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, 2005
Item 1 - Reports to Stockholders.
[IMAGE]
COMMITMENTS
ANNUAL REPORT
SEPTEMBER 30, 2005
[LOGO]
MARSICO FUNDS
HELPING YOU APPRECIATE LIFE
THE INVESTMENTS WE VALUE MOST CANNOT BE FOUND WITHIN A PORTFOLIO.
BY TAKING AN INSPIRED APPROACH TO INVESTING AND FOCUSING ON LONG-TERM RESULTS,
WE CAN ALL START EXPERIENCING MORE OF WHAT MATTERS MOST IN LIFE.
LIFE ITSELF.
OCTOBER 2005
DEAR SHAREHOLDER:
Enclosed is your fiscal year 2005 annual report for the Marsico Investment Fund
encompassing the one-year period from October 1, 2004 - September 30, 2005.
Stock prices worldwide were quite strong overall during this period, as the most
widely watched US benchmark equity indexes experienced significant positive
returns, and international equity performance results were even better.
The purpose of this report is to provide a retrospective for the Funds'
investment results for fiscal year 2005 by discussing the main factors that
impacted performance - 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 our updated thoughts regarding the market
environment and our overall investment outlook, please refer to the quarterly
shareholder update dated October 2005 that is available on the Funds' website
www.marsicofunds.com.
- --------------------
TABLE OF CONTENTS
Investment Review for Focus Fund and Growth Fund 4
MARSICO FOCUS FUND
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
MARSICO GROWTH FUND
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
MARSICO 21ST CENTURY FUND
Investment Review for 21st Century Fund 19
Fund Overview 21
Schedule of Investments 22
Statement of Assets and Liabilities 24
Statement of Operations 24
Statements of Changes in Net Assets 25
Financial Highlights 26
MARSICO INTERNATIONAL OPPORTUNITIES FUND
Investment Review for International Opportunities Fund 27
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
MARSICO FOCUS FUND & MARSICO GROWTH FUND
INVESTMENT REVIEW BY TOM MARSICO (UNAUDITED)
I am pleased to report that both the Focus Fund and Growth Fund outperformed
their primary benchmark index for the one-year period ended September 30, 2005.
The Focus Fund posted a total return of 17.67% and the Growth Fund returned
13.42% for this period. By comparison, the S&P 500(R) Index - which we consider
to be the Funds' primary equity benchmark - had a total return of 12.25% for the
one-year period ended September 30, 2005. The Funds reached 7-3/4 years of
operating history as of the end of September. Please see the Funds' overviews
for more detailed information about each Fund's longer-term performance for
various periods ended September 30, 2005. 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, it is interesting to
"decompose" the S&P 500(R) Index's return. Much of the Index's 12%-plus gain for
the reporting period was achieved in the fourth calendar quarter of 2004, when
it rose by about 9%. In the first nine months of calendar year 2005, the
investment landscape seemed to shift. Over that nine-month time frame, the S&P
500(R) Index was able to eke out a gain of less than 4%. US equities generally
seemed to have been stalled by a variety of concerns through the first nine
months of calendar year 2005. These included higher energy prices, higher
inflation expectations, a possible slowdown in consumer spending, and growing
unease about rising housing markets.
In the past year, there were a few interesting aspects of the US and
international equity markets:
o In the large-capitalization equity arena, "value" stocks outperformed
"growth" stocks. The Russell 1000 Value Index, which is intended to
provide a representation of the performance of major companies whose
stocks trade at relatively low valuations, had a total one-year return
of 17.69% for the period ended September 30, 2005. The Russell 1000
Growth Index, which is intended to be a proxy for the performance of
large-capitalization growth-oriented companies, had a total one-year
return of 11.60% over the same period. Much of the differential
between the two investment styles was attributable to the higher
weighting of energy-related companies in the value index. As discussed
later, the S&P 500(R) Index's Energy sector had a return of nearly 50%
for the one-year period ended September 30, 2005.
o Medium- and small-capitalization stocks outperformed large
capitalization stocks for the one-year period ended September 30,
2005. The largest-sized companies, as represented by the performance
of the Russell Top 50 Index, had a return of 7.31%. The Russell
Mid-Cap Index, which is intended to provide a representation for the
performance of medium-sized companies, had a return of 25.10%. The
Russell 2000 Index, a proxy for the performance of small-sized
companies, gained 17.95%.
o Non-US stocks were "the place to be" last year. The MSCI EAFE Index
had a total return of (US$) 25.79%. Results in "emerging" markets were
even better.
At the economic sector level, gains over the full one-year period were
widespread. All 10 Global Industry Classification Standard industry sectors
("GICS") that comprise the S&P 500(R) Index had a positive return. As is often
the case, there was a considerable range of results; the "spread" between the
top- and bottom-performing sectors was more than 45%. Energy, which soared by
48%, was the top-performing sector in the S&P 500(R) Index for the one-year
period ended September 30, 2005. Other sectors that generated strong returns
included Utilities (+39%), Information Technology (+13%), and Health Care
(+10%). Several sectors had relatively modest gains, including Materials (+2%)
and Telecommunications Services (+2%).
At an industry group level, there also was quite a bit of variance in returns.
Several industries, quite diverse in nature, had robust gains. These included
Real Estate (+29%), Semiconductors and Semiconductor Equipment (+26%), Health
Care Equipment and Services (+24%), and Food, Beverage & Tobacco (+21%). There
were not many areas "in the red" last year. One exception was Automobiles &
Components (-21%), which struggled due to a variety of industry-wide issues.
The Focus Fund and the Growth Fund often invest in similar growth companies.
Their performance differs at times, however, because the Focus Fund invests in a
relatively more concentrated portfolio of securities while the Growth Fund holds
some positions that are not present in the Focus Fund. (2)
Following is a synopsis of each Fund's investment results for the fiscal year:
FOCUS FUND
The Focus Fund's outperformance for the one-year period ended September 30, 2005
(as compared to the S&P 500(R) Index) was attributable to several factors:
o Health Care - Two of the Fund's largest individual positions -
Genentech and UnitedHealth Group - gained 61% and 52%, respectively,
over the reporting period. (3)
o Diversified Financials - The Fund's positions in this industry group
had a collective return of 32% in fiscal year 2005. Two of the Fund's
holdings, Chicago Mercantile Exchange (+95%) and Goldman Sachs Group
(+32%) were among the Fund's largest individual performance
contributors taking into account their price returns and average
position sizes in the Fund.
o Information Technology - The Fund's results were helped by stock
selection in two industry groups within this sector. In the Hardware &
Equipment area, Apple Computer had a price return of 42% prior to
being sold and QUALCOMM gained 16%. Google, which is classified
officially as a Technology Software & Services company, rose 45%.
o Utilities - TXU Corporation gained 90%.
o Capital Goods - Caterpillar posted a gain of 49%.
o Media - The Fund's underweighted posture in this industry contributed
materially to overall investment results. Media, which eked out a
modest gain of 2% in the benchmark index, was among the
weaker-performing industry groups last year.
The main areas that detracted materially from the Fund's performance over the
past year were our stock selection in the Consumer Services industry group
(particularly the hotel/casino operators and leisure-related holdings), an
underweighted posture in the Energy sector, and select holdings in the Banks
industry (most notably Countrywide Financial Corporation).
MARSICO FOCUS FUND & MARSICO GROWTH FUND
GROWTH FUND
The Growth Fund shared some of the Focus Fund's performance characteristics for
the one-year period ended September 30, 2005. Sectors and industry groups such
as Health Care, Utilities, Diversified Financials, Capital Goods, and Technology
Software & Services were significant value-added contributors, as was an
underweighted posture in the Media industry, which was among the
weaker-performing areas of the market. In addition, the Growth Fund benefited
significantly from many of its homebuilding-related positions. Several of these
factors are discussed below in a bit more detail:
o Health Care - Stock selection in this industry group was a significant
positive contributor to performance. In particular, biotechnology
company Genentech gained 61% during the reporting period and health
care services provider UnitedHealth Group rose 52%. (3)
o Diversified Financials - Chicago Mercantile Exchange (+105%), SLM
Corporation (+22%), Merrill Lynch & Co. (+18% prior to being sold),
and Lehman Brothers Holdings (+18%) were among the Fund's
better-performing individual holdings.
o Homebuilding - A variety of the Fund's homebuilding stocks had strong
stock price performance, including KB Homes (+80%), MDC Corp. (+42%),
Toll Brothers (+35%), and Lennar Corp. (+27%). In a related vein, home
improvement retailer Lowe's Cos. (+19%) also had solid performance.
o Capital Goods - Caterpillar posted a gain of 49%.
o Technology Software & Services - Google had a return of 47%.
o Utilities - TXU Corporation had a return of 49%.
The primary negative performance factors for the Growth Fund for the one-year
period ended September 30, 2005 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 (+48%
return) was the strongest-performing sector in the S&P 500(R) Index
for the one-year period ended September 30, 2005. The Fund sustained a
substantial "opportunity cost" because of our decision to not invest
significantly in this sector.
o Stock selection in the Consumer Services industry - As in the case of
the Focus Fund, stock selection in this industry group adversely
impacted the Growth Fund's fiscal year performance. Specific
individual holdings that materially impacted performance included Wynn
Resorts (-13%) and Four Seasons Hotels (-10%).
o Information Technology - The Growth Fund did not benefit as much as
the Focus Fund from investments in this sector, particularly in the
Hardware & Equipment industry where the Fund held several positions
that did not perform particularly well and were sold. These included
Dell Computer (0%), L M Ericsson (-7%), Adobe Systems (-16%), and
Cisco Systems (-5%). The Fund did have positions in QUALCOMM and Apple
Computer which performed well in terms of overall returns. However,
the Growth Fund's average position size in QUALCOMM was less than that
in the Focus Fund, which mitigated some of its positive return impact.
Apple Computer (+24%) was held for a different period of time than in
the Focus Fund, and also was a somewhat smaller-sized position in the
Growth Fund. As a result it did not have the same degree of positive
impact on the Growth Fund as it did on the Focus Fund.
FISCAL YEAR-END INVESTMENT POSTURE
As of September 30, 2005 the Funds' primary economic sector allocations were in
Health Care, Consumer Discretionary, Financials, Industrials, and Information
Technology. The Funds had little or no exposure in areas such as Materials and
Telecommunications Services.
Sincerely,
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
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 percentage of the Fund's
portfolio represented by the securities or industries mentioned in this
letter.
MARSICO FOCUS FUND
FUND OVERVIEW SEPTEMBER 30, 2005
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.
PERFORMANCE COMPARISON
One Year Five Year Average Annual Average Annual Since Inception
(10/1/04-9/30/05) (10/1/00-9/30/05) (12/31/97-9/30/05)
Marsico Focus Fund 17.67% (2.48)% 9.07%
S&P 500(R) Index 12.25% (1.49)% 4.67%
NET ASSETS GROWTH OF $10,000(1)
[CHART]
9/30/05 $3,740,190,839 Focus S&P 500
---------------------------------------------
NET ASSET VALUE
31-Dec-97 10,000 10,000
Net Asset Value Per Share $17.45 31-Mar-98 12,310 11,395
30-Sep-98 12,360 10,600
TOP FIVE HOLDINGS 31-Mar-99 17,030 13,498
30-Sep-99 17,430 13,548
UnitedHealth Group, Inc. 8.05% 31-Mar-00 23,542 15,920
Genentech, Inc. 7.33 30-Sep-00 22,210 15,347
Lowe's Companies, Inc. 5.43 31-Mar-01 15,692 12,469
The Procter & Gamble Co. 5.42 30-Sep-01 13,733 11,262
Caterpillar, Inc. 5.26 31-Mar-02 15,956 12,500
30-Sep-02 13,115 8,955
SECTOR ALLOCATION(2) 31-Mar-03 12,711 9,404
30-Sep-03 15,148 11,140
Consumer Non-Cyclical 30.72% 31-Mar-04 16,866 12,708
Consumer Cyclical 18.74 30-Sep-04 16,652 12,685
Financial 15.32 31-Mar-05 17,854 13,558
Industrial 14.64 30-Sep-05 19,594 14,239
Communications 10.77
Energy 5.84
Utilities 3.97
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.
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2005
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS
BUILDING - RESIDENTIAL/COMMERCIAL
Lennar Corporation - Class A 1,024,730 $61,237,865 1.64%
- --------------------------------------------------------------------------------
CASINO HOTELS
MGM MIRAGE* 2,115,915 92,613,600 2.48
Wynn Resorts Ltd.* 1,542,524 69,644,959 1.86
- --------------------------------------------------------------------------------
162,258,559 4.34
- --------------------------------------------------------------------------------
COSMETICS & TOILETRIES
The Procter &
Gamble Company 3,412,068 202,881,563 5.42
- --------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING
OPERATIONS
General Electric Company 4,507,421 151,764,865 4.06
- --------------------------------------------------------------------------------
ELECTRIC - INTEGRATED
TXU Corporation 1,297,076 146,413,939 3.91
- --------------------------------------------------------------------------------
FINANCE - CONSUMER LOANS
SLM Corporation 2,991,094 160,442,282 4.29
- --------------------------------------------------------------------------------
FINANCE - INVESTMENT
BANKER/BROKER
The Goldman Sachs
Group, Inc. 1,487,573 180,859,125 4.83
- --------------------------------------------------------------------------------
FINANCE - MORTGAGE
LOAN/BANKER
Countrywide Financial
Corporation 2,831,527 93,383,760 2.50
- --------------------------------------------------------------------------------
FINANCE - OTHER SERVICES
Chicago Mercantile
Exchange Holdings, Inc. 457,795 154,414,253 4.13
- --------------------------------------------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc. 825,883 47,405,684 1.27
- --------------------------------------------------------------------------------
MACHINERY -
CONSTRUCTION/MINING
Caterpillar, Inc. 3,345,896 196,571,390 5.26
- --------------------------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
Amgen, Inc.* 1,302,467 103,767,546 2.77
Genentech, Inc.* 3,254,881 274,093,529 7.33
- --------------------------------------------------------------------------------
377,861,075 10.10
- --------------------------------------------------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 5,355,656 300,987,867 8.05
- --------------------------------------------------------------------------------
MEDICAL INSTRUMENTS
Medtronic, Inc. 920,207 49,341,499 1.32
- --------------------------------------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS CONTINUED
MEDICAL PRODUCTS
Johnson & Johnson 997,372 $63,113,700 1.69%
Zimmer Holdings, Inc.* 2,027,359 139,664,762 3.73
- --------------------------------------------------------------------------------
202,778,462 5.42
MONEY CENTER BANKS
UBS AG 1,201,441 102,723,206 2.75
- --------------------------------------------------------------------------------
OIL - FIELD SERVICES
Halliburton Company 379,009 25,969,697 0.69
- --------------------------------------------------------------------------------
OIL COMPANIES - INTEGRATED
Exxon Mobil Corporation 2,986,481 189,761,003 5.07
- --------------------------------------------------------------------------------
RETAIL - BUILDING PRODUCTS
Lowe's Companies, Inc. 3,155,060 203,185,864 5.43
- --------------------------------------------------------------------------------
RETAIL - DRUG STORE
CVS Corporation 1,326,333 38,476,920 1.03
- --------------------------------------------------------------------------------
RETAIL - RESTAURANTS
Starbucks Corporation* 1,051,030 52,656,603 1.41
- --------------------------------------------------------------------------------
TRANSPORTATION - RAIL
Burlington Northern
Santa Fe Corporation 893,090 53,406,782 1.43
- --------------------------------------------------------------------------------
TRANSPORTATION - SERVICES
FedEx Corporation 1,588,002 138,362,614 3.70
- --------------------------------------------------------------------------------
WEB PORTALS/INTERNET
SERVICE PROVIDERS
Google, Inc.* 327,745 103,718,183 2.77
- --------------------------------------------------------------------------------
WIRELESS EQUIPMENT
Motorola, Inc. 5,108,984 112,857,457 3.02
QUALCOMM, Inc. 4,039,019 180,746,100 4.83
- --------------------------------------------------------------------------------
293,603,557 7.85
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $2,722,673,770) 3,690,466,617 98.67
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
SSgA Prime Money
Market Fund, 3.61% 46,471,467 46,471,467 1.24
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $46,471,467) 46,471,467 1.24
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $2,769,145,237) 3,736,938,084 99.91
Cash and Other Assets
Less Liabilities 3,252,755 0.09
- --------------------------------------------------------------------------------
NET ASSETS $3,740,190,839 100.00%
================================================================================
* Non-income producing.
See notes to financial statements.
MARSICO FOCUS FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2005
(Amounts in thousands)
ASSETS
Investments, at value (cost $2,769,145) $3,736,938
Receivable for investments sold 2,876
Receivable for capital stock sold 2,927
Interest and dividends receivable 2,422
Prepaid expenses and other assets 809
--------------
TOTAL ASSETS 3,745,972
--------------
LIABILITIES
Payable for capital stock redeemed 1,956
Accrued investment advisory fee 2,519
Accrued distribution fee 210
Accrued trustees fees 644
Accrued expenses and other liabilities 452
--------------
TOTAL LIABILITIES 5,781
--------------
NET ASSETS $3,740,191
==============
NET ASSETS CONSIST OF
Paid-in-capital $2,954,462
Accumulated net investment loss (700)
Accumulated net realized loss on
investments and foreign currency transactions (181,488)
Net unrealized appreciation on investments 967,917
--------------
NET ASSETS $3,740,191
==============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 214,384
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $17.45
==============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(Amounts in thousands)
INVESTMENT INCOME
Interest $3,105
Dividends (net of $641 of non-reclaimable
foreign withholding taxes) 31,042
--------------
TOTAL INVESTMENT INCOME 34,147
--------------
EXPENSES
Investment advisory fees 27,789
Distribution fees 8,267
Transfer agent fees and expenses 3,095
Custody and fund accounting fees 385
Printing and postage expenses 385
Professional fees 321
Fund administration fees 313
Trustees' fees and expenses 224
Federal and state registration fees 175
Miscellaneous 291
--------------
TOTAL EXPENSES 41,245
Less expenses paid indirectly (1,046)
--------------
NET EXPENSES 40,199
--------------
NET INVESTMENT LOSS (6,052)
--------------
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 116,499
Net realized gain on options written 1,524
Net realized gain on foreign
currency transactions 1,037
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 418,080
--------------
Net Gain on Investments 537,140
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $531,088
==============
* Not in thousands.
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
Year Year
Ended Ended
(Amounts in thousands) 9/30/05 9/30/04
OPERATIONS
Net investment loss $(6,052) $(9,652)
Net realized gain on investments 116,499 66,096
Net realized gain on options written 1,524 --
Net realized gain on foreign currency transactions 1,037 12,287
Change in unrealized appreciation/depreciation on investments
and foreign currency translations 418,080 158,667
----------------------------------------------------
Net increase in net assets resulting from operations 531,088 227,398
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares 978,811 1,022,647
Redemption fees 29 27
Redemption of shares (665,059) (636,863)
----------------------------------------------------
increase from capital share transactions 313,781 385,811
----------------------------------------------------
TOTAL INCREASE IN NET ASSETS 844,869 613,209
NET ASSETS
Beginning of period 2,895,322 2,282,113
----------------------------------------------------
END OF PERIOD $3,740,191 $2,895,322
====================================================
Accumulated net investment loss (700) (1,638)
TRANSACTIONS IN SHARES
Shares sold 60,431 69,859
Shares redeemed (41,224) (43,900)
----------------------------------------------------
NET INCREASE 19,207 25,959
====================================================
See notes to financial statements.
MARSICO FOCUS FUND
FINANCIAL HIGHLIGHTS
Year Year Year Year Year
For a Fund Share Outstanding Ended Ended Ended Ended Ended
Throughout the Period. 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
NET ASSET VALUE, BEGINNING OF PERIOD $14.83 $13.49 $11.68 $12.27 $22.17
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.03) (0.05) (0.03) (0.08) (0.07)
Net realized and unrealized gains
(losses) on investments 2.65 1.39 1.84 (0.47) (7.87)
-----------------------------------------------------------------------------
Total from investment operations 2.62 1.34 1.81 (0.55) (7.94)
-----------------------------------------------------------------------------
DISTRIBUTIONS & OTHER
Net realized gains -- -- -- -- (1.96)
Tax return of capital -- -- -- (0.04) --
Redemption fees [See Note 2(i)] --(1) --(1) -- -- --
-----------------------------------------------------------------------------
Total distributions & other -- -- -- (0.04) (1.96)
-----------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $17.45 $14.83 $13.49 $11.68 $12.27
-----------------------------------------------------------------------------
TOTAL RETURN 17.67% 9.93% 15.50% (4.50)% (38.17)%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $3,740,191 $2,895,322 $2,282,113 $1,274,068 $1,311,495
Ratio of expenses to average net assets,
before expenses paid indirectly 1.25% 1.30% 1.34% 1.35% 1.30%
Ratio of net investment loss to average
net assets, net of expenses paid indirectly (0.18)% (0.36)% (0.54)% (0.64)% (0.36)%
Ratio of net investment loss to average
net assets, before expenses paid indirectly (0.21)% (0.40)% (0.59)% (0.68)% (0.39)%
Portfolio turnover rate 84% 84% 90% 117% 127%
(1) Less than $0.01.
See notes to financial statements.
MARSICO GROWTH FUND
FUND OVERVIEW SEPTEMBER 30, 2005
The Growth Fund invests primarily in the common stocks of large companies that
are selected for their long-term growth potential. The Growth Fund will normally
hold a core position of between 35 and 50 common stocks.
PERFORMANCE COMPARISON
One Year Five Year Average Annual Average Annual Since Inception
(10/1/04-9/30/05) (10/1/00-9/30/05) (12/31/97-9/30/05)
Marsico Growth Fund 13.42% (1.96)% 8.61%
S&P 500(R) Index 12.25% (1.49)% 4.67%
NET ASSETS GROWTH OF $10,000(1)
[CHART]
9/30/05 $2,125,667,753 Growth S&P 500
-----------------------------------------------
NET ASSET VALUE
Net Asset Value Per Share $18.09 31-Dec-97 10,000 10,000
31-Mar-98 11,960 11,395
TOP FIVE HOLDINGS 30-Sep-98 11,540 10,600
31-Mar-99 15,710 13,498
UnitedHealth Group, Inc. 7.58% 30-Sep-99 16,290 13,548
Genentech, Inc. 6.59 31-Mar-00 22,607 15,920
Lowe's Companies, Inc. 4.05 30-Sep-00 20,938 15,347
Caterpillar, Inc. 3.74 31-Mar-01 15,495 12,469
FedEx Corp. 3.33 30-Sep-01 13,307 11,262
31-Mar-02 15,304 12,500
SECTOR ALLOCATION(2) 30-Sep-02 12,452 8,955
31-Mar-03 12,159 9,404
Consumer Non-Cyclical 30.38% 30-Sep-03 14,769 11,140
Consumer Cyclical 21.47 31-Mar-04 16,614 12,708
Industrial 16.29 30-Sep-04 16,719 12,685
Financial 14.31 31-Mar-05 17,714 13,558
Communications 8.43 30-Sep-05 18,962 14,239
Energy 6.24
Utilities 1.80
Technology 1.08
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, 2005
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS
AEROSPACE/DEFENSE
General Dynamics Corporation 372,128 $44,487,902 2.09%
Lockheed Martin Corporation 423,915 25,875,772 1.22
- --------------------------------------------------------------------------------
70,363,674 3.31
- --------------------------------------------------------------------------------
AUDIO/VIDEO PRODUCTS
Harman International
Industries, Inc. 132,004 13,500,049 0.64
- --------------------------------------------------------------------------------
BEVERAGES - NON-ALCOHOLIC
PepsiCo, Inc. 207,508 11,767,779 0.55
- --------------------------------------------------------------------------------
BUILDING -
RESIDENTIAL/COMMERCIAL
KB HOME 280,674 20,545,337 0.97
Lennar Corporation - Class A 438,937 26,230,875 1.23
M.D.C. Holdings, Inc. 247,967 19,562,117 0.92
Toll Brothers, Inc.* 429,488 19,185,229 0.90
- --------------------------------------------------------------------------------
85,523,558 4.02
CASINO HOTELS
MGM MIRAGE* 1,026,526 44,931,043 2.11
Wynn Resorts Ltd.* 791,390 35,731,258 1.68
- --------------------------------------------------------------------------------
80,662,301 3.79
- --------------------------------------------------------------------------------
COAL
Peabody Energy Corporation 108,544 9,155,686 0.43
- --------------------------------------------------------------------------------
COMMERCIAL BANKS -
WESTERN US
UCBH Holdings, Inc. 377,656 6,918,658 0.33
- --------------------------------------------------------------------------------
COMPUTERS
Apple Computer, Inc.* 410,538 22,008,942 1.04
- --------------------------------------------------------------------------------
COSMETICS & TOILETRIES
The Procter &
Gamble Company 1,148,708 68,302,178 3.21
- --------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING
OPERATIONS
General Electric Company 1,856,421 62,505,695 2.94
- --------------------------------------------------------------------------------
ELECTRIC - INTEGRATED
TXU Corporation 322,735 36,430,327 1.71
- --------------------------------------------------------------------------------
FINANCE - CONSUMER LOANS
SLM Corporation 979,330 52,531,261 2.47
- --------------------------------------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS CONTINUED
FINANCE - INVESTMENT BANKER/BROKER
The Goldman
Sachs Group, Inc. 75,377 $9,164,336 0.43%
Lehman Brothers
Holdings, Inc. 281,877 32,833,033 1.54
- --------------------------------------------------------------------------------
41,997,369 1.97
- --------------------------------------------------------------------------------
FINANCE - MORTGAGE
LOAN/BANKER
Countrywide Financial
Corporation 1,518,212 50,070,632 2.36
- --------------------------------------------------------------------------------
FINANCE - OTHER SERVICES
Chicago Mercantile
Exchange Holdings, Inc. 142,205 47,965,746 2.26
- --------------------------------------------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc. 336,417 19,310,336 0.91
- --------------------------------------------------------------------------------
MACHINERY -
CONSTRUCTION/MINING
Caterpillar, Inc. 1,352,703 79,471,301 3.74
- --------------------------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
Amgen, Inc.* 749,103 59,681,036 2.81
Genentech, Inc.* 1,662,993 140,040,641 6.59
Genzyme Corporation* 276,929 19,839,194 0.93
- --------------------------------------------------------------------------------
219,560,871 10.33
- --------------------------------------------------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 2,865,454 161,038,515 7.58
- --------------------------------------------------------------------------------
MEDICAL INSTRUMENTS
Medtronic, Inc. 680,652 36,496,560 1.72
- --------------------------------------------------------------------------------
MEDICAL LABS &
TESTING SERVICES
Quest Diagnostics, Inc. 361,460 18,268,188 0.86
- --------------------------------------------------------------------------------
MEDICAL PRODUCTS
Johnson & Johnson 662,576 41,927,809 1.97
Zimmer Holdings, Inc.* 675,002 46,500,888 2.19
- --------------------------------------------------------------------------------
88,428,697 4.16
- --------------------------------------------------------------------------------
MONEY CENTER BANKS
UBS AG 529,937 45,309,614 2.13
- --------------------------------------------------------------------------------
OIL - FIELD SERVICES
Halliburton Company 455,195 31,189,961 1.47
- --------------------------------------------------------------------------------
OIL COMPANIES -
EXPLORATION & PRODUCTION
Canadian Natural
Resources Ltd. 453,572 20,496,919 0.96
- --------------------------------------------------------------------------------
* Non-income producing.
See notes to financial statements.
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2005 (continued)
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS CONTINUED
OIL COMPANIES - INTEGRATED
Exxon Mobil Corporation 1,036,307 $65,846,947 3.10%
- --------------------------------------------------------------------------------
PROPERTY/CASUALTY INSURANCE
The Progressive Corporation 197,793 20,722,773 0.97
- --------------------------------------------------------------------------------
REAL ESTATE
OPERATING/DEVELOPMENT
The St. Joe Company 238,516 14,895,324 0.70
- --------------------------------------------------------------------------------
REITS - MORTGAGE
KKR Financial Corporation 451,399 10,039,114 0.47
- --------------------------------------------------------------------------------
RETAIL - BUILDING PRODUCTS
Lowe's Companies, Inc. 1,336,847 86,092,947 4.05
- --------------------------------------------------------------------------------
RETAIL - DISCOUNT
Target Corporation 800,794 41,585,232 1.96
- --------------------------------------------------------------------------------
RETAIL - DRUG STORE
CVS Corporation 850,218 24,664,824 1.16
Walgreen Co. 391,010 16,989,384 0.80
- --------------------------------------------------------------------------------
41,654,208 1.96
- --------------------------------------------------------------------------------
RETAIL - RESTAURANTS
Starbucks Corporation* 446,907 22,390,041 1.05
Yum! Brands, Inc. 930,820 45,060,996 2.12
- --------------------------------------------------------------------------------
67,451,037 3.17
- --------------------------------------------------------------------------------
THERAPEUTICS
Amylin Pharmaceuticals, Inc.* 369,829 12,866,351 0.61
- --------------------------------------------------------------------------------
TRANSPORTATION - RAIL
Burlington Northern Santa
Fe Corporation 508,672 30,418,586 1.43
Union Pacific Corporation 240,709 17,258,835 0.81
- --------------------------------------------------------------------------------
47,677,421 2.24
- --------------------------------------------------------------------------------
TRANSPORTATION - SERVICES
FedEx Corporation 811,624 70,716,799 3.33
- --------------------------------------------------------------------------------
WEB PORTALS/INTERNET
SERVICE PROVIDERS
Google, Inc.* 186,067 58,882,763 2.77
- --------------------------------------------------------------------------------
WIRELESS EQUIPMENT
Motorola, Inc. 2,515,224 55,561,298 2.61
QUALCOMM, Inc. 1,268,867 56,781,798 2.67
- --------------------------------------------------------------------------------
112,343,096 5.28
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $1,564,436,024) 2,030,048,829 95.50
- --------------------------------------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
SHORT-TERM INVESTMENTS
SSgA Prime Money
Market Fund, 3.61% 95,119,157 $95,119,157 4.48%
SSgA Money
Market Fund, 3.41% 49,393,201 49,393,201 2.32
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $144,512,358) 144,512,358 6.80
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $1,708,948,382) 2,174,561,187 102.30
Liabilities Less Cash
and Other Assets (48,893,434) (2.30)
- --------------------------------------------------------------------------------
NET ASSETS $2,125,667,753 100.00%
================================================================================
* Non-income producing.
See notes to financial statements.
MARSICO GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2005
(Amounts in thousands)
ASSETS
Investments, at value (cost $1,708,948) $2,174,561
Receivable for investments sold 4,372
Receivable for capital stock sold 2,142
Interest and dividends receivable 1,336
Prepaid expenses and other assets 431
--------------
TOTAL ASSETS 2,182,842
--------------
LIABILITIES
Payable for investments purchased 53,567
Payable for capital stock redeemed 1,127
Accrued investment advisory fee 1,474
Accrued distribution fee 312
Accrued trustees' fees 325
Accrued expenses and other liabilities 369
--------------
TOTAL LIABILITIES 57,174
--------------
NET ASSETS $2,125,668
==============
NET ASSETS CONSIST OF
Paid-in-capital $1,780,411
Accumulated net investment loss (338)
Accumulated net realized loss on investments
and foreign currency transactions (120,084)
Net unrealized appreciation on investments
and foreign currency translations 465,679
--------------
NET ASSETS $2,125,668
==============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 117,494
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $18.09
===========================================================
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(Amounts in thousands)
INVESTMENT INCOME
Interest $3,015
Dividends (net of $343 of non-reclaimable
foreign withholding taxes) 16,462
--------------
TOTAL INVESTMENT INCOME 19,477
--------------
EXPENSES
Investment advisory fees 14,986
Distribution fees 4,408
Transfer agent fees and expenses 1,557
Custody and fund accounting fees 247
Fund administration fees 236
Printing and postage expenses 204
Professional fees 173
Federal and state registration fees 168
Trustees' fees and expenses 111
Miscellaneous 131
--------------
TOTAL EXPENSES 22,221
Less expenses paid indirectly (317)
--------------
NET EXPENSES 21,904
--------------
NET INVESTMENT LOSS (2,427)
--------------
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 13,226
Net realized gain on options written 42
Net realized gain on foreign
currency transactions 1,037
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 201,230
--------------
Net Gain on Investments 215,535
--------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $213,108
==============
* Not in thousands.
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
Year Year
Ended Ended
(Amounts in thousands) 9/30/05 9/30/04
OPERATIONS
Net investment loss $(2,427) $(3,796)
Net realized gain on investments 13,226 9,815
Net realized gain on options written 42 --
Net realized gain on foreign currency transactions 1,037 1,481
Change in unrealized appreciation/depreciation on investments
and foreign currency translations 201,230 113,857
----------------------------------------------------
Net increase in net assets resulting from operations 213,108 121,357
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares 834,350 684,707
Redemption fees 85 21
Redemption of shares (285,300) (231,880)
----------------------------------------------------
increase from capital share transactions 549,135 452,848
----------------------------------------------------
TOTAL INCREASE IN NET ASSETS 762,243 574,205
NET ASSETS
Beginning of period 1,363,425 789,220
----------------------------------------------------
END OF PERIOD $2,125,668 $1,363,425
====================================================
Accumulated net investment loss (338) (326)
TRANSACTIONS IN SHARES
Shares sold 48,520 44,600
Shares redeemed (16,522) (15,100)
----------------------------------------------------
NET INCREASE 31,998 29,500
====================================================
See notes to financial statements.
MARSICO GROWTH FUND
FINANCIAL HIGHLIGHTS
Year Year Year Year Year
For a Fund Share Outstanding Ended Ended Ended Ended Ended
Throughout the Period. 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
NET ASSET VALUE, BEGINNING OF PERIOD $15.95 $14.09 $11.88 $12.71 $20.82
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.02) (0.04) (0.07) (0.04) (0.09)
Net realized and unrealized gains
(losses) on investments 2.16 1.90 2.28 (0.77) (7.32)
---------------------------------------------------------------------
Total from investment operations 2.14 1.86 2.21 (0.81) (7.41)
---------------------------------------------------------------------
DISTRIBUTIONS & OTHER
Net realized gains -- -- -- -- (0.70)
Tax return of capital -- -- -- (0.02) --
Redemption fees [See Note 2(i)] --(1) --(1) -- -- --
---------------------------------------------------------------------
Total distributions & other -- -- -- (0.02) (0.70)
---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $18.09 $15.95 $14.09 $11.88 $12.71
---------------------------------------------------------------------
TOTAL RETURN 13.42% 13.20% 18.60% (6.42)% (36.45)%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $2,125,668 $1,363,425 $789,220 $641,974 $530,904
Ratio of expenses to average net assets,
before expenses paid indirectly 1.26% 1.30% 1.38% 1.37% 1.33%
Ratio of net investment loss to average
net assets, net of expenses paid indirectly (0.14)% (0.34)% (0.62)% (0.49)% (0.53)%
Ratio of net investment loss to average
net assets, before expenses paid indirectly (0.16)% (0.38)% (0.67)% (0.52)% (0.55)%
Portfolio turnover rate 73% 73% 91% 111% 120%
(1) Less than $0.01.
See notes to financial statements.
MARSICO 21ST CENTURY FUND
INVESTMENT REVIEW BY CORY GILCHRIST (UNAUDITED)
I am pleased to report that the 21st Century Fund outperformed its primary
benchmark index for the one-year period ended September 30, 2005. The 21st
Century Fund had a total return of 18.33% for this period. For comparative
purposes, the S&P 500(R) Index (which we consider to be the Fund's primary
benchmark index), the Russell 3000 Index (a proxy for the performance of all
publicly traded U.S. stocks, including smaller capitalization companies), and
the NASDAQ Composite Index (consisting primarily of technology-related
companies) had total returns of 12.25%, 14.57%, and 14.19%, respectively, over
the same period. Please see the Fund overview for more detailed information
about the Fund's longer-term performance for various periods ended September 30,
2005. The performance data for the Fund 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)
--------------------
The primary areas that helped buoy the Fund's performance for the one-year
period ended September 30, 2005 included:
o Pharmaceutical & Biotechnology companies - This industry group
provided excellent overall returns for the Fund last year. Specific
holdings that performed well include Amylin Pharmaceuticals (+86%),
Genentech (+61%), and Roche Holdings (+20%). Amylin's principal
activity is to discover, develop, and market drug candidates for the
treatment of diabetes, obesity, and cardiovascular disease.
Genentech's principal activities are to discover, develop, and
manufacture biotherapeutic treatments for unmet medical needs,
including cancer, heart attacks, and asthma. Roche Holdings is also
focused on providing health care solutions, principally in
pharmaceuticals and diagnostics. Roche owns 55.5% of Genentech. (2)
o Media - The Fund held two positions for part of the reporting period -
Dreamworks Animations (+44%) and Pixar (+15%) - that contributed
positively to overall investment results. Another media-related
holding that helped performance was Getty Images, an e-commerce visual
content company whose products include news and sports photography,
which gained 35% during the fiscal year.
o Diversified Financials - Stock selection in this industry had a
material positive effect on the Fund's performance. In particular,
investment results were buoyed by positions in Chicago Mercantile
Exchange (+111%) and Jefferies Group (+28%).
o Materials - A position in Monsanto (+42% prior to being sold) helped
performance. Monsanto is an agricultural products company that
produces seed brands and develops biotechnology traits that assist
farmers in controlling insects and weeds.
o Technology Software & Services - Google rose 42%.
o Consumer Staples - Holdings in Dean Foods (+32%) and Whole Foods
Market (+56% prior to being sold) helped performance. Dean Foods'
principal activity is to process and distribute fresh milk and other
dairy products. Whole Foods Market operates a chain of natural and
organic food supermarkets.
MARSICO 21ST CENTURY FUND
Although the Fund's overall return for the year surpassed its primary benchmark
indexes, there were certain factors that detracted significantly from investment
results and should be mentioned:
o Underweighted Posture in the Energy sector - As discussed earlier in
this report, Energy was the best-performing economic sector in the S&P
500(R) Index for the one-year period ended September 30, 2005. In the
Russell 3000 Index, the Energy sector gained 52% over that period. As
in the case of the Focus and Growth Funds, we elected to be
substantially underweighted, as compared to our primary benchmark
index, in energy-related companies. As a result, the 21st Century Fund
absorbed a substantial "opportunity cost."
o Banking Positions - Countrywide Financial Corporation (-16%) and UCBH
(-6%) were among the Fund's weaker-performing individual holdings last
year.
o Diversified Financials Positions - On the whole, the Fund's holdings
in this industry added value. However, there were a few clunkers
during the reporting period. Most notably, First Marblehead
Corporation, a provider of outsourcing services for private education
lending, declined -63% prior to being sold.
o Real Estate Positions - This industry was among the top-performing
industry groups last year. We had the right idea in having some
positions in this area. However, our stock selection, in aggregate,
detracted from investment results. The Fund's holdings included three
real estate investment trusts ("REITs") - Redwood Trust (-10%), KKR
Financial Group (-9%), and Government Properties Trust (+10%) - whose
returns trailed the benchmark. In addition, St. Joe Corporation, a
Florida-based land developer, declined by -2% for the period. While
that loss was modest, it was magnified by the substantial average size
of the position in the Fund. Further- more, St. Joe's return was
considerably behind the industry benchmark's overall return.
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.
FISCAL YEAR-END INVESTMENT POSTURE
As of September 30, 2005 the Fund's holdings primarily emphasized five economic
sectors. These included: Financials, Consumer Discretionary, Health Care,
Industrials, and Information Technology. The Fund had few or no investments in
Telecommunications Services, Materials, and Utilities.
Sincerely,
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 April 2004 through
January 2005, 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 percentage of the Fund's
portfolio represented by the securities or industries mentioned in this
letter.
FUND OVERVIEW SEPTEMBER 30, 2005
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
One Year Five Year Average Annual Average Annual Since Inception
(10/1/04-9/30/05) (10/1/00-9/30/05) (2/1/00-9/30/05)
Marsico 21st Century Fund 18.33%(1) .14%(1) 3.38%(1)
S&P 500(R) Index 12.25% (1.49)% (0.66)%
NET ASSETS GROWTH OF $10,000(1)(2)
9/30/05 $379,328,043 [CHART]
21st
NET ASSET VALUE Century S&P 500
-----------------------------------------------
Net Asset Value Per Share $12.07
TOP FIVE HOLDINGS 01-Feb-00 10,000 10,000
31-Mar-00 12,810 10,770
Chicago Mercantile Exchange 30-Sep-00 10,860 10,383
Holdings, Inc. 4.94% 31-Mar-01 7,290 8,436
Burlington Northern 30-Sep-01 6,260 7,619
Santa Fe Corp. 4.61 31-Mar-02 7,520 8,456
Amylin Pharmaceuticals, Inc. 4.56 30-Sep-02 6,540 6,058
QUALCOMM, Inc. 4.45 31-Mar-03 6,540 6,362
Urban Outfitters, Inc. 4.14 30-Sep-03 8,740 7,536
31-Mar-04 10,260 8,597
SECTOR ALLOCATION(3) 30-Sep-04 10,200 8,582
31-Mar-05 11,190 9,172
Financial 25.56% 30-Sep-05 12,070 9,633
Consumer Non-Cyclical 21.91
Consumer Cyclical 21.81
Industrial 14.16
Communications 12.52
Energy 2.99
Technology 1.05
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 April 2004 through
January 2005, 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, 2005
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS
ADVERTISING SERVICES
Getty Images, Inc.* 66,895 $5,755,646 1.52%
- --------------------------------------------------------------------------------
APPAREL MANUFACTURERS
Volcom, Inc.* 54,265 1,519,963 0.40
- --------------------------------------------------------------------------------
AUDIO/VIDEO PRODUCTS
Harman International
Industries, Inc. 38,833 3,971,451 1.05
- --------------------------------------------------------------------------------
BUILDING -
RESIDENTIAL/COMMERCIAL
Toll Brothers, Inc.* 84,322 3,766,664 0.99
- --------------------------------------------------------------------------------
CASINO HOTELS
Kerzner International Ltd.* 80,934 4,495,884 1.19
Las Vegas Sands Corp.* 248,292 8,171,290 2.15
Station Casinos, Inc. 229,458 15,226,833 4.01
Wynn Resorts Ltd.* 318,090 14,361,764 3.79
- --------------------------------------------------------------------------------
42,255,771 11.14
- --------------------------------------------------------------------------------
COAL
Peabody Energy Corporation 134,015 11,304,165 2.98
- --------------------------------------------------------------------------------
COMMERCIAL BANKS -
WESTERN US
UCBH Holdings, Inc. 634,392 11,622,062 3.06
- --------------------------------------------------------------------------------
COMPUTER AIDED DESIGN
Autodesk, Inc. 85,688 3,979,351 1.05
- --------------------------------------------------------------------------------
FINANCE - INVESTMENT
BANKER/BROKER
Jefferies Group, Inc. 210,043 9,147,373 2.41
- --------------------------------------------------------------------------------
FINANCE - MORTGAGE
LOAN/BANKER
Countrywide Financial
Corporation 209,551 6,910,992 1.82
- --------------------------------------------------------------------------------
FINANCE - OTHER SERVICES
Chicago Mercantile
Exchange Holdings, Inc. 55,559 18,740,051 4.94
- --------------------------------------------------------------------------------
FOOD - DAIRY PRODUCTS
Dean Foods Company* 159,764 6,208,429 1.64
- --------------------------------------------------------------------------------
HOTELS & MOTELS
Shangri-La Asia Ltd. 2,299,006 3,719,379 0.98
- --------------------------------------------------------------------------------
MACHINERY - CONSTRUCTION/MINING
Bucyrus International, Inc. 82,460 4,051,260 1.07
Caterpillar, Inc. 159,015 9,342,131 2.46
- --------------------------------------------------------------------------------
13,393,391 3.53
- --------------------------------------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS CONTINUED
MEDICAL - BIOMEDICAL/GENETIC
Amgen, Inc.* 122,846 $9,787,141 2.58%
Genentech, Inc.* 119,420 10,056,358 2.65
Genzyme Corporation* 211,128 15,125,210 3.99
- --------------------------------------------------------------------------------
34,968,709 9.22
- --------------------------------------------------------------------------------
MEDICAL - DRUGS
Roche Holding AG 51,716 7,182,833 1.89
- --------------------------------------------------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 236,070 13,267,134 3.50
- --------------------------------------------------------------------------------
MEDICAL INSTRUMENTS
Foxhollow Technologies, Inc.* 80,181 3,817,417 1.01
- --------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING
Freightcar America, Inc. 60,889 2,483,053 0.65
- --------------------------------------------------------------------------------
MONEY CENTER BANKS
UBS AG 114,446 9,724,661 2.56
- --------------------------------------------------------------------------------
PROPERTY/CASUALTY INSURANCE
The Progressive Corporation 69,215 7,251,656 1.91
- --------------------------------------------------------------------------------
REAL ESTATE
OPERATING/DEVELOPMENT
The St. Joe Company 73,180 4,570,091 1.21
- --------------------------------------------------------------------------------
REITS - DIVERSIFIED
Crystal River
Capital, Inc. 144A+ 240,411 6,010,275 1.59
Government Properties
Trust, Inc. 771,843 7,564,061 1.99
- --------------------------------------------------------------------------------
13,574,336 3.58
- --------------------------------------------------------------------------------
REITS - MORTGAGE
KKR Financial Corporation 505,018 11,231,600 2.96
Redwood Trust, Inc. 76,848 3,735,581 0.99
- --------------------------------------------------------------------------------
14,967,181 3.95
- --------------------------------------------------------------------------------
RETAIL - APPAREL/SHOE
Urban Outfitters, Inc.* 534,628 15,718,063 4.14
- --------------------------------------------------------------------------------
RETAIL - RESTAURANTS
The Cheesecake Factory, Inc.* 364,531 11,387,948 3.00
- --------------------------------------------------------------------------------
THERAPEUTICS
Amylin Pharmaceuticals, Inc.* 497,148 17,295,779 4.56
- --------------------------------------------------------------------------------
TRANSPORTATION - RAIL
Burlington Northern
Santa Fe Corporation 292,360 17,483,128 4.61
- --------------------------------------------------------------------------------
* Non-income producing.
See notes to financial statements.
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2005 (continued)
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS CONTINUED
TRANSPORTATION - SERVICES
Expeditors International
of Washington, Inc. 172,626 $9,801,704 2.58%
FedEx Corporation 118,124 10,292,144 2.71
- --------------------------------------------------------------------------------
20,093,848 5.29
- --------------------------------------------------------------------------------
WEB PORTALS/INTERNET
SERVICE PROVIDERS
Google, Inc.* 39,767 12,584,665 3.32
- --------------------------------------------------------------------------------
WIRELESS EQUIPMENT
Motorola, Inc. 545,337 12,046,494 3.18
QUALCOMM, Inc. 377,333 16,885,652 4.45
- --------------------------------------------------------------------------------
28,932,146 7.63
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $322,447,504) 377,597,336 99.54
- --------------------------------------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
SHORT-TERM INVESTMENTS
SSgA Prime Money
Market Fund, 3.61% 3,096,716 $3,096,716 0.82%
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $3,096,716) 3,096,716 0.82
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $325,544,220) 380,694,052 100.36
Liabilities Less Cash
and Other Assets (1,366,009) (0.36)
- --------------------------------------------------------------------------------
NET ASSETS $379,328,043 100.00%
================================================================================
* Non-income producing.
+ Security valued at fair value as determined in good faith by Marsico Capital
Management, LLC, investment adviser to the Fund, in accordance with
procedures established by, and under the general supervision of, the Fund's
Board of Trustees. The security was purchased on March 9, 2005 for
$6,010,275 and is considered to be restricted and illiquid due to resale
restrictions. At September 30, 2005, the value of the Fund's restricted and
illiquid securities was 1.59% of net assets.
See notes to financial statements.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2005
(Amounts in thousands)
ASSETS
Investments, at value (cost $325,544) $380,694
Receivable for investments sold 5,543
Receivable for capital stock sold 233
Interest and dividends receivable 444
Prepaid expenses and other assets 159
--------------
TOTAL ASSETS 387,073
--------------
LIABILITIES
Payable for investments purchased 6,341
Payable for capital stock redeemed 615
Accrued investment advisory fee 262
Accrued distribution fee 279
Accrued trustees' fees 129
Accrued expenses and other liabilities 119
--------------
TOTAL LIABILITIES 7,745
--------------
NET ASSETS $379,328
==============
NET ASSETS CONSIST OF
Paid-in-capital $361,425
Accumulated net investment loss (135)
Accumulated net realized loss on investments
and foreign currency transactions (37,153)
Net unrealized appreciation on investments 55,191
--------------
NET ASSETS $379,328
===============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 31,415
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $12.07
==============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(Amounts in thousands)
INVESTMENT INCOME
Interest $433
Dividends (net of $100 of non-reclaimable
foreign withholding taxes) 3,696
--------------
TOTAL INVESTMENT INCOME 4,129
--------------
EXPENSES
Investment advisory fees 2,942
Distribution fees 865
Transfer agent fees and expenses 409
Fund administration fees 144
Custody and fund accounting fees 121
Printing and postage expenses 57
Federal and state registration fees 57
Professional fees 38
Trustees' fees and expenses 36
Miscellaneous 24
--------------
TOTAL EXPENSES 4,693
Recovery of previously waived expenses 99
Less expenses paid indirectly (1)
--------------
NET EXPENSES 4,791
--------------
NET INVESTMENT LOSS (662)
--------------
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 14,704
Net realized gain on foreign
currency transactions 405
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 30,495
--------------
Net Gain on Investments 45,604
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $44,942
--------------
* Not in thousands.
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
Year Year
Ended Ended
(Amounts in thousands) 9/30/05 9/30/04
OPERATIONS
Net investment loss $(662) $(872)
Net realized gain on investments 14,704 11,654
Net realized gain (loss) on foreign currency transactions 405 (438)
Change in unrealized appreciation/depreciation on investments
and foreign currency translations 30,495 9,681
----------------------------------------------------
Net increase in net assets resulting from operations 44,942 20,025
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares 269,623 159,175
Redemption fees 35 18
Redemption of shares (151,500) (67,028)
----------------------------------------------------
increase from capital share transactions 118,158 92,165
----------------------------------------------------
TOTAL INCREASE IN NET ASSETS 163,100 112,190
NET ASSETS
Beginning of period 216,228 104,038
----------------------------------------------------
END OF PERIOD $379,328 $216,228
====================================================
Accumulated net investment loss (135) (483)
TRANSACTIONS IN SHARES
Shares sold 23,590 16,143
Shares redeemed (13,372) (6,855)
----------------------------------------------------
NET INCREASE 10,218 9,288
====================================================
See notes to financial statements.
MARSICO 21ST CENTURY FUND
FINANCIAL HIGHLIGHTS
Year Year Year Year Year
For a Fund Share Outstanding Ended Ended Ended Ended Ended
Throughout the Period. 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
NET ASSET VALUE, BEGINNING OF PERIOD $10.20 $8.74 $6.54 $6.26 $10.86
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.01) (0.04) (0.04) (0.08) (0.08)
Net realized and unrealized gains
(losses) on investments 1.88 1.50 2.23 0.36 (4.52)
-------------------------------------------------------------------
Total from investment operations 1.87 1.46 2.19 0.28 (4.60)
-------------------------------------------------------------------
DISTRIBUTIONS & OTHER
Increase from payment by service provider -- -- 0.01 -- --
Redemption fees [See Note 2(i)] --(1) --(1) -- -- --
-------------------------------------------------------------------
Total distributions & other -- -- 0.01 -- --
-------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $12.07 $10.20 $8.74 $6.54 $6.26
-------------------------------------------------------------------
TOTAL RETURN 18.33% 16.70% 33.64% 4.47% (42.36)%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $379,328 $216,228 $104,038 $56,021 $60,124
Ratio of expenses to average net assets,
less waivers and before expenses paid indirectly,
plus reimbursements of previously waived expenses 1.39% 1.50% 1.55%(3) 1.50% 1.50%
Ratio of net investment loss to average net assets, net
of waivers, expenses paid indirectly, and
reimbursements of previously waived expenses (0.19)% (0.48)% (1.05)% (0.89)% (0.76)%
Ratio of expenses to average net assets, before
waivers, expenses paid indirectly and
reimbursements of previously waived expenses 1.36% 1.44% 1.65% 1.60% 1.57%
Ratio of net investment loss to average net assets,
before waivers, expenses paid indirectly and
reimbursements of previously waived expenses (0.22)% (0.42)% (1.15)% (0.99)% (0.83)%
Portfolio turnover rate(2) 175% 191% 236% 388% 399%
(1) Less than $0.01.
(2) Portfolio turnover is greater than most funds due to the investment style of
the Fund.
(3) See note 3 for information regarding the voluntary fee waiver.
See notes to financial statements.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
INVESTMENT REVIEW BY JIM GENDELMAN (UNAUDITED)
The Marsico International Opportunities Fund had a (US$) return of 22.30% for
the one-year period ended September 30, 2005. For comparative purposes, the MSCI
EAFE Index ("EAFE Index"), which we consider to be the Fund's primary benchmark
index, had a total (US$) return of 25.79% for the same time period. Please see
the Fund overview for more detailed information about the Fund's longer-term
performance for various periods ended September 30, 2005. The performance data
for the Fund 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)
--------------------
International equity markets in developed markets were remarkably strong over
the last year. Asian markets had robust gains. Japan was up 27% in dollar terms.
Hong Kong stocks rose 24% and Singapore securities advanced by 19%. Continental
Europe also posted strong overall returns. As examples, Germany and the United
Kingdom had returns of 26% and 21%, respectively, during the reporting period.
Within the EAFE Index, economic sector strength abounded. All 10 sectors (GICS
classification) that comprise the Index had returns that were solidly in
positive territory. Three sectors rose by 30% or more, including Energy (+39%),
Materials (+37%), and Industrials (+32%). Six other sectors had gains of
25%-plus. The "laggard" sector (note the quotation marks) was Information
Technology, which had a relatively modest increase - as compared to the rest of
the sectors - of 13%. A similar story of strength unfolded at the industry group
level. All 20 industries represented in the EAFE Index had positive returns last
year. Just one group, Semiconductors and Semiconductor Equipment, had a gain of
less than 10%.
Overall, the Fund's return for the one-year period ended September 30, 2005
lagged only modestly behind its benchmark index. The Fund had a significant
allocation to Japan throughout that period (19% as of September 30, 2005) and
therefore was considerably influenced by the strong Japanese equity market rally
that took place. Several of the key performance "positives" for the Fund
included:
o Retailing investments - Yamada Denki, a Japanese home appliance and
consumer electronics manufacturer, had a return of 121%. (2)
o Semiconductor-related holdings - Samsung Electronics rose 44%.
o Energy - We were fortunate to experience good results in several of
our energy-related holdings. These included Talisman Energy (+91%), a
Canadian-headquartered company that explores, develops, and
distributes crude oil, natural gas, and natural gas liquids in a
variety of markets. Brazilian-based oil company Petroleos Brasileiro
SA (+52%) also had a strong return.
o Telecommunications Services - America Movil SA, a provider of wireless
communications services in Latin America, gained nearly 104%.
o Banks - The Fund's banking-related holdings had a good year and were
among its top-performing individual holdings. These included Japanese
banks Mitsubishi Ufj (+59%) and Sumitomo Mitsui (+42%). ICICI Bank, a
full service banking company in India, and Erste Bank der Oster, an
Austria-based private and commercial banking organization, had returns
of 108% and 31%, respectively.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
o Real Estate - Singapore-based property services provider CapitaLand
Ltd. (+79%) and Leopalace 21 Corp. (+34%), a Japanese residential
building firm, were solid performing holdings.
o Utilities - British Energy, a recently restructured nuclear power
company, gained 73%.
o Country Allocations - The Fund had a number of equity holdings in
markets not included in the EAFE Index that performed well. These
included certain holdings in Canada, Mexico, Brazil, India, and South
Korea.
A few factors caused the Fund's one-year return to slightly trail the EAFE
Index. One factor related to the Fund's posture in the Consumer Discretionary
sector. Throughout the past year, the Fund tended to have a high degree of
emphasis on this sector, which at times meant that the Fund was almost
double-weighted in this sector as compared to the EAFE Index. The Fund's
positions in Consumer Discretionary sector were allocated across a variety of
industries and individual companies and had a collective price return of 18% for
the Fund. That was a good absolute return and it included some good stock
selection, particularly in the retailing industry. In addition, Shangri-La Asia,
a Hong Kong-based hotel operator, and Grupo Televisa SA, a Mexico
City-headquartered provider of television broadcasting services, had strong
returns of 53% and 42%, respectively, while held in the Fund. However, the
Fund's overall return in this sector trailed the benchmark index return by
almost 8%. The Fund's media-related holdings had an aggregate return of about
11% over the fiscal year - well behind the EAFE Index's overall gain for the
one-year period ended September 30, 2005. Thomson SA, a video service provider
to the entertainment and media industries, fell by 24% and some of the Fund's
hotel/casino operator positions (e.g., Kerzner International, Wynn Resorts) were
among the Fund's performing holdings and weighed on the Fund's overall sector
return. The impact of that performance shortfall was magnified by our decision
to have such an emphasis on this sector.
Another "soft spot" for the Fund's performance related to its over-weighted
posture in the Information Technology sector, which, as mentioned earlier, was
(somewhat remarkably) the lowest-returning sector in the EAFE Index for the
one-year period ended September 30, 2005. That created an opportunity cost of
sorts, as there were quite a few other areas of the market that had considerably
better returns. The Fund's Information Technology holdings gained 14% in
aggregate, with Samsung Electronics (+44%) among the top-performing individual
holdings. However, that result - in the context of a benchmark index that rose
nearly 26% - did not help the Fund's overall return.
The Fund's positions in the Financials sector had somewhat mixed returns last
year. A variety of banking positions were strong performers, as mentioned above.
Offsetting those gains to a significant extent were the Fund's insurance
positions, including Swiss Life Holding (-8% prior to being sold). Promise Co.,
a Japanese consumer finance company providing unsecured and non-guaranteed
loans, fell -13% prior to being sold. Takefuji, another Japanese consumer
finance company, declined by -17% prior to being sold.
The Fund's cash positions, which typically are a residual of our stock selection
process, mildly impacted performance results. This was particularly true in the
fourth calendar quarter of 2004, when international equities generally
experienced substantial gains and the Fund's modest cash positions impacted
performance. The trend of international equities outperforming cash by a wide
margin continued through the end of the Fund's 2005 fiscal year. For this
reason, any cash positions held during the past year tended to create a modest
"drag" on performance.
For the complete fiscal year, fluctuations in currency
exchange rates did not have a material impact on the Fund's return. At times
during the year, however, currency was a significant factor. In the fourth
quarter of 2004, for example, the Fund had a number of US dollar-related
positions, which included some positions that trade in dollars or were
denominated in a currency that tends to correlate highly with the US dollar
(e.g., the Mexican peso). As the dollar weakened in relation to other major
world currencies, the Fund's performance was adversely impacted. Later in the
fiscal year, however, the dollar rallied considerably, which helped the Fund's
dollar-related positions.
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.
FISCAL YEAR-END INVESTMENT POSTURE
As of September 30, 2005 the Fund's holdings, in terms of economic sector
distribution, were allocated primarily to Consumer Discretionary, Financials,
Health Care, Information Technology, and Industrials. The Fund's largest
country-level allocations were in Japan, the United Kingdom, Switzerland,
France, and Canada.
Sincerely,
JAMES G. GENDELMAN
PORTFOLIO MANAGER
(1) The performance returns for the International Opportunities Fund (for the
period prior to September 30, 2004) reflect a fee waiver in effect; in the
absence of such a waiver, the returns would have been reduced. For the
period beginning October 1, 2004, performance returns for the International
Opportunities 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. 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 percentage of the Fund's
portfolio represented by the securities or industries mentioned in this
letter.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
FUND OVERVIEW SEPTEMBER 30, 2005
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
One Year Five Year Average Annual Average Annual Since Inception
(10/1/04-9/30/05) (10/1/00-9/30/05) (6/30/00-9/30/05)
Marsico International Opportunities Fund 22.30%(1) 5.37%(1) 5.82%(1)
Morgan Stanley Capital International EAFE Index 25.79% 3.16% 1.37%
NET ASSETS GROWTH OF $10,000(1)(2)
9/30/05 $262,522,340 [CHART]
NET ASSET VALUE International MS
Net Asset Value Per Share $13.00 Opportunities EAFE
-----------------------------------------------
TOP FIVE HOLDINGS
Roche Holding AG 4.50%
Vinci S.A. 3.74
Canadian National 30-Jun-00 10,000 10,000
Railway Co. 3.10 30-Sep-00 10,360 9,193
Continental AG 3.02 31-Mar-01 8,283 7,720
UBS AG 2.98 30-Sep-01 7,011 6,570
31-Mar-02 8,542 7,064
SECTOR ALLOCATION(3) 30-Sep-02 7,248 5,550
Financial 21.29% 31-Mar-03 7,040 5,422
Consumer Cyclical 18.72 30-Sep-03 9,101 6,993
Consumer Non-Cyclical 17.55 31-Mar-04 11,493 8,542
Industrial 16.81 30-Sep-04 11,006 8,537
Communications 10.71 31-Mar-05 12,072 9,829
Energy 7.02 30-Sep-05 13,460 10,739
Basic Materials 4.12
Utilities 2.27
Technology 1.51
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 (for the
period prior to September 30, 2004) reflect a fee waiver in effect; in the
absence of such a waiver, the returns would be reduced. For the period
beginning October 1, 2004, performance returns for the International
Opportunities Fund would be higher but for the reimbursement of fees waived
previously.
(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.
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.
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2005
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS
ADVERTISING SERVICES
JC Decaux S.A.* 167,203 $3,689,494 1.40%
- --------------------------------------------------------------------------------
AUDIO/VIDEO PRODUCTS
Thomson Multimedia 119,660 2,487,970 0.95
- --------------------------------------------------------------------------------
AUTOMOTIVE -
CARS/LIGHT TRUCKS
Hyundai Motor Company 57,550 4,494,801 1.71
Toyota Motor Corporation 87,100 3,989,782 1.52
- --------------------------------------------------------------------------------
8,484,583 3.23
- --------------------------------------------------------------------------------
BEVERAGES - WINE/SPIRITS
Diageo PLC 262,840 3,778,315 1.44
- --------------------------------------------------------------------------------
BROADCAST
SERVICES/PROGRAMMING
Grupo Televisa S.A. ADR 80,120 5,745,405 2.19
- --------------------------------------------------------------------------------
BUILDING - HEAVY CONSTRUCTION
Vinci S.A. 113,960 9,813,382 3.74
- --------------------------------------------------------------------------------
BUILDING PRODUCTS -
CEMENT/AGGREGATES
Cemex S.A. ADR 114,842 6,006,237 2.29
- --------------------------------------------------------------------------------
CASINO HOTELS
Kerzner International Ltd.* 48,196 2,677,288 1.02
Wynn Resorts Ltd.* 48,889 2,207,338 0.84
- --------------------------------------------------------------------------------
4,884,626 1.86
-------------------------------------------------------------------------------
CELLULAR TELECOMMUNICATIONS
America Movil ADR 222,018 5,843,514 2.23
The Carphone
Warehouse PLC 836,815 2,937,187 1.12
SK Telecom Company Ltd. 12,896 2,502,578 0.95
- --------------------------------------------------------------------------------
11,283,279 4.30
- --------------------------------------------------------------------------------
CHEMICALS - SPECIALTY
Lonza Group AG 109,346 6,453,234 2.46
- --------------------------------------------------------------------------------
COMMERCIAL BANKS - NON-US
Anglo Irish Bank
Corporation PLC 274,759 3,731,474 1.42
ICICI Bank Ltd. ADR 97,379 2,750,957 1.05
Mitsubishi Tokyo
Financial Group, Inc. 368 4,830,162 1.84
- --------------------------------------------------------------------------------
11,312,593 4.31
- --------------------------------------------------------------------------------
COSMETICS & TOILETRIES
Natura Cosmeticos S.A. 35,675 1,423,673 0.54
- --------------------------------------------------------------------------------
ELECTRIC - GENERATION
British Energy Group PLC* 302,846 2,558,624 0.97
- --------------------------------------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS CONTINUED
ELECTRIC PRODUCTS -
MISCELLANEOUS
Samsung Electronics Co., Ltd. 7,610 $4,288,146 1.63%
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS -
MISCELLANEOUS
Fanuc Ltd. 34,814 2,815,297 1.07
Murata Manufacturing
Company Ltd. 72,000 4,014,799 1.53
Nippon Electric
Glass Co., Ltd. 293,000 5,278,233 2.01
- --------------------------------------------------------------------------------
12,108,329 4.61
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS -
SEMICONDUCTORS
Arm Holdings PLC 1,862,923 3,860,841 1.47
- --------------------------------------------------------------------------------
ELECTRONIC
MEASURING INSTRUMENTS
Keyence Corporation 10,300 2,589,517 0.99
- --------------------------------------------------------------------------------
FINANCE - CREDIT CARD
Credit Saison Co., Ltd. 96,900 4,250,898 1.62
- --------------------------------------------------------------------------------
HOTELS & MOTELS
InterContinental Hotels
Group PLC 409,978 5,184,762 1.98
Shangri-La Asia Ltd. 2,681,003 4,337,382 1.65
- --------------------------------------------------------------------------------
9,522,144 3.63
- --------------------------------------------------------------------------------
MEDICAL - DRUGS
Chugai Pharmaceutical
Co., Ltd. 261,100 4,979,576 1.90
CSL Ltd. 84,863 2,485,115 0.95
Roche Holding AG 85,182 11,830,925 4.50
Sanofi-Aventis S.A. 79,089 6,534,898 2.49
- --------------------------------------------------------------------------------
25,830,514 9.84
- --------------------------------------------------------------------------------
MONEY CENTER BANKS
Erste Bank der oesterreichischen
Sparkassen AG 78,896 4,219,539 1.61
Sumitomo Mitsui Financial
Group, Inc. 464 4,373,502 1.66
UBS AG 92,086 7,824,696 2.98
- --------------------------------------------------------------------------------
16,417,737 6.25
- --------------------------------------------------------------------------------
MORTGAGE BANKS
Hypo Real Estate Holding AG 103,512 5,232,509 1.99
- --------------------------------------------------------------------------------
MUSIC
EMI Group PLC 533,353 2,281,264 0.87
- --------------------------------------------------------------------------------
OIL - FIELD SERVICES
Stolt Offshore S.A.* 199,265 2,303,932 0.88
- --------------------------------------------------------------------------------
* Non-income producing.
See notes to financial statements.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2005 (continued)
Number Market Percent
of Value of Net
Shares in Dollars Assets
COMMON STOCKS CONTINUED
OIL & GAS DRILLING
Precision Drilling Corporation* 78,365 $3,856,569 1.47%
- --------------------------------------------------------------------------------
OIL COMPANIES -
EXPLORATION & PRODUCTION
CNOOC Ltd. ADR 36,464 2,632,336 1.00
Talisman Energy, Inc. 93,468 4,573,299 1.74
- --------------------------------------------------------------------------------
7,205,635 2.74
- --------------------------------------------------------------------------------
OIL COMPANIES - INTEGRATED
Petroleo Brasilerio SA ADR 64,111 4,583,295 1.75
- --------------------------------------------------------------------------------
PETROCHEMICALS
Reliance Industries, Ltd.
GDR 144A 112,727 4,060,427 1.55
- --------------------------------------------------------------------------------
REAL ESTATE
OPERATING/DEVELOPMENT
Capitaland Ltd. 2,717,000 5,042,038 1.92
Hang Lung Properties Ltd. 1,499,518 2,377,625 0.91
LeoPalace 21 Corporation 181,786 4,387,717 1.67
Sumitomo Realty &
Development Co., Ltd. 362,000 5,363,672 2.04
- --------------------------------------------------------------------------------
17,171,052 6.54
- --------------------------------------------------------------------------------
RETAIL - CONSUMER ELECTRONICS
Yamada Denki Company Ltd. 59,500 4,523,300 1.72
- --------------------------------------------------------------------------------
RETAIL - DRUG STORES
Shoppers Drug Mart
Corporation 147,958 5,231,031 1.99
- --------------------------------------------------------------------------------
RETAIL - PUBS
Enterprise Inns PLC 520,402 7,733,178 2.95
- --------------------------------------------------------------------------------
RUBBER - TIRES
Continental AG 96,480 7,919,688 3.02
- --------------------------------------------------------------------------------
SOAP & CLEANING PREPARATIONS
Reckitt Benckiser PLC 177,267 5,399,696 2.06
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT
Ericsson (LM) Tel-SP ADR 180,334 6,643,505 2.53
- --------------------------------------------------------------------------------
TRANSPORTATION - RAIL
Canadian National
Railway Co. 114,776 8,147,948 3.10
- --------------------------------------------------------------------------------
WATER
Veolia Environment 76,618 3,233,045 1.23
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $212,397,044) 252,315,615 96.11
- --------------------------------------------------------------------------------
Number Market Percent
of Value of Net
Shares in Dollars Assets
PREFERRED STOCK
DRUG DELIVERY SYSTEMS
Fresenius AG 22,879 $3,173,167 1.21%
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(COST $2,362,446) 3,173,167 1.21
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
SSgA Prime Money
Market Fund, 3.61% 9,901,561 9,901,561 3.77
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $9,901,561) 9,901,561 3.77
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $224,661,051) 265,390,343 101.09
Liabilities Less Cash
and Other Assets (2,868,003) (1.09)
- --------------------------------------------------------------------------------
NET ASSETS $262,522,340 100.00%
================================================================================
SUMMARY OF INVESTMENTS BY COUNTRY
Percent
of
Market Investment
Country Value Securities
- --------------------------------------------------------------------------------
Australia $2,485,115 0.9%
Austria 4,219,539 1.6
Brazil 6,006,968 2.3
Canada 21,808,847 8.2
France 25,758,789 9.7
Germany 16,325,364 6.1
Hong Kong 9,347,343 3.5
India 6,811,384 2.6
Ireland 3,731,474 1.4
Japan 51,396,455 19.4
Mexico 17,595,156 6.6
Norway 2,303,932 0.9
Singapore 5,042,038 1.9
South Korea 11,285,525 4.3
Sweden 6,643,505 2.5
Switzerland 26,108,855 9.8
United Kingdom 33,733,867 12.7
United States(1) 14,786,187 5.6
- --------------------------------------------------------------------------------
TOTAL $265,390,343 100.0%
- --------------------------------------------------------------------------------
* Non-income producing.
(1) Includes short-term securities.
See notes to financial statements.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2005
(Amounts in thousands)
ASSETS
Investments, at value (cost $224,661) $265,390
Receivable for investments sold 855
Receivable for capital stock sold 402
Interest and dividends receivable 492
Prepaid expenses and other assets 117
--------------
TOTAL ASSETS 267,256
--------------
LIABILITIES
Payable for investments purchased 3,800
Payable for capital stock redeemed 401
Accrued investment advisory fee 179
Accrued distribution fee 164
Accrued trustees' fees 92
Accrued expenses and other liabilities 98
TOTAL LIABILITIES 4,734
--------------
NET ASSETS $262,522
==============
NET ASSETS CONSIST OF
Paid-in-capital $223,778
Accumulated net investment income 1,824
Accumulated net realized loss on investments
and foreign currency transactions (3,847)
Net unrealized appreciation on investments 40,767
--------------
NET ASSETS $262,522
==============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 20,187
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $13.00
==============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(Amounts in thousands)
INVESTMENT INCOME
Interest $197
Dividends (net of $286 of non-reclaimable
foreign withholding taxes) 5,007
--------------
TOTAL INVESTMENT INCOME 5,204
--------------
EXPENSES
Investment advisory fees 1,587
Distribution fees 467
Custody and fund accounting fees 263
Transfer agent fees and expenses 201
Fund administration fees 135
Federal and state registration fees 43
Printing and postage expenses 33
Trustees' fees and expenses 26
Professional fees 21
Miscellaneous 10
--------------
TOTAL EXPENSES 2,786
Recovery of previously waived expenses 203
Less expenses paid indirectly (1)
--------------
NET EXPENSES 2,988
--------------
NET INVESTMENT INCOME 2,216
--------------
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 4,461
Net realized loss on foreign
currency transactions (1,206
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 30,413
--------------
Net Gain on Investments 33,668
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $35,884
==============
* 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) 9/30/05 9/30/04
OPERATIONS
Net investment income $2,216 $51
Net realized gain (loss) on investments 4,461 (513)
Net realized gain (loss) on foreign currency transactions (1,206) 334
Change in unrealized appreciation/depreciation on investments
and foreign currency translations 30,413 5,295
---------------------------------------------------
Net increase in net assets resulting from operations 35,884 5,167
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares 165,245 90,174
Redemption fees 11 24
Redemption of shares (44,780) (17,612)
---------------------------------------------------
increase from capital share transactions 120,476 72,586
---------------------------------------------------
TOTAL INCREASE IN NET ASSETS 156,360 77,753
NET ASSETS
Beginning of period 106,162 28,409
---------------------------------------------------
END OF PERIOD $262,522 $106,162
===================================================
Accumulated net investment income (loss) 1,824 (258)
TRANSACTIONS IN SHARES
Shares sold 14,012 8,443
Shares redeemed (3,810) (1,686)
---------------------------------------------------
NET INCREASE 10,202 6,757
===================================================
See notes to financial statements.
FINANCIAL HIGHLIGHTS
Year Year Year Year Year
For a Fund Share Outstanding Ended Ended Ended Ended Ended
Throughout the Period. 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
NET ASSET VALUE, BEGINNING OF PERIOD $10.63 $8.80 $7.00 $6.78 $10.36
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.12 0.04 0.02 (0.02) --
Net realized and unrealized gains
(losses) on investments 2.25 1.79 1.78 0.19 (3.27)
-------------------------------------------------------------------
Total from investment operations 2.37 1.83 1.80 0.17 (3.27)
-------------------------------------------------------------------
DISTRIBUTIONS & OTHER
Net investment income -- -- -- (0.01) (0.04)
Net realized gains -- -- -- -- (0.27)
Redemption fees [See Note 2(i)] --(1) --(1) --(1) 0.05 --
Payment by affiliate -- -- -- 0.01 --
-------------------------------------------------------------------
Total distributions & other -- -- -- 0.05 (0.31)
NET ASSET VALUE, END OF PERIOD $13.00 $10.63 $8.80 $7.00 $6.78
-------------------------------------------------------------------
TOTAL RETURN 22.30% 20.80% 25.71% 3.37% (32.32)%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $262,522 $106,162 $28,409 $20,632 $17,609
Ratio of expenses to average net assets,
less waivers and before expenses paid indirectly,
plus reimbursements of previously waived expenses 1.60% 1.60% 1.68%(3) 1.60% 1.60%
Ratio of net investment income (loss) to average net assets,
net of waivers, expenses paid indirectly, and
reimbursements of previously waived expenses 1.19% 0.07% 0.18% (0.25)% 0.05%
Ratio of expenses to average net assets,
before waivers, expenses paid indirectly and
reimbursements of previously waived expenses 1.49% 1.68% 2.31% 2.07% 2.60%
Ratio of net investment income (loss) to average net assets,
before waivers, expenses paid indirectly and
reimbursements of previously waived expenses 1.30% (0.00)% (0.45)% (0.73)% (0.94)%
Portfolio turnover rate(2) 156% 105% 211% 192% 534%
(1) Less than $0.01.
(2) Portfolio turnover is greater than most funds due to the investment style of
the Fund.
(3) See Note 3 for information regarding the voluntary fee waiver.
See notes to financial statements.
MARSICO FUNDS
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2005
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 7% of the 21st Century
Fund and 9% 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 assist in determining 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 $1,034,961 and
$311,115 for the Focus Fund and Growth Fund, respectively, for the year
ended September 30, 2005. Also, the Funds received credits on certain
custody account balances which reduced certain transfer agent fees and
expenses in the amount of $10,524, $5,611, $1,101 and $594 for the Focus
Fund, Growth Fund, 21st Century Fund and International Opportunities
Fund, respectively, for the year ended September 30, 2005. 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. 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, 2005,
reclassifications (in thousands) were recorded to increase (decrease)
paid-in-capital by $(7,803), $(2,712), $(225) and $12, increase
(decrease) net investment income by $6,990, $2,415, $1,009 and $(134) and
increase (decrease) accumulated net realized gain (loss) on investments
and foreign currency transactions by $813, $297, $(784) and $122 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.
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.
MARSICO FUNDS
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2005 (continued)
(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
counter-party 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.
Transactions in call options written for the year ended September 30, 2005
were as follows:
Number of
FOCUS FUND Contracts Premiums
Options outstanding
at 9/30/04 -- $ --
Options written 7,753 1,545,094
Options closed (257) (54,925)
Options exercised (3,768) (782,825)
Options expired (3,728) (707,344)
- --------------------------------------------------------------
Options outstanding
at 9/30/05 -- $ --
==============================================================
Number of
GROWTH FUND Contracts Premiums
Options outstanding
at 9/30/04 -- $ --
Options written 252 42,166
Options closed -- --
Options exercised (252) (42,166)
Options expired -- --
- --------------------------------------------------------------
Options outstanding
at 9/30/05 -- $ --
==============================================================
(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 $115,840,
$54,302, $31,531 and $27,377 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 year ended September 30, 2005, the Focus
Fund, Growth Fund, 21st Century Fund and International Opportunites Fund
received $28,928, $84,502, $35,265 and $10,750, respectively, in
redemption fees.
(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.
(k) Indemnifications--In the normal course of business, the Funds enter into
contracts that contain provisions indemnifying other parties against
specified potential liabilities. Each Fund's maximum exposure under these
arrangements is unknown as this would involve future claims that may be
made against the Fund that have not yet occurred. However, based on
experience, the Funds expect the risk of loss to be remote.
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. Effective November 11, 2004, the Adviser
reduced its investment advisory fee ("management fee") for managing the Focus
Fund and Growth Fund for assets that exceed certain thresholds. The current
management fee schedule for these two Funds is 0.85% per year of average
daily net assets up to $3 billion in each Fund, and 0.75% per year of average
daily net assets exceeding $3 billion in each Fund. 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, 2005. This fee waiver is voluntary and may be
terminated at any time. 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. 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, 2005, the Adviser recovered previously waived fees
of $98,548 and $203,223, respectively, in the 21st Century Fund and
International Opportunities Fund.
As of September 30, 2005, the reimbursement that may potentially be made by
the International Opportunities Fund to the Adviser is $101,347, which
expires between 2006 and 2007.
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, 2005, 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.
MARSICO FUNDS
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2005 (continued)
5.INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the year ended September 30, 2005, were as
follows:
21st International
Focus Growth Century Opportunities
(Amounts in thousands) Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------------------
Purchases $3,024,114 $1,713,056 $693,691 $401,134
Sales $2,689,019 $1,204,068 $576,255 $278,528
There were no purchases or sales of U.S. government securities.
- ------------------------------------------------------------------------------------------------------------------------------------
6.FEDERAL INCOME TAX INFORMATION
At September 30, 2005, 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 $2,776,966 $1,710,168 $326,139 $226,990
-----------------------------------------------------------------------------------
Gross unrealized appreciation 1,037,772 497,007 63,170 43,477
Gross unrealized depreciation (77,800) (32,614) (8,615) (5,077)
-----------------------------------------------------------------------------------
Net unrealized appreciation on investments $959,972 $464,393 $54,555 $38,400
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, and International Opportunities Funds had realized
currency losses (in thousands) from transactions between November 1, 2004 and
September 30, 2005 of $76, $15, and $125, respectively. Post-October currency
losses and capital losses are treated as arising in the Funds' next fiscal
year.
At September 30, 2005, the Focus, Growth, 21st Century and International
Opportunities Funds had accumulated capital loss carryforwards (in thousands)
of $173,667, $118,864, $36,559 and $1,519, with $0, $0, $8,036 and $0
expiring in 2009, $86,197, $40,272, $28,523 and $1,441 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 (in thousands) $119,576, $14,183, $14,115 and $4,326, respectively,
of its capital loss carryforwards during the year ended September 30, 2005.
- --------------------------------------------------------------------------------
As of September 30, 2005, 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) $(577) $(272) $(94) $1,862
Undistributed long-term capital gains -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Tax accumulated earnings (deficit) (577) (272) (94) 1,862
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated capital and other losses (173,667) (118,864) (36,559) (1,519)
Unrealized appreciation on investments 959,972 464,393 54,555 38,400
TOTAL ACCUMULATED EARNINGS (DEFICIT) $785,728 $345,257 $17,902 $38,743
- --------------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary income (deficit) consists primarily of post-October
currency losses and deferred Trustees' compensation.
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 "Trust") at September 30, 2005, 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 five years in the period then ended, 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 Trust's 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, 2005 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.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
November 4, 2005
MARSICO FUNDS
EXPENSE EXAMPLE FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2005 (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, 2005 to September 30, 2005
(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
---------------------------------------------------------------------
Beginning Ending Expenses paid during
account value account value the period ended
April 1, 2005 September 30, 2005 September 30, 2005(1)
---------------------------------------------------------------------
Actual Example $1,000.00 $1,097.50 $6.32
Hypothetical Example, assuming a 5% return before expenses $1,000.00 $1,018.97 $6.08
GROWTH FUND
---------------------------------------------------------------------
Beginning Ending Expenses paid during
account value account value the period ended
April 1, 2005 September 30, 2005 September 30, 2005(1)
---------------------------------------------------------------------
Actual Example $1,000.00 $1,070.40 $6.43
Hypothetical Example, assuming a 5% return before expenses $1,000.00 $1,018.79 $6.27
EXPENSES PAID DURING THE PERIOD (continued) 21st CENTURY FUND
---------------------------------------------------------------------
Beginning Ending Expenses paid during
account value account value the period ended
April 1, 2005 September 30, 2005 September 30, 2005(1)
---------------------------------------------------------------------
Actual Example $1,000.00 $1,078.60 $7.18
Hypothetical Example, assuming a 5% return before expenses $1,000.00 $1,018.09 $6.97
INTERNATIONAL OPPORTUNITIES FUND
---------------------------------------------------------------------
Beginning Ending Expenses paid during
account value account value the period ended
April 1, 2005 September 30, 2005 September 30, 2005(1)
---------------------------------------------------------------------
Actual Example $1,000.00 $1,114.90 $8.36
Hypothetical Example, assuming a 5% return before expenses $1,000.00 $1,017.09 $7.97
- --------------------------------------------------------------------------------
OTHER INFORMATION (UNAUDITED)
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, 2005 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.
OTHER TAX INFORMATION
The International Opportunities Fund intends to treat any
distribution from net investment income as qualified dividend income to the
maximum extent allowable.
(1) Expenses are equal to the Funds' annualized expense ratios (1.20% for the
Focus Fund, 1.24% for the Growth Fund, 1.38% for the 21st Century Fund and
1.58% for the International Opportunities Fund), multiplied by the average
account value over the period, multiplied by 183/365 (to reflect the six
month period).
MARSICO FUNDS
TRUSTEE AND OFFICER INFORMATION INDEPENDENT TRUSTEES
Term of Office(1) Number of Portfolios
Position(s) Held and Length of Principal Occupation(s) in Fund Complex Other Directorships
Name, Address and Age with the Trust Time Served During Past 5 Years Overseen by Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
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).
Michael D. Rierson Trustee Since November 1998 Vice President and Vice Chancellor 4 None
University of Houston for University Advancement at the
204 East Cullen Building University of Houston and UH
Houston, TX 77204-2021 System, respectively.
DOB: 1952 (October 2005 - present);
President and Vice
President
University of
South Florida
Foundation and
University of
South Florida (May
2001 - September
2005); Vice
President,
University
Advancement at
University of
Miami (September
1998 - March
2001).
Joseph T. Willett Trustee Since November 2002 Private Investor 4 None
1200 17th Street (2002 - present)
Suite 1600 Chief Operating Officer, Merrill Lynch
Denver, CO 80202 Europe (1998 - 2002)
DOB: 1951
(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.
TRUSTEE AND OFFICER INFORMATION INTERESTED TRUSTEES AND OFFICERS
Term of Office(1) Number of Portfolios
Position(s) Held and Length of Principal Occupation(s) in Fund Complex Other 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, President Since December 1997 Chief Executive Officer, Marsico 4 None
1200 17th Street and Chief Capital Management, LLC
Suite 1600 Executive Officer (September 1997 - present).
Denver, CO 80202
DOB: 1955
J. Jeffrey Riggs(2) Trustee Since December 1997 President, Essex Financial Group, 4 None
8400 East Prentice Avenue Inc. (commercial mortgage bank)
Suite 910 (more than five years); Principal,
Englewood, CO 80111 Baron Properties, LLC (January
DOB: 1953 1997 - present).
Christopher J. Marsico(3)Vice President Since September 2002 President, Marsico Capital N/A N/A
1200 17th Street and Treasurer Management, LLC (June 2002 -
Suite 1600 present); Chief Operations Officer,
Denver, CO 80202 Marsico Capital Management, LLC
DOB: 1961 (September 1997 - June 2002).
Mary L. Watson Vice President Since September 2002 Chief Operations Officer, Marsico N/A N/A
1200 17th Street and Secretary Capital Management, LLC
Suite 1600 (June 2002 - present); Vice President
Denver, CO 80202 of Client Services, Marsico Capital
DOB: 1959 Management, LLC (September 1997 -
June 2002).
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).
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.
NOTES
NOTES
NOTES
[LOGO]
MARSICO FUNDS
HELPING YOU APPRECIATE LIFE
The Marsico Investment Fund
UMB Distribution Serives, LLC, Distributor
P.O. Box 3210, Milwaukee, WI 53201-3210
www.marsicofunds.com 888.860.8686
(C)2005 MARSICO CAPITAL MANAGEMENT, LLC
Not authorized for distribution unless preceded or accompanied by an effective
Marsico Funds prospectus.
The ticker symbols on page one are fictitious and do not refer to existing
securities.
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, 2005 and September
30, 2004, 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.
2005 2004
$101,000 $95,215
(b) Audit-Related Fees.
In each of the fiscal years ended September 30, 2005 and September 30, 2004, 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.
2005 2004
$0 $0
(c) Tax Fees.
In each of the fiscal years ended September 30, 2005 and September 30, 2004 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.
2005 2004
$14,500 $13,500
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, 2005 and September 30, 2004 the
aggregate Other Fees billed (or to be billed) by PwC for all other non-audit
services rendered are shown in the table below.
2005 2004
$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, 2005, 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 2005
Work performed by persons who are not full-time 0%
(g) In each of the fiscal years ended September 30, 2005 and September 30, 2004,
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.
2005 2004
$32,000 $27,500
(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 - Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10 - Submission of matters to a vote of Security Holders.
Not applicable.
Item 11 - 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 12 - Exhibits.
(a)(1) Code of Ethics - Filed as an attachment to this filing (Exhibit (a)).
(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 (b) and (c)).
(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 (d) and (e)).
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 2, 2005
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 2, 2005
By: /s/ Christopher J. Marsico
Christopher J. Marsico
Vice President and Treasurer
Date: December 2, 2005