Sextant  Mutual  Funds
(Graphic  Omitted)
Fellow  Shareowners:
Its likely to be some time before the Sextant Funds have a year as good as 1997.
Fueled by falling  interest and inflation  rates,  the markets  soared ahead for
another  strong year.  For the 12 months ended  November 30, 1997, the Dow Jones
Industrials  were up 22.2%,  the S&P 500  28.5%,  and the  Russell  2000  gained
23.2%.Its likely to be some time before the Sextant Funds have a year as good as
1997.  Fueled by falling  interest and inflation rates, the markets soared ahead
for another  strong  year.  For the 12 months ended  November 30, 1997,  the Dow
Jones  Industrials were up 22.2%, the S&P 500 28.5%, and the Russell 2000 gained
23.2%.
 The public  continues  to focus on long-term  mutual funds to build  retirement
assets.  The 1997 stock market rewarded value investors,  and the Sextant Funds'
emphasis on the financial,  cyclical,  technology,  and service  sectors brought
excess returns to all Funds.  The public  continues to focus on long-term mutual
funds  to  build  retirement  assets.  The  1997  stock  market  rewarded  value
investors,  and  the  Sextant  Funds'  emphasis  on  the  financial,   cyclical,
technology, and service sectors brought excess returns to all Funds. The no-load
Sextant Funds are designed to address a broad spectrum of investment  needs. All
stress low operating expenses and employ a "fulcrum" advisory fee structure that
rewards or penalizes Saturna Capital for investment results.  The four Funds pay
increased or decreased  monthly advisory fees depending on relative  performance
over  the  prior 12  months.  For the  fiscal  year  ended  November  30,  1997,
comparative  total returns and percentile  category rankings (1 is best) are:The
no-load  Sextant  Funds are designed to address a broad  spectrum of  investment
needs.  All stress low  operating  expenses and employ a "fulcrum"  advisory fee
structure that rewards or penalizes Saturna Capital for investment results.  The
four Funds pay  increased  or  decreased  monthly  advisory  fees  depending  on
relative  performance  over the  prior 12  months.  For the  fiscal  year  ended
November 30, 1997, comparative total returns and percentile category rankings (1
is best) are:
     Sextant  Fund          Total  Return     vs. Morningstar     Total Return
     -------------          -------------     ---------------     ------------
RankSextant  Fund          Total  Return      vs. Morningstar     Total Return
  ---------------          -------------      ---------------     ------------
Rank
  --
     Short-Term Bond     5.44%     Short-Term Bonds     5.56%     42Short-Term
Bond          5.44%          Short-Term  Bonds          5.56%          42
Bond  Income          8.27%        Long-Term Bonds     7.74%     37Bond Income
8.27%          Long-Term  Bonds          7.74%          37
Growth          30.30%       Domestic Growth     20.56%     7Growth     30.30%
Domestic  Growth          20.56%          7
International 13.58% Foreign Stock -3.22%  15International  13.58% Foreign Stock
-3.22% 15 For the year, the  high-quality  Sextant bond funds both  outperformed
their peers. There is an anchor role for bonds in most portfolios, especially if
we begin to  experience  deflation.  With  its 2 to 3 year  portfolio  maturity,
Short-Term Bond Fund is a great alternative to money-market  funds for investing
your cash reserves. Bond Income Fund's long (15 year) average portfolio maturity
boosted its total return in a year of falling  interest  rates.For the year, the
high-quality  Sextant  bond funds both  outperformed  their  peers.  There is an
anchor role for bonds in most  portfolios,  especially if we begin to experience
deflation.  With its 2 to 3 year portfolio  maturity,  Short-Term Bond Fund is a
great alternative to money-market  funds for investing your cash reserves.  Bond
Income Fund's long (15 year) average portfolio maturity boosted its total return
in a year of falling  interest rates. Our value approach to investing helped the
Growth Fund dramatically.  The Fund provided a total return of 30.3%, almost 10%
above the average  Morningstar  domestic growth fund and putting the Fund in the
top 7% of this  category.Our  value approach to investing helped the Growth Fund
dramatically.  The Fund  provided a total return of 30.3%,  almost 10% above the
average  Morningstar  domestic growth fund and putting the Fund in the top 7% of
this  category.  We  created  Sextant  International  Fund to  invest  in non-US
equities,  believing  it unwise to  insulate  oneself  from  foreign  events and
opportunities.  While 1997 was a year  focused  on the  excess  risks in foreign
investing, we are pleased that the 13.6% return earned by the International Fund
in its second year again outdistanced the Foreign Stock category.


<PAGE>

Sextant  International  confines its  investments to stocks easily traded in the
US, such as ADR's, and these tend to be the larger companies  worldwide.  Little
of the portfolio was subject to the Asian financial  meltdown,  and our emphasis
continues on European and Canadian issues.We created Sextant  International Fund
to invest in non-US  equities,  believing  it unwise to  insulate  oneself  from
foreign  events and  opportunities.  While 1997 was a year focused on the excess
risks in foreign  investing,  we are pleased that the 13.6% return earned by the
International  Fund in its second  year again  outdistanced  the  Foreign  Stock
category. Sextant International confines its investments to stocks easily traded
in the US, such as ADR's, and these tend to be the larger  companies  worldwide.
Little of the portfolio  was subject to the Asian  financial  meltdown,  and our
emphasis continues on European and Canadian issues.  Further information on each
Fund is found in the following  sections of this report.  Our portfolio managers
welcome  your  comments and  suggestions.  Only with your help can we be certain
that  we are  meeting  your  investment  needs  our  primary  objective.  In the
footnotes,  you will notice another  unusual  feature of the Sextant  funds:  on
average, 20% of each Sextant Fund is owned by the trustees,  officers, and their
immediate  families.  We  invite  you to  continue  investing  your  money  with
ours.Further information on each Fund is found in the following sections of this
report. Our portfolio managers welcome your comments and suggestions.  Only with
your help can we be certain  that we are  meeting  your  investment  needs - our
primary objective. In the footnotes,  you will notice another unusual feature of
the  Sextant  funds:  on  average,  20% of each  Sextant  Fund is  owned  by the
trustees,  officers,  and their  immediate  families.  We invite you to continue
investing your money with ours.
                              RESPECTFULLY,
RESPECTFULLY,

     NICHOLAS  KAISER,  PRESIDENT          PHELPS  MCILVAINE,  VICE  PRESIDENT
     (Manager,  Sextant  Growth;          (Manager,  Sextant  Bond  Income;
     Sextant  International  )          Sextant  Short-Term  Bond)


(Graphic  Omitted)
              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To  the  Shareholders  and  Board  of  Trustees
Saturna  Investment  Trust
We have  audited the  accompanying  statement of assets and  liabilities  of the
Sextant  Short-Term Bond Fund, Sextant Bond Income Fund, Sextant Growth Fund and
Sextant  International  Fund,  each a series of the  Saturna  Investment  Trust,
including the schedules of  investments as of November 30, 1997, and the related
statements of operations and changes in net assets and the financial  highlights
for the year 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 and prior were audited by other  auditors  whose report
dated December 18, 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, 1997, 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 1997 financial statements and financial highlights referred to above
present  fairly,  in all material  respects,  the financial  position of Sextant
Short-Term Bond Fund,  Sextant Bond Income Fund, Sextant Growth Fund and Sextant
International  Fund, as of November 30, 1997,  the results of their  operations,
the changes in their net assets and their financial highlights for the year then
ended, in conformity with generally accepted accounting principles.
                                                          TAIT, WELLER & BAKER
Philadelphia,  Pennsylvania
December  12,  1997
<PAGE>

                          SEXTANT SHORT-TERM BOND FUND
1997  ANNUAL  REPORT
November  30,  1997
INVESTMENTS
(Graphics  Omitted)


<TABLE>

<CAPTION>



Rating*                                 ISSUER                 COUPON/MATURITY   FACE AMOUNT   MARKET VALUE
------------------------  ---------------------------------  -----------------  ------------  -------------
                           APPLIANCES (4.3%)
<S>                        <C>                                <C>                <C>           <C>

A-                         Whirlpool                            9.50% 6/15/2000  $    100,000  $     106,790
                           AUTO MANUFACTURING (4.3%)
BBB                        General Motors                      9.625% 12/1/2000       100,000        108,563
                           BANKING (6.3%)
A-                         Bankers Trust-NY                     9.50% 6/14/2000        75,000         80,302
BBB+                       First Interstate Bank                8.625% 4/1/1999        75,000         77,040
                                                                                 ------------  -------------
                           SUB-TOTAL                                                  150,000        157,342
                           FINANCE (14.3%)
AA-                        Associates Corp NA                  8.35% 12/22/1998       100,000        102,050
A                          Deluxe Corp.                         8.55% 2/15/2001        50,000         53,242
AA-                        Norwest Financial                    7.25% 3/15/2000       100,000        101,537
A                          Travelers Property & Casualty        6.75% 4/15/2001       100,000        101,026
                                                                                 ------------  -------------
                           SUB-TOTAL                                                  350,000        357,855
                           ELECTRIC UTILITY (10.6%)
A+                         Mississippi Power Co.                6.625% 8/1/2000        60,000         59,676
A                          Pacific Gas & Electric               6.75% 12/1/2000       100,000        100,254
A-                         Public Service Enterprise Group       8.75% 7/1/1999       100,000        105,288
                                                                                 ------------  -------------
                           SUB-TOTAL                                                  260,000        265,218
                           FOOD (5.8%)
A+                         H.J. Heinz Co.                      6.75% 10/15/1999        65,000         65,260
BBB+                       Supervalue                           7.25% 7/15/1999        80,000         80,632
                                                                                 ------------  -------------
                           SUB-TOTAL                                                  145,000        145,892
                           OIL & GAS (3.0%)
A-                         Fina Oil & Chemical                 6.875% 7/15/2001        75,000         76,050
                           INVESTMENT FINANCE (13.0%)
AA-                        Merrill Lynch & Co.                  6.00% 1/15/2001       100,000         99,080
A+                         Morgan Stanley                      9.375% 6/15/2001        50,000         54,665
BBB                        Salomon Bros.                        6.70% 12/1/1998       100,000         99,930
BBB+                       Finovia Capital                      5.98% 2/27/2001        75,000         73,070
                                                                                 ------------  -------------
                           SUB-TOTAL                                                  325,000        326,745
                           RETAILING (11.4%)
BBB                        Limited                             8.875% 8/15/1999        75,000         77,670
BBB+                       Dayton Hudson                         7.50% 3/1/1999       100,000        101,350
A                          J.C. Penny & Co.                      9.05% 3/1/2001       100,000        107,350
                                                                                 ------------  -------------
                           SUB-TOTAL                                                  275,000        286,370
                           TOBACCO (3.2%)
A                          Phillip Morris                       9.25% 2/15/2000        75,000         79,058
                           U.S. GOVERNMENT  (20.2%)
AAA                        U.S. Treasury Note                   6.75% 4/30/2000       200,000        204,125
AAA                        U.S. Treasury Note                   6.25% 4/30/2001       300,000        303,609
                                                                                 ------------  -------------
                           SUB-TOTAL                                                  500,000        507,734
                           TOTAL INVESTMENTS (96.4%)   (Cost = $2,412,154)  $       2,355,000   $  2,417,617
                                                                             =================  ============
                           Other Assets (net of liabilities) (3.6%)                                   90,671
                                                                           ---------------------------------
                           TOTAL NET ASSETS (100%)                                      $          2,508,288
                                                                           =================================

<FN>


     *Ratings  are  the  lesser  of  S&P  or  Moody's  (unaudited)

</FN>

</TABLE>


(The  accompanying  notes are an integral part of these financial statements.)
<PAGE>

(Graphics  Omitted)

1997  ANNUAL  REPORT
                          SEXTANT SHORT-TERM BOND FUND
                                                  ----------------------------

STATEMENT  OF  ASSETS  AND  LIABILITIES

<TABLE>

<CAPTION>



As of November 30, 1997
ASSETS
<S>                                                                 <C>

  Bond investments (cost $2,412,154)                                $2,417,617
  Cash                                                                  43,321
  Interest receivable                                                   49,186
                                                                    -----------
    Total Assets                                                     2,510,124
                                                                    -----------
LIABILITIES
  Other Liabilities                                                      1,836
                                                                    -----------
    Total Liabilities                                                    1,836
                                                                    -----------
NET ASSETS                                                          $2,508,288
                                                                    ===========
Fund shares outstanding                                                502,530
ANALYSIS OF NET ASSETS
  Paid in capital  (unlimited shares  authorized,  without par value) $2,525,356
  Accumulated  net realized gain (loss) on investments  (22,531)  Unrealized net
  appreciation on investments 5,463
                                                                    -----------
  Net Assets applicable to Fund shares outstanding                  $2,508,288
                                                                    ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE            $     4.99
                                                                    ===========
</TABLE>



                            STATEMENT OF OPERATIONS
<TABLE>

<CAPTION>



For year ended November 30, 1997
INVESTMENT INCOME
<S>                                                          <C>          <C>

  Interest income                                            $  153,602          -
  Amortization of bond premiums                                 (19,176)         -
  Accretion                                                          71          -
                                                             -----------
    Gross investment income                                           -   $134,497
EXPENSES
  Investment adviser and administration fee                      13,245          -
  Professional fees                                               4,969          -
  Filing and registration fees                                    1,520          -
  Printing and postage                                            1,111          -
  Other expenses                                                    816          -
                                                             -----------
  Total gross expenses                                           21,661          -
                                                                          ---------
    Less advisory fee waived                                     (8,609)         -
                                                             -----------
  Net expenses                                                        -     13,052
                                                                          ---------
    Net investment income                                             -    121,445
                                                                          ---------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
  Proceeds from sales                                         1,001,078          -
  Less cost of securities sold based on identified cost       1,002,483          -
                                                             -----------
    Realized net gain (loss)                                          -     (1,405)
                                                                          ---------
UNREALIZED GAIN (LOSS) ON INVESTMENTS
  End of period                                                   5,463          -
  Beginning of period                                             4,435          -
                                                             -----------
  Increase in unrealized gain for the period                          -      1,028
                                                                          ---------
    Net realized and unrealized gain (loss) on investments            -       (377)
                                                                          ---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                  -   $121,068
                                                                          =========



</TABLE>



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

<PAGE>


(Graphics  Omitted)

SEXTANT  SHORT-TERM  BOND  FUND
-------------------------------
1997  ANNUAL  REPORT

                      STATEMENT OF CHANGES IN NET ASSETS


<TABLE>

<CAPTION>



                                                          Year ended       Year ended
                                                         Nov. 30, 1997    Nov. 30, 1996
                                                        ---------------  ---------------
   INCREASE IN NET ASSETS
FROM OPERATIONS
<S>                                                     <C>              <C>

  Net investment Income                                 $      121,445   $      133,032
  Net realized (loss) on investments                            (1,405)         (21,126)
  Net increase in unrealized appreciation                        1,028              698
                                                        ---------------  ---------------
  Net increase  in net assets from operations                  121,068          112,604
                                                        ---------------  ---------------

DIVIDENDS TO SHAREOWNERS FROM
  Net investment income                                       (121,530)        (133,010)
  Capital gains distributions                                        -                -
                                                        ---------------  ---------------
                                                              (121,530)        (133,010)
                                                        ---------------  ---------------

FUND SHARE TRANSACTIONS
  Proceeds from sales of shares                              1,321,409        3,700,165
  Value of shares issued in reinvestment of dividends          120,427          129,365
                                                        ---------------  ---------------
                                                             1,441,836        3,829,530
  Cost of shares redeemed                                     (949,884)      (2,670,058)
                                                        ---------------  ---------------
  Net Increase in net assets from share transactions           491,952        1,159,472
                                                        ---------------  ---------------
Total increase in net assets                                   491,490        1,139,066

NET ASSETS
  Beginning of period                                        2,016,798          877,732
                                                        ---------------  ---------------
  End of period                                         $    2,508,288   $    2,016,798
                                                        ===============  ===============

Shares of the Fund Sold and Redeemed
  Number of shares sold                                        265,939          740,752
  Number of shares issued in reinvestment of dividends          24,218           26,037
                                                        ---------------  ---------------
                                                               290,157          766,789
  Number of shares redeemed                                   (190,967)        (538,054)
                                                        ---------------  ---------------

Net Increase in Number of Shares Outstanding                    99,190          228,735
                                                        ===============  ===============



</TABLE>


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


(Graphic  Omitted)
                          SEXTANT SHORT-TERM BOND FUND
                                                  ----------------------------
1997  ANNUAL  REPORT
--------------------

FINANCIAL  HIGHLIGHTS
------------------------------------------

<TABLE>

<CAPTION>



Selected data per share of capital stock outstanding throughout the period:
                                                                               For the Year Ended November 30
                                                                              --------------------------------
                                                                                            1997
                                                                              --------------------------------
NET ASSET VALUE AT BEGINNING OF PERIOD                                                     $5.00
                                                                              --------------------------------
<S>                                                                           <C>

  INCOME FROM INVESTMENT OPERATIONS
  Net investment income                                                                                  0.27
  Net gains or losses on securities
    (both realized and unrealized)                                                                      (0.01)
                                                                              --------------------------------
Total from investment operations                                                                         0.26
  LESS DISTRIBUTIONS
  Dividends (from net investment income)                                                                (0.27)
  Distributions (from capital gains)                                                                     0.00
                                                                              --------------------------------
Total distributions                                                                                     (0.27)
NET ASSET VALUE AT END OF PERIOD                                              $                          4.99
                                                                              ================================
                                                                                                         0.01
TOTAL RETURN                                                                                             5.44%

RATIOS / SUPPLEMENTAL DATA
----------------------------------------------------------------------------
Net assets ($000), end of period                                              $                         2,508
Ratio of expenses to average net assets                                                                  0.60%
Ratio of net investment income to average net assets                                                     5.58%
Portfolio turnover rate                                                                                    47%


Selected data per share of capital stock outstanding throughout the period:
                                                                                    Sept. 28. '95 (incep-

                                                                 1996              tion) to Nov. 30 '95*
                                                        -----------------------  -----------------------
NET ASSET VALUE AT BEGINNING OF PERIOD                             $5.03                    $5.00
                                                        -----------------------  -----------------------
<S>                                                     <C>                      <C>

  INCOME FROM INVESTMENT OPERATIONS
  Net investment income                                             0.25                     0.03
  Net gains or losses on securities
    (both realized and unrealized)                                 (0.03)                    0.03
                                                        -----------------------  -----------------------
Total from investment operations                                    0.22                     0.06
  LESS DISTRIBUTIONS
  Dividends (from net investment income)                           (0.25)                   (0.03)
  Distributions (from capital gains)                                0.00                     0.00
                                                        -----------------------  -----------------------
Total distributions                                                (0.25)                   (0.03)
NET ASSET VALUE AT END OF PERIOD                           $        5.00              $      5.03
                                                        =======================  =======================
                                                                    0.01                     0.01
TOTAL RETURN                                                        4.85%                    1.05%

RATIOS / SUPPLEMENTAL DATA
----------------------------------------------------------------------------
Net assets ($000), end of period                   $                2,016   $                  878
Ratio of expenses to average net assets                             0.85%                    0.23%
Ratio of net investment income to average net assets                6.30%                    0.68%
Portfolio turnover rate                                              100%                       0%
<FN>


       For  the  above  periods, all or a portion of the operating expenses were waived.  If expensess had not
been  waived,
     the  resulting  increase  to  expenses  per  share  in  the periods would have been $.02, $.02 and $.007,
respectively.
     The  increase to the ratio of expenses to average  monthly net assets would
be .40%, .52% and .16%, respectively.
                                   *  not  annualized
 </FN>

</TABLE>


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



DISCUSSION  OF  FUND  PERFORMANCE
(UNAUDITED)

Fiscal  Year  1997
For the fiscal year ended  November 28, 1997, the Sextant  Short-Term  Bond Fund
returned  5.44% to its  shareholders.  The price moved  within a narrow $4.91 to
$5.01  range,  or less  than 2%.  The  Fund  has  performed  well,  meeting  its
objectives of high current income and capital stability.  Factors Affecting Past
Performance Nearly perfect economic conditions continued through 1997. Receeding
inflation,  stable monetary policy and reduced  government  deficits boosted the
real returns  provided  fixed income  investors.  Positive real rates of return,
high  equity  valuations,  and the Asian  financial  crisis  are now  persuading
investors  to allocate  more money to the US bond  market.  Despite all of these
positive  factors,  short-term  interest rates  actually rose in March,  and the
Fund's NAV dropped 1 for the year.  The average  effective  maturity of the Fund
remains  close to 21/2  years.  The  majority  of the  portfolio  is invested in
high-grade corporate paper, with the balance in US Treasury and bullet US Agency
paper.  Yield spreads to corporates and agencies were narrow at the start of the
year, then widened slightly because of the foreign demand for US Treasuries. The
Fund added yield to the portfolio by investing in high coupon,  callable  paper.
Also, the Fund invested in the corporate debt of selected  banks,  utilities and
finance  companies when these areas were cheap.  As the economy has continued to
grow at a  modest  pace  these  companies  have  prospered  and  their  debt has
performed well in the market.

<PAGE>
1997  ANNUAL  REPORT
SEXTANT  SHORT-TERM  BOND  FUND
-------------------------------
(Graphics  Omitted)


Looking  Forward
In 1998 we expect modest  economic  expansion.  The Federal  Reserve could lower
short-term rates by as much as a full percent,  letting the yield curve steepen.
With long bond values inflated by foreign buyers,  the yield curve flat and long
rates at historic  lows, we see little  upside  potential in the long end of the
bond market.  As foreign credit  problems  subside,  long rates should rise back
toward  6.00%.  A steepening  yield curve and falling  short-term  rates mean we
should keep the portfolio's  maturity close to 3 years.  Credit spreads can also
narrow  as  rates  fall.  Performance  Fee  The  Sextant  Short-Term  Bond  Fund
calculates  its management fee based on a comparison of the Fund's return to the
return of the  Morningstar  Category  Short  Term  Bond.  This is  defined  as a
portfolio that "focuses on corporate and other  investment  grade issues with an
average duration of more than one year or an effective  average maturity of more
than one year but less than four years".  As the 12-month return of the Fund was
within 1% of the average,  no  adjustment  to the basic 0.60%  advisory fee were
made for the month of December 1997. Comparison to Index When comparing any fund
to an index,  remember that the index is unmanaged AND EXPENSE-FREE.  Unlike the
index, the fund likely will (1) be actively managed, (2) have an objective other
than mirroring the index,  such as limiting risk, (3) bear transaction and other
costs, (4) stand ready to buy and sell its securities to shareholders on a daily
basis,  and (5)  provide a wide  range of  services.  The graph  below  compares
$10,000  invested in the Fund at its  inception,  compared  to a similar  amount
invested  in The  Salomon  Brothers  Gov/Corp  Investment  Grade  Bond Index for
maturities  between  one  and  three  years.  The  graph  shows  that a  $10,000
investment  made on 11/30/95 would have risen to $11,173 in the Fund and $11,418
in the  Index.  The  short  history  of the Fund  limit the  usefulness  of this
comparison. Past performance is not indicative of future results.

Sextant  Short-Term  Bond  Fund  vs.  Salomon  2-yr  Treasury

 (Graph  Omitted)
<PAGE>

November  30,  1997
1997  ANNUAL  REPORT
SEXTANT  BOND  INCOME  FUNDSEXTANT  BOND  INCOME  FUND
------------------------------------------------------

(Graphic  Omitted)

                                  INVESTMENTS
<TABLE>

<CAPTION>



RATING*                                   ISSUER              COUPON/MATURITY   FACE AMOUNT  MARKET VALUE
------------------------------ ----------------------------  -----------------  -----------  ------------
                                     BANKING (18.7%)
<S>                            <C>                           <C>                <C>          <C>

A-                             Chase Manhatten-Sub Notes      7.125% 6/15/2009       50,000        51,542
A                              Citicorp                       7.25% 10/15/2011       50,000        52,295
A-                             Comercia Bank                  7.125% 12/1/2013       50,000        49,828
AA-                            Norwest Financial Inc.          6.85% 7/15/2009       50,000        50,560
                                                                                -----------  ------------
                               SUB-TOTAL                                            200,000       204,225
                               BEVERAGES (5.2%)
A-                             Seagram Co. Ltd                 8.35% 1/15/2022       50,000        56,315
                               BUILDING (4.4%)
A+                             Lowes Corp                     7.00% 10/15/2023       50,000        47,665
                               ELECTRIC UTILITIES (13.5%)
A                              Alabama Power                    7.75% 2/1/2023       50,000        50,285
BBB                            Commonwealth Edison              7.50% 7/1/2013       50,000        50,065
A+                             Southern California Edison      6.90% 10/1/2018       50,000        47,520
                                                                                -----------  ------------
                               SUB-TOTAL                                            150,000       147,870
                               ELECTRONICS (4.6%)
A-                             Phillips Electronics            7.25% 8/15/2013       50,000        50,350
                               FOOD (4.8%)
BBB-                           Nabisco Holdings                7.55% 6/15/2015       50,000        52,250
                               INSURANCE (4.9%)
A                              Allstate                        7.50% 6/15/2013       50,000        53,465
                               INVESTMENT FINANCE (13.9%)
A                              Bear Sterns Co.s Inc.           7.00% 3/01/2007       50,000        50,765
A                              Dean Witter Discover           6.75% 10/15/2013       50,000        48,940
BBB                            Paine Webber Group             7.625% 2/15/2014       50,000        52,500
                                                                                -----------  ------------
                               SUB-TOTAL                                            150,000       152,205
                               OIL & GAS (4.3%)
A                              Texaco Capital                 8.625% 6/30/2010       40,000        46,744
                               PAPER PRODUCTS (4.8%)
BBB-                           Georgia Pacific                 7.70% 6/15/2015       50,000        52,170
                               RETAILING (9.2%)
A                              Gap                             6.90% 9/15/2007       50,000        51,480
A-                             Rite Aid                       6.875% 8/15/2013       50,000        49,200
                                                                                -----------  ------------
                               SUB-TOTAL                                            100,000       100,680
                               TELECOMMUNICATIONS (4.6%)
A+                             GTE                            6.90% 11/01/2008       50,000        50,500

TOTAL INVESTMENTS (92.9%)                                    Cost = $908,876      $ 990,000     1,014,439
                                                                                ===========   -----------
Other Assets (net of liabilities) (7.1%)                                                           77,800
                                                                           ----------------------------
Total Net Assets (100%)                                                      $                  1,092,239
                                                                           ============================
<FN>


*Ratings  are  the  lesser  of  S&P  or  Moody's  (unaudited)
</FN>


</TABLE>


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

<PAGE>

(Graphic  Omitted)
1997  ANNUAL  REPORT
SEXTANT  BOND  INCOME  FUND
------------------------------------------------------

<TABLE>

<CAPTION>



Selected data per share of capital stock outstanding throughout each period.
Data prior to September 28, 1995 may not be meaningful, as the fund operated with different
investment objectives and fee arrangements.                                             Period
                                                                                        3/1/93 (In-
                                    Year ended November 30,                             ception) to
--------------------------------------------------------------------------------------------
                                                      1997        1996     1995
                                                 -------------  -------  -------
NET ASSET VALUE AT BEGINNING OF PERIOD               $4.76       $4.91    $4.39
                                                 -------------  -------  -------
INCOME FROM INVESTMENT OPERATIONS
<S>                                              <C>            <C>      <C>

  Net investment income                               0.30       0.30     0.24
  Net gains or losses on securities
    (both realized and unrealized)                    0.07      (0.12)    0.52
                                                 -------------  -------  -------
Total from investment operations                      0.37       0.18     0.76
  LESS DISTRIBUTIONS
  Dividends (from net investment income)
    Non-taxable                                      (0.24)     (0.25)   (0.17)
    Taxable                                          (0.30)     (0.30)
  Distributions (from capital gains)                  0.00      (0.03)    0.00
                                                 -------------  -------  -------
Total distributions                                  (0.30)     (0.33)   (0.24)
NET ASSET VALUE AT END OF PERIOD                   $  4.83     $ 4.76   $ 4.91
                                                 =============  =======  =======

TOTAL RETURN                                          8.24%      4.04%   17.69%

RATIOS / SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------
Net assets ($000), end of period               $      1,092     $1,201   $1,096
Ratio of expenses to average net assets               0.47%      0.63%    0.54%
Ratio of net investment income to average net assets  6.85%      5.96%    5.15%
Portfolio turnover rate                                 51%        75%      77%



Selected data per share of capital  stock  outstanding  throughout  each period.
Data prior to September  28, 1995 may not be  meaningful,  as the fund  operated
with different investment objectives and fee arrangements. 3/1/93 (In-
                                                Year ended November 30,    Period 3/1/93 (Inception ) to
--------------------------------------------------------------------------------------------
                                                                  1994          11/30/93*
                                                                --------       -----------
NET ASSET VALUE AT BEGINNING OF PERIOD                           $5.03            $5.00
                                                                --------       -----------
INCOME FROM INVESTMENT OPERATIONS
<S>                                                              <C>            <C>

  Net investment income                                           0.25              0.16
  Net gains or losses on securities
    (both realized and unrealized)                               (0.64)             0.04
                                                                --------       -----------
Total from investment operations                                 (0.39)             0.20
  LESS DISTRIBUTIONS
  Dividends (from net investment income)
    Non-taxable
    Taxable
  Distributions (from capital gains)                              0.00             (0.00)
                                                                --------       -----------
Total distributions                                              (0.25)            (0.17)
NET ASSET VALUE AT END OF PERIOD                               $  4.39          $   5.03
                                                               ========        ===========

TOTAL RETURN                                                     (8.24)%            4.86%

RATIOS / SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------
Net assets ($000), end of period                                $ 1,456          $  1,662
Ratio of expenses to average net assets                            0.41%            0.35%
Ratio of net investment income to average net assets               5.48%            3.28%
Portfolio turnover rate                                              74%              36%

<FN>

            For each of the above  periods,  all or a portion  of the  operating
          expenses  were  waived.  If  these  costs  had not  been  waived,  the
          resulting increases to expenses per share in each of the above periods
          would be $.03, $.03, $0.22, $0.13,and $.03 respectively.  The increase
          to the ratio of expenses to average  monthly net assets would be .63%,
          .70%, .60%, .51%, and 26%, respectively.
                                                 * not annualized
</FN>



</TABLE>


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


(Graphic  Omitted)
SEXTANT  BOND  INCOME  FUND
1997  ANNUAL  REPORT
--------------------

                      STATEMENT OF ASSETS AND LIABILITIES
<TABLE>

<CAPTION>



As of November 30, 1997
ASSETS
<S>                                                                 <C>

  Bond investments (cost $1,010,470)                                $1,014,439
  Cash                                                                  55,134
  Interest receivable                                                   22,325
  Insurance deposit                                                        400
                                                                    -----------
    Total Assets                                                     1,092,298
                                                                    -----------
LIABILITIES
  Other liabilities                                                         59
                                                                    -----------
    Total Liabilities                                                       59
                                                                    -----------
NET ASSETS                                                          $1,092,239
                                                                    ===========

Fund shares outstanding                                                226,348
ANALYSIS OF NET ASSETS
  Paid in capital  (unlimited  shares  authorized,  without par value) 1,170,086
  Accumulated  net realized gain (loss) on investments  (81,816)  Unrealized net
  depreciation on investments 3,969
                                                                    -----------
  Net Assets applicable to Fund shares outstanding                  $1,092,239
                                                                    ===========

NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE            $     4.83
                                                                    ===========




</TABLE>



                            STATEMENT OF OPERATIONS
<TABLE>

<CAPTION>



For the year ended November 30, 1997
INVESTMENT INCOME
<S>                                                       <C>        <C>

  Interest income                                           79,709          -
  Amortization of bond premiums                             (1,803)         -
  Accretion                                                    446          -
                                                          ---------
    Gross investment income                                      -   $ 78,352
EXPENSES
  Investment adviser and administration fee                  6,805          -
  Professional fees                                          2,842          -
  Printing and postage                                         586          -
  Filing and registration fees                                 983          -
  Other expenses                                               650          -
                                                          ---------
  Total gross expenses                                      11,866          -
                                                                     ---------
    Less advisory fee waived                                (6,805)         -
                                                          ---------  ---------
  Net expenses                                                   -      5,061
                                                          ---------  ---------
    Net investment income                                        -     73,291
                                                          ---------  ---------
NET REALIZED GAIN ON INVESTMENTS
  Proceeds from sales                                      662,852          -
  Less cost of securities sold based on identified cost    674,569          -
                                                          ---------  ---------
    Realized net gain (loss)                                     -    (11,717)
                                                          ---------  ---------
UNREALIZED GAIN (LOSS) ON INVESTMENTS
  End of period                                              3,969          -
  Beginning of period                                      (22,635)         -
                                                          ---------  ---------
  Increase in unrealized gain for the period                     -     26,604
                                                          ---------  ---------
    Net realized and unrealized gain on investments              -     14,887
                                                          ---------  ---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                 $ 88,178
                                                                     =========



</TABLE>


<PAGE>

(Graphic  Omitted)
1997  ANNUAL  REPORT
--------------------
SEXTANT  BOND  INCOME  FUND
------------------------------------------------------

                      STATEMENT OF CHANGES IN NET ASSETS
<TABLE>

<CAPTION>



                                                                    Year ended       Year ended
                                                                   Nov. 30, 1997    Nov. 30, 1996
                                                                  ---------------  ---------------

INCREASE IN NET ASSETS
OPERATIONS
<S>                                                               <C>              <C>

  Net investment income                                           $       73,291   $       71,541
  Net realized gain (loss) on investments                                (11,717)           7,358
  Net increase in unrealized appreciation (depreciation)                  26,604          (35,266)
                                                                  ---------------  ---------------
  Net increase in net assets from operations                              88,178           43,633
                                                                  ---------------  ---------------

DIVIDENDS TO SHAREOWNERS FROM
  Net investment income                                                  (73,332)         (72,347)
  Capital gains distributions                                                  -           (7,240)
                                                                  ---------------  ---------------
                                                                         (73,332)         (79,587)
                                                                  ---------------  ---------------

FUND SHARE TRANSACTIONS
  Proceeds from sales of shares                                           65,272          303,624
  Value of shares issued in reinvestment of dividends                     71,910           77,813
                                                                  ---------------  ---------------
                                                                         137,182          381,437
  Cost of shares redeemed                                               (260,712)        (240,384)
                                                                  ---------------  ---------------
  Net increase (decrease) in net assets from share transactions         (123,530)         141,053
                                                                  ---------------  ---------------
Total increase (decrease) in net assets                                 (108,684)         105,099

NET ASSETS
  Beginning of period                                                  1,200,923        1,095,824
                                                                  ---------------  ---------------
  End of period                                                   $    1,092,239   $    1,200,923
                                                                  ===============  ===============

Shares of the Fund Sold and Redeemed
  Number of shares sold                                                   14,054           65,268
  Number of shares issued in reinvestment of dividends                    15,448           16,726
                                                                  ---------------  ---------------
                                                                          29,502           81,994
  Number of shares redeemed                                              (55,536)         (52,815)
                                                                  ---------------  ---------------

Net Increase (Decrease) in Number of Shares Outstanding                  (26,034)          29,179
                                                                  ===============  ===============



</TABLE>


<PAGE>

(Graphic  Omitted)
SEXTANT  BOND  INCOME  FUND
------------------------------------------------------
1997  ANNUAL  REPORT
--------------------
                        DISCUSSION OF  FUND PERFORMANCE
                                  (UNAUDITED)
Fiscal  Year  1997
For the fiscal year  ending  November  28,  1997,  the Sextant  Bond Income Fund
returned 8.24% to its  shareowners.  The net asset value gained 7 to $4.83.  The
majority  of the  Fund's  performance  comes  from  its long  average  effective
portfolio  maturity.  The average maturity of the portfolio remained close to 20
years for most of the year,  only recently  decreasing to 14.9 years.  Long-term
interest  rates  fell  late in the  year,  which  pushed  up the  prices  of the
long-term  investment  grade  securities  in the Fund.  Factors  Affecting  Past
Performance Nearly perfect economic conditions continued through 1997. Receeding
inflation,  stable Federal Reserve Bank policy and reduced  government  deficits
boosted the real  (i.e.,  inflation  adjusted)  returns  available  in the fixed
income market.  These high real rates of return and high equity  valuations have
finally  persuaded  investors to allocate more money to the US bond market.  The
strong US dollar and low overseas  interest  rates have  maintained  the foreign
investors' appetite for US bonds. Late in 1997, the Asian crisis caused a flight
to quality in the US Treasury market,  forcing bond prices substantially higher.
Despite all of these positive factors, long-term interest rates fell only twenty
to thirty basis points.  Rates are clearly at both relatively and absolutely low
levels.  All of these factors combined with the long effective  average maturity
of the portfolio  boosted the return of the Fund. This, in large part,  explains
the modestly higher NAV for the Fund. Late in the year,  after rates had fallen,
and a  substantial  flattening of the yield curve,  the average  maturity of the
portfolio was cut to 14.9 years.  This shift resulted in a slightly higher yield
for the fund and lower price risk profile. Sextant Bond Income Fund continues to
invest a large percentage of the portfolio in high grade corporate paper and the
balance in US Treasury and bullet US Agency  paper.  Looking  Forward In 1998 we
expect a more  modest  rate of  economic  expansion.  We expect the US dollar to
weaken slightly and the high level of domestic and international  competition to
continue.  With deflation being whispered  about,  the Federal Reserve will have
the  opportunity  to lower  short-term  interest  rates and the yield curve will
steepen.  The overall  direction of interest rates has been relatively flat over
the last four years with long rates moving between 8% to 6%. We expect the range
of long term rates to move modestly  lower and establish a new range of 7.50% to
5.50% over the next few years.  On two previous  occasions  long-term rates have
slipped  below 6%, as they are now.  This time,  the move has been caused by the
Asian financial  crisis.  As this crisis subsides,  we expect long rates to rise
back toward  6.00% and the yield curve to resume a steeper,  more normal  slope.
This transition and a Federal Reserve policy ease will favor shorter  maturities
and are key reasons to reduce the average  maturity of the Fund.  If the Federal
Reserve  continues  their current policy with Fed Funds at 5.50%,  there are few
lasting  reasons to invest in extremely  long  maturites  that yield only 5.75%.
This situation limits the performance of the longer  maturities.  In conclusion,
we expect  total  returns  for long  investment-grade  bonds in 1998 will remain
between zero and plus ten percent.

<PAGE>

1997  ANNUAL  REPORT
SEXTANT  BOND  INCOME  FUNDSEXTANT  BOND  INCOME  FUND
------------------------------------------------------
(Graphic  Omitted)

Performance  Fee
The Sextant Bond Income Fund calculates its management fee based on a comparison
of the Fund's return, to the return of the Morningstar  Long-Term Bond Category.
This  category is defined as a portfolio  that  "focuses on corporate  and other
investment  grade  issues with an average  duration of more than six years or an
effective average maturity of more than ten years". With this maturity criteria,
the performance  comparison  between the Sextant Bond Income Fund and this index
will be heavily  influenced  by the movement of interest  rates.  For the twelve
month period ending  11/28/97,  the Fund ranked in the 37th percentile out of 82
funds in the  Morningstar  "Long Term Bond"  Category.  Comparison to Index When
comparing  any fund to an  index,  remember  that the  index  is  unmanaged  AND
EXPENSE-FREE.  On the other hand, the fund likely will (1) be actively  managed,
(2) have an  objective  other than  mirroring  the index,  such as high  current
income,  (3) bear  transaction and other costs,  (4) stand ready to buy and sell
its securities to shareowners on a daily basis,  and (5) provide a wide range of
services.  The  graph  below  compares  $10,000  invested  in  the  Fund  at its
inception,  compared to a similar amount invested in the Salomon  Brothers Broad
Investment-Grade  Bond Index. The graph shows that a $10,000  investment made at
the beginning of the fund's operations in March 1993 would have risen to $12,648
in the Fund and $13,718 in the Index. The short history of the Fun, and its 1995
change in  investment  policy,  limit the  usefulness of this  comparison.  Past
performance is not indicative of future results.

Sextant  Bond  Income Fund vs. Salomon Bros. Broad Investment Grade Bond Index
(Graph  Omitted)
<PAGE>

SEXTANT  GROWTH  FUND
1997  ANNUAL  REPORT
--------------------
November  30,  1997
(Graphic  Omitted)
                                  INVESTMENTS


<TABLE>

<CAPTION>



                                  NUMBER               MARKET
ISSUE                            OF SHARES    COST     VALUE
-------------------------------  ---------  --------  --------
<S>                              <C>        <C>       <C>

Common Stocks
BANKING (9.5%)
Washington Mutual Savings Bank       3,000  $ 44,124  $207,375
CONSTRUCTION (1.5%)
Butler Manufacturing                 1,000    31,071    33,875
COMPUTERS  (15.5%)
Adobe Systems                        1,200    50,490    50,400
Award Software International         2,500    29,148    27,188
3Com                                 1,225    29,726    44,406
Hewlett-Packard                        800    42,650    48,850
Mylex                               10,000   102,435    80,000
Netscape Communications              1,000    43,448    28,500
Oracle                               1,800    37,879    59,963
                                            --------  --------
SUB-TOTAL                                    335,776   339,307
ELECTRONICS (8.1%)
Advanced Micro Devices               2,000    76,778    43,625
FLIR Systems                         2,500    27,611    49,375
Gasonix International                3,000    31,631    39,750
Motorola                               700    40,511    44,013
                                            --------  --------
SUB-TOTAL                                    176,531   176,763
INVESTMENTS (12.9%)
McDonald & Co.                       4,000    34,347   107,750
Schwab, Charles                      4,537     9,117   174,958
                                            --------  --------
SUB-TOTAL                                     43,464   282,708
MACHINERY (2.5%)
Regal Beloit                         2,000    52,106    54,375
MEDICAL (7.7%)
Atria Communities                    3,500    49,091    58,844
Genentech*                           1,000    37,225    58,375
Ligand Pharmaceuticals               4,000    49,132    51,000
                                            --------  --------
SUB-TOTAL                                    135,448   168,219
METAL ORES (1.8%)
Cyprus Amax Minerals                 2,200    54,541    40,287
OIL & GAS PRODUCTION (7.5%)
Atlantic Richfield                     900    51,620    73,350
Noble Drilling                       3,000    21,322    90,187
                                            --------  --------
SUB-TOTAL                                     72,942   163,537
  PAPER & PRODUCTS (2.3%)
Boise Cascade                        1,500    47,431    50,531
POLLUTION CONTROL (1.5%)
Ionics                                 900    36,864    33,187
RETAIL (2.4%)
Albertson's                          1,200    26,255    53,250
</TABLE>


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

1997  ANNUAL  REPORT
SEXTANT  GROWTH  FUND
---------------------
(Graphic  Omitted)
                            INVESTMENTS, CONTINUED

<TABLE>

<CAPTION>


ISSUE                                     NUMBER                             MARKET
                                          OF SHARES       COST          VALUE
-------------------------------------------------  ---------         --------
TRANSPORTATION (16.9%)
<S>                                       <C>         <C>            <C>

Airborne Freight                               3,000      69,116     191,062
Fritz Companies*                               4,000      51,640      52,750
Halter Marine Group                              834       9,967      23,248
Trinity Industries                             1,600      45,315      72,600
Wisconsin Central Transport                    1,000      32,250      30,125
                                                      ----------     -------
SUB-TOTAL                                                208,288     369,785
UTILITIES (2.0)
Washington Water Power                         2,000      37,078      42,750
TOTAL INVESTMENTS (92.1%)                             $1,301,919     $2,015,949
                                                      ==========     ==========
Other Assets (net of liabilities) (7.9%)                             172,418
                                                                     ----------
TOTAL NET ASSETS (100%)                                              $2,188,367
                                                                     ==========
<FN>

*  non-income  producing
</FN>
</TABLE>



<TABLE>

<CAPTION>
-------------------------------------------------------------------------------------------------------
 Selected data per share of capital stock outstanding throughout the year.
     Note  that  data  prior  to  Sept.  28,  1995,  when  the  fund  operated with different investment objectives and fee
arrangements,
     may  not  be  meaningful

                                       For Year Ended November 30,
                                      -----------------------------
                                       1997                1996      1995      1994     1993     1992     1991
                         -----------------------------  -------  --------  --------  -------  -------  -------
NET ASSET VALUE AT BEGINNING
<S>                       <C>                            <C>      <C>       <C>       <C>      <C>      <C>

   OF YEAR                $                       7.92   $ 7.42   $  5.82   $  6.38   $ 5.93   $ 5.55   $ 4.93
  INCOME FROM INVESTMENT OPERATIONS
  Net Investment Income                          (0.01)    0.00     (0.03)    (0.03)    0.01     0.01     0.04
  Net gains or losses on securities
    (both realized and unrealized)                2.41     0.50      1.82     (0.53)    0.45     0.38     0.60
                         -----------------------------  -------  --------  --------  -------  -------  -------
Total From Investment Operations                  2.40     0.50      1.79     (0.56)    0.46     0.39     0.64
  LESS DISTRIBUTIONS
  Dividends (from net
     investment income)                         (0.01)    0.00      0.00      0.00    (0.01)   (0.01)   (0.02)
  Distributions (from capital gains)            (0.73)    0.00     (0.19)     0.00     0.00     0.00     0.00
                         -----------------------------  -------  --------  --------  -------  -------  -------
Total Distributions                             (0.74)    0.00     (0.19)     0.00    (0.01)   (0.01)   (0.02)
NET ASSET VALUE AT END OF YEAR $                 9.58   $ 7.92   $  7.42   $  5.82   $ 6.38   $ 5.93   $ 5.55
                         =============================  =======  ========  ========  =======  =======  =======
TOTAL RETURN                                    30.30%    6.74%    30.76%   (8.78)%    7.76%    7.01%   11.79%
RATIOS / SUPPLEMENTAL DATA
------------------------------------
Net assets ($000), end of year        $          2,188   $1,616   $ 1,137   $ 1,010   $1,425   $1,321   $  947
Ratio of expenses to average
   net assets                                    1.04%    0.95%     1.63%     1.50%    1.40%    1.60%    1.93%
Ratio of net investment income to
  average net assets                            -0.12%    0.01%   (0.45)%   (0.43)%    0.15%    0.17%    0.60%
Portfolio turnover rate                            25%      32%       40%       12%      25%      46%      16%
Average commission rate paid          $         .0487   $.0458   $ .0572



                                       1990     1989     1988
                                      -------  -------  -------
NET ASSET VALUE AT BEGINNING
<S>                                   <C>      <C>      <C>

   OF YEAR                            $ 4.88   $ 4.88   $ 4.96
  INCOME FROM INVESTMENT OPERATIONS
  Net Investment Income                 0.27     0.28     0.30
  Net gains or losses on securities
    (both realized and unrealized)      0.01     0.00    (0.08)
                                      -------  -------  -------
Total From Investment Operations        0.28     0.28     0.22
  LESS DISTRIBUTIONS
  Dividends (from net
     investment income)                (0.23)   (0.28)   (0.30)
  Distributions (from capital gains)    0.00     0.00     0.00
                                      -------  -------  -------
Total Distributions                    (0.23)   (0.28)   (0.30)
NET ASSET VALUE AT END OF YEAR        $ 4.93   $ 4.88   $ 4.88
                                      =======  =======  =======
TOTAL RETURN                            7.37%    5.22%    5.12%
RATIOS / SUPPLEMENTAL DATA
------------------------------------
Net assets ($000), end of year        $   53   $1,356   $1,365
Ratio of expenses to average
   net assets                           1.06%    0.89%    0.25%
Ratio of net investment income to
  average net assets                    5.25%    5.60%    5.86%
Portfolio turnover rate                   29%      19%      20%
Average commission rate paid
<FN>


       For 1996,  1995 and the  years  prior to 1993,  all or a  portion  of the
operating expenses were waived. If these costs had not been waived,
      the resulting  increase to expenses per share in each of these years would
be $.00, $.01, $.01, $.05, .$.05, $.10, and $.16, respectively.
     The increase to the ratio of expenses to average net assets would have been
 .00%, .18%, 0.21%, 0.76%, 1.02%, 1.28%, and 2.02%,
      respectively.
                                                                                                                      </FN>


</TABLE>


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

SEXTANT  GROWTH  FUND
1997  ANNUAL  REPORT
--------------------
(Graphic  Omitted)

                      STATEMENT OF ASSETS AND LIABILITIES
<TABLE>

<CAPTION>



As of November 30, 1997
ASSETS
<S>                                                           <C>

  Common stock investments (cost $1,301,919)                  $2,015,949
  Cash                                                           177,201
  Dividends receivable                                             1,423
  Insurance deposit                                                1,214
                                                              -----------
    Total Assets                                               2,195,787
                                                              -----------

LIABILITIES
  Other Liabilities                                                7,420
                                                              -----------
    Total Liabilities                                              7,420
                                                              -----------

NET ASSETS                                                    $2,188,367
                                                              ===========

Fund shares outstanding                                          228,245
                                                              ===========

ANALYSIS OF NET ASSETS
  Paid in capital (unlimited shares authorized, without par)   1,474,407
  Accumulated net realized gain on investments                       (70)
  Unrealized net appreciation on investments                     714,030
                                                              -----------
  Net Assets applicable to Fund shares outstanding            $2,188,367
                                                              ===========

NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE      $     9.57
                                                              ===========
</TABLE>



                            STATEMENT OF OPERATIONS

<TABLE>

<CAPTION>



For year ended November 30, 1997
INVESTMENT INCOME
<S>                                                      <C>       <C>

  Dividends                                              $ 17,551         -
                                                         --------
    Gross investment income                                     -  $ 17,551
EXPENSES
  Investment adviser and administration fee                11,819         -
  Professional fees                                         4,476         -
  Printing and postage                                      1,100         -
  Filing and registration fees                              1,700         -
  Other expenses                                              949         -
                                                         --------
  Total gross expenses                                     20,044         -
                                                                   ---------
  Net expenses                                                  -    20,044
                                                         --------  ---------
    Net investment loss                                         -  $ (2,493)
                                                         --------  ---------
  NET REALIZED GAIN ON INVESTMENTS
  Proceeds from sales                                     420,143         -
  Less cost of securities sold based on identified cost   248,305         -
                                                         --------  ---------
    Realized net gain                                           -   171,838
                                                         --------  ---------
UNREALIZED GAIN ON INVESTMENTS
  End of period                                           714,030         -
  Beginning of period                                     398,808         -
                                                         --------  ---------
  Increase in unrealized gain for the period                    -   315,222
                                                         --------  ---------
    Net realized and unrealized gain on investments                 487,060
                                                                    --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS               $484,567
                                                                    ========
</TABLE>


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

SEXTANT  GROWTH  FUNDSEXTANT  GROWTH  FUND
1997  ANNUAL  REPORT
--------------------
                      STATEMENT OF CHANGES IN NET ASSETS
(Graphic  Omitted)

<TABLE>

<CAPTION>



                                                          Year ended       Year ended
                                                         Nov. 30, 1997    Nov. 30, 1996
                                                        ---------------  ---------------

INCREASE IN NET ASSETS
OPERATIONS:
<S>                                                     <C>              <C>

  Net investment Income                                 $       (2,654)  $          115
  Net realized gain (loss) on investments                      171,838           (5,688)
  Net increase in unrealized appreciation                      315,388          109,794
                                                        ---------------  ---------------
  Net increase in net assets from operations                   484,572          104,221
                                                        ---------------  ---------------

DIVIDENDS TO SHAREOWNERS FROM:
  Net investment income                                         (1,105)               -
  Capital gains distributions                                 (162,378)               -
                                                        ---------------  ---------------
                                                              (163,483)               -
                                                        ---------------  ---------------

FUND SHARE TRANSACTIONS:
  Proceeds from sales of shares                                407,623          676,224
  Value of shares issued in reinvestment of dividends          161,233                -
                                                        ---------------  ---------------
                                                               568,856          676,224
  Cost of shares redeemed                                     (317,129)        (301,892)
                                                        ---------------  ---------------
  Net Increase in net assets from share transactions           251,727          374,332
                                                        ---------------  ---------------
Total increase in net assets                                   572,816          478,553

NET ASSETS
  Beginning of period                                        1,615,556        1,137,003
                                                        ---------------  ---------------
  End of period                                         $    2,188,372   $    1,615,556
                                                        ===============  ===============

Shares of the Fund Sold and Redeemed
  Number of shares sold                                         45,282           90,055
  Number of shares issued in reinvestment of dividends          16,830                -
                                                        ---------------  ---------------
                                                                62,112           90,055
  Number of shares redeemed                                    (37,742)         (39,396)
                                                        ---------------  ---------------

Net Increase in Number of Shares Outstanding                    24,370           50,659
                                                        ===============  ===============



</TABLE>


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


SEXTANT  GROWTH  FUNDSEXTANT  GROWTH  FUND
1997  ANNUAL  REPORT
--------------------
(Graphic  Omitted)
                        DISCUSSION OF  FUND PERFORMANCE
                                  (UNAUDITED)
FISCAL  YEAR  1997
During  the year  ended  November  30,  1997,  the  Fund's  total  return to its
shareholders was +30.3%. The Fund's net asset value per share rose to $9.58 from
$7.92, in addition to capital gains distributions of 73 per share.
Total assets increased 35% to $2.2 million.
FACTORS  AFFECTING  PERFORMANCE
In September 1995, the Fund's shareholders voted to broaden its objective from
that  of investing in growth companies linked only to the Northwest.  The Fund
now  seeks  long-term  growth through investment in common stocks of companies
with  major  operations  throughout  the  United  States.
The  Sextant  Growth  Fund  follows  an  value  investment  approach, favoring
medium-sized  companies with good businesses and future prospects.  The Fund's
portfolio did exceptionally well in 1997, outperforming the market indices and
most  other  growth  funds.  The banking and investments sectors did the best,
and  we  recorded strong gains in computers, electronics and medical stocks as
well.
LOOKING  FORWARD
The Fund will continue to favor solid companies, especially in the technology,
financial  and  cyclical  areas.    With  a  steady economy, these sectors are
expected to perform well.  We expect the domestic computer, communications and
bio-tech sectors to continue to provide good long-term growth prospects, while
knowing  that  they  are  subject  to  higher  volatility.
We  don't  expect  the  high  gains  of  the  last  few years to continue, and
investors  should  anticipate  that  stock  returns will decline to historical
levels  of  below 10%.  Stocks are now priced relatively high as a multiple of
expected  earnings.    While  recent  corporate earnings reports are generally
positive,  but  we  must  expect  that  Asia's  financial  restructuring  and
deflationary forces will work to restrain near-term earnings growth of America's
corporations.
PERFORMANCE  FEE  COMPUTATION
The  Sextant Growth Fund calculates its performance fee on a comparison of the
Fund's  12-month  return  to  the  return of the Morningstar "Domestic Growth"
category.     This index is well matched to the characteristics of the Sextant
Growth  Fund.    At  November 30, 1997, the one-year return for this index was
20.56%.    As the Fund outperformed the Morningstar benchmark by more than 4%,
the  Fund  paid  an increased 0.90% (annualized) advisory fee for the month of
December 1997. Adjustments to the basic 0.60% advisory fee are made in a similar
manner each month.
<PAGE>
1997  ANNUAL  REPORT
SEXTANT  GROWTH  FUNDSEXTANT  GROWTH  FUND
------------------------------------------
(Graphic  Omitted)

COMPARISON  TO  INDEX
The  line  graph  compares  Sextant  Growth  Fund's  performance  to  that  of a
broad-based  stock  market  index,  the  Standard  &  Poor's  500  Index.  To be
comparable, the S&P 500 Index data includes reinvested income. Comparison of any
fund to an index must be made  bearing in mind that the index is  unmanaged  AND
EXPENSE-FREE.  On the other hand the fund likely  will (1) be actively  managed,
(2) have an objective other than mirroring the index, such as limiting risk, (3)
bear transaction and other costs, (4) stand ready to buy and sell its securities
to shareholders on a daily basis, and (5) provide a wide range of services.  The
following graph compares $10,000 invested in the Fund at its inception, compared
to a similar  amount  invested in  Standard & Poor's 500 Index.  The graph shows
that the  investment  at  inception  would have risen to $21,515 in the Fund and
$35,365 in the Index. The changes in investment objective during the life of the
Fund  limit the  usefulness  of this  comparison.  And past  performance  is not
indicative of future results.

Sextant  Growth  Fund  vs.  S&P  500  Index
(Graph  Omitted)
<PAGE>

SEXTANT  INTERNATIONAL  FUNDSEXTANT  INTERNATIONAL  FUND
1997  ANNUAL  REPORT
--------------------
November  30,  1997
(Graphic  Omitted)
                                  INVESTMENTS

<TABLE>

<CAPTION>



                                      NUMBER    MARKET
ISSUE                                OF SHARES   COST   VALUE      COUNTRY
-----------------------------------  ---------  ------  ------  --------------

Common Stocks
BANKING AND FINANCIAL (16.4%)
<S>                                  <C>        <C>     <C>       <C>

Australia & New Zealand Bank ADR           500  10,875  17,000    Australia
Aegon NV ADR                               306  11,512  26,010    Netherlands
Banco Bilbao Vizcaya ADS                 1,200  15,505  35,850    Spain
Banco Latinoamericano de Export SA         200   9,325   8,125    Panama
Hutchison Whampoa ADR                      500  17,826  16,625    Hong Kong
ING Groep N.V. ADS                         400  18,257  16,300    Netherlands
Toronto Dominion Bank                      700  18,159  24,894    Canada
                                                ------  ------
SUB-TOTAL                            -         101,459  144,804    -
BUILDING MATERIALS (3.5%)
C R H plc ADR                              300  15,661  17,850    Ireland
Hanson plc ADR                             500  12,090  13,000    United Kingdom
                                                ------  ------
SUB-TOTAL                            -          27,751  30,850    -
CHEMICALS (2.6%)
Phone Poulenc SA ADR                       508  15,859  22,797    France
COMPUTERS  (6.6%)
Business Objects SA ADS                  2,000  19,570  21,750    France
Dassault Systems SA ADR                    400  13,875  10,400    France
Olicom A/S                                 900  16,245  25,875    Denmark
                                                ------  ------
SUB-TOTAL                            -          49,690  58,025    -
CONSUMER PRODUCTS (3.8%)
Gucci Group NV                             200  10,925   8,137    Italy
Coca Cola FEMSA S.A. ADR                   500   9,750  25,719    Mexico
                                                ------  ------
SUB-TOTAL                           -          20,675   33,856    -
CLOSED END COUNTRY FUNDS (5.2%)
Austria Fund                             1,000   7,923  10,062    Austria
New Germany Fund                         1,022  12,417  13,733    Germany
Irish Investment Fund                      900  10,238  14,231    Ireland
Singapore Fund                           1,000  13,777   7,875    Singapore
                                                ------  ------
SUB-TOTAL                            -          44,355  45,901    -
ELECTRICAL EQUIPMENT  (1.4%)
ABB AB ADR                                 100  10,000  12,400    Sweden
MEDICAL-DRUGS (5.2%)
Glaxo Wellcome plc ADR                     400   9,800  18,275    United Kingdom
Novo-Nordisk A/S ADR                       450  14,702  27,647    Denmark
                                                ------  ------
SUB-TOTAL                           -          24,502   45,922    -
METALS & MINING (3.7%)
Broken Hill Proprietary ADR                400  11,700   7,300    Australia
Potash Corp of Saskatchewan                200  14,675  15,737    Canada
Rio Tinto plc ADS                          200  11,375   9,800    United Kingdom
                                                ------  ------
SUB-TOTAL                            -          37,750  32,837    -




</TABLE>


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

1997  ANNUAL  REPORT
SEXTANT  INTERNATIONAL  FUNDSEXTANT  INTERNATIONAL  FUND
--------------------------------------------------------
                            INVESTMENTS, CONTINUED

<TABLE>

<CAPTION>



                                           NUMBER    MARKET
ISSUE                                     OF SHARES   COST   VALUE       COUNTRY
----------------------------------------  ---------  ------  ------  ---------------
OIL & GAS PRODUCTION (8.6%)
<S>                                       <C>        <C>     <C>     <C>

Numac Energy*                                 2,000   8,853   7,750  Canada
Petroleum Geo-Services A/S*                     500  10,979  32,156  Norway
Total S.A. ADR                                  307   8,813  16,137  France
YPF SA ADS                                      600  12,345  20,137  Argentina
                                                     ------  ------
SUB-TOTAL                                            40,990  76,180  -
PAPER PRODUCTS (2.1%)
Abitibi-Consolidated                            800  11,847  10,400  Canada
Fletcher Challenge Forests ADR                   24     316     225  New Zealand
Fletcher Challenge Paper ADR                    600  12,623   7,800  New Zealand
                                                     ------  ------
SUB-TOTAL                                            24,786  18,425  -

PHOTOGRAPHIC EQUIPMENT (4.4%)
Canon  ADR                                      200  23,427  24,100  Japan
Fuji Photo Film ADR                             400  10,050  14,350  Japan
                                                     ------  ------
SUB-TOTAL                                            33,477  38,450  -
REAL ESTATE (2.9%)
Intrawest                                     1,500  26,218  25,313  Canada
TELECOMMUNICATIONS (14.7%)
BCE Inc                                         900  15,830  27,281  Canada
British Sky Broadcasting ADS                    300  11,063  13,388  United Kingdom
Cable & Wireless plc ADS                        600  13,021  16,163  Hong Kong
PT Indosat ADR                                  300  10,584   6,713  Indonesia
Telebras ADS                                    300  15,051  31,500  Brazil
Telecom Corp New Zealand ADS                    300  10,050  12,300  New Zealand
Telefonica de Espana ADS                        250  10,250  21,625  Spain
                                                     ------  ------
SUB-TOTAL                                            85,849 128,970  -
TRANSPORTATION (8.2%)
British Airways ADS                             150  10,931  13,725  United Kingdom
Canadian Pacific Ltd.                           500   8,164  14,156  Canada
Daimler-Benz ADS                                250  16,406  17,656  Germany
Desc SA ADR                                     700  19,649  26,338  Mexico
                                                     ------  ------
SUB-TOTAL                                            55,150  71,875  -
UTILITIES-ELECTRIC (3.3%)
Enersis S.A. ADR                                400  10,100  11,950  Chile
Energy Group plc ADS                            400  14,390  17,100  United Kingdom
                                                     ------  ------
SUB-TOTAL                                            24,490  29,050  -

UTILITIES-GAS (1.8%)
Transport de Gas del Sur SA ADR               1,500  18,807  16,031  Argentina

TOTAL INVESTMENTS (94.4%)                          $641,808  $831,686  -
                                            ===============  ========
Other Assets (net of liabilities) (5.6%)                      49,468  -
                                                              --------
TOTAL NET ASSETS (100%)                                      $881,154  -
                                                             ========

<FN>

   *  Non-income  producing  security
</FN>


</TABLE>


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

<PAGE>

SEXTANT  INTERNATIONAL  FUND
1997  ANNUAL  REPORT
--------------------
(Graphic  Omitted)
                      STATEMENT OF ASSETS AND LIABILITIES
<TABLE>

<CAPTION>



As of November 30, 1997
ASSETS
<S>                                                                  <C>

  Common stock investments (cost $641,808)                           $831,686
  Cash                                                                 49,286
  Dividends receivable                                                  2,530
                                                                     ---------
                                                                      883,502
    Total Assets
LIABILITIES
  Other Liabilities                                                     2,348
                                                                     ---------
                                                                        2,348
                                                                     ---------
    Total Liabilities
NET ASSETS                                                           $881,154
                                                                     =========
Fund Shares Outstanding                                               133,385
ANALYSIS OF NET ASSETS
  Paid in capital  (unlimited  shares  authorized,  without  par value)  705,129
  Accumulated  net realized gain (loss) on investments  (13,853)  Unrealized net
  appreciation on investments 189,878
                                                                     ---------
  Net Assets applicable to Fund shares outstanding                   $881,154
                                                                     =========

NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE             $   6.61
                                                                     =========


</TABLE>



                            STATEMENT OF OPERATIONS
<TABLE>

<CAPTION>



Year Ended November 30, 1997
INVESTMENT INCOME
<S>                                                       <C>       <C>

  Dividends (net of foreign taxes paid)                   $ 18,754        -
  Miscellaneous Income                                          59        -
                                                          --------
    Gross investment income                                      -  $18,813
EXPENSES
  Investment adviser and administration fee                  7,537        -
  Professional fees                                          1,741        -
  Filing and registration fees                                 765
  Other expenses                                               521        -
  Printing and postage                                         420        -
                                                          --------
  Total gross expenses                                      10,984        -
                                                                    --------
  Net expenses                                                   -   10,984
                                                          --------  --------
    Net investment income                                        -    7,829
                                                          --------  --------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
  Proceeds from sales                                       66,895        -
  Less cost of securities sold based on identified cost     74,395        -
                                                          --------  --------
    Realized net loss                                            -   (7,500)
                                                          --------  --------
UNREALIZED GAIN ON INVESTMENTS
  End of period                                            189,878        -
  Beginning of period                                       96,586        -
                                                          --------  --------
  Increase in unrealized gain for the period                     -   93,292
                                                          --------  --------
    Net realized and unrealized gain on investments              -   85,792
                                                          --------  --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS             -  $93,621
                                                                    ========



</TABLE>


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

1997  ANNUAL  REPORT
SEXTANT  INTERNATIONAL  FUNDSEXTANT  INTERNATIONAL  FUND
--------------------------------------------------------
(Graphic  Omitted)
                      STATEMENT OF CHANGES IN NET ASSETS
<TABLE>

<CAPTION>



                                                         Year Ended     Year Ended
                                                         Nov 30 1997    Nov 29 2996
                                                        -------------  -------------

INCREASE IN NET ASSETS
OPERATIONS:
<S>                                                     <C>            <C>

  Net investment Income                                 $      7,829   $      3,070
  Net realized (loss) on investments                          (7,500)        (5,169)
  Net increase  in unrealized appreciation                    93,292         94,408
                                                        -------------  -------------
  Net increase in net assets from operations                  93,621         92,309
                                                        -------------  -------------
DIVIDENDS TO SHAREOWNERS FROM
  Net investment income                                       (7,831)        (3,068)
  Capital gains distributions                                      -              -
                                                        -------------  -------------
                                                              (7,831)        (3,068)
                                                        -------------  -------------
FUND SHARE TRANSACTIONS
  Proceeds from sales of shares                              274,408        440,062
  Value of shares issued in reinvestment of dividends          7,831          3,068
                                                        -------------  -------------
                                                             282,239        443,130
  Cost of shares redeemed                                   (182,369)      (165,015)
                                                        -------------  -------------
  Net increase in net assets from share transactions          99,870        278,115
                                                        -------------  -------------
Total increase in net assets                                 185,660        367,356

NET ASSETS
  Beginning of period                                        695,494        328,138
                                                        -------------  -------------
  End of period                                         $    881,154   $    695,494
                                                        =============  =============

Shares of the Fund sold and redeemed
  Number of shares sold                                       45,878         83,056
  Number of shares issued in reinvestment of dividends         1,184            523
                                                        -------------  -------------
                                                              47,062         83,579
  Number of shares redeemed                                  (32,214)       (30,837)
                                                        -------------  -------------
 Net Increase in Number of Shares Outstanding                 14,848         52,742
                                                        =============  =============



</TABLE>


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

SEXTANT  INTERNATIONAL  FUNDSEXTANT  INTERNATIONAL  FUND
1997  ANNUAL  REPORT
--------------------
(Graphic  Omitted)

FINANCIAL  HIGHLIGHTS

<TABLE>
<CAPTION>
Selected data per share of capital stock outstanding throughout the period:
                                                                                         Sept. 28, '95
                                                   Year Ended          Year Ended       (Inception) to
                                                  Nov. 30, '97          Nov. 30, '96      Nov. 30, '95*
                                                  ------------          ------------    -------------
<S>                                                <C>                   <C>             <C>
NET ASSET VALUE AT BEGINNING OF PERIOD                 $5.87             $4.99            $5.00
                                                       -----             -----            -----
INCOME  FROM  INVESTMENT  OPERATIONS
     Net investment income                              0.06              0.03            (0.02)
     Net gains or losses on securities
     (both realized and unrealized)                     0.74              0.88             0.01
                                                        ----              ----             ----
Total from investment operations                        0.80              0.91            (0.01)
                                                        ----              ----            ------
     LESS  DISTRIBUTIONS
     Dividends (from net investment income)            (0.06)            (0.03)            0.00
     Distributions (from capital gains)                 0.00              0.00             0.00
                                                        ----              ----             ----
Total distributions                                    (0.06)            (0.03)            0.00
                                                       ------            ------            ----
NET ASSET VALUE AT END OF PERIOD                       $6.61             $5.87            $4.99
                                                       =====             =====            =====

TOTAL RETURN                                           13.58%            18.16%           (0.20)%
RATIOS/SUPPLEMENTAL  DATA
-------------------------
Net assets ($000), end of period                       $881               $695             $328
Ratio of expenses to average net assets                 1.51%             1.80%            0.49%
Ratio of net investment income to average net assets    0.93%             0.60%           (0.38)%
Portfolio turnover rate                                    9%               11%              12%
Average commission rate paid                          $0.0890          $0.0827            $0.0192

<FN>

       For  the above periods, all or a portion of the operating expenses were
waived.      If  costs  had
      not  been  have  waived  and directly assumed, the resulting increase to
expenses  per  share
     in  the  period  would have been $.00, $.03 and $.01, respectively.   The
increase  to  the  ratio  of  expenses  to
     average  monthly  net assets would be .00%, .50% and .21 %, respectively.
                                        *  not  annualized

</FN>
</TABLE>
(The accompanying notes are an integral part of these financial statements)

                        DISCUSSION OF  FUND PERFORMANCE
                                  (UNAUDITED)
During its second fiscal year, the Sextant  International  Fund provided a total
return of 13.58%.  Total assets  increased 27%, and the Fund remains small.  The
objective  of the Fund is to provide  long-term  growth  through  investment  in
foreign stocks.  Factors Affecting  Performance  Investing in foreign securities
includes  risks not  present in domestic  securities.  For  example,  many Asian
markets simply crumbled in 1997 as their  long-running  "economic  miracle" both
crashed and burned.  Fortunately,  Sextant  International  has  concentrated  on
European and Canadian  companies and avoided much of the pain.  The U.S.  dollar
generally strengthened in relation to its major trading partners,  also reducing
the returns on foreign investments.  Because the Fund invests only in securities
easily traded in the US (larger worldwide companies), it also avoided the severe
declines  of many  emerging  markets  and smaller  overseas  companies.  Looking
Forward The Sextant  International  Fund is broadly invested in growth companies
outside the United

<PAGE>

1997  ANNUAL  REPORT
SEXTANT  INTERNATIONAL  FUNDSEXTANT  INTERNATIONAL  FUND
--------------------------------------------------------
(Graph  Omitted)

States. While many foreign economies slowed dramatically in 1997, we expect that
our portfolio  securities  will continue to show good growth in future years and
the Fund  will  continue  to  perform  well.  Performance  Fee  Computation  The
International  Fund calculates its performance fee on a comparison of the Fund's
12-month  return to the return of the Morningstar  Foreign Stock Index.  Because
the Fund's 12-month return  outperformed  this index by more than 4% at November
30, 1997, the Fund paid a bonus 0.30% (annualized) performance fee for the month
of December  1997.  Adjustments  to the basic 0.60%  advisory  fee are made in a
similar  manner each month.  Comparison  to Index  Comparison  of any fund to an
index must be made bearing in mind that the index is unmanaged and EXPENSE-FREE.
On the other hand,  the fund likely  will (1) be actively  managed,  (2) have an
objective  other than  mirroring  the index,  such as  limiting  risk,  (3) bear
transaction  and other costs,  (4) stand ready to buy and sell its securities to
shareholders  on a daily basis,  and (5) provide a wide range of  services.  The
following graph compares $10,000 invested in the Fund at its inception, compared
to  a  similar  amount   invested  in  the  AMEX   International   Index.   This
capitalization-weighted index averages 50 American Depository Receipts (ADRs) of
large worldwide companies, and reflects the types of securities in which Sextant
International  Fund invests.  The graph shows that the  investment of $10,000 at
9/30/95  would have risen to $13,393 in the Fund and  $13,123 in the Index.  The
relatively  short history of the Fund limits the usefulness of this  comparison.
Past performance is not indicative of future results.

Sextant  International  Fund  vs.  AMEX  International  Index
(Graph  Omitted)
<PAGE>

                         NOTES TO FINANCIAL STATEMENTS
(Graphic  Omitted)
------------------
1997  ANNUAL  REPORT
Note  1  -Organization
Saturna Investment Trust (the "Trust") (formerly  Northwest Investors 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 invest-ment company under
the Investment Company Act of 1940, as amended.  Five portfolio series have been
created to date:  Sextant Bond Income Fund ("Bond Income"),  Sextant  Short-Term
Bond Fund  ("Short-Term  Bond"),  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.

Note  2  -Significant  Accounting  Policies
The following is a summary of the sig-nificant  accounting  policies followed by
the Funds.

INVESTMENTS:
Securities  traded on a  national  ex-change  or the  national  over-the-counter
market  system are valued at the last sale price or, in the  absence of any sale
on  that  date,  the  closing  bid  price.   Other  securities   traded  in  the
over-the-counter  market  are  valued  at  the  last  bid  price.   Fixed-income
securities  for which there are no publicly  available  market  quo-tations  are
valued  using a matrix based on maturity,  quality,  yield and similar  factors,
which are compared  periodically  to multiple  dealer bids and  ad-justed by the
adviser under policies  established  by the Trustees.  The cost of securities is
the  same  for   accounting   and  federal   income  tax  purposes.   Securities
trans-actions 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 con-stant
yield-to-maturity  basis from  pur-chase  date to maturity.  Interest  income is
increased by accretion only for bonds  underwritten as original issue discounts.
Market  dis-counts  are  recorded  as  realized  gains  upon  disposition.  Cash
dividends  from equity  secu-rities  are recorded as income on the  ex-div-idend
date. Expenses incurred by the Trust on be-half of the Funds (e.g., professional
fees) are  allocated  to the Funds on the basis of  relative  daily  average net
assets.  The Adviser has agreed to certain  limits on  ex-penses,  as  described
below.

INCOME  TAXES:
The Funds have elected to be taxed as regulated  investment  companies under the
Internal  Revenue Code and  distribute  sub-stantially  all of their taxable net
invest-ment  income and realized net gains on in-vest-ments.  Thus, no provision
for Federal income taxes is required.

DIVIDENDS  AND  DISTRIBUTIONS  TO  SHAREOWNERS:
Dividends and  distributions  to  share-owners  are recorded on the  ex-dividend
date.  For the Bond Income and  Short-Term  Bond,  div-idends are paid daily and
distributed  on the  last  business  day of  each  month.  For  the  Growth  and
International,  dividends are payable at the end of each  November.  Shareowners
electing to reinvest dividends and distributions  pur-chase additional shares at
the net asset value on the payable date.

Note  3  -Transactions  with  Affiliated  Persons
Under a contract approved by shareowners on September 28, 1995,  Saturna Capital
Corporation   provides   investment   ad-vi-sory   services  and  certain  other
adminis-tra-tive and distribution services to conduct Trust busi-ness, including
shareholder servicing and transfer agency


<PAGE>
services.  Each of the  Funds  pays  the  Adviser  an  Investment  Advisory  and
Administrative  Services  Fee (the "Base Fee") of .60% of average net assets per
annum,  payable  monthly.  The  Base Fee is  subject  to  adjustment  up or down
depending  on the  investment  performance  of the Fund  relative to a specified
index (the "Performance Adjustment").  The Adviser has voluntarily undertaken to
limit  expenses of Bond Income and  Short-Term  Bond to 0.60%  through March 31,
1998 and waives its investment advisory and administrative fee as to either Fund
completely so long as assets of that Fund are less than $2 million. For the year
ended  November 30, 1997,  Bond Income and  Short-Term  Bond  incurred  advisory
expenses of $6,805 and $13,245, respectively.  Growth and International incurred
advisory  expenses of $11,819 and $7,537,  respectively.  In accordance with the
expense waiver, for the year ended November 30, 1997, Saturna Capital waived all
of the Bond  Income  advisory  fee and  $8,609 of that of  Short-Term  Bond.  In
accordance with the Funds' custodian agreements with National City Bank, for the
year ended November 30, 1997,  custodian fees for Bond Income,  Short-Term Bond,
Growth, and International,  were $803, $2,182, $2,386, and $2,713, respectively.
The custodian waived its fees for earnings credits. One trustee, who also serves
as the president of the Trust, is a di-rector and president of the Adviser.  The
four unaffiliated trustees receive $100 per Board or committee meeting attended.
On January 16, 1998, the trustees,  officers and their  immediate  families as a
group owned  26.1%,  12.3%,  16.5% and 27.5% of the  outstanding  shares of Bond
Income, Short-Term Bond, Growth and International,  respectively. The Trust acts
as a distributor  of its own shares,  except in those states in which  Investors
National  Corporation (a sub-si-diary of Saturna Capital  Corporation) is itself
registered as a  broker-dealer  and acts as dis-tributor  without  compensation.
Investors  National  Corporation  is the  primary  stockbroker  used  to  effect
portfolio  transactions for Growth and International,  and paid $1,967 and $872,
respectively  in  commissions  at  deep-discount  rates  during  the year  ended
November 30, 1997.

Note  4  -Federal  Income  Taxes
At November 30, 1997,  International  had capital loss  carryforwards of $13,853
which  expire in 2004,  Bond Income had capital  loss  carryforwards  of $72,931
which  expire in 2004 and  Short-Term  Bond had capital  loss  carryforwards  of
$22,531 which expire in 2004, 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, 1997,  the net unrealized  gain on investments  for Bond Income,
Short-Term Bond, Growth and International  were $3,969,  $5,463,  $315,222,  and
$189,878, which consist of unrealized gains of $13,445,  $12,504,  $806,836, and
$227,388, and unrealized losses of $9,476, $7,039, $92,640, and $37,510,
respectively.
During the year ended  November 30,  1997,  Bond Income  pur-chased  $540,998 of
securities and sold/matured $662,852. Comparable figures for Short-Term Bond are
$1,494,356  and  $1,001,078;   for  Growth   $484,083  and  $420,143;   and  for
International,  $1,176,500 and $986,339.  Included in the above amounts for Bond
Income and  Short-Term  Bond are  purchases of $39,581 and $736,728 and sales of
$272,639 and $489,052 of U.S. Government securities, respectively.
<PAGE>

SEXTANT  MUTUAL  FUNDS
(Graphic  Omitted)

SHORT-TERM  BOND  SHORT-TERM  BOND
(Graphic  Omitted)

BOND  INCOMEBOND  INCOME
(Graphic  Omitted)

GROWTHGROWTH
(Graphic  Omitted)

INTERNATIONALINTERNATIONAL
(Graphic  Omitted)

Saturna  Capital
(Graphic  Omitted)
Mutual  Funds
1300  N.  State  Street
Bellingham,  WA  98225-4730

800/SATURNA
(800/728-8762)
www.saturna.com

This report is issued for the information of the shareowners of the Funds. 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.

ANNUAL  REPORT
November  30,  1997
<PAGE>