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)
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, 2007
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ITEM 1. Report to Shareholders.
[LOGO] CENTURY FUNDS
Seventy-Nine
Years of
Investing
1928 - 2007
CENTURY
Century Shares
Trust
Century Small Cap
Select Fund
Semi-Annual Report
April 30, 2007
PEOPLE and IDEAS that WORK TM
CENTURY FUNDS
AVERAGE ANNUAL TOTAL RETURNS AS OF APRIL 30, 2007
SINCE INCEPTION/
CENTURY SHARES TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------
Investor Shares (7/18/05) 10.17% N/A N/A 9.27%
Institutional Shares 10.91% 8.97% 7.24% 9.81%
CENTURY SMALL CAP SELECT FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------
Investor Shares (02/24/00) 5.57% 9.86% 12.75% 17.26%
Institutional Shares (12/09/99) 5.86% 10.20% 13.18% 17.38%
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. As stated in the prospectus dated
February 28, 2007, the total annual fund operating expenses, gross of any fee
waivers or expense reimbursements, for Century Small Cap Select Fund are 1.45%
for the Investor Shares and 1.07% for the Institutional Shares, and the total
annual fund operating expenses, gross of any fee waivers or expense
reimbursements, for Century Shares Trust are 2.15% for the Investor Shares and
1.11% for the Institutional Shares. The Adviser has agreed contractually to
waive a portion of its fees and/or reimburse operating expenses for the Investor
Shares of Century Shares Trust to maintain total operating expenses at 1.45%
through February 28, 2008. Please see the Financial Highlights and Notes to the
Financial Statements sections of this report for gross and net expense related
disclosure for the period ended April 30, 2007. Shares held less than 90 days
for both Funds may be subject to a 1.0% redemption fee.
Returns include the reinvestment of dividends and capital gains. Performance for
Century Small Cap Select Fund and the Investor Shares of Century Shares Trust
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.
CENTURY SMALL CAP SELECT FUND CONCENTRATES ITS INVESTMENTS IN THE FINANCIAL
SERVICES AND HEALTH CARE GROUP OF INDUSTRIES. CENTURY SHARES TRUST CURRENTLY HAS
MORE THAN 25% OF ITS ASSETS INVESTED IN COMPANIES IN THE INSURANCE INDUSTRY.
CONCENTRATION IN A PARTICULAR INDUSTRY SUBJECTS THE FUNDS TO THE RISKS
ASSOCIATED WITH THAT INDUSTRY AND, AS A RESULT, MAY BE SUBJECT TO GREATER PRICE
VOLATILITY THAN FUNDS WITH LESS CONCENTRATED PORTFOLIOS. IN ADDITION, THE
CENTURY SMALL CAP SELECT FUND INVESTS IN SMALLER COMPANIES WHICH POSE GREATER
RISKS THAN THOSE ASSOCIATED WITH LARGER, MORE ESTABLISHED COMPANIES.
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.
The views in this report were those of Century Funds' Chief Investment Officer
and Director of Research as of April 30, 2007 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
DEAR FELLOW SHAREHOLDERS:
The equity markets continue their fifth consecutive year of significant earnings
growth and price appreciation. The rise of global trade and easy credit terms
are feeding a liquidity boom that may further, lift stock valuations. The
economy is benefiting from some of the highest profit margins and lowest
interest rates in forty years. Meanwhile, inflation and declining home prices
are raising concerns about future growth. We are keeping a sharp eye on both of
these issues since they could lead to a slowdown or a pullback in the economy.
We are anxious optimists about the equity markets today. Earnings remain strong,
valuations appear fair but growth continues to slow. As the world begins to
appreciate the potential for heightened "risks" in a maturing economic cycle, we
remain focused on investing the Funds in companies with resilient franchises and
consistent returns.
With this as a backdrop, for the six months ended April 30, 2007, Century Small
Cap Select Fund was up +8.57% (Institutional Shares) and +8.48% (Investor
Shares) versus the +7.42% return for the Russell 2000 Growth Index; and Century
Shares Trust was up +6.50% (Institutional Shares) and +6.20% (Investor Shares)
versus the +8.60% return for the S&P 500 Index.
MARKET COMMENTARY
The investment environment today is dominated by a number of noteworthy issues.
In this report, we focus on three: 1) private equity's growing influence, 2)
corporate earnings growth, and 3) the U.S. housing market. We believe 2007 will
continue to see low unemployment and continued economic growth.
PRIVATE EQUITY:
AN EMERGING PRESENCE
For eighty years, the public equity markets (represented by the NASDAQ and New
York Stock Exchanges) have been the primary source of low-cost money when an
established company seeks to finance its growth through issuing equity. Once a
company underwent an Initial Public Offering (IPO), it remained publicly-traded
and financed its future growth through either its internal cash flows, borrowing
from a bank or issuing more equity through the public markets.
Meanwhile, private equity pools historically invested in small, incubating or
turnaround companies and nursed them to strength before bringing them to the
public investors through an IPO.
Rising global trade and economic expansion are driving increased liquidity into
the equity and debt markets. This ravenous appetite by high risk-high return
investors has led to dramatic growth in the demand for private equity and hedge
funds over the last four years.
CENTURY FUNDS 1
BREAKING NEW GROUND
In our opinion, there is a seismic shift in the world of corporate ownership.
Corporate capital structures are "going private" at a surprising pace, and debt
is replacing equity on balance sheets. The equity markets are in a tug-of-war
between "public" securities holders (individual, institutional and mutual fund
investors) and "private" equity pools (including venture, buyout and hedge
funds). There are two campaigns being fought: one battle for assets to invest
and a second battle for companies in which to invest.
In terms of battling for assets, Private Equity is gaining market share. In
2006, U.S.-based private equity firms raised an aggregate $215.4 billion in
commitments. And that total is 4 times larger than total commitments in 2003. In
2004, the change in dollars invested in public equity outnumbered the
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Bar Chart:
PRIVATE EQUITY
FUND COMMITMENTS BY YEAR
($ IN BILLIONS)
63% CAGR
2003 $49
2004 $92
2005 $152
2006 $215
Source: KBW Research report 5-29-2007
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dollars of new private equity commitments by a ratio of 35:1. In 2006, the ratio
declined to 20:1. The amount of money Private Equity has raised in terms of fund
commitments has grown at the enviable compound annual growth rate (CAGR) of 63%
since 2003 and a very healthy 19% since 1996. This influence grows even larger
when you consider that Private Equity firms use debt to finance acquisitions.
Assuming Private Equity firms finance an acquisition with 75% debt and 25%
capital from one of their funds, the total amount of capital at their disposal
is approximately $860 billion (based on 2006 commitments alone), when viewed
relative to overall equity markets, this $860 billion represents almost 3% of
the $29.1 trillion in total public equity market capitalization. If this number
is multiplied by funds raised in recent and future years, private equity's
impact on the equity markets is shocking and continues to grow.
PRICING FOR PERFECTION:
SHORT TERM GAIN, LONG TERM PAIN?
Why does this private equity trend matter to our Funds' investors? In the short
term, private equity capital may help our Funds' returns as acquisition prices
raise stock valuations. However, in the long term, we believe private equity's
influence increases the stock market's risk profile without a commensurate
increase in return expectations. As investors who are focused on risk-adjusted
returns, this potential scenario is a concern.
2 CENTURY FUNDS
We are concerned this disruptive trend could end badly. In our opinion, the high
valuation multiples (10-15 times annual operating profits) being paid to acquire
firms will make it difficult for private equity investors to generate an
attractive return on their investment. In addition, we believe that the high
amount of debt (up to 90% of deal value in some cases) involved in these deals
will be a burden on the operating companies and may make it difficult for these
firms to thrive, should their operating experience distress.
After six years of rapid economic expansion, we think that rosy assumptions of
future growth and/or expense saving "synergies" is a recipe for possible
failure. Investor caution is warranted.
EARNINGS GROWTH
While earnings per share growth has been robust for both large stocks and small
cap stocks over the past few years, a divergence seems to be occurring in terms
of next year's growth. Over the past four years, the S&P 500 has generated
compound annual earnings per share (EPS) growth of 16% from 2002 through 2006.
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Bar Chart:
LARGE CAP GROWTH RATES
Earnings Per Share - % Change
Year over Year
S&P 500
2003 15%
2004 21%
2005 14%
2006 16%
2007E 5%
2008E 7%
Source: Baseline As of 6/8/2007
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The Russell 2000 Growth Index experienced even better growth, with annual EPS up
34% since 2002. EPS for the Russell 2000 Growth Index rebounded sharply after
the dot-com collapse from 2000 to 2002. Furthermore, the inclusion of stock
option expensing, beginning in 2006, negatively hurt EPS growth on a
year-over-year basis.
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SMALL CAP GROWTH RATES
Earnings Per Share - % Change
Year over Year
RUSSELL 2000 GROWTH INDEX
2003 92%
2004 38%
2005 15%
2006 8%
2007E 20%
2008E 34%
Source: Baseline As of 6/8/2007
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In terms of the S&P 500 Index, the consensus EPS growth rate seems to be
naturally decelerating after four strong years of 14% or better growth. This is
inline with our expectations. However, in our view, consensus EPS estimates for
the small cap benchmark (i.e. The Russell 2000 Growth Index) remain optimistic.
The annual growth rate in EPS for 2007 is estimated to be 20%, with almost all
of the growth backend loaded into the third and fourth quarter (+58%) as shown
on the next page. We are monitoring the expectations for second half earnings
and the
CENTURY FUNDS 3
fourth quarter earnings in particular, given the various housing and
inflationary pressures weighing on consumers.
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Bar Chart:
SMALL CAP QUARTERLY EARNINGS
Earnings Per Share - % Change
Year over Year Growth by Quarter
2007 FULL YEAR 20%
MAR -4%
JUN 8%
SEP 23%
DEC 58%
RUSSELL 2000 GROWTH INDEX
Source: Baseline As of 6/8/2007
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If the current market expectations turn out to be too optimistic, we believe
that the Century Small Cap Select Fund will be well positioned due to our
investment approach of investing in more predictable, higher quality companies.
We believe that this investment philosophy results in a below-average risk
profile. We always strive to generate above average returns over a full market
cycle, through our intensive bottom-up research process.
HOUSING MARKET SLOWDOWN
The housing market is suffering from a modest downturn after years of meaningful
appreciation. Residential housing represents an important part of the economy
and is a bellwether of consumer spending and attitudes. Consumer spending
represents over 70% of U.S. economic activity.
Investing in a home has been one of the best investments you could have made
over the past 20+ years. Housing prices for the U.S. market in aggregate have
increased at over 300% from 1980 to 2006. New England and California experienced
the greatest increase at about 500%. These cumulative price increases do not
factor in the use of mortgage debt, which in many cases serves to increase the
rate of return by 2x to 4x.
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HOUSE PRICE CHANGES
Period Ended 12/31/06
CUMULATIVE ANNUAL RATE
SINCE SINCE
DIVISION 1980 1980
----------------------------------------------------
Mountain 283.2% 5.2%
West South Central 124.4% 3.1%
South Atlantic 325.3% 5.6%
East South Central 187.2% 4.0%
Pacific 498.4% 6.9%
Middle Atlantic 436.5% 6.5%
West North Central 203.3% 4.2%
East North Central 221.3% 4.5%
New England 532.2% 7.1%
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United States(1) 307.5% 5.4%
(1) - U.S. figures based on weighted division average.
Source: Office of Federal Housing Enterprise Oversight 3-1-2007
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However, in March 2007, the rapid deterioration of sub-prime real estate sent
shockwaves throughout the entire real estate industry and capital markets.
'Sub-prime' refers to borrowers who have poor credit histories. Even in the more
stable 'prime' market, credit losses or delinquencies rose as well. Though
delinquencies remain below long-term averages, lending standards are likely to
tighten. This situation will reduce liquidity and might cause economic growth to
slow.
4 CENTURY FUNDS
With a decline in the housing market, the consumers' health has weakened from a
very strong position. Since consumers are the lifeblood of almost every sector
in the economy, we incorporate the consumer trends into our analysis of almost
every company in which we consider investing. It ranges from the customers
ability to repay loans (i.e credit quality) to his/her appetite to buy personal
computers or home furnishings or eat at restaurants.
CURRENT FUND POSITIONING
Have our views on private equity and earnings growth affected our positioning in
the Funds? Yes, but only on the margin. First, it has led us to focus on
companies that are benefiting from secular rather than cyclical trends.
As an example, in the Century Select Small Cap Fund, we own more payment
processing companies that, in our view, are benefiting from increased volume
rather than traditional banks that are experiencing narrowing net interest
margins and rising mortgage delinquencies. Second, we are paying attention to
balance sheets as much as income statements. We believe that a strong balance
sheet is important if a firm is to weather unforeseen events in the future.
Our goal is to invest in well capitalized, sustainable growth companies rather
than firms characterized by high leverage, fast growing receivables, or
deteriorating cash flows.
CENTURY SMALL CAP SELECT FUND
PERFORMANCE
For the six months ended April 30, 2007, the Fund's Institutional Shares and the
Investor Shares returns were up +8.57% and +8.48%, respectively, versus +7.42%
for the Russell 2000 Growth Index. The Health Care and Financial Services
sectors were top contributors, followed by Consumer Discretionary. The Producer
Durables and Materials & Processing sectors were the main underperformers.
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PERFORMANCE COMPARISON 4/30/2007
CSCS RUSSELL 2000 RUSSELL 2000
INSTITUTIONAL SHARES GROWTH INDEX INDEX*
1 YEAR 5.86 4.53 7.83
3 YEARS 10.2 12.27 14.65
5 YEARS 13.18 8.91 11.14
SINCE INCEPT. (12/9/99) 17.38 1.95 9.25
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* Russell 2000 Index is an unmanaged, market value weighted index, which
measures performance of the 2000 companies that are between 1000th and
3000th largest in the market. One cannot invest directly in an index.
During this same period, the Fund's exposure to the Financial Services and
Technology sectors increased modestly, while exposure to the Materials &
Processing, Other Energy and Consumer Staples sectors decreased.
CENTURY FUNDS 5
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BAR CHART:
CSCSF HOLDINGS BY SECTOR 4/30/2007
FINANCIAL SERVICES 25.0%
CONSUMER DISCRETIONARY 24.4%
HEALTH CARE 20.7%
TECHNOLOGY 16.8%
PRODUCER DURABLES 5.4%
CASH 3.7%
OTHER INDUSTRIES 4.0%
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The largest contributors to Fund performance over the last six months included
Smart Modular Technologies (electronics manufacturer), HealthExtras (pharmacy
benefit manager), GATX Corp (leasing and financing servicer), and Wright Express
(payment processor). The Fund's underperformers included Benchmark Electronics
(electronics manufacturer), Casual Male Retail Group (men's apparel retailer)
and Semitool Inc. (semiconductor equipment manufacturer). In general, we are
pleased that we exceeded the benchmark in a reasonably strong market
environment.
CENTURY SHARES TRUST
PERFORMANCE
For the six months ended April 30, 2007, the Trust's Institutional Shares were
up +6.50% and the Investors Shares were up +6.20% versus +8.60% for the S&P 500
Index. The Technology, Consumer Discretionary, and Healthcare sectors were
positive contributors for the period, while Financial Services, Producer
Durables, and Consumer Staples sectors detracted from performance.
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BAR CHART:
PERFORMANCE COMPARISON 4/30/2007
CENTURY SHARES TRUST
(INSTITUTIONAL SHARES) S&P 500 INDEX
1 YEAR 10.91% 15.24%
3 YEARS 8.97% 12.25%
5 YEARS 7.24% 8.54%
10 YEARS 9.81% 8.04%
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During the period, we modestly reduced our Financial Services weighting while
increasing our holdings in Technology and Health Care sectors. As we have
mentioned in the past, our sector weightings tend to be a function of bottom up
stock selection and changes in market value, rather than a top-down macro
approach to asset allocation.
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BAR CHART:
CST HOLDINGS BY SECTOR 4/30/2007
FINANCIAL SERVICES 29.6%
HEALTH CARE 18.9%
CONSUMER DISCRETIONARY 15.1%
TECHNOLOGY 10.9%
PRODUCER DURABLES 6.2%
CONSUMER STAPLES 5.7%
CASH 5.0%
OTHER INDUSTRIES 8.6%
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6 CENTURY FUNDS
The top contributors to performance for the 6 month period ended April 30, 2007
included Caremark (a pharmacy benefit manager acquired by CVS), Nokia (cell
phone manufacturer), Alcon Inc. (vision products) and Tiffany's (luxury
retailer). Underperformers included Varian Medical (medical equipment),
Progressive (auto insurance) and FedEx Corp. (transportation services).
The Trust's performance was driven by sector weightings rather than stock
selection. Specifically, the Trust's large exposure to the financial services
sector detracted from performance for the 6 months. While we have reduced the
Trust's exposure to the Financial Services sector over the past few years, it
still represented 29% of the Trust's assets on average during the period. In
addition, the Trust did not have exposure to the Integrated Oils and Utilities
sectors, which performed well. These sector allocation decisions caused much of
the underperformance for the 6 months. Though sector weightings may change in
the future, our bottom up style favors resilient franchises at the expense of
capital intensive industries (e.g. automobile or steel industries).
A CENTURY SNAPSHOT:
INVESTING IN FRANCHISE BUSINESSES
Continuing a tradition, we share a couple of examples of holdings in each of the
Funds. We believe these companies possess many of the characteristics that are
hallmarks of Century's investment style.
McGraw-Hill Companies (MHP) is one of Century Shares Trust's holdings. This firm
serves three different industry segments: Financial Services, Education and
Information & Media. It owns some very well-known brands (Business Week,
Standard & Poor's and J.D. Power) and has been gaining market share. The main
driver of results over the past 10+ years is the Financial Services segment
(which provides credit ratings and indices to investors), which has benefited
from strong growth in capital markets around the world. These credit ratings are
a key component of the analytical work when evaluating investment opportunities.
In our opinion, over the past 10 years, management has consistently generated a
very attractive Return on Equity (ROE) of about 25%-30% while growing EPS at a
15% compound annual growth rate. This firm is a classic investment for Century
due to its brand name franchise businesses, low capital expenditures and high
level of recurring revenue.
HealthExtras (HLEX), a pharmacy benefit manager (PBM), is one of Century Small
Cap Select Fund's holdings. HLEX manages pharmacy benefits and reimbursement
costs for managed care organizations and large employer groups such as
corporations, unions and government agencies. We believe that the company is
taking share from the larger PBMs through better and more transparent client
service. The company has visible growth opportunities, no net debt (not capital
intensive), generates a 15% ROE, and has a relatively predictable revenue
stream.
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) with any questions or comments.
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 expressed in this report reflect those of the portfolio managers as of
the end of the period covered by this report. These views are subject to change
at any time based on market and other conditions and should not be construed as
a recommendation with respect to any security.
CENTURY FUNDS 7
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: Quality Growth Investors
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
8 CENTURY FUNDS
PERFORMANCE OF A $10,000 INVESTMENT
Line Chart:
CENTURY SMALL CAP SELECT FUND INSTITUTIONAL SHARES
CSF Institutional Russell 2000 Growth Russell 2000
Dec-99 10000 10000 10000
10010 11145 10870
Mar-00 11160 11042 11640
11610 11282 11200
Sep-00 14010 10834 11324
15510 8646 10542
Mar-01 14101 7331 9856
16086 8649 11264
Sep-01 15356 6220 8922
16410 7848 10804
Mar-02 17436 7694 11234
16752 6486 10296
Sep-02 15239 5091 8093
16533 5473 8591
Mar-03 16437 5261 8205
19436 6531 10127
Sep-03 21368 7215 11046
24351 8130 12650
Mar-04 25317 8583 13442
25374 8591 13505
Sep-04 24857 8075 13119
27352 9293 14969
Mar-05 27409 8658 14170
27904 8960 14781
Sep-05 28549 9526 15475
28458 9679 15650
Mar-06 30866 11069 17832
29299 10266 16936
Sep-06 29510 10086 17010
31184 10970 18525
32058 11242 18885
Apr-07 32675 11537 19225
This chart compares the performance through April 30, 2007 of a hypothetical
$10,000 investment in Century Small Cap Select Fund's Institutional Shares
(12/9/99 inception date) including reinvested dividends and distributions, and
the Russell 2000 Growth Index and the Russell 2000 Index. On February 28, 2007,
the Russell 2000 Growth index replaced the Russell 2000 index as the Fund's
comparative index. The Adviser believes that the Russell 2000 Growth index is a
more appropriate benchmark because the Fund invests principally in companies
that exhibit growth characteristics similar to those of companies included in
the Russell 2000 Growth index. (Institutional shares inception date). The
Russell 2000(R) Growth Index is widely regarded in the industry as the premier
measure of small cap growth 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. Performance for other share classes may vary.
Line Chart:
CENTURY SHARES TRUST INSTITUTIONAL SHARES
CST Institutional S&P 500
Apr-97 10000 10000
Apr-98 15064 14107
Apr-99 14948 17185
Apr-00 12474 18926
Apr-01 16506 16471
Apr-02 17970 14391
Apr-03 15891 12476
Apr-04 19703 15330
Apr-05 20301 16302
Apr-06 22987 18815
Apr-07 25493 21671
This chart compares the performance over the past ten years, through April 30,
2007, 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. Performance for other share classes may
vary.
CENTURY FUNDS 9
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, 2006 to April 30, 2007).
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, 2006 APRIL 30, 2007 APRIL 30, 2007
Based on Actual Fund Return
Institutional Shares $1,000.00 $1,065.00 $ 5.53
Investor Shares $1,000.00 $1,062.00 $ 8.49
Based on Hypothetical 5% Yearly Return before expenses
Institutional Shares $1,000.00 $1,019.50 $ 5.41
Investor Shares $1,000.00 $1,008.32 $ 8.30
* These calculations are based on expenses incurred in the most recent fiscal
half-year. The Fund's annualized expense ratios are 1.08% for Institutional
Shares and 1.66% 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, 2006 APRIL 30, 2007 APRIL 30, 2007
Based on Actual Fund Return
Institutional Shares $1,000.00 $1,085.70 $ 5.53
Investor Shares $1,000.00 $1,084.80 $ 6.87
Based on Hypothetical 5% Yearly Return before expenses
Institutional Shares $1,000.00 $1,019.53 $ 5.36
Investor Shares $1,000.00 $1,018.23 $ 6.66
* 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 1.33% 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.
10 CENTURY FUNDS
CENTURY SHARES TRUST APRIL 30, 2007 - (UNAUDITED)
PORTFOLIO OF INVESTMENTS
COMMON STOCK - 95%
SHARES VALUE
- ---------------------------------------------------------
AUTO & TRANSPORT - 2.9%
48,500 FedEx Corp. $ 5,113,840
63,000 Oshkosh Truck Corp. 3,524,220
------------
8,638,060
------------
CONSUMER DISCRETIONARY - 15.1%
142,950 Bed Bath & Beyond, Inc. * 5,823,783
62,920 CDW Corp. 4,530,869
28,350 Costco Wholesale Corp. 1,518,710
141,600 Fastenal Co. 5,822,592
127,550 Home Depot, Inc. 4,830,319
85,300 McGraw-Hill Companies, Inc. 5,589,709
26,150 Nordstrom, Inc. 1,436,158
127,250 Scientific Games Corp. * 4,236,153
294,765 Staples, Inc. 7,310,172
65,160 Tiffany & Co. 3,107,480
------------
44,205,944
------------
CONSUMER STAPLES - 5.7%
92,200 PepsiCo, Inc. 6,093,498
103,900 Proctor & Gamble Co. 6,681,809
88,420 Walgreen Co. 3,881,638
------------
16,656,945
------------
FINANCIAL SERVICES - 29.6%
73,100 AFLAC, Inc. 3,752,954
55,594 Allstate Corp. 3,464,618
147,866 American International Gr., Inc. 10,337,312
105,000 Aon Corp. 4,068,750
100 Berkshire Hathaway, Inc. CL A * 10,920,000
170,600 The Chubb Corp. 9,183,398
206,300 J.P. Morgan Chase & Co. 10,748,230
413,600 The Progressive Corp. 9,541,752
194,350 Protective Life Corp. 9,115,015
58,850 RenaissanceRe Holdings Ltd. 3,186,728
151,850 Torchmark Corp. 10,371,355
87,666 Waddell & Reed Fin'l, Inc. CL A 2,123,271
------------
86,813,382
------------
HEALTH CARE - 18.9%
36,700 Alcon, Inc. 4,951,931
88,700 Biomet, Inc. 3,831,840
110,336 CVS/Caremark Corp. 3,998,577
109,050 Covance, Inc. * 6,597,525
31,500 Henry Schein, Inc. * 1,642,095
100,550 IMS Health, Inc. 2,949,132
73,450 Johnson & Johnson, Inc. 4,716,959
62,400 Millipore Corp. 4,606,992
SHARES/FACE AMOUNT VALUE
- ---------------------------------------------------------
HEALTH CARE (CONTINUED)
32,250 Roche Holdings Ltd. $ 3,031,500
187,481 UnitedHealth Group, Inc. 9,947,742
95,250 Varian Medical Systems, Inc. * 4,020,503
67,440 Wellpoint, Inc. * 5,325,737
------------
55,620,531
------------
MATERIALS & PROCESSING - 1.2%
38,100 Fluor Corp. 3,643,122
------------
OTHER - 3.7%
81,650 3M Co. 6,758,171
50,650 Fortune Brands, Inc. 4,057,065
------------
10,815,236
------------
OTHER ENERGY - .8%
31,550 Valero Energy Corp. 2,215,757
------------
PRODUCER DURABLES - 6.2%
50,100 Danaher Corp. 3,566,619
136,600 Donaldson Co., Inc. 4,906,672
145,960 United Technologies Corp. 9,798,295
------------
18,271,586
------------
TECHNOLOGY - 10.9%
244,000 Cisco Systems, Inc. * 6,524,560
70,300 Cognos, Inc. * 3,030,633
240,540 Microsoft Corp. 7,201,768
256,350 Nokia Corp. 6,472,838
257,900 Oracle Corp. * 4,848,520
118,650 Texas Instruments, Inc. 4,078,001
------------
32,156,319
------------
(Identified cost, $159,066,424) 279,036,881
------------
CASH EQUIVALENTS - 6.3%
Time Deposits 18,514,000
------------
TOTAL INVESTMENTS AND TIME DEPOSITS - 101.3%
(Identified cost, $177,580,424) 297,550,881
------------
CASH AND RECEIVABLES
LESS LIABILITIES - (1.3)%
Liabilities in excess of other assets (3,747,333)
------------
NET ASSETS - 100% $293,803,548
============
* Non-income producing security
See notes to financial statements.
CENTURY FUNDS 11
CENTURY SMALL CAP SELECT FUND APRIL 30, 2007 - (UNAUDITED)
PORTFOLIO OF INVESTMENTS
COMMON STOCK - 96.3%
SHARES VALUE
- ---------------------------------------------------------
CONSUMER DISCRETIONARY - 24.4%
80,200 Advisory Board Co. * $ 3,807,896
438,950 aQuantive, Inc. * 13,436,260
529,450 Bright Horizons Family Solutions,
Inc. * 20,447,359
540,950 Casual Male Retail Group, Inc. * 6,226,335
1,787,450 CMGI, Inc. * 3,753,645
126,050 CRA International, Inc. * 6,500,399
556,200 Global Imaging Systems, Inc. * 16,068,618
367,950 Guitar Center, Inc. * 17,036,085
414,025 Jarden Corp. * 17,447,014
529,700 Kforce, Inc. * 7,272,781
350,500 LECG Corp. * 5,134,825
506,750 Red Lion Hotels Corp. * 6,461,063
595,000 Scientific Games Corp. * 19,807,550
452,570 Tractor Supply Co. * 23,415,972
623,615 Tuesday Morning Corp. 8,705,665
244,902 USANA Health Sciences, Inc. * 9,756,896
609,800 World Fuel Services Corp. 28,178,858
------------
213,457,218
------------
FINANCIAL SERVICES - 25.0%
86,450 Capital Trust, Inc. 4,095,137
296,300 Cohen & Steers, Inc. 15,203,153
443,250 Employers Holdings, Inc. * 8,789,648
238,450 Euronet Worldwide, Inc. * 6,640,833
638,600 GATX Corp. 31,297,786
925,500 Old National Bancorp 16,547,940
695,600 Online Resources Corp. * 7,679,424
459,350 optionsXpress Holdings, Inc. 11,336,758
858,540 Platinum Underwriters Holdings,
Ltd. 29,379,239
97,700 Portfolio Recovery Associates,
Inc. * 5,437,005
1,904,910 Primus Guaranty Ltd. * 23,030,362
309,250 Protective Life Corp. 14,503,825
170,080 Redwood Trust, Inc. 8,539,717
451,950 Waddell & Reed Financial, Inc. 10,946,229
792,700 Wright Express Corp. * 24,977,977
------------
218,405,031
------------
HEALTH CARE - 20.7%
66,900 Adams Respiratory Therapeutics,
Inc. * 2,509,419
762,900 Bruker BioSciences Corp. * 8,780,979
374,650 Computer Programs & Systems, Inc. 11,932,603
101,746 Haemonetics Corp. * 4,867,529
604,500 Healthextras, Inc. * 18,709,275
387,775 Healthways, Inc. * 16,449,416
367,850 IRIS International, Inc. * 4,988,046
SHARES VALUE
- ---------------------------------------------------------
HEALTH CARE (CONTINUED)
166,300 Kendle International, Inc. * $ 5,667,504
151,000 LifeCell Corp. * 4,439,400
144,050 Millipore Corp. 10,635,212
123,300 Molecular Insight Pharm., Inc. * 1,457,406
378,100 Perrigo Co. 7,183,900
307,250 Psychiatric Solutions, Inc. * 10,775,258
417,250 QIAGEN N.V. * 7,397,843
538,762 Quality Systems, Inc. 21,803,698
106,950 Respironics, Inc. * 4,359,282
394,863 Sunrise Senior Living, Inc. * 15,119,304
181,201 Surmodics, Inc. * 7,362,197
287,500 TECHNE Corp. * 16,953,875
------------
181,392,143
------------
MATERIALS AND PROCESSING - 1.1%
457,430 RPM International, Inc. 9,729,536
------------
OTHER ENERGY - 2.9%
224,850 Aventine Renewable Energy, Inc. * 4,319,369
286,050 Berry Petroleum Co. 9,742,863
282,500 Foundation Coal Holdings, Inc. 11,127,675
------------
25,189,907
------------
PRODUCER DURABLES - 5.4%
122,950 Donaldson Co., Inc. 4,416,364
606,400 Measurement Specialties, Inc. * 12,413,008
271,000 MTS Systems Corp. 11,520,210
154,600 Ryland Group, Inc. 6,848,780
1,177,867 Semitool, Inc. * 12,226,259
------------
47,424,621
------------
TECHNOLOGY - 16.8%
832,455 Benchmark Electronics, Inc. * 17,631,397
933,953 Blackbaud, Inc. 20,621,682
105,418 Cognos, Inc. * 4,544,570
211,850 DRS Technologies, Inc. 10,658,174
1,626,750 Epicor Software Corp. * 23,587,875
570,250 J2 Global Communication * 16,400,390
1,092,200 Lawson Software, Inc. * 9,720,580
197,450 MICROS Systems, Inc. * 10,820,260
2,501,950 SMART Modular Technologies, Inc. * 33,275,935
------------
147,260,863
------------
(Identified cost, $781,211,103) $842,859,319
------------
See notes to financial statements.
12 CENTURY FUNDS
CENTURY SMALL CAP SELECT FUND (CONT.) APRIL 30, 2007 - (UNAUDITED)
PORTFOLIO OF INVESTMENTS
SHARES/FACE AMOUNTS VALUE
- ---------------------------------------------------------
CASH EQUIVALENTS - 8.2%
Time Deposits $ 71,627,000
------------
TOTAL INVESTMENTS AND TIME DEPOSITS - 104.5%
(Identified cost, $852,838,103) 914,486,319
------------
CASH AND RECEIVABLES LESS LIABILITIES - (4.5)%
Liabilities in excess of other assets (39,375,395)
------------
NET ASSETS - 100% $875,110,924
============
*Non-income producing security
See notes to financial statements.
CENTURY FUNDS 13
STATEMENT OF ASSETS AND LIABILITIES - APRIL 30, 2007 - (UNAUDITED)
Century Shares Century Small Cap
Trust Select Fund
------------ ------------
ASSETS:
Investments, at value (Note 1A) (Identified cost of,
$177,580,424 and $852,838,103, respectively) $ 297,550,881 $ 914,486,319
Cash 133 866
Dividends and interest receivable 109,428 84,890
Receivable for investments sold 2,195,290 9,918,724
Receivable for Trust/Fund shares sold 3,806 1,434,114
------------- -------------
Total Assets 299,859,538 925,924,913
------------- -------------
LIABILITIES:
Payable to Affiliates:
Management fee (Note 4) 191,184 697,795
Administration fee (Note 5) 35,985 --
Distribution fees (Note 7) 73 --
Accrued expenses and other liabilities 105,768 265,775
Payable for investments purchased 5,489,168 44,400,726
Payable for Trust/Fund shares repurchased 233,813 5,449,693
------------- -------------
Total Liabilities 6,055,991 50,813,989
------------- -------------
NET ASSETS $ 293,803,548 $ 875,110,924
============= =============
At April 30, 2007, net assets consisted of:
Capital paid-in $ 151,723,992 $ 768,985,316
Accumulated distributions in excess of net investment income (247,377) --
Accumulated undistributed net realized gains on investments 22,356,474 44,477,393
Unrealized appreciation in value of investments 119,970,457 61,648,217
------------- -------------
Net assets applicable to outstanding capital stock $ 293,803,548 $ 875,110,924
============= =============
Net Assets consist of:
Investor Class $ 1,701,342 $ 310,540,316
Institutional Class $ 292,102,205 $ 564,570,608
Shares Outstanding consist of (Note 2):
Century Shares Trust
Investor Class 60,427 12,392,202
Institutional Class 10,330,273 22,205,651
NET ASSET VALUE PER SHARE
(Represents both the offering and redemption price*)
Investor Class $ 28.16 $ 25.06
Institutional Class $ 28.28 $ 25.42
* In general, shares of the Trust and fund may be redeemed at net asset
value. However, upon the redemption of shares held less than 90 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.
14 CENTURY FUNDS
STATEMENT OF OPERATIONS - SIX MONTHS ENDED APRIL 30, 2007 - (UNAUDITED)
Century Shares Century Small Cap
Trust Select Fund
------------- ----------------
INVESTMENT INCOME/(LOSS):
Dividends (net of withholding tax of $25,449 and $0, respectively) $ 1,944,350 $ 4,509,398
Interest 255,708 1,260,146
------------ ------------
Total income 2,200,058 5,769,545
EXPENSES:
Investment adviser fee (Note 4) 1,168,225 4,189,823
Non-interested trustees' remuneration 15,655 74,085
Transfer agent
Institutional Class 31,080 29,985
Investor Class 5,430 181,000
Custodian 31,675 47,200
Administration (Note 5) 219,042 --
Insurance 1,810 9,050
Professional fees 25,630 55,510
Registration 33,350 27,150
Printing and other 45,750 271,500
Distribution fee (Note 7) 2,180 281,598
------------ ------------
Total expenses 1,579,827 5,166,901
Advisor reimbursement (Note 6) (2,347) --
------------ ------------
Net expenses 1,577,480 5,166,901
------------ ------------
Net investment income/(loss) 622,579 602,644
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain from investment transactions 21,928,655 49,404,051
(Decrease) / Increase in unrealized appreciation on investments (4,137,203) 23,007,884
------------ ------------
Net realized and unrealized gain on investments 17,791,452 72,411,935
------------ ------------
Net increase in net assets resulting from operations $ 18,414,031 $ 73,014,579
============ ============
See notes to financial statements.
CENTURY FUNDS 15
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, 2007 Year Ended April 30, 2007 Year Ended
(unaudited) October 31, 2006 (unaudited) October 31, 2006
------------ -------------- ------------ --------------
Operations:
Net investment income/(loss) $ 622,579 $ 879,585 $ 602,644 $ 1,408,894
Net realized gain on investment
transactions 21,928,655 79,595,230 49,404,051 80,347,261
Change in net unrealized appreciation (4,137,203) (50,132,170) 23,007,884 (56,826)
------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations 18,414,031 30,342,645 73,014,579 81,699,329
Distributions to shareholders from:
Net Investment Income
Century Shares Trust
Institutional Class (2,688,437) (7,217,847)
Investor Class -- (26,346)
Century Small Cap Select Fund
Institutional Class (7,516,448) (2,271,628)
Investor Class (4,411,492) (512,770)
Realized gain from investment transactions
Century Shares Trust
Institutional Class (75,570,929) (21,454,737)
Investor Class (459,673) (78,306)
Century Small Cap Select Fund
Institutional Class (42,614,264) (6,886,193)
Investor Class (27,610,318) (4,754,069)
Trust/Fund share transactions - net 47,092,002 (19,338,500) (10,039,530) (165,917,361)
Redemption fees 834 7,107 9,640 150,395
------------ ------------ ------------ ------------
Total (decrease)/increase (13,212,172) (17,765,984) (19,167,833) (98,492,297)
NET ASSETS:
At beginning of period 307,015,718 324,781,702 894,278,757 992,771,054
------------ ------------ ------------ ------------
At end of period $293,803,548 $307,015,718 $875,110,924 $894,278,757
============ ============ ============ ============
Distributions in excess of net investment
income at end of period $ 247,377 $ 247,377 $ -- $ --
============ ============ ============ ============
See notes to financial statements.
16 CENTURY FUNDS
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED PERIOD
APRIL 30, ENDED YEAR ENDED
CENTURY SHARES TRUST 2007 YEAR ENDED OCTOBER 31, OCTOBER 31, DECEMBER 31,
INSTITUTIONAL SHARES (UNAUDITED) 2006 2005 2004 2003 2002 (a) 2001
------ ------ ------ ------ ------ ------ ------
Net Asset Value, beginning of period $35.69 $35.40 $35.62 $35.66 $33.95 $38.12 $42.97
------ ------ ------ ------ ------ ------ ------
Income/(loss) from
Investment Operations:
Net investment income (b) 0.06 0.10 0.19 0.03 0.07 0.08 0.17
Net realized and unrealized
gain/(loss) on investments 1.63 3.31 3.54 3.02 5.03 (4.20) (1.26)
------ ------ ------ ------ ------ ------ ------
Total income/(loss) from
investment operations 1.69 3.41 3.73 3.05 5.10 (4.12) (1.09)
------ ------ ------ ------ ------ ------ ------
Less Distributions From:
Net investment income (0.25) (0.77) (0.32) (0.34) (0.10) (0.05) (0.17)
Net realized gain on
investment transactions (8.85) (2.35) (3.63) (2.75) (3.29) -- (3.60)
------ ------ ------ ------ ------ ------ ------
Total distributions (9.10) (3.12) (3.95) (3.09) (3.39) (0.05) (3.77)
------ ------ ------ ------ ------ ------ ------
Redemption fees --+ --+ --+ --+ --+ --+ 0.01
------ ------ ------ ------ ------ ------ ------
Net Asset Value, end of period $28.28 $35.69 $35.40 $35.62 $35.66 $33.95 $38.12
====== ====== ====== ====== ====== ====== ======
Total Return 6.50%** 10.17% 11.18% 9.06% 16.99% -10.82%** -2.52%
Ratios and supplemental data
Net assets, end of period
(000 omitted) $292,102 $305,172 $323,643 $362,392 $342,679 $291,311 $345,849
Ratio of expenses to average
net assets 1.08%* 1.11% 1.12% 1.15% 1.17% 1.19%* 1.05%
Ratio of net investment income
to average net assets 0.43%* 0.29% 0.55% 0.07% 0.21% 0.26%* 0.41%
Portfolio Turnover Rate 12% 48% 19% 43% 37% 22% 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 17
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED YEAR PERIOD
APRIL 30, ENDED ENDED
CENTURY SHARES TRUST 2007 OCTOBER 31, OCTOBER 31,
INVESTOR SHARES (UNAUDITED) 2006 2005 (a)
------ ------ ------
Net Asset Value, beginning of period $35.41 $35.35 $35.00
------ ------ ------
Income/(loss) from
Investment Operations:
Net investment income (b) (0.02) (0.19) (0.03)
Net realized and unrealized
gain/(loss) on investments 1.62 3.27 0.29
------ ------ ------
Total income/(loss) from
investment operations 1.60 3.08 0.26
------ ------ ------
Less Distributions From:
Net investment income -- (0.68) --
Net realized gain on
investment transactions (8.85) (2.35) --
------ ------ ------
Total distributions (8.85) (3.03) --
------ ------ ------
Redemption fees --+ 0.01 0.09
------ ------ ------
Net Asset Value, end of period $28.16 $35.41 $35.35
====== ====== ======
Total Return 6.20%** 9.18% 1.00%**
Ratios and supplemental data
Net assets, end of period (000 omitted) $1,701 $1,844 $1,139
Ratio of expenses to average net assets 1.66%* 2.00% 1.20%*
Ratio of expenses to average net assets
without giving effect to voluntary
expense agreement 1.93%* 2.15% 1.35%*
Ratio of net investment income to
average net assets -0.16%* -0.58% -0.36%*
Portfolio Turnover Rate 12% 48% 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.
18 CENTURY FUNDS
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED
CENTURY SMALL CAP APRIL 30, 2007 YEAR ENDED OCTOBER 31,
SELECT FUND - INSTITUTIONAL SHARES (UNAUDITED) 2006 2005 2004 2003 2002
------ ------ ------ ------ ------ ------
Net Asset Value, beginning of period $25.74 $24.15 $22.46 $21.53 $15.42 $14.68
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment (loss)/income (a) 0.05 0.06 0.03 (0.08) (0.09) (0.10)
Net realized and unrealized gain on investments 1.99 1.90 2.22 2.14 6.64 0.93
------ ------ ------ ------ ------ ------
Total income from investment operations 2.04 1.96 2.25 2.06 6.55 0.83
------ ------ ------ ------ ------ ------
Less Distributions From:
Net investment income (0.35) (0.09) -- (0.94) (0.11) --
Net realized gain on investment transactions (2.01) (0.28) (0.56) (0.19) (0.35) (0.13)
------ ------ ------ ------ ------ ------
Total distributions (2.36) (0.37) (0.56) (1.13) (0.46) (0.13)
------ ------ ------ ------ ------ ------
Redemption fees --+ --+ --+ --+ 0.02 0.04
------ ------ ------ ------ ------ ------
Net Asset Value, end of period $25.42 $25.74 $24.15 $22.46 $21.53 $15.42
====== ====== ====== ====== ====== ======
Total Return 8.57%** 8.21% 10.19% 9.83% 43.76% 5.87%
Ratios and supplemental data
Net assets, end of period (000 omitted) $564,571 $540,697 $585,723 $140,208 $42,936 $12,938
Ratio of expenses to average net assets 1.07%* 1.07% 1.06% 1.13% 1.26% 1.45%
Ratio of expenses to average net assets
without giving effect to voluntary
expense agreement 1.07%* 1.07% 1.06% 1.13% 1.40% 1.87%
Ratio of net investment (loss)/income to
average net assets 0.23%* 0.25% 0.13% -0.36% -0.50% -0.70%
Portfolio Turnover Rate 52% 127% 96% 103% 88% 123%
(a) 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 19
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED
CENTURY SMALL CAP APRIL 30, 2007 YEAR ENDED OCTOBER 31,
SELECT FUND - INVESTOR SHARES (UNAUDITED) 2006 2005 2004 2003 2002
------ ------ ------ ------ ------ ------
Net Asset Value, beginning of period $25.40 $23.86 $22.26 $21.39 $15.35 $14.60
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment (loss) (a) -- (0.02) (0.04) (0.15) (0.15) (0.18)
Net realized and unrealized gain on investments 1.99 1.86 2.20 2.12 6.60 0.94
------ ------ ------ ------ ------ ------
Total income from investment operations 1.99 1.84 2.16 1.97 6.45 0.76
------ ------ ------ ------ ------ ------
Less Distributions From:
Net investment income (0.32) (0.03) -- (0.91) (0.07) --
Net realized gain on investment transactions (2.01) (0.28) (0.56) (0.19) (0.35) (0.03)
------ ------ ------ ------ ------ ------
Total distributions (2.33) (0.31) (0.56) (1.10) (0.42) (0.03)
------ ------ ------ ------ ------ ------
Redemption fees --+ 0.01 --+ --+ 0.01 0.02
------ ------ ------ ------ ------ ------
Net Asset Value, end of period $25.06 $25.40 $23.86 $22.26 $21.39 $15.35
====== ====== ====== ====== ====== ======
Total Return 8.48%** 7.83% 9.87% 9.45% 43.12% 5.34%
Ratios and supplemental data
Net assets, end of period (000 omitted) $310,540 $353,581 $407,048 $150,418 $78,959 $10,119
Ratio of expenses to average net assets 1.33%* 1.45% 1.35% 1.50% 1.61% 1.80%
Ratio of expenses to average net assets
without giving effect to voluntary
expense agreement 1.33%* 1.45% 1.35% 1.50% 1.76% 2.53%
Ratio of net investment (loss)/income to
average net assets -0.02%* -0.09% -0.17% -0.69% -0.86% -1.05%
Portfolio Turnover Rate 52% 127% 96% 103% 88% 123%
(a) 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.
20 CENTURY FUNDS
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. When determining the price for
a fair value asset, the investment advisor shall seek to determine the price
that the funds might reasonably expect to receive from the current sale of that
asset in an arm's-length transaction. Fair value determinations shall be based
upon all available factors that the investment advisor deems relevant.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157), was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of SFAS
157 and its impact on the Funds' financial statements has not yet been
determined.
B. Securities Transactions -- Investment security transactions are recorded on a
trade date basis. Gain or loss on sales is determined by the use of specific
identification method, for both financial reporting and federal income tax
purposes. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Foreign dividend income is recorded on ex-dividend date or as
soon as practical after the Fund or Trust determine the existence of a dividend
declaration after exercising reasonable due diligence. Foreign income and
capital gain on some foreign securities may be subject to foreign withholding
taxes, which are accrued as applicable. 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 -- Century Shares Trust adopted a fundamental policy
not to concentrate its investments in any industry or group of industries in
2001; however, prior to that time the Fund concentrated its investments in
insurance companies and banks. As a result, long-term holdings in insurance
companies comprise more than 25% of the Trust's total assets, which subjects the
Trust to risks associated with those industries (such as increases in claims
activity and exposure to property-casualty risks).
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 90
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.
CENTURY FUNDS 21
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.
In June 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 (FIN 48) "Accounting for Uncertainty in Income Taxes". FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken in the course of preparing the Trusts' tax
returns to determine whether the tax positions are "more-likely-than-not" of
being sustained by the applicable tax authority. Tax benefits of positions not
deemed to meet the more-likely-than-not threshold would be booked as a tax
expense in the current year and recognized as: a liability for unrecognized tax
benefits; a reduction of an income tax refund receivable; a reduction of
deferred tax asset; an increase in deferred tax liability; or a combination
thereof. Adoption of FIN 48 is required for fiscal years beginning after
December 15, 2006. At this time, management is evaluating the implications of
FIN 48 and its impact in the financial statements has not yet been determined.
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, 2007
- -------------
Unrealized appreciation .................................... $ 120,589,467
Unrealized depreciation .................................... 619,010
-------------
Unrealized net appreciation ................................ $ 119,970,457
=============
Cost for federal income tax purposes ....................... $ 177,580,424
FOR THE FUND
Unrealized appreciation .................................... $ 88,162,947
Unrealized depreciation .................................... 26,514,730
-------------
Unrealized net appreciation ................................ $ 61,648,217
=============
Cost for federal income tax purposes ....................... $ 852,838,103
22 CENTURY FUNDS
(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, 2007
INSTITUTIONAL SHARES INVESTOR SHARES
SHARES AMOUNT SHARES AMOUNT
--------- ------------ --------- -----------
Sold .......................................................... 111,635 $ 3,060,177 8,722 $ 239,317
Issued to shareholders in reinvestment of distributions from:
Net investment income ...................................... 80,627 2,208,745 -- --
Realized gain on investment transactions ................... 2,436,217 65,004,501 17,333 457,249
--------- ------------ --------- -----------
2,628,479 70,273,422 26,055 696,565
Repurchased ................................................... (847,731) (23,393,587) (17,702) (484,398)
--------- ------------ --------- -----------
Net increase (decrease) .................................... 1,780,748 $ 46,879,835 8,354 $ 212,167
========= ============ ========= ===========
YEAR ENDED OCTOBER 31, 2006
INSTITUTIONAL SHARES INVESTOR SHARES
SHARES AMOUNT SHARES AMOUNT
--------- ------------ --------- -----------
Sold .......................................................... 140,521 $ 4,811,501 35,367 $ 1,201,981
Issued to shareholders in reinvestment of distributions from:
Net investment income ...................................... 164,017 5,489,498 2,425 83,289
Realized gain on investment transactions ................... 502,439 17,339,169 635 21,336
--------- ------------ --------- -----------
806,977 27,640,168 38,427 1,306,606
Repurchased ................................................... (1,398,778) (47,651,748) (18,576) (633,526)
--------- ------------ --------- -----------
Net increase (decrease) .................................... (591,801) $(20,011,580) 19,851 $ 673,080
========= ============ ========= ===========
CENTURY FUNDS 23
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, 2007
INSTITUTIONAL SHARES INVESTOR SHARES
SHARES AMOUNT SHARES AMOUNT
--------- ------------ ---------- ------------
Sold .......................................................... 2,701,576 $ 67,212,638 1,149,481 $ 28,058,137
Issued to shareholders in reinvestment of distributions from:
Net investment income ...................................... 1,019,877 24,487,404 589,489 13,959,316
Realized gain on investment transactions ................... 922,382 22,736,723 547,709 13,314,927
--------- ------------ ---------- ------------
4,643,835 114,436,764 2,286,678 55,332,380
Repurchased ................................................... (3,445,843) (85,932,473) (3,813,170) (93,900,983)
--------- ------------ ---------- ------------
Net increase (decrease) .................................... 1,197,991 $ 28,504,291 (1,526,492) $(38,568,603)
========= ============ ========== ============
YEAR ENDED OCTOBER 31, 2006
INSTITUTIONAL SHARES INVESTOR SHARES
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold .......................................................... 10,410,981 $262,260,196 2,973,244 $73,988,591
Issued to shareholders in reinvestment of distributions from:
Net investment income ...................................... 87,940 2,140,457 18,553 446,932
Realized gain on investment transactions ................... 276,459 6,693,063 174,747 4,179,953
---------- ------------ ---------- ------------
10,775,380 271,093,716 3,166,544 78,615,476
Repurchased ................................................... (14,025,479) (358,745,524) (6,304,203) (156,881,029)
---------- ------------ ---------- ------------
Net increase (decrease) .................................... (3,250,099) $(87,651,808) (3,137,659) $(78,265,553)
========== ============ ========== ============
24 CENTURY FUNDS
(3) INVESTMENT SECURITY TRANSACTIONS
FOR THE TRUST, other than U.S. Government obligations and certificates of
deposit, purchases and sales of investment securities aggregated $33,515,073 and
$63,174,251, respectively, during the period ended April 30, 2007.
FOR THE FUND, other than U.S.Government obligations and certificates of deposit,
purchases and sales of investment securities aggregated $439,305,077 and
$528,724,846, respectively, during the period ended April 30, 2007.
(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, 2007, the fee
amounted to $1,168,225. 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.
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, 2007, the fee amounted to
$4,189,873. 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 $219,042
for the period ended April 30, 2007. 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 contractually agreed to reimburse the Trust for
0.15% of the distribution and service fees paid by the Trust's Investor Shares
through February 28, 2007. In addition, effective as of February 28, 2007, CCM
has contractually agreed to waive a portion of its management fee and reimburse
or pay operating expenses of the Trust's Investor Shares to the extend necessary
to maintain the total operating expenses of the Investor Shares at 1.45% through
February 28, 2008. During the period ended April 30,2007, CCM made a
reimbursement of $2,347.
(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,
2007, $2,180 and $281,598 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 25
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 12, 2006.
In advance of the meeting, the Board, including all of the independent
Trustees, received, among other things: (i) a Lipper Inc. report comparing each
Fund's fees and expenses to those of a peer group and peer universe for that
Fund, each selected by Lipper; (ii) information regarding each Fund's total
returns for the 1 month, 3 month, 1 year, 3 year and 5 year periods ended
October 31, 2006 and since inception, the average annual total returns for the
3, 5, 10 and 15 years ended October 31, 2006 (for CST) and for the 2, 3 and 5
years ended October 31, 2006 and since inception (for CSCS), and the five year
cumulative total returns for each Fund for the periods ended October 31, 2004,
2005 and 2006, as well as comparative total return information for various
securities indices, the applicable Lipper peer group and a CCM selected peer
group; (iii) 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; (iv) a profitability report prepared by CCM and (v) 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: 1 month, 3 months,
12 months and year to date and (ii) average annual total return information for
the following periods: 3, 5, 10 and 15 years for CST and 2, 3 and 5 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.
26 CENTURY FUNDS
The Board considered CCM's resources and personnel, focusing in particular
on investment and compliance resources and personnel. The Board reviewed each
portfolio manager's experience and qualifications, as well as CCM's investment
approach and research process. The Board also considered CCM's plans to add a
senior level investment professional in 2007. 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 reviewed
CCM's trading procedures and brokerage practices, including information
regarding soft dollar-dollar arrangements.
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. It was 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 periods ended September 30, 2005
and September 30, 2006, 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 concluded that the 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.
CENTURY FUNDS 27
INVESTMENT RESULTS
CST. The Trustees reviewed comparative information that showed that CST's
average annual total return for the Institutional class of shares for both the 5
years and 10 years ended October 31, 2006 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
three years ended October 31, 2006 lagged the average annual total return of the
Standard & Poor's 500 Index and the Russell 1000 for the same period. The
Trustees also noted that the Fund's longer term performance compared favorably
to the performance of the funds in its Lipper peer group. The Trustees
considered CCM's explanation for CST's relative underperformance in the short
term and noted that they were satisfied with CCM's investment strategy and
discipline. 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 the 5 years ended October 31, 2006 and
period from December, 1999 through October 31, 2006 was better than the average
annual return of the Russell 2000 and the Russell 2000 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 2 and 3 year periods. 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
discipline. 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 Trustees
did not independently verify any of the information provided by Lipper.
CST. The Trustees reviewed information that showed that CST's advisory fee
(which includes administration) was slightly higher than the Lipper peer group
and peer universe averages but that CST's total expense ratio was less than the
Lipper peer universe average and only slightly higher than the Lipper peer group
average. The Trustees considered that certain of the funds in the 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.
28 CENTURY FUNDS
CSCS. The Trustees reviewed information that showed that CSCS's advisory
fees were slightly lower than the Lipper peer universe average and slightly
higher 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 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 CSCS were acceptable in light of the performance of the
Fund and the other factors considered.
CENTURY FUNDS 29
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.
BOARD OF TRUSTEES
Alexander L. Thorndike, Chairman and Chief Investment Officer
John E. Beard, Trustee *
Davis R. Fulkerson, Trustee
William Gray, Trustee
Stephen W. Kidder, Trustee
Jerrold Mitchell, Trustee
Jerry S. Rosenbloom, Trustee
David D. Tripple, Trustee
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. Beard is expected to
retire from the Board of Trustees as of July 31, 2007.
30 CENTURY FUNDS
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 31
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32 CENTURY FUNDS
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CENTURY FUNDS 33
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100 Federal Street Boston, Massachusetts 02110
QUALITY GROWTH INVESTORS [LOGO] CENTURY
CCMT SAR 50 APR2007
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
--------------------------------
Alexander L. Thorndike, Chairman
Date: July 6, 2007
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
--------------------------------
Alexander L. Thorndike, Principal Executive Officer
Date: July 6, 2007
By: /s/ Steven Alfano
--------------------------------
Steven Alfano, Principal Financial Officer
Date: July 6, 2007