Sextant Funds Investment Process | Saturna Capital

 

 

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Launched in 1995, the Sextant Funds provide the basic elements to build a low-expense, balanced investment program emphasizing a value approach to investing.

Value investing allows for longer holding periods which can lead to tax efficiency. The Sextant Funds’ investment process focuses on fundamentals at both the issuer and industry level. Saturna Capital’s research team further seeks issuers with sustainable competitive advantages, high-quality operations (including diverse and high-functioning management teams), strong free cash flows, attractive growth rates, increasing dividends, low price volatility, and low debt.

The Sextant bond funds employ rigorous comparative analysis that examines credit prices relative to credit default swaps from the same issuer, if available, as well as prices on comparable instruments with similar maturities. In general, for portfolio managers to consider a credit instrument for inclusion in a Sextant Fund, the security must be investment grade and be considered high-quality commercial paper. Consistent with its objective of high income, the Global High Income Fund favors bonds of lower quality, but may have up to half of its investments in bonds rated A- or higher.

The Growth Fund and International Fund invest primarily in stocks, the Short-Term Bond Fund and Bond Income Fund invest in bonds, the Core Fund invests in both stocks and bonds, and the Global High Income Fund invests in common stocks, preferred stocks, and bonds. All Sextant Funds seek tax efficiency for their shareowners and reduced trading expenses by limiting portfolio trading.

The Funds do not purchase securities on margin or sell securities short or purchase or write put or call options; purchase “restricted securities” (those which are subject to legal or contractual restrictions on resale or are otherwise not readily marketable); or invest in oil, gas, or other mineral exploration leases and programs.

About The Funds

The Sextant Growth Fund (SSGFX) actively 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.

The Sextant International Fund (SSIFX) actively seeks long-term capital growth by investing in diversified portfolio allocated among many countries, predominantly those with mature markets (such as Europe and Canada). The Fund looks for companies with growing revenues and earnings, favoring companies trading for less than the adviser’s assessment of intrinsic value.

The Sextant Core Fund (SCORX) seeks longterm appreciation and capital preservation by investing in a mix of debt and equity securities. It normally invests 60% of its assets in equity securities and 40% in investment grade fixed-income securities (those rated Baa or higher, including government and convertible bonds).

The Sextant Global High Income Fund (SGHIX) seeks high current income through investing in a globally diversified portfolio of incomeproducing debt and equity securities, including preferred stocks, depositary receipts, and highyield 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.

The Sextant Bond Income Fund (SBIFX) seeks current income through a diversified portfolio of income producing corporate and government bonds. Under normal circumstances, the Fund maintains a dollar-weighted average maturity of 10 years or more.

The Sextant Short-term Bond Fund (STBFX) seeks capital preservation and current income through a diversified portfolio of short-term, income-producing corporate and government bonds. Under normal circumstances, the Fund’s dollar-weighted average maturity does not exceed three years.