**Idaho Tax-Exempt Fund****May 31, 2002 Report**
*Fellow Shareowners:*
Idaho Tax Exempt Fund provided a total return of +2.36% for the six months  and +5.68% for the twelve months ending May 31, 2002. Total Fund assets are  now $6.7 million. The Fund continues to outperform common stocks, as evidenced  by the -13.84% S&P 500 Index return for the twelve months ending May 31,  2002.   Since September 2001, the U.S. Federal Reserve Bank’s deep interest rate  cuts and the federal income tax cut provided enough economic stimulus to avoid  a recession. But terrorist threats at home and wars abroad, as well as theunwinding  of the speculative stock bubble since March 2000, are shaking investorconfidence  and overshadowed the broad economy’s solid performance. Interest rates  changed little since our November 2001 report.  Looking ahead, the economy recovers at a spotted but reasonable pace. Barring  greater weakness the U.S. dollar, the Federal Reserve will keep interest rates  low. Inflation remains low. The bond yield curve will maintain its normalslope,  with lower interest rates for shorter maturities. Short-term interest rates  should remain near current cyclical lows, and long-term rates held down bycontinued  investor demand in a non-inflationary era. Despite a recent rally in general  bond prices, the Idaho municipal bond market still offers reasonablevalue.  While suffering from the technology downdraft, we expect the Idaho economy to  grow faster than the national economy for the forseeable future. Idaho’s  pro-business policies, natural resources and high standard of living give the  State a competitve edge in the marketplace. The credit quality of Idahomunicipal  issuers improves as the State’s economy grows and diversifies.  For two years we have recommended investors reposition financial assets from  the high-priced stock markets to a core investment holding in tax exemptbonds.  We remain convinced that a balanced, diversified investment portfolio willproduce  positive results in the years ahead.   We invite you to again review the advantages of the Idaho Tax-Exempt Fund,including  low expenses, income free from Idaho and federal income taxes (includingfederal  alternative minimum tax), a high-quality diversified bond portfolio and daily  supervision by professional managers. Recently we added on-line Internetaccess  to your account. We welcome your suggestions. Only with your help can we be  certain that we are meeting your investment needs — our primaryobjective.

***NicholasKaiser,******Phelps        McIlvaine,*****President**
**Vice President, Portfolio Manager**
July 15, 2002Performance data quoted in this reportrepresents      past  Average Annual Total Returnsperformance and is no guarantee of futureperformance.      The investment return and principal value of investments  One Year5 Years10 Yearsin the Fund fluctuate daily, and an investor's      shares when redeemed may be worth more or less than the originalcost. 6.28% 5.28% 5.67%    Performance data for years ended 6/28/2002.
 ***Investments*** **Rating*****Issuer****Coupon/Maturity****Face Amount****Market Value**   **Airport Parking (3.4%)**  AAABoise City Airport Revenue COP5.40% due 8/1/2011$215,000 $221,945**Electric Power (2.6%)**  AAAIdaho Falls Electric Revenue 6.75% due 4/1/2019155,000 168,769**Financial Services (2.5%)**  AAABoise City General Fund Revenue5.20% due 12/1/2017160,000163,760**General Obligations (46%)**  AA-Ada & Canyon Counties 5.50% due 7/30/2011175,000 191,100 JSD #2 Meridian5.50% due 7/30/2015100,000 108,650AAAAdams County GO5.00% due 8/1/2014110,000111,034A+Bannock County GO Jail5.05% due 9/1/201295,000 97,774ABannock County SD #254.90% due 8/1/200990,000 93,897 "5.25% due 8/1/2016110,000 112,266AAABingham County SCD #555.00% due 8/1/2009200,000 213,300AAABoise City GO ISD5.50% due 7/30/201195,000 98,629AA-"5.50% due 7/30/2016150,000 157,470ABoise County SD #735.15% due 7/31/2010125,000 131,534AAA Caldwell GO5.30% due 5/15/2014150,000 158,595AAACanyon County ID SD #1325.40% due 7/30/2011195,000 208,806 "5.40% due 7/30/2012100,000 107,080AAACanyon County ID SD #134 Middleton4.65% due 7/31/2016170,000167,875ACanyon County ID SD #135 Notus Series 19946.00% due 8/1/200750,000 50,066AAACassia, Twin Falls JSD #1515.10% due 8/1/200990,000 96,687 "5.375% due 8/1/201385,000 92,055 "5.375% due 8/1/201575,000 81,225AAAClark County SD #161 Dubois5.00% due 8/1/2015270,000275,589AAAKootenai County SD #2735.00% due 7/30/201670,000 70,913AAAKuna Sch/Comm Library Dist.4.90% due 8/1/201375,000 76,238AAAMeridian ID Free Library Dist.5.00% due 8/1/2006200,000202,220AAA Power & Cassia Cos. JSD #3815.25% due 8/1/201260,000 71,944AAATeton County SD #401 GO5.50% due 8/1/201275,000 79,417 SUB-TOTAL 2,915,0003,054,364
 
*2**May 31, 2001 Semi-AnnualReport* ****Investments******Rating*****Issuer****Coupon/Maturity****Face Amount****Market Value****Housing (4.2%)**  AAIdaho Housing Authority  Single Fam Mortgage, B-16.85% due 7/1/201275,00076,628AAIdaho Housing Authority  Refunding Series A6.15% due 7/1/2024125,000128,676AA+Idaho Housing Authority  Single Fam Mort Mezz-E-16.60% due 7/1/201150,00051,259AAIdaho Housing Authority  Single Fam Mort Rev Ser B18.00% due 1/1/202010,000 10,241AAIdaho Housing Authority  Single Fam Mort SR Series C17.70% due 7/1/201715,000 15,202 SUB-TOTAL 275,000282,006**Medical/Hospitals (4%)**  AAAIdaho Health Facility Auth.  Holy Cross 5.25% due 12/1/201480,000 83,032AAAIdaho Health Facility Auth. Corp.    Holy Cross Sys Corp Rev5.00% due 12/1/2022115,000 112,044AAAIdaho Health Facility    Holy Cross Rev Refunding5.25% due 12/1/201165,000 68,812 SUB-TOTAL 260,000263,888**Real Estate (3%)**  AAAIdaho State Bldg Authority Series C5.70% due 9/1/2007100,000 102,280AAAIdaho State Building Authority5.00% due 9/1/2021100,000 99,140   200,000 201,420**Roads (2%)**  APayette L.I.D. #89-17.60% due 5/1/200530,000 30,396APost Falls, Kootenai County L.I.D. #91-17.95% due 4/15/200320,000 20,065 "7.95% due 4/15/200420,000 20,113 
L.I.D. #91-4
7.95% due 4/15/200520,000 20,145 "7.95% due 4/15/200620,000 20,176 "7.95% due 4/15/200720,000 20,140 SUB-TOTAL 130,000131,035
 
*May 31, 2001 Semi-AnnualReport**3***Rating*****Issuer****Coupon/Maturity****Face Amount****Market Value****State Education (11.7%)**  AAABoise State University  Student Univ. & Housing Sys.5.10% due 4/1/2014300,000 308,910AAAIdaho State University  Student Fee Revenue4.90% due 4/1/2017150,000 149,130AAAUniversity of Idaho  Student Fee Revenue-Elmwood Apts.5.25% due 4/1/2014120,000 124,872AAAUniversity of Idaho  Student Fee Revenue5.60% due 4/1/2015185,000195,841 SUB-TOTAL 755,000 778,753**Sewer (1.8%)**  ATroy, Sewer Revenue7.50% due 2/1/200310,000 9,998 "7.60% due 2/1/200410,000 10,059 "7.70% due 2/1/200515,000 15,119 "7.80% due 2/1/200615,000 15,167 "7.90% due 2/1/200715,000 15,182 "8.00% due 2/1/200815,000 15.203 "8.00% due 2/1/200920,000 20,244 "8.00% due 2/1/201020,000 20,256 SUB-TOTAL 120,000121,228**Urban Renewal (9.4%)**    AAABoise City Idaho Urban Renewal Rev5.00% due 9/1/201265,00067,688AAABoise City Urban Renewal5.875% due 8/15/2025190,000200,165AJerome Urban Renewal District5.40% due 9/1/2013200,000199,250AAPocatello Development Authority5.15% due 3/1/2011150,000158,901 SUB-TOTAL 605,000626,004**Water Supply (5.7%)**  AAAKetchum Water Revenue4.75% due 9/1/201360,000 60,471AMcCall Water Rev., Series 19946.25% due 9/1/2008200,000 211,838AMcCall Water Revenue6.375% due 9/1/201470,000 73,165AUcon Water & Sewer Rev. Refunding7.75% due 12/1/200235,00035,083 SUB-TOTAL 365,000 380,557     **Total Investments (96.3%)** (Cost=$6,209,421)**$6,155,000****$6,393,729**Other Assets (net of liabilities) (3.7%)  247,668**Total Net Assets (100%)**  **$6,641,397**** These unaudited bond ratings reflect the adviser'scurrent      rating of each bond, as determined using Standard & Poor's and Moody'sratings.*
 
4*May 31, 2001 Semi-AnnualReport****Financial        Highlights***    Year ended November 30, *Selected data per share of capital stock outstanding        throughout the period:*
Period ended        May 31, 2002
20012000199919981997**Net asset value at beginning of period**      *Income from investment operations*$5.28$5.13$5.01$5.36$5.28$5.25 Net investment income0.110.220.230.240.250.26 Net gains or losses on securities (both realized andunrealized)0.010.150.12(0.35)0.120.03Total From investment operations0.120.370.35(0.11)0.370.29 *Less Distributions* Dividends (from net investment income)(0.11)(0.22)(0.23)(0.24)(0.25)(0.26) Distributions (from capital gains)0.000.000.000.00(0.04)0.00Total Distributions(0.11)(0.22)(0.23)(0.24)(0.29)(0.26)**Net asset value at end of period**$5.29$5.28$5.13$5.01$5.36$5.28**Total Return**2.36%7.40%7.28%(2.18)%7.27%5.69%  Ratios/Supplemental dataNet assets ($000), end of period$6,641$6,650$5,628$6,151$6,264$5,255Ratio of expenses to average net assets*0.40%0.79%0.80%0.80%0.76%0.80%Ratio of net investment income to average net assets2.14%4.21%4.69%4.55%4.69%4.99%Portfolio turnover rate6%13%14%13%23%20%
*For each of the above periods, 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 .04%, .11%, .14%,        .05%, .07%, and .16%, respectively.

 
***Statement        of Assets and Liabilities*** *As of May 31, 2002*   **Assets**    Bond Investments (Cost $6,209,421) $6,393,729  Cash 159,426  Interest Receivable 100,386  Insurance Reserve Premium2,473    Total Assets  $6,656,014    **Liabilities**    Other Liabilities 14,617   Total Liabilities 14,617    **Net Assets**  $6,641,397    **Fund Shares Outstanding**   1,255,158****   **Analysis of Net Assets**    Paid in Capital (unlimited shares authorized, without par        value)6,499,583   Undistributed net investment income164  Accumulated net realized loss on investments(42,657)   Unrealized net appreciation on investments184,307   Net Assets applicable to Fund shares outstanding $6,641,397    **Net Asset Value, Offering and Redemption price pershare** $5.29
*(The accompanying notes are an integralpart  of these financial statements)*

 
*May 31, 2001 Semi-AnnualReport**5* ****Statement        of Operations*****For the period ended May 31, 2002*       **Investment Income**    Interest income $171,851  Amortization of bond premium (4,351)  Accretion 278   Gross Investment Income  $167,778    **Expenses**    Investment Advisor and administration fee 16,468  Professional fees 5,214  Shareholder service fee 1,921  Meetings1,404  Insurance 1,308  Printing and postage 1,118  Custodian fees833  Other expenses 732  Filing and Registration fees393  Total gross expenses 29,391  Less: advisory fees waived (2,118)  Less: custodian fees waived(833)  Net expenses 26,440  Net investment income  141,338    **Net realized loss on investments**    Proceeds from sales 442,675  Less: cost of securities sold (based on identifiedcost)446,327   Realized net loss  (3,652)    **Unrealized gain on investments**    End of period 184,307  Beginning of period172,328  Increase in unrealized gain for the period  11,979  Net realized and unrealized gain oninvestments 8,327    **Net increase in net assets resulting fromoperations** $149,665*****Statement        of Changes in Net Assets*****   **Period ended****Year ended**  **May 31, 2002****Nov. 30, 2001****INCREASE (DECREASE) IN NET ASSETS**   **From Operations**    Net investment income  $141,338 $262,883 Net realized gain (loss) on investments (3,652) 33,570 Net increase in unealized appreciation 11,979 139,197 Net increase in net assets  $149,665 $435,650    **Dividends to shareowners from net investmentincome** (141,419)(262,974)    **Fund Share Transactions**    Proceeds from sales of shares272,8291,150,800 Value of shares issued in reinvestment of dividends113,788213,038  386,6171,363,838 Cost of shares redeemed(403,624)(514,250) Net increase (decrease) in net assets from sharetransactions(17,007)849,588**Total increase (decrease) in net assets********$(8,761)****$1,022,264**    **NET ASSETS**    Beginning of period6,650,1585,627,894 End of period6,641,3976,650,158    **Shares of the fund sold and redeemed**   ****Number of shares sold58,078218,964****Number of shares issued in reinvestment of dividends21,61840,308**** 79,696259,272****Number of shares redeemed(83,187)(97,226)**Net increase (decrease) in number of sharesoutstanding****(3,491)****162,046**
*(The accompanying notes are an integralpart  of these financial statements)*
***6**May 31, 2001 Semi-AnnualReport* *****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, 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. 

**Unaudited Information**        The information in this interim report has not been subject toindependent        audit. 

**Significant Accounting Policies**        The following is a summary of the significant accounting policiesfollowed        by the Funds.

**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 theTrustees.      

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 for bonds underwritten asoriginal        issue discounts and for bonds purchased at market discounts.         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 itstaxable        net investment income and realized net gains on investments. Therefore,        no provision for Federal income taxes is required. Further, the Fundintends        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 theex-dividend        date. Dividends are paid daily and distributed on the last business day        of each month. Shareowners electing to reinvest dividends anddistributions        purchase additional shares at the net asset value on the distribution        date. 

**Transactions with AffiliatedPersons**        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'sbusiness.        For such services, the Fund pays an annual fee equal to .50% of average        daily net assets. For the six months ended May 31, 2002, the Fundincurred        advisory fee expenses of $16,468.

 Saturna Capital has volunteered to reimburse the Fund to the extent        that total expenses of the Fund, (excluding interest, brokeragecommissions        and taxes) exceeds .80% through March 31, 2003. Accordingly, for the six        months ended May 31, 2002, Saturna Capital waived $2,118 of the advisory        fee.

 In accordance with the Fund's agreement with its custodian, National        City Bank of Indiana, for the six months ended May 31, 20021, custodian        fees incurred by the Fund amounted to $833. The custodian waived itsfees        for earnings credits.

The Trust acts as a distributor of its own shares, except in thosestates        in which Investors National Corporation (a subsidiary of Saturna Capital        Corporation) is itself registered as a broker-dealer and acts asdistributor        without compensation. Saturna Capital Corporation acts as shareownerservicing        agent for the Fund, for a monthly fee plus certain expenses. For the six        months ended May 31, 2002, the Fund paid such a fee of $1,921. 

One trustee is also a director and officer of Saturna CapitalCorporation.        The unaffiliated trustees receive a fee of $100 per meeting attended,        and in the period ending May 31, 2002, such fees totalled $700. 

**Investments**At May 31, 2002, the net unrealized appreciation ofinvestments        for the Fund of $184,307 comprised gross unrealized gains of $191,879        and gross unrealized losses of $7,572. 

During the six months ended May 31, 2002, the Fund purchased $398,218        of securities and sold/matured $442,675 of securities.
*May 31, 2001 Semi-AnnualReport**7*
 
 

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

 

 

 

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**1-800/SATURNA**          (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 orpreceded          by an effective prospectus relating to the securities of the Fund.Idaho          Tax-Exempt Fund is a series of Saturna Investment Trust

 
I D A H OTax-Exempt Fund     (graphic omitted)*A Portfolio of Saturna Investment Trust*
 

 

SEMI-ANNUALREPORT

**May 31, 2001**