PC&J PRESERVATION FUND
Semi-Annual Report
to Shareholders
June 30, 1999
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The PC&J Preservation 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 1999 Semi-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.
/s/ James Johnson
----------------------
James Johnson
Secretary
/s/ Kathleen Carlson
----------------------
Kathleen Carlson
Treasurer
<PAGE>
PC&J PRESERVATION FUND
FINANCIAL HIGHLIGHTS
The information contained in the table below for the years ended
December 31, 1998, 1997, 1996, and 1995, have been derived from data
contained in financial statements examined by Deloitte & Touche,
independent certified public accountants. The information for the
six months ended June 30, 1999 have been derived from data contained in
the unaudited financial statements but which are believed to include all
adjustments necessary for a fair presentation. Such information should
be read in conjunction with the enclosed financial statements.
<TABLE>
<CAPTION>
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Selected Data for Each Share 1999 1998 1997 1996 1995
of Capital Stock Outstanding
Throughout the Period (Unaudited)
-------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE-BEGINNING OF PERIOD $11.37 $11.14 $10.97 $11.32 $10.34
----------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.32 0.57 0.64 0.62 0.59
Net realized and unrealized
gain (loss) on securities (0.50) 0.36 0.17 (0.31) 0.98
----------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS (0.18) 0.93 0.81 0.31 1.57
----------- ------- ------- ------- -------
Less dividends:
From net investment income (0.00) (0.57) (0.64) (0.62) (0.59)
From net realized gain
on investments (0.00) (0.13) (0.00) (0.04) (0.00)
----------- ------- ------- ------- -------
TOTAL DIVIDENDS (0.00) (0.70) (0.64) (0.66) (0.59)
----------- ------- ------- ------- -------
NET ASSET VALUE-END OF PERIOD $11.19 $11.37 $11.14 $10.97 $11.32
=========== ======= ======= ======= =======
TOTAL RETURN (1.58%) 8.35% 7.38% 2.75% 15.18%
RATIOS TO AVERAGE NET ASSETS
Expenses 1.00%<FN1> 1.00% 1.00% 1.00% 1.00%
Net investment income 5.76%<FN1> 5.25% 5.62% 5.38% 5.56%
Portfolio turnover rate 38.16%<FN1> 44.50% 31.39% 28.66% 25.62%
Net assets at end of period (000's) $20,152 $19,852 $16,071 $16,151 $16,472
<FN>
<FN1> ANNUALIZED
</FN>
</TABLE>
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Page 1
<PAGE>
PC&J PRESERVATION FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
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PERCENT YEARS
OF NET TO PRINCIPAL MARKET
SECURITY (Note A) ASSETS MATURITY AMOUNT VALUE
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<S> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Maturity of less than 1 year - 2.5%
U.S. Treasury Notes,
5.375%, due 01/00 0.50 500,000 $ 500,937
------------
Maturity of 1 - 5 years: 19.9
Federal Nat'l. Mortgage Assoc.
Notes, 5.490%, due 08/00 1.25 1,000,000 992,500
Federal Home Loan Bank Notes,
5.270%, due 02/02 2.75 1,000,000 982,500
U.S. Treasury Notes,
6.375%, due 08/02 3.25 2,000,000 2,038,125
------------
4,013,125
------------
Maturity of 5 - 10 years: 25.4
Federal Home Loan Bank Notes,
6.380%, due 10/04 5.25 1,000,000 1,000,938
Federal Nat'l. Mortgage Assoc.
Notes, 6.650%, due 03/06 6.75 1,000,000 979,687
U.S. Treasury Notes,
6.500%, due 10/06 7.25 1,500,000 1,547,812
Federal Nat'l. Mortgage Assoc.
Notes, 6.860%, due 10/07 8.25 1,000,000 978,438
Federal Home Loan Bank Notes,
5.805%, due 03/09 9.75 650,000 616,891
------------
5,123,766
------------
Maturity of 10 _ 20 years - 3.9
Student Loan Marketing Assoc.
Notes, 7.300%, due 08/12 13.25 750,000 799,219
------ ------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $10,568,561) 51.7% $10,437,047
------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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Page 2
<PAGE>
PC&J PRESERVATION FUND
SCHEDULE OF INVESTMENTS (Continued)
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
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PERCENT YEARS
OF NET TO PRINCIPAL MARKET
SECURITY (Note A) ASSETS MATURITY AMOUNT VALUE
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<S> <C> <C> <C> <C>
U.S. CORPORATE OBLIGATIONS:
Maturity of less than 1 year - 2.5%
U.S. Leasing Int'l. Medium-Term
Notes, 6.700%, due 09/99 0.25 500,000 $ 500,625
------------
Maturity of 1 _ 5 years: 8.6
Ford Motor Credit Co. Notes,
5.125%, due 10/01 2.25 750,000 731,953
American Express Credit Corp.
Notes, 6.125%, due 11/01 2.50 500,000 497,031
Lehman Brothers Holdings Inc.
Notes, 7.250%, due 10/03 4.25 500,000 502,031
------------
1,731,015
------ ------------
TOTAL U.S. CORPORATE OBLIGATIONS
(Cost $2,265,990) 11.1 2,231,640
------ ------------
TAXABLE MUNICIPAL OBLIGATIONS:
Maturity of 1 - 5 years: 3.0
Ohio Development Assistance
Taxable Bonds, 6.820%,
due 04/03 3.75 500,000 506,840
Philadelphia PA Industrial Dev.
Taxable Bonds, 6.488%,
due 06/04 5.00 99,700 99,738
------------
606,578
------------
Maturity of 5 _ 10 years: 8.4
Rome NY Hsg. Dev. Taxable Bonds,
6.500%, due 01/05 5.50 440,000 436,203
New York City Taxable Bonds,
10.000%, due 08/05 6.25 100,000 110,920
Cleveland OH Airport Taxable
Bonds, 6.490%, due 01/06 6.50 365,000 359,883
Chicago Heights IL General
Obligation Taxable Bonds,
7.350%, due 12/07 8.50 170,000 177,009
Oklahoma City OK Airport Trust
Taxable Bonds, 6.950%,
due 07/08 9.00 475,000 479,574
Dayton OH Housing Improvement
Taxable Bonds, 6.250%,
due 11/08 9.50 140,000 132,966
------------
$ 1,696,555
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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Page 3
<PAGE>
PC&J PRESERVATION FUND
SCHEDULE OF INVESTMENTS (Continued)
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
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PERCENT YEARS
OF NET TO PRINCIPAL MARKET
SECURITY (Note A) ASSETS MATURITY AMOUNT VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maturity of 10 _ 20 years: 17.4%
Texas State Water Financial
Assistance Taxable Bonds,
6.550%, due 08/09 10.25 400,000 $ 400,252
Dayton OH Baseball Project
Taxable Bonds, 6.380%,
due 12/09 10.50 500,000 475,175
Texas State Water Development
Taxable Bonds, 8.800%,
due 08/12 13.25 50,000 51,585
Mississippi State General
Obligation Taxable Bonds,
6.750%, due 11/12 13.50 300,000 294,291
Denver CO School Dist.Taxable
Bonds, 6.90%, due 12/12 13.50 500,000 485,960
New York City Taxable Bonds,
9.000%, due 02/13 13.75 50,000 53,810
St. Cloud MN Tax Increment
Taxable Bonds, 6.700%,
due 02/13 13.75 70,000 66,528
Sacramento CA Redevelopment
Agency Taxable Bonds,
6.375%, due 11/13 14.50 200,000 183,366
Dayton OH Housing Improvement
Taxable Bonds, 6.500%,
due 11/13 14.50 250,000 231,955
Jackson Cnty. MS GO Taxable
Bonds, 8.250%, due 03/14 14.75 135,000 142,507
Jackson Cnty. MS GO Taxable
Bonds, 8.250%, due 03/15 15.75 110,000 115,907
Ohio State Taxable Bonds,
7.600%, due 10/16 17.25 750,000 772,950
Palmdale CA Community Redev.
Agency Taxable Bonds,
7.900%, due 09/17 18.25 225,000 228,730
------------
3,503,016
------------
Maturity over 20 years: 4.2
California Housing Finance
Agency Rev. Taxable Bonds,
7.200%, due 08/19 20.25 420,000 414,355
Pittsburgh PA Conv. GO Taxable
Bonds, 0.000%, due 03/24 24.75 705,000 424,340
------------
838,695
------ ------------
TOTAL TAXABLE MUNICIPAL
OBLIGATIONS (Cost $6,885,089) 33.0% $ 6,644,844
------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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Page 4
<PAGE>
PC&J PRESERVATION FUND
SCHEDULE OF INVESTMENTS (Concluded)
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
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PERCENT YEARS
OF NET TO PRINCIPAL MARKET
SECURITY (Note A) ASSETS MATURITY AMOUNT VALUE
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<S> <C> <C> <C> <C>
TOTAL U.S. GOVERNMENT,
CORPORATE, AND MUNICIPAL
OBLIGATIONS
(Cost $19,719,640) 95.8% $19,313,531
------------
SHORT-TERM OBLIGATIONS 2.4
Firstar Treasury Fund 35,125
Firstar Federal Prime
Obligations Fund 450,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(Cost $485,125) 485,125
------ ------------
TOTAL INVESTMENTS
(Cost $20,204,765) <FN1> 98.2% $19,798,656
====== ============
<FN>
<FN1> REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES
AND DIFFERS FROM VALUE BY NET UNREALIZED APPRECIATION
(SEE NOTE D)
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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Page 5
<PAGE>
PC&J PRESERVATION FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
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<S> <C>
ASSETS:
Investments in securities, at market value $19,798,656
(Cost basis - $20,204,765) (Notes A & D)
Receivables _ Interest 370,293
------------
Total assets 20,168,949
LIABILITIES _ Accrued expenses (Note B) (16,521)
------------
NET ASSETS $20,152,428
============
SHARES OUTSTANDING (Unlimited authorization - no par value):
Beginning of year 1,746,275
Net increase (Note C) 55,147
------------
End of period 1,801,422
============
NET ASSET VALUE, offering price and redemption price per share $11.19
============
NET ASSETS CONSIST OF:
Paid in capital $19,837,990
Net unrealized depreciation on investments (406,108)
Undistributed net investment income 570,625
Undistributed net realized gain on investments 149,921
------------
Net Assets $20,152,428
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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Page 6
<PAGE>
PC&J PRESERVATION FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
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<S> <C>
INVESTMENT INCOME - Interest (Note A): $ 668,913
------------
EXPENSES (Note B):
Investment advisory fee 49,144
Management fee 49,144
------------
Total expenses 98,288
------------
NET INVESTMENT INCOME 570,625
------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (Note D):
Net realized gain on investments 149,921
Change in unrealized depreciation of investments (1,041,733)
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS (891,812)
------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (321,187)
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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Page 7
<PAGE>
PC&J PRESERVATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
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For the Six Months For the Year
Ended Ended
June 30, 1999 December 31, 1998
(Unaudited)
--------------------------------------
<S> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 570,625 $ 935,382
Net realized gain on investments 149,921 241,455
Change in unrealized appreciation
/(depreciation) of investments (1,041,733) 249,373
------------ ------------
Net increase/(decrease) in net assets
from operations (321,187) 1,426,210
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment
income 0 (935,382)
Dividends from net realized gain
on investments 0 (218,402)
------------ ------------
Net decrease in assets from dividends
to shareholders 0 (1,153,784)
INCREASE IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS (Note C) 621,736 508,181
------------ ------------
Total increase in net assets 300,549 3,780,607
NET ASSETS:
Beginning of period 19,851,879 16,071,272
------------ ------------
End of period $20,152,428 $19,851,879
============ =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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Page 8
<PAGE>
PC&J PRESERVATION FUND
NOTES TO FINANCIAL STATEMENTS
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A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PC&J Preservation Fund (the 'Fund') commenced operations on April 30, 1985, a
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 investment objective of the Fund is preservation of capital through
investment in fixed-income obligations.
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 for which quotations are
readily available are valued on the basis of quotations from dealers or an
independent pricing service with consideration of such factors as yield,
coupon rate, maturity, type of issue and other market information. All
other securities are valued using established procedures which involve
approximating the yield-to-maturity of similar securities traded on a
national exchange.
(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 securitie
are purchased or sold, (trade date). All premium and discounts are
amortized or accreted for both financial and tax reporting purposes as
required by Federal Income Tax regulations. Realized gains and losses on
sales are determined using the first-in first-out method. Dividends to
shareholders from net investment income and net realized capital gains are
declared and paid annually. 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-half of one percent of the
daily net assets of the Fund. Investment advisory fees were $49,144 for the
six months ended June 30, 1999.
The Fund has a management agreement with PC&J Service Corp., (the 'Service
Corp.') which is 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'
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 $49,144 for the six months ended
June 30, 1999.
The Fund's shareholders have adopted a Distribution Expense Plan ('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 described above which might be deemed to be expenses primarily
intended to result in the sale of Fund shares. No other payments are
authorized under the Plan.
Certain officers and trustees of the Fund are officers and directors, or
both of the Advisor and of Service Corp.
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Page 9
<PAGE>
PC&J PRESERVATION FUND
NOTES TO FINANCIAL STATEMENTS - (Concluded)
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C. CAPITAL SHARE For the Six Months Ending For the Year Ending
TRANSACTIONS June 30, 1999 December 31, 1998
(Unaudited)
------------------------------------------------------
[S] [C] [C] [C] [C]
Shares sold 189,518 $ 2,143,670 323,475 $ 3,761,985
Shares issued in
reinvestment of
dividends 0 0 101,493 1,153,784
--------- ------------ --------- ------------
189,518 2,143,671 425,968 4,915,769
Shares redeemed (134,371) (1,521,934) (120,942) (1,407,588
--------- ------------ --------- ------------
Net increase 55,147 $ 621,736 304,026 $ 3,508,181
========= ============ ========= ============
D. INVESTMENT TRANSACTIONS
Securities purchased and sold (excluding short-term obligations) for the six
months ended June 30, 1999 aggregated $5,857,468 and $3,599,844,
respectively. Purchases and sales of U.S. Government Securities for the six
months ended June 30, 1999 aggregated $4,708,281 and $3,579,844,
respectively.
At June 30, 1999 gross unrealized appreciation on investments was $52,721 and
gross unrealized depreciation on investments was $458,829 for net unrealized
depreciation of $406,108 for financial reporting and federal income tax
purposes.
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Page 10
