[LOGO]
INTRODUCTION
The PC&J Performance Fund is a registered investment company
under the Investment Company Act of 1940 and, for your
protection, is regulated by the Securities and Exchange
Commission. The enclosed 1995 Annual Report is for your
information and is provided to you in compliance with ongoing
Securities and Exchange Commission regulations. This report
requires no action on your part. Please give us a call if you
have any questions.
MANAGEMENT REVIEW AND ANALYSIS
During 1995 the economy grew moderately which allowed
productivity gains to translate into higher corporate profits
without putting pressure on interest rates. This is the ideal
environment for the stock market. Stocks, as measured by the S&P
500 had their best year since 1975. Unfortunately, it was also a
year in which it was extremely difficult for investment advisors
to match the S&P 500 Index. The PC&J Performance Fund provided a
22.7% return for the year and the average general equity fund as
measured by Lipper Analytical produced a 31.1% return.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
1 Year 5 Years 10 Years
<S> <C> <C> <C>
Performance Fund 22.7% 14.8% 11.6%
S&P 500 Index 37.5% 16.6% 14.9%
Lipper Gen'l Equity Funds 31.1% 16.4% 12.2%
</TABLE>
We experienced a return lower than the average general
equity fund primarily because the fund recorded flat performance
in the fourth quarter of the year while the stock market kept
rising. We had an over-weighting in cyclical stocks and an
under-weighting in global growth stocks.
While the earnings of cyclical stocks were very good, they
did not quite match investor's expectations, so the stocks under-
performed the market. Also during the fourth quarter, it sounded
like the Congress and the President would come to terms on a
balanced budget agreement. Lower deficits would be very good
news for the bond market which in turn is very positive for the
stock market. Investors anxious to increase their exposure to
the stock market chose the most liquid issues which again were
the global growth stocks.
We are disappointed with the results. Last year's
performance brought our long-term numbers down to approximate the
average general equity fund. The disparity with the S&P 500
Index, dominated by the large capitalization stocks, is a
reflection of their relative outperformance. Since most managers
have a significant portion of their assets in small and mid-sized
companies, they did poorly in this environment when compared with
an index comprised of larger stocks.
GROWTH OF $10,000 INVESTMENT
<TABLE>
Year Performance S&P500 Lipper
<S> <C> <C> <C> <C>
12/85 10,000 10,000 10,000
12/86 11,820 11,850 11,320
12/87 10,638 12,466 11,343
12/88 11,978 14,561 12,738
12/89 15,967 19,147 15,795
12/90 15,025 18,534 14,800
12/91 19,608 24,187 20,068
12/92 21,176 26,050 21,855
12/93 24,205 28,681 24,586
12/94 24,398 29,054 24,168
12/95 29,946 39,949 31,685
</TABLE>
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 will be
worth more or less than their original cost at the time of
redemption.
[LOGO]
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
PC&J Performance Fund:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments of the
PC&J Performance Fund as of December 31, 1995, the related
statement of operations for the year then ended, and the
statements of changes in net assets and the financial
highlights for each of the years presented. 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 generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1995 by correspondence with
the Fund's custodian and brokers. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position
of the PC&J Performance Fund at December 31, 1995, the results of
its operations, the changes in its net assets, and the financial
highlights for the respective stated years in conformity with
generally accepted accounting principles.
\S\ Deloitte & Touche
January 22, 1996
PC&J PERFORMANCE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PERCENT
OF NET NUMBER OF MARKET
SECURITY (Note A) ASSETS SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS:
Capital good and transportation: 8.1%
Airborne Freight Corp. 10,000 $ 266,250
Blount Inc. - Class A 11,650 305,813
Federal Signal Corp. 20,101 520,113
General Electric Co. 11,800 849,600
------------
1,941,776
Consumer cyclical: 7.2
Disney (Walt) Co. 4,000 235,500
Home Depot Inc. 10,300 491,825
Magna International Inc. - Class A 10,700 462,775
McDonalds Corp. 11,700 527,962
------------
1,718,062
Consumer staple: 12.1
Columbia/HCA Corp. 14,200 720,650
Living Centers of America Inc. <F1> 14,400 504,000
Medtronics Inc. 11,000 614,625
Merck & Co., Inc. 9,000 590,625
Sysco Corp. 14,500 471,250
------------
2,901,150
Energy: 10.2
Chevron Corp. 10,200 534,225
Mobil Corp. 6,800 759,900
Newpark Resources Inc. <F1> 25,620 570,045
Western Atlas Inc. <F1> 11,600 585,800
------------
2,449,970
Financial services: 13.9
Advanta Corp. - Class B 12,000 436,500
American Express Co. 13,000 537,875
Franklin Resources Inc. 8,000 403,000
Northern Trust Corp. 8,450 473,200
Schwab (Charles) Corp. 12,900 259,613
SunAmerica Inc. 8,400 399,000
Vesta Insurance Group Inc. 15,000 817,500
------------
3,326,688
------------
COMMON STOCKS 51.5% $12,337,646
<FN>
<F1> Nonincome producing security.
</FN>
</TABLE>
See notes to financial statements.
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Page 2
<PAGE>
PC&J PERFORMANCE FUND
SCHEDULE OF INVESTMENTS (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PERCENT
OF NET NUMBER OF MARKET
SECURITY (Note A) ASSETS SHARES VALUE
- --------------------------------------------------------------------------------
<C> <C> <C> <C>
COMMON STOCKS FORWARD: 51.5% $12,337,646
------------
Industrial commodities: 9.4
Aluminum Co. of America 7,200 380,700
Kimberly-Clark Corp. 4,800 397,200
Loctite Corp. 10,600 503,500
Phelps Dodge Corp. 7,400 460,650
Sealed Air Corp. <F1> 18,000 504,000
------------
2,246,050
Technology: 16.6
Anixter International Inc. <F1> 32,400 603,450
Cisco Systems Inc. <F1> 7,200 537,300
Computer Sciences Corp. <F1> 12,000 843,000
Eastman Kodak 6,800 455,600
Intel Corp. 6,300 357,525
Solectron Corp. <F1> 13,000 573,625
United Technologies Corp. 6,400 607,200
------------
3,977,700
Telecommunications: 10.9
AT&T Corp. 11,000 712,250
Cablevision Systems Corp. <F1> 10,800 585,900
Motorola Inc. 6,000 342,000
Viacom Inc. - Class B 12,100 573,237
Young Broadcasting - Class A <F1> 14,400 406,800
------------
2,620,187
TOTAL COMMON STOCKS
(Cost $16,317,123) 88.4 21,181,583
SHORT-TERM OBLIGATIONS
(Cost $2,602,845) 10.9 2,602,845
------------
TOTAL INVESTMENTS
(Cost $18,919,968) 99.3% $23,784,428
============
<FN>
<F1> Nonincome producing security.
</FN>
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
Page 3
<PAGE>
PC&J PERFORMANCE FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at market value
(Cost basis - $18,919,968) (Notes A & D) $23,784,428
------------
Receivables:
Dividends and interest 42,419
Securities sold 152,319
------------
Total receivables 194,738
------------
Total assets 23,979,166
LIABILITIES - Accrued expenses (Note B) (30,469)
------------
NET ASSETS $23,948,697
============
SHARES OUTSTANDING
(Unlimited authorization - no par value) ( Note C) 1,248,376
NET ASSET VALUE PER SHARE $19.18
============
NET ASSETS CONSIST OF:
Paid in capital $19,084,237
Net unrealized appreciation 4,864,460
------------
Net Assets $23,948,697
============
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
Page 4
<PAGE>
PC&J PERFORMANCE FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME (Note A):
Dividends $ 207,400
Interest 159,424
-----------
Total investment income 366,824
-----------
EXPENSES (Note B):
Investment advisory fee 225,207
Management fee 112,603
-----------
Total expenses 337,810
-----------
NET INVESTMENT INCOME 29,014
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (Note D):
Net realized gain on investments 2,754,585
Change in unrealized appreciation of investments 1,791,320
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 4,545,905
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 4,574,919
============
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
Page 5
<PAGE>
PC&J PERFORMANCE FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 29,014 $ 68,203
Net realized gain on investments 2,754,585 569,372
Change in unrealized appreciation
(depreciation) of investments 1,791,320 (484,220)
------------ ------------
Net increase in net assets from operations 4,574,919 153,355
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income (28,683) (68,534)
Dividends from net realized gain on investments (2,754,585) (569,372)
CAPITAL STOCK TRANSACTIONS - Increase in net assets
resulting from capital share transactions (Note C) 2,403,982 567,279
------------ ------------
Total increase in net assets 4,195,633 82,728
NET ASSETS:
Beginning of year 19,753,064 19,670,336
------------ ------------
End of year $23,948,697 $19,753,064
============ ============
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
Page 6
<PAGE>
PC&J PERFORMANCE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PC&J Performance Fund (the 'Fund') commenced operations on December 23,
1983, 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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
or assumptions that affect the reported amounts of assets and liabilities
and 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 - Investments in securities traded on a national
securities exchange are valued at the last reported sales price on the
last business day of the month; securities traded on the over-the-
counter market are valued at the average of the closing bid and ask
prices.
(2) Federal Income Taxes - The Fund has elected to be treated as a
regulated investment company and intends to comply with the
requirements under Subchapter M of the Internal Revenue Code and to
distribute all of its net investment income and realized gains on
security transactions. Accordingly, no provision for federal income
taxes has been made in the accompanying financial statements.
(3) Other - Security transactions are accounted for on the date the
securities are purchased or sold (trade date). Realized gains and
losses on sales are determined using the first-in first-out method.
Dividends and distributions to shareholders are recorded on the
ex-dividend date. Dividend income is recorded on the ex-dividend date.
Interest income is accrued daily.
B. INVESTMENT ADVISORY AGREEMENT AND MANAGEMENT AGREEMENT
The Fund has an investment advisory agreement with Parker, Carlson &
Johnson, Inc. (the `Advisor'), wherein the Fund pays the Advisor a
monthly advisory fee, accrued daily, based on an annual rate of one
percent of the daily net assets of the Fund. Investment advisory fees
were $225,207 for the year ended December 31, 1995.
The Fund has a management agreement with PC&J Service Corp., (the
`Service Corp.'), wholly owned by the shareholders of the Advisor. The
Fund pays Service Corp. for the overall management of the Fund's business
affairs, exclusive of the services provided by the Advisor, and functions
as the Fund's transfer and dividend disbursing agent. Service Corp. pays
all expenses of the Fund (with certain exclusions) and is entitled to a
monthly fee, accrued daily, based on an annual rate of one-half of one
percent of the daily net assets of the Fund. Management fees were $112,603
for the year ended December 31, 1995.
Certain officers and trustees of the Fund are officers and trustees, or
both, of the Advisor and of Service Corp.
- --------------------------------------------------------------------------------
Page 7
<PAGE>
PC&J PERFORMANCE FUND
NOTES TO FINANCIAL STATEMENTS - (Concluded)
- --------------------------------------------------------------------------------
C. CAPITAL STOCK TRANSACTIONS
<TABLE>
<CAPTION>
For the Year Ending For the Year Ending
December 31, 1995 December 31, 1994
----------------------- -----------------------
<S> <C> <C> <C> <C>
Shares sold 138,400 $ 2,657,095 99,206 $ 1,793,367
Shares issued in reinvestment of
dividends and capital gains
distributions 145,083 2,783,267 36,083 637,906
---------- ------------ ---------- ------------
283,483 5,440,362 135,289 2,431,273
Shares redeemed (152,432) (3,036,380) (102,776) (1,863,994)
---------- ------------ ---------- ------------
Net increase 131,051 2,403,982 32,513 567,279
Shares outstanding at beginning of
year 1,117,325 16,680,255 1,084,812 16,112,976
---------- ------------ ---------- ------------
Shares outstanding at end of year 1,248,376 $19,084,237 1,117,325 $16,680,255
========== ============ ========== ============
</TABLE>
D. INVESTMENT TRANSACTIONS
Securities purchased and sold (excluding short-term obligations) for the
year ended December 31, 1995, aggregated $15,426,045 and $14,962,137,
respectively. At December 31, 1995 gross unrealized appreciation on
investments was $5,068,045 and gross unrealized depreciation on investments
was $203,585 for a net unrealized appreciation of $4,864,460 for financial
reporting and federal income tax purposes.
E. DISTRIBUTION EXPENSE
The Fund's shareholders have adopted a Distribution Expense plan pursuant
to Rule 12b-1 of the Investment Company Act of 1940. This Plan authorizes
payments under the Investment Advisory Agreement and Management Agreement
(See Note B) which might be deemed to be expenses primarily intended to
result in the sale of Fund shares. No other payments are authorized under
the Distribution Expense Plan.
- --------------------------------------------------------------------------------
Page 8
<PAGE>
PC&J PERFORMANCE FUND
FINANCIAL HIGHLIGHTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, 1993, 1992, AND 1991
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Selected Data for Each Share of
Capital Stock Outstanding
Throughout the Year 1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE-BEGINNING OF YEAR $17.68 $18.13 $17.42 $17.90 $14.22
------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.03 0.06 0.08 0.15 0.10
Net realized and unrealized
gain on securities 3.99 0.08 2.47 1.30 4.18
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 4.02 0.14 2.55 4.33 1.40
------- ------- ------- ------- -------
Less dividends:
From net investment income (0.03) (0.06) (0.08) (0.15) (0.10)
From net realized gain
on investments (2.49) (0.53) (2.24) (0.98) 0.82)
------- ------- ------- ------- -------
TOTAL DIVIDENDS (2.52) (0.59) (2.32) (1.13) (0.92)
------- ------- ------- ------- -------
NET ASSET VALUE-END OF YEAR $19.18 $17.68 $18.13 $17.90 $17.42
======= ======= ======= ======= =======
TOTAL RETURN 22.74% 0.77% 14.25% 8.04% 30.45%
RATIOS TO AVERAGE NET ASSETS
Expenses 1.50% 1.50% 1.52% 1.52% 1.52%
Net investment income 0.13% 0.35% 0.45% 0.61% 0.97%
Portfolio turnover rate 76.71% 68.56% 48.26% 63.28% 41.40%
Net assets at end of year (000's) $23,949 $19,753 $19,670 $16,045 $14,040
</TABLE>
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