**Idaho Tax-ExemptFund**
**November 30, 2002 Report**
Fellow Shareowners:
For the twelve-month period ending November 30, 2002, Idaho Tax Exempt Fund  provided a total return of +6.21%. The Fund outperformed common stocks again,  illustrated by the S&P 500 Stock Index declining 16.51% for the sametwelve  months. Additional performance information and discussion is on pages 8 and  9.  Over the past year, the Federal Reserve Bank‘s assessment of the economy  ranged from weak to neutral, with the Federal Funds rate is now at anextremely  low 11/4%. Fixed income markets have moved in inversely to equity markets.Lower-rated  credits reflected destabilizing political events in excess volatility.High-grade  municipal interest rates remained steady over the last twelve months.  Looking ahead, we expect GDP to grow 3% and corporate profits 10% in 2003. The  government can provide further economic stimulus with federal tax cuts, which  may not be helpful to municipal bonds. The housing and the consumer sectors  will loose steam, while capital spending recovers. We expect short-terminterest  rates to increase slightly and long-term rates to remain steady, with theyield  curve maintaining a classic slope. Today’s unusual degree of price and  credit spread volatility offers an important reason to increase yourinvestment  in quality Idaho municipal bonds.  On a risk-adjusted basis, Idaho continues to be a rewarding and sane place to  invest. The Idaho economy will recover with the national economy. Idaho’s  pro-business policies, natural resources and high standard of living give the  State a strong competitive edge.   For a third year, we recommend investors “ reposition financial assets  from the stock markets to a core investment holding in tax-exempt bonds.”  With the strong inverse relationship between the municipal bond market and the  equity market, the benefits from this basic form of diversification haverarely  been greater. We remain convinced that well-balanced, diversified investment  portfolios will produce positive results in the year ahead.   We invite you to review the advantages of the Idaho Tax-Exempt Fund, including  low expenses, income free from Idaho and federal income taxes, a high-quality  diversified bond portfolio and daily supervision by professional managers. We  welcome your suggestions. Only with your help can we be certain that we are  meeting your investment needs — our primary objective.

***NicholasKaiser,******Phelps        McIlvaine,***President 
Vice President, Portfolio Manager 
December 27, 2002**INVESTMENTS**  ***Rating*******Issuer******Coupon/Maturity******Face Amount******Market Value***   *As of November 30, 2002****Airport Parking (3.3%)***    AAABoise City Airport Revenue COP5.40% due 8/1/2011$215,000 $225,788***Electric Power (2.4%)***    AAAIdaho Falls Electric Revenue 6.75% due 4/1/2019155,000 168,817***Finance Services (2.4%)***    AAABoise City General Fund Revenue5.20% due 12/1/2017160,000168,188***General Obligations (47.2%)***    AA-Ada & Canyon Counties JSD #25.50% due 7/30/2011175,000 196,432 "5.50% due 7/30/2015100,000 111,276AAAAdams County5.00% due 8/1/2014110,000 113,732A+Bannock County Jail5.05% due 9/1/201295,000 99,750ABannock County SD #254.90% due 8/1/200990,000 95,664 "5.25% due 8/1/2016110,000 114,952AAABingham County SD #554.65% due 8/1/2017285,000286,302AAABoise City ISD5.50% due 7/30/201195,000 96,677AA-"5.50% due 7/30/2016150,000 166,027ABoise County SD #735.15% due 7/31/2010125,000 132,617AAACaldwell, Idaho 5.30% due 5/15/2014150,000 161,509AAACanyon County SD #1325.40% due 7/30/2011195,000 207,919 "5.40% due 7/30/2012100,000 106,625ACanyon County SD #135 Notus    Series 19946.00% due 8/1/200750,000 50,082AAACanyon County SD #1344.65% due 7/31/2016170,000172,203AAACassia, Twin Falls JSD #1515.10% due 8/1/200990,000 97,976 "5.375% due 8/1/201385,000 93,175 "5.375% due 8/1/201575,000 82,213AAAClark County SD #161 5.00 % due 8/1/2015270,000283,343AAIdaho Housing and Finance Association4.80% due 6/1/2017100,000102,248AAAKootenai County SD #2735.00% due 7/30/201670,000 71,683AAAKuna Sch/Comm Library District4.90% due 8/1/201375,000 78,231AAAMeridian ID Free Library District5.00% due 8/1/2015200,000207,034AAAPower & Cassia Cos. JSD #3815.25% due 8/1/201260,000 66,392AAATeton County SD #401 5.50% due 8/1/201275,000 80,548 SUB-TOTAL 3.100,0003,274,610***Housing (5.2%)***        AAIdaho Housing Authority    Single Fam Mortgage, B-16.85% due 7/1/201280,00061,313AAIdaho Housing Authority    Refunding Series A6.15% due 7/1/2024105,000109,014AA+Idaho Housing Authority    Single Fam Mort Mezz-E-16.60% due 7/1/201140,00041,629AAIdaho Housing Authority    Single Fam Mort Rev Ser B18.00% due 1/1/202010,000 10,341AAIdaho Housing Authority    Single Fam Mort SR Series C17.70% due 7/1/201710,0009,963AAAValley County Jail Project Ref.4.70% due 8/1/2014125,000130,441 SUB-TOTAL 350,000362,701***Medical/Hospitals (3.9%)***    AAAIdaho Health Facility Auth. Ref.    Holy Cross 5.25% due 12/1/201480,00085,022AAAIdaho Health Facility Auth. Corp.    Holy Cross Sys Corp Rev5.00% due 12/1/2022115,000114,463AAAIdaho Health Facility    Holy Cross Rev Refunding5.25% due 12/1/201165,00069,797 SUB-TOTAL 260,000269,282***Real Estate (7%)***    AAABoise City Urban Renewal Agency Pk Rev & RA5.00% due 9/1/201265,00068,734AAAIdaho State Bldg Authority Series C5.70% due 9/1/2007100,000 102,765AAAIdaho State Building Authority5.00% due 9/1/2021100,000101,304AJerome Urban Renewal District5.40% due 9/1/2013200,000210,076   465,000 482,879***Roads (1.9%)***    APayette L.I.D. #89-17.60% due 5/1/200530,000 30,007AL.I.D. #91-17.95% due 4/15/200320,000 19,947 "7.95% due 4/15/200420,000 19,969AL.I.D. #91-47.95% due 4/15/200520,000 19,984 "7.95% due 4/15/200620,000 19,982 "7.95% due 4/15/200720,000 19,982 SUB-TOTAL 130,000 129,871***State Education (11.6%)***    AAABoise State University    Student Univ. & Housing Sys.5.10% due 4/1/2014300,000 317,780AAAIdaho State University    Student Fee Revenue4.90% due 4/1/2017150,000 154,486AAAUniversity of Idaho    Student Fee Revenue-Elmwood Apts.5.25% due 4/1/2014120,000 129,801AAAUniversity of Idaho    Student Fee Revenue5.60% due 4/1/2015185,000 200,789 SUB-TOTAL 755,000 802,856***Sewer (1.7%)***    ATroy, Sewer Revenue7.50% due 2/1/200310,000 9,953 "7.60% due 2/1/200410,000 9,958 "7.70% due 2/1/200515,000 14,939 "7.80% due 2/1/200615,000 14,957 "7.90% due 2/1/200715,000 14,963 "8.00% due 2/1/200815,000 14,971 "8.00% due 2/1/200920,000 19,970 "8.00% due 2/1/201020,000 19,974 SUB-TOTAL 120,000 119,685***Urban Renewal (5.1%)***    AAABoise City Idaho Urban Renewal5.875% due 8/15/2025190,000 204,014AAPocatello Idaho Development Authority5.15% due 3/1/2011150,000 152,763 SUB-TOTAL 340,000 356,777***Water Supply (5.5%)***    AAAKetchum Water Revenue4.75% due 9/1/201360,00060,879AMcCall Water Rev., Series 19946.25% due 9/1/2008200,000 214,852AMcCall Water Revenue6.375% due 9/1/201470,000 73,728AUcon Water & Sewer Rev. Refunding7.75% due 12/1/200235,000 34,827 SUB-TOTAL 365,000385,286     **Total Investments (97.2%)** (Cost = $6,470,833)$6,415,0006,746,740Other Assets (net of liabilities) (2.8%)   196,428**Total Net Assets (100%)**   $6,943,168** These unaudited bond ratings reflect the adviser'scurrent      rating of each bond, as determined using Standard & Poor's and Moody'sratings.*
 
 *Trustees and Officers (unaudited)* 
**Name and (age)        Address**
**Position(s) held with      Trust and Length of       Time Served****Principal Occupation(s)       during past 5 Years****Number of Portfolios in      Fund Complex      overseen by Trustee****Other Directorships      Held by Trustee****INDEPENDENT TRUSTEES**A. Herbet Ershig (64)      22 Shorewood Drive      Bellingham, WA 98225Independent Trustee        since 1997President (now retired), Ershigs, Inc.        (industrial fabrication)FiveNoneGary A. Goldfogel (44)      1500 N. State Street      Bellingham, WA 98226Independent Trustee        since 1995Medical Examiner (pathologist)        Owner, Avocet Environmental Testing (laboratory)FiveNoneJohn E. Love (70)      1002 Spokane Street      Garfield, WA 99130Independent Trustee        since 1987Owner, J.E. Love Co., (agricultural equipmentmanufacturer)FiveNoneJohn S. Moore (71)      346 Bayside Road      Bellingham, WA 98225Independent Trustee        since 1993Professor (now retired), College of Business and Economics,      Western Washington UniversityFiveNone**INTERESTED TRUSTEES**Nicholas F. Kaiser, CFA (56)      1300 N. State Street      Bellingham, WA 98225President and Trustee        since 1989President, Saturna Capital Corporation        President, Saturna Brokerage ServicesSevenAmana Mutual Funds Trust**OFFICERS WHO ARE NOT TRUSTEES**Phelps S. McIlvaine (49)      1300 N. State Streeet      Bellingham, WA 98225Vice President        since 1994Vice President, Saturna Capital Corporation        Treasurer, Saturna Brokerage ServicesN/AN/AChrisopher R. Fankhauser (30)      1300 N. State Street      Bellingham, WA 98225Treasurer        since 2002Manager of Operations, Saturna Capital CorporationN/AN/AEthel D. Beltran (30)      1300 N. State Street      Bellingham, WA 98225Secretary        since 2001Corporate Administrator, Saturna Capital Corporation [since      2000]       Administrator, Cytel Corporation [1994-1999]N/AN/ATerm of Office: Each Trustee serves for thelifetime      of the Trust or until he dies, resigns, is removed, or not re-elected by      the shareowners. Each officer serves a one-year term subject to annualreappointment      by the Trustees.      Mr. Kaiser is an interested person of the Trust by reason of his positions      with the Trust's adviser and underwriter. Mr. McIlvaine is the primarymanager      of the Fund's portfolio. Saturna Capital Corporation is the Fund'sadvisor,      and Saturna Brokerage Services, Inc. is the distributor.
 
**FINANCIALHIGHLIGHTS**
*Selected data per share of capital stock outstanding throughout theyear:*
  **For Year Ended November 30,**   **2002****2001****2000****1999****1998** **Net asset value at beginning of year** **$5.13****$5.13****$5.01****$5.36****$5.28**  *Income from investment operations*       Net investment income0.220.220.23 0.24 0.25   Net gains or losses on securities (both realized andunrealized)0.090.150.12 (0.35)0.12  Total from investment operations 0.310.370.35 (0.11)0.37   *Less distributions*       Dividends (from net investment income)(0.22)(0.22)(0.23)(0.24)(0.25)  Distributions (from capital gains)----(0.04) Total distributions (0.22)(0.22)(0.23)(0.24)(0.29)         **Net asset value at end of year** **$5.37****$5.28****$5.13****$5.01****$5.36**   ******************** **Total Return** **5.98%****7.40%****7.28%****(2.18)%****7.27%**         Ratios / Supplemental Data       Net assets ($000), end of year $6,943$6,650$5,628 $6,151 $6,264  Ratio of gross expenses to average net assets* 0.80%0.79%0.80%0.80%0.76% Ratio of net investment income to average net assets 4.14%4.21%4.69%4.55%4.69% **Portfolio turnover rate********11%****13%****14%****13%****23%**         *For each of the above years, all or a portion of theexpenses      were waived. If these costs had not been waived, the resulting increase      to the ratio of expenses to average net assets would be .08%, .11%, .14%,      .05%, and .07%, respectively.
 
**STATEMENT OF ASSETS          AND LIABILITIES***As of November 30, 2002*     **Assets**  Bond investments (cost $6,470,833)$6,746,740 Interest receivable114,323 Cash91,950 Insurance Reserve Premium2,473  Total Assets$6,955,486**Liabilities**  Other Liabilities12,318 Total Liabilities12,318  **Net Assets** $6,943,168  **Fund Shares Outstanding** 1,291,987  **Analysis of Net Assets**  Paid in Capital (unlimited shares authorized, without par      value)6,697,895 Accumulated net realized loss (30,632) Unrealized net appreciation to on investments275,905 Net Assets applicable to Fund shares outstanding$6,943,168**Net Asset Value, Offering and Redemption price pershare**$5.37
*(The accompanying notes are an integral part of thesefinancial  statements)*
**STATEMENT OFOPERATIONS**  *For the year ended November 30, 2002***Investment income**     Interest income $642,438 Amortization of bond premium (9,441) Accretion 943 Miscellaneous income 25  Gross investment income$333,965   **Expenses**   Investment advisor and administration fee 33,797 Professional fees 10,242 Other expenses 4,200 Shareholder service fee 3,800 Insurance 2,710 Printing and postage 2,297 Custodian fees 1,626 Filing and registration fees 800 Total gross expenses 59,472 Less: Advisor fees waived (3,664) Less: Custodian fees waived (1,626) Net expenses 54,182  Net investment income279,783**Net realized gain on investments**   Proceeds from sales 715,353 Less: cost of securities sold (based on identifiedcost) 706,980  Realized net gain8,373**Unrealized gain on investments**   End of year 275,905 Beginning of year 172,328 Increase in unrealized gain for the year 103,577  Net realized and unrealized gain111,950**Net increase in net assets resulting fromoperations** $391,733
*(The accompanying notes are an integralpart  of these financial statements)*
**STATEMENT OF CHANGES        IN NET ASSETS**  Year endedYear ended   Nov. 30, 2002Nov. 30, 2001 **INCREASE IN NET ASSETS**    ***From Operations***     Net investment income$279,783$262,883  Net realized gain on investments8,37333,570  Net increase in unrealized appreciation 103,577 139,197  Net increase in net assets  391,733 435,650    ***Dividends to shareowners from***   Net investment income(280,029)(262,974)    ***From fund share transactions***   Proceeds from sales of shares633,7591,150,800  Value of shares issued in reinvestment of dividends222,546213,038   856,3051,363,838  Cost of shares redeemed(674,999)(514,250)  Net increase in net assets181,306849,588 **Total increase in net assets********$293,010****$1,022,264******   **NET ASSETS**   Beginning of year6,650,1585,627,894  End of year$6,943,168$6,650,158    **Shares of the fund sold and redeemed**   Number of shares sold118,569218,964  Number of shares issued in reinvestment of dividends41,71440,308   160,283259,272  Number of shares redeemed(126,945)(97,226) **Net increase in number of shares outstanding** **33,338****162,046** 
*(The accompanying notes are  an integral part of these financial statements)*

 

**Privacy Statement(unaudited)**
*At Saturna Capital, we understand the importance of maintaining the      privacy of your financial information. To that end, we want to insure that      we protect the confidentiality of any personal information you share with      us.      We collect personal information about you from information we receive from      you on applications and other forms and from transactions or trades placed      with us. Please be assured that except to administer a transaction with      an affiliated third party upon your request, we do not disclose anypersonal      information about our customers, or our former customers, to anyone,except      as may be required by law. We maintain our own technology resources tominimize      the use of outside service providers.      Additionally, Saturna Capital restricts access to personal informationabout      you to those employees who need to know that information to provideproducts      or services to you. We maintain physical, electronic, and proceduralsafeguards      that comply with federal standards to guard your personal information. If      you have further questions or concerns about the security or privacy of      the information we receive from you, please call us at1-888/732-6262.*
**Discussion of FundPerformance****(unaudited)**

 **FISCAL YEAR 2001**        For the year ending November 30, 2002, Idaho Tax Exempt Fund returned        shareowners a total 5.98%. For the last five years, the Fund averaged        a 5.13% annualized total return. The Fund ranks in the top 6% of 235funds        in its Morningstar Category for the year, and continues its 4-starrating*.        .*Average Annual TotalReturns*1 year5 years10 years**9.02%****7.69%****5.63%**Performance data for calendar years ended12/31/2002.
Fund assets increased 5.8% to $6.95 million. As of November 30, 2002 thethirty-day  SEC yield was 3.80% (net of expenses), unchanged from one year ago.Fund’s  net expense ratio remains at 0.80%. Consistent with the Fund’sconservative  investment style, the Fund’s net asset value moved in a narrow range from  low ($5.19) to high ($5.51). **FACTORS AFFECTING PAST PERFORMANCE**  In 2002, Idaho communities dealt with weakness in agriculture, mining,chemicals  and forest products. A drought pressures agriculture, hydropower production  and municipal budgets in southern Idaho. The previous boom in high technology  products reversed. In response, state government curtailed spending andemployment.  Construction spending held, but may weaken. The service sector provided new  employment, a trend that will continue.   The Federal Reserve Bank reacted to national economic stagnation by lowering  interest rates further. They are now at the lowest point in decades. Ten-year  insured general obligation municipal bonds rates fell slightly and the insured  general obligation yield curve steepened over the year. The Fund kept itsaverage  effective maturity near the short end of its target range and benefited from  this steepening curve.  The average maturity of the Fund is an important factor affecting portfolio  principal values. The Fund’s weighted average maturity is now 5.8 years,  down from 7.1 years one year ago. In 2002, Idaho municipal bonds generally out  performed U.S. Treasuries in periods of rising rates and underperformed inperiods  of falling rates. **LOOKING FORWARD**  We agree with the College of Business and Economics, University of Idaho:“Although  Idaho may not experience the rapid increases in employment and income thatcame  with the last record long expansion, its economic performance as measured by  employment growth will continue to attract people and business to the state.  Idaho will return to its position of one of the fastest growing states in the  nation.” 
 
*Source: Morningstar 11/30/02. Past performance does notguarantee  future results. For each fund with at least a three-year history, Morningstar  calculates a Morningstar Rating™ based on a Morningstar Risk-AdjustedReturn  measure that accounts for variation in a fund’s monthly performance(including  the effects of sales charges, loads, and redemption fees), placing moreemphasis  on downward variations and rewarding consistent performance. The top 10% in  each category receive 5 stars, the next 22.5% 4 stars, the next 35% 3 stars,  the next 22.5% 2 stars and the bottom 10% receive 1 star. (Each share class  is counted as a fraction of one fund within this scale and rated separately,  which may cause slight variations in the distribution percentages.) TheOverall  Morningstar Rating for a fund is derived from a weighted average ofperformance  figures associated with its 3-, 5- and 10-year (if applicable) MorningstarRating  metrics. Idaho Tax-Exempt was rated against the following numbers of MuniSingle  State Interm funds over the following time periods: 312 funds in the last 3  years, 291 funds in the last 5 years, and 104 funds in the last 10years.
We expect the US economy to grow around 3% in 2003. As recovery occurs, the  Federal Reserve will move to a positive economic outlook and adopt a tighter  interest-rate policy bias. But a cyclical rise in rates is unlikely to occur  quickly. This still leaves investors with an extended period that is favorable  for investing in high-grade Idaho paper. 

**COMPARISON TO INDEX**  The graph compares the Idaho Tax-Exempt Fund‘s performance to theperformance  of the Lehman Brothers Composite Municipal Bond Index, a broad-based municipal  bond market index. To be comparable, the Municipal Index data includesreinvested  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 also stands ready  to buy and sell its own securities to shareholders on a daily basis, as well  as providing a wide range of services to them. Few investors are able toinvest  in an exact index portfolio because of the large amount of securities required  to model such an index.  The graph shows that $10,000 invested in the Idaho Tax Exempt Fund on 11/30/92  would have grown to $17,129 at the end of November 2002. If $10,000 could have  been invested in the Lehman Brothers Composite Municipal Bond Index on11/30/92,  it would have grown to $18,935. These returns do not reflect the deduction of  taxes that a shareowner could pay on fund capital gain distributions or the  redemption of fund shares for a profit.
 
**Idaho Tax Exempt Bond Fund vs. Lehman Composite Municipal  Bond Index (unaudited)**
*(graphic omitted*)
 
 *NOTES TO FINANCIALSTATEMENTS*
**Note 1 - Organization****Saturna Investment Trust, (the "Trust") was establishedunder  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 theInvestment  Company Act of 1940, as amended. Four portfolios have been created to date in  addition to Idaho Tax-Exempt Fund (the "Fund"). The other fourportfolios  distribute through a separate prospectus and the results of those funds are  contained in a separate report.

**Note 2 - Significant AccountingPolicies****The following is a summary of the significant accounting policiesfollowed  by the Fund.

**Investments:****Fixed-income securities for which there are no publicly availablemarket  quotations are valued using matrices based on maturity, quality, yield, call  features and similar factors, which are compared periodically to multipledealer  bids and adjusted by the adviser under policies established by the Trustees.    The cost of securities is the same for accounting and Federal income taxpurposes.  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 asoriginal  issue discounts. Market discounts are recorded as realized gains upondisposition.  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 ofrelative  daily average net assets. The Adviser has agreed to certain limits onexpenses,  as described below.

**Income taxes:****The Fund has elected to be taxed as a regulated investment companyunder  the Internal Revenue Code and distribute substantially all of its taxable net  investment income and realized net gains on investments. Therefore, noprovision  for Federal income taxes is required. Further, the Fund intends to meet IRS  requirements for tax-free income dividends, and requirements of the IdahoDepartment  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 ofeach  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 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’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, 2002, the Fund incurred advisory  fee expenses of $33,797.  Saturna Capital has volunteered to waive its advisory fee to the extent that  total expenses of the Fund, (excluding interest, brokerage commissions andtaxes)  exceeds .80% through March 31, 2003. Accordingly, for the year ended November  30, 2002, Saturna Capital waived $3,664 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, 2002, custodian fees incurred  by the Fund amounted to $1,626. The custodian waived its fees for earningscredits.  The Trust acts as a distributor of its own shares, except in those states in  which Saturna Brokerage Services, Inc. (a subsidiary of Saturna CapitalCorporation)  is itself registered as a broker-dealer and acts as distributor withoutcompensation.  Saturna Capital Corporation acts as shareowner servicing agent for the Fund,  for a monthly fee plus certain expenses. For the year ended November 30, 2002,  the Fund paid such a fee of $3,800.   One trustee, who also serves at the president of the Trust, is a director and  president of the Adviser. The four unaffiliated trustees receive a fee of $100  per meeting attended, allocated pro-rata to the five Funds of the SaturnaInvestment  Trust. On November 30, 2002, the trustees, officers and their immediatefamilies  as a group owned 0.1% of the outstanding shares of the Fund.
**Note 4 - Federal Income Taxes****At November 30, 2002, Idaho Tax-Exempt had capital loss carryforwards  of $31,663 which expire in 2008, subject to regulation. Prior to theirexpiration,  such loss carryforwards may be used to offset future net capital gainsrealized  for federal income tax purposes.
**Note 5 - Investments****At November 30, 2002, the net unrealized appreciation of investments  for the Fund of $275,907 comprised gross unrealized gains of $287,588 andgross  unrealized losses of $11,681, and cost for federal income tax purposes was$6,470,833.  During the year ended November 30, 2002, the Fund purchased $924,710 ofsecurities  and sold/matured $715,353 of securities. **Distributions to shareowners:**  As of November 30, 2002, the tax composition of dividends are as follows:
  Ordinary Income Income Per ShareLong-term      Capital GainsLong-term Capital Gains Per Share11/30/02$280,029$0.22$ -$ -11/30/01$262,974$0.22$ -$ -
 
 
 
**REPORT of****INDEPENDENTCERTIFIED    PUBLIC 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, 2002, and the relatedstatements  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 five years then  ended. These financial statements and financial highlights are theresponsibility  of the Trust’s management. Our responsibility is to express an opinion  on these financial statements and financial highlights based on our audits.    We conducted our audits in accordance with auditing standards generallyaccepted  in the United States of America. Those standards require that we plan andperform  the audit to obtain reasonable assurance about whether the financialstatements  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 ofsecurities  owned as of November 30, 2002, by correspondence with the custodian andbroker.  Our audit also includes assessing the accounting principles used andsignificant  estimates made by management, as well as evaluating the overall financialstatement  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 ofIdaho  Tax-Exempt Fund as of November 30, 2002, the results of its operations for the  year then ended, the changes in net assets for each of the two years thenended,  and the financial highlights for each of the five years then ended, inconformity  with accounting principles generally accepted in the United States of America.
  Philadelphia, Pennsylvania   December 13, 2002
/s/ signature  Tait, Weller & Baker
 
 

 

 

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

 

 

 

 

***(logo)***

 

1300 N. State Street          Bellingham, WA 98225-47301-800/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 prospectiveinvestors          unless it is accompanied or preceded by an effective prospectusrelating          to the securities of the Fund. Idaho Tax-Exempt Fund is a series of          Saturna Investment Trust.*

*(graphic omitted)*

 

 

 

 

 

I D A H OTAX-EXEMPT FUND

 

 

 

 

**ANNUAL REPORT***November 30, 2002*