UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08397
The Marsico Investment Fund
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(Exact name of Registrant as specified in charter)
1200 17th Street, Suite 1600
Denver, Colorado 80202
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(Address of principal executive offices) (Zip code)
Christopher J. Marsico
The Marsico Investment Fund
1200 17th Street, Suite 1600
Denver, Colorado 80202
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(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
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Date of fiscal year end: September 30
-----------------
Date of reporting period: March 31, 2006
Item 1. Reports to Stockholders
TRADITIONS
SEMI-ANNUAL REPORT
MARCH 31, 2006
[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.
APRIL 2006
DEAR SHAREHOLDER:
ENCLOSED IS YOUR SEMI-ANNUAL REPORT FOR THE MARSICO INVESTMENT FUND ENCOMPASSING
THE SIX-MONTH PERIOD FROM OCTOBER 1, 2005 TO MARCH 31, 2006. EQUITIES POSTED
STRONG OVERALL RETURNS DURING THE PERIOD, PARTICULARLY SMALL CAPITALIZATION AND
INTERNATIONAL EQUITIES.
THE PURPOSE OF THIS REPORT IS TO PROVIDE A RETROSPECTIVE FOR THE FUNDS'
SIX-MONTH INVESTMENT RESULTS BY DISCUSSING WHAT WE BELIEVE ARE THE MAIN FACTORS
THAT IMPACTED PERFORMANCE - SUCH AS SECTOR POSITIONING, INDUSTRY ALLOCATIONS,
AND STOCK SELECTION - AS COMPARED TO THE FUNDS' BENCHMARK INDEXES. CERTAIN
SECTOR OR INDUSTRY CLASSIFICATIONS USED IN THIS PORTION OF THE SEMI-ANNUAL
REPORT MAY BE BROADER THAN THOSE USED ELSEWHERE IN THE REPORT. FOR OUR UPDATED
THOUGHTS REGARDING THE MARKET ENVIRONMENT AND OUR OVERALL INVESTMENT OUTLOOK,
PLEASE REFER TO THE QUARTERLY SHAREHOLDER UPDATE DATED APRIL 2006 THAT IS
AVAILABLE ON THE FUNDS' WEBSITE AT 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
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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
EXPENSE EXAMPLE 42
ANNUAL RENEWAL OF
INVESTMENT ADVISORY AGREEMENTS 44
OTHER INFORMATION 46
MARSICO FOCUS FUND & MARSICO GROWTH FUND
INVESTMENT REVIEW BY TOM MARSICO (UNAUDITED)
I am pleased to report that the Focus Fund and Growth Fund had total returns of
8.88% and 7.68%, respectively, for the six-month period ended March 31, 2006,
outperforming their primary benchmark index for the period. For comparative
purposes, the S&P 500(R) Index - which we consider to be the Funds' primary
benchmark index - had a totaL six-month return of 6.38%. Please see the Funds'
overviews for more detailed information about each Fund's performance for
various periods ended March 31, 2006.
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 HIGHER OR LOWER 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 six-month period ended March 31,
2006, it may be helpful to review the performance of broader equity markets
during this period. Stock prices worldwide posted solid gains during the
six-month period ended March 31, 2006. A recap of equity market performance
reflecting several well-known benchmark indexes is provided below:
[CHART]
INDEX NAME UNIVERSE OF SIX MONTH
EQUITIES REPRESENTED TOTAL RETURN
- -------------------------------------------------------------
US
- -------------------------------------------------------------
S&P 500(R) US large
capitalization equities 6.38%
Russell 3000(R) US publicly-traded
equities of all sizes 7.46%
Russell 2000(R) US small
capitalization equities 15.23%
- -------------------------------------------------------------
INTERNATIONAL
- -------------------------------------------------------------
MSCI EAFE Equities in developed
international equity markets,
including Japan, Western
Europe, and Australasia 13.86%
As shown above, US small capitalization and international equities were
stand-out performers over the course of the reporting period. Both areas
performed well during the fourth quarter of 2005, and were also very strong in
the first calendar quarter of 2006.
MARKET ENVIRONMENT
US LARGE-CAPITALIZATION EQUITIES
US large-cap stocks moved higher over the past six months, weathering a variety
of challenges including higher oil prices, interest rate and inflation concerns,
and numerous geopolitical tensions. For the reporting period as a whole,
large-cap stocks seemed to take heart in generally strong corporate earnings, as
well as positive factors such as improved labor markets, healthy consumer
discretionary spending levels, relatively resilient housing markets, continued
signs of strong US economic growth, and relatively quiescent interest rates and
inflation.
Performance at the Global Industry Classification Standard ("GICS") economic
sector level (using the S&P 500(R) Index as a reference) exhibited both strength
and breadth. Nine of ten sectors were in positive territory during the six-month
period ended March 31, 2006. The top-performing areas included Materials (+20%),
Telecommunication Services (+14%), Industrials (+12%), and Financials (+12%).
Other sectors experienced more muted gains, at least in comparison to the
sectors just mentioned. These included Information Technology (+5%), Consumer
Discretionary (+4%), Health Care (+3%), Consumer Staples (+2%), and Energy
(+1%). The only sector "in the red" for the six-month period was Utilities,
which declined -7%.
At an industry level, investment results also demonstrated widespread strength.
The vast majority of industry groups achieved gains - some very substantial in
nature. The top-performing groups represented a diverse mix. They included
Transportation (+25%), Real Estate (+17%), Diversified Financials (+16%),
Consumer Services (+12%), Banks (+11%), and Technology Hardware & Equipment
(+11%). Only three industries had negative returns: Automobiles & Components
(-8%), Semiconductors & Semiconductor Equipment (-5%), and Media (-1%).
US ALL-CAPITALIZATION EQUITIES
The performance of US equity markets overall, which encompass companies of all
sizes, was somewhat better than the performance of the large-cap segment of
those markets for the six-month period ended March 31, 2006. Medium- and
smaller-capitalization companies had better overall performance - particularly
the latter (as
noted above). One chief reason for the sizable differential between "small" and
"large" during the reporting period was that small-capitalization technology
companies performed very well over the past six months, a marked difference from
the somewhat tepid overall performance of large-capitalization
technology-related companies. In particular, small-cap semiconductor-related and
software/services companies enjoyed major gains. Smaller-capitalization
companies in the Materials and Industrials sectors also outperformed their
larger-capitalization brethren by a substantial margin.
INTERNATIONAL EQUITIES
International equities in both "developed" and "emerging" markets posted strong
gains for the six-month period, substantially outperforming their US equity
counterparts. Equity market returns in developed countries, as measured by the
performance of the MSCI EAFE Index ("EAFE Index"), were more than twice that of
US large-capitalization stocks, as measured by the performance of the S&P 500(R)
Index. Within the EAFE Index, returns were particularly strong in countries such
as Japan, The Netherlands, Germany, and Switzerland.
From a GICS economic sector perspective, international equity market strength
was powerful and widespread during the reporting period. Eight of ten sectors in
the EAFE Index had gains, four of which - Materials, Industrials, Information
Technology, and Financials - rose in excess of 20%. Telecommunication Services,
which declined -7%, was the lowest-performing sector. Energy edged slightly
lower.
At an industry level, international equity strength also abounded. Almost all
GICS industry groups had positive returns; 13 out of 20 groups gained 15% or
more for the six-month period ended March 31, 2006. The top-performing areas
spanned Diversified Financials (+27%), Capital Goods (+24%), Insurance (+23%),
Consumer Durables & Apparel (+23%), Technology Software & Services (+23%),
Semiconductors & Semiconductor Equipment (+23%), and Real Estate (+20%). Quite a
few other industry groups also had robust gains, particularly those residing
within the Industrials and Consumer Discretionary sectors.
For a review of our thoughts regarding the macro-economic environment and
investment outlook, please refer to the section entitled "Investment Outlook" in
the quarterly shareholder update dated April 2006 that is available on the
Funds' website at www.marsicofunds.com.
Turning to the factors underlying the performance of the Focus Fund and the
Growth Fund, as you know, the Focus Fund and the Growth Fund often invest in
similar growth companies. Their performance may differ at times, however,
because of a variety of factors. Among such factors, the Focus Fund is a
non-diversified fund that may invest in a more concentrated portfolio and may
invest in fewer issuers than the Growth Fund. As a result, the Focus Fund may
hold some different stocks, and may be more exposed to individual stock
volatility than the Growth Fund or other funds that invest in a larger number of
securities. As discussed below, the two Funds experienced relatively similar
performance during the reporting period.
You should keep in mind that our views on all stocks discussed in this report
are subject to change at any time and do not represent recommendations to buy or
sell the stocks, and that the Funds may not necessarily hold these stocks
today.(2)
FOCUS FUND
There were several primary factors that contributed to the Focus Fund's
outperformance for the semi-annual period ended March 31, 2006 (as compared with
the S&P 500(R) Index). These are summarized below:
o STOCK SELECTION AND POSITIONING IN THE DIVERSIFIED FINANCIALS INDUSTRY:
During the reporting period, the Focus Fund emphasized investments in the
Diversified Financials industry, which comprised approximately 21% of the
Fund's net equity assets as of March 31, 2006 (using the Global Industry
Classification Standard ("GICS")). The Fund was positively impacted by this
investment posture, as this industry was among the strongest performing
areas of the S&P 500(R) Index. Stock selection in the Diversified
Financials industry was a further positive contributor to the Fund's
performance results. Specifically, Goldman Sachs Group (+30%, the largest
individual contributor in the period), Chicago Mercantile Exchange (+33%),
UBS AG (+29%), and Lehman Brothers Holdings (+12%) were among the Fund's
better-performing individual holdings.
MARSICO FOCUS FUND & MARSICO GROWTH FUND
o STOCK SELECTION AND POSITIONING IN THE CONSUMER SERVICES INDUSTRY: The
Fund's Consumer Services positions (comprised of hotels, restaurants, and
leisure-related companies) performed well, gaining more than 25% in
aggregate. These positions included hotel/casino operators Wynn Resorts
Ltd. (+70%) and Las Vegas Sands Corp. (+13%) and coffee retailer Starbucks
(+50%). The Fund also benefited materially from maintaining a generally
overweighted posture (as compared to the S&P 500(R) Index) to Consumer
Services companies, as the industry was among the better-performing
industries of the Index.
o STOCK SELECTION AND POSITIONING IN THE INDUSTRIALS SECTOR: The Fund
maintained, on average, an overweighted posture in the Transportation
industry during the reporting period. That positioning was a significant,
positive contributor to performance, since the Transportation industry
group was the best-performing industry in the S&P 500(R) Index, gaining
25%. The Fund's individual holdings in the Transportation industry
performed well in aggregate. More specifically, FedEx (+30%) and railroad
operators Burlington Northern Santa Fe (+40%) and Union Pacific (+9%) had
solid returns. In addition, Caterpillar, Inc., which is classified under
GICS as a Capital Goods company, rose more than 23%.
o STOCK SELECTION AND POSITIONING IN THE INFORMATION TECHNOLOGY SECTOR: Stock
selection in the sector was strong, overall, primarily due to a position in
Google, Inc., which gained 26% prior to being sold. An additional
"positive" was that the Fund did not have any exposure to the
Semiconductors & Semiconductor Equipment industry, an area of the S&P
500(R) Index that struggled during the reporting period.
The primary factors that detracted from the Focus Fund's performance included:
o STOCK SELECTION AND POSITIONING IN THE HEALTH CARE SECTOR: We have
emphasized investments in the Health Care sector (particularly Equipment &
Services-related companies) for some time. This positioning hurt the Fund's
performance results for the six-month reporting period, as the S&P 500(R)
Index Health Care sector posted a modest gain of 3%, lagging the Index's
overall return. Our stock selection in the sector was a further negative
factor. Medical device companies Medtronic (-5%) and Zimmer Holdings (-2%)
declined during the period. Two holdings in the Pharmaceuticals &
Biotechnology industry held in the reporting period, Amgen and Johnson &
Johnson, declined by -11% and -3%, respectively, prior to being sold.
o STOCK SELECTION IN THE RETAILING INDUSTRY: In aggregate, the Fund's
retailing positions posted a modest gain of 1%, while the S&P 500(R) Index
industry group posted a return of nearly 9%.
o AN UNDERWEIGHTED POSTURE IN MATERIALS AND TELECOMMUNICATION SERVICES: The
Fund did not invest in Materials or Telecommunication Services-related
companies during the six-month period. This presented an "opportunity cost"
for the Fund, as those sectors gained 20% and 14%, respectively, in the S&P
500(R) Index.
GROWTH FUND
The Growth Fund shared several of the Focus Fund's performance attributes during
the six-month period ended March 31, 2006, including the following:
o STOCK SELECTION AND POSITIONING IN THE INDUSTRIALS SECTOR: Like the Focus
Fund, the Growth Fund maintained an overweighted posture in the
Transportation industry during the reporting period. This positioning
benefited the Growth Fund, as this industry was one of the strongest
performing industries of the S&P 500(R) Index, increasing 25%. Stock
selection in the Transportation industry was an additional positive factor.
FedEx (+30%), Burlington Northern Santa Fe (+40%), and Union Pacific (+31%)
were among the Fund's strongest performing individual positions. In
addition, heavy equipment manufacturer Caterpillar, Inc., which is
classified under GICS as a Capital Goods company, gained more than 23%.
o STOCK SELECTION AND POSITIONING IN THE CONSUMER SERVICES INDUSTRY: Stock
selection in the Consumer Services industry was strong in aggregate. In
particular, hotel/casino operators Wynn Resorts Ltd. and Las Vegas Sands
Corp. posted returns of 70% and 13%, respectively. Starbucks also posted
strong returns and gained 50%. The Growth Fund's performance further
benefited from maintaining an overweighted posture
(as compared to the S&P 500(R) Index) to Consumer Services companies. This
industry group (+12% in the Index) was among the better-performing areas of
the equity market during the reporting period.
o STOCK SELECTION AND POSITIONING IN THE INFORMATION TECHNOLOGY SECTOR: Stock
selection in the sector was led by the Fund's position in Internet company
Google, Inc., which gained 26% before it was sold. In addition, the Fund
was aided by generally maintaining little exposure to the Semiconductors &
Semiconductor Equipment industry, an area of the S&P 500(R) Index that
struggled during the reporting period.
o STOCK SELECTION AND POSITIONING IN THE DIVERSIFIED FINANCIALS INDUSTRY:
Stock selection in the Diversified Financials industry positively impacted
the Fund's performance results. Chicago Mercantile Exchange (+33%), Lehman
Brothers Holdings (+25%), UBS AG (+29%), and Goldman Sachs Group (+30%)
were among the Fund's better-performing individual holdings. An
overweighted posture in this industry group also benefited the Fund, as the
industry was among the stronger-performing areas of the S&P 500(R) Index.
There were a few areas of weakness for the Growth Fund during the reporting
period, including:
o STOCK SELECTION AND POSITIONING IN THE HEALTH CARE SECTOR: Stock selection
in the sector materially detracted from the Fund's performance results.
Medical device companies Medtronic (-5%) and Zimmer Holdings (-2%) declined
during the period. Certain holdings in the Biotechnology and
Pharmaceuticals industries also struggled, including Amgen (-11%), Genzyme
(-6%), and Johnson & Johnson (-3%). (Amgen and Johnson & Johnson were not
held in the Fund as of March 31, 2006.) The Fund's overweighted posture to
health care-related companies was a further detractor to performance as
compared to the S&P 500(R) Index.
o SELECT CONSUMER-RELATED POSITIONS: The Fund's homebuilding-related
positions were among its weakest-performing individual holdings. These
included Toll Brothers, Inc. (-23%), KB Home (-11%), and MDC Holdings
(-19%). (The Growth Fund's position in MDC Holdings was sold prior to March
31, 2006.) Retailing companies Target Corp. (+0.5%) and Coach, Inc. (-1%)
had returns that lagged the Fund's benchmark Index.
o POSITIONING IN THE MATERIALS AND TELECOMMUNICATION SERVICES SECTORS: The
Fund maintained few investments in the Materials and Telecommunication
Services sectors during the six-month period and was underweighted in these
areas as compared to its benchmark index. These investment postures created
an "opportunity cost" for the Fund, as the sectors gained 20% and 14%,
respectively, in the S&P 500(R) Index.
In terms of economic sector positioning, as of March 31, 2006, the Focus Fund's
and Growth Fund's primary sector allocations were in Consumer Discretionary,
Health Care, Financials, and Industrials. The Funds had little or no investments
in areas such as Materials, Telecommunication Services, and Utilities.
Sincerely,
THOMAS F. MARSICO
PORTFOLIO MANAGER
(1) Total returns are based on net change in NAV assuming reinvestment of
distributions. A redemption fee of 2% may be imposed on redemptions or
exchanges of Fund shares owned for 30 days or less. Please 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 report are
not recommendations to purchase or sell any particular security. See the
accompanying Schedule of Investments for the percentage of each Fund's
portfolio represented by the securities or industries mentioned in this
report.
MARSICO FOCUS FUND
FUND OVERVIEW MARCH 31, 2006 (UNAUDITED)
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
(4/1/05-3/31/06) (4/1/01-3/31/06) (12/31/97-3/31/06)
MARSICO FOCUS FUND 19.50% 6.34% 9.62%
S&P 500(R) INDEX 11.73% 3.97% 5.16%
- --------------------------------------------------------------------------------
NET ASSETS GROWTH OF $10,000(1)
- --------------------------------------------------------------------------------
3/31/06 $4,559,290,397 [CHART]
- ------------------------------------------- Marsico
NET ASSET VALUE Focus S&P 500(R)
- ------------------------------------------- Fund Index
NET ASSET VALUE PER SHARE $19.00 ----------------------------------------
- ------------------------------------------- 31-Dec-97 10,000 10,000
TOP FIVE HOLDINGS 31-Mar-98 12,310 11,395
- ------------------------------------------- 30-Sep-98 12,360 10,600
UNITEDHEALTH GROUP, INC. 7.27% 31-Mar-99 17,030 13,498
GENENTECH, INC. 5.65 30-Sep-99 17,430 13,548
THE GOLDMAN SACHS 31-Mar-00 23,542 15,920
GROUP, INC. 5.21 30-Sep-00 22,210 15,347
UBS AG 4.76 31-Mar-01 15,692 12,469
LOWE'S COMPANIES, INC. 4.58 30-Sep-01 13,733 11,262
- ------------------------------------------- 31-Mar-02 15,956 12,500
SECTOR ALLOCATION(2) 30-Sep-02 13,115 8,955
- ------------------------------------------- 31-Mar-03 12,711 9,404
CONSUMER CYCLICAL 25.34% 30-Sep-03 15,148 11,140
CONSUMER NON-CYCLICAL 23.34 31-Mar-04 16,866 12,708
FINANCIAL 22.43 30-Sep-04 16,652 12,685
INDUSTRIAL 14.73 31-Mar-05 17,854 13,558
COMMUNICATIONS 9.38 30-Sep-05 19,594 14,239
ENERGY 4.78 31-Mar-06 21,335 15,148
THE PERFORMANCE DATA 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. A redemption fee may be imposed on
redemptions or exchanges of Fund shares held for 30 days or less.
The performance included in the table and graph does 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 MARCH 31, 2006 (UNAUDITED)
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------------
AUTOMOTIVE - CARS/LIGHT TRUCKS
TOYOTA MOTOR
CORPORATION SPON. ADR 1,154,478 $ 125,722,654 2.76%
----------------------------------------------
BUILDING -
RESIDENTIAL/COMMERCIAL
LENNAR CORPORATION - CL. A 1,646,640 99,424,123 2.18
----------------------------------------------
CASINO HOTELS
LAS VEGAS SANDS CORP.* 1,696,955 96,149,470 2.11
MGM MIRAGE* 3,171,764 136,671,311 3.00
WYNN RESORTS LTD.* 1,633,932 125,567,674 2.75
----------------------------------------------
358,388,455 7.86
----------------------------------------------
COSMETICS & TOILETRIES
THE PROCTER &
GAMBLE COMPANY 3,156,641 181,885,655 3.99
----------------------------------------------
FINANCE - CONSUMER LOANS
SLM CORPORATION 2,991,094 155,357,422 3.41
----------------------------------------------
FINANCE - INVESTMENT
BANKER/BROKER
THE GOLDMAN SACHS
GROUP, INC 1,512,995 237,479,695 5.21
LEHMAN BROTHERS
HOLDINGS, INC 891,127 128,794,585 2.82
UBS AG 1,973,427 217,017,767 4.76
----------------------------------------------
583,292,047 12.79
----------------------------------------------
FINANCE - MULTI-LINE
INSURANCE
GENWORTH FINANCIAL, INC 2,018,159 67,467,055 1.48
----------------------------------------------
FINANCE - OTHER SERVICES
CHICAGO MERCANTILE
EXCHANGE HOLDINGS, INC 305,566 136,740,785 3.00
----------------------------------------------
HOTELS & MOTELS
FOUR SEASONS HOTELS, INC 825,883 41,872,268 0.92
----------------------------------------------
MACHINERY -
CONSTRUCTION/MINING
CATERPILLAR, INC 2,269,489 162,972,005 3.57
----------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
GENENTECH, INC.* 3,047,138 257,513,632 5.65
----------------------------------------------
MEDICAL - HMO
UNITEDHEALTH GROUP, INC 5,935,999 331,584,904 7.27
----------------------------------------------
MEDICAL - INSTRUMENTS
MEDTRONIC, INC 1,875,762 95,194,922 2.09
----------------------------------------------
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS continued
- -------------------------------------------------------------------------------------
MEDICAL PRODUCTS
ZIMMER HOLDINGS, INC.* 1,697,334 $ 114,739,779 2.52%
----------------------------------------------
NETWORKING PRODUCTS
CISCO SYSTEMS, INC.* 2,144,024 46,461,000 1.02
----------------------------------------------
OIL - FIELD SERVICES
HALLIBURTON COMPANY 1,553,095 113,406,997 2.49
SCHLUMBERGER LTD 691,533 87,527,332 1.92
----------------------------------------------
200,934,329 4.41
----------------------------------------------
RETAIL - BUILDING PRODUCTS
THE HOME DEPOT, INC 3,585,515 151,667,285 3.33
LOWE'S COMPANIES, INC 3,242,383 208,939,161 4.58
----------------------------------------------
360,606,446 7.91
----------------------------------------------
RETAIL - RESTAURANTS
STARBUCKS CORPORATION* 2,102,060 79,121,538 1.73
----------------------------------------------
TRANSPORTATION - RAIL
BURLINGTON NORTHERN
SANTA FE CORPORATION 1,853,126 154,420,990 3.39
UNION PACIFIC CORPORATION 1,081,174 100,927,593 2.21
----------------------------------------------
255,348,583 5.60
----------------------------------------------
TRANSPORTATION - SERVICES
FEDEX CORPORATION 1,776,293 200,614,532 4.40
----------------------------------------------
WIRELESS EQUIPMENT
ERICSSON (LM) TEL-SP ADR 829,435 31,286,288 0.69
MOTOROLA, INC 7,159,020 164,013,148 3.59
QUALCOMM, INC 3,011,897 152,432,107 3.34
----------------------------------------------
347,731,543 7.62
----------------------------------------------
TOTAL COMMON STOCKS
(COST $3,060,396,300) 4,202,973,677 92.18
----------------------------------------------
- ------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- ------------------------------------------------------------------------------------
SSGA PRIME MONEY
MARKET FUND, 4.62% 205,417,883 205,417,883 4.51
SSGA MONEY
MARKET FUND, 4.35% 114,032,325 114,032,325 2.50
----------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $319,450,208) 319,450,208 7.01
----------------------------------------------
TOTAL INVESTMENTS
(COST $3,379,846,508) 4,522,423,885 99.19
CASH AND OTHER ASSETS
LESS LIABILITIES 36,866,512 0.81
----------------------------------------------
NET ASSETS $4,559,290,397 100.00%
==============================================
* Non-income producing.
See notes to financial statements.
MARSICO FOCUS FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2006 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
INVESTMENTS, AT VALUE (COST $3,379,847) $4,522,424
RECEIVABLE FOR INVESTMENTS SOLD 44,869
RECEIVABLE FOR CAPITAL STOCK SOLD 6,366
INTEREST AND DIVIDENDS RECEIVABLE 2,064
PREPAID EXPENSES AND OTHER ASSETS 826
--------------
TOTAL ASSETS 4,576,549
--------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
PAYABLE FOR INVESTMENTS PURCHASED 9,876
PAYABLE FOR CAPITAL STOCK REDEEMED 2,672
ACCRUED INVESTMENT ADVISORY FEE 3,091
ACCRUED DISTRIBUTION FEE 596
ACCRUED TRUSTEES' FEES 890
ACCRUED EXPENSES AND OTHER LIABILITIES 134
--------------
TOTAL LIABILITIES 17,259
--------------
NET ASSETS $4,559,290
==============
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
PAID-IN-CAPITAL $3,424,166
ACCUMULATED NET INVESTMENT LOSS (8,659)
ACCUMULATED NET REALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS 1,021
NET UNREALIZED APPRECIATION ON
INVESTMENTS 1,142,762
--------------
NET ASSETS $4,559,290
==============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 239,922
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $19.00
==============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
INTEREST $4,492
DIVIDENDS (NET OF $641 OF NON-RECLAIMABLE
FOREIGN WITHHOLDING TAXES) 12,007
--------------
TOTAL INVESTMENT INCOME 16,499
--------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
INVESTMENT ADVISORY FEES 16,809
DISTRIBUTION FEES 5,104
TRANSFER AGENT FEES AND EXPENSES 1,792
PRINTING AND POSTAGE EXPENSES 283
CUSTODY AND FUND ACCOUNTING FEES 214
FUND ADMINISTRATION FEES 176
PROFESSIONAL FEES 164
MISCELLANEOUS 137
TRUSTEES' FEES AND EXPENSES 103
FEDERAL AND STATE REGISTRATION FEES 88
--------------
TOTAL EXPENSES 24,870
LESS EXPENSES PAID INDIRECTLY (414)
--------------
NET EXPENSES 24,456
--------------
NET INVESTMENT LOSS (7,957)
--------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS 182,508
NET REALIZED GAIN ON FOREIGN
CURRENCY TRANSACTIONS --(1)
CHANGE IN UNREALIZED APPRECIATION/
DEPRECIATION ON INVESTMENTS AND
FOREIGN CURRENCY TRANSLATIONS 174,845
--------------
NET GAIN ON INVESTMENTS 357,353
--------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $349,396
==============
* Not in thousands.
(1) Less than $1,000.
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS YEAR
ENDED 3/31/06 ENDED
(AMOUNTS IN THOUSANDS) (UNAUDITED) 9/30/05
- ---------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS $(7,957) $(6,052)
NET REALIZED GAIN ON INVESTMENTS 182,508 116,499
NET REALIZED GAIN ON OPTIONS WRITTEN -- 1,524
NET REALIZED GAIN ON FOREIGN CURRENCY TRANSACTIONS --(1) 1,037
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
ON INVESTMENTS AND FOREIGN CURRENCY TRANSLATIONS 174,845 418,080
--------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 349,396 531,088
--------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
PROCEEDS FROM SALE OF SHARES 817,293 978,811
REDEMPTION FEES 27 29
REDEMPTION OF SHARES (347,617) (665,059)
--------------------------------------------------------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS 469,703 313,781
--------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 819,099 844,869
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
BEGINNING OF PERIOD 3,740,191 2,895,322
--------------------------------------------------------
END OF PERIOD $4,559,290 $3,740,191
========================================================
ACCUMULATED NET INVESTMENT LOSS (8,659) (700)
- ---------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
SHARES SOLD 44,600 60,431
SHARES REDEEMED (19,062) (41,224)
--------------------------------------------------------
NET INCREASE 25,538 19,207
========================================================
(1) Less than $1,000.
See notes to financial statements.
MARSICO FOCUS FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
FOR A FUND SHARE OUTSTANDING ENDED 3/31/06 ENDED ENDED ENDED ENDED ENDED
THROUGHOUT THE PERIOD. (UNAUDITED) 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
NET ASSET VALUE, BEGINNING OF PERIOD $17.45 $14.83 $13.49 $11.68 $12.27 $22.17
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (0.03) (0.03) (0.05) (0.03) (0.08) (0.07)
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS 1.58 2.65 1.39 1.84 (0.47) (7.87)
---------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.55 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) --(1) -- -- --
---------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS & OTHER -- -- -- -- (0.04) (1.96)
NET ASSET VALUE, END OF PERIOD $19.00 $17.45 $14.83 $13.49 $11.68 $12.27
---------------------------------------------------------------------------------
TOTAL RETURN 8.88%(3) 17.67% 9.93% 15.50% (4.50)% (38.17)%
- ---------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $4,559,290 $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 1.22%(2) 1.25% 1.30% 1.34% 1.35% 1.30%
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET
ASSETS, NET OF EXPENSES PAID INDIRECTLY (0.39)%(2) (0.18)% (0.36)% (0.54)% (0.64)% (0.36)%
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET
ASSETS, BEFORE EXPENSES PAID INDIRECTLY (0.41)%(2) (0.21)% (0.40)% (0.59)% (0.68)% (0.39)%
PORTFOLIO TURNOVER RATE 42%(3) 80% 84% 90% 117% 127%
(1) Less than $0.01.
(2) Annualized.
(3) Not annualized for the six months ended March 31, 2006.
See notes to financial statements.
MARSICO GROWTH FUND
FUND OVERVIEW MARCH 31, 2006 (UNAUDITED)
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
(4/1/05-3/31/06) (4/1/01-3/31/06) (12/31/97-3/31/06)
MARSICO GROWTH FUND 15.27% 5.67% 9.04%
S&P 500(R) INDEX 11.73% 3.97% 5.16%
- ----------------------------------------------------------------------------------------------
NET ASSETS GROWTH OF $10,000(1)
- ----------------------------------------------------------------------------------------------
3/31/06 $2,466,396,515 [CHART]
- -------------------------------------------- Marsico
NET ASSET VALUE Growth S&P 500(R)
- -------------------------------------------- Fund Index
NET ASSET VALUE PER SHARE $19.48 ----------------------------------
- -------------------------------------------- 31-Dec-97 10,000 10,000
TOP FIVE HOLDINGS 31-Mar-98 11,960 11,395
- -------------------------------------------- 30-Sep-98 11,540 10,600
UNITEDHEALTH GROUP, INC. 6.74% 31-Mar-99 15,710 13,498
GENENTECH, INC. 5.35 30-Sep-99 16,290 13,548
LOWE'S COMPANIES, INC. 4.09 31-Mar-00 22,607 15,920
UBS AG 3.84 30-Sep-00 20,938 15,347
FEDEX CORPORATION 3.72 31-Mar-01 15,495 12,469
- -------------------------------------------- 30-Sep-01 13,307 11,262
SECTOR ALLOCATION(2) 31-Mar-02 15,304 12,500
- -------------------------------------------- 30-Sep-02 12,452 8,955
CONSUMER CYCLICAL 27.43% 31-Mar-03 12,159 9,404
CONSUMER NON-CYCLICAL 23.79 30-Sep-03 14,769 11,140
INDUSTRIAL 18.28 31-Mar-04 16,614 12,708
FINANCIAL 16.70 30-Sep-04 16,719 12,685
COMMUNICATIONS 8.53 31-Mar-05 17,714 13,558
ENERGY 4.34 30-Sep-05 18,962 14,239
BASIC MATERIALS 0.93 31-Mar-06 20,419 15,148
THE PERFORMANCE DATA 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. 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 does 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 MARCH 31, 2006 (UNAUDITED)
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------------
AEROSPACE/DEFENSE
GENERAL DYNAMICS CORPORATION 833,202 $53,308,264 2.16%
LOCKHEED MARTIN CORPORATION 423,915 31,848,734 1.29
----------------------------------------------
85,156,998 3.45
----------------------------------------------
AEROSPACE/DEFENSE - EQUIPMENT
UNITED TECHNOLOGIES
CORPORATION 402,623 23,340,055 0.95
----------------------------------------------
AGRICULTURAL CHEMICALS
MONSANTO COMPANY 93,465 7,921,159 0.32
----------------------------------------------
AGRICULTURAL OPERATIONS
ARCHER DANIELS
MIDLAND COMPANY 127,116 4,277,453 0.17
----------------------------------------------
APPAREL MANUFACTURERS
COACH, INC.* 485,042 16,772,752 0.68
----------------------------------------------
AUTOMOTIVE - CARS/LIGHT TRUCKS
TOYOTA MOTOR
CORPORATION SPON. ADR 443,860 48,336,354 1.96
----------------------------------------------
BEVERAGES - NON-ALCOHOLIC
PEPSICO, INC 207,508 11,991,887 0.49
----------------------------------------------
BUILDING -
RESIDENTIAL/COMMERCIAL
KB HOME 536,089 34,835,063 1.41
LENNAR CORPORATION - CL. A 478,490 28,891,226 1.17
TOLL BROTHERS, INC.* 429,488 14,873,169 0.61
----------------------------------------------
78,599,458 3.19
----------------------------------------------
CASINO HOTELS
LAS VEGAS SANDS CORP.* 681,184 38,595,885 1.57
MGM MIRAGE* 1,261,876 54,374,237 2.20
STATION CASINOS, INC 134,109 10,644,231 0.43
WYNN RESORTS LTD.* 791,390 60,818,322 2.47
----------------------------------------------
164,432,675 6.67
----------------------------------------------
CELLULAR TELECOMMUNICATIONS
AMERICA MOVIL
S.A. DE C.V. ADR 941,379 32,251,645 1.31
----------------------------------------------
COAL
PEABODY ENERGY CORPORATION 329,760 16,623,202 0.67
----------------------------------------------
COSMETICS & TOILETRIES
THE PROCTER &
GAMBLE COMPANY 1,413,499 81,445,812 3.30
----------------------------------------------
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS continued
- -------------------------------------------------------------------------------------
DIVERSIFIED MINERALS
COMPANHIA
VALE DO RIO DOCE 449,945 $ 21,835,831 0.89%
----------------------------------------------
FINANCE - CONSUMER LOANS
SLM CORPORATION 841,719 43,718,885 1.77
----------------------------------------------
FINANCE - INVESTMENT BANKER/BROKER
THE GOLDMAN
SACHS GROUP, INC 316,076 49,611,289 2.01
LEHMAN BROTHERS
HOLDINGS, INC 538,432 77,819,577 3.15
UBS AG 860,360 94,613,789 3.84
----------------------------------------------
222,044,655 9.00
----------------------------------------------
FINANCE - MULTI-LINE INSURANCE
GENWORTH FINANCIAL, INC 286,447 9,575,923 0.39
----------------------------------------------
FINANCE - OTHER SERVICES
CHICAGO MERCANTILE
EXCHANGE HOLDINGS, INC 152,787 68,372,183 2.77
----------------------------------------------
HOTELS & MOTELS
FOUR SEASONS HOTELS, INC 336,417 17,056,342 0.69
----------------------------------------------
MACHINERY -
CONSTRUCTION/MINING
CATERPILLAR, INC 1,007,203 72,327,247 2.93
----------------------------------------------
MACHINERY - FARM
DEERE & COMPANY 249,355 19,711,513 0.80
----------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
GENENTECH, INC.* 1,561,111 131,929,491 5.35
GENZYME CORPORATION* 276,929 18,615,167 0.75
----------------------------------------------
150,544,658 6.10
----------------------------------------------
MEDICAL - HMO
UNITEDHEALTH GROUP, INC 2,973,875 166,120,658 6.74
----------------------------------------------
MEDICAL INSTRUMENTS
MEDTRONIC, INC 906,504 46,005,078 1.87
----------------------------------------------
MEDICAL LABS &
TESTING SERVICES
QUEST DIAGNOSTICS, INC 286,896 14,717,765 0.60
----------------------------------------------
MEDICAL PRODUCTS
ZIMMER HOLDINGS, INC.* 542,476 36,671,378 1.49
----------------------------------------------
NETWORKING PRODUCTS
CISCO SYSTEMS, INC.* 1,171,013 25,375,852 1.03
----------------------------------------------
* Non-income producing
See notes to financial statements.
SCHEDULE OF INVESTMENTS MARCH 31, 2006 (UNAUDITED)
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS continued
- -------------------------------------------------------------------------------------
OIL - FIELD SERVICES
HALLIBURTON COMPANY 501,369 $ 36,609,964 1.48%
SCHLUMBERGER LTD 381,456 48,280,886
1.96
----------------------------------------------
84,890,850 3.44
----------------------------------------------
PROPERTY/CASUALTY INSURANCE
THE PROGRESSIVE CORPORATION 206,300 21,508,838 0.87
----------------------------------------------
REAL ESTATE
OPERATING/DEVELOPMENT
THE ST. JOE COMPANY 242,904 15,264,087 0.62
----------------------------------------------
REITS - MORTGAGE
KKR FINANCIAL CORPORATION 451,399 10,124,880 0.41
----------------------------------------------
RETAIL - BUILDING PRODUCTS
THE HOME DEPOT, INC 1,311,518 55,477,211 2.25
LOWE'S COMPANIES, INC 1,567,346 100,999,776 4.09
----------------------------------------------
156,476,987 6.34
----------------------------------------------
RETAIL - DISCOUNT
TARGET CORPORATION 711,404 37,000,122 1.50
----------------------------------------------
RETAIL - DRUG STORES
CVS CORPORATION 528,533 15,787,281 0.64
WALGREEN CO 391,010 16,864,261 0.68
----------------------------------------------
32,651,542 1.32
----------------------------------------------
RETAIL - RESTAURANTS
STARBUCKS CORPORATION* 1,189,236 44,762,843 1.81
YUM! BRANDS, INC 930,820 45,479,865 1.84
----------------------------------------------
90,242,708 3.65
----------------------------------------------
THERAPEUTICS
AMYLIN PHARMACEUTICALS, INC.* 754,018 36,909,181 1.50
----------------------------------------------
TRANSPORTATION - RAIL
BURLINGTON NORTHERN
SANTA FE CORPORATION 981,050 81,750,897 3.31
UNION PACIFIC CORPORATION 575,911 53,761,292 2.18
----------------------------------------------
135,512,189 5.49
----------------------------------------------
TRANSPORTATION - SERVICES
FEDEX CORPORATION 811,624 91,664,815 3.72
----------------------------------------------
WIRELESS EQUIPMENT
MOTOROLA, INC 2,923,864 66,985,724 2.72
QUALCOMM, INC 1,480,662 74,936,304 3.04
----------------------------------------------
141,922,028 5.76
TOTAL COMMON STOCKS
(COST $1,762,706,101) 2,339,395,645 94.85
----------------------------------------------
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- -------------------------------------------------------------------------------------
SSGA PRIME MONEY
MARKET FUND, 4.62% 95,334,609 $ 95,334,609 3.87%
SSGA MONEY
MARKET FUND, 4.35% 1 1 --
----------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $95,334,610) 95,334,610 3.87
----------------------------------------------
TOTAL INVESTMENTS
(COST $1,858,040,711) 2,434,730,255 98.72
CASH AND OTHER
ASSETS LESS LIABILITIES 31,666,260 1.28
----------------------------------------------
NET ASSETS $2,466,396,515 100.00%
==============================================
* Non-income producing.
See notes to financial statements.
MARSICO GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2006 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
INVESTMENTS, AT VALUE (COST $1,858,041) $2,434,730
RECEIVABLE FOR INVESTMENTS SOLD 15,701
RECEIVABLE FOR CAPITAL STOCK SOLD 40,302
INTEREST AND DIVIDENDS RECEIVABLE 943
PREPAID EXPENSES AND OTHER ASSETS 442
-------------
TOTAL ASSETS 2,492,118
-------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
PAYABLE FOR INVESTMENTS PURCHASED 21,573
PAYABLE FOR CAPITAL STOCK REDEEMED 1,158
ACCRUED INVESTMENT ADVISORY FEE 1,731
ACCRUED DISTRIBUTION FEE 435
ACCRUED TRUSTEES' FEES 357
ACCRUED EXPENSES AND OTHER LIABILITIES 467
-------------
TOTAL LIABILITIES 25,721
-------------
NET ASSETS $2,466,397
=============
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
PAID-IN-CAPITAL $1,954,458
ACCUMULATED NET INVESTMENT LOSS (5,188)
ACCUMULATED NET REALIZED LOSS ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS (59,654)
NET UNREALIZED APPRECIATION ON INVESTMENTS
AND FOREIGN CURRENCY TRANSLATIONS 576,781
-------------
NET ASSETS $2,466,397
=============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 126,588
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $19.48
=============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
INTEREST $1,810
DIVIDENDS (NET OF $343 OF NON-RECLAIMABLE
FOREIGN WITHHOLDING TAXES) 7,400
-------------
TOTAL INVESTMENT INCOME 9,210
-------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
INVESTMENT ADVISORY FEES 9,663
DISTRIBUTION FEES 2,842
TRANSFER AGENT FEES AND EXPENSES 999
PRINTING AND POSTAGE EXPENSES 162
CUSTODY AND FUND ACCOUNTING FEES 144
FUND ADMINISTRATION FEES 130
PROFESSIONAL FEES 96
FEDERAL AND STATE REGISTRATION FEES 78
MISCELLANEOUS 73
TRUSTEES' FEES AND EXPENSES 51
-------------
TOTAL EXPENSES 14,238
LESS EXPENSES PAID INDIRECTLY (178)
-------------
NET EXPENSES 14,060
-------------
NET INVESTMENT LOSS (4,850)
-------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS 60,429
NET REALIZED GAIN ON FOREIGN
CURRENCY TRANSACTIONS --(1)
CHANGE IN UNREALIZED APPRECIATION/
DEPRECIATION ON INVESTMENTS AND
FOREIGN CURRENCY TRANSLATIONS 111,103
-------------
NET GAIN ON INVESTMENTS 171,532
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $166,682
=============
* Not in thousands.
(1) Less than $1,000.
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS YEAR
ENDED 3/31/06 ENDED
(AMOUNTS IN THOUSANDS) (UNAUDITED) 9/30/05
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS $(4,850) $(2,427)
NET REALIZED GAIN ON INVESTMENTS 60,429 13,226
NET REALIZED GAIN ON OPTIONS WRITTEN -- 42
NET REALIZED GAIN ON FOREIGN CURRENCY TRANSACTIONS --(1) 1,037
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
ON INVESTMENTS AND FOREIGN CURRENCY TRANSLATIONS 111,103 201,230
---------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 166,682 213,108
---------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------
PROCEEDS FROM SALE OF SHARES 446,258 834,350
REDEMPTION FEES 27 85
REDEMPTION OF SHARES (272,238) (285,300)
---------------------------------------------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS 174,047 549,135
---------------------------------------------
TOTAL INCREASE IN NET ASSETS 340,729 762,243
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------
BEGINNING OF PERIOD 2,125,668 1,363,425
---------------------------------------------
END OF PERIOD $2,466,397 $2,125,668
=============================================
ACCUMULATED NET INVESTMENT LOSS (5,188) (338)
- ----------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- ----------------------------------------------------------------------------------------------------------------------
SHARES SOLD 23,614 48,520
SHARES REDEEMED (14,519) (16,522)
---------------------------------------------
NET INCREASE 9,095 31,998
=============================================
(1) Less than $1,000.
See notes to financial statements.
MARSICO GROWTH FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
FOR A FUND SHARE OUTSTANDING ENDED 3/31/06 ENDED ENDED ENDED ENDED ENDED
THROUGHOUT THE PERIOD. (UNAUDITED) 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
NET ASSET VALUE, BEGINNING OF PERIOD $18.09 $15.95 $14.09 $11.88 $12.71 $20.82
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (0.04) (0.02) (0.04) (0.07) (0.04) (0.09)
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS 1.43 2.16 1.90 2.28 (0.77) (7.32)
----------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.39 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) --(1) -- -- --
----------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS & OTHER -- -- -- -- (0.02) (0.70)
NET ASSET VALUE, END OF PERIOD $19.48 $18.09 $15.95 $14.09 $11.88 $12.71
----------------------------------------------------------------------------------
TOTAL RETURN 7.68%(3) 13.42% 13.20% 18.60% (6.42)% (36.45)%
- -------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $2,466,397 $2,125,668 $1,363,425 $789,220 $641,974 $530,904
RATIO OF EXPENSES TO AVERAGE NET ASSETS,
BEFORE EXPENSES PAID INDIRECTLY 1.25%(2) 1.26% 1.30% 1.38% 1.37% 1.33%
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET
ASSETS, NET OF EXPENSES PAID INDIRECTLY (0.43)%(2) (0.14)% (0.34)% (0.62)% (0.49)% (0.53)%
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET
ASSETS, BEFORE EXPENSES PAID INDIRECTLY (0.44)%(2) (0.16)% (0.38)% (0.67)% (0.52)% (0.55)%
PORTFOLIO TURNOVER RATE 33%(3) 72% 73% 91% 111% 120%
(1) Less than $0.01.
(2) Annualized.
(3) Not annualized for the six months ended March 31, 2006.
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 posted a total return of
19.41% for the six-month period ended March 31, 2006, substantially
outperforming the S&P 500(R) Index, the Fund's primary benchmark index, which
had a total return of 6.38% over the same period of time. The Russell 3000(R)
Index, which is a proxy for the performance of publicly-traded US equity
securities overall (and in some respects is a useful reflection of the Fund's
all-capitalization approach), had a total return of 7.46%. Please see the Fund
overview for more detailed information about the Fund's performance for various
periods ended March 31, 2006.
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)
You should keep in mind that our views on all stocks discussed in this report
are subject to change at any time and do not represent recommendations to buy or
sell the stocks, and that the Fund may not necessarily hold these stocks
today.(2)
Specific factors that contributed positively to the Fund's performance during
the reporting period ended March 31, 2006 included:
o STOCK SELECTION AND POSITIONING IN THE CONSUMER SERVICES INDUSTRY: The
Fund's Consumer Services holdings gained 45% in aggregate (using the
Global Industry Classification Standard ("GICS") industry
classifications) during the six-month period. Specifically, the Fund's
holdings in hotel/casino operators posted very strong results. Las
Vegas Sands Corp. and Wynn Resorts Ltd. each gained more than 70% and
Station Casinos posted a return of 21%. Restaurant operator Cheesecake
Factory also performed well, gaining 20% for the period. Throughout
the period, the Fund emphasized investments in the Consumer Services
industry. This was a further positive factor contributing to the
Fund's performance, as Consumer Services was among the
stronger-performing industries of the S&P 500(R) Index with a return
of 12%.
o STOCK SELECTION AND POSITIONING IN THE INDUSTRIALS SECTOR: The Fund's
holdings in the Capital Goods and Transportation industries performed
well overall, gaining 20% and 41%, respectively, during the reporting
period. The Fund's Capital Goods positions included Caterpillar, Inc.
(+23%), mining equipment manufacturer Joy Global (+29%), aerospace
parts manufacturer Precision Castparts (+24%), Cummins Engine, Inc.
(+23% prior to being sold) and railcar manufacturer American Railcar
Industries, Inc. (+53%). The Fund's Transportation-related investments
also performed well, particularly railroad companies such as
Burlington Northern Santa Fe (+40%) and Genesee & Wyoming, Inc.
(+26%). Package and freight delivery companies FedEx and Expeditors
International of Washington, Inc. each posted returns of 30% during
the period. (Expeditors International of Washington, Inc. was sold
prior to March 31, 2006.) An overweighted posture to
Transportation-related companies further amplified the Fund's positive
performance results, as the industry was among the top-performing
groups in the benchmark index for the six-month period.
MARSICO 21ST CENTURY FUND
o STOCK SELECTION AND POSITIONING IN THE DIVERSIFIED FINANCIALS
INDUSTRY: The Fund's Diversified Financials positions gained more than
34% in aggregate. Electronic trading platform Chicago Mercantile
Exchange (+33%), specialty investment banking company Jefferies Group,
Inc. (+35%), Switzerland-based UBS AG (+28%), and Investors Financial
Services (+35% prior to being sold) were among the Fund's best
performing individual positions.
Certain individual Fund holdings also posted strong results, including Amylin
Pharmaceuticals (+41%) and Google, Inc. (+26% prior to being sold).
The main areas that detracted materially from the Fund's performance over the
past six months were our stock selection in the Consumer Durables industry group
(particularly homebuilding-related holdings) and stock selection in the Real
Estate and Health Care Equipment and Services industry groups. Our decision not
to invest in the Materials and Telecommunication Services sectors also created a
modest "opportunity cost" for the Fund as the sectors were among the
best-performing areas of the US equity market for the six-month period ended
March 31, 2006.
Fund has tended to have a relatively high portfolio turnover level because of
its investment style. Although the Fund may hold core positions for some time,
it may change its portfolio composition quickly to take advantage of new
opportunities, or to address issues affecting particular holdings.
As of March 31, 2006, the Fund's primary economic sector allocations were in the
following areas: Financials, Industrials, Consumer Discretionary, and Health
Care. The Fund had little or no exposure to Consumer Staples, Materials,
Telecommunication Services, and Utilities.
Sincerely,
CORYDON J. GILCHRIST, CFA
PORTFOLIO MANAGER
(1) Total returns are based on net change in NAV assuming reinvestment of
distributions. For the period prior to March 31, 2004, the performance
returns for the Fund reflect a fee waiver in effect; in the absence of such
a waiver, the returns would have been reduced. For the period beginning
April 2004 through January 2005, performance returns for the Fund would have
been higher but for the reimbursement of fees waived previously. A
redemption fee of 2% may be imposed on redemptions or exchanges of Fund
shares owned for 30 days or less. Please 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 report 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
report.
FUND OVERVIEW MARCH 31, 2006 (UNAUDITED)
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
(4/1/05-3/31/06) (4/1/01-3/31/06) (2/1/00-3/31/06)
MARSICO 21ST CENTURY FUND 28.80% 14.60%(1) 6.11%(1)
S&P 500(R) INDEX 11.73% 3.97% 0.40%
- ---------------------------------------------------------------------------------------------------
NET ASSETS GROWTH OF $10,000(1)(2) [CHART]
- ---------------------------------------------------------------------------------------------------
3/31/06 $565,887,159 21st S&P 500(R)
- ---------------------------------------------- Century Fund Index
NET ASSET VALUE ------------------------------
- ----------------------------------------------
NET ASSET VALUE PER SHARE $14.41
- ---------------------------------------------- 31-Jan-00 10,000 10,000
TOP FIVE HOLDINGS 31-Mar-00 12,810 10,770
- ---------------------------------------------- 30-Sep-00 10,860 10,383
AMYLIN PHARMACEUTICALS, INC. 6.00% 31-Mar-01 7,290 8,436
LAS VEGAS SANDS CORP. 4.67 30-Sep-01 6,260 7,619
UBS AG 4.50 31-Mar-02 7,520 8,456
STATION CASINOS, INC. 4.37 30-Sep-02 6,540 6,058
WYNN RESORTS LTD. 4.32 31-Mar-03 6,540 6,362
- ---------------------------------------------- 30-Sep-03 8,740 7,536
SECTOR ALLOCATION(3) 31-Mar-04 10,260 8,597
- ---------------------------------------------- 30-Sep-04 10,200 8,582
FINANCIAL 27.14% 31-Mar-05 11,190 9,172
INDUSTRIAL 22.87 30-Sep-05 12,070 9,633
CONSUMER CYCLICAL 22.45 31-Mar-06 14,412 10,248
CONSUMER NON-CYCLICAL 19.90
COMMUNICATIONS 4.99
ENERGY 2.65
THE PERFORMANCE DATA 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. 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 does not reflect the
deduction of taxes on Fund distributions or the redemption of Fund shares.
(1) The performance returns for the 21st Century Fund (for the period prior to
March 31, 2004) reflect a fee waiver in effect; in the absence of such a
waiver, the returns would be reduced. For the period beginning April 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 MARCH 31, 2006 (UNAUDITED)
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------------
AEROSPACE/DEFENSE
GENERAL DYNAMICS
CORPORATION 211,681 $13,543,350 2.39%
-------------------------------------------
APPAREL MANUFACTURERS
COACH, INC.* 221,126 7,646,537 1.35
-------------------------------------------
AUTOMOTIVE - CARS/LIGHT TRUCKS
TOYOTA MOTOR
CORPORATION SPON. ADR 118,201 12,872,089 2.28
-------------------------------------------
CASINO HOTELS
LAS VEGAS SANDS CORP.* 466,413 26,426,961 4.67
STATION CASINOS, INC 311,494 24,723,279 4.37
WYNN RESORTS LTD.* 318,090 24,445,217 4.32
-------------------------------------------
75,595,457 13.36
-------------------------------------------
COAL
PEABODY ENERGY CORPORATION 96,820 4,880,696 0.86
-------------------------------------------
COMMERCIAL BANKS - NON-US
BANCO ITAU` HOLDING
FINANCERIA S.A. ADR 345,897 10,297,354 1.82
ICICI BANK LTD. SPON. ADR 280,486 7,763,852 1.37
-------------------------------------------
18,061,206 3.19
-------------------------------------------
COMMERCIAL BANKS -
WESTERN US
UCBH HOLDINGS, INC 367,350 6,950,262 1.23
-------------------------------------------
COMMERCIAL SERVICES - FINANCE
CLAYTON HOLDINGS, INC.* 269,700 5,685,276 1.00
-------------------------------------------
ENGINEERING/R&D SERVICES
MCDERMOTT INTERNATIONAL, INC.* 112,072 6,102,320 1.08
-------------------------------------------
FINANCE - INVESTMENT
BANKER/BROKER
JEFFERIES GROUP, INC 242,748 14,200,758 2.51
UBS AG 231,578 25,437,786 4.50
-------------------------------------------
39,638,544 7.01
-------------------------------------------
FINANCE - OTHER SERVICES
CHICAGO MERCANTILE
EXCHANGE HOLDINGS, INC 35,280 15,787,800 2.79
-------------------------------------------
FOOD - DAIRY PRODUCTS
DEAN FOODS COMPANY* 173,131 6,722,677 1.19
-------------------------------------------
MACHINERY - CONSTRUCTION/MINING
CATERPILLAR, INC 140,793 10,110,345 1.79
JOY GLOBAL, INC 87,852 5,250,914 0.93
-------------------------------------------
15,361,259 2.72
-------------------------------------------
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS continued
- -------------------------------------------------------------------------------------
MACHINERY - FARM
DEERE & COMPANY 152,138 $12,026,509 2.13%
-------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
DIVERSA CORPORATION* 446,972 4,071,915 0.72
GENENTECH, INC.* 123,661 10,450,591 1.85
GENZYME CORPORATION* 218,278 14,672,647 2.59
-------------------------------------------
29,195,153 5.16
-------------------------------------------
MEDICAL - DRUGS
ROCHE HOLDING AG 62,392 9,289,523 1.64
-------------------------------------------
MEDICAL - HMO
UNITEDHEALTH GROUP, INC 385,308 21,523,305 3.80
-------------------------------------------
METAL PROCESSORS & FABRICATORS
PRECISION CASTPARTS CORP 192,161 11,414,363 2.02
-------------------------------------------
MISCELLANEOUS MANUFACTURING
AMERICAN RAILCAR
INDUSTRIES, INC 240,644 8,439,385 1.49
-------------------------------------------
OIL - FIELD SERVICES
SCHLUMBERGER LTD 67,204 8,506,010 1.50
-------------------------------------------
REAL ESTATE
MANAGEMENT/SERVICES
CB RICHARD ELLIS GROUP, INC.* 106,853 8,623,037 1.52
-------------------------------------------
REAL ESTATE
OPERATING/DEVELOPMENT
THE ST. JOE COMPANY 242,496 15,238,449 2.69
-------------------------------------------
REITS - MORTGAGE
CRYSTAL RIVER
CAPITAL, INC. 144A 240,411 6,010,275 1.06
KKR FINANCIAL CORPORATION 505,018 11,327,554 2.00
REDWOOD TRUST, INC 100,322 4,345,949 0.77
-------------------------------------------
21,683,778 3.83
-------------------------------------------
REITS - OFFICE PROPERTY
GOVERNMENT
PROPERTIES TRUST, INC 590,957 5,637,730 1.00
-------------------------------------------
RETAIL - RESTAURANTS
THE CHEESECAKE FACTORY, INC.* 333,234 12,479,613 2.21
CHIPOTLE MEXICAN
GRILL, INC. CI. A* 90,268 4,999,945 0.88
-------------------------------------------
17,479,558 3.09
-------------------------------------------
THERAPEUTICS
AMYLIN PHARMACEUTICALS, INC.* 693,890 33,965,916 6.00
-------------------------------------------
* Non-income producing.
See notes to financial statements.
SCHEDULE OF INVESTMENTS MARCH 31, 2006 (UNAUDITED)
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS continued
- -------------------------------------------------------------------------------------
TRANSPORTATION - RAIL
BURLINGTON NORTHERN
SANTA FE CORPORATION 203,048 $16,919,990 2.99%
GENESEE & WYOMING,
INC. CL. A* 458,025 14,052,207 2.48
-------------------------------------------
30,972,197 5.47
-------------------------------------------
TRANSPORTATION - SERVICES
FEDEX CORPORATION 158,290 17,877,273 3.16
-------------------------------------------
WIRELESS EQUIPMENT
MOTOROLA, INC 607,962 13,928,409 2.46
QUALCOMM, INC 223,695 11,321,204 2.00
-------------------------------------------
25,249,613 4.46
-------------------------------------------
TOTAL COMMON STOCKS
(COST $397,788,844) 505,969,272 89.41
-------------------------------------------
MARKET PERCENT
PRINCIPAL/ VALUE OF NET
SHARES IN DOLLARS ASSETS
- --------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- --------------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK,
4.55%, 4/3/06 6,998,231 $6,998,231 1.24%
SSGA PRIME MONEY
MARKET FUND, 4.62% 25,480,562 25,480,562 4.50
SSGA MONEY
MARKET FUND, 4.35% 25,392,975 25,392,975 4.49
-------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $57,871,768) 57,871,768 10.23
-------------------------------------------
TOTAL INVESTMENTS
(COST $455,660,612) 563,841,040 99.64
CASH AND OTHER ASSETS
LESS LIABILITIES 2,046,119 0.36
-------------------------------------------
NET ASSETS $565,887,159 100.00%
===========================================
* 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 March 31, 2006, the value of the Fund's restricted and
illiquid securities was 1.06% of net assets.
See notes to financial statements.
MARSICO 21ST CENTURY FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2006 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
INVESTMENTS, AT VALUE (COST $455,661) $563,841
RECEIVABLE FOR INVESTMENTS SOLD 1,675
RECEIVABLE FOR CAPITAL STOCK SOLD 2,232
INTEREST AND DIVIDENDS RECEIVABLE 499
PREPAID EXPENSES AND OTHER ASSETS 217
------------
TOTAL ASSETS 568,464
------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
PAYABLE FOR INVESTMENTS PURCHASED 1,396
PAYABLE FOR CAPITAL STOCK REDEEMED 162
ACCRUED INVESTMENT ADVISORY FEE 384
ACCRUED DISTRIBUTION FEE 289
ACCRUED TRUSTEES' FEES 181
ACCRUED EXPENSES AND OTHER LIABILITIES 165
------------
TOTAL LIABILITIES 2,577
------------
NET ASSETS $565,887
============
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
PAID-IN-CAPITAL $467,849
ACCUMULATED NET INVESTMENT LOSS (418)
ACCUMULATED NET REALIZED LOSS ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS (9,793)
NET UNREALIZED APPRECIATION ON INVESTMENTS 108,249
------------
NET ASSETS $565,887
============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 39,275
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $14.41
============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
INTEREST $518
DIVIDENDS (NET OF $100 OF NON-RECLAIMABLE
FOREIGN WITHHOLDING TAXES) 2,305
------------
TOTAL INVESTMENT INCOME 2,823
------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
INVESTMENT ADVISORY FEES 1,915
DISTRIBUTION FEES 563
TRANSFER AGENT FEES AND EXPENSES 262
FUND ADMINISTRATION FEES 77
CUSTODY AND FUND ACCOUNTING FEES 60
PRINTING AND POSTAGE EXPENSES 56
PROFESSIONAL FEES 33
TRUSTEES' FEES AND EXPENSES 33
FEDERAL AND STATE REGISTRATION FEES 25
MISCELLANEOUS 15
------------
TOTAL EXPENSES 3,039
LESS EXPENSES PAID INDIRECTLY (1)
------------
NET EXPENSES 3,038
------------
NET INVESTMENT LOSS (215)
------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS 27,477
NET REALIZED LOSS ON FOREIGN
CURRENCY TRANSACTIONS (116)
CHANGE IN UNREALIZED APPRECIATION/
DEPRECIATION ON INVESTMENTS AND
FOREIGN CURRENCY TRANSLATIONS 53,057
------------
NET GAIN ON INVESTMENTS 80,418
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $80,203
============
* Not in thousands.
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS YEAR
ENDED 3/31/06 ENDED
(AMOUNTS IN THOUSANDS) (UNAUDITED) 9/30/05
- ------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS $(215) $(662)
NET REALIZED GAIN ON INVESTMENTS 27,477 14,704
NET REALIZED GAIN (LOSS) ON FOREIGN CURRENCY TRANSACTIONS (116) 405
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
ON INVESTMENTS AND FOREIGN CURRENCY TRANSLATIONS 53,057 30,495
------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 80,203 44,942
------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (67) --
------------------------------------------------------
TOTAL DISTRIBUTIONS (67) --
------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
PROCEEDS FROM SALE OF SHARES 161,705 269,623
PROCEEDS FROM REINVESTMENT OF DISTRIBUTIONS 64 --
REDEMPTION FEES 22 35
REDEMPTION OF SHARES (55,368) (151,500)
------------------------------------------------------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS 106,423 118,158
------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 186,559 163,100
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
BEGINNING OF PERIOD 379,328 216,228
------------------------------------------------------
END OF PERIOD $565,887 $379,328
======================================================
ACCUMULATED NET INVESTMENT LOSS (418) (135)
- ------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- ------------------------------------------------------------------------------------------------------------------------------
SHARES SOLD 12,044 23,590
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS 5 --
SHARES REDEEMED (4,189) (13,372)
------------------------------------------------------
NET INCREASE 7,860 10,218
======================================================
See notes to financial statements.
MARSICO 21ST CENTURY FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
FOR A FUND SHARE OUTSTANDING ENDED 3/31/06 ENDED ENDED ENDED ENDED ENDED
THROUGHOUT THE PERIOD. (UNAUDITED) 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
NET ASSET VALUE, BEGINNING OF PERIOD $12.07 $10.20 $8.74 $6.54 $6.26 $10.86
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (0.01) (0.01) (0.04) (0.04) (0.08) (0.08)
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS 2.35 1.88 1.50 2.23 0.36 (4.52)
----------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.34 1.87 1.46 2.19 0.28 (4.60)
----------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS & OTHER
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME --(1) -- -- -- -- --
INCREASE FROM PAYMENT BY SERVICE PROVIDER -- -- -- 0.01 -- --
REDEMPTION FEES [SEE NOTE 2(I)] --(1) --(1) --(1) -- -- --
TOTAL DISTRIBUTIONS & OTHER -- -- -- 0.01 -- --
NET ASSET VALUE, END OF PERIOD $14.41 $12.07 $10.20 $8.74 $6.54 $6.26
----------------------------------------------------------------------------------
TOTAL RETURN 19.41%(4) 18.33% 16.70% 33.64% 4.47% (42.36)%
- ---------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $565,887 $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 1.35%(3) 1.39% 1.50% 1.55%(5) 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 (0.10)%(3) (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 1.35%(3) 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 (0.10)%(3) (0.22)% (0.42)% (1.15)% (0.99)% (0.83)%
PORTFOLIO TURNOVER RATE(2) 71%(4) 175% 191% 236% 388% 399%
(1) Less than $0.01.
(2) Portfolio turnover is greater than most funds due to the investment style of
the Fund.
(3) Annualized.
(4) Not annualized for the six months ended March 31, 2006.
(5) See Note 3 for information regarding the voluntary fee waiver.
See notes to financial statements.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
INVESTMENT REVIEW BY JIM GENDELMAN (UNAUDITED)
The six-month period ended March 31, 2006 was a remarkably healthy period for
international equities. I am pleased to report that the International
Opportunities Fund ended the reporting period with a total return of (US$)
21.06%. The Fund substantially outperformed its primary benchmark index, the
MSCI EAFE Index, which had a total return for the six-month period of 13.86% in
dollar terms. Please see the Fund overview for more detailed information about
the Fund's performance for various periods ended March 31, 2006.
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 HIGHER OR LOWER 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)
You should keep in mind that our views on all stocks discussed in this report
are subject to change at any time and do not represent recommendations to buy or
sell the stocks, and that the Fund may not necessarily hold these stocks
today.(2)
The primary areas contributing to the Fund's outperformance as compared to the
MSCI EAFE Index are summarized below:
o STOCK SELECTION IN THE REAL ESTATE INDUSTRY: The Fund's real
estate holdings gained, collectively, 63% during the reporting
period ended March 31, 2006. Sumitomo Realty & Development, one
of Japan's leading real estate operators, and Hypo Real Estate
Holding, a German commercial real estate financing company, rose
87% and 35%, respectively. The Fund's positions in LeoPalace 21
Corp., a Japan-headquartered residential construction company,
and Singapore-based real estate developer and management company
Capitaland Ltd., also aided performance results.
o STOCK SELECTION AND POSITIONING IN THE TELECOMMUNICATION SERVICES
SECTOR: America Movil SA, a mobile telecommunications provider in
Latin America, posted a return of 33% for the period. This was
the Fund's sole holding in the Telecommunication Services sector.
Our decision to have an underweighted posture (as compared to the
Fund's benchmark index) also added value, as the sector was the
weakest-performing area in the index, declining by more than -7%
(using Global Industry Classification Standard ("GICS") industry
classifications).
o STOCK SELECTION IN THE CONSUMER DISCRETIONARY SECTOR: The Fund's
holdings in this sector had an aggregate return of 23% for the
semi-annual period ended March 31, 2006. Specifically,
performance benefited from several industry groups within this
sector:
o Automobiles & Components: Positions in Continental AG (+34%), a
German auto-components company, and Toyota Motor (+20%), a
Japanese car manufacturer, helped boost the Fund's overall
return.
o Retailing: Yamada Denki, a Japan-headquartered consumer
electronics retailer, rose 51%.
o Consumer Services: Carphone Warehouse plc, a UK-based provider of
mobile communications products and services, gained 53%. British
pub and restaurant operator Enterprise Inns plc rose 12%.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
o STOCK SELECTION AND POSITIONING IN THE ENERGY SECTOR: Stock
selection in this sector, coupled with an overall underweighted
allocation to the Energy sector, aided performance for the
period. The MSCI EAFE Index's Energy sector posted a modest
decline of less than -1%, while the Fund's energy-related
investments had an aggregate gain of +18%. Acergy, formerly Stolt
Offshore (+35%), a provider of a variety of services to sub-sea
oil and gas operations, posted strong results. Additional
strength came from Petroleo Brasileiro (+21%), a Brazilian
integrated oil and gas company, and Canadian oil and gas
exploration and production company Talisman Energy (+9%).
o STOCK SELECTION IN THE INDUSTRIALS SECTOR: Industrial companies
performed well during the period and were among the Fund's
strongest-performing individual holdings. These included
Vallourec SA (+48%), a France-based manufacturer of carbon steel
and alloy tubes, Canadian National Railway (+28%), Swiss power
and automation company ABB Ltd. (+18%), and VINCI SA (+10% prior
to being sold), a France-based construction contractor and
infrastructure concessions operator.
Although the Fund's overall return for the six-month period ended March 31, 2006
exceeded its primary benchmark index, there were a few factors that had a
negative effect on investment results. One involved certain of the Fund's
Materials-related holdings. Overall, the Fund's investments Materials companies
generated a strong return of 19%; however, the Fund's sector return lagged the
benchmark index sector return of 22%. In particular, two of the Fund's
Materials-related positions struggled. Cia Vale Rio Doce, a Brazilian mining and
logistics company and Swiss chemicals company Syngenta declined by -13% and -2%,
respectively, during the period. (Cia Vale Rio Doce was not held in the Fund as
of March 31, 2006.)
A second factor that negatively impacted performance was the Fund's
underweighted allocation to the Insurance industry. The Insurance industry was
among the strongest performing industry groups of the MSCI EAFE Index for the
period, rising by 23%. By abstaining from investments in insurance companies,
the Fund missed the opportunity for potential gains such as those experienced by
the benchmark index.
Finally, there were certain individual holdings that struggled during the period
while they were held in the Fund. Precision Drilling, a Canadian drilling
contractor, declined by -14% prior to being sold and consumer-related positions
Esprit Holdings and EMI Group declined by -7% and -11%, respectively, during the
reporting period. (EMI Group was sold during the period.)
Currency fluctuations may at times affect the Fund because its foreign holdings
are denominated in foreign currencies whose value may rise or fall against the
dollar. Such fluctuations were not a significant factor in the Fund's
performance during the reporting period, however.
The International Opportunities Fund has tended to have a relatively high
portfolio turnover level because of its investment style. Although the Fund may
hold core positions for some time, it may change its portfolio composition
quickly to take advantage of new opportunities, or to address issues affecting
particular holdings.
As of March 31, 2006, the Fund's primary economic sector allocations included
Financials, Consumer Discretionary, Industrials, and Materials. In terms of
country allocations, the Fund's most significant weightings at period-end were
Japan, Switzerland, Mexico, Canada, Germany, France, and the United Kingdom. As
mentioned in previous shareholder reports, country-level weightings generally
are a residual of the Fund's "bottom-up" stock selection process rather than a
central facet of the investment strategy.
Sincerely,
JAMES G. GENDELMAN
PORTFOLIO MANAGER
(1) Total returns are based on net change in NAV assuming reinvestment of
distributions. For the period prior to September 30, 2004, the performance
returns for the International Opportunities Fund reflect a fee waiver in
effect; in the absence of such a waiver, the returns would have been
reduced. For the period beginning October 2004 through December 2005,
performance returns for the Fund would be higher but for the reimbursement
of fees waived previously. A redemption fee of 2% may be imposed on
redemptions or exchanges of Fund shares owned for 30 days or less. Please
see the prospectus for more information.
The MSCI EAFE Index tracks the stocks of about 1,000 companies in Europe,
Australasia, and the Far East (together referred to as "EAFE"). You cannot
invest directly in an index. 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.
(2) Portfolio composition is subject to change at any time, and references to
specific securities, industries, and sectors referenced in this report 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
report.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
FUND OVERVIEW MARCH 31, 2006 (UNAUDITED)
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 THE SECURITIES OF ISSUERS THAT ARE ECONOMICALLY TIED TO ONE OR MORE
FOREIGN COUNTRIES, AND EXPECTS TO BE INVESTED IN VARIOUS ISSUERS OR SECURITIES
THAT TOGETHER HAVE TIES TO AT LEAST FOUR DIFFERENT FOREIGN COUNTRIES. SOME
ISSUERS OR SECURITIES IN THE FUND'S PORTFOLIO MAY BE BASED IN OR ECONOMICALLY
TIED TO THE UNITED STATES. THE 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
(4/1/05-3/31/06) (4/1/01-3/31/06) (6/30/00-3/31/06)
MARSICO INTERNATIONAL OPPORTUNITIES FUND 34.98%(1) 14.49%(1) 8.86%(1)
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX 24.41% 9.63% 3.56%
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS GROWTH OF $10,000(1)(2)
- ----------------------------------------------------------------------------------------------------------------------------
3/31/06 $448,580,855 Internationl Morgan Stanley
Opportunities Capital International
NET ASSET VALUE Fund EAFE Index
------------ ------------
NET ASSET VALUE PER SHARE $15.63 30-Jun-00 10,000 10,000
- ----------------------------------------------- 30-Sep-00 10,360 9,193
TOP FIVE HOLDINGS 31-Mar-01 8,283 7,720
- ----------------------------------------------- 30-Sep-01 7,011 6,570
CEMEX S.A. ADR 3.98% 31-Mar-02 8,542 7,064
CONTINENTAL AG 3.91 30-Sep-02 7,248 5,550
AMERICA MOVIL 31-Mar-03 7,040 5,422
S.A. DE C.V. ADR 3.72 30-Sep-03 9,101 6,993
ERICSSON (LM) TEL-SP ADR 3.71 31-Mar-04 11,493 8,542
UBS AG 3.40 30-Sep-04 11,006 8,537
- ----------------------------------------------- 31-Mar-05 12,072 9,829
SECTOR ALLOCATION(3) 30-Sep-05 13,460 10,739
- ----------------------------------------------- 31-Mar-06 16,295 12,228
FINANCIAL 22.28%
INDUSTRIAL 19.60
CONSUMER CYCLICAL 19.18 The performance included in the table and graph do not reflect the
CONSUMER NON-CYCLICAL 11.71 deduction of taxes on Fund distributions or the redemption of Fund shares.
COMMUNICATIONS 11.08
ENERGY 6.72
BASIC MATERIALS 5.12
UTILITIES 2.52
DIVERSIFIED 1.79
THE PERFORMANCE DATA 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. A redemption fee may be imposed on
redemptions or exchanges of Fund shares owned for 30 days or less.
(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 2004 through December 2005, 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 MARCH 31, 2006 (UNAUDITED)
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------------
ADVERTISING SERVICES
JC DECAUX S.A.* 160,394 $ 4,340,358 0.97%
-------------------------------------------
AGRICULTURAL CHEMICALS
SYNGENTA AG 77,887 10,945,345 2.44
-------------------------------------------
AUTOMOTIVE - CARS/LIGHT TRUCKS
TOYOTA MOTOR
CORPORATION SPON. ADR 186,100 10,166,720 2.27
-------------------------------------------
BEVERAGES - WINE/SPIRITS
DIAGEO PLC 550,115 8,664,049 1.93
-------------------------------------------
BROADCAST
SERVICES/PROGRAMMING
GRUPO TELEVISA S.A. ADR 210,308 4,185,129 0.93
-------------------------------------------
BUILDING -
RESIDENTIAL/COMMERCIAL
MISAWA HOMES HOLDINGS, INC.* 69,500 3,489,762 0.78
-------------------------------------------
BUILDING PRODUCTS -
CEMENT/AGGREGATES
CEMEX S.A. ADR 273,737 17,869,551 3.98
-------------------------------------------
CELLULAR TELECOMMUNICATIONS
AMERICA MOVIL
S.A. DE C.V. ADR 487,010 16,684,963 3.72
-------------------------------------------
CHEMICALS - SPECIALTY
LONZA GROUP AG 153,883 10,546,885 2.35
-------------------------------------------
COMMERCIAL BANKS - NON-US
ANGLO IRISH BANK
CORPORATION PLC 259,780 4,281,474 0.95
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN AG 117,714 6,941,429 1.55
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN AG 144A* 29,606 1,722,503 0.38
ICICI BANK LTD. SPON. ADR 277,201 7,672,924 1.71
MITSUBISHI UFJ
FINANCIAL GROUP, INC 641 9,802,889 2.19
UNIBANCO HOLDINGS
S.A. ADR 78,068 5,770,006 1.29
-------------------------------------------
36,191,225 8.07
-------------------------------------------
DISTRIBUTION/WHOLESALE
ESPRIT HOLDINGS, LTD 690,000 5,371,207 1.20
-------------------------------------------
DIVERSIFIED OPERATIONS
LVMH MO`T HENNESSY
LOUIS VUITTON SA 76,819 7,531,229 1.68
-------------------------------------------
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS continued
- -------------------------------------------------------------------------------------
ELECTRONIC
COMPONENTS - MISCELLANEOUS
FANUC LTD 47,014 $ 4,525,647 1.01%
MURATA MANUFACTURING
COMPANY LTD 64,400 4,360,816 0.97
NIPPON ELECTRIC
GLASS CO., LTD 300,000 7,468,139 1.66
-------------------------------------------
16,354,602 3.64
-------------------------------------------
ELECTRONIC COMPONENTS -
SEMICONDUCTORS
SAMSUNG ELECTRONICS CO., LTD. 13,040 8,455,331 1.88
-------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS
ADVANTEST CORPORATION 36,900 4,398,530 0.98
-------------------------------------------
ENGINEERING/R&D SERVICES
ABB LTD.* 882,085 11,130,517 2.48
-------------------------------------------
FINANCE - CREDIT CARD
CREDIT SAISON CO., LTD 127,200 7,035,446 1.57
-------------------------------------------
FINANCE - INVESTMENT
BANKER/BROKER
UBS AG 138,803 15,246,876 3.40
-------------------------------------------
FOOD - RETAIL
METRO AG 77,244 3,960,559 0.88
-------------------------------------------
HOTELS & MOTELS
SHANGRI-LA ASIA LTD 3,781,003 6,091,200 1.36
-------------------------------------------
IMPORT/EXPORT
MARUBENI CORPORATION 847,000 4,432,897 0.99
-------------------------------------------
LEISURE & RECREATION PRODUCTS
SEGA SAMMY HOLDINGS, INC 210,452 8,546,819 1.91
-------------------------------------------
MACHINERY - GENERAL INDUSTRIAL
SHANGHAI ELECTRIC
GROUP COMPANY LTD.* 595,621 251,401 0.06
-------------------------------------------
MEDICAL - DRUGS
CSL LTD 155,021 6,070,581 1.35
ROCHE HOLDING AG 55,552 8,271,118 1.84
-------------------------------------------
14,341,699 3.19
-------------------------------------------
MORTGAGE BANKS
HYPO REAL ESTATE HOLDING AG 192,985 13,229,956 2.95
-------------------------------------------
OIL - FIELD SERVICE
ACERGY S.A.* 317,465 4,989,455 1.11
-------------------------------------------
OIL COMPANIES -
EXPLORATION & PRODUCTION
CNOOC LTD. ADR 51,811 4,050,584 0.90
TALISMAN ENERGY, INC 242,962 12,902,773 2.88
-------------------------------------------
16,953,357 3.78
-------------------------------------------
*Non-income producing.
See notes to financial statements.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2006 (UNAUDITED) (CONTINUED)
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
COMMON STOCKS continued
- -------------------------------------------------------------------------------------
OIL COMPANIES - INTEGRATED
PETROLEO BRASILEIRO S.A. ADR 72,558 $ 6,288,602 1.40%
-------------------------------------------
REAL ESTATE
OPERATING/DEVELOPMENT
CAPITALAND LTD 2,322,000 6,955,151 1.55
GAFISA S/A.* 199,487 2,136,834 0.48
LEOPALACE 21 CORPORATION 152,186 5,715,056 1.27
SUMITOMO REALTY &
DEVELOPMENT CO., LTD 254,000 7,035,174 1.57
-------------------------------------------
21,842,215 4.87
-------------------------------------------
RETAIL - CONSUMER ELECTRONICS
THE CARPHONE
WAREHOUSE PLC 877,158 4,709,078 1.05
YAMADA DENKI COMPANY, LTD 77,100 8,889,099 1.98
-------------------------------------------
13,598,177 3.03
-------------------------------------------
RETAIL - DRUG STORES
SHOPPERS DRUG MART
CORPORATION 307,021 11,685,647 2.61
-------------------------------------------
RETAIL - MISCELLANEOUS/DIVERSIFIED
THE SEIYU, LTD.* 2,573,000 6,864,248 1.53
-------------------------------------------
RETAIL - PUBS
ENTERPRISE INNS PLC 553,429 9,153,737 2.04
-------------------------------------------
RUBBER - TIRES
CONTINENTAL AG 159,372 17,546,303 3.91
-------------------------------------------
SOAP & CLEANING PREPARATIONS
RECKITT BENCKISER PLC 298,970 10,523,656 2.35
-------------------------------------------
STEEL PIPE & TUBE
VALLOUREC S.A 11,103 10,723,766 2.39
-------------------------------------------
TRANSPORTATION - RAIL
CANADIAN NATIONAL
RAILWAY CO 290,210 13,140,709 2.93
-------------------------------------------
WATER
VEOLIA ENVIRONMENT 190,193 10,563,141 2.35
-------------------------------------------
WIRELESS EQUIPMENT
ERICSSON (LM) TEL-SP ADR 440,861 16,629,277 3.71
-------------------------------------------
TOTAL COMMON STOCKS
(COST $333,870,437) 419,964,546 93.62
-------------------------------------------
NUMBER MARKET PERCENT
OF VALUE OF NET
SHARES IN DOLLARS ASSETS
- -------------------------------------------------------------------------------------
OPTIONS PURCHASED
- -------------------------------------------------------------------------------------
SYNGENTA AG - PUT OPTION,
EXPIRES 5/23/06* 15,320 $ 19,273 --%
-------------------------------------------
TOTAL OPTIONS PURCHASED
(COST $16,825) 19,273 --
-------------------------------------------
- -------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- -------------------------------------------------------------------------------------
SSGA PRIME MONEY
MARKET FUND, 4.62% 20,173,296 20,173,296 4.50
SSGA MONEY
MARKET FUND, 4.35% 7,494,030 7,494,030 1.67
-------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $27,667,326) 27,667,326 6.17
-------------------------------------------
TOTAL INVESTMENTS
(COST $361,554,588) 447,651,145 99.79
CASH AND OTHER
ASSETS LESS LIABILITIES 929,710 0.21
-------------------------------------------
NET ASSETS $448,580,855 100.00%
===========================================
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS BY COUNTRY
- --------------------------------------------------------------------------------
PERCENT
OF
MARKET INVESTMENT
COUNTRY VALUE SECURITIES
- -------------------------------------------------------------------
AUSTRALIA $6,070,581 1.4%
AUSTRIA 8,663,932 1.9
BRAZIL 14,195,442 3.2
CANADA 37,729,129 8.4
FRANCE 44,123,112 7.4
GERMANY 34,736,818 7.8
HONG KONG 15,764,392 3.5
INDIA 7,672,924 1.7
IRELAND 4,281,474 1.0
JAPAN 92,731,242 20.7
MEXICO 38,739,643 8.6
NORWAY 4,989,455 1.1
SINGAPORE 6,955,151 1.5
SOUTH KOREA 8,455,331 1.9
SWEDEN 16,629,277 3.7
SWITZERLAND 45,195,396 12.6
UNITED KINGDOM 33,050,520 7.4
UNITED STATES(1) 27,667,326 6.2
----------------------------
TOTAL $447,651,145 100.0%
----------------------------
* Non-income producing.
(1) Includes short-term securities.
See notes to financial statements.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2006 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
INVESTMENTS, AT VALUE (COST $361,555) $447,651
RECEIVABLE FOR INVESTMENTS SOLD --(1)
RECEIVABLE FOR CAPITAL STOCK SOLD 1,906
INTEREST AND DIVIDENDS RECEIVABLE 847
PREPAID EXPENSES AND OTHER ASSETS 170
------------
TOTAL ASSETS 450,574
------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
PAYABLE FOR INVESTMENTS PURCHASED 1,181
PAYABLE FOR CAPITAL STOCK REDEEMED 124
ACCRUED INVESTMENT ADVISORY FEE 305
ACCRUED DISTRIBUTION FEE 201
ACCRUED TRUSTEES' FEES 129
ACCRUED EXPENSES AND OTHER LIABILITIES 53
------------
TOTAL LIABILITIES 1,993
------------
NET ASSETS $448,581
============
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------
PAID-IN-CAPITAL $348,928
ACCUMULATED NET INVESTMENT LOSS (661)
ACCUMULATED NET REALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 14,160
NET UNREALIZED APPRECIATION ON INVESTMENTS 86,154
------------
NET ASSETS $448,581
============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 28,702
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $15.63
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
INTEREST $293
DIVIDENDS (NET OF $286 OF NON-RECLAIMABLE
FOREIGN WITHHOLDING TAXES) 1,655
------------
TOTAL INVESTMENT INCOME 1,948
------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
INVESTMENT ADVISORY FEES 1,396
DISTRIBUTION FEES 411
CUSTODY AND FUND ACCOUNTING FEES 153
TRANSFER AGENT FEES AND EXPENSES 128
FUND ADMINISTRATION FEES 84
TRUSTEES' FEES AND EXPENSES 23
PRINTING AND POSTAGE EXPENSES 21
FEDERAL AND STATE REGISTRATION FEES 18
PROFESSIONAL FEES 13
MISCELLANEOUS 8
------------
TOTAL EXPENSES 2,255
RECOVERY OF PREVIOUSLY WAIVED EXPENSES 101
LESS EXPENSES PAID INDIRECTLY --(1)
------------
NET EXPENSES 2,356
------------
NET INVESTMENT INCOME (408)
------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS 21,289
NET REALIZED LOSS ON FOREIGN
CURRENCY TRANSACTIONS (3,282)
CHANGE IN UNREALIZED APPRECIATION/
DEPRECIATION ON INVESTMENTS AND
FOREIGN CURRENCY TRANSLATIONS 45,387
------------
NET GAIN ON INVESTMENTS 63,394
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $62,986
============
* Not in thousands.
(1) Less than $1,000.
See notes to financial statements.
MARSICO INTERNATIONAL OPPORTUNITIES FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS YEAR
ENDED 3/31/06 ENDED
(AMOUNTS IN THOUSANDS) (UNAUDITED) 9/30/05
- --------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) $(408) $2,216
NET REALIZED GAIN ON INVESTMENTS 21,289 4,461
NET REALIZED LOSS ON FOREIGN CURRENCY TRANSACTIONS (3,282) (1,206)
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
ON INVESTMENTS AND FOREIGN CURRENCY TRANSLATIONS 45,387 30,413
--------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 62,986 35,884
--------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (2,078) --
--------------------------------------------------------
TOTAL DISTRIBUTIONS (2,078) --
--------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------------------
PROCEEDS FROM SALE OF SHARES 166,302 165,245
PROCEEDS FROM REINVESTMENT OF DISTRIBUTIONS 1,980 --
REDEMPTION FEES 18 11
REDEMPTION OF SHARES (43,149) (44,780)
--------------------------------------------------------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS 125,151 120,476
--------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 186,059 156,360
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
BEGINNING OF PERIOD 262,522 106,162
--------------------------------------------------------
END OF PERIOD $448,581 $262,522
========================================================
ACCUMULATED NET INVESTMENT INCOME (LOSS) (661) 1,824
- --------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- --------------------------------------------------------------------------------------------------------------------------------
SHARES SOLD 11,432 14,012
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS 141 --
SHARES REDEEMED (3,057) (3,810)
--------------------------------------------------------
NET INCREASE 8,516 10,202
========================================================
See notes to financial statements.
FINANCIAL HIGHLIGHTS
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
FOR A FUND SHARE OUTSTANDING ENDED 3/31/06 ENDED ENDED ENDED ENDED ENDED
THROUGHOUT THE PERIOD. (UNAUDITED) 9/30/05 9/30/04 9/30/03 9/30/02 9/30/01
NET ASSET VALUE, BEGINNING OF PERIOD $13.00 $10.63 $8.80 $7.00 $6.78 $10.36
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (0.01) 0.11 0.01 0.02 (0.02) --
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS 2.74 2.26 1.82 1.78 0.19 (3.27)
----------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.73 2.37 1.83 1.80 0.17 (3.27)
----------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS & OTHER
- --------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (0.10) -- -- -- (0.01) (0.04)
NET REALIZED GAINS -- -- -- -- -- (0.27)
REDEMPTION FEES [SEE NOTE 2(I)] --(1) --(1) --(1) --(1) 0.05 --
PAYMENT BY AFFILIATE -- -- -- -- 0.01 --
----------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS & OTHER (0.10) -- -- -- 0.05 (0.31)
NET ASSET VALUE, END OF PERIOD $15.63 $13.00 $10.63 $8.80 $7.00 $6.78
----------------------------------------------------------------------------------
TOTAL RETURN 21.06%(4) 22.30% 20.80% 25.71% 3.37% (32.32)%
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $448,581 $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 1.43%(3) 1.60% 1.60% 1.68%(5) 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 (0.25)%(3) 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 1.37%(3) 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 (0.19)%(3) 1.30% 0.00% (0.45)% (0.73)% (0.94)%
PORTFOLIO TURNOVER RATE(2) 52%(4) 154% 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) Annualized.
(4) Not annualized for the six months ended March 31, 2006.
(5) See Note 3 for information regarding the voluntary fee waiver.
MARSICO FUNDS
NOTES TO FINANCIAL STATEMENTS MARCH 31, 2006 (UNAUDITED)
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 5% of the 21st Century
Fund and 6% of the International Opportunities Fund as of March 31, 2006.
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 closing of the principal
exchange on which the security is traded. Securities traded on NASDAQ
generally will be valued at the NASDAQ Official Closing Price. If no sale
is reported on the valuation date, the most current bid price will
generally be used. All other securities for which over-the-counter market
quotations are readily available are valued at the last sale price. Debt
securities that will mature in more than 60 days are generally valued at
their bid prices furnished by a pricing service. Debt securities that
will mature in 60 days or less are valued at amortized cost, if it
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 $409,504 and
$175,273 for the Focus Fund and Growth Fund, respectively, for the six
months ended March 31, 2006. Also, the Funds received credits on certain
custody account balances which reduced certain transfer agent fees and
expenses in the amount of $4,859, $2,706, $536 and $391 for the Focus
Fund, Growth Fund, 21st Century Fund and International Opportunities
Fund, respectively, for the six months ended March 31, 2006. 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.
(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 MARCH 31, 2006 (UNAUDITED) (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.
(h) Trustees' Compensation--Effective February 1, 2000, the Board of Trustees
adopted the Marsico Investment Fund Deferred Fee Plan, amended and
restated as of December 30, 2005 (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 $157,470, $70,654, $55,481
and $45,683 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 certain 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 six months
ended March 31, 2006, the Focus Fund, Growth Fund, 21st Century Fund and
International Opportunities Fund received $27,374, $27,606, $22,495 and
$17,854, 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 for managing the Focus
Fund and the Growth Fund at the rate of 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; and at a rate of 0.85% of the
average daily net assets of the 21st Century Fund and the International
Opportunities Fund. Prior to November 11, 2004, the Adviser was compensated
for managing the Focus Fund and the Growth Fund at a rate of 0.85% of average
daily net assets of 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,
2006. 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 six months ended March 31, 2006, the Adviser
recovered previously waived fees of $101,347 in the International
Opportunities Fund.
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 six months ended March 31, 2006, 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 MARCH 31, 2006 (UNAUDITED) (CONTINUED)
5.INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the six months ended March 31, 2006, were as
follows:
21st International
Focus Growth Century Opportunities
(Amounts in thousands) Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
Purchases $1,785,068 $850,211 $353,622 $266,124
Sales $1,629,855 $712,371 $305,686 $165,103
There were no purchases or sales of U.S. government securities.
- ---------------------------------------------------------------------------------------------------------------------------
6.FEDERAL INCOME TAX INFORMATION
At March 31, 2006, 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 $3,391,525 $1,863,750 $455,951 $363,678
- ---------------------------------------------------------------------------------------------------------------------------
Gross unrealized appreciation 1,161,834 591,666 112,050 84,374
Gross unrealized depreciation (30,935) (20,686) (4,160) (401)
Net unrealized appreciation on investments $1,130,899 $570,980 $107,890 $83,973
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.
7. RESULTS OF SHAREHOLDER MEETING
A special meeting of shareholders of the Trust was held on February 8, 2006.
The sole matter voted on by the shareholders of record as of November 30, 2005
(the "Record Date") was the election of the Board of Trustees. A plurality of
votes cast by shareholders of the Funds (with votes of each Fund of the Trust
counted together) was required for election. The number of shares outstanding
for each Fund as of the Record Date was 219,892,705 for the Marsico Focus Fund;
119,935,362 for the Marsico Growth Fund; 33,126,842 for the Marsico 21st Century
Fund; and 21,252,322 for the Marsico International Opportunities Fund.
With respect to the proposal to elect the following nominees as the Board of
Trustees for the Funds, the results of the vote were as follows:
NOMINEE VOTES FOR AUTHORITY WITHHELD
- --------------------------------------------------------------------------------
Walter A. Koelbel, Jr. 317,255,398 2,632,260
Michael D. Rierson 317,353,735 2,533,923
Joseph T. Willett 317,379,325 2,508,333
Jay S. Goodgold 317,594,845 2,292,813
Elizabeth Hoffman 315,012,058 4,875,600
Christopher E. Kubasik 315,309,666 4,577,992
Thomas F. Marsico 317,660,678 2,226,980
J. Jeffery Riggs 317,715,865 2,171,793
MARSICO FUNDS
EXPENSE EXAMPLE FOR THE SIX MONTHS ENDED MARCH 31, 2006 (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 October 1, 2005 to March 31, 2006
(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
October 1, 2005 March 31, 2006 March 31, 2006(1)
- -----------------------------------------------------------------------------------------------------------------------------
Actual Example $1,000.00 $1,088.80 $6.24
Hypothetical Example, assuming a 5% return before expenses $1,000.00 $1,019.03 $6.03
GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------
Beginning Ending Expenses paid during
account value account value the period ended
October 1, 2005 March 31, 2006 March 31, 2006(1)
- -----------------------------------------------------------------------------------------------------------------------------
Actual Example $1,000.00 $1,076.80 $6.40
Hypothetical Example, assuming a 5% return before expenses $1,000.00 $1,018.83 $6.23
EXPENSES PAID DURING THE PERIOD (CONTINUED)
21ST CENTURY FUND
- ----------------------------------------------------------------------------------------------------------------------
Beginning Ending Expenses paid during
account value account value the period ended
October 1, 2005 March 31, 2006 March 31, 2006(1)
- ----------------------------------------------------------------------------------------------------------------------
Actual Example $1,000.00 $1,194.10 $7.38
Hypothetical Example, assuming a 5% return before expenses $1,000.00 $1,018.28 $6.78
INTERNATIONAL OPPORTUNITIES FUND
- ----------------------------------------------------------------------------------------------------------------------
Beginning Ending Expenses paid during
account value account value the period ended
October 1, 2005 March 31, 2006 March 31, 2006(1)
- ----------------------------------------------------------------------------------------------------------------------
Actual Example $1,000.00 $1,210.60 $7.91
Hypothetical Example, assuming a 5% return before expenses $1,000.00 $1,017.85 $7.22
(1) Expenses are equal to the Funds' annualized expense ratios (1.20% for the
Focus Fund, 1.24% for the Growth Fund, 1.35% for the 21st Century Fund and
1.43% for the International Opportunities Fund), multiplied by the average
account value over the period, multiplied by 182/365 (to reflect the six
month period).
- --------------------------------------------------------------------------------
MARSICO FUNDS
ANNUAL RENEWAL OF INVESTMENT
ADVISORY AGREEMENTS
At a meeting of the Board of Trustees of the Trust that
commenced on November 9, 2005 and concluded on November 10, 2005, the Trustees,
by a unanimous vote (including a separate vote of those Trustees who are not
"interested persons" (as the term is defined in the 1940 Act)) (the "Independent
Trustees"), approved the renewal of the Funds' Investment Advisory Agreements
(the "Agreements"). In advance of the meeting, the Independent Trustees
requested and received extensive materials from the Adviser to assist them in
considering the renewal of the Agreements. The materials provided by the Adviser
contained information with respect to the factors noted below, including
detailed comparative information relating to the performance, advisory fees and
other expenses of the Funds, other funds sub-advised by the Adviser and non-fund
advisory accounts of the Adviser. The materials also included comparisons of the
Funds with other funds and non-fund accounts of similar size and investment
objectives in terms of performance, fees and other expenses, as well as the
performance of each Fund versus its benchmark. In addition, the Adviser provided
information regarding its overall expenses and profitability, as well as
estimates of its costs and profitability relating to managing the Funds.
In addition to the materials prepared specifically for contract review analysis,
on an ongoing basis the Trustees receive information and reports from the
Adviser and other service providers to the Funds on investment performance as
well as operational, compliance and other matters.
The Trustees engaged in a detailed discussion of the materials with management
of the Adviser. The Independent Trustees then met separately with independent
counsel to the Independent Trustees for a full review of the materials.
Following this session, the full Board reconvened and approved the continuation
of the Agreements.
DISCUSSION OF FACTORS CONSIDERED
In connection with the re-approval of the Agreements, the Trustees, including
the Independent Trustees, requested and received from the Adviser, and reviewed,
a wide variety of information, including information about (1) the nature,
extent, and quality of the services provided by the Adviser; (2) the investment
performance of the Funds and the Adviser; (3) the costs of the services to be
provided and profits realized by the Adviser and its affiliates from the
relationship with the Funds; (4) the extent to which economies of scale may be
realized as the Funds grow; and (5) whether fee levels reflect these economies
of scale for the benefit of Fund investors; as well as other relevant
considerations such as the management fees and expense ratios of each Fund;
potential fall-out benefits to the Adviser from its relationship to each Fund;
and other general information about the Adviser. The following is a summary of
the Board's discussion and views regarding these factors:
1. NATURE, EXTENT, AND QUALITY OF SERVICES.
The Independent Trustees considered the nature, quality and extent of
administrative and shareholder services performed by the Adviser, including
portfolio management, supervision of Fund operations and compliance and
regulatory filings and disclosures to shareholders, general oversight of
other service providers, coordination of Fund marketing initiatives, review
of Fund legal issues, assisting the Trustees in that capacity and other
services. The Independent Trustees concluded that the services are extensive
in nature, that the Adviser effectively manages the outsourcing by the Fund
to other service providers and that the Adviser consistently delivered a high
level of service.
2. INVESTMENT PERFORMANCE OF THE FUNDS AND ADVISER.
The Independent Trustees considered short-term and long-term investment
performance for each Fund over various periods of time as compared to both
relevant equity indices and the performance of such Fund's Lipper, Inc. peer
group universe, and concluded that the Adviser was delivering superior
performance results consistent with the long-term investment strategies being
pursued by the Funds. The Independent Trustees also noted that the strong
investment performance delivered by the Adviser to the Funds appeared to be
consistent with the performance delivered for other clients of the Adviser.
3. COSTS OF SERVICES AND PROFITS REALIZED BY THE ADVISER.
(a) COSTS OF SERVICES TO FUNDS: FEES AND EXPENSES. The Independent Trustees
considered each Fund's management fee rates and expense ratios relative
to industry averages for such Fund's benchmark category and the advisory
fees charged by the Adviser to other sub-advised funds and non-fund
clients, including information regarding expense limitation commitments
from the Adviser, and the breakpoints for the Fund's advisory services.
The Independent
Trustees noted that the mix of services under the Agreements are much
more extensive than those under the Adviser's advisory agreements for
sub-advised funds as well as non-fund clients. While the Independent
Trustees noted that the investment advisory fees paid by the Funds are
generally in the upper quartile of their peer groups, they concluded that
those fees are acceptable based upon the qualifications, experience,
reputation, and performance of the Adviser and the low-to-moderate
overall expense ratios of the Funds.
(b) PROFITABILITY AND COSTS OF SERVICES TO THE ADVISER. The Independent
Trustees considered the Adviser's overall profitability and costs and a
pro forma estimate of the Adviser's profitability and costs if the Funds
constituted the Adviser's only assets under management. The Independent
Trustees also considered whether the amount of profit is a fair
entrepreneurial profit for the management of each Fund, and noted that
the Adviser has substantially increased its resources devoted to Fund
matters in response to regulatory requirements enacted during the last
few years and Fund policies and procedures that were adopted or enhanced
in late 2004 and thereafter. The Independent Trustees concluded that the
Adviser's profitability was at an acceptable level, particularly in light
of the high quality of the services being provided to the Funds.
4. EXTENT OF ECONOMIES OF SCALE AS FUNDS GROW.
The Independent Trustees considered whether there have been economies of
scale with respect to the management of each Fund and whether such Fund has
appropriately benefited from any economies of scale. The Independent Trustees
noted that economies of scale may develop for certain Funds as their assets
increase and their Fund-level expenses decline as a percentage of assets, but
that Fund-level economies of scale may not necessarily result in
Adviser-level economies of scale. The Adviser had stated during the main
meeting that the expenses incurred by the Adviser relating to management of
the Funds have increased substantially in recent years as a percentage of
management fees, rather than declining as might be anticipated as the assets
of certain Funds increase. The Independent Trustees agreed that it was
possible that Adviser-level expenses incurred in managing the Funds
eventually may level off or decline as a percentage of management fees,
especially if the assets of certain Funds continue to grow beyond certain
thresholds.
5. WHETHER FEE LEVELS REFLECT ECONOMIES OF SCALE.
The Independent Trustees also considered whether the management fee rate is
reasonable in relation to the asset size of each Fund and any economies of
scale that may exist. The Independent Trustees noted that, effective November
11, 2004, at the behest of the Independent Trustees, breakpoints had been
introduced for the two larger Funds, the Focus Fund and the Growth Fund, for
assets in excess of $3 billion in each Fund. Under the breakpoints,
investment management fees are 0.85% per year of average daily net assets up
to $3 billion in each of those two Funds, and 0.75% per year of average daily
net assets exceeding $3 billion in each Fund. The Independent Trustees agreed
to continue to monitor whether any additional breakpoints for any of the
Funds may be appropriate in the future.
6. OTHER RELEVANT CONSIDERATIONS.
(a) ADVISER PERSONNEL AND METHODS. The Independent Trustees considered the
size, education and experience of the Adviser's staff. There was also a
review of the Adviser's "top down" economic analysis with "bottom up"
stock selection. This two-pronged approach, considering both
macro-economic factors, such as interest rates, inflation and the global
competitive landscape, and seeking to identify individual companies with
unique market presence and potential earnings growth that may not be
recognized by the market at-large, was regarded by the Independent
Trustees as providing an overall risk-managed approach to effective stock
selection. This overall strategy and corporate culture was further viewed
as facilitating the recruitment, training and retention of portfolio
managers and other research and management personnel, and the Trustees
concluded that in each of these areas the Adviser was structured in such
a way to support the high level of services being provided to the Funds.
(b) OTHER BENEFITS TO THE ADVISER. The Independent Trustees also considered
the character and amount of other incidental benefits received by the
Adviser and its affiliates from its association with the Funds. The
Independent Trustees concluded that potential "fall-out" benefits that
the Adviser may receive, such as greater name recognition or increased
ability to obtain research or brokerage services, appear to be
reasonable, and may in some cases benefit the Funds.
MARSICO FUNDS
CONCLUSIONS
In considering the Agreements, the Independent Trustees did not identify any
factor as all-important or all-controlling and instead considered these
factors collectively in light of each Fund's surrounding circumstances. Based
on this review, it was the judgment of the Independent Trustees that
shareholders had received very favorable absolute and relative performance at
reasonable fees and, therefore, re-approval of the Agreements was in the best
interests of each Fund and its shareholders. As a part of their
decision-making process, the Independent Trustees noted that the Adviser has
managed the Funds since their inception, and the Independent Trustees believe
that a long-term relationship with a capable, conscientious adviser is in the
best interests of the Funds. The Independent Trustees considered, generally,
that shareholders invested in a Fund knowing that the Adviser managed that
Fund and knowing its investment management fee schedule. As such, the
Independent Trustees considered, in particular, whether the Adviser managed
each Fund in accordance with its investment objectives and policies as
disclosed to shareholders. The Independent Trustees concluded that each Fund
was managed by the Adviser consistent with its investment objectives and
policies.
Upon conclusion of their review and discussion, the Independent Trustees
unanimously agreed to recommend the continuation of the Investment Advisory
and Management Agreements for each of the Funds.
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 PORTFOLIO 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.
NOTES
NOTES
[LOGO]MARSICO FUNDS
Helping you appreciate Life
The Marsico Investment Fund
UMB Distribution Services, LLC, Distributor
P.O. Box 3210, Milwaukee, WI 53201-3210
www.marsicofunds.com (Y) 888.860.8686
(C)2006 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
Not applicable to semi-annual reports.
Item 3. Audit Committee Financial Expert
Not applicable to semi-annual reports.
Item 4. Principal Accountant Fees and Services
Not applicable to semi-annual reports.
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 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 quarter of the
period 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 - Not applicable to semi-annual reports.
(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)) - see Exhibits (a) and (b).
(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 (c) and (d)).
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: May 30, 2006
- ------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Thomas F. Marsico
- ------------------------------------
Thomas F. Marsico
President
Date: May 30, 2006
By: /s/ Christopher J. Marsico
- ------------------------------------
Christopher J. Marsico
Vice President and Treasurer
Date: May 30, 2006