SECURITIES ANDEXCHANGE COMMISSION WASHINGTON, DC 20549

**FORM N-CSRS**

**CERTIFIEDSHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENTCOMPANIES**

Investment Company Act file number:811-05071 or 33-13247**SATURNA INVESTMENT TRUST**(Exact Name of Registrant as Specified in Charter)

**1300 N. State Street Bellingham, Washington98225-4730** (Address of Principal Executive Offices, including ZIPCode)

Nicholas F. Kaiser 1300 N. State StreetBellingham, Washington 98225-4730 (Name and Address of Agent forService)

Registrant’s Telephone Number- (360)734-9900

Date of fiscal year end: November 30, 2006Date of reporting period: May 31, 2006

 

 

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**Sextant**

***MutualFunds***

******

(GraphicOmitted)

 

(Graphic Omitted) Short-Term Bond

(GraphicOmitted) Bond Income

(Graphic Omitted) Growth

(Graphic Omitted)International

 

**Semi-Annual Report**

May31, 2006

 

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**Table of Contents**

| Additional Performance Information | ***Page2***   |
|------------------------------------|---------------|
| LetterTo Shareowners               | ***Page 3***  |
| Sextant Short-Term Bond Fund       | ***Page4***   |
| SextantBond Income Fund            | ***Page 8***  |
| Sextant Growth Fund                | ***Page13***  |
| Sextant International Fund         | ***Page19***  |
| NotesTo Financial Statements       | ***Page 25*** |

 

 

| ***Additional PerformanceInformation***     |
|---------------------------------------------|
| **AverageAnnual Returns (as of 6/30/2006)** | **1-Year** | **5-Years** | **10-Years** |
| SextantShort-Term Bond Fund                 | 0.87% | 3.48% | 4.64% |
| Sextant Bond Income Fund                    | -2.17% | 5.24% | 6.24% |
| Sextant GrowthFund                          | 17.05% | 7.40% | 11.05% |
| Sextant International Fund                  | 19.01% | 10.08% | 9.54% |

*Performance data quoted in this report represents pastperformance, is before any taxes payable by shareowners, and is no guarantee offuture performance. Mutual fund performance changes over time and currently maybe significantly higher or lower than stated. Recent performance and Morningstarrating data is published online at each month’s end. Please visitsaturna.com or call Saturna Capital for current performance figures. Totalreturns are historical and include change in share value and reinvestment ofdividends and capital gains, if any. Share price, yield and return will vary andyou may have a gain or loss when you sell your shares. See individual Fundperformance discussions for further information. Funds that invest in foreignsecurities may involve greater risk, including political and economicuncertainties of foreign countries as well as the risk of currency fluctuations.*

 

 

 

| *2* | *May 31, 2006 Semi-AnnualReport* |
|-----|----------------------------------|

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***Fellow Shareowners:***

For the six months ended May 31, 2006, the four Sextant fundscontinued to reflect the markets where they invest. Sextant International Funddid the best, up 8.38% as its non-US stock portfolio grew in value as expectedwhen the US dollar was declining. Sextant Growth Fund, up 1.17%, reflected avolatile US stock market that ended almost unchanged (the S&P 500 indextotal return was 1.74% for the six months). The two Sextant bond funds continuedto suffer from the steady rise in short-term interest rates, with SextantShort-Term Bond Fund returning 0.88% and Sextant Bond Income Fund returning-0.76%.

Looking forward, the Fed’s steady increasein short-term interest rates appears to be nearing conclusion, meaning bonds mayfinally shine. The US economy and business profits march constantly up, greatlyboosting income tax receipts and reducing pressure on the federal deficit. Theover-heated and leveraged housing sector is cooling, meaning investors willagain be considering the security markets.

The no-loadSextant Funds are designed to address a broad spectrum of investment needs. AllSextant Funds stress low operating expenses and employ a “fulcrum”advisory fee structure that rewards or penalizes Saturna Capital for investmentresults. Contrary to popular wisdom, a higher fund advisory fee that resultsfrom superior investment performance under a fulcrum advisory fee structure andconsequently a higher fund expense ratio is actually in the best interests ofshareowners.  

In early July, the Trustees directed thatthe shareowners be asked to approve a new distribution plan (under SEC Rule12b-1) designed to help the Sextant funds grow in size. For the last 10 years,the funds have provided good investment results at relatively low expense, butthis has failed to attract significant new assets. The historically low expenseshave meant the funds cannot afford to be offered through intermediaries, such asbrokerage firms, where almost 90% of mutual fund sales take place. While the0.25% annual additional expense for the 12b-1 plan seems like a wrong choice,the Trustees believe it is necessary if the funds are to grow in size - whichcan dramatically reduce the expense ratio as fixed costs are spread over moreinvestor assets. And regardless of the 12b-1 plan, the voluntary waiver of feesby the advisor effectively caps the expense ratio in Sextant Short-Term Bond andSextant Bond Income at 0.75% and 0.90%, respectively.

For thetwelve-month period ended May 31, 2006, comparative total returns and percentileMorningstar category rankings (1 is best)† are:

| ***Sextant Fund*** | ***TotalReturn*** | ***vs. Morningstar**** | ***TotalReturn*** | ***Rank (category size)*** |
|--------------------|-------------------|------------------------|-------------------|----------------------------|
| Short-Term Bond    | 1.19%             | Short-term Bond        | 1.46%             | 62 (419)                   |
| Bond Income        | -1.82%            | Long-term Bond         | -2.39%            | 61 (63)                    |
| Growth             | 17.63%            | Mid-CapGrowth          | 15.42             | 31 (953)                   |
| International      | 21.59%            | Foreign Large Blend    | 28.92%            | 95(638)                    |

Furtherinformation on each Fund is found in its section of this report. Perhapsuniquely, equity portfolio brokerage commission expenses are entirely borne bythe adviser. Consequently, the Sextant Funds can not use portfolio brokerage topay any expenses of the Funds or the adviser. Another unusual feature of theSextant funds: on average, over one-third of each Sextant Fund is owned by thetrustees, officers, and their related accounts.  

Ourportfolio managers welcome your comments and suggestions. We invite you toinvest your money with ours. 

| Nicholas Kaiser,President (Manager, Sextant Growth, Sextant International) | Phelps McIlvaine, Vice President (Manager, SextantShort-Term Bond, Sextant Bond Income) |
|----------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|

 

July 18, 2006

**The 12-month Rank shows how each Fund ranks in itsMorningstar peer category for the year ended May 31, 2006. Morningstar, Inc. isan independent fund performance monitor. Rankings are determined monthly fromtotal returns by Morningstar, by category as determined by Morningstar. Theaverage total return for a category is determined by Saturna Capital, utilizingthe Morningstar database. Results are shown for twelve months because theSextant Funds’ performance fees are computed monthly.*

 

| *May 31, 2006 Semi-Annual Report* | *3* |
|-----------------------------------|-----|

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(Graphic omitted) ***Sextant Short-Term Bond Fund***

***Investments***

| ***Rating**** | ***Issuer***                          | ***Coupon/Maturity***                   | ***Face Amount*** | ***Market Value*** | ***Percentage*** |
|---------------|---------------------------------------|-----------------------------------------|-------------------|--------------------|------------------|
|          |
|          | ***Cosmetics & Toiletries***      |
| A             | Avon Products                         | 6.55% due 8/1/2007                      | $95,000           | $95,881            | 3.9%             |
|          |
|          | ***Diversified Operations***          |
| A             | First Data Corp                       | 4.50% due 6/15/2010                     | 100,000           | 95,461             | 3.8%             |
|          |
|          | ***Finance & Insurance***         |
| A             | Alliance Capital Management           | 5.625% due 8/15/2006                    | 65,000            | 64,742             | 2.6%             |
| AAA           | Federal Farm CreditBank               | 4.62% due 2/7/2009                      | 100,000           | 97,250             | 3.9%             |
| AAA           | Federal Home Loan Bank                | 4.60% due 5/18/2009                     | 120,000           | 117,260            | 4.7%             |
| AAA           | Federal Home LoanMortgage             | 4.125% due 11/6/2009                    | 120,000           | 115,406            | 4.6%             |
| AAA           | Federal National Mortgage Assoc.      | 4.00% due2/23/2007, 5.00% due 2/23/2010 | 120,000           | 117,074            | 4.7%             |
| A+            | International Finance AIG             | 5.75% due 10/15/2006                    | 95,000            | 96,135             | 3.9%             |
|          |                                  | SUBTOTAL                                | 620,000           | 607,867            | 24.4%            |
|          |
|          | ***Machinery***                       |
| A             | Caterpillar Inc.                      | 7.25% due 9/15/2009                     | 100,000           | 104,497            | 4.2%             |
| A-            | Rockwell AutomationInt'l              | 6.15 due 1/15/2008                      | 95,000            | 96,122             | 3.9%             |
|          |                                  | SUBTOTAL                                | 195,000           | 200,619            | 8.1%             |
|          |
|          | ***Medical Drugs***                   |
| A             | Amgen                                 | 6.50% due 12/1/2007                     | 90,000            | 90,679             | 3.6%             |
|          |
|          | ***Publishing***                      |
| BBB-          | Tribune Company                       | 6.875% ue 11/1/2006                     | 45,000            | 44,925             | 1.8%             |
|          |
|          | ***Retail-Discount & Variety***   |
| A-            | TJ X Companies                        | 7.45% due 12/15/2009                    | 95,000            | 100,627            | 4.1%             |
|          |
|          | ***Telecommunications***              |
| A             | Southwestern Bell Telephone           | 6.625% due 7/15/2007                    | 95,000            | 95,579             | 3.8%             |
| A-            | Verizon Wireless Capital              | 5.375% due 12/15/2006                   | 82,000            | 81,439             | 3.3%             |
|          |                                  | SUBTOTAL                                | 177,000           | 177,018            | 7.1%             |
|          |
|          | ***U.S. Government***                 |
| AAA           | U.S. Treasury Note                    | 3.25% due 8/15/2008                     | 225,000           | 216,633            | 8.7%             |
| AAA           | U.S. Treasury Note                    | 4.00% due 6/15/2009                     | 425,000           | 412,715            | 16.6%            |
| AAA           | U.S. Treasury Note                    | 4.00% due 4/15/2010                     | 200,000           | 192,750            | 7.7%             |
|          |                                  | SUBTOTAL                                | 850,000           | 822,098            | 33.0%            |
|          |
|          | ***Utilities***                       |
| BBB           | PSI Energy                            | 7.85% due 10/15/2007                    | 90,000            | 91,413             | 3.7%             |
|          |
|          | **TotalInvestments**                  | **(Cost = $2,388,820)**                 | **$2,357,000**    | **$2,326,588**     | **93.5%**        |
|          | **Other Assets (net of liabilities)** |                                    |                   | **162,229**        | **6.5%**         |
|          | **Total Net Assets**                  |                                    |                   | **$2,488,817**     | **100.0%**       |

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

| *4* | *May 31, 2006 Semi-AnnualReport* |
|-----|----------------------------------|

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***Sextant Short-Term Bond Fund***(Graphic omitted)

| ***FinancialHighlights***                                                | **Period ended**           | **Year endedNovember 30,** |
|--------------------------------------------------------------------------|----------------------------|----------------------------|
| *Selected data per share of capital stockoutstanding throughout period:* | **May31, 2006**            | **2005**                   | **2004** | **2003** | **2002** | **2001** |
| **Net asset value atbeginning of period**                                | **$4.85**                  | **$4.97**                  | **$5.09** | **$5.07** | **$5.10** | **$4.95** |
| *Income from investmentoperations*                                       |                       |                       |   |   |   |   |
| Netinvestment income                                                     | 0.07                       | 0.17                       | 0.19 | 0.23 | 0.27 | 0.26 |
| Net gains or losses on securities (bothrealized and unrealized)          | (0.03)                     | (0.12)                     | (0.12) | 0.02 | (0.02) | 0.14 |
| Total from investment operations                                         | 0.04                       | 0.05                       | 0.07 | 0.25 | 0.25 | 0.40 |
| *Less ditributions*                                                      |                            |                            |  |  |  |  |
| Dividends(from net investment income)                                    | (0.07)                     | (0.17)                     | (0.19) | (0.23) | (0.28) | (0.25) |
| Total distributions                                                      | (0.07)                     | (0.17)                     | (0.19) | (0.23) | (0.28) | (0.25) |
| Paid-in capital from earlyredemption penalties                           | *0.00                      | *0.00                      | - | - | - | - |
|                                                                     |
| **Net asset value at end ofperiod**                                      | **$4.82**                  | **$4.85**                  | **$4.97** | **$5.09** | **$5.07** | **$5.10** |
| **Total Return**                                                         | **0.88%**                  | **0.94%**                  | **1.41%** | **5.00%** | **4.90%** | **8.37%** |
|                                                                     |
| **Ratios/supplementaldata**                                              |                            |                            |  |  |  |  |
| Net assets ($000), end of period                                         | $2,489                     | $2,557                     | $2,255 | $2,259 | $2,177 | $2,189 |
| **Ratio of expenses to average net assets**                              |                            |                            |  |  |  |  |
| Before fee waivers                                                       | 0.62%                      | 1.23%                      | 1.14% | 1.17% | 1.14% | 0.94% |
| After fee waivers                                                        | 0.37%                      | 0.59%                      | 0.58% | 0.60% | 0.93% | 0.51% |
| Ratioof net investment income after wiaver to average net assets         | 1.57%                      | 3.35%                      | 3.80% | 4.47% | 5.23% | 5.45% |
| **Portfolio turnover rate**                                              | **13%**                    | **33%**                    | **37%** | **22%** | **28%** | **28%** |
|                                                                     | *Amount is less than $0.01 |

 

| ***Statement ofAssets and Liabilities***                    | *As of May31, 2006*                                             |
|-------------------------------------------------------------|-----------------------------------------------------------------|
| **Assets**                                                  |
|                                                        | Investments (Cost: $2,388,820)                                  | $2,326,588 |  |
|                                                        | Cash                                                            | 123,274 |  |
|                                                        | Interest Receivable                                             | 36,429 |  |
|                                                        | Receivable for Fund sharessold                                  | 784 |  |
|                                                        | Total Assets                                                    |  | $2,487,075 |
|                                                        |
| **Liabilities**                                             |
|                                                        | Accrued expenses                                                | (1,922) |  |
|                                                        | Due to affiliates                                               | 95 |  |
|                                                        | Distribution Payable                                            | 85 |  |
|                                                        | Total Liabilities                                               |  | (1,742) |
|                                                        |
| **Net Assets**                                              | **$2,488,817**                                                  |
|                                                             |
| **Fund shares outstanding**                                 | **516,334**                                                     |
|                                                        |
| **Analysis of Net Assets**                                  |
|                                                        | Paid-in Capital (unlimited shares authorized, without parvalue) | 2,591,534 |  |
|                                                        | Accumulated net realized loss                                   | (40,485) |  |
|                                                        | Unrealized net depreciation on investments                      | (62,232) |  |
|                                                        | Net Assets applicable to Fund shares outstanding                |  | $2,488,817 |
|                                                        |
| **Net Asset Value, Offering and Redemption price pershare** | **$4.82**                                                       |

 

| *May 31, 2006 Semi-Annual Report* | *(The accompanyingnotes are an integral part of these financial statements)* | *5* |
|-----------------------------------|------------------------------------------------------------------------------|-----|

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(Graphic omitted) ***SextantShort-Term Bond Fund***

| ***Statement of Operations***                           | *For the period ended May 31,2006* |
|---------------------------------------------------------|------------------------------------|
| **InvestmentIncome**                                    |
| Interest income                                         | $48,758                            |  |
| Other income                                            | 22                                 |  |
| Grossinvestment income                                  |                                    | $48,780 |
|                                                    |
| **Expenses**                                            |
| Investment adviser and administration fees              | 7,527                              |  |
| Filing and registrationfees                             | 3,249                              |  |
| Custodian fees                                          | 1,382                              |  |
| Audit fees                                              | 1,050                              |  |
| Chief compliance officer expenses                       | 823                                |  |
| Insurance                                               | 613                                |  |
| Printing and postage                                    | 365                                |  |
| Trustee fees                                            | 317                                |  |
| Legal fees                                              | 144                                |  |
| Other expenses                                          | 72                                 |  |
| Total gross expenses                                    | 15,542                             |  |
| Less adviser fees waived                                | (4,686)                            |  |
| Less custodian fees wiaved                              | (1,487)                            |  |
| Net expenses                                            |                                    | 9,369 |
| Net investment income                                   |                                    | 39,411 |
|                                                    |
| **Net realized gain oninvestments**                     |
| Proceeds from sales                                     | 357,000                            |  |
| Less cost of securities sold (basedon identified cost)  | (357,000)                          |  |
| Realized net gain                                       |                                    | 0 |
|                                                    |
| **Unrealized loss oninvestments**                       |
| End of period                                           | (62,232)                           |  |
| Beginning of period                                     | (44,417)                           |  |
| Decrease in unrealized gain for theperiod               |                                    | (17,815) |
| Net realized and unrealized loss on investments         |                                    | (17,815) |
|                                                    |
| **Net increase in net assetsresulting from operations** | **$21,596**                        |

| ***Statement of Changes in NetAssets***                    |
|------------------------------------------------------------|
|                                                       | *Period ended May 31, 2006* | *Year ended Nov. 30, 2005* |
| **INCREASE (DECREASE) IN NETASSETS**                       |
| ***FromOperations:***                                      |
| Net investmentincome                                       | $39,411 | $82,195 |
| Net realized loss oninvestments                            | 0 | (6,540) |
| Netdecrease in unrealized appreciation                     | (17,815) | (49,766) |
| Net increase in net assets                                 | $21,596 | $25,889 |
|                                                       |
| ***Dividends to shareownersfrom:***                        |
| Net investmentincome                                       | (37,812) | (83,151) |
|                                                       |
| ***Fund share transactions:***                             |
| Proceeds from sales of shares                              | 293,157 | 570,038 |
| Value of shares issued in reinvestment ofdividends         | 37,122 | 81,918 |
|                                                       | 330,279 | 651,956 |
| Early redemption penalties retained                        | 62 | 59 |
| Cost of shares redeemed                                    | (381,853) | (293,595) |
| Net increase (decrease) in netassets                       | (51,512) | 358,400 |
| **Total increase (decrease) in net assets**                | **($67,728)** | **$301,138** |
|                                                       |
| **NETASSETS**                                              |
| Beginning of period                                        | 2,556,545 | 2,255,407 |
| End ofperiod                                               | $2,488,817 | $2,556,545 |
|                                                       |
| **Shares of the Fund sold andredeemed**                    |
| Number of shares sold                                      | 60,526 | 115,934 |
| Number of shares issued inreinvestment of dividends        | 7,668 | 16,765 |
|                                                       | 68,194 | 132,699 |
| Number of shares redeemed                                  | (78,849) | (59,815) |
| **Netincrease (decrease) in number of shares outstanding** | **(10,655)** | **72,884** |

 

 

 

 

 

 

 

 

 

 

 

 

 

 

| *6* | *(The accompanying notes are anintegral part of these financial statements)* | *May 31, 2006 Semi-AnnualReport* |
|-----|------------------------------------------------------------------------------|----------------------------------|

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***Sextant Short-Term Bond Fund***(Graphic omitted)

***Expenses*** As a Sextant Short-TermBond Fund shareowner, you incur ongoing costs, including management fees andother fund expenses. Unlike many mutual funds, you do not incur sales charges(loads) on purchase payments, reinvested dividends or other distributions. Nordo you incur redemption fees, exchange fees or fees related to IndividualRetirement Accounts. This example is intended to help you understand yourongoing costs (in dollars) of investing in the Fund and to compare these costswith the ongoing costs of investing in other mutual funds.

***Example*** The following example isbased on an investment of $1,000 invested at the beginning of the semi-annualperiod and held for six months (Thursday, December 1, 2005 to Wednesday, May 31,2006).

***ActualExpenses*** The first line provides information aboutactual account values and expenses. You may use the information in this line,together with the amount you have invested, to estimate the expenses you havepaid over the period. Simply divide your account value by $1,000 (for example, a$8,600 account value divided by $1,000 = 8.6), then multiply the result by thenumber in the first line under the heading entitled “Expenses Paid DuringYear” to estimate the expenses you paid on your account during this fiscalyear. The Fund also charges for these extra services rendered on request, whichyou may need to add to determine your total expenses: $10 per checkbook, $25 perbank wire, $15 per overnight courier delivery, 2% penalty for redemptions within30 days.

***HypotheticalExample For Comparison Purposes*** The second lineprovides information about hypothetical account values and hypothetical expensesbased on the Fund’s actual expense ratio (based on the last six months)and an assumed rate of return of 5% per year before expenses, which is not theFund’s actual return. The hypothetical account values and expenses may notbe used to estimate the actual ending balance or expenses you paid for the year.You may use this information to compare ongoing costs of investing in the Fundand other funds. To do so, compare this 5% hypothetical example with the 5%hypothetical examples that appear in the shareowner reports of other funds. Youmay wish to add other fees that are not included in the expenses shown in thetable, such as IRA fees (there are no fees on Saturna Capital IRAs, ESAs orHSAs), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlightyour ongoing costs only and do not reflect any transactional costs, such assales charges (loads), redemption fees or exchange fees, or possible earlyredemption penalties. Therefore, the second line is useful in comparing ongoingcosts only, and may not help you determine the relative total costs of owningdifferent funds. 

| **Short-Term Bond Fund**                 | **Beginning Account Value(Thursday, December 1, 2005)** | **Ending Account Value(Wednesday, May 31, 2006)** | **Expenses Paid  DuringPeriod*** |
|------------------------------------------|---------------------------------------------------------|---------------------------------------------------|----------------------------------|
| Actual (0.88% return afterexpenses)      | $1,000                                                  | $1,008.80                                         | $3.71                            |
| Hypopthetical (5% return beforeexpenses) | $1,000                                                  | $1,021.24                                         | $3.73                            |

*Expenses areequal to the Sextant Short-Term Bond Fund’s annualized expense ratio of0.74% (based on the most recent semi-annual period of December 1, 2005 throughMay 31, 2006), multiplied by the average account value of $1,004.40 over theperiod multiplied by 182/365 (to reflect the one-half year period).

 

***Portfolio Composition***

| **Ratings Established** | **By Adviser** | **By Standard &Poor's** | **ByMoody's Investor Services** |
|-------------------------|----------------|-----------------------------|---------------------------------|
| AAA                     | 50.4%          | 42.7%                       | 46.5%                           |
| AA                      | 0.0%           | 6.4%                        | 0.0%                            |
| A                       | 32.8%          | 30.2%                       | 32.8%                           |
| BBB                     | 9.2%           | 5.4%                        | 9.2%                            |
| Unrated                 | 0.0%           | 7.7%                        | 3.9%                            |
| Cash                    | 7.6%           | 7.6%                        | 7.6%                            |

| *May 31, 2006 Semi-Annual Report* | *(The accompanyingnotes are an integral part of these financial statements)* | *7* |
|-----------------------------------|------------------------------------------------------------------------------|-----|

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***Sextant Bond Income Fund***

***Investments***

| ***Rating**** | ***Issuer***                        | ***Coupon/Maturity***                                        | ***Face Amount*** | ***Market Value*** | ***Percentage*** |
|---------------|-------------------------------------|--------------------------------------------------------------|-------------------|--------------------|------------------|
|          |
|          | ***Automotive***                    |
| BBB           | Auto Zone Inc.                      | 5.50% due 11/15/2015                                         | $95,000           | $87,012            | 2.8%             |
|          |
|          | ***Banking***                       |
| A             | Chase Manhattan                     | 7.125% due 6/15/2009                                         | 50,000            | 51,450             | 1.7%             |
| A+            | Citicorp                            | 7.25% due10/15/2011                                          | 50,000            | 52,553             | 1.8%             |
| A-            | Comerica Bank                       | 7.125%due 12/1/2013                                          | 50,000            | 50,999             | 1.7%             |
| AA-           | Norwest Financial                   | 6.85% due 7/15/2009                                          | 50,000            | 51,538             | 1.7%             |
|          |                                | SUBTOTAL                                                     | 200,000           | 206,540            | 6.9%             |
|          |
|          | ***BuildingProducts***              |
| BBB+          | Masco Corporation                   | 7.125% due 8/15/2013                                         | 60,000            | 64,111             | 2.1%             |
|          |
|          | ***Chemicals***                     |
| A             | Air Products & Chemicals        | 8.75% due 4/15/2021                                          | 50,000            | 62,068             | 2.1%             |
|          |
|          | ***DiversifiedFinancial Services*** |
| AAA           | GeneralElectric Capital Corp.       | 8.125% due 5/15/2012                                         | 60,000            | 66,293             | 2.2%             |
|          |
|          | ***ElectricUtilities***             |
| A-            | Commonwealth Edison                 | 7.50% due 7/1/2013                                           | 50,000            | 52,235             | 1.8%             |
| BBB+          | Sempra Energy Corp.                 | 7.95% due 3/1/2010                                           | 50,000            | 53,060             | 1.8%             |
|          |                                | SUBTOTAL                                                     | 100,000           | 105,295            | 3.6%             |
|          |
|          | ***Electronics***                   |
| BBB+          | Koninlijke Phillips Electronics     | 7.25% due 8/15/2013                                          | 50,000            | 53,853             | 1.8%             |
|          |
|          | ***Food***                          |
| BBB           | Conagra                             | 7.875% due 9/15/2010                                         | 33,000            | 34,901             | 1.2%             |
| A+            | Hershey Foods Co.                   | 6.95% due 8/15/2012                                          | 50,000            | 52,751             | 1.8%             |
| BBB+          | HJ Heinz                            | 6.00%due 3/15/2012                                           | 75,000            | 73,969             | 2.5%             |
|          |                                | SUBTOTAL                                                     | 158,000           | 161,621            | 5.5%             |
|          |
|          | ***Insurance***                     |
| A+            | Allstate                            | 7.50% due 6/15/2013                                          | 50,000            | 53,870             | 1.8%             |
| A+            | Progressive Corp.                   | 7.00% due 10/1/2013                                          | 75,000            | 79,535             | 2.7%             |
| A-            | XL Capital (Europe)                 | 6.5% due 1/15/2012                                           | 90,000            | 90,671             | 3.0%             |
|          |                                | SUBTOTAL                                                     | 215,000           | 224,076            | 7.5%             |
|          |
|          | ***InvestmentFinance***             |
| A             | Bear StearnsCo.                     | 3.50% due 6/27/2008, 5.00% due 6/27/2013, 8.00% due6/27/2018 | 154,000           | 138,803            | 4.7%             |
| A+            | Morgan Stanley DeanWitter           | 6.75% due 10/15/2013                                         | 50,000            | 51,857             | 1.7%             |
| AA            | Paine Webber Group                  | 7.625% due 2/15/2014                                         | 50,000            | 54,984             | 1.8%             |
|          |                                | SUBTOTAL                                                     | 254,000           | 245,644            | 8.2%             |

*(Continued on next page)*

| *8* | *(The accompanying notes are anintegral part of these financial statements)* | *May 31, 2006 Semi-AnnualReport* |
|-----|------------------------------------------------------------------------------|----------------------------------|

----

***Sextant Bond IncomeFund*** (Graphic omitted) 

***Investments (continued)***

| ***Rating**** | ***Issuer***                          | ***Coupon/Maturity***                                        | ***Face Amount*** | ***Market Value*** | ***Percentage*** |
|---------------|---------------------------------------|--------------------------------------------------------------|-------------------|--------------------|------------------|
|          |
|          | ***Machinery***                       |
| A             | Caterpillar Inc.                      | 9.375% due 8/15/2011                                         | $40,000           | $46,286            | 1.6%             |
| A             | Dover Corp.                           | 6.25%due 6/1/2008                                            | 70,000            | 70,308             | 2.4%             |
|          |                                  | SUBTOTAL                                                     | 110,000           | 116,594            | 4.0%             |
|          |
|          | ***Medical Supplies***                |
| A             | Becton Dickinson                      | 7.15% due 10/1/2009                                          | 40,000            | 41,375             | 1.4%             |
|          |
|          | ***Oil & Gas***                   |
| A             | Baker Hughes Inc.                     | 6.00% due 2/15/2009                                          | 70,000            | 69,539             | 2.3%             |
| AA            | Texaco Capital                        | 8.625% due 6/30/2010                                         | 40,000            | 43,951             | 1.5%             |
|          |                                  | SUBTOTAL                                                     | 110,000           | 113,490            | 3.8%             |
|          |
|          | ***Real Estate***                     |
| BBB+          | Archstone Smith Opr Trust             | 5.625% due8/15/2014                                          | 50,000            | 48,504             | 1.6%             |
|          |
|          | ***Retailing***                       |
| A             | Dayton Hudson (Target Stores)         | 10.00% due1/1/2011                                           | 50,000            | 58,058             | 2.0%             |
| A             | Lowe's Companies                      | 8.25% due 6/1/2010                                           | 50,000            | 54,366             | 1.8%             |
| BBB           | May Department Stores Corp.           | 8.00% due 7/15/2012                                          | 50,000            | 54,078             | 1.8%             |
| AA            | Wal-Mart Stores                       | 7.25% due 6/1/2013                                           | 45,000            | 47,512             | 1.6%             |
|          |                                  | SUBTOTAL                                                     | 195,000           | 214,014            | 7.2%             |
|          |
|          | ***Telecommunications***              |
| A-            | GTE                                   | 6.90% due 11/1/2008                                          | 50,000            | 50,575             | 1.7%             |
|          |
|          | ***Transportation***                  |
| BBB+          | Southwest Airlines                    | 6.50% due 3/1/2012                                           | 75,000            | 75,967             | 2.5%             |
| BBB-          | US Freightways Corp.                  | 8.5% due 4/25/2010                                           | 50,000            | 52,278             | 1.8%             |
|          |                                  | SUBTOTAL                                                     | 125,000           | 128,245            | 4.3%             |
|          |
|          | ***U.S. Government***                 |
| AAA           | Federal Farm Credit Bank              | 5.09% due 2/17/2015                                          | 120,000           | 113,637            | 3.8%             |
| AAA           | Federal Home Loan Bank                | 5.55% due 4/13/2015                                          | 100,000           | 96,703             | 3.2%             |
| AAA           | Federal Home Loan Mortgage            | 5.00% due 8/26/2009,6.25% due 8/26/2014, 8.00% due 8/26/2019 | 100,000           | 96,264             | 3.2%             |
| AAA           | Federal National Mtge. Assoc.         | 5.00% due 4/10/2015                                          | 100,000           | 94,467             | 3.2%             |
| AAA           | U.S. Treasury Note                    | 4.125% due 5/15/2015                                         | 470,000           | 436,145            | 14.6%            |
|          |                                  | SUBTOTAL                                                     | 890,000           | 837,216            | 28.0%            |
|          |
|          | **Total Investments**                 | **(Cost = $2,840,091)**                                      | **$2,812,000**    | **$2,826,526**     | **94.7%**        |
|          | **Other Assets (net of liabilities)** |                                                              |                   | **157,537**        | **5.3%**         |
|          | **Total Net Assets**                  |                                                         |              | **$2,984,063**     | **100.0%**       |

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

| *May 31, 2006 Semi-Annual Report* | *(The accompanyingnotes are an integral part of these financial statements)* | *9* |
|-----------------------------------|------------------------------------------------------------------------------|-----|

----

(Graphic omitted) ***Sextant Bond Income Fund***

**

| ***Financial Highlights***                                               | **Period ended**           | **Year endedNovember 30,** |
|--------------------------------------------------------------------------|----------------------------|----------------------------|
| *Selected data per share of capital stockoutstanding throughout period:* | **May31, 2006**            | **2005**                   | **2004** | **2003** | **2002** | **2001** |
| **Net asset value atbeginning of period**                                | **$4.92**                  | **$5.06**                  | **$5.07** | **$4.97** | **$4.81** | **$4.56** |
| *Income from investment operations*                                      |
| Net investmentincome                                                     | 0.11                       | 0.21                       | 0.22 | 0.22 | 0.26 | 0.30 |
| Netgains or losses on securities (both realized and unrealized)          | (0.15)                     | (0.14)                     | (0.01) | 0.10 | 0.16 | 0.25 |
| Total from investmentoperations                                          | (0.04)                     | 0.07                       | 0.21 | 0.32 | 0.42 | 0.55 |
| *Less ditributions*                                                      |
| Dividends (from net investmentincome)                                    | (0.11)                     | (0.21)                     | (0.22) | (0.22) | (0.26) | (0.30) |
| Total distributions                                                      | (0.11)                     | (0.21)                     | (0.22) | (0.22) | (0.26) | (0.30) |
| Paid-in capital from earlyredemption penalties                           | *0.00                      | *0.00                      | - | - | - | - |
|                                                                     |
| **Net asset value at end ofperiod**                                      | **$4.77**                  | **$4.92**                  | **$5.06** | **$5.07** | **$4.97** | **$4.81** |
| **Total Return**                                                         | **-0.76%**                 | **1.40%**                  | **4.26%** | **6.52%** | **9.02%** | **12.40%** |
|                                                                     |
| **Ratios/supplementaldata**                                              |
| Net assets ($000), end of period                                         | $2,984                     | $3,050                     | $2,643 | $2,272 | $2,105 | $1,965 |
| **Ratio of expenses to average net assets**                              |
| Before fee waivers                                                       | 0.47%                      | 0.97%                      | 0.89% | 1.15% | 1.06% | 1.06% |
| After fee waivers                                                        | 0.45%                      | 0.94%                      | 0.87% | 0.97% | 0.72% | 0.34% |
| Ratioof net investment income after wiaver to average net assets         | 2.33%                      | 4.26%                      | 4.47% | 4.29% | 5.40% | 6.71% |
| **Portfolio turnover rate**                                              | **12%**                    | **4%**                     | **0%** | **0%** | **29%** | **30%** |
|                                                                     | *Amount is less than $0.01 |

 

| ***Statement ofAssets and Liabilities***                    | *As of May31, 2006*                                             |
|-------------------------------------------------------------|-----------------------------------------------------------------|
| **Assets**                                                  |
|                                                        | Investments (Cost $2,840,091)                                   | $2,826,526 |  |
|                                                        | Cash                                                            | 110,842 |  |
|                                                        | Interest Receivable                                             | 44,250 |  |
|                                                        | Insurance reservepremium                                        | 401 |  |
|                                                        | Receivable for Fund shares sold                                 | 25 |  |
|                                                        | Total Assets                                                    |  | $2,982,044 |
|                                                        |
| **Liabilities**                                             |
|                                                        | Accrued expenses                                                | (2,330) |  |
|                                                        | Due to affiliates                                               | 228 |  |
|                                                        | Distribution payable                                            | 83 |  |
|                                                        | Total Liabilities                                               |  | (2,019) |
|                                                        |
| **Net Assets**                                              | **$2,984,063**                                                  |
|                                                             |
| **Fund shares outstanding**                                 | **625,985**                                                     |
|                                                             |
| **Analysis of Net Assets**                                  |
|                                                        | Paid-in Capital (unlimited shares authorized, without parvalue) | 3,025,614 |  |
|                                                        | Accumulated net realized loss                                   | (27,986) |  |
|                                                        | Unrealized net depreciation on investments                      | (13,656) |  |
|                                                        | Net Assets applicable to Fund sharesoutstanding                 |  | $2,984,0623 |
|                                                        |
| **Net Asset Value,Offering and Redemption price per share** | **$4.77**                                                       |

 

| *10* | *(Theaccompanying notes are an integral part of these financialstatements)* | *May 31, 2006 Semi-Annual Report* |
|------|-----------------------------------------------------------------------------|-----------------------------------|

----

***Sextant Bond IncomeFund*** (Graphic omitted)

| ***Statement of Operations***                           | *For the period ended May 31,2006* |
|---------------------------------------------------------|------------------------------------|
| **InvestmentIncome**                                    |
| Interest income                                         | $84,210                            |  |
| Gross investment income                                 |                                    | $84,210 |
|                                                    |
| **Expenses**                                            |
| Investment adviser and administration fees              | 5,897                              |  |
| Filing and registrationfees                             | 3,675                              |  |
| Audit fees                                              | 1,340                              |  |
| Chief compliance officer expenses                       | 871                                |  |
| Insurance                                               | 766                                |  |
| Custodian fees                                          | 480                                |  |
| Trustee fees                                            | 387                                |  |
| Printing and postage                                    | 357                                |  |
| Legal fees                                              | 328                                |  |
| Other expenses                                          | 57                                 |  |
| Total gross expenses                                    | 14,158                             |  |
| Less custodian fees wiaved                              | (583)                              |  |
| Net expenses                                            |                                    | 13,575 |
| Net investment income                                   |                                    | 70635 |
|                                                    |
| **Net realized loss oninvestments**                     |
| Proceeds from sales                                     | 392,893                            |  |
| Less cost of securities sold (basedon identified cost)  | 398,755                            |  |
| Realized net gain                                       |                                    | (5,862) |
|                                                    |
| **Unrealized loss oninvestments**                       |
| End of period                                           | (13,565)                           |  |
| Beginning of period                                     | 74,080                             |  |
| Decrease in unrealized gain for theperiod               |                                    | (87,645) |
| Net realized and unrealized loss                        |                                    | (93,507) |
|                                                    |
| **Net decrease in net assetsresulting from operations** | **($22,872)**                      |

| ***Statement of Changes in NetAssets***             |
|-----------------------------------------------------|
|                                                | *Period ended May 31, 2006* | *Year ended Nov. 30, 2005* |
| **INCREASE (DECREASE) IN NETASSETS**                |
| ***FromOperations:***                               |
| Net investmentincome                                | $70,635 | $126,312 |
| Net realized gain(loss) on investments              | (5,862) | 826 |
| Netdecrease in unrealized appreciation              | (87,645) | (86,448) |
| Net increase (decrease) in netassets                | (22,872) | 40,690 |
|                                                |
| ***Dividends to shareowners from:***                |
| Net investment income                               | (70,684) | (126,361) |
|                                                |
| ***Fund share transactions:***                      |
| Proceeds from sales of shares                       | 233,150 | 787,201 |
| Value of shares issued in reinvestment ofdividends  | 69,779 | 124,959 |
|                                                | 302,929 | 912,160 |
| Early redemption penalties retained                 | 30 | 12 |
| Cost of shares redeemed                             | (275,445) | (418,996) |
| Net increase  in netassets                          | 27,514 | 493,176 |
| **Total increase (decrease) in net assets**         | **($66,042)** | **$407,505** |
|                                                |
| **NETASSETS**                                       |
| Beginning of period                                 | 3,050,105 | 2,642,600 |
| End ofperiod                                        | $2,984,063 | $3,050,105 |
|                                                |
| **Shares of the Fund sold andredeemed**             |
| Number of shares sold                               | 47,791 | 155,844 |
| Number of shares issued inreinvestment of dividends | 14,391 | 24,894 |
|                                                | 62,182 | 180,738 |
| Number of shares redeemed                           | (56,463) | (83,147) |
| **Netincrease  in number of shares outstanding**    | **5,719** | **97,591** |

 

 

 

 

 

 

 

 

 

  

| *May 31, 2006 Semi-AnnualReport* | *(The accompanying notes are an integral part of these financialstatements)* | *11* |
|----------------------------------|------------------------------------------------------------------------------|------|

----

***Sextant Bond IncomeFund***

 

***Expenses (unaudited)*** As a Sextant  Bond Income Fund shareowner, you incur ongoing costs,including management fees and other fund expenses. Unlike many mutual funds, youdo not incur sales charges (loads) on purchase payments, reinvested dividends orother distributions. Nor do you incur redemption fees, exchange fees or feesrelated to Individual Retirement Accounts. This example is intended to help youunderstand your ongoing costs (in dollars) of investing in the Fund and tocompare these costs with the ongoing costs of investing in other mutualfunds.

***Example*** The following example isbased on an investment of $1,000 invested at the beginning of the semi-annualperiod and held for six months (Thursday, December 1, 2005 to Wednesday, May 31,2006).

***ActualExpenses*** The first line provides information aboutactual account values and expenses. You may use the information in this line,together with the amount you have invested, to estimate the expenses you havepaid over the period. Simply divide your account value by $1,000 (for example, a$8,600 account value divided by $1,000 = 8.6), then multiply the result by thenumber in the first line under the heading entitled “Expenses Paid DuringYear” to estimate the expenses you paid on your account during this fiscalyear. The Fund also charges for these extra services rendered on request, whichyou may need to add to determine your total expenses: $10 per checkbook, $25 perbank wire, $15 per overnight courier delivery, 2% penalty for redemptions within30 days.

***HypotheticalExample For Comparison Purposes*** The second lineprovides information about hypothetical account values and hypothetical expensesbased on the Fund’s actual expense ratio (based on the last six months)and an assumed rate of return of 5% per year before expenses, which is not theFund’s actual return. The hypothetical account values and expenses may notbe used to estimate the actual ending balance or expenses you paid for the year.You may use this information to compare ongoing costs of investing in the Fundand other funds. To do so, compare this 5% hypothetical example with the 5%hypothetical examples that appear in the shareowner reports of other funds. Youmay wish to add other fees that are not included in the expenses shown in thetable, such as IRA fees (there are no fees on Saturna Capital IRAs, ESAs orHSAs), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlightyour ongoing costs only and do not reflect any transactional costs, such assales charges (loads), redemption fees or exchange fees, or possible earlyredemption penalties. Therefore, the second line is useful in comparing ongoingcosts only, and may not help you determine the relative total costs of owningdifferent funds. 

| **Bond Income Fund**                     | **Beginning Account Value(Thursday, December 1, 2005)** | **Ending Account Value(Wednesday, May 31, 2006)** | **Expenses Paid  DuringPeriod*** |
|------------------------------------------|---------------------------------------------------------|---------------------------------------------------|----------------------------------|
| Actual (-0.76% return afterexpenses)     | $1,000                                                  | $992.40                                           | $4.47                            |
| Hypopthetical (5% return beforeexpenses) | $1,000                                                  | $1,020.44                                         | $4.53                            |

*Expenses areequal to the Sextant Bond Income Fund’s annualized expense ratio of 0.90%(based on the most recent semi-annual period of December 1, 2005 through May 31,2006), multiplied by the average account value of $996.20 over the periodmultiplied by 182/365 (to reflect the one-half year period).

 

***Portfolio Composition***

| **Ratings Established** | **By Adviser** | **By Standard &Poor's** | **ByMoody's Investor Services** |
|-------------------------|----------------|-----------------------------|---------------------------------|
| AAA                     | 30.2%          | 30.2%                       | 30.2%                           |
| AA                      | 6.6%           | 6.6%                        | 11.8%                           |
| A                       | 35.9%          | 42.6%                       | 30.7%                           |
| BBB                     | 21.7%          | 14.9%                       | 21.7%                           |
| Unrated                 | 0.0%           | 0.0%                        | 0.0%                            |
| Cash                    | 5.6%           | 5.6%                        | 5.6%                            |

 

| *12* | *(The accompanying notes are an integral part of thesefinancial statements)* | *May 31, 2006 Semi-Annual Report* |
|------|------------------------------------------------------------------------------|-----------------------------------|

----

***Sextant GrowthFund*** (Graphic omitted) 

***Investments***

| ***Issue***                    | ***Quantity*** | ***Tax Cost*** | ***Market Value*** | ***Percentage*** |
|--------------------------------|----------------|----------------|--------------------|------------------|
| Common Stocks                  |
|                           |
| ***Auto/Truck***               |
| Accuride*                      | 10,000         | $134,466       | $114,800           | 0.8%             |
| Oshkosh Truck                  | 3,000          | 160,448        | 158,550            | 1.2%             |
|                           | SUBTOTAL       | 294,914        | 273,350            | 2.0%             |
|                           |
| ***Banking***                  |
| Frontier Financial             | 10,000         | 220,751        | 341,800            | 2.5%             |
| Washington Banking Company     | 5,000          | 83,121         | 95,000             | 0.7%             |
| WashingtonMutual               | 6,750          | 44,124         | 309,893            | 2.3%             |
|                           | SUBTOTAL       | 347,996        | 746,693            | 5.5%             |
|                           |
| ***Computers***                |
| 3Com*                          | 30,000         | 167,836        | 135,300            | 1.0%             |
| AdobeSystems*                  | 9,600          | 50,490         | 274,848            | 2.0%             |
| AppleComputer*                 | 11,000         | 97,170         | 657,470            | 4.8%             |
| Hewlett-Packard                | 7,000          | 157,040        | 226,660            | 1.7%             |
| Intuit*                        | 5,500          | 248,693        | 304,095            | 2.2%             |
| MapInfo*                       | 8,000          | 114,181        | 108,960            | 0.8%             |
| Oracle*                        | 15,000         | 115,139        | 213,300            | 1.6%             |
| SymbolTechnologies             | 10,092         | 122,340        | 119,792            | 0.9%             |
| UnitedOnline                   | 8,000          | 118,060        | 95,360             | 0.7%             |
|                           | SUBTOTAL       | 1,190,949      | 2,135,785          | 15.7%            |
|                           |
| ***Construction***             |
| KBHome                         | 3,500          | 234,513        | 179,200            | 1.3%             |
| Lowe'sCompanies                | 4,000          | 135,141        | 249,120            | 1.8%             |
| Weyerhaeuser                   | 4,200          | 246,845        | 268,632            | 2.0%             |
|                           | SUBTOTAL       | 616,499        | 696,952            | 5.1%             |
|                           |
| ***Diversified Operations***   |
| Honeywell                      | 3,500          | 131,966        | 144,130            | 1.1%             |
|                           |
| ***Electronics***              |
| Advanced Micro Devices*        | 10,000         | 41,708         | 308,900            | 2.3%             |
| Agilent Technologies*          | 8,000          | 231,954        | 279,120            | 2.0%             |
| HarmanInternational Industries | 2,800          | 248,605        | 237,244            | 1.7%             |
|                           | SUBTOTAL       | 522,267        | 825,264            | 6.0%             |
|                           |
| ***Food***                     |
| PerformanceFood Group*         | 3,000          | 96,917         | 97,770             | 0.7%             |
| PepsiCo                        | 4,500          | 248,326        | 272,070            | 2.0%             |
|                           | SUBTOTAL       | 345,243        | 369,840            | 2.7%             |
|                           |
| ***Hotels & Motels***      |
| Red Lion Hotels*               | 21,000         | 150,354        | 241,080            | 1.8%             |

*(Continued onnext page)*

| *May 31, 2006 Semi-Annual Report* | *(The accompanyingnotes are an integral part of these financial statements)* | *13* |
|-----------------------------------|------------------------------------------------------------------------------|------|

----

(Graphic omitted) ***Sextant Growth Fund***

***Investments (continued)***

| ***Issue***                        | ***Quantity*** | ***Tax Cost*** | ***Market Value*** | ***Percentage*** |
|------------------------------------|----------------|----------------|--------------------|------------------|
| Common Stocks                      |
|                               |
| ***Investments***                  |
| Chubb                              | 6,000          | $266,300       | $303,180           | 2.2%             |
| Schwab (Charles)                   | 25,000         | 79,726         | 416,500            | 3.0%             |
|                               | SUBTOTAL       | 346,056        | 719,680            | 5.2%             |
|                               |
| ***Machinery***                    |
| Regal-Beloit                       | 4,000          | 104,006        | 191,720            | 1.4%             |
| Lincoln Electric Holdings          | 4,000          | 180,617        | 219,840            | 1.6%             |
|                               | SUBTOTAL       | 284,623        | 411,560            | 3.0%             |
|                               |
| ***Medical***                      |
| Abott Laboratories                 | 4,000          | 171,114        | 170,800            | 1.2%             |
| Affymetrix*                        | 4,000          | 109,131        | 110,040            | 0.8%             |
| Amgen*                             | 3,700          | 111,703        | 250,083            | 1.8%             |
| BarrLaboratories*                  | 4,500          | 159,489        | 237,150            | 1.7%             |
| Bristol-Meyers Squibb*             | 6,000          | 158,987        | 147,300            | 1.1%             |
| Caremark Rx                        | 5,000          | 139,942        | 239,850            | 1.7%             |
| Genentech                          | 2,000          | 179,816        | 165,920            | 1.2%             |
| LigandPharmaceuticals*             | 10,000         | 112,072        | 109,500            | 0.8%             |
| Lilly (Eli)                        | 3,500          | 249,361        | 180,740            | 1.3%             |
| Pharmaceutical Product Development | 15,000         | 67,174         | 544,950            | 4.0%             |
| VCA Antech*                        | 8,000          | 209,048        | 240,960            | 1.8%             |
|                               | SUBTOTAL       | 1,667,837      | 2,397,293          | 17.4%            |
|                               |
| ***Metal Ores***                   |
| Alcoa                              | 6,000          | 189,043        | 190,320            | 1.4%             |
| Phelps Dodge                       | 2,660          | 76,218         | 227,935            | 1.7%             |
|                               | SUBTOTAL       | 265,261        | 418,255            | 3.1%             |
|                               |
| ***Oil & GasProduction***      |
| Devon Energy                       | 3,000          | 185,020        | 172,080            | 1.3%             |
| NobleDrilling                      | 4,000          | 125,240        | 278,120            | 2.0%             |
| PattersonUTI Energy                | 7,000          | 237,978        | 209,300            | 1.5%             |
|                               | SUBTOTAL       | 548,238        | 659,500            | 4.8%             |
|                               |
| ***Publishing***                   |
| Wiley(John) & Sons, Class A    | 5,000          | 134,777        | 174,150            | 1.3%             |
|                               |
| ***Retail***                       |
| Amazon.com*                        | 3,500          | 152,945        | 121,135            | 0.9%             |
| Bed Bath & Beyond*             | 5,000          | 176,186        | 175,850            | 1.3%             |
| BestBuy                            | 4,000          | 223,149        | 212,000            | 1.5%             |
| Build-A-Bear Workshop*             | 7,000          | 177,548        | 207,900            | 1.5%             |
| Restoration Hardware*              | 15,203         | 94,239         | 98,515             | 0.7%             |
| Staples                            | 6,000          | 144,720        | 140,820            | 1.0%             |
|                               | SUBTOTAL       | 968,787        | 956,220            | 6.9%             |

*(Continued on next page)*

| *14* | *(The accompanying notes are anintegral part of these financial statements)* | *May 31, 2006 Semi-AnnualReport* |
|------|------------------------------------------------------------------------------|----------------------------------|

----

***Sextant Growth Fund***(Graphic omitted)

***Investments(continued)***

| ***Issue***                          | ***Quantity*** | ***Tax Cost*** | ***Market Value*** | ***Percentage*** |
|--------------------------------------|----------------|----------------|--------------------|------------------|
| Common Stocks                        |
|                                 |
| ***Steel***                          |
| Nucor                                | 2,000          | $189,851       | $210,540           | 1.5%             |
|                                 |
| ***Telecommunications***             |
| Trimble Navigation*                  | 7,000          | 202,081        | 321,580            | 2.3%             |
|                                 |
| ***Transportation***                 |
| Norfolk Southern                     | 4,500          | 185,235        | 237,420            | 1.7%             |
| UAL Corp*                            | 2,500          | 99,710         | 73,575             | 0.5%             |
| UnitedParcel Service, Cl B           | 2,500          | 189,469        | 201,375            | 1.5%             |
|                                 | SUBTOTAL       | 474,414        | 512,370            | 3.7%             |
|                                 |
| ***Utilities***                      |
| DukeEnergy                           | 6,000          | 175,259        | 169,320            | 1.2%             |
| FPLGroup                             | 7,000          | 244,409        | 278,810            | 2.0%             |
| IDACORP                              | 6,000          | 159,539        | 200,460            | 1.5%             |
| SempraEnergy                         | 3,000          | 116,395        | 134,910            | 1.0%             |
| USEC                                 | 16,000         | 195,956        | 192,960            | 1.4%             |
|                                 | SUBTOTAL       | 891,558        | 976,460            | 7.1%             |
|                                 |
| **Total Investments**                |           | **$9,573,671** | **$13,190,702**    | **96.2%**        |
| **Other Assets(net of liabilities)** |                |                | **519,150**        | **3.8%**         |
| **TotalNet Assets**                  |                |                | **$13,709,852**    | **100.0%**       |

*Non-incomeproducing

 

***Portfolio Composition***

| ***Industries***     |
|----------------------|
| Medical              | 17.4% |
| Computers            | 15.7% |
| Utilities            | 7.1% |
| Retail               | 6.9% |
| Electronics          | 6.0% |
| Banking              | 5.5% |
| Investments          | 5.2% |
| Construction         | 5.1% |
| Oil & Gas        | 4.8% |
| Cash                 | 3.8% |
| Transportation       | 3.7% |
| Metal Ores           | 3.1% |
| Machinery            | 3.0% |
| Food                 | 2.7% |
| Telecommunications   | 2.3% |
| Auto / Truck         | 2.0% |
| Miscellaneous< 2% | 5.7% |

 

| *May 31, 2006 Semi-AnnualReport* | *(The accompanying notes are an integral part of these financialstatements)* | *15* |
|----------------------------------|------------------------------------------------------------------------------|------|

----

(Graphic omitted)***Sextant GrowthFund***

| ***Financial Highlights***                                               | **Period ended**            | **Year ended November 30,** |
|--------------------------------------------------------------------------|-----------------------------|-----------------------------|
| *Selected data per share ofcapital stock outstanding throughout period:* | **May 31, 2006**            | **2005**                    | **2004** | **2003** | **2002** | **2001** |
| **Net asset value at beginning of period**                               | **$17.11**                  | **$14.20**                  | **$12.91** | **$10.64** | **$11.90** | **$13.16** |
| *Income from investment operations*                                      |
| Netinvestment income                                                     | *0.00                       | (0.02)                      | 0.01 | (0.04) | (0.05) | (0.02) |
| Net gains or losses on securities(both realized and unrealized)          | 0.20                        | 2.96                        | 1.45 | 2.31 | (1.21) | (1.24) |
| Total from investment operations                                         | 0.20                        | 2.94                        | 1.46 | 2.27 | (1.26) | (1.26) |
| *Less ditributions*                                                      |
| Dividends (from net investment income)                                   | -                           | *(0.00)                     | (0.01) | - | - | - |
| Distributions (from capitalgains)                                        | -                           | (0.03)                      | (0.16) | - | - | - |
| Total distributions                                                      | -                           | (0.03)                      | (0.17) | - | - | - |
| Paid-in capital from early redemptionpenalties                           | *0.00                       | *0.00                       | - | - | - | - |
|                                                                     |
| **Net asset value at end ofperiod**                                      | **$17.31**                  | **$17.11**                  | **$14.20** | **$12.91** | **$10.64** | **$11.90** |
| **Total Return**                                                         | **1.17%**                   | **20.76%**                  | **11.35%** | **21.31%** | **(10.51)%** | **(9.57)%** |
|                                                                     |
| **Ratios/supplementaldata**                                              |
| Net assets ($000), end ofperiod                                          | $13,710                     | $9,006                      | $5,331 | $4,732 | $3,373 | $3,792 |
| **Ratio of expenses to average net assets**                              |
| Before fee waivers                                                       | 0.54%                       | 1.28%                       | 0.80% | 1.20% | 1.17% | 0.84% |
| After fee waivers                                                        | 0.50%                       | 1.24%                       | 0.78% | 1.14% | 1.11% | 0.78% |
| Ratio of net investment income after wiaver to average netassets         | **0.00%                     | (0.17%)                     | 0.12% | (0.40%) | (0.48%) | (0.18%) |
| **Portfolio turnover rate**                                              | *****0%**                   | **4%**                      | **8%** | **12%** | **15%** | **8%** |
| *Amount is lessthan $0.01                                                | **Amount is less than 0.01% | ***Amount is less than 1%   |

 

| ***Statement of Assets andLiabilities***                    | *As of May 31,2006*                                             |
|-------------------------------------------------------------|-----------------------------------------------------------------|
| **Assets**                                                  |
|                                                        | Investments (Cost $9,573,671)                                   | $13,190,702 |  |
|                                                        | Cash                                                            | 484,107 |  |
|                                                        | Receivable for Fund shares sold                                 | 16,617 |  |
|                                                        | Dividends receivable                                            | 10,786 |  |
|                                                        | Insurance reserve premium                                       | 1,214 |  |
|                                                        | Total Assets                                                    |  | $13,703,426 |
|                                                        |
| **Liabilities**                                             |
|                                                        | Accrued expenses                                                | (14,032) |  |
|                                                        | Due to affiliates                                               | 7,346 |  |
|                                                        | Payable for Fund shares redeemed                                | 260 |  |
|                                                        | Total Liabilities                                               |  | (6,426) |
|                                                        |
| **Net Assets**                                              | **$13,709,852**                                                 |
|                                                             |
| **Fund shares outstanding**                                 | **791,867**                                                     |
|                                                             |
| **Analysis of Net Assets**                                  |
|                                                        | Paid-in Capital (unlimited shares authorized, without parvalue) | 10,092,821 |  |
|                                                        | Unrealized net appreciation on investments                      | 3,617,031 |  |
|                                                        | Net Assets applicable to Fund sharesoutstanding                 |  | $13,709,852 |
|                                                        |
| **Net Asset Value,Offering and Redemption price per share** | **$17.31**                                                      |

 

| *16* | *(Theaccompanying notes are an integral part of these financialstatements)* | *May 31, 2006 Semi-Annual Report* |
|------|-----------------------------------------------------------------------------|-----------------------------------|

----

***Sextant GrowthFund*** (Graphic omitted)

 

| ***Statement ofOperations***                            | *For theperiod ended May 31, 2006* |
|---------------------------------------------------------|------------------------------------|
| **Investment Income**                                   |
| Dividend income                                         | $67,243                            |  |
| Grossinvestment income                                  |                                    | $67,243 |
|                                                    |
| **Expenses**                                            |
| Investment adviser and administration fees              | 47,481                             |  |
| Filing and registrationfees                             | 7,181                              |  |
| Audit fees                                              | 4,117                              |  |
| Custodian fees                                          | 4,001                              |  |
| Chief compliance officer expenses                       | 3,016                              |  |
| Insurance                                               | 2,581                              |  |
| Printing and postage                                    | 1,090                              |  |
| Trustee fees                                            | 857                                |  |
| Legal fees                                              | 773                                |  |
| Other expenses                                          | 206                                |  |
| Total gross expenses                                    | 71,303                             |  |
| Less custodian fees wiaved                              | (4,178)                            |   |
| Net expenses                                            |                               | 67,125 |
| Net investment income                                   |                               | 118 |
|                                                    |
| **Net realized loss on investments**                    |
| Proceeds from sales                                     | 19,412                             |  |
| Less cost of securities sold (based on identifiedcost)  | 29,148                             |  |
| Realized net loss                                       |                                    | (9,736) |
|                                                    |
| **Unrealized gain on investments**                      |
| End of period                                           | 3,617,031                          |  |
| Beginning of period                                     | 3,564,851                          |  |
| Increase in unrealized gain for the period              |                                    | 52,180 |
| Net realized and unrealized gain                        |                                    | 42,444 |
|                                                    |
| **Net increase in net assetsresulting from operations** | **$42,562**                        |

| ***Statement of Changes in NetAssets***              |
|------------------------------------------------------|
|                                                 | *Period ended May 31, 2006* | *Year ended Nov. 30, 2005* |
| **INCREASE (DECREASE) IN NETASSETS**                 |
| ***FromOperations:***                                |
| Net investmentincome (loss)                          | $118 | ($11,402) |
| Net realized gain(loss) on investments               | (9,736) | 12,474 |
| Netincrease in unrealized appreciation               | 52,180 | 1,494,285 |
| Net increase in net assets                           | $42,562 | $1,495,357 |
|                                                 |
| ***Dividends to shareownersfrom:***                  |
| Net investment income                                | 0 | (2,289) |
| Capital gainsdistributions                           | 0 | (12,474) |
|                                                 | 0 | (14,763) |
|                                                 |
| ***Fund share transactions:***                       |
| Proceeds from sales of shares                        | 5,218,938 | 2,709,260 |
| Value of shares issued in reinvestment ofdividends   | 0 | 14,444 |
|                                                 | 5,218,938 | 2,723,704 |
| Early redemption penalties retained                  | 286 | 53 |
| Cost of shares redeemed                              | (558,330) | (528,970) |
| Net increase in netassets                            | 4,660,894 | 2,194,787 |
| **Total increase  in net assets**                    | **$4,703,456** | **$3,675,381** |
|                                                 |
| **NETASSETS**                                        |
| Beginning of period                                  | 9,006,396 | 5,331,015 |
| End ofperiod                                         | $13,709,852 | $9,006,396 |
|                                                 |
| **Shares of the Fund sold andredeemed**              |
| Number of shares sold                                | 303,365 | 186,540 |
| Number of shares issued in reinvestment of dividends | 0 | 844 |
|                                                 | 303,365 | 187,384 |
| Number of sharesredeemed                             | (37,810) | (36,600) |
| **Netincrease in number of shares outstanding**      | **265,555** | **150,784** |

 

 

 

 

 

 

 

 

| *May 31, 2006 Semi-Annual Report* | *(The accompanyingnotes are an integral part of these financial statements)* | *17* |
|-----------------------------------|------------------------------------------------------------------------------|------|

----

***Sextant Growth Fund***

***Expenses (unaudited)***As a Sextant Growth Fund shareowner, you incur ongoing costs, includingmanagement fees and other fund expenses. Unlike many mutual funds, you do notincur sales charges (loads) on purchase payments, reinvested dividends or otherdistributions. Nor do you incur redemption fees, exchange fees or fees relatedto Individual Retirement Accounts. This example is intended to help youunderstand your ongoing costs (in dollars) of investing in the Fund and tocompare these costs with the ongoing costs of investing in other mutualfunds.

***Example*** The following example isbased on an investment of $1,000 invested at the beginning of the semi-annualperiod and held for six months (Thursday, December 1, 2005 to Wednesday, May 31,2006).

***ActualExpenses*** The first line provides information aboutactual account values and expenses. You may use the information in this line,together with the amount you have invested, to estimate the expenses you havepaid over the period. Simply divide your account value by $1,000 (for example, a$8,600 account value divided by $1,000 = 8.6), then multiply the result by thenumber in the first line under the heading entitled “Expenses Paid DuringYear” to estimate the expenses you paid on your account during this fiscalyear. The Fund also charges for these extra services rendered on request, whichyou may need to add to determine your total expenses: $10 per checkbook, $25 perbank wire, $15 per overnight courier delivery, 2% penalty for redemptions within30 days.

***HypotheticalExample For Comparison Purposes*** The second lineprovides information about hypothetical account values and hypothetical expensesbased on the Fund’s actual expense ratio (based on the last six months)and an assumed rate of return of 5% per year before expenses, which is not theFund’s actual return. The hypothetical account values and expenses may notbe used to estimate the actual ending balance or expenses you paid for the year.You may use this information to compare ongoing costs of investing in the Fundand other funds. To do so, compare this 5% hypothetical example with the 5%hypothetical examples that appear in the shareowner reports of other funds. Youmay wish to add other fees that are not included in the expenses shown in thetable, such as IRA fees (there are no fees on Saturna Capital IRAs, ESAs orHSAs), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlightyour ongoing costs only and do not reflect any transactional costs, such assales charges (loads), redemption fees or exchange fees, or possible earlyredemption penalties. Therefore, the second line is useful in comparing ongoingcosts only, and may not help you determine the relative total costs of owningdifferent funds. 

| **Growth Fund**                          | **Beginning Account Value(Thursday, December 1, 2005)** | **Ending Account Value(Wednesday, May 31, 2006)** | **Expenses Paid  DuringPeriod*** |
|------------------------------------------|---------------------------------------------------------|---------------------------------------------------|----------------------------------|
| Actual (1.17% return afterexpenses)      | $1,000                                                  | $1,011.70                                         | $5.02                            |
| Hypopthetical (5% return beforeexpenses) | $1,000                                                  | $1,019.95                                         | $5.04                            |

*Expenses areequal to the Sextant Growth Fund’s annualized expense ratio of 1.00%(based on the most recent semi-annual period of December 1, 2005 through May 31,2006), multiplied by the average account value of $1,005.85 over the periodmultiplied by 182/365 (to reflect the one-half year period).

 

 

| *18* | *(The accompanying notes are anintegral part of these financial statements)* | *May 31, 2006 Semi-AnnualReport* |
|------|------------------------------------------------------------------------------|----------------------------------|

----

***Sextant InternationalFund***

***Investments***

| ***Issue***                             | ***Number ofShares*** | ***Cost*** | ***Market Value*** | ***Country***  | ***Percentage*** |
|-----------------------------------------|-----------------------|------------|--------------------|----------------|------------------|
| Common Stocks                           |
|                                    |
| ***Aircraft***                          |
| EmbraerAircraft ADR                     | 3,400                 | $105,058   | $113,730           | Brazil         | 1.4%             |
|                                    |
| ***Audio Video***                       |
| SonyADS                                 | 3,000                 | 116,940    | 135,510            | Japan          | 1.6%             |
|                                    |
| ***Automotive***                        |
| Nissan Motor ADR                        | 5,500                 | 106,770    | 133,375            | Japan          | 1.6%             |
|                                    |
| ***Banking***                           |
| Australia & New Zealand Banking ADS | 1,000                 | 84,500     | 100,570            | Australia      | 1.2%             |
| AXAADS                                  | 4,200                 | 98,136     | 145,950            | France         | 1.7%             |
| Banco Bilbao Vizcaya ADS                | 7,500                 | 105,518    | 155,625            | Spain          | 1.9%             |
| ING Groep ADS                           | 4,000                 | 118,530    | 156,840            | Netherlands    | 1.9%             |
| Mitsubishi OFC Financial Group          | 10,000                | 131,800    | 137,600            | Japan          | 1.6%             |
| Nomura Holdings                         | 10,000                | 187,836    | 197,000            | Japan          | 2.4%             |
| Toronto-Dominion Bank                   | 2,400                 | 70,709     | 130,152            | Canada         | 1.6%             |
|                                    | SUBTOTAL              | 797,029    | 1,023,737          |                | 12.3%            |
|                                    |
| ***BuildingMaterials***                 |
| C R H plc ADR                           | 4,000                 | 81,159     | 137,120            | Ireland        | 1.6%             |
| Hanson plc ADR                          | 2,100                 | 88,247     | 128,079            | United Kingdom | 1.5%             |
| James Hardie Industries NV ADS          | 3,000                 | 83,041     | 96,600             | Netherlands    | 1.2%             |
|                                    | SUBTOTAL              | 252,447    | 361,799            |                | 4.3%             |
|                                    |
| ***Chemicals***                         |
| Arkema ADS*                             | 65                    | 1,857      | 2,405              | France         | **0.0%           |
| BASF AG ADS                             | 1,700                 | 120,102    | 138,380            | Germany        | 1.7%             |
| BOC Group plc ADS*                      | 2,000                 | 102,749    | 117,760            | United Kingdom | 1.4%             |
|                                    | SUBTOTAL              | 224,708    | 258,545            |                | 3.1%             |
|                                    |
| ***Computers***                         |
| Business Objects ADS*                   | 7,000                 | 60,510     | 206,430            | France         | 2.5%             |
| DassaultSystems ADR                     | 3,000                 | 146,427    | 156,360            | United Kingdom | 1.9              |
| Satyam Computor Services                | 3,000                 | 108,750    | 96,510             | India          | 1.2%             |
|                                    | SUBTOTAL              | 315,687    | 459,300            |                | 5.6%             |
|                                    |
| ***ConsumerProducts***                  |
| Coca-Cola Femsa ADS                     | 4,300                 | 82,844     | 132,913            | Mexico         | 1.6%             |
| Cadbury Schweppes plc ADR               | 2,500                 | 102,335    | 96,350             | United Kingdom | 1.2%             |
|                                    | SUBTOTAL              | 185,179    | 229,263            |                | 2.8%             |
|                                    |
| ***Electronics***                       |
| Epcos AG ADS*                           | 2,500                 | 57,307     | 36,900             | Germany        | 0.4%             |
| InfineonTechnologies AG*                | 5,000                 | 45,900     | 56,850             | Germany        | 0.7%             |
|                                    | SUBTOTAL              | 103,207    | 93,750             |                | 1.1%             |

*****(Continued on next page)*

| *May 31, 2006 Semi-AnnualReport* | *(The accompanying notes are an integral part of these financialstatements)* | *19* |
|----------------------------------|------------------------------------------------------------------------------|------|

----

***Sextant InternationalFund*** (Graphic omitted) 

***Investments (continued)***

| ***Issue***                      | ***Number of Shares*** | ***Cost*** | ***Market Value*** | ***Country***  | ***Percentage*** |
|----------------------------------|------------------------|------------|--------------------|----------------|------------------|
| Common Stocks                    |
|                             |
| ***Hotels &Motels***         |
| Orient-Express Hotels, Cl A      | 3,500                  | $110,528   | $134,260           | Bermuda        | 1.6%             |
|                             |
| ***Machinery-Electrical***       |
| Nidec                            | 5,000                  | 89,122     | 94,750             | Japan          | 1.1%             |
|                             |
| ***Medical***                    |
| AmericanOriental Bioengineering* | 15,000                 | 72,300     | 84,150             | China          | 1.0%             |
| Glaxo SmithKline plc AADR        | 2,000                  | 90,792     | 110,600            | United Kingdom | 1.3%             |
| Novartis AG ADR                  | 1,600                  | 77,283     | 88,768             | Switzerland    | 1.1%             |
| Serono SA ADR                    | 5,000                  | 88,661     | 79,650             | Switzerland    | 1.0%             |
| Shire plc ADR                    | 2,000                  | 92,860     | 88,380             | United Kingdom | 1.1%             |
|                             | SUBTOTAL               | 421,896    | 451,548            |                | 5.5%             |
|                             |
| ***Metals &Mining***         |
| Anglo-American plc ADR           | 7,500                  | 138,371    | 151,049            | United Kingdom | 1.8%             |
| Potash Corp. of Saskatchewan     | 1,000                  | 34,234     | 91,300             | Canada         | 1.1%             |
| Rio Tinto plc ADS                | 750                    | 74,825     | 166,500            | United Kingdom | 2.0%             |
| Tenaris                          | 2,500                  | 95,290     | 92,225             | Luxebourg      | 1.1%             |
|                             | SUBTOTAL               | 342,720    | 501,074            |                | 6.0%             |
|                             |
| ***Oil & GasProduction***    |
| EnCana                           | 3,000                  | 84,990     | 151,620            | Canada         | 1.8%             |
| Norsk Hydro                      | 6,000                  | 122,808    | 169,200            | Norway         | 2.0%             |
| Petro-Canada                     | 2,000                  | 95,990     | 91,940             | Canada         | 1.1%             |
| Repsol-YPF ADR                   | 3,500                  | 87,962     | 98,175             | Spain          | 1.2%             |
| Total SA ADR                     | 2,600                  | 121,935    | 169,546            | France         | 2.0%             |
|                             | SUBTOTAL               | 513,685    | 680,481            |                | 8.1%             |
|                             |
| ***Paper Products***             |
| Metso ADS                        | 2,100                  | 22,802     | 75,075             | Finland        | 0.9%             |
| UPM-Kymmene Oyj                  | 3,500                  | 64,384     | 75,005             | Finland        | 0.9%             |
| VotorantimCelulose ADS           | 8,000                  | 102,000    | 113,840            | Brazil         | 1.4%             |
|                             | SUBTOTAL               | 189,186    | 263,920            |                | 3.2%             |
|                             |
| ***Photographic Equipment***     |
| Canon, Inc ADR                   | 2,200                  | 95,607     | 154,440            | Japan          | 1.8%             |
|                             |
| ***Publishing***                 |
| Pearson plc ADS                  | 7,000                  | 84,430     | 95,200             | United Kingdom | 1.1%             |
|                             |
| ***Real Estate***                |
| Intrawest                        | 4,600                  | 119,659    | 149,408            | Canada         | 1.8%             |
|                             |
| ***Telecommunications***         |
| American Movil                   | 6,000                  | 29,725     | 195,960            | Mexico         | 2.3%             |
| Audiocodes*                      | 8,000                  | 103,899    | 96,560             | Israel         | 1.1%             |
| BCE                              | 6,000                  | 135,459    | 145,440            | Canada         | 1.7%             |

*(Continued on next page)*

| *20* | *(The accompanying notes are anintegral part of these financial statements)* | *May 31, 2006 Semi-AnnualReport* |
|------|------------------------------------------------------------------------------|----------------------------------|

----

(Graphic omitted) ***Sextant InternationalFund***

***Investments (continued)***

| ***Issue***                         | ***Number of Shares*** | ***Cost***     | ***Market Value*** | ***Country*** | ***Percentage*** |
|-------------------------------------|------------------------|----------------|--------------------|---------------|------------------|
| Common Stocks                       |
|                                |
| ***Telecommunications(continued)*** |
| China Mobil Ltd.                    | 5,500                  | $119,327       | $142,175           | China         | 1.7%             |
| PT IndosatADR                       | 2,500                  | 64,962         | 65,100             | Indonesia     | 0.8%             |
| SK Telecom ADS                      | 5,000                  | 100,161        | 130,500            | South Korea   | 1.6%             |
| Telecom Corp. New Zealand ADS       | 2,500                  | 76,174         | 57,275             | New Zealand   | 0.7%             |
| Telefonica ADS                      | 2,200                  | 85,949         | 108,108            | Spain         | 1.3%             |
| Telefonos de Mexico ADS             | 5,000                  | 107,470        | 98,950             | Mexico        | 1.2%             |
| Telus                               | 2,000                  | 63,219         | 80,900             | Canada        | 1.0%             |
|                                | SUBTOTAL               | 886,345        | 1,120,968          |               | 13.4%            |
|                                |
| ***Transportation***                |
| Canadian Pacific Ltd.               | 3,200                  | 109,246        | 167,360            | Canada        | 2.0%             |
| GOL-LinhasAereas Intel ADS          | 6,000                  | 178,560        | 187,560            | Brazil        | 2.2%             |
| LanAirlines SA                      | 3,500                  | 24,636         | 119,175            | Chile         | 1.4%             |
|                                | SUBTOTAL               | 312,442        | 474,095            |               | 5.6%             |
|                                |
| ***Utilities-Electric***            |
| Enel ADR                            | 1,300                  | 58,877         | 58,188             | Italy         | 0.7%             |
| Enersis ADR                         | 9,000                  | 97,125         | 104,940            | Chile         | 1.3%             |
| Korea Electric Power ADS            | 7,000                  | 120,661        | 142,030            | South Korea   | 1.7%             |
|                                | SUBTOTAL               | 276,663        | 305,158            |               | 3.7%             |
|                                |
| ***Utilities-Gas***                 |
| Transport de Gas del Sur ADR*       | 1,500                  | 18,807         | 7,305              | Argentina     | 0.1%             |
|                                |
| **Total Investments**               |                   | **$5,668,115** | **$7,241,616**     |          | **86.8%**        |
| **OtherAssets**                     |                        |                | **1,104,291**      |               | **13.2%**        |
| **Total Net Assets**                |                        |                | **$8,345,907**     |               | **100.00%**      |

* Non-income producing ** Amount is less than 0.1% ADS =American Depositary Share ADR = American Depositary Receipt

***PortfolioComposition***

| ***Industries***     |   | ***Countries*** |
|----------------------|--------|-----------------|
| Telecommunications   | 13.4%  |            | Other Assets | 13.2% |
| Other Assets         | 13.2%  |            | Canada | 12.1% |
| Banking              | 12.3%  |            | Japan | 10.2% |
| Oil & Gas        | 8.1%   |            | United Kingdom | 9.6% |
| Metals & Mining  | 6.0%   |            | France | 8.2% |
| Transportation       | 5.6%   |            | Mexico | 5.1% |
| Computers            | 5.6%   |            | Brazil | 5.0% |
| Medical              | 5.5%   |            | Spain | 4.3% |
| Building Materials   | 4.3%   |            | South Korea | 3.3% |
| Utilities            | 3.8%   |            | Germany | 2.8% |
| Paper Products       | 3.2%   |            | China | 2.7% |
| Chemicals            | 3.1%   |            | Chile | 2.7% |
| Miscellaneous <2% | 15.9%  |            | Australia | 2.4% |
|                 |        |            | Miscellaneous <2% | 18.4% |

******

| *May 31, 2006 Semi-AnnualReport* | *(The accompanying notes are an integral part of these financialstatements)* | *21* |
|----------------------------------|------------------------------------------------------------------------------|------|

----

***Sextant InternationalFund***

   

| ***FinancialHighlights***                                                | **Period ended** | **Year ended November 30,** |
|--------------------------------------------------------------------------|------------------|-----------------------------|
| *Selected data per share of capital stockoutstanding throughout period:* | **May31, 2006**  | **2005**                    | **2004** | **2003** | **2002** | **2001** |
| **Net asset value at beginning of period**                               | **$11.22**       | **$9.40**                   | **$8.05** | **$6.07** | **$7.24** | **$8.52** |
| *Income from investment operations*                                      |
| Netinvestment income                                                     | 0.08             | 0.05                        | 0.03 | 0.05 | 0.02 | 0.04 |
| Net gains or losses on securities(both realized and unrealized)          | 0.86             | 1.83                        | 1.35 | 1.97 | (1.16) | (1.30) |
| Total from investment operations                                         | 0.94             | 1.88                        | 1.38 | 2.02 | (1.14) | (1.26) |
| *Less ditributions*                                                      |
| Dividends (from netinvestment income)                                    | -                | (0.06)                      | (0.03) | (0.04) | (0.03) | (0.02) |
| Total distributions                                                      | -                | (0.06)                      | (0.03) | (0.04) | (0.03) | (0.02) |
| Paid-in capital fromearly redemption penalties                           | *0.00            | *0.00                       | - | - | - | - |
|                                                                     |
| **Net asset value at end of period**                                     | **$12.16**       | **$11.22**                  | **$9.40** | **$8.05** | **$6.07** | **$7.24** |
| **Total Return**                                                         | **8.38%**        | **19.95%**                  | **17.11%** | **33.23%** | **-15.80%** | **-14.80%** |
|                                                                     |
| **Ratios/supplementaldata**                                              |
| Net assets ($000), end ofperiod                                          | $8,346           | $3,671                      | $2,053 | $1,650 | $1,150 | $1,445 |
| **Ratio of expenses to average net assets**                              |
| Before fee waivers                                                       | 0.49%            | 1.36%                       | 1.22% | 1.29% | 1.36% | 1.37% |
| After fee waivers                                                        | 0.46%            | 1.25%                       | 1.10% | 1.10% | 1.17% | 1.17% |
| Ratio of net investment income after wiaver to average netassets         | 0.62%            | 0.52%                       | 0.31% | 0.75% | 0.20% | 0.34% |
| **Portfolio turnoverrate**                                               | **6%**           | **5%**                      | **7%** | **4%** | **4%** | **6%** |
|                                                                     |             | *Amount is less than $0.01% |

 

| ***Statement of Assets and Liabilities***                   | *As of May 31, 2006*                                            |
|-------------------------------------------------------------|-----------------------------------------------------------------|
| **Assets**                                                  |
|                                                        | Investments (Cost $5,668,115)                                   | $7,241,616 |  |
|                                                        | Cash                                                            | 1,075,704 |  |
|                                                        | Dividends receivable                                            | 19,615 |  |
|                                                        | Receivable for Fund sharessold                                  | 2,161 |  |
|                                                        | Total Assets                                                    |  | $8,339,096 |
|                                                        |
| **Liabilities**                                             |
|                                                        | Accrued expenses                                                | (11,057) |  |
|                                                        | Due to affiliates                                               | 4,246 |  |
|                                                        | Total Liabilities                                               |  | (6,8,11) |
|                                                        |
| **Net Assets**                                              | **$8,345,907**                                                  |
|                                                             |
| **Fund shares outstanding**                                 | **686,367**                                                     |
|                                                             |
| **Analysis of Net Assets**                                  |
|                                                        | Paid-in Capital (unlimited shares authorized, without parvalue) | 6,879,566 |  |
|                                                        | Accumulated net realized loss                                   | (107,160) |  |
|                                                        | Unrealized net appreciation on investments                      | 1,573,501 |  |
|                                                        | Net Assets applicable to Fund sharesoutstanding                 |  | $8,345,907 |
|                                                        |
| **Net Asset Value,Offering and Redemption price per share** | **$12.16**                                                      |

 

| *22* | *(Theaccompanying notes are an integral part of these financialstatements)* | *May 31, 2006 Semi-Annual Report* |
|------|-----------------------------------------------------------------------------|-----------------------------------|

----

***Sextant International Fund***

******

 

| ***Statement of Operations***                           | *For the period ended May 31, 2006* |
|---------------------------------------------------------|-------------------------------------|
| **Investment Income**                                   |
| Dividend income (net of foreign tax of $11,031)         | $83,290                             |  |
| Gross investment income                                 |                                     | $83,290 |
|                                                    |
| **Expenses**                                            |
| Investment adviser and administration fees              | 21,848                              |  |
| Filing and registrationfees                             | 7,155                               |  |
| Custodian fees                                          | 2,721                               |  |
| Audit fees                                              | 2,176                               |  |
| Insurance                                               | 1,427                               |  |
| Chief compliance officerexpenses                        | 1,199                               |  |
| Printing and postage                                    | 593                                 |  |
| Trustee fees                                            | 576                                 |  |
| Legal fees                                              | 315                                 |  |
| Other expenses                                          | 115                                 |  |
| Total gross expenses                                    | 38,125                              |  |
| Less custodian fees wiaved                              | (2,781)                             |   |
| Net expenses                                            |                                | 35,344 |
| Net investment income                                   |                                | 47,946 |
|                                                    |
| **Net realized loss oninvestments**                     |
| Proceeds from sales                                     | 340,615                             |  |
| Less cost of securities sold (basedon identified cost)  | 274,813                             |  |
| Realized net gain                                       |                                     | 65,802 |
|                                                    |
| **Unrealized gain oninvestments**                       |
| End of period                                           | 1,573,501                           |  |
| Beginning of period                                     | 1,188,023                           |  |
| Increase in unrealized gain for theperiod               |                                     | 385,478 |
| Net realized and unrealized gain                        |                                     | 451,280 |
|                                                    |
| **Net increase in net assetsresulting from operations** | **$499,226**                        |

| ***Statement of Changes in NetAssets***              |
|------------------------------------------------------|
|                                                 | *Period ended May 31, 2006* | *Year ended Nov. 30, 2005* |
| **INCREASE (DECREASE) IN NETASSETS**                 |
| ***FromOperations:***                                |
| Net investmentincome                                 | $47,946 | $14,949 |
| Net realized gain oninvestments                      | 65,802 | 21,377 |
| Netincrease in unrealized appreciation               | 385,478 | 495,498 |
| Net increase in net assets                           | 499,226 | 531,824 |
|                                                 |
| ***Dividends to shareownersfrom:***                  |
| Net investmentincome                                 | - | (17,930) |
|                                                 |
| ***Fund share transactions:***                       |
| Proceeds from sales of shares                        | 4,421,890 | 1,203,188 |
| Value of shares issued in reinvestment ofdividends   | - | 17,356 |
|                                                 | 4,421,890 | 1,220,544 |
| Early redemption penalties retained                  | 8 | 45 |
| Cost of shares redeemed                              | (246,316) | (115,946) |
| Net increase in netassets                            | 4,175,582 | 1,104,643 |
| **Total increase ) in net assets**                   | **$4,674,808** | **$1,618,537** |
|                                                 |
| **NETASSETS**                                        |
| Beginning of period                                  | 3,671,099 | 2,052,562 |
| End ofperiod                                         | $8,345,907 | $3,671,099 |
|                                                 |
| **Shares of the Fund sold andredeemed**              |
| Number of shares sold                                | 378,696 | 118,463 |
| Number of shares issued in reinvestment of dividends | - | 1,547 |
|                                                 | 378,696 | 120,010 |
| Number of sharesredeemed                             | (19,604) | (10,994) |
| **Netincrease in number of shares outstanding**      | **359,092** | **109,016** |

 

 

 

 

 

 

 

 

 

 

 

 

| *May 31, 2006 Semi-Annual Report* | *(The accompanyingnotes are an integral part of these financial statements)* | *23* |
|-----------------------------------|------------------------------------------------------------------------------|------|

----

(Graphic omitted)***Sextant International Fund***

***Expenses (unaudited)***As a Sextant International Fund shareowner, you incur ongoing costs, includingmanagement fees and other fund expenses. Unlike many mutual funds, you do notincur sales charges (loads) on purchase payments, reinvested dividends or otherdistributions. Nor do you incur redemption fees, exchange fees or fees relatedto Individual Retirement Accounts. This example is intended to help youunderstand your ongoing costs (in dollars) of investing in the Fund and tocompare these costs with the ongoing costs of investing in other mutualfunds.

***Example*** The following example isbased on an investment of $1,000 invested at the beginning of the semi-annualperiod and held for six months (Thursday, December 1, 2005 to Wednesday, May 31,2006).

***ActualExpenses*** The first line provides information aboutactual account values and expenses. You may use the information in this line,together with the amount you have invested, to estimate the expenses you havepaid over the period. Simply divide your account value by $1,000 (for example, a$8,600 account value divided by $1,000 = 8.6), then multiply the result by thenumber in the first line under the heading entitled “Expenses Paid DuringYear” to estimate the expenses you paid on your account during this fiscalyear. The Fund also charges for these extra services rendered on request, whichyou may need to add to determine your total expenses: $10 per checkbook, $25 perbank wire, $15 per overnight courier delivery, 2% penalty for redemptions within30 days.

***HypotheticalExample For Comparison Purposes*** The second lineprovides information about hypothetical account values and hypothetical expensesbased on the Fund’s actual expense ratio (based on the last six months)and an assumed rate of return of 5% per year before expenses, which is not theFund’s actual return. The hypothetical account values and expenses may notbe used to estimate the actual ending balance or expenses you paid for the year.You may use this information to compare ongoing costs of investing in the Fundand other funds. To do so, compare this 5% hypothetical example with the 5%hypothetical examples that appear in the shareowner reports of other funds. Youmay wish to add other fees that are not included in the expenses shown in thetable, such as IRA fees (there are no fees on Saturna Capital IRAs, ESAs orHSAs), and charges for extra services such as check writing and bank wires.

Please note that the expenses shown are meant to highlightyour ongoing costs only and do not reflect any transactional costs, such assales charges (loads), redemption fees or exchange fees, or possible earlyredemption penalties. Therefore, the second line is useful in comparing ongoingcosts only, and may not help you determine the relative total costs of owningdifferent funds. 

| **International Fund**                   | **Beginning Account Value(Thursday, December 1, 2005)** | **Ending Account Value(Wednesday, May 31, 2006)** | **Expenses Paid  DuringPeriod*** |
|------------------------------------------|---------------------------------------------------------|---------------------------------------------------|----------------------------------|
| Actual (8.38% return afterexpenses)      | $1,000                                                  | $1,083.80                                         | $4.78                            |
| Hypopthetical (5% return beforeexpenses) | $1,000                                                  | $1,020.34                                         | $4.63                            |

*Expenses areequal to the Sextant International Fund’s annualized expense ratio of0.92% (based on the most recent semi-annual period of December 1, 2005 throughMay 31, 2006), multiplied by the average account value of $1,041.90 over theperiod multiplied by 182/365 (to reflect the one-half year period).

 

 

| *24* | *(The accompanying notes are an integral part of thesefinancial statements)* | *May 31, 2006 Semi-Annual Report* |
|------|------------------------------------------------------------------------------|-----------------------------------|

----

***Notes To FinancialStatements***

| ***Note 1 -Organization*** Saturna Investment Trust (the“Trust”) was established under Washington State Law as a BusinessTrust on February 20, 1987. The Trust is registered as a no-load, open-endseries investment company under the Investment Company Act of 1940, as amended.Five portfolio series have been created to date: Sextant Short-Term Bond Fund,Sextant Bond Income Fund, Sextant Growth Fund, and Sextant International Fund(the “Funds”), and Idaho Tax-Exempt Fund, distributed through aseparate prospectus and the results of which are contained in a separate report.

The investment goals of the Growth and InternationalFunds are long-term capital growth. The investment goals of the Bond Income andShort-Term Bond Funds are current income, with Short-Term Bond having theadditional goal of capital preservation.

***NOTE 2 - Significant AccountingPolicies*** The following is a summary of the significantaccounting policies followed by the Funds.

**Security Valuation:** Investments insecurities traded on a national securities exchange (or reported on the NASDAQnational market) are stated at the last reported sales price on the day ofvaluation; other securities traded in the over-the-counter market and listedsecurities for which no sale was reported on that date are stated at the lastquoted bid price. Securities for which quotations are not readily available areadjusted to fair value as determined in good faith under the supervision of thetrustees. 

Fixed-income securities for which there are nopublicly available market quotations are valued using a matrix based onmaturity, quality, yield and similar factors, which are compared periodically tomultiple dealer bids and adjusted by the adviser under fair value policiesestablished by the trustees. The ability of issuers of debt securities held bythe Funds to meet their obligations may be affected by economic and politicaldevelopments in a specific country or region.

**Federal income taxes:** The Funds’policies are to continue to comply with the requirements of the Internal RevenueCode applicable to regulated investment companies and to distribute all theirtaxable income to their shareowners. Therefore, no provisions for Federal incometaxes are required. 

**Dividends and distributionsto shareowners:** Dividends and distributions to shareowners, whichare determined in accordance with income tax regulations, are recorded on theex-dividend date. For the Sextant Short-Term Bond Fund and Sextant Bond IncomeFund, dividends are paid daily and distributed on the last business day of eachmonth. For the Sextant Growth Fund and Sextant International Fund, dividends arepayable at the end of each November. Shareowners electing to reinvest dividendsand distributions purchase additional shares at the net asset value on thepayable date. 

**Use of Estimates:** Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of increases and decreases innet assets from operations during the reporting period. Actual results coulddiffer from those estimates.

**Other:**The cost of securities is the same for accounting and Federal income taxpurposes. Securities transactions are recorded on trade date. Interestincome is recognized on an accrual basis. Discounts and premiums on securitiespurchased are amortized, over the lives of the respective securities. Cashdividends from equity securities are recorded as income on the ex-dividend date.

Expenses incurred by the Trust on behalf of the Fund(e.g., professional fees) are allocated to the Fund and the other Funds of theTrust on the basis of relative daily average net assets. The Adviser has agreedto certain limits on expenses, as described below.

TheTrustees have adopted certain policies and procedures with respect to frequenttrading of Fund shares. The Funds are intended for long-term investment and donot permit rapid trading of their shares. Shares held less than 30 calendardays, including those held in omnibus accounts at intermediaries, will beassessed a 2% early-redemption | penalty (payable to the Fund).

***NOTE 3 - Transactions withAffiliated Persons*** Under a contract approved byshareowners on September 28, 1995, Saturna Capital Corporation providesinvestment advisory services and certain other administrative and distributionservices to conduct Trust business. Each of the Funds pays the Adviser a baseInvestment Advisory and Administrative Services Fee of .60% of average netassets per annum, payable monthly.        

The baseAdvisory Fee is subject to adjustment up or down depending on the investmentperformance of the Fund relative to a specified index.        

*Performance Adjustment for Sextant Short-Term Bond Fund andSextant Bond Income Fund:*
-  For eachmonth in which either of these Funds’ total investment return (change innet asset value plus all distributions reinvested) for the year period periodthrough that month outperforms or underperforms the total return of a specifiedindex for that period by 1% or more but less than 2%, the Base Fee is increasedor decreased by the annual rate of .10% of the Fund’s average daily netassets for the preceding semi-annual period. 
- If the outperformance orunderperformance is 2% or more, then the adjustment is at the annual rate of..20%. 

*Performance adjustmentfor Sextant Growth Fund and Sextant International Fund:*
-  For each month in which either of these Fund’stotal investment return (change in net asset value plus all distributionsreinvested) for the one year period period through that month outperforms orunderperforms the total return of a specified index for that period by 1% ormore but less than 2%, the Base Fee is increased or decreased by the annual rateof .10% of the Fund’s average daily net assets for the precedingsemi-annual period. 
- If the outperformance or underperformance is 2% ormore but less than 4%, then the adjustment is at the annual rate of .20%.
- If the outperformance or underperformance is 4% or more, the adjustment isat an annual rate of .30%.

TheAdviser has voluntarily undertaken to limit expenses of Sextant Short-Term BondFund to 0.75% and Sextant Bond Income to 0.90% through March 31, 2007. TheAdviser waives its investment advisory and administrative fee for SextantShort-Term Bond Fund and Sextant Bond Income Fund completely so long as assetsof either Fund are less than $2 million. For the semi-annual period ended May31, 2006, Sextant Short-Term Bond Fund incurred advisory and administrationexpenses of $7,527. Sextant Bond Income Fund and Sextant Growth Fund incurredadvisory and administration expenses of $5,897 and $47,481, respectively.Sextant International Fund incurred advisory and administration expenses of$21,848.

In accordance with the expense waiver notedabove, for the semi-annual period ended May 31, 2006, Saturna Capital waived$4,686 of the Sextant Short-Term Bond Fund advisory fee.

In accordance with the Funds’ custodian agreements withNational City Bank Indiana, for the semi-annual period ended May 31, 2006,custodian fees for Short-Term Bond, Bond Income, Growth, and International were$1,382, $480, $4,001, and $2,721, respectively. The custodian waived $1,487,$583, $4,178 and $2,781 of its fees for earnings credits for Short-Term Bond,Bond Income, Growth and International respectively.

Onetrustee, who also serves as the president of the Trust, is a director andpresident of the Adviser. On May 31, 2006, the trustees, officers and theirrelated accounts as a group owned 22.8%, 23.6%, 37.2% and 50.6% of theoutstanding shares of Short-Term Bond, Bond Income, Growth and International,respectively.

The four unaffiliated trustees receive $300per Board or committee meeting attended, plus travel expenses. The Trustincurred expenses for the independent trustees of $3,713 to attend meetingsduring the fiscal semi-annual period. Regulations require the Trust to designatea Chief Compliance Officer; Mr. Winship was retained by the Trust and paid$8,697 during the fiscal semi-annual period. The other officers are paid bySaturna Capital, and not the Trust.

 

*(Continued on next page)* |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| *May 31, 2006Semi-Annual Report* | ** | *25* |
|----------------------------------|----|------|

----

***Notes ToFinancial Statements***

Saturna Brokerage Services,Inc. (a discount brokerage subsidiary of Saturna Capital Corporation) is aregistered as a broker-dealer and acts as distributor without compensation.

Saturna Brokerage Services is the primary stockbroker used to effectportfolio transactions for Sextant Growth Fund and Sextant International Fund.The adviser has undertaken to waive all brokerage commissions charged by itsaffiliate.

***NOTE 4 -Investments*** During the semi-annual period ended May 31,2006, Short-Term Bond pur-chased $306,787 of securities and sold $357,000 ofsecurities. Comparable figures for Bond Income are $359,652 purchased and$392,893 sold; for Growth $5,169,305 and $19,412; and for International,$4,065,433 and $340,615. 

***NOTE 5 -Distribution to shareholders*** The tax character ofdistributions paid during the semi-annual period ended May 31, 2006 and November30, 2005 were as follows:

|                 | 2006            | 2005    |
|----------------------|-----------------|---------|
| Short-Term Bond Fund |                 |         |
|                 | Ordinary income | $37,812 | $83,151 |
| Bond IncomeFund      |                 |         |
|                 | Ordinary income | 70,684  | 126,361 |
| Growth Fund          |                 |         |
|                 | Ordinary income | 0       | (2,289) |
|                 | Capital gains   | 0       | (12,474) |
| InternationalFund    |                 |         |
|                 | Ordinary income | $0      | $17,930 |

As of May 31, 2006,components of distributable earnings on a tax basis were as follows:

|                                          | Short-Term Bond | Bond Income | Growth     | International |
|-----------------------------------------------|-----------------|-------------|------------|---------------|
| Cost of investments                           | $2,388,820      | $2,840,091  | $9,573,671 | $5,668,115    |
| Gross tax unrealizedappreciation              | 1,035           | 53,830      | 4,120,918  | 1,763,892     |
| Gross tax unrealized depreciation             | (63,267)        | (67,395)    | (503,887)  | (190,391)     |
| Net tax unrealized appreciation(depreciation) | 62,232          | (13,565)    | 3,617,031  | 1,573,501     |
| Undistributed ordinary income                 | -               | -           | -          | -             |
| Undistributed long-term capital gain(loss)    | (40,485)        | (27,986)    | -          | (107,160)     |
| Totaldistributable earnings                   | (40,485)        | (27,986)    | -          | (107,160)     |
| Total accumulated earnings(losses)            | $(102,717)      | $(41,551)   | $3,617,031 | $1,466,341    |

 

 

| *26* | *(The accompanying notes are an integral part of thesefinancial statements)* | *May 31, 2006 Semi-Annual Report* |
|------|------------------------------------------------------------------------------|-----------------------------------|

----

***Availability of SextantPortfolio Information***

(1) The Sextant Funds filecomplete schedules of portfolio holdings with the SEC for the first and thirdquarters of each fiscal year on Form N-Q. (2) The Funds’ Forms N-Q areavailable on the SEC’s website at http://www.sec.gov., and atwww.saturna.com. (3) The Funds’ Forms N-Q may be reviewed and copiedat the SEC’s Public Reference Room in Washington, DC. Information on theoperation of the Public Reference Room may be obtained by calling1-800-SEC-0330. (4) The Funds make a complete schedule of portfolio holdingsafter the end of each month available to investors athttp://www.saturna.com.

***Availability of Proxy Voting Information***

(1) A description of the policies and procedures that the Funds use todetermine how to vote proxies in relation to portfolio securities is available(a) without charge, upon request, by calling Saturna Capital at (800) 728-8762;(b) on the Funds’ website at www.saturna.com; and (c) on the SEC’swebsite, www.sec.gov. (2) Information regarding how each Fund voted proxiesrelating to portfolio securities during the most recent 12-month period endedJune 30 is available (a) without charge, upon request, by calling SaturnaCapital at (800) 728-8762; (b) on the Fund’s website at www.saturna.com;and (c) on the SEC’s website, www.sec.gov.

***Privacy Statement***

AtSaturna Capital, we understand the importance to you in maintaining the privacyof your financial information. To that end, we want to assure you that weprotect the confidentiality of any personal information you share with us.We collect personal information about you from information we receive from youon applications and other forms and from transactions or trades placed with us.Please be assured that except to administer a transaction with an affiliatedthird party upon your request, we do not disclose any personal information aboutour customers, or our former customers, to anyone, except as may be required bylaw. We maintain our own technology resources to minimize the use of outsideservice providers. Additionally, Saturna Capital restricts access topersonal information about you to those employees who need to know thatinformation to provide products or services to you. We maintain physical,electronic, and procedural safeguards that comply with regulations to guard yourpersonal information. If you have further questions or concerns about thesecurity or privacy of the information we receive from you, please call us at800 / SATURNA.

 

 

| *May 31, 2006 Semi-Annual Report* | *(The accompanyingnotes are an integral part of these financial statements)* | *27* |
|-----------------------------------|------------------------------------------------------------------------------|------|

----

 

| **This report is issued for the information of the shareowners ofthe Funds. It is not authorized for distribution to prospective investors unlessit is accompanied or preceded by an effective prospectus relating to thesecurities of the Funds. The Sextant Funds are series of Saturna InvestmentTrust.**

**Saturna Brokerage Services,Distributor** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

***Saturna Capital*** 1300 North StateStreet Bellingham, WA 98225 www.saturna.com sextant@saturna.com(800) SATURNA

(Graphics omitted)

----

----

 

**Idaho Tax-Exempt Fund**(Graphic omitted)

(Graphic omitted)

May 31, 2006

**Semi-Annual Report**(Graphic omitted)

 

----

(Graphic omitted) ***FellowShareowners:***

For the six months ended May 31, 2006,Idaho Tax-Exempt Fund provided a total return of +0.93%. The net asset value was$5.23 per share compared to $5.27 at November 30, 2005. Fund assets decreasedslightly to $8.31 million. The expense ratio continues at the annual rate of0.88%.

For the twelve months ending May 31, 2006, global bond pricessuffered as major central banks acted in concert to restrain the simultaneousresurgence of growth and inflation in the US, Pan European and Asian economies.Long US Treasury, agency, and corporate bonds returned -5.5% and lower. MostIntermediate US Treasury, agency, and corporate bonds also produced negativereturns. However, intermediate general obligation municipal bonds againoutperformed taxable bonds during a bear market with a positive return of 1.06%.Historically, rising municipal bond yields increase the demand for municipalbonds. In turn, that acts to support municipal bond prices during bear markets.

Looking ahead, we expect the Federal Reserve to move the Federal fundsrate up to 6%. The flat yield curve is already anticipating the end of thecurrent tightening cycle and a peak in short-term rates. We are less concernedabout long term U.S. inflation risk and have extended the weighted averagematurity of the Fund at current yields. We expect better returns for the IdahoTax-Exempt Fund in 2007, and we view any further increase in short-term rates asan excellent opportunity to increase fixed-income allocations and especiallyallocations to municipal bonds.

Conservative investors choose the IdahoTax-Exempt Fund for high quality tax-free municipal bonds and low pricevolatility when they reallocate assets from higher-risk common stocks to therelative safety of municipal bonds. Should restrictive monetary policy producesoft equity prices and an economic slowdown in 2007, the bond markets could havea good year. We recommend a balanced portfolio diversified with both commonstocks and Idaho Tax-Exempt Fund. Idaho has many new residents (i.e., taxpayers)who can benefit from a tax-exempt bond portfolio.

The Idaho economy,population and State employment are once again growing above the nationalaverage. Construction spending has defied all expectations and remains strong.The State is forecasting a second multi-million dollar budget surplus. Idahoissuer credit worthiness remains healthy and improving. The government’sfiscal discipline and pro-business policies still give the State a sharpcompetitive edge.

We invite you to review the advantages of the IdahoTax-Exempt Fund, including low expenses, income free from Idaho and federalincome taxes, a high-quality diversified bond portfolio and daily supervision byprofessional managers. We welcome your suggestions. Only with your help can webe certain that we are meeting your investment needs — our primaryobjective.

| **NicholasKaiser,** President | **Phelps McIlvaine,** Vice President,Portfolio Manager |
|-------------------------------|--------------------------------------------------------|

 

________________________________1 All returns above fromLehman Brothers Global Family of Indexes May 31, 2006. By authors Jack Malvey,CFA, and Joseph Di Censo, CFA

| **One Year**                              | **5 Years** | **10 Years** |
|-------------------------------------------|-------------|--------------|
| **+0.01%**                                | **+3.69%**  | **+4.63%**   |
| Performancedata for years ended 6/30/2006 |

Performance data quoted inthis report represents past performance and is no guarantee of futureperformance. The investment return and principal value of investments in theFund fluctuate daily, and an investor’s shares when redeemed may be worthmore or less than the original cost.

 

 

| 2 | Idaho Tax-Exempt Fund Semi-Annual Report May31, 2006 |
|---|------------------------------------------------------|

 

| ***Investments***        | *As of May 31, 2006*                                       |
|--------------------------|------------------------------------------------------------|
| ***Rating****            | ***Issue***                                                | ***Coupon/Maturity*** | ***Face Amount*** | ***Market Value*** | ***Percentage*** |
|                     |
| ***Building***           |
| AAA                      | Idaho State Building Authority                             | 4.50% due9/1/2023 | $110,000 | $109,893 | 1.3% |
|                     |
| Electirc Power           |
| AAA                      | Idaho FallsElectric Revenue                                | 6.75% due 4/1/2019 | 150,000 | 151,370 | 1.8% |
|                     |
| ***FinancialServices***  |
| AAA                      | Boise City General FundRevenue                             | 5.20% due 12/1/2017 | 160,000 | 169,626 | 2.0% |
| AAA                      | "                                                     | 5.25% due 12/1/2018 | 100,000 | 105,737 | 1.3% |
|                     |                                                       | SUBTOTAL | 260,000 | 275,363 | 3.3% |
|                     |
| ***General Obligation*** |
| AA-                      | Ada & Canyon JSD #2 Meridian                           | 5.50% due7/30/2015 | 50,000 | 55,081 | 0.7% |
| AAA                      | Ada & Canyon JSD #2Meridian                            | 5.00% due 8/15/2020 | 165,000 | 175,182 | 2.1% |
| AAA                      | Ada & Canyon JSD #2 Meridian                           | 5.00% due 8/15/2021 | 155,000 | 164,183 | 2.0% |
| AAA                      | Adams & Washington                                     | 4.00% due 8/15/2019 | 100,000 | 97,811 | 12.% |
| AAA                      | Bingham County SD #55 Blackfoot                            | 4.65% due 8/1/2017 | 285,000 | 293,966 | 3.5% |
| A                        | Boise County SD #73 HorseshoeBend                          | 5.15% due 7/31/2010 | 125,000 | 127,475 | 1.5% |
| AAA                      | Boundary County SD #101                                    | 5.10% due 8/1/2022 | 130,000 | 137,728 | 1.7% |
| AAA                      | Caldwell, Idaho                                            | 5.30% due 5/15/2014 | 150,000 | 157,597 | 1.9% |
| AAA                      | Canyon County SD #139 Valley View                          | 4.05% due 8/15/2016 | 80,000 | 80,504 | 1.0% |
| AAA                      | Canyon County SD #139 ValleyView                           | 4.35% due 9/15/2025 | 350,000 | 342,311 | 4.1% |
| A                        | Canyon County SD #131 Nampa                                | 4.75% due 8/15/2019 | 325,000 | 334,357 | 4.0% |
| AAA                      | Canyon County SD #134Middleton                             | 4.65% due 7/31/2016 | 170,000 | 177,482 | 2.1% |
| A                        | Canyon County SD #135                                      | 6.00% due 8/1/2007 | 50,000 | 49,841 | 0.6% |
| AAA                      | Clark County SD #161Dubois                                 | 5.00% due 8/1/2015 | 270,000 | 282,726 | 3.4% |
| AAA                      | Idaho Housing & Finance Association                    | 4.80% due 6/1/2017 | 100,000 | 104,576 | 1.3% |
| AAA                      | Jerome Lincoln Gooding Co.'sJSD #261                       | 3.75% due 9/15/2018 | 125,000 | 119,539 | 1.4% |
| AAA                      | "                                                     | 5.00% due 9/15/2022 | 250,000 | 264,495 | 3.2% |
| AAA                      | Kootenai-Shonshone Area Library                            | 4.25% due 8/1/2021 | 220,000 | 218,652 | 2.6% |
| AAA                      | Lakeland ID JSD #272                                       | 4.00% due 8/15/2015 | 100,000 | 99,593 | 1.2% |
| AAA                      | Lemhi County                                               | 4.20% due 8/1/2015 | 100,000 | 100,506 | 1.2% |
| AAA                      | Meridian Free Library District                             | 5.00% due 8/1/2015 | 200,000 | 199,359 | 2.4% |
| AAA                      | Nampa Idaho Series B                                       | 5.00% due 8/1/2020 | 200,000 | 208,694 | 2.5% |
| AAA                      | Oneida County SD #351 Malad City                           | 4.00% due 8/15/2015 | 150,000 | 150,464 | 1.8% |
| AAA                      | Owyhee & Canyon Cos. JSD#370                           | 4.55% due 8/15/2016 | 160,000 | 168,799 | 2.0% |
|                     |                                                       | SUBTOTAL | 4,010,000 | 4,110,921 | 49.4% |
|                     |
| ***Housing***            |
| AA                       | Idaho Housing Agency Single Family Mortgage, B-1           | 6.85% due7/1/2012 | 5,000 | 4,963 | 01.% |
| AA+                      | Idaho Housing AgencyRefunding Series A                     | 6.15% due 7/1/2024 | 15,000 | 14,899 | 0.2% |
| AAA                      | Idaho Housing Agency SingleMort Mezz E-1                   | 6.60% due 7/1/2011 | 10,000 | 9,958 | 0.1% |
| AAA                      | Valley County Jail Project Ref                             | 4.70% due 8/1/2014 | 125,000 | 127,148 | 1.5% |
|                     |                                                       | SUBTOTAL | 155,000 | 156,968 | 1.9% |
|                     |
| ***Medical/Hospitals***  |
| AAA                      | Idaho Health Facility Auth. Ref. Holy Cross Sys Corp. Rev  | 5.25% due 12/1/2014 | 110,000 | 113,045 | 1.4% |
| AAA                      | Idaho Health Facility Auth. Corp. Holy Cross Rev Refunding | 5.00%due 12/1/2022 | 115,000 | 117,651 | 1.4% |

*(Theaccompanying notes are an integral part of these financial statements)*

*(Continued on next page)*

| Idaho Tax-Exempt Fund Semi-Annual Report May31, 2006 | 3 |
|------------------------------------------------------|---|

----

 

| ***Investments***                   | *As of May 31, 2006*                            |
|-------------------------------------|-------------------------------------------------|
| ***Rating****                       | ***Issue***                                     | ***Coupon/Maturity*** | ***Face Amount*** | ***Market Value*** | ***Percentage*** |
|                                |
| ***Medical/Hospitals (continued)*** |
| AAA                                 | Madison CO Hospital COP                         | 5.00% due12/1/2018 | $105,000 | $108,082 | 1.3% |
|                                |                                            | SUBTOTAL | 330,000 | 338,778 | 4.1% |
|                                |
| ***PollutionControl***              |
| AAA                                 | Idaho Bond BankAuthority                        | 4.30% due 9/1/2022 | 135,000 | 132,810 | 1.6% |
|                                |
| ***Real Estate***                   |
| AAA                                 | Idaho State Building Association                | 5.05% due9/1/2018 | 95,000 | 96,695 | 1.2% |
| AAA                                 | Idaho State BuildingAuthority                   | 5.00% due9/1/2021 | 100,000 | 101,602 | 1.2% |
| A                                   | Jerome Urban Renewal District                   | 5.40% due9/1/2013 | 200,000 | 201,474 | 2.4% |
| A                                   | Post Falls LID                                  | 5.00% due 5/1/2021 | 300,000 | 301,245 | 3.6% |
|                                |                                            | SUBTOTAL | 695,000 | 701,016 | 8.4% |
|                                |
| ***Roads***                         |
| A                                   | Post Falls ID                                   | 7.95% due 4/15/2007 | 20,000 | 20,147 | 0.3% |
|                                |
| ***StateEducation***                |
| AAA                                 | Boise State UniversityRev                       | 5.00% due 4/1/2019 | 295,000 | 310,255 | 3.7% |
| AAA                                 | Idaho State Building Authority                  | 4.00% due 9/1/2016 | 105,000 | 103,579 | 1.3% |
| AAA                                 | Idaho State Universtiy Ref.& Improvement    | 4.90% due 4/1/2017 | 150,000 | 153,196 | 1.9% |
| AAA                                 | Idaho State UniverstiyRev                       | 4.625% due 4/1/2024 | 220,000 | 223,886 | 2.7% |
| AAA                                 | University of Idaho Student Fee Rev             | 5.00% due 4/1/2019 | 200,000 | 210,342 | 2.5% |
| AAA                                 | University of Idaho StudentFee Rev              | 5.00% due 4/1/2020 | 160,000 | 167,766 | 2.0% |
|                                |                                            | SUBTOTAL | 1,130,000 | 1,169,024 | 14.1% |
|                                |
| ***Sewer***                         |
| A                                   | TroyID Sewer System                             | 7.90% due 2/1/2007 | 15,000 | 14,893 | 0.2% |
| A                                   | "                                          | 8.00% due 2/1/2008 | 15,000 | 14,900 | 0.2% |
| A                                   | "                                          | 8.00% due 2/1/2009 | 20,000 | 19,873 | 0.2% |
| A                                   | "                                          | 8.00% due 2/1/2010 | 20,000 | 19,898 | 0.2% |
|                                |                                            | SUBTOTAL | 70,000 | 69,564 | 0.8% |
|                                |
| ***Urbal Renewal***                 |
| AAA                                 | Boise City Urban Renewal Agency Pk Rev & RA | 5.00% due9/1/2012 | 65,000 | 66,939 | 0.8% |
| AAA                                 | Boise City Urban RenewalLease Rev               | 5.00% due 8/15/2020 | 190,000 | 199,198 | 2.4% |
| AAA                                 | Boise City Urban Renewal Agency Lease Rev       | 5.00% due8/15/2021 | 110,000 | 115,023 | 1.4% |
|                                |                                            | SUBTOTAL | 365,000 | 381,160 | 4.6% |
|                                |
| ***Water Supply***                  |
| AAA                                 | Blackfoot COP Series 2000                       | 5.80% due9/1/2018 | 135,000 | 145,563 | 1.8% |
| AAA                                 | Idaho Bond BankAuthority                        | 5.00% due 9/15/2026 | 250,000 | 259,786 | 3.1% |
| AAA                                 | Ketchum Water Revenue                           | 4.75% due 9/1/2013 | 60,000 | 60,658 | 0.7% |
|                                |                                            | SUBTOTAL | 445,000 | 466,007 | 5.6% |
|                                |
|                                | **TotalInvestments**                            | **(Total Cost = $8,095,453)** | **$7,875,000** | **$8,083,021** | **97.2%** |
|                                | **Other Assets (net of liabilities**            |  |  | **234,095** | **2.8%** |
|                                | **Total Net Assets (100%)**                     |  |  | **$8,317,116** | **100.0%** |

*(The accompanying notes are an integral part of thesefinancial statements)*

| 4 | Bond ratings reflect the adviser’s current rating of eachbond,  as determined using Standard & Poor’s and Moody’sRatings | IdahoTax-Exempt Fund Semi-Annual Report May 31, 2006 |
|---|------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|

----

 

| ***FinancialHighlights***                                                | **Period ended** | **Year ended November 30,** |
|--------------------------------------------------------------------------|------------------|-----------------------------|
| *Selected data per share of capital stockoutstanding throughout period:* | **May31, 2006**  | **2005**                    | **2004** | **2003** | **2002** | **2001** |
| **Net asset value at beginning of period**                               | **$5.27**        | **$5.39**                   | **$5.46** | **$5.37** | **$5.28** | **$5.13** |
| *Income from investment operations*                                      |
| Netinvestment income                                                     | 0.09             | 0.19                        | 0.19 | 0.21 | 0.22 | 0.22 |
| Net gains (losses) on securities,both realized and unrealized            | (0.04)           | (0.10)                      | (0.07) | 0.09 | 0.09 | 0.15 |
| Total from investment operations                                         | 0.05             | 0.09                        | 0.12 | 0.30 | 0.31 | 0.37 |
| *Less ditributions*                                                      |
| Dividends (from netinvestment income)                                    | (0.09)           | (0.19)                      | (0.19) | (0.21) | (0.22) | (0.22) |
| Distributions (from capitalgains)                                        | -                | (0.02)                      | - | - | - | - |
| Total distributions                                                      | (0.09)           | (0.21)                      | (0.19) | (0.21) | (0.22) | (0.22) |
| Paid-in capital fromearly redemption penalties                           | *0.00            | *0.00                       | - | - | - | - |
|                                                                     |
| **Net asset value at end ofperiod**                                      | **$5.23**        | **$5.27**                   | **$5.39** | **$5.46** | **$5.37** | **$5.28** |
| **Total Return**                                                         | **0.93%**        | **1.66%**                   | **2.29%** | **5.40%** | **5.98%** | **7.40%** |
|                                                                     |
| **Ratios/supplementaldata**                                              |
| Net assets ($000), end ofperiod                                          | $8,317           | $8,531                      | $8,472 | $7,692 | $6,943 | $6,650 |
| **Ratio of expenses to average net assets**                              |
| Before fee waivers                                                       | 0.46%            | 0.91%                       | 0.95% | 0.88% | 0.88% | 0.90% |
| After fee waivers                                                        | 0.44%            | 0.88%                       | 0.93% | 0.85% | 0.80% | 0.79% |
| Ratio of net investment income after wiaver to average netassets         | 1.69%            | 3.58%                       | 3.56% | 3.78% | 4.14% | 4.21% |
| **Portfolio turnoverrate**                                               | **18%**          | **21%**                     | **15%** | **6%** | **11%** | **13%** |
|                                                                     |             | *Amount is less than $0.01% |

 

| ***Statement of Assets and Liabilities***                   | *As of May 31, 2006*                                            |
|-------------------------------------------------------------|-----------------------------------------------------------------|
| **Assets**                                                  |
|                                                        | Investments (Cost $8,095,453)                                   | $8,083,021 |  |
|                                                        | Cash                                                            | 138,281 |  |
|                                                        | Interest receivable                                             | 108,809 |  |
|                                                        | Receivable for Fund sharessold                                  | 1,200 |  |
|                                                        | Insurance reserve premium                                       | 801 |  |
|                                                        | TotalAssets                                                     |  | $8,332,112 |
|                                                        |
| **Liabilities**                                             |
|                                                        | Distributions payable                                           | 6,600 |  |
|                                                        | Due to affiliates                                               | 4,729 |  |
|                                                        | Accrued expenses                                                | 3,667 |  |
|                                                        | Total Liabilities                                               |  | 14,996 |
|                                                        |
| **Net Assets**                                              | **$8,317,116**                                                  |
|                                                             |
| **Fund shares outstanding**                                 | **1,589,703**                                                   |
|                                                             |
| **Analysis of Net Assets**                                  |
|                                                        | Paid-in Capital (unlimited shares authorized, without parvalue) | 8,329,548 |  |
|                                                        | Unrealized net depreciation on investments                      | (12,432) |  |
|                                                        | Net Assets applicable to Fund sharesoutstanding                 |  | $8,317,116 |
|                                                        |
| **Net Asset Value,Offering and Redemption price per share** | **$5.23**                                                       |

 

***PortfolioHoldings***

| **Ratingsestablished** | **By Adviser** | **By Standard & Poor's** | **By Moody's Investor Services** |
|------------------------|----------------|------------------------------|----------------------------------|
| **AAA**                | 83.1%          | 36.7%                        | 85.1%                            |
| **AA**                 | 0.9%           | 0.7%                         | 0.9%                             |
| **A**                  | 13.3%          | 4.0%                         | -                                |
| **unrated**            | -              | 55.8%                        | 11.3%                            |
| **cash**               | 2.7%           | 2.7%                         | 2.7%                             |

*(The accompanying notes are an integral part of thesefinancial statements)*

| Idaho Tax-Exempt Fund Semi-Annual Report May 31,2006 | 5 |
|------------------------------------------------------|---|

----

 

| ***Statement ofOperations***                            | *For the6-month period ended May 31, 2006* |
|---------------------------------------------------------|--------------------------------------------|
| **Investment Income**                                   |
| Interest income                                         | $198,476                                   |  |
| Amortization of bond premium                            | (15,222)                                   |  |
| Grossinvestment income                                  |                                            | $183,254 |
|                                                    |
| **Expenses**                                            |
| Investment adviser and administration fees              | 21,472                                     |  |
| Audit fees                                              | 4,599                                      |  |
| Chief compliance officer expenses                       | 2,788                                      |  |
| Shareholder service fee                                 | 2,300                                      |  |
| Insurance                                               | 2,274                                      |  |
| Trustee fees                                            | 1,576                                      |  |
| Custodian fees                                          | 1,256                                      |  |
| Legal fees                                              | 1,112                                      |  |
| Filing and registration fees                            | 1,083                                      |  |
| Printing and postage                                    | 838                                        |  |
| Other expenses                                          | 156                                        |  |
| Total gross expenses                                    | 39,454                                     |  |
| Less custodian fees wiaved                              | (1,583)                                    |   |
| Net expenses                                            |                                       | 37,871 |
| Net investment income                                   |                                       | 145,383 |
|                                                    |
| **Net realized loss oninvestments**                     |
| Proceeds from sales                                     | 1,591,798                                  |  |
| Less cost of securities sold(based on identified cost)  | 1,579,801                                  |  |
| Realized net gain                                       |                                            | 11,997 |
|                                                    |
| **Unrealized loss oninvestments**                       |
| End of period                                           | (12,432)                                   |  |
| Beginning of period                                     | 69,559                                     |  |
| Decrease in unrealized gain for theperiod               |                                            | (81,991) |
| Net realized and unrealized loss                        |                                            | (69,994) |
|                                                    |
| **Net increase in net assetsresulting from operations** | **$75,389**                                |

| ***Statement of Changes in NetAssets***                    | *Periodended May 31, 2006* | *Yearended Nov. 30, 2005* |
|------------------------------------------------------------|----------------------------|---------------------------|
| **INCREASE (DECREASE) IN NET ASSETS**                      |
| ***From Operations:***                                     |
| Net investment income                                      | $145,383                   | $302,302                  |
| Net realized gain on investments                           | 11,997                     | 60,461                    |
| Net decrease in unrealizedappreciation                     | (81,991)                   | (224,149)                 |
| Net increase in net assets                                 | $75,389                    | $138,614                  |
|                                                       |
| ***Dividends to shareowners from:***                       |
| Net investment income                                      | (145,497)                  | (302,222)                 |
| Capital gains distributions                                | -                          | (17,930)                  |
|                                                       | (145,497)                  | (328,214)                 |
|                                                       |
| ***Fund share transactions:***                             |
| Proceeds from sales of shares                              | 781,519                    | 1,076,370                 |
| Value of shares issued in reinvestment ofdividends         | 113,653                    | 264,076                   |
|                                                       | 895,172                    | 1,340,446                 |
| Early redemption penalties retained                        | 1                          | 28                        |
| Cost of shares redeemed                                    | (1,039,397)                | (1,091,850)               |
| Net increase (decrease) in netassets                       | (144,224)                  | 248,624                   |
| **Total increase (decrease) in net assets**                | **$(214,332)**             | **$59,024**               |
|                                                       |
| **NETASSETS**                                              |
| Beginning of period                                        | 8,531,448                  | 8,472,424                 |
| End ofperiod                                               | $8,317,116                 | $8,531,448                |
| Undistributed net investment income                        | $0                         | $80                       |
|                                                       |
| **Shares of the Fundsold and redeemed**                    |
| Number of sharessold                                       | 148,472                    | 218,971                   |
| Number of shares issued in reinvestment of dividends       | 21,606                     | 49,415                    |
|                                                       | 170,078                    | 268,386                   |
| Number of sharesredeemed                                   | (198,434)                  | (221,568)                 |
| **Net increase (decrease) in number of sharesoutstanding** | **(28,356)**               | **46,818**                |

 

 

 

 

 

 

 

 

 

 

***Notes To FinancialStatements** (These notes are an integral part of the abovefinancial statements)*

| **Note1—Organization** Saturna Investment Trust (the“Trust”) was established under Washington State Law as a BusinessTrust on February 20, 1987. The Trust is registered as a no-load, open-endseries investment company under the Investment Company Act of 1940, as amended.Four portfolios have been created to date in addition to Idaho Tax-Exempt Fund(the “Fund”). The other four portfolios distribute through aseparate prospectus and the results of those funds are contained in a separatereport.

The investment objective of the Fund is toprovide income free from federal income, federal alternative minimum and Idahostate income taxes, with a secondary objective of capital preservation.

**Note 2—SignificantAccounting Policies** The following is a summary of thesignificant accounting policies followed by the Fund.

**Security valuation:** Fixed-income securitiesfor which there are no publicly available market quotations are valued usingmatrices based on maturity, quality, yield, call features and similar | factors, which are compared periodically tomultiple dealer bids and adjusted by the adviser under fair value policiesestablished by the Trustees. The ability of issuers of debt securities held bythe Fund to meet their obligations may be affected by economic and politicaldevelopments in the State of Idaho.

**Incometaxes:** The Fund’s policy is to continue to comply with therequirements of the Internal Revenue Code that are applicable to regulatedinvestment companies and to distribute all its taxable income to itsshareowners. Therefore, no provision for Federal income taxes is required.Further, the Fund intends to meet requirements for tax-free income dividends,and requirements of the Idaho Department of Revenue for income dividends free ofIdaho state income tax.

**Dividends anddistributions to shareowners:** Dividends and distributions toshareowners, which are determined in accordance with income tax regulations, arerecorded on the ex-dividend date. Dividends are paid daily and distributed onthe last business day of each month. Shareowners electing to reinvest dividendsand distributions purchase additional shares at the net asset value on thepayable date. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Idaho Tax-Exempt Fund Semi-Annual Report May 31,2006 |
|---|------------------------------------------------------|

----

***Expenses (unaudited)***

All mutual fundshave operating expenses. As an Idaho Tax-Exempt mutual fund shareowner, youincur ongoing costs, including management fees; and other fund expenses such asshareowner reports (like this one). Operating expenses, which are deducted froma fund’s gross earnings, directly reduce the investment return of a fund.All mutual funds (unlike some other financial investments) only report theirresults after deduction of operating expenses.

With the Idaho Tax-Exemptfund, unlike many mutual funds, you do not incur sales charges (loads) onpurchase payments, reinvested dividends, or other distributions. You do notincur redemption fees, exchange fees, or fees related to Individual RetirementAccounts. However, to discourage speculation, you may incur a 2% penalty forredemption of shares held less than 30 days. You may incur fees related to extraservices requested by you for your account, such as a checkbook to use forredemptions or bank wires.

**EXAMPLE**

The example is based on aninvestment of $1,000 invested at the beginning of the fiscal year and held forsix months [Thursday, December 1, 2005 to Wednesday, May 31, 2006].

**ACTUAL EXPENSES** The firstline provides information about actual account values and actual expenses. Youmay use the information in this line, together with the amount you haveinvested, to estimate the expenses that you paid over the period. Simply divideyour account value by $1,000 (for example, a $8,600 account value divided by$1,000 = 8.6), then multiply the result by the number in the first line underthe heading entitled “Expenses Paid During Year” to estimate theexpenses you paid on your account during this fiscal year. The Fund also chargesthe following fees for extra services rendered on request, which you may need toadd to determine your total expenses: $10 per checkbook, $25 per bank wire, $15per overnight courier delivery.

**HYPOTHETICAL EXAMPLE FOR COMPARISONPURPOSES** The second line provides information abouthypothetical account values and hypothetical expenses based on the Fund’sactual expense ratio (based on the last six months) and an assumed rate ofreturn of 5% per year before expenses, which is not the Fund’s actualreturn. The hypothetical account values and expenses may not be used to estimatethe actual ending account balance or expenses you paid for the year. You may usethis information to compare the ongoing costs of investing in the Fund and otherfunds. To do so, compare this 5% hypothetical example with the 5% hypotheticalexamples that appear in the shareowner reports of the other funds. You may wishto add other fees that are not included in the expenses shown in the table andcharges for extra services such as check writing and bank wires.

Pleasenote that the expenses shown are meant to highlight your ongoing costs only anddo not reflect any transactional costs, such as sales charges (loads),redemption fees, or exchange fees (note that the Idaho Tax-Exempt Fund does nothave any such transaction costs). Therefore, the second line is useful incomparing ongoing costs only, and may not help you determine the relative totalcosts of owning different funds. 

| ****                                     | **Beginning Account Value(Thursday, December 1, 2005)** | **Ending Account Value(Wednesday, May 31, 2006)** | **Expenses Paid  DuringPeriod*** |
|------------------------------------------|---------------------------------------------------------|---------------------------------------------------|----------------------------------|
| Actual (0.93% return afterexpenses)      | $1,000                                                  | $1,009.30                                         | $4.61                            |
| Hypopthetical (5% return beforeexpenses) | $1,000                                                  | $1,020.34                                         | $4.63                            |

> 
* Expenses areequal to Idaho Tax-Exempt Bond Fund’s annualized expense ratio of 0.92%(based on the most recent semi-annual period of December 1, 2005 through May 31,2006, multiplied by the average account value of $1,004.65 over the periodmultiplied by 182/365 (to reflect the one-half year period).

| **Use of estimates:** The preparation offinancial statements in conformity with accounting principles generally acceptedin the United States of America requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of increases and decreases in net assetsfrom operations during the reporting period. Actual results could differ fromthose estimates. 

**Other:** The cost ofsecurities is the same for accounting and Federal income tax purposes.Securities transactions are recorded on trade date. Interest income isrecognized on an accrual basis. Discounts and premiums on securities purchasedare amortized over the lives of the respective securities.  Expensesincurred by the Trust on behalf of the Fund (e.g., professional fees) areallocated to the Fund and the other Funds of the Trust on the basis of relativedaily average net assets.

The Trustees have adoptedcertain policies and procedures with respect | to frequent trading of Fund shares. The Funds are intended forlong-term investment and do not permit rapid trading of their shares. Sharesheld less than 30 calendar days, including those held in omnibus accounts atintermediaries, will be assessed a 2% early-redemption penalty (payable to theFund).

**Note3—Transactions with Affiliated Persons** Under acontract approved by shareowners on October 12, 1990, Saturna CapitalCorporation provides investment advisory services and certain otheradministrative and distribution services to conduct the Fund’s business.For such services, the Fund pays an annual fee equal to .50% of average dailynet assets. For the 6-month period ended May 31, 2006, the Fund incurredadvisory fee expenses of $21,472.        

In accordancewith the Fund’s agreement with its custodian, National City Bank ofIndiana, for the 6-month period ended May 31, 2006, custodian fees incurred bythe Fund amounted to $1,256. The custodian waived $1,583 of its fees forearnings credits.

Saturna Brokerage Services, Inc. (asubsidiary of Saturna Capital Corporation) is |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Idaho Tax-Exempt FundSemi-Annual Report May 31, 2006 | 7 |
|------------------------------------------------------|---|

----

***Notes To Financial Statements(continued)***

| a broker-dealer and acts asdistributor without compensation. Saturna Capital Corporation acts as shareownerservicing agent for the Fund, for a monthly fee plus certain expenses. For the6-month period ended May 31, 2006, the Fund paid shareholder servicing fees of$2,300.

One trustee, who also serves as the president ofthe Trust, is a director and president of the Adviser. On May 31, 2006, thetrustees, officers and their immediate families as a group owned 0.05% of theoutstanding shares of the Fund.

The four unaffiliatedtrustees receive $300 per Board or committee meeting attended, plus travelexpenses, allocated pro-rata to the five Funds of Saturna Investment Trust. TheTrust paid the Independent Trustees $3,713 to attend meetings during the periodcovered by this report. Regulations require the Trust to designate a ChiefCompliance Officer; Mr. James Winship was retained by the Trust and paid $8,697during the period. The other officers are paid by Saturna Capital, and not theTrust.

**Note4—Investments** During the 6-month period ended May 31,2006, the Fund purchased $1,511,773 of securities and sold/matured $1,591,798 ofsecurities.

**Distributions toshareowners:** The tax character of distributions paid during the6-month period ended May 31, | 2006 and the year ended November 30, 2005 were as follows: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2006                                                       | 2005 |
| Tax-ExemptIncome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | $145,497                                                   | $302,222 |
| TaxableIncome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 0                                                          | 0 |
| Capital Gains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 0                                                          | $25,992 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| As of May 31,2006 the components of capital on a tax basis were as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Cost of investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $8,095,453                                                 |
| Gross unrealized appreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 67,764                                                     |
| Grossunrealized depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (80,196)                                                   |
| Net unrealized depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $(12,432)                                                  |
| Undistributed ordinary income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 0                                                          |
| Capitalloss carryforward                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ( 0 )                                                      |
| Total distributable earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $ 0                                                        |
| Total accumulated earnings (losses)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $(12,432)                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

 

| ***Availability of Fund PortfolioInformation***
-   The Fundfiles a complete schedule of portfolio holdings with the SEC for the first andthird quarters of each fiscal year on Form N-Q. 
-  The Fund’s Forms N-Q is available on the SEC’swebsite at www.sec.gov., and at www.saturna.com. 
-   The Fund’s Forms N-Q may be reviewed and copied at theSEC’s Public Reference Room in Washington, DC. Information on theoperation of the Public Reference Room may be obtained by calling1-800-SEC-0330. 
-   The Fund makes a completeschedule of portfolio holdings after the end of each month available toinvestors at www.saturna.com. 

***Availability of Proxy Voting Information***
-  A description of the policies and procedures thatthe Funds use to determine how to vote proxies relating to portfolio securitiesis available (a) without charge, upon request, by calling Saturna Capital at1-800 728-8762 (b) on the Funds’ website at www.saturna.com; and (c) onthe SEC’s website at www.sec.gov. 
-  Information regarding how each Fund voted proxies relating to portfoliosecurities during the most recent 12-month period ended June 30 is available (a)without charge, upon request, by calling Saturna Capital at 1-800 728-8752; (b)on the Funds’ website at www.saturna.com; and (c) on the SEC’swebsite at www.sec.gov. | ***Privacy Statement***

AtSaturna Capital, we understand the importance to you in maintaining the privacyof your financial information. To that end, we want to assure you that weprotect the confidentiality of any personal information you share with us.

We collect personal information about you from information wereceive from you on applications and other forms and from transactions or tradesplaced with us. Please be assured that except to administer a transaction withan affiliated third party upon your request, we do not disclose any personalinformation about our customers, or our former customers, to anyone, except asmay be required by law. We maintain our own technology resources to minimize theuse of outside service providers.

Additionally, SaturnaCapital restricts access to personal information about you to those employeeswho need to know that information to provide products or services to you. Wemaintain physical, electronic, and procedural safeguards that comply withregulations to guard your personal information. If you have further questions orconcerns about the security or privacy of the information we receive from you,please call us at 800 / SATURNA.

 

 

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This report is issuedfor the information of the shareowners of the Fund. It is not authorized fordistribution to prospective investors unless it is accompanied or preceded by aneffective prospectus relating to the securities of the Fund. Idaho Tax-ExemptFund is a series of Saturna Investment Trust.

 

***Saturna Capital*** 1300 N. State StreetBellingham, WA 98225 www.saturna.com (800) SATURNA

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**Submission of Matters to a Vote of SecurityHolders** Not applicable.

**Controls and Procedures** Internal control overfinancial reporting is under the supervision of the principal executive andfinancial officers. On July 6, 2006, Mr. Nicholas Kaiser (President) and Mr.Christopher Fankhauser (Treasurer), reviewed the internal control procedures forSaturna Investment Trust and found them reasonable and adequate.

**Exhibits** Exhibits included withthis filing:

> 
Certifications.
- Nicholas Kaiser,President, Saturna Investment Trust
-  Christopher Fankhauser, Treasurer,Saturna Investment Trust

 

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**Signatures**Pursuant to the requirements of the Securities Exchange Act of 1934 and theInvestment Company Act of 1940, the registrant has duly caused this report to besigned on its behalf by the undersigned, thereunto duly authorized. SATURNAINVESTMENT TRUST

By/s/ Nicholas Kaiser President July21, 2006 Pursuant to the requirements of the Securities Exchange Act of1934 and the Investment Act of 1940, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on thedates indicated.

By:/s/ Nicholas Kaiser PresidentJuly 21, 2006 By:/s/ Christopher FankhauserTreasurer July 21, 2006