFA®

 

Sextant Growth Fund

Portfolio Manager

Sextant International Fund

Deputy Portfolio Manager

     (photo omitted)   

Bryce Fegley CFA®, CIPM®

 

Sextant Global High Income Fund

Portfolio Manager

   
           
    (photo omitted)   

Patrick Drum MBA, CFA®, CFP®

 

Sextant Short-Term Bond Fund

Sextant Bond Income Fund

Sextant Global High Income Fund

Deputy Portfolio Manager

     (photo omitted)   

Christopher Paul MBA, CFA®

 

Sextant Core Fund

Portfolio Manager

   

 

 

             
 
       
4                  November 30, 2019   Annual Report

 


 
         
Morningstar Sustainability Ratings   (unaudited)   As of November 30, 2019

 

At Saturna Capital, we describe ourselves as value and values-based investors. We believe our approach improves the likelihood of achieving superior investment results over the long term. Our approach also leads to investment portfolios we can be proud of from the perspective of Environmental, Social, and Governance (ESG) issues. Morningstar recently partnered with leading ESG research firm Sustainalytics to develop the Morningstar Sustainability Rating – here are Sextant Funds’ recent results:

 

                 
     

Sextant International Fund

      Sextant Core Fund
         

Investor Shares (SSIFX)

   ؠؠؠ Ø Ø       SCORX    ؠؠؠ Ø Ø
       

Z Shares (SIFZX)

   ؠؠؠ Ø Ø        
     
7th percentile among 395 Foreign Large Blend Funds       16th percentile among 643 Allocation 50%-70% Equity Funds
     

Sextant Growth Fund

      Sextant Global High Income Fund
         

Investor Shares (SSGFX)

   ؠؠؠ Ø Ø       SGHIX    ؠؠؠ Ø Ø
       

Z Shares (SGZFX)

   ؠؠ Ø Ø Ø       67th percentile among 378 World Allocation Funds
     
27th percentile among 1,223 Large Growth Funds        
     
       

The Sextant Bond Income and Sextant Short-Term Bond Funds were not rated by Morningstar for the period.

 

The Morningstar Sustainability Rating gives investors across the globe a way to compare fund portfolios based on a standard measure of sustainability. The rating is a holdings-based calculation using company-level environmental, social, and governance (ESG) analytics from Sustainalytics.

The Morningstar Sustainability Rating and the Morningstar Portfolio Sustainability Score are not based on fund performance and are not equivalent to the Morningstar Rating (“Star Rating”).

© 2020 Morningstar®. All rights reserved. Morningstar, Inc. is an independent fund performance monitor. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Morningstar Sustainability Ratings and Portfolio Sustainability Scores are as of November 30, 2019. The Morningstar Sustainability Rating is intended to measure how well the issuing companies of the securities within a fund’s portfolio are managing their environmental, social, and governance (“ESG”) risks and opportunities relative to the fund’s Morningstar category peers. The Morningstar Sustainability Rating calculation is a two-step process. First, each fund with at least 50% of assets covered by a company-level ESG score from Sustainalytics receives a Morningstar Portfolio Sustainability Score. The Morningstar Portfolio Sustainability Score is an asset-weighted average of normalized company-level ESG scores with deductions made for controversial incidents by the issuing companies, such as environmental accidents, fraud, or discriminatory behavior. The Morningstar Sustainability Rating is then assigned to all scored funds within Morningstar Categories in which at least ten (10) funds receive a Portfolio Sustainability Score and is determined by each fund’s rank within the following distribution: High (highest 10%), Above Average (next 22.5%), Average (next 35%), Below Average (next 22.5%), and Low (lowest 10%). The Morningstar Sustainability Rating is depicted by globe icons where High equals 5 globes and Low equals 1 globe. A Sustainability Rating is assigned to any fund that has more than half of its underlying assets rated by Sustainalytics and is within a Morningstar Category with at least 10 scored funds; therefore, the rating it is not limited to funds with explicit sustainable or responsible investment mandates. Morningstar updates its Sustainability Ratings monthly. Portfolios receive a Morningstar Portfolio Sustainability Score and Sustainability Rating one month and six business days after their reported as-of date based on the most recent portfolio. As part of the evaluation process, Morningstar uses Sustainalytics’ ESG scores from the same month as the portfolio as-of date.

 

The Funds were rated on the following percentages of Assets Under Management:

 

         
Sextant International Fund      100%  
Sextant Core Fund      83%  
Sextant Growth Fund      100%  
Sextant Global High Income Fund      71%  

The Funds’ portfolios are actively managed and are subject to change, which may result in different Morningstar Sustainability Scores and Ratings.

% Rank in Category is the fund’s 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.

 

 

             
 
       
Annual Report   November 30, 2019                  5

 


 
     
Performance Summary (as of November 30, 2019)    (unaudited)

 

                                                         
                                                    Expense Ratio1  
               

Average Annual Total Returns

     1 Year        3 Year        5 Year        10 Year        15 Year        Gross        Net  
               

Sextant Short-Term Bond Fund (STBFX)

     4.64%        1.90%        1.48%        1.43%        2.29%        0.91%        0.60%  
               

FTSE USBIG Govt/Corp 1-3 Year Index

     4.53%        2.06%        1.54%        1.42%        2.44%                 n/a  
               

Sextant Bond Income Fund (SBIFX)

     12.45%        4.90%        3.41%        4.04%        4.10%        0.84%        0.65%  
               

FTSE US Broad Investment-Grade Bond Index

     10.97%        4.16%        3.11%        3.56%        4.30%                 n/a  
               

Sextant Core Fund (SCORX)

     13.04%        9.25%        4.88%        6.04%        n/a                 0.88%  
               

Dow Jones Moderate US Portfolio Index

     11.53%        8.55%        6.04%        7.66%        6.49%                 n/a  
               

Sextant Global High Income Fund (SGHIX)

     7.06%        8.00%        5.02%        n/a        n/a        0.97%        0.75%  
               

S&P Global 1200 Index

     14.97%        13.04%        8.40%        9.82%        7.65%                 n/a  
               

Sextant Growth Fund Investor Shares (SSGFX)

     21.81%        17.99%        9.52%        11.81%        8.86%                 0.92%  
               

Sextant Growth Fund Z Shares (SGZFX)

     22.22%        n/a        n/a        n/a        n/a                 0.70%  
               

S&P 500 Index

     16.11%        14.90%        10.97%        13.44%        9.02%                 n/a  
               

Sextant International Fund Investor Shares (SSIFX)

     18.82%        15.23%        7.74%        5.77%        6.93%                 1.05%  
               

Sextant International Fund Z Shares (SIFZX)

     19.14%        n/a        n/a        n/a        n/a                 0.84%  
               

MSCI EAFE Index

     13.04%        10.18%        4.76%        5.81%        5.41%                 n/a  

Performance data quoted above represents past performance, is before any taxes payable by shareowners, and is no guarantee of future results. Current performance may be higher or lower than that stated herein. Performance current to the most recent month-end is available by calling toll-free 1-800-728-8762 or visiting www.sextantfunds.com. Average annual total returns are historical and include change in share value as well as reinvestment of dividends and capital gains, if any. The 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. Funds that invest in foreign securities may involve greater risk, including political and economic uncertainties of foreign countries as well as the risk of currency fluctuations.

 

1 

By regulation, expense ratios shown in this table are as stated in the Funds’ most recent prospectus, which is dated March 27, 2019, and incorporate results for the fiscal year ended November 30, 2018. Ratios presented in this table differ from the expense ratios shown elsewhere in this report as they represent different periods.

 

 

             
 
       
6                  November 30, 2019   Annual Report

 


 

Sextant Short-Term Bond Fund

 

         

Performance Summary

        (unaudited)

 

                                 

Average Annual Total Returns as of November 30, 2019

 

         
       1 Year        5 Year        10 Year        Expense Ratio1  
         

Sextant Short-Term Bond Fund

       4.64%          1.48%          1.43%          0.91%  
         

FTSE USBIG Govt/Corp 1-3 Year Index

       4.53%          1.54%          1.42%          n/a  

Growth of $10,000

 

 

     
Sextant Short-Term Bond Fund Growth of $10,000
  Comparison of any mutual fund to a market index must be made bearing in mind that the index is expense-free. Conversely, the fund will (1) be actively managed; (2) have an objective other than mirroring the index, such as limiting risk; (3) bear transaction and other costs; (4) stand ready to buy and sell its securities to shareowners on a daily basis; and (5) provide a wide range of services. The graph compares $10,000 invested in the Fund on November 30, 2009, to an identical amount invested in the FTSE USBIG Govt/Corp 1-3 Year Index, a broad-based index of shorter-term investment grade US government and corporate bond prices. The graph shows that an investment in the Fund would have risen to $11,531 versus $11,513 in the index.

Past performance does not guarantee future results. The “Growth of $10,000” graph and “Average Annual Returns” performance table assume the reinvestment of dividends and capital gains. They do not reflect the deduction of taxes that a shareowner might pay on fund distributions or the redemption of fund shares.

 

1 

By regulation, the expense ratio shown in this table is as stated in the Fund’s most recent prospectus which is dated March 27, 2019, and incorporates results for the fiscal year ended November 30, 2018, before fee waivers. The actual expense ratio, shown in the most recent prospectus after fee waivers was 0.60%. The ratio presented in this table differs from expense ratios shown elsewhere in this report as they represent different periods.

Fund Objective

 

The objectives of the Short-Term Bond Fund are capital preservation and current income.

 

         

Top 10 Holdings

 

 
% of Total Net Assets  
   

United States Treasury Note (3.625% due 02/15/2021)

     8.3%  
   

United States Treasury Note (2.875% due 04/30/2025)

     7.2%  
   

United States Treasury Note (2.50% due 08/15/2023)

     4.7%  
   

McCormick & Co. (2.70% due 08/15/2022)

     4.6%  
   

Honeywell International (4.25% due 03/01/2021)

     4.2%  
   

Loews (2.625% due 05/15/ 2023)

     4.1%  
   

Burlington Northern Santa Fe (3.05% due 09/01/2022)

     3.7%  
   

AvalonBay Communities (2.85% due 03/15/2023)

     3.7%  
   

Qualcomm (2.60% due 01/30/2023)

     3.7%  
   

Gilead Sciences (2.55% due 09/01/2020)

     3.6%  

 

 

                         

Portfolio Diversification

 

     
% of Total Net Assets

 

                
       

Government Bonds

    23.4%             
Sextant Short-Term Bond Fund Portfolio Diversification
 

Financials

    14.1%        

Consumer Staples

    13.8%        

Health Care

    13.1%        

Technology

    11.3%        

Industrials

    6.9%        

Consumer Discretionary

    5.5%        

Materials

    3.6%        

Energy

    2.9%        

Utilities

    2.3%        

Other assets (net of liabilities)

    3.1%        

 

 

             
 
       
Annual Report   November 30, 2019                  7

 


 

Sextant Short-Term Bond Fund

 

     

Discussion of Fund Performance

   (unaudited)

(photo omitted)

Fiscal Year 2019

For the fiscal year ended November 30, 2019, the Sextant Short-Term Bond Fund returned 4.64%, which was lower than the 4.87% average return of its Morningstar Short-Term Bond category peer group. For the five years ended November 30, the Fund provided a 1.48% annualized total return versus 1.86% for its Morningstar category peer group. During the year, the Fund’s share price grew from $4.94 to $5.08. The ratio of net investment income (after fee waivers) to net assets rose from 1.44% to 1.75%. Fund shares outstanding rose 2.53, and Fund assets rose 7.91%. The Fund’s 30-day yield was 1.33%, and its unsubsidized 30-day yield was 0.82%. Reflecting Saturna Capital’s subsidies to cap operating expenses, the Fund’s effective expense ratio was reduced to 0.60% from 0.87%.

Factors Affecting Past Performance

2019 began with the US Federal Reserve Bank policy at an inflection point. Good US economic growth and low US unemployment justified policy normalization, meaning shrinking the Fed’s balance sheet (quantitative tightening) and moving the Federal Funds rates higher. However, softening global growth, trade tensions, a flat yield curve, a strong US dollar, and faltering financial asset prices required the opposite policy response. By November 2019, US policy makers had reversed rate normalization, setting Federal Funds at 1.50%, below their level in June 2018. Quantitative tightening was halted. The policy dichotomy between US economic strength and global economic weakness was resolved with global concerns and the urgent need for greater US dollar liquidity prevailing.

This rapid policy reversal triggered a “risk on” response in financial markets. The Fed succeeded in steepening the US Treasury yield curve, discounting a flat curve’s recession signal. Reinvigorated investors poured money into financial assets, and especially income producing assets such as high-yield bonds. Reinvestment risk suddenly re-emerged at the most urgent of investment objectives. Corporate bond spreads narrowed significantly, returning to previous lows in 1998, 2003, and 2018. High-yield spreads narrowed significantly more than investment grade spreads. US 30-yr bond yields established a new low, eclipsing the previous low in 2016.

More recently, the US Federal Reserve expanded short-term liquidity funding to address funding shortfalls in the US repo market. An unusual structural balance of payments deficit caused by record US government deficit spending, restrictive banking regulations, and weak foreign demand for US Treasury paper combined to create the funding deficit.

In echoes of 2008, the European Central Bank, Japan, and Britain also amplified their own monetary easing policies. With interest rates falling and corporate bond spreads narrowing simultaneously, bond markets produced exceptional returns.

Looking Forward

US economic growth and inflation will likely remain relatively benign, while progress on Brexit and the US China trade negotiations will relax some anxieties. New monetary and fiscal stimulus from the US, Britain, Japan, and others will be deployed to fund debt burdens, fiscal deficits, as well as boost economic growth and inflation. In the last decade, monetary and fiscal stimulus policies initially pushed bond yields higher. However, these reflation policies have a mixed record of producing lasting results. Once these policies run their course, inflation and bond yields may very well fall again, boosting bond prices. Despite these reflation initiatives, negative nominal and real rates will not disappear. Reinvestment risk will remain the most urgent concern for bond investors over the medium to long term. Easing US Federal Reserve monetary policy will remain the first line of defense against global economic weakness. Short rates will remain low.

With yields only slightly higher than recent lows, credit spreads offering historically little additional compensation, and real yields near zero, it is tempting to discount the appeal of bonds in 2020. But bonds still offer another exceptional quality: diversification. As an asset class, short-term bonds demonstrated excellent negative correlation to common stocks on days when stock prices fell during 2019. Higher yields in the next few quarters represent a buying opportunity.

For yield starved investors looking for a relatively calm mooring, short-term bonds may offer the comfort of low correlation that leads to better decision making when many asset classes offer persistently high valuations and low potential returns.

Management Fee Calculations

The Sextant Short-Term Bond Fund calculates the performance part of its management fee by comparing the Fund’s return to the average return of Morningstar’s Short-Term Bond category. The Fund’s 12-month return of 4.64% was less than 1% percent below the Morningstar category average of 4.87% at month-end November 30, 2019. Therefore, the basic annual management fee of 0.50% remained unchanged for the month of December 2019. Note that the management fee is partially waived due to the adviser’s cap on total Fund expenses.

 

 

             
 
       
8                  November 30, 2019   Annual Report

 


 

Sextant Short-Term Bond Fund

 

                                     
    Schedule of Investments                          As of November 30, 2019  
             
    Corporate Bonds – 73.5%       Coupon / Maturity    Face Amount      Market Value      Percentage of Assets  
             
    Consumer Discretionary                             
             
   

Alibaba Holding Group

      3.125% due 11/28/2021      $350,000        $356,710        3.2%  
             
   

Ford Motor Credit

      3.157% due 08/04/2020      250,000        250,928        2.3%  
             
                            607,638        5.5%  
             
    Consumer Staples                             
             
   

Church & Dwight

      2.875% due 10/01/2022      260,000        265,001        2.4%  
             
   

Costco Wholesale

      2.75% due 05/18/2024      385,000        397,558        3.6%  
             
   

Estee Lauder

      2.35% due 08/15/2022      350,000        353,594        3.2%  
             
   

McCormick & Co.

      2.70% due 08/15/2022      500,000        507,714        4.6%  
             
                            1,523,867        13.8%  
             
    Energy                             
             
   

Schlumberger Investment

      3.65% due 12/01/2023      310,000        326,135        2.9%  
             
                            326,135        2.9%  
             
    Financials                             
             
   

AvalonBay Communities

      2.85% due 03/15/2023      400,000        409,468        3.7%  
             
   

Loews

      2.625% due 05/15/2023      450,000        458,250        4.1%  
             
   

Paccar Financial

      2.05% due 11/13/2020      350,000        350,581        3.2%  
             
   

Simon Property Group

      2.00% due 09/13/2024      350,000        348,051        3.1%  
             
                            1,566,350        14.1%  
             
    Health Care                             
             
   

AbbVie

      2.50% due 05/14/2020      250,000        250,414        2.3%  
             
   

Astrazeneca

      2.375% due 01/16/2020      155,000        155,597        1.4%  
             
   

Celgene

      2.25% due 08/15/2021      300,000        301,531        2.7%  
             
   

Gilead Sciences

      2.55% due 09/01/2020      400,000        401,832        3.6%  
             
   

Teva Pharmaceutical

      3.65% due 11/10/2021      350,000        342,846        3.1%  
             
                            1,452,220        13.1%  
             
    Industrials                             
             
   

Burlington Northern Santa Fe

      3.05% due 09/01/2022      400,000        410,961        3.7%  
             
   

CSX Corporation

      4.25% due 06/01/2021      350,000        359,392        3.2%  
             
                            770,353        6.9%  
             
    Materials                             
             
   

3M

      2.00% due 06/26/2022      400,000        401,719        3.6%  
             
                            401,719        3.6%  
             
    Technology                             
             
   

Adobe Systems

      4.75% due 02/01/2020      379,000        380,759        3.4%  

 

Continued on next page.

 

 

                 
 
         
The accompanying notes are an integral part of these financial statements.   Annual Report   November 30, 2019                  9

 


 

Sextant Short-Term Bond Fund

 

                                     
    Schedule of Investments                          As of November 30, 2019  
             
    Corporate Bonds – 73.5%       Coupon / Maturity    Face Amount      Market Value      Percentage of Assets  
             
    Technology (continued)                             
             
   

Honeywell International

      4.25% due 03/01/2021      $450,000        $463,459        4.2%  
             
   

Qualcomm

      2.60% due 01/30/2023      400,000        406,126        3.7%  
             
                            1,250,344        11.3%  
             
    Utilities                             
             
   

PacifiCorp

      2.95% due 06/01/2023      250,000        256,930        2.3%  
             
                            256,930        2.3%  
             
                                        
             
    Total Corporate Bonds                       $8,155,556        73.5%  
             
                                        
             
    Government Bonds – 23.4%       Coupon / Maturity    Face Amount      Market Value      Percentage of Assets  
             
    United States Treasury Notes                             
             
   

United States Treasury Note

      2.625% due 05/15/2021      $355,000        $359,771        3.2%  
             
   

United States Treasury Note

      3.625% due 02/15/2021      900,000        920,461        8.3%  
             
   

United States Treasury Note

      2.50% due 08/15/2023      500,000        515,801        4.7%  
             
   

United States Treasury Note

      2.875% due 04/30/2025      750,000        796,699        7.2%  
             
                            2,592,732        23.4%  
             
                                        
             
    Total Government Bonds                       2,592,732        23.4%  
             
                                        
             
    Total investments       (Cost is $10,648,234)               10,748,288        96.9%  
             
    Other assets (net of liabilities)                       340,601        3.1%  
             
    Total net assets                       $11,088,889        100.0%  
             
                                        

 

 

                         

Bond Quality Diversification

                     (unaudited)  
     
% of Total Net Assets

 

                
       

Rated “AAA”

    23.4%             
Sextant Short-Term Bond Bond Quality Diversification
 

Rated “AA-”

    3.6%        

Rated “A+”

    15.2%        

Rated “A”

    14.2%        

Rated “A-”

    22.3%        

Rated “BBB+”

    3.2%        

Rated “BBB”

    9.6%        

Rated “BB+”

    2.3%        

Rated “BB”

    3.1%        

Other assets (net of liabilities)

    3.1%        
 
Credit ratings are the lesser of S&P Global Ratings or Moody’s Investors Service. If neither S&P nor Moody’s rate a particular security, that security is categorized as not rated (except for US Treasury securities and securities issued or backed by US agencies which inherit the credit rating for the US government). Ratings range from AAA (highest) to D (lowest). Bonds rated BBB or above are considered investment grade. Credit ratings BB and below are lower-rated securities (junk bonds). Ratings apply to the creditworthiness of the issuers of the underlying securities and not the Fund or its shares. Ratings may be subject to change.

 

 

 

                 
 
         
10                  November 30, 2019   Annual Report   The accompanying notes are an integral part of these financial statements.

 


 

Sextant Short-Term Bond Fund

 

Statement of Assets and Liabilities

 

         
As of November 30, 2019

 

   
         
   

Assets

                          
   

Investments in securities, at value

(Cost $10,648,234)

    $10,748,288  
   

Cash

    266,182  
   

Dividends and interest receivable

    74,625  
   

Other assets

    6,247  
   

Receivable for Fund shares sold

    1,859  
   

Receivable from adviser

    44  
         
   

Total assets

    11,097,245  
         
   

Liabilities

       
   

Accrued retirement plan custody fee

    3,138  
   

Accrued audit expenses

    3,000  
   

Accrued insurance expenses

    685  
   

Accrued legal expenses

    510  
   

Accrued trustee expenses

    362  
   

Accrued Chief Compliance Officer expenses

    334  
   

Accrued other expenses

    279  
   

Distributions payable

    48  
         
   

Total liabilities

    8,356  
         
   

Net Assets

    $11,088,889  
   
         
   

Analysis of net assets

       
   

Paid-in capital (unlimited shares authorized, without par value)

    $10,995,696  
   

Total distributable earnings

    93,193  
         
   

Net assets applicable to Fund shares outstanding

    $11,088,889  
   
         

Fund shares outstanding

    2,181,911  
   

Net asset value, offering, and redemption price per share

    $5.08  
         

 

Statement of Operations

 

         
Year ended November 30, 2019

 

   

    

       
   

Investment income

                          
   

Interest income

    $252,039  
   

Miscellaneous income

    269  
         
   

Total investment income

    252,308  
         
   

Expenses

       
   

Investment adviser fees

    53,500  
   

Filing and registration fees

    18,335  
   

Audit fees

    6,307  
   

Retirement plan custodial fees

    3,477  
   

Legal fees

    2,659  
   

Trustee fees

    2,608  
   

Chief Compliance Officer expenses

    2,591  
   

Printing and posting fees

    1,933  
   

Other expenses

    1,492  
   

Custodian fees

    432  
         
   

Total gross expenses

    93,334  
         
   

Less adviser fees waived

    (28,421
   

Less custodian fee credits

    (407
         
   

Net expenses

    64,506  
         
   

Net investment income

    $187,802  
   
         
   

    

       
   

Net realized gain from investments

    $6,528  
   

Net increase in unrealized appreciation on investments

    299,329  
         
   

Net gain on investments

    $305,857  
   
         
   

Net increase in net assets resulting from operations

    $493,659  
         

 

 

                 
 
         
The accompanying notes are an integral part of these financial statements.   Annual Report   November 30, 2019                  11

 


 

Sextant Short-Term Bond Fund

 

                 

Statements of Changes in Net Assets

    Year ended Nov. 30, 2019          Year ended Nov. 30, 2018  
     

Increase (decrease) in net assets from operations

                  
     

From operations

                  
     

Net investment income

    $187,802          $147,275  
     

Net realized gain (loss) on investment

    6,528          (16,794
     

Net increase (decrease) in unrealized appreciation

    299,329          (110,471
                    
     

Net increase in net assets

    493,659          20,010  
                    
     
                    
     

Distributions to shareowners

    (187,268 )         (150,192 ) 
     
                    
     

Capital share transactions

                  
     

Proceeds from sales of shares

    1,406,263          974,206  
     

Value of shares issued in reinvestment of dividends

    186,358          150,567  
     

Cost of shares redeemed

    (1,085,719        (1,423,649
                    
     

Total capital share transactions

    506,902          (298,876
                    
     

Total increase (decrease) in net assets

    813,293          (429,058
     
                    
     

Net assets

                  
     

Beginning of year

    10,275,596          10,704,654  
     

End of year

    $11,088,889          $10,275,596  
     
                    
     

Shares of the Fund sold and redeemed

                  
     

Number of shares sold

    279,784          196,541  
     

Number of shares issued in reinvestment of dividends

    36,950          30,411  
     

Number of shares redeemed

    (215,988        (286,428
                    
     

Net increase (decrease) in number of shares outstanding

    100,746          (59,476
     
                    

 

                                         

Financial Highlights

            For year ended November 30,          
           

Selected data per share of outstanding capital stock throughout each year:

    2019       2018       2017       2016       2015  
           

Net asset value at beginning of year

    $4.94       $5.00       $5.02       $5.02       $5.04  
           

Income from investment operations

                                       
           

Net investment income

    0.09       0.07       0.06       0.05       0.05  
           

Net gains (losses) on securities (both realized and unrealized)

    0.14       (0.06     (0.02     0.00 A       (0.02
                                         
           

Total from investment operations

    0.23       0.01       0.04       0.05       0.03  
                                         
           

Less distributions

                                       
           

Dividends (from net investment income)

    (0.09     (0.07     (0.06     (0.05     (0.05
           

Capital gains distribution

    -       (0.00 )A       -       -       -  
                                         
           

Total distributions

    (0.09     (0.07     (0.06     (0.05     (0.05
                                         
           
                                         
           

Net asset value at end of year

    $5.08       $4.94       $5.00       $5.02       $5.02  
           
                                         

Total return

    4.64%       0.26%       0.87%       1.06%       0.67%  
           

Ratios / supplemental data

                                       
           

Net assets ($000), end of year

    $11,089       $10,276       $10,705       $10,326       $7,488  
           

Ratio of expenses to average net assets

                                       
           

Before fee waivers and custodian fee credits

    0.87%       0.91%       1.01%       1.15%       1.21%  
           

After fee waivers

    0.61%       0.61%       0.68%       0.76%       0.76%  
           

After fee waivers and custodian fee credits

    0.60%       0.60%       0.68%       0.75%       0.75%  
           

Ratio of net investment income after fee waivers and custodian fee credits to average net assets

    1.75%       1.44%       1.26%       1.05%       1.06%  
           

Portfolio turnover rate

    32%       36%       31%       11%       13%  
           
                                         
A 

Amount is less than $0.01

 

 

                 
 
         
12                  November 30, 2019   Annual Report   The accompanying notes are an integral part of these financial statements.

 


 

Sextant Bond Income Fund

 

     

Performance Summary

   (unaudited)

 

                                 

Average Annual Total Returns as of November 30, 2019

 

         
       1 Year        5 Year        10 Year        Expense Ratio1  
         

Sextant Bond Income Fund

       12.45%          3.41%          4.04%          0.84%  
         

FTSE US Broad Investment-Grade Bond Index

       10.97%          3.11%          3.56%          n/a  

Growth of $10,000

 

 

     
Sextant Bond Income Fund Growth of $10,000
  Comparison of any mutual fund to a market index must be made bearing in mind that the index is expense-free. Conversely, the fund will (1) be actively managed; (2) have an objective other than mirroring the index, such as limiting risk; (3) bear transaction and other costs; (4) stand ready to buy and sell its securities to shareowners on a daily basis; and (5) provide a wide range of services. The graph compares $10,000 invested in the Fund on November 30, 2009, to an identical amount invested in the FTSE US Broad Investment-Grade Bond Index, a broad-based index of medium and long-term investment grade bond prices. The graph shows that an investment in the Fund would have risen to $14,857 versus $14,191 in the index.

Past performance does not guarantee future results. The “Growth of $10,000” graph and “Average Annual Returns” performance table assume the reinvestment of dividends and capital gains. They do not reflect the deduction of taxes that a shareowner might pay on fund distributions or the redemption of fund shares.

 

1

By regulation, the expense ratio shown in this table is as stated in the Fund’s most recent prospectus which is dated March 27, 2019, and incorporates results for the fiscal year ended November 30, 2018, before fee waivers. The expense ratio shown in the most recent prospectus after fee waivers was 0.65%. The ratio presented in this table differs from expense ratios shown elsewhere in this report as they represent different periods.

Fund Objective

 

The objective of the Bond Income Fund is current income.

 

         

Top 10 Holdings

        
 
% of Total Net Assets  
   

United States Treasury Bond (4.25% due 05/15/2039)

     8.3%  
   

United States Treasury Bond (5.375% due 02/15/2031)

     4.4%  
   

Apple (4.50% due 02/23/2036)

     3.4%  
   

Microsoft (4.20% due 11/03/2035)

     3.4%  
   

Intel (4.00% due 12/15/2032)

     3.3%  
   

Burlington Northern Santa Fe (5.05% due 03/01/2041)

     3.1%  
   

United States Treasury Note (3.625% due 02/15/2021)

     3.0%  
   

Praxair (3.55% due 11/07/2042)

     3.0%  
   

Puget Sound Energy (4.434% due 11/15/2041)

     2.8%  
   

United Technologies (6.05% due 06/01/2036)

     2.7%  

 

 

                         

Portfolio Diversification

                        
     
% of Total Net Assets               
       

Government Bonds

    24.5%             
Sextant Bond Income Fund Portfolio Diversification
 

Health Care

    11.7%        

Municipal Bonds

    10.6%        

Technology

    10.1%        

Industrials

    9.2%        

Utilities

    7.5%        

Financials

    6.2%        

Energy

    5.8%        

Consumer Discretionary

    4.6%        

Materials

    3.0%        

Consumer Staples

    2.2%        

Other Assets (net of liabilities)

    4.6%        

 

 

             
 
       
Annual Report   November 30, 2019                  13

 


 

Sextant Bond Income Fund

 

     

Discussion of Fund Performance

   (unaudited)

(photo omitted)

Fiscal Year 2019

For the fiscal year ended November 30, 2019, the Sextant Bond Income Fund returned 12.45%, lower than the 22.73% average return of its Morningstar Long-Term Bond category peer group. For the five years ended November 30, the Fund provided a 3.41% annualized total return versus 5.81% for its Morningstar category peer group. During the year, the Fund’s share price rose from $4.89 to $5.34 and the ratio of net investment income (after fee waivers) to net assets declined from 3.20% to 2.96%. Fund shares outstanding rose 5.42%, and fund assets rose 13.91%. The Fund’s 30-day yield was 2.13%, and its unsubsidized 30-day yield was 1.84%. Reflecting Saturna Capital’s subsidies to cap operating expenses, the Fund’s effective expense ratio was reduced to 0.55% from 0.71%.

Factors Affecting Past Performance

2019 began with the US Federal Reserve Bank policy at an inflection point. Good US economic growth and low US unemployment justified policy normalization, meaning shrinking the Fed’s balance sheet (quantitative tightening) and moving the Federal Funds rates higher. However, softening global growth, trade tensions, a flat yield curve, a strong US dollar, and faltering financial asset prices required the opposite policy response. By November 2019, US policy makers had reversed rate normalization, setting Federal Funds at 1.50%, below their level in June 2018. Quantitative tightening was halted. The policy dichotomy between US economic strength and global economic weakness was resolved with global concerns and the urgent need for greater US dollar liquidity prevailing.

This rapid policy reversal triggered a “risk on” response in financial markets. The Fed succeeded in steepening the US Treasury yield curve, discounting a flat curve’s recession signal. Reinvigorated investors poured money into financial assets, and especially income producing assets such as high-yield bonds. Reinvestment risk suddenly re-emerged as the most urgent of investment objectives. Corporate bond spreads narrowed significantly, returning to previous lows in 1998, 2003, and 2018. High-yield spreads narrowed significantly more than investment grade spreads. US 30-yr bond yields established a new low, eclipsing the previous low in 2016.

More recently, the US Federal Reserve expanded short-term liquidity funding to address funding shortfalls in the US repo market. An unusual structural balance of payments deficit caused by record US government deficit spending, restrictive banking regulations, and weak foreign demand for US Treasury paper combined to create the funding deficit.

In echoes of 2008, the European Central Bank, Japan, and Britain also amplified their own monetary easing policies. With interest rates falling and corporate bond spreads narrowing simultaneously, bond markets produced exceptional returns.

Looking Forward

US economic growth and inflation will likely remain relatively benign, while progress on Brexit and the US China trade negotiations will relax some anxieties. New monetary and fiscal stimulus from the US, Britain, Japan, and others will be deployed to fund debt burdens, fiscal deficits, as well as boost economic growth and inflation. In the last decade, monetary and fiscal stimulus policies initially pushed bond yields higher. However, these reflation policies have a mixed record of producing lasting results. Once these policies run their course, inflation and bond yields may very well fall again, boosting bond prices. Despite these reflation initiatives, negative nominal and real rates will not disappear. Reinvestment risk will remain the most urgent concern for bond investors over the medium to long term.

With yields only slightly higher than recent lows, credit spreads offering historically little additional compensation, and real yields near zero, it is tempting to discount the appeal of bonds in 2020. But bonds still offer another exceptional quality: diversification. As an asset class, bonds demonstrated excellent negative correlation to common stocks on days when stock prices fell during 2019. Higher yields in the next few quarters represent a buying opportunity.

For yield starved investors looking for a relatively calm mooring, bonds may offer the comfort of low correlation that leads to better decision making when many asset classes offer persistently high valuations and low potential returns.

Management Fee Calculations

The Sextant Bond Income Fund calculates the performance part of its management fee by comparing the Fund’s return to the return of Morningstar’s Long-Term Bond category. The Fund’s 12-month return of 12.45% was more than 2% below the Morningstar category average of 22.73% at month-end November 30, 2019. Therefore, the basic annual management fee of 0.50% was decreased by 0.20% to 0.30% for the month of December 2019. Note that the management fee is partially waived due to the adviser’s cap on total Fund expenses.

 

 

             
 
       
14                  November 30, 2019   Annual Report

 


 

Sextant Bond Income Fund

 

                                     
    Schedule of Investments                          As of November 30, 2019  
             
    Corporate Bonds – 60.3%       Coupon / Maturity    Face Amount      Market Value      Percentage of Assets  
             
    Consumer Discretionary                             
             
   

Lowe’s

      5.80% due 10/15/2036      $250,000        $312,863        2.5%  
             
   

VF

      6.00% due 10/15/2033      200,000        258,775        2.1%  
             
                            571,638        4.6%  
             
    Consumer Staples                             
             
   

Unilever Capital

      5.90% due 11/15/2032      200,000        271,747        2.2%  
             
                            271,747        2.2%  
             
    Energy                             
             
   

Baker Hughes

      6.875% due 01/15/2029      100,000        124,507        1.0%  
             
   

Canadian Natural Resources

      6.45% due 06/30/2033      225,000        286,151        2.3%  
             
   

Statoil

      7.15% due 01/15/2029      224,000        304,803        2.5%  
             
                            715,461        5.8%  
             
    Financials                             
             
   

Affiliated Managers Group

      3.50% due 08/01/2025      250,000        260,658        2.1%  
             
   

Bank Of New York Mellon MTN

      3.30% due 08/23/2029      250,000        263,332        2.1%  
             
   

UBS AG Stamford CT

      7.75% due 09/01/2026      200,000        250,825        2.0%  
             
                            774,815        6.2%  
             
    Health Care                             
             
   

Becton Dickinson

      6.70% due 08/01/2028      240,000        298,360        2.4%  
             
   

Johnson & Johnson

      4.95% due 05/15/2033      226,000        286,927        2.3%  
             
   

Medtronic Inc

      4.375% due 03/15/2035      260,000        311,484        2.5%  
             
   

Merck & Co.

      6.50% due 12/01/2033      215,000        309,726        2.5%  
             
   

Teva Pharmaceutical

      3.65% due 11/10/2021      250,000        244,890        2.0%  
             
                            1,451,387        11.7%  
             
    Industrials                             
             
   

Boeing

      6.125% due 02/15/2033      215,000        286,145        2.3%  
             
   

Burlington Northern Santa Fe

      5.05% due 03/01/2041      310,000        385,448        3.1%  
             
   

Deere & Co.

      8.10% due 05/15/2030      95,000        138,669        1.1%  
             
   

United Technologies

      6.05% due 06/01/2036      250,000        338,145        2.7%  
             
                            1,148,407        9.2%  
             
    Materials                             
             
   

Praxair

      3.55% due 11/07/2042      350,000        372,778        3.0%  
             
                            372,778        3.0%  

 

Continued on next page.

 

 

                 
 
         
The accompanying notes are an integral part of these financial statements.   Annual Report   November 30, 2019                  15

 


 

Sextant Bond Income Fund

 

                                     
    Schedule of Investments                          As of November 30, 2019  
             
    Corporate Bonds – 60.3%       Coupon / Maturity    Face Amount      Market Value      Percentage of Assets  
             
    Technology                             
             
   

Apple

      4.50% due 02/23/2036      $350,000        $427,926        3.4%  
             
   

Intel

      4.00% due 12/15/2032      360,000        416,946        3.3%  
             
   

Microsoft

      4.20% due 11/03/2035      350,000        416,965        3.4%  
             
                            1,261,837        10.1%  
             
    Utilities                             
             
   

Alabama Power

      4.15% due 08/15/2044      200,000        227,740        1.8%  
             
   

Entergy Louisiana

      5.40% due 11/01/2024      200,000        229,313        1.8%  
             
   

Florida Power & Light

      5.95% due 10/01/2033      100,000        134,457        1.1%  
             
   

Puget Sound Energy

      4.434% due 11/15/2041      300,000        347,575        2.8%  
             
                            939,085        7.5%  
             
                                        
             
    Total Corporate Bonds                       $7,507,155        60.3%  
             
                                        
             
    Government Bonds – 24.5%       Coupon / Maturity    Face Amount      Market Value      Percentage of Assets  
             
    Foreign Government Bonds                             
             
   

Quebec Canada Yankee

      7.125% due 02/09/2024      $175,000        $210,954        1.7%  
             
                            210,954        1.7%  
             
    United States Treasury Bonds                             
             
   

United States Treasury Bond

      5.25% due 02/15/2029      170,000        220,230        1.8%  
             
   

United States Treasury Bond

      6.25% due 05/15/2030      75,000        106,893        0.8%  
             
   

United States Treasury Bond

      4.25% due 05/15/2039      770,000        1,038,898        8.3%  
             
   

United States Treasury Bond

      3.125% due 11/15/2041      145,000        169,310        1.4%  
             
   

United States Treasury Bond

      3.375% due 11/15/2048      60,000        75,073        0.6%  
             
   

United States Treasury Bond

      6.125% due 08/15/2029      225,000        312,275        2.5%  
             
   

United States Treasury Bond

      5.375% due 02/15/2031      400,000        544,703        4.4%  
             
                            2,467,382        19.8%  
             
    United States Treasury Notes                             
             
   

United States Treasury Note

      3.625% due 02/15/2021      370,000        378,412        3.0%  
             
                            378,412        3.0%  
             
                                        
             
    Total Government Bonds                       $3,056,748        24.5%  
             
                                        

 

Continued on next page.

 

 

                 
 
         
16                  November 30, 2019   Annual Report   The accompanying notes are an integral part of these financial statements.

 


 

Sextant Bond Income Fund

 

                                     
    Schedule of Investments                          As of November 30, 2019  
             
    Municipal Bonds – 10.6%       Coupon / Maturity    Face Amount      Market Value      Percentage of Assets  
             
    General Obligation                             
             
   

Blaine Co. ID SCD #61 Hailey

      5.25% due 08/01/2020      $250,000        $255,650        2.1%  
             
   

Idaho Hsg & Fin GARVEE BAB A-2

      5.379% due 07/15/2020      180,000        183,467        1.5%  
             
   

San Marcos Texas ULTD GO BAB

      6.028% due 08/15/2030      200,000        205,994        1.6%  
             
   

Springville UT GO BAB

      5.30% due 05/01/2031      240,000        243,250        1.9%  
             
                            888,361        7.1%  
             
    Municipal Leases                             
             
   

Johnson Co KS Bldg Ls/Pr RevBAB

      4.60% due 09/01/2026      250,000        253,765        2.0%  
             
   

Oklahoma City Fin Auth Ed Lease Rev

      6.60% due 09/01/2022      160,000        178,230        1.5%  
             
                            431,995        3.5%  
             
                                        
             
    Total Municipal Bonds                       $1,320,356        10.6%  
             
                                        
             
    Total investments       (Cost = $11,132,690)               $11,884,259        95.4%  
             
    Other assets (net of liabilities)                       569,294        4.6%  
             
    Total net assets                       $12,453,553        100.0%  
             
                                        

 

 

                         

Bond Quality Diversification

                     (unaudited)  
     
% of Total Net Assets               
       

Rated “AAA”

    30.5%             
Sextant Bond Income Fund Bond Quality Diversification
 

Rated “AA+”

    3.4%        

Rated “AA”

    10.9%        

Rated “A+”

    11.3%        

Rated “A”

    14.6%        

Rated “A-”

    10.8%        

Rated “BBB+”

    7.2%        

Rated “BBB”

    2.3%        

Rated “BB+”

    2.4%        
       

Rated “BB”

    2.0%                 
       

Other assets (net of liabilities)

    4.6%                 
 
Credit ratings are the lesser of S&P Global Ratings or Moody’s Investors Service. If neither S&P nor Moody’s rate a particular security, that security is categorized as not rated (except for US Treasury securities and securities issued or backed by US agencies which inherit the credit rating for the US government). Ratings range from AAA (highest) to D (lowest). Bonds rated BBB or above are considered investment grade. Credit ratings BB and below are lower-rated securities (junk bonds). Ratings apply to the creditworthiness of the issuers of the underlying securities and not the Fund or its shares. Ratings may be subject to change.

 

 

 

                 
 
         
The accompanying notes are an integral part of these financial statements.   Annual Report   November 30, 2019                  17

 


 

Sextant Bond Income Fund

 

         

Statement of Assets and Liabilities

 

       
As of November 30, 2019

 

   

    

       
   

Assets

                          
   

Investments in securities, at value
(Cost $11,132,690)

    $11,884,259  
   

Cash

    443,124  
   

Interest receivable

    118,150  
   

Receivable for Fund shares sold

    8,665  
   

Other assets

    10,955  
         
   

Total assets

    12,465,153  
         
   

Liabilities

       
   

Accrued audit expenses

    3,709  
   

Distributions payable

    2,695  
   

Accrued retirement plan custody fee

    2,516  
   

Accrued advisory fees

    1,237  
   

Accrued insurance expenses

    475  
   

Accrued other operating expenses

    439  
   

Accrued Chief Compliance Officer expenses

    243  
   

Accrued legal expenses

    189  
   

Accrued trustee expenses

    92  
   

Payable for Fund shares redeemed

    5  
         
   

Total liabilities

    11,600  
         
   

Net assets

    $12,453,553  
   
         
   

Analysis of net assets

       
   

Paid-in capital (unlimited shares authorized, without par value)

    $11,705,518  
   

Total distributable earnings

    748,035  
         
   

Net assets applicable to Fund shares outstanding

    $12,453,553  
   
         

Fund shares outstanding

    2,333,514  
   

Net asset value, offering, and redemption price per share

 

    $5.34  

 

 

         

Statement of Operations

 

       
Year ended November 30, 2019

 

   
         
   

Investment income

                          
   

Interest income

    $397,306  
         
   

Total investment income

    397,306  
         
   

Expenses

       
   

Investment adviser fees

    48,988  
   

Filing and registration fees

    10,432  
   

Audit fees

    6,760  
   

Retirement plan custodial fees

    2,753  
   

Chief Compliance Officer expenses

    2,513  
   

Trustee fees

    2,364  
   

Legal fees

    2,322  
   

Printing and postage fees

    1,829  
   

Other expenses

    1,675  
   

Custodian fees

    456  
         
   

Total gross expenses

    80,092  
         
   

Less adviser fees waived

    (17,370
   

Less custodian fee credits

    (429
         
   

Net expenses

    62,293  
         
   

Net investment income

    $335,013  
   
         
   
         
   

Net realized gain from investments

    $41,830  
   

Net increase in unrealized appreciation on investments

    $933,335  
         
   

Net gain on investments

    $975,165  
   
         
   

Net increase in net assets resulting from operations

 

    $1,310,178  

 

 

                 
 
         
18                  November 30, 2019   Annual Report   The accompanying notes are an integral part of these financial statements.

 


 

Sextant Bond Income Fund

 

                 

Statements of Changes in Net Assets

    Year ended Nov. 30, 2019          Year ended Nov. 30, 2018  
     

Increase (decrease) in net assets from operations

                  
     

From operations

                  
     

Net investment income

    $335,013          $309,853  
     

Net realized gain on investments

    41,830          -  
     

Net increase (decrease) in unrealized appreciation

    933,335          (480,051
                    
     

Net increase (decrease) in net assets

    1,310,178          (170,198
                    
     
                    
     

Distributions to shareowners

    (334,236 )         (309,851 ) 
     
                    
     

Capital share transactions

                  
     

Proceeds from sales of shares

    1,865,586          3,232,820  
     

Value of shares issued in reinvestment of dividends

    328,512          306,251  
     

Cost of shares redeemed

    (1,649,526        (1,621,814
                    
     

Total capital share transactions

    544,572          1,917,257  
                    
     

Total increase (decrease) in net assets

    1,520,514          1,437,208  
     
                    
     

Net assets

                  
     

Beginning of year

    10,933,039          9,495,831  
     

End of year