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 811-08397
THE MARSICO INVESTMENT FUND
(Exact name of registrant as specified in charter)
1200 17th Street, Suite 1600
Denver, CO 80202
(Address of principal executive offices) (Zip code)
Christopher J. Marsico
The Marsico Investment Fund
1200 17th Street, Suite 1600
Denver, CO 80202
(Name and address of agent for service)
Copies to:
Sander M. Bieber, Esq.
Dechert LLP
1775 I Street, N.W.
Washington, D.C. 20006
Registrant's telephone number, including area code: (303)454-5600
Date of fiscal year end: September 30
Date of reporting period: September 30, 2004
Item 1 - Reports to Stockholders
[LOGO]
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MARSICO
FUNDS/R
Helping you appreciate life/SM
ANNUAL REPORT o SEPTEMBER 30, 2004
THE INVESTMENTS WE VALUE MOST
REACH BEYOND THE FINANCIAL WORLD.
[LOGO]
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MARSICO
FUNDS/R
Helping you appreciate life/SM
[GRAPHIC]
THE TICKER SYMBOLS ARE FICTITIOUS AND DO NOT REFER TO EXISTING SECURITIES.
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OCTOBER 2004
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DEAR SHAREHOLDER:
Enclosed is your fiscal year-end report for the Marsico Funds for the year ended
September 30, 2004. Stock prices worldwide were quite strong overall during the
year, with many of the most widely watched benchmark equity indexes able to post
strong returns for the 12 months ending September 30, 2004. The purpose of this
letter is to provide a retrospective for the Funds' investment results for the
period by discussing the main factors that impacted performance (e.g., sector
positioning, industry allocations, and stock selection) as compared to the
Funds' benchmark indexes. Certain sector or industry classifications used in
this letter may be broader than those used elsewhere in this annual report. For
a perspective on our recent economic and market outlook, please refer to the
quarterly shareholder letter dated October 2004 that we previously sent to you,
which is also available on our web site at www.marsicofunds.com.
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TABLE OF CONTENTS
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Investment Review for Focus Fund and Growth Fund 4
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MARSICO FOCUS FUND
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Fund Overview 8
Schedule of Investments 9
Statement of Assets and Liabilities 10
Statement of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 12
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MARSICO GROWTH FUND
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Fund Overview 13
Schedule of Investments 14
Statement of Assets and Liabilities 16
Statement of Operations 16
Statements of Changes in Net Assets 17
Financial Highlights 18
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MARSICO 21ST CENTURY FUND
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Investment Review for 21st Century Fund 19
Fund Overview 22
Schedule of Investments 23
Statement of Assets and Liabilities 25
Statement of Operations 25
Statements of Changes in Net Assets 26
Financial Highlights 27
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MARSICO INTERNATIONAL OPPORTUNITIES FUND
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Investment Review for International Opportunities Fund 28
Fund Overview 30
Schedule of Investments 31
Statement of Assets and Liabilities 33
Statement of Operations 33
Statements of Changes in Net Assets 34
Financial Highlights 35
NOTES TO FINANCIAL STATEMENTS 36
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 41
EXPENSE EXAMPLE 42
OTHER INFORMATION 43
TRUSTEE AND OFFICER INFORMATION 44
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MARSICO FOCUS FUND & MARSICO GROWTH FUND
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INVESTMENT REVIEW BY TOM MARSICO (UNAUDITED)
The Focus Fund and Growth Fund posted total returns of 9.93% and 13.20%,
respectively, for the one-year period ended September 30, 2004. For comparative
purposes, the S&P 500/R Index - which we consider to be the Funds' primary
equity benchmark - had a total return of 13.87% over the same time period. The
Funds reached 6-3/4 years of operating history as of the end of September.
Please see the Fund overviews for more detailed information about each Fund's
performance for various periods ending September 30, 2004. The performance data
for the Funds quoted here represent past performance, and past performance is
not a guarantee of future results. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Current performance may be lower or
higher than the performance information quoted. To obtain performance
information current to the most recent month-end, please call 888-860-8686 or
visit www.marsicofunds.com.(1)
In assessing the Funds' performance over the past year, we think as a starting
point that it is interesting to "decompose" the S&P 500/R Index's return. Much
of the S&P 500/R Index's gain of nearly 14% over the fiscal year took place in
the fourth calendar quarter of 2003, when it rose 12.18% (in large part due to a
strong rally in Information Technology and Telecommunications Services
companies). In the first nine months of calendar year 2004, the investment
landscape seemed to shift quite substantially. Over that time frame, the S&P
500/R Index was able to eke out a modest gain of 1.51%, while fixed-income
securities, despite three interest rate hikes by the Federal Reserve, had
substantially better performance.
Gains in stocks over the full 12-month period were widespread. All 10 economic
sectors (GICS classification) that comprise the S&P 500/R Index had a positive
return. The range of returns across sectors was considerable; the "spread"
between the top- and bottom-performing areas was more than 40%. Five sectors had
gains of 20% or more. Equity market leadership shifted quite substantially from
the prior fiscal year. The best-performing sector for the past fiscal year was
Energy, which soared by 45%. Other areas that generated strong returns were
Materials (+28%), Telecommunications Services (+25%), and Industrials (+23%).
The weakest-performing sector? That was Information Technology, with a fiscal
year gain of approximately 2%. That modest overall return, however, masked
considerable quarterly volatility in the sector's returns during the year.
The Focus Fund and Growth Fund often invest in similar growth companies. Their
performance has differed at times, however, because the Focus Fund invests in a
relatively more concentrated portfolio of securities, while the Growth Fund has
held some positions that are not present in the Focus Fund.(2)
As you may notice, the Funds - while having reasonably strong absolute returns -
trailed the S&P 500/R Index, their primary benchmark index. In the case of the
Growth Fund, the 12-month return was competitive with the S&P 500/R Index; the
performance shortfall was modest (less than 1%). However, the Focus Fund's
results trailed the Growth Fund by a substantial margin (see below for a summary
explanation), and also were well below the S&P 500/R Index's return. Following
is a summary of the Funds' investment results for the entire fiscal year:
FOCUS FUND
The FOCUS FUND'S performance shortfall (as compared to the S&P 500/R Index) was
mainly attributable to three areas:
o AN UNDERWEIGHTED POSTURE IN ENERGY - As noted above, Energy was the best
performing economic sector over the past 12 months. The Focus Fund did not
have any investments in this sector. As a result, the Fund experienced a
substantial "opportunity cost" in its performance. The primary reasons that
the Fund avoided Energy investments related to our stock selection criteria
as investment adviser. Among other factors, we like to emphasize companies
that we believe have durable, growing earnings, are not in businesses
susceptible to major fluctuations (i.e., "boom/bust" cycles), are not overly
dependent on the fluctuations of commodity prices, and whose business models
are not overly capital-intensive. We also tend to favor industries and
companies where there are significant barriers to entry for
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MARSICO FOCUS FUND & MARSICO GROWTH FUND
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new competitors, thereby creating an opportunity to establish significant
market share. In general, these types of investment criteria tend to "steer"
us away from making significant investments in the Energy sector. In past
fiscal years, that posture has been a positive contributor to investment
results. More recently, that has not been the case.
o STOCK SELECTION IN THE RETAILING INDUSTRY - The Fund had, on average, a
substantial allocation to retailing companies throughout the reporting
period. Unfortunately, our stock selection in this industry detracted
materially from investment results. For some time, we have believed that U.S.
consumer spending, as well as U.S. economic activity, has been relatively
strong. That view, however, has been periodically challenged over the course
of the past year, most recently as the result of the potential effect of
higher energy prices on consumer spending. In aggregate, the Fund's retailing
positions had a return of -5% over the reporting period, while the S&P
Retailing industry return was 19%. One significant retailing position in the
Fund was Tiffany & Co., which had a price decline of more than -17% during
the fiscal year. Tiffany & Co.' s sales did not grow as rapidly as we
expected in Japan (where the Company has a significant presence), and
perceptions of a sluggish U.S. economy also seemed to create a significant
overhang on the Company's stock price. Other retailing holdings that had a
significant negative impact on performance were Wal-Mart Stores, which
declined -15%, and Amazon.com, which fell by -12% prior to being sold.(3)
o DIVERSIFIED FINANCIALS - The Fund's results were hurt on two dimensions here.
The first involved OUR decision to maintain, on average, an overweighted
posture in this industry. Our rationale for investing in this area was based
primarily on our views that financial services companies had better-
diversified revenue streams than in years past, were generally less prone to
being significantly impacted by the potential of a higher interest rate
environment, and could potentially be among the "early beneficiaries" of a
sustained U.S. economic recovery. As it turned out, we underestimated the
impact on these types of companies, real or psychological, when long-term
interest rates increased substantially during the first half of the fiscal
year. Subsequently, interest rates declined significantly and performance for
these companies improved. However, that improvement was not enough to offset
weakness from earlier in the year. Over the 12-month period, Diversified
Financials - while having a positive return - was one of the weaker-
performing industry groups within the S&P 500/R Index. Second, overall our
stock selection within this industry group left something to be desired. In
particular, Goldman Sachs Group (-10%), Merrill Lynch & Co. (-6%), Morgan
Stanley (-6%), and Citigroup (+4%) were relative laggards.(3)
..
On the positive side of the ledger, the Focus Fund did have several value-added
areas last year. These included:
o HEALTH CARE EQUIPMENT AND SERVICES - We have emphasized positions in this
industry for some time, believing that it offers quite attractive long-term
growth potential. The overall "demand" for health care appears to be
increasing in the U.S. based on the fact that the country has an aging
population. There is tremendous innovation in various medical technology
fields, including biotechnology, medical devices, and testing procedures.
Stock selection in this industry group was a significant positive contributor
to performance. The Fund's holdings in aggregate gained 33% during the
reporting period. UnitedHealth Group, one of the Fund's top positions
throughout the reporting period, rose 47%. Boston Scientific Corporation, a
medical device company, gained 25%.(3)
..
o TECHNOLOGY HARDWARE & EQUIPMENT - Stock selection added material value to the
Fund's performance. The Fund's holdings in this industry gained more than 40%
during the reporting period. QUALCOMM, a company that specializes in wireless
communications technology, gained 88% last fiscal year. Cisco Systems, a
company that provides a variety of Internet infrastructure, rose 24% prior to
being sold.(3)
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MARSICO FOCUS FUND & MARSICO GROWTH FUND
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INVESTMENT REVIEW BY TOM MARSICO (continued)
The Focus Fund's performance also benefited from certain other individual
positions. In the Financials sector, Countrywide Financial Corporation, a
mortgage lending and servicing company (+67%), and SLM Corporation, an
educational lending institution (+17%), had strong gains. FedEx Corporation
gained 33%. Certain hotel and property management companies performed well,
including Mandalay Resort Group (+15%) and Four Seasons Hotels (+29%).
Homebuilder Lennar Corp.-Class A (+24%), Caterpillar (+19%), and Procter &
Gamble (+16%) also had solid returns.(3)
GROWTH FUND
The GROWTH FUND shared several of the Focus Fund's performance characteristics.
On the positive side, areas such as Health Care Equipment and Services and
Technology Hardware & Equipment were significant value-added contributors. In
addition, the Growth Fund benefited significantly from positions in the Hotels,
Restaurants, and Leisure industry. These holdings were a principal reason why
the Growth Fund's performance was more competitive with the S&P 500/R Index than
the Focus Fund. These factors are discussed below in more detail:
o HEALTH CARE EQUIPMENT AND SERVICES - Stock selection in this industry group
was a significant positive contributor to performance. The Fund's holdings in
aggregate gained 40% during the reporting period. UnitedHealth Group, one of
the Fund's top positions throughout the reporting period, rose 47%. Zimmer
Holdings, a medical products company that specializes in artificial knee and
hip replacement, gained 43%. Quest Diagnostics, a diagnostic testing company,
rose 46%, while Boston Scientific (see company description on previous page),
rose 25%.(3)
o TECHNOLOGY HARDWARE & EQUIPMENT - Stock selection added material value to the
Fund's performance, as the Fund's positions in this industry had a collective
return of 36% over the course of the reporting period. QUALCOMM gained 88%
last fiscal year and Cisco Systems rose 24% prior to being sold.(3)
o HOTELS, RESTAURANTS, AND LEISURE - The Fund benefited materially by being
overweighted (as compared to the S&P 500/R Index) in this industry group,
which was among the best-performing S&P industry categories with a return of
nearly 32%. The Fund had several hotel-related positions, which generated
strong overall returns. Wynn Resorts, a hotel/casino operator, surged by 184%
during the reporting period. Mandalay Resort Group, another hotel/casino
operator, had a return of 30%. Four Seasons Hotels rose 28%.(3)
The Growth Fund's performance was positively impacted by several individual
positions spanning a number of industry groups. Certain holdings in the
Financials sector - including Countrywide Financial Corporation (+52%) and SLM
Corporation (+17%) had solid overall returns. The Fund's homebuilding-related
positions also performed relatively well for the year. These included MDC
Corporation (+50%) and Lennar Corp.-Class A (+24%). FedEx Corporation (+33%),
Caterpillar (+19%), and Procter & Gamble (+19%) also had solid returns.(3)
The primary negative performance factors for the Growth Fund were similar to
those impacting the Focus Fund. They included:
o AN UNDERWEIGHTED POSTURE IN ENERGY - The Fund did not have any direct
positions in the Energy sector. As discussed earlier, Energy (+45% return)
was the strongest-performing sector for the 12-month period. The Fund
sustained a substantial "opportunity cost" because of our decision (discussed
in more detail in the Focus Fund discussion) to not invest in this sector.
..
o STOCK SELECTION IN THE RETAILING INDUSTRY - As in the Focus Fund, stock
selection in this industry adversely impacted the Growth Fund's fiscal year
performance. The S&P Retailing industry had a return of 19% last fiscal year,
while the Fund's holdings had an aggregate return of -5%. Wal-Mart Stores
.. (-15%), Tiffany & Co. (-17%), and Amazon.com (-14% prior to being sold) were,
again, the three main "culprits" for the Fund's sub-par results.(3)
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MARSICO FOCUS FUND & MARSICO GROWTH FUND
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o Diversified Financials - Like the Focus Fund, the Growth Fund's performance
was negatively impacted by an overweighted posture in a relatively weak-
performing industry group (the S&P 500/R Diversified Financials industry had
a one-year return of 7%, well below the Index's overall return of nearly
14%), and by stock selection. In particular, Goldman Sachs Group (-5%), HSBC
Holdings (-7% prior to being sold), Merrill Lynch & Co. (-6%), and Morgan
Stanley (-4% prior to being sold) were among the Fund's more significant
individual holdings that detracted from investment results.(3)
INVESTMENT POSTURE
As of September 30, 2004 the Focus Fund's and Growth Fund's primary economic
sector allocations were in Health Care, Consumer Discretionary, Financials,
Information Technology, and Industrials. The Funds had little or no exposure in
areas such as Energy, Utilities, Materials, and Telecommunications Services.
Sincerely,
/s/Thomas F. Marsico
THOMAS F. MARSICO
PORTFOLIO MANAGER
(1) A redemption fee may be imposed on redemptions or exchanges of Fund shares
owned for 30 days or less. See the prospectus for more information.
(2) Because the Focus Fund may hold securities of fewer issuers than other
diversified funds, the Fund is more exposed to individual stock volatility
and market pressures than funds investing in a larger number of securities.
(3) Portfolio composition is subject to change at any time and references to
specific securities, industries and sectors referenced in this letter are
not recommendations to purchase or sell any particular security. See the
accompanying Schedule of Investments for the percent of a Fund's portfolio
represented by the securities or industries mentioned in this letter.
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MARSICO FOCUS FUND
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FUND OVERVIEW SEPTEMBER 30, 2004
The Focus Fund invests primarily in the common stocks of large companies,
normally a core position of 20-30 common stocks that are selected for their
long-term growth potential.
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PERFORMANCE COMPARISON
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Five Year Average Annual
One Year Average Annual Since Inception
(10/1/03-9/30/04) (10/1/99-9/30/04) (12/31/97-9/30/04)
Marsico Focus Fund 9.93% -0.91% 7.85%
S&P 500/R Index 13.87% -1.31% 3.59%
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NET ASSETS GROWTH OF $10,000(1)
- --------------------------------- ---------------------------------------------
9/30/04 $2,895,322,405 Marsico S&P 500/R
Focus Fund Index
12/31/1997 10,000 10,000
3/31/1998 12,310 11,395
9/30/1998 12,360 10,600
3/31/1999 17,030 13,498
9/30/1999 17,430 13,548
3/31/2000 23,542 15,920
9/30/2000 22,210 15,347
3/31/2001 15,692 12,469
9/30/2001 13,733 11,262
3/31/2002 15,956 12,500
9/30/2002 13,115 8,955
3/31/2003 12,711 9,404
9/30/2003 15,148 11,140
3/31/2004 16,866 12,708
9/30/2004 16,652 12,685
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NET ASSET VALUE
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Net Asset Value Per Share $14.83
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TOP FIVE HOLDINGS
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UnitedHealth Group, Inc. 9.06%
QUALCOMM, Inc. 6.05
Genentech, Inc. 5.64
SLM Corporation 5.34
Countrywide Financial Corporation 5.31
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SECTOR ALLOCATION(2)
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Consumer Non-Cyclical 29.04%
Financial 19.11
Consumer Cyclical 17.22
Industrial 14.18
Communications 11.91
Technology 8.54
The performance data quoted here represents past performance, and past
performance is not a guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information quoted. To
obtain performance information current to the most recent month-end, please call
888-860-8686 or visit www.marsicofunds.com. A redemption fee may be imposed on
redemptions or exchanges of Fund shares owned for 30 days or less.
The performance included in the table and graph do not reflect the deduction of
taxes on Fund distributions or the redemption of Fund shares.
(1) This chart assumes an initial investment of $10,000 made on December 31,
1997 (inception). Total returns are based on net change in NAV, assuming
reinvestment of distributions.
(2) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one
industry. The Fund's portfolio composition is subject to change at any
time.
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MARSICO FOCUS FUND
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SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2004
Number Market Percent
of Value of Net
Shares in Dollars Assets
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COMMON STOCKS
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APPLICATIONS SOFTWARE
Microsoft Corporation 3,003,568 $83,048,655 2.87%
-------------------------------------------------
ATHLETIC FOOTWEAR
NIKE, Inc. - Class B 824,380 64,961,144 2.24
-------------------------------------------------
BEVERAGES - NON-ALCOHOLIC
PepsiCo, Inc. 493,124 23,990,483 0.83
-------------------------------------------------
BUILDING -
RESIDENTIAL/COMMERCIAL
Lennar Corporation - Class A 1,024,730 48,777,148 1.68
-------------------------------------------------
CASINO HOTELS
Mandalay Resort Group 805,841 55,320,985 1.91
MGM MIRAGE* 72,291 3,589,248 0.13
Wynn Resorts Ltd.* 198,012 10,235,240 0.35
-------------------------------------------------
69,145,473 2.39
-------------------------------------------------
COMPUTERS
Dell, Inc.* 2,390,923 85,116,859 2.94
-------------------------------------------------
COSMETICS & TOILETRIES
The Procter &
Gamble Company 1,761,838 95,350,673 3.29
-------------------------------------------------
DIVERSIFIED MANUFACTURING
OPERATIONS
General Electric Company 4,187,166 140,605,034 4.86
-------------------------------------------------
E-COMMERCE/SERVICES
eBay, Inc.* 1,062,722 97,706,661 3.37
-------------------------------------------------
ELECTRIC PRODUCTS -
MISCELLANEOUS
Samsung Electronics Co., Ltd. 160,820 63,964,881 2.21
-------------------------------------------------
ENTERTAINMENT SOFTWARE
Electronic Arts, Inc.* 1,580,246 72,675,514 2.51
-------------------------------------------------
FINANCE - CONSUMER LOANS
SLM Corporation 3,464,689 154,525,129 5.34
-------------------------------------------------
FINANCE - INVESTMENT
BANKER/BROKER
Citigroup, Inc. 2,644,059 116,655,883 4.03
The Goldman Sachs
Group, Inc. 529,393 49,360,603 1.70
Merrill Lynch & Co., Inc. 1,298,820 64,577,330 2.23
-------------------------------------------------
230,593,816 7.96
-------------------------------------------------
FINANCE - MORTGAGE
LOAN/BANKER
Countrywide Financial
Corporation 3,906,754 153,887,040 5.31
-------------------------------------------------
FOOD - RETAIL
Whole Foods Market, Inc. 441,660 37,890,011 1.31
-------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
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COMMON STOCKS (CONTINUED)
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HOTELS & MOTELS
Four Seasons Hotels, Inc. 825,883 $52,939,100 1.83%
-------------------------------------------------
MACHINERY - CONSTRUCTION
& MINING
Caterpillar, Inc. 1,201,530 96,663,089 3.34
-------------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
Genentech, Inc.* 3,114,288 163,250,977 5.64
-------------------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 3,555,688 262,196,433 9.06
-------------------------------------------------
MEDICAL INSTRUMENTS
Boston Scientific Corporation* 2,040,243 81,058,854 2.80
Medtronic, Inc. 1,437,058 74,583,310 2.58
-------------------------------------------------
155,642,164 5.38
-------------------------------------------------
MEDICAL PRODUCTS
Zimmer Holdings, Inc.* 1,023,161 80,870,646 2.79
-------------------------------------------------
RETAIL - BUILDING PRODUCTS
Lowe's Companies, Inc. 2,043,094 111,042,159 3.84
-------------------------------------------------
RETAIL - DISCOUNT
Wal-Mart Stores, Inc. 1,321,540 70,305,928 2.43
-------------------------------------------------
RETAIL - JEWELRY
Tiffany & Company 1,263,124 38,828,432 1.34
-------------------------------------------------
RETAIL - RESTAURANTS
Starbucks Corporation* 657,689 29,898,542 1.03
-------------------------------------------------
TELEPHONE - INTEGRATED
Verizon Communications, Inc. 892,452 35,144,760 1.21
-------------------------------------------------
TRANSPORTATION - SERVICES
FedEx Corporation 1,151,628 98,683,003 3.41
-------------------------------------------------
WIRELESS EQUIPMENT
Motorola, Inc. 1,553,510 28,025,320 0.97
QUALCOMM, Inc. 4,486,494 175,152,726 6.05
-------------------------------------------------
203,178,046 7.02
-------------------------------------------------
TOTAL COMMON STOCKS
(COST $2,271,080,264) 2,820,881,800 97.43
-------------------------------------------------
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SHORT-TERM INVESTMENTS
- --------------------------------------------------------------------------------
SSgA Money Market Funds 44,243,327 44,243,327 1.53
-------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $44,243,327) 44,243,327 1.53
-------------------------------------------------
TOTAL INVESTMENTS
(COST $2,315,323,591) 2,865,125,127 98.96
Cash and Other
Assets Less Liabilities 30,197,278 1.04
-------------------------------------------------
NET ASSETS $2,895,322,405 100.00%
=================================================
* Non-income producing.
See notes to financial statements.
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MARSICO FOCUS FUND
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STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2004
(Amounts in thousands)
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $2,315,324) $2,865,125
Receivable for investments sold 34,821
Receivable for capital stock sold 2,372
Interest and dividends receivable 1,385
Prepaid expenses and other assets 770
------------
TOTAL ASSETS 2,904,473
------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 4,102
Payable for capital stock redeemed 1,454
Accrued investment advisory fee 1,979
Accrued distribution fee 142
Accrued trustees' fees 638
Accrued expenses and other liabilities 836
------------
TOTAL LIABILITIES 9,151
------------
NET ASSETS $2,895,322
============
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NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
Paid-in-capital $2,648,484
Accumulated net investment loss (1,638)
Accumulated net realized loss on investments
and foreign currency transactions (301,361)
Net unrealized appreciation on investments
and foreign currency translations 549,837
------------
NET ASSETS $2,895,322
============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 195,177
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $14.83
============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
(Amounts in thousands)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $1,208
Dividends (net of $234 of non-reclaimable
foreign withholding taxes) 23,262
------------
TOTAL INVESTMENT INCOME 24,470
------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 22,998
Distribution fees 6,764
Transfer agent fees and expenses 2,962
Printing and postage expenses 855
Custody and fund accounting fees 466
Fund administration fees 283
Professional fees 276
Trustees' fees and expenses 249
Federal and state registration fees 155
Miscellaneous 217
------------
TOTAL EXPENSES 35,225
Less expenses paid indirectly (1,103)
------------
NET EXPENSES 34,122
------------
NET INVESTMENT LOSS (9,652)
------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
Net realized gain on investments 66,096
Net realized gain on foreign
currency transactions 12,287
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 158,667
------------
Net Gain on Investments 237,050
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $227,398
============
* Not in thousands.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO FOCUS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Year Year
Ended Ended
(Amounts in thousands) 9/30/04 9/30/03
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $(9,652) $(9,525)
Net realized gain (loss) on investments 66,096 (44,296)
Net realized gain on foreign
currency transactions 12,287 5,675
Change in unrealized appreciation/depreciation
on investments
and foreign currency translations 158,667 354,257
-----------------------------
Net increase in net assets resulting
from operations 227,398 306,111
-----------------------------
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Proceeds from sale of shares 1,022,647 1,273,020
Redemption fees 27 -
Redemption of shares (636,863) (571,086)
-----------------------------
Net increase from capital share transactions 385,811 701,934
-----------------------------
TOTAL INCREASE IN NET ASSETS 613,209 1,008,045
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 2,282,113 1,274,068
-----------------------------
END OF PERIOD $2,895,322 $2,282,113
=============================
Accumulated net investment loss (1,638) (848)
- --------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- --------------------------------------------------------------------------------
Shares sold 69,859 107,005
Shares redeemed (43,900) (46,887)
-----------------------------
NET INCREASE 25,959 60,118
=============================
See notes to financial statements.
MARSICO FOCUS FUND
FINANCIAL HIGHLIGHTS
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a Fund Share Outstanding Throughout the Period. 9/30/04 9/30/03 9/30/02 9/30/01 9/30/00
NET ASSET VALUE, BEGINNING OF PERIOD $13.49 $11.68 $12.27 $22.17 $17.43
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.05) (0.03) (0.08) (0.07) (0.16)
Net realized and unrealized gains
(losses) on investments 1.39 1.84 (0.47) (7.87) 4.94
---------------------------------------------------------------------------
Total from investment operations 1.34 1.81 (0.55) (7.94) 4.78
---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS & OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains - - - (1.96) (0.04)
Tax return of capital - - (0.04) - -
Redemption fees [See Note 2(i)] -(1) - - - -
---------------------------------------------------------------------------
Total distributions & other - - (0.04) (1.96) (0.04)
---------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $14.83 $13.49 $11.68 $12.27 $22.17
---------------------------------------------------------------------------
TOTAL RETURN 9.93% 15.50% (4.50)% (38.17)% 27.42%
- ------------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $2,895,322 $2,282,113 $1,274,068 $1,311,495 $2,853,805
Ratio of expenses to average net assets,
before expenses paid indirectly 1.30% 1.34% 1.35% 1.30% 1.27%
Ratio of net investment loss to average
net assets, net of expenses paid indirectly (0.36)% (0.54)% (0.64)% (0.36)% (0.69)%
Ratio of net investment loss to average
net assets, before expenses paid indirectly (0.40)% (0.59)% (0.68)% (0.39)% (0.70)%
Portfolio turnover rate 84% 90% 117% 127% 176%
(1) Less than $0.01.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO GROWTH FUND
- --------------------------------------------------------------------------------
FUND OVERVIEW SEPTEMBER 30, 2004
The Growth Fund invests primarily in the common stocks of large companies that
are selected for their growth potential. The Growth Fund will normally hold
between 35 and 50 common stocks.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Five Year Average Annual
One Year Average Annual Since Inception
(10/1/03-9/30/04) (10/1/99-9/30/04) (12/31/97-9/30/04)
Marsico Growth Fund 13.20% 0.52% 7.91%
S&P 500/R Index 13.87% -1.31% 3.59%
-------------------------------- ----------------------------------------------
NET ASSETS GROWTH OF $10,000(1)
-------------------------------- ----------------------------------------------
9/30/04 $1,363,425,468 Marsico S&P 500/R
Growth Fund Index
12/13/1997 10,000 10,000
3/31/1998 11,960 11,395
9/30/1998 11,540 10,600
3/31/1999 15,710 13,498
9/30/1999 16,290 13,548
3/31/2000 22,607 15,920
9/30/2000 20,938 15,347
3/31/2001 15,495 12,469
9/30/2001 13,307 11,262
3/31/2002 15,304 12,500
9/30/2002 12,452 8,955
3/31/2003 12,158 9,404
9/30/2003 14,769 11,140
3/31/2004 16,614 12,708
9/30/2004 16,719 12,685
- --------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------
Net Asset Value Per Share $15.95
- --------------------------------------------------------------------------------
TOP FIVE HOLDINGS
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc. 7.75%
Genentech, Inc. 5.07
QUALCOMM, Inc. 4.85
General Electric Company 4.75
Countrywide Financial Corporation 4.52
- --------------------------------------------------------------------------------
SECTOR ALLOCATION(2)
- --------------------------------------------------------------------------------
Consumer Non-Cyclical 26.00%
Consumer Cyclical 22.28
Industrial 17.92
Financial 15.47
Communications 10.40
Technology 7.93
The performance data quoted here represents past performance, and past
performance is not a guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information quoted. To
obtain performance information current to the most recent month-end, please call
888-860-8686 or visit www.marsicofunds.com. A redemption fee may be imposed on
redemptions or exchanges of Fund shares owned for 30 days or less.
The performance included in the table and graph do not reflect the deduction of
taxes on Fund distributions or the redemption of Fund shares.
(1) This chart assumes an initial investment of $10,000 made on December 31,
1997 (inception). Total returns are based on net change in NAV, assuming
reinvestment of distributions.
(2) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one
industry. The Fund's portfolio composition is subject to change at any
time.
- --------------------------------------------------------------------------------
MARSICO GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2004
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
AEROSPACE/DEFENSE
General Dynamics Corporation 183,941 $18,780,376 1.38%
-------------------------------------------------
AGRICULTURAL OPERATIONS
Monsanto Company 141,140 5,140,319 0.38
-------------------------------------------------
APPLICATIONS SOFTWARE
Microsoft Corporation 1,300,982 35,972,152 2.64
-------------------------------------------------
ATHLETIC FOOTWEAR
NIKE, Inc. - Class B 355,176 27,987,869 2.05
-------------------------------------------------
BEVERAGES - NON-ALCOHOLIC
PepsiCo, Inc. 232,008 11,287,189 0.83
-------------------------------------------------
BUILDING -
RESIDENTIAL/COMMERCIAL
Lennar Corporation - Class A 438,937 20,893,401 1.53
M.D.C. Holdings, Inc. 190,744 13,943,386 1.02
-------------------------------------------------
34,836,787 2.55
-------------------------------------------------
CASINO HOTELS
Mandalay Resort Group 253,011 17,369,205 1.27
MGM MIRAGE* 34,071 1,691,625 0.13
Wynn Resorts Ltd.* 791,390 40,906,949 3.00
-------------------------------------------------
59,967,779 4.40
-------------------------------------------------
COMMERCIAL BANKS -
WESTERN US
UCBH Holdings, Inc. 54,711 2,137,559 0.16
-------------------------------------------------
COMPUTERS
Dell, Inc.* 1,023,670 36,442,652 2.67
-------------------------------------------------
COSMETICS & TOILETRIES
The Procter &
Gamble Company 630,234 34,108,264 2.50
-------------------------------------------------
CRUISE LINES
Royal Caribbean Cruises Ltd. 500,208 21,809,069 1.60
-------------------------------------------------
E-COMMERCE/SERVICES
eBay, Inc.* 443,189 40,746,797 2.99
-------------------------------------------------
DIVERSIFIED MANUFACTURING
OPERATIONS
General Electric Company 1,927,541 64,726,827 4.75
Honeywell International, Inc. 500,148 17,935,307 1.32
Tyco International Ltd. 740,497 22,703,638 1.66
-------------------------------------------------
105,365,772 7.73
-------------------------------------------------
ELECTRIC PRODUCTS -
MISCELLANEOUS
Samsung Electronics Co., Ltd. 71,670 28,506,175 2.09
-------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- --------------------------------------------------------------------------------
ENTERTAINMENT SOFTWARE
Electronic Arts, Inc.* 677,892 $31,176,253 2.29%
-------------------------------------------------
FINANCE - CONSUMER LOANS
SLM Corporation 996,188 44,429,985 3.26
-------------------------------------------------
FINANCE - INVESTMENT
BANKER/BROKER
Citigroup, Inc. 991,432 43,741,980 3.21
-------------------------------------------------
The Goldman Sachs
Group, Inc. 234,072 21,824,873 1.60
Merrill Lynch & Co., Inc. 569,568 28,318,921 2.08
-------------------------------------------------
93,885,774 6.89
-------------------------------------------------
FINANCE - MORTGAGE
LOAN/BANKER
Countrywide Financial
Corporation 1,564,949 61,643,341 4.52
-------------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc. 336,417 21,564,330 1.58
-------------------------------------------------
LEISURE & RECREATION PRODUCTS
Brunswick Corporation 75,437 3,451,997 0.25
-------------------------------------------------
MACHINERY - CONSTRUCTION
& MINING
Caterpillar, Inc. 515,148 41,443,657 3.04
-------------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
Genentech, Inc.* 1,317,964 69,087,673 5.07
-------------------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 1,432,727 105,649,289 7.75
-------------------------------------------------
MEDICAL INSTRUMENTS
Boston Scientific Corporation* 940,877 37,381,043 2.74
Medtronic, Inc. 462,863 24,022,590 1.76
St. Jude Medical, Inc.* 107,653 8,103,041 0.60
-------------------------------------------------
69,506,674 5.10
-------------------------------------------------
MEDICAL LABS &
TESTING SERVICES
Quest Diagnostics, Inc. 180,730 15,944,001 1.17
-------------------------------------------------
MEDICAL PRODUCTS
Wright Medical Group, Inc.* 66,662 1,674,549 0.12
Zimmer Holdings, Inc.* 345,479 27,306,660 2.00
-------------------------------------------------
28,981,209 2.12
-------------------------------------------------
* Non-income producing.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2004
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- --------------------------------------------------------------------------------
RETAIL - BEDDING
Bed Bath & Beyond, Inc.* 320,323 $11,887,186 0.87%
-------------------------------------------------
RETAIL - BUILDING PRODUCTS
Lowe's Companies, Inc. 667,235 36,264,222 2.66
-------------------------------------------------
RETAIL - DISCOUNT
Wal-Mart Stores, Inc. 718,148 38,205,474 2.80
-------------------------------------------------
RETAIL - DRUG STORE
CVS Corporation 287,854 12,127,289 0.89
-------------------------------------------------
RETAIL - JEWELRY
Tiffany & Company 592,731 18,220,551 1.34
-------------------------------------------------
RETAIL - RESTAURANTS
Starbucks Corporation* 106,215 4,828,534 0.35
-------------------------------------------------
TELEPHONE - INTEGRATED
Verizon Communications, Inc. 420,626 16,564,252 1.21
-------------------------------------------------
TRANSPORTATION - SERVICES
FedEx Corporation 467,330 40,045,508 2.94
-------------------------------------------------
WIRELESS EQUIPMENT
Motorola, Inc. 694,045 12,520,572 0.92
QUALCOMM, Inc. 1,693,782 66,125,249 4.85
-------------------------------------------------
78,645,821 5.77
-------------------------------------------------
TOTAL COMMON STOCKS
(COST $1,042,222,381) 1,306,641,779 95.84
=================================================
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- --------------------------------------------------------------------------------
SSgA Money Market Funds 42,600,937 $42,600,937 3.12%
-------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $42,600,937) 42,600,937 3.12
-------------------------------------------------
TOTAL INVESTMENTS
(COST $1,084,823,318) 1,349,242,716 98.96
Cash and Other
Assets Less Liabilities 14,182,752 1.04
-------------------------------------------------
NET ASSETS $1,363,425,468 100.00%
=================================================
* Non-income producing.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2004
(Amounts in thousands)
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $1,084,823) $1,349,243
Receivable for investments sold 16,531
Receivable for capital stock sold 1,509
Interest and dividends receivable 666
Prepaid expenses and other assets 404
-------------
TOTAL ASSETS 1,368,353
-------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 2,671
Payable for capital stock redeemed 454
Accrued investment advisory fee 919
Accrued distribution fee 154
Accrued trustees' fees 338
Accrued expenses and other liabilities 392
-------------
TOTAL LIABILITIES 4,928
-------------
NET ASSETS $1,363,425
=============
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
Paid-in-capital $1,233,988
Accumulated net investment loss (326)
Accumulated net realized loss on investments
and foreign currency transactions (134,686)
Net unrealized appreciation on investments
and foreign currency translations 264,449
-------------
NET ASSETS $1,363,425
=============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 85,496
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $15.95
=============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
(Amounts in thousands)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $579
Dividends (net of $97 of non-reclaimable
foreign withholding taxes) 9,795
-------------
TOTAL INVESTMENT INCOME 10,374
-------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 9,508
Distribution fees 2,797
Transfer agent fees and expenses 1,115
Printing and postage expenses 334
Custody and fund accounting fees 224
Fund administration fees 203
Trustees' fees and expenses 110
Professional fees 110
Federal and state registration fees 101
Miscellaneous 80
-------------
TOTAL EXPENSES 14,582
Less expenses paid indirectly (412)
-------------
NET EXPENSES 14,170
-------------
NET INVESTMENT LOSS (3,796)
-------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
Net realized gain on investments 9,815
Net realized gain on foreign
currency transactions 1,481
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 113,857
-------------
Net Gain on Investments 125,153
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $121,357
=============
* Not in thousands.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Year Year
Ended Ended
(Amounts in thousands) 9/30/04 9/30/03
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $(3,796) $(4,165)
Net realized gain (loss) on investments 9,815 (23,520)
Net realized gain on foreign
currency transactions 1,481 8,532
Change in unrealized appreciation/depreciation
on investments
and foreign currency translations 113,857 132,227
-----------------------------
Net increase in net assets resulting
from operations 121,357 113,074
-----------------------------
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Proceeds from sale of shares 684,707 356,489
Redemption fees 21 -
Redemption of shares (231,880) (322,317)
-----------------------------
Net increase from capital share transactions 452,848 34,172
-----------------------------
TOTAL INCREASE IN NET ASSETS 574,205 147,246
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 789,220 641,974
-----------------------------
END OF PERIOD $1,363,425 $789,220
=============================
Accumulated net investment loss (326) (285)
- --------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- --------------------------------------------------------------------------------
Shares sold 44,600 28,383
Shares redeemed (15,100) (26,435)
-----------------------------
NET INCREASE 29,500 1,948
=============================
See notes to financial statements.
FINANCIAL HIGHLIGHTS
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a Fund Share Outstanding Throughout the Period. 9/30/04 9/30/03 9/30/02 9/30/01 9/30/00
NET ASSET VALUE, BEGINNING OF PERIOD $14.09 $11.88 $12.71 $20.82 $16.29
-----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.04) (0.07) (0.04) (0.09) (0.11)
Net realized and unrealized gains
(losses) on investments 1.90 2.28 (0.77) (7.32) 4.75
---------------------------------------------------------------------------
Total from investment operations 1.86 2.21 (0.81) (7.41) 4.64
---------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS & OTHER
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains - - - (0.70) (0.11)
Tax return of capital - - (0.02) - -
Redemption fees [See Note 2(i)] -(1) - - - -
---------------------------------------------------------------------------
Total distributions & other - - (0.02) (0.70) (0.11)
---------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $15.95 $14.09 $11.88 $12.71 $20.82
---------------------------------------------------------------------------
TOTAL RETURN 13.20% 18.60% (6.42)% (36.45)% 28.53%
- -----------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $1,363,425 $789,220 $641,974 $530,904 $1,002,722
Ratio of expenses to average net assets,
before expenses paid indirectly 1.30% 1.38% 1.37% 1.33% 1.30%
Ratio of net investment loss to average
net assets, net of expenses paid indirectly (0.34)% (0.62)% (0.49)% (0.53)% (0.54)%
Ratio of net investment loss to average
net assets, before expenses paid indirectly (0.38)% (0.67)% (0.52)% (0.55)% (0.55)%
Portfolio turnover rate 73% 91% 111% 120% 137%
(1) Less than $0.01.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO 21ST CENTURY FUND
- --------------------------------------------------------------------------------
INVESTMENT REVIEW BY CORY GILCHRIST (UNAUDITED)
The 21st Century Fund had a total return of 16.70% for the one-year period ended
September 30, 2004. For comparative purposes, the S&P 500/R Index (which we
consider to be the Fund's primary equity benchmark), the Russell 3000 Index
(which is a proxy for the performance of all publicly traded U.S. stocks,
including smaller capitalization companies), and the Nasdaq Composite Index had
total returns of 13.87%, 14.26%, and 6.71%, respectively, over the same period.
(As a reminder, the Nasdaq Composite consists primarily of technology-related
companies, which were among the U.S. equity market's weaker-performing areas
during the past fiscal year.) Please see the Fund overviews for more detailed
information about each Fund's performance for various periods ending September
30, 2004. The performance data for the Funds quoted here represent past
performance, and past performance is not a guarantee of future results.
Investment return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Current performance may be lower or higher than the performance
information quoted. To obtain performance information current to the most recent
month-end, please call 888-860-8686 or visit www.marsicofunds.com.(1)
Over the course of the 12-month period covered in this report, there were
several major factors underlying the 21st Century Fund's outperformance compared
with relevant benchmark indexes. These are discussed below.
o CONSUMER DISCRETIONARY - This economic sector was an area of considerable
investment emphasis for the Fund during the fiscal year, and comprised about
40% of the Fund's assets as of September 30, 2004. Overall, stock selection
within the sector - particularly in industries such as Hotels, Restaurants &
Leisure and Consumer Durables & Apparel - was a significant positive
contributor to Fund performance. (As discussed below, there were some areas
of industry weakness within the Consumer Discretionary holdings, particularly
Media and Retailing positions.) The Fund benefited from being overweighted
(as compared to the Russell 3000 Index) in these areas, which were the
strongest industry groups return-wise during the fiscal year. Hotel/Casino
operators Wynn Resorts (+184%) and Mandalay Resort Group (+36%) were among
the Fund's strongest-performing individual holdings. In addition, Shangri-La
Asia (+18%) and Four Seasons Hotels (+9%) contributed materially to
investment results. In the Consumer Durables & Apparel industry, the Fund had
two positions that performed well. Harman International, a manufacturer of
high fidelity audio products and electronic systems, rose 119%, and WCI
Communities, a Florida-headquartered homebuilding and real estate services
company, was up 41%.(2)
o PHARMACEUTICALS AND BIOTECHNOLOGY - The Fund's holdings in this industry,
which consisted primarily of biotechnology companies, gained 53% collectively
during the fiscal year. Specifically, Genentech (+31%), ImClone Systems (+33%
prior to being sold), and Kinetic Concepts (+50% prior to being sold) were
among the Fund's better-performing individual holdings.(2) The Fund also was
positively impacted by an underweighted posture (as compared to its benchmark
index) in pharmaceutical companies, which generally struggled during the year
ended September 30, 2004.
o BANKS AND DIVERSIFIED FINANCIALS - Stock selection in these two industries had
a material positive effect on the Fund's performance. In the banking area,
investment results were buoyed by positions in Countrywide Financial
Corporation, a mortgage banking and servicing company (+42%), and UCBH
Holdings, a California-chartered commercial bank that focuses on providing
services to Asian-Americans and others (+30%). Diversified Financials
companies Jefferies & Co., a full service brokerage firm (+21%) and Citigroup
(+14%) had significant positive impact on overall returns.(2)
- --------------------------------------------------------------------------------
MARSICO 21ST CENTURY FUND
- --------------------------------------------------------------------------------
o INFORMATION TECHNOLOGY POSITIONING AND STOCK SELECTION - As in the Focus and
Growth Funds, we elected to maintain, on average, an underweighted posture in
this sector in the 21st Century Fund. As noted earlier, Information
Technology was the weakest-performing sector last year. As a result, having a
lower allocation helped the Fund's investment results. In addition, stock
selection within the sector helped investment results. QUALCOMM (+89%) was
one of the Fund's best-performing individual holdings and Cisco Systems (+34%
prior to being sold) was another.(2)
The Fund's performance was positively impacted by several other individual
holdings and several sectors and industries. UnitedHealth Group, a health care
services and resources company, rose nearly 47%. Brunswick Corporation, a
manufacturer of various recreational products, gained 25%. Nextel
Communications, a telecommunications services company, was up nearly 40% prior
to being sold.(2)
Although the Fund's overall return for the year surpassed its primary benchmark
index, there were several factors that detracted significantly from investment
results:
o POSITIONING AND STOCK SELECTION IN THE INDUSTRIALS SECTOR - The main source of
underperformance stemming from the Fund's investments in this sector were
positions in the airline industry, an industry that has been under tremendous
pressure post-9/11 and, more recently, with the challenge of higher fuel
costs. JetBlue Airways (-36% prior to being sold) and RyanAir Holdings (-12%
prior to being sold) were two of the Fund's weakest-performing individual
holdings last year. A second negative was our decision to maintain, on
average, an underweighted posture in the Capital Goods companies, which was
the fourth-best performing industry group last year. And Monster Worldwide,
an online "warehouse" for advertising employment opportunities and storing
applicant responses, declined by more than -21% prior to being sold.(2)
o UNDERWEIGHTING IN ENERGY - As discussed earlier in this letter, Energy was the
best-performing economic sector last year. Like the Focus and Growth Funds,
the 21st Century Fund elected to not invest in this sector. As a result, the
Fund had to absorb a substantial "opportunity cost."
o MEDIA POSITIONS - Media-related companies had subdued performance overall last
year, perhaps due to concerns about the potential impact of a slower-growth
economic environment. The Fund's holdings in this industry declined, in
aggregate, by -5% last year. Sogecable, a Spanish media company, declined -
17% while it was owned in the Fund prior to being sold. Echostar
Communications, a provider of satellite-delivered digital television, fell -
13% prior to being sold. Cumulus Media, a radio broadcasting corporation,
lost -16%.(2)
o RETAILING POSITIONS - Retailing companies, overall, had market-like returns
last year. However, our stock selection in this industry detracted from the
Fund's investment results. The main "culprit" was Select Comfort, a
manufacturer of adjustable-firmness beds, which declined -30% prior to being
sold. In addition, Electronics Boutique, a specialty retailer of video game
hardware and software, was down -17% prior to being sold.(2)
o REAL ESTATE - This industry (26% return in the benchmark index) was the third-
best performing industry group last year. We had the right idea in causing
the Fund to own some positions (through real estate investment trusts) in
this area. However, our stock selection, in aggregate, detracted from
investment results. Performance did benefit through a position in Redwood
Trust, which rose 24%. However, Government Properties Trust (a larger-sized
position on average) had a return of -1%.(2) While that decline was modest,
it was magnified by the size of the holding. Furthermore, it was far behind
the industry's overall return.
- --------------------------------------------------------------------------------
MARSICO 21ST CENTURY FUND
- --------------------------------------------------------------------------------
The Fund has tended to have a relatively high portfolio turnover level because
of its investment style. Although the Fund may hold core positions for some
time, it may change its portfolio composition quickly to take advantage of new
opportunities, or to address issues affecting particular holdings.
As of September 30, 2004 the Fund maintained a number of areas of emphasis in
terms of economic sector distribution. These included: Consumer Discretionary,
Financials, Information Technology, and Health Care. During the year, we
decreased positions in two sectors: Industrials (primarily transportation-
related companies) and Information Technology. The Fund had a modest allocation
to Telecommunications Services and Materials as of the end of the fiscal year,
and had no investments in Utilities and Energy.
Sincerely,
/s/ Corydon J. Gilchrist
CORYDON J. GILCHRIST
PORTFOLIO MANAGER
(1) The performance returns for the 21st Century Fund (for the period prior to
March 31, 2004) reflect a fee waiver in effect; in the absence of such a
waiver, the returns would be reduced. For the period beginning April 1,
2004, performance returns for the 21st Century Fund would be higher but for
the reimbursement of fees waived previously. A redemption fee may be
imposed on redemptions or exchanges of Fund shares owned for 30 days or
less. See the prospectus for more information.
(2) Portfolio composition is subject to change at any time and references to
specific securities, industries and sectors referenced in this letter are
not recommendations to purchase or sell any particular security. See the
accompanying Schedule of Investments for the percent of the Fund's
portfolio represented by the securities or industries mentioned in this
letter.
- --------------------------------------------------------------------------------
MARSICO 21ST CENTURY FUND
- --------------------------------------------------------------------------------
FUND OVERVIEW SEPTEMBER 30, 2004
The 21st Century Fund invests primarily in common stocks that are selected for
their long-term growth potential. The Fund may invest in companies of any size,
and will normally hold a core position of between 35 and 50 common stocks.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Five Year Average Annual
Average Annual Since Inception
(10/1/99-9/30/04) (2/1/00-9/30/04)
Marsico 21st Century Fund 16.70%(1) 0.43%(1)
S&P 500/R Index 13.87% -3.23%
---------------------------------- -------------------------------------------
NET ASSETS GROWTH OF $10,000(1)(2)
---------------------------------- -------------------------------------------
9/30/04 $216,228,273 Marsico 21st S&P 500/R
Century Fund Index
2/01/2000 10,000 10,000
3/31/2000 12,810 10,770
9/30/2000 10,860 10,383
3/31/2001 7,290 8,436
9/30/2001 6,260 7,619
3/31/2002 7,520 8,456
9/30/2002 6,540 6,058
3/31/2003 6,540 6,362
9/30/2003 8,740 7,536
3/31/2004 10,260 8,597
9/30/2004 10,200 8,582
- --------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------
Net Asset Value Per Share $10.20
- --------------------------------------------------------------------------------
TOP FIVE HOLDINGS
- --------------------------------------------------------------------------------
Countrywide Financial
Corporation 5.32%
Wynn Resorts Ltd. 4.82
QUALCOMM, Inc. 4.57
UCBH Holdings, Inc. 4.39
Royal Caribbean Cruises Ltd. 4.38
- --------------------------------------------------------------------------------
SECTOR ALLOCATION(3)
- --------------------------------------------------------------------------------
Consumer Cyclical 31.13%
Financial 23.48
Consumer Non-Cyclical 16.24
Communications 15.96
Industrial 8.05
Technology 5.14
The performance data quoted here represents past performance, and past
performance is not a guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information quoted. To
obtain performance information current to the most recent month-end, please call
888-860-8686 or visit www.marsicofunds.com. A redemption fee may be imposed on
redemptions or exchanges of Fund shares owned for 30 days or less.
The performance included in the table and graph do not reflect the deduction of
taxes on Fund distributions or the redemption of Fund shares.
(1) The performance returns for the 21st Century Fund (for the period prior to
March 31, 2004) reflect a fee waiver in effect; in the absence of such a
waiver, the returns would be reduced. For the period beginning April 1,
2004 performance returns for the 21st Century Fund would be higher but for
the reimbursement of fees waived previously.
(2) This chart assumes an initial investment of $10,000 made on February 1,
2000 (inception). Total returns are based on net change in NAV, assuming
reinvestment of distributions.
(3) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one
industry. The Fund's portfolio composition is subject to change at any
time.
- --------------------------------------------------------------------------------
MARSICO 21ST CENTURY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2004
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
ADVERTISING SERVICES
Getty Images, Inc.* 100,587 $5,562,461 2.57%
-------------------------------------------------
AGRICULTURAL OPERATIONS
Monsanto Company 121,194 4,413,885 2.04
-------------------------------------------------
APPAREL MANUFACTURERS
Polo Ralph Lauren
Corporation 55,727 2,026,791 0.94
-------------------------------------------------
AUDIO/VIDEO PRODUCTS
Harman International
Industries, Inc. 72,882 7,853,036 3.63
-------------------------------------------------
BUILDING -
RESIDENTIAL/COMMERCIAL
WCI Communities, Inc.* 184,235 4,292,676 1.99
-------------------------------------------------
CASINO HOTELS
Wynn Resorts Ltd.* 201,753 10,428,613 4.82
-------------------------------------------------
COMMERCIAL BANKS -
SOUTHERN US
The South Financial
Group, Inc. 230,128 6,489,610 3.00
-------------------------------------------------
COMMERCIAL BANKS -
WESTERN US
UCBH Holdings, Inc. 242,825 9,487,173 4.39
-------------------------------------------------
COMMERCIAL SERVICES -
FINANCE
Moody's Corporation 29,113 2,132,527 0.99
-------------------------------------------------
COMPUTERS
Dell, Inc.* 164,988 5,873,573 2.72
-------------------------------------------------
COSMETICS & TOILETRIES
The Procter & Gamble
Company 56,346 3,049,446 1.41
-------------------------------------------------
CRUISE LINES
Royal Caribbean Cruises Ltd. 217,389 9,478,160 4.38
-------------------------------------------------
E-COMMERCE/PRODUCTS
Amazon.com, Inc.* 113,449 4,635,526 2.14
-------------------------------------------------
E-COMMERCE/SERVICES
eBay, Inc.* 67,818 6,235,187 2.88
-------------------------------------------------
ELECTRIC PRODUCTS -
MISCELLANEOUS
Samsung Electronics
Co., Ltd. 12,750 5,071,211 2.35
-------------------------------------------------
ENTERTAINMENT SOFTWARE
Electronic Arts, Inc.* 112,791 5,187,258 2.40
-------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- --------------------------------------------------------------------------------
FINANCE - INVESTMENT
BANKER/BROKER
Jefferies Group, Inc. 186,883 $6,441,857 2.98%
J.P. Morgan Chase & Co. 108,580 4,313,883 1.99
-------------------------------------------------
10,755,740 4.97
-------------------------------------------------
FINANCE - MORTGAGE
LOAN/BANKER
Countrywide Financial
Corporation 292,014 11,502,431 5.32
-------------------------------------------------
FINANCE - OTHER SERVICES
The Chicago Mercantile
Exchange 12,361 1,992,488 0.92
-------------------------------------------------
FOOD - RETAIL
Whole Foods Market, Inc. 51,137 4,387,043 2.03
-------------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc. 50,441 3,233,268 1.50
Shangri-La Asia Ltd. 4,267,006 4,569,525 2.11
Shangri-La Asia Ltd. 144A 832,000 890,987 0.41
-------------------------------------------------
8,693,780 4.02
-------------------------------------------------
LEISURE & RECREATION PRODUCTS
Brunswick Corporation 144,357 6,605,776 3.05
WMS Industries, Inc.* 93,935 2,413,190 1.12
-------------------------------------------------
9,018,966 4.17
-------------------------------------------------
MACHINERY - CONSTRUCTION
& MINING
Caterpillar, Inc. 55,246 4,444,541 2.05
Joy Global, Inc. 62,227 2,139,364 0.99
-------------------------------------------------
6,583,905 3.04
-------------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
Genentech, Inc.* 128,366 6,728,946 3.11
-------------------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 110,995 8,184,771 3.79
-------------------------------------------------
MEDICAL PRODUCTS
Wright Medical Group, Inc.* 239,652 6,020,058 2.78
-------------------------------------------------
MUSIC
EMI Group PLC+ 528,294 2,112,877 0.98
-------------------------------------------------
RADIO
Cumulus Media, Inc. -
Class A* 99,918 1,437,820 0.67
-------------------------------------------------
REITS - OFFICE PROPERTY
Government Properties
Trust, Inc. 671,519 6,379,431 2.95
-------------------------------------------------
REITS - MORTGAGE
Redwood Trust, Inc. 62,209 3,883,086 1.80
-------------------------------------------------
* Non-income producing.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO 21ST CENTURY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2004
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- --------------------------------------------------------------------------------
RETAIL - CONSUMER ELECTRONICS
Best Buy Co., Inc. 100,649 $5,459,202 2.52%
-------------------------------------------------
RETAIL - PET FOOD & SUPPLIES
PETSMART, INC. 266,663 7,570,563 3.50
-------------------------------------------------
TRANSPORTATION - SERVICES
FedEx Corporation 66,065 5,661,110 2.62
-------------------------------------------------
WIRELESS EQUIPMENT
Crown Castle International
Corporation* 369,962 5,505,035 2.55
JAMDAT Mobile, Inc.* 46,370 1,069,756 0.49
QUALCOMM, Inc. 252,937 9,874,660 4.57
-------------------------------------------------
16,449,451 7.61
-------------------------------------------------
TOTAL COMMON STOCKS
(COST $190,308,248) 215,038,801 99.45
-------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- --------------------------------------------------------------------------------
SSgA Money Market Funds 4,700,660 $4,700,660 2.17%
-------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $4,700,660) 4,700,660 2.17
-------------------------------------------------
TOTAL INVESTMENTS
(COST $195,008,908) 219,739,461 101.62
Liabilities Less Cash
and Other Assets (3,511,188) (1.62)
-------------------------------------------------
NET ASSETS $216,228,273 100.00%
=================================================
- --------------------------------------------------------------------------------
FORWARD CURRENCY CONTRACT OPEN AT SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
Currency
Currency Sold and Local U.S. Value in Unrealized
Settlement Date Currency Dollars U.S. Dollars Gain/Loss
- --------------------------------------------------------------------------------
British Pound 12/15/04 1,098,000 $1,923,011 $1,977,427 $(54,416)
-------------------------------------------------------
TOTAL $(54,416)
=======================================================
* Non-income producing.
+ A portion of this security has been segregated by the custodian to cover
segregation requirements on open forward currency contracts.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO 21ST CENTURY FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2004
(Amounts in thousands)
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $195,009) $219,739
Receivable for investments sold 10,166
Receivable for capital stock sold 286
Interest and dividends receivable 308
Prepaid expenses and other assets 175
-------------
TOTAL ASSETS 230,674
-------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 13,563
Payable for capital stock redeemed 234
Accrued investment advisory fee 133
Accrued distribution fee 178
Accrued trustees' fees 156
Unrealized loss on foreign currency
exchange contracts 54
Accrued expenses and other liabilities 128
-------------
TOTAL LIABILITIES 14,446
-------------
NET ASSETS $216,228
=============
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
Paid-in-capital $243,492
Accumulated net investment loss (483)
Accumulated net realized loss on investments
and foreign currency transactions (51,478)
Net unrealized appreciation on investments
and foreign currency translations 24,697
-------------
NET ASSETS $216,228
=============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 21,197
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $10.20
=============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
(Amounts in thousands)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $65
Dividends (net of $46 of non-reclaimable
foreign withholding taxes) 1,810
-------------
TOTAL INVESTMENT INCOME 1,875
-------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 1,556
Distribution fees 458
Transfer agent fees and expenses 250
Fund administration fees 115
Custody and fund accounting fees 95
Printing and postage expenses 62
Trustees' fees and expenses 35
State registration fees 34
Professional fees 26
Miscellaneous 10
-------------
TOTAL EXPENSES 2,641
Recovery of previously waived expenses 106
-------------
NET EXPENSES 2,747
-------------
NET INVESTMENT LOSS (872)
-------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain on investments 11,654
Net realized loss on foreign
currency transactions (438)
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 9,681
-------------
Net Gain on Investments 20,897
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $20,025
=============
* Not in thousands.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO 21ST CENTURY FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Year Year
Ended Ended
(Amounts in thousands) 9/30/04 9/30/03
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $(872) $(693)
Net realized gain on investments 11,654 6,230
Net realized gain (loss) on foreign
currency transactions (438) 322
Change in unrealized appreciation/depreciation
on investments
and foreign currency translations 9,681 13,359
Increase from payment by service provider - 68
-------------------------------
Net increase in net assets resulting
from operations 20,025 19,286
-------------------------------
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Proceeds from sale of shares 159,175 56,312
Redemption fees 18 -
Redemption of shares (67,028) (27,581)
-------------------------------
Net increase (decrease) from capital
share transactions 92,165 28,731
-------------------------------
TOTAL INCREASE IN NET ASSETS 112,190 48,017
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 104,038 56,021
-------------------------------
END OF PERIOD $216,228 $104,038
===============================
Accumulated net investment loss (483) (113)
- --------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- --------------------------------------------------------------------------------
Shares sold 16,143 7,212
Shares redeemed (6,855) (3,875)
-------------------------------
NET INCREASE 9,288 3,337
===============================
See notes to financial statements.
MARSICO 21ST CENTURY FUND
FINANCIAL HIGHLIGHTS
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a Fund Share Outstanding Throughout the Period. 9/30/04 9/30/03 9/30/02 9/30/01 9/30/00
NET ASSET VALUE, BEGINNING OF PERIOD $8.74 $6.54 $6.26 $10.86 $10.00
-----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.04) (0.04) (0.08) (0.08) (0.07)
Net realized and unrealized gains
(losses) on investments 1.50 2.23 0.36 (4.52) 0.93
---------------------------------------------------------------------------
Total from investment operations 1.46 2.19 0.28 (4.60) 0.86
---------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS & OTHER
- -----------------------------------------------------------------------------------------------------------------------------------
Increase from payment by service provider - 0.01 - - -
Redemption fees [See Note 2(i)] -(1) - - - -
---------------------------------------------------------------------------
Total distributions & other - 0.01 - - -
---------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.20 $8.74 $6.54 $6.26 $10.86
---------------------------------------------------------------------------
TOTAL RETURN 16.70% 33.64% 4.47% (42.36)% 8.60%(2)
- -----------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $216,228 $104,038 $56,021 $60,124 $130,173
Ratio of expenses to average net assets,
less waivers and before expenses paid indirectly,
plus reimbursements of previously waived expenses 1.50% 1.55%(5) 1.50% 1.50% 1.50%(3)
Ratio of net investment loss to average net assets,
net of waivers, reimbursements of previously
waived expenses and expenses paid indirectly (0.48)% (1.05)% (0.89)% (0.76)% (0.92)%(3)
Ratio of expenses to average net assets,
before waivers, reimbursements of previously
waived expenses and expenses paid indirectly 1.44% 1.65% 1.60% 1.57% 1.70%(3)
Ratio of net investment loss to average net assets,
before waivers, reimbursements of previously
waived expenses and expenses paid indirectly (0.42)% (1.15)% (0.99)% (0.83)% (1.13)%(3)
Portfolio turnover rate(4) 191% 236% 388% 399% 267%(2)
* Inception.
(1) Less than $0.01.
(2) Not annualized for the periods less than one year.
(3) Annualized for the periods less than one year.
(4) Portfolio turnover is greater than most funds due to the investment style
of the Fund.
(5) See Note 3 for information regarding the voluntary fee waiver.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
INVESTMENT REVIEW BY JIM GENDELMAN (UNAUDITED)
The Marsico International Opportunities Fund had a (US$) return of 20.93% for
the 12-month period ended September 30, 2004. For comparative purposes, the
Morgan Stanley Capital International EAFE Index ("EAFE Index"), which we
consider to be the Fund's primary equity benchmark index, had a total (US$)
return of 22.08% for the same time period. Please see the Fund overviews for
more detailed information about each Fund's performance for various periods
ending September 30, 2004. The performance data for the Funds quoted here
represent past performance, and past performance is not a guarantee of future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. Current performance may be lower or higher than the
performance information quoted. To obtain performance information current to the
most recent month-end, please call 888-860-8686 or visit
www.marsicofunds.com.(1)
As the "bottom line" performance numbers suggest, there was a nearly equal
balance between positive and negative factors underlying the Fund's fiscal-year
performance. Positive elements included:
- - MEDIA - Stock selection in this industry group, which was an area of
considerable investment emphasis for the Fund last year, had a significant
positive impact on the Fund's investment results. Collectively, the Fund's
media positions gained 40%. There were three particularly material holdings:
EMI Group, a London-based music publishing and distribution company (+68%),
Sogecable, a Spanish media company owned throughout the year by the Fund
(+67%), and NTL, a broadcasting and cable television company (+34%).(2)
- - HOTELS, RESTAURANTS & LEISURE - The Fund's position in Wynn Resorts, a
hotel/casino operator, surged 184% last year. Among other ventures, Wynn
Resorts is seeking to establish a major presence in Macau, located 12 miles
west of Hong Kong, based on potentially rapid growth associated with gaming
and tourism. Shangri-La Asia, a Hong Kong-based hotel, rose 20%.(2)
- - TELECOMMUNICATIONS SERVICES - Overall, this was a strong area of performance
for the Fund during the past fiscal year, with holdings in aggregate gaining
71%. In particular, Mobile Telesystems, a provider of cellular communications
in the Russian Federation and Ukraine, was a very strong performing holding
with a return of 101%. That result more than offset some weaker individual
telecommunications positions such as KDDI Corporation (-6%) and NTT Docomo (-
10% prior to being sold).(2)
- - INFORMATION TECHNOLOGY STOCK SELECTION - This sector, paralleling what
transpired in U.S. equity markets, was the weakest-performing area last
fiscal year for foreign stocks as reflected in the EAFE Index. In some
respects, particularly the Semiconductor industry, it might have been wiser
for us to have avoided the sector altogether. However, we were fortunate to
have some good stock selections during the year, which contributed positively
to overall Fund performance. These included German software company SAP AG
(+28%), Samsung Electronics (+19%), Marconi Corporation (+44% prior to being
sold), and AU Optronics, a Taiwan-based manufacturer of liquid crystal flat
panel television displays (+2%). The latter return may seem counterintuitive
in terms of being a positive contributor, in light of the Fund's benchmark
return of more than 22%. However, AU Optronics' modestly positive return is
being compared to the benchmark index's negative Semiconductor industry
return.(2)
The Fund had a number of holdings in the Financials sector, particularly banking
companies, which helped performance. These included (in order of the magnitude
of their individual contributions):
- - Erste Bank der Oster, an Austria-based Eastern European commercial bank
(+67%),
- - HSBC Holdings, a global banking and financial services company (+25%),
- - UFJ Holdings, a Japanese commercial bank (+25% prior to being sold), and
- - OTP Bank, a Hungarian-based bank (+84%).
- --------------------------------------------------------------------------------
MARSICO INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
UBS AG, a diversified global financial services company whose shares were held
by the Fund, rose 29%.(2)
There were several industry-level areas that detracted materially from the
Fund's performance last year: Transportation, Consumer Durables & Apparel, and
Food, Beverage & Tobacco. RyanAir Holdings, a Dublin-headquartered regional
airline company, had been one of the Fund's largest individual holdings and
declined -8% prior to being sold. Yamaha Corporation, a Japanese manufacturer of
audio and video products, declined -21% prior to being sold. Nestle SA, a
Switzerland-headquartered food company, declined by -16%. Ambev Cia de Bebidas,
a Brazilian beer brewer, declined -17% prior to being sold.(2)
There were some holdings in the Financials sector that struggled last fiscal
year, including Kookmin Bank, a South Korean commercial bank (-32% prior to
being sold), Man Group, a United Kingdom-based hedge fund manager (-25% prior to
being sold), and Millea Holdings, a Japanese property and casualty insurance
company (-14%).(2)
Given the amount of discussion earlier regarding the Energy sector, it would
seem remiss if we did not make a few comments regarding the sector's impact on
the Fund's performance. The International Opportunities Fund did have some
positions in Energy companies during the fiscal year, with a combined overall
return of 48%. These holdings included CNOOC Ltd., a China-based offshore gas
and drilling company (+59%), Golar LNG, a company that transports liquefied
natural gas through a fleet of carriers (+40%), and Total SA, an integrated oil
and gas company (+17%).(2) While the overall return for the Fund's energy-
related holdings was quite good, we were underweighted on average in this sector
compared to the benchmark index. As a result, like other Marsico Funds, we
absorbed an "opportunity cost" in terms of performance.
Country allocations, in aggregate, did not have a material impact on the Fund's
fiscal-year performance, particularly in the context of the factors discussed
above. The Fund's country-level positioning typically is derived as a residual
of the Fund's stock selection process. Currency gains and losses had a modest
negative impact on overall Fund performance during the fiscal year as a whole.
Currency-related strategies are not a central facet of the Fund's investment
process. The Fund has tended to have a relatively high portfolio turnover level
because of its investment style. Although the Fund may hold core positions for
some time, it may change its portfolio composition quickly to take advantage of
new opportunities, or to address issues affecting particular holdings.
As of September 30, 2004 the Fund's holdings, in terms of economic sector
distribution, were allocated primarily to Consumer Discretionary, Financials,
Information Technology, Health Care, and Industrials. The Fund's largest
country-level allocations were in the United Kingdom, Japan, Switzerland,
France, United States, and Germany. Compared to the prior fiscal year-end, the
United Kingdom, Switzerland, and France weightings rose. Holdings in countries
such as Ireland, Netherlands, and Brazil decreased.
Sincerely,
/s/ James G. Gendelman
JAMES G. GENDELMAN
PORTFOLIO MANAGER
(1) The performance returns for the International Opportunities Fund reflect a
fee waiver in effect; in the absence of such a waiver, the returns would
have been reduced. A redemption fee may be imposed on redemptions or
exchanges of Fund shares owned for 30 days or less. See the prospectus for
more information. Foreign investments present additional risks due to
currency fluctuations, economic and political factors, lower liquidity,
government regulations, differences in securities regulations and
accounting standards, possible changes in taxation, limited public
information and other factors.
The Morgan Stanley Capital International EAFE Index tracks the stocks of
about 1,000 companies in Europe, Australasia, and the Far East (EAFE). You
cannot invest directly in an index.
(2) Portfolio composition is subject to change at any time and references to
specific securities, industries and sectors referenced in this letter are
not recommendations to purchase or sell any particular security. See the
accompanying Schedule of Investments for the percent of the Fund's
portfolio represented by the securities or industries mentioned in this
letter.
- --------------------------------------------------------------------------------
MARSICO INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
FUND OVERVIEW SEPTEMBER 30, 2004
The International Opportunities Fund invests primarily in common stocks of
foreign companies that are selected for their long-term growth potential. The
Fund may invest in companies of any size throughout the world. It normally
invests in issuers from at least three different countries, not including the
United States, and maintains a core position of between 35 and 50 common stocks.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Five Year Average Annual
Average Annual Since Inception
(10/1/99-9/30/04) (6/30/00-9/30/04)
Marsico International Opportunities Fund 20.80%(1)(4) 2.28%(1)
Morgan Stanley Capital
International EAFE Index 22.08% -3.65%
- --------------------------------- ---------------------------------------------
NET ASSETS GROWTH OF $10,000(1)(2)
- --------------------------------- ---------------------------------------------
9/30/04 $106,161,617 Morgan
Marsico Stanley
International Capital
Opportunities International
Fund EAFE Index
6/30/2000 10,000 10,000
9/30/2000 10,360 9,193
3/31/2001 8,283 7,720
9/30/2001 7,011 6,570
3/31/2002 8,542 7,064
9/30/2002 7,248 5,550
3/31/2003 7,040 5,422
9/30/2003 9,101 6,993
3/31/2004 11,493 8,542
9/30/2004 11,006 8,537
- --------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------
Net Asset Value Per Share $10.63
- --------------------------------------------------------------------------------
TOP FIVE HOLDINGS
- --------------------------------------------------------------------------------
HSBC Holdings PLC 3.97%
UBS AG 3.89
Roche Holding AG 3.81
Renault S.A. 3.79
Reed Elsevier PLC 3.07
- --------------------------------------------------------------------------------
SECTOR ALLOCATION(3)
- --------------------------------------------------------------------------------
Communications 22.02%
Consumer Cyclical 21.79
Financial 20.29
Industrial 12.35
Consumer Non-Cyclical 11.23
Technology 5.31
Energy 5.29
Basic Materials 1.72
The performance data quoted here represents past performance, and past
performance is not a guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information quoted. To
obtain performance information current to the most recent month-end, please call
888-860-8686 or visit www.marsicofunds.com. A redemption fee may be imposed on
redemptions or exchanges of Fund shares owned for 30 days or less.
The performance included in the table and graph do not reflect the deduction of
taxes on Fund distributions or the redemption of Fund shares.
(1) The performance returns for the International Opportunities Fund reflect a
fee waiver in effect; in the absence of such a waiver, the returns would
have been 20.72% for the one year period ended 9/30/04, 1.49% since
inception through 9/30/04, and the ending value of a $10,000 investment
would have been $10,651 on 9/30/04.
(2) This chart assumes an initial investment of $10,000 made on June 30, 2000
(inception). Total returns are based on net change in NAV, assuming
reinvestment of distributions.
(3) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one
industry. The Fund's portfolio composition is subject to change at any
time.
(4) One year total return calculation includes financial statement trade date
adjustments. In the absence of adjustments, the Fund's one year return
would be 20.93%.
The Morgan Stanley Capital International EAFE Index tracks the stocks of about
1,000 companies in Europe, Australasia, and the Far East (EAFE). You cannot
invest directly in an index.
- --------------------------------------------------------------------------------
MARSICO INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2004
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
ADVERTISING SERVICES
JC Decaux S.A.* 50,425 $1,147,566 1.08%
-------------------------------------------------
AUDIO/VIDEO PRODUCTS
Sony Corporation 57,600 1,968,694 1.85
-------------------------------------------------
AUTOMOTIVE -
CARS/LIGHT TRUCKS
Nissan Motor Company, Ltd. 196,000 2,137,987 2.01
Renault S.A. 49,089 4,019,951 3.79
-------------------------------------------------
6,157,938 5.80
-------------------------------------------------
BROADCAST SERVICES/
PROGRAMMING
Grupo Televisa S.A. ADR 43,516 2,294,599 2.16
-------------------------------------------------
CABLE TV
Sogecable S.A.* 53,735 2,165,125 2.04
-------------------------------------------------
CASINO HOTELS
Wynn Resorts Ltd.* 25,870 1,337,220 1.26
-------------------------------------------------
CELLULAR TELECOMMUNICATIONS
Mobile Telesystems ADR 8,665 1,256,338 1.18
Vodafone Group PLC 916,809 2,197,135 2.07
-------------------------------------------------
3,453,473 3.25
-------------------------------------------------
CHEMICALS - SPECIALTY
Syngenta AG 17,651 1,686,920 1.59
-------------------------------------------------
COMMERCIAL BANKS - NON-US
ICICI Bank Ltd. ADR 98,983 1,365,965 1.29
Mitsubishi Tokyo Financial
Group, Inc. 251 2,096,800 1.98
OTP Bank Rt. GDR 144A 24,459 1,082,311 1.02
ROYAL BANK OF SCOTLAND GROUP 53,709 1,553,324 1.46
Royal Bank of Scotland
Group 144A 19,924 576,224 0.54
Unibanco Uniao de Bancos
Brasileiros S.A. GDR 49,530 1,200,112 1.13
-------------------------------------------------
7,874,736 7.42
-------------------------------------------------
COSMETICS & TOILETRIES
Natura Cosmeticos S.A. 27,575 557,674 0.53
Natura Cosmeticos S.A. 144A 6,000 121,344 0.11
-------------------------------------------------
679,018 0.64
-------------------------------------------------
CRUISE LINES
Carnival PLC 31,637 1,557,640 1.47
-------------------------------------------------
DISTRIBUTION/WHOLESALE
Esprit Holdings Ltd. 45,500 232,834 0.22
-------------------------------------------------
DIVERSIFIED MANUFACTURING
OPERATIONS
Siemens AG 28,182 2,075,141 1.95
Tyco International Ltd. 104,959 3,218,043 3.03
-------------------------------------------------
5,293,184 4.98
-------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- --------------------------------------------------------------------------------
ELECTRIC PRODUCTS -
MISCELLANEOUS
Samsung Electronics Co., Ltd. 7,650 $3,042,727 2.87%
-------------------------------------------------
ELECTRONIC MEASURING
INSTRUMENTS
Keyence Corporation 7,900 1,664,594 1.57
-------------------------------------------------
ENTERPRISE SOFTWARE/SERVICES
SAP AG 13,590 2,114,256 1.99
-------------------------------------------------
FOOD - MISCELLANEOUS/
DIVERSIFIED
Nestle S.A. 9,098 2,089,731 1.97
-------------------------------------------------
HOTELS & MOTELS
InterContinental Hotels
Group PLC 249,963 2,846,840 2.68
Shangri-La Asia Ltd. 1,385,003 1,483,196 1.40
Shangri-La Asia Ltd. 144A 258,000 276,291 0.26
-------------------------------------------------
4,606,327 4.34
-------------------------------------------------
MEDICAL - DRUGS
Roche Holding AG 39,040 4,044,621 3.81
-------------------------------------------------
MEDICAL PRODUCTS
Synthes, Inc.* 23,648 2,582,924 2.43
-------------------------------------------------
MONEY CENTER BANKS
Erste Bank der oesterreichischen
Sparkassen AG 26,557 1,106,381 1.04
HSBC Holdings PLC 265,351 4,216,989 3.97
UBS AG 58,407 4,123,178 3.89
-------------------------------------------------
9,446,548 8.90
-------------------------------------------------
MULTIMEDIA
The News Corporation
Ltd. ADR 47,598 1,564,546 1.47
-------------------------------------------------
MUSIC
EMI Group PLC 706,599 2,826,545 2.66
-------------------------------------------------
OFFICE AUTOMATION
& EQUIPMENT
Canon, Inc. 22,000 1,035,906 0.98
-------------------------------------------------
OIL COMPANIES - EXPLORATION
& PRODUCTION
CNOOC Ltd. ADR 21,703 1,141,578 1.07
Talisman Energy, Inc. 54,159 1,407,803 1.33
-------------------------------------------------
2,549,381 2.40
-------------------------------------------------
OIL COMPANIES - INTEGRATED
Total S.A. 12,912 2,633,408 2.48
-------------------------------------------------
PROPERTY/CASUALTY INSURANCE
Millea Holdings, Inc. 115 1,484,411 1.40
-------------------------------------------------
* Non-income producing.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2004
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- --------------------------------------------------------------------------------
PUBLISHING - BOOKS
Reed Elsevier PLC 371,366 $3,263,818 3.07%
-------------------------------------------------
REAL ESTATE OPERATING/
DEVELOPMENT
Capitaland Ltd. 1,017,000 1,080,695 1.02
-------------------------------------------------
RETAIL - CONSUMER ELECTRONICS
Yamada Denki Company, Ltd. 48,500 1,675,302 1.58
-------------------------------------------------
RETAIL - DRUG STORES
Boots Group PLC 85,635 996,250 0.94
Shoppers Drug
Mart Corporation* 59,514 1,613,523 1.52
-------------------------------------------------
2,609,773 2.46
-------------------------------------------------
SEMICONDUCTOR COMPONENTS/
INTEGRATED CIRCUITS
Taiwan Semiconductor
Manufacturing Co., Ltd. ADR 136,169 972,247 0.92
-------------------------------------------------
SEMICONDUCTOR EQUIPMENT
ASM Pacific Technology Ltd. 331,000 1,080,381 1.02
-------------------------------------------------
TELECOM SERVICES
China Telecom Corporation
Ltd. ADR 32,600 1,052,980 0.99
-------------------------------------------------
TELEPHONE - INTEGRATED
KDDI Corporation 431 2,096,037 1.97
NTL, Inc.* 43,779 2,717,363 2.56
-------------------------------------------------
4,813,400 4.53
-------------------------------------------------
TRANSPORTATION - MARINE
Golar LNG Ltd.* 70,600 1,115,573 1.05
-------------------------------------------------
TRANSPORTATION - TRUCK
Yamato Transport Co., Ltd. 72,000 992,855 0.94
-------------------------------------------------
TOTAL COMMON STOCKS
(COST $85,816,768) 96,191,896 90.61
-------------------------------------------------
- --------------------------------------------------------------------------------
PREFERRED STOCK
- --------------------------------------------------------------------------------
MULTIMEDIA
The News Corporation Ltd. ADR 58,600 1,835,938 1.73
-------------------------------------------------
TOTAL PREFERRED STOCK
(COST $1,875,576) 1,835,938 1.73
-------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- --------------------------------------------------------------------------------
SSgA Money Market Funds 5,179,153 $5,179,153 4.88%
-------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $5,179,153) 5,179,153 4.88
-------------------------------------------------
TOTAL INVESTMENTS
(COST $92,871,497) 103,206,987 97.22
Cash and Other Assets
Less Liabilities 2,954,630 2.78
-------------------------------------------------
NET ASSETS $106,161,617 100.00%
=================================================
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS BY COUNTRY
- --------------------------------------------------------------------------------
Percent
of
Market Investment
Country Value Securities
- --------------------------------------------------------------------------------
Australia $3,400,484 3.3%
Austria 1,106,381 1.1
Bermuda 3,218,043 3.1
Brazil 1,879,130 1.8
Canada 3,021,326 2.9
China 1,052,980 1.0
France 11,845,546 11.5
Germany 4,189,397 4.1
Hong Kong 4,214,280 4.1
Hungary 1,082,311 1.0
India 1,365,965 1.3
Japan 15,152,586 14.7
Mexico 2,294,599 2.2
Norway 1,115,573 1.1
Russia 1,256,338 1.2
Singapore 1,080,695 1.0
South Korea 3,042,727 3.0
Spain 2,165,125 2.1
Switzerland 10,482,753 10.2
Taiwan 972,247 1.0
United Kingdom 20,034,765 19.4
United States(1) 9,233,736 8.9
----------------------------------------
TOTAL $103,206,987 100.0%
----------------------------------------
* Non-income producing.
(1) Includes short-term securities.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2004
(Amounts in thousands)
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $92,871) $103,207
Foreign currency (cost $2) 2
Receivable for investments sold 3,052
Receivable for capital stock sold 265
Interest and dividends receivable 329
Prepaid expenses and other assets 126
-------------
TOTAL ASSETS 106,981
-------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 396
Payable for capital stock redeemed 115
Accrued investment advisory fee 57
Accrued distribution fee 52
Accrued trustees' fees 111
Accrued expenses and other liabilities 88
-------------
TOTAL LIABILITIES 819
-------------
NET ASSETS $106,162
=============
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
Paid-in-capital $103,290
Accumulated net investment loss (258)
Accumulated net realized loss on investments
and foreign currency transactions (7,224)
Net unrealized appreciation on investments
and foreign currency translations 10,354
-------------
NET ASSETS $106,162
=============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 9,985
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $10.63
=============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
(Amounts in thousands)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $52
Dividends (net of $119 of non-reclaimable
foreign withholding taxes) 1,135
-------------
TOTAL INVESTMENT INCOME 1,187
-------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 603
Distribution fees 177
Custody and fund accounting fees 153
Transfer agent fees and expenses 97
Fund administration fees 80
Trustees' fees and expenses 23
Federal and state registration fees 21
Printing and postage expenses 19
Professional fees 14
Miscellaneous 3
-------------
TOTAL EXPENSES 1,190
Less waiver of expenses and
expenses paid indirectly (54)
-------------
NET EXPENSES 1,136
-------------
NET INVESTMENT INCOME 51
-------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized loss on investments (513)
Net realized gain on foreign
currency transactions 334
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 5,295
-------------
Net Gain on Investments 5,116
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,167
=============
* Not in thousands.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Year Year
Ended Ended
(Amounts in thousands) 9/30/04 9/30/03
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment income $51 $42
Net realized loss on investments (513) (699)
Net realized gain on foreign
currency transactions 334 1,560
Change in unrealized appreciation/depreciation
on investments
and foreign currency translations 5,295 4,489
-----------------------------
Net increase in net assets resulting
from operations 5,167 5,392
-----------------------------
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Proceeds from sale of shares 90,174 7,109
Redemption fees 24 9
Redemption of shares (17,612) (4,733)
-----------------------------
Net increase from capital share transactions 72,586 2,385
-----------------------------
TOTAL INCREASE IN NET ASSETS 77,753 7,777
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 28,409 20,632
-----------------------------
END OF PERIOD $106,162 $28,409
=============================
Accumulated net investment loss (258) (181)
- --------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- --------------------------------------------------------------------------------
Shares sold 8,443 919
Shares redeemed (1,686) (637)
-----------------------------
NET INCREASE 6,757 282
=============================
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a Fund Share Outstanding Throughout the Period. 9/30/04 9/30/03 9/30/02 9/30/01 9/30/00
NET ASSET VALUE, BEGINNING OF PERIOD $8.80 $7.00 $6.78 $10.36 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.04 0.02 (0.02) - 0.01
Net realized and unrealized gains
(losses) on investments 1.79 1.78 0.19 (3.27) 0.35
---------------------------------------------------------------------------
Total from investment operations 1.83 1.80 0.17 (3.27) 0.36
---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS & OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income - - (0.01) (0.04) -
Net realized gains - - - (0.27) -
Redemption fees [See Note 2(i)] -(1) -(1) 0.05 - -
Payment by affiliate - - 0.01 - -
---------------------------------------------------------------------------
Total distributions & other - - 0.05 (0.31) -
---------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.63 $8.80 $7.00 $6.78 $10.36
---------------------------------------------------------------------------
TOTAL RETURN 20.80% 25.71% 3.37% (32.32)% 3.60%(2)
-----------------------------------------------------------------------------------------------------------------------------------
- -
SUPPLEMENTAL DATA AND RATIOS
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $106,162 $28,409 $20,632 $17,609 $15,480
Ratio of expenses to average net assets,
less waivers and before expenses paid indirectly 1.60% 1.68%(5) 1.60% 1.60% 1.60%(3)
Ratio of net investment income (loss) to average net
assets, net of waivers and expenses paid indirectly 0.07% 0.18% (0.25)% 0.05% 0.33%(3)
Ratio of expenses to average net assets,
before waivers and expenses paid indirectly 1.68% 2.31% 2.07% 2.60% 4.76%(3)
Ratio of net investment loss to average net assets,
before waivers and expenses paid indirectly (0.00)% (0.45)% (0.73)% (0.94)% (2.83)%(3)
Portfolio turnover rate(4) 105% 211% 192% 534% 190%(2)
* Inception.
(1) Less than $0.01.
(2) Not annualized for the periods less than one year.
(3) Annualized for the periods less than one year.
(4) Portfolio turnover is greater than most funds due to the investment style
of the Fund.
(5) See Note 3 for information regarding the voluntary fee waiver.
See notes to financial statements.
- --------------------------------------------------------------------------------
MARSICO FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2004
1. ORGANIZATION
The Marsico Investment Fund (the "Trust") was organized on October 1, 1997,
as a Delaware Statutory Trust and is registered under the Investment
Company Act of 1940 (the "1940 Act") as an open-end management investment
company. The Focus Fund, the Growth Fund, the 21st Century Fund and the
International Opportunities Fund (collectively, the "Funds") are separate
investment portfolios of the Trust. The Focus Fund is a non-diversified
fund and the Growth Fund, the 21st Century Fund and the International
Opportunities Fund are diversified funds. The Focus and Growth Funds
commenced operations on December 31, 1997, the 21st Century Fund commenced
operations on February 1, 2000 and the International Opportunities Fund
commenced operations on June 30, 2000. Affiliates of the Adviser hold
approximately 9% of the 21st Century Fund and 18% of the International
Opportunities Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements.
These policies are in conformity with generally accepted accounting
principles ("GAAP") for investment companies. The presentation of financial
statements in conformity with GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of income
and expenses during the reporting period. Actual results could differ from
those estimates. Certain prior year information has been reformatted to
conform to the current year presentation.
(a) Investment Valuation-A security traded on a recognized stock exchange
is valued at the last sale price prior to the time when assets are
valued on the principal exchange on which the security is traded. If
no sale is reported on the valuation date, the most current bid price
will be used. All other securities for which over-the-counter market
quotations are readily available are valued at the most current
closing price. Debt securities that will mature in more than 60 days
are valued at prices furnished by a pricing service. Securities that
will mature in 60 days or less are valued at amortized cost, which
approximates market value. Any securities for which market quotations
are not readily available are valued at their fair value as determined
in good faith by the Adviser in accordance with procedures established
by, and under the general supervision of, the Funds' Board of
Trustees. The Funds may use pricing services to determine market
value. The Board of Trustees has authorized the use of a pricing
service to assist the Funds in valuing certain equity securities
listed or traded on foreign security exchanges in the Funds'
portfolios in certain circumstances where there is a significant
change in the value of related U.S.-traded securities, as represented
by the S&P 500/R Index.
(b) Expenses-The Funds are charged for those expenses that are directly
attributable to each Fund, such as advisory and custodian fees.
Expenses that are not directly attributable to a Fund are typically
allocated among the Funds in proportion to their respective net
assets. The Funds' expenses may be reduced by voluntary advisory fee
waivers, brokerage credits and uninvested cash balances earning
interest or credits. Such credits are included in Waiver of Expenses
and Expenses Paid Indirectly in the Statement of Operations.
Brokerage commissions were paid to unaffiliated brokers which reduced
certain transfer agent fees and expenses in the amount of $1,097,943
and $409,882 for the Focus Fund and Growth Fund, respectively, for the
year ended September 30, 2004. Also, the Funds received credits on
certain custody account balances which reduced certain transfer agent
fees and expenses in the amount of $5,212, $2,155, $353 and $137 for
the Focus Fund, Growth Fund, 21st Century Fund and International
Opportunities Fund, respectively, for the year ended September 30,
2004. Brokerage commission credits and custody account earnings
credits are included in Expenses Paid Indirectly on the Statements of
Operations.
(c) Federal Income Taxes-Each Fund intends to comply with the requirements
of the Internal Revenue Code necessary to qualify as a regulated
investment company and to make the requisite distributions of income
to its shareholders which will be sufficient to relieve it from all or
substantially all federal and state income and excise taxes.
- --------------------------------------------------------------------------------
MARSICO FUNDS
- --------------------------------------------------------------------------------
Certain Funds may utilize earnings and profits on redemption of shares
as part of the dividends paid deduction.
(d) Distributions to Shareholders-Dividends from net investment income and
net realized capital gains, if any, will be declared and paid at least
annually. Distributions to shareholders are recorded on the ex-
dividend date. Each Fund may periodically make reclassifications among
certain of its capital accounts as a result of the timing and
characterization of certain income and capital gains determined in
accordance with federal tax regulations, which may differ from GAAP.
These reclassifications are due to differing treatment for items such
as deferral of wash sales, foreign currency transactions, deferred
trustees compensation, net operating losses and post-October capital
losses. Accordingly, at September 30, 2004, reclassifications (in
thousands) were recorded to increase (decrease) paid-in-capital by
$(12,190), $(3,764), $(974) and $(22), increase (decrease) net
investment income by $8,862, $3,755, $502 and $(128) and increase
(decrease) accumulated net realized gain (loss) on investments and
foreign currency transactions by $3,328, $9, $472 and $150 for the
Focus, Growth, 21st Century and International Opportunities Funds,
respectively.
(e) Foreign Currency Translation-The accounting records of the Funds are
maintained in U.S. dollars. Prices of securities denominated in
foreign currencies are translated into U.S. dollars at 4:00 p.m. ET.
Amounts related to the purchase and sale of foreign securities and
investment income are translated at the rates of exchange prevailing
on the respective dates of such transactions.
Reported realized gains on foreign currency transactions arise from
sales of portfolio securities, forward currency contracts, currency
gains or losses realized between the trade and settlement dates on
securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the
Funds' books, and the U.S. dollar equivalent of the amounts actually
received or paid.
The Funds do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities
held at fiscal year-end. Net unrealized appreciation or depreciation
on investments and foreign currency translations arise from changes in
the value of assets and liabilities, including investments in
securities at fiscal year-end, resulting from changes in the exchange
rates and changes in market prices of securities held.
(f) Forward Currency Contracts and Futures Contracts-The Funds may enter
into forward currency contracts to reduce their exposure to changes in
foreign currency exchange rates on their foreign holdings and to lock
in the U.S. dollar cost of firm purchase and sale commitments for
securities denominated in foreign currencies. A forward currency
contract is a commitment to purchase or sell a foreign currency at a
future date at a negotiated forward rate. The gain or loss arising
from the difference between the U.S. dollar cost of the original
contract and the value of the foreign currency in U.S. dollars upon
closing of such contract is included in net realized gain or loss from
foreign currency transactions.
Forward currency contracts held by the Funds are fully collateralized
by other securities. If held by the Funds, such collateral would be in
the possession of the Funds' custodian. The collateral would be
evaluated daily to ensure its market value equals or exceeds the
current market value of the corresponding forward currency contracts.
Futures contracts are marked to market daily and the resultant
variation margin is recorded as an unrealized gain or loss. When a
contract is closed, a realized gain or loss is recorded equal to the
difference between the opening and closing value of the contract.
Generally, open forward and futures contracts are marked to market
(i.e., treated as realized and subject to distribution) for federal
income tax purposes at fiscal year-end.
Foreign-denominated assets and forward currency contracts may involve
more risks than domestic transactions, including currency risk,
political and economic risk, regulatory risk and market risk. Risks
may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar.
- --------------------------------------------------------------------------------
MARSICO FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2004 (continued)
The Funds may enter into "futures contracts" and "options" on
securities, financial indexes and foreign currencies, forward
contracts, and interest rate swaps and swap-related products. The
Funds intend to use such derivative instruments primarily to hedge or
protect from adverse movements in securities prices, currency rates or
interest rates. The use of futures contracts and options may involve
risks such as the possibility of illiquid markets or imperfect
correlation between the value of the contracts and the underlying
securities, or that the counterparty will fail to perform its
obligations.
(g) Options Contracts-The Funds may purchase and write (sell) put and call
options on foreign and domestic stock indices, foreign currencies and
U.S. and foreign securities that are traded on U.S. and foreign
securities exchanges and over-the-counter markets. These transactions
are for hedging purposes or for the purpose of earning additional
income. In addition, the Funds may enter into such transactions for
cross-hedging purposes.
The risk associated with purchasing an option is that the Fund pays a
premium whether or not the option is exercised. Additionally, the Fund
bears the risk of loss of premium and change in market value should
the counterparty not perform under the contract. Put and call options
purchased are accounted for in the same manner as portfolio
securities. The cost of securities acquired through the exercise of
call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by
the premiums paid.
When the Fund writes an option, the premium received by the Fund is
recorded as a liability and is subsequently adjusted to the current
market value of the option written. Premiums received from writing
options that expire are recorded by the Fund on the expiration date as
realized gains from option transactions. The difference between the
premium and the amount paid on effecting a closing purchase
transaction, including brokerage commissions, is also treated as a
realized gain, or if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the
underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium
reduces the cost basis of the security or currency purchased by the
Fund. In writing an option, the Fund bears the market risk of an
unfavorable change in the price of the security or currency underlying
the written option. Exercise of an option written by the Fund could
result in the Fund selling or buying a security or currency at a price
different from the current market value.
(h) Trustees' Compensation-Effective February 1, 2000, the Board of
Trustees adopted the Marsico Investment Fund Deferred Fee Plan (the
"Deferred Fee Plan") that allows the independent Trustees to defer the
receipt of all or a portion of the Trustees' fees payable. The
Trustees are deemed to be notionally invested in the Funds until
distribution in accordance with the Deferred Fee Plan. Included in the
Trustees' Fees and Expenses on the Statement of Operations is the
unrealized appreciation of $35,860, $29,588, $20,518 and $18,526
related to the mark-to-market of the shares of the Deferred Fee Plan
for the Focus Fund, Growth Fund, 21st Century Fund and International
Opportunities Fund, respectively.
(i) Redemption Fee-For shares purchased on or after January 30, 2004, a
2.00% redemption fee is retained by the Funds to offset transaction
costs and other expenses associated with short-term investing. The fee
is imposed on redemptions or exchanges of shares held 30 days or less
from their purchase date. Prior to January 30, 2004, a 2.00%
redemption fee was imposed on redemptions or exchanges of shares of
the International Opportunities Fund held three months or less from
their purchase date. Redemption fees are recorded by the Funds as a
reduction of shares redeemed and as a credit to paid-in-capital. For
the period January 30 (effective date) to September 30, 2004, the
Focus Fund, Growth Fund and 21st Century Fund received $27,362,
$21,289 and $17,883, respectively, in redemption fees. For the year
ended September 30, 2004, the International Opportunities Fund
received $24,153 in redemption fees.
- --------------------------------------------------------------------------------
MARSICO FUNDS
- --------------------------------------------------------------------------------
(j) Other-Investment transactions are accounted for on a trade date basis.
Each Fund determines the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold
with the net sale proceeds. Dividend income is recognized on the ex-
dividend date. Certain dividends from foreign securities will be
recorded as soon as the Trust is informed of the dividend if such
information is obtained subsequent to the ex-dividend date. Interest
income is recognized on an accrual basis.
During the year ended September 30, 2003, the fund accounting agent
reimbursed the 21st Century Fund $67,752 for an investment transaction
loss, which had resulted from an unintended error in available cash
balances for investment transactions. This reimbursement is included
in the Statement of Changes in Net Assets and the Financial Highlights
as an Increase From Payment By Service Provider.
3. INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH AFFILIATES
The Funds have an agreement with Marsico Capital Management, LLC (the
"Adviser") to furnish investment advisory services to the Funds. Under the
terms of this agreement, the Adviser is compensated at the rate of 0.85% of
the average daily net assets of each of the Focus, Growth, 21st Century and
International Opportunities Funds. The Adviser has voluntarily agreed to
limit the total expenses of each Fund (excluding interest, taxes, brokerage
and extraordinary expenses) to an annual rate of 1.60% of the Focus and
International Opportunities Funds' average daily net assets and 1.50% of
the Growth and 21st Century Funds' average daily net assets until December
31, 2004. This fee waiver is voluntary and may be terminated at any time.
For the year ended September 30, 2004, the Adviser voluntarily waived
$54,190 for the International Opportunities Fund. The voluntary waiver of
expenses for the year ended September 30, 2003 excludes as an extraordinary
item the unrealized appreciation of $30,090 and $17,937, respectively, for
the 21st Century Fund and International Opportunities Fund related to the
mark-to-market of the shares of the Deferred Fee Plan. The unrealized
appreciation is included in the Change in Unrealized
Appreciation/Depreciation on Investment and Foreign Currency Translations
on the Statement of Operations. As a result, the unrealized appreciation is
retained by the Funds in accordance with the Deferred Fee Plan. For periods
subsequent to September 30, 2003, unrealized appreciation/depreciation of
Fund shares in the Deferred Fee Plan will be subject to the Funds' expense
reimbursement agreement with the Adviser.
The Adviser is entitled to reimbursement from a Fund of any fees waived
pursuant to this arrangement if such reimbursements do not cause a Fund to
exceed existing expense limitations and the reimbursement is made within
three years after the year in which the Adviser incurred the expense. For
the year ended September 30, 2004, the Adviser recovered previously waived
fees of $105,888 in the 21st Century Fund.
As of September 30, 2004, the reimbursements that may potentially be made
by the 21st Century Fund and the International Opportunities Fund to the
Adviser are $98,548 and $304,570, respectively, which expire between 2004
and 2006.
Banc of America Securities is an affiliate of Marsico Capital Management,
LLC and is designated as an introductory broker on certain Fund
transactions. For the year ended September 30, 2004, none of the Funds paid
brokerage commissions to Banc of America Securities.
4. SERVICE AND DISTRIBUTION PLAN
The Funds have adopted a Service and Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments by
the Funds in connection with the distribution of their shares at an annual
rate, as determined from time to time by the Board of Trustees, of up to
0.25% of a Fund's average daily net assets.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the year ended September 30, 2004, were as
follows:
(Amounts in thousands) Purchases Sales
------------------------------------------------------------------
Focus Fund $2,569,376 $2,156,227
Growth Fund 1,214,896 779,720
21st Century Fund 427,172 336,938
International Opportunities Fund 135,028 69,427
There were no purchases or sales of U.S. government securities.
- --------------------------------------------------------------------------------
MARSICO FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2004 (continued)
6. FEDERAL INCOME TAX INFORMATION
At September 30, 2004, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax
purposes were as follows:
21st International
Focus Growth Century Opportunities
(Amounts in thousands) Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Cost of investments $2,323,441 $1,086,462 $195,812 $94,253
-------------------------------------------------
Gross unrealized appreciation 585,742 275,834 29,896 11,365
Gross unrealized depreciation (44,058) (13,053) (5,969) (2,411)
-------------------------------------------------
Net unrealized appreciation
on investments $541,684 $262,781 $23,927 $8,954
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The difference between cost amounts for financial statement and federal
income tax purposes is due primarily to wash sale loss deferrals and
foreign currency transactions.
The Focus, Growth, 21st Century and International Opportunities Funds had
realized currency losses (in thousands) from transactions between November
1, 2003 and September 30, 2004 of $1,068, $9, $401 and $173, respectively.
Post-October currency losses and capital losses are treated as arising in
the Funds' next fiscal year.
At September 30, 2004, the Focus, Growth, 21st Century and International
Opportunities Funds had accumulated capital loss carryforwards (in
thousands) of $293,243, $133,048, $50,674 and $5,843, with $0, $0, $22,151
and $0 expiring in 2009, $205,773, $54,455, $28,523 and $5,765 expiring in
2010 and $87,470, $78,593, $0 and $78 expiring in 2011, respectively. To
the extent that a fund may realize future net capital gains, those gains
will be offset by any of its unused capital loss carryforward.
The Focus, Growth, 21st Century and International Opportunities Funds
utilized $36,536, $72, $12,404 and $840, respectively, of its capital loss
carryforwards during the year ended September 30, 2004.
- --------------------------------------------------------------------------------
As of September 30, 2004, the components of accumulated earnings (deficit)
on a tax basis were as follows:
21st International
Focus Growth Century Opportunities
(Amounts in thousands) Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Undistributed ordinary
income (deficit) $(1,603) $(297) $(463) $(239)
Undistributed long-term
capital gains - - - -
----------------------------------------------------
Tax accumulated earnings
(deficit) (1,603) (297) (463) (239)
----------------------------------------------------
Accumulated capital and
other losses (293,243) (133,047) (50,674) (5,843)
Unrealized appreciation
on investments 541,684 262,781 23,927 8,954
TOTAL ACCUMULATED
EARNINGS (DEFICIT) $246,838 $129,437 $(27,210) $2,872
====================================================
Undistributed ordinary income (deficit) consists primarily of post-October
currency losses and deferred Trustees' compensation.
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MARSICO FUNDS
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of The Marsico Investment Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Marsico Focus Fund, the Marsico
Growth Fund, the Marsico 21st Century Fund and the Marsico International
Opportunities Fund (constituting The Marsico Investment Fund, hereafter referred
to as the "Funds") at September 30, 2004, the results of each of their
operations for the year then ended, the changes in each of their net assets for
each of the two years in the period then ended and the financial highlights for
each of the periods indicated, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 2004 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where securities purchased had not been received, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Denver, Colorado
November 8, 2004
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MARSICO FUNDS
- --------------------------------------------------------------------------------
EXPENSE EXAMPLE FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)
As a shareholder of the Marsico Funds (the "Funds"), you incur two types of
costs: (1) transaction costs, including redemption fees on certain redemptions;
and (2) ongoing costs, including management fees; distribution (12b-1) fees, and
other Fund expenses. This Example is intended to help you understand your
ongoing costs (in dollars) of investing in the Funds and to compare these 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 from April 1, 2004 to September 30, 2004
(the "period").
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 you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 equals 8.6), then multiply the result by the number in the
first line under the heading entitled "Expenses Paid During the Period" to
estimate the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Funds' actual expense
ratios and an assumed rate of return of 5% per year before expenses, which is
not the actual return of any of the Funds. 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 Funds and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees. Therefore, the second line of the table is useful in comparing
the ongoing costs 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 could have been higher.
- --------------------------------------------------------------------------------
EXPENSES PAID DURING THE PERIOD
FOCUS FUND
-------------------------------------------------
Expenses paid
Beginning Ending during the
account value account value period ended
April 1, September 30, September 30,
2004 2004 2004(1)
-------------------------------------------------
Actual Example $1,000.00 $987.40 $6.28
Hypothetical Example,
assuming a 5% return
before expenses $1,000.00 $1,012.36 $6.36
GROWTH FUND
-------------------------------------------------
Expenses paid
Beginning Ending during the
account value account value period ended
April 1, September 30, September 30,
2004 2004 2004(1)
-------------------------------------------------
Actual Example $1,000.00 $1,006.30 $6.37
Hypothetical Example,
assuming a 5% return
before expenses $1,000.00 $1,012.30 $6.39
- --------------------------------------------------------------------------------
MARSICO FUNDS
- --------------------------------------------------------------------------------
21st CENTURY FUND
-------------------------------------------------
Expenses paid
Beginning Ending during the
account value account value period ended
April 1, September 30, September 30,
2004 2004 2004(1)
-------------------------------------------------
Actual Example $1,000.00 $994.20 $7.48
Hypothetical Example,
assuming a 5% return
before expenses $1,000.00 $1,010.00 $7.54
INTERNATIONAL OPPORTUNITIES FUND
-------------------------------------------------
Expenses paid
Beginning Ending during the
account value account value period ended
April 1, September 30, September 30,
2004 2004 2004(1)
-------------------------------------------------
Actual Example $1,000.00 $957.70 $7.83
Hypothetical Example,
assuming a 5% return
before expenses $1,000.00 $1,009.00 $8.04
OTHER INFORMATION
PROXY VOTING GUIDELINES
The Funds exercise the voting rights associated with the securities held by the
Funds under the proxy voting policy of the Funds. A description of those
policies and procedures of the Fund and a record of the Funds' proxy votes for
the year ended June 30, 2004 are available without charge, upon request, by
calling 888-860-8686. It is also available on the Securities and Exchange
Commission's website at www.sec.gov.
QUARTERLY FILING OF PORTOLIO HOLDINGS
The Funds will file their complete schedule of investments with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Funds' Form N-Q
will be available (i) on the SEC's website at www.sec.gov; (ii) at the SEC's
Public Reference Room and (iii) by calling 800-SEC-0330.
(1) Expenses are equal to the Funds' annualized expense ratios (1.26% for the
Focus Fund, 1.27% for the Growth Fund, 1.50% for the 21st Century Fund and
1.60% for the International Opportunities Fund), multiplied by the average
account value over the period, multiplied by 183/366 (to reflect the six
month period).
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MARSICO FUNDS
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TRUSTEE AND OFFICER INFORMATION INDEPENDENT TRUSTEES
Term of Office(1) Number of Portfolios Other
Position(s) Held and Length of Principal Occupation(s) in Fund Complex Directorships
Name, Address and Age with the Trust Time Served During Past 5 Years Overseen by Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Rono Dutta Trustee Since August 1998 President, United Airlines 4 None
1200 17th Street (1999 - September 2002);
Suite 1600 Senior Vice President -
Denver, CO 80202 Planning, United Airlines
DOB: 1951 (1994 - 1999); other positions
with United Airlines (1985 - 1994);
previously, Manager for Planning,
Bell & Howell, and Management
Consultant, Booz, Allen and Hamilton.
Walter A. Koelbel, Jr. Trustee Since December 1997 President, and other positions, 4 None
5291 Yale Avenue Koelbel and Company (real estate
Denver, CO 80222 development company)
DOB: 1952 (December 1976 - present).
Federico Pena Trustee Since February 1999 Managing Director, Vestar Capital 4 Principal Financial
1225 17th Street Partners (August 1998 - present); Group, Inc.
Denver, CO 80202 Secretary, U.S. Department of Energy Sonic Corp.
DOB: 1947 (March 1997 - July 1998); Secretary,
U.S. Department of Transportation
(January 1993 - February 1997).
Michael D. Rierson Trustee Since November 1998 Vice President of University 4 None
4202 East Fowler Avenue Advancement at University of South
ADM 214 Florida (May 2001 - present);
Tampa, FL 33620 Vice President, University Advancement
DOB: 1952 at University of Miami (September 1998 -
March 2001); Associate Dean,
Kenan-Flagler Business School at
University of North Carolina at Chapel Hill
(November 1993 - September 1998);
Various positions at Duke University,
Durham, N.C. (October 1983 -
November 1993).
Joseph T. Willett Trustee Since November 2002 Chief Operating Officer, Merrill 4 Merrill Lynch
1200 17th Street Lynch Europe (1998 - 2002); Capital Markets
Suite 1600 Chief Financial Officer, Merrill Bank Limited
Denver, CO 80202 Lynch & Co., (1993 - 1998). (Ireland)
DOB: 1955
(1) Each Trustee serves an indefinite term until the election of a successor.
Each Officer serves an indefinite term, renewed annually, until the
election of a successor.
The Statement of Additional Information includes additional information
about the Trustees and is available upon request, without charge, by
calling 1-888-860-8686.
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MARSICO FUNDS
- --------------------------------------------------------------------------------
TRUSTEE AND OFFICER INFORMATION INTERESTED TRUSTEES AND OFFICERS
Term of Office(1) Number of Portfolios Other
Position(s) Held and Length of Principal Occupation(s) in Fund Complex Directorships
Name, Address and Age with the Trust Time Served During Past 5 Years Overseen by Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas F. Marsico(2)(3) Trustee, Since December 1997 Chief Executive Officer, Marsico 4 None
1200 17th Street President Capital Management, LLC
Suite 1600 and Chief (September 1997 - present);
Denver, CO 80202 Executive Executive Vice President,
DOB: 1955 Officer Janus Capital Corp. (1986 - 1997).
Jeffrey Riggs(2) Trustee Since December 1997 President, Essex Financial Group, 4 None
8400 East Prentice Avenue Inc.(commercial mortgage bank)
Suite 1310 (more than five years); Principal,
Englewood, CO 80111 Metropolitan Homes, Inc. (January
DOB: 1953 1992 - 2000); Principal, Baron
Properties, LLC (January 1997 - present).
Christopher J. Marsico(3) Vice Since September 2002 President, Marsico Capital N/A N/A
1200 17th Street President Management, LLC (June 2002 -
Suite 1600 and Treasurer present); Chief Operations Officer,
Denver, CO 80202 Marsico Capital Management, LLC
DOB: 1961 (September 1997 - June 2002);
Vice President, US West
(1988 - September 1997).
Mary L. Watson Vice Since September 2002 Chief Operations Officer, Marsico N/A N/A
1200 17th Street President Capital Management, LLC
Suite 1600 and Secretary (June 2002 - present); Vice President
Denver, CO 80202 of Client Services, Marsico Capital
DOB: 1959 Management, LLC (September 1997 -
present); Vice President of Institutional
Services and other positions,
Janus Capital (1986 - September 1997).
David C. Price, CPA Chief Since August 2004 Director of Compliance, N/A N/A
1200 17th Street Compliance Marsico Capital Management, LLC
Suite 1600 Officer (August 2004 - present); Senior
Denver, CO 80202 Compliance Officer, INVESCO
DOB: 1969 Institutional, N.A. (October 2003 -
July 2004); Assistant Vice President-
Compliance, Berger Financial
Group LLC and The Berger Funds
(March 2001 - May 2003);
Manager-Compliance, Berger
Financial Group LLC (October
1998 - March 2001); Auditor,
PricewaterhouseCoopers LLP
(August 1993 - August 1998).
Sander M. Bieber Assistant Since December 1997 Partner, Dechert (law firm)
1775 I Street, N.W. Secretary (more than five years). N/A N/A
Washington, D.C. 20005
DOB: 1950
(1) Each Trustee serves an indefinite term until the election of a successor.
Each Officer serves an indefinite term, renewed annually, until the
election of a successor.
(2) Mr. T. Marsico is considered an Interested Trustee of the Trust within the
meaning of the Investment Company Act of 1940, as amended, because of his
affiliation with Marsico Capital Management, LLC. The Trust treats Mr.
Riggs as an Interested Trustee due to a business relationship with Mr. T.
Marsico whereby Mr. T. Marsico has invested personal assets in certain
partnerships for which Mr. Riggs acts as principal.
(3) Mr. T. Marsico and Mr. C. Marsico are brothers.
The Statement of Additional Information includes additional information
about the Trustees and is available upon request, without charge, by
calling 1-888-860-8686.
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MARSICO FUNDS
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[LOGO]
------------
MARSICO
FUNDS
Helping you appreciate life/SM
THE MARSICO INVESTMENT FUND
UMB DISTRIBUTION SERVICES, LLC, DISTRIBUTOR
P.O. BOX 3210, MILWAUKEE, WI 53201-3210
www.marsicofunds.com - 888.860.8686
C/2004 MARSICO CAPITAL MANAGEMENT, LLC
Not authorized for distribution unless preceded or accompanied by an effective
Marsico Funds prospectus.
[LOGO]
------------
MARSICO
FUNDS
Helping you appreciate life/SM
Item 2 - Code of Ethics
(a) The Registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the Registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the
Registrant or a third party. A copy of this code of ethics is attached hereto as
Exhibit (a).
(c) There have been no amendments, during the period covered by this report, to
a provision of the code of ethics that applies to the Registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the Registrant or a third party, and that relates to
any element of the code of ethics description.
(d) The Registrant has not granted any waivers, including an implicit waiver,
from a provision of the code of ethics that applies to the Registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the Registrant or a third party, that
relates to one or more of the items set forth in paragraph (b) of this item's
instructions.
(e) Not applicable.
(f) See attached Exhibit A.
Item 3 - Audit Committee Financial Expert
(a)(1) The Registrant's Board of Trustees has determined that the Registrant has
at least one audit committee financial expert serving on its audit committee.
(a)(2) Mr. Joseph T. Willett is the audit committee financial expert. Mr.
Willett is "independent" under the applicable rules.
Item 4 - Principal Accountant Fees and Services
In each of the fiscal years ended September 30, 2004 and September 30,
2003, the aggregate Audit Fees billed (or to be billed) by
PricewaterhouseCoopers LLP (PwC) for professional services rendered for the
audits of the financial statements, or services that are normally provided in
connection with statutory and regulatory filings or engagements as well as
reimbursable expenses are listed below.
(a) Audit Fees.
2004 2003
$95,215 $95,499
(b) Audit-Related Fees.
In each of the fiscal years ended September 30, 2004 and September 30, 2003, the
aggregate Audit-Related Fees billed (or to be billed) by PwC for services
rendered for assurance and related services to each fund that are reasonably
related to the performance of the audit or review of the fund's financial
statements, but not reported as Audit Fees, are shown in the table below.
2004 2003
$0 $0
(c) Tax Fees.
In each of the fiscal years ended September 30, 2004 and September 30, 2003 the
aggregate Tax Fees billed (or to be billed) by PwC for professional services
rendered for tax compliance, tax advice, and tax planning are shown in the table
below.
2004 2003
$13,500 $12,500
All of these fees were approved by the Trust's Audit Committee as required
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
Fees included in the Tax Fees category comprise all services performed by
professional staff in the independent registered public accounting firm's tax
division except those services related to the audit. Typically, this category
would include fees for tax compliance, tax planning, and tax advice. Tax
compliance, tax advice, and tax planning services include preparation of
original and amended tax returns, claims for refund and tax payment-planning
services, assistance with tax audits and appeals, tax advice related to mergers
and acquisitions and requests for rulings or technical advice from taxing
authorities.
(d) All Other Fees.
In each of the fiscal years ended September 30, 2004 and September 30, 2003 the
aggregate Other Fees billed (or to be billed) by PwC for all other non-audit
services rendered are shown in the table below.
2004 2003
$0 $0
(e) (1) Audit Committee Pre-Approval Policies and Procedures:
Pursuant to the Trust's Audit Committee Charter and Policies and Procedures
(collectively, the "Procedures"), the Audit Committee has adopted pre-approval
policies and procedures to govern the pre-approval of (i) all audit services and
permissible non-audit services to be provided to the Trust by its independent
accountant, and (ii) all permissible non-audit services to be provided by such
independent accountant to the Trust's investment adviser and to any entity
controlling, controlled by or under common control with the investment adviser
that provides on-going services to the Trust (collectively, any
"Service Affiliates") if the engagement directly relates to the Trust's
operations and financial reporting.
In accordance with the Procedures, the Committee is responsible for the
engagement of the independent accountant to certify the Trust's financial
statements for each fiscal year. With respect to the pre-approval of non-audit
services provided to the Trust and its Service Affiliates, the Procedures
provide that the Committee may pre-approve such services on a project-by-project
basis as they arise. The Procedures also permit the Committee to delegate
authority to the Audit Committee Chairman (the "Designated Member") to
pre-approve any proposed non-audit services that have not been previously
approved by the Committee, subject to certain conditions. Any action by the
Designated Member in approving a requested non-audit service shall be presented
to the Audit Committee not later than at its next scheduled meeting. If the
Designated Member does not approve the independent auditor's provision of a
requested non-audit service, the matter may be presented to the full Committee
for its consideration and action.
(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X:
100% of these fees were approved by the Trust's Audit Committee as required
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(f) According to PwC for the fiscal year ended September 30, 2004, the
percentage of hours spent on the audit the Marsico Funds' financial statements
for the most recent fiscal year that were attributed to work performed by
persons who are not full-time, permanent employees of PwC is as follows:
PwC 2004
Work performed by persons who are not full-time 0%
(g) In each of the fiscal years ended September 30, 2004 and September 30, 2003,
the aggregate fees billed (or to be billed) by PwC relating to non-audit
services that were rendered to the Trust, to its investment adviser, and to any
entity controlling, controlled by, or under common control with the investment
adviser and that provides ongoing services to the Trust are shown in the table
below.
2004 2003
$27,500 $25,000
(h) All non-audit services of the specified type (services that were provided
by PwC to the investment adviser and to any entity controlling, controlled by,
or under common control with the investment adviser and that provides ongoing
services to the Trust) were pre-approved.
Item 5 - Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
The schedule of investments in securities of unaffiliated issuers is included as
part of the report to shareholders filed under Item 1.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8 Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable.
Item 9 - Submission of Matters to a Vote of Security Holders
At a meeting held on November 11, 2004, the Board of Trustees of the Trust
adopted Policies for Consideration of Board Member Candidates (the "Policies").
A copy of the Policies is attached hereto as Exhibit (b).
Generally, the Policies provide that, while the Nominating Committee is solely
responsible for evaluating, selecting and nominating candidates to serve on the
Board, the Nominating Committee may consider nominations from shareholders. Such
nominations must be submitted by eligible shareholders and satisfy certain
requirements as set forth in the Policies.
Among other requirements, each eligible shareholder may submit a candidate so
long as it is received by the Committee within one year immediately preceding
the Committee's consideration of Board member candidates and such recommendation
is delivered to the Trust's Secretary. Additionally, any shareholder submitting
a candidate must beneficially own securities of the Trust and must be eligible
to vote both at the time of submission of the candidate and at the time of the
Board member election. Such securities must continue to be held through the date
of the meeting.
A shareholder's submission to the Secretary of the Trust must include, among
other information: (a) contact information for the nominating shareholder; (b) a
certification from the nominating shareholder which provides the number of
shares which the person or group has: (i) sole power to vote or direct the vote;
(ii) shared power to vote or direct the vote; (iii) sole power to dispose or
direct the disposition of such shares; and (iv) shared power to dispose or
direct the disposition of such shares. In addition the certification shall
provide (c) the candidate's contact information and the number of applicable
Trust
shares owned by the candidate; (d) all information regarding the candidate
that would be required to be disclosed in solicitations of proxies for elections
of directors required by Regulation 14A under the Securities Exchange Act of
1934, as amended; and (e) a notarized letter executed by the candidate, stating
his or her intention to serve as a candidate and be named in the Trust's proxy
statement, if so designated by the Nominating Committee and the Trust's Board.
It shall be in the Nominating Committee's sole discretion whether to seek
corrections of a deficient submission or to exclude a candidate from
consideration.
Item 10 - Controls and Procedures
(a) The registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended)
are effective, based on their evaluation of these disclosure controls and
procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no significant changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company
Act of 1940, as amended) that occurred during the second fiscal half-year
covered by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 11 - Exhibits
(a)(1) Code of Ethics - Filed as an attachment to this filing (Exhibit (a).
Other - Policies for Consideration of Board Member Candidates (Exhibit (b).
(a)(2) Certification for each principal executive and principal financial
officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR
270.30a-2(a)) (Exhibits (c) and (d)).
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Investment Company Act of 1940, as amended, that was sent or given during
the period covered by the report by or on behalf of the registrant to 10 or more
persons.
Not applicable.
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) - Filed as an attachment to this filing
(Exhibits (e) and (f)).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Marsico Investment Fund
By: /s/ Thomas F. Marsico
-------------------------
Thomas F. Marsico
President
Date: December 1, 2004
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/ Thomas F. Marsico
------------------------
Thomas F. Marsico
President
Date: December 1, 2004
By: /s/ Christopher J. Marsico
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Christopher J. Marsico
Vice President and Treasurer
Date: December 1, 2004