**Idaho Tax-Exempt Fund**
**November 30, 2000 Report**
Fellow Shareowners:
For the year ending November 30, 2000, the Idaho Tax-Exempt Fund provided a  total return of 7.3%. And while municipal bonds performed better than common  stocks for the year (the S&P 500 Index’s total return was -4.2%), investors  continue to shun bonds. The Fund’s net assets dropped to $5.6 million,  down 9% from one year ago.  Over the last twelve months, the Federal Reserve Bank raised interest rates,  successfully slowing the economy. Although the new Republican administration  has a pro-growth, tax-reduction agenda, higher energy prices now bring a sense  of caution to the economic outlook. We expect federal policies to boost profitability  and productivity, keeping inflation and interest rates low.  The Consumer Price index has shown few signs of lasting acceleration. Despite  the increase in short-term rates, longer-term Idaho municipal interest rates  have actually fallen slightly, in sympathy with the slowing economy. The bond  market continues to respond favorably to the Federal Reserve’s cautious  policy stance. We expect interest rates to fall further in the coming year.  One year ago, we suggested a balanced portfolio where investors should “reposition  financial assets from the high-priced stock markets to a core investment holding  in tax-exempt bonds.” Our advice was correct, and we continue to recommend  a balanced investment program. We expect another solid year of positive, real  returns for shareowners of the Idaho Tax-Exempt Fund.   Idaho appears to be a magnet for the new US economy. It is at the epicenter  of growth in the western US region. Technology is Idaho’s largest durable  goods manufacturing sector. Idaho’s pro-business policies and natural beauty  help produce a diverse, stable economy – which adds to the traditional  credit-worthiness of Idaho municipal bonds. The State successfully competes  on a global basis in many key industries.  We invite you to again review the advantages of the Idaho Tax-Exempt Fund, including  current income free from Idaho and federal income taxes, a diversified quality  bond portfolio, useful services, low expenses, and continuous supervision by  professional managers. We welcome your comments and 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 
December 26, 2000
*Morningstar Mutual Funds has awarded Idaho  Tax-Exempt Fund a "4-star" rating as of November 30, 2000. The Morningstar rating  is a widely respected measure of historical risk-adjusted performance. The ratings  are subject to change each month, and are calculated from a fund's 3 and 5-year  average annual returns with sales charge adjustments (if any), and a risk factor  that reflects performance relative to 3-month Treasury Bill returns. Twenty  percent of the funds in a Morningstar investment category receive four stars,  the second-highest rating. The adviser has waived a portion of its fee in past  years, resulting in higher returns. Naturally, past performance may not indicate  future results.***INVESTMENTS**  ***Rating*******Issuer******Coupon/Maturity******Face Amount******Market Value******Airport Parking (2.1%)***    AAABoise City Airport Revenue COP5.40% due 8/1/2011$115,000 $117,864 ***Electric Power (3.0%)***    AAAIdaho Falls Electric Revenue 6.75% due 4/1/2019160,000 168,083 ***General Obligations (48.2%)***    AA-Ada & Canyon Counties5.50% due 7/30/2011175,000 184,188  JSD #2 Meridian5.50% due 7/30/2015100,000 104,140 AAAAdams County GO5.00% due 8/1/2014110,000 107,371 A+Bannock County GO Jail5.05% due 9/1/201295,000 94,535 ABannock County SD #254.90% due 8/1/200990,000 90,693  "5.25% due 8/1/2016110,000 109,879 AA-Boise City Revenue Bonds5.10% due 2/1/2011110,000 111,177 AAABoise City GO ISD5.50% due 7/30/201195,000 96,663 AA-"5.50% due 7/30/2016150,000 152,445 ABoise County SD #735.15% due 7/31/2010125,000 125,240 AAACaldwell, Idaho GO5.30% due 5/15/2014150,000 151,380 AAACanyon Co. SD #131 Nampa5.50% due 7/30/201350,000 50,833 AAACanyon County SD #1325.40% due 7/30/2011195,000 199,641  "5.40% due 7/30/2012100,000 102,350 ACanyon County SD #135 Notus    Series 19946.00% due 8/1/200750,000 50,066 AAACassia, Twin Falls JSD #1515.10% due 8/1/200990,000 91,710  "5.375% due 8/1/201385,000 86,776 "5.375% due 8/1/201575,000 75,743 AAAKootenai County SD #2735.00% due 7/30/201670,000 67,995 AAAKuna Sch/Comm Library Dist.4.9% due 8/1/201375,000 72,525 AAAMadison County SD #3215.60% due 2/1/2010100,000 100,183 AAPayette County SD #3726.50% due 7/31/200880,000 83,152  "6.75% due 7/31/2009155,000 162,363  "6.75% due 7/31/2010100,000 104,750 AAAPower & Cassia Co.s JSD #3815.25% due 8/01/201260,000 60,742 AAATeton County SD #401 GO5.50% due 8/1/201275,000 77,033  SUB-TOTAL 2,670,000 2,713,573 ***Housing (5.8%)***    AAIdaho Housing Authority    Single Fam Mortgage, B-16.85% due 7/1/201285,000 86,295 AAIdaho Housing Authority    Refunding Series A6.15% due 7/1/2024150,000 151,433 AA+Idaho Housing Authority    Single Fam Mort Mezz-E-16.60% due 7/1/201165,000 65,643 AAIdaho Housing Authority    Single Fam Mort Rev Ser B18.00% due 1/1/202010,000 10,249 AAIdaho Housing Authority    Single Fam Mort SR Series C17.70% due 7/1/201715,000 14,975  SUB-TOTAL 325,000 328,595 ***Irrigation (0.9%)***    AABoise Kuna Irrigation Dist.6.00% due 7/1/200850,000 50,353 ***Medical/Hospitals (3.1%)***    AAAIdaho Health Facility Auth. Corp.    Holy Cross Sys Corp Rev5.00% due 12/01/2022115,000 106,283 AAAIdaho Health Facility    Holy Cross Rev Refunding5.25% due 12/1/201165,000 65,283  SUB-TOTAL 180,000 171,566 ***Real Estate (3.5%)***    AAAIdaho State Bldg Authority Series C5.70% due 9/1/2007100,000 103,090 AAAIdaho State Building Authority5.00% due 9/1/2021100,000 93,930    200,000 197,020 ***Roads (2.9%)***    APayette L.I.D. #89-17.60% due 5/1/200530,000 29,780 APost Falls, Kootenai County7.60% due 4/15/200115,000 14,909  L.I.D. #91-17.75% due 4/15/200220,000 19,731  "7.95% due 4/15/200320,000 19,941  "7.95% due 4/15/200420,000 19,865  L.I.D. #91-47.95% due 4/15/200520,000 19,903  "7.95% due 4/15/200620,000 19,923  "7.95% due 4/15/200720,000 19,946  SUB-TOTAL 165,000 163,998 ***State Education (13.3%)***    AAABoise State University    Student Univ. & Housing Sys.5.10% due 4/1/2014300,000 299,070 AAAIdaho State University    Student Fee Revenue4.90% due 4/1/2017150,000 140,940 AAAUniversity of Idaho    Student Fee Revenue-Elmwood Apts.5.25% due 4/1/2014120,000 119,856 AAAUniversity of Idaho    Student Fee Revenue5.60% due 4/1/2015185,000 191,068  SUB-TOTAL 755,000 750,934 ***Sewer (2.5%)***    ATroy, Sewer Revenue7.30% due 2/1/200110,000 9,925   7.40% due 2/1/200210,000 9,944  "7.50% due 2/1/200310,000 9,944  "7.60% due 2/1/200410,000 9,948  "7.70% due 2/1/200515,000 14,927  "7.80% due 2/1/200615,000 14,931  "7.90% due 2/1/200715,000 14,933  "8.00% due 2/1/200815,000 14,934  "8.00% due 2/1/200920,000 19,915  "8.00% due 2/1/201020,000 19,917  SUB-TOTAL 140,000 139,318 ***Urban Renewal (4.3%)***    AAABoise City Idaho Urban Renewal5.875% due 8/15/202590,000 92,790 AAPocatello Idaho Development Authority5.15% due 3/01/2011150,000 150,554  SUB-TOTAL 240,000 243,344 ***Water Supply (7.4%)***    ACoeur d' Alene Water Revenue5.00% due 6/1/2006100,000 101,420 AMcCall Water Rev., Series 19946.25% due 9/1/2008200,000 207,234 AMcCall Water Revenue6.375% due 9/1/201470,000 72,171 AUcon Water & Sewer Rev. Refunding7.75% due 12/1/200235,000 34,984  SUB-TOTAL 405,000 415,809           **TOTAL INVESTMENTS (97.0%)** (Cost = $5,427,326)$5,405,000 5,460,457 Other Assets (net of liabilities) (3.0%)   167,437 **TOTAL NET ASSETS (100%)**   $5,627,894 ** These unaudited bond ratings reflect the adviser's current      rating of each bond, as determined using Standard & Poor's and Moody's ratings.*   *(The accompanying notes are an integral  part of these financial statements)***FINANCIAL HIGHLIGHTS**
*Selected data per share of capital stock outstanding throughout each period:*
  For the Years Ended November 30,    2000 1999 1998 1997 1996**Net asset value at beginning of year** $5.01 $5.36 $5.28 $5.25 $5.28  *Income from investment operations*      Net investment income0.23 0.24 0.25 0.26 0.27  Net gains or losses on securities (both realized and unrealized)0.12 (0.35)0.12 0.03 (0.03)Total from investment operations 0.35 (0.11)0.37 0.29 0.24  *Less distributions*      Dividends (from net investment income)(0.23)(0.24)(0.25)(0.26)(0.27) Distributions (from capital gains)- -(0.04)-- Total distributions (0.23)(0.24)(0.29)(0.26)(0.27)       **Net asset value at end of year** $5.13 $5.01 $5.36 $5.28 $5.25        **Total Return** 7.28%(2.18)%7.27%5.69%4.66%       Ratios / Supplemental Data      Net assets ($000), end of year $5,628 $6,151 $6,264 $5,255 $5,064 Ratio of gross expenses to average net assets * 0.80%0.80%0.76%0.80%0.79%Ratio of net investment income to average net assets  4.69%4.55%4.69%4.99%5.10%Portfolio turnover rate 14%13%23%20%10%       * For each of the above years, all or a portion of the expenses      were waived. If these costs had not been waived, the resulting increase      to the ratio of expenses to average net assets would be .14%, .05%, .07%,      .16%, and .27%, respectively.     
*(The accompanying notes are an integral part of these financial  statements)*
**STATEMENT OF ASSETS          AND LIABILITIES***As of November 30, 2000*    **Assets**     Investments (cost $5,427,326) $5,460,457   Cash 71,667   Interest Receivable 102,428   Insurance Reserve Premium 2,473    Total Assets $5,637,025 **Liabilities**     Other Liabilities 9,131    Total Liabilities 9,131      **Net Assets**   $5,627,894      **Fund Shares Outstanding**   1,096,602      **Analysis of Net Assets**     Paid in Capital (unlimited shares authorized, without par      value) 5,667,002   Undistributed net investment income 336   Accumulated net realized loss on investments (72,575)  Unrealized net appreciation to Fund shares outstanding 33,131  Net Assets applicable to Fund shares outstanding   $5,627,894 **Net Asset Value, Offering and Redemption price per share**   $5.13 
 
**STATEMENT OF OPERATIONS***For the year ended November 30, 2000*         **Investment income**     Interest income $314,443  Amortization of bond premium (7,912)  Accretion 908    Gross investment income $307,439      **Expenses**     Investment advisor and administration fee 29,503   Professional fees 8,683   Shareholder service fee 3,701   Printing and postage 3,695   Other expenses 4,483   Custodian fees 1,674  Filing and registration fees 924   Total gross expenses 52,663   Less: Advisor fees waived(6,037)   Less: Custodian fees waived(1,674)  Net expenses  44,952   Net investment income 262,487 **Net realized gain on investments**     Proceeds from sales 1,403,922   Less: cost of securities sold based on identified cost 1,475,345   Realized net loss (71,423)**Unrealized gain on investments**     End of year 33,131   Beginning of year (164,073)   Increase in unrealized gain for the year 197,204   Net realized and unrealized gain on investments 125,781 **Net increase in net assets resulting from operations**   $388,268 
*(The accompanying notes are an integral part  of these financial statements)*
**STATEMENT OF CHANGES        IN NET ASSETS**  Year ended Year ended   Nov. 30, 2000Nov. 30, 1999 **INCREASE IN NET ASSETS**     **From Operations**      Net investment income $262,487   $291,693   Net realized loss on investments (71,423)  (1,502)  Net increase (decrease) in unrealized appreciation 197,204  (431,909)  Net increase (decrease) in net assets from operations 388,268  (141,718)       **Dividends to shareowners from**      Net investment income(262,550)(291,771)       **Fund share transactions**      Proceeds from sales of shares485,456  1,306,810   Value of shares issued in reinvestment of dividends214,861 234,362    700,317  1,541,172   Cost of shares redeemed(1,350,100)(1,219,443)  Net increase (decrease) in net assets from share transactions(649,783)321,729  Total decrease in net assets  (524,065) (111,760)       **NET ASSETS**      Beginning of year6,151,959 6,263,719   End of year$5,627,894 $6,151,959        Shares of the fund sold and redeemed      Number of shares sold96,797  249,151   Number of shares issued in reinvestment of dividends42,755 45,232    139,552  294,383   Number of shares redeemed(270,432)(236,298) Net increase (decrease) in number of shares outstanding (130,880)58,085  
*(The accompanying notes are  an integral part of these financial statements)*

**DISCUSSION of FUND PERFORMANCE****(unaudited)**

For the year ending November 30, 2000, Idaho Tax-Exempt Fund returned shareowners  7.28%. As of November 30, 2000, the thirty-day SEC yield was 4.56%, or twenty-four  basis points lower than one year ago. The Fund’s operating expense ratio  remains capped at 0.80%.  Ten-year high-grade municipal bond rates have fallen about thirty basis points  over the year. This is good news. The yield curve had a classic positive slope  throughout the year and is slightly flatter now than one year ago. Restrictive  Federal Reserve monetary policy has slowed the economy, restored rational expectations  to the equity markets and reduced inflationary expectations.   The quality of municipal bond issues owned by the Fund remains strong. State  revenues now produce a budget surplus. Idaho’s employment growth is above  the national average from strength in construction and technology-based industries.  Idaho continues to see a strong influx of new arrivals seeking a higher quality  of life and good jobs. The State economy has become more diversified and better  balanced. The supply of municipal bonds in Idaho has dwindled as issuer’s  tax receipts and project revenues have reduced the need to issue bonds. Idaho’s  high state income taxes create a substantial appetite among residents for tax-exempt  bonds. The imbalance between the demand for and the supply of new issues is  an important element in the overall performance of Idaho municipal bonds in  both bull and bear markets. In short, the outlook for Idaho municipal bond appears  bright and we expect positive real returns to continue next year.  The primary objective of the Fund is income exempt from federal and Idaho personal  income taxes. The yield advantage of uninsured paper has risen lately; however,  we do not yet feel compelled to increase our commitment to this sector. The  average credit quality of the Fund is solidly investment grade. 14% of the portfolio  remains invested in non-rated paper, unchanged from twelve months ago. 52% of  the Fund is now invested in insured bonds.  The secondary objective of the Fund is capital preservation. The average maturity  of the Fund is the most important short-term factor affecting portfolio principal  values. The Fund’s average maturity is now 8.84 years, slightly shorter  than last November. We expect the eight- to twelve-year area of the yield curve  to offer the best combination of risk and return for 2001, and plan to maintain  average portfolio maturity in this range. Due to extraordinary US government  budget surpluses and the US Treasury debt buy-back program, the Fund’s  +7.28% return pales in comparison to the one-year return of 14.6% from seven-  to ten-year US Treasury notes.   Though the Fund does not try to “beat” the Lehman Brothers Municipal  Bond Index or any other specific index, the Fund’s returns, considering  the lower price fluctuation, compare well to that of the Index for the fiscal  year. The graph compares the Idaho Tax-Exempt Fund’s performance to the  performance of the Lehman Brothers Composite Municipal Bond Index, a broad-based  municipal bond market index. To be comparable, the Municipal Index data includes  reinvested income (as computed by Lehman Brothers Fixed Income Research).  Note that this graph compares an unmanaged, expense-free index to an actively  managed Fund that has transaction and other costs. The Fund stands ready to  buy and sell its own shares on a daily basis, and provides numerous investor  services. Few investors are able to invest in an exact index portfolio because  of the large amount of securities required to model such an index.  Were the Fund to target the index as an objective, the Fund might take greater  risk by extending the average maturity of its portfolio to take advantage of  the greater price fluctuation (for better or worse) available in such a portfolio.  However, maintaining the stability of capital is an objective of the portfolio,  and we believe the Fund has performed well considering its investment restrictions.  The graph shows that $10,000 invested in the Idaho Tax-Exempt Fund ten years  ago (end of November 1989) would have grown to $17,375 at the end of November  2000. If the $10,000 could have been invested in the Lehman Brothers Composite  Municipal Bond Index at the end of November 1989, it would have grown to $19,866.
**Idaho Tax Exempt Bond Fund vs. Lehman Composite Municipal  Bond Index**

 *NOTES TO FINANCIAL STATEMENTS*
**NOTE 1-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, as amended. 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.

**NOTE 2--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, call  features 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 same for 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 only for bonds underwritten as original  issue discounts. Market discounts are recorded as realized gains upon disposition.  Expenses incurred by the Trust on behalf of the Fund (e.g., professional fees)  are allocated to the Fund and the other Funds of the Trust on the basis of relative  daily average net assets. The Adviser has agreed to certain limits on expenses,  as described below.

**Income taxes:****The Fund has elected to be taxed as a regulated investment company under  the Internal Revenue Code and distribute substantially all of its taxable net  investment income and realized net gains on investments. 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 are recorded on the ex-dividend  date. Dividends are paid daily and distributed on the last business day of each  month. 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 at the date of the  financial statements. Actual results could differ from those estimates.

**NOTE 3--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 November 30, 2000, the Fund incurred advisory  fee expenses of $29,503.  Saturna Capital has volunteered to waive its advisory fee to the extent that  total expenses of the Fund, (excluding interest, brokerage commissions and taxes)  exceeds .80% through March 31, 2001. Accordingly, for the year ended November  30, 2000, Saturna Capital waived $6,037 of the advisory fee.   In accordance with the Fund’s agreement with its custodian, National City  Bank of Indiana, for the year ended November 30, 2000, custodian fees incurred  by the Fund amounted to $1,674. The custodian waived its fees for earnings credits.  One trustee and shareowner also serves as president of the Trust and is a director  and president of Saturna Capital Corporation.  The Trust acts as a distributor of its own shares, except in those states in  which Investors National Corporation (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 year ended November 30, 2000,  the Fund paid such a fee of $3,701.   Unaffiliated trustees receive a fee of $100 per meeting attended, allocated  pro-rata to the five Funds of Saturna Investment Trust. On November 30, 2000,  the trustees, officers and their immediate families as a group owned 0.1% of  the outstanding shares of the Fund.
**NOTE 4--Federal Income Taxes****At November 30, 2000, Idaho Tax-Exempt had capital loss carryforwards  of $72,925, of which $1,502 expires in 2007 and $71,423 expires in 2008, subject  to regulation. Prior to their expiration, such loss carryforwards may be used  to offset future net capital gains realized for federal income tax purposes.
**NOTE 5 -- Investments****At November 30, 2000, the net unrealized appreciation of investments  for the Fund of $33,131 comprised gross unrealized gains of $85,930 and gross  unrealized losses of $52,799, and cost for federal income tax purposes was $5,427,326.  During the year ended November 30, 2000, the Fund purchased $747,603 of securities  and sold / matured $1,403,922 of securities.
 
 
**REPORT of****INDEPENDENT ACCOUNTANTS**

To the Shareowners and Board of Trustees  Idaho Tax-Exempt Fund  We have audited the accompanying statement of assets and liabilities of the  Idaho Tax-Exempt Fund, a series of shares of the Saturna Investment Trust, including  the schedules of investments as of November 30, 2000, and the related statements  of operations for the year then ended, the changes in net assets for each of  the two years then ended, and the financial highlights for the four years then  ended. These financial statements and financial highlights are the responsibility  of the Trust’s management. Our responsibility is to express an opinion  on these financial statements and financial highlights based on our audits.  The financial statements and financial highlights presented for the year ended  November 30, 1996 were audited by other auditors whose report dated December  16, 1996, expressed an unqualified opinion on those statements.  We conducted our audits in accordance with generally accepted auditing standards.  Those standards require that we plan and perform the audit to obtain reasonable  assurance about whether the financial statements and financial highlights are  free of material misstatement. An audit includes examining, on a test basis,  evidence supporting the amounts and disclosures in the financial statements.  Our procedures included confirmation of securities owned as of November 30,  2000, by correspondence with the custodian. Our audit also includes assessing  the accounting principles used and significant estimates made by management,  as well as evaluating the overall financial statement presentation. We believe  that our audits provide a reasonable basis for our opinion.   In our opinion the financial statements and financial highlights referred to  above present fairly, in all material respects, the financial position of Idaho  Tax-Exempt Fund as of November 30, 2000, the results of its operations for the  year then ended, the changes in net assets for each of the two years then ended,  and the financial highlights for each of the four years then ended, in conformity  with generally accepted accounting principles.
Philadelphia, Pennsylvania
Tait, Weller & Baker  /s/ signature
December 15, 2000
 
**Web: http://www.saturna.com          E-mail: idaho@saturna.com**

 

***Mutual Funds***

 

 

*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.*

 

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*A Portfolio of Saturna Investment Trust*

 

 

I D A H OTax-Exempt Fund

 

 

 

**Annual Report***November 30, 2000*