December 2, 2009

  To: **Trustees of Saturna Investment Trust,   Amana Mutual Funds Trust**  Re: **Fidelity Bond and D&O/E&O Annual Premium Allocations**  From: **Saturna Capital**  Annually, the Trustees must review continuation of the existing Rule 17g-1 fidelity  bond coverage. We filed the application for the annual renewal to ICI Mutual  (ICIM) for the Funds' fidelity bond and D&O/E&O coverage, and were given  the coverage for which we applied.  Policy limits and deductibles are unchanged from last year. The D&O/E&O  limit remains at $3 million with a deductible of $300,000. Due to growth in  both trusts, the fidelity bond coverage has increased from $1,960,000 to $2,335,000.  Each entity's fidelity bond coverage is to the full limit of $2,335,000. Mutual  fund required amounts have been set in accordance with SEC Rule 17(g)-1, based  on assets as of December 1, 2009.

Despite the large increase in coverage the fidelity bond premium has only increased  $3,665 from $17,000 to $20,665. We have historically allocated the premium according  to the proportion of each insured's required coverage to the total bond coverage.  Using this method, the bond premium allocation is show below in Table 1.  The D&O/E&O premium has increased approximately 10% over last year.  The allocation applies a 17% discount to quoted premiums received from ICI Mutual  for individual policies of appropriate size for each entity. The individually  quoted policy sizes were $3MM for Amana, and $1MM for each of Saturna Investment  Trust and Saturna Capital, including its subsidiaries, Saturna Brokerage Services  and Saturna Trust Company. The D&O/E&O allocation is show below in Table  2.

We have indicated acceptance of the policies, subject to your ratification  of payment at this meeting. Attatched is a letter, from ICIM, confirming that  the total premium for the bond and policy coverage allocated to each investment  company is less than the premium such company would have to pay if it purchased  separate policies. 

| **Table 1. Fidelity Bond Premium Allocation** |
|-----------------------------------------------|
| **Insured**                                   | **17(g)-1 Bracket** | **Coverage         Requirement** | **Percentage of         Total Bond** | **Bond Premium** |
| Amana                                         | $2.5-3 Billion | $1,700,000 | 65.13% | $13,460 |
| Saturna Investment                            | $150-250 Million | $600,000 | 22.99% | $4,751 |
| Saturna Capital                               | IRS requirement | $250,000 | 9.58% | $1,979 |
| Saturna Brokerage                             | FINRA requirement | $60,000 | 2.30% | $475 |
|                                          |   | $2,610,000 | 100.00% | $20,665 |

 

| **Table 2. D&O/E&O Policy Premium Allocation** |
|--------------------------------------------------------|
| **Insured**                                            | **Individual        Policy Limit** | **Individual        Policy Quote** | **Joint Policy        Discount (17%)** | **Policy Premium** |
| Amana                                                  | $3,000,000 | $75,000 | $12,667 | $62,333 |
| Saturna Investment                                     | $1,000,000 | $25,000 | $4,222 | $20,778 |
| Saturna Capital                                        | $1,000,000 | $35,000 | $5,911 | $29,089 |