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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Aspen Insurance Holdings Limited Ordinary Shares | NYSE:AHL | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 42.74 | 0.00 | 01:00:00 |
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: 811-22504
Clark Fork Trust
(Exact Name of Registrant as Specified in Charter)
218 East Front Street, Suite 205, Missoula, Montana 59802
(Address of Principal Executive Offices) (Zip Code)
Capitol Services, Inc.
615 S. Dupont Hwy, Dover, DE 19901
(Name and Address of Agent for Service)
Registrants Telephone Number, including Area Code: (406) 541-0130
Date of fiscal year end: May 31
Date of reporting period: November 30, 2012
Item 1. Reports to Stockholders.
TARKIO FUND
(TARKX)
CLARK FORK TRUST
SEMI-ANNUAL REPORT
NOVEMBER 30, 2012
(UNAUDITED)
TARKIO FUND
PORTFOLIO ILLUSTRATION
NOVEMBER 30, 2012 (UNAUDITED)
The following chart gives a visual breakdown of the Fund by the industry sectors the underlying securities represent as a percentage of the portfolio of investments.
TARKIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2012 (UNAUDITED)
1. ORGANIZATION
The Clark Fork Trust (the Trust) is registered as an open-end management investment company under the Investment Company Act of 1940 (the Act) and is organized as a statutory trust under the laws of Delaware by the filing of a Certificate of Trust on October 28, 2010. The Trust is authorized to issue one or more series of beneficial interests and issue classes of any series or divide shares of any series into two or more separate classes. The Trust currently consists of one series of units of beneficial interest (shares) called the Tarkio Fund (the Fund). The Fund is a non-diversified fund. The investment adviser to the Fund is Front Street Capital Management, Inc. (the Adviser).
The Funds investment objective is long term growth of capital.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the U.S. (GAAP).
SECURITY VALUATIONS : All investments in securities are recorded at their estimated fair value, as described in Note 3.
ORGANIZATIONAL AND OFFERING EXPENSES: All costs incurred by the Fund in connection with the organization, offering and initial registration of the Fund, principally professional fees, were paid on behalf of the Fund by the Adviser and will not be borne by the Fund.
FEDERAL INCOME TAXES: The Funds policy is to comply with the requirements of Subchapter M of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all of its taxable income to their shareholders. Therefore, no federal income tax provision is required. It is the Funds policy to distribute annually, prior to the end of the calendar year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Code. This Internal Revenue Code requirement may cause an excess of distributions over the book year-end accumulated income. In addition, it is the Funds policy to distribute annually, after the end of the fiscal year, any remaining net investment income and net realized capital gains.
The Fund recognizes the tax benefits of certain tax positions only where the position is more likely than not to be sustained assuming examination by tax authorities. Management has analyzed the Funds tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded as of or during the six months ended November 30, 2012, related to uncertain tax positions expected to be taken in the Funds 2012 tax returns. The Fund identifies its major tax jurisdictions as U.S. Federal and certain State tax authorities; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period, the Fund did not incur any interest or penalties.
USE OF ESTIMATES: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense, or realized capital gain for federal income tax purposes.
RECLASSIFICATION OF CAPITAL ACCOUNT : GAAP requires that certain components of net assets be reclassified between financial and tax reporting. These reclassifications have no impact on the net asset value of the Fund and are designed generally to present undistributed income and net realized gains on a tax basis, which is considered to be more informative to shareholders.
OTHER: The Fund records security transactions on the trade date. Dividend income is recognized on the ex-dividend date. Interest income is recognized on an accrual basis. The Fund uses the specific identification method in computing gain or loss on sale of investment securities. Discounts and premiums on securities purchased are amortized over the life of the respective securities.
3. SIGNIFICANT ACCOUNTING POLICIES
SECURITIES VALUATIONS: As described in Note 2, all investments in securities are recorded at their estimated fair value. The Fund utilizes various methods to measure the fair value of most of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds own assumptions about the assumptions a market participant would use in valuating the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
FAIR VALUE MEASUREMENTS: A description of the valuation techniques applied to the Funds major categories of assets and liabilities measured at fair value on a recurring basis follows.
Equity securities (common stock) - Equity securities are valued by using market quotations furnished by a pricing service when the Adviser believes such prices accurately reflect the fair value of such securities. Securities that are traded on any stock exchange are valued by the pricing service at the last quoted sale price. Lacking a last sale price, an exchange traded security is valued by the pricing service at its last bid price. Securities traded in the NASDAQ over-the-counter market are valued by the pricing service at the NASDAQ Official Closing Price. When market quotations are not readily available, when the Adviser determines that the market quotation or the price provided by the pricing service does not accurately reflect the current fair value or when restricted or illiquid securities are being valued, such securities are valued at a fair value as determined by the Adviser in good faith, in accordance with guidelines adopted by and subject to review of the Board. Manually priced securities held by the Fund (if any) are reviewed by the Board on a quarterly basis. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. If the Adviser decides that a price provided by the pricing services does not accurately reflect the fair value of the securities, when prices are not readily available from a pricing service or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Adviser.
Money market mutual funds are generally priced at the ending NAV provided by the service agent of the funds. These securities will be categorized as Level 1 securities.
Fixed income securities - Fixed income securities such as corporate bonds and U.S. Government Securities when valued using market quotations in an active market, will be categorized as Level 1 securities. However, they may be valued on the basis of prices furnished by a pricing service when the Adviser believes such prices more accurately reflect the fair value of such securities. A pricing service utilizes electronic data processing techniques based on 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. These securities will generally be categorized as Level 2 securities. If the Adviser decides that a price provided by the pricing service does not accurately reflect the fair value of the securities, when prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board. These securities will be categorized as Level 3 securities. Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation. These securities are categorized as Level 2 or Level 3, when appropriate.
The following table summarizes the inputs used to value the Funds assets measured at fair value as of November 30, 2012:
Valuation Inputs of Assets * |
Level 1 |
Level 2 |
Level 3 |
Total |
Common Stock |
$ 8,761,164 |
$0 |
$0 |
$ 8,761,164 |
Cash Equivalents |
117,759 |
0 |
0 |
117,759 |
Total |
$ 8,878,923 |
$0 |
$0 |
$ 8,878,923 |
* See the Schedule of Investments for categories by industry.
There were no transfers into or out the levels during the six months ended November 30, 2012. The Fund considers transfers into and out of the levels as of the end of the reporting period.
The Fund did not hold any Level 3 assets during the six months ended November 30, 2012. For more detail on the investments, please refer to the Schedule of Investments. The Fund did not hold any derivative instruments at any time during the six months ended November 30, 2012.
4. RELATED PARTY TRANSACTIONS
INVESTMENT ADVISOR: Front Street Capital Management, Inc. serves as investment adviser to the Fund. Subject to the authority of the Board, the Adviser is responsible for management of the Fund's investment portfolio. The Adviser is responsible for selecting the Fund's investments according to the Fund's investment objective, policies and restrictions and as compensation for its management services, the Fund is obligated to pay the Adviser a fee computed and accrued daily and paid monthly in arrears at an annual rate of 1.00% of the average daily net assets of the Fund during the term of the Investment Advisory Agreement (Agreement). Effective April 9, 2012, the Adviser agreed to reduce its management fee to 0.90%. Under the Agreement, the Adviser, at its own expense and without reimbursement from the Trust, furnishes office space and all necessary office facilities, equipment and executive personnel necessary for managing the assets of the Fund. Under this Agreement, the Adviser pays the operating expenses of the Fund excluding fees payable under the Agreement and the Services Agreement, brokerage fees and commissions, taxes, interest expense, the costs of acquired fund fees and expenses, and extraordinary expenses. For the six months ended November 30, 2012, the Advisor earned $36,829 in Advisory fees. At November 30, 2012, the Fund owed the Adviser $1,867. The Advisor has voluntarily agreed to waive a portion of its Advisory fees. These waivers may be discontinued at any time. For the six months ended November 30, 2012, the Advisor voluntarily waived $3,683 in advisory fees.
The Fund entered into a Services Agreement with the Adviser. Under the Services Agreement, the Adviser receives an additional fee of 0.25% of the average daily net assets of the Fund and is obligated to provide executive and administrative services, assist in the preparation of the Trusts tax returns and various reports to shareholders, and provide non-investment related statistical and research data. For the six months ended November 30, 2012, the Fund incurred $9,207 in service fees. At November 30, 2012, the Fund owed $1,697 in service fees.
5. CAPITAL SHARE TRANSACTIONS
At November 30, 2012, paid in capital amounted to $8,687,776 of the Fund. Transactions in capital stock were as follows:
Six months ended November 30, 2012 |
June 28, 2011 (commencement of operations) through May 31, 2012 |
|||
Shares |
Amount |
Shares |
Amount |
|
Shares sold |
277,929 |
$ 2,523,274 |
675,679 |
$ 6,235,519 |
Shares issued in reinvestment of dividends |
- |
- |
- |
- |
Shares redeemed |
(18,246) |
(171,017) |
- |
- |
Net increase |
259,683 |
$ 2,352,257 |
675,679 |
$ 6,235,519 |
6. INVESTMENT TRANSACTIONS
For the six months ended November 30, 2012, purchases and sales of investment securities, other than short-term investments, were as follows:
Purchases
Investment Securities $ 2,524,449
Sales
Investment Securities $ 237,188
As of November 30, 2012, the net unrealized depreciation of investments for tax purposes was as follows:
Gross Appreciation |
$ 925,381 |
Gross (Depreciation) |
(745,719) |
Net Appreciation on Investments |
$ 179,662 |
At November 30, 2012, the aggregate cost of securities for federal income tax purposes was $8,699,261.
7. DISTRIBUTIONS TO SHAREHOLDERS
As of the fiscal period ended May 31, 2012, the components of distributable earnings/(accumulated losses) on a tax basis are as follows:
Undistributed Ordinary Income $ 0
Undistributed Gains 4,180
Unrealized Depreciation (261,847)
$(257,667)
The difference between book basis and tax basis unrealized depreciation is attributable to the tax deferral of losses on wash sales.
The Fund did not pay any distributions for the period June 28, 2011, (commencement of operations), through May 31, 2012.
The Fund did not pay any distributions for the six months ended November 30, 2012.
8. CONTROL OWNERSHIP
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under Section 2 (a) (9) of the Act. As of November 30, 2012, Ameritrade, Inc. held in omnibus accounts for the benefit of others approximately 56% of the voting securities of the Fund. The Trust believes that neither Ameritrade, Inc., nor any of the underlying beneficial owners owned or controlled 25% or more of the voting securities of the Fund.
9. NEW ACCOUNTING PRONOUNCEMENT
In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11 related to disclosures about offsetting assets and liabilities. The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The guidance requires retrospective application for all comparative periods presented. Management is currently evaluating the impact of this amendment may have on the Funds financial statements.
TARKIO FUND
TRUSTEES AND OFFICERS
NOVEMBER 30, 2012 (UNAUDITED)
Interested Trustees and Officers
Name, Address (1)
and Age |
Position(s) with the Trust |
Length o f Time Served |
Principal Occupation(s) during Past 5 Years |
Number of Portfolios in Fund Complex Overseen by Trustee |
Other Directorships Held by Trustee During the Past 5 Years |
Russell T. Piazza (2)
(57) |
Chairman of the Board of Trustees and President |
Indefinite Term; Since 2011 |
Registered Representative, Cowell Weeden & Co., 1977 to 1979. Portfolio Manager, Vice President of Investments, Piper Jaffray & Co., 1979 to 2006. Portfolio Manager, Front Street Capital Management, Inc., 2006 to Present. |
1 |
None |
Virginia Belker (47) |
Chief Compliance Officer |
Indefinite Term; Since 2011 |
Branch Administrative Manager, Piper Jaffray & Co. 2006. Branch Administrative Manager, UBS Financial Services, 2006. Chief Compliance Officer, Front Street Capital Management, Inc. 2006 to Present. |
N/A |
N/A |
David J. Wild (32) |
Vice President and Treasurer |
Indefinite Term; Since 2011 |
Assistant Trader, Fixed Income, Bear Stearns & Co., Inc., 2006. Financial Advisor, B.C. Ziegler and Company, 2006 to 2008. Director, Appleton Group Wealth Management, 2008 to 2010. Research Analyst, Front Street Capital Management, Inc., 2010 to Present. |
N/A |
N/A |
John H. Lively (44) |
Secretary |
Indefinite Term; Since 2010 |
Attorney, The Law Offices of John H. Lively & Associates, Inc. (law firm), March 2010 to present: Attorney, Husch Blackwell Sanders LLP (law firm), March 2007 to February 2010; Managing Attorney, Raymond James Financial (financial services), September 2005 to March 2007; Assistant General Counsel, AIM Investments (investment advisor), October 2000 to September 2005. |
N/A |
N/A |
(1) The address of each trustee and officer is c/o Clark Fork Trust, 218 East Front Street, Suite 205, Missoula, Montana 59802.
(2) Trustee who is considered an "interested person" as defined in Section 2(a)(19) of the Investment Company Act of 1940 by virtue of his affiliation with the Advisor.
Independent Trustees
Name, Address (1)
and Age |
Position(s) with the Trust |
Length o f Time Served |
Principal Occupation(s) during Past 5 Years |
Number of Portfolios in Fund Complex Overseen by Trustee |
Other Directorships Held by Trustee During the Past 5 Years |
Simona Stan (48) |
Independent Trustee |
Indefinite Term; Since 2011 |
Associate Professor of Marketing and Interim Director of the MBA Program in the School of Business Administration at the University of Montana (Since 2006); Assistant Professor at University of Oregon (2001 2006). |
1 |
None |
Matthew Kreutz (39) |
Independent Trustee |
Indefinite Term; Since 2011 |
Manager and Member of Hunter Bay, LLC a retail and wholesale business of coffee and coffee related products, April 2007 to Present. CEO and President of T-Shirts.com, Inc., a retail and wholesale business of t-shirts and related apparel products, July 1999 to December 2010. |
1 |
None |
(1) The address of each trustee is c/o Clark Fork Trust, 218 East Front Street, Suite 205, Missoula, Montana 59802.
TARKIO FUND
ADDITIONAL INFORMATION
NOVEMBER 30, 2012 (UNAUDITED)
Proxy Voting - 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 proxies during the most recent 12 month period ended June 30, are available without charge upon request by (1) calling the Fund at (800) 231-2901 and (2) from Fund documents filed with the Securities and Exchange Commission ("SEC") on the SEC's website at www.sec.gov .
Portfolio Holdings - The Fund files a complete schedule of investments with the SEC for the first and third quarter of each fiscal year on Form N-Q. The Funds first and third fiscal quarters end on January 31 and July 31. The Form N-Q filing must be made within 60 days of the end of the quarter. The Funds Forms N-Q are available on the SECs website at http://sec.gov , or they may be reviewed and copied at the SECs Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room). You may also obtain copies by calling the Fund at 1-800-231-2901.
Additional Information - The Fund's Statement of Additional Information ("SAI") includes additional information about the trustees and is available, without charge, upon request. You may call toll-free (800) 231-2901 to request a copy of the SAI or to make shareholder inquiries.
INVESTMENT ADVISOR
Front Street Capital Management, Inc.
218 East Front Street, Suite 205
Missoula, MT 59802
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Cohen Fund Audit Services, Ltd.
1350 Euclid Ave., Suite 800
Cleveland, OH 44115
LEGAL COUNSEL
The Law Offices of John H. Lively & Associates, Inc.
A member firm of The 1940 Act Law Group TM
11300 Tomahawk Creek Pkwy., Suite 310
Leawood, KS 66211
CUSTODIAN
Huntington National Bank
41 South Street
Columbus, OH 43125
TRANSFER AGENT AND FUND ACCOUNTANT
Mutual Shareholder Services
8000 Town Centre Drive, Suite 400
Broadview Heights, OH 44147
DISTRIBUTOR
Pinnacle Investments, LLC
507 Plum Street, Suite 120
Syracuse, NY 13204
This report is intended only for the information of shareholders or those who have received the Funds prospectus which contains information about the Funds management fee and expenses. Please read the prospectus carefully before investing.
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.
(e) The Code of Ethics is not posted on registrants website.
(f) A copy of the Code of Ethics is attached as an exhibit.
Item 3. Audit Committee Financial Expert.
(a) The registrants Board of Trustees has determined that it does not have an audit committee financial expert serving on its audit committee. At this time, the registrant believes that the experience provided by each member of the audit committee together offer the registrant adequate oversight for the registrants level of financial complexity.
Item 4. Principal Accountant Fees and Services. Not applicable.
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 Managers of Closed-End Funds. 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.
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)
The Registrants principal executive officer and principal financial officer have reviewed the Registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended, (the Act)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act. Based on their review, such officers have concluded that the disclosure controls and procedures were effective in ensuring that information required to be disclosed in this report was appropriately recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commissions rules and forms.
(b)
There were no changes in the Registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the Registrants second fiscal quarter of the period covered by this report that materially affected, or were reasonably likely to materially affect, the Registrants internal control over financial reporting.
Item 12. Exhibits.
(a)(1)
Not applicable.
(a)(2)
Certifications required pursuant to Rule 30a-2(a) under the 1940 Act are attached hereto.
(a)(3)
Not applicable.
(b)
Certifications pursuant to Rule 30a-2(b) under the 1940 Act are furnished herewith.
SIGNATURES
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.
Clark Fork Trust
By /s/ Russell T. Piazza
Russell T. Piazza
Chairman of the Board, Principal Executive Officer
Date: February 1, 2013
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/ Russell T. Piazza
Russell T. Piazza
Chairman of the Board, Principal Executive Officer
Date February 1, 2013
By /s/ David Wild
David Wild
Principal Financial Officer, Treasurer
Date February 1, 2013
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