Performance Advisory Fee

The Sextant Funds employ a fulcrum advisory fee, which rewards or penalizes Saturna Capital for the Funds' investment performance.

Few funds have adopted a fulcrum fee structure, making it somewhat of a rarity. However, at the Sextant Funds, tying manager compensation to performance is a natural extension of our core values of accountability and acting in our shareowners' best interest.

"A benefit of a performance based fee is that it aligns the interest of management with the interests of investors. The fulcrum fee has two components: a base fee which represents the midpoint of the entire fulcrum fee; and an incentive adjustment. The incentive adjustments must be symmetrical — hence the term 'fulcrum.'"

Andrew Donohue, Former Director of Investment Management
U.S. Securities and Exchange Commission¹

How Sextant Fulcrum Fees Are Calculated

Each month, the Sextant Funds' 12-month trailing total investment returns are compared to the total return of their corresponding Morningstar categories. If a fund outperforms or underperforms the total return of its category, the base administrative fee is increased or decreased according to the fee structure table shown below.

Sextant Fund Morningstar Category
Sextant Growth Large Growth Funds
Sextant International Foreign Large Growth Funds
Sextant Core Allocation 50% to 70% Equity Funds
Sextant Global High Income World Allocation Funds
Sextant Short-Term Bond Short-Term Bond Funds
Sextant Bond Income Long-Term Bond Funds


Advisory Fee Structure
Base Fee annual rate Performance Adjustment annual rate
< 1% 
more or less than benchmark
1% and < 2%
more or less than benchmark
2% or greater
more or less than benchmark
0.50% 0.00% +/- 0.10% +/- 0.20%


Our Disciplined Approach

At Saturna Capital and the Sextant Mutual Funds, we strive for excellence in everything we do. We are primarily long-term investors, seeking to preserve and grow clients' capital over time.

In making investments, we are value-oriented; we are reluctant to pay a premium for a stock and endeavor to buy stocks when they are out of favor with the market. Our disciplined buy-and-hold execution minimizes portfolio turnover while increasing tax efficiency. We seek companies that represent high quality operations, with large free cash flows, sustainable growth rates, increasing dividends, low price volatility, stable earnings, and strong balance sheets free of excessive debt. We favor companies in which management has a considerable stake, and often sell those issues and industries in which the insiders are liquidating.

Read more about Sextant Funds' Investment Process and Saturna's Investment Philosophy.

¹ Donohue, Andrew J. — Speech by SEC Staff: Keynote Address at the Independent Directors Council Investment Company Directors Conference. November 12, 2009. Read the whole speech on the SEC's website here.