(Graphic  Omitted)
Sextant
Mutual  Funds
Fellow  Shareowners:
Its been a good year for some markets,  but others failed to keep up. For the 12
months ended November 30, 1998, large capitalization  stocks as found in the Dow
Jones  Industrials  (+16.5%)  and the S&P 500  (+21.7%)  were up. But medium and
smaller  company  stocks,  exemplified  by the Russell  2000  (-7.5%) were down.
Domestic  growth  mutual  funds  averaged  +7.85%.Its  been a good year for some
markets,  but others  failed to keep up. For the 12 months  ended  November  30,
1998, large capitalization stocks as found in the Dow Jones Industrials (+16.5%)
and the S&P 500  (+21.7%)  were up.  But  medium  and  smaller  company  stocks,
exemplified by the Russell 2000 (-7.5%) were down.  Domestic growth mutual funds
averaged +7.85%.  Growth and momentum  investors did well, but longer-term value
investors  suffered.  The 1998 stock market ignored value  investors - those who
focus on earnings and assets (like  Saturna  Capital)  rather than  momentum and
psychology.  Our quality focus brought  excellent results to our bond funds, but
our equity funds' emphasis on the financial,  cyclical,  technology, and service
sectors  brought  sub-par  returns.Growth  and momentum  investors did well, but
longer-term  value  investors  suffered.  The 1998 stock  market  ignored  value
investors - those who focus on earnings and assets (like Saturna Capital) rather
than momentum and psychology. Our quality focus brought excellent results to our
bond  funds,  but  our  equity  funds'  emphasis  on  the  financial,  cyclical,
technology,  and service sectors brought  sub-par  returns.  The no-load Sextant
Funds are designed to address a broad spectrum of investment  needs.  All stress
low  operating  expenses  and employ a "fulcrum"  advisory  fee  structure  that
rewards or penalizes Saturna Capital for investment results.  The four Funds pay
increased or decreased  monthly advisory fees depending on relative  performance
over  the  prior 12  months.  For the  fiscal  year  ended  November  30,  1998,
comparative  total returns and percentile  category rankings (1 is best) are:The
no-load  Sextant  Funds are designed to address a broad  spectrum of  investment
needs.  All stress low  operating  expenses and employ a "fulcrum"  advisory fee
structure that rewards or penalizes Saturna Capital for investment results.  The
four Funds pay  increased  or  decreased  monthly  advisory  fees  depending  on
relative  performance  over the  prior 12  months.  For the  fiscal  year  ended
November 30, 1998, comparative total returns and percentile category rankings (1
is best) are:
     Sextant  Fund          Total  Return     vs. Morningstar     Total Return
     -------------          -------------     ---------------     ------------
RankSextant  Fund          Total  Return      vs. Morningstar     Total Return
  ---------------          -------------      ---------------     ------------
Rank
  --
     Short-Term Bond     6.67%     Short-Term Bonds     6.54%     25Short-Term
Bond          6.67%          Short-Term  Bonds          6.54%          25
Bond  Income          10.04%       Long-Term Bonds     7.46%     20Bond Income
10.04%          Long-Term  Bonds          7.46%          20
Growth          (0.97)%     Domestic Growth     7.85%     82Growth     (0.97)%
Domestic  Growth          7.85%          82
International  3.57%  Foreign  Stock 9.56%  84International  3.57% Foreign Stock
9.56% 84 For the year,  the  high-quality  Sextant bond funds both  outperformed
their peers. There is an anchor role for bonds in most portfolios, especially if
we begin to  experience  deflation.  With  its 2 to 3 year  portfolio  maturity,
Short-Term Bond Fund is a great alternative to money-market  funds for investing
your cash reserves. Bond Income Fund's long (13 year) average portfolio maturity
boosted its total return in a year of falling  interest  rates.For the year, the
high-quality  Sextant  bond funds both  outperformed  their  peers.  There is an
anchor role for bonds in most  portfolios,  especially if we begin to experience
deflation.  With its 2 to 3 year portfolio  maturity,  Short-Term Bond Fund is a
great alternative to money-market  funds for investing your cash reserves.  Bond
Income Fund's long (13 year) average portfolio maturity boosted its total return
in a year of falling  interest  rates.  Our value approach to investing hurt the
Growth Fund.  For 1997,  the Fund  provided a total return of 30.3%  (almost 10%
above the average Morningstar domestic growth fund) but the 1998 total return of
-0.97% (over 8% below the comparable Morningstar  average).Our value approach to
investing  hurt the Growth Fund.  For 1997,  the Fund provided a total return of
30.3% (almost 10% above the average  Morningstar  domestic  growth fund) but the
1998 total return of -0.97% (over 8% below the comparable  Morningstar average).
We created Sextant International Fund to invest in non-US equities, believing it
unwise to <PAGE>



insulate oneself from foreign events and  opportunities.  With 1998 illustrating
the risks in foreign investing, the Fund still provided a +3.57% return. Sextant
International  confines its  investments to stocks easily traded in the US, such
as ADR's.  Little of the portfolio was subject to the Asian financial  meltdown,
and our emphasis  continues on European and Canadian  issues.We  created Sextant
International Fund to invest in non-US equities, believing it unwise to insulate
oneself from foreign events and opportunities.  With 1998 illustrating the risks
in  foreign  investing,  the  Fund  still  provided  a  +3.57%  return.  Sextant
International  confines its  investments to stocks easily traded in the US, such
as ADR's.  Little of the portfolio was subject to the Asian financial  meltdown,
and our emphasis continues on European and Canadian issues.  Further information
on each Fund is found in the  following  sections of this report.  Our portfolio
managers  welcome  your  comments  and  suggestions.  The entire  staff works to
minimize operating expenses.  In the footnotes,  you will notice another unusual
feature of the Sextant funds:  on average,  23% of each Sextant Fund is owned by
the trustees,  officers,  and their immediate families.  We invite you to invest
your money with ours.Further  information on each Fund is found in the following
sections of this  report.  Our  portfolio  managers  welcome  your  comments and
suggestions.  The entire  staff works to  minimize  operating  expenses.  In the
footnotes,  you will notice another  unusual  feature of the Sextant  funds:  on
average, 23% of each Sextant Fund is owned by the trustees,  officers, and their
immediate families. We invite you to invest your money with ours.
                              RESPECTFULLY,
RESPECTFULLY,

     NICHOLAS  KAISER,  PRESIDENT          PHELPS  MCILVAINE,  VICE  PRESIDENT
     (Manager,  Sextant  Growth;          (Manager,  Sextant  Bond  Income;
     Sextant  International  )          Sextant  Short-Term  Bond)
(Graphic  Omitted)
              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To  the  Shareholders  and  Board  of  Trustees
Saturna  Investment  Trust
We have  audited the  accompanying  statement of assets and  liabilities  of the
Sextant  Short-Term Bond Fund, Sextant Bond Income Fund, Sextant Growth Fund and
Sextant  International  Fund,  each a series of the  Saturna  Investment  Trust,
including the schedules of  investments as of November 30, 1998, and the related
statements of  operations  for the year then ended and changes in net assets and
the financial  highlights for each of the two years then ended.  These financial
statements  and  financial  highlights  are the  responsibility  of the  Trust's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements  and  financial   highlights  based  on  our  audits.  The  financial
statements  and financial  highlights  presented for the year ended November 30,
1996 and prior were audited by other  auditors  whose report dated  December 18,
1996,  expressed an unqualified  opinion on those  statements.  We conducted our
audits in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements and financial  highlights are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of November 30, 1998, by correspondence with
the custodian.  Our audit also includes assessing the accounting principles used
and significant estimates made by management,  as well as evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.  In our opinion the 1998 financial  statements
and  financial  highlights  referred to above  present  fairly,  in all material
respects,  the financial  position of Sextant Short-Term Bond Fund, Sextant Bond
Income Fund, Sextant Growth Fund and Sextant  International Fund, as of November
30,  1998,  the results of their  operations  for the year then  ended,  and the
changes in their net assets and their financial  highlights for eqach of the two
years in the period then ended, in conformity with generally accepted accounting
principles.
                                                          TAIT, WELLER & BAKER
Philadelphia,  Pennsylvania
December  11,  1998

<PAGE>
                                                            1998 ANNUAL REPORT

November  30,  1998
                                                             (Graphic Omitted)
                          SEXTANT SHORT-TERM BOND FUND
(GRAPHIC  OMITTED)
INVESTMENTSINVESTMENTS
(GRAPHIC  OMITTED)

<TABLE>

<CAPTION>




<S>     <C>                                        <C>        <C>                  <C>           <C>

Rating  Issuer                                                Coupon/Maturity      Face Amount   Market Value
------  -----------------------------------------             -------------------  ------------  -------------

        Aerospace - Aircraft (4.4%)
A       McDonnell Douglas/Boeing Capital                          9.25% 4/1/2002         75,000         83,145
        Banking (12.5%)
A+      Bank of America                                          9.375% 3/1/2001         50,000         53,615
A-      Bankers Trust-NY                                         9.50% 6/14/2000         75,000         78,083
A       Harris Bank Corp                                         9.375% 6/1/2001        100,000        107,560
                                                                                   ------------  -------------
                                                   SUB-TOTAL                            225,000        239,258
        Finance (17.1%)
A-      Aristar                                                  6.75% 8/15/2001         95,000         97,005
A       Deluxe Corp                                              8.55% 2/15/2001         50,000         52,840
BBB+    Finovia Capital Corp.                                     5.98 2/27/2001         75,000         74,610
A       Travellers Property & Casualty                           6.75% 4/15/2001        100,000        101,520
                                                                                   ------------  -------------
                                                   SUB-TOTAL                            320,000        325,975
        Food (2.8%)
A-      Coca Cola Enterprises                                    7.875% 2/1/2002         50,000         52,850
        Oil & Gas (7.9%)
AA+     Amoco Canada                                             7.25% 12/1/2002         70,000         74,144
A-      Fina Oil & Chemical                                     6.875% 7/15/2001         75,000         76,710
                                                                                   ------------  -------------
                                                   SUB-TOTAL                            145,000        150,854
        Investment Finance (8.1%)
AA-     Merrill Lynch & Co.                                      6.00% 1/15/2001        100,000        100,790
A+      Morgan Stanley                                          9.375% 6/15/2001         50,000         53,535
                                                                                   ------------  -------------
                                                   SUB-TOTAL                            150,000        154,325
        Machinery (3.8%)
A-      Ingersol Rand                                           6.75% 11/19/2001         70,000         71,561
        Medical - Health Maintenance Org. (3.7%)
A-      Aetna Services                                           6.38% 8/15/2001         70,000         71,211
        Paper & Paper Products (5.2%)
A       Westvaco Corporation                                      9.65% 3/1/2002         90,000         99,585
        Retailing (5.6%)
A       J.C. Penny & Co.                                          9.05% 3/1/2001        100,000        106,400
        Telecommunications (9.3%)
A       Northern Telecom                                         8.75% 6/12/2001        100,000        107,790
BBB     Worldcom Inc.                                            6.125% 8/1/2001         70,000         70,721
                                                                                   ------------  -------------
                                                   SUB-TOTAL                            170,000        178,511
        Tobacco (4.0%)
A       Phillip Morris                                           9.25% 2/15/2000         75,000         77,542
        U.S. Government  (5.2%)
AAA     U.S. Treasury Note                                      6.25% 10/31/2001         95,000         99,141

        Total Investments (89.6%)                             (Cost = $1,720,539)  $  1,635,000  $   1,710,358
                                                                                   ============  -------------
        Other Assets (net of liabilities) (10.4%)                                                      197,641
                                                                                                 -------------
        Total Net Assets (100%)                                                                  $   1,907,999
                                                                                                 =============
<FN>

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



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

Page  3
<PAGE>

SEXTANT  SHORT-TERM  BOND  FUND
 (Graphic  Omitted)

1998  ANNUAL  REPORT
(Graphic  Omitted)



                      STATEMENT OF ASSETS AND LIABILITIES
<TABLE>

<CAPTION>

As  of  November  30,  1998


<S>                                                                     <C>         <C>

ASSETS                                                                           -           -
      Bond investments (cost $1,720,539)                                $1,710,358           -
      Cash                                                                 160,607           -
      Interest receivable                                                   39,154           -
                                                                        ----------
            Total Assets                                                         -  $1,910,119
                                                                                    -----------
LIABILITIES                                                                      -           -
      Other Liabilities                                                      2,120           -
                                                                        ----------
            Total Liabilities                                                    -       2,120
                                                                                    -----------
NET ASSETS                                                                       -  $1,907,999
                                                                                    ===========
                                                                                 -           -
                                                                                    -----------
Fund shares outstanding                                                          -     378,847
ANALYSIS OF NET ASSETS
      Paid in capital (unlimited shares authorized, without par value)           -  $1,904,492
      Accumulated net realized gain (loss) on investments                        -      (8,649)
      Unrealized net appreciation on investments                                 -      12,156
                                                                                    -----------
      Net Assets applicable to Fund shares outstanding                           -  $1,907,999
                                                                                    ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE                         -  $     5.04

</TABLE>



                            STATEMENT OF OPERATIONS

<TABLE>

<CAPTION>

For  the  Year  Ended  November  30,  1998


<S>                                                          <C>          <C>

INVESTMENT INCOME                                                     -          -
      Interest income                                        $  143,870          -
      Amortization of bond premiums                             (23,419)         -
      Accretion                                                      48          -
                                                             -----------
            Gross investment income                                   -   $120,499
EXPENSES
      Investment adviser and administration fee                  12,132          -
      Professional fees                                           3,435          -
      Filing and registration fees                                  908          -
      Printing and postage                                        1,202          -
      Other expenses                                                716          -
                                                             -----------
      Total gross expenses                                       18,393          -
                                                                          --------
            Less advisory fee waived                             (8,805)         -
                                                             -----------
      Net expenses                                                    -      9,588
                                                                          --------
            Net investment income                                     -    110,911
                                                                          --------
NET REALIZED GAIN ON INVESTMENTS
      Proceeds from sales                                     2,075,227          -
      Less cost of securities sold based on identified cost   2,061,072          -
                                                             -----------
            Realized net gain                                         -     14,155
                                                                          --------
UNREALIZED GAIN ON INVESTMENTS
      End of period                                              12,156          -
      Beginning of period                                         5,463          -
                                                             -----------
      Increase in unrealized gain for the period                      -      6,693
                                                                          --------
            Net realized and unrealized gain on investments           -     20,848
                                                                          --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                  -   $131,759
                                                                          ========

</TABLE>



  (The accompanying notes are an integral part of these financial statements)
Page  4
<PAGE>


1998  ANNUAL  REPORT
(Graphic  Omitted)
SEXTANT  SHORT-TERM  BOND  FUND

(Graphic  Omitted)

                      STATEMENT OF CHANGES IN NET ASSETS

<TABLE>

<CAPTION>

                                                           Year ended      Year ended
                                                      Nov. 30, 1998     Nov. 30, 1997
                                                      -------------     -------------


<S>                                                         <C>           <C>

INCREASE (DECREASE) IN NET ASSETS                                     -            -
FROM OPERATIONS:                                                      -            -
      Net investment Income                                 $   110,911   $  121,445
      Net realized gain (loss) on investments                    14,155       (1,405)
      Net increase in unrealized appreciation                     6,693        1,028
                                                            ------------  -----------
      Net increase  in net assets from operations               131,759      121,068
                                                            ------------  -----------
DIVIDENDS TO SHAREOWNERS FROM:
      Net investment income                                    (111,184)    (121,530)
      Capital gains distributions                                     -            -
                                                            ------------  -----------
                                                               (111,184)    (121,530)
                                                            ------------  -----------
FUND SHARE TRANSACTIONS:
      Proceeds from sales of shares                           1,685,010    1,321,409
      Value of shares issued in reinvestment of dividends       107,840      120,427
                                                            ------------  -----------
                                                              1,792,850    1,441,836
      Cost of shares redeemed                                (2,413,714)    (949,884)
                                                            ------------  -----------
      Net increase (decrease) in net assets
          from share transactions                              (620,864)     491,952
                                                            ------------  -----------
Total increase (decrease) in net assets                        (600,289)     491,490

NET ASSETS
      Beginning of period                                     2,508,288    2,016,798
                                                            ------------  -----------
      End of period                                         $ 1,907,999   $2,508,288
                                                            ============  ===========
Shares of the Fund Sold and Redeemed
      Number of shares sold                                     335,801      265,939
      Number of shares issued in reinvestment of dividends       21,460       24,218
                                                            ------------  -----------
                                                                357,261      290,157
      Number of shares redeemed                                (480,944)    (190,967)
                                                            ------------  -----------
Net Increase (decrease) in
      Number of Shares Outstanding                             (123,683)      99,190
                                                            ============  ===========

</TABLE>



  (The accompanying notes are an integral part of these financial statements)
Page  5
<PAGE>

SEXTANT  SHORT-TERM  BOND  FUND
(GRAPHIC  OMITTED)

1998  ANNUAL  REPORT
 (GRAPHIC  OMITTED)SEXTANT  BOND  INCOME  FUND


FINANCIAL  HIGHLIGHTS
<TABLE>

<CAPTION>
FINANCIAL  HIGHLIGHTS
              Selected data per share of capital stock outstanding throughout the period:
                                                                                Sept. 28. '95
                                               For the year ended November 30,  (inception) to
                                               -------------------------------
                                                         1998     1997     1996  Nov. 30 '95*
                                                         ----     ----     ----  ------------


<S>                                                    <C>      <C>      <C>      <C>

NET ASSET VALUE AT BEGINNING OF PERIOD                 $ 4.99   $ 5.00   $ 5.03   $ 5.00
                                                       -------  -------  -------  -------
      INCOME FROM INVESTMENT OPERATIONS
      Net Investment Income                              0.27     0.27     0.25     0.03
      Net gains or losses on securities
 (both realized and unrealized)                          0.05    (0.01)   (0.03)    0.03
                                                       -------  -------  -------  -------
Total from investment operations                         0.32     0.26     0.22     0.06
      LESS DISTRIBUTIONS
      Dividends (from net investment income)            (0.27)   (0.27)   (0.25)   (0.03)
      Distributions (from capital gains)                    -        -        -        -
                                                       -------  -------  -------  -------
Total distributions                                     (0.27)   (0.27)   (0.25)   (0.03)
                                                       -------  -------  -------  -------
NET ASSET VALUE AT END OF PERIOD                       $ 5.04   $ 4.99   $ 5.00   $ 5.03
                                                       =======  =======  =======  =======
TOTAL RETURN                                             6.67%    5.45%    4.85%    1.05%
Ratios / Supplemental Data
-----------------------------------------------------
Net assets ($000), end of period                       $1,908   $2,508   $2,016   $  878
Ratio of expenses to average net assets                  0.48%    0.60%    0.85%    0.23%
Ratio of net investment income to average net assets     5.57%    5.58%    6.30%    0.68%
Portfolio turnover rate                                    71%      47%     100%       0%
<FN>

  For the above periods, all or a portion of the operating expenses were waived.
If costs had not been waived,  the  resulting  increase to expenses per share in
each period  would have been $ .02,  $.02,  $.02 and $.007.  The increase to the
ratio of expenses to average  monthly net assets would be .44%,  .40%,  .52% and
 .16%, respectively.

                                * not annualized
</FN>
</TABLE>



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

                        DISCUSSION OF  FUND PERFORMANCE
                                  (UNAUDITED)
Fiscal  Year  1998
For the fiscal year ended  November 30, 1998, the Sextant  Short-Term  Bond Fund
returned 6.67% to its shareowners.  Reflecting its capital stability  investment
objective, the Fund's price moved in a narrow range (about 3%) from high to low.
For the  fiscal  year,  the  Fund  ranked  in the top  25% of 216  funds  in the
Morningstar  "Short-Term Bond" category.  Factors Affecting Past Performance For
the first eight  months of 1998,  short-term  rates  interest  rates and Federal
Reserve policy were stable.  The yield curve became virtually flat. In the third
quarter however,  the stock market fell precipitously and short-term note prices
rose in a brief but  pronounced  flight to  quality.  Russia's  default  and the
failure  of a major  hedge  fund  caused a  credit  crunch.  There  was a sudden
de-leveraging of risk in the bond market. Credit spreads in the short end of the
bond  market  doubled.  As part of the effort to restore  liquidity  to the bond
market and restore  confidence to the slumping stock market, the Federal Reserve
Bank lowered overnight Federal Funds rates seventy-five basis points. During the
upheaval of the third quarter,  the wisdom of keeping a large  percentage of the
portfolio in high-grade  liquid  corporate  paper,  US Governments and bullet US
Agency  paper was never  clearer.  We will  continue to follow this  strategy in
1999.

Page  6
<PAGE>

Looking  Forward
In 1999,  we expect  short-term  interest  rates to continue  downward and world
economies to slow  further.  Deflation is now prevalent in many  countries.  The
yield curve will  maintain its current  steeper  shape.  Many  economies  remain
financially  troubled,  and more are succumbing to recession.  Another flight to
quality and widening of credit spreads is a distinct possibility. Management Fee
Calculations The Sextant  Short-Term Bond Fund calculates part of its management
fee based on a  comparison  of the Fund's  return to the  average  return of the
Morningstar  category Short-Term Bond. This is defined as portfolios that "focus
on corporate and other  investment grade issues with an average duration of more
than one year or an  effective  average  maturity of more than one year but less
than  four  years."  As the  12-month  return  of the Fund was  within 1% of the
category  average,  no adjustment to the basic 0.60% management fee was made for
the month of December  1998.  Comparison  to Index  Comparison of any fund to an
index  must  be  made  bearing  in  mind  that  the  Index  is  unmanaged,   and
expense-free.  The graph  below  compares  $10,000  invested  in the Fund at its
inception,  compared  to a  similar  amount  invested  in The  Salomon  Brothers
Gov/Corp Investment Grade Bond Index for maturities between one and three years.
The graph  shows that a $10,000  investment  made on  September  1995 would have
risen to $11,919 in the Fund and $12,250 in the Index.  Past  performance is not
indicative of future results.


Sextant  Short-Term  Bond  Fund  vs.  Salomon  Gov/Corp  1-3  yr.

(Graph  Omitted)

Page  7
<PAGE>



SEXTANT  BOND  INCOME  FUNDSEXTANT  BOND  INCOME  FUND
INVESTMENTSINVESTMENTS
November  30,  1998
(Graphic  Omitted)
1998  ANNUAL  REPORT
(Graphic  Omitted)

INVESTMENTS
<TABLE>

<CAPTION>



<S>     <C>                                       <C>        <C>                  <C>           <C>

RATING  ISSUER                                               COUPON/MATURITY      FACE AMOUNT   MARKET VALUE
------  ----------------------------------------             -------------------  ------------  -------------
        BANKING (15.9%)
A-      Chase Manhatten                                         7.125% 6/15/2009  $     50,000  $      54,565
A       Citicorp                                                7.25% 10/15/2011        50,000         55,335
A-      Comerica Bank                                           7.125% 12/1/2013        50,000         51,901
AA-     Norwest Financial                                        6.85% 7/15/2009        50,000         52,695
                                                                                  ------------  -------------
                                                  SUB-TOTAL                            200,000        214,496
        BEVERAGES (4.1%)
A-      Seagram Co.                                              8.35% 1/15/2022        50,000         54,620
        BUILDING (3.7%)
A+      Lowes                                                   7.00% 10/15/2023        50,000         50,095
        COMPUTER (2.2%)
BBB     Dell Computer                                            6.55% 4/15/2008        30,000         29,512
        ELECTRIC UTILITIES (11.7%)
A+      Alabama Power                                             7.75% 2/1/2023        50,000         51,665
BBB     Commonwealth Edison                                       7.50% 7/1/2013        50,000         54,530
A+      Southern California Edison                               6.90% 10/1/2018        50,000         50,650
                                                                                  ------------  -------------
                                                  SUB-TOTAL                            150,000        156,845
        ELECTRONICS (4.0%)
BBB+    Phillips Electronics                                     7.25% 8/15/2013        50,000         53,605
        FOOD (3.6%)
BBB-    Nabisco Holdings                                         7.55% 6/15/2015        50,000         48,355
        INSURANCE (4.1%)
A       Allstate                                                 7.50% 6/15/2013        50,000         55,580
        INVESTMENT FINANCE (11.5%)
A       Bear Sterns                                               7.00% 3/1/2007        50,000         52,640
A       Morgan Stanley Dean Witter                              6.75% 10/15/2013        50,000         50,965
BBB     Paine Webber Group                                      7.625% 2/15/2014        50,000         50,785
                                                                                  ------------  -------------
                                                  SUB-TOTAL                            150,000        154,390
        OIL & GAS (3.7%)
A       Texaco Capital                                          8.625% 6/30/2010        40,000         50,164
        PAPER PRODUCTS (3.9%)
BBB-    Georgia Pacific                                          7.70% 6/15/2015        50,000         52,420
        RETAILING (7.6%)
A       Gap                                                      6.90% 9/15/2007        50,000         52,287
BBB+    Rite Aid                                                6.875% 8/15/2013        50,000         50,315
                                                                                  ------------  -------------
                                                  SUB-TOTAL                            100,000        102,602
        TELECOMMUNICATIONS (7.9%)
A+      GTE                                                     6.90% 11/01/2008        50,000         54,295
BBB     WorldCom                                                 6.40% 8/15/2005        50,000         51,526
                                                                                  ------------  -------------
        SUB-TOTAL                                                                      100,000        105,821
        U.S. GOVERNMENT AGENCY (13.3%)
AAA     Federal Home Loan Bank                               6.53% due 7/23/2007       165,000        178,596

        TOTAL INVESTMENTS (97.2%)                            Cost = $1,263,057    $  1,235,000      1,307,101
                                                                                  ============  -------------
        Other Assets (net of liabilities) (2.8%)                                                       37,605
                                                                                                -------------
        TOTAL NET ASSETS (100%)                                                                 $   1,344,706
                                                                                                =============
<FN>

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





  (The accompanying notes are an integral part of these financial statements)
Page  8
<PAGE>


(Graphic  Omitted)
1998  Annual  Report
(Graphic  Omitted)
Sextant  Bond  Income  Fund

FINANCIAL  HIGHLIGHTS

<TABLE>

<CAPTION>
FINANCIAL  HIGHLIGHTS
Selected                          data per share of  capital  stock  outstanding
                                  throughout the year:* Year ended November 30,
                                  -----------------------
                                              1998     1997     1996     1995     1994
                                              ----     ----     ----     ----     ----


<S>                                       <C>      <C>      <C>      <C>      <C>

NET ASSET VALUE AT BEGINNING OF PERIOD    $ 4.83   $ 4.76   $ 4.91   $ 4.39   $  5.03
                                          -------  -------  -------  -------  --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income                       0.30     0.30     0.30     0.24      0.25
Net gains or losses on securities
(both realized and unrealized)              0.17     0.07    (0.12)    0.52     (0.64)
                                          -------  -------  -------  -------  --------
Total from investment operations            0.47     0.37     0.18     0.76     (0.39)
LESS DISTRIBUTIONS
Dividends (from net investment income)
Non-taxable                                    -        -        -    (0.24)    (0.25)
Taxable                                    (0.30)   (0.30)   (0.30)
Distributions (from capital gains)             -        -    (0.03)       -         -
                                          -------  -------  -------  -------  --------
Total distributions                        (0.30)   (0.30)   (0.33)   (0.24)    (0.25)
                                          -------  -------  -------  -------  --------
NET ASSET VALUE AT END OF PERIOD          $ 5.00   $ 4.83   $ 4.76   $ 4.91   $  4.39
                                          =======  =======  =======  =======  ========
TOTAL RETURN                               10.04%    8.24%    4.04%   17.69%   (8.24)%
Ratios/supplemental data
----------------------------------------
Net assets ($000), end of period          $1,345   $1,092   $1,201   $1,096   $ 1,456
Ratio of expenses to average net assets     0.30%    0.47%    0.63%    0.54%     0.41%
Ratio of net investment income
to average net assets                       6.24%    6.85%    5.96%    5.15%     5.48%
Portfolio turnover rate                        0%      51%      75%      77%       74%
<FN>

  For each of the above periods, all or a portion of the operating expenses were
waived. If these costs had not been waived, the resulting  increases to expenses
per share in each of the above periods would be $.03,  $.03,  $.03,  $0.22,  and
$0.13,  respectively.  The increase to the ratio of expenses to average  monthly
net assets would be .61%, .63%, .70%, .60%, and .51% respectively.
                                                                                     *
Data  prior  to  September  28,  1995 may not be meaningful, as the fund operated with
different
investment  objectives  and  fee  arrangements.
</FN>
</TABLE>




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

Page  9
<PAGE>
(Graphic  Omitted)
Sextant  Bond  Income  Fund
(Graphic  Omitted)
1998  Annual  Report
                      STATEMENT OF ASSETS AND LIABILITIES


<TABLE>

<CAPTION>

As  of  November  30,  1998


<S>                                                                     <C>         <C>          <C>  <C>

ASSETS                                                                           -           -
      Bond investments (cost $1,260,787)                                $1,307,101           -
      Cash                                                                   8,912           -
      Interest receivable                                                   27,665           -
      Insurance deposit                                                      1,221           -
                                                                        ----------
            Total Assets                                                         -  $1,344,899
                                                                                    -----------
LIABILITIES
      Other Liabilities                                                        193           -
                                                                        ----------
            Total Liabilities                                                    -         193
                                                                                    -----------
NET ASSETS                                                                       -  $1,344,706
                                                                                    ===========
Fund shares outstanding                                                                          -  269,033
ANALYSIS OF NET ASSETS
      Paid in capital (unlimited shares authorized, without par value)           -  $1,372,967
      Accumulated net realized gain (loss) on investments                        -     (74,575)
      Unrealized net appreciation on investments                                 -      46,314
                                                                                    -----------
      Net Assets applicable to Fund shares outstanding                           -  $1,344,706
                                                                                    ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE                         -  $     5.00
                                                                                    ===========
</TABLE>



                            STATEMENT OF OPERATIONS

<TABLE>

<CAPTION>

For  the  year  ended  November  30,  1998


<S>                                                                  <C>       <C>

INVESTMENT INCOME                                                          -          -
      Interest income                                                $84,323          -
      Amortization of bond premiums                                   (1,807)         -
      Accretion                                                           62          -
                                                                     --------
            Gross investment income                                            $ 82,578
EXPENSES
      Investment adviser and administration fee                        7,691          -
      Professional fees                                                2,220          -
      Filing and registration fees                                       961          -
      Printing and postage                                               794          -
      Other expenses                                                    (163)         -
                                                                     --------
      Total gross expenses                                            11,503          -
                                                                     --------  --------
            Less advisory fee waived                                  (7,691)         -
                                                                     --------
      Net expenses                                                         -      3,812
                                                                               --------
            Net investment income                                          -     78,766
                                                                               --------
NET REALIZED GAIN ON INVESTMENTS
      Proceeds from sales                                                  -          -
      Less cost of securities sold based on identified cost                -          -
                                                                     --------
            Realized net gain (loss)                                       -          -
                                                                               --------
UNREALIZED GAIN (LOSS) ON INVESTMENTS
      End of period                                                   46,314          -
      Beginning of period                                              3,969          -
                                                                     --------
      Increase in unrealized gain for the period                           -     42,345
                                                                               --------
            Net realized and unrealized gain (loss) on investments         -     42,345
                                                                               --------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS                       -   $121,111

</TABLE>



Page  10
<PAGE>

SEXTANT  BOND  INCOME  FUNDSEXTANT  BOND  INCOME  FUND
(Graphic  Omitted)
1998  Annual  Report
(Graphic  Omitted)

                      STATEMENT OF CHANGES IN NET ASSETS

<TABLE>

<CAPTION>

                                                         Year ended      Year ended
                                                   Nov. 30, 1998      Nov. 30, 1997
                                                   -------------     --------------


<S>                                                        <C>          <C>

INCREASE (DECREASE) IN NET ASSETS                                   -            -
FROM OPERATIONS:                                                    -            -
     Net investment income                                 $   78,766   $   73,291
     Net realized gain (loss) on investments                        -      (11,717)
     Net increase in unrealized appreciation                   42,345       26,604
                                                           -----------  -----------
     Net increase in net assets from operations               121,111       88,178
                                                           -----------  -----------
DIVIDENDS TO SHAREOWNERS FROM:
     Net investment income                                    (78,767)     (73,332)
     Capital gains distributions                                    -            -
                                                           -----------  -----------
                                                              (78,767)     (73,332)
                                                           -----------  -----------
FUND SHARE TRANSACTIONS:
     Proceeds from sales of shares                            331,514       65,272
     Value of shares issued in reinvestment of dividends       76,908       71,910
                                                           -----------  -----------
                                                              408,422      137,182
     Cost of shares redeemed                                 (198,299)    (260,712)
                                                           -----------  -----------
     Net increase in net assets from share transactions       210,123     (123,530)
                                                           -----------  -----------
Total increase (decrease) in net assets                       252,468     (108,684)
NET ASSETS
     Beginning of period                                    1,092,239    1,200,923
                                                           -----------  -----------
     End of period                                         $1,344,706   $1,092,239
                                                           ===========  ===========
Shares of the fund sold and redeemed
     Number of shares sold                                     66,905       14,054
     Number of shares issued in reinvestment of dividends      15,499       15,448
                                                           -----------  -----------
                                                               82,404       29,502
     Number of shares redeemed                                (39,719)     (55,536)
                                                           -----------  -----------
Net increase (decrease) in number of shares outstanding        42,685      (26,034)
                                                           ===========  ===========



</TABLE>



Page  11
<PAGE>

Sextant  Bond  Income  Fund
(Graphic  Omitted)
1998  Annual  Report
(Graphic  Omitted)


                        DISCUSSION OF  FUND PERFORMANCE
                                  (UNAUDITED)

Fiscal  Year  1998
For the fiscal year  ending  November  30,  1998,  the Sextant  Bond Income Fund
returned  10.04% to its  shareowners,  with the net asset value (NAV)  rising to
$5.00 from $4.83. Reflecting its conservative investment philosophy,  the Fund's
NAV moved in a relatively  narrow range ($4.79 to $5.21,  or about 9%) from high
to low. For the fiscal  year,  the Fund ranked in the top 20% of the 83 funds in
the  Morningstar  "Long  Term  Bond"  category.   The  majority  of  the  Fund's
performance came from its long portfolio  maturity.  The average maturity of the
portfolio is now 13.2 years, reduced from 14.9 years at the end of 1997. Factors
Affecting  Past  Performance In early 1998,  interest rates  gradually fell with
only modest  volatility.  Credit spreads continued to narrow as investors sought
higher yields from both lower quality issues and moving out the yield curve.  We
believed  that these  strategies  were  flawed.  Investors  were not  adequately
compensated  for assuming  either the extra credit or maturity risk. We moved in
the opposite direction in both cases. We modestly shortened the average maturity
of our portfolio and increased the average credit quality. Starting in July, the
stock market fell and bond prices rose.  While uncommon  recently,  this inverse
relationship  was the normal before 1982. Then, at summer's end, a credit crunch
developed due to Russia's  default and the failure of a major hedge fund.  There
was a sudden  de-leveraging of risk in the bond market.  Credit spreads doubled,
even tripled.  The relative calm of the first half  vanished.  Fortunately,  the
intervention  of central  banks and  several  large  investment  firms  restored
liquidity  to  the  market.   The  Federal  Reserve  lowered   short-term  rates
seventy-five basis points in three quick steps. During the upheaval of the third
quarter,  the wisdom of keeping the  portfolio in liquid,  high-grade  corporate
paper,  US  Governments  and bullet US Agency paper was never  clearer.  We will
continue to follow this  strategy in 1999.  Looking  Forward In 1999,  we expect
interest rates to continue  downward and world  economies to slow further.  With
the euro a reality and higher  Japanese  rates,  the dollar will weaken.  Excess
cash,  manufacturing  capacity and low commodity  prices will defeat  inflation.
Deflation is now prevalent in many countries. Short-term rates should fall under
4.%. The yield curve will  maintain  its current  steeper  shape.  We expect the
range of long rates to slide further.  The Asian financial crisis is not today's
front-page news, but the problems  persist.  Many economies  remain  financially
troubled,  and more are  succumbing to recession.  If the problems of the recent
past flare up again another  flight to quality and widening of credit spreads is
a distinct  possibility.  As world capital seeks honest and open markets,  where
information flows easily and is relatively complete and accurate, investments in
quality corporate bonds will continue to provide solid returns and security.

Page  12
<PAGE>

1998  Annual  Report
(Graphic  Omitted)
Sextant  Bond  Income  Fund
(Graphic  Omitted)

Management  Fee  Calculations
The Sextant Bond Income Fund calculates its management fee based on a comparison
of the Fund's return to the return of  Morningstar's  "Long Term Bond" category.
This category  consists of mutual fund  portfolios  that "focus on corporate and
other investment grade issues with an average duration of more than six years or
an  effective  average  maturity  of more than ten  years."  Because  the Fund's
12-month  return  outperformed  this index by more than 2% at November 30, 1998,
the Fund would pay the maximum bonus 0.20% (annualized)  performance fee for the
month of December 1998. No management  fee was actually paid,  since the advisor
has waived the entire fee until assets  exceed $2 million.  Comparison  to Index
Comparison  of any fund to an index must be made  bearing in mind that the index
is  unmanaged,  and  expense-free.  Conversely,  the fund  will (1) be  actively
managed,  (2) have an objective other than mirroring the index, such as limiting
risk, (3) bear  transaction and other costs, (4) stand ready to buy and sell its
securities  to  shareholders  on a daily basis,  and (5) provide a wide range of
services.  The  graph  below  compares  $10,000  invested  in  the  Fund  at its
inception,  compared to a similar amount invested in The Salomon  Brothers Broad
Investment-Grade  Bond  Index.  The  graph  shows  that  the  investment  at the
beginning of October 1993 would have risen to $13,923 in the Fund and $15,019 in
the Index. The September 1995 changes in this Fund's investment policy limit the
usefulness of this  comparison.  Past  performance  is not  indicative of future
results.

Sextant  Bond  Income Fund vs. Salomon Bros. Broad Investment Grade Bond Index

(Graph  Omitted)

Page  13
<PAGE>




(Graphic  Omitted)

SEXTANT  GROWTH  FUND

1998  ANNUAL  REPORT
(Graphic  Omitted)

November  30,  1998
SEXTANT  GROWTH  FUND
INVESTMENTS
<TABLE>

<CAPTION>



<S>                                <C>       <C>       <C>

Issue                              Quantity  Cost      Market Value
---------------------------------  --------  --------  -------------
Common Stocks (78.9%)
BANKING (17.3%)
Washington Mutual Savings Bank        4,500  $ 44,124  $     174,375
KeyCorp                               6,360    94,957        195,172
                                             --------  -------------
SUB-TOTAL                                     139,081        369,548
CONSTRUCTION (3.4%)
Building Materials Holding Corp*      4,000    44,171         49,250
Butler Manufacturing                  1,000    31,071         23,250
                                             --------  -------------
SUB-TOTAL                                      75,242         72,500
COMPUTERS  (12.5%)
Adobe Systems                         1,200    50,490         53,700
Apple Computer*                       1,200    39,606         38,325
3Com*                                 1,225    29,726         47,392
Netscape Communications*              1,200    26,920         44,400
Oracle*                               1,800    37,879         61,650
Phoenix Technologies Ltd.*            3,062    29,149         21,434
                                             --------  -------------
SUB-TOTAL                                     213,770        266,901
ELECTRONICS (2.3%)
FLIR Systems*                         2,500    27,611         48,125
INVESTMENTS (12.0%)
Schwab, Charles                       4,537     9,117        255,773
MACHINERY (2.3%)
Regal Beloit                          2,000    52,106         50,000
MEDICAL (9.3%)
Affymetrix*                           1,000    26,862         25,000
Genentech*                            1,000    37,225         70,062
Immunex Corp*                           700    48,438         64,488
Ligand Pharmaceuticals*               4,000    49,132         39,750
                                             --------  -------------
SUB-TOTAL                                     161,657        199,300
METAL ORES (2.0%)
Cyprus Amax Minerals                  3,800    76,218         43,225
OIL & GAS PRODUCTION (3.9%)
Atlantic Richfield                      900    51,620         59,850
Noble Drilling*                       2,000    14,212         23,125
                                             --------  -------------
SUB-TOTAL                                      65,832         82,975
RETAIL (7.5%)
Albertson's                           1,200    26,255         68,475
Meyer (Fred)*                         1,000    46,461         51,000
Saks*                                 1,500    43,683         41,250
                                             --------  -------------
SUB-TOTAL                                     116,399        160,725
TRANSPORTATION (6.4%)
Airborne Freight                      2,500    27,082         66,719
Halter Marine Group*                  5,834    54,239         40,109
Trinity Industries                      800    22,658         30,950
                                             --------  -------------
SUB-TOTAL                                     103,979        137,778

</TABLE>

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

Page  14
<PAGE>


1998  Annual  Report
(GRAPHIC  OMITTED)
SEXTANT  GROWTH  FUND
(Graphic  Omitted)SEXTANT  GROWTH  FUND
INVESTMENTS

<TABLE>

<CAPTION>



<S>                                       <C>       <C>         <C>

Issue                                     Quantity  Cost        Market Value
----------------------------------------  --------  ----------  -------------
Preferred Stocks (1.7%)
Washington Water Power, Pref.W               2,000      37,079         37,250
Government Bonds (11.6%)
US Treasury Bill  02/18/99                 250,000     247,377        247,555
                                                    ----------  -------------
Total Investments (92.2%)                           $1,325,468  $   1,971,654
                                                    ==========  =============
Other Assets (net of liabilities) (7.8%)                              167,782
                                                                -------------
TOTAL NET ASSETS (100.0%)                                       $   2,139,436
* non-income producing
</TABLE>


FINANCIAL  HIGHLIGHTS


SEXTANT  GROWTH  FUND
FINANCIAL  HIGHLIGHTS
(Graphic  Omitted)
<TABLE>

<CAPTION>

                 Selected data per share of capital stock outstanding throughout the year:*

                                   For Year Ended November 30,
                                   ---------------------------


<S>                                           <C>       <C>       <C>      <C>      <C>

                                                 1998      1997     1996     1995     1994
                                              --------  --------  -------  -------  -------
NET ASSET VALUE AT BEGINNING OF PERIOD        $  9.58   $  7.92   $ 7.42   $ 5.82   $ 6.38
                                              --------  --------  -------  -------  -------
      INCOME FROM INVESTMENT OPERATIONS
      Net investment income                      0.02      0.01        -    (0.03)   (0.03)
      Net gains or losses on securities
(both realized and unrealized)                  (0.11)     2.41     0.50     1.82    (0.53)
                                              --------  --------  -------  -------  -------
Total from investment operations                (0.07)     2.40     0.50     1.79    (0.56)
      LESS DISTRIBUTIONS
      Dividends (from net investment income)    (0.02)    (0.01)       -        -        -
      Distributions (from capital gains)        (0.18)    (0.73)       -    (0.19)       -
                                              --------  --------  -------  -------  -------
Total distributions                             (0.22)    (0.74)       -    (0.19)       -
                                              --------  --------  -------  -------  -------
NET ASSET VALUE AT END OF PERIOD              $  9.29   $  9.58   $ 7.92   $ 7.42   $ 5.82
                                              ========  ========  =======  =======  =======
TOTAL RETURN                                   (0.97)%    30.30%    6.74%   30.76%    8.78%
Ratios / Supplemental Data
--------------------------------------------
Net assets ($000), end of period              $ 2,139   $ 2,188   $1,616   $1,137   $1,010
Ratio of expenses to average net assets          0.66%     1.04%    0.95%    1.63%    1.50%
Ratio of net investment income to
      average net assets                         0.19%   (0.12)%    0.01%    0.45%    0.43%
Portfolio turnover rate                            37%       25%      32%      40%      12%
<FN>

  For 1996 and 1995 all or a portion of the operating expenses were waived.  If these costs
had  not  been  waived,
       the
                                                                       
                                                                        resulting
                                                                        increase
                                                                        to
                                                                        expenses
                                                                        per
                                                                        share in
                                                                        each  of
                                                                        these
                                                                        years
                                                                        would be
                                                                        $.00,
                                                                        and
                                                                        $.01,
                                                                        respectively.
The
                                                                             
                                                                              increase
                                                                              to
                                                                              the
                                                                              ratio
                                                                              of
                                                                              expenses
                                                                              to
                                                                              average
                                                                              net
                                                                              assets
                                                                              would
                                                                              have
                                                                              been
                                                                              .00%,
                                                                              and
                                                                              .18%,
                                                                              respectively.
*  Data  prior  to  September  28,  1995  may  not be meaningful, as the fund operated with
different  investment
                                                            objectives and fee arrangements
</FN>
                                                                                          .
</TABLE>


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

Page  15
<PAGE>

SEXTANT  GROWTH  FUND
(Graphic  Omitted)
1998  Annual  Report
(GRAPHIC  OMITTED)SEXTANT  GROWTH  FUND
                      STATEMENT OF ASSETS AND LIABILITIES
<TABLE>

<CAPTION>

As  of  November  30,  1998


<S>                                                                    <C>         <C>

ASSETS                                                                          -           -
     Investments (cost $1,325,468)                                     $1,971,654           -
     Cash                                                                 166,527           -
     Interest receivable                                                    2,236           -
     Insurance reserve premium                                              1,214           -
                                                                       ----------
          Total Assets                                                          -  $2,141,631
                                                                                   -----------
LIABILITIES
     Other Liabilities                                                      2,195           -
                                                                       ----------
          Total Liabilities                                                     -       2,195
                                                                                   -----------
NET ASSETS                                                                      -  $2,139,436
                                                                                   ===========
Fund shares outstanding                                                         -     230,106
ANALYSIS OF NET ASSETS
     Paid in capital (unlimited shares authorized, without par value)           -   1,493,340
     Undistributed net investment income                                        -     (13,220)
     Accumulated net realized gain (loss) on investments                        -         (90)
     Unrealized net appreciation on investments                                 -     646,186
                                                                                   -----------
     Net Assets applicable to Fund shares outstanding                           -  $2,139,436
                                                                                   ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE                        -  $     9.29
                                                                                   ===========
</TABLE>




                            STATEMENT OF OPERATIONS
<TABLE>

<CAPTION>


For  the  year  ended  November  30,  1998


<S>                                                                 <C>        <C>

INVESTMENT INCOME                                                          -           -
      Dividend income                                               $ 17,959           -
                                                                    ---------
            Gross investment income                                        -   $  17,959
EXPENSES
      Investment adviser and administration fee                        8,933           -
      Professional fees                                                3,883           -
      Filing and registration fees                                     1,330           -
      Printing and postage                                             1,429           -
      Other expenses                                                  (1,581)          -
                                                                    ---------
      Total gross expenses                                                 -      13,994
                                                                               ----------
            Net investment income                                          -       3,965
                                                                    ---------  ----------
NET REALIZED GAIN ON INVESTMENTS
      Proceeds from sales                                            666,621           -
      Less cost of securities sold based on identified cost          626,530           -
                                                                    ---------
            Realized net gain                                                     40,091
                                                                               ----------
UNREALIZED GAIN ON INVESTMENTS
      End of period                                                  646,186           -
      Beginning of period                                            714,030           -
                                                                    ---------  ----------
      Decrease in unrealized gain for the period                           -     (67,844)
                                                                    ---------  ----------
            Net realized and unrealized gain (loss) on investments         -     (27,753)
                                                                    ---------  ----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS                       -    ($23,788)
                                                                               ==========

</TABLE>


  (The accompanying notes are an integral part of these financial statements)
Page  16
<PAGE>

(GRAPHIC  OMITTED)
SEXTANT  GROWTH  FUND
1998  ANNUAL  REPORT
(Graphic  Omitted)
                      STATEMENT OF CHANGES IN NET ASSETS
<TABLE>

<CAPTION>

                                                     Year ended      Year ended
                                               Nov. 30, 1998      Nov. 30, 1997
                                              --------------     --------------


<S>                                                    <C>          <C>

INCREASE IN NET ASSETS                                          -            -
FROM OPERATIONS:                                                -            -
Net investment income (loss)                           $    3,965   $   (2,493)
Net realized gain (loss) on investments                    40,091      171,838
Net increase (decrease) in unrealized appreciation        (67,844)     315,222
                                                       -----------  -----------
Net increase in net assets from operations                (23,788)     484,567
                                                       -----------  -----------
DIVIDENDS TO SHAREOWNERS FROM:
Net investment income                                      (4,281)      (1,105)
Capital gains distributions                               (40,111)    (162,378)
                                                       -----------  -----------
                                                          (44,392)    (163,483)
                                                       -----------  -----------
FUND SHARE TRANSACTIONS:
Proceeds from sales of shares                             295,175      407,623
Value of shares issued in reinvestment of dividends        44,024      161,233
                                                       -----------  -----------
                                                          339,199      568,856
Cost of shares redeemed                                  (319,950)    (317,129)
                                                       -----------  -----------
Net increase in net assets from share transactions         19,249      251,727
                                                       -----------  -----------
Total increase (decrease) in net assets                   (48,931)     572,811
NET ASSETS
Beginning of period                                     2,188,367    1,615,556
                                                       -----------  -----------
End of period                                          $2,139,436   $2,188,367
                                                       ===========  ===========
Shares of the fund sold and redeemed
Number of shares sold                                      30,923       45,282
Number of shares issued in reinvestment of dividends        4,739       16,830
                                                       -----------  -----------
                                                           35,662       62,112
Number of shares redeemed                                 (33,801)     (37,742)
                                                       -----------  -----------
Net increase in number of shares outstanding                1,861       24,370
                                                       ===========  ===========
</TABLE>


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

Page  17
<PAGE>

(GRAPHIC  OMITTED)
SEXTANT  GROWTH  FUND
1998  ANNUAL  REPORT
(Graphic  Omitted)SEXTANT  GROWTH  FUND

                        DISCUSSION OF  FUND PERFORMANCE
                                  (UNAUDITED)
The  Year  1998
For the fiscal year ending  November 30, 1998,  the Sextant Growth Fund declined
almost 1%. This was a sharp  disappointment  in comparison  to 1997,  when total
return was over 30%. Total assets remained almost constant at $2.1 million. But,
showing  the  volatility  of the  stock  markets,  the Fund  jumped  up 12% from
November 30 to Christmas.  Factors  Affecting  Past  Performance  The Fund seeks
long-term  growth  through  investment  in common stocks of U.S.  companies.  It
follows a value investment  approach,  favoring companies with good fundamentals
and low price/earnings ratios. This year's market essentially split in two, with
big companies,  especially those in technology-related  businesses,  soaring and
most  everything  else  failing to keep pace.  We were against the tide with our
cyclicals,  and mid-sized  and smaller  companies.  Although it hurt  short-term
results,  we avoided the high-flying,  Vegas-like Internet stocks where entry is
easy and  earnings  hard to spot.  During the year we kept as much as 25% of the
Fund's  assets in cash,  a  beneficial  strategy  during  the July to  September
sell-off.  Looking Forward Stocks ultimately  reflect their underlying  business
values.  After their strong  performance in 1998, we feel many large-cap  stocks
are now overvalued.  Growth of the U.S. economy is slowing,  even while interest
rate cuts are  proping  it up.  As  low-priced  imports  from  devalued  foreign
economies  flood our markets,  the evil voices of  protectionism  are rising.  A
sharp decline, like that of this year's third quarter, won't be as easy to stem.
Now that much of the  general  public  is  day-trading,  a major  drop in market
wealth  will  clearly  restrict   consumer  spending  and  bring  on  deflation.
Management  Fee  Calculations  The Sextant  Growth Fund  calculates  part of its
management  fee based on a comparison of the Fund's return to the average return
in Morningstar's  Domestic Growth  category.  At November 30, 1998, the one-year
return for this category  average was 7.8%.  Because the Fund's  12-month return
underperformed  this average by more than 4% at November 30, 1998, the Fund paid
the maximum penalty 0.30% (annualized) performance fee for the month of December
1998.  For the fiscal  year,  the subpar  investment  performance  was muted for
shareowners  as the Fund's total  expense  ratio dropped to 0.66% from 1.04% the
prior year.

Page  18
<PAGE>

(GRAPHIC  OMITTED)
1998  Annual  Report
(GRAPHIC  OMITTED)


SEXTANT  GROWTH  FUND

Comparison  to  Index
The  line  graph  compares  Sextant  Growth  Fund's  performance  to  that  of a
broad-based  stock market index, the Standard & Poor's 500 Index.  Comparison of
any fund to an index must be made  bearing in mind that the index is  unmanaged,
and expense-free. Conversely, the fund will (1) be actively managed, (2) have an
objective  other than  mirroring  the index,  such as  limiting  risk,  (3) bear
transaction  and other costs,  (4) stand ready to buy and sell its securities to
shareholders  on a daily basis,  and (5) provide a wide range of  services.  The
graph below compares $10,000 invested in the Fund at its inception,  compared to
a similar amount  invested in Standard & Poor's 500 Index.  The graph shows that
the investment at the Fund's  inception  would have risen to $21,306 in the Fund
and $43,732 in the Index. The changes in this Fund's  investment  objectives and
policies during the life of the Fund limit the usefulness of this comparison.
Past performance is not indicative of future results.

SEXTANT  GROWTH  FUND  VS.  S&P  500  INDEX
(GRAPH  OMITTED)

PAGE  19
<PAGE>


SEXTANT  INTERNATIONAL  FUND
(Graphic  Omitted)
1998  Annual  Report
(GRAPHIC  OMITTED)
NOVEMBER  30,  1998

INVESTMENTS


<TABLE>

<CAPTION>



<S>                                     <C>       <C>      <C>            <C>

ISSUE                                   Quantity  Cost     Market Value   Country
--------------------------------------  --------  -------  -------------  --------------
BANKING AND FINANCIAL (20%)
Australia & New Zealand Bank ADR             500  $10,875  $      16,531  Australia
Aegon NV ADR                                 612   11,513         64,872  Netherlands
Banco Bilbao Vizcaya ADS                   1,800    7,752         28,350  Spain
AXA S.A. ADS                                 300   16,116         19,238  France
ING Groep N.V. ADS                           406   18,258         22,888  Netherlands
Toronto Dominion Bank                        700   18,159         23,450  Canada
                                                  -------  -------------
SUB-TOTAL                                          82,673        175,329
BUILDING MATERIALS (4.8%)
C R H plc ADR                              1,500   15,661         23,719  Ireland
Hanson plc ADR                               500   12,090         18,563  United Kingdom
                                                  -------  -------------
SUB-TOTAL                                          27,751         42,282
CHEMICALS (2.9%)
Phone Poulenc SA ADR                         508   15,859         25,400  France

COMPUTERS  (6.2%)
Business Objects SA ADS*                   2,000   19,570         38,000  France
Dassault Systems SA ADR                      400   13,875         16,200  France
                                                  -------  -------------
SUB-TOTAL                                          33,445         54,200
CONSUMER PRODUCTS (3.6%)
Gucci Group NV                               200   10,925          9,000  Italy
Coca Cola FEMSA S.A. ADR                   1,500    9,750         22,312  Mexico
                                                  -------  -------------
SUB-TOTAL                                          20,675         31,312
COUNTRY FUNDS (5.5%)
Asia Pacific Fund                          3,000   20,752         20,250  Asia
Austria Fund                               1,000    7,923         10,562  Austria
Irish Investment Fund                        900   10,237         17,212  Ireland
                                                  -------  -------------
SUB-TOTAL                                          38,912         48,024
ELECTRICAL EQUIPMENT  (3.1%)
ABB AB ADR                                   100   10,000         10,600  Sweden
Lernout & Houspie Speech Products NV*        400   16,457         16,200  Belgium
                                                  -------  -------------
SUB-TOTAL                                          26,457         26,800
MEDICAL-DRUGS (5.8%)
Glaxo Wellcome plc ADR                       400    9,800         25,400  United Kingdom
Novo-Nordisk A/S ADR                         450   14,702         25,988  Denmark
                                                  -------  -------------
SUB-TOTAL                                          24,502         51,388
METALS & MINING (3.2%)
Potash Corp of Saskatchewan                  300   21,164         18,506  Canada
Rio Tinto plc ADS                            200   11,375          9,600  United Kingdom
                                                  -------  -------------
SUB-TOTAL                                          32,539         28,106
OIL & GAS PRODUCTION (6.8%)
Petroleum Geo-Services A/S*                1,000   10,979         14,063  Norway
Total S.A. ADR                               307    8,812         18,765  France
YPF SA ADS                                   900   21,274         26,606  Argentina
                                                  -------  -------------
SUB-TOTAL                                          41,065         59,434

</TABLE>


  (The accompanying notes are an integral part of these financial statements)
Page  20
<PAGE>



(GRAPHIC  OMITTED)
1998  Annual  Report
SEXTANT  INTERNATIONAL  FUND
(Graphic  Omitted)
SEXTANT  INTERNATIONAL  FUND
INVESTMENTS
<TABLE>

<CAPTION>



<S>                                                 <C>       <C>       <C>             <C>

 ISSUE                                              Quantity  Cost      Market Value    Country
--------------------------------------------------  --------  --------  --------------  --------------
PAPER PRODUCTS (1.3%)
Fletcher Challenge Forests ADR                         2,024    15,778          7,716   New Zealand
Fletcher Challenge Paper ADR                             600    12,623          3,825   New Zealand
                                                              --------  --------------
SUB-TOTAL                                                       28,401         11,541
PHOTOGRAPHIC EQUIPMENT (4.3%)
Canon  ADR                                             1,000    23,426         22,187   Japan
Fuji Photo Film ADR                                      400    10,050         15,150   Japan
                                                              --------  --------------
SUB-TOTAL                                                       33,476         37,337
REAL ESTATE (2.7%)
Intrawest                                              1,500    26,218         24,094   Canada

TELECOMMUNICATIONS (18.5%)
BCE Inc                                                  900    15,830         32,006   Canada
British Sky Broadcasting ADS                             300    11,063         15,281   United Kingdom
Cable & Wireless plc ADS                                 600    13,021         22,650   Hong Kong
Embratel Participacoes ADR*                              300     6,933          4,800   Brazil
Gilat Satellite Networks Ltd*                            300    12,353         15,263   Israel
PT Indosat ADR                                         1,000    20,952         14,000   Indonesia
Tele Celular Sul Partcipacoes S.A. ADR*                   30       693            683   Brazil
Tele Centro Oeste Celular Participacoes S.A. ADR*        100     2,311            475   Brazil
Tele Centro Sul Participacoes S.A. ADR*                   60     1,387          3,424   Brazil
Telefonica de Espana ADS ADR                             250    10,250         34,844   Spain
Tele Leste Celular Participacoes S.A. ADR*                 6       139            251   Brazil
Telemig Celular Participacoes S.A. ADR*                   15       347            463   Brazil
Tele Nordeste Celular Participacoes S.A. ADR*             15       347            394   Brazil
Tele Norte Celular Participacoes S.A. ADR*                 6       139            246   Brazil
Tele Norte Leste Participacoes S.A. ADR*                 300     6,933          5,100   Brazil
Telesp Celular Participacoes S.A. ADR*                   120     5,546          3,150   Brazil
Telesp Participacoes S.A. ADR*                           300     6,933          8,025   Brazil
Tele Sudeste Celular Participacoes S.A. ADR*              60     1,387          1,620   Brazil
                                                              --------  --------------
SUB-TOTAL                                                      116,564        162,675
TRANSPORTATION (8.6%)
British Airways ADS                                      150    10,931         10,444   United Kingdom
Daimler-Chrysler AG                                      251    16,406         23,013   Germany
Desc SA ADR                                              700    19,649         13,213   Mexico
KLM Royal Dutch Airlines                               1,017    35,548         28,730   Netherlands
                                                              --------  --------------
SUB-TOTAL                                                       82,534         75,400
UTILITIES-ELECTRIC (2.1%)
Enersis S.A. ADR                                         800    19,414         18,700   Chile

UTILITIES-GAS (1.7%)
Transport de Gas del Sur SA ADR                        1,500    18,807         15,000   Argentina
                                                              --------

TOTAL INVESTMENTS (101%)                                      $669,292        887,022
                                                              ========
Other Assets (net of liabilities) (-1%)                                        (6,272)
                                                                        --------------
TOTAL NET ASSETS (100%)                                                 $     880,750
                                                                        ==============
<FN>

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


INVESTMENTS
  (The  accompanying  notes are an integral part of these financial  statements)
Page 21
 <PAGE> 
(GRAPHIC OMITTED) SEXTANT INTERNATIONAL FUND
                          SEXTANT INTERNATIONAL FUND
(Graphic  Omitted)

                      STATEMENT OF ASSETS AND LIABILITIES

<TABLE>

<CAPTION>

 As  of  November  30,  1998


<S>                                                                       <C>        <C>

 ASSETS                                                                          -          -
       Common stock investments (cost $669,292)                           $887,022          -
       Cash                                                                 (5,048)         -
       Dividends receivable                                                    470          -
                                                                          ---------
             Total Assets                                                        -   $882,444
                                                                                     --------
 LIABILITIES
      Payable to affiliate                                                   1,694          -
                                                                          ---------
             Total Liabilities                                                   -      1,694
                                                                                     --------
 NET ASSETS                                                                      -   $880,750
                                                                                     ========

 Fund Shares Outstanding                                                         -    129,464
 ANALYSIS OF NET ASSETS
       Paid in capital  (unlimited shares authorized, without par value)   671,714          -
       Accumulated net realized gain (loss) on investments                  (8,694)         -

       Unrealized net appreciation on investments                          217,730          -
                                                                          ---------
       Net Assets applicable to Fund shares outstanding                          -   $880,750
                                                                                     ========
 NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE                        -   $   6.81
                                                                                     ========

</TABLE>



                            STATEMENT OF OPERATIONS

<TABLE>

<CAPTION>

 For  the  Year  ended  November  30,  1998


<S>                                                           <C>       <C>

INVESTMENT INCOME                                                    -        -
      Dividends (net of foreign tax)                          $ 15,740        -
                                                              --------
            Net investment income                                    -  $15,740
EXPENSES
      Investment adviser and administration fee                  7,060        -
      Professional fees                                          1,716        -
      Filing and registration fees                                 900        -
      Printing and postage                                         700        -
      Other expenses                                               345        -
                                                              --------
            Total gross expenses                                     -   10,721
                                                                        -------
            Net investment income                                    -    5,019
                                                                        -------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
      Proceeds from sales                                      172,047        -
      Less cost of securities sold based on identified cost    166,888        -
                                                              --------  -------
Realized net gain (loss)                                             -    5,159
UNREALIZED GAIN (LOSS) ON INVESTMENTS
      End of period                                            217,730        -
      Beginning of period                                      189,878        -
                                                              --------  -------
      Increase in unrealized gain for the period                     -   27,852
                                                                        -------
            Net realized and unrealized gain on investments          -   33,011
                                                                        -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                 -  $38,030
                                                                        =======
</TABLE>



  (The accompanying notes are an integral part of these financial statements)
PAGE  22
<PAGE>

(Graphic  Omitted)
1998  Annual  Report
(GRAPHIC  OMITTED)

SEXTANT  INTERNATIONAL  FUND

STATEMENT  OF  CHANGES  IN  NET  ASSETS

                                                    Year ended      Year ended
                                                 Nov 30, 1998     Nov 30, 1997
                                                 ------------     ------------




                                 INCREASE (DECREASE) IN NET ASSETS     -     -
                                                  FROM OPERATIONS:     -     -
                                 Net investment Income      $5,019      $7,829
               Net realized gain (loss) on investments      5,159      (7,500)
              Net increase  in unrealized appreciation      27,852      93,292
                                                           -------     -------
            Net increase in net assets from operations      38,030      93,621
                                                           -------     -------

DIVIDENDS  TO  SHAREOWNERS  FROM:
                               Net investment income      (5,174)      (7,831)
                                     Capital gains distributions      -      -
                                                                     --     --
                                                          (5,174)      (7,831)
                                                         --------     --------
FUND  SHARE  TRANSACTIONS:
                       Proceeds from sales of shares      355,656      274,408
                  Value of shares issued in reinvestment of dividends      5,129
                                                                          ------
                                                                         7,831
                                                                             -
                                                          360,785      282,239
                         Cost of shares redeemed      (394,045)      (182,369)
                                                     ----------     ----------
                   Net increase (decrease) in net assets from share transactions
                                                          (33,260)      99,870
                                                               ---     -------
               Total increase (decrease) in net assets      (404)      185,660

NET  ASSETS
                                 Beginning of period      881,154      695,494
                                                         --------     --------
                                     End of period      $880,750      $881,154
                                                       =========     =========

Shares  of  the  Fund  sold  and  redeemed
                                 Number of shares sold      50,080      41,860
      Number of shares issued in reinvestment of dividends      753      1,184
                                                               ----     ------
                                                            50,833      43,044
                         Number of shares redeemed      (54,754)      (28,196)
                                                       ---------     ---------
            Net increase (decrease) in number of shares outstanding      (3,921)
                                                                        ========
                                                                        14,848
                                                                            ==


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

Page  23
<PAGE>
SEXTANT  INTERNATIONAL  FUNDSEXTANT  INTERNATIONAL  FUND
(GRAPHIC  OMITTED)
1998  ANNUAL  REPORT
(Graphic  Omitted)
FINANCIAL  HIGHLIGHTSFINANCIAL  HIGHLIGHTS

<TABLE>

<CAPTION>

Selected data per share of capital stock outstanding throughout the period:
                                  Sept. 28, '95
                          For the Year Ended November 30,               (Inception) to
                          -------------------------------
                                    1998     1997     1996     Nov. 30, '95*
                                    ----     ----     ----     -------------


<S>                                                                     <C>      <C>      <C>      <C>

NET ASSET VALUE AT BEGINNING OF PERIOD                                  $ 6.61   $ 5.87   $ 4.99   $  5.00
                                                                        -------  -------  -------  --------
      INCOME FROM INVESTMENT OPERATIONS
      Net investment income                                               0.03     0.06     0.03     (0.02)
      Net gains or losses on securities (both realized and unrealized)    0.21     0.74     0.88      0.01
                                                                        -------  -------  -------  --------
Total from investment operations                                          0.24     0.80     0.91     (0.01)
      LESS DISTRIBUTIONS
      Dividends (from net investment income)                             (0.04)   (0.06)   (0.03)        -
      Distributions (from capital gains)                                     -        -        -         -
                                                                        -------  -------  -------  --------
Total distributions                                                      (0.04)   (0.06)   (0.03)        -
                                                                        -------  -------  -------  --------
NET ASSET VALUE AT END OF PERIOD                                        $ 6.81   $ 6.61   $ 5.87   $  4.99
                                                                        =======  =======  =======  ========
TOTAL RETURN                                                              3.57%   13.58%   18.16%   (0.20)%
Ratios/supplemental data
----------------------------------------------------------------------
Net assets ($000), end of period                                        $  881   $  881   $  695   $   328
Ratio of expenses to average net assets                                   1.16%    1.51%    1.80%     0.49%
Ratio of net investment income to average net assets                      0.54%    0.93%    0.60%     0.38%
Portfolio turnover rate                                                     20%       9%      11%       12%
<FN>

       For the year ended  Nov.  '96 and the period  ended  Nov.  '95,  all or a
portion of the operating expenses were waived. If costs had not been have waived
and  directly  assumed,  the  resulting  increase to expenses per share in these
periods would have been $.03 and $.01,  respectively.  The increase to the ratio
of expenses to average monthly net assets would be .50% and .21 %, respectively.


* not annualized
 </FN>
</TABLE>


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

                        DISCUSSION OF  FUND PERFORMANCE
                                  (UNAUDITED)
FINANCIAL  HIGHLIGHTS
Fiscal  Year  1998
For the fiscal year ended  November 30,  1998,  the Sextant  International  Fund
returned 3.57% to its  shareowners.  Total assets ended  unchanged from the year
before,  and the Fund  remains  small.  The  objective of the Fund is to provide
long-term growth through  investment in foreign stocks.  Factors  Affecting Past
Performance  Investing  in  foreign  securities  includes  risks not  present in
domestic  securities.  During 1998,  foreign  markets  suffered  from  defaults,
illiquidity and  uncertainty - yet many showed gains after 1997  disasters.  Our
portfolio was heavily weighted in financial  issues,  which suffered in a credit
cruch.   Commodity  prices  mostly  declined,   which  hurt  our  resource-based
securities.  Looking Forward The Sextant  International Fund is broadly invested
in growing companies  headquartered outside the United States. Foreign companies
were generally less aggressive at cutting expenses and

Page  24
<PAGE>

(GRAPHIC  OMITTED)
1998  ANNUAL  REPORT
SEXTANT  INTERNATIONAL  FUND
(Graphic  Omitted)

focusing their  operations on shareowner  value than US companies in the 1990's,
but this is changing.  We expect that our portfolio  securities will continue to
show  growth  and the  Fund  will  continue  to  perform  well.  Management  Fee
Calculations  The Sextant  International  Fund calculates part of its management
fee based on a  comparison  of the Fund's  return to the  average  return of the
Morningstar  fund category  Foreign  Stock.  At November 30, 1998,  the one-year
return for this category  average was 9.6%.  Because the Fund's  12-month return
underperformed  this average by more than 4% at November 30, 1998, the Fund paid
the maximum penalty 0.30% (annualized) performance fee for the month of December
1998.  For the  fiscal  year,  the  sub-par  investment  returns  were muted for
shareowners  as the Fund's total  expense  ratio dropped to 0.54% from 0.93% the
prior year.  Comparison to Index Comparison of any fund to an index must be made
bearing in mind that the Index is unmanaged,  and expense-free.  The graph below
compares  $10,000  invested in the Fund at its inception,  compared to a similar
amount invested in the AMEX  International  Index. This  capitalization-weighted
index  averages  50  American  Depository  Receipts  (ADRs)  of large  worldwide
companies,  and reflects the types of securities in which Sextant  International
Fund invests.  The graph shows that a $10,000  investment made on September 1995
would  have  risen to  $13,871  in the  Fund  and  $13,856  in the  Index.  Past
performance is not indicative of future results.


Sextant  International  Fund  vs.  AMEX  International  Index

(Graph  Omitted)
Page  25
<PAGE>

Notes  to  Financial  Statements
(GRAPHIC  OMITTED)
1998  ANNUAL  REPORT
Note  1  -Organization
Saturna Investment Trust (the "Trust") (formerly  Northwest Investors Trust) was
established under Washington State Law as a Business Trust on February 20, 1987.
The Trust is registered as a no-load,  open-end series invest-ment company under
the Investment Company Act of 1940, as amended.  Five portfolio series have been
created to date:  Sextant Bond Income Fund ("Bond Income"),  Sextant  Short-Term
Bond Fund  ("Short-Term  Bond"),  Sextant  Growth Fund  ("Growth"),  and Sextant
International  Fund  ("International")  (collectively,  the  "Funds")  and Idaho
Tax-Exempt Fund,  distributed  through a separate  prospectus and the results of
which are contained in a separate report.

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

INVESTMENTS:
Securities  traded on a  national  ex-change  or the  national  over-the-counter
market  system are valued at the last sale price or, in the  absence of any sale
on  that  date,  the  closing  bid  price.   Other  securities   traded  in  the
over-the-counter  market  are  valued  at  the  last  bid  price.   Fixed-income
securities  for which there are no publicly  available  market  quo-tations  are
valued  using a matrix based on maturity,  quality,  yield and similar  factors,
which are compared  periodically  to multiple  dealer bids and  ad-justed by the
adviser under policies  established  by the Trustees.  The cost of securities is
the  same  for   accounting   and  federal   income  tax  purposes.   Securities
trans-actions are recorded on trade date. Realized gains and losses are recorded
on the identified cost basis.

INCOME  AND  EXPENSES:
Interest income is reduced by the amortization of bond premiums,  on a con-stant
yield-to-maturity  basis from  pur-chase  date to maturity.  Interest  income is
increased by accretion only for bonds  underwritten as original issue discounts.
Market  dis-counts  are  recorded  as  realized  gains  upon  disposition.  Cash
dividends  from equity  secu-rities  are recorded as income on the  ex-div-idend
date. Expenses incurred by the Trust on be-half of the Funds (e.g., professional
fees) are  allocated  to the Funds on the basis of  relative  daily  average net
assets.  The Adviser has agreed to certain  limits on  ex-penses,  as  described
below.

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

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

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

Page  26
<PAGE>


 services.  Each of the  Funds  pays the  Adviser  an  Investment  Advisory  and
Administrative  Services  Fee (the "Base Fee") of .60% of average net assets per
annum,  payable  monthly.  The  Base Fee is  subject  to  adjustment  up or down
depending  on the  investment  performance  of the Fund  relative to a specified
index (the "Performance Adjustment").  The Adviser has voluntarily undertaken to
limit  expenses of Bond Income and  Short-Term  Bond to 0.60%  through March 31,
1999 and waives its investment advisory and administrative fee as to either Fund
completely so long as assets of that Fund are less than $2 million. For the year
ended  November 30, 1998,  Bond Income and  Short-Term  Bond  incurred  advisory
expenses of $7,691 and $12,132, respectively.  Growth and International incurred
advisory  expenses of $8,933 and $7,060,  respectively.  In accordance  with the
expense waiver, for the year ended November 30, 1998, Saturna Capital waived all
of the Bond  Income  advisory  fee and  $8,805 of that of  Short-Term  Bond.  In
accordance with the Funds' custodian agreements with National City Bank, for the
year ended November 30, 1998,  custodian fees for Bond Income,  Short-Term Bond,
Growth, and International,  were $475, $2,145, $2,210, and $2,748, respectively.
The custodian waived its fees for earnings credits. One trustee, who also serves
as the president of the Trust, is a di-rector and president of the Adviser.  The
four unaffiliated trustees receive $100 per Board or committee meeting attended.
On December 8, 1998, the trustees,  officers and their  immediate  families as a
group owned  25.7%,  18.7%,  17.3% and 32.6% of the  outstanding  shares of Bond
Income, Short-Term Bond, Growth and International,  respectively. The Trust acts
as a distributor  of its own shares,  except in those states in which  Investors
National  Corporation (a sub-si-diary of Saturna Capital  Corporation) is itself
registered as a  broker-dealer  and acts as dis-tributor  without  compensation.
Investors  National  Corporation  is the  primary  stockbroker  used  to  effect
portfolio transactions for Growth and International, and paid $2,727 and $1,431,
respectively  in  commissions  at  deep-discount  rates  during  the year  ended
November 30, 1998.

Note  4  -Federal  Income  Taxes
At November 30, 1998,  International  had capital loss  carryforwards  of $8,694
which  expire in 2004,  Bond Income had capital  loss  carryforwards  of $74,575
which  expire in 2004 and  Short-Term  Bond had capital  loss  carryforwards  of
$7,602 which expire in 2004,  subject to regulation.  Prior to their expiration,
such loss  carryforwards may be used to offset future net capital gains realized
for federal income tax purposes.

Note  5  -Investments
At November 30, 1998,  the net unrealized  gain on investments  for Bond Income,
Short-Term Bond, Growth and International were $46,314,  $12,156,  $646,186, and
$217,730, which consist of unrealized gains of $48,875,  $13,476,  $725,905, and
$278,489, and unrealized losses of $2,561, $1,320, $79,719, and $60,759,
respectively.
During the year ended  November 30,  1998,  Bond Income  pur-chased  $252,062 of
securities and sold no securities.  Comparable  figures for Short-Term  Bond are
$1,370,491 purchased $2,075,227 sold; for Growth $650,078 and $666,621;  and for
International,  $194,372  and  $172,047.  Included  in  the  above  amounts  for
Short-Term Bond are purchases of $240,278 and sales of $650,488 of U.S.
Government  securities.

Page  27
<PAGE>


Sextant  Mutual  Funds
(GRAPHIC  OMITTED)


Saturna  Capital
(GRAPHIC  OMITTED)

MUTUAL  FUNDSMUTUAL  FUNDS
                             1300 No. State Street
                           Bellingham WA 98225-4730
                                  800/SATURNA
                                 (800/728-8762)
                                WWW.SATURNA.COM
This report is issued for the information of the shareowners of the Funds. It is
not  authorized  for   distribution  to  prospective   investors  unless  it  is
accompanied or preceded by an effective prospectus relating to the securities of
the Trust. The Sextant Funds are a series of Saturna Investment Trust.

SHORT-TERM  BOND  SHORT-TERM  BOND
(GRAPHIC  OMITTED)
BOND  INCOMEBOND  INCOME
(GRAPHIC  OMITTED)
GROWTHGROWTH
(GRAPHIC  OMITTED)
INTERNATIONALINTERNATIONAL
(GRAPHIC  OMITTED)

Annual  Report

November  30,  1998




<PAGE>