N-CSRS 1 sitncsrs200505.htm SEXTANT & IDAHO MAY 2005 SEMI-ANNUAL REPORTS Sextant/Idaho Semi-Annual Report May 2005

 

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-05071 or 33-13247

SATURNA INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)

1300 N. State Street
Bellingham, Washington 98225-4730
(Address of Principal Executive Offices, including ZIP Code)

Nicholas F. Kaiser
1300 N. State Street
Bellingham, Washington 98225-4730
(Name and Address of Agent for Service)

Registrant’s Telephone Number- (360) 734-9900

Date of fiscal year end: November 30, 2005
Date of reporting period: May31, 2005

May 31, 2005 Semi-Annual Report  
1

 

Item 1. Reports to Stockholders.

Sextant
Mutual Funds

SHORT-TERM BOND
BOND INCOME
GROWTH
INTERNATIONAL
SEMI-ANNUAL REPORT MAY 31, 2005

(graphic omitted)

Fellow Shareowners:

For the six months ended May 31, 2005, stocks advanced and bonds declined, both modestly. Bond investors can look for higher yields but little total return as interest rates climb slowly. Stock investors should see a good second half in 2005, helped by confident consumers, growing employment, an reduced government deficits. But the rising US currency will reduce corporate earnings growth to the high single digits.

For the last six months, bot the Sextant Growth and Sextant International funds have continued their outstanding performances. The Sextant bond funds provided haven while interest rates increased. Now able to purchase greater yields, we expect to be increasing maturities and quality in these bond funds. Equities should continue to provide the better returns, as their fundamental valuations remain solid. As we have done (accurately) for the past year, we are recommending a balance favoring stocks over bonds.

Prudent investors do well to remember that change is the only real constant. Choppy economic seas will always be soothed by the "invisible hand" of free economic markets. Change is the rationale for our four distinctly different Sextant funds, which allow investors to choose the variable returns of the domestic and international stock markets, long-term bonds, or the safety of short-term bonds.

Our Sextant funds employ a "fulcrum" advisory fee structure that reward or penalizes Saturna Capital for investment results. Relative performance of the Sextant equity funds over the last 12 months (the fulcurm fee measurement period) was far above our Morningstar mutual fund benchmarks-to the considerable benefit of shareowners as well as Saturna Capital. For the six and twleve months ended May 31, 2005 comparative total returns are:

Sextant Fund
6 Month Total Return
12 Month Total Return
vs. Morningstar
12 Month Total Return
Short-Term Bond
0.76%
1.89%
Short-Term Bonds
2.41%
Bond Income
2.57%
7.01%
Long-Term Bonds
9.47%
Growth
3.88%
17.68%
Domestic Growth
7.91%
International
6.92%
24.58%
Foreign Stock
14.92%

While are funds remain small, growing awareness of the Sextant Funds and their good performance continues to attract investors. The year 2005 has been solid so far and we are looking forward to the second half. Thank you for investing your money with ours.

Nicholas Kaiser, President Phelps McIlvaine, Vice President
(Manager, Sextant Growth;
Sextant International)		 (Manager, Sextant Bond Income;
Sextant Short-Term Bond)


July 15, 2005

2  
May 31, 2005 Semi-Annual Report
Investments  
Sextant Short Term Bond Fund (Graphic Omited)
Rating* Issuer Coupon/Maturity
Face Amount
Market Value
Percentage
As of May 31, 2005
  Banking  
AA+ Washington Mutual Financial 8.25% due 6/15/2005
$75,000
$74,815
3.0%
           
  Building Products  
A Lowe's Companies 7.50% due 12/15/2005
70,000
70,964
2.8%
     
  Computer  
A- Hewlett Packard 7.15% due 6/15/2005
70,000
69,795
2.8%
           
  Cosmetics & Toiletries  
A Avon Products 6.55% due 8/1/2007
95,000
98,864
3.9%
     
  Finance & Insurance  
A Allliance Capital Management 5.625% due 8/15/2006
65,000
65,933
2.6%
AAA Federal Home Loan Bank 4.60% due 5/18/2009
120,000
120,487
4.8%
AAA Federal Home Loan Mortgage 3.00% due 8/18/2005
100,000
99,934
3.9%
AAA Federnal National Mortgage 4.00% due 2/23/2007
120,000
119,941
4.7%
A+ International Finance AIG 5.75% due 10/15/2006
95,000
96,133
3.8%
  SUB-TOTAL  
500,000
502,428
19.8%
     
  Machinery  
A- Rockwell Automation Int'l 6.15% due 1/15/2008
95,000
98,559
3.9%
     
  Medical Drugs  
A Amgen 6.50% due 12/1/2007
90,000
94,150
3.7%
AAA Pfizer Inc. 5.625% due 2/1/2006
100,000
102,644
4.1%
  SUB-TOTAL  
190,000
196,794
7.8%
     
  Publishing  
A- Tribune Company 6.875% due 11/1/2006
45,000
46,376
1.8%
           
  Telecommunications  
A Southwestern Bell Telephone 6.625% due 7/15/2007
95,000
99,933
3.9%
A- Verizon Wireless 5.375% due 12/15/2006
82,000
82,939
3.3%
  SUB-TOTAL  
177,000
182,872
7.2%
     
  U.S. Government        
AAA U.S. T-Note 3.25% due 8/15/2008
225,000
222,258
8.8%
AAA U.S. T-Note 4.00% due 6/15/2009
425,000
429,582
17.0%
  SUB-TOTAL  
650,000
651,840
25.8%
           
  Utilities  
A Florida Power & Light 6.875% due 12/1/2005
95,000
96,068
3.8%
BBB PSI Energy 7.85% due 10/15/2007
90,000
94,321
3.7%
BBB+ Sempra Energy 6.95% due 12/1/2005
92,000
93,624
3.7%
    SUB-TOTAL
277,000
284,013
11.2%
     
Total Investments (Cost = $2,287,548)
$2,244,000
$2,277,320
90.0%
Other Assets (net of liabilities)  
252,084
10.0%
Total Net Assets  
$2,529,404
100.0%
*Ratings are the lesser of S&P or Moody's (unaudited)

 

May 31, 2005 Semi-Annual Report  
3

 FINANCIAL HIGHLIGHTS  

SEXTANT SHORT TERM BOND FUND (Graphic Omitted)


Selected data per share of capital stock outstanding
throughout the period:		 Period ended May 31, 2005
For the year ended November 30,
    2004 2003 2002 2001 2000
Net asset value at beginning of period   $4.97 $5.09 $5.07 $5.10 $4.95 $4.92
Income from investment operations              
Net investment income   0.09 0.19 0.23 0.27 0.26 0.27
Net gains or losses on securities (both realized and unrealized)   (0.05) (0.12) 0.02 (0.02) 0.14 0.03
Total from investment operations   0.04 0.07 0.25 0.25 0.40 0.30
Less distributions              
Dividends (from net investment income)   (0.09) (0.19) (0.23) (0.28) (0.25) (0.27)
Total distributions   (0.09) (0.19) (0.23) (0.28) (0.25) (0.27)
Net asset value at end of period   $4.92 $4.97 $5.09 $5.07 $5.10 $4.95
Total Return   0.76% 1.41% 5.00% 4.90% 8.37% 6.20%
               
Ratios / Supplemental Data              
Net assets ($000), end of period   $2,529 $2,255 $2,259 $2,177 $2,189 $2,555
Ratio of expenses to average net assets              
Before fee waivers   0.54% 1.14% 1.17% 1.14% 0.94% 1.02%
After fee waivers   0.30% 0.58% 0.60% 0.93% 0.51% 0.61%
Ratio of net investment income after waivers to average net assets   1.76% 3.80% 4.47% 5.23% 5.45% 5.45%
               
Portfolio turnover rate 23% 37% 22% 28% 28% 12%


STATEMENT OF ASSETS AND LIABILITIES

SEXTANT SHORT TERM BOND FUND (Graphic Omitted)

As of May 31, 2005
       
Assets      
Investments (cost $2,287,548)  
$2,277,320
Cash  
206,926
Interest receivable  
42,755
Total Assets  
$2,527,001
Liabilities  
Other Liabilities  
(2,403)
Total Liabilities  
(2,403)
   
Net Assets  
$2,529,404
   
Fund shares outstanding  
514,206
   
Analysis of Net Assets  
Paid in Capital (unlimited shares authorized, without par value)  
$2,580,117
Accumlated net realized loss on investments  
(40,485)
Unrealized net depreciation on investments  
(10,228)
Net Assets applicable to Fund shares outstanding  
$2,529,404
Net Asset Value, Offering and Redemption price per share  
$4.92

(The accompanying notes are an integral part of these financial statements)

4  
May 31,2005 Semi-Annual Report

STATEMENT OF OPERATIONS   

SEXTANT SHORT TERM BOND FUND  (Graphic Omitted)


    For the period ended May 31, 2005
Investment income      
Interest income  
$62,727
Amortization of bond premium  
(14,953)
Accretion  
685
Other income  
125
  
Gross investment income  
$48,584
   
Expenses  
Investment adviser and administration fees  
6,968
Filing and registration fees  
1,574
Custodian fees  
1,470
Legal fees  
1,025
Meetings  
743
Insurance  
500
Audit fees  
305
Printing and postage  
85
Total gross expenses  
12,670
Less adviser fees waived  
(4,341)
Less custodian fees waived  
(1,245)
Net expenses  
7,084
Net investment income  
$41,500
   
Net realized loss on investments  
Proceeds from sales  
493,096
Less cost of securities sold (based on identified cost)  
499,636
Realized net loss  
(6,540)
   
Unrealized gain on investments  
End of period  
(10,228)
Beginning of period  
5,349
Decrease in unrealized gain for the period  
(15,577)
Net realized and unrealized loss  
(22,117)
Net increase in net assets resulting from operations
$19,383
     

STATEMENT OF CHANGES IN NET ASSETS  

SEXTANT SHORT TERM BOND FUND (Graphic Omitted)

 
Period ended
Year ended
 
May 31, 2005
Nov. 30, 2004
INCREASE (DECREASE) IN NET ASSETS
From Operations
 
Net investment income
$41,500
$90,916
Net realized loss on investments
(6,540)
(4,422)
Net decrease in unrealized appreciation
(15,577)
(57,383)
Net increase in net assets from operations
$19,383
$29,111
 
Dividends to shareowners from
Net investment income
(41,506)
(90,916)
 
Fund Share transactions
Proceeds from sales of shares
417,644
610,686
Value of shares issued in reinvestment of dividends
41,141
90,739
 
458,785
701,425
Cost of shares redeemed
(162,665)
(643,510)
Net increase in net assets
296,120
57,915
Total increase (decrease) in net assets
$273,997
$(3,890)
 
NET ASSETS
Beginning of period
2,255,407
2,259,297
End of period
$2,529,404
$2,255,407
 
Shares of the fund sold and redeemed
Number of shares sold
84,721
119,937
Number of shares issued in reinvestment of dividends
8,346
18,013
 
93,067
137,950
Number of shares redeemed
(32,965)
(127,472)
Net increase in number of shares outstanding
60,102
10,478

(The accompanying notes are an integral part of these financial statements)

May 31, 2005 Semi-Annual Report  
5

 

Expenses (Unaudited)

Sextant Short Term Bond Fund (grahic omitted)

As a Sextant Short-Term Bond Fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends, or other distributions. Nor do you incur redemption fees, exchange fees, or fees related to Individual Retirement Accounts. You may incur fees related to extra services requested by you for your account, such as bank wires.

EXAMPLE
The example is based on an investment of $1,000 invested at the beginning of the fiscal year and held for the entire year [Friday, May 28, 2004 to Tuesday, May 31, 2005].

ACTUAL EXPENSES
The first line provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $9,400 account value divided by $1,000 = 9.4), then multiply the result by the number in the first line under heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges the following fees for extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the year. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of the other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no IRA fees with the Sextant Funds), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees (note that the Sextant Funds do not have any such transactional costs). Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.



SEXTANT SHORT-TERM BOND FUND

Beginning Account Value
[Friday, May 28, 2004]
Ending Account Value
[Tuesday, May 31, 2005]
Expenses Paid During Period*
Actual
(1.89% return
after expenses)
$1,000.00
$1,018.90
$6.06
Hypothetical
(5% return
before expenses)
$1,000.00
$1,044.00
$6.13

* Expenses are equal to Sextant Short-Term Bond Fund's annualized expense ratio of 0.60% (based on the most recent semi-annual period of December 1, 2004 through May 31, 2005), multiplied by the average account value of $1,009.45 over the period.

Portfolio Holdings  

SEXTANT SHORT TERM BOND FUND (Graphic Omitted)


Ratings
established
By
Advisor
By Standard & Poor's
By Moody's
Investor Services
AAA
43.3%
39.3%
43.3%
AA
3.0%
6.8%
6.8%
A
36.4%
32.6%
32.6%
BBB
7.4%
7.4%
7.4%
unrated
--
4.0%
0.0%
cash
9.9%
9.9%
9.9%

 

6  
May 31, 2005 Semi-Annual Report

 

 

 

INVESTMENTS  

SEXTANT BOND INCOME FUND (Graphic Omitted)

     
As of May 31, 2005
Rating* Issuer Coupon/Maturity
Face Amount
Market Value
Percentage
     
  Automotive  
BBB Auto Zone 5.50% due 11/15/2015
$95,000
$94,174
3.0%
           
  Banking  
A+ Chase Manhattan 7.125% due 6/15/2009
50,000
54,649
1.8%
A+ Citicorp 7.25% due 10/15/2011
50,000
57,032
1.8%
A- Comerica Bank 7.125% due 12/1/2013
50,000
54,473
1.7%
A+ Norwest Financial 6.85% due 7/15/2009
50,000
54,863
1.8%
  SUB-TOTAL  
200,000
221,017
7.1%
     
  Building Products  
BBB+ Masco Corporation 7.125% due 8/15/2013
60,000
68,440
2.2%
     
  Chemicals  
A Air Products & Chemicals 8.75% due 4/15/2021
50,000
65,894
2.1%
     
  Diversified Financial Services  
AAA General Electric Capital 8.125% due 5/15/2012
60,000
71,743
2.3%
     
  Electric Utilities  
A- Commonwealth Edison 7.50% due 7/1/2013
50,000
58,818
1.9%
     
  Electronics  
A- Koninlijke Phillips Electronics 7.25% due 8/15/2013
50,000
55,601
1.8%
A- Sempra Energy 7.95% due 3/1/2010
50,000
56,485
1.8%
  SUB-TOTAL  
100,000
112,086
3.6%
     
  Food  
BBB+ Conagra 7.875% due 9/15/2010
50,000
57,701
1.9%
A+ Hershy Foods 6.95% due 8/15/2012
50,000
57,425
1.8%
A- HJ Heinz 6.00 % due 3/15/2012
75,000
80,897
2.6%
  SUB-TOTAL  
175,000
196,023
6.3%
     
  Insurance  
A+ Allstate 7.50% due 6/15/2013
50,000
58,744
1.9%
A+ Progressive 7.00% due 10/1/2013
75,000
86,494
2.7%
A+ XL Capital 6.50% due 1/15/2012
90,000
99,440
3.2%
  SUB-TOTAL  
215,000
244,678
7.8%
     
  Investment Finance  
A Bear Stearns 3.5% due 6/27/2008
154,000
147,361
4.7%
AA- Morgan Stanley Dean Witter 6.75% due 10/15/2013
50,000
55,794
1.8%
AA+ Paine Webber Group 7.625% due 2/15/2014
50,000
59,655
1.9%
  SUB-TOTAL  
254,000
262,810
8.4%
           
  Machinery  
A+ Caterpillar 9.375% due 8/15/2011
40,000
49,265
1.6%
A+ Dover 6.25% due 6/1/2008
70,000
73,269
2.3%
  SUB-TOTAL  
110,000
122,534
3.9%
     
  Medical Supplies  
A+ Becton Dickinson 7.15% due 10/1/2009
40,000
44,128
1.4%
     
  Oil & Gas  
A Baker Hughes 6.00% due 2/15/2009
70,000
73,185
2.4%
A+ Texaco Capital 8.625% due 6/30/2010
40,000
47,766
1.5%
  SUB-TOTAL  
110,000
120,951
3.9%
     
  Real Estate  
BBB+ Archstone Smith 5.625% due 8/15/2014
50,000
52,674
1.7%
           
  Retailing  
A Dayton Hudson (Target Stores) 10.00% due 1/1/2011
50,000
60,654
1.9%
A Lowe's Companies 8.25% due 6/1/2010
50,000
58,729
1.9%
A May Department Stores 8.00% due 7/15/2012
50,000
58,010
1.9%
AA Wal-Mart Stores 7.25% due 6/1/2013
45,000
53,050
1.7%
  SUB-TOTAL  
195,000
230,443
7.4%
     
  Telecommunications  
A+ GTE 6.90% due 11/1/2008
50,000
53,634
1.7%
     
  Transportation  
A Southwest Airlines 6.50% due 3/1/2012
75,000
80,700
2.6%
A- US Freightways 8.50% due 4/25/2010
50,000
57,132
1.8%
  SUB-TOTAL  
125,000
137,832
4.4%
     
  US Government  
AAA Federal Farm Credit Bank 5.09% due 2/17/2015
120,000
119,646
3.8%
AAA Federal Home Loan Bank 5.55% due 4/13/2015
100,000
101,382
3.2%
AAA Federal Home Loan Mortgage Corp 5.00% due 8/1/2009
100,000
100,342
3.2%
AAA Federal National Mortgage 5.00% due 4/10/2015
100,000
99,829
3.2%
AAA US Treasury Note 5.50% due 2/15/2008
125,000
131,035
4.2%
AAA US Treasury Note 4.00% due 4/15/2010
250,000
252,617
8.1%
  SUB-TOTAL  
795,000
804,851
25.7%
     
Total Investments (Cost = $2,789,044)
$2,734,000
$2,962,730
94.8%
Other Assets (net of liabilities)  
163,801
5.2%
Total Net Assets  
$3,126,531
100.0%
   
*Ratings are the lesser of S&P or Moody's (unaudited)
           

May 31, 2005 Semi-Annual Report  
7

FINANCIAL HIGHLIGHTS  

SEXTANT BOND INCOME FUND (graphic omitted)


Selected data per share of capital stock outstanding
throughout the period:
For Year Ended November 30,
  Period ended May 31,2005 2004 2003 2002 2001 2000
Net asset value at beginning of period $5.06 $5.07 $4.97 $4.81 $4.56 $4.59
Income from investment operations            
Net investment income 0.11 0.22 0.22 0.26 0.30 0.29
Net gains or losses on securities (both realized and unrealized) 0.02 (0.01) 0.10 0.16 0.25 (0.03)
Total from investment operations 0.13 0.21 0.32 0.42 0.55 0.26
Less distributions            
Dividends (from net investment income) (0.11) (0.22) (0.22) (0.26) (0.30) (0.29)
Total distributions (0.11) (0.22) (0.22) (0.26) (0.30) (0.29)
Net asset value at end of period $5.08 $5.06 $5.07 $4.97 $4.81 $4.56
 
Total return 2.57% 4.26% 6.52% 9.02% 12.40% 6.05%
             
Ratios/supplemental data            
Net assets ($000), end of period $3,127 $2,643 $2,272 $2,105 $1,965 $1,505
Ratio of expenses to average net assets            
Before fee waiver 0.49% 0.89% 1.15% 1.06% 1.06% 0.99%
After fee waiver 0.47% 0.87% 0.97% 0.72% 0.34% 0.35%
Ratio of net investment income after waiver to average net assets 2.19% 4.47% 4.29% 5.40% 6.71% 6.58%
             
Portfolio turnover rate 4% 0% 0% 29% 30% 0%


STATEMENT OF ASSETS & LIABILITIES

Sextant Bond Income Fund (graphic omitted)

As of May 31, 2005      
       
Assets      
Bond investments (cost $2,789,044)  
$2,962,730
Cash  
115,229
Interest receivable  
46,941
Insurance reserve premium  
401
Total Assets  
$3,125,301
Liabilities  
Other Liabilities  
(1,230)
Total Liabilities  
(1,230)
Net Assets  
$3,126,531
       
Fund shares outstanding  
615,873
       
Analysis of Net Assets  
Paid in capital (unlimited shares authorized, without par value)  
2,985,860
Accumlated net realized loss on investments  
(33,015)
Unrealized net appreciation on investments  
173,686
Net Assets applicable to Fund shares outstanding  
$3,126,531
Net Asset Value, Offering and Redemption price per share
$5.08


(The accompanying notes are an integral part of these financial statements)

8   
May 31, 2005 Semi-Annual Report

STATEMENT OF OPERATIONS  

SEXTANT BOND INCOME FUND (graphic omitted)

 
For the semi-annual period ended May 31, 2005
Investment income      
Interest income  
$77,528
Amortization of bond premium  
(5,701)
Accretion  
376
Other income  
43
  
Gross investment income  
$72,246
       
Expenses  
Investment advisory and administration fee  
6,005
Filing and registration fees  
1,799
Legal fees  
1,686
Audit fees  
1,540
Insurance  
741
Custodian fees  
666
Printing and postage  
395
Trustee fees  
290
Other expenses  
102
Total gross expenses  
13,224
Less: custodian fees waived  
(445)
Net expenses  
12,779
Net investment income  
$59,467
       
Net realized gain on investments      
Proceeds from sales  
106,937
Less cost of securities sold (based on identified cost)  
106,111
Realized net gain  
826
       
Unrealized gain on investments  
End of period  
173,686
Beginning of period  
160,528
Increase in unrealized gain for the period  
(13,158)
Net realized and unrealized gain  
(13,984)
Net increase in net assets resulting from operations
$73,451

 

STATEMENT OF CHANGES IN NET ASSETS  

SEXTANT BOND INCOME FUND (graphic omitted)


 
Period ended
Year ended
 
May 31, 2005
Nov. 30, 2004
INCREASE IN NET ASSETS    
From Operations    
Net investment income
$59,467
$111,643
Net realized gain on investments
826
-
Net increase (decrease) in unealized appreciation
13,158
(8,589)
Net increase in net assets
$73,451
$103,054
 
Dividends to shareowners from
Net investment income
(59,518)
(111,643)
 
From tund share transactions
Proceeds from sales of shares
680,088
418,675
Value of shares issued in reinvestment of dividends
58,584
106,570
 
738,672
525,245
Cost of shares redeemed
(268,674)
(146,179)
Net increase in net assets
469,998
379,066
Total increase in net assets
$483,931
$370,477
 
NET ASSETS
Beginning of period
2,642,600
2,272,123
End of period
$3,126,531
$2,642,600
 
Shares of the fund sold and redeemed
Number of shares sold
134,405
82,699
Number of shares issued in reinvestment of dividends
11,594
20,985
 
145,999
103,684
Number of shares redeemed
(52,802)
(29,190)
Net increase in number of shares outstanding
93,197
74,494


(The accompanying notes are an integral part of these financial statements)

May 31, 2005 Semi-Annual Report  
9

Expenses (Unaudited)


SEXTANT BOND INCOME FUND (graphic omitted)


As a Sextant Bond Income Fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends, or other distributions. Nor do you incur redemption fees, exchange fees, or fees related to Individual Retirement Accounts. You may incur fees related to extra services requested by you for your account, such as bank wires.

EXAMPLE
The example is based on an investment of $1,000 invested at the beginning of the fiscal year and held for the entire year [Friday, May 28, 2004 to Tuesday,May 31, 2005].

ACTUAL EXPENSES
The first line provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $9,400 account value divided by $1,000 = 9.4), then multiply the result by the number in the first line under heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges the following fees for extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the year. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of the other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no IRA fees with the Sextant Funds), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees (note that the Sextant Funds do not have any such transactional costs). Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.

SEXTANT BOND INCOME FUND
Beginning Account Value
[Friday, May 28, 2004]
Ending Account Value
[Tuesday, May 31, 2005]
Expenses Paid During Period*
Actual
(7.01% return
after expenses)
$1,000.00
$1,070.10
$9.73
Hypothetical
(5% return
before expenses)
$1,000.00
$1,040.60
$9.59

* Expenses are equal to Sextant Bond Income Fund's annualized expense ratio of 0.94% (based on the most recent semi-annual period of December 1, 2004 through May 31, 2005), multiplied by the average account value of $1,035.05 over the period.

Portfolio Holdings  

SEXTANT BOND INCOME FUND (graphic omitted)

 

Ratings established
By
Advisor
By Standar &
Poor's
By Moody's
Investor Services
AAA
28.1%
16.7%
28.0%
AA
8.7%
6.9%
10.5%
A
39.4%
43.9%
39.5%
BBB
18.6%
16.0%
16.8%
unrated
--
11.3%
0.0%
cash
5.2%
5.2%
5.2%

10  
May 31, 2005 Semi-Annual Report

 


INVESTMENTS  
SEXTANT GROWTH FUND (graphic omitted)

 
As of May 31, 2005
Issue
Number of Shares
Cost
Market Value
Percentage
 
Banking
Frontier Financial
6,000
$90,207
$149,400
2.1%
Washington Banking Company
2,000
29,080
28,600
0.4%
Washington Mutual
6,750
44,124
278,775
3.9%
SUB-TOTAL
163,411
456,775
6.4%
         
Computers
3 Com*
16,000
96,576
58,560
0.8%
Adobe Systems
9,600
50,490
317,952
4.4%
Apple Computer*
11,000
97,170
437,352
6.1%
Earthlink*
12,000
101,107
126,960
1.8%
Hewlett-Packard
5,500
113,000
123,805
1.7%
Intuit*
4,000
175,198
173,080
2.4%
Oracle*
8,000
28,059
102,400
1.4%
Phoenix Technologies Ltd.*
3,062
29,148
24,832
0.3%
SUB-TOTAL
690,748
1,364,941
18.9%
         
Construction
Lowe's Companies
4,000
135,141
228,840
3.2%
Weyerhaeuser
3,000
158,837
192,450
2.7%
SUB-TOTAL
293,978
421,290
5.9%
         
Electronics
Advanced Micro Devices*
10,000
41,708
164,000
2.3%
Agilent Technologies*
6,000
155,834
144,060
2.0%
Harman International Industries
1,500
114,354
124,290
1.7%
SUB-TOTAL
311,896
432,350
6.0%
         
Food
Performance Food Group*
3,000
96,917
81,180
1.1%
PepsiCo
2,000
102,111
112,600
1.6%
SUB-TOTAL
199,028
193,780
2.7%
 
Hotels & Motels
Westcoast Hospitality*
12,000
75,904
82,680
1.1%
 
Investments
Chubb
1,200
99,900
100,920
1.4%
Schwab (Charles)
20,415
9,117
231,506
3.2%
SUB-TOTAL
109,017
332,426
4.6%
         
Machinery
Regal-Beloit
4,000
104,006
102,800
1.4%
 
Medical
Affymetrix*
4,000
109,131
213,960
3.0%
Amgen*
2,640
34,598
165,211
2.3%
Barr Laboratories*
4,500
159,489
228,285
3.2%
Bristol-Myers Squibb
4,500
121,892
114,120
1.6%
Caremark Rx*
4,000
92,593
178,641
2.5%
Ligand Pharmaceuticals*
5,000
56,430
29,200
0.4%
Lilly (Eli)
2,000
165,241
116,600
1.6%
Pharmaceutical Product Development*
7,500
67,174
362,325
5.0%
SUB-TOTAL
806,548
1,408,342
19.6%
         
Metal Ores
Alcoa
3,000
104,233
81,300
1.1%
Phelps Dodge
1,330
76,218
116,242
1.6%
SUB-TOTAL
180,451
197,542
2.7%
         
Oil &Gas
Noble Drilling
3,000
54,457
169,860
2.3%
 
Publishing
Wiley (John) & Sons, Class A
3,400
74,233
130,152
1.8%
         
Retail
Bed Bath & Beyond*
3,000
100,051
121,950
1.7%
Build-A-Bear-Workshop*
4,000
111,000
109,600
1.5%
SUB-TOTAL
211,051
231,550
3.2%
         
Telecommunications
Sprint (FON Group)
1,300
24,114
30,758
0.4%
Trimble Navigation*
4,500
106,214
178,830
2.5%
SUB-TOTAL
130,328
209,588
2.9%
 
Utility
FPL Group
5,000
158,289
203,250
2.8%
IDACorp
6,000
159,539
170,100
2.4%
Sempra Energy
3,000
116,394
119,010
1.6%
SUB-TOTAL
434,222
492,360
6.8%
 
Total Investments
$3,839,278
$6,226,436
86.3%
Other Assets (net of liabilities)
989,247
13.7%
Total Net Assets
$7,215,683
100.0%
 
*Non-income producing
         

May 31, 2005 Semi-Annual Report  
11

FINANCIAL HIGHLIGHTS  

SEXTANT GROWTH FUND (graphic omitted)


Selected data per share of capital stock outstanding throughout the period:  
For Year Ended November 30,

  Period ended May 31, 2005
2004
2003
2002
2001
2000
Net asset value at beginning of period $14.20 $12.91 $10.64 $11.90 $13.16 $12.68
Income from investment operations            
Net investment income (0.03) 0.01 (0.04) (0.05) (0.02) (0.07)
Net gains or losses on securities (both realized and unrealized) 0.57 1.45 2.31 (1.21) (1.24) 1.36
Total from investment operations 0.54 1.46 2.27 (1.26) (1.26) 1.29
Less distributions            
Dividends (from net investment income) - (0.01) - - - -
Distributions (from capital gains) - (0.16) - - - (0.81)
Total distributions - (0.17) - - - (0.81)
Net asset value at end of period $14.74 $14.20 $12.91 $10.64 $11.90 $13.16
Total Return 3.88% 11.35% 21.31% (10.51)% (9.57)% 10.16%
             
Ratios / Supplemental Data            
Net assets ($000), end of period $7,216 $5,331 $4,732 $3,373 $3,792 $3,862
Ratio of expenses to average net assets            
Before fee waiver 0.62% 0.80% 1.20% 1.17% 0.84% 1.11%
After fee waiver 0.60% 0.78% 1.14% 1.11% 0.78% 1.05%
Ratio of net investment income after waiver to average net assets (0.20)% 0.12% (0.40)% (0.48)% (0.18)% (0.51)%
             
Portfolio turnover rate 2% 8% 12% 15% 8% 20%



STATEMENT OF ASSETS & LIABILITIES
SEXTANT GROWTH FUND (graphic omitted)
As of May 31, 2005      
       
Assets  
Investments (cost $3,839,278)  
$6,226,436
Cash  
992,190
Insurance reserve premium  
1,214
Dividends receivable  
1,153
Total Assets  
$7,220,993
Liabilities  
Other liabilities  
5,310
Total Liabilities  
5,310
Net Assets  
$7,215,683
       
Fund shares outstanding  
489,421
       
Analysis of Net Assets  
Paid in Capital (unlimited shares authorized, without par value)  
4,846,862
Accumlated net realized loss on investments  
(18,337)
Unrealized net appreciation on investments  
2,387,158
Net Assets applicable to Fund shares outstanding  
$7,215,683
Net Asset Value, Offering and Redemption price per share
$14.74

(The accompanying notes are an integral part of these financial statements)

12  
May 31, 2005 Semi-Annual Report
STATEMENT OF OPERATIONS  

SEXTANT GROWTH FUND  (Graphic Omitted)

For the semi annual period ended May 31, 2005
Investment income      
Dividend income  
$23,635
Other income  
28
Gross investment income  
$23,663
       
Expenses  
Investment advisory and administration fee  
24,219
Legal fees  
3,034
Filing and registration fees  
2,708
Audit fees  
2,257
Custodian fees  
1,930
Insurance  
1,757
Meetings  
574
Printing and postage  
276
Other expenses  
202
Total gross expenses  
36,957
Less custodian fees waived  
(1,453)
Net expenses  
35,504
Net investment income  
$(11,841)
       
Net realized loss on investments  
Proceeds from sales  
97,530
Less cost of securities sold (based on identified cost)  
117,044
Realized net loss  
(19,514)
       
Unrealized gain on investments  
End of period  
2,387,158
Beginning of period  
2,070,566
Increase in unrealized gain for the period  
316,592
Net realized and unrealized gain  
297,078
 
Net increase in net assets resulting from operations
$285,237

STATEMENT OF CHANGES IN NET ASSETS  

SEXTANT GROWTH FUND (graphic omitted)

 
Period ended
Year ended
 
May 31, 2005
Nov. 30, 2004
INCREASE IN NET ASSETS
From Operations
Net investment income (loss)
$(11,841)
$5,799
Net realized gain (loss) on investments
(19,514)
91,659
Net increase in unealized appreciation
316,592
454,857
Net increase in net assets
285,237
552,315
Dividends to shareowners from
Net investment income
-
(4,662)
Capital gains distributions
-
(60,280)
 
-
(64,902)
From fund share transactions
Proceeds from sales of shares
1,951,598
1,129,561
Value of shares issued in reinvestment of dividends
-
64,879
 
1,951,598
1,194,440
Cost of shares redeemed
(352,167)
(1,082,914)
Net increase in net assets
1,599,431
111,526
Total increase in net assets
$1,884,668
$598,939
NET ASSETS
Beginning of period
5,331,015
4,732,076
End of period
$7,215,683
$5,331,015
     
Undistributed net investment income
-
1,177
Shares of the fund sold and redeemed
Number of shares sold
138,256
87,757
Number of shares issued in reinvestment of dividends
-
4,572
138,256
92,329
Number of shares redeemed
(24,365)
(83,204)
Net increase in number of shares outstanding
113,891
9,125

(The accompanying notes are an integral part of these financial statements)

May 31, 2005 Semi-Annual Report  
13
Expenses (Unaudited)  

SEXTANT GROWTH FUND (graphic omitted)

As a Sextant Growth Fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends, or other distributions. Nor do you incur redemption fees, exchange fees, or fees related to Individual Retirement Accounts. You may incur fees related to extra services requested by you for your account, such as bank wires.

EXAMPLE
The example is based on an investment of $1,000 invested at the beginning of the fiscal year and held for the entire year [Friday, May 28, 2004 to Tuesday, May 31, 2005].

ACTUAL EXPENSES
The first line provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $9,400 account value divided by $1,000 = 9.4), then multiply the result by the number in the first line under heading entitled “"Expenses Paid During Year" to estimate the expenses you paid on your account during this fiscal year. The Fund also charges the following fees for extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the year. You may use this information to compare the ongoing costs of investing in the Funds and other fund. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of the other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no IRA fees with the Sextant Funds), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees (note that the Sextant Funds do not have any such transactional costs). Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.

SEXTANT GROWTH FUND
Beginning Account Value [Friday, May 28, 2004]
Ending Account Value
[Tuesday, May 31, 2005]
Expenses Paid During Period*
Actual
(17.68% return
after expenses)
$1,000.00
$1,176.80
$12.95
Hypothetical
(5% return
before expenses)
$1,000.00
$1,038.10
$12.13

* Expenses are equal to Sextant Growth Fund's annualized expense ratio of 1.19% (based on the most recent semi-annual period of December 1, 2004 through May 31, 2005), multiplied by the average account value of $1,088.40 over the period.

Portfolio Holdings  

SEXTANT GROWTH FUND (graphic omitted)


Industries
Medical
19.6%
Computers
18.9%
Cash
13.7%
Utilities
6.8%
Banking
6.4%
Electronics
6.0%
Construction
5.9%
Investments
4.6%
Other (less than 2%)
4.3%
Retail
3.2%
Telecommunications
2.9%
Food
2.7%
Metals
2.7%
Oil & Gas
2.3%

14  
May 31, 2005 Semi-Annual Report

 


INVESTMENTS  

SEXTANT INTERNATIONAL FUND (Graphic Omitted)

 
As of May 31. 2005
Issue
Number of Shares
Cost
Market Value
Country
Percentage
Aircraft
Embraer Aircraft ADR
1,713
$38,169
$51,904
Brazil
1.7%
       
 
Automotive
Nissan Motor ADR
2,000
30,085
39,321
Japan
1.3%
 
Banking
Australia & New Zealand Banking ADS
1,000
84,500
81,350
Australia
2.8%
AXA ADS
3,000
59,784
73,470
France
2.5%
Banco Bilbao Vizcaya ADS
3,800
39,182
59,622
Spain
2.0%
ING Groep ADS
2,200
54,954
61,006
Netherlands
2.1%
Toronto-Dominion Bank
1,400
18,159
59,542
Canada
2.0%
SUB-TOTAL
256,579
334,990
11.4%
           
Building Materials
CRH plc ADR
2,000
23,075
51,400
Ireland
1.8%
Hanson plc ADR
1,100
33,055
50,809
United Kingdom
1.7%
James Hardie Industries NV ADS
2,000
50,041
50,840
Netherlands
1.7%
SUB-TOTAL
106,171
153,049
5.2%
           
Computers
Business Objects ADS*
6,000
19,570
171,960
France
5.9%
Dassault Systems ADR
1,000
28,380
46,640
France
1.6%
Sina*
1,600
39,849
44,528
China
1.5%
SUB-TOTAL
87,799
263,128
9.0%
           
Consumer Products
Allied Domecq plc
1,200
40,576
60,780
United Kingdom
2.1%
Coca-Cola Femsa ADS
2,100
23,910
49,980
Mexico
1.7%
SUB-TOTAL
64,486
110,760
3.8%
           
Electronics
Epcos AG ADS*
2,500
57,307
32,325
Germany
1.1%
Infineon Technologies AG*
5,000
45,900
44,100
Germany
1.5%
SUB-TOTAL
103,207
76,425
2.6%
           
Hotels & Motels          
Fairmond Hotels & Resorts
1,700
44,641
58,633
Canada
2.0%
           
Machinery-Electrical
Nidec
1,200
35,700
33,300
Japan
1.1%
 
Medical-Drugs
Glaxo Smithkline plc ADR
400
9,800
19,880
United Kingdom
0.7%
Novartis AG ADR
1,000
45,177
48,830
Switzerland
1.7%
Soreno SA ADR
2,000
29,761
30,520
Switzerland
1.0%
SUB-TOTAL
84,738
99,230
3.4%
           
Metals & Mining
Fording Canadian Coal Trust
600
50,625
53,904
Canada
1.9%
Potash Corp of Saskatchewan
500
34,234
90,410
Canada
3.0%
Rio Tinto plc ADS
500
31,175
59,510
United Kingdom
2.0%
SUB-TOTAL
116,034
203,824
6.9%
           
Oil & Gas Production
 
EnCana
1,000
35,020
69,340
Canada
2.4%
Repsol-YPF ADR
2,000
43,592
50,120
Spain
1.7%
Total Fina Elf ADR
500
21,864
55,595
France
1.9%
SUB-TOTAL
100,476
175,055
6.0%
           
Paper Products
Metso ADS
2,100
22,802
42,147
Finland
1.5%
UPM-Kymmene Oyj ADS
3,500
64,384
68,180
Finland
2.3%
SUB-TOTAL
87,186
110,327
3.8%
           
Photographic Equipment
Canon, Inc ADR
1,000
23,426
54,201
Japan
1.9%
Fuji Photo Film ADR
400
10,050
12,516
Japan
0.4%
SUB-TOTAL
33,476
66,717
2.3%
           
Publishing-Books          
Pearson plc ADS
4,000
48,640
48,400
United Kingdom
1.7%
           
Real Estate-Development
Intrawest
1,200
21,840
26,760
Canada
0.9%
 
Telecommunications
American Movil
2,000
29,725
113,360
Mexico
3.9%
BCE
1,600
30,120
36,800
Canada
1.3%
British Sky Broadcasting ADS*
450
11,063
17,942
United Kingdom
0.6%
China Mobil Ltd
2,000
33,541
36,520
China
1.2%
PT Indosat ADR
1,000
20,952
25,750
Indonesia
0.9%
SK Telecom ADS
3,000
58,061
62,760
South Korea
2.1%
Telefonica ADS
1,000
33,610
50,440
Spain
1.7%
Telefonos de Mexico ADS
2,000
35,170
37,320
Mexico
1.2%
Telus
2,000
63,219
64, 060
Canada
2.2%
SUB-TOTAL
315,461
444,952
15.1%
           
Transportation
Canadian Pacific Ltd.
1,200
20,338
44,340
Canada
1.5%
Lan Chile ADS
3,500
24,636
128,450
Chile
4.4%
SUB-TOTAL
44,974
172,790
5.9%
           
Utilities-Electric
Enel ADR
1,300
58,877
58,760
Italy
2.0%
Enersis ADR
4,000
37,125
37,080
Chile
1.3%
Korea Electric Power ADS
4,000
61,261
59,560
Korea
2.0%
SUB-TOTAL
157,263
155,400
5.3%
           
Utilities-Gas
Transport de Gas del Sur ADR
1,500
18,807
9,300
Argentina
0.3%
 
Total Investments
$1,795,732
$2,634,265
89.7%
Other Assets (net of liabilities)
301,549
10.3%
Total Net Assets
$2,935,814
100.0%
 
* Non-income producing

May 31, 2005 Semi-Annual Report  
15
FINANCIAL HIGHLIGHTS  
SEXTANT INTERNATIONAL FUND (graphic omitted)

Selected data per share of capital stock outstanding
throughout the period:		          
  Period ended
For Year Ended November 30,
  May 31, 2005
2004
2003
2002
2001
2000
Net asset value at beginning of period
$9.40
$8.05
$6.07
$7.24
$8.52
$8.32
Income from investment operations
Net investment income
0.04
0.03
0.05
0.02
0.04
0.43
Net gains or losses on securities (both realized and unrealized)
0.61
1.35
1.97
(1.16)
(1.30)
0.20
Total from investment operations
0.65
1.38
2.02
(1.14)
(1.26)
0.63
Less distributions
Dividends (from net investment income)
-
(0.03)
(0.04)
(0.03)
(0.02)
(0.43)
Total distributions
-
(0.03)
(0.04)
(0.03)
(0.02)
(0.43)
Net asset value at end of period
$10.05
$9.40
$8.05
$6.07
$7.24
$8.52
 
Total Return
6.92%
17.11%
33.23%
(15.80)%
(14.80)%
7.62%
 
Ratios/Supplemental data
Net assets ($000), end of period
$2,936
$2,053
$1,650
$1,150
$1,445
$1,736
Ratio of expenses to average net assets
Before fee waiver
0.64%
1.22%
1.29%
1.36%
1.37%
1.36%
After fee waiver
0.57%
1.10%
1.10%
1.17%
1.17%
1.20%
Ratio of net investment income after waiver to average net assets
0.43%
0.31%
0.75%
0.20%
0.34%
4.74%
 
Portfolio turnover rate
3%
7%
4%
4%
6%
11%

 

STATEMENT OF ASSETS & LIABILITIES

SEXTANT INTERNATIONAL FUND (graphic omitted)
       
As of May 31, 2005      
       
Assets      
Investments (cost $1,795,732)  
$2,634,265
Cash  
301,255
Dividends receivable  
4,093
Total Assets  
$2,939,613
 
Liabilities  
Other Liabilities  
3,799
Total Liabilities  
3,799
 
Net Assets  
$2,935,814
 
Fund shares outstanding  
292,133
 
Analysis of Net Assets  
Paid in Capital (unlimited shares authorized, without par value)  
2,270,243
Accumulated net realized loss on investments  
(172,962)
Unrealized net appreciation on investments  
838,533
Net Assets applicable to Fund shares outstanding  
$2,935,814
 
Net Asset Value, Offering and Redemption price per share
$10.05

 

(The accompanying notes are an integral part of these financial statements)

16  
May 31, 2005 Semi-Annual Report
STATEMENT OF OPERATIONS  

SEXTANT INTERNATIONAL FUND (graphic omitted)

 
For the semi-annual period ended May 31, 2005
       
Investment income      
Dividend income (net of Foreign taxes of $3,915)  
$24,243
Gross investment income  
$24,243
 
Expenses  
Investment advisory and administration fee  
7,667
Filing and registration fees  
2,307
Custodian fees  
1,745
Legal fees  
1,390
Audit fees  
1,175
Insurance  
576
Printing and postage  
305
Trustee fees  
224
Other expenses  
76
Total gross expenses  
15,465
Less custodian fees waived  
(1,587)
Net expenses  
13,878
Net investment income  
$10,365
 
Net realized gain on investments  
Proceeds from sales  
69,633
Less cost of securities sold (based on identified cost)  
67,252
Realized net gain  
2,381
 
Unrealized gain on investments  
End of period  
838,533
Beginning of period  
692,525
Increase in unrealized gain for the period  
146,008
Net realized and unrealized gain  
143,389
   
Net increase in net assets resulting from operations
$158,754

 

STATEMENT OF CHANGES IN NET ASSETS

SEXTANT INTERNATIONAL FUND (graphic omitted)

 
Period ended
Year ended
 
May 31, 2005
Nov. 30, 2004
INCREASE IN NET ASSETS
From Operations
Net investment income
$10,365
$5,934
Net realized gain on investments
2,381
460
Net increase in unealized appreciation
146,008
279,482
Net increase in net assets from operations
158,754
285,876
Dividends to shareowners from
Net investment income
-
(5,876)
From fund share transactions
Proceeds from sales of shares
781,575
652,936
Value of shares issued in reinvestment of dividends
-
5,863
 
781,575
658,799
Cost of shares redeemed
(57,077)
(535,868)
Net increase in net assets
724,498
122,931
Total increase in net assets
$883,252
$402,931
NET ASSETS
Beginning of period
2,052,562
1,649,631
End of period
$2,935,814
$2,052,562
Undistributed net investment income
-
2,020
     
Shares of the fund sold and redeemed
Number of shares sold
79,595
75,589
Number of shares issued in reinvestment of dividends
-
624
 
79,595
76,213
Number of shares redeemed
(5,721)
(62,906)
Net increase in number of shares outstanding
73,874
13,307

(The accompanying notes are an integral part of these financial statements)

May 31, 2005 Semi-Annual Report  
17
Expenses (Unaudited)

SEXTANT INTERNATIONAL FUND (graphic omitted)


As a Sextant International Fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends, or other distributions. Nor do you incur redemption fees, exchange fees, or fees related to Individual Retirement Accounts. You may incur fees related to extra services requested by you for your account, such as bank wires.

EXAMPLE
The example is based on an investment of $1,000 invested at the beginning of the fiscal year and held for the entire year [Friday, May 28, 2004 to Tuesday, May 31, 2005].

ACTUAL EXPENSES
The first line provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $9,400 account value divided by $1,000 = 9.4), then multiply the result by the number in the first line under heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges the following fees for extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the year. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of the other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no IRA fees with the Sextant Funds), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees (note that the Sextant Funds do not have any such transactional costs). Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.

SEXTANT INTERNATIONAL FUND
Beginning Account Value [Friday, May 28, 2004]
Ending Account Value
[Tuesday, May 31, 2005]
Expenses Paid During Period*
Actual
(24.58% return
after expenses)
$1,000.00
$1,245.80
$12.80
Hypothetical
(5% return
before expenses)
$1,000.00
$1,038.60
$11.63

* Expenses are equal to Sextant International Fund's annualized expense ratio of 1.14% (based on the most recent semi-annual period of December 1, 2004 through May 31, 2005), multiplied by the average account value of $1,122.90 over the period.

Portfolio Holdings

SEXTANT INTERNATIONAL FUND (graphic omitted)


Industries
   
Countries
Telecommunications
15.1%
   Canada
17.2%
Banking
11.4%
   France
15.3%
Cash
10.3%
   Cash
10.3%
Computers
9.0%
   United Kingdom
8.8%
Other (less than 2%)
7.0%
   Mexico
6.8%
Metals & Mining
6.9%
   Chile
5.7%
Oil & Gas
6.0%
   Spain
5.4%
Transportation
5.9%
   Japan
4.7%
Utilities - Electric
5.3%
   Other (less than 2%)
4.7%
Building Materials
5.2%
   Finland
3.8%
Consumer Products
3.8%
   Netherlands
3.8%
Paper & Products
3.8%
   Australia
2.8%
Medical - Drugs
3.4%
   China
2.7%
Electronics
2.6%
   Switzerland
2.7%
Photography
2.3%
   Germany
2.6%
Hotels & Motels
2.0%
   South Korea
2.1%
 
     

 

18  
May 31, 2005 Semi-Annual Report

Additional Performance Information

Average Annual Total Returns (as of 6/30/2005, per NASD requirement)
1 Year
5 Years
10 Years
Sextant Growth Fund
16.50%
0.27%
10.12%
Sextant International Fund
22.95%
0.47%
8.73%*
Sextant Short-Term Bond Fund
2.01%
4.82%
4.92%
Sextant Bond Income Fund
6.71%
8.13%
6.42%

*Since inception, 9/28/95


Performance data quoted in this report represents past performance, is before any taxes payable by shareowners, and is no guarantee of future performance. The investment return and principal value of investment in the Funds fluctuate daily, and an investor's shares when redeemed may be worth more or less than the original cost. Morningstar, Inc. is an independent fund performance monitor. The average total return for a category is determined by Saturna Capital, utilizing the Morningstar database. Results are shown for twelve months in this report because of the Sextant Funds performance fee advisory structure.

NOTES TO FINANCIAL STATEMENTS

Organization
Saturna Investment Trust (the “Trust”) was established under Washington State Law as a Business Trust on February 20, 1987. The Trust is registered as a no-load, open-end series investment company under the Investment Company Act of 1940. Five portfolio series have been created to date: Sextant Short-Term Bond Fund ("Short-Term Bond"), Sextant Bond Income Fund ("Bond Income"), Sextant Growth Fund ("Growth"), and Sextant International Fund ("International", collectively,the “Funds”), and Idaho Tax-Exempt Fund, distributed through a separate prospectus and the results of which are contained in a separate report. The investment objectives of Short-Term Bond is capital preservation and current income, of Bond Income is current income, of Growth is long-term capital growth, and of International is long-term capital growth, respectively.

Unaudited Information
The information in this interim report has not been subject to independent audit.

Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Funds.

Securities valuation:
Investments in securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation; other securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price. Restricted securities and other securities for which quotations are not readily available are valued at fair value in accordance with procedures adopted by the Board of Trustees.

The cost of securities is the same for accounting and Federal income tax purposes. Security transactions are recorded on trade date. Realized gains and losses are recorded on the identified cost basis.

Cash dividends from equity securities are recorded as income on the ex-dividend date. Expenses incurred by the Trust on behalf of the Funds (e.g., audit fees) are allocated to the Funds on the basis of relative daily average net assets. Withholding taxes on foreign dividends have been provided for in accordance with the Funds' understanding of the applicable country's tax rules and rates.

Share valuation
The net asset value ("NAV") per share of each Fund is calculated by dividing the sum of the value of the securities held by each Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for each Fund, rounded to the nearest cent. The Funds' shares are not priced or traded on the days the NYSE is closed. The offering and redemption price per share for each Fund is equal to each Fund's NAV.

To discourage speculation, a 2% early redemption penalty on the Fund shares held less than thirty calendar days was initiated effective in March 2005. These penalties are deducted from the redemption proceeds otherwise payable to the shareowner and retained by the Funds as paid-in capital and included in the daily NAV calculation.

Income and expenses:
Interest income is reduced by the amoritization of bond premiums, on a constant yield-to-maturity basis from purchase date to maturty or call, as appropriate. Interest income is increased by accretion for bonds underwritten as original issue discounts and for bonds purchased at market discounts. Cash dividends from equity securities are recorded as income on the ex-dividend date.

Expenses incurred by the Trust on behalf of the Funds (e.g., audit fees) are allocated to the Funds and the other fund of the Trust on the basis of relative daily average net assets. The advisor has agreed to certain limits on expenses as described below.

Income taxes:
The Fund's policy is to continue to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all their income to shareowners. Therefore, no provision for Federal income taxes is required.

May 31, 2005 Semi-Annual Report  
19

Dividends and distributions to shareowners:
Dividends and distributions to shareowners, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. For the Short-Term Bond and Bond Income, dividends are paid daily and distributed on the last business day of each month. For Growth and International, dividends are payable at the end of each November. Shareowners electing to reinvest dividends and distributions purchase additional shares at the net asset value on the payable date.

Use of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.


Transactions with Affiliated Persons
Under a contract approved by shareowners on September 28, 1995, Saturna Capital Corporation provides investment advisory services plus certain other administrative, distribution and shareowner services to the Funds. Each of the Funds pays the Adviser a base Investment Advisory and Administrative Services Fee of .60% of average net assets per annum, payable monthly. The base Advisory Fee is subject to adjustment up or down depending on the investment performance of the Fund relative to a specified Morningstar mutual fund category average. The adviser has voluntarily undertaken to limit expenses of Sextant Short-Term Bond Fund to 0.60% through March 31, 2006 and waived its investment advisory administrative fee as to either Sextant bond fund completely so long as assets of that fund are less than $2 million.

For the six months ended may 31, 2005, Bond Income and Growth incurred advisory expenses of $6,005 and $24,219 respectively. International incurred advisory expenses of $7,667 and Short-Term Bond incurred advisory expenses of $6,968.

In accordance with expense waivers for the six months ended May 31, 2005, Saturna Capital waived $4,341 of the Short-Term Bond advisory fee.

The Funds' custodian, National City Bank Indiana, waived a portion of its fees for earnings credits. The Funds' compensated its Chief Compliance Officer $4,991, for the six months ended May 31, 2005.

The Trust acts as a distributor of its own shares, except in those states in which Saturna Brokerage Services, Inc. (a subsidiary of Saturna Capital Corporation) is itself registered as a broker-dealer and acts as distributor without compensation. Saturna Brokerage Services, Inc. is also the primary stockbroker used to effect portfolio transactions for Growth and International, and was paid $279 and $0, respectively in commissions during the six months ended May 31, 2005.

One trustee is also a director and officer of Saturna Capital Corporation. The unaffiliated trustees receive a fee of $200 per meeting attended, and in the six months ending May 31, 2005, such fees totaled $2,400 for the Trust.

Dividends
As of May 31, 2005, the tax composition of dividends are as follows:

Short Term Bond
Income
Income Per Share
Long-term Capital Gains
Long-term Capital Gains Per Share
5/31/05
$45,506
$0.09
$-
$-
11/30/04
$90,916
$0.19
$-
$-
 
Bond Income
Income
Income Per Share
Long-term Capital Gains
Long-term Capital Gains Per Share
5/31/05
$59,518
$0.11
$-
$-
11/30/04
$111,643
$0.22
$-
$-
 
Growth
Income
Income Per Share
Long-term Capital Gains
Long-term Capital Gains Per Share
5/31/05
$0
$-
$-
$-
11/30/04
$4,622
$0.012
$60,280
$0.163
 
International
Income
Income Per Share
Long-term Capital Gains
Long-term Capital Gains Per Share
5/31/05
$0
$-
$-
$-
11/30/04
$5,876
$0.27
$-
$-

Investments
At May 31, 2005, the net unrealized gain (loss) on investments for Bond Income, Short-Term Bond, Growth and International were $173,686, ($10,228), $2,387,158, and $838,533, which consist of unrealized gains of $176,399, $8,305, $2,599,306, and $912,713, and unrealized losses of $2,713, $18,533, $212,148, and $74,180, respectively.

During the six months ended May 31, 2005, Bond Income purchased $520,779 of securities and sold/matured $106,937. Comparable figures for Short-Term Bond are $889,970 purchased $493,096 sold/matured; for Growth $722,427 and $493,096; and for International, $585,745 and $69,633.

 

20  
May 31, 2005 Semi-Annual Report

Availability of Sextant Portfolio Information (unaudited)

(1) The Sextant Funds file complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q.
(2) The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov., and at www.saturna.com.
(3) The Funds’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
(4) The Funds make a complete schedule of portfolio holdings after the end of each month available to investors at http://www.saturna.com.

Availability of Proxy Voting Information (unaudited)

(1) A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (a) without charge, upon request, by calling Saturna Capital at 1-800 728-8762 (b) on the Funds’ website at http://www.saturna.com; and (c) on the SEC’s website at http://www.sec.gov.
(2) Information regarding how each Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (a) without charge, upon request, by calling Saturna Capital at 1-800 728-8752; (b) on the Funds’ website at http://www.saturna.com; and (c) on the SEC’s website at http://www.sec.gov.

 

 

(logo)

SATURNA CAPITAL
Investment counsel, Discount Brokerage
No-Load Mutual Funds, Retirement Plans

Web: http://www.saturna.com
E-mail: sextant@saturna.com

1-800-SATURNA
(1-800-728-8762)
1-888-732-6262 for automated assistance,
including Fund prices



This report is issued for the information of the shareoweners of the Funds of the Trust. It is not authorized for distribution to prospective investors unless it is accompanied or preceded by an effective prospectus relating to the securities of the Trust. The Sextant Funds are a series of Saturna Investment Trust

 

 

May 31, 2005 Semi-Annual Report
21

Idaho Tax-Exempt Fund
(Graphic Omitted)

Semi-Annual Report
May 31 2005

Fellow Shareowners:

Idaho Tax-Exempt Fund provided a total return of 1.61% for the six months and 5.33% for twelve months ending May 31, 2005. Total Fund assets are unchanged at $8.47 million from our November 30, 2004 report.

In the last six months, while short-term rates rose, long-term rates actually declined-a phenomenon called "yield curve flattening." This type of yield curve shifting improves returns for long-bond maturities and reduces returns on short-bond maturities. With the average maturity of the Idaho Fund at the 5-year pivot point, the Fund was neither benefited or penalized by the curve shift.

Rates on long-term bonds remain low for several reasons: (1) Overseas demand continues strong, as our currency strengthens and our yields are relatively high. (2) Current income and capital preservation are replacing growth as the objective for millions of investors nearing retirement age. (3) Volatile stock market returns shift investor focus to bonds. (4) Core inflation rates are less than 1%, meaning bonds provide postive real (after inflation) returns.

We look forward to higher rates as an opportunity to buy higher yielding bonds and extend the dollar-weighted average maturity of the Fund towards a more normal 7-10 years, but cannot forecast when this is likely to happen.

Idaho's economy is strong, and it is a safe place to live. Idaho's pro-business policies, well managed budget and conservative governments give the State a strong competitive edge. The national economy is strong too, with high consumer confidence and declining federal deficits.

We invite you to review the advantages of the Idaho Tax-Exempt Fund, including low expenses, income free from Idaho and federal income taxes (including federal alternative minimum tax), a high-quality diversified bond portfolio and professional supervision. We welcome your suggestions. Only with your help can we be certain that we are meeting your investment needs - our primary objective.

Nicholas Kaiser,
Phelps McIlvaine,
President

Vice President, Portfolio Manager

July 15, 2005
Average Annual Total Returns
1 year
5 years
10 years
+5.27%
+5.47%
+5.06%

Performance date for years ended 6/30/2005.

Performance data quoted in this report represents past performance and is no guarantee of future performance. The investment return and principal value of investments in the Fund fluctuate daily, and an investor's shares when redeemed may be worth more or less than the original cost.

22  
Semi-Annual Report May 31, 2005

Investments
Idaho Tax-Exempt Fund (grahic omitted)

Rating* Issuer Coupon/Maturity
Face Amount
Market Value
Percentage
     
As of May 31, 2005
Electric Power  
AAA Idaho Falls Electric Revenue 6.75% due 4/1/2019
$155,000
$156,676
1.8%
           
Financial Services  
AAA Boise City General Fund Revenue 5.20% due 12/1/2017
160,000
175,894
2.1%
AAA " 5.25% due 12/1/2018
100,000
109,656
1.3%
 
SUB-TOTAL
260,000
285,550
3.4%
           
General Obligation  
AA- Ada & Canyon JSD #2 5.50% due 7/30/2011
175,000
197,107
2.3%
AA- " 5.50% due 7/30/2015
100,000
115,060
1.4%
AAA Adams County 5.00% due 8/1/2014
110,000
112,608
1.3%
A+ Bannock County Jail 5.05% due 9/1/2012
95,000
98,344
1.2%
AAA Bannock County SD #25 Pocatello 5.20% due 8/1/2014
100,000
104,294
1.2%
A+ " 5.25% due 8/1/2016
110,000
114,618
1.4%
A+ " 4.90% due 8/1/2009
90,000
93,275
1.1%
AAA Bingham County SCD #55 Blackfoot 4.65% due 8/1/2017
285,000
302,471
3.6%
AA Boise City ISD UTGO 1996 5.50% due 7/30/2016
150,000
156,793
1.8%
AA Boise City ISD Ref. Ada & Boise 5.00 due 8/15/2014
100,000
111,070
1.3%
A Boise County SD #73 Horshoe Bend 5.15% due 7/31/2010
125,000
129,865
1.5%
AAA Boundary County SCD #101 4.05% due 8/1/2015
200,000
208,354
2.5%
AAA " 5.10% due 8/1/2022
130,000
142,051
1.7%
AAA Caldwell, Idaho 5.30% due 5/15/2014
150,000
163,648
1.9%
AAA Canyon County SCD #139 Valley View 4.05% due 8/15/2016
80,000
81,314
1.0%
A Canyon County SD #131 Nampa 4.75% due 8/15/2019
325,000
344,896
4.1%
AAA Canyon County SD #134 Middleton 4.65% due 7/31/2016
170,000
181,689
2.1%
A Canyon County SD #135 6.00% due 8/1/2007
50,000
49,809
0.6%
AAA Cassia & Twin Falls JSD #151 5.375% due 8/1/2013
85,000
87,134
1.0%
AAA " 5.375% due 8/1/2015
75,000
76,883
0.9%
AAA Clark County SD #161 Dubois 5.00 % due 8/1/2015
270,000
287,192
3.4%
AAA Idaho Housing & Finance Association 4.80% due 6/1/2017
100,000
107,446
1.3%
AAA Kootenai County SD #273 5.00% due 7/30/2016
70,000
71,835
0.8%
AAA Kuna Sch/Comm Library District 4.90% due 8/1/2013
75,000
78,817
0.9%
AAA Lemhi County 4.20% due 8/1/2015
100,000
103,496
1.2%
AAA Meridian Free Library District 5.00% due 8/1/2015
200,000
204,012
2.4%
AAA Oneida County SCD #351 Malad City 4.00% due 8/15/2015
150,000
153,536
1.8%
AAA Owyhee & Canyon Cos. JSD #370 4.55% due 8/15/2016
160,000
171,614
2.0%
AAA Power & Cassia Cos. JSD #381 5.25% due 8/1/2012
60,000
64,156
0.8%
AAA Teton County SD #401 5.50% due 8/1/2012
75,000
76,990
0.9%
 
SUB-TOTAL
3,965,000
4,190,377
49.4%
           
Housing  
AA Idaho Housing Agency, Single Family Mortgage, B-1 6.85% due 7/1/2012
10,000
9,946
0.1%
AA Idaho Housing Agency, Refunding Series A 6.15% due 7/1/2024
45,000
44,786
0.5%
AAA Idaho Housing Agency, Single Family Mort Mezz-E-1 6.60% due 7/1/2011
15,000
14,727
0.2%
AAA Valley County Jail Project Ref. 4.70% due 8/1/2014
125,000
128,955
1.5%
 
SUB-TOTAL
195,000
198,414
2.3%
* These bond ratings reflect the adviser's current rating of each bond, as determined using Standard & Poor's and Moody's ratings.

Semi-Annual Report May 31, 2005
23

Investments
Idaho Tax-Exempt Fund (grahic omitted)

Rating Issuer Coupon/Maturity
Face Amount
Market Value
Percentage
Medical/Hospitals  
AAA Idaho Health Facility Auth. Ref. Holy Cross 5.25% due 12/1/2011
$65,000
$69,077
0.8%
AAA Idaho Health Facility Auth Rev Ref Holy Cross Sys Corp. Rev 5.25% due 12/1/2014
110,000
116,629
1.4%
AAA Idaho Health Facility Auth. Corp Holy Cross Refunding 5.00% due 12/1/2022
115,000
118,864
1.4%
AAA Madison CO Hospital COP 5.00% due 12/1/2018
105,000
111,153
1.3%
 
SUB-TOTAL
395,000
415,723
4.9%
           
Pollution Control  
AAA Idaho Bond Bank Authority 4.30% due 9/1/2022
135,000
136,489
1.6%
           
Real Estate  
AAA Boise City Urban Renewal Agency Pk Rev & RA 5.00% due 9/1/2012
65,000
68,946
0.8%
AAA Idaho State Bldg Association 5.05% due 9/1/2018
95,000
98,898
1.2%
AAA Idaho State Bldg Authority 5.00% due 9/1/2021
100,000
104,856
1.2%
A Jerome Urban Renewal District 5.40% due 9/1/2013
200,000
205,296
2.4%
 
SUB-TOTAL
460,000
477,996
5.6%
           
Roads  
A Post Falls L.I.D. #91-4 7.95% due 4/15/2006
20,000
19,871
0.2%
A Post Falls L.I.D. #91-4 7.95% due 4/15/2007
20,000
19,855
0.2%
 
SUB-TOTAL
40,000
39,726
0.4%
           
  State Education        
AAA Boise State University Revs-Ref. 5.10% due 4/1/2014
300,000
319,333
3.8%
AAA Idaho State Building Authority 4.00% due 9/1/2016
105,000
106,300
1.3%
AAA Idaho State University Ref & I mpt 4.90% due 4/1/2017
150,000
157,995
1.9%
AAA Idaho State University Rev 4.625% due 4/1/2024
220,000
229,260
2.7%
AAA University of Idaho 5.60% due 4/1/2015
185,000
195,504
2.3%
AAA University of Idaho Student Fee Rev. 5.00% due 4/1/2019
200,000
217,006
2.6%
 
SUB-TOTAL
1,160,000
1,225,398
14.6%
           
Sewer  
A Troy Sewer Revenue 7.80% due 2/1/2006
15,000
14,945
0.2%
A Troy Sewer Revenue 7.90% due 2/1/2007
15,000
14,966
0.2%
A Troy Sewer Revenue 8.00% due 2/1/2008
15,000
14,982
0.2%
A Troy Sewer Revenue 8.00% due 2/1/2009
20,000
19,983
0.2%
A Troy Sewer Revenue 8.00% due 2/1/2010
20,000
20,009
0.2%
 
SUB-TOTAL
85,000
84,885
1.0%
           
  Urban Renewal        
AAA Boise City Urban Ren Agcy Lease Rev 5.875% due 8/15/2025
190,000
210,841
2.5%
AA Pocatello Dev Auth Rev Al Tax Inc 5.15% due 3/1/2011
150,000
153,865
1.8%
 
SUB-TOTAL
340,000
364,706
4.3%
           
  Water Supply        
AAA Blackfoot COP Series 2000 5.80% due 9/1/2018
135,000
151,120
1.8%
AAA Ketchum Water Revenue 4.75% due 9/1/2013
60,000
62,367
0.7%
AAA McCall Water System 6.25% due 9/1/2008
200,000
207,898
2.5%
AAA McCall Water System 6.375% due 9/1/2014
70,000
72,231
0.9%
AAA Moscow Sewer Revenue 4.125% due 11/1/2008
165,000
169,652
2.0%
 
SUB-TOTAL
630,000
663,268
7.9%
     
  Total Investments (Cost = $7,974,472)
7,820,000
8,239,208
97.2%
  Other Assets (net of liabilities)  
233,442
2.8%
  Total Net Assets  
8,472,650
100.0%

24  
Semi-Annual Report May 31, 2005

Financial Highlights
Idaho Tax-Exempt Fund (grahic omitted)

Selected data per share of capital stock outstanding throughout the period:
Period ended May 31,
Year Ended November 30,
 
2005
2004
2003
2002
2001
2000
Net asset value at beginning of period
$5.39
$5.46
$5.37
$5.28
$5.13
$5.01
Income from investment operations
Net investment income
0.10
0.19
0.21
0.22
0.22
0.23
Net gains or losses on securities (both realized & unrealized)
(0.01)
(0.07)
0.09
0.09
0.15
0.12
Total from investment operations
0.09
0.12
0.30
0.31
0.37
0.35
Less distributions
Dividends (from net investment income)
(0.10)
(0.19)
(0.21)
(0.22)
(0.22)
(0.23)
Total distributions
(0.10)
(0.19)
(0.21)
(0.22)
(0.22)
(0.23)
 
Net asset value at end of period
$5.38
$5.39
$5.46
$5.37
$5.28
$5.13
 
Total Return
1.61%
2.29%
5.40%
5.98%
7.40%
7.28%
 
Ratios / Supplemental Data
Net assets ($000), end of period
$8,473
$8,472
$7,692
$6,943
$6,650
$5,628
Ratio of expenses to average net assets
Before fee waivers
0.48%
0.95%
0.88%
0.88%
0.90%
0.94%
After fee waivers
0.47%
0.93%
0.85%
0.80%
0.79%
0.80%
Ratio of net investment income after fee waiver to average net assets
1.79%
3.56%
3.78%
4.14%
4.21%
4.69%
 
Portfolio turnover rate
3%
15%
6%
11%
13%
14%

Statement of Assets and Liabilities
Idaho Tax-Exempt Fund

As of May 31, 2005
     
Assets
Bond Investments (Cost $7,974,472)
$8,239,208
Cash
128,146
Interest receivable
117,959
Insurance Reserve Premium
801
Total Assets
$8,486,114
 
Liabilities
Other Liabilities
13,464
Total Liabilities
13,464
 
Net Assets
$8,472,650
 
Fund Shares Outstanding
1,575,646
 
Analysis of Net Assets
Paid in Capital (unlimited shares authorized, without par value)
8,236,508
Accumulated net realized loss
(28,594)
Unrealized net appreciation on investments
264,736
Net Assets applicable to Fund shares outstanding
$8,472,650
Net Asset Value, Offering and Redemption price per share
$5.38


(The accompanying notes are an integral part of these financial statements)

Semi-Annual Report May 31, 2005  
25

Statement of Operations
Idaho Tax-Exempt Fund (grahic omitted)

For the period ended May 31, 2005  
Investment income      
Interest income  
$201,947
Amortization of bond premium  
(11,605)
Accretion  
523
Other income  
180
  
Gross investment income  
$191,045
   
Expenses  
Investment advisory and administration fee  
21,170
Audit fees  
5,179
Legal and Compliance fees  
3,831
Insurance  
2,763
Shareholder service fee  
2,274
Custodian fees  
1,833
Trustees fees  
1,381
Printing and postage  
1,178
Filing and registration fees  
587
Other expenses  
329
Total gross expenses  
40,525
Less custodian fees waived  
(876)
Net expenses  
39,649
Net investment income  
$151,396
       
Net realized gain on investments  
Proceeds from sales  
216,460
Less cost of securities sold (based on identified cost)  
210,585
Realized net gain  
5,875
       
Unrealized gain on investments  
End of period  
264,736
Beginning of period  
293,708
Decrease in unrealized gain for the period  
(28,972)
Net realized and unrealized loss on investments  
(23,097)
       
Net increase in net assets resulting from operations  
$128,299

Statement of Changes in Net Assets
Idaho Tax-Exempt Fund
 
Period ended
Year ended
 
May 31, 2005
Nov. 30, 2004
INCREASE IN NET ASSETS    
From Operations    
Net investment income
$151,396
$281,029
Net realized gain (loss) on investments
5,875
(13,470)
Net decrease in unrealized appreciation
(28,972)
(76,652)
Net increase in net assets from operations
128,299
190,907
 
Dividends to shareowners from
Net investment income
(151,512)
(281,029)
 
From fund share transactions
Proceeds from sales of shares
389,691
1,610,860
Value of shares issued in reinvestment of dividends
122,666
223,255
 
512,357
1,834,115
Cost of shares redeemed
(488,918)
(963,286)
Net increase in net assets from share transactions
23,439
870,829
Total increase in net assets
$226
$780,707
 
NET ASSETS
Beginning of period
8,472,424
7,691,717
End of period
$8,472,650
$8,472,424
 
Shares of the fund sold and redeemed
Number of shares sold
72,411
298,944
Number of shares issued in reinvestment of dividends
22,833
41,311
 
95,244
340,255
Number of shares redeemed
(90,839)
(178,689)
Net increase in number of shares outstanding
4,405
161,566

(The accompanying notes are an integral part of these financial statements)

 


26  
Semi-Annual Report May 31, 2005

Expenses (Unaudtied)
Idaho Tax-Exempt Fund (grahic omitted)

As an Idaho Tax-Exempt mutual fund shareowner, you incur ongoing costs, including management fees and other fund expenses. Unlike many mutual funds, you do not incur sales charges (loads) on purchase payments, reinvested dividends, or other distributions. Nor do you incur redemption fees, exchange fees, or fees related to Individual Retirement Accounts. You may incur fees related to extra services requested by you for your account, such as a checkbook to use for redemptions or bank wires.

EXAMPLE
The exampleis based on an investment of $1,000 invested at the beginning of the fiscal year and held for the entire year [Friday, May 28, 2004 to Tuesday, May 31, 2005].

ACTUAL EXPENSES
The first line provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you have invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $9,400 account value divided by $1,000 = 9.4), then multiply the result by the number in the first line under heading entitled “Expenses Paid During Year” to estimate the expenses you paid on your account during this fiscal year. The Fund also charges the following fees for extra services rendered on request, which you may need to add to determine your total expenses: $10 per checkbook, $25 per bank wire, $15 per overnight courier delivery.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio (based on the last six months) and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the year. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareowner reports of the other funds. You may wish to add other fees that are not included in the expenses shown in the table, such as IRA fees (there are no IRA fees with the Idaho Tax-Exempt Fund), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees (note that the Idaho Tax-Exempt Fund do not have any such transactional costs). Therefore, the second line is useful in comparing ongoing costs only, and may not help you determine the relative total costs of owning different funds.

IDAHO TAX-EXEMPT FUND

Beginning Account Value [Friday, May 28, 2004]
Ending Account Value [Tuesday, May 31, 2005]
Expenses Paid During Period*
Actual
(5.33% return
after expenses)
$1,000
$1,053.30
$9.55
Hypothetical
(5% return
before expenses)
$1,000
$1,040.70
$9.49

* Expenses are equal to Idaho Tax-Exempt Fund’s annualized expense ratio of 0.93% (based on the most recent semi-annual period of December 1, 2004 through May 31, 2005), multiplied by the average account value of $1,026.65 over the period.

Portfolio Holdings
Idaho Tax-Exempt Fund (grahic omitted)

Ratings
established
By
Advisor
By Standard & Poor's
By Moody's
Investor Services
AAA
72.3%
38.9%
63.2%
AA
9.3%
8.8%
4.3%
A
15.5%
4.0%
3.6%
unrated
--
45.4%
26.0%
cash
2.9%
2.9%
2.9%

 

Semi-Annual Report May 31, 2005
27

 


Notes to Financial Statements
Idaho Tax-Exempt Fund (grahic omitted)

Organization
Saturna Investment Trust, (the “Trust”) was established under Washington State Law as a Business Trust on February 20, 1987. The Trust is registered as a no-load, open-end series investment company under the Investment Company Act of 1940. Four portfolios have been created to date in addition to Idaho Tax-Exempt Fund (the “Fund”). The other four portfolios distribute through a separate prospectus and the results of those funds are contained in a separate report.The investment objective of the Idaho Tax-Exempt Fund is to provide income free from federal and Idaho state income taxes, with a secondary objective of capital preservation.

Unaudited Information
The information in this interim report has not been subject to independent audit.

Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Fund.

Investments:
Fixed-income securities for which there are no publicly available market quotations are valued using matrices based on maturity, quality, yield, and similar factors, which are compared periodically to multiple dealer bids and adjusted by the adviser under policies established by the Trustees.

The cost of securities is the sam efor accounting and Federal income tax purposes. Securities transactions are recorded on trade date. Realized gains and losses are recorded on the identified cost basis.

Income and Expenses:
Interest income is reduced by the amortization of bond premiums, on a constant yield-to-maturity basis from purchase date to maturity or call, as appropriate.

Interest income is increased by accretion for bonds underwritten as original issue discounts and for bonds purchased at market discounts.

Expenses incurred by the Trust on behalf of the Fund (e.g., audit fees) are allocated to the Fund and the other Funds of the Trust on the basis of relative daily average net assets.

Income taxes:
The Fund’s policy is to continue to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all its taxable income to its shareowners. Therefore, no provision for Federal income taxes is required. Further, the Fund intends to meet IRS requirements for tax-free income dividends, and requirements of the Idaho Department of Revenue for income dividends free of Idaho state income tax.

Dividends and distributions to shareowners:
Dividends and distributions to shareowners, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Dividends are paid daily and distributed on the last business day of each month.

Use of estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent


assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

Transactions with Affiliated Persons
Under a contract approved by shareowners on October 12, 1990, Saturna Capital Corporation provides investment advisory services and certain other administrative and distribution services to conduct the Fund’s business. For such services, the Fund pays an annual fee equal to .50% of average daily net assets. For the year ended May 31, 2005, the Fund incurred advisory fee expenses of $21,170.

In accordance with the Fund’s agreement with its custodian, National City Bank of Indiana, for the six months ended May 31, 2005, custodian fees incurred by the Fund amounted to $876. The custodian waived its fees for earnings credits. The Fund compensated its Chief Compliance Officer $3,074 for the six months ended May 31, 2005.

The Trust acts as a distributor of its own shares, except in those states in which Saturna Brokerage Services, Inc. (a subsidiary of Saturna Capital Corporation) is itself registered as a broker-dealer and acts as distributor without compensation. Saturna Capital Corporation acts as shareowner servicing agent for the Fund, for a monthly fee plus certain expenses. For the six months ended May 31, 2005, the Fund paid such a fee of $2,274.

One trustee is also a director and officer of Saturna Capital Corporation. The unaffiliated trustees receive a fee of $200 per meeting attended. For the six months ending May 31, 2005, such fees totaled $2,400 for the Trust.

Dividends
As of May 31, 2005, the tax composition of dividends are as follows:

..............Tax Free......Income.......Long-term......Long-term
..............Income........Per Share.....Capital........Capital Gains
5/31/05... $151,512........$0.11............$-........................$-11/30/04 $281,029.........$0.19............$-........................$-

Investments
At May 31, 2005, the net unrealized appreciation of the Fund investments was $264,736 comprised of gross unrealized gains of $277,871 and gross unrealized losses of $13,135.

During the six months ended May 31, 2005, the Fund purchased $221,096 of securities and sold/matured $216,460 of securities.


28
Semi-Annual Report May 31, 2005


Availability of Idaho Tax-Exempt Fund Portfolio Information(unaudited)

(1) The Idaho Tax-Exempt Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q.
(2) The Fund’s Forms N-Q is available on the SEC’s website at http://www.sec.gov., and at www.saturna.com.
(3) The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
(4) The Fund makes a complete schedule of portfolio holdings after the end of each month available to investors at http://www.saturna.com.

(graphic omited)Idaho Tax-Exempt Fund

 

Web: http://www.saturna.com
E-mail: idaho@saturna.com

 

(logo)
SATURNA CAPITAL
Investment Counsel,Discount Brokerage
No-Load Mutual Funds, Retirement Plans


1-800-SATURNA
(1-800-728-8762)
1-888-732-6262 for automated assistance,
including Fund prices

This report is issued for the information of the shareowners of the Fund. It is not authorized for distribution to prospective investors unless it is accompanied or preceded by an effective prospectus relating to the securities of the Fund. Idaho Tax-Exempt Fund is a series of Saturna Investment Trust.

 

 

 

 

Semi-Annual Report May 31, 2005  
29

 

CONTROLS AND PROCEDURES
(a) Internal control over financial reporting is under the supervision of the principal executive and financial officers. On December 29, 2004, Mr. Nicholas Kaiser (President) and Mr. Christopher Fankhauser (Treasurer), reviewed the internal control procedures for Saturna Investment Trust and found them reasonable and adequate.

(b) No change.

EXHIBITS
Exhibits included with this filing:

(a) Code of Ethics. (not required)

(b) Certifications.
(1) Nicholas Kaiser, President, Saturna Investment Trust
(2) Christopher Fankhauser, Treasurer, Saturna Investment Trust

30
Semi-Annual Report May 31, 2005

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


SATURNA INVESTMENT TRUST


By:

/s/ Nicholas Kaiser
Nicholas Kaiser, President

Date: July 12, 2005



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/ Nicholas Kaiser
Nicholas Kaiser, President

Date: January 12, 2005


By:

/s/ Christopher Fankhouser
Christopher Fankhouser, Treasurer

Date: July 13, 2005

Semi-Annual Report May 31, 2005  
31