**UNITED STATESSECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549****SCHEDULE 14A**Proxy Statement Pursuant to Section 14(a) of the Securities  Exchange Act of1934

Filed by the Registrant [ x ] Filed by a Party otherthan the Registrant [ ]

Check the appropriate box: [ ]Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only(as permitted by Rule 14a-6(e)(2)) [ x ] Definitive Proxy Statement [ ]Definitive Additional Materials [ ] Soliciting Material Pursuant to§240.14A-12

**SATURNA INVESTMENTTRUST** (Name of Registrant as Specified in itsCharter) (Name of Person(s) Filing Proxy Statement, if otherthan the Registrant)

Payment of Filing Fee (Check theappropriate box): [ x ] No fee required. [ ] Fee computed ontable below per Exchange Act Rules 14a-6(i)(4) and 0-11.

>  1) Title of each class of securities to which transactionapplies: __________________________ 2) Aggregate number of securitiesto which transaction applies: __________________________ 3) Per unitprice or other underlying value of transaction computed pursuant to Exchange ActRule 0-11 (set forth the amount on which the filing fee is calculated and statehow it was determined):  4) Proposed maximum aggregate value oftransaction:  5) Total fee paid: 

[ ] Fee paid previously with preliminarymaterials. [ ] Check box if any part of the fee is offset as providedby Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsettingfee was paid previously. Identify the previous filing by registration statementnumber, or the form or schedule and the date of its filing.

>  1) Amount Previously Paid:______________________________________________________ 2) Form,Schedule or Registration Statement No.:_____________________________________ 3) Filing Party:________________________________________________________________ 4)Date Filed: _______________________________

PRELIMINARY MATERIALS

 

**SATURNA INVESTMENT TRUST** SEXTANT GROWTH FUNDSEXTANT INTERNATIONAL FUND SEXTANT BOND INCOME FUND SEXTANT SHORT-TERMBOND FUND IDAHO TAX-EXEMPT FUND

1300 North StateStreet, Bellingham, WA 98225 (1-800-728-8762)

**NOTICE OF SPECIAL MEETING OF SHAREOWNERS TO BE HELDTUESDAY, AUGUST 15, 2006**

*To the Shareowners of SaturnaInvestment Trust:*

NOTICE is hereby given that a Special Meeting ofthe shareowners of Sextant Growth Fund, Sextant International Fund, Sextant BondIncome Fund, Sextant Short-Term Bond Fund and Idaho Tax-Exempt Fund(“Funds”) will be held in the offices of Saturna CapitalCorporation, 1300 North State Street, Bellingham, WA 98225 at 3 PM (PacificTime) on August 15, 2006. The purpose of the Special Meeting is to consider andact upon the following proposals, and to transact such other business as mayproperly come before the Special Meeting or any adjournments thereof.

> 
1) To elect a Board of Trustees (all funds)

2) To approve the adoption of a Plan of Distribution pursuant to Rule 12b-1under the Investment Company Act of 1940 (all funds except Idaho Tax-ExemptFund)

3) To transact any other business that may properly come before theSpecial Meeting

You are entitled to vote atthe Special Meeting and any adjournment thereof if you owned Shares at the closeof business on July 3, 2006. If you attend the meeting, you may vote your Sharesin person. **If you do not expect to attend the meeting, please complete,sign, date, and return the enclosed proxy card in the enclosed postage-paidenvelope.** You may revoke your proxy by written notice to the Trustbefore the meeting, by a subsequent valid proxy, or by request at the meetingbefore the vote. To avoid unnecessary expense, we ask your cooperation in votingpromptly, no matter how large or small your holdings may be.

> 
By order of the Board of Trustees, ETHEL B.BARTOLOME, Secretary

Bellingham, Washington June 30, 2006 

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**YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOUOWN**

Please indicate your voting instructions on the enclosedproxy card, sign, and date the card, and return it in the envelope provided.**IF YOU SIGN, DATE AND RETURN THE PROXY CARD BUT GIVE NO VOTINGINSTRUCTIONS, YOUR SHARES WILL BE VOTED “FOR” THE PROPOSALSDESCRIBED ABOVE.** To avoid the additional expense of furthersolicitation, we ask your cooperation in mailing your proxy card promptly.Shares that are registered in your name may also be voted by faxing yourcompleted proxy card(s) to 360/734-0755. 

 

|  

**INSTRUCTIONS FOR EXECUTING PROXY CARD**

 

The following general rules for executing proxy cards        may be of assistance to you and help avoid the time and expense involved        in validating your vote if you fail to execute your proxy card properly.

1. **Individual Accounts:** Your name should be signed        exactly as it appears in the registration on the proxy card.

2. **Joint Accounts:** Either party may sign, but the name        of the party signing should conform exactly to a name shown in the registration.

3. **All other accounts** should show the capacity of the        individual signing. This can be shown either in the form of the account        registration itself or by the individual executing the proxy card.

Unless proxy card(s) submitted by corporations and partnerships are        signed by the appropriate persons as indicated in the voting instructions    on the proxy card, they will not be voted. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Registration | Valid Signature |
| A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1) ABC Corp.      2) ABC Corp. c/o John Smith, Treasurer | Jane Smith, Treasurer      John Smith, Treasurer |
| B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1) ABC Corp. Profit Sharing Plan      2) ABC Trust      3) John Smith, Trustee u/t/d 3/2/48 | John Smith, Trustee      John Smith, Trustee      John Smith, Trustee |
| C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1) Jane Smith, Cust. f/b/o John Smith, Jr. UGMA | Jane Smith |
| D.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1) J & J Smith Partnership | John Smith, Partner |

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**SATURNA INVESTMENTTRUST 1300 N. State Street, Bellingham, WA 98225(1-800-728-8762) PROXY STATEMENT FOR SPECIAL MEETING OF SHAREOWNERSAUGUST 15, 2006 ______________________**

This Proxy Statementis furnished in connection with a solicitation of proxies made by, and on behalfof, the Board of Trustees of Saturna Investment Trust (the “Trust”)to be used at the Special Meeting of the shareowners of each series of theTrust: Sextant Growth Fund, Sextant International Fund, Sextant Bond IncomeFund, Sextant Short-Term Bond Fund and Idaho Tax-Exempt Fund, to be held onTuesday, August 15, 2006, at 3 PM in the offices of Saturna Capital Corporation,1300 North State Street, Bellingham, WA 98225. 

The purpose of theMeeting is set forth in the accompanying Notice. The solicitation is being madeprimarily by the mailing of this Proxy Statement and the accompanying proxy onor about July 6, 2006. 

**For a free copy of the Trust’sannual report for the fiscal year ended November 30, 2005 and the semiannualreport for the fiscal period ended May 31, 2006, call 1-800-728-8762 or write toSaturna Capital Corporation at 1300 N. State Street, Bellingham, WA98225.**

**VOTING INFORMATION**

The Trust currently has five investment portfolios: Sextant Growth Fund,Sextant International Fund, Sextant Bond Income Fund, Sextant Short-Term BondFund and Idaho Tax-Exempt Fund, each of which has issued only one class ofShares of beneficial interest ("Shares"). The holders of Shares whosenames appear of record on the books of a Fund at the close of business on July3, 2006 are entitled at the meeting to a vote for each full Share or fractionthereof. As of July 3, 2006 the outstanding Shares of each Fund were asfollows:

| **Fund**                    | **SharesOutstanding** |
|-----------------------------|-----------------------|
| ***GrowthFund***            | **784,865.596**       |
| ***International Fund***    | **684,744.314**       |
| ***Bond Income Fund***      | **627,305.532**       |
| ***Short-Term Bond Fund***  | **519,257.662**       |
| ***Idaho Tax-Exempt Fund*** | **1,590,033.924**     |

One-half of each Fund’s Shares outstanding on July 3, 2006, represented inperson or by proxy, will constitute a quorum and must be present for thetransaction of business at the meeting. All Shares that are voted and votes toABSTAIN will be counted towards establishing a quorum.

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**VOTING OFPROXIES**

If a quorum is not present at the meeting or a quorum ispresent but sufficient votes to approve one or more of the proposals are notreceived, the persons named as proxies may propose one or more adjournments ofthe meeting to permit further solicitation of proxies. Any such adjournment willrequire the affirmative vote of a majority of those Shares represented at themeeting in person or by proxy. The persons named as proxies will vote thoseproxies that they are entitled to vote **FOR** any proposal infavor of such an adjournment and will vote those proxies required to be voted**AGAINST** a proposal against such adjournment. A shareowner votemay be taken on one or more of the proposals in this Proxy Statement prior toany such adjournment if sufficient votes have been received and it is otherwiseappropriate.

Broker non-votes are Shares held in street name for whichthe broker indicates that instructions have not been received from thebeneficial owners or other persons entitled to vote and for which the brokerdoes not have discretionary voting authority. Abstentions and broker non-voteswill be counted as Shares present for purposes of determining whether a quorumis present but will not be voted for or against any adjournment or proposal.Accordingly, abstentions and broker non-votes effectively will be a vote againstadjournment or against any proposal where the required vote is a percentage ofthe Shares present or outstanding. Abstentions and broker non-votes will not becounted, however, as votes cast for purposes of determining whether sufficientvotes have been received to approve a proposal.

With respect to Sharesheld in Individual Retirement Accounts and other tax-deferred custodial accounts(including Traditional, Rollover, SEP, SARSEP, Roth, SIMPLE IRAs, HSAs, andESAs) (“Tax-Deferred Accounts”), the Custodian (often, SaturnaCapital) for the Tax-Deferred Accounts will vote those Shares for which it hasreceived instructions from shareowners only in accordance with suchinstructions. If shareowners of Tax-Deferred Accounts do not vote their Shares,the Custodian for the Tax-Deferred Accounts will vote their Shares for them, inthe same proportion as other shareowners of Tax-Deferred Accounts havevoted.

The individuals named as proxies on the enclosed proxy ballot willvote in accordance with your directions as indicated on the proxy ballot, ifyour proxy ballot is received properly executed by you or by your duly appointedagent or attorney-in-fact. If you sign, date and return the proxy ballot, butgive no voting instructions, your Shares will be voted in favor of approval ofeach of the proposals, and the duly appointed proxies may, in their discretion,vote upon such other matters as may come before the meeting. The proxy ballotmay be revoked by giving another proxy or by letter or e-mail revoking theinitial proxy. To be effective, revocation must be received by the Trust priorto the meeting and must indicate your name and account number. If you attend themeeting in person you may, if you wish, vote by ballot at the meeting, therebycanceling any proxy previously given. In addition to solicitation by mail,proxies may be solicited by telephone, telegraph, facsimile, electronic means orby personal interview by representatives of the Trust. No solicitations will bemade by specifically engaged agents of the Trust or other paid solicitors.

Unless otherwise directed by the shareowner giving the proxy, the personsacting under the accompanying proxy will vote the Shares represented thereby (a)for the election of the five persons named under the caption “Election ofTrustees” as nominees for Trustees of the Trust, (b) for adoption of thePlan of Distribution under Rule 12b-1 of the 1940 Act, and (c) in theirdiscretion with respect to the transaction of such other business as mayproperly come before the meeting or any adjournment thereof. The Board ofTrustees does not know of any other matter or business that may be broughtbefore the meeting.

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**VOTE REQUIRED**

**Proposal1.** Approval of Proposal 1 requires the affirmative vote of a pluralityof the Shares of the entire Trust voted in person or by proxy at theMeeting.

**Proposal 2.** (Growth Fund, International Fund,Bond Income Fund, and Short-Term Bond Fund only). Each Fund voting on Proposal 2does so separately. The approval of the Proposal by a Fund is applicable only tothat particular Fund. A Fund’s approval of the Proposal is not dependenton, or affected in any way by, the results of the vote of another Fund. Approvalof the Proposal by a Fund requires the “vote of a majority of votingsecurities” of that Fund, meaning the vote, at any meeting of shareownersmore than 50% of the outstanding Shares of that Fund. With respect toProposal 2, votes to ABSTAIN and broker non-votes will have the same effect asvotes cast AGAINST the Proposal.

Each outstanding full Share of each Fundis entitled to one vote, and each outstanding fractional Share is entitled to aproportionate fractional Share of one vote. If Proposal 2 is not approved by therequisite vote of shareowners of a Fund, the persons named as proxies maypropose one or more adjournments of the meeting to permit further solicitationof proxies.

 

 

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**PROPOSAL 1: NOMINEES FOR ELECTION ASTRUSTEES**

The overall direction and supervision of the Trust isthe responsibility of the Board, which has the primary duty of ensuring that theTrust’s general investment policies and programs are adhered to and thatthe Trust is properly administered. The officers of the Trust are responsiblefor the day-to-day administration of the Trust. Saturna Capital, as investmentadviser for the Trust, is primarily responsible for providing each portfolio ofthe Trust with various administrative services and supervising the dailybusiness affairs of each series. 

Each of the nominees for Trustee hasconsented to be named herein and to serve if elected. Should any nominee becomeunable or unwilling to accept nomination or election, the persons acting underthe proxy will vote for the election in the nominee’s stead of such otherperson as the Board of Trustees may recommend. Each trustee serves for thelifetime of the Trust or until he dies, resigns, is removed, or not re-electedby the shareowners. Each officer serves a one-year term subject to annualreappointment by the Trustees. 

The following table provides importantinformation about the Trustees/Nominees and the officers of the Trust.

 

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| Name (age)Address                                                                          | Position(s) held with Trust and Length of Time Served | Principal Occupation(s) during past 5 Years                                                        | Dollar Range of Securities in the  Sextant Funds                                                             | Dollar Range of  Securities inall  Funds Overseen  or to be  Overseen by Director or Nominee in  Family of  Investment  Companies | Number of Portfolios in  Saturna Fund  Complex  Overseen by  Trustee | Other Directorships held by Trustee |
|--------------------------------------------------------------------------------------------|-------------------------------------------------------|----------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|-------------------------------------|
| ***IndependentTrustees***                                                                  |
| Gary A.Goldfogel, MD (47) 1500 N. State Street Bellingham, WA 98225                        | Independent Trustee (since 1995)                      | Medical Examiner(pathologist); Owner, Avocet Environmental Testing (laboratory)                    | Growth: over $100,000 International:$50,001-100,000 Short-Term Bond: over $100,000 Bond Income: over$100,000 | over $100,000                                                                                                                     | Five                                                                 | None                                |
| Herbert G. Grubel (71)  Apt. 1202 - 125 West  SecondSt. North Vancouver, BC Canada V7M 1C5 | Independent Trustee(since 2005)                       | Senior Fellow, Fraser Institute; Professor (Emeritus) ofEconomics, Simon Fraser University; Author | Growth: $10,001-50,000                                                                                       | $10,001-50,000                                                                                                                    | Five                                                                 | None                                |
| John E. Love (73) 1002 Spokane StreetGarfield, WA 99130                                    | Chairman; Independent Trustee (since1987)             | Owner, J.E. Love Co. (agricultural equipmentmanufacturer)                                          | Growth:  $10,001-50,000International:  $1-10,000 Short-Term Bond:  over $100,000 BondIncome: $50,001-100,000 | over$100,000                                                                                                                      | Five                                                                 | None                                |
| John S. Moore(74) 346 Bayside Road Bellingham, WA 98225                                    | IndependentTrustee (since 1993)                       | Professor (now retired), College of Businessand Economics, Western Washington University           | Growth: $10,001-50,000                                                                                       | $10,001-50,000                                                                                                                    | Five                                                                 | None                                |

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| ***InterestedTrustee*** |
|-------------------------|

| Nicholas F. Kaiser, CFA (60) 1300 N. State Street Bellingham, WA98225   | President; Trustee* (since 1989)       | President, SaturnaCapital Corporation; President, Saturna Brokerage Services                       | Growth: over $100,000 International: over$100,000 Short-Term Bond: $10,001-50,000 Bond Income:$10,001-50,000 Idaho Tax-Exempt: $1-10,000 | over $100,000  | Seven | Amana Mutual Funds Trust |
|-------------------------------------------------------------------------|----------------------------------------|----------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|----------------|-------|--------------------------|
| ***Officerswho are not Trustees***                                      |
| Phelps S. McIlvaine (52) 1300 N. State Street Bellingham, WA98225       | Vice President (since 1994)            | Vice President, SaturnaCapital Corporation; Treasurer, Saturna Brokerage Services                  | None                                                                                                                                     | None           | N/A   | N/A                      |
| Christopher R. Fankhauser (33) 1300 N. State StreetBellingham, WA 98225 | Treasurer* (since 2002)                | Manager ofOperations, Saturna Capital Corporation                                                  | Growth:$1-10,000 International: $1-10,000 Bond Income: $1-10,000Short-Term Bond: $1-10,000                                               | $10,001-50,000 | N/A   | N/A                      |
| Ethel B.Bartolome (33) 1300 N. State Street Bellingham, WA 98225        | Secretary* (since 2001)                | Corporate Administrator, SaturnaCapital Corporation                                                | Growth:$1-10,000                                                                                                                         | $1-10,000      | N/A   | N/A                      |
| James D. Winship, (57) 1300 N. State StreetBellingham, WA 98225         | Chief Compliance Officer* (since 2004) | Attorney; Adjunct Professor,  University of Washington and SeattlePacific University (1999 - 2003) | Growth:$1-10,000                                                                                                                         | $1-10,000      | N/A   | N/A                      |

*Holds the same position with Amana Mutual Funds Trust.

1/Valuations of share holdings are computed as of May 31, 2006

2/   Mr. Kaiser is an “interested person” of theTrust, as defined in the Investment Company Act of 1940, by reason of hispositions with the Trust’s adviser and distributor. He is also portfoliomanager of the Growth Fund and the International Fund. See “AdditionalInformation Concerning the Investment Adviser.” 

3/   Each Trustee oversees or will oversee the five portfoliosof the Trust. In addition, Mr. Kaiser oversees two portfolios of AmanaMutual Funds Trust.

4/ Mr. McIlvaine is the primary portfolio manager ofthe Bond Income Fund, Sextant Short-Term Bond Fund and the Idaho Tax-ExemptFund.

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The following table provides importantinformation about the shareholdings of the Trustees/Nominees, and the officersof the Trust.

| ***Name of Fund***           | ***Name of Individual*** | ***Number of Shares*** | ***Percent of Fund**** |
|------------------------------|--------------------------|------------------------|------------------------|
| **Sextant Growth**           |
|                         | Gary Goldfogel           | 25279.435              | 3.19                   |
|                         | Herbert Grubel           | 611.111                | *                      |
|                         | John Love                | 1297.481               | *                      |
|                         | John Moore               | 671.817                | *                      |
|                         | Nicholas Kaiser          | 23711.690              | 2.99                   |
|                         | Phelps McIlVaine         | None                   | *                      |
|                         | Christopher Fankhauser   | 93.094                 | *                      |
|                         | Ethel Bartolome          | 43.087                 | *                      |
|                         | James Winship            | 170.116                | *                      |
| Sextant International        |
|                         | Gary Goldfogel           | 7666.376               | 1.12                   |
|                         | Herbert Grubel           | None                   |                   |
|                         | John Love                | 7842.416               | 1.14                   |
|                         | John Moore               | None                   |                   |
|                         | Nicholas Kaiser          | 22364.460              | 3.26                   |
|                         | Phelps McIlVaine         | None                   |                   |
|                         | Christopher Fankhauser   | 782.739                | *                      |
|                         | Ethel Bartolome          | None                   |                   |
|                         | James Winship            | None                   |                   |
| **Sextant Short-TermBond**   |
|                         | Gary Goldfogel           | 21800.161              | 4.21                   |
|                         | HerbertGrubel            | None                   |                   |
|                         | JohnLove                 | 18483.179              | 3.57                   |
|                         | JohnMoore                | None                   |                   |
|                         | NicholasKaiser           | 4683.990               | *                      |
|                         | PhelpsMcIlVaine          | None                   |                   |
|                         | Christopher Fankhauser   | 639.367                | *                      |
|                         | Ethel Bartolome          | None                   |                   |
|                         | James Winship            | None                   |                   |
| **Sextant Bond Income Fund** |
|                         | Gary Goldfogel           | 32551.844              | 5.20                   |
|                         | Herbert Grubel           | None                   |                   |
|                         | John Love                | 14165.123              | 2.26                   |
|                         | John Moore               | None                   |                   |
|                         | Nicholas Kaiser          | 2931.454               | *                      |
|                         | Phelps McIlVaine         | None                   |                   |
|                         | Christopher Fankhauser   | 1255.774               | *                      |
|                         | Ethel Bartolome          | None                   |                   |
|                         | James Winship            | None                   |                   |
| **Idaho Tax-ExemptFund**     |
|                         | Gary Goldfogel           | None                   |                   |
|                         | Herbert Grubel           | None                   |                   |
|                         | John Love                | None                   |                   |
|                         | John Moore               | None                   |                   |
|                         | NicholasKaiser           | 815.281                | *                      |
|                         | PhelpsMcIlVaine          | None                   |                   |
|                         | Christopher Fankhauser   | None                   |                   |
|                         | Ethel Bartolome          | None                   |                   |
|                         | James Winship            | None                   |                   |

** Signifies less than 1% ownership*

On May 31, 2006,the trustees, officers and their related accounts as a group owned 23.64%,22.81%, 36.97%, 50.34%, 0.05% of the outstanding shares of the Bond Income,Short-Term Bond, Growth, International, and Idaho Tax-Exempt Funds,respectively.

The Trust’s Statement of Additional Information,available without charge by calling Saturna Capital at 800-SATURNA, includesadditional information about the trustees.

If elected, the Trustees willhold office without limit in time except that (a) any Trustee may resign; (b) aTrustee may be removed with or without cause by 2/3 vote of the Board or by theshareowners holding 

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2/3 of theoutstanding Shares of the Trust, in either case at a meeting expressly calledfor the purpose; (c) Trustees reaching age 78 retire by board policy. In case avacancy shall for any reason exist, the remaining Trustees will fill suchvacancy by appointing another Trustee, so long as, immediately after suchappointment, at least two-thirds of the Trustees have been elected byshareowners.

There are no arrangements known to the Trustthe operation of which may at a subsequent date result in a change in control ofthe Trust.

During the fiscal year ended November 30, 2005,the Board of Trustees held four regularly scheduled meetings. All trustees whowere members of the Board throughout the fiscal year, and who are proposed forre-election to the Board, attended all meetings. (Prof. Grubel joined the Boardafter the end of the fiscal year.) It is expected that the Trustees will meet atleast four times a year at regularly scheduled meetings. The Trustees haveestablished certain Governance Policies and Procedures to enhance theindependence and effectiveness of the Independent Trustees and to assist them infurthering their roles.

The Board has a standing AuditCommittee that has adopted a written charter (a copy of which is attached tothis Proxy Statement). The Board’s Audit Committee is composed of theIndependent Trustees, and has a financial expert, Mr. John Moore, an IndependentTrustee. 

The purpose of the Audit Committee is to:

> 
1)	Monitor and oversee theTrust’s accounting and financial reporting policies and practices, itsinternal controls and, as appropriate, the internal controls of theTrust’s service providers; 2)	To monitor and oversee the qualityand objectivity of the Trust’s financial statements and its independentaudit; 3)	To act as a liaison between the Trust’s external auditorsand the full Board;  4) To review and report to the full Board on regulatoryand compliance matters relating to the Trust and its investment portfolios;and 5) Review and establish the fees of the independent accountants, andother matters.

During the fiscalyear ended November 30, 2005, the audit committee held one meeting.  TheIndependent Trustees function as the nominating committee, although the Boardhas not established a formal nominating committee as such, and has not adopted anominating committee charter. The Independent Trustees will consider nominationsfurnished by shareowners. Nominations (or any other communication directed tothe Board or any Trustee) may be sent directly to the Trustee, or to theSecretary of the Trust, c/o Saturna Capital Corporation, 1300 N. State Street,Bellingham, WA 98225.

The Trust does not have a compensationcommittee.

Effective December 2005, the Trust paysdisinterested trustees $300 per meeting attended, plus reimbursement of travelexpenses (pro-rata to each Fund of the Trust). Mr. Kaiser receives nocompensation from the Trust, nor are the other officers of the Trust paid fortheir duties with the Trust; except that Mr. Winship has been retained by theTrust as Chief Compliance Officer, for which he is compensated. 

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The following table provides the total compensationpaid trustees for the fiscal year ended November 30, 2005. 

 

| Name of Person; Position                      | Aggregate Compensationfrom Trust | Pension or Retirement Benefits Accrued As Part of TrustExpenses | Estimated Annual Benefits Upon Retirement | Total Compensation FromTrust and Fund Complex Paid To Trustees |
|-----------------------------------------------|----------------------------------|-----------------------------------------------------------------|-------------------------------------------|----------------------------------------------------------------|
| John E.Love Trustee, Chairman                 | $1000                            | $0                                                              | $0                                        | $1000                                                          |
| John S. MoreTrustee                           | $1000                            | $0                                                              | $0                                        | $1000                                                          |
| Gary A. Goldfogel Trustee                     | $1000                            | $0                                                              | $0                                        | $1000                                                          |
| Herbert A. Ershig Trustee(retired Sept. 2005) | $600                             | $0                                                              | $0                                        | $600                                                           |
| Herbert G. Grubel Trustee(new Dec. 2005)      | $0                               | $0                                                              | $0                                        | $0                                                             |
| Nicholas F. Kaiser Trustee                    | $0                               | $0                                                              | $0                                        | $0                                                             |

Nicholas F. Kaiser, Trustee and President who is an“interested person” of the Trust, receives compensation as anofficer of Saturna Capital or its affiliated companies, but does not receive anydirector’s fees or other compensation from the Trust for his services asTrustee.

 

_______________________________________________________

**THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREOWNERSVOTE “FOR” PROPOSAL 1_______________________________________________________**

 

 

 

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**PROPOSAL 2: TO APPROVE THE ADOPTION OF A PLAN OFDISTRIBUTION PURSUANT TO RULE 12b-1 UNDER THE INVESTMENT COMPANY ACT OF1940**

The Board of Trustees has approved, and recommends thatshareowners of each of the Growth Fund, International Fund, Bond Income Fund andShort-Term Bond Fund (but not Idaho Tax-Exempt Fund) approve a Distribution Planpursuant to Rule 12b-1 under the Investment Company Act of 1940 (the“Plan”) for each of those Funds. (All references to“Fund” or “Funds” in this discussion of Proposal 2 referonly to the Funds that are voting with respect to this Proposal.) A copy of thePlan is attached to this Proxy Statement as Exhibit A. 

**ThePlan.** The Plan was approved by the Board on June 28, 2006 as providedfor by Rule 12b-1 (the “Rule”) promulgated by the SEC under the 1940Act. The Rule provides that, an investment company (i.e. a mutual fund) actingas a distributor of its Shares must do so pursuant to a written Plan“describing all material aspects of the proposed financing ofdistribution.” Under the Rule, an investment company is deemed to beacting as a distributor of its Shares if it engages “directly orindirectly in financing any activity which is primarily intended to result inthe sale of Shares issued by such company, including, but not necessarilylimited to, advertising, compensation of underwriters, dealers, and salespersonnel, the printing and mailing of prospectuses to other than currentshareowners, and the printing and mailing of sales literature.”

Since the Trust’s inception, distribution expenses of each of the Fundshave been paid by the Adviser. The Trust has entered into a distributionagreement (“Distribution Agreement”) with Saturna Brokerage Services(“Distributor”), a broker-dealer registered under the SecuritiesExchange Act of 1934, pursuant to which the Distributor will act as principalunderwriter of Shares of the Funds for sale to the public. Since theTrust’s inception, the Distributor has provided distribution andshareowner services for the Funds without compensation. The Distributor is amember of the National Association of Securities Dealers and a wholly-ownedsubsidiary of Saturna Capital Corporation. All employees of the Distributor arealso employees of Saturna Capital Corporation.

The SEC has neitherapproved nor disapproved the Plan.

The Plan contemplates that each of theFunds shall pay the Distributor, a monthly fee at the annual rate of 0.25% ofthe average daily net assets of each Fund (“Distribution Fee”).Distributor may use all or any portion of the Distribution Fee for activitiesthat the Distributor determines to be reasonably calculated to result in salesof Shares. Such activities may include, but neither are required to include norare limited to, compensation to the Distributor or such other underwriters,dealers, brokers, banks and other selling or servicing entities and sales,marketing and servicing personnel of any of them that have entered intoagreements with the Distributor for the marketing and sale of Shares or theprovision of shareowner services; payments for producing, printing anddisseminating sales materials, prospectuses, statements of additionalinformation and reports to other than existing shareowners; theDistributor’s expenses, including overhead, telephone and othercommunication expenses; costs of transmitting communications to shareowners,costs of answering shareowner inquiries; expenses incurred in processingshareowner transactions; payments for providing such other information andservices as shareowners reasonably may request; and payments for such othersimilar services that Distributor determines are reasonably calculated to resultin sales of Shares. 

**EACH VOTING FUND PAYS, AND WILL CONTINUE TOPAY, AN ADVISORY FEE TO THE ADVISER PURSUANT TO A SEPARATE INVESTMENT ADVISORYAND ADMINISTRATIVE SERVICES AGREEMENT.**

The Plan does not requirethe Distributor to perform any specific type or level of distribution activitiesor to incur any specific level of expenses for activities primarily intended toresult in the sale of Shares.

The Plan specifically recognizes that theAdviser may use its advisory fee revenue, as well as its past

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profits or its resources from any other source, tomake payment to the Distributor with respect to any expenses incurred inconnection with the distribution of Shares, including the activities referred toabove. To the extent that the payment of advisory fees by a Fund to the Advisershould be deemed to be indirect financing of any activity primarily intended toresult in the sale of Shares within the meaning of Rule 12b-1, such paymentshall be deemed to be authorized by this Plan. 

The Plan contains anumber of provisions relating to reporting obligations and to its amendment andtermination as required by the Rule. If approved by the shareowners of a Fund,the Plan will continue in effect with respect to that Fund as long as itscontinuance is specifically approved at least annually by a majority of theBoard of Trustees, as well as a majority of the Trustees who are not“interested persons’’ of the Trust within the meaning ofSection 2(a)(19) of the 1940 Act, and who have no direct or indirectfinancial interest in the operation of the Plan or any agreement related to thePlan (the “Disinterested Trustees”), cast in person at a meetingcalled for the purpose of voting on the Plan.

The Plan may be amended atany time by the Trustees, except that it may not be amended to increasematerially the Distribution Fee for a Fund unless such amendment is approved bythe vote of a majority of the outstanding Shares of that Fund (as defined in the40 Act). All material amendments to the Plan must be approved by a majority ofthe non-interested Trustees. 

The Plan may be terminated with respect toa Fund by the vote of a majority of the Disinterested Trustees or by majorityvote of the outstanding Shares of that Fund as defined in the 1940 Act. 

The Plan requires that the Trust’s Principal Financial Officer orTreasurer, or such other person authorized to direct the disposition of moniespaid or payable by the Trust, provide to the Trustees, and that the Trusteesreview, at least quarterly, a written report of the amounts expended withrespect to each Fund, during the quarter under the Plan, and the purposes forwhich such expenditures were made. As required by the Rule, while the Plan is ineffect, the Board must satisfy the fund governance standards as defined in Rule270.0-1(a)(7).

 

 

 

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**ANNUAL FUND OPERATINGEXPENSES**

Based on the fiscal year ended November30, 2005, the table below sets out the fees paid by each of the Funds and thefees that will be paid if the Plan of Distribution is approved:

|           | **Growth**  | **International** | **Short-Term** | **BondIncome** |
|----------------|-------------|-------------------|----------------|----------------|
|           | **Current** | *Proposed*        | **Current**    | *Proposed*     | **Current** | *Proposed* | **Current** | *Proposed* |
| Management Fee | **0.83%**   | *0.83%*           | **0.73%**      | *0.73%*        | **0.58%** | *0.58%* | **0.43%** | *0.43%* |
| Distribution   | **None**    | *0.25%*           | **None**       | *0.25%*        | **None** | *0.25%* | **None** | *0.25%* |
| Other Expenses | **0.45%**   | *0.45%*           | **0.63%**      | *0.63%*        | **0.65%** | *0.65%* | **0.54%** | *0.54%* |
| Total          | **1.28%**   | *1.53%*           | **1.36%**      | *1.61%*        | **1.23%** | *1.48%* | **0.97%** | *1.22%* |

***
*Earnings credits for custody fees further reducedoperating expenses and are not reflected above. For 3/29/2006 through 3/31/2007,expenses for Short-Term Bond Fund are voluntarily capped at 0.75% and BondIncome Fund are voluntarily capped at 0.90%. Management fees for both Bond fundsare contractually waived when assets are less than $2 million.*

The following table assumes an investor invests $10,000 in a Fundfor the years indicated and then redeems at the end of those years. The examplealso assumes that the investor has a 5% return each year and that theFunds’ “Annual Operating Expenses” shown above (without feewaivers or credits or variation for performance) remain the same. Althoughactual costs may be higher or lower, based on these assumptions, an investorscumulative expenses would be as shown, both under the current fee structure andas if the Plan of Distribution were in place throughout the periods.

|            | **Current  1Year** | ***1 Year  ProForma*** | **Current  3Year** | ***3 Year  ProForma*** | **Current  5Year** | ***5 Year  ProForma*** | **Current  10Year** | ***10 Year  ProForma*** |
|-----------------|--------------------|------------------------|--------------------|------------------------|--------------------|------------------------|---------------------|-------------------------|
| Growth          | **$134**           | *$161*                 | **$442**           | *$528*                 | **$800**           | *$956*                 | **$1,920**          | *$2,295*                |
| International   | **$143**           | *$169*                 | **$469**           | *$555*                 | **$850**           | *$1,006*               | **$2,040**          | *$2,415*                |
| Short-Term Bond | **$129**           | *$155*                 | **$424**           | *$511*                 | **$769**           | *$925*                 | **$1,845**          | *$2,220*                |
| Bond Income     | **$102**           | *$128*                 | **$335**           | *$421*                 | **$606**           | *$763*                 | **$1,455**          | *$1,830*                |

**Trustee Consideration.** Inconsidering whether the Funds should establish the Plan, the Board considered avariety of factors and was advised by counsel who are independent within themeaning of the 1940 Act and Rule. The Trustees considered the factors suggestedin the SEC Releases that accompanied the proposal and adoption of the Rule,including: the need for independent counsel or experts to assist the Trustees inreaching a determination; the nature and approximate amount of the expected costof the Plan; the interrelationship between the Plan and the activities of theAdviser in financing the distribution of Fund Shares; the full range of servicesprovided by the Adviser and the Distributor, including services which may berelated to the distribution of Shares, the possible benefits of the Plan to theAdviser and its affiliates relative to those expected to accrue to the Funds;the effects and benefits of the Plan on existing shareowners, including theprobability of increased expenses when the Plan first becomes effective; andwhether the Plan is reasonably likely to benefit the Funds and theirshareowners.

The Trustees believe that, to the extent thatthe Distributor has greater flexibility and resources under the Plan, additionalsales of Fund Shares are likely to result. With investors having an increasingnumber of mutual funds and related investment products from which to choose andmultiple ways to invest in and hold funds, many of which are through thirdparties unrelated to funds and distributors, it is difficult and expensive toattract and retain shareowners.

The Trustees recognized thata significant factor in the attraction and retention of shareowners today ismaking existing and potential shareowners aware of the benefits and performanceof the Funds in a crowded marketplace. This is compounded by the involvement ofthird parties who attract investors to their “platforms,” offeringmultiple funds and other investment choices, breaking a direct link betweenfunds and their shareowners. A consequence is the increased difficulty of makinginvestors aware of the Funds as well as retaining current shareowners who haveless direct contact with the Funds, and who are constantly faced withinformation regarding alternative investment choices. 

 

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The Trustees believethat it is important to maintain a stable, if not growing, shareowner base toassist in spreading fixed costs of fund operation across a wider base. A widerbase may decrease expense ratios and increase investment efficiency. A widerbase also may assist investment managers by creating more stable portfolios notbeset with net redemptions, which have adverse effects and costs for remainingshareowners. An additional cost of dealing with this difficult environment formaintaining stable and economically viable and efficient funds is compensatingthird parties that distribute funds for their contribution and efforts inattracting and servicing shareowner accounts.

Of course, there can be noassurance that these events will occur. The Funds may not be successful inachieving their investment objectives. The Plan may not work. Changes in theincreasingly tumultuous marketplace, opportunities and demands on shareownersfrom competitive funds and alternative investments are a constant challenge tomaintaining and growing an appropriate shareowner base. Political, economic andother forces outside the investment world affect the value of securities thatall funds invest in, and change their relative attractiveness as an investmentvehicle.

12b-1 Plans are a common method of implementing successfulmutual fund distribution plans. While Rule 12b-1 allows considerable creativityin design, this Plan follows a simple and well-tested structure. Afterconsideration of alternatives, the Trustees concluded that this Plan was thebest alternative, given the philosophies and circumstances of the Funds, andcame to the conclusion that the Plan was reasonably likely to benefit the Fundsand their shareowners.

The Trustees recognized that a greater level offund assets may benefit the Adviser by increasing its management fee revenues.The Trustees also noted that, although the revenues of the Adviser may increasewith a higher level of assets, expenses of the Adviser in the administration ofthe Funds and servicing a growing shareowner base also rise. These costs affectthe Adviser directly because the Funds’ comprehensive Advisory Contractsinclude investment management, free portfolio trading, Trust administration andshareowner servicing as part of its services to the Funds.

The Boardnoted that each year the Board reviews the Advisory Contracts of the Funds ontheir own merits. Each year the Trustees have concluded that the level of feesassociated with the Advisory Contracts is fair and reasonable, considering thehigh quality of investment management services, administration, and portfolioand investor services that have been provided by Adviser over the years. 

The Board also found that the Funds are not indirectly subsidizing or bearingdistribution costs through the Advisory Contracts. The Trustees note theperformance fee nature of the Advisory Contracts make them more in the interestof shareowners than almost all other mutual funds.

The Board has beenconcerned about the small size of the Funds and has repeatedly sought methods toincrease Fund assets. Shareowners have suffered from rising fixed expenses ofoperating the Funds in the last several years, as fixed costs related tocompliance, insurance, audit, legal, board operations, printing and postage, andstate registration fees have all jumped. 

The Board understands that thesmall assets and low fees of the Funds have meant that the Adviser has hadlimited resources to spend on Fund distribution. Higher expenses borne by theAdviser, such as portfolio management, research, fund administration, andshareowner servicing, have also constrained the resources the Adviser can spendon marketing.

For approximately ten years, the Funds have followed astrategy of low expenses and direct marketing. Even with solid investmentperformance records, the Funds have failed to attract the assets necessary toapproach break-even operations for the Adviser. Without modification of itsdistribution plan, the Adviser may seek to sell or liquidate the Funds in thenear future.

With national figures showing that a small minority ofmutual fund shares are sold directly to investors,

 

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the Plan seeks to make the Funds attractive forsale indirectly through third parties (such as brokers, banks, and retirementplan administrators) by paying a small trailing fee. Under the Plan, theFunds’ distributor will be paid a maximum of only 25 basis points (0.25%)of Fund assets with the implementation of the Plan. Yet third parties oftendemand as much as 35 to 40 basis points (0.35% to 0.45%) in trailing fees todistribute the Funds’ shares. Thus the Adviser also is likely to becontributing its own assets and resources to any expense incurred throughincreased third-party distribution efforts.

The Board notes that whilethe Adviser can benefit from increased assets that may result under the Plan,shareowners also benefit from the services that may become available from thirdparties. For example, brokerages may provide the ease and convenience of acentral asset account without extra direct expense to Sextant shareowners, andretirement plan administrators might provide full-feature, complex plan services(i.e., 401K plans).

**Conclusion.** Accordingly, the membersof the Board of Trustees concluded in the exercise of their business judgment,and in light of their fiduciary duties under state law and the InvestmentCompany Act of 1940, that there is a reasonable likelihood that this Plan willbenefit the Funds and their shareowners. The Trustees recommend that shareownersof each Fund vote FOR approval of the Plan. With respect to each Fund, if thePlan is not approved, the Board and the Advisor will consider alternative meansof obtaining the objectives of the Plan.

 

___________________________________________________

**THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREOWNERSVOTE “FOR” PROPOSAL 2****___________________________________________________**

 

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**ADDITIONAL INFORMATION**

***TheAdviser*** Saturna Capital Corporation, a Washington Statecorporation formed in 1989, 1300 N. State Street, Bellingham, Washington 98225,is the Investment Adviser and Administrator (the “Adviser”) for theFunds. Saturna Capital is also the Funds’ shareowner servicing agent. Mr.Nicholas Kaiser, by his ownership of the majority of its voting stock, is thecontrolling person of the Adviser. The Adviser also serves as investment adviserto individuals and corporations, as well as other mutual funds.

***Independent Public Accountants*** TheTrust’s principal public independent accountant is Tait, Weller and Baker.A representative from Tait, Weller and Baker is not expected to be present atthe meeting, however, a representative is expected to be available to respond toappropriate questions.

***Audit Committee Pre-Approval Policiesand Procedures*** The following is an excerpt from the SaturnaInvestment Trust Audit Committee Charter, a copy of which is attached as ExhibitB:

> 
D. Oversight of Independent Auditors

3. Pre-approval of Audit and Non-Audit Services. Except as provided below,the Committee’s prior approval is necessary for the engagement of theindependent auditors to provide any audit or non-audit services for the Trustand any non-audit services for any entity controlling, controlled by or undercommon control with Saturna that provides ongoing services to the Trust (Saturnaand each such entity, an “Adviser Affiliate”) where the engagementrelates directly to the operations or financial reporting of the Trust.Non-audit services that qualify under the de minimis exception described in theSecurities Exchange Act of 1934, as amended, and applicable rules thereunder,that were not pre-approved by the Committee, must be approved by the Committeeprior to the completion of the audit. Pre-approval by the Committee is notrequired for engagements entered into pursuant to (a) pre-approval policies andprocedures established by the Committee, or (b) pre-approval granted by one ormore members of the Committee to whom, or by a subcommittee to which, theCommittee has delegated pre-approval authority, provided in either case, thatthe Committee is informed of each such service at its next regular meeting.

***Audit and Other Fees Paid toIndependent Public Accountants*** One hundred percent of theservices described in the table below were approved by the Audit Committee. Noservices were performed for the adviser and paid for by the Trust. 

|                  | **Fiscal year endingNovember 30, 2004** | **Fiscal year ending November 30,2005** | **Nature of service**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----------------------|-----------------------------------------|-----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) Audit Fees        | $24,500                                 | $24,500                                 | Total audit fees billed forprofessional auditing services                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (b)Audit-Related Fees | $18,500                                 | $18,500                                 | Fee for(1) auditing of the statements of assets and liabilities, related statements ofoperations and changes in net assets, and the financial highlights of each ofthe Funds; (2) auditing and reporting on the financial statements to be includedin the Amendment to the Funds’ Registration Statement, Form N-1A, to befiled with the Securities and Exchange Commission; (3) review of the Amendmentto the Registration Statement; and (4) issuance of a Report on Internal ControlStructure for inclusion in Form N-SAR. |
| (c) Tax Fees          | $6,000                                  | $6,000                                  | Preparation of the Funds’federal and state income tax returns.                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (d) All othe fees     | N/A                                     | N/A                                     | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

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>  

**5% BENEFICIAL OWNERS**

As of May 31, 2006the following are the only persons known to the Trust to be the beneficial ownerof more than five percent of any Fund:

|                     | **Name and Address**                                                                  | **Shares**  | **Percentage** |
|--------------------------|---------------------------------------------------------------------------------------|-------------|----------------|
| **Growth Fund**          |
|                     | Helen F. Schloerb 	 P.O. Box 436 Londonderry VT 05148-0436                            | 122,186.130 | 15.32%         |
|                     | Marion R.Foote 	 223 Chuckanut Point Road  Bellingham WA 98229                        | 64,366.070  | 8.07%          |
|                     | Estate ofMarkell Kaiser  305 Chuckanut Point Road  Bellingham WA 98229                | 48,438.272  | 6.07%          |
| **International Fund**   |
|                     | Helen F. Schloerb  P.O. Box 436 Londonderry VT 05148-0436                             | 127,923.432 | 18.55%         |
|                     | MarionR. Foote  223 Chuckanut Point Road  Bellingham WA 98229                         | 86,655.113  | 12.56%         |
|                     | Estateof Markell Kaiser  305 Chuckanut Point Road  Bellingham WA 98229                | 77,679.123  | 11.26%         |
| **Short-Term Bond Fund** |
|                     | Bellingham Anesthesia PS Telfer  2152 DellestaDrive Bellingham WA 98226               | 77,493.388  | 15.00%         |
|                     | Brian N. Oliver IRA  2965 Haxton WayBellingham WA 98226                               | 42,579.313  | 8.24%          |
|                     | Helen F. Schloerb  P.O. Box 436 Londonderry VT05148-0436                              | 42,101.094  | 8.15%          |
|                     | Thomas B. Callender IRA Rollover  605 Briar Rd.Bellingham WA 98225-7813               | 37,599.605  | 7.28%          |
|                     | Roger A. Barnhart, MD IRA  3017 Vining StreetBellingham WA 98226                      | 33,754.900  | 6.53%          |
| **Bond Income Fund**     |
|                     | Helen F. Schloerb P.O. Box 436 Londonderry VT 05148-0436                              | 83,202.438  | 13.29%         |
|                     | David K.Heaps IRA Rollover  PO Box 1977  Bellingham WA 98225                          | 51,445.306  | 8.21%          |
|                     | Bellingham Anesthesia PS Telfer  2152 Dellesta Drive Bellingham WA98226               | 39,832.440  | 6.36%          |
|                     | Frederick M. Graham  Mary J. Graham JTWROS  8647 W Sierra PintaDrive  Peoria AZ 85382 | 39,760.911  | 6.35%          |
|                     | Gary A. Goldfogel IRA Rollover  406 BaysideRd. Bellingham WA 98225                    | 32,551.844  | 5.20%          |

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| **Idaho Tax-ExemptFund** |
|--------------------------|
|                     | National Investor ServiceCorp.  Omnibus Account  55 Water Street New York NY 10041-3299 | 163,037.159 | 10.25% |
|                     | RobertKitzinger  690 E. Kingsford Drive Meridian ID 83642 | 88,519.360 | 5.56% |
|                     | O. Richard Barker  OrmaH. Barker JTWROS  177 E. Fir Street Shelley NY 83274 | 86,709.481 | 5.45% |
|                     | C. DeanCardin  Kay F. Cardin JTWROS  4911 Sand Hollow Road New Plymouth ID83655 | 81,589.071 | 5.13%

  |

 

 

 

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**EXHIBIT A**

**DISTRIBUTION PLAN OFSATURNAINVESTMENT TRUST PURSUANT TO RULE 12B-1**

SaturnaInvestment Trust (the “Trust”) is registered under the InvestmentCompany Act of 1940, as amended (“1940 Act”), as an open-endmanagement investment company and presently has four series of shares ofbeneficial interest (“Series”): Sextant Growth Fund, SextantInternational Fund, Sextant Bond Income Fund, Sextant Short-Term Bond Fund, withrespect to which it desires to adopt a Plan of Distribution pursuant to Rule12b-1 under the 1940 Act, as well as such other Series as may hereinafter bedesignated by the Trust’s Board of Trustees (“Board”).

The Trust has entered into a Distribution Agreement (“DistributionAgreement”) with Saturna Brokerage Services (the“Distributor”), a broker-dealer registered under the SecuritiesExchange Act of 1934, pursuant to which Distributor acts as principalunderwriter of the Shares of each Series (“Shares”). Pursuant to theDistribution Agreement, Distributor shall devote appropriate efforts to effectsales of Shares of each of the Series. The Trust hereby adopts the followingPlan with respect to the Series in accordance with Rule 12b-1 under the 1940Act:

> 
1) In consideration for the services provided and theexpenses incurred by the Distributor pursuant to the Distribution Agreement,each Series that adopts the Distribution Agreement and this Plan shall pay tothe Distributor a monthly fee (“Distribution Fee”) at the annualrate of 0.25% of the average daily net assets of that Series. The determinationof daily net assets shall be made at the close of business each day throughoutthe month and computed in the manner specified in the Trust’s then currentProspectus. 

2) The Distributor may use all or any portion of theDistribution Fee for activities that the Distributor determines to be reasonablycalculated to result in sales of Shares. Such activities may include, butneither are required to include nor are limited to, compensation to theDistributor or such other underwriters, dealers, brokers, banks and otherselling or servicing entities and sales, marketing and servicing personnel ofany of them that have entered into agreements with the Distributor for themarketing and sale of Shares or the provision of shareholder services; paymentsfor producing, printing and disseminating sales materials, prospectuses,statements of additional information and reports to other than existingshareholders; the Distributor’s expenses, including overhead, telephoneand other communication expenses; costs of transmitting communications toshareholders, costs of answering shareholder inquiries; expenses incurred inprocessing shareholder transactions; payments for providing such otherinformation and services as shareholders reasonably may request; and paymentsfor such other similar services that Distributor determines are reasonablycalculated to result in sales of Shares. 

3) Each Series pays, and willcontinue to pay, an advisory fee to Saturna Capital Corporation (the“Adviser”) pursuant to a separate Investment Advisory andAdministrative Services Agreement between the Series and the Adviser. It isrecognized that the Adviser may use its advisory fee revenue, as well as itspast profits or its resources from any other source, to make payment to theDistributor with respect to any expenses incurred in connection with thedistribution of Shares, including the activities referred to in paragraph 2hereof. To the extent that the payment of advisory fees by the Series to theAdviser should be deemed to be indirect financing of any activity primarilyintended to result in the sale of Shares within the meaning of Rule 12b-1, suchpayment shall be deemed to be authorized by this Plan. 

4) If adoptedwith respect to a Series after any public offering of the Shares of that Series,this Plan shall not take effect with respect to those Shares unless it has firstbeen approved by the vote of a majority of the voting securities of that Series.This provision does not apply to 

Plan-1

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> 
adoption of an amended Plan of Distribution wherethe prior Plan of Distribution either was approved by the vote of a majority ofthe voting securities of the applicable Series or such approval was not requiredunder Rule 12b-1.

5) This Plan shall not take effect with respect to anySeries unless it first has been approved, together with the DistributionAgreement and any other related agreements (“Related Agreements”) bythe votes of a majority of both (a) the Board and (b) those members of the Boardwho are not interested persons of the Trust and have no direct or indirectfinancial interest in the operation of the Plan or in any Related Agreements(“Disinterested Trustees”), cast in person at a meeting (ormeetings) called for the purpose of voting on such approval; and until the Boardmembers who approve the Plan’s taking effect with respect to such Serieshave reached the conclusions required by Rule 12b-1 under the 1940 Act. 

6) After approval as set forth in Paragraph (4) (if applicable) and Paragraph(5), this Plan shall take effect and continue in full force and effect for solong as such continuance is specifically approved, at least annually, in themanner provided for approval of this Plan in Paragraph (5).

7) Inconsidering whether to adopt, continue or implement this Plan, the Board shallhave a duty to request and evaluate, and the Distributor shall have a duty tofurnish, such information as may be reasonably necessary to an informeddetermination of whether this Plan should be adopted, implemented orcontinued.

8) This Plan may not be amended to increase materially theamount of fees provided for in Paragraph (1) hereof unless such amendment isapproved by the vote of a majority of the outstanding voting securities of theaffected Series and no material amendment to the Plan shall be made unlessapproved in the manner provided for initial approval in Paragraph (5)hereof.

9)	The Trust’s Principal Financial Officer or Treasurer,or such other person authorized to direct the disposition of monies paid orpayable by the Trust, shall provide to the Board, and the Board shall review, atleast quarterly, a written report of the amounts expended with respect to eachSeries under this Plan and the purposes for which such expenditures weremade.

10) While this Plan is in effect the Board must satisfy the fundgovernance standards defined in Rule 0-1(a)(7).

11) This Plan may beterminated with respect to any Series at any time by a vote of a majority of theDisinterested Trustees, or by the vote of a majority of the outstanding votingsecurities of that Series. In the event this Plan is terminated or otherwisediscontinued with respect to a Series, no further payments hereunder will bemade by the Plan.

12) To the extent any activity is covered by paragraph(2) and is also an activity which a Series may pay for without regard to theexistence or terms and conditions of a plan of distribution under Rule 12b-1 ofthe 1940 Act (such as the printing of prospectuses for existing shareholders),this Plan shall not be construed to prevent or restrict the Series from payingsuch amounts outside the Plan and without limitation hereby and without suchpayments being included in the calculation of payments subject to the limitationset forth in paragraph (1).

13) The Distribution Agreement is, and anyother Related Agreement with any person or entity relating to the implementationof this Plan shall be, in writing and shall provide that (a) such agreementshall be subject to termination with respect to a Series, without penalty, bythe vote of a majority of the outstanding voting securities of that Series onnot more than 60 days’ written notice to the other party to the agreement,and (b) such agreement shall terminate automatically in the event of itsassignment.

14) The Trust shall preserve copies of this Plan and anyRelated Agreements and all reports made pursuant to paragraph (9) hereof, andany other information, estimates, projections and other materials that serve asa basis therefore, considered by the Board, for a period of not less than sixyears from the date of this Plan, the agreement or report, as the case may be,the first two years in an easily accessible place.

15) This Plan does notrequire the Adviser or Distributor to perform any specific type or level of 

Plan-2

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> 
distributionactivities or to incur any specific level of expenses for activities primarilyintended to result in the sale of Shares.

16) As used in this Plan, theterms “majority of the outstanding voting securities” and“interested person” shall have the same meaning as those terms havein the 1940 Act.

17) The Board members of the Trust and the shareholdersof each Series shall not be liable for any obligations of the Trust or anySeries under this Plan, and the Distributor or any other person asserting anyrights under this Plan, shall look only to the assets and property of suchSeries in settlement of such right or claim, and not to such Board members orshareholders.

18) This Plan does not require the Adviser or Distributorto perform any specific type or level of distribution activities or to incur anyspecific level of expenses for activities primarily intended to result in thesale of Shares. 

IN WITNESS WHEREOF, the Trust has executedthis Plan of Distribution on the date and year set forth below.

Date:_________________

SATURNA INVESTMENT TRUST

By_______________________

Nicholas F. Kaiser, President

 

 

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**SATURNA INVESTMENT TRUST AUDITCOMMITTEE CHARTER**

**A.	Purpose**

TheBoard of Trustees of Saturna Investment Trust (the “Trust”) hascreated an Audit Committee (“Committee”). The purpose of the AuditCommittee is to serve as a liaison between the independent auditors and theTrust’s full Board of Trustees (“Board”) and to perform thefollowing activities on behalf of the Trust:

- Oversee theTrust’s accounting and financial reporting policies and practices,including the Trust’s internal controls;
- 	Receive reports withrespect to the quality and objectivity of the Trust’s financial statementsand the independent audit of those statements;
- 	Approve, prior toappointment, the engagement of the Trust’s independent auditors and, inconnection therewith, review and evaluate the independent auditors’qualifications, independence and performance;
-  Oversee compliance withlegal and regulatory requirements that relate to the Trust’s accountingand financial reporting, internal controls and independent audits; and
- Consider such other matters as the Board reasonably shall assign to theCommittee from time to time.

Although the Committee has the dutiesand powers set forth in this Charter, the Committee has no duty to plan orconduct audits for the Trust or to determine that the Trust’s financialstatements are complete, accurate and in accordance with generally acceptedaccounting principles. In carrying out the Committee’s duties, a member ofthe Committee shall be entitled to rely, in good faith, on information,opinions, reports or statements made or prepared by others, including financialstatements and other financial data, if prepared and presented by: (1) one ormore officers of the Trust whom the Committee member reasonably believes to bereliable and competent in the matters presented; (2) legal counsel, publicaccountants, or other persons as to matters the Committee member reasonablybelieves are within the person’s professional or expert competence; or (3)a Board committee of which the Committee member is not a member. 

TheCommittee’s function is oversight. Management is responsible formaintaining appropriate accounting and financial reporting principles andpolicies and internal controls and procedures designed to ensure compliance withaccounting standards and applicable laws and regulations. The independentauditors are responsible for planning and carrying out a proper audit. Theindependent auditors shall report directly to the Committee and ultimately areaccountable to the Board and the Committee.

**B.	CommitteeMembership**

> 
1. Composition. The Committeeshall be comprised of at least three Board members satisfying the independencestandards of B (2) hereof.

2. Independence. No member of theCommittee shall be an “interested person” (as defined in Section2(a)(19) of the Investment Company Act of 1940, as amended (“1940Act”), and the rules thereunder) of the Trust.

> 
3. Audit Committee Financial Expert. The Board shalldetermine whether at least one member of the Committee qualifies as an“audit committee financial expert” (“ACFE”) as definedby applicable Securities and Exchange Commission (“SEC”) rules. Thedesignation of a Committee member as an ACFE shall be based on a finding by theBoard that the Committee member has the attributes of an ACFE set forth in FormN-CSR, Item 3, and has acquired those attributes through the education orexperience prescribed therein. The designation of a Committee member as an ACFEdoes not impose on such person any duties or liabilities that are greater thanthe duties and liabilities imposed on such person as a member of the Committeeand the Board. The designation of an ACFE also does not affect the duties orliabilities of any other member of the Committee or the Board. The Committee isnot 

Charter-1

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> 
required to have an ACFE.

4.  Compensation. The Board shalldetermine the compensation of Committee members, including the CommitteeChairperson.  5. Selection and Removal. The Board shall appointmembers of the Committee and a Chairperson of the Committee. By a majority vote,the Board may remove or replace members of the Committee and designate adifferent member as Chairperson for any reason at any time. 

**C.	Meetings and Procedures**

> 
1. Meetings. The Committee shall meet as often as itdetermines is appropriate to carry out its duties under this Charter. Meetingsmay be called by the Chairperson of the Committee or by a majority of theCommittee members. Meetings shall be chaired by the Chairperson or, in his orher absence, by a member chosen by the Committee. Meetings may be conducted withmembers present in person or by telephone or other communications facilitiesthat permit all persons participating in the meeting to hear or communicate witheach other simultaneously. A majority of the members of the Committee shallconstitute a quorum for the transaction of business. The act of a majority ofthe members present at a meeting at which a quorum is present shall be the actof the Committee. The Committee shall keep minutes of its meetings. TheCommittee shall meet periodically in separate executive sessions with managementand with the independent auditors. The Committee may request any officer oremployee of the Trust, the Trust’s independent legal counsel, any serviceprovider or the Trust’s independent auditors to attend a meeting of theCommittee or to meet with any members of, or consultants to, the Committee. 

2. Subcommittees. The Committee may delegate itsauthority to one or more subcommittees (including a subcommittee comprised of asingle member) when it deems appropriate. Any decision of a subcommittee topre-approve audit or non-audit services shall be presented to the full Committeeat its next scheduled meeting.

3. IndependentAdvisers. The Committee shall have the authority, to the extent it deemsnecessary or appropriate and without seeking approval of the full Board, toretain special legal, accounting or other advisers. The Trust shall provideappropriate funding, as determined by the Committee, for payment of ordinaryadministrative Committee expenses, as well as for compensation to any advisersretained by the Committee. 

**D.	Oversight of Independent Auditors**

> 
1. Selection and Termination.    TheCommittee shall be directly responsible for pre-approving the engagement of theTrust’s independent auditors to provide audit review and attest servicesfor the Trust and recommending to the members of the Board who are not“interested persons” of the Trust the selection, retention ortermination of the independent auditors. In connection with its oversight role,the Committee shall review and discuss with the independent auditors theplanning, scope and staffing of the Trust’s audit and the performance ofother audit, review or attest services for the Trust.

> 
2. Independence. The Committee shall review and evaluatethe independent auditors’ independence. In connection with this review andevaluation, the Committee shall at least annually obtain and review a report bythe independent auditors describing all relationships between the independentauditors and the Trust, management, any affiliate of the Trust, or any materialservice provider to the Trust, including the disclosures required byIndependence Standards Board Standard No. 1. The Committee shall discuss withthe independent auditors any disclosed relationships or services that mightaffect the objectivity and independence of the auditors. The Committee alsoshall consider whether the provision of non-audit services to Saturna CapitalCorporation (“Saturna”) and any entity in the Saturna investmentcompany complex that were not pre-approved pursuant to paragraph 3 below iscompatible with maintaining the independent auditors’ independence. 

3. Pre-approval of Audit and Non-Audit Services. Except as providedbelow, the Committee’s prior approval is necessary for the engagement ofthe independent auditors to provide any audit or non-audit services for theTrust and any non-audit services for any entity controlling, controlled by orunder common control with Saturna that provides ongoing services to the Trust(Saturna and each such entity, an “Adviser Affiliate”) where theengagement relates directly to the operations or financial reporting of

 

Charter-2

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> 
the Trust. Non-audit services that qualify under the deminimis exception described in the Securities Exchange Act of 1934, as amended,and applicable rules thereunder, that were not pre-approved by the Committee,must be approved by the Committee prior to the completion of the audit.Pre-approval by the Committee is not required for engagements entered intopursuant to (a) pre-approval policies and procedures established by theCommittee, or (b) pre-approval granted by one or more members of the Committeeto whom, or by a subcommittee to which, the Committee has delegated pre-approvalauthority, provided in either case, that the Committee is informed of each suchservice at its next regular meeting.

4. Compensation. No fees orother compensation for audit or non-audit services shall be paid to theindependent auditors unless such fees or other compensation have been approvedby the Committee. 

**E.	Review and Discussion ofFinancial Reporting Matters**

> 
The Committeeshall:

1. Review information and reports provided by the independentauditors with respect to, and discuss, as appropriate, with management and/orthe independent auditors, among other things:

a.	anymatters of concern relating to the Trust’s financial statements, includingany adjustments to the financial statements recommended by the independentauditors and other results of the audit; 

b.	the independentauditors’ comments with respect to the Trust’s financial policies,procedures and internal accounting controls (including the Trust’scritical accounting policies and practices) and management’s responsesthereto; and

c. the effect on the Trust of any changes in accountingprinciples or practices proposed by management or the independent auditors andany other matters that may have a material effect on the Trust’s financialstatements.

2. Discuss with the independent auditors thematters required to be discussed by Statement of Auditing Standards No. 61relating to the conduct of the audit, including any difficultiesencountered inthe course of the audit work, any restrictions on the scope of activities oraccess to requested information, and any significant disagreements withmanagement.

> 
3. Review the form of opinion theindependent auditors propose to render to the Board and shareholders.

**F.	Investigations**

The Committeeshall have the authority to investigate any improprieties or suspectedimproprieties in the Trust’s financial operations, and to direct andsupervise an investigation into any matter brought to its attention within thescope of its duties, functions, and responsibilities, including theauthorization to retain, at the Trust’s expense, outside counsel and/orother experts in connection with any such investigation.

**G.	Reporting to the Boards**

> 
1.Reports to the Boards. The Committee shall make regular reports to theBoard. Such reports shall include a review of any issues that arise with respectto the quality or integrity of a Trust’s financial statements, thequalifications, independence and performance of its independent auditors, andany other matters that the Committee deems appropriate or are requested to bereported by the Board.

2. Charter. The Committee shall review andreassess the adequacy of this Charter periodically and recommend any proposedchanges to the Board for approval.

 

Adopted:September 25, 2003

 

 

Charter-3

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----

**SATURNAINVESTMENT TRUST:  GROWTH FUND PROXY SOLICITED BY TRUSTEES**

The undersigned hereby appoint(s) Nicholas F. Kaiser, Ethel B.Bartolome, and Phelps S. McIlvaine, or any one or more of them, attorneys, withfull power of substitution, to vote all shares of Saturna Investment Trust:Growth Fund which the undersigned is entitled to vote at the Special Meeting ofShareowners to be held at the offices of Saturna Capital, Inc., 1300 N. StateStreet, Bellingham, WA, on Tuesday, August 15, 2006 at 3:00 P.M. and at anyadjournments thereof. All powers may be exercised by any of said proxy holdersor substitutes. This Proxy shall be voted on the proposals described in theProxy Statement as specified in the spaces below. Receipt of the Notice of themeeting and the accompanying Proxy Statement is hereby acknowledged.

|   | NOTE:Please sign exactly as your name appears on this Proxy. When signing in afiduciary, corporate or other capacity, please indicate your authority.

Date __________, 2006 _______________________________________________________________________________________________________________ Signature(s) [Title(s), ifapplicable] |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**PLEASE SIGN, DATE, AND MAIL THIS PROXY CARD PROMPTLY INTHE POSTAGE-PAID ENVELOPE ENCLOSED**

**Please refer to the Proxy Statement discussion of each ofthese matters.**

IF NO SPECIFICATION IS MADE, THEPROXY SHALL BE VOTED FOR THE TRUSTEES AND THE PROPOSAL. As to any othermatter, said attorneys shall vote in accordance with their best judgment.

**THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACHOF THE FOLLOWING:**

| (i) **To elect a Board ofTrustees**

**FOR** all nominees listed below | **To withhold authority to vote for a Nominee--**

draw a line through the name of that person. |
|------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|

**Gary A. Goldfogel, Herbert G. Grubel, Nicholas F.Kaiser, John E. Love, John S. Moore**

_______________________________________________________________________

 

| (ii) To approve the adoption of a Plan ofDistribution pursuant to Rule 12b-1 under the 1940 Act |
|-------------------------------------------------------------------------------------------------|
| **[ ] FOR**                                                                                     | **[ ] AGAINST** | **[ ] ABSTAIN** |

Cards-1

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**SATURNA INVESTMENTTRUST:  INTERNATIONAL FUND PROXY SOLICITED BY TRUSTEES**

The undersigned hereby appoint(s) Nicholas F. Kaiser, Ethel B.Bartolome, and Phelps S. McIlvaine, or any one or more of them, attorneys, withfull power of substitution, to vote all shares of Saturna Investment Trust:Growth Fund which the undersigned is entitled to vote at the Special Meeting ofShareowners to be held at the offices of Saturna Capital, Inc., 1300 N. StateStreet, Bellingham, WA, on Tuesday, August 15, 2006 at 3:00 P.M. and at anyadjournments thereof. All powers may be exercised by any of said proxy holdersor substitutes. This Proxy shall be voted on the proposals described in theProxy Statement as specified in the spaces below. Receipt of the Notice of themeeting and the accompanying Proxy Statement is hereby acknowledged.

|   | NOTE:Please sign exactly as your name appears on this Proxy. When signing in afiduciary, corporate or other capacity, please indicate your authority.

Date __________, 2006 _______________________________________________________________________________________________________________ Signature(s) [Title(s), ifapplicable] |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**PLEASE SIGN, DATE, AND MAIL THISPROXY CARD PROMPTLY IN THE POSTAGE-PAID ENVELOPE ENCLOSED**

**Please refer to the Proxy Statement discussion of each ofthese matters.**

IF NO SPECIFICATION IS MADE, THEPROXY SHALL BE VOTED FOR THE TRUSTEES AND THE PROPOSAL. As to any othermatter, said attorneys shall vote in accordance with their best judgment.

**THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACHOF THE FOLLOWING:**

| (i) **To elect a Board ofTrustees**

**FOR** all nominees listed below | **To withhold authority to vote for a Nominee--**

draw a line through the name of that person. |
|------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|

**Gary A. Goldfogel, Herbert G. Grubel, Nicholas F.Kaiser, John E. Love, John S. Moore**

_______________________________________________________________________

 

| (ii) To approve the adoption of a Plan ofDistribution pursuant to Rule 12b-1 under the 1940 Act |
|-------------------------------------------------------------------------------------------------|
| **[ ] FOR**                                                                                     | **[ ] AGAINST** | **[ ] ABSTAIN** |

 

Cards-2

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**SATURNA INVESTMENT TRUST:  SHORT-TERM BOND FUNDPROXY SOLICITED BY TRUSTEES**

The undersigned herebyappoint(s) Nicholas F. Kaiser, Ethel B. Bartolome, and Phelps S. McIlvaine, orany one or more of them, attorneys, with full power of substitution, to vote allshares of Saturna Investment Trust: Growth Fund which the undersigned isentitled to vote at the Special Meeting of Shareowners to be held at the officesof Saturna Capital, Inc., 1300 N. State Street, Bellingham, WA, on Tuesday,August 15, 2006 at 3:00 P.M. and at any adjournments thereof. All powers may beexercised by any of said proxy holders or substitutes. This Proxy shall be votedon the proposals described in the Proxy Statement as specified in the spacesbelow. Receipt of the Notice of the meeting and the accompanying Proxy Statementis hereby acknowledged.

|   | NOTE: Please sign exactly as your name appears on this Proxy.When signing in a fiduciary, corporate or other capacity, please indicate yourauthority.

 Date __________, 2006_______________________________________________________________________________________________________________ Signature(s) [Title(s), ifapplicable] |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**PLEASE SIGN, DATE, AND MAIL THISPROXY CARD PROMPTLY IN THE POSTAGE-PAID ENVELOPE ENCLOSED**

**Please refer to the Proxy Statement discussion of each ofthese matters.**

 

IF NOSPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE TRUSTEES AND THEPROPOSAL. As to any other matter, said attorneys shall vote in accordance withtheir best judgment.

**THE BOARD OF TRUSTEESRECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:**

| (i)**To elect a Board of Trustees**

**FOR** allnominees listed below | **To withhold authority to vote fora Nominee--**

draw a line through the name of that person. |
|-----------------------------------------------------------------------|------------------------------------------------------------------------------------------------|

**Gary A. Goldfogel, Herbert G.Grubel, Nicholas F. Kaiser, John E. Love, John S. Moore**

_______________________________________________________________________

 

| (ii) To approve the adoption of a Plan ofDistribution pursuant to Rule 12b-1 under the 1940 Act |
|-------------------------------------------------------------------------------------------------|
| **[ ] FOR**                                                                                     | **[ ] AGAINST** | **[ ] ABSTAIN** |

 

Cards-3

----

 

**SATURNA INVESTMENT TRUST:  BOND INCOME FUND PROXYSOLICITED BY TRUSTEES**

The undersigned herebyappoint(s) Nicholas F. Kaiser, Ethel B. Bartolome, and Phelps S. McIlvaine, orany one or more of them, attorneys, with full power of substitution, to vote allshares of Saturna Investment Trust: Growth Fund which the undersigned isentitled to vote at the Special Meeting of Shareowners to be held at the officesof Saturna Capital, Inc., 1300 N. State Street, Bellingham, WA, on Tuesday,August 15, 2006 at 3:00 P.M. and at any adjournments thereof. All powers may beexercised by any of said proxy holders or substitutes. This Proxy shall be votedon the proposals described in the Proxy Statement as specified in the spacesbelow. Receipt of the Notice of the meeting and the accompanying Proxy Statementis hereby acknowledged.

|   | NOTE: Please sign exactly as your name appears on this Proxy.When signing in a fiduciary, corporate or other capacity, please indicate yourauthority.

 Date __________, 2006_______________________________________________________________________________________________________________ Signature(s) [Title(s), ifapplicable] |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**PLEASE SIGN, DATE, AND MAIL THISPROXY CARD PROMPTLY IN THE POSTAGE-PAID ENVELOPE ENCLOSED**

**Please refer to the Proxy Statement discussion of each ofthese matters.**

IF NO SPECIFICATION IS MADE, THEPROXY SHALL BE VOTED FOR THE TRUSTEES AND THE PROPOSAL. As to any othermatter, said attorneys shall vote in accordance with their best judgment.

**THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACHOF THE FOLLOWING:**

| (i) **To elect a Board ofTrustees**

**FOR** all nominees listed below | **To withhold authority to vote for a Nominee--**

draw a line through the name of that person. |
|------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|

**Gary A. Goldfogel, Herbert G. Grubel, Nicholas F.Kaiser, John E. Love, John S. Moore**

_______________________________________________________________________

 

| (ii) To approve the adoption of a Plan ofDistribution pursuant to Rule 12b-1 under the 1940 Act |
|-------------------------------------------------------------------------------------------------|
| **[ ] FOR**                                                                                     | **[ ] AGAINST** | **[ ] ABSTAIN** |

(FORADDITIONAL INFORMATION AND TO DATE AND SIGN THIS PROXY, PLEASE SEE REVERSESIDE)

Cards-4

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**SATURNAINVESTMENT TRUST:  IDAHO TAX-EXEMPT FUND PROXY SOLICITED BYTRUSTEES**

The undersigned hereby appoint(s) NicholasF. Kaiser, Ethel B. Bartolome, and Phelps S. McIlvaine, or any one or more ofthem, attorneys, with full power of substitution, to vote all shares of SaturnaInvestment Trust: Growth Fund which the undersigned is entitled to vote at theSpecial Meeting of Shareowners to be held at the offices of Saturna Capital,Inc., 1300 N. State Street, Bellingham, WA, on Tuesday, August 15, 2006 at 3:00P.M. and at any adjournments thereof. All powers may be exercised by any of saidproxy holders or substitutes.. This Proxy shall be voted on the proposalsdescribed in the Proxy Statement as specified in the spaces below. Receipt ofthe Notice of the meeting and the accompanying Proxy Statement is herebyacknowledged.

|   | NOTE: Please sign exactly as your name appears on this Proxy.When signing in a fiduciary, corporate or other capacity, please indicate yourauthority.

 Date __________, 2006_______________________________________________________________________________________________________________ Signature(s) [Title(s), ifapplicable] |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**PLEASE SIGN, DATE, AND MAIL THISPROXY CARD PROMPTLY IN THE POSTAGE-PAID ENVELOPE ENCLOSED**

**Please refer to the Proxy Statement discussion of each ofthese matters.**

___________________________________

IF NOSPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE TRUSTEES AND THEPROPOSAL. As to any other matter, said attorneys shall vote in accordance withtheir best judgment.

**THE BOARD OF TRUSTEESRECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:**

| (i)**To elect a Board of Trustees**

**FOR** allnominees listed below | **To withhold authority to vote fora Nominee--**

draw a line through the name of that person. |
|-----------------------------------------------------------------------|------------------------------------------------------------------------------------------------|

**Gary A. Goldfogel, Herbert G.Grubel, Nicholas F. Kaiser, John E. Love, John S. Moore**

 

Cards-5

----