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: 811-09561
Century Capital Management Trust
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(Exact name of registrant as specified in charter)
c/o Century Capital Management, LLC
100 Federal Street, Boston, Massachusetts 02110
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(Address of principal executive offices) (Zip code)
Steven Alfano
Century Capital Management, LLC
100 Federal Street, Boston, Massachusetts 02110
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(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 482-3060
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Date of fiscal year end: October 31
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Date of reporting period: April 30, 2006
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ITEM 1. Report to Shareholders.
[LOGO] CENTURY FUNDS
Seventy-Eight
Years of
Investing
1928 - 2006
CENTURY
PEOPLE and IDEAS that WORK TM
Century Shares
Trust
Century Small Cap
Select Fund
Semi-Annual Report
April 30, 2006
CENTURY FUNDS
AVERAGE ANNUAL TOTAL RETURNS AS OF APRIL 30, 2006
CENTURY SHARES TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Institutional Shares 13.23% 13.09% 6.85% 11.61%
CENTURY SMALL CAP SELECT FUND 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
Investor Shares (02/24/00) 15.40% 20.68% 15.27% 19.27%
Institutional Shares (12/09/99) 15.77% 21.11% 15.74% 19.29%
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE
DATA QUOTED. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN ORIGINAL COST.
FOR THE MOST RECENT MONTH END PERFORMANCE, PLEASE CALL 1-800-321-1928 OR VISIT
THE FUNDS' WEBSITE AT WWW.CENTURYFUNDS.COM. SHARES HELD LESS THAN 180 DAYS MAY
BE SUBJECT TO A 1.0% REDEMPTION FEE. CENTURY SMALL CAP SELECT FUND INVESTS IN
SMALLER COMPANIES WHICH POSE GREATER RISKS THAN THOSE ASSOCIATED WITH LARGER,
MORE ESTABLISHED COMPANIES. CONCENTRATION OR FOCUS, AS THE CASE MAY BE, IN THE
FINANCIAL SERVICES AND HEALTH CARE GROUP INDUSTRIES WILL SUBJECT THE FUNDS TO
THE RISKS ASSOCIATED WITH THOSE FIELDS (E.G., GOVERNMENT REGULATION, INTEREST
RATES, CLAIMS ACTIVITY, AND EXPOSURE TO NATURAL AND MAN-MADE DISASTERS) AND MAY
RESULT IN GREATER FLUCTUATION IN SHARE VALUE THAN IS EXPERIENCED IN LESS
CONCENTRATED PORTFOLIOS.
RETURNS INCLUDE THE REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PERFORMANCE FOR
CENTURY SMALL CAP SELECT FUND WOULD HAVE BEEN LOWER DURING RELEVANT PERIODS IF
CERTAIN FEES HAD NOT BEEN WAIVED OR EXPENSES REIMBURSED. PERFORMANCE INFORMATION
FOR THE FUNDS DOES NOT REFLECT THE DEDUCTION OF TAXES THAT SHAREHOLDERS WOULD
PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
This report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors unless
preceded or accompanied by the Funds' prospectus.
PERFORMANCE OF A $10,000 INVESTMENT
Line chart:
CENTURY SHARES TRUST INSTITUTIONAL SHARES
CST INSTITUTIONAL S&P 500
APR-96 $10,000 $10,000
APR-97 $13,048 $12,513
APR-98 $19,655 $17,652
APR-99 $19,503 $21,504
APR-00 $16,275 $23,682
APR-01 $21,536 $20,610
APR-02 $23,447 $18,008
APR-03 $20,735 $15,612
APR-04 $25,709 $19,183
APR-05 $26,488 $20,399
APR-06 $29,993 $23,543
This chart compares the performance over the past ten years, through April 30,
2006, of a hypothetical $10,000 investment in Century Shares Trust Institutional
Shares, including reinvested dividends and distributions, with that of a
broad-based securities market index. The S&P 500(R) Index is a well known gauge
of how large capitalization U.S. equities are doing. On the other hand, its
results are not adjusted for the costs to manage and trade a portfolio of
securities, so they are not directly comparable to an actual investor's results,
and it is not available for investment.
Line chart:
CENTURY SMALL CAP SELECT FUND
CSCS INSTITUTIONAL CSCS INVESTOR RUSSELL 2000
12/09/99 $10,000 $10,000
1/31/00 $10,100 $10,000 $10,696
04/30/00 $11,150 $10,920 $10,940
07/31/00 $12,390 $12,130 $10,840
10/31/00 $14,570 $14,260 $10,819
1/31/01 $15,304 $14,978 $11,091
4/30/01 $14,862 $14,593 $10,627
7/31/01 $16,024 $15,727 $10,654
10/31/01 $15,099 $14,785 $9,445
1/31/02 $16,337 $15,990 $10,691
4/30/02 $17,592 $17,208 $11,337
7/31/02 $15,767 $15,412 $8,741
10/31/02 $15,985 $15,574 $8,352
1/31/03 $16,309 $15,871 $10,691
4/30/03 $17,376 $16,902 $11,337
7/31/03 $20,482 $19,883 $10,761
10/31/03 $22,980 $22,290 $11,974
1/31/04 $25,588 $24,792 $13,200
4/30/04 $24,419 $23,652 $12,757
7/31/04 $24,026 $23,246 $12,596
10/31/04 $25,239 $24,397 $13,378
1/31/05 $26,557 $25,649 $14,344
4/30/05 $26,661 $25,739 $13,358
7/31/05 $29,240 $28,211 $15,718
10/31/05 $27,812 $26,806 $14,994
1/31/06 $30,200 $29,089 $17,054
4/30/06 $30,866 $29,703 $17,829
This chart compares the performance through April 30, 2006 of a hypothetical
$10,000 investment in Century Small Cap Select Fund's Investor shares (2/24/00
inception date), Institutional Shares (12/9/99 inception date) and the Russell
2000 Index (Institutional shares inception date). The Russell 2000(R) Index is
widely regarded in the industry as the premier measure of small cap stocks. On
the other hand, its results are not adjusted for the costs to manage and trade a
portfolio of securities, so that they are not directly comparable to an actual
investors' results. The index is not available for investment.
CENTURY FUNDS
DEAR FELLOW SHAREHOLDERS:
Our Funds performed reasonably well during the six months ended April 30, 2006.
Century Small Cap Select Fund was up 10.98% (Institutional shares) and 10.81%
(Investor shares) versus the 18.91% return for the Russell 2000 Index during the
six-month period ending April 30, 2006. Century Shares Trust was up 5.79%
(Institutional shares) and 5.25% (Investor shares) versus the 9.64% return for
the S&P 500 Index.
Why do we use the words "reasonably well" to describe our Funds' performance? We
say this because the Fund's positive performance was over such a brief period in
which we lagged the respective benchmarks. We are naturally competitive and do
not like losing, even over short periods of time. However, we focus on investing
to win the long distance race. If the portfolios are well positioned and of high
quality, we are less concerned about short-term performance.
Century's Quality Growth investment philosophy strives to deliver strong
risk-adjusted returns over time. So what does this mean to the investor? We hope
to outperform when equity markets are normal or nervous, which we define as
periods when the market's annualized returns are between 0% and 20%, or
negative. We seek portfolio companies that are positioned to deliver a return on
equity (ROE) over 15%, strong earnings and book value growth above 15% and a
solid, unlevered balance sheet.
In periods of very strong equity market returns (such as the last year ending in
April), our Funds historically underperform, as many investors tend to reach for
higher returns, while downplaying the potential risks inherent in faster
growing, less predictable businesses. During these go-go periods, our consistent
growth investment philosophy tends to lose favor with some investors, who
gravitate toward rapidly growing companies benefiting from some cyclical or
near-term trends.
Our emphasis on risk-adjusted returns means that we think as much about the
possible downside in an investment as we do about the potential upside. We
believe that preserving capital and mitigating risk in a market downturn are as
important as participating in the positive returns of a brief equity rally or
long-term recovery. To illustrate with an analogy, the Century Funds are managed
as if they are All-Weather radial tires in contrast with the high traction, less
durable racing tires (aggressive growth) or the winter storm variety with extra
tread depth (defensive value).
We hope you share our investment philosophy, and we want you to understand where
and how we invest and why it may or may not be appropriate for your investment
goals, risk tolerance and time horizon. Please refer to our Investment
Principles on Page 7 for additional perspective on our goals and objectives.
CENTURY FUNDS
1
This report begins with a review of the current market and each Fund's
performance, followed by a snapshot of our investments in two companies in the
Financial Services and Energy sectors. Although regulatory changes have put a
damper on communications with shareholders, we will do our best to be as
informative as possible.
MARKET CONDITIONS: HEALTHY GROWTH, BUT SLOWING AMID INFLATION
Although the equity markets rallied very strongly over the 12-month period
ending April 2006, a change in investor sentiment occurred in mid-May, when the
equity market reversed course and gave back most of the strong gains achieved in
early 2006.
The current outlook is mostly sunny with a moderate chance of showers, given the
mounting concerns regarding inflation, energy prices and the slowing business
cycle. On the positive side, unemployment is low, job and earnings growth remain
above average, while corporate balance sheets and profit margins remain stronger
than they have been in over a decade. We expect these positive underlying trends
to continue driving stronger than average productivity and grossdomestic product
(GDP) growth, but at a more moderate pace than the 4% growth over the last few
years.
Looking forward, we remain optimistic about the resiliency of this recovery. The
consumer continues to be the tired champion of the `post-9/11' recovery and
expansion, but rising inflation, interest rates and energy costs are likely to
slow consumer spending further. As we visit portfolio companies and prospective
management teams on a regular basis, we are encouraged that expanding business
spending and capital expenditures in research, development and new capacity
might be able to offset much of the expected consumer slowdown.
Our optimism is based on the belief that equity valuations (following the recent
market pullback) are reasonable, considering the above-average growth prospects
we see for both small cap and larger companies. The market does not like
creeping inflation nor the rising cost of capital (the Federal Reserve has
increased interest rates 16 times in 2 years), but so far, our companies appear
to be managing through this headwind and maintaining their profitability.
WHAT IS THE ECONOMIC IMPACT OF INFLATION?
Inflation is now the largest headline economic concern, due to the combination
of rising energy and housing costs over the past three years. The gasoline price
per gallon has roughly doubled from $1.60 in 2003 to $3.00 currently. We
estimate this `pump inflation' alone increases the average household's auto
expenses by almost $1,700 per year - a meaningful drag on each consumer's
disposal income.
Housing prices have risen as well, up about 40% on a national basis since 2000.
These two issues heighten the levels of economic uncertainty, along with the
interest rate increases and the learning curve of a new Federal Reserve Board
Chairman. This increased uncertainty makes equity investors nervous because it
reduces their ability to forecast future market conditions and growth prospects.
CENTURY FUNDS
2
While rising energy and housing costs impact each of us personally, they also
affect the companies in which we invest. Many of our investments are
service-based companies, which are less capital-intensive. We like these types
of companies because they tend to generate consistently profitable results over
time. However, employee compensation and distribution costs tend to be a higher
percentage of their expenses. Given the importance of labor and transportation,
each company seeks to manage the rising cost of wages and fuel in different
ways.
For example, in the retail industry, rising raw material costs as well as higher
transportation, heating and leasing expenses negatively impact
companies such as Casual Male, a men's clothing retailer and a holding of
Century Small Cap Select Fund, and Tiffany, the luxury jeweler and a holding of
Century Shares Trust. Casual Male is seeking to offset the higher costs through
supply chain improvements and cutting out middlemen in the sourcing of goods
from Asia.
Tiffany is also facing a sharp increase in its raw material purchases. For
example, the prices of gold, silver and platinum are up about 30% to 40% over
the past year. Fortunately for Tiffany, its brand is well positioned in the
luxury market, which is less price sensitive. This gives the company an above
average ability to implement price increases whereas other retailers may have
more difficulty. From a research standpoint, our goal is to understand what the
revenue and expense implications might be for portfolio company facing rising
inflation or interest rates and how the impact might affect its competitive
position, profitability and future growth.
CENTURY SHARES TRUST
PERFORMANCE
The Trust reported a +5.79% return (Institutional shares) and +5.25% return
(Investor shares) for the six months ended April 30, 2006, versus a +9.64%
return for the S&P 500 Index. In general, the Technology and Energy sectors
accounted for much of our positive performance, while the Health Care and
Financial Services sectors were a drag.
Bar Chart:
PERFORMANCE COMPARISON 4/30/06
1 YEAR 3 YEARS 5 YEARS 10 YEARS
CENTURY SHARES TRUST (Institutional Shares) 13.23% 13.09% 6.85% 11.61%
S&P 500 INDEX 15.42% 14.68% 2.70% 8.94%
During the period, we modestly reduced our Financial Services and Health Care
weightings while increasing our holdings in Consumer Discretionary and Staples.
Generally, our sector weightings are a function of bottom up stock selection and
changes in market value rather than a top-down macro approach to asset
allocation.
CENTURY FUNDS
3
FUND HOLDINGS 4/30/06
FINANCIAL SERVICES 42.2%
HEALTH CARE 16.8%
CONSUMER DISCRETIONARY 12.2%
TECHNOLOGY 7.5%
CONSUMER STAPLES 6.1%
OTHER 5.5%
CASH EQUIVALENTS 5.2%
PRODUCER DURABLES 4.5%
For the six months ended April 30, 2006, the Trust's best performers were
Financial Services companies led by JP Morgan (banking), Protective Life (life
insurer), Chubb (non-life insurer) and Torchmark (life insurer). Other notable
contributors included United Technologies (diversified manufacturer), Peabody
Energy (energy supplier), Nokia (mobile communication) and Staples (office
product retailer).
The Trust's underperformers include prior outperformers United Health Group
(health benefits), Caremark Rx (pharmaceutical distribution), Progressive (auto
insurer), Tiffany (luxury retailer) and Johnson & Johnson (health and consumer
products).
THE LARGE CAP VS. SMALL CAP DEBATE
From time to time, we are asked our opinion regarding the outlook for
large-capitalization stocks (those in Century Shares Trust) as compared to small
capitalization stocks (those in Century Small Cap Select). To help analyze this
question, we reference the following table, which highlights growth and
valuation characteristics. We use checkmarks ([graphic of: check mark])
indicating attractive aspects of each market segment.
MARKET GROWTH AND VALUATION
Current
2006 EPS Year 2006* PEG**
Growth P/E Ratio Ratio
S&P 500 Index
(Large Cap) 9% [graphic of: checkmark] 14.7 x 1.63 x
Russell 2000 Index
(Small Cap) [graphic of: checkmark] 22% 21.5 x 0.98 x
Source: Baseline
* Price Earnings Ratio (P/E)
** P/E-to-growth ratio (PEGRATIO)
Price to earnings (P/E) ratio is the value of a company's stock price relative
to company earnings. Estimated earnings growth is the year over year growth in
earnings per share. The PEG Ratio is the P/E ratio relative to the company's
earnings growth rate.
Continuing a seven-year trend, the above data shows small cap stocks growing
earnings 22%, faster than the larger cap 9% S&P 500 universe. In terms of
valuation, the Russell 2000 Index is now selling at a sizable valuation premium
to the S&P 500 Index. From an investment standpoint, we continue to find
attractive growth prospects among small companies growing at a faster rate than
their larger competitors, but we increasingly find that the valuations of
larger, multinational firms are compelling as long term investments.
CENTURY SMALL CAP SELECT FUND
PERFORMANCE
For the six-months ended April 30, 2006, the Institutional class and the
Investor class returns were up +10.98% and +10.81%, respectively, versus 18.91%
return for the Russell 2000 Index. During this same period, the Fund's exposure
to the Health Care and Energy sectors increased while exposure to the Financial
Services and Material Processing
CENTURY FUNDS
4
sectors decreased. The increase in the Energy weighting was mostly appreciation.
Generally, our sector weightings are a function of bottom-up stock selection and
changes in market value rather than a top-down macro approach to asset
allocation.
PERFORMANCE COMPARISON 4/30/06
Bar Chart:
1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
CSCS INSTITUTIONAL SHARES 15.77% 21.11% 15.74% 19.29%
RUSSELL 2000 INDEX 33.47% 25.67% 10.90% 9.47%
Institutional shares since inception 12/9/99
The largest contributors to fund performance over the last six months included
Foundation Coal (energy), Jones Lang LaSalle (real estate services), Maverick
Tube (energy), Scientific Games (lottery products), Blackbaud (nonprofit
software), and Casual Male (male apparel retailer). The fund's underperformers
included Usana Health (healthy living products), Avid Technology (video editing
software), Semitool (technology assembly equipment) and Tuesday Morning
(closeout retailer).
FUND HOLDINGS 4/30/06
FINANCIAL SERVICES 24.4%
CONSUMER DISCRETIONARY 22.0%
HEALTH CARE 17.6%
TECHNOLOGY 12.6%
OTHER 9.3%
OTHER ENERGY 8.5%
CASH EQUIVALENTS 5.6%
The Fund was closed to most new investors in July 2005 in order to preserve
investment flexibility and performance integrity. We are happy to report that we
are comfortable with the resulting stability in asset levels and investment
opportunities. We believe it was the correct and prudent action to protect
shareholder interests and returns.
A CENTURY SNAPSHOT:
INVESTING IN FRANCHISE BUSINESSES
As we have done in the past, we share a couple of examples below of holdings
that are owned in each of the Funds. These Companies highlight some of the
characteristics and criteria that we consider when investing. The names have
been left out to protect the innocent.
One of Century Shares Trust's longer-term holdings is a personal auto insurer.
The company is still an attractive investment because of its ability to
consistently generate ROEs and growth in book-value per-share of 15% or better
over time. It is a perfect example of a great management team being able to
consistently execute better than the competition over a twenty-year period.
CENTURY FUNDS
5
The company achieves these results by maximizing operating leverage and
eliminating financial leverage. Its auto insurance focus, which is a relatively
stable insurance type, facilitates higher levels of operating leverage. By
minimizing debt and interest expense, the company is able to raise underwriting
leverage. In positioning the firm in this way, they can generate high returns on
capital versus competitors. One of the keys going forward is managing capital
efficiently. The company, like many other firms, is flush with cash on its
balance sheet. Some firms are using cash to make questionable acquisitions, but
not this progressive company. It is focused on organic growth and as a result,
is reducing its excess cash through share repurchases and an innovative dividend
policy.
A US coal producer is one of our largest holdings in the Small Cap Fund. The
firm predominately sells its steam coal to utilities for base load electricity
generation. Coal-fired generators make up more than 50% of the US electric
supply annually. Years of under-investment in the energy industry have led to
demand outstripping supply over the last three years. Industry consolidation has
allowed for more rational production and pricing power for the major coal
producers. Furthermore, coal currently enjoys a price advantage versus natural
gas, its main competitor, for electricity generation. We also like the long-term
nature (generally 3 to 5 years) of its contracts with utility customers, because
it provides excellent earnings visibility. Since its IPO in 2004, it has
produced industry leading cash flow margins and has consistently executed in the
face of railroad constraints in the Powder River Basin. The company has a
foundation of strong operating metrics including: a 28% ROE, strong book value
per share growth, high recurring revenue, an attractive valuation and cash flow
growing 20%-plus per year.
Thank you for your continued interest and support. As always, we look forward to
a continuing dialogue with our investors. Please contact us anytime via phone
(1-800-321-1928) or our website (www.centuryfunds.com) with any questions or
comments. We also welcome any feedback on our updated website or other
improvements you would like to see from Century Funds.
Respectfully submitted,
/s/ Alexander L. Thorndike
Alexander L. Thorndike
Chairman & Chief Investment Officer
/s/ Kevin W. Callahan
Kevin W. Callahan
Director of Research
The views in this report were those of Century Funds' Chief Investment Officer
and Director of Research as of April 30, 2006 and may not reflect their views on
the date this report is first published or anytime thereafter. These views are
intended to assist shareholders of the Funds in understanding their investments
and do not constitute investment advice. There is no assurance that the Funds
will continue to invest in the securities mentioned. Foreside Fund Services,
LLC, Distributor.
CENTURY FUNDS
6
CENTURY FUNDS INVESTMENT PRINCIPLES
GOALS:
> We strive to deliver exceptional risk-adjusted performance over
time
> We seek to develop long-term relationships with our shareholders
and clients
> We aim to be an ethical leader in the investment industry
OBJECTIVES:
o Performance is our primary goal
- We pursue a research-intensive process, resulting in a
disciplined investment strategy
o Hire the best people
- We seek curious individuals who challenge consensus, thrive
on adversity and possess a competitive spirit
- We value a sense of humor and humility
o Continuous improvement is a high priority
o Maintain a culture of teamwork and mutual respect
CORE VALUES: Create a culture of excellence and integrity
o Think long term ... always do the "right" thing
o Remember why people entrust us with their money
o Value our independence, entrepreneurial spirit and flexibility
o Learn from our weaknesses
o Encourage innovation and creativity
o Leverage our talent, resources and contacts
o Reward excellence
INVESTMENT PHILOSOPHY: Growth Investors in Value Industries
WE BELIEVE:
o Capital markets are semi-efficient
o In-depth original research is a competitive advantage
o Reassessing each investment's risks and rewards will benefit
performance
WE SEEK:
o Credible, capable management with a history of success
o Franchises with high recurring revenues, barriers to entry and
improving fundamentals
o Firms with expanding profit margins and ROE's
o Companies growing consistently faster than the overall market and
peers
o Attractively valued stocks relative to the overall market and
peers
o Firms operating in favorable competitive environments
o Companies with shareholder orientation and transparent accounting
CENTURY FUNDS
7
SHAREHOLDER EXPENSE EXAMPLE
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs
including redemption fees, and (2) ongoing costs, including management fees,
distribution and service fees (in the case of Investor Shares of both Funds) and
other Fund expenses. This Example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare those 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 and held for the entire period (November 1, 2005 to April 30, 2006).
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 $1,000.00 (for example, an $8,600
account value divided by $1,000.00=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. An annual
maintenance fee of $10.00 that is charged once a year may apply for certain IRA
accounts. This fee is not included in the table below. If it was, the estimate
of expenses you paid during the period would be higher, and your ending account
value lower, by this amount.
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 transaction costs such as redemption
fees. Therefore, the second line of the table is useful in comparing ongoing
cost 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.
CENTURY SHARES TRUST EXPENSES PAID
BEGINNING ENDING DURING PERIOD*
ACCOUNT VALUE ACCOUNT VALUE SIX MONTHS ENDING
NOVEMBER 1, 2005 APRIL 30, 2006 APRIL 30, 2006
Based on Actual Fund Return
Institutional Shares $1,000.00 $1,057.90 $ 5.87
Investor Shares $1,000.00 $1,052.50 $10.79
Based on Hypothetical 5% Yearly Return
before expenses
Institutional Shares $1,000.00 $1,019.09 $ 5.76
Investor Shares $1,000.00 $1,014.28 $10.59
* These calculations are based on expenses incurred in the most recent fiscal
half-year. The Fund's annualized expense ratios are 1.15% for Institutional
Shares and 2.12% for Investor Shares. The dollar amounts shown as "Expenses
Paid" are equal to the annualized expense ratio 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.
CENTURY SMALL CAP SELECT FUND EXPENSES PAID
BEGINNING ENDING DURING PERIOD*
ACCOUNT VALUE ACCOUNT VALUE SIX MONTHS ENDING
NOVEMBER 1, 2005 APRIL 30, 2006 APRIL 30, 2006
Based on Actual Fund Return
Institutional Shares $1,000.00 $1,109.80 $ 5.60
Investor Shares $1,000.00 $1,108.10 $ 7.84
Based on Hypothetical 5% Yearly Return
before expenses
Institutional Shares $1,000.00 $1,019.49 $ 5.36
Investor Shares $1,000.00 $1,017.36 $ 7.50
* These calculations are based on expenses incurred in the most recent fiscal
half-year. The Fund's annualized expense ratios are 1.07% for Institutional
Shares and 1.50% for Investor Shares. The dollar amounts shown as "Expenses
Paid" are equal to the annualized expense ratio 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.
CENTURY FUNDS
8
CENTURY SHARES TRUST APRIL 30, 2006 - (UNAUDITED)
PORTFOLIO OF INVESTMENTS
COMMON STOCK - 94.8%
SHARES VALUE
- -------- ------------
CONSUMER DISCRETIONARY - 12.2%
128,800 Bed Bath & Beyond, Inc. * $ 4,939,480
110,320 CDW Corp. 6,566,246
66,750 Chico's FAS, Inc. * 2,473,755
63,300 Costco Wholesale Corp. 3,445,419
59,220 Home Depot, Inc. 2,364,655
72,050 Nordstrom, Inc. 2,761,676
335,065 Staples, Inc. 8,849,067
35,950 Target Corp. 1,908,945
156,460 Tiffany & Co. 5,458,889
------------
38,768,132
------------
CONSUMER STAPLES - 6.1%
92,200 PepsiCo, Inc. 5,369,728
67,250 Proctor & Gamble Co. 3,914,623
102,330 Sysco Corp. 3,058,644
111,620 Walgreen Co. 4,680,226
38,250 William Wrigley Jr. Co. 1,800,427
9,562 William Wrigley Jr. Co. CL B 450,370
------------
19,274,018
------------
FINANCIAL SERVICES - 42.2%
190,800 AFLAC, Inc. 9,070,632
181,394 Allstate Corp. 10,246,947
234,016 American International Gr., Inc. 15,269,544
105,000 Aon Corp. 4,400,550
360,000 The Chubb Corp. 18,554,400
191,257 Cincinnati Financial Corp. 8,155,198
260,000 J.P. Morgan Chase & Co. 11,798,800
107,850 MBIA, Inc. 6,431,096
8,000 Ohio Casualty Corp. 237,200
103,400 The Progressive Corp. 11,222,002
290,000 Protective Life Corp. 14,616,000
111,750 RenaissanceRe Holdings Ltd. 4,699,088
71,500 SAFECO Corp. 3,710,850
218,300 Torchmark Corp. 13,122,013
87,666 Waddell & Reed Fin'l, Inc. CL A 2,061,904
------------
133,596,224
------------
HEALTH CARE - 16.8%
70,870 Abbott Laboratories 3,028,984
29,500 Alcon, Inc. 3,000,445
70,650 C.R. Bard, Inc. 5,260,599
107,970 Caremark Rx, Inc. 4,918,034
21,400 Covance, Inc. * 1,248,690
128,950 IMS Health, Inc. 3,504,861
161,600 Johnson & Johnson, Inc. 9,471,375
74,500 Quest Diagnostics, Inc. 4,151,885
SHARES/FACE AMOUNT VALUE
- ---------------------- ------------
HEALTH CARE (CONTINUED)
36,050 Stryker Corp. $ 1,577,188
187,481 UnitedHealth Group, Inc. 9,325,305
107,640 Wellpoint, Inc. * 7,642,440
------------
53,129,806
------------
OTHER - 4.7%
165 Berkshire Hathaway, Inc. CL A * 14,685,000
------------
OTHER ENERGY - 0.9%
43,800 Peabody Energy Corp. 2,797,068
------------
PRODUCER DURABLES - 4.5%
174,400 Donaldson Co., Inc. 5,797,056
134,060 United Technologies Corp. 8,420,309
------------
14,217,365
------------
TECHNOLOGY - 7.4%
128,350 Cisco Systems, Inc. * 2,688,932
55,750 Dell, Inc. * 1,460,650
380,540 Microsoft Corp. 9,190,041
252,450 Nokia Corp. 5,720,517
171,450 Seagate Technology 4,553,712
------------
23,613,852
------------
TOTAL INVESTMENT IN COMMON STOCKS - 94.8%
(Identified cost, $132,358,778) 300,081,465
------------
CASH EQUIVALENTS - 5.3%
$16,604,000 State Street Bank and Trust
Eurodollar Time Deposit, at cost
approximating value,
maturity 05/01/06, 3.75% 16,604,000
------------
TOTAL INVESTMENTS - 100.1%
(Identified cost, $148,962,778) 316,685,465
------------
OTHER ASSETS AND LIABILITIES - (0.1%)
Liabilities in excess of other assets (272,500)
------------
NET ASSETS - 100% $316,412,965
============
* Non-income producing security
See notes to financial statements.
CENTURY FUNDS
9
CENTURY SMALL CAP SELECT FUND APRIL 30, 2006 - (UNAUDITED)
PORTFOLIO OF INVESTMENTS
COMMON STOCK - 94.8%
SHARES VALUE
- -------- ------------
AUTO & TRANSPORT - 1.4%
332,650 Polaris Industries, Inc. $ 15,933,935
------------
CONSUMER DISCRETIONARY - 22.1%
372,811 America's Car-Mart, Inc. * 7,586,704
465,350 CSK Auto Corp. * 5,979,747
1,208,100 Casual Male Retail Group, Inc. * 11,380,302
343,950 The Cato Corp. 7,783,589
263,500 ChoicePoint, Inc. * 11,601,905
662,150 Copart, Inc. * 17,778,728
1,459,030 Fred's, Inc. 20,703,636
591,700 Guitar Center, Inc. * 31,809,792
806,475 Jarden Corp. * 27,420,150
1,180,600 Kforce, Inc. * 16,587,430
769,150 Labor Ready, Inc. * 20,328,635
351,995 Providence Service Corp. * 11,024,482
436,450 Scientific Games Corp. * 16,624,381
179,170 Tractor Supply Co. * 11,608,424
726,915 Tuesday Morning Corp. 13,775,039
808,954 USANA Health Sciences, Inc. * 29,599,627
------------
261,592,571
------------
CONSUMER STAPLES - 1.5%
200,200 Church & Dwight, Inc. 7,341,333
276,750 McCormick & Co., Inc. 9,639,203
------------
16,980,536
------------
FINANCIAL SERVICES - 24.5%
690,200 AmeriCredit Corp. * 20,899,256
822,344 Blackbaud, Inc. 17,277,447
737,450 Bristol West Holdings, Inc. 13,613,327
351,430 Capital Trust, Inc. 10,929,473
462,822 CapitalSource, Inc. * 10,876,317
642,322 Encore Capital Group, Inc. * 9,487,096
60,451 First Community Bancorp, Inc. 3,506,158
320,200 GATX Corp. 14,985,360
484,950 Infinity Property and
Casualty Corp. 21,745,158
764,400 Interactive Data Corp. * 17,023,188
356,700 Marlin Business Services Corp. * 7,776,060
669,850 Max Re Capital Ltd. 16,411,325
72,850 McGrath RentCorp. 1,958,936
415,390 Platinum Underwriters
Holdings, Ltd. 11,452,302
357,550 Protective Life Corp. 18,020,520
352,330 Redwood Trust, Inc. 14,963,455
610,250 Republic Companies Group, Inc. 10,526,812
124,700 UMB Financial Corp. 8,467,130
779,300 Universal American
Financial Corp. * 11,486,882
SHARES VALUE
- -------- ------------
FINANCIAL SERVICES (CONTINUED)
1,287,350 Waddell & Reed Financial, Inc. $ 30,278,472
575,350 Wright Express Corp. * 17,715,027
------------
289,399,701
------------
HEALTH CARE - 17.7%
253,900 Amedisys, Inc. * 8,419,324
402,350 Covance, Inc. * 23,477,123
174,100 Haemonetics Corp. * 9,488,450
269,700 Healthcare Services Group, Inc. 5,758,095
374,340 Healthways, Inc. * 18,365,120
427,550 IMS Health, Inc. 11,620,809
356,138 LCA-Vision, Inc. 20,000,710
918,123 Perrigo Co. 14,653,243
1,043,050 QIAGEN N.V. * 15,541,444
303,362 Quality Systems, Inc. * 10,180,829
389,600 Respironics, Inc. * 14,267,152
247,300 Sunrise Senior Living, Inc. * 9,199,560
631,901 Surmodics, Inc. * 22,470,400
785,755 United Surgical Partners
Int'l, Inc. * 25,937,773
------------
209,380,032
------------
MATERIALS & PROCESSING - 2.8%
388,350 Olin Corp. 7,980,593
1,378,680 RPM International, Inc. 25,367,712
------------
33,348,305
------------
OTHER ENERGY - 8.5%
258,050 Berry Petroleum Co. 19,018,284
380,050 Bronco Drilling Co., Inc. * 10,265,151
866,100 Foundation Coal Holdings, Inc. 43,911,270
143,850 Holly Corp. 11,100,905
1,750,700 SMART Modular Technologies, Inc. * 16,281,510
------------
100,577,120
------------
PRODUCER DURABLES - 3.7%
97,150 Dionex Corp. * 5,840,658
656,150 Donaldson Co., Inc. 21,810,426
80,150 MTS Systems Corp. 3,586,713
238,750 Nordson Corp. 12,761,187
------------
43,998,984
------------
See notes to financial statements.
CENTURY FUNDS
10
CENTURY SMALL CAP SELECT FUND (CONT.) APRIL 30, 2006 - (UNAUDITED)
PORTFOLIO OF INVESTMENTS
SHARES/FACE AMOUNTS VALUE
- ----------------------- --------------
TECHNOLOGY - 12.6%
156,650 Avid Technology, Inc. * $ 6,038,858
1,267,595 Bell Microproducts, Inc. * 8,239,368
390,905 Benchmark Electronics, Inc. * 10,671,706
206,150 Cognos, Inc. * 7,683,211
627,800 FLIR Systems, Inc. * 15,349,710
1,474,000 Maxtor Corp. * 14,268,320
784,650 Mercury Interactive Corp. * 28,247,400
446,250 MICROS Systems, Inc. * 18,653,250
1,478,302 Semitool, Inc. * 13,733,425
737,980 Silicon Image, Inc. * 7,527,396
123,650 Western Digital Corp. * 2,601,596
703,150 Witness Systems, Inc. * 16,418,552
--------------
149,432,792
--------------
TOTAL INVESTMENT IN COMMON STOCKS - 94.8%
(Identified cost, $1,046,652,015) 1,120,643,976
--------------
CASH EQUIVALENTS - 5.6%
$66,296,000 State Street Bank and Trust
Eurodollar Time Deposit, at cost
approximating value,
maturity 05/01/06, 3.75% 66,296,000
--------------
TOTAL INVESTMENTS - 100.4%
(Identified cost, $1,112,948,015) 1,186,939,976
--------------
OTHER ASSETS AND LIABILITIES - (0.4)%
Liabilities in excess of other assets (4,649,606)
--------------
NET ASSETS - 100% $1,182,290,370
==============
* Non-income producing security
See notes to financial statements.
CENTURY FUNDS
11
STATEMENT OF ASSETS AND LIABILITIES - APRIL 30, 2006 - (UNAUDITED)
Century Shares Century Small Cap
Trust Select Fund
-------------- --------------
ASSETS:
Investments, at value (Note 1A) (Identified cost of,
$148,962,778 and $1,112,948,015, respectively) $ 316,685,465 $1,186,939,976
Cash 634 465
Dividends and interest receivable 213,549 343,083
Receivable for investments sold -- 14,923,148
Receivable for Trust/Fund shares sold 5,754 3,045,092
-------------- --------------
Total Assets 316,905,402 1,205,251,764
-------------- --------------
LIABILITIES:
Payable to Affiliates:
Management fee (Note 4) 205,760 916,358
Administration fee (Note 5) 38,617 --
Distribution fees (Note 7) 1,948 109,490
Accrued expenses and other liabilities 194,207 144,337
Payable for investments purchased -- 20,770,183
Payable for Trust/Fund shares repurchased 51,905 1,021,026
-------------- --------------
Total Liabilities 492,437 22,961,394
-------------- --------------
NET ASSETS $ 316,412,965 $1,182,290,370
============== ==============
At April 30, 2006, net assets consisted of:
Capital paid-in $ 124,019,420 $1,036,083,334
Accumulated distributions in excess of net investment income (247,377) --
Accumulated undistributed net realized gains on investments 24,918,235 72,215,074
Unrealized appreciation in value of investments 167,722,687 73,991,962
-------------- --------------
Net assets applicable to outstanding capital stock $ 316,412,965 $1,182,290,370
============== ==============
Net Assets consist of:
Investor Shares $ 1,578,970 $ 416,833,507
Institutional Shares $ 314,833,995 $ 765,456,863
Shares Outstanding consist of (Note 2):
Century Shares Trust
Investor Shares 46,115 15,968,469
Institutional Shares 9,132,881 28,989,810
NET ASSET VALUE PER SHARE
(Represents both the offering and redemption price*)
Investor Shares $ 34.24 $ 26.10
Institutional Shares $ 34.47 $ 26.40
* In general, shares of the Trust and fund may be redeemed at net asset
value. However, upon the redemption of shares held less than 180 days, a
redemption fee of 1% of the current net asset value of the shares may be
assessed and retained by each for the benefit of their respective remaining
shareholders. The redemption fee is accounted for as an addition to
paid-in-capital.
See notes to financial statements.
CENTURY FUNDS
12
STATEMENT OF OPERATIONS - SIX MONTHS ENDED APRIL 30, 2006 - (UNAUDITED)
Century Shares Century Small Cap
Trust Select Fund
-------------- -------------
INVESTMENT INCOME/(LOSS):
Dividends (net of withholding tax of $25,449 and $0, respectively) $ 2,012,185 $ 7,539,808
Interest 297,869 1,636,953
-------------- -------------
Total income 2,310,054 9,176,761
EXPENSES:
Investment adviser fee (Note 4) 1,279,362 5,189,423
Non-interested trustees' remuneration 28,320 62,470
Transfer agent
Institutional Shares 113,000 19,005
Investor Shares 6,480 399,500
Custodian 36,550 94,500
Administration (Note 5) 239,880 --
Insurance 16,750 40,970
Professional fees 29,110 50,110
Registration 30,675 25,050
Printing and other 59,790 349,800
Distribution fee (Note 7) 1,726 514,066
-------------- -------------
Total expenses 1,841,643 6,744,894
Advisor reimbursement (Note 6) (1,036) --
-------------- -------------
Net expenses 1,840,607 6,744,894
-------------- -------------
Net investment income/(loss) 469,447 2,431,867
-------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain from investment transactions 24,533,850 74,916,142
(Decrease) in unrealized appreciation on investments (6,517,143) 35,294,803
-------------- -------------
Net realized and unrealized gain on investments 18,016,707 110,210,945
-------------- -------------
Net increase in net assets resulting from operations $ 18,486,154 $ 112,642,812
============== =============
See notes to financial statements.
CENTURY FUNDS
13
STATEMENT OF CHANGES IN NET ASSETS
Century Small Cap
Century Shares Trust Select Fund
Six Months Six Months
INCREASE (DECREASE) Ended Ended
IN NET ASSETS: April 30, 2006 Year Ended April 30, 2006 Year Ended
(unaudited) October 31, 2005 (unaudited) October 31, 2005
-------------- -------------- -------------- --------------
Operations:
Net investment income/(loss) $ 469,447 $ 1,775,849 $ 2,431,867 $ (62,758)
Net realized gain on investment
transactions 24,533,850 27,162,660 74,916,142 11,309,976
Change in net unrealized appreciation (6,517,143) 7,610,424 35,294,803 16,240,663
-------------- -------------- -------------- --------------
Net increase in net assets resulting
from operations 18,486,154 36,548,933 112,642,812 27,487,881
Distributions to shareholders from:
Net Investment Income
Institutional Shares (5,557,383) (3,027,966) (2,271,807) --
Investor Shares (21,336) -- (512,585) --
Realized gain from investment transactions
Institutional Shares (21,454,737) (35,121,376) (6,886,193) (3,513,749)
Investor Shares (78,306) -- (4,754,075) (3,922,249)
Trust/Fund share transactions -- net 253,886 (36,019,193) 91,223,860 682,027,208
Redemption fees 2,985 9,629 77,304 65,647
-------------- -------------- -------------- --------------
Total (decrease)/increase (8,368,737) (37,609,973) 189,519,316 702,144,738
NET ASSETS:
At beginning of period 324,781,702 362,391,675 992,771,054 290,626,316
-------------- -------------- -------------- --------------
At end of period $ 316,412,965 $ 324,781,702 $1,182,290,370 $ 992,771,054
============== ============== ============== ==============
Distributions in excess of net investment
income at end of period $ 247,377 $ 247,377 $ -- $ --
============== ============== ============== ==============
See notes to financial statements.
CENTURY FUNDS
14
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED PERIOD
APRIL 30, ENDED YEAR ENDED
CENTURY SHARES TRUST 2006 YEAR ENDED OCTOBER 31, OCTOBER 31, DECEMBER 31,
INSTITUTIONAL SHARES (UNAUDITED) 2005 2004 2003 2002 (a) 2001 2000
----------- ------ ------ ------ ------ ------ ------
Net Asset Value, beginning of period $35.40 $35.62 $35.66 $33.95 $38.12 $42.97 $34.32
------ ------ ------ ------ ------ ------ ------
Income/(loss) from
Investment Operations:
Net investment income (b) 0.05 0.19 0.03 0.07 0.08 0.17 0.39
Net realized and unrealized
gain/(loss) on investments 1.95 3.54 3.02 5.03 (4.20) (1.26) 12.39
------ ------ ------ ------ ------ ------ ------
Total income/(loss) from
investment operations 2.00 3.73 3.05 5.10 (4.12) (1.09) 12.78
------ ------ ------ ------ ------ ------ ------
Less Distributions From:
Net investment income (0.58) (0.32) (0.34) (0.10) (0.05) (0.17) (0.38)
Net realized gain on
investment transactions (2.35) (3.63) (2.75) (3.29) -- (3.60) (3.75)
------ ------ ------ ------ ------ ------ ------
Total distributions (2.93) (3.95) (3.09) (3.39) (0.05) (3.77) (4.13)
------ ------ ------ ------ ------ ------ ------
Redemption fees --+ --+ --+ --+ --+ 0.01 --
------ ------ ------ ------ ------ ------ ------
Net Asset Value, end of period $34.47 $35.40 $35.62 $35.66 $33.95 $38.12 $42.97
====== ====== ====== ====== ====== ====== ======
Total Return 5.79%** 11.18% 9.06% 16.99% -10.82%** -2.52% 37.44%
Ratios and supplemental data
Net assets, end of period
(000 omitted) $314,834 $323,643 $362,392 $342,679 $291,311 $345,849 $417,598
Ratio of expenses to average
net assets 1.15%* 1.12% 1.15% 1.17% 1.19%* 1.05% 0.83%
Ratio of net investment income
to average net assets 0.30%* 0.55% 0.07% 0.21% 0.26%* 0.41% 1.05%
Portfolio Turnover Rate 18% 19% 43% 37% 22% 17% 17%
(a) For the period from January 1, 2002 to October 31, 2002. Effective
September 5, 2002, CST changed its fiscal year end from December 31 to
October 31.
(b) Calculated based on average shares outstanding during the period.
+ Amount represents less than $0.01 per share.
* Annualized
** Not annualized
See notes to financial statements.
CENTURY FUNDS
15
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED PERIOD
APRIL 30, ENDED
CENTURY SHARES TRUST 2006 OCTOBER 31,
INVESTOR SHARES (UNAUDITED) 2005 (a)
----------- -----------
Net Asset Value, beginning of period $35.35 $35.00
------ ------
Income/(loss) from Investment Operations:
Net investment income (b) 0.10 (0.03)
Net realized and unrealized gain/(loss)
on investments 1.72 0.29
------ ------
Total income/(loss) from
investment operations 1.82 0.26
------ ------
Less Distributions From:
Net investment income (0.58) --
Net realized gain on
investment transactions (2.35) --
------ ------
Total distributions (2.93) --
------ ------
Redemption fees --+ 0.09
------ ------
Net Asset Value, end of period $34.24 $35.35
====== ======
Total Return 5.25%** 1.00%**
Ratios and supplemental data
Net assets, end of period (000 omitted) $1,579 $1,139
Ratio of expenses to average net assets 2.12%* 1.20%*
Ratio of expenses to average net assets
without giving effect to voluntary
expense agreement 2.27% 1.35%*
Ratio of net investment income to
average net assets -0.62%* -0.36%*
Portfolio Turnover Rate 18% 19%
(a) From the commencement date of operations, July 18, 2005 to October 31,
2005.
(b) Calculated based on average shares outstanding during the period.
+ Amount represents less than $0.01 per share.
* Annualized
** Not annualized
See notes to financial statements.
CENTURY FUNDS
16
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED
CENTURY SMALL CAP APRIL 30, 2006 YEAR ENDED OCTOBER 31,
SELECT FUND - INSTITUTIONAL SHARES (UNAUDITED) 2005 2004 2003 2002 2001
----------- ------ ------ ------ ------ ------
Net Asset Value, beginning of period $24.15 $22.46 $21.53 $15.42 $14.68 $14.57
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment (loss)/income (a) 0.07 0.03 (0.08) (0.09) (0.10) --
Net realized and unrealized gain
on investments 2.55 2.22 2.14 6.64 0.93 0.52(b)
------ ------ ------ ------ ------ ------
Total income from investment operations 2.62 2.25 2.06 6.55 0.83 0.52
------ ------ ------ ------ ------ ------
Less Distributions From:
Net investment income (0.09) -- (0.94) (0.11) -- (0.02)
Net realized gain on investment transactions (0.28) (0.56) (0.19) (0.35) (0.13) (0.41)
------ ------ ------ ------ ------ ------
Total distributions (0.37) (0.56) (1.13) (0.46) (0.13) (0.43)
------ ------ ------ ------ ------ ------
Redemption fees --+ --+ --+ 0.02 0.04 0.02
------ ------ ------ ------ ------ ------
Net Asset Value, end of period $26.40 $24.15 $22.46 $21.53 $15.42 $14.68
====== ====== ====== ====== ====== ======
Total Return 10.98%** 10.19% 9.83% 43.76% 5.87% 3.63%
Ratios and supplemental data
Net assets, end of period (000 omitted) $765,457 $585,723 $140,208 $42,936 $12,938 $6,093
Ratio of expenses to average net assets 1.07%* 1.06% 1.13% 1.26% 1.45% 1.45%
Ratio of expenses to average net assets
without giving effect to voluntary
expense agreement 1.07%* 1.06% 1.13% 1.40% 1.87% 4.04%
Ratio of net investment (loss)/income to
average net assets 0.59%* 0.13% -0.36% -0.50% -0.70% -0.02%
Portfolio Turnover Rate 71% 96% 103% 88% 123% 48%
(a) Calculated based on average shares outstanding during the period.
(b) The per share amount is not in accord with the net realized and unrealized
gain/loss for the period because of the timing of sales of Fund shares and
the amount of per share realized and unrealized gains and losses at such
time.
+ Amount represents less than $0.01 per share.
* Annualized
** Not annualized
See notes to financial statements.
CENTURY FUNDS
17
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED
CENTURY SMALL CAP APRIL 30, 2006 YEAR ENDED OCTOBER 31,
SELECT FUND - INVESTOR SHARES (UNAUDITED) 2005 2004 2003 2002 2001
----------- ------ ------ ------ ------ ------
Net Asset Value, beginning of period $23.86 $22.26 $21.39 $15.35 $14.60 $14.26
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment (loss) (a) 0.03 (0.04) (0.15) (0.15) (0.18) (0.03)
Net realized and unrealized gain
on investments 2.52 2.20 2.12 6.60 0.94 0.53(b)
------ ------ ------ ------ ------ ------
Total income from investment operations 2.55 2.16 1.97 6.45 0.76 0.50
------ ------ ------ ------ ------ ------
Less Distributions From:
Net investment income (0.03) -- (0.91) (0.07) -- --
Net realized gain on investment transactions (0.28) (0.56) (0.19) (0.35) (0.03) (0.19)
------ ------ ------ ------ ------ ------
Total distributions (0.31) (0.56) (1.10) (0.42) (0.03) (0.19)
------ ------ ------ ------ ------ ------
Redemption fees --+ --+ --+ 0.01 0.02 0.03
------ ------ ------ ------ ------ ------
Net Asset Value, end of period $26.10 $23.86 $22.26 $21.39 $15.35 $14.60
====== ====== ====== ====== ====== ======
Total Return 10.81%** 9.87% 9.45% 43.12% 5.34% 3.68%
Ratios and supplemental data
Net assets, end of period (000 omitted) $416,834 $407,048 $150,418 $78,959 $10,119 $9,302
Ratio of expenses to average net assets 1.50%* 1.35% 1.50% 1.61% 1.80% 1.80%
Ratio of expenses to average net assets
without giving effect to voluntary
expense agreement 1.50%* 1.35% 1.50% 1.76% 2.53% 4.38%
Ratio of net investment (loss)/income to
average net assets 0.21%* -0.17% -0.69% -0.86% -1.05% -0.48%
Portfolio Turnover Rate 71% 96% 103% 88% 123% 48%
(a) Calculated based on average shares outstanding during the period.
(b) The per share amount is not in accord with the net realized and unrealized
gain/loss for the period because of the timing of sales of Fund shares and
the amount of per share realized and unrealized gains and losses at such
time.
+ Amount represents less than $0.01 per share.
* Annualized
** Not annualized
See notes to financial statements.
CENTURY FUNDS
18
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES -- Century Capital Management Trust (the
"Master Trust") is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company. Century Shares Trust (the
"Trust") and Century Small Cap Select Fund (the "Fund" and together with the
Trust, the "Funds") are diversified series of the Master Trust. The following is
a summary of significant accounting policies consistently followed by both the
Trust and the Fund in the preparation of their financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America.
A. Investment Security Valuations -- Securities listed on national securities
exchanges are valued at closing prices. Unlisted securities or listed securities
for which closing prices are not available generally are valued at the latest
bid prices. Short-term obligations, maturing in 60 days or less, are valued at
amortized cost, which approximates value. In the absence of readily available
market quotes, the Funds' portfolio securities and other assets will be valued
at fair value, as determined in good faith by the Board of Trustees, its
Valuation Committee, or the Adviser or a Delegate pursuant to instructions from
the Board of Trustees or its Valuation Committee.
B. Securities Transactions -- Investment security transactions are recorded on a
trade date basis. Gain or loss on sales is determined on the basis of identified
cost. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Shares issuable to shareholders electing to receive income
dividends and capital gain distributions in shares are recorded on the
ex-dividend date. Interest income is recorded daily on an accrual basis.
C. Use of Estimates -- The preparation of these financial statements in
accordance with accounting principles generally accepted in the United States of
America incorporates estimates made by management in determining the reported
amounts of assets, liabilities, revenues and expenses of the Trust and Fund.
Actual results could differ from those estimates.
D. Risks and Uncertainty -- The Trust focuses its investments in securities
issued by companies in the financial services sector, which will subject the
Trust to risks associated with that sector (e.g., government regulation,
interest rate changes, claims activity, and exposure to property casualty
risks). The Fund concentrates its investments in the financial services and
health care group of industries, which will subject the Fund to the risks
associated with those industries and may result in greater fluctuation in share
value than is experienced in less concentrated portfolios. In addition, the Fund
invests in smaller companies, which generally involves greater risk than
investing in larger, more established companies.
E. Multiple Classes of Shares -- The Funds offers multiple classes of shares,
which differ in their respective distribution and transfer agent fees. Transfer
agent fees for each Fund's class are based on a per shareholder account charge.
All shareholders bear the common expenses of the Funds based upon daily net
assets of each class, without distinction between share classes.
F. Redemption Fees -- In general, shares of the Trust and Fund may be redeemed
at net asset value. However, upon the redemption of shares held less than 180
days, a fee of 1% of the current net asset value of the shares may be assessed
and retained by each for the benefit of their respective remaining shareholders.
The redemption fee is accounted for as an addition to paid-in-capital.
G. Income Tax Information and Distributions to Shareholders -- Each year, each
Fund intends to qualify as a regulated investment company by distributing all of
its taxable income and realized gains under Subchapter M of the Internal Revenue
Code. As a result, no provision for income taxes is required in the accompanying
financial statements. Foreign taxes are provided for based on each fund's
understanding of the tax rules and rates that exist in the foreign markets in
which it invests. Income dividends and capital gain distributions are declared
separately for each class. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent and
temporary book and tax differences.
CENTURY FUNDS
19
Book-tax differences are primarily due to equalization, partnership income, net
operating losses and losses deferred due to wash sales and excise tax
regulations.
The federal tax cost of investments and unrealized appreciation (depreciation)
as of period end were as follows:
FOR THE TRUST APRIL 30, 2006
- -------------
Unrealized appreciation ..................................... $ 169,691,368
Unrealized depreciation ..................................... 1,968,681
--------------
Unrealized net appreciation ................................. $ 167,722,687
==============
Cost for federal income tax purposes ........................ $ 148,962,778
FOR THE FUND
Unrealized appreciation ..................................... $ 112,603,088
Unrealized depreciation ..................................... 38,611,126
--------------
Unrealized net appreciation ................................. $ 73,991,962
==============
Cost for federal income tax purposes ........................ $1,112,948,015
(2) TRANSACTIONS IN SHARES
A. TRUST SHARES-- The number of authorized shares is unlimited. Shares of
the Trust are currently divided into Investor shares and Institutional shares.
Transactions in Trust shares were as follows:
CENTURY SHARES TRUST
PERIOD ENDED APRIL 30, 2006
INSTITUTIONAL SHARES INVESTOR SHARES
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
Sold ........................................................ 89,587 $ 3,084,735 25,977 $ 884,692
Issued to shareholders in reinvestment of distributions from:
Net investment income .................................... 124,211 4,184,682 635 21,336
Realized gain on investment transactions ................. 502,162 17,329,393 2,272 78,306
------------ ------------ ------------ ------------
715,960 24,598,810 28,884 984,334
Repurchased ................................................. (724,406) (24,817,336) (14,991) (511,922)
------------ ------------ ------------ ------------
Net increase (decrease) .................................. (8,446) $ (218,526) 13,893 $ 472,412
============ ============ ============ ============
YEAR ENDED OCTOBER 31, 2005
INSTITUTIONAL SHARES INVESTOR SHARES
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
Sold ........................................................ 436,413 $ 15,013,209 38,232 $ 1,320,066
Issued to shareholders in reinvestment of distributions from:
Net investment income .................................... 847,946 28,406,204 -- --
Realized gain on investment transactions ................. 66,835 2,303,047 -- --
------------ ------------ ------------ ------------
1,351,194 45,722,460 38,232 1,320,066
Repurchased ................................................. (2,383,848) (82,852,859) (6,010) (208,860)
------------ ------------ ------------ ------------
Net increase (decrease) .................................. (1,032,654) $(37,130,399) 32,222 $ 1,111,206
============ ============ ============ ============
CENTURY FUNDS
20
B. FUND SHARES - The number of authorized shares is unlimited. Shares of the
Fund are currently divided into Investor shares and Institutional shares.
Transactions in Fund shares were as follows:
CENTURY SMALL CAP SELECT FUND
PERIOD ENDED APRIL 30, 2006
INSTITUTIONAL SHARES INVESTOR SHARES
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
Sold ........................................................ 6,596,559 $ 167,006,222 1,960,009 $ 49,011,372
Issued to shareholders in reinvestment of distributions from:
Net investment income .................................... 87,938 2,140,457 18,552 446,931
Realized gain on investment transactions ................. 276,459 6,693,063 174,747 4,179,953
------------- ------------- ------------- -------------
6,960,956 175,839,742 2,153,308 53,638,256
Repurchased ................................................. (2,228,907) (56,798,945) (3,241,193) (81,455,193)
------------- ------------- ------------- -------------
Net increase (decrease) .................................. 4,732,049 $ 119,040,797 (1,087,885) $ (27,816,937)
============= ============= ============= =============
YEAR ENDED OCTOBER 31, 2005
INSTITUTIONAL SHARES INVESTOR SHARES
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
Sold ........................................................ 20,297,470 $ 493,078,854 12,763,403 $ 301,872,176
Issued to shareholders in reinvestment of distributions from:
Net investment income .................................... -- -- -- --
Realized gain on investment transactions ................. 148,747 3,354,253 148,925 3,326,988
------------- ------------- ------------- -------------
20,446,217 496,433,107 12,912,328 305,199,164
Repurchased ................................................. (2,431,059) (57,909,605) (2,612,975) (61,695,458)
------------- ------------- ------------- -------------
Net increase ............................................. 18,015,158 $ 438,523,502 10,299,353 $ 243,503,706
============= ============= ============= =============
(3) INVESTMENT SECURITY TRANSACTIONS
FOR THE TRUST, other than U.S. Government obligations and certificates of
deposit, purchases and sales of investment securities aggregated $53,278,972 and
$75,544,190, respectively, during the period ended April 30, 2006.
FOR THE FUND, other than U.S.Government obligations and certificates of deposit,
purchases and sales of investment securities aggregated $815,139,093 and
$739,804,248, respectively, during the period ended April 30, 2006.
(4) INVESTMENT ADVISER FEE
FOR THE TRUST, the investment adviser fee is earned by Century Capital
Management, LLC ("CCM"), as compensation for providing investment advisory
services to the Trust. CCM receives a monthly fee equal on an annualized basis
to 0.8% of the first $500 million and 0.7% of the amounts exceeding $500 million
of the Trust's net asset value. For the period ended April 30, 2006, the fee
amounted to $1,279,362. Officers and Trustees of the Master Trust who are
employed by CCM receive remuneration for their services out of such investment
adviser fee.
The Trust has guaranteed retirement benefits to be paid to one former Trustee.
Under the terms of the Trust's Investment Advisory and Management Agreement with
CCM, CCM has assumed the obligation to make all such payments on behalf of the
Trust during the term of the agreement. The amount of potential future payments
owed by the Trust cannot be estimated with certainty due to the variability of
amounts used to determine the payment and therefore are not reflected in the
Trust's financial statements. Retirement benefits are payable over various
periods.
CENTURY FUNDS
21
FOR THE FUND, the investment adviser fee is earned by CCM as compensation for
providing investment advisory, management and administrative services to the
Fund. CCM receives a monthly fee equal on an annualized basis to 0.95% of the
Fund's net asset value. For the period ended April 30, 2006, the fee amounted to
$5,189,423. Officers and Trustees of the Master Trust who are employed by CCM
receive remuneration for their services out of such investment adviser fee.
(5) ADMINISTRATION FEES -- The Trust has an Administration Agreement with CCM.
Under the agreement CCM shall provide or procure, at its expense, non-investment
advisory services to the Trust. CCMwill receive a monthly fee equal on an
annualized basis to 0.15% of the Trust's net asset value. The fee was $239,880
for the period ended April 30, 2006. Per the Investment Advisory and Management
Services Agreement between CSCS and CCM, the Fund will reimburse CCM for
expenses associated with having the adviser's personnel perform shareholder
service functions and certain financial, accounting, administrative and clerical
services.
(6) ADVISER REIMBURSEMENT -- CCM had voluntarily waived a portion of its
management fee for both classes of the Fund and reimbursed certain other
expenses to the extent necessary so that net fund annual operating expenses
(exclusive of brokerage commissions, taxes, interest and litigation,
indemnification and other extraordinary expenses) would not exceed certain
expense limitations through February 28, 2006. The expense limitations for the
Investor and Institutional Shares were 1.80% and 1.45%, respectively. During the
period ended April 30, 2006, CCM did not make a voluntary reimbursement. CCM has
contractually agreed to reimburse the Trust for 0.15% of the distribution and
services fees paid by the Trust's Investor Shares through February 28, 2007.
During the period ended April 30, 2006, CCM made a reimbursement of $1,036.
(7) DISTRIBUTION AND SERVICE PLAN -- The Trust and the Fund have adopted a
distribution and service plan for the Investor Shares under Rule 12b-1 of the
1940 Act. Distribution plans permit a fund to pay for all or a portion of the
costs incurred in connection with the distribution and/or servicing of shares.
The Investor Shares currently pays a distribution and service fee up to 0.25% of
the average daily net assets of the class. During the period ended April 30,
2006, $1,726 and $514,066 for the Trust and Fund, respectively, was paid under
the distribution and service plan. The plan may be terminated at any time by the
vote of a majority of the independent Trustees or by the vote of the holders of
a majority of the outstanding shares of the Investor Shares.
CENTURY FUNDS
22
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
The Board of Trustees, including the independent Trustees, approved the
continuation of each Fund's investment management agreement with Century Capital
Management, LLC (CCM) at a meeting held on December 15, 2005.
In advance of the meeting, the Trustees received, among other things: (i)
a Lipper Inc. report comparing each Fund's fees, expenses and performance to
those of a peer group and peer universe for that Fund, each selected by Lipper;
(ii) reports from CCM that described (a) the services provided to each Fund and
information about the personnel providing those services, (b) the fees paid
under the advisory and administration agreements, (c) compliance and oversight,
(d) "fall-out" benefits to CCM, (e) brokerage and soft-dollar arrangements, and
(f) information about fees paid by and services provided to comparable accounts;
(iii) a profitability report prepared CCM and (iv) CCM's Form ADV. The
independent Trustees also received a memorandum from their counsel outlining the
legal standards and certain other considerations relevant to the Trustees'
deliberations.
In addition, at each regularly scheduled Board meeting, the Trustees
receive and review, among other things, information concerning each Fund's
performance and the services provided to each Fund by CCM. The performance
information received by the Trustees on a quarterly basis includes (i) total
return information for each Fund for the following periods: one month, three
months, twelve months and year to date and (ii) average annual total return
information for the following periods: three, five, ten and fifteen years for
CST and two, three and five years and since inception (December, 1999) for CSCS.
The Trustees also receive performance information for one or more selected
securities indices at each quarterly meeting.
After receiving the requested information, the independent Trustees met in
executive session to consider the advisory and administrative arrangements. The
Trustees then unanimously determined to approve the continuance of the advisory
and administration agreements with respect to each Fund. This approval was based
on the following conclusions:
(i) that CCM has the capabilities, resources and personnel necessary to
provide the advisory and administrative services currently required by
each Fund; and
(ii) that the advisory and administrative fees paid by each Fund represent
reasonable compensation to CCM in light of the services provided, the
costs to CCM of providing those services, the fees paid by similar
funds, and such other matters as the Trustees considered relevant in
the exercise of their reasonable judgment.
In determining to approve the advisory and administration agreements, the
Trustees considered a number of factors as outlined below. The Trustees did not
identify any single factor as controlling. The Trustees evaluated all
information available to them on a Fund-by-Fund basis, and their determinations
were made separately in respect of each Fund. They also took into account the
common interests of both of the Funds in their review. Throughout their
deliberations, the independent Trustees were represented by counsel.
NATURE, QUALITY AND EXTENT OF SERVICES PROVIDED
In considering the nature, extent and quality of the services provided by
CCM under the advisory and administration agreements, the Board considered the
terms of those agreements and reviewed information provided by CCM relating to
its operations and personnel. The Trustees also considered their knowledge of
the nature and quality of the services provided by CCM to the Funds gained from
their experience as trustees of the Funds and noted the expectations of the
shareholders who had invested in the Funds. The Board considered that CCM was
responsible for the management and administration of each Fund's operations.
They also considered that CCM provides day-to day management of each Fund's
portfolio of investments, including making purchases and sales of portfolio
securities consistent with each Fund's investment objectives and policies.
The Board considered CCM's resources and personnel, focusing in particular
on investment and compliance resources and personnel. The Board noted that CCM
had made considerable investments in technology to enhance investment management
capabilities and to facilitate CCM's ability to monitor compliance with
investment policies and regulatory requirements. The Board also noted that CCM
had added equity analysts to the research team as well as compliance personnel.
The Board reviewed each portfolio manager's experience and qualifications, as
well as CCM's investment approach and research process. The Board also reviewed
CCM's trading procedures and brokerage practices, including information
regarding the average commissions per share paid by each Fund during
CENTURY FUNDS
23
each semi-annual period since January 1, 2004 and noted that each Fund had
experienced a significant decrease in commission costs. The Board also noted the
steps CCM had taken generally to address conflicts of interest in its business,
including the oversight of personal trading and the allocation of trades and
investment opportunities among the Funds and CCM's other clients.
The Board also considered that, as administrator, CCM is responsible for
the administration of each Fund's business and other affairs. It was noted that
CCM supervises and monitors the performance of each Fund's service providers and
provides each Fund with personnel (including officers) as are necessary for the
Fund's operations. The Board noted, in particular, that CCM had successfully
negotiated reductions in custody, distribution and transfer agency fees for the
Funds. It was also noted that CCM pays all of the compensation of Mr. Thorndike
and Mr. Fulkerson, the interested Trustees, and the Funds' officers. The Board
also noted that CCM assisted the Funds in meeting legal and regulatory
requirements and considered, among other things, CCM's compliance program. The
Board considered the fees paid to CCM for the provisions of such services.
Taking all of the foregoing into account, the Trustees concluded that they
were satisfied with the nature, extent and quality of services provided to the
Funds under the advisory and administration agreements.
COSTS OF SERVICES PROVIDED AND PROFITABILITY
The Trustees reviewed information concerning the costs of services
provided to the Funds by CCM, and the profitability to CCM of its advisory and
administrative relationship with Funds for the fiscal year ended December 31,
2004 and the period ended September 30, 2005, along with a description of the
methodology used by CCM in preparing the profitability information. It was
noted, among other things, that profitability was shown on a Fund-by-Fund basis.
The Trustees recognized that CCM should be entitled to earn a reasonable
level of profit for the services provided to each Fund, and that it is difficult
to make comparisons of profitability from fund advisory and administration
contracts because comparative information is not generally available and is
affected by numerous factors, including the structure of the particular adviser,
the types of funds it manages, its business mix, numerous assumptions about
allocations and the adviser's capital structure and cost of capital. The
Trustees concluded that, taking all of the foregoing into account, they were
satisfied that CCM's level of profitability from its relationship with each Fund
was not excessive.
FALL-OUT BENEFITS
The Trustees considered the extent to which CCM benefited from soft dollar
arrangements whereby it receives brokerage and research services from brokers
that execute a Fund's purchases and sales of investment securities. It was noted
that CCM had represented that it fulfills its fiduciary obligation of seeking
best execution when engaging in portfolio transactions for the Funds. The
Trustees also considered the indirect benefits, such as favorable publicity,
experienced by CCM as a result of the performance track record of the Funds,
particularly CSCS. The Trustees concluded that such direct and indirect benefits
to CCM from its relationship with the Funds were reasonable.
ECONOMIES OF SCALE
The Trustees considered the extent to which CCM may realize economies of
scale or other efficiencies in managing and supporting the Funds. It was noted
that as assets increase certain fixed costs may be spread across a larger asset
base, and it was noted that any economies of scale or other efficiencies might
be realized (if at all) across a variety of products and services, including the
Funds, and not only in respect of a single Fund. The Trustees noted that the
advisory fee schedule for CST included breakpoints that would allow the
shareholders of CST to share in the economies of scale experienced by CCM in
managing that Fund as assets under management increased. The Trustees noted that
the advisory fee schedule for CSCS did not include breakpoints that would reduce
the fee rate on assets above specified levels. The Board determined that the
current fee structure for CSCS was acceptable given the fee level, the fees
waived by CCM in prior years in respect of CSCS, and the fact that CSCS was
closed to most new investments and would not, therefore, experience a
significant growth in Fund assets.
INVESTMENT RESULTS
The information obtained from Lipper for the meeting compared the
investment results of each Fund to those of funds in both a peer group and a
peer universe, each as selected for that Fund by Lipper, over the one, three,
five, ten and fifteen year peri-
CENTURY FUNDS
24
ods ended November 30, 2005 (for CST) and over the one, three and five year
periods ended November 30, 2005 and since inception (December, 1999) (for CSCS).
The Trustees also received information showing each Fund's percentile ranking in
the appropriate Lipper peer group and peer universe for each of the applicable
periods. The Trustees did not independently verify any of the information
provided by Lipper.
CST. The Trustees reviewed comparative information that showed that CST's
average annual total return for the Institutional class of shares for each
period was better than the average annual total return of both the Standard &
Poor's 500 Index and the Russell 1000 for the same periods. The Trustees also
noted that the average annual return for the Institutional class of shares for
each period (other than the three year period) was better than that of CST's
Lipper peer universe. The Trustees also reviewed information that showed that
the CST's performance was above both the average and median performance of its
Lipper peer group for all periods. The Trustees noted that CST had consistently
ranked in the top third of all funds in the Lipper peer universe, with the
exception of the three-year return. The Trustees also received comparative
performance with respect to the Investor class of shares that was established in
July 2005. Based on their review, the Trustees concluded that CST's relative
investment performance over time had been sufficient along with other factors
considered to merit approval of the continuation of the advisory agreement.
CSCS. The Trustees reviewed comparative information that showed that
CSCS's average annual total return for both the Institutional class of shares
and the Investor class of shares for both the five years ended November 30, 2005
and period from December, 1999 through November 30, 2005 was better than the
average annual return of the Russell 2000 and the Russell 200 Growth indices and
CSCS's Lipper peer universe for the same periods, but that CSCS's average annual
total return (for both classes) lagged the average annual total returns of those
indices and the peer universe for the two and three year periods. The Trustees
also reviewed information that showed that CSCS's total return for both the one
year ended November 30, 2005 and year to date (for both classes) was slightly
better than or in line with the total returns of the Russell 2000 and the
Russell 2000 Growth indices and CSCS's Lipper peer universe for the same
periods. The Trustees also reviewed information that showed that CSCS's
performance was above both the average and median performance of its Lipper peer
group for the three years and five years ended November 30, 2005. The Trustees
considered CCM's explanation of CSCS's relative underperformance in the short
term and noted that they were satisfied with CCM's investment strategy and
CSCS's long term investment performance in light of that strategy. Based on
their review, the Trustees concluded that CSCS's relative investment performance
over time had been sufficient along with other factors considered to merit
approval of the continuation of the advisory agreement.
FEES AND OTHER EXPENSES
The Trustees considered the advisory fees paid by each Fund to CCM. The Trustees
also considered the administrative fee rate paid by CST to CCM. The Trustees
considered (i) the level of each Fund's advisory fee versus its peer group and
peer universe as shown in the Lipper materials and (ii) each Fund's total
expense ratio as compared to its peer group and peer universe as shown in the
Lipper materials.
The Trustees also considered the fees that CCM charges other clients with
investment objectives similar to the Funds. The Trustees reviewed materials from
CCM describing the differences in services provided to these other clients,
which noted that typically more services were provided to the Funds than these
other clients and that, because of the constant issuance and redemption of Fund
shares, the Funds were more difficult to manage than institutional accounts. The
materials showed that the fee rates charged by CCM to other clients were
generally similar to (but not necessarily as low as, in all cases) the fees paid
by the Funds.
The information obtained from Lipper for the meeting compared the advisory
fee, transfer agency/custodian fees, distribution fees, other nonmanagement
expenses and total expenses for the Institutional class of shares of each Fund
and the CSCS Investor class of shares to those of a group of competitor funds of
roughly equivalent size, as well as a universe of competitor funds. The expense
groups of competitor funds were the same groups used for investment performance
comparison, but the performance universes were broader than the expense
universes. The Trustees did not independently verify any of the information
provided by Lipper.
CST. The Trustees reviewed information that showed that CST's advisory
fees (which includes administration) were slightly higher than the Lipper peer
group average but that CST's total expense ratio was less than the Lipper peer
group average and also compared favorably to the average total expense ratio of
the Lipper peer universe. The Trustee considered that certain of the funds in
the
CENTURY FUNDS
25
peer group had lower advisory fees than CST as a result of fee waivers that
could be terminated. The Trustees concluded that the advisory fees and total
expense ratios were acceptable in light of the performance and the other factors
considered.
CSCS. The Trustees reviewed information that showed that CSCS's advisory
fees were slightly lower than the Lipper peer group average. The Trustees also
reviewed information that showed that the total expense ratio for CSCS's
Investor class of shares was slightly higher than the average total expense
ratio of the Lipper peer group but slightly lower than the average total expense
ratio of the Lipper peer universe. The Trustees considered CSCS's performance
relative to the funds in the peer group that had lower expense ratios and noted
that CSCS's performance was in line or better than the performance of those
funds. The Trustees also considered information provided to them regarding the
costs to CCM of providing advisory services to CSCS, noting in particular the
competitive market for analysts and portfolio managers and that the research
needed to implement CSCS's investment strategy was relatively costly. The
Trustees concluded that the advisory fees, administrative fees and total expense
ratios of both classes of shares of CSCS were acceptable in light of the
performance of the Fund and the other factors considered.
CENTURY FUNDS
26
Quarterly Portfolio Schedule and Proxy Voting Policies and Procedures. The Funds
file their complete schedule of portfolio holdings with the Securities and
Exchange Commission (the "SEC") for the first and third quarters of each fiscal
year on Form N-Q. A description of the policies and procedures that each Fund
uses to determine how to vote proxies relating to portfolio securities and each
Fund's proxy voting record for the 12-month period ended June 30 is available,
without charge, upon request, by calling 1-800-321-1928. The Funds' Form N-Q, a
description of the Funds' proxy voting policies and procedures and proxy voting
record are available on the SEC's website at http://www.sec.gov. These materials
may also be reviewed and copied at the SEC's Public Reference Room in
Washington, D.C. Information on the operation of the Public Reference Room may
be obtained by calling 1-800-SEC-0330.
TRUSTEES AND OFFICERS
Alexander L. Thorndike, Chairman and Chief Investment Officer
John E. Beard, Trustee
Davis R. Fulkerson, Trustee
Stephen W. Kidder, Trustee
Jerrold Mitchell, Trustee
Michael J. Poulos, Trustee*
Jerry S. Rosenbloom, Trustee
David D. Tripple, Trustee
Steven Alfano, Secretary and Chief Compliance Officer
INVESTMENT ADVISOR
Century Capital Management, LLC
100 Federal Street
Boston, Massachusetts 02110
SHAREHOLDER INFORMATION
800-303-1928
www.centuryfunds.com
* In accordance with the Board's retirement policy, Mr. Poulos is expected to
retire from the Board of Trustees as of July 31, 2006.
CENTURY FUNDS
27
[LOGO] CENTURY
CENTURY FUNDS
28
CENTURY FUNDS PRIVACY POLICY
When you become a Century Funds shareholder, you entrust us with not only your
investments but your personal and financial data as well. Century has always
been committed to maintaining the confidentiality, security and integrity of
personal information entrusted to us. We hold ourselves to the highest standards
regarding our privacy practices, and we want you to know how we protect your
information and how we use it to service your account.
THIS MEANS, MOST IMPORTANTLY, THAT WE DO NOT SELL CLIENT INFORMATION--WHETHER IT
IS YOUR PERSONAL INFORMATION OR THE FACT THAT YOU ARE A CENTURY FUNDS
SHAREHOLDER--TO ANYONE.
Instead, we use your information primarily to complete transactions that you
request or we share your information within the Century Funds family in order to
help us make you better aware of other financial products and services that we
offer for your investing needs.
In servicing your account, we may also share your information with unaffiliated
third parties that perform administrative, marketing or research services for
us, or with whom we are developing or offering investment products. When we
enter into such a relationship, our contracts restrict these third parties from
sharing or using your information for any purpose other than those for which
they were hired.
THE INFORMATION WE COLLECT ABOUT YOU
You typically provide personal information when you complete a Century Funds
account application or when you request a transaction that involves one of the
Century Funds. This information may include your:
o Name and address.
o Social Security or taxpayer identification number.
o Account balance.
o Accounts at other institutions.
WE MAINTAIN PHYSICAL, ELECTRONIC, AND PROCEDURAL SAFEGUARDS TO PROTECT YOUR
PERSONAL INFORMATION.
o We do not disclose any nonpublic personal information about our
customers or former customers to unaffiliated third parties without
the customer's authorization, except as necessary to process a
transaction, service an account, respond to inquiries from
governmental agencies, or as otherwise permitted by law.
o We restrict access to your personal and account information to those
employees and service agents who need to know that information to
provide products and services to you.
WHAT YOU CAN DO
For your protection, we recommend that you do not provide your account
information to anyone. If you become aware of any suspicious activity relating
to your account, please contact us immediately at the number listed below.
UPDATING YOUR PERSONAL INFORMATION.
The accuracy of your personal information is important. If you need to correct
or update your personal or account information, please call us at 800-303-1928.
One of our customer service representatives will be happy to review, correct or
update your personal or account information.
- --------------------------------------------------------------------------------
This Privacy Policy applies to the following Century Funds: Century Shares Trust
and Century Small Cap Select Fund.
CENTURY FUNDS
29
[LOGO] CENTURY FUNDS
100 Federal Street Boston, Massachusetts 02110
QUALITY GROWTH INVESTORS [LOGO] CENTURY
CCMT SAR 110 APR2006
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable to open-end investment companies.
Item 6. Schedule of Investments.
Schedule of Investments is included as part of the report to shareholders
filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchases.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
No changes.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal
financial officer, after evaluating the effectiveness of the registrant's
"disclosure controls and procedures" (as defined in the Investment Company Act
of 1940 Rule 30-a-2(c) under the Act (17 CFR 270.30a-2(c))) as of a date (the
"Evaluation Date") within 90 days of the filing date of this report, have
concluded that, as of the Evaluation Date, the registrant's disclosure controls
and procedures were adequately designed to ensure that the information required
to be disclosed by the registrant in this Form N-CSR is recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and forms.
Items 12. Exhibits.
(a) Not applicable.
(b) Attached hereto. Exhibit 99.CERT A separate certification for each
principal executive officer and principal financial officer of the registrant
as required by Rule 30a-2 of the Investment Company Act of 1940.
Exhibit 99.906CERT Certifications pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
SIGNATURES
Pursuant to the requirement 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.
Century Capital Management Trust
By: /s/ Alexander L. Thorndike
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Alexander L. Thorndike, Chairman
Date: June 30, 2006
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/ Alexander L. Thorndike
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Alexander L. Thorndike, Chairman (Principal Executive Officer)
Date: June 30, 2006
By: /s/ Steven Alfano
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Steven Alfano, Secretary (Principal Financial Officer)
Date: June 30, 2006