09/06/2024 | Press release | Distributed by Public on 09/06/2024 12:57
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 811-02631
Chestnut Street Exchange Fund
(Exact name of registrant as specified in charter)
223 Wilmington West Chester Pike, Suite 216
Chadds Ford, PA 19137
(Address of principal executive offices) (Zip code)
Frederick C. Teufel, Jr.
Chestnut Street Exchange Fund
223 Wilmington West Chester Pike, Suite 216
Chadds Ford, PA 19137
(Name and address of agent for service)
1-866-311-7541
Registrant's telephone number, including area code
Date of fiscal year end: December 31
Date of reporting period: June 30, 2024
Item 1. Reports to Stockholders.
(a) | ||
Chestnut Street Exchange Fund
|
||
CHNTX
|
||
Semi-Annual Shareholder Report | June 30, 2024
|
Fund Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
Chestnut Street Exchange Fund
|
$26
|
0.50%
|
Net Assets
|
$170,410,636
|
Number of Holdings
|
38
|
Portfolio Turnover Rate
|
0%
|
Top Sectors
|
(% of Net Assets)
|
Information Technology
|
25.9%
|
Financials
|
13.6%
|
Health Care
|
12.8%
|
Industrials
|
11.1%
|
Communication Services
|
10.5%
|
Materials
|
7.6%
|
Consumer Staples
|
6.5%
|
Consumer Discretionary
|
6.0%
|
Energy
|
4.8%
|
Cash & Other
|
1.2%
|
Top 10 Issuers
|
(% of Net Assets)
|
Microsoft Corp.
|
8.6%
|
Apple, Inc.
|
6.6%
|
JPMorgan Chase & Co.
|
5.5%
|
Moody's Corp.
|
5.3%
|
Abbott Laboratories
|
4.8%
|
Union Pacific Corp.
|
4.8%
|
Alphabet, Inc.
|
4.5%
|
Air Products and Chemicals, Inc.
|
4.3%
|
Oracle Corp.
|
4.1%
|
Emerson Electric Co.
|
4.1%
|
Chestnut Street Exchange Fund | PAGE 1 | TSR-SAR-166668103 |
(b) | Not applicable. |
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this Form. |
(b) | Not Applicable. |
Item 7. Financial Statements and Financial Highlights for Open-End Investment Companies
(a) |
Page
|
|||
Schedule of Investments
|
1
|
||
Statement of Assets & Liabilities
|
4
|
||
Statement of Operations
|
5
|
||
Statements of Changes in Net Assets
|
6
|
||
Financial Highlights
|
7
|
||
Notes to Financial Statements
|
8
|
||
Item 8 - Changes in and Disagreements with Accountants for Open-End Management Investment
Companies
|
11
|
||
Item 9 - Proxy Disclosures for Open-End Management Investment Companies
|
12
|
||
Item 10 - Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies
|
13
|
||
Item 11 - Statement Regarding Basis for Approval of Investment Advisory Contract
|
14
|
||
TABLE OF CONTENTS
Shares
|
Value
|
|||||
COMMON STOCKS - 98.8%
|
||||||
Banks - 8.3%
|
||||||
Bank of America Corp.
|
39,255
|
$1,561,171
|
||||
JPMorgan Chase & Co.
|
46,453
|
9,395,584
|
||||
Wells Fargo & Co.
|
55,125
|
3,273,874
|
||||
14,230,629
|
||||||
Capital Goods - 6.3%
|
||||||
3M Co.
|
18,556
|
1,896,238
|
||||
Emerson Electric Co.
|
62,908
|
6,929,945
|
||||
GE Vernova, Inc.(a)
|
2,353
|
403,563
|
||||
General Electric Co.
|
9,415
|
1,496,702
|
||||
10,726,448
|
||||||
Consumer Discretionary Distribution & Retail - 5.2%
|
||||||
Amazon.com, Inc.(a)
|
16,666
|
3,220,704
|
||||
Home Depot, Inc.
|
16,394
|
5,643,471
|
||||
8,864,175
|
||||||
Consumer Durables & Apparel - 0.8%
|
||||||
NIKE, Inc. - Class B
|
17,287
|
1,302,921
|
||||
Consumer Staples Distribution & Retail - 1.8%
|
||||||
Walmart, Inc.
|
44,853
|
3,036,997
|
||||
Energy - 4.8%
|
||||||
Exxon Mobil Corp.
|
47,783
|
5,500,779
|
||||
Schlumberger NV
|
57,711
|
2,722,805
|
||||
8,223,584
|
||||||
Financial Services - 5.3%
|
||||||
Moody's Corp.
|
21,614
|
9,097,981
|
||||
Food, Beverage & Tobacco - 4.4%
|
||||||
Altria Group, Inc.
|
12,580
|
573,019
|
||||
Mondelez International, Inc. - Class A
|
8,737
|
571,749
|
||||
PepsiCo, Inc.
|
30,497
|
5,029,870
|
||||
Philip Morris International, Inc.
|
12,580
|
1,274,732
|
||||
7,449,370
|
||||||
Health Care Equipment &
Services - 5.1%
|
||||||
Abbott Laboratories
|
79,250
|
8,234,868
|
||||
GE HealthCare Technologies, Inc.
|
3,138
|
244,513
|
||||
Solventum Corp.(a)
|
4,639
|
245,310
|
||||
8,724,691
|
||||||
Household & Personal Products - 0.3%
|
||||||
Kenvue, Inc.
|
26,378
|
479,552
|
||||
Materials - 7.6%
|
||||||
Air Products and Chemicals, Inc.
|
28,579
|
7,374,811
|
||||
Cabot Corp.
|
60,180
|
5,529,940
|
||||
12,904,751
|
||||||
Shares
|
Value
|
|||||
Media & Entertainment - 10.5%
|
||||||
Alphabet, Inc. - Class A
|
42,416
|
$7,726,074
|
||||
Comcast Corp. - Class A
|
97,417
|
3,814,850
|
||||
Paramount Global - Class B
|
41,580
|
432,016
|
||||
Walt Disney Co.
|
60,469
|
6,003,967
|
||||
17,976,907
|
||||||
Pharmaceuticals, Biotechnology & Life Sciences - 7.7%
|
||||||
Johnson & Johnson
|
43,842
|
6,407,947
|
||||
Merck & Co., Inc.
|
54,860
|
6,791,668
|
||||
13,199,615
|
||||||
Semiconductors & Semiconductor Equipment - 2.9%
|
||||||
Intel Corp.
|
157,922
|
4,890,844
|
||||
Software & Services - 15.8%
|
||||||
Check Point Software Technologies Ltd.(a)
|
31,774
|
5,242,710
|
||||
Microsoft Corp.
|
32,788
|
14,654,596
|
||||
Oracle Corp.
|
49,558
|
6,997,590
|
||||
26,894,896
|
||||||
Technology Hardware & Equipment - 7.2%
|
||||||
Apple, Inc.
|
53,471
|
11,262,062
|
||||
Cisco Systems, Inc.
|
19,716
|
936,707
|
||||
12,198,769
|
||||||
Transportation - 4.8%
|
||||||
Union Pacific Corp.
|
36,064
|
8,159,841
|
||||
TOTAL COMMON STOCKS
(Cost $18,834,137)
|
168,361,971
|
|||||
SHORT-TERM INVESTMENTS - 1.5%
|
||||||
Money Market Funds - 1.5%
|
||||||
First American Government Obligations Fund - Class X, 5.23%(b)
|
2,494,131
|
2,494,131
|
||||
TOTAL SHORT-TERM INVESTMENTS
(Cost $2,494,131)
|
2,494,131
|
|||||
TOTAL INVESTMENTS - 100.3%(Cost $21,328,268)
|
$170,856,102
|
|||||
Liabilities in Excess of Other
Assets - (0.3)%
|
(445,466)
|
|||||
TOTAL NET ASSETS - 100.0%
|
$170,410,636
|
|||||
1
|
TABLE OF CONTENTS
(a)
|
Non-income producing security.
|
(b)
|
The rate shown represents the 7-day effective yield as of June 30, 2024.
|
2
|
TABLE OF CONTENTS
Total Value at
December 31, 2023
|
Level 1
Quoted Price
|
Level 2
Significant
Observable
Inputs
|
Level 3
Significant
Unobservable
Inputs
|
|||||||||
Investments in Common Stocks*
|
$170,856,102
|
$170,856,102
|
$ -
|
$ -
|
||||||||
*
|
See details of industry breakout in the Schedule of Investments.
|
3
|
TABLE OF CONTENTS
Assets
|
|||
Investments in securities, at value (cost $18,834,137)
|
$168,361,971
|
||
Cash
|
2,494,131
|
||
Dividends receivable
|
98,984
|
||
Interest receivable
|
10,088
|
||
Prepaid expenses
|
4,497
|
||
Total assets
|
170,969,671
|
||
Liabilities
|
|||
Payable for distributions
|
462,626
|
||
Payable for Fund shares redeemed
|
-
|
||
Accrued advisory fees
|
13,937
|
||
Accrued administration and accounting fees
|
12,448
|
||
Accrued partners' compensation
|
11,645
|
||
Accrued expenses and other liabilities
|
58,379
|
||
Total liabilities
|
559,035
|
||
NET ASSETS
|
$170,410,636
|
||
Net Assets consisted of:
|
|||
Other capital - paid-in or reinvested
|
$17,769,162
|
||
Distributable earnings
|
152,641,474
|
||
Net Assets (Applicable to 159,821 partnership shares outstanding)
|
$170,410,636
|
||
Net Asset Value offering and redemption price per share (170,410,636 / 159,821 shares)
|
$1,066.26
|
||
Net Assets applicable to shares owned by:
|
|||
Limited partners (159,788 shares)
|
$170,375,450
|
||
Managing general partners (33 shares)
|
35,186
|
||
Net Assets (159,821 shares)
|
$170,410,636
|
||
4
|
TABLE OF CONTENTS
Investment Income
|
|||
Dividends
|
$1,419,879
|
||
Interest
|
56,403
|
||
Total investment income
|
1,476,282
|
||
Expenses
|
|||
Legal fees (Note C)
|
115,448
|
||
Administration and accounting fees (Note C)
|
88,904
|
||
Investment advisory services (Note C)
|
83,501
|
||
Managing general partners' compensation (Note C)
|
40,910
|
||
Officer's salary and expenses
|
23,392
|
||
Transfer agent fees
|
22,942
|
||
Insurance
|
12,280
|
||
Audit fees
|
12,194
|
||
Custodian fees
|
10,394
|
||
Printing
|
5,788
|
||
Other fees and expenses
|
5,536
|
||
Total expenses
|
421,289
|
||
Net investment income
|
1,054,993
|
||
Net realized and unrealized gain on investments
|
|||
Net realized gain from securities transactions: distributed on redemption of partnership shares
|
3,102,248
|
||
Net realized gain on sale of investment securities
|
98
|
||
Unrealized appreciation on investments
|
|||
Beginning of period
|
$143,523,958
|
||
End of period
|
149,527,834
|
||
Net change in unrealized appreciation
|
6,003,876
|
||
Net realized and unrealized gain from investments
|
9,106,222
|
||
Net increase in net assets resulting from operations
|
$10,161,215
|
||
5
|
TABLE OF CONTENTS
Six Months Ended
June 30, 2024
(Unaudited)
|
Year Ended
December 31, 2023
|
|||||
Increase/(Decrease) in net assets Operations:
|
||||||
Net investment income
|
$1,054,993
|
$2,454,041
|
||||
Net realized gain from securities transactions: distributed on redemption of partnership shares
|
3,102,346
|
22,104,351
|
||||
Net realized gain from securities litigation
|
-
|
27
|
||||
Net change in unrealized appreciation on investments
|
6,003,876
|
3,775,847
|
||||
Net increase in net assets resulting from operations
|
10,161,215
|
28,334,266
|
||||
Distributions to partners from:
|
||||||
Total distributable earnings
|
(1,043,699)
|
(2,454,366)
|
||||
Capital share transactions(5):
|
||||||
Net asset value of 57(1) and 135(2) shares issued in lieu of cash distributions, respectively
|
85,835
|
124,530
|
||||
Cost of 7,553(3) and 21,096(4) shares repurchased, respectively
|
(3,267,878)
|
(23,346,768)
|
||||
Net decrease in net assets from capital share transactions
|
(3,182,043)
|
(23,222,238)
|
||||
Total net increase in net assets
|
5,935,473
|
2,657,662
|
||||
Net assets:
|
||||||
Beginning of period
|
164,475,163
|
161,817,501
|
||||
End of period
|
$ 170,410,636
|
$ 164,475,163
|
||||
(1)
|
Includes 57 Limited partners' shares and 0 Managing general partners' shares.
|
(2)
|
Includes 135 Limited partners' shares and 0 Managing general partners' shares.
|
(3)
|
Includes 7,553 Limited partners' shares and 0 Managing general partners' shares.
|
(4)
|
Includes 21,096 Limited partners' shares and 0 Managing general partners' shares.
|
6
|
TABLE OF CONTENTS
Ended
June 30, 2024* (Unaudited)
|
Year Ended December 31,
|
|||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
Net asset value, beginning of period
|
$1,009.75
|
$863.50
|
$ 1,024.81
|
$860.00
|
$796.22
|
$619.69
|
||||||||||||
Income From Investment
Operations:
|
||||||||||||||||||
Net investment income(a)
|
6.54
|
13.87
|
13.65
|
10.66
|
9.51
|
11.82
|
||||||||||||
Net gain (loss) on securities (both realized and
unrealized)
|
56.47
|
146.62
|
(160.85)
|
165.24
|
63.81
|
176.53
|
||||||||||||
Total from investment
operations
|
63.01
|
160.49
|
(147.20)
|
175.90
|
73.32
|
188.35
|
||||||||||||
Less Distributions:
|
||||||||||||||||||
From net investment income
|
(6.50)
|
(14.24)
|
(14.11)
|
(11.09)
|
(9.54)
|
(11.82)
|
||||||||||||
Net asset value, end of
period
|
$ 1,066.26
|
$ 1,009.75
|
$863.50
|
$ 1,024.81
|
$860.00
|
$796.22
|
||||||||||||
Total return
|
6.23%
|
18.71%
|
−14.34%
|
20.54%
|
9.39%
|
30.66%
|
||||||||||||
Ratios/Supplemental Data:
|
||||||||||||||||||
Net Assets, End of Period
(000's)
|
$170,411
|
$164,475
|
$161,818
|
$213,527
|
$ 209,441
|
$ 201,079
|
||||||||||||
Ratios to average net assets:
|
||||||||||||||||||
Expenses
|
||||||||||||||||||
Including waivers
|
0.50%
|
0.52%
|
0.47%
|
0.56%
|
0.81%
|
0.66%
|
||||||||||||
Excluding waivers
|
0.50%
|
0.52%
|
0.47%
|
0.57%
|
0.83%
|
0.68%
|
||||||||||||
Net investment income
|
1.26%
|
1.51%
|
1.53%
|
1.11%
|
1.26%
|
1.62%
|
||||||||||||
Portfolio Turnover Rate(b)
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.89%
|
||||||||||||
(a)
|
Net Investment Income per share is based on average shares outstanding.
|
(b)
|
Portfolio Turnover Rate does not include securities delivered from processing in-kind redemptions.
|
*
|
All ratios have been annualized except total return and portfolio turnover rate.
|
7
|
TABLE OF CONTENTS
8
|
TABLE OF CONTENTS
Federal tax cost
|
$18,933,490
|
||
Gross unrealized appreciation
|
143,523,958
|
||
Gross unrealized depreciation
|
-
|
||
Net unrealized appreciation
|
$143,523,958
|
||
9
|
TABLE OF CONTENTS
2023
|
2022
|
|||||
Ordinary income
|
$ 2,454,366
|
$ 2,790,343
|
||||
Distributed to partners
|
$2,454,366
|
$2,790,343
|
||||
Value of the
Redemptions
|
Net Realized Gain
Included in
Redemptions
|
Fund Shares
Redeemed
|
|||||||
Portfolio Securities
|
$3,203,268*
|
$3,102,346
|
3,147
|
||||||
Cash
|
64,610
|
-
|
-
|
||||||
$3,267,878
|
$3,102,346
|
3,147
|
|||||||
*
|
Includes $1,667 in cash redeemed.
|
Undistributed net investment income
|
$-
|
||
Net realized gain
|
-
|
||
Net unrealized appreciation on investments
|
143,523,958
|
||
$143,523,958
|
|||
10
|
TABLE OF CONTENTS
11
|
TABLE OF CONTENTS
(1)
|
The date of the meeting and whether it was an annual or special meeting.
|
(2)
|
If the meeting involved the election of directors, the name of each director elected at the meeting and the name of each other director whose term of office as a director continued after the meeting.
|
(3)
|
A brief description of each matter voted upon at the meeting and the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes as to each such matter, including a separate tabulation with respect to each matter or nominee for office.
|
12
|
TABLE OF CONTENTS
13
|
TABLE OF CONTENTS
14
|
(b) | Financial Highlights are included within the financial statements filed under Item 7 of this Form. |
Item 8. Changes in and Disagreements with Accountants for Open-End Investment Companies
See Item 7(a).
There were no changes in or disagreements with accountants during the period covered by this report.
Item 9. Proxy Disclosure for Open-End Investment Companies.
See Item 7(a).
There were no matters submitted to a vote of shareholders during the period covered by this report.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Investment Companies.
See Item 7(a).
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
See Item 7(a).
See Item 1(a).
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 15. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Managing General Partners.
Item 16. Controls and Procedures.
(a) | The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation.
(a) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. |
Not applicable.
(2) Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant's securities are listed.
Not applicable.
(3) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)). Filed herewith.
(4) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons.
Not applicable.
(5) Change in the registrant's independent public accountant. Provide the information called for by Item 4 of Form 8-K under the Exchange Act (17 CFR 249.308). Unless otherwise specified by Item 4, or related to and necessary for a complete understanding of information not previously disclosed, the information should relate to events occurring during the reporting period.
Not applicable.
Item 19. Exhibits.
(b) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. |
Not applicable.
(2) A separate certification for each principal executive and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons.
Not applicable.
(4) Changes in the registrant's independent public accountant.
Filed herewith.
(c) |
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
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.
(Registrant) | Chestnut Street Exchange Fund | ||
By (Signature and Title) | /s/ Frederick C. Teufel, Jr. | ||
Frederick C. Teufel, Jr., President & Chief Compliance Officer (principal executive officer) |
|||
Date |
9/4/2024 |
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 (Signature and Title) | /s/ Frederick C. Teufel, Jr. | ||
Frederick C. Teufel, Jr., President & Chief Compliance Officer (principal executive officer) |
|||
Date | 9/4/2024 | ||
By (Signature and Title) | /s/ Frederick C. Teufel, Jr. | ||
Frederick C. Teufel, Jr., Chief Financial Officer | |||
(principal financial officer) | |||
Date | 9/4/2024 |