UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4204
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PC&J Preservation Fund
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(Exact name of registrant as specified in charter)
120 West Third Street, Suite 300, Dayton, Ohio 45402-1819
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(Address of principal executive offices) (Zip code)
PC&J Service Corp., 120 West Third Street, Suite 300, Dayton, OH
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45402-1819
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(Name and address of agent for service)
Registrant's telephone number, including area code: 937-223-0600
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Date of fiscal year end: 12-31
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Date of reporting period: 12-31-2010
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
PC&J PRESERVATION
FUND
Financial Statements and Financial Highlights for
The Year Ended December 31, 2010, and Report of
Independent Registered Public Accounting Firm
PC&J PRESERVATION FUND
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ANNUAL REVIEW
Unaudited
MANAGEMENT REVIEW AND ANALYSIS
Although we were not expecting interest rates to rise much in 2010, we had not
expected them to fall. We let the average duration of the portfolio decline,
believing the probability yields would rise was higher than the probability they
would fall. Therefore, the Fund did not capture as much upside from the drop in
yields over the first three quarters of the year as it could have had we kept
the duration the same. However, believing the economic recovery would continue,
particularly for our economy's industrially-oriented industries, we added to the
Fund's holdings of medium-quality corporate securities. In essence, we traded
duration risk for credit risk. These investments provided some solid gains for
the Fund.
AVERAGE ANNUAL TOTAL RETURNS
1 Yr. 5 Yrs 10 Yrs
Preservation Fund 7.08% 5.14% 4.56%
Barclays Inter
Gov/Credit 5.89% 5.53% 5.51%
Treasury Bills
(3 month) 0.00% 2.47% 2.28%
The PC&J Preservation Fund (the "Fund") provided a 7.08% return for 2010,
outperforming the more government-oriented 5.89% return for the Barclay's
Intermediate Government/Credit Index. Of course, any positive return would have
beaten the 0.00% Fed-engineered return for 3-Month Treasury Bills.
So why, when we said in our 2009 Review "it's hard to conjure up a scenario in
the long-term that doesn't include rising interest rates," did interest rates
fall? First were the PIIGS and then came QE2. Global sentiment regarding our
fiscal management was pretty low at the end of 2009. The housing and banking
crises were centered in the U.S. and our out-sized budget deficits were expected
to continue for the foreseeable future. Global investors were backing away from
our debt markets, favoring the Eurozone's. That was until Greece's debt problems
were put under the microscope. Investors began to worry about a number of the
Eurozone economies, the rest of the PIIGS - Portugal, Ireland, Italy and Spain.
Would the Eurozone be up to the task of constructing a viable safety net? All
of sudden the U.S. looked like a safer bet than Europe. Money came back into
U.S. bonds and yields dropped.
Next, investors and, more importantly, the Federal Reserve began to fear the
U.S. economic recovery was starting to stall. In the late summer the Fed began
to signal a willingness to embark on another round of quantitative easing, QE2.
If the Fed was going to start buying more bonds, prices would rise. So, bond
investors got in ahead of the program and yields declined even more.
Interestingly, yields actually rose once the Fed began its program. Economic
growth began to pick up and investors were even more confident, given the Fed's
actions, that it would continue.
Well this year we really mean it. We are once again employing a price
preservation theme in our management decisions. Not only is it hard to conjure
up a scenario that doesn't include rising interest rates, we might have to
contend with rising spreads between Treasuries and medium-quality corporate
debt. Over the long-term, this bias has served the Fund well with returns that
fall between the no-risk Treasury Bills and the Barclays Index.
PRESERVATION FUND EXPENSE RATIO*
Per May 1, 2010 Prospectus 1.21%
Per December 31, 2010 Annual Report 1.10%
* The expense ratio stated in the May 1, 2010 Prospectus includes acquired fund
fees and expenses as required by Form N-1A. The expense ratio stated in the
December 31, 2010 Annual Report includes only operating expenses of the
Preservation Fund.
GROWTH OF $10,000 INVESTMENT
PRESERVATION BARCLAYS INTER TREASURY BILL
GROWTH GOV/CR GROWTH GROWTH
2000 10,000 10,000 10,000
2001 10,625 10,896 10,340
2002 11,260 11,968 10,506
2003 11,557 12,484 10,613
2004 11,871 12,864 10,758
2005 12,161 13,067 11,088
2006 12,630 13,600 11,604
2007 13,366 14,605 12,200
2008 12,698 15,347 12,498
2009 14,591 16,151 12,529
2010 15,624 17,102 12,529
TOTAL RETURNS AND THE GROWTH OF A $10,000 INVESTMENT ARE BASED ON PAST
PERFORMANCE AND ARE NOT AN INDICATION OF FUTURE PERFORMANCE. THE VALUE OF YOUR
SHARES WILL FLUCTUATE AND MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST AT
THE TIME OF REDEMPTION. THE RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES
THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND
SHARES. PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END MAY BE
OBTAINED BY CALLING 888.223.0600.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS
DECEMBER 31, 2010
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
- ------------------------------------- -------- ---------- --------
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U.S. AGENCY OBLIGATIONS:
Maturity of 5 - 10 years: 1.1%
Federal Home Loan Bank
5.625%, due 06-13-16 $ 125,000 $135,352
Maturity of 11 - 15 years: 1.9
Federal National Mtg Assn Step-Up 1
2.250%, due 09-30-25 260,000 249,986
TOTAL U.S. AGENCY OBLIGATIONS
(Cost $384,742) 3.0 385,338
U.S. CORPORATE OBLIGATIONS:
Maturity of less than 1 year: 3.2
Nissan Motor Acceptance Corp. 2
5.625%, due 03-14-11 100,000 100,928
Oneok Inc.
7.125%, due 04-15-11 105,000 106,747
Williams Partners
7.500%, due 06-15-11 100,000 102,933
Western Union
5.400%, due 11-17-11 100,000 103,975
414,583
Maturity of 1 - 5 years: 22.5
Fiserv Inc.
6.125%, due 11-20-12 55,000 59,556
Alcoa Inc.
5.375%, due 01-15-13 250,000 266,666
Scholastic Corp.
5.000%, due 04-15-13 125,000 125,937
Arcelormittal Sa Luxembourg
5.375%, due 06-01-13 130,000 138,095
Arcelormittal Sa Luxembourg 2
5.375%, due 06-01-13 50,000 53,148
Leucadia National Corp.
7.000%, due 08-15-13 125,000 133,906
Montpelier Re Holdings Ltd.
6.125%, due 08-15-13 150,000 156,062
Massey Energy Co.
6.875%, due 12-15-13 100,000 100,875
American Axle & Manufacturing Inc.
5.250%, due 02-11-14 125,000 122,500
Brinker International Inc.
5.750%, due 06-01-14 155,000 163,028
See notes to financial statements.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2010
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
- ----------------------------------------- -------- ---------- ----------
U.S. CORPORATE OBLIGATIONS (Cont'd):
- -----------------------------------------
HSBC Finance Corp.
6.000%, due 08-15-14 $ 275,000 $ 291,015
Bear Stearns Cos. Inc.
5.700%, due 11-15-14 162,000 177,646
OGE Energy Corp.
5.000%, due 11-15-14 250,000 265,938
Hornbeck Offshore Services Inc.
6.125%, due 12-01-14 100,000 99,750
L-3 Communications Corp.
5.875%, due 01-15-15 150,000 152,438
Chesapeake Energy Corp.
9.500%, due 02-15-15 120,000 135,300
JPMorgan Floating Rate
3.500%, due 05-01-15 150,000 138,000
Nabisco Inc.
7.550%, due 06-15-15 100,000 117,934
Teck Cominco Ltd.
5.375%, due 10-01-15 160,000 174,523
2,872,317
Maturity of 6 - 10 years: 12.1%
Alltel Corp.
7.000%, due 03-15-16 100,000 117,735
Alliant Techsystems Inc.
6.750%, due 04-01-16 110,000 113,850
Boston Scientific Corp.
6.400%, due 06-15-16 150,000 161,825
Peabody Energy Corp.
7.375%, due 11-01-16 130,000 144,300
Goldman Sachs Group Inc.
5.625%, due 01-15-17 250,000 264,359
Sealed Air Corp.
7.875%, due 06-15-17 125,000 137,459
Terex Corp.
8.000%, due 11-15-17 250,000 252,500
Merrill Lynch Co. Inc.
6.500%, due 07-15-18 230,000 240,919
Conoco Philips
5.750%, due 02-01-19 100,000 113,764
1,546,711
Maturity of 11 - 15 years: 5.3
General Electric Capital Corp. Step-Up 1
5.50%%, due 10-28-21 200,000 201,507
Dow Chemical Co.
7.375%, due 03-01-23 200,000 227,991
See notes to financial statements.
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PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2010
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
- ----------------------------------------- -------- ---------- ----------
U.S. CORPORATE OBLIGATIONS (Cont'd):
- -----------------------------------------
Morgan Stanley Curve Accrual 3
8.375%, due 04-25-23 $ 250,000 $ 248,750
678,248
TOTAL U.S. CORPORATE OBLIGATIONS
(Cost $5,243,725) 43.1% 5,511,859
TAXABLE MUNICIPAL OBLIGATIONS 4:
Maturity of 1 - 5 years: 4.6
New York State Housing Finance Agency
4.810%, due 09-15-13 90,000 97,172
Dayton, OH Taxable Bonds
6.500%, due 11-01-13 150,000 150,000
Nebraska Public Power District Revenue
5.140%, due 01-01-14 310,000 335,194
582,366
Maturity of 6 - 10 years: 10.3
Hazelwood MO Industrial Dev. Auth. Rev
5.640%, due 02-01-18 150,000 148,873
Maryland Heights MO Tax Incremnt Rev
7.000%, due 09-01-18 200,000 205,128
Portland OR Weekly Auction Notes 5, 6
0.255%, due 06-01-19 125,000 125,000
Hudson Cnty NJ Lease Revenue
7.950%, due 09-01-19 300,000 300,318
Cuyahoga County OH Economic Dev.
5.000%, due 12-01-19 150,000 145,379
Dekalb Cnty GA Dev Authority Revenue
6.875%, due 03-01-20 275,000 275,146
Michigan State Refunding School Loan
6.950%, due 11-01-20 110,000 120,613
1,320,457
Maturity of 11 - 15 years: 7.0
New York, NY General Obligation
6.491%, due 03-01-21 125,000 135,742
Minneapolis & St. Paul Met. Gen. Oblig.
6.850%, due 01-01-22 295,000 314,818
San Bernadino Cnty CA Pension Oblig.
6.020%, due 08-01-23 245,000 243,126
Ohio State Dev. Assistance
5.670%, due 10-01-23 100,000 101,524
See notes to financial statements.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2010
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
- --------------------------------------- -------- ---------- ----------
TAXABLE MUNICIPAL OBLIGATIONS
(Cont'd)
- ---------------------------------------
Pennsylvania Turnpike
7.470%, due 06-01-25 $ 100,000 $ 104,268
899,478
Maturity of 16 - 25 years: 5.2%
Lake County IL School District
6.300%, due 01-01-27 110,000 110,323
Alameda Corridor Transit Authority CA
6.600%, due 10-01-29 200,000 184,556
Frisco TX COP
6.375%, due 02-15-33 360,000 370,638
665,517
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TOTAL TAXABLE MUNICIPAL
OBLIGATIONS (Cost $3,447,503) 27.1 3,467,818
TOTAL U.S. AGENCY, U.S. CORPORATE
AND TAXABLE MUNICIPAL
OBLIGATIONS
(Cost $9,075,970) 73.2 9,365,015
GOVERNMENT NATIONAL MORTGAGE
ASSN MORTGAGE BACKED SECURITIES: 3.3
GNMA Remic Series 2010-76
4.500%, due 07-19-12 140,862 142,010
GNMA Remic Series 2010-17
4.500%, due 07-15-13 279,989 281,744
TOTAL GOVERNMENT NATIONAL
MORTGAGE ASSN MORTGAGE BACKED
SECURITIES
(Cost $420,850) 423,754
LEASE ASSIGNMENTS: 1.4
Ford Motor Co. ESA Lease 3, 5
12.524%, due 06-01-13 144,084 177,055
TOTAL LEASE ASSIGNMENTS
(Cost $144,084) 177,055
See notes to financial statements.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 2010
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
- ---------------------------------------- -------- --------- ----------
- ----------------------------------------
NUMBER OF
WARRANTS: 1.7% WARRANTS
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X-Alpha Call Warrants 22,500 $ 213,750
6-27-2013
TOTAL WARRANTS
(Cost $224,437) 213,750
NON-CONVERTIBLE PREFERRED STOCK: 4.9 SHARES
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Annaly Cap. Mgt. Inc. Pfd. A, 7.875% 5,000 127,500
FPL Group Cap. Tr. I Pfd., 5.875% 5,300 131,758
Georgia Power Cap. Tr. VII Pfd., 5.875% 5,200 130,780
Metlife Inc. Pfd. B, 6.500% 5,200 128,960
Powershares ETF Trust Finl. Pfd. 5,900 103,899
TOTAL NON-CONVERTIBLE PREFERRED
STOCK (Cost $614,209) 622,897
EXCHANGE TRADED DEBT: 4.1 SHARES
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AT&T Inc. Senior Notes
6.375%, due 02-15-56 5,000 133,050
Comcast Corp. Notes
6.625%, due 05-15-56 5,400 137,430
General Elec. Cap. Corp. Pines
6.100%, due 11-15-32 5,000 126,150
Metlife Inc. Senior Notes
5.875%, due 11-21-33 5,175 131,574
TOTAL EXCHANGE TRADED DEBT
(Cost $491,702) 528,204
MUTUAL FUNDS: 8.6 SHARES
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Oppenheimer Sr. Floating Rate A 36,400 302,121
Templeton Income Global Bond A 37,594 509,774
Vanguard Money Market Reserves 230,000 230,000
First American Treasury Obligations 50,367 50,367
TOTAL MUTUAL FUNDS
(Cost $1,070,367) 1,092,262
CLOSED END FUNDS: 1.7 SHARES
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Highland Floating Rate A 5 35,270 222,203
TOTAL CLOSED END FUNDS
(Cost $345,000) 222,203
See notes to financial statements.
PC&J PRESERVATION FUND
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SCHEDULE OF INVESTMENTS (Concluded)
DECEMBER 31, 2010
PERCENT
OF NET PRINCIPAL
SECURITY ASSETS AMOUNT VALUE
- ----------------------------- -------- --------- -----------
- -----------------------------
TOTAL INVESTMENTS
(Cost $12,386,619) 7 98.9% $12,645,140
ASSETS LESS OTHER LIABILITIES 1.1 141,740
NET ASSETS 100.0% $12,786,880
1 Interest rates listed for step-up bonds are the rates as of December 31, 2010.
2 Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. At December 31, 2010, the aggregate amount of Rule 144A
securities was $154,076, which is 1.2% of the Fund's net assets.
3 Security valued according to "good faith pricing" guidelines. (See Note A)
4 Some municipal obligations have a credit enhancement feature, such as
insurance or letter of credit, which produces a credit quality comparable to
that of a same-rated corporate bond.
5 Security has been deemed illiquid. At December 31, 2010, the aggregate amount
of illiquid securities was $524,258, which is 4.1% of the Fund's net assets.
6 Variable interest rate. Interest rate listed is the rate as of December 31,
2010.
7 Represents cost for federal income tax and book purposes and differs from
value by net unrealized appreciation (depreciation). (See Note D)
The following table presents securities held by PC&J Preservation Fund by
industry sector as a percentage of net assets:
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Consumer Discretionary 6.5%
Consumer Staple 0.9%
Energy 5.5%
Financial 19.3%
Healthcare 1.3%
Industrials 4.1%
Information Technology 1.3%
Materials 7.8%
Telecommunications 1.9%
Utilities 4.9%
Other 46.5%
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Total 100.0%
See notes to financial statements.
PC&J PRESERVATION FUND
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STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2010
ASSETS:
Investments in securities, at value
(Cost basis - $12,386,619) (Notes A & D) $12,645,140
Receivables - Dividends and Interest 151,659
Receivables - Fund shares sold 2,000
Total assets 12,798,799
LIABILITIES:
Accrued expenses (Note B) (11,919)
Total liabilities (11,919)
NET ASSETS $12,786,880
SHARES OUTSTANDING (Unlimited authorized shares):
Beginning of year 1,292,299
Net decrease (Note C) (85,764)
End of year 1,206,535
NET ASSET VALUE, offering price and redemption price per share $ 10.60
NET ASSETS CONSIST OF:
Paid in capital $12,888,477
Net unrealized appreciation on investments 258,521
Undistributed net investment income 5,687
Accumulated net realized loss on investments (365,805)
Net Assets $12,786,880
See notes to financial statements.
PC&J PRESERVATION FUND
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STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
INVESTMENT INCOME (Note A):
Interest $ 589,195
Dividends 128,543
Total investment income 717,738
EXPENSES (Note B):
Investment advisory fee (67,904)
Management fee (81,484)
Total expenses (149,388)
NET INVESTMENT INCOME 568,350
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note D):
Net realized loss on investments (50,327)
Change in net unrealized appreciation/depreciation of investments 409,626
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 359,299
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 927,649
See notes to financial statements.
PC&J PRESERVATION FUND
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STATEMENTS OF CHANGES IN NET ASSETS
For The Years Ended December 31,
2010 2009
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 568,350 $ 576,271
Net realized gain/(loss) on investments (50,327) (13,846)
Change in net unrealized appreciation/depreciation
of investments 409,626 1,072,551
Net increase in net assets resulting from operations 927,649 1,634,976
DECREASE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (566,978) (577,711)
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS (Note C) (963,427) 1,379,784
Total increase/(decrease) in net assets (602,756) 2,437,049
NET ASSETS:
Beginning of year 13,389,636 10,952,587
End of year $12,786,880 $13,389,636
UNDISTRIBUTED NET INVESTMENT INCOME $ 5,687 $ 4,315
See notes to financial statements.
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PC&J PRESERVATION FUND
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NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2010
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PC&J Preservation Fund (the "Fund") commenced operations on April 30, 1985, as a
no-load, open-end, diversified investment company. It is organized as an Ohio
business trust and is registered under the Investment Company Act of 1940, as
amended. The investment objective of the Fund is the generation of income and
the preservation of capital.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates or assumptions that affect the reported amounts of assets and
liabilities, disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
(1) Security Valuations - Securities that are traded on any national
exchange, including exchange traded debt and non-convertible preferred stock,
are generally valued at the last quoted sales price or, if unavailable, the last
bid price. Securities that are traded on the NASDAQ over-the-counter market,
including non-convertible preferred stock, are generally valued at the NASDAQ
Official Closing Price. Mutual funds and closed end funds are valued at the net
asset value of their shares on each business day. Fixed income securities,
including U.S. agency obligations, U.S. corporate obligations, taxable municipal
obligations, Government National Mortgage Association mortgage backed securities
and warrants, are generally valued by using market quotations, or a matrix
methodology (including prices furnished by a pricing service) when Parker
Carlson & Johnson, Inc. (the "Adviser") believes such prices accurately reflect
the fair value of such securities. These prices may be based on inputs such as
dealer quotations, current trades and offerings, market movement and credit
information. The matrix pricing methodology utilizes yield spreads relating
to securities with similar characteristics to determine prices for normal
institutional-size trading units of debt securities without regard to sale or
bid prices. If the Adviser decides that the market quotation does not
accurately reflect current value or that prices cannot be readily estimated
using the matrix methodology, or when restricted or illiquid securities are
being valued, or when unique investment structures have no widely adopted
benchmarks, securities are valued at fair value as determined in good faith by
the Adviser, in conformity with guidelines adopted by and subject to review by
the Board of Trustees (the "Trustees") (generally lease assignments). It is
incumbent upon the Adviser to consider all appropriate factors relevant to the
value of securities for which market quotations are not readily available. No
single standard for determining fair value can be established, since fair value
depends upon the circumstances of each individual case. As a general principle,
the current fair value of an issue of securities being valued by the Adviser
would appear to be the amount which the owner might reasonably expect to receive
for the securities upon their current sale. Methods which are in accordance
with this principle may, for example, be based on inputs such as a multiple of
earnings, or a discount from market of a similar, freely traded security
(including a derivative security or a basket of securities traded on other
markets, exchanges or among dealers), or yield to maturity with respect to debt
issues, or a combination of these and other methods.
GAAP establishes a framework for measuring fair value and expands disclosures
about fair value measurements in financial statements, effective for the Fund's
current fiscal period.
Various inputs may be used to determine the value of the Fund's investments.
These inputs are summarized in three broad levels:
Level 1 - quoted prices in active markets for identical securities.
Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.).
Observable inputs may also include benchmark yields, reported trades, broker
quotes, benchmark securities and bid/offer quotations.
PC&J PRESERVATION FUND
- ----------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2010
Level 3 - significant unobservable inputs (including the Fund's own assumptions
used to determine the fair value of investments). Level 3 securities are
generally unique investment structures that have no widely adopted benchmarks.
Factors involved in valuation may include the type of security, financial
statements, cost at the date of purchase, and information as to any transactions
or offers with respect to the security.
In January 2010, the Financial Accounting Standards Board issued Accounting
Standard Update (ASU) No. 2010-06 "Improving Disclosures about Fair Value
Measurements". This ASU adds new disclosures about the amounts and reason for
significant transfers in and out of Level 1 and Level 2 as well as inputs and
valuation techniques used to measure fair value that fall in either Level 2 or
Level 3, and information on purchases, sales, issuance and settlement on a gross
basis in the reconciliation of activity in Level 3. Certain portions of the ASU
are effective for fiscal years beginning after December 15, 2009 and December
15, 2010. Management adopted the portions effective for the current period and
is evaluating the impact adoption will have on the Fund's financial statement
disclosures for portions effective in future periods.
There were no significant transfers in and out of Levels 1 and 2.
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following table summarizes the inputs used to value the Fund's securities as
of December 31, 2010.
Level 1 Level 2 Level 3 Total
Security Type Investments in Securities ($000)
U.S. Agency Obligations $ - $ 385 $ - $ 385
U.S. Corporate Obligations - 5,512 - 5,512
Taxable Municipal Obligations - 3,468 - 3,468
Government National Mortgage Assn. Mortgage
Backed Securities - 424 - 424
Lease Assignments - 177 - 177
Warrants - 214 - 214
Non-Convertible Preferred Stock 623 - - 623
Exchange Traded Debt 528 - - 528
Mutual Funds 1,092 - - 1,092
Closed End Funds 222 - - 222
Total $ 2,465 $ 10,180 $ - $12,645
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PC&J PRESERVATION FUND
- ----------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2010
Measurements
Using Unobservable Inputs ($000)
(Level 3)
Securities
- ---------------------------------------------------------------
Beginning Balance, December 31, 2009 $ 19
Total gains or losses (realized/unrealized) included in
earnings -
Purchases, sales, issuances, settlements and return of
capital (net) (19)
Transfers in and/or out of Level 3 -
Ending Balance, December 31, 2010 $ -
The amount of total gains or losses for the period included in
earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets still
held at the reporting date $ -
=====
(2) Federal Income Taxes - The Fund has elected to be treated as a regulated
investment company and intends to continue to comply with the requirements under
Subchapter M of the Internal Revenue Code and to distribute all, or
substantially all, of its net investment income and net realized gains on
security transactions. Accordingly, no provision for federal income or excise
taxes has been made in the accompanying financial statements. As of December
31, 2010, the Fund has a capital loss carry forward of $365,805, of which
$98,440 can be carried forward through 2011, $35,450 through 2012, $29,688
through 2013, $120,473 through 2014, $17,581 through 2015, $13,846 through 2017,
and $50,327 through 2018. These losses can be used to offset future gains. See
Note E for further disclosure regarding uncertain tax positions.
(3) Other - Security transactions are accounted for on the date the
securities are purchased or sold, (trade date). All premiums and discounts are
amortized or accreted for financial and tax reporting purposes using the
effective interest rate method. Realized gains and losses on sales are
determined using the specific lot method. Dividends to shareholders from net
investment income and net realized capital gains are declared and paid annually.
Interest income is accrued daily. Dividend income is recorded on the
ex-dividend date. Paydown gains and losses on mortgage and asset-backed
securities are presented as interest income. For tax purposes, paydown gains
and losses are reclassified to realized gains and losses on investments. Net
investment losses, if any, for tax purposes are reclassified to paid in capital.
The Fund indemnifies the Trustees and officers of the Fund for certain
liabilities that might arise from the performance of their duties to the Fund.
The Fund's maximum exposure under these arrangements is not known; however, the
Fund has not had prior claims or losses pursuant to these arrangements and
expects the risk of loss to be remote.
PC&J PRESERVATION FUND
- ----------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2010
B. INVESTMENT ADVISORY AGREEMENT AND MANAGEMENT AGREEMENT
The Fund has an investment advisory agreement (the "Agreement") with the
Adviser, whereby the Fund pays the Adviser a monthly advisory fee, accrued
daily, based on an annual rate of 0.5% of the daily net assets of the Fund.
Investment advisory fees were $67,904 for the year ended December 31, 2010.
The Fund has a management agreement with PC&J Service Corp. ("Service Corp."),
which is wholly owned by the shareholders of the Adviser. The Fund pays Service
Corp. for the overall management of the Fund's business affairs, exclusive of
the services provided by the Adviser, and functions as the Fund's transfer and
dividend disbursing agent. Service Corp. pays all expenses of the Fund (with
certain exclusions), including Trustee fees of $4,000 for the year ended
December 31, 2010.
Service Corp. is entitled to a monthly fee, accrued daily, based on an annual
rate of 0.6% of the daily net assets of the Fund. Management fees were $81,484
for the year ended December 31, 2010.
Certain officers and Trustees of the Fund are officers and directors, or both,
of the Adviser and of Service Corp.
C. CAPITAL SHARE TRANSACTIONS
For the Year Ended For the Year Ended
December 31, 2010 December 31, 2009
------------------- -------------------
Shares Dollars Shares Dollars
---------- ------------ --------- ------------
Subscriptions 168,022 $ 1,804,164 193,666 $ 1,988,278
Reinvestment of distributions 53,640 566,978 55,710 577,711
221,662 2,371,142 249,376 2,565,989
--------- ------------ --------- ------------
Redemptions (307,426) (3,334,569) (118,709) (1,186,205)
Net increase/(decrease) (85,764) $ (963,427) 130,667 $ 1,379,784
D. INVESTMENT TRANSACTIONS
Securities purchased and sold (excluding short-term obligations and long-term
U.S. Government securities) for the year ended December 31, 2010, aggregated
$2,534,673 and $1,780,707, respectively. Purchases and sales of long-term U.S.
Government Securities for the year ended December 31, 2010, aggregated $660,000
and $774,000, respectively.
At December 31, 2010, gross unrealized appreciation on investments was $521,119
and gross unrealized depreciation on investments was $262,598, for a net
unrealized appreciation of $258,521 for financial reporting and federal income
tax purposes.
PC&J PRESERVATION FUND
- ----------------------
NOTES TO FINANCIAL STATEMENTS (Concluded)
FOR THE YEAR ENDED DECEMBER 31, 2010
E. FEDERAL TAX DISCLOSURE
Tax Character of Distributions Paid
For the Year Ended December 31, 2010 For the Year Ended December 31, 2009
Ordinary Income Capital Gains Total Distribution Ordinary Income Capital Gains Total Distribution
- --------------- ------------- ------------------- -------------- ------------ ------------------
$ 566,978 $ - $ 566,978 $ 577,711 $ - $ 577,711
=============== ============= ================== =============== ============= ==================
Tax Basis of Distributable Earnings
As of December 31, 2010
- ------------------------------------
Undistributed Undistributed
Ordinary Accumulated Unrealized
Income Realized Losses Appreciation
- ------------- ---------------- -------------
$ 5,687 $ (365,805) $ 258,521
============= ================ =============
The Fund recognizes tax benefits or expenses of uncertain tax positions only
when the position is "more likely than not" to be sustained assuming examination
by tax authorities. Management has reviewed the tax positions taken on Federal
income tax returns for all open tax years (tax years ended December 31,
2007-2010) and has concluded that no provision for uncertain tax benefits or
expenses is required in these financial statements.
F. SUBSEQUENT EVENTS
The Fund has evaluated subsequent events through the date of issuance of the
financial statements and determined that no events have occurred that require
disclosure.
G. OTHER FEDERAL TAX INFORMATION (UNAUDITED)
The percentage of ordinary income dividends that are eligible for the reduced
rate attributed to qualified dividend income under the Jobs and Growth Tax
Relief & Reconciliation Act of 2003 is 2.78%.
PC&J PRESERVATION FUND
- ----------------------
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital For The Years Ended December 31,
Stock Outstanding Throughout the Period 2010 2009 2008 2007 2006
-------- -------- -------- -------- --------
NET ASSET VALUE-BEGINNING OF PERIOD $ 10.36 $ 9.43 $ 10.48 $ 10.39 $ 10.52
Income from investment operations:
Net investment income 0.49 0.48 0.52 0.52 0.53
Net realized and unrealized
gain (loss) on securities 0.24 0.93 (1.05) 0.09 (0.12)
TOTAL FROM INVESTMENT OPERATIONS 0.73 1.41 (0.53) 0.61 0.41
Less distributions:
From net investment income (0.49) (0.48) (0.52) (0.52) (0.54)
TOTAL DISTRIBUTIONS (0.49) (0.48) (0.52) (0.52) (0.54)
NET ASSET VALUE-END OF PERIOD $ 10.60 $ 10.36 $ 9.43 $ 10.48 $ 10.39
TOTAL RETURN 7.08% 14.91% (5.00%) 5.83% 3.86%
RATIOS TO AVERAGE NET ASSETS
Expenses 1.10% 1.10% 1.10% 1.10% 1.10%
Net investment income 4.18% 4.89% 4.96% 4.58% 4.49%
Portfolio turnover rate 20.52% 22.50% 65.51% 31.76% 5.99%
Net assets at end of period (000's) $12,787 $13,390 $10,953 $12,078 $12,923
See notes to financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of
PC&J Preservation Fund:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of PC&J Preservation Fund (the "Fund") as of
December 31, 2010, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2010, by correspondence with the
custodian and the broker. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of PC&J
Preservation Fund as of December 31, 2010, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
Cincinnati, Ohio
February 25, 2011
PC&J PRESERVATION FUND
- ----------------------
ADDITIONAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2010 (Unaudited)
FUND EXPENSES
As a shareholder of the Fund, you incur ongoing costs, including management fees
and investment advisory fees. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period (July 1, 2010) and held for the entire period through December 31, 2010.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
Beginning Account Ending Account
Value Value Expenses Paid
July 1, 2010 December 31, 2010 During Period*
Actual $ 1,000.00 $ 1,030.96 $ 5.63
Hypothetical (5% return 1,000.00 $ 1,019.66 $ 5.60
before expenses)
* Expenses are equal to the Fund's annualized expense ratio of 1.10%,
multiplied by the average account value over the period, multiplied by the
number of days in the most recent fiscal half-year, then divided by 365 (to
reflect the one-half year period).
PC&J PRESERVATION FUND
- ------------------------
ADDITIONAL INFORMATION (Concluded)
FOR THE YEAR ENDED DECEMBER 31, 2010 (Unaudited)
PORTFOLIO CHARACTERISTICS
% OF NET
TYPE OF SECURITY ASSETS
---------
- ---------------------------------
U.S. Agency Obligations 3.0%
U.S. Corporate Obligations 43.1
Taxable Municipal Obligations 27.1
Government National Mortgage Assn
Mortgage Backed Securities 3.3
Lease Assignments 1.4
Warrants 1.7
Non-Convertible Preferred Stock 4.9
Exchange Traded Debt 4.1
Mutual Funds 8.6
Closed End Funds 1.7
Assets Less Other Liabilities 1.1
Total 100.0%
---------
PC&J PRESERVATION FUND
- ----------------------
FUND TRUSTEES DISCLOSURE
(Unaudited)
The responsibility for management of the Fund is vested in its Board of
Trustees, which, among other things, is empowered by the Fund's Declaration of
Trust to elect officers of the Fund and contract with and provide for the
compensation of agents, consultants and other professionals to assist and advise
in such management.
The following table provides information regarding each Trustee who is not an
"interested person" of the Fund, as defined in the Investment Company Act of
1940, as amended.
NUMBER OF PORTFOLIOS
POSITION(S) IN LENGTH OF IN FUND COMPLEX**
NAME, AGE AND ADDRESS FUND COMPLEX** TIME SERVED OVERSEEN BY TRUSTEE
- ---------------------- -------------- ------------- --------------------
- ----------------------
John W. Lohbeck
c/o PC&J Service Corp.
300 Old Post Office
120 West Third Street
Dayton, Ohio 45402 Trustee since
Year of Birth: 1949 Trustee 2008 2
- ---------------------- -------------- ------------- --------------------
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
OTHER DIRECTORSHIPS HELD BY TRUSTEE
-----------------------------------
- -----------------------------------------------------------
From September 2005 to present, consultant with Battelle &
Battelle LLP (CPA firm); from December 1990 to August
2005, COO of Wagner Smith Co. (commercial electrical
contracting firm) None
- ----------------------------------------------------------- -----------------------------------
NUMBER OF PORTFOLIOS
POSITION(S) IN LENGTH OF IN FUND COMPLEX**
NAME, AGE AND ADDRESS FUND COMPLEX** TIME SERVED OVERSEEN BY TRUSTEE
- ---------------------- -------------- ------------- --------------------
- ----------------------
Laura B. Pannier
c/o PC&J Service Corp.
300 Old Post Office
120 West Third Street
Dayton, Ohio 45402 Trustee since
Year of Birth: 1954 Trustee 2003 2
- ---------------------- -------------- ------------- --------------------
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD BY TRUSTEE
- --------------------------------------------------- -----------------------------------
- ---------------------------------------------------
Not presently employed; from May 1988 to May 1997,
partner with Deloitte & Touche LLP (CPA firm) None
- --------------------------------------------------- -----------------------------------
**The term "Fund Complex" refers to the PC&J Performance Fund and the PC&J
Preservation Fund.
PC&J PRESERVATION FUND
- ----------------------
FUND TRUSTEES DISCLOSURE (Concluded)
(Unaudited)
The following table provides information regarding each Trustee who is an
"interested person" of the Trust, as defined in the Investment Company Act of
1940, as amended, and each officer of the Trust.
NUMBER OF PORTFOLIOS
POSITION(S) HELD LENGTH OF IN FUND COMPLEX**
NAME, AGE AND ADDRESS WITH FUND TIME SERVED OVERSEEN BY TRUSTEE
---------------- ------------- --------------------
- -------------------------
Kathleen A. Carlson, CFA* Treasurer and
c/o PC&J Service Corp. Trustee since
300 Old Post Office Treasurer, Chief 1985; Chief
120 West Third Street Compliance Compliance
Dayton, Ohio 45402 Officer and Officer since
Year of Birth: 1955 Trustee 2004 2
- ------------------------- ---------------- ------------- --------------------
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------- -----------------------------------
- -------------------------------------------------------
President of the Adviser and PC&J Service Corp. since
1998; Treasurer and Director of the Adviser since 1982;
Chief Compliance Officer of the Adviser since 2004. None
- ------------------------------------------------------- -----------------------------------
NUMBER OF PORTFOLIOS
POSITION(S) HELD LENGTH OF IN FUND COMPLEX**
NAME, AGE AND ADDRESS WITH FUND TIME SERVED OVERSEEN BY TRUSTEE
- ---------------------- ---------------- --------------- --------------------
- ----------------------
Secretary and
James M. Johnson, CFA* Trustee since
c/o PC&J Service Corp. 1985;
300 Old Post Office President, President since
120 West Third Street Secretary, 2005;
Dayton, Ohio 45402 Chairman and Chairman since
Year of Birth: 1952 Trustee 2010 2
- ---------------------- ---------------- --------------- --------------------
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD BY TRUSTEE
- --------------------------------------------------------- -----------------------------------
- ---------------------------------------------------------
Secretary and Director of the Adviser and PC&J Service
Corp. since 1982; Chief Investment Officer of the Adviser
since 1982. None
- --------------------------------------------------------- -----------------------------------
* Ms. Carlson and Mr. Johnson are "interested persons" of the Fund because they
are officers of the Fund and officers and shareholders of the Adviser, and own
in the aggregate a controlling interest in the Adviser and PC&J Service Corp.,
the Fund's transfer agent.
**The term "Fund Complex" refers to the PC&J Performance Fund and the PC&J
Preservation Fund.
The Statement of Additional Information includes additional information about
the Trustees and is available without charge upon request, by calling toll free
at (888) 223-0600.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities and information regarding how
the Fund voted those proxies during the most recent 12-month period ended June
30 are available without charge: (1) upon request by calling toll free at (888)
223-0600 or (2) from the Fund's documents filed with the Securities and Exchange
Commission ("SEC") on the SEC's website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available on the SEC's web site at www.sec.gov. The Fund's Forms N-Q may
also be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the Public Reference Room may be obtained
by calling 1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) As of the end of the period covered by this report, the registrant has
adopted a code of ethics that applies to the registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party.
(b) For purposes of this item, "code of ethics" means written standards that
are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in reports
and documents that a registrant files with, or submits to, the Commission and in
other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) Amendments: During the period covered by the report, there have not
been any amendments to the provisions of the code of ethics.
(d) Waivers: During the period covered by the report, the registrant has
not granted any express or implicit waivers from the provisions of the code of
ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) The registrant's board of trustees has determined that Laura B. Pannier
is an audit committee financial expert. Ms. Pannier is independent for purposes
of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES
----------
FY 2009 $ 19,250
FY 2010 $ 20,000
(b) AUDIT-RELATED FEES
------------------
Registrant Parker Carlson & Johnson
---------- ------------------------
FY 2009 $ None $ None
FY 2010 $ None $ None
Nature of the fees: N/A
(c) TAX FEES
--------
Registrant Parker Carlson & Johnson
---------- ------------------------
FY 2009 $ 2,100 $ None
FY 2010 $ 2,200 $ None
Nature of the fees: Federal and Excise Tax Returns
(d) ALL OTHER FEES
--------------
Registrant Parker Carlson & Johnson
---------- ------------------------
FY 2009 $ None $ None
FY 2010 $ None $ None
(e) (1) AUDIT COMMITTEE'S PRE-APPROVAL POLICIES
---------------------------------------
The audit committee has not adopted pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) PERCENTAGES OF SERVICES APPROVED BY THE AUDIT COMMITTEE
-------------------------------------------------------
Registrant Parker Carlson & Johnson
---------- ------------------------
Audit-Related Fees: None None
Tax Fees: None None
All Other Fees: None None
None of the services described in paragraphs (b) through (d) of this Item were
approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X. All non-audit services were pre-approved by the audit
committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X.
(f) During audit of registrant's financial statements for the most recent
fiscal year, less than 50 percent of the hours expended on the principal
accountant's engagement were attributed to work performed by persons other than
the principal accountant's full-time, permanent employees.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant:
Registrant Parker Carlson & Johnson
---------- ------------------------
FY 2009 $ 2,100 $ None
FY 2010 $ 2,200 $ None
(h) Not applicable. The auditor performed no services for the registrant's
investment adviser or any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED COMPANIES. Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable - schedule filed with Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END FUNDS.
Not applicable.
ITEM 8. PORTFOLIO MANAGER OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not
applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END FUNDS. Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
The registrant has not adopted procedures by which shareholders may recommend
nominees to the registrant's board of trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of December 31, 2010, the disclosure controls and procedures are
reasonably designed to ensure that the information required in filings on Forms
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's second fiscal
half-year that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
PC&J Preservation Fund
- ----------------------
By
/s/
- ---
Kathleen Carlson, Treasurer
Date February 23, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By
/s/
- ---
James M. Johnson, President
Date February 23, 2011
By
/s/
- ---
Kathleen Carlson, Treasurer
Date February 23, 2011