Saturna Sustainable Equity Fund
Overview
Investment Style
The Saturna Sustainable Equity Fund actively seeks issuers that demonstrate sustainable financial characteristics as well as a commitment to identifying and managing environmental, social, and governance-related risks.
- ESG factors considered include resource efficiency, community and labor relations, board composition, and business ethics
- Characteristics of financial sustainability include management strength, low debt, and strong balance sheets
- Screens exclude security issuers primarily engaged in higher ESG risk businesses; no alcohol, tobacco, pornography, weapons, gambling, or fossil fuel extraction
- Globally diversified
- Targeted to investors seeking long-term capital growth
- Generally large and mid-cap, but can invest in any capitalization domestic and foreign stocks
Investment Objective
Capital appreciation.
Principal Investment Strategies
Under normal conditions, the Fund invests at least 80% of its net assets in equities of issuers located throughout the world that the Fund’s adviser believes demonstrate sustainable characteristics. For purposes of this investment policy, the Fund’s adviser (Saturna Capital Corporation) considers issuers with sustainable characteristics to be those issuers that are more established, consistently profitable, financially strong, and with robust policies in the areas of the environment, social responsibility, and corporate governance (“ESG”).
The Fund’s adviser employs a fundamental research driven approach to stock selection and portfolio construction. The adviser’s focus on sustainability considers financial and non-financial characteristics from diverse sources including regulatory filings, market data, and data supplied by third-party vendors. The adviser uses that information to identify issuers with strong balance sheets, capable management teams with a track record of success, good cash flow, prospects for sustainable above-average earnings growth, and to assess issuers’ business models, over the long term.
The Fund’s adviser employs a proprietary sustainable rating system based on its own, as well as third-party, data to identify issuers believed to present low risks in ESG. The use of third-party data does not include third-party ESG ratings or criteria established by third parties for third-party ratings. The Fund’s ESG evaluation process considers risks and opportunities holistically, meaning an issuer will not necessarily be excluded from investment due to any one particular factor if the overall analysis results in a favorable evaluation by the adviser. The Fund’s adviser also uses negative screening to exclude security issuers primarily engaged in higher ESG risk businesses such as alcohol, tobacco, pornography, weapons, gambling, and fossil fuel exploration, production, or refining. The Fund generally does not invest in any issuer with exposure to the foregoing businesses, but may invest in an issuer if the issuer is not primarily engaged in higher ESG risk businesses.
The Fund diversifies its investments across industries, companies, and countries, and generally follows a large and mid-cap value investment approach. The Fund prefers seasoned companies that are expected to grow revenue and earnings, favoring equities of companies trading for less than the adviser’s assessment of their intrinsic value, which typically means companies with low price/earnings multiples, strong balance sheets, and higher dividend yields. The Fund principally invests in securities of companies with market capitalizations of greater than $5 billion. The Fund may invest up to 30% of net assets in companies with headquarters in countries with developing economies and/or markets.
Portfolio Managers
Portfolio Manager since 2017
Deputy Portfolio Manager since 2019
Performance
Short Term Performance
| As of April 30, 2023 | Ticker | 3 Month | 6 Month | YTD | |||
|---|---|---|---|---|---|---|---|
| Saturna Sustainable Equity | SEEFX | 3.87% | 15.53% | 9.35% | |||
| S&P Global 1200 | 2.22% | 13.43% | 9.55% | ||||
Average Annual Total Returns
| Month-end, as of April 30, 2023 | Ticker | 1 Year | 3 Year | 5 Year | 10 Year | Expense Ratio² | 30-Day Yield¹ | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Saturna Sustainable Equity | SEEFX | 3.32% | 8.98% | 7.86% | n/a | 0.85% | 0.83% | ||||
| S&P Global 1200 | 3.83% | 13.55% | 8.52% | 9.23% | n/a | n/a | |||||
| Quarter-end, as of March 31, 2023 | Ticker | 1 Year | 3 Year | 5 Year | 10 Year | Expense Ratio² | 30-Day Yield¹ | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Saturna Sustainable Equity | SEEFX | -5.22% | 10.96% | 7.30% | n/a | 0.85% | 0.77% | ||||
| S&P Global 1200 | -6.00% | 16.65% | 8.39% | 9.37% | n/a | n/a | |||||
Performance data quoted represents past performance which is no guarantee of future results. 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. Current performance may be higher or lower than performance data quoted. Standardized returns current to the most recent month-end can be obtained by visiting our Month-end Returns Page or by calling toll free 1-800-728-8762. The Fund cannot guarantee that its investment objective will be met. Securities of the Fund are offered and sold only through the prospectus or summary prospectus.
¹ 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.
² Expense ratios shown are as stated in the Fund's most recent prospectus or summary prospectus dated March 30, 2022.
Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 invested at the beginning of the period and redeemed at the end of the period, and assumes reinvestment of all dividends and capital gains.
The S&P Global 1200 Index is a global stock market index covering nearly 70% of the world's equity markets. Investors cannot invest directly in the index.
Distributions
| Record Date | Ex, Pay and Reinvest Date |
Ordinary Income |
Qualified Income |
Short-Term Capital Gains |
Long-Term Capital Gains |
Total Distributions (per share) |
|---|---|---|---|---|---|---|
| 12/14/2022 | 12/15/2022 | $0.14000 | $0.00 | $0.00 | $0.00 | $0.14000 |
| 12/15/2021 | 12/16/2021 | $0.00 | $0.12000 | $0.00 | $0.00 | $0.12000 |
| 12/16/2020 | 12/17/2020 | $0.00 | $0.05880 | $0.00 | $0.00 | $0.05880 |
| 12/18/2019 | 12/19/2019 | $0.00 | $0.06960 | $0.00 | $0.00 | $0.06960 |
The Saturna Sustainable Equity Fund intends to distribute its net investment income and net realized capital gains, if any, to its shareowners. Distributions from net capital gains and dividend income, if any, are paid at the end of the year; as a result of its investment strategy, the Equity Fund may not pay income dividends.
Both dividends and capital gain distributions are paid in additional full and fractional shares of the share class owned. At your option, you may receive dividends and/or capital gain distributions in cash. You are notified of each dividend and capital gain distribution when paid. Returned dividend payments will be automatically reinvested into your account and invested in additional shares of the Fund; future dividends in such accounts will continue to be reinvested until the shareowner is located or the account is closed.
Distributions for the last five years are listed in the table above. For prior distributions, please contact a Saturna representative.
Regulations regarding distributions can be complex, and there are several methods for managing your tax liability. Please consult a tax advisor about your particular circumstances. You also may obtain helpful information by calling the Internal Revenue Service at 1-800-829-1040 or visiting www.irs.gov.
If applicable, distribution information will appear on Form 1099-DIV, typically sent in late January. For more information on tax documentation, please visit our Tax Documentation page.
The Fund pays per-share distributions to shareowners invested on the Record Date. On the Payable Date, the fund's share price is reduced by the amount of its distribution.
Fees & Minimums
The following tables describe the fees and expenses mutual fund shareowners may pay. There are no shareowner fees (fees paid directly from an investment). The Fund imposes no sales charge (load) on purchases or reinvested dividends, or any deferred sales charge (load) upon redemption. There are no exchange fees or account fees. Investments in mutual funds are subject to ongoing expenses. Saturna endeavors to keep these fees low. We encourage you to compare the following fees with similar fees of other no-load mutual funds:
Shareowner Fees (fees paid directly from your investment)
None.
| Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | |
| Management Fees | 0.65% |
| Other Expenses | 0.28% |
| Total Annual Fund Operating Expenses | 0.93% |
| Fee Waiver and Expense Reimbursement | -0.18% |
| Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement | 0.75% |
The investment adviser has committed through March 31, 2024, 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.
Investment Minimum
The minimum initial investment is $1,000 (for tax-sheltered accounts, there is no minimum).
Principal Risks of Investing in the Fund
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. Consider investing in the Fund only if you are willing to accept the risk that you may lose money. Fund share prices, yields, and total returns will change with the fluctuations in the securities markets as well as the fortunes of the industries and companies in which the Fund invests.
Investment strategy risk: The adviser believes that sustainable investing may mitigate security-specific risk, but the screens used in connection with sustainable investing reduce the investable universe, which limits opportunities and may increase the risk of loss during market declines.
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, and at times may be out of favor with investors. 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.
Foreign investing risk: The Fund may invest in securities that are not traded in the United States when market conditions or investment opportunities arise that, in the judgment of the adviser, warrant such investment. Investments in the securities of foreign issuers may involve risks in addition to those normally associated with investments in the securities of US issuers. All foreign investments are subject to risks of: (1) foreign political and economic instability; (2) adverse movements in foreign exchange rates; (3) currency devaluation; (4) the imposition or tightening of exchange controls or other limitations on repatriation of foreign capital; (5) changes in foreign governmental attitudes towards private investment, including potential nationalization, increased taxation, or confiscation of assets; and (6) differing reporting, accounting, and auditing standards of foreign countries.
Emerging markets risk: There are heightened risks when investing in emerging markets, which are generally less liquid and more volatile than more developed securities markets. These risks include greater political or economic uncertainties; delays and disruptions in securities settlement procedures; weaker corporate governance, accounting, auditing and financial reporting standards; and less publicly available information about issuers. Emerging market countries’ governments may also be more likely to impose capital controls or nationalize an industry.
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.
Sector risk: From time to time, based on market or economic conditions, the Fund may have significant positions in one or more sectors of the market. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events.
Large transaction risk: A significant percentage of the Fund’s shares may be owned or controlled by the Adviser and its affiliates or other large shareholders. Accordingly, the Fund is subject to the potential for large-scale inflows and outflows as a result of purchases and redemptions of its shares by such shareholders. These inflows and outflows could negatively affect the Fund’s net asset value and performance.