UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07883
----------------------------------------------
ICON FUNDS
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
5299 DTC Blvd. Suite 1200 Greenwood Village, CO 80111
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Erik L. Jonson 5299 DTC Blvd. Suite 1200 Greenwood Village, CO 80111
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 303-790-1600
-----------------------------
Date of fiscal year end: 9/30/05
--------------------------
Date of reporting period: 3/31/05
-------------------------
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Include a copy of the report transmitted to stockholders pursuant to
Rule 30e-1 under the Act (17 CFR 270.30e-1).
> March 31, 2005
Investment Update
ICON U.S. DIVERSIFIED FUNDS
ICON BOND FUND
ICON CORE EQUITY FUND
ICON COVERED CALL FUND
ICON EQUITY INCOME FUND
ICON LONG/SHORT FUND
Semiannual Report
(unaudited)
(ICON FUNDS LOGO)
Table of Contents
<Table>
ABOUT THIS REPORT 2
MESSAGE FROM ICON FUNDS 4
MANAGEMENT OVERVIEWS AND SCHEDULES OF INVESTMENTS
ICON Bond Fund 7
ICON Core Equity Fund 16
ICON Covered Call Fund 26
ICON Equity Income Fund 43
ICON Long/Short Fund 55
HYPOTHETICAL EXPENSE EXAMPLE 66
FINANCIAL STATEMENTS 69
FINANCIAL HIGHLIGHTS 76
NOTES TO FINANCIAL STATEMENTS 80
</Table>
[RECYCLE LOGO]
About This Report
HISTORICAL RETURNS
All total returns mentioned in this report account for the change in a Fund's
per-share price, the reinvestment of any dividends and capital gain
distributions, and adjustments for financial statement purposes. If your account
is set up to receive Fund distributions in cash rather than reinvest them, your
actual return may differ from these figures. The Funds' performance results do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or on the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance results represent
past performance, and current performance may be higher or lower. Please call
1-800-764-0442 or visit www.iconadvisers.com for performance results current to
the most recent month-end.
PORTFOLIO DATA
This report reflects ICON's views, opinions, and portfolio holdings as of March
31, 2005, the end of the reporting period. The information is not a complete
analysis of every aspect of any sector, industry, security or the Funds.
Opinions and forecasts regarding industries, companies and/or themes, and
portfolio composition and holdings, are subject to change at any time based on
market and other conditions, and should not be construed as a recommendation of
any specific security. Each Fund's percentage holdings as of March 31, 2005 are
included in each Fund's Schedule of Investments.
Certain companies' stock performance during the period is mentioned throughout
the Management Overviews. While ICON's quantitative investment methodology does
not consider company-specific factors beyond financial data, those factors may
impact a stock's performance, and therefore, Fund performance.
There are risks associated with mutual fund investing, including the risk of
loss of principal. There is no assurance that the investment process will
consistently lead to successful results. An investment concentrated in sectors
and industries may involve greater risk and volatility than a more diversified
investment. There are also risks associated with small- and mid-cap investing,
including limited product lines, less liquidity and small market share.
There are risks associated with selling short, including the risk that the
Long/Short Fund may have to cover its short position at a higher price than the
short price, resulting in a loss. The Fund's loss on a short sale is potentially
unlimited as a loss occurs when the value of a security sold short increases.
Call options involve certain risks, such as limited gains and lack of liquidity
of
2 About This Report
the underlying securities, and are not suitable for all investors. Investments
in foreign securities may entail unique risks, including political, market, and
currency risks.
Investing in fixed income securities such as bonds involves interest rate risk.
When interest rates rise, the value of fixed income securities generally
decreases. The Bond Fund may invest up to 25% of its assets in high-yield bonds
that are below investment grade. High-yield bonds involve a greater risk of
default and price volatility than U.S. Government and other higher-quality
bonds.
COMPARATIVE INDEXES
The comparative indexes discussed in this report are meant to provide a basis
for judging the Funds' performance against a specific securities index. Each
index shown accounts for both change in security price and reinvestment of
dividends and distributions, but does not reflect the costs of managing a mutual
fund. The Funds' portfolios may significantly differ in holdings and composition
from the index. Individuals cannot invest directly in an index.
- - The unmanaged Standard & Poor's SuperComposite 1500 (S&P 1500) Index is a
broad-based capitalization-weighted index comprising 1,500 stocks of
large-cap, mid-cap, and small-cap U.S. companies.
- - The Lehman Brothers (LB) U.S. Universal Index represents the union of the
U.S. Aggregate Index, the U.S. High-Yield Corporate Index, the 144A Index,
the Eurodollar Index, the Emerging Markets Index, the non-ERISA portion of
the Commercial Mortgage-Backed Securities (CMBS) Index and the CMBS
High-Yield Index. All securities in this market-value weighted index have at
least one year remaining to maturity and meet certain minimum issue size
criteria.
Index returns and statistical data included in this report are provided by
Bloomberg, FactSet, and Lehman Brothers.
About This Report 3
Message from ICON Funds
- --------------------------------------------------------------------------------
The fact that stocks have been in the midst of a two-year bull market may come
as a surprise to many investors.
- --------------------------------------------------------------------------------
Thank you for your continued investment in the ICON U.S. Diversified Funds and
welcome to those of you receiving this report for the first time.
As you may know, ICON employs a value-based, bottom-up investment system of
industry rotation to try to capture leading market themes that evolve over time.
While intrinsic value is dynamic and always changing, stock prices have
continued in their move toward fair value, even as a number of distractions have
made for a volatile setting.
DEALING WITH DISTRACTIONS
At times like these, I often think of Douglas Adams, author of The Hitchhiker's
Guide to the Galaxy, who wrote, "Nothing travels faster than the speed of light
with the possible exception of bad news, which follows its own special laws."
Over the course of the past six months, investors have been inundated by a
litany of bad news, ranging from Iraq, terrorism and oil prices to interest
rates and budget deficits. Although the markets seemed to rise above these
distractions during the first half of the reporting period, investors have since
found it difficult to sort through these events despite the presence of solid
economic and investment fundamentals -- and no clear signs of inflation.
Investors' behavior is highly reminiscent of patterns established last year,
which featured fear-driven sell-offs and highly correlated industry dynamics.
During market setbacks, economically sensitive and cyclical industries have
declined the most while industries considered recession-proof have been the most
resilient. In contrast, when the market has advanced, cyclical industries have
led the way while recession-proof industries have lagged.
PARTICIPATING IN THE ADVANCE
Given myriad doubts about the economy and earnings, and the volatility typically
associated with a cyclical rally, the fact that stocks have been in the midst of
a bull market may come as a surprise to many investors. But that is in fact the
case. Having hit significant multi-year lows on March 11, 2003 just prior to the
Iraq war, and near-term lows on August 12, 2004, stocks have actually recorded a
two-year advance.
Research into market history and investor behavior indicates to us that many
investors assign the horrible and distasteful aspects of war as negatives for
economic growth and company valuations. However, we have found no concrete
evidence, past or present, to support such a relationship. For this reason, we
believe that successful investors need to stay focused on the divergence between
price and value, while also drawing a distinction between geopolitical concerns
and the realities of investment fundamentals.
4 Message from ICON Funds
We apply our value-based, bottom-up industry
rotation across the entire market in order to
identify leading industry themes wherever
they may emerge.
[CRAIG T. CALLAHAN PHOTO]
Craig T. Callahan
President
Our research has shown these fundamentals to be generally healthy and
encouraging. By invoking the valuation-driven discipline that enables us to
patiently ride through market turbulence, we have participated in the advance.
- --------------------------------------------------------------------------------
Despite short-lived theme reversals and temporary setbacks, our valuation model
suggests stocks are still priced below intrinsic value.
- --------------------------------------------------------------------------------
A MORE DIVERSE INDUSTRY COMPOSITION
No matter what the market environment, our approach remains consistent. At the
end of the period, we measured the broad market as significantly below our
estimate of fair value. This discount makes sense to us as investors seemingly
braced for a slowdown in economic growth and corporate earnings, although we
believe the market has overreacted to these short-term concerns.
Nevertheless, what has become gradually apparent amid the market turmoil is that
our recent focus on highly cyclical industries is no longer warranted. While
economically sensitive sectors such as Energy, Materials and Industrials were
clear market leaders during the first half of our reporting period, value and
relative strength readings have since pointed us toward a more diverse
composition of industries, including those widely considered to be defensive or
recession-proof.
Accordingly, we were able to capture second-half upside within the Healthcare,
Consumer Staples and Utilities sectors, where combinations of value and relative
strength became increasingly more attractive. Healthcare, in particular, offered
considerable breadth, with all eight industries in the sector trading at
double-digit discounts to their intrinsic value and six posting above-average
relative strength. Utilities were also quite compelling. Despite their so-called
defensive tendencies, we view them as prospective market leaders.
Bonds, on the other hand, came under pressure during the period, encountering
extreme volatility in the face of monetary tightening and inflation fears.
Although our valuation measures suggest that investors have overstated the
impact of higher short-term interest rates, there is no evidence either in the
Consumer Price Index or the yield curve to suggest that inflation is currently a
threat. Rather than debate inflation, we continue to rely on our valuation
readings, which favor long-term corporate bonds, and lower-grade, higher-
yielding securities.
Message from ICON Funds 5
Message from ICON Funds (continued)
SEARCHING FOR VALUE
Having sustained market leadership for the past three years, it comes as no
surprise that cyclical industries were decidedly volatile. Because of their
sensitivity to economic fluctuations, these industries typically exhibit a
higher standard deviation or variability, which serves as a measure of risk.
Capturing their leadership has been a challenge and has certainly made for some
unpleasant periods. However, our system dictates that we not be swayed by
emotion. We simply calculate value and allow it to direct us to industries that
are showing value above price and relative strength.
ICON does not subscribe to the traditional style grid that classifies stocks by
size -- small-cap, mid-cap or large-cap -- and by style, either value or growth.
Instead, we apply our value-based, bottom-up industry rotation across the entire
market in order to identify leading industry themes wherever they may emerge. In
doing so, we are an all-cap manager and thus avoid arbitrary barriers or
restrictions in our pursuit of value.
THE PRIVILEGE OF GUIDING YOU
In January, we had the good fortune to announce the promotions of three
investment team members. We'd like to again take a moment to share the news.
Portfolio Managers Robert Straus, Derek Rollingson and J.C. Waller, III have
been promoted to Vice Presidents and have been named Chief Investment Officer,
Director of Research and Director of Institutional Portfolio Management,
respectively. These promotions recognize the outstanding and valuable
contributions each has made to your investment.
In closing, we wish to thank you for the privilege of guiding you through these
challenging markets. For current market updates, as well as up-to-date Fund,
performance and account information, we invite you to visit our website at
www.iconadvisers.com.
Yours truly,
/s/ Craig T. Callahan
Craig T. Callahan, DBA
Chairman of the Board of Trustees and President of the Adviser
The Consumer Price Index is the primary indicator of U.S. inflation and is used
to make cost-of-living adjustments to billions of dollars in benefit payments.
6 Message from ICON Funds
Management Overview
ICON Bond Fund
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
March 31, 2005
Corporate Bonds 44.3%
Investment Grade 33.0%
Non-Investment Grade 11.3%
U.S. Governments and Agencies 35.2%
Short-Term Investments 19.5%
Percentages are based upon net assets.
PORTFOLIO HIGHLIGHTS
March 31, 2005
Number of Bonds(1) 84
Weighted average
maturity(1) 10.2 Years
Weighted average
duration(1) 6.2 Years
30-Day SEC Yield
(after expense
limitation) -
Class I 4.26%
30-Day SEC Yield
(before expense
limitation) -
Class I 3.94%
Yield is for the Fund's Class I shares.
Yield for the Fund's other share classes will vary due to differences in charges
and expenses.
(1) Excludes cash and cash equivalents.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARK?
A. For the six months ended March 31, 2005, the ICON Bond Fund returned, -0.03%
for Class I shares, -0.29% for Class C shares, and 0.22% for Class Z shares,
underperforming the 0.71% return of the Lehman Brothers U.S. Universal Index,
the Fund's benchmark, over the same period. Total returns for other periods
as of March 31, 2005 appear on page 11.
Q. WHICH MARKET FACTORS INFLUENCED THE FUND'S RELATIVE PERFORMANCE?
A. The Fund captured modest upside during the fourth quarter of 2004, as the
bond market exhibited resilience in the face of rising interest rates.
Despite monetary tightening, which saw the federal funds rate increase from
1.75% to 2.75% during the period, the measured pace kept benchmark 10-year
treasury yields within a benign trading range. At the same time, corporate
credit spreads remained relatively tight amid signs of tame inflation and
sustainable economic growth.
However, conditions weakened considerably during the first quarter of 2005,
when surging oil prices raised fears of higher inflation and slowing economic
growth. While 10-year Treasury yields drifted as low as 3.99% in early
February, this stoking of concerns sent yields dramatically higher, peaking
at 4.64% by mid-March. As bond prices fell sharply lower in conjunction with
rising rates, the Fund slipped into negative territory, eroding earlier
gains.
Relative performance also suffered after an earnings warning issued by Fund
holding General Motors produced a widespread sell-off in automotive-related
debt. The subsequent downgrading of GM credits further pressured the Fund,
which saw declines in its automotive-related holdings.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs a quantitative methodology, identifying bonds believed to be
underpriced relative to value regardless of their location on the
conventional style grid. In doing so, the Fund may go anywhere in its pursuit
of potential market themes, without limitations on maturity, duration
(interest-rate sensitivity) or credit quality.
For that reason, the Fund does not partake in the counterproductive exercise
of forecasting interest rate movements. Instead, ICON calculates proprietary
value-to-price ratios that consider the combined effects of income stream,
yield curve characteristics and risk. By combining valuation with relative
strength, the Fund aims to maximize total return (income plus capital
appreciation) by focusing on securities poised to lead the broader market.
Management Overview 7
Management Overview (continued)
ICON Bond Fund
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. With longer rates still well within the levels established by their prolonged
secular decline, favorable valuation readings led to the Fund's continued
overweighting of longer-duration bonds. However, this strategy worked against
overall six-month performance as longer-duration bonds, given their increased
sensitivity to changing interest rates, underperformed shorter-duration bonds
when benchmark yields trended higher.
Although the Fund does not invest based on projected interest rate movements,
net duration was steadily reduced during the period, but not at the expense
of valuation and relative strength.
A pullback in high-yield bonds also detracted from Fund performance. With
risk premiums declining following a strong two-year run, the sector appears
to have run its course. Consequently, the Fund continued to trim its high-
yield exposure on declining relative strength, as extremely tight spreads
over Treasuries left little room for further contraction or capital
appreciation.
Nevertheless, longer-duration names such as Farmers Exchange Capital, Federal
National Mortgage Association, First American Corp., and Time Warner Company
Inc. all contributed to Fund performance due to solid underlying
fundamentals. Meanwhile, DaimlerChrysler and General Motors Acceptance Corp.
lost value when GM's lowered guidance and ensuing downgrade roiled the bond
market. Phillips Petroleum and U.S. Treasury positions also detracted, as
oil-related concerns and rising interest rates fueled inflation fears.
Nevertheless, these bonds had not reached our sell criteria at period-end,
and the Fund continued to own them.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE BOND MARKET?
A. Irrespective of efforts to shorten net duration, the Fund's valuation and
relative strength readings continue to favor longer-duration bonds.
Furthermore, with economic growth seemingly in line with sustainable Federal
Reserve targets, there appears to be no reason why rates must rise
appreciably above current levels. However, rather than attempt to predict the
unpredictable, the Fund will continue to rely on a disciplined, valuation-
based methodology in seeking out suitable opportunities to invest for maximum
total return.
8 Management Overview
[DEREK ROLLINGSON PHOTO]
Derek Rollingson
Portfolio Manager
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund initially captured modest upside but later slipped into negative
territory as inflation concerns pressured bond prices.
- - Relative performance suffered after an earnings warning issued by General
Motors produced a widespread sell-off in automotive-related debt.
DaimlerChrysler and General Motors Acceptance Corp., owned by the Fund, lost
value.
- - The Fund's continued overweighting of longer-duration bonds worked against
six-month performance when benchmark yields trended higher.
- - Farmers Exchange Capital, Federal National Mortgage Association, First
American Corp., and Time Warner Company Inc. all contributed to Fund
performance.
Management Overview 9
Management Overview (continued)
ICON Bond Fund
TOP 10 BOND HOLDINGS
March 31, 2005
<Table>
U.S. Treasury, 8.75%, 5-15-17
2.9%
Federal Home Loan Bank (FHLB), 5.375%, 8-15-18
2.7%
U.S. Treasury, 6.875%, 8-15-25
2.6%
U.S. Treasury, 7.50%, 11-15-16
2.6%
U.S. Treasury, 1.625%, 4-30-05
2.5%
Federal National Mortgage Association (FNMA), 7.125%,
1-15-30 2.2%
U.S. Treasury, 6.25%, 8-15-23
2.0%
Federal National Mortgage Association (FNMA), 6.25%,
5-15-29 2.0%
U.S. Treasury, 5.75%, 8-15-10
1.9%
Federal Home Loan Mortgage Corp. (FHLMC), 5.125%, 7-15-12
1.7%
</Table>
Percentages are based upon net assets.
10 Management Overview
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
INCEPTION SINCE
DATE 6 MONTHS* 1 YEAR 5 YEARS INCEPTION
- ---------------------------------------------------------------------------------------------
ICON Bond Fund - Class I 10/1/02 -0.03% -0.17% N/A 5.39%
- ---------------------------------------------------------------------------------------------
Lehman Brothers U.S.
Universal Index 0.71% 1.66% N/A 4.89%
- ---------------------------------------------------------------------------------------------
ICON Bond Fund - Class C 10/21/02 -0.29% -0.68% N/A 5.88%
- ---------------------------------------------------------------------------------------------
Lehman Brothers U.S.
Universal Index 0.71% 1.66% N/A 5.82%
- ---------------------------------------------------------------------------------------------
ICON Bond Fund - Class Z 5/6/04 0.22% N/A N/A 4.56%*
- ---------------------------------------------------------------------------------------------
Lehman Brothers U.S.
Universal Index 0.71% N/A N/A 5.02%*
- ---------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative index can be found on pages 2 and 3. The
Adviser has agreed to limit certain Fund expenses; without these limitations,
returns would have been lower. The limitation provisions may be terminated in
the future. Class Z shares are available only to institutional investors.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
<Table>
<Caption>
LEHMAN BROTHERS U.S. UNIVERSAL
ICON BOND FUND - CLASS I INDEX
------------------------ ------------------------------
10/1/02 10000 10000
3/31/03 10245 10385
3/31/04 11422 11083
3/31/05 11404 11266
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund's Class I shares on the Class' inception
date of 10/1/02 to a $10,000 investment made in an unmanaged securities index on
that date. Performance for the Fund's other share classes will vary due to
differences in charges and expenses. The Fund's performance in this chart and
the performance table assumes the reinvestment of dividends and capital gain
distributions but does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or on the redemption of Fund shares.
Management Overview 11
Schedule of Investments
ICON Bond Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
BONDS 79.5%
CORPORATE BONDS 44.3%
AAA RATING 1.3%
250,000 General Electric
Capital Corp.,
2.85%, 01/30/06 $ 248,210
354,000 General Electric
Capital Corp.,
7.38%, 01/19/10 393,842
300,000 Private Export
Funding, Series
B,
6.49%, 07/15/07 314,223
------------
956,275
AA3 RATING 1.4%
500,000 Bell Telephone
Co. of
Pennsylvania,
6.00%, 12/01/28 480,680
500,000 Merrill Lynch &
Co.,
5.30%, 09/30/15 496,624
------------
977,304
A3 RATING 6.6%
500,000 Boeing Co.,
8.75%, 08/15/21 675,764
500,000 Boeing Corp.,
6.88%, 11/01/06 519,442
700,000 Countrywide Home
Loan,
5.50%, 02/01/07 713,497
1,000,000 DaimlerChrysler
NA Holdings,
6.50%, 11/15/13 1,039,974
400,000 GTE Corp.,
6.94%, 04/15/28 432,623
500,000 Phillips
Petroleum,
8.75%, 05/25/10 591,689
400,000 PNC Funding
Corp.,
5.25%, 11/15/15 396,769
352,000 Textron
Financial Corp.,
2.75%, 06/01/06 344,572
------------
4,714,330
A2 RATING 8.0%
500,000 Ameritech
Capital Funding,
6.55%, 01/15/28 531,915
400,000 Archer-Daniels-
Midland Co.,
8.38%, 04/15/17 502,229
</Table>
<Table>
<Caption>
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
900,000 Bellsouth Corp.,
6.00%, 11/15/34 $ 895,486
450,000 Cincinnati
Financial Corp.,
6.90%, 05/15/28 500,169
450,000 John Hancock,
7.38%, 02/15/24* 528,522
675,000 Lowe's Cos.,
Inc.,
6.88%, 02/15/28 791,815
382,000 SBC
Communications,
Inc.,
6.25%, 03/15/11 405,354
500,000 Target Corp.,
3.38%, 03/01/08 486,892
550,000 Union Tank Car
Co.,
7.13%, 02/01/07 577,609
500,000 Wisconsin Power
& Light Co.,
7.00%, 06/15/07 526,621
------------
5,746,612
A1 RATING 4.6%
760,000 First Data
Corp.,
4.70%, 11/01/06 766,610
600,000 First Tennessee
Bank,
2.76%, 11/18/05 599,850
670,000 Household
Finance Co.,
5.88%, 02/01/09 697,176
750,000 IBM Corp.,
2.38%, 11/01/06 733,881
455,000 JP Morgan Chase
& Co.,
6.75%, 08/15/08 486,423
------------
3,283,940
BAA3 RATING 6.7%
185,000 Cardinal Health
Inc.,
4.45%, 06/30/05 185,184
1,020,000 Cigna Corp,
8.25%, 01/01/07 1,084,968
400,000 Comcast Cable
Communications,
8.88%, 05/01/17 505,051
500,000 Farmers
Insurance
Capital Notes,
7.20%, 07/15/48 524,850
</Table>
12 Schedule of Investments
<Table>
<Caption>
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
400,000 Hilton Hotels
Corp.,
7.50%, 12/15/17 $ 458,507
500,000 Motorola, Inc.,
6.50%, 11/15/28 520,584
440,000 News America
Holdings, Inc.,
7.75%, 02/01/24 511,412
500,000 Sprint Capital
Corp.,
7.13%, 01/30/06 511,850
500,000 Tyco
International
Ltd.,
6.13%, 11/01/08 524,691
------------
4,827,097
BAA2 RATING 2.0%
350,000 Capital One
Financial Corp.,
6.88%, 02/01/06 358,328
6,000 First American
Financial,
7.55%, 04/01/28 6,731
600,000 Halliburton Co.,
6.00%, 08/01/06 612,115
400,000 Phillip Morris
Cos.,
7.65%, 07/01/08 433,814
------------
1,410,988
BAA1 RATING 2.4%
600,000 General Motors
Acceptance
Corp.,
6.13%, 08/28/07 585,069
600,000 PSEG Power
Corp.,
6.95%, 06/01/12 664,056
399,000 Time Warner,
Inc.,
7.57%, 02/01/24 461,810
------------
1,710,935
BA3 RATING 2.1%
415,000 Fairfax
Financial
Holdings f,
7.75%, 04/26/12 400,475
350,000 Georgia-Pacific
Corp.,
7.38%, 12/01/25 365,750
240,000 Georgia-Pacific
Corp.,
8.88%, 05/15/31 289,200
426,000 Qwest Corp.,
6.13%, 11/15/05 430,260
------------
1,485,685
</Table>
<Table>
<Caption>
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
BA2 RATING 1.5%
400,000 Afc Capital
Trust I,
8.21%, 02/03/27 $ 424,898
580,000 Avnet, Inc.,
8.00%, 11/15/06 609,000
------------
1,033,898
BA1 RATING 0.5%
350,000 Royal Caribbean
Cruises f,
6.75%,
03/15/08 f 363,563
------------
B3 RATING 3.9%
990,000 Curative Health
Services,
10.75%, 05/01/11 814,274
500,000 Marsh
Supermarkets,
Inc.,
8.88%, 08/01/07 497,500
500,000 Nortel Networks,
Ltd.,
6.13%, 02/15/06 501,250
829,000 Owens Illinois
Inc,
8.10%, 05/15/07 858,015
200,000 Primus Telecomm
Group,
8.00%, 01/15/14 144,000
------------
2,815,039
B2 RATING 2.3%
250,000 Mediacom
Broadband Llc,
11.00%, 07/15/13 267,500
400,000 Providian
Financial Corp.,
3.25%, 08/15/05 399,500
500,000 Tembec
Industries,
Inc.,
8.63%, 06/30/09 482,500
500,000 United Rentals
NA, Inc.,
7.00%, 02/15/14 457,500
------------
1,607,000
B1 RATING 1.0%
670,000 CSC Holdings,
Inc.,
7.25%, 07/15/08 686,750
------------
TOTAL CORPORATE BONDS 31,619,416
</Table>
Schedule of Investments 13
Schedule of Investments (continued)
ICON Bond Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
U.S. GOVERNMENT AND U.S. GOVERNMENT AGENCY
BONDS 35.2%
AAA RATING 35.2%
700,000 Federal Farm
Credit Bank,
4.00%, 12/05/06 $ 700,623
200,000 Federal Farm
Credit Bank,
5.90%, 07/21/08 209,792
255,000 Federal Farm
Credit Bank,
5.90%, 08/04/08 267,570
750,000 Federal Home
Loan Bank,
3.35%, 03/03/06 747,660
1,000,000 Federal Home
Loan Bank,
3.50%, 03/21/06 997,755
1,000,000 Federal Home
Loan Bank,
4.00%, 02/12/10 979,978
450,000 Federal Home
Loan Bank,
5.88%, 02/15/11 476,790
1,850,000 Federal Home
Loan Bank,
5.38%, 08/15/18 1,911,246
750,000 Federal Home
Loan Bank,
5.50%, 02/14/20 738,138
1,150,000 Federal Home
Loan Mortgage
Corp.,
5.13%, 07/15/12 1,178,036
370,000 Federal Home
Loan Mortgage
Corp.,
5.00%, 10/29/13 365,514
270,000 Federal National
Mortgage
Association,
3.10%, 07/28/08 257,267
1,250,000 Federal National
Mortgage
Association,
6.25%, 05/15/29 1,432,914
1,250,000 Federal National
Mortgage
Association,
7.13%, 01/15/30 1,585,040
</Table>
<Table>
<Caption>
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
800,000 Tennessee Valley
Authority,
5.63%, 01/18/11 $ 840,104
1,250,000 U.S. Treasury,
5.75%, 08/15/10 1,341,406
1,000,000 U.S. Treasury,
3.88%, 02/15/13 965,273
1,500,000 U.S. Treasury,
7.50%, 11/15/16 1,880,625
1,500,000 U.S. Treasury,
8.75%, 05/15/17 2,061,153
1,250,000 U.S. Treasury,
6.25%, 08/15/23 1,455,420
1,500,000 U.S. Treasury,
6.88%, 08/15/25 1,882,442
1,000,000 U.S. Treasury,
5.25%, 11/15/28 1,051,680
1,750,000 U.S. Treasury,
1.63%, 04/30/05 1,748,359
------------
25,074,785
------------
TOTAL U.S. GOVERNMENT AND U.S.
GOVERNMENT AGENCY BONDS 25,074,785
------------
TOTAL BONDS (COST $56,403,978) 56,694,201
SHORT-TERM INVESTMENTS 19.5%
VARIABLE RATE DEMAND NOTE 0.3%
$ 190,888 American Family
Demand Note,
2.4663%# 190,888
------------
U.S. GOVERNMENT AGENCIES 15.0%
10,700,000 Federal Home
Loan Bank,
2.25%, 04/01/05 10,700,000
------------
COMMERCIAL PAPER 4.2%
500,000 Ford Motor
Credit Co.,
3.19%,
07/22/05(fv) 495,033
500,000 Hertz Corp.,
2.75%, 04/25/05 499,084
500,000 Hertz Corp.,
3.04%, 04/28/05 498,860
500,000 Natexis US
Financial Co.,
2.97%,
06/29/05(fv) 496,335
</Table>
14 Schedule of Investments
<Table>
<Caption>
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
500,000 Zions Bancorp.,
2.98%,
06/02/05(fv) $ 497,434
500,000 Zions Bancorp.,
2.94%,
06/23/05(fv) 496,617
------------
2,983,363
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $13,874,251) 13,874,251
------------
TOTAL INVESTMENTS (COST
$70,278,229) 99.0% 70,568,452
OTHER ASSETS LESS LIABILITIES
1.0% 701,027
------------
NET ASSETS 100.0% $ 71,269,479
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates. The
rates listed are as of March 31, 2005.
f Foreign security
* Security was acquired pursuant to Rule 144A of the Securities Act of 1933 and
may be deemed to be restricted for resale.
fv Security was fair valued at March 31, 2005.
Dates shown on securities are the due dates of the obligation.
Schedule of Investments 15
Management Overview
ICON Core Equity Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 98.4%
Top 10 Equity Holdings 14.5%
Number of Stocks 108
Short-Term Investments 1.0%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
CIGNA Corp. 1.7%
Yellow Roadway Corp. 1.6%
Texas Instruments, Inc. 1.5%
Labor Ready, Inc. 1.5%
America Movil S.A. de C.V. 1.4%
Burlington Northern Santa Fe Corp. 1.4%
Reebok International Ltd. 1.4%
Quiksilver, Inc. 1.4%
Norfolk Southern Corp. 1.3%
Aetna, Inc. 1.3%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. For the six months ended March 31, 2005, the ICON Core Equity Fund returned
8.37% for Class I shares, 7.90% for Class C shares, and 8.52% for Class Z
shares, outperforming the 7.45% return of the S&P 1500 Index, the Fund's
benchmark, over the same period. Total returns for other periods as of March
31, 2005 appear on page 20.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. Despite a turbulent investment environment lacking clear, sustained industry
leadership, the Fund's strong tilt toward the most economically sensitive
sectors such as Industrials and Information Technology enabled it to
outperform its benchmark during a broad year-end rally and across the entire
six-month period. As the cyclical theme weakened during the first quarter of
2005, the Fund was repositioned to more defensive-oriented industries, which
assumed market leadership. Toward the end of the period, this positioning was
favorable, but relative to its index, the Fund lost ground.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. The period was marked by extreme swings in the broad market. Concerns over
rising oil prices dominated the environment for much of the period, even as
the broad equity market rallied in conjunction with the year-end cyclical
theme. During the year-end rally, investors appeared to set aside their fears
of higher inflation and slowing economic growth, and instead focused on
strong corporate earnings and sound underlying fundamentals.
By mid-December, however, the tone of the market had changed dramatically, as
crude oil futures began to rise sharply followed in early February
16 Management Overview
[ROBERT STRAUS, CMT PHOTO]
Robert Straus, CMT
Portfolio Manager
[J.C. WALLER, III PHOTO]
J.C. Waller, III
Portfolio Manager
[DEREK ROLLINGSON PHOTO]
Derek Rollingson
Portfolio Manager
by a sudden jump in 10-year Treasury yields. This convergence of events
rekindled inflation concerns while raising fears that a more aggressive
stance toward monetary tightening might restrict economic growth. As the
cyclically led rally subsided amid these distractions, investors braced for
disappointing quarterly earnings, sending stocks into a late-period decline.
Against this backdrop, investors sought refuge in more defensive areas of the
market, yet remained prone to fear-based selling.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. The cyclical bent of the Fund's leading industry contributors highlights the
strength of this positioning. The railroads, communications equipment,
trucking, commodity chemicals, IT consulting & services, and managed health
care industries contributed positively to overall Fund performance.
Specific stocks that enhanced Fund performance included IT services provider
Cognizant Technology Solutions Corp. and telecom equipment maker Comtech
Telecommunications Corp., both of which benefited from better-than-expected
quarterly earnings. Elsewhere, container manufacturer Owens-Illinois profited
from higher-than-forecast operating income and widening margins resulting
from efforts to focus on core glass operations.
In contrast, principal industry detractors included insurance brokers,
building products, steel, specialty chemicals, and health care equipment. At
the same time, the Fund's lack of exposure to the integrated oil & gas
industry generated the largest negative impact on a relative basis.
Measurable individual detractors included insurance brokerage AON Corp.,
which slid when it agreed to a settlement stemming from the New York State
Attorney General's investigation into insurance industry practices. Managed
health care group Coventry Health Care Inc. retreated when it announced the
proposed acquisition of First Health Group. Both of these stocks were sold
when their relative strength declined. Meanwhile, building products
manufacturer Griffon Corp. also hurt Fund performance, having posted lower
operating results on continued increases in raw material costs, but it had
not reached our sell criteria by period-end.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE DOMESTIC EQUITY MARKET?
A. The late-period sell-off appears to be fear-driven and our methodology
indicates that stocks are currently trading at a discount to estimated fair
value. Ultimately, we anticipate that investor concerns will give way to
strong prevailing fundamentals. However, given recent ambiguity in market
leadership, we have broadened the Fund's exposure to include a more diverse
range of industries.
Management Overview 17
Management Overview (continued)
ICON Core Equity Fund
PERFORMANCE HIGHLIGHTS
- - The Fund's strong tilt toward economically sensitive sectors for the first
three months of the period enabled it to outperform its benchmark over the
six-month period.
- - The Fund's defensive positioning during the final three months of the period
helped maintain most gains.
- - Railroads, communications equipment, trucking, commodity chemicals, IT
consulting & services and managed health care were among the Fund's leading
industry contributors, while insurance brokers, building products, steel,
specialty chemicals, and health care equipment were principal industry
detractors.
- - Specific stocks that enhanced Fund performance included Cognizant Technology
Solutions Corp., Comtech Telecommunications Corp. and Owens-Illinois.
- - Measurable individual detractors included AON Corp., Griffon Corp. and
Coventry Health Care Inc.
18 Management Overview
TOP SECTORS
March 31, 2005
<Table>
Industrials
17.5%
Financial
15.6%
Healthcare
14.9%
Consumer Discretionary
14.8%
Information Technology
13.1%
Materials
7.1%
Telecommunications & Utilities
6.1%
Leisure & Consumer Staples
4.7%
Energy
4.6%
</Table>
Percentages are based upon net assets.
Management Overview 19
Management Overview (continued)
ICON Core Equity Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
INCEPTION SINCE
DATE 6 MONTHS* 1 YEAR 5 YEARS INCEPTION
- ---------------------------------------------------------------------------------------------
ICON Core Equity Fund -
Class I 10/12/00 8.37% 8.97% N/A 8.11%
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% N/A 0.03%
- ---------------------------------------------------------------------------------------------
ICON Core Equity Fund -
Class C 11/28/00 7.90% 8.07% N/A 6.04%
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% N/A -0.26%
- ---------------------------------------------------------------------------------------------
ICON Core Equity Fund -
Class Z 5/6/04 8.52% N/A N/A 15.00%*
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% N/A N/A 8.55%*
- ---------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative index can be found on pages 2 and 3. The
Since Inception performance results for Class C shares include returns for
certain time periods that were restated as of June 8, 2004. Class Z shares are
available only to institutional investors.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE CHART]
<Table>
<Caption>
ICON CORE EQUITY FUND - CLASS I S&P 1500 INDEX
------------------------------- --------------
10/12/00 10000 10000
3/31/01 10810 8861
3/31/02 13234 9049
3/31/03 8715 6818
3/31/04 13001 9336
3/31/05 14167 10015
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund's Class I shares on the Class' inception
date of 10/12/00 to a $10,000 investment made in an unmanaged securities index
on that date. Performance for the Fund's other share classes will vary due to
differences in charges and expenses. The Fund's performance in this chart and
the performance table assumes the reinvestment of dividends and capital gain
distributions but does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or on the redemption of Fund shares.
20 Management Overview
Schedule of Investments
ICON Core Equity Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 98.4%
UNITED STATES OF AMERICA 90.2%
CONSUMER DISCRETIONARY 14.8%
APPAREL ACCESSORIES & LUXURY GOODS 2.3%
31,800 Polo Ralph Lauren
Corp. $ 1,233,840
62,800 Quiksilver,
Inc.(a) 1,823,084
------------
3,056,924
APPAREL RETAIL 5.2%
38,900 Hot Topic,
Inc.(a) 849,965
54,900 Jos. A. Bank
Clothiers,
Inc.(a) 1,608,570
60,200 Pacific Sunwear
Of California,
Inc.(a) 1,684,396
55,400 Ross Stores, Inc. 1,614,356
22,400 Urban Outfitters,
Inc.(a) 1,074,528
------------
6,831,815
FOOTWEAR 2.6%
49,600 Brown Shoe Co.,
Inc. 1,699,792
42,100 Reebok
International
Ltd. 1,865,030
------------
3,564,822
HOME IMPROVEMENT RETAIL 1.3%
31,700 The Home Depot,
Inc. 1,212,208
11,800 The Sherwin-
Williams Co. 519,082
------------
1,731,290
HOMEBUILDING 1.2%
21,300 Toll Brothers,
Inc.(a) 1,679,505
------------
MOTORCYCLE MANUFACTURERS 0.4%
9,900 Harley-Davidson,
Inc. 571,824
------------
SPECIALTY STORES 1.8%
46,800 Michaels Stores,
Inc. 1,698,840
25,800 Zale Corp.(a) 766,776
------------
2,465,616
------------
TOTAL CONSUMER DISCRETIONARY 19,901,796
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
ENERGY 3.5%
OIL & GAS EXPLORATION & PRODUCTION 2.3%
56,600 Energy Partners
Ltd.(a) $ 1,469,902
30,600 Ultra Petroleum
Corp.(a) 1,554,480
------------
3,024,382
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.2%
33,400 General Maritime
Corp.(a) 1,617,896
------------
TOTAL ENERGY 4,642,278
FINANCIAL 14.8%
ASSET MANAGEMENT & CUSTODY BANKS 2.4%
23,100 American Capital
Strategies Ltd. 725,571
28,000 Bank of New York
Co., Inc. 813,400
19,000 Investors
Financial
Services Corp. 929,290
21,400 SEI Investments
Co. 773,824
------------
3,242,085
CONSUMER FINANCE 3.2%
36,500 Americredit
Corp.(a) 855,560
15,900 Capital One
Financial Corp. 1,188,843
44,500 First Cash
Financial
Services, Inc.(a) 942,065
74,000 Providian
Financial
Corp.(a) 1,269,840
------------
4,256,308
INVESTMENT BANKING & BROKERAGE 2.3%
40,500 Investment
Technology Group,
Inc.(a) 708,750
13,000 Lehman Brothers
Holding, Inc. 1,224,080
12,200 The Bear Stearns
Cos., Inc. 1,218,780
------------
3,151,610
LIFE & HEALTH INSURANCE 1.7%
23,600 AmerUs Group Co. 1,115,100
19,900 Prudential
Financial, Inc. 1,142,260
------------
2,257,360
</Table>
Schedule of Investments 21
Schedule of Investments (continued)
ICON Core Equity Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
MULTI-LINE INSURANCE 2.8%
37,600 Allmerica
Financial
Corp.(a) $ 1,351,720
34,600 HCC Insurance
Holdings, Inc. 1,251,136
17,900 The Hartford
Financial
Services Group,
Inc. 1,227,224
------------
3,830,080
OTHER DIVERSIFIED FINANCIAL SERVICES 0.8%
24,900 Citigroup, Inc. 1,119,006
------------
PROPERTY & CASUALTY INSURANCE 1.6%
24,100 Selective
Insurance Group,
Inc. 1,114,143
26,000 Stewart
Information
Services Corp. 975,520
------------
2,089,663
------------
TOTAL FINANCIAL 19,946,112
HEALTHCARE 14.9%
HEALTH CARE EQUIPMENT 1.7%
39,000 CONMED Corp.(a) 1,174,680
22,900 Diagnostic
Products Corp. 1,106,070
------------
2,280,750
HEALTH CARE FACILITIES 2.2%
41,700 Community Health
Systems, Inc.(a) 1,455,747
30,200 Triad Hospitals,
Inc.(a) 1,513,020
------------
2,968,767
HEALTH CARE SERVICES 4.6%
39,000 Caremark Rx,
Inc.(a) 1,551,420
31,500 Laboratory Corp.
of America
Holdings(a) 1,518,300
15,100 Quest
Diagnostics, Inc. 1,587,463
39,450 Renal Care Group,
Inc.(a) 1,496,733
------------
6,153,916
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
HEALTH CARE SUPPLIES 1.1%
19,800 The Cooper Cos.,
Inc. $ 1,443,420
------------
MANAGED HEALTH CARE 5.3%
22,800 Aetna, Inc. 1,708,860
25,500 CIGNA Corp. 2,277,150
17,300 UnitedHealth
Group, Inc. 1,650,074
29,000 WellChoice,
Inc.(a) 1,545,990
------------
7,182,074
------------
TOTAL HEALTHCARE 20,028,927
INDUSTRIALS 17.5%
AEROSPACE & DEFENSE 2.4%
15,400 L-3
Communications
Holdings, Inc. 1,093,708
17,800 Lockheed Martin
Corp. 1,086,868
18,200 Northrop Grumman
Corp. 982,436
------------
3,163,012
AIRLINES 0.8%
61,000 SkyWest, Inc. 1,133,990
------------
BUILDING PRODUCTS 2.9%
32,100 ElkCorp 1,234,566
67,900 Griffon Corp.(a) 1,453,739
35,100 Masco Corp. 1,216,917
------------
3,905,222
COMMERCIAL PRINTING 0.5%
20,100 John H. Harland
Co. 690,636
------------
EMPLOYMENT SERVICES 1.5%
105,900 Labor Ready,
Inc.(a) 1,975,035
------------
INDUSTRIAL MACHINERY 2.7%
51,400 Flowserve
Corp.(a) 1,329,718
39,900 The Manitowoc Co,
Inc. 1,611,561
23,100 Watts Water
Technologies,
Inc.- Class A 753,291
------------
3,694,570
</Table>
22 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
RAILROADS 2.7%
34,700 Burlington
Northern Santa Fe
Corp. $ 1,871,371
47,000 Norfolk Southern
Corp. 1,741,350
------------
3,612,721
TRUCKING 4.0%
44,400 Arkansas Best
Corp. 1,677,432
62,250 Knight
Transportation,
Inc. 1,535,708
36,700 Yellow Roadway
Corp.(a) 2,148,417
------------
5,361,557
------------
TOTAL INDUSTRIALS 23,536,743
INFORMATION TECHNOLOGY 9.7%
COMPUTER STORAGE & PERIPHERALS 0.8%
85,100 EMC Corp.(a) 1,048,432
------------
1,048,432
ELECTRONIC EQUIPMENT MANUFACTURERS 1.9%
34,900 Amphenol Corp.-
Class A 1,292,696
25,900 Mettler-Toledo
International,
Inc.(a) 1,230,250
------------
2,522,946
INTERNET SOFTWARE & SERVICES 2.2%
51,200 Digital Insight
Corp.(a) 839,680
34,000 Digital River,
Inc.(a) 1,059,440
32,900 j2 Global
Communications,
Inc.(a) 1,128,799
------------
3,027,919
IT CONSULTING & OTHER SERVICES 1.4%
23,100 Anteon
International
Corp.(a) 899,283
21,600 Cognizant
Technology
Solutions
Corp.(a) 997,920
------------
1,897,203
SEMICONDUCTOR EQUIPMENT 0.6%
17,700 KLA-Tencor
Corp.(a) 814,377
------------
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
SEMICONDUCTORS 1.5%
78,500 Texas
Instruments, Inc. $ 2,000,965
------------
TECHNOLOGY DISTRIBUTORS 1.3%
35,700 Arrow
Electronics,
Inc.(a) 904,995
49,200 Avnet, Inc.(a) 906,264
------------
1,811,259
------------
TOTAL INFORMATION TECHNOLOGY 13,123,101
LEISURE & CONSUMER STAPLES 4.7%
FOOD DISTRIBUTORS 1.1%
40,400 Nash Finch Co. 1,534,796
------------
HOTELS, RESORTS & CRUISE LINES 0.7%
22,000 Royal Caribbean
Cruises Ltd. 983,180
------------
MOVIES & ENTERTAINMENT 0.5%
21,100 The Walt Disney
Co. 606,203
------------
RESTAURANTS 2.4%
24,900 CEC
Entertainment,
Inc.(a) 911,340
34,000 McDonald's Corp. 1,058,760
36,600 Sonic Corp.(a) 1,222,440
------------
3,192,540
------------
TOTAL LEISURE & CONSUMER
STAPLES 6,316,719
MATERIALS 5.6%
COMMODITY CHEMICALS 1.0%
96,800 Wellman, Inc. 1,399,728
------------
CONSTRUCTION MATERIALS 1.4%
13,500 Eagle Materials,
Inc. 1,092,690
14,600 Texas Industries,
Inc. 784,750
------------
1,877,440
DIVERSIFIED CHEMICALS 0.7%
14,900 Eastman Chemical
Co. 879,100
------------
METAL & GLASS CONTAINERS 0.9%
49,600 Owens-Illinois,
Inc.(a) 1,246,944
------------
SPECIALTY CHEMICALS 0.8%
59,300 RPM
International,
Inc. 1,084,004
------------
</Table>
Schedule of Investments 23
Schedule of Investments (continued)
ICON Core Equity Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
STEEL 0.8%
32,100 Steel Dynamics,
Inc. $ 1,105,845
------------
TOTAL MATERIALS 7,593,061
TELECOMMUNICATIONS & UTILITIES 4.7%
ELECTRIC UTILITIES 1.6%
24,200 FPL Group, Inc. 971,630
24,900 PNM Resources,
Inc. 664,332
40,100 TECO Energy, Inc. 628,768
------------
2,264,730
GAS UTILITIES 0.5%
21,900 Oneok, Inc. 674,958
------------
INTEGRATED TELECOMMUNICATION SERVICES 0.4%
24,200 Sprint Corp. (FON
Group) 550,550
------------
MULTI-UTILITIES & UNREGULATED POWER 1.0%
23,900 Public Service
Enterprise Group,
Inc. 1,299,921
------------
WATER UTILITIES 1.2%
61,400 American States
Water Co. 1,553,420
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 6,343,579
------------
TOTAL UNITED STATES OF AMERICA 121,432,316
AMERICAN DEPOSITARY RECEIPT 4.7%
NETHERLANDS 0.8%
FINANCIAL 0.8%
OTHER DIVERSIFIED FINANCIAL SERVICES 0.8%
35,500 Ing Groep N.V. 1,073,165
------------
TOTAL FINANCIAL 1,073,165
------------
TOTAL NETHERLANDS 1,073,165
FINLAND 0.8%
INFORMATION TECHNOLOGY 0.8%
COMMUNICATIONS EQUIPMENT 0.8%
70,800 Nokia Oyj - ADR 1,092,444
------------
TOTAL INFORMATION TECHNOLOGY 1,092,444
------------
TOTAL FINLAND 1,092,444
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
MEXICO 2.1%
TELECOMMUNICATION & UTILITIES 1.4%
WIRELESS TELECOMMUNICATION SERVICES 1.4%
37,400 America Movil
S.A. De C.V. $ 1,929,840
------------
TOTAL TELECOMMUNICATION &
UTILITIES 1,929,840
MATERIALS 0.7%
CONSTRUCTION MATERIALS 0.7%
24,330 Cemex S.A. De
C.V. 881,963
------------
TOTAL MATERIALS 881,963
------------
TOTAL MEXICO 2,811,803
SWITZERLAND 1.0%
INFORMATION TECHNOLOGY 1.0%
COMPUTER STORAGE & PERIPHERALS 1.0%
21,700 Logitech
International
S.A.(a) 1,321,096
------------
TOTAL INFORMATION TECHNOLOGY 1,321,096
------------
TOTAL SWITZERLAND 1,321,096
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 6,298,508
CANADA 1.4%
INFORMATION TECHNOLOGY 0.6%
SEMICONDUCTORS 0.6%
47,800 ATI Technologies,
Inc.(a) 825,028
------------
TOTAL INFORMATION TECHNOLOGY 825,028
MATERIALS 0.8%
COMMODITY CHEMICALS 0.8%
51,700 Methanex Corp. 1,004,531
------------
TOTAL MATERIALS 1,004,531
------------
TOTAL CANADA 1,829,559
BAHAMAS 1.1%
ENERGY 1.1%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.1%
34,200 Teekay Shipping
Corp. 1,537,290
------------
TOTAL ENERGY 1,537,290
------------
TOTAL BAHAMAS 1,537,290
</Table>
24 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
BERMUDA 1.0%
INFORMATION TECHNOLOGY 1.0%
SEMICONDUCTORS 1.0%
36,500 Marvell
Technology Group,
Ltd.(a) $ 1,399,410
------------
TOTAL INFORMATION TECHNOLOGY 1,399,410
------------
TOTAL BERMUDA 1,399,410
------------
TOTAL COMMON STOCKS (COST
$113,007,818) 132,497,083
SHORT-TERM INVESTMENTS 1.0%
VARIABLE RATE DEMAND NOTES 1.0%
$1,291,604 American Family
Demand Note,
2.4840%# 1,291,604
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,291,604) 1,291,604
------------
TOTAL INVESTMENTS 99.4% (COST
$114,299,422) 133,788,687
OTHER ASSETS LESS LIABILITIES
0.6% 757,804
------------
NET ASSETS 100.0% $134,546,491
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
Schedule of Investments 25
Management Overview
ICON Covered Call Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 101.3%
Top 10 Equity Holdings 15.0%
Number of Stocks 120
Short-Term Investments 0.4%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
Burlington Northern
Santa Fe Corp. 1.8%
CIGNA Corp. 1.8%
HCA, Inc. 1.5%
Coventry Health Care, Inc. 1.5%
American Healthways, Inc. 1.4%
Altria Group, Inc. 1.4%
Diagnostic Products Corp. 1.4%
The Hartford Financial
Services Group, Inc. 1.4%
Steel Dynamics, Inc. 1.4%
Owens-Illinois, Inc. 1.4%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. For the six months ended March 31, 2005, the ICON Covered Call Fund returned
5.19% for Class I shares, 4.72% for Class C shares, and 5.26% for Class Z
shares, underperforming the 7.45% return of its benchmark, the S&P 1500
Index, over the same period. Total returns for other periods as of March 31,
2005 appear on page 30.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. Conflicting market dynamics helped to neutralize the Fund's call writing
strategy during the reporting period and consequently worked against relative
performance. When stocks advanced, as they did in broad fashion during the
fourth quarter of 2004, the Fund was unable to keep pace as calls written
against the underlying securities restricted upside potential.
However, as stocks experienced sharp, volatile swings during the first
quarter of 2005, implied or expected volatility as measured by the CBOE
Market Volatility Index (VIX) averaged just 13.23, well below its 15-year
historical average of nearly 20. Since lower volatility expectations
typically result in lower option premiums, income levels, which were already
at near-term lows, declined further, thereby limiting the Fund's downside
cushion.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. The period was marked by extreme swings in the broad market, conditions that
are generally difficult for a covered call writing strategy. This environment
emerged in the wake of surging oil prices, which climbed from $40.71 a barrel
in early December to $55.40 a barrel by period-end. When a corresponding rise
in 10-year Treasury yields stoked pronounced fears of
26 Management Overview
[ROBERT STRAUS, CMT PHOTO]
Robert Straus, CMT
Portfolio Manager
higher inflation and slowing economic growth, investors sold shares, driving
prices sharply lower off their early-March highs.
Given historically low levels of implied volatility and call option premiums,
the Fund continued to write shorter-dated options (one to two months) rather
than lock in the relatively low call premiums offered by longer-dated options
(three to six months). By doing so, the Fund focused on exploiting the rapid
rate of decay prior to expiration, while exercising patience for an eventual
upward regression in premium levels. Although this tactic is in keeping with
our valuation-driven methodology, with premiums at historical lows, it served
to hamper Fund performance.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. From a broad sector perspective, Industrials and Healthcare were the top
contributors to positive performance, evidenced by leading market themes in
the managed health care, trucking, railroads, and homebuilding industries. On
average, managed health care led all industry contributors and was the second
most heavily weighted industry in the Fund, while trucking was the second
leading contributor and most heavily weighted industry based on value and
relative strength.
Conversely, Information Technology proved to be the principal relative
detractor at the sector level, while industry laggards included steel,
computer hardware, health care equipment, and application software. Of the
four, steel had the largest negative impact on Fund performance, having
peaked in early March, but then declining sharply through period-end on
concerns surrounding a possible economic softening. Ultimately, the steel
position was pared back due to declining relative strength.
As for top-performing companies, container manufacturer Owens-Illinois
benefited from better-than-expected operating income and widening margins.
Toll Brothers also advanced, as the upscale homebuilder experienced strong
growth in conjunction with robust new home sales. Elsewhere, railroad
operator Burlington Northern Santa Fe Corp. was successful in instituting
fuel surcharges while experiencing double-digit volume growth.
In contrast, individual performance detractors included Stratasys Inc., a
maker a rapid prototyping devices, which struggled with higher compliance and
commission costs. Life and health insurer UICI tumbled on the announcement
that the company has settled class action cases challenging its relationship
with member associations. Both of these stocks were liquidated due to
declining relative strength. Meanwhile, Steel Dynamics Inc. also lost ground
when the mini-mill steelmaker lowered earnings guidance
Management Overview 27
Management Overview (continued)
ICON Covered Call Fund
due to softening demand and rising input costs, but the Fund continued to
hold it at period-end because it did not meet our sell criteria.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE DOMESTIC EQUITY MARKET?
A. Given the fear-driven nature of the early-March sell-off, our methodology
indicates that U.S. stocks are trading at a sizable discount to proprietary
fair value estimates. We believe that investor angst over unpredictable
macroeconomic events will give way to recognition of strong prevailing
fundamentals, and stocks are poised to move toward fair value.
Accordingly, we continue to write out-of-the-money calls, sacrificing some
premium yield and downside cushion in return for increased upside potential.
Moreover, we continue to write shorter-dated options in order to maintain
flexibility should premium levels improve, making longer-dated options more
attractive.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund's investment strategy hurt relative performance, as calls written
against the underlying securities restricted upside potential in a rising
market.
- - Lower implied volatility sent option premiums to 15-year lows, limiting the
Fund's premium yield and downside cushion.
- - Late-period declines turned steel into the largest industry detractor, while
managed health care led all industry contributors.
- - Top-performing holdings included Owens-Illinois, Toll Brothers and Burlington
Northern Santa Fe Corp.
- - Among the stocks that detracted from Fund performance were Stratasys Inc.,
Steel Dynamics Inc. and UICI.
The CBOE Market Volatility Index is a measure of expected volatility calculated
as 100 times the square root of the expected 30-day variance of the S&P 500
Index rate of return.
28 Management Overview
TOP SECTORS
March 31, 2005
<Table>
Industrials
18.0%
Healthcare
15.7%
Consumer Discretionary
15.6%
Financial
11.9%
Information Technology
10.7%
Leisure & Consumer Staples
8.0%
Materials
7.6%
Telecommunications & Utilities
7.1%
Energy
6.7%
</Table>
Percentages are based upon net assets.
Management Overview 29
Management Overview (continued)
ICON Covered Call Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
INCEPTION SINCE
DATE 6 MONTHS* 1 YEAR 5 YEARS INCEPTION
- ---------------------------------------------------------------------------------------------
ICON Covered Call Fund -
Class I 10/1/02 5.19% 4.48% N/A 15.79%
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% N/A 18.73%
- ---------------------------------------------------------------------------------------------
ICON Covered Call Fund -
Class C 11/21/02 4.72% 3.69% N/A 12.38%
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% N/A 14.42%
- ---------------------------------------------------------------------------------------------
ICON Covered Call Fund -
Class Z 5/6/04 5.26% N/A N/A 8.62%*
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% N/A N/A 8.55%*
- ---------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative index can be found on pages 2 and 3. The
Adviser has agreed to limit certain Fund expenses; without these limitations,
returns would have been lower. The limitation provisions may be terminated in
the future. Class Z shares are available only to institutional investors.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON COVERED CALL FUND - CLASS I S&P 1500 INDEX
-------------------------------- --------------
10/1/02 10000 10000
3/31/03 10050 10450
3/31/04 13799 14308
3/31/05 14416 15349
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund's Class I shares on the Class' inception
date of 10/1/02 to a $10,000 investment made in an unmanaged securities index on
that date. Performance for the Fund's other share classes will vary due to
differences in charges and expenses. The Fund's performance in this chart and
the performance table assumes the reinvestment of dividends and capital gain
distributions but does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or on the redemption of Fund shares.
30 Management Overview
Schedule of Investments
ICON Covered Call Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 101.3%
UNITED STATES OF AMERICA 97.7%
CONSUMER DISCRETIONARY 15.6%
APPAREL ACCESSORIES & LUXURY GOODS 3.0%
9,400 Polo Ralph Lauren
Corp.(x) $ 364,720
21,300 Quiksilver,
Inc.(a)(x) 618,339
10,500 V.F. Corp.(x) 620,970
------------
1,604,029
APPAREL RETAIL 4.8%
7,800 Abercrombie & Fitch
Co.(x) 446,472
30,100 Hot Topic,
Inc.(a)(x) 657,685
14,500 Pacific Sunwear of
California,
Inc.(a)(x) 405,710
23,500 Ross Stores, Inc.(x) 684,790
12,800 The Finish Line,
Inc.(x) 296,320
------------
2,490,977
COMPUTER & ELECTRONICS RETAIL 0.4%
4,400 Best Buy Co.,
Inc.(x) 237,644
------------
FOOTWEAR 1.4%
2,200 NIKE, Inc. - Class
B(x) 183,282
7,600 Timberland Co. -
Class A(a)(x) 539,068
------------
722,350
HOME IMPROVEMENT RETAIL 3.1%
8,500 Lowe's Cos., Inc.(x) 485,265
17,600 The Home Depot,
Inc.(x) 673,024
10,300 The Sherwin-Williams
Co.(x) 453,097
------------
1,611,386
HOMEBUILDING 1.0%
6,900 Toll Brothers,
Inc.(a)(x) 544,065
------------
MOTORCYCLE MANUFACTURERS 0.7%
6,500 Harley-Davidson,
Inc.(x) 375,440
------------
SPECIALTY STORES 1.2%
12,800 Michael's Stores,
Inc.(x) 464,640
3,600 O'Reilly Automotive,
Inc.(a)(x) 178,308
------------
642,948
------------
TOTAL CONSUMER DISCRETIONARY 8,228,839
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
ENERGY 5.2%
OIL & GAS EXPLORATION & PRODUCTION 1.8%
3,500 Newfield Exploration
Co.(a)(x) $ 259,910
14,000 Ultra Petroleum
Corp.(a)(x) 711,200
------------
971,110
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 3.4%
4,900 Ashland, Inc.(x) 330,603
6,800 General Maritime
Corp.(a)(x) 329,392
25,300 OMI Corp.(x) 484,495
9,800 Overseas Shipholding
Group, Inc.(x) 616,518
------------
1,761,008
------------
TOTAL ENERGY 2,732,118
FINANCIAL 11.9%
CONSUMER FINANCE 2.3%
8,500 Capital One
Financial Corp.(x) 635,545
23,800 Providian Financial
Corp.(a)(x) 408,408
3,100 SLM Corp.(x) 154,504
------------
1,198,457
INVESTMENT BANKING & BROKERAGE 2.6%
15,700 A.G. Edwards,
Inc.(x) 703,360
3,200 Lehman Brothers
Holding, Inc.(x) 301,312
3,500 The Goldman Sachs
Group, Inc.(x) 384,965
------------
1,389,637
LIFE & HEALTH INSURANCE 0.6%
5,500 Prudential
Financial, Inc.(x) 315,700
------------
MULTI-LINE INSURANCE 2.6%
8,800 Loews Corp.(x) 647,152
10,800 The Hartford
Financial Services
Group, Inc.(x) 740,448
------------
1,387,600
PROPERTY & CASUALTY INSURANCE 2.8%
9,200 ACE Ltd.(x) 379,684
9,100 The Allstate
Corp.(x) 491,946
13,400 Selective Insurance
Group, Inc.(x) 619,482
------------
1,491,112
</Table>
Schedule of Investments 31
Schedule of Investments (continued)
ICON Covered Call Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
REINSURANCE 1.0%
6,200 Everest Re Group
Ltd.(x) $ 527,682
------------
TOTAL FINANCIAL 6,310,188
HEALTHCARE 15.7%
HEALTH CARE DISTRIBUTORS 0.4%
4,400 Patterson Cos.,
Inc.(a)(x) 219,780
------------
HEALTH CARE EQUIPMENT 1.4%
15,500 Diagnostic Products
Corp.(x) 748,650
------------
HEALTH CARE FACILITIES 4.6%
13,500 Community Health
Systems, Inc.(a)(x) 471,285
15,000 HCA, Inc.(x) 803,550
10,400 Lifepoint Hospitals,
Inc.(a)(x) 455,936
5,100 United Surgical
Partners
International,
Inc.(a)(x) 233,427
9,400 Universal Health
Services, Inc.(x) 492,560
------------
2,456,758
HEALTH CARE SERVICES 3.5%
23,000 American Healthways,
Inc.(a)(x) 759,460
13,200 Laboratory Corp. of
America
Holdings(a)(x) 636,240
4,300 Quest Diagnostics,
Inc.(x) 452,059
------------
1,847,759
MANAGED HEALTH CARE 5.8%
7,800 Aetna, Inc.(x) 584,610
11,500 AMERIGROUP
Corp.(a)(x) 420,440
10,400 CIGNA Corp.(x) 928,720
11,750 Coventry Health
Care, Inc.(a)(x) 800,645
9,500 Health Net
Inc.(a)(x) 310,745
------------
3,045,160
------------
TOTAL HEALTHCARE 8,318,107
INDUSTRIALS 18.0%
AEROSPACE & DEFENSE 0.5%
4,000 Alliant Techsystems,
Inc.(a)(x) 285,800
------------
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
AIRLINES 1.2%
12,600 Alaska Air Group,
Inc.(a)(x) $ 370,944
15,400 SkyWest, Inc.(x) 286,286
------------
657,230
BUILDING PRODUCTS 1.7%
15,800 Lennox
International,
Inc.(x) 346,336
14,000 NCI Building
Systems, Inc.(a)(x) 540,400
------------
886,736
CONSTRUCTION & ENGINEERING 1.4%
10,800 Granite
Construction,
Inc.(x) 283,716
9,200 Jacobs Engineering
Group, Inc.(a)(x) 477,664
------------
761,380
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
2.0%
7,500 Oshkosh Truck
Corp.(x) 614,925
5,000 The Toro Co.(x) 442,500
------------
1,057,425
EMPLOYMENT SERVICES 0.6%
17,600 Labor Ready,
Inc.(a)(x) 328,240
------------
ENVIRONMENTAL SERVICES 0.8%
12,000 Waste Connections,
Inc.(a)(x) 417,000
------------
INDUSTRIAL MACHINERY 0.7%
4,600 Ingersoll Rand Co.
Ltd. - Class A(x) 366,390
------------
RAILROADS 3.5%
18,000 Burlington Northern
Santa Fe Corp.(x) 970,740
12,000 CSX Corp.(x) 499,800
10,300 Norfolk Southern
Corp.(x) 381,615
------------
1,852,155
TRADING COMPANIES & DISTRIBUTORS 1.1%
9,700 W.W. Grainger,
Inc.(x) 604,019
------------
</Table>
32 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
TRUCKING 4.5%
9,000 Arkansas Best
Corp.(x) $ 340,020
14,000 CNF, Inc.(x) 655,060
11,700 J.B. Hunt Transport
Services, Inc.(x) 512,109
20,650 Knight
Transportation,
Inc.(x) 509,436
8,800 Swift Transportation
Co., Inc.(a)(x) 194,832
2,600 Yellow Roadway
Corp.(a)(x) 152,204
------------
2,363,661
------------
TOTAL INDUSTRIALS 9,580,036
INFORMATION TECHNOLOGY 10.0%
APPLICATION SOFTWARE 0.2%
4,900 SS&C Technologies,
Inc.(x) 111,720
------------
COMPUTER STORAGE & PERIPHERALS 1.5%
29,000 Overland Storage,
Inc.(a)(x) 425,720
12,300 SanDisk Corp.(a)(x) 341,940
------------
767,660
COMPUTER HARDWARE 1.5%
6,600 Avid Technology,
Inc.(a)(x) 357,192
11,700 Dell, Inc.(a)(x) 449,514
------------
806,706
ELECTRONIC EQUIPMENT MANUFACTURERS 0.6%
8,300 Amphenol Corp. -
Class A(x) 307,432
------------
HOME ENTERTAINMENT SOFTWARE 0.5%
7,400 Take-Two Interactive
Software, Inc.(a)(x) 289,340
------------
INTERNET SOFTWARE & SERVICES 2.0%
33,700 Digital Insight
Corp.(a)(x) 552,680
15,400 j2 Global
Communications,
Inc.(a)(x) 528,374
------------
1,081,054
IT CONSULTING & OTHER SERVICES 0.9%
6,200 Anteon International
Corp.(a)(x) 241,366
4,900 Cognizant Technology
Solutions
Corp.(a)(x) 226,380
------------
467,746
SEMICONDUCTOR EQUIPMENT 0.8%
8,800 KLA-Tencor
Corp.(a)(x) 404,888
------------
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
SEMICONDUCTORS 2.0%
8,000 International
Rectifier
Corp.(a)(x) $ 364,000
11,100 OmniVision
Technologies,
Inc.(a)(x) 168,165
20,500 Texas Instruments,
Inc.(x) 522,545
------------
1,054,710
------------
TOTAL INFORMATION TECHNOLOGY 5,291,256
LEISURE & CONSUMER STAPLES 8.0%
AGRICULTURE PRODUCTS 0.9%
19,200 Corn Products
International,
Inc.(x) 499,008
------------
DISTILLERS & VINTNERS 1.0%
10,400 Constellation
Brands, Inc.(a)(x) 549,848
------------
FOOD DISTRIBUTORS 0.9%
13,000 Nash Finch Co.(x) 493,870
------------
PHOTOGRAPHIC PRODUCTS 0.4%
6,200 Eastman Kodak Co.(x) 201,810
------------
RESTAURANTS 2.7%
12,900 CBRL Group, Inc.(x) 532,770
6,700 Rare Hospitality
International,
Inc.(a)(x) 206,896
18,300 Sonic Corp.(a)(x) 611,220
------------
1,350,886
TOBACCO 2.1%
11,600 Altria Group,
Inc.(x) 758,524
1,100 Reynolds American,
Inc.(x) 88,649
5,600 UST, Inc.(x) 289,520
------------
1,136,693
------------
TOTAL LEISURE & CONSUMER
STAPLES 4,232,115
MATERIALS 7.6%
ALUMINUM 0.6%
12,900 Aleris
International,
Inc.(a)(x) 321,855
------------
CONSTRUCTION MATERIALS 2.4%
8,000 Eagle Materials,
Inc.(x) 647,520
15,200 Headwaters,
Inc.(a)(x) 498,864
2,500 Lafarge North
America, Inc.(x) 146,125
------------
1,292,509
DIVERSIFIED CHEMICALS 0.8%
5,800 PPG Industries,
Inc.(x) 414,816
------------
</Table>
Schedule of Investments 33
Schedule of Investments (continued)
ICON Covered Call Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
FERTILIZERS & AGRICULTURAL CHEMICALS 0.0%
200 Scotts Miracle-Gro
Company(a) $ 14,046
------------
METAL & GLASS CONTAINERS 1.4%
28,600 Owens-Illinois,
Inc.(a)(x) 719,004
------------
STEEL 2.4%
9,000 Nucor Corp.(x) 518,040
21,400 Steel Dynamics,
Inc.(x) 737,230
------------
1,255,270
------------
TOTAL MATERIALS 4,017,500
TELECOMMUNICATIONS & UTILITIES 5.7%
ELECTRIC UTILITIES 1.5%
8,100 DTE Energy Co.(x) 368,388
7,600 PPL Corp.(x) 410,324
------------
778,712
GAS UTILITIES 0.9%
7,700 Questar Corp.(x) 456,225
------------
MULTI-UTILITIES & UNREGULATED POWER 2.3%
12,600 Public Service
Enterprise Group,
Inc.(x) 685,314
14,000 Sempra Energy(x) 557,760
------------
1,243,074
WIRELESS TELECOMMUNICATION SERVICES 1.0%
4,900 NII Holdings, Inc. -
Class B(a)(x) 281,750
4,000 SpectraSite,
Inc.(a)(x) 231,880
------------
513,630
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 2,991,641
------------
TOTAL UNITED STATES OF AMERICA 51,701,800
AMERICAN DEPOSITARY RECEIPT 1.4%
MEXICO 1.4%
TELECOMMUNICATIONS & UTILITIES 1.4%
WIRELESS TELECOMMUNICATION SERVICES 1.4%
13,900 America Movil S.A.
de C.V.(x) 717,240
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 717,240
------------
TOTAL MEXICO 717,240
------------
TOTAL AMERICAN
DEPOSITARY RECEIPT 717,240
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
BAHAMAS 0.7%
ENERGY 0.7%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 0.7%
8,300 Teekay Shipping
Corp.(x) $ 373,085
------------
TOTAL ENERGY 373,085
------------
TOTAL BAHAMAS 373,085
BERMUDA 0.5%
ENERGY 0.5%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 0.5%
5,700 Nordic American
Tanker Shipping
Ltd.(x) 270,465
------------
TOTAL ENERGY 270,465
------------
TOTAL BERMUDA 270,465
BRITISH VIRGIN ISLANDS 0.7%
INFORMATION TECHNOLOGY 0.7%
ELECTRONIC EQUIPMENT MANUFACTURERS 0.7%
14,000 Nam Tai Electronics,
Inc.(x) 372,400
------------
TOTAL INFORMATION TECHNOLOGY 372,400
------------
TOTAL BRITISH VIRGIN ISLANDS 372,400
CANADA 0.3%
ENERGY 0.3%
INTEGRATED OIL & GAS 0.3%
3,500 Suncor Energy,
Inc.(x) 140,735
------------
TOTAL ENERGY 140,735
------------
TOTAL CANADA 140,735
------------
TOTAL COMMON STOCKS
(COST $47,229,469) 53,575,725
</Table>
34 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
SHORT-TERM INVESTMENTS 0.4%
VARIABLE RATE DEMAND NOTES 0.4%
234,055 American Family
Demand Note,
2.4663%(#) $ 234,055
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $234,055) 234,055
------------
TOTAL INVESTMENTS 101.7%
(COST $47,463,524) 53,809,780
LIABILITIES LESS
OTHER ASSETS (1.7)% (906,169)
------------
NET ASSETS 100.0% $ 52,903,611
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005.
x Portion or all of this security is pledged as collateral for call options
written.
Schedule of Investments 35
Schedule of Written Options
ICON Covered Call Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
A.G. Edwards, Inc.
Expiration April
2005 Exercise
Price $45.00 157 $ 10,205
Abercrombie & Fitch
Co.
Expiration April
2005 Exercise
Price $55.00 51 15,173
ACE Ltd.
Expiration May 2005
Exercise Price
$45.00 92 3,220
Aetna, Inc.
Expiration April
2005 Exercise
Price $75.00 55 9,488
Expiration April
2005 Exercise
Price $77.50 12 810
Expiration May 2005
Exercise Price
$75.00 11 3,630
Alaska Air Group,
Inc.
Expiration April
2005 Exercise
Price $30.00 126 9,135
Aleris International,
Inc.
Expiration May 2005
Exercise Price
$30.00 129 4,838
Alliant Techsystems,
Inc.
Expiration May 2005
Exercise Price
$75.00 40 3,300
The Allstate Corp.
Expiration May 2005
Exercise Price
$55.00 86 7,955
Altria Group, Inc.
Expiration April
2005 Exercise
Price $65.00 81 9,518
America Movil S.A. de
C.V.
Expiration April
2005 Exercise
Price $55.00 118 1,475
Expiration May 2005
Exercise Price
$55.00 21 1,785
</Table>
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
American Healthways,
Inc.
Expiration April
2005 Exercise
Price $35.00 207 $ 3,623
Expiration May 2005
Exercise Price
$35.00 23 1,898
AMERIGROUP Corp.
Expiration May 2005
Exercise Price
$35.00 58 15,660
Amphenol Corp.
Expiration May 2005
Exercise Price
$40.00 45 2,363
Anteon International
Corp.
Expiration April
2005 Exercise
Price $40.00 56 2,240
Arkansas Best Corp.
Expiration April
2005 Exercise
Price $40.00 76 4,180
Expiration April
2005 Exercise
Price $45.00 14 315
Ashland, Inc.
Expiration April
2005 Exercise
Price $70.00 49 3,920
Avid Technology, Inc.
Expiration April
2005 Exercise
Price $55.00 50 6,250
Expiration May 2005
Exercise Price
$55.00 10 2,700
Best Buy Co., Inc.
Expiration April
2005 Exercise
Price $55.00 44 5,170
Burlington Northern
Santa Fe Corp.
Expiration April
2005 Exercise
Price $50.00 117 47,970
Capital One Financial
Corp.
Expiration April
2005 Exercise
Price $75.00 85 9,563
</Table>
36 Schedule of Written Options
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
CBRL Group, Inc.
Expiration April
2005 Exercise
Price $45.00 129 $ 1,613
CIGNA Corp.
Expiration April
2005 Exercise
Price $90.00 104 15,860
CNF, Inc.
Expiration April
2005 Exercise
Price $47.50 28 1,890
Expiration April
2005 Exercise
Price $50.00 112 1,400
Cognizant Technology
Solutions Corp.
Expiration April
2005 Exercise
Price $45.00 34 7,395
Community Health
Systems, Inc.
Expiration May 2005
Exercise Price
$35.00 135 17,550
Constellation Brands,
Inc.
Expiration April
2005 Exercise
Price $50.00 36 11,070
Expiration April
2005 Exercise
Price $55.00 52 1,430
Expiration May 2005
Exercise Price
$55.00 16 1,520
Corn Products
International, Inc.
Expiration April
2005 Exercise
Price $27.50 192 1,920
Coventry Health Care,
Inc.
Expiration April
2005 Exercise
Price $65.00 64 22,720
Expiration April
2005 Exercise
Price $70.00 53 3,048
CSX Corp.
Expiration May 2005
Exercise Price
$45.00 120 3,300
</Table>
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
Dell, Inc.
Expiration April
2005 Exercise
Price $40.00 117 $ 1,463
Diagnostic Products
Corp.
Expiration April
2005 Exercise
Price $50.00 108 5,130
Expiration May 2005
Exercise Price
$50.00 47 6,698
Digital Insight Corp.
Expiration April
2005 Exercise
Price $17.50 303 3,788
Expiration May 2005
Exercise Price
$17.50 34 1,530
DTE Energy Co.
Expiration April
2005 Exercise
Price $45.00 49 4,410
Eagle Materials, Inc.
Expiration April
2005 Exercise
Price $85.00 68 6,970
Expiration May 2005
Exercise Price
$85.00 12 3,000
Eastman Kodak Co.
Expiration April
2005 Exercise
Price $32.50 62 4,495
Everest Re Group Ltd.
Expiration April
2005 Exercise
Price $90.00 40 500
Expiration May 2005
Exercise Price
$90.00 22 1,595
General Maritime
Corp.
Expiration April
2005 Exercise
Price $50.00 68 4,930
The Goldman Sachs
Group, Inc.
Expiration May 2005
Exercise Price
$115.00 35 4,200
</Table>
Schedule of Written Options 37
Schedule of Written Options (continued)
ICON Covered Call Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
Granite Construction,
Inc.
Expiration April
2005 Exercise
Price $25.00 41 $ 5,843
Harley-Davidson, Inc.
Expiration April
2005 Exercise
Price $60.00 49 2,573
Expiration April
2005 Exercise
Price $65.00 16 80
The Hartford
Financial Services
Group, Inc.
Expiration April
2005 Exercise
Price $70.00 65 3,738
Expiration May 2005
Exercise Price
$70.00 27 4,320
HCA, Inc.
Expiration April
2005 Exercise
Price $47.50 127 78,740
Expiration May 2005
Exercise Price
$55.00 23 2,760
Headwaters, Inc.
Expiration May 2005
Exercise Price
$35.00 152 15,200
Health Net, Inc.
Expiration May 2005
Exercise Price
$35.00 95 6,413
The Home Depot, Inc.
Expiration April
2005 Exercise
Price $40.00 176 1,760
Hot Topic, Inc.
Expiration May 2005
Exercise Price
$22.50 301 32,358
Ingersoll-Rand Co.
Ltd. - Class A
Expiration May 2005
Exercise Price
$90.00 46 1,725
International
Rectifier Corp.
Expiration April
2005 Exercise
Price $45.00 56 8,400
</Table>
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
j2 Global
Communications,
Inc.
Expiration April
2005 Exercise
Price $35.00 46 $ 4,600
Expiration April
2005 Exercise
Price $40.00 108 810
Jacobs Engineering
Group, Inc.
Expiration April
2005 Exercise
Price $55.00 60 750
Expiration May 2005
Exercise Price
$55.00 32 2,480
J.B. Hunt Transport
Services, Inc.
Expiration April
2005 Exercise
Price $45.00 35 2,363
Expiration May 2005
Exercise Price
$50.00 82 3,485
KLA-Tencor Corp.
Expiration April
2005 Exercise
Price $47.50 71 3,905
Knight
Transportation,
Inc.
Expiration April
2005 Exercise
Price $25.00 75 3,563
Expiration May 2005
Exercise Price
$25.00 72 6,660
Labor Ready, Inc.
Expiration May 2005
Exercise Price
$20.00 150 9,375
Laboratory Corp. of
America Holdings
Expiration April
2005 Exercise
Price $45.00 40 13,200
Expiration April
2005 Exercise
Price $50.00 59 738
Expiration May 2005
Exercise Price
$47.50 33 6,518
Lafarge North
America, Inc.
Expiration April
2005 Exercise
Price $60.00 16 760
</Table>
38 Schedule of Written Options
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
Lehman Brothers
Holdings, Inc.
Expiration April
2005 Exercise
Price $95.00 32 $ 4,000
Lennox International,
Inc.
Expiration April
2005 Exercise
Price $22.50 111 2,498
Expiration May 2005
Exercise Price
$22.50 47 2,703
Lifepoint Hospitals,
Inc.
Expiration May 2005
Exercise Price
$40.00 68 31,280
Expiration May 2005
Exercise Price
$45.00 36 5,220
Loews Corp.
Expiration April
2005 Exercise
Price $75.00 77 3,273
Expiration May 2005
Exercise Price
$75.00 11 1,430
Lowe's Cos., Inc.
Expiration May 2005
Exercise Price
$60.00 85 4,675
Michael's Stores,
Inc.
Expiration May 2005
Exercise Price
$35.00 77 16,940
Nam Tai Electronics,
Inc.
Expiration May 2005
Exercise Price
$30.00 140 7,000
Nash Finch Co.
Expiration April
2005 Exercise
Price $35.00 65 20,150
Expiration April
2005 Exercise
Price $40.00 39 1,268
Expiration May 2005
Exercise Price
$40.00 26 2,990
</Table>
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
NCI Building Systems,
Inc.
Expiration April
2005 Exercise
Price $40.00 112 $ 6,440
Expiration May 2005
Exercise Price
$40.00 28 3,710
Newfield Exploration
Co.
Expiration April
2005 Exercise
Price $75.00 26 3,965
Expiration May 2005
Exercise Price
$75.00 9 2,813
NII Holdings, Inc.
Expiration April
2005 Exercise
Price $60.00 39 1,950
Expiration May 2005
Exercise Price
$60.00 10 1,475
NIKE, Inc.
Expiration April
2005 Exercise
Price $85.00 15 1,013
Expiration May 2005
Exercise Price
$85.00 4 690
Nordic American
Tanker Shipping
Ltd.
Expiration April
2005 Exercise
Price $50.00 57 3,420
Norfolk Southern
Corp.
Expiration May 2005
Exercise Price
$40.00 103 2,060
Nucor Corp.
Expiration April
2005 Exercise
Price $65.00 77 1,925
Expiration May 2005
Exercise Price
$65.00 13 1,788
OMI Corp.
Expiration April
2005 Exercise
Price $20.00 215 5,913
Expiration May 2005
Exercise Price
$20.00 38 3,420
</Table>
Schedule of Written Options 39
Schedule of Written Options (continued)
ICON Covered Call Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
Omnivision
Technologies
Expiration April
2005 Exercise
Price $17.50 111 $ 833
O'Reilly Automotive,
Inc.
Expiration May 2005
Exercise Price
$50.00 27 4,118
Oshkosh Truck Corp.
Expiration April
2005 Exercise
Price $80.00 41 12,300
Overland Storage,
Inc.
Expiration April
2005 Exercise
Price $15.00 232 8,120
Overseas Shipholding
Group, Inc.
Expiration April
2005 Exercise
Price $65.00 78 7,605
Expiration May 2005
Exercise Price
$65.00 20 5,000
Owens-Illinois, Inc.
Expiration May 2005
Exercise Price
$25.00 186 25,575
Pacific Sunwear of
California
Expiration April
2005 Exercise
Price $30.00 145 2,538
Patterson Cos., Inc.
Expiration April
2005 Exercise
Price $50.00 40 3,800
Polo Ralph Lauren
Corp.
Expiration April
2005 Exercise
Price $40.00 47 1,645
Expiration May 2005
Exercise Price
$40.00 47 4,230
PPG Industries, Inc.
Expiration May 2005
Exercise Price
$75.00 58 3,045
</Table>
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
PPL Corp.
Expiration April
2005 Exercise
Price $55.00 61 $ 1,220
Expiration May 2005
Exercise Price
$55.00 15 1,200
Providian Financial
Corp.
Expiration May 2005
Exercise Price
$17.50 119 7,140
Prudential Financial,
Inc.
Expiration April
2005 Exercise
Price $60.00 47 588
Expiration May 2005
Exercise Price
$60.00 8 660
Public Service
Enterprise Group,
Inc.
Expiration April
2005 Exercise
Price $55.00 100 3,750
Expiration May 2005
Exercise Price
$55.00 26 2,600
Quest Diagnostics,
Inc.
Expiration April
2005 Exercise
Price $100.00 15 8,025
Expiration May 2005
Exercise Price
$105.00 19 6,175
Questar Corp.
Expiration April
2005 Exercise
Price $55.00 77 33,880
Quiksilver, Inc.
Expiration April
2005 Exercise
Price $30.00 149 6,333
Expiration April
2005 Exercise
Price $35.00 64 800
Rare Hospitality
International, Inc.
Expiration April
2005 Exercise
Price $30.00 57 6,413
</Table>
40 Schedule of Written Options
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
Reynolds American,
Inc.
Expiration May 2005
Exercise Price
$80.00 8 $ 2,520
Ross Stores, Inc.
Expiration May 2005
Exercise Price
$30.00 235 21,738
SanDisk Corp.
Expiration April
2005 Exercise
Price $27.50 37 4,348
Expiration April
2005 Exercise
Price $30.00 62 1,860
Expiration May 2005
Exercise Price
$30.00 24 3,240
Selective Insurance
Group, Inc.
Expiration April
2005 Exercise
Price $45.00 60 9,450
Expiration April
2005 Exercise
Price $50.00 23 288
Sempra Energy
Expiration April
2005 Exercise
Price $40.00 21 1,103
Expiration May 2005
Exercise Price
$40.00 70 8,225
SkyWest, Inc.
Expiration May 2005
Exercise Price
$20.00 154 4,620
SLM Corp.
Expiration April
2005 Exercise
Price $50.00 31 3,023
Sonic Corp.
Expiration April
2005 Exercise
Price $35.00 146 2,920
Expiration May 2005
Exercise Price
$35.00 37 2,960
SpectraSite, Inc.
Expiration April
2005 Exercise
Price $60.00 24 1,380
Expiration May 2005
Exercise Price
$60.00 16 2,760
</Table>
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
SS&C Technologies,
Inc.
Expiration May 2005
Exercise Price
$25.00 40 $ 2,500
Steel Dynamics, Inc.
Expiration April
2005 Exercise
Price $40.00 214 5,350
Suncor Energy, Inc.
Expiration April
2005 Exercise
Price $40.00 35 4,550
Swift Transportation
Co., Inc.
Expiration April
2005 Exercise
Price $22.50 24 1,200
Expiration May 2005
Exercise Price
$25.00 64 2,240
Take-Two Interactive
Software, Inc.
Expiration April
2005 Exercise
Price $40.00 14 1,085
Expiration April
2005 Exercise
Price $42.50 52 780
Expiration May 2005
Exercise Price
$42.50 8 700
Teekay Shipping Corp.
Expiration April
2005 Exercise
Price $50.00 83 1,245
Texas Instruments,
Inc.
Expiration May 2005
Exercise Price
$27.50 205 9,738
The Finish Line
Expiration May 2005
Exercise Price
$22.50 102 14,790
The Sherwin-Williams
Co.
Expiration May 2005
Exercise Price
$45.00 67 5,863
Timberland Co.
Expiration April
2005 Exercise
Price $75.00 76 1,710
</Table>
Schedule of Written Options 41
Schedule of Written Options (continued)
ICON Covered Call Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
Toll Brothers, Inc.
Expiration April
2005 Exercise
Price $85.00 69 $ 2,243
The Toro Co.
Expiration May 2005
Exercise Price
$95.00 50 5,875
Ultra Petroleum Corp.
Expiration April
2005 Exercise
Price $55.00 28 1,260
Expiration May 2005
Exercise Price
$55.00 1,008 20,720
United Surgical
Partners
International, Inc.
Expiration April
2005 Exercise
Price $45.00 31 4,728
Expiration May 2005
Exercise Price
$47.50 20 2,850
Universal Health
Services, Inc.
Expiration April
2005 Exercise
Price $50.00 61 16,318
Expiration May 2005
Exercise Price
$55.00 33 3,053
</Table>
<Table>
<Caption>
UNDERLYING SECURITY/ CONTRACTS
EXPIRATION DATE/ (100 SHARES MARKET
EXERCISE PRICE PER CONTRACT) VALUE
- -------------------------------------------------
UST, Inc.
Expiration April
2005 Exercise
Price $55.00 31 $ 465
Expiration May 2005
Exercise Price
$55.00 25 938
V.F. Corp.
Expiration April
2005 Exercise
Price $60.00 105 6,038
W.W. Grainger, Inc.
Expiration April
2005 Exercise
Price $60.00 39 10,043
Waste Connections,
Inc.
Expiration May 2005
Exercise Price
$35.00 78 6,825
Yellow Roadway Corp.
Expiration April
2005 Exercise
Price $60.00 26 2,145
Total Options Written 12,791 1,056,190
(Premiums received $1,030,299)
</Table>
The accompanying notes are an integral part of the financial statements.
42 Schedule of Written Options
Management Overview
ICON Equity Income Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities
Common Stocks 76.9%
Preferred Stocks 2.9%
Convertible Preferred Stocks 5.1%
Top 10 Equity Holdings 14.0%
Number of Stocks 107
Options Purchased
Call Options 0.3%
Number of Securities on Which Options Have Been Purchased 4
Bonds & Short-Term Investments
Convertible Corporate Bonds 2.0%
Corporate Bonds 8.1%
Short-Term Investments 0.6%
Number of Bonds 21
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
Canadian Pacific Railway Ltd. 1.7%
The Allstate Corporation 1.6%
Burlington Northern Santa Fe Corp. 1.6%
CIGNA Corp. 1.6%
Apogee Enterprises, Inc. 1.3%
Caterpillar, Inc. 1.3%
Altria Group, Inc. 1.3%
Smith & Nephew plc 1.2%
UST, Inc. 1.2%
DaimlerChrysler AG, 6.5%, 11/15/2013 1.2%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. For the six months ended March 31, 2005, the ICON Equity Income Fund returned
6.17% for Class I shares, 5.71% for Class C shares, and 6.30% for Class Z
shares, underperforming the 7.45% return of its benchmark, the S&P 1500
Index, over the same period. Total returns for other periods as of March 31,
2005 appear on page 47.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. After capturing solid upside alongside a broad year-end rally, the Fund
surrendered a portion of its gains during the first quarter of 2005, as
weakness in the fixed-income markets led to relative underperformance. Behind
this weakness were external factors ranging from inflation fears to slowing
economic growth, both of which were related to the rising cost of oil.
Higher interest rates, however, also posed a significant challenge. With 10-
year Treasury Note yields drifting as low as 3.99% before peaking at 4.64% in
mid-March, bond prices declined as interest rates rose. Additionally,
automotive-related debt lost value when an earnings warning issued by General
Motors (which the Fund did not own) produced a widespread sell-off. Because
the Fund held a sizable position in corporate debt during the period,
including several automotive-related holdings, falling bond prices worked
against relative performance. Consequently, the corporate debt position was
reduced.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying equity and debt
securities we believe are underpriced regardless of their location on the
conventional style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Management Overview 43
Management Overview (continued)
ICON Equity Income Fund
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Conflicting markets characterized the investment environment during the six-
month period. Initially, stocks rose in a broad advance as investors warmed
to easing energy prices, positive job growth and decisive election-year
results. Moreover, steady increases in gross domestic product and the
measured pace of monetary tightening suggested that the economy was on solid
footing.
However, conditions worsened during the first quarter when sudden surges in
oil prices and interest rates fueled fears that higher inflation would lead
to a softening economy. Although pricing power and inflation remained in
check, investors nonetheless retreated as cyclical industries lost ground,
while defensive groups maintained traction amid subsequent downturns.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Despite the pullback in cyclical industries, economically sensitive sectors
such as Industrials and Materials comprised large sector weights relative the
benchmark and proved to be the leading contributors to Fund performance.
Within the Industrials sector, the railroads industry was an industry
standout, whereas construction materials and commodity chemicals were top
gainers in the Materials sector.
Although the largest sector weight when the period began, positions in the
Financial area were steadily reduced due to their lack of relative strength.
Industry weakness within the consumer finance group, which experienced a
severe reversal of leadership during the period, resulted in the sector
finishing the period as a net detractor. Steel also saw its leadership
position evaporate when the industry suffered a fear-based sell-off as the
period came to a close, and finished up as a net detractor to performance.
As for the Fund's leading individual contributors, railroad operator
Burlington Northern Santa Fe Corp. was successful in instituting fuel
surcharges while also achieving double-digit volume growth. Meanwhile,
polyester fiber and PET resin producer Wellman Inc. benefited from pricing
improvements and subsequent margin recovery. Smokeless tobacco marketer UST
Inc. also gapped higher as the company continued to benefit from favorable
industry trends.
Conversely, consumer finance company Cash America International Inc. slid
when Federal regulators unveiled new guidelines governing the secured non-
recourse loan business. Multi-line insurer American International Group Inc.
also struggled when it was named in the New York State Attorney General's
investigation into insurance industry practices. Likewise, insurance
brokerage AON Corp. fell when it agreed to settle a lawsuit stemming from the
New
44 Management Overview
[DEREK ROLLINGSON PHOTO]
Derek Rollingson
Portfolio Manager
York State investigation. All three were ultimately liquidated due to
declining relative strength.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE DOMESTIC MARKETS?
A. While ICON does not utilize market capitalization as a research metric,
compelling valuation and relative strength readings in selected industries
have led us to increase the Fund's exposure to large-cap names. Generally,
large-cap companies, particularly those featuring more defensive tendencies,
distribute attractive dividend income, and their attractive valuations made
them suited for inclusion in the Fund.
It is likely that the Fund will continue to decrease its weighting in
convertible instruments, whose value is tied to yields, while increasing its
pure equity exposure. With economic growth seemingly in line with Federal
Reserve targets, we see no reason why yields must rise appreciably above
current levels, but do anticipate that the broader equity market will resume
its upward advance over time.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - After capturing solid upside in a broad year-end rally, the Fund surrendered
a portion of its gains as its fixed-income allocation led to relative
underperformance.
- - The Fund's fixed-income holdings lost value during the period when bond
prices declined as interest rates rose.
- - Despite a pullback in cyclical industries, Industrials and Materials
comprised large sector weights relative to the benchmark and were the leading
contributors to Fund performance.
- - Burlington Northern Santa Fe Corp., Wellman Inc. and UST Inc. were among the
Fund's leading individual contributors.
- - Stocks that detracted from Fund performance included Cash America
International Inc., American International Group Inc. and AON Corp.
Management Overview 45
Management Overview (continued)
ICON Equity Income Fund
SECTOR COMPOSITION
March 31, 2005
<Table>
Financial
13.9%
Industrials
13.7%
Healthcare
13.5%
Leisure & Consumer Staples
11.4%
Information Technology
10.3%
Telecommunications & Utilities
9.8%
Materials
9.1%
Consumer Discretionary
8.9%
Energy
4.7%
</Table>
Percentages are based upon common stock positions and net assets.
46 Management Overview
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
INCEPTION SINCE
DATE 6 MONTHS* 1 YEAR 5 YEARS INCEPTION
- ---------------------------------------------------------------------------------------------
ICON Equity Income Fund - Class I 10/1/02 6.17% 6.07% N/A 20.26%
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% N/A 18.73%
- ---------------------------------------------------------------------------------------------
ICON Equity Income Fund - Class C 11/8/02 5.71% 5.21% N/A 17.20%
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% N/A 14.82%
- ---------------------------------------------------------------------------------------------
ICON Equity Income Fund - Class Z 5/10/04 6.30% N/A N/A 14.93%*
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% N/A N/A 11.44%*
- ---------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative index can be found on pages 2 and 3. The
Adviser has agreed to limit certain Fund expenses; without these limitations,
returns would have been lower. The limitation provisions may be terminated in
the future. Class Z shares are available only to institutional investors.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON EQUITY INCOME FUND - CLASS
I S&P 1500 INDEX
------------------------------- --------------
10/1/02 10000 10000
3/31/03 10091 10450
3/31/04 14940 14308
3/31/05 15847 15349
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund's Class I shares on the Class' inception
date of 10/1/02 to a $10,000 investment made in an unmanaged securities index on
that date. Performance for the Fund's other share classes will vary due to
differences in charges and expenses. The Fund's performance in this chart and
the performance table assumes the reinvestment of dividends and capital gain
distributions but does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or on the redemption of Fund shares.
Management Overview 47
Schedule of Investments
ICON Equity Income Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 76.9%
UNITED STATES OF AMERICA 65.8%
CONSUMER DISCRETIONARY 5.3%
APPAREL ACCESSORIES & LUXURY GOODS 1.0%
22,600 V.F. Corp. $ 1,336,564
APPAREL RETAIL 0.9%
50,400 Limited Brands,
Inc. 1,224,720
FOOTWEAR 1.0%
41,000 Brown Shoe Co.,
Inc. 1,405,070
HOME IMPROVEMENT RETAIL 0.9%
28,100 The Sherwin-
Williams Co. 1,236,119
HOMEBUILDING 1.5%
19,700 Hovnanian
Enterprises,
Inc. - Class A(a) 1,004,700
18,300 Ryland Group, Inc. 1,134,966
------------
2,139,666
------------
TOTAL CONSUMER DISCRETIONARY 7,342,139
ENERGY 2.0%
INTEGRATED OIL & GAS 0.7%
9,400 ConocoPhillips 1,013,696
OIL & GAS EQUIPMENT & SERVICES 0.7%
26,500 Tidewater, Inc. 1,029,790
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 0.6%
10,600 Ashland, Inc. 715,182
------------
TOTAL ENERGY 2,758,668
FINANCIAL 8.7%
ASSET MANAGEMENT & CUSTODY BANKS 0.7%
30,000 American Capital
Strategies Ltd. 942,300
CONSUMER FINANCE 0.9%
69,200 Providian
Financial Corp.(a) 1,187,472
DIVERSIFIED BANKS 0.9%
29,694 Bank of America
Corp. 1,309,505
INVESTMENT BANKING & BROKERAGE 1.0%
29,400 A.G. Edwards, Inc. 1,317,120
LIFE & HEALTH INSURANCE 0.4%
12,000 Lincoln National
Corp. 541,680
</Table>
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
MULTI-LINE INSURANCE 1.8%
30,300 American Financial
Group, Inc. $ 933,240
21,000 Loews Corp. 1,544,340
------------
2,477,580
PROPERTY & CASUALTY INSURANCE 2.4%
33,500 First American
Corp. 1,103,490
40,700 The Allstate Corp. 2,200,242
------------
3,303,732
REAL ESTATE INVESTMENT TRUSTS 0.6%
25,600 General Growth
Properties, Inc. 872,960
------------
TOTAL FINANCIAL 11,952,349
HEALTHCARE 9.5%
HEALTH CARE DISTRIBUTORS 0.9%
43,500 Owens & Minor,
Inc. 1,181,025
HEALTH CARE EQUIPMENT 1.5%
20,500 Diagnostic
Products Corp. 990,150
52,900 PerkinElmer, Inc. 1,091,327
------------
2,081,477
HEALTH CARE FACILITIES 1.0%
26,700 HCA, Inc. 1,430,319
HEALTH CARE SERVICES 1.8%
30,100 Caremark Rx,
Inc.(a) 1,197,378
45,700 Computer Programs
& Systems, Inc. 1,283,256
------------
2,480,634
MANAGED HEALTH CARE 2.4%
24,000 CIGNA Corp. 2,143,200
22,500 WellChoice,
Inc.(a) 1,199,475
------------
3,342,675
PHARMACEUTICALS 1.9%
24,000 Abbott
Laboratories 1,118,880
11,200 Bristol-Myers
Squibb Co. 285,152
18,200 Johnson & Johnson,
Inc. 1,222,312
------------
2,626,344
------------
TOTAL HEALTHCARE 13,142,474
INDUSTRIALS 11.6%
AEROSPACE & DEFENSE 0.9%
32,000 Raytheon Co. 1,238,400
</Table>
48 Schedule of Investments
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
BUILDING PRODUCTS 3.3%
128,700 Apogee
Enterprises, Inc. $ 1,837,836
58,000 Lennox
International,
Inc. 1,271,360
45,200 Masco Corp. 1,567,084
------------
4,676,280
COMMERCIAL PRINTING 0.9%
38,000 R.R. Donnelley &
Sons Co. 1,201,560
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
1.3%
19,300 Caterpillar, Inc. 1,764,792
ELECTRICAL COMPONENTS & EQUIPMENT 0.8%
15,400 Cooper Industries,
Ltd. 1,101,408
INDUSTRIAL CONGLOMERATES 1.0%
18,300 Textron, Inc. 1,365,546
INDUSTRIAL MACHINERY 0.9%
21,300 Harsco Corp. 1,269,693
MARINE 0.4%
14,000 Alexander &
Baldwin, Inc. 576,800
RAILROADS 1.6%
40,500 Burlington
Northern Santa Fe
Corp. 2,184,165
TRADING COMPANIES & DISTRIBUTORS 0.5%
25,200 Applied Industrial
Technology, Inc. 685,440
------------
TOTAL INDUSTRIALS 16,064,084
INFORMATION TECHNOLOGY 6.4%
APPLICATION SOFTWARE 0.4%
27,100 Jack Henry &
Associates, Inc. 487,529
COMMUNICATIONS EQUIPMENT 1.1%
107,500 SpectraLink Corp. 1,517,900
COMPUTER HARDWARE 1.9%
23,100 Diebold, Inc. 1,267,035
65,000 Hewlett-Packard
Co. 1,426,100
------------
2,693,135
COMPUTER STORAGE & PERIPHERALS 0.8%
74,900 Overland Storage,
Inc.(a) 1,099,532
</Table>
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
INTERNET SOFTWARE & SERVICES 1.6%
59,100 Digital Insight
Corp.(a) $ 969,240
36,600 j2 Global
Communications,
Inc.(a) 1,255,746
------------
2,224,986
SEMICONDUCTORS 0.6%
32,300 Texas Instruments,
Inc. 823,327
------------
TOTAL INFORMATION TECHNOLOGY 8,846,409
LEISURE & CONSUMER STAPLES 7.8%
FOOD DISTRIBUTORS 0.7%
24,500 Nash Finch Co. 930,755
LEISURE PRODUCTS 0.6%
68,600 Callaway Golf Co. 878,080
PACKAGED FOODS & MEATS 0.7%
19,900 General Mills,
Inc. 978,085
PHOTOGRAPHIC PRODUCTS 0.8%
33,200 Eastman Kodak Co. 1,080,660
RESTAURANTS 2.5%
31,900 CBRL Group, Inc. 1,317,470
32,100 McDonald's Corp. 999,594
26,000 Outback
Steakhouse, Inc. 1,190,540
------------
3,507,604
TOBACCO 2.5%
26,800 Altria Group, Inc. 1,752,452
32,300 UST, Inc. 1,669,910
------------
3,422,362
------------
TOTAL LEISURE & CONSUMER
STAPLES 10,797,546
MATERIALS 6.4%
CONSTRUCTION MATERIALS 1.7%
16,800 Eagle Materials,
Inc. 1,359,792
18,200 Vulcan Materials
Company 1,034,306
------------
2,394,098
DIVERSIFIED CHEMICALS 2.4%
27,800 Dow Chemical Co. 1,385,830
18,000 Eastman Chemical
Co. 1,062,000
13,500 PPG Industries,
Inc. 965,520
------------
3,413,350
</Table>
Schedule of Investments 49
Schedule of Investments (continued)
ICON Equity Income Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
SPECIALTY CHEMICALS 0.8%
56,700 RPM International,
Inc. $ 1,036,476
STEEL 1.5%
27,200 Steel Dynamics,
Inc. 937,040
45,600 Steel
Technologies, Inc. 1,093,944
------------
2,030,984
------------
TOTAL MATERIALS 8,874,908
TELECOMMUNICATIONS & UTILITIES 8.1%
ELECTRIC UTILITIES 2.9%
31,600 Alliant Energy
Corp 846,248
109,300 CenterPoint
Energy, Inc. 1,314,879
83,000 TECO Energy, Inc. 1,301,440
6,465 TXU Corp. 514,808
------------
3,977,375
GAS UTILITIES 1.3%
24,200 Atmos Energy Corp. 653,400
48,600 NiSource, Inc. 1,107,594
------------
1,760,994
INTEGRATED TELECOMMUNICATION SERVICES 0.9%
53,232 Sprint Corp. (FON
Group) 1,211,028
MULTI-UTILITIES & UNREGULATED POWER 1.2%
39,200 Duke Energy Corp. 1,097,992
23,600 Energy East Corp. 618,792
------------
1,716,784
WATER UTILITIES 1.8%
45,000 American States
Water Co. 1,138,500
40,000 California Water
Service Group 1,334,800
------------
2,473,300
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 11,139,481
------------
TOTAL UNITED STATES OF AMERICA 90,918,058
AMERICAN DEPOSITARY RECEIPT 6.8%
BRAZIL 1.4%
MATERIALS 0.7%
PAPER PRODUCTS 0.7%
28,700 Aracruz Celulose
S.A. 1,027,460
------------
TOTAL MATERIALS 1,027,460
</Table>
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
TELECOMMUNICATIONS & UTILITIES 0.7%
WIRELESS TELECOMMUNICATION SERVICES 0.7%
34,000 Telemig Celular
Participacoes S. A $ 984,300
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 984,300
------------
TOTAL BRAZIL 2,011,760
FINLAND 0.9%
INFORMATION TECHNOLOGY 0.9%
COMMUNICATIONS EQUIPMENT 0.9%
82,600 Nokia Oyj 1,274,518
------------
TOTAL INFORMATION TECHNOLOGY 1,274,518
------------
TOTAL FINLAND 1,274,518
MEXICO 0.9%
MATERIALS 0.9%
CONSTRUCTION MATERIALS 0.9%
32,234 Cemex S.A. de C.V. 1,168,483
------------
TOTAL MATERIALS 1,168,483
------------
TOTAL MEXICO 1,168,483
NETHERLANDS 0.9%
FINANCIAL 0.9%
OTHER DIVERSIFIED FINANCIAL SERVICES 0.9%
40,709 ING Groep N.V. 1,230,633
------------
TOTAL FINANCIAL 1,230,633
------------
TOTAL NETHERLANDS 1,230,633
SWITZERLAND 0.8%
INFORMATION TECHNOLOGY 0.8%
COMPUTER STORAGE & PERIPHERALS 0.8%
17,300 Logitech
International
S.A.(a) 1,053,224
------------
TOTAL INFORMATION TECHNOLOGY 1,053,224
------------
TOTAL SWITZERLAND 1,053,224
UNITED KINGDOM 1.9%
ENERGY 0.7%
INTEGRATED OIL & GAS 0.7%
16,700 Shell Transport &
Trading Co. plc 907,812
------------
TOTAL ENERGY 907,812
</Table>
50 Schedule of Investments
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
HEALTHCARE 1.2%
HEALTH CARE EQUIPMENT 1.2%
36,000 Smith & Nephew plc $ 1,692,720
------------
TOTAL HEALTH CARE 1,692,720
------------
TOTAL UNITED KINGDOM 2,600,532
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 9,339,150
BERMUDA 0.8%
ENERGY 0.8%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 0.8%
24,300 Nordic American
Tanker Shipping
Ltd. 1,153,035
------------
TOTAL ENERGY 1,153,035
------------
TOTAL BERMUDA 1,153,035
CANADA 2.8%
INDUSTRIALS 1.7%
RAILROADS 1.7%
64,000 Canadian Pacific
Railway Ltd. 2,302,080
------------
TOTAL INDUSTRIALS 2,302,080
MATERIALS 1.1%
COMMODITY CHEMICALS 1.1%
78,400 Methanex Corp. 1,523,312
------------
TOTAL MATERIALS 1,523,312
------------
TOTAL CANADA 3,825,392
UNITED KINGDOM 0.7%
ENERGY 0.7%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 0.7%
50,400 Top Tankers, Inc. 934,920
------------
TOTAL ENERGY 934,920
------------
TOTAL UNITED KINGDOM 934,920
------------
TOTAL COMMON STOCKS (COST
$93,074,867) 106,170,555
PREFERRED STOCKS 2.9%
CONSUMER DISCRETIONARY 0.3%
HOUSEHOLD APPLIANCES 0.3%
15,000 Maytag Corp.,
7.875%, 8-1-31 375,750
------------
TOTAL CONSUMER DISCRETIONARY 375,750
</Table>
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
FINANCIAL 1.1%
BUSINESS SERVICES 0.6%
800,000 AFC Capital Trust
I, 8.207%, 2/3/27 $ 849,796
CONSUMER FINANCE 0.3%
16,000 MBNA Corp.,
7.500%, Series A 405,760
PROPERTY & CASUALTY INSURANCE 0.2%
12,200 AMBAC Financial
Group, Inc.,
7.000%, 10-17-51 312,198
------------
TOTAL FINANCIAL 1,567,754
HEALTHCARE 0.3%
MANAGED HEALTH CARE 0.3%
18,200 Aetna, Inc.,
8.500%, 8-31-41 475,020
------------
TOTAL HEALTHCARE 475,020
INFORMATION TECHNOLOGY 0.5%
OFFICE ELECTRONICS 0.5%
18,100 Xerox Capital LLC,
6.540%, 2-28-06,
Series A(a) 648,352
------------
TOTAL INFORMATION TECHNOLOGY 648,352
LEISURE & CONSUMER STAPLES 0.7%
MOVIES & ENTERTAINMENT 0.7%
38,000 The Walt Disney
Co., 7.000%,
11-1-31 980,400
------------
TOTAL LEISURE & CONSUMER
STAPLES 980,400
------------
TOTAL PREFERRED STOCKS
(COST $4,076,257) 4,047,276
CONVERTIBLE PREFERRED STOCKS 5.1%
UNITED STATES OF AMERICA 4.8%
CONSUMER DISCRETIONARY 1.0%
SPECIALTY STORES 1.0%
23,200 Toys "R" Us, Inc.,
6.250%, 8-16-05 1,427,960
------------
TOTAL CONSUMER DISCRETIONARY 1,427,960
ENERGY 0.4%
ELECTRIC INTEGRATED 0.4%
14,400 TXU Corp., 8.750%,
11-16-05, Series C 531,072
------------
TOTAL ENERGY 531,072
</Table>
Schedule of Investments 51
Schedule of Investments (continued)
ICON Equity Income Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
HEALTHCARE 0.3%
HEALTH CARE DISTRIBUTORS 0.3%
9,000 Omnicare, Inc.,
4.000%, 6-15-33 $ 464,130
------------
TOTAL HEALTHCARE 464,130
INDUSTRIALS 0.4%
AEROSPACE & DEFENSE 0.4%
4,000 Northrop Grumman
Corp., 7.000%,
4-4-21 520,000
------------
TOTAL INDUSTRIALS 520,000
INFORMATION TECHNOLOGY 0.8%
TECHNOLOGY DISTRIBUTORS 0.8%
17,000 Pioneer Standard
Fin. Trust,
6.750%, 3-31-28 1,081,625
------------
TOTAL INFORMATION TECHNOLOGY 1,081,625
LEISURE & CONSUMER STAPLES 1.2%
DISTILLERS & VINTNERS 1.2%
39,000 Constellation
Brands, Inc.,
5.750%, 9-1-06 1,575,990
------------
TOTAL LEISURE & CONSUMER
STAPLES 1,575,990
TELECOMMUNICATIONS & UTILITIES 0.7%
ELECTRIC UTILITIES 0.2%
16,200 Ameren Corp.,
9.750%, 5-15-05 434,484
GAS UTILITIES 0.2%
4,300 KeySpan Corp.,
8.750%, 5-16-05 217,537
MULTI-UTILITIES & UNREGULATED POWER 0.3%
10,500 Sempra Energy,
8.500%, 5-17-05 347,130
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 999,151
------------
TOTAL UNITED STATES OF AMERICA 6,599,928
</Table>
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
AMERICAN DEPOSITARY RECEIPT 0.3%
TELECOMMUNICATIONS & UTILITIES 0.3%
INTEGRATED TELECOMMUNICATION SERVICES 0.3%
8,600 Philippine Long
Distance Telephone
Co., 3.500%,
12-31-49, Series
III $ 421,400
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 421,400
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 421,400
------------
TOTAL CONVERTIBLE PREFERRED
STOCKS (COST $5,614,448) 7,021,328
CALL OPTIONS PURCHASED
(100 SHARES PER CONTRACT) 0.3%
CONSUMER DISCRETIONARY 0.0%
HOME IMPROVEMENT RETAIL 0.0%
123 Lowe's Companies,
Inc. Expiration
January 2007,
Exercise price
$65.00 60,270
FINANCIAL 0.1%
INVESTMENT BANKING & BROKERAGE 0.1%
125 Morgan Stanley
Expiration January
2007, Exercise
Price $60.00 88,750
LIFE & HEALTH INSURANCE 0.0%
125 Prudential
Financial, Inc.
Expiration January
2006, Exercise
price $60.00 46,875
------------
TOTAL CONSUMER DISCRETIONARY 135,625
HEALTHCARE 0.2%
MANAGED HEALTH CARE 0.2%
84 Aetna, Inc.
Expiration January
2006, Exercise
Price $60.00 157,080
------------
TOTAL HEALTHCARE 157,080
------------
TOTAL CALL OPTIONS PURCHASED
(COST $222,095) 352,975
</Table>
52 Schedule of Investments
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
CONVERTIBLE CORPORATE BONDS 2.0%
HEALTHCARE 1.0%
PHARMACEUTICALS 1.0%
1,500,000 King
Pharmaceuticals,
Inc., 2.7500%,
11/15/21 $ 1,423,125
------------
TOTAL HEALTHCARE 1,423,125
INFORMATION TECHNOLOGY 0.9%
COMPUTER STORAGE & PERIPHERALS 0.1%
177,000 Adaptec, Inc.,
3.000%, 3/5/07 177,000
DATA PROCESSING & OUTSOURCED SERVICES 0.3%
458,000 The BISYS Group,
Inc., 4.000%,
3/15/06 452,848
SEMICONDUCTORS 0.5%
600,000 International
Rectifier Corp.,
4.250%, 7/15/07 597,750
------------
TOTAL INFORMATION TECHNOLOGY 1,227,598
LEISURE & CONSUMER STAPLES 0.1%
PHOTOGRAPHIC PRODUCTS 0.1%
110,000 Eastman Kodak Co.,
3.375%, 10/15/33 133,650
------------
TOTAL LEISURE & CONSUMER
STAPLES 133,650
------------
TOTAL CONVERTIBLE CORPORATE
BONDS (COST $2,807,363) 2,784,373
CORPORATE BONDS 8.1%
CONSUMER DISCRETIONARY 2.3%
AUTOMOBILE MANUFACTURERS 1.2%
1,600,000 DaimlerChrysler
AG, 6.500%,
11/15/13 1,663,960
HOME IMPROVEMENT RETAIL 0.7%
800,000 Lowe's Companies,
Inc., 8.250%,
6/1/10 929,465
RENTAL & LEASING 0.4%
575,000 United Rentals NA,
Inc., 7.750%,
11/15/13 557,750
------------
TOTAL CONSUMER DISCRETIONARY 3,151,175
</Table>
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
ENERGY 0.1%
GAS DISTRIBUTION 0.1%
111,000 SEMCO Energy,
Inc., 8.000%,
6/30/16 $ 114,186
------------
TOTAL ENERGY 114,186
FINANCIAL 2.8%
CONSUMER FINANCE 0.9%
1,230,000 Providian
Financial Corp.,
3.250%, 8/15/05 1,228,462
CONSUMER LOANS 0.9%
1,288,000 Household Finance
Corp., 4.750%,
7/15/13 1,253,946
INVESTMENT BANKING & BROKERAGE 0.5%
750,000 Morgan Stanley,
4.750%, 4/1/14 714,089
LIFE & HEALTH INSURANCE 0.5%
750,000 Prudential
Financial, Inc.,
5.750%, 7/15/33 753,060
------------
TOTAL FINANCIAL 3,949,557
HEALTHCARE 1.3%
HEALTH CARE SERVICES 0.9%
1,447,000 Curative Health
Services, Inc.,
10.750%, 5/1/11 1,190,158
MANAGED HEALTH CARE 0.4%
500,000 Aetna, Inc.,
6.970%, 8/15/36 573,136
------------
TOTAL HEALTHCARE 1,763,294
LEISURE & CONSUMER STAPLES 1.6%
BROADCASTING & CABLE TV 0.6%
750,000 Mediacom Broadband
LLC, 11.000%,
07/15/13* 802,500
HOTELS, RESORTS & CRUISE LINES 0.7%
1,000,000 Royal Caribbean
Cruises, 7.2500%,
3/15/18 1,060,000
LEISURE FACILITIES 0.1%
113,000 Bally Total
Fitness Holding
Corp., 10.500%,
7/15/11 111,305
</Table>
Schedule of Investments 53
Schedule of Investments (continued)
ICON Equity Income Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
RESTAURANTS 0.2%
225,000 McDonald's Corp.,
5.000%, 9/30/16 $ 212,935
------------
TOTAL LEISURE & CONSUMER
STAPLES 2,186,740
------------
TOTAL CORPORATE BONDS (COST
$11,334,464) 11,164,952
U.S. GOVERNMENT & U.S. GOVERNMENT AGENCY
BONDS 1.3%
AAA RATINGS 1.3%
750,000 U.S. Treasury,
8.75%, 5/15/17 1,030,577
750,000 U.S. Treasury,
5.25%, 11/15/28 788,760
------------
TOTAL AAA RATINGS 1,819,337
------------
TOTAL U.S. GOVERNMENT & U.S.
GOVERNMENT AGENCY BONDS (COST
$1,847,344) 1,819,337
</Table>
<Table>
<Caption>
SHARES, CONTRACTS OR
PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
SHORT-TERM INVESTMENTS 0.6%
VARIABLE RATE DEMAND NOTES 0.6%
889,098 American Family
Demand Note,
2.4663%# $ 889,098
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $889,098) 889,098
------------
TOTAL INVESTMENTS 97.2% (COST
$119,865,936) 134,249,894
OTHER ASSETS LESS LIABILITIES
2.8% 3,881,414
------------
NET ASSETS 100.0% $138,131,308
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates. The
rates listed are as of March 31, 2005.
* Security was acquired pursuant to Rule 144A of the Securities Act of 1933 and
may be deemed to be restricted for resale.
Dates shown on securities are due dates of the obligations.
54 Schedule of Investments
Management Overview
ICON Long/Short Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 99.6%
Top 10 Long Equity
Holdings 11.8%
Number of Long Stocks 118
Number of Short Positions 18
Short-Term Investments 0.0%
Percentages are based upon net assets.
TOP 10 LONG EQUITY HOLDINGS
March 31, 2005
Altria Group, Inc. 1.3%
The Finish Line, Inc. 1.3%
Canadian Pacific
Railway Ltd. 1.2%
Pacific Sunwear of
California, Inc. 1.2%
ElkCorp 1.2%
Aetna, Inc. 1.2%
HCA, Inc. 1.1%
UnitedHealth Group, Inc. 1.1%
Sonic Corp. 1.1%
Triad Hospitals, Inc. 1.1%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. For the six months ended March 31, 2005, the ICON Long/Short Fund returned
11.79% for Class I shares, 11.28% for Class C shares, and 11.84% for Class Z
shares, outpacing the 7.45% return of the S&P 1500 Index, the Fund's
benchmark, over the same period. Total returns for other periods as of March
31, 2005 appear on page 59.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. The Fund's valuation-driven investment approach captured meaningful upside in
conjunction with a broad year-end rally favoring economically sensitive
industries. This cyclical tilt proved conducive to Fund performance, as
heavily weighted sectors such as Industrials and Materials typically perform
best during times of economic expansion. With the economy seemingly in the
middle stages of a sustainable recovery, bargains were plentiful, helping to
bolster returns as stocks closed the gap between market and intrinsic value.
Later in the period, concerns over possible economic softening, rising
commodity costs, perceived inflationary pressures, and weak corporate profits
severely dampened investor sentiment. While cyclical industries bore the
brunt of this reversal, exposure to more defensive sectors such as Healthcare
and Leisure and Consumer Staples enabled the Fund to withstand subsequent
setbacks. Despite the volatile nature of conflicting markets, our value
discipline proved effective in keeping the Fund well ahead of its relative
benchmark during the period.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are either underpriced or overpriced regardless of their location on
the conventional style grid. Our system is not limited by restrictions on
market capitalization or investment style, and searches for potential
industry leadership wherever and whenever it may emerge. In doing so, the
Fund seeks to maximize returns by playing both sides of our valuation
methodology.
For that reason, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with improving relative strength on the long side, and declining relative
strength on the short side, we aim to capture leading industry themes poised
to outperform the broader market.
Management Overview 55
Management Overview (continued)
ICON Long/Short Fund
It is important to note that the Fund is not market neutral; the proportion
of long and short positions depends on the availability of underpriced and
overpriced industries, as well as ICON's evaluation of market conditions.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Stocks trended higher during the first half of the reporting period as easing
energy prices, positive job growth and decisive election-year results
bolstered investor confidence. Moreover, steady increases in gross domestic
product and the measured pace of monetary tightening suggested that the
economy remained on solid footing. Nevertheless, we believe there was no one
triggering event, and that upside gains were simply a natural move toward
fair value.
However, with expectations running high for 2005, stocks got off to a shaky
start, as surging commodity prices rekindled inflation fears, sending
interest rates markedly higher. As these and other distractions permeated the
market, investors succumbed to mounting selling pressure, erasing a portion
of the previous quarter's gains.
While shorting opportunities were limited during the late-year advance,
subsequent declines in relative strength provided an opening. As such, the
Fund's short exposure was increased to approximately 15% of total assets by
period-end.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. On the long side, market leadership was captured among both cyclical and
defensive industries exhibiting a strong combination of value and relative
strength. Among the leading industry contributors were homebuilding,
railroads and managed health care, all of which were overweighted relative to
the benchmark. Exposure to the Leisure and Consumer Staples sector also
served to boost returns, with food distributors and restaurants driving
industry performance.
The Fund had short positions in application software, systems software,
semiconductor equipment, casinos & gaming, and specialized finance. These
positions were initiated during the second half of the reporting period as
signs of overvaluation and declining relative strength became more evident.
Conversely, the insurance brokers group proved to be a principal detractor
amid fallout from the New York State Attorney General's investigation into
insurance industry practices. Computer hardware followed suit despite
better-than-expected showings from several industry bellwethers.
On the company level, meaningful contributors to Fund performance included
container manufacturer Owens Illinois, which benefited from
56 Management Overview
[J.C. Waller III PHOTO]
J.C. Waller, III
Portfolio Manager
higher-than-forecast operating income and widening margins, the result of
efforts to focus on core glass operations. Toll Brothers also appreciated, as
the upscale builder capitalized on a robust market for new home sales.
Meanwhile, railroad operator Burlington Northern Santa Fe Corp. was
successful in instituting fuel surcharges while achieving double-digit
growth.
In contrast, individual detractors included networking equipment supplier
UTStarcom Inc., which experienced delays in its financial reporting and
internal controls assessment. Insurance brokerage AON Corp. also encountered
negative sentiment when it agreed to settle a lawsuit stemming from the New
York State investigation. Elsewhere, rising fuel costs, which cut into
profitability, hurt Northwest Airlines, the nation's fourth largest carrier.
All three stocks were liquidated when they met our sell discipline.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE DOMESTIC EQUITY MARKET?
A. Given the increasing ambiguity in market leadership, the Fund has taken steps
to broaden its industry exposure to include defensive-oriented areas such as
Consumer Staples and Utilities. Although this move is tactical in nature, it
remains guided by our valuation and relative strength metrics, and positions
the Fund to capitalize on developing market themes once industry leadership
comes into focus. Against this backdrop, overvaluation and declining relative
strength in certain industries could lead to additional shorting
opportunities.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - Despite conflicting markets, the Fund's value discipline proved effective in
driving relative outperformance.
- - Long positions in cyclical and defensive industries such as homebuilding,
railroads and managed health care contributed to Fund performance, while
insurance brokers and computer hardware were principal industry detractors.
- - The Fund held short positions in application software, systems software,
semiconductor equipment, casinos & gaming, and specialized finance during the
period.
- - Meaningful company contributors to Fund performance included Owens-Illinois,
Toll Brothers and Burlington Northern Santa Fe Corp.
- - Among the Fund's weakest individual performers were UTStarcom Inc., AON Corp.
and Northwest Airlines.
Management Overview 57
Management Overview (continued)
ICON Long/Short Fund
SECTOR COMPOSITION
March 31, 2005
<Table>
Industrials
15.5%
Healthcare
14.6%
Financial
13.4%
Consumer Discretionary
12.5%
Leisure & Consumer Staples
11.3%
Information Technology
10.8%
Telecommunications & Utilities
8.3%
Materials
7.3%
Energy
5.9%
</Table>
Percentages are based upon long positions and net assets.
58 Management Overview
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
INCEPTION SINCE
DATE 6 MONTHS* 1 YEAR 5 YEARS INCEPTION
- ---------------------------------------------------------------------------------------------
ICON Long/Short Fund - Class I 10/1/02 11.79% 9.12% N/A 19.97%
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% N/A 18.73%
- ---------------------------------------------------------------------------------------------
ICON Long/Short Fund - Class C 10/17/02 11.28% 8.29% N/A 16.62%
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% N/A 16.79%
- ---------------------------------------------------------------------------------------------
ICON Long/Short Fund - Class Z 5/6/04 11.84% N/A N/A 11.44%*
- ---------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% N/A N/A 8.55%*
- ---------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative index can be found on pages 2 and 3. The
Adviser has agreed to limit certain Fund expenses; without these limitations,
returns would have been lower. The limitation provisions may be terminated in
the future. Class Z shares are available only to institutional investors.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON LONG/SHORT FUND - CLASS I S&P 1500 INDEX
------------------------------ --------------
10/1/02 10000 10000
3/31/03 8880 10450
3/31/04 14435 14308
3/31/05 15752 15349
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund's Class I shares on the Class' inception
date of 10/1/02 to a $10,000 investment made in an unmanaged securities index on
that date. Performance for the Fund's other share classes will vary due to
differences in charges and expenses. The Fund's performance in this chart and
the performance table assumes the reinvestment of dividends and capital gain
distributions but does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or on the redemption of Fund shares.
Management Overview 59
Schedule of Investments
ICON Long/Short Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 99.6%
UNITED STATES OF AMERICA 87.1%
CONSUMER DISCRETIONARY 12.5%
APPAREL RETAIL 4.7%
27,100 Pacific Sunwear of
California, Inc.(a) $ 758,258
22,500 Ross Stores, Inc. 655,650
33,200 The Finish Line,
Inc. 768,580
14,000 Urban Outfitters,
Inc.(a) 671,580
------------
2,854,068
DISTRIBUTORS 0.7%
10,100 Building Materials
Holding Corp. 449,248
------------
FOOTWEAR 3.2%
18,000 Brown Shoe Co., Inc. 616,860
15,000 Reebok International
Ltd. 664,500
9,500 Timberland Co. -
Class A(a) 673,835
------------
1,955,195
HOME IMPROVEMENT RETAIL 1.1%
6,600 Lowe's Cos., Inc. 376,794
6,700 The Home Depot, Inc. 256,208
------------
633,002
HOMEBUILDING 1.9%
12,300 Hovnanian
Enterprises, Inc. -
Class A(a) 627,300
9,000 Ryland Group, Inc. 558,180
------------
1,185,480
TIRES & RUBBER 0.9%
43,200 The Goodyear Tire &
Rubber Co.(a) 576,720
------------
TOTAL CONSUMER DISCRETIONARY 7,653,713
ENERGY 2.8%
OIL & GAS EXPLORATION & PRODUCTION 1.7%
14,000 Petroleum
Development Corp.(a) 527,660
10,500 Ultra Petroleum
Corp.(a) 533,400
------------
1,061,060
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.1%
33,500 OMI Corp. 641,525
------------
TOTAL ENERGY 1,702,585
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
FINANCIAL 13.4%
CONSUMER FINANCE 3.4%
21,200 Cash America
International, Inc. $ 464,916
21,400 First Cash Financial
Services, Inc.(a) 453,038
36,900 Providian Financial
Corp.(a) 633,204
21,400 World Acceptance
Corp.(a) 546,128
------------
2,097,286
DIVERSIFIED BANKS 1.4%
9,700 Wachovia Corp. 493,827
6,100 Wells Fargo & Co. 364,780
------------
858,607
INVESTMENT BANKING & BROKERAGE 4.3%
15,300 A.G. Edwards, Inc. 685,440
7,300 Lehman Brothers
Holding, Inc. 687,368
10,000 Morgan Stanley 572,500
6,100 The Goldman Sachs
Group, Inc. 670,939
------------
2,616,247
LIFE & HEALTH INSURANCE 1.1%
7,500 Protective Life
Corp. 294,750
4,300 StanCorp Financial
Group, Inc. 364,554
------------
659,304
MULTI-LINE INSURANCE 1.8%
15,400 HCC Insurance
Holdings, Inc. 556,864
8,300 The Hartford
Financial Services
Group, Inc. 569,048
------------
1,125,912
PROPERTY & CASUALTY INSURANCE 1.4%
4,100 Philadelphia
Consolidated Holding
Corp.(a) 317,873
11,400 Selective Insurance
Group, Inc. 527,022
------------
844,895
------------
TOTAL FINANCIAL 8,202,251
</Table>
60 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
HEALTHCARE 14.6%
HEALTH CARE FACILITIES 5.5%
18,000 Community Health
Systems, Inc.(a) $ 628,380
13,000 HCA, Inc. 696,410
13,800 Triad Hospitals,
Inc.(a) 691,380
14,000 United Surgical
Partners
International,
Inc.(a) 640,780
12,000 Universal Health
Services, Inc. -
Class B 628,800
------------
3,285,750
HEALTH CARE SERVICES 3.9%
36,200 Dendrite
International,
Inc.(a) 508,248
12,600 Laboratory Corp. of
America Holdings(a) 607,320
5,900 Quest Diagnostics,
Inc. 620,267
17,150 Renal Care Group,
Inc.(a) 650,671
------------
2,386,506
MANAGED HEALTH CARE 5.2%
9,600 Aetna, Inc. 719,520
16,800 Centene Corp.(a) 503,832
7,200 CIGNA Corp. 642,960
7,300 UnitedHealth Group,
Inc. 696,274
11,800 WellChoice, Inc.(a) 629,058
------------
3,191,644
------------
TOTAL HEALTHCARE 8,863,900
INDUSTRIALS 13.7%
AIRLINES 2.5%
45,400 Continental
Airlines,
Inc. - Class B(a) 546,616
42,600 Frontier Airlines,
Inc.(a) 446,448
29,200 SkyWest, Inc. 542,828
------------
1,535,892
BUILDING PRODUCTS 3.9%
19,400 ElkCorp 746,124
22,000 Griffon Corp.(a) 471,020
16,400 Simpson
Manufacturing Co.,
Inc. 506,760
16,600 Universal Forest
Products, Inc. 644,910
------------
2,368,814
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMERCIAL PRINTING 0.4%
6,700 John H. Harland Co. $ 230,212
------------
CONSTRUCTION & ENGINEERING 1.5%
17,700 Granite
Construction, Inc. 464,979
15,500 URS Corp.(a) 445,625
------------
910,604
EMPLOYMENT SERVICES 0.3%
10,200 Labor Ready, Inc.(a) 190,230
------------
INDUSTRIAL MACHINERY 1.0%
7,800 The Manitowoc Co,
Inc. 315,042
9,800 Watts Water
Technologies, Inc. -
Class A 319,578
------------
634,620
RAILROADS 1.8%
10,600 Burlington Northern
Santa Fe Corp. 571,658
13,900 Norfolk Southern
Corp. 514,995
------------
1,086,653
TRUCKING 2.3%
10,900 Arkansas Best Corp. 411,802
20,000 Knight
Transportation, Inc. 493,400
9,000 Yellow Roadway
Corp.(a) 526,860
------------
1,432,062
------------
TOTAL INDUSTRIAL 8,389,087
INFORMATION TECHNOLOGY 7.4%
COMMUNICATIONS EQUIPMENT 1.5%
27,600 NETGEAR, Inc.(a) 416,484
36,700 SpectraLink Corp. 518,204
------------
934,688
COMPUTER HARDWARE 1.5%
10,500 Diebold, Inc. 575,925
90,600 Sun Microsystems,
Inc.(a) 366,024
------------
941,949
COMPUTER STORAGE & PERIPHERALS 1.8%
25,000 Komag, Inc.(a) 558,750
38,400 Overland Storage,
Inc.(a) 563,712
------------
1,122,462
</Table>
Schedule of Investments 61
Schedule of Investments (continued)
ICON Long/Short Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
INTERNET SOFTWARE & SERVICES 1.9%
18,200 j2 Global
Communications,
Inc.(a) $ 624,442
23,700 Sohu.com, Inc.(a) 416,646
------------
1,041,088
SEMICONDUCTORS 0.7%
9,400 International
Rectifier Corp.(a) 427,700
------------
TOTAL INFORMATION TECHNOLOGY 4,467,887
LEISURE & CONSUMER STAPLES 11.3%
FOOD DISTRIBUTORS 2.3%
15,500 Central European
Distribution Corp(a) 515,995
20,000 Performance Food
Group Co.(a) 553,600
34,300 Spartan Stores,
Inc.(a) 364,952
------------
1,434,547
MOVIES & ENTERTAINMENT 0.9%
19,800 The Walt Disney Co. 568,854
------------
PACKAGED FOODS & MEATS 1.8%
5,500 General Mills, Inc. 270,325
7,500 Ralcorp Holdings,
Inc. 355,125
14,500 Smithfield Foods,
Inc.(a) 457,475
------------
1,082,925
PHOTOGRAPHIC PRODUCTS 0.6%
10,500 Eastman Kodak Co. 341,775
------------
RESTAURANTS 3.1%
12,000 Panera Bread Co. -
Class A(a) 678,360
20,700 Sonic Corp.(a) 691,380
15,050 The Cheesecake
Factory, Inc. 533,523
------------
1,903,263
TOBACCO 2.6%
12,400 Altria Group, Inc. 810,836
6,600 Reynolds American,
Inc. 531,894
5,200 Universal Corp. 238,004
------------
1,580,734
------------
TOTAL LEISURE & CONSUMER
STAPLES 6,912,098
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
MATERIALS 5.7%
CONSTRUCTION MATERIALS 3.4%
7,200 Eagle Materials,
Inc. $ 582,768
7,600 Florida Rock
Industries, Inc. 447,032
7,300 Headwaters, Inc.(a) 239,586
7,000 Lafarge North
America, Inc. 409,150
7,000 Martin Marietta
Materials, Inc. 391,440
------------
2,069,976
DIVERSIFIED CHEMICALS 1.1%
2,800 Eastman Chemical Co. 165,200
18,900 Hercules, Inc.(a) 273,861
13,200 Penford Corp. 214,500
------------
653,561
FERTILIZERS & AGRICULTURAL CHEMICALS 0.3%
2,800 The Scotts Miracle-
Gro Co.(a) 196,644
------------
METAL & GLASS CONTAINERS 0.9%
23,000 Owens-Illinois,
Inc.(a) 578,220
------------
TOTAL MATERIALS 3,498,401
TELECOMMUNICATIONS & UTILITIES 5.7%
ELECTRIC UTILITIES 4.2%
10,000 DTE Energy Co. 454,800
31,500 El Paso Electric Co. 598,500
12,600 PG&E Corp. 429,660
45,600 Sierra Pacific
Resources(a) 490,200
39,400 TECO Energy, Inc. 617,792
------------
2,590,952
GAS UTILITIES 1.0%
19,000 ONEOK, Inc. 585,580
------------
MULTI-UTILITIES & UNREGULATED POWER 0.5%
6,400 Constellation Energy
Group, Inc. 330,880
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 3,507,412
------------
TOTAL UNITED STATES OF AMERICA 53,197,334
</Table>
62 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
AMERICAN DEPOSITARY RECEIPT 6.3%
BRAZIL 0.6%
MATERIALS 0.6%
STEEL 0.6%
16,000 Companhia
Siderurgica Nacional
S.A., ADR $ 385,600
------------
TOTAL MATERIALS 385,600
------------
TOTAL BRAZIL 385,600
DENMARK 1.1%
ENERGY 1.1%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.1%
12,000 Dampskibsselskabet
Torm - ADR 641,880
------------
TOTAL ENERGY 641,880
------------
TOTAL DENMARK 641,880
ISRAEL 0.7%
TELECOMMUNICATIONS & UTILITIES 0.7%
WIRELESS TELECOMMUNICATION SERVICES 0.7%
50,000 Partner
Communications Co.
Ltd.(a) 455,500
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 455,500
------------
TOTAL ISRAEL 455,500
MEXICO 2.0%
MATERIALS 1.0%
CONSTRUCTION MATERIALS 1.0%
16,405 Cemex S.A. de C.V. 594,681
------------
TOTAL MATERIALS 594,681
TELECOMMUNICATIONS & UTILITIES 1.0%
WIRELESS TELECOMMUNICATION SERVICES 1.0%
12,000 America Movil S.A.
de C.V. 619,200
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 619,200
------------
TOTAL MEXICO 1,213,881
RUSSIA 0.9%
TELECOMMUNICATIONS & UTILITIES 0.9%
WIRELESS TELECOMMUNICATION SERVICES 0.9%
15,400 Mobile Telesystems 541,926
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 541,926
------------
TOTAL RUSSIA 541,926
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
SWITZERLAND 1.0%
INFORMATION TECHNOLOGY 1.0%
COMPUTER STORAGE & PERIPHERALS 1.0%
9,900 Logitech
International
S.A.(a) $ 602,712
------------
TOTAL INFORMATION TECHNOLOGY 602,712
------------
TOTAL SWITZERLAND 602,712
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 3,841,499
CANADA 1.8%
INDUSTRIALS 1.8%
RAILROADS 1.8%
5,000 Canadian National
Railway Co. 316,550
21,100 Canadian Pacific
Railway Ltd. 758,967
------------
TOTAL INDUSTRIALS 1,075,517
------------
TOTAL CANADA 1,075,517
HONG KONG 0.7%
INFORMATION TECHNOLOGY 0.7%
INTERNET SOFTWARE & SERVICES 0.7%
14,200 SINA Corp.(a) 441,052
------------
TOTAL INFORMATION TECHNOLOGY 441,052
------------
TOTAL HONG KONG 441,052
UNITED KINGDOM 1.0%
ENERGY 1.0%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.0%
32,800 Top Tankers, Inc. 608,440
------------
TOTAL ENERGY 608,440
------------
TOTAL UNITED KINGDOM 608,440
BAHAMAS 1.0%
ENERGY 1.0%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.0%
13,200 Teekay Shipping
Corp. 593,340
------------
TOTAL ENERGY 593,340
------------
TOTAL BAHAMAS 593,340
BERMUDA 0.8%
INFORMATION TECHNOLOGY 0.8%
SEMICONDUCTORS 0.8%
13,200 Marvell Technology
Group, Ltd.(a) 506,088
------------
TOTAL INFORMATION TECHNOLOGY 506,088
------------
TOTAL BERMUDA 506,088
</Table>
Schedule of Investments 63
Schedule of Investments (continued)
ICON Long/Short Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
CAYMAN ISLANDS 0.9%
INFORMATION TECHNOLOGY 0.9%
INTERNET SOFTWARE & SERVICES 0.9%
11,700 Netease.com, Inc.(a) $ 564,057
------------
TOTAL INFORMATION TECHNOLOGY 564,057
------------
TOTAL CAYMAN ISLANDS 564,057
------------
TOTAL COMMON STOCKS (COST
$54,884,696) 60,827,327
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
SHORT-TERM INVESTMENTS 0.0%
VARIABLE RATE DEMAND NOTES 0.0%
488 American Family
Demand Note,
2.4663%# $ 488
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $488) 488
------------
TOTAL INVESTMENTS 99.6% (COST
$54,885,184) 60,827,815
OTHER ASSETS LESS LIABILITIES
0.4% 239,276
------------
NET ASSETS 100.0% $ 61,067,091
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005.
Dates shown on securities are due dates of the obligations.
64 Schedule of Investments
Schedule of Short Securities
ICON Long/Short Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
MARKET
SHARES SHORT SECURITIES VALUE
- ---------------------------------------------
8,400 Arch Coal, Inc. $ 361,284
30,000 Aspect Communications
Corp.(a) 312,300
26,100 Aztar Corp.(a) 745,416
32,500 BMC Software, Inc.(a) 487,500
1,500 Chicago Mercantile
Exchange 291,045
22,000 Computer Associates
International, Inc. 596,200
17,000 Cymer, Inc.(a) 455,090
35,000 eSPEED, Inc.(a) 322,000
15,000 FileNET Corp.(a) 341,700
10,800 Massey Energy Co. 432,432
25,800 McAfee, Inc.(a) 582,048
120,000 Novell, Inc.(a) 715,200
24,000 Novellus Systems,
Inc.(a) 641,520
45,300 Pinnacle
Entertainment, Inc.(a) 756,510
35,000 Siebel Systems,
Inc.(a) 319,550
43,000 Ultratech, Inc.(a) 627,800
20,000 VERITAS Software
Corp.(a) 464,400
24,800 WMS Industries,
Inc.(a) 698,368
----------
TOTAL SHORT SECURITIES (PROCEEDS
OF $8,897,151) $9,150,363
==========
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
Schedule of Short Securities 65
Six Month Hypothetical Expense Example
March 31, 2005 (unaudited)
EXAMPLE
As a shareholder of a Fund you may pay two types of fees: transaction fees and
fund-related fees. Certain funds charge transactions fees, including sales
charges (loads) on purchase payments, reinvested dividends, or other
distributions; redemption fees; and exchange fees. The ICON Funds do not charge
these types of fees. Funds also incur various ongoing expenses, including
management fees, distribution and/or service fees, and other fund expenses,
which are indirectly paid by shareholders.
This Example is intended to help you understand your ongoing costs (in dollars)
of investing in the various ICON Funds and to compare these costs with the
ongoing costs of investing in other mutual funds. This Example is based on an
investment of $1,000 invested at the beginning of the period and held for the
six-month period (10/1/04 - 3/31/05).
ACTUAL EXPENSES
The first set of lines in the table for each Fund provide information about
actual account values and actual expenses. The Example includes, but is not
limited to, management fees, 12b-1 fees, fund accounting, custody and transfer
agent fees. However, the Example does not include client specific fees, such as
the $15.00 fee charged to IRA accounts, or the $15.00 fee charged for wire
redemptions. The Example also does not include portfolio trading commissions and
related trading expenses, and interest expenses or dividends on short positions
taken by the Fund. You may use this information, together with the amount you
invested, to estimate the expenses that you paid over the period. Simply divide
your account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number in the first line for each
Fund under the heading entitled "Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second set of lines in the table for each Fund provide information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not the Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds. Please note that the expenses shown in
the table are meant to highlight your ongoing costs only and do not reflect any
transactional costs, such as sales charges (loads), redemption fees, or exchange
fees that may be charged by other funds. Therefore, this information is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds.
66 Expense Example
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD
10/1/04 3/31/05 10/1/04-3/31/05*
- -----------------------------------------------------------------------------------------------
ICON BOND FUND
- -----------------------------------------------------------------------------------------------
CLASS C Actual Expenses $1,000 $ 997 $ 8.91
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,016 $ 9.00
- -----------------------------------------------------------------------------------------------
CLASS I Actual period return $1,000 $1,000 $ 5.93
- -----------------------------------------------------------------------------------------------
Hypothetical
$1,000 $1,019 $ 5.99
- -----------------------------------------------------------------------------------------------
CLASS Z Actual period return $1,000 $1,002 $ 4.19
- -----------------------------------------------------------------------------------------------
Hypothetical
$1,000 $1,021 $ 4.23
- -----------------------------------------------------------------------------------------------
ICON CORE EQUITY FUND
- -----------------------------------------------------------------------------------------------
CLASS C Actual Expenses $1,000 $1,079 $10.47
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,015 $10.15
- -----------------------------------------------------------------------------------------------
CLASS I Actual Expenses $1,000 $1,084 $ 6.65
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,019 $ 6.44
- -----------------------------------------------------------------------------------------------
CLASS Z Actual Expenses $1,000 $1,085 $ 5.15
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,020 $ 4.99
- -----------------------------------------------------------------------------------------------
ICON COVERED CALL FUND
- -----------------------------------------------------------------------------------------------
CLASS C Actual Expenses $1,000 $1,047 $11.23
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,014 $11.05
- -----------------------------------------------------------------------------------------------
CLASS I Actual Expenses $1,000 $1,052 $ 7.42
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,018 $ 7.29
- -----------------------------------------------------------------------------------------------
CLASS Z Actual Expenses $1,000 $1,053 $ 5.94
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,019 $ 5.84
- -----------------------------------------------------------------------------------------------
ICON EQUITY INCOME FUND
- -----------------------------------------------------------------------------------------------
CLASS C Actual Expenses $1,000 $1,057 $11.28
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,014 $11.05
- -----------------------------------------------------------------------------------------------
CLASS I Actual Expenses $1,000 $1,062 $ 6.63
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,019 $ 6.49
- -----------------------------------------------------------------------------------------------
CLASS Z Actual Expenses $1,000 $1,063 $ 5.30
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,020 $ 5.19
- -----------------------------------------------------------------------------------------------
</Table>
Expense Example 67
Six Month Hypothetical Expense Example (continued)
March 31, 2005 (unaudited)
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD
10/1/04 3/31/05 10/1/04-3/31/05*
- -----------------------------------------------------------------------------------------------
ICON LONG/SHORT FUND
- -----------------------------------------------------------------------------------------------
CLASS C Actual Expenses $1,000 $1,113 $12.12
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,014 $11.55
- -----------------------------------------------------------------------------------------------
CLASS I Actual Expenses $1,000 $1,118 $ 8.18
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,017 $ 7.80
- -----------------------------------------------------------------------------------------------
CLASS Z Actual Expenses $1,000 $1,118 $ 6.87
- -----------------------------------------------------------------------------------------------
Hypothetical Example
(5% return before
expenses)
$1,000 $1,019 $ 6.54
- -----------------------------------------------------------------------------------------------
</Table>
* Expenses are equal to the Fund's six month expense ratio annualized,
multiplied by the average account value over the period, multiplied by 182/365
to reflect the one-half year period.
68 Expense Example
Statements of Assets and Liabilities
March 31, 2005 (unaudited)
<Table>
<Caption>
ICON ICON ICON ICON
ICON CORE COVERED EQUITY LONG/SHORT
BOND FUND EQUITY FUND CALL FUND INCOME FUND FUND
----------- ------------ ----------- ------------ -----------
ASSETS
Investments, at cost $70,278,229 $114,299,422 $47,463,524 $119,865,936 $54,885,184
----------- ------------ ----------- ------------ -----------
Investments, at value 70,568,452 133,788,687 53,809,780 134,249,894 60,827,815
Cash 700,483 5,494 33,871 5,331 -
Deposits for short sales - - - - 9,073,172
Receivables:
Fund shares sold 212,212 491,189 164,858 189,825 152,553
Investments sold - 951,703 - 5,194,538 579,515
Interest 822,667 4,948 44 289,209 868
Dividends - 57,643 47,176 182,081 53,844
Expense reimbursements by Advisor 29,697 - 42,530 13,645 7,206
Other assets 2,544 4,236 1,858 5,401 1,027
----------- ------------ ----------- ------------ -----------
Total Assets 72,336,055 135,303,900 54,100,117 140,129,924 70,696,000
----------- ------------ ----------- ------------ -----------
LIABILITIES
Options written, at value (premiums received of
$0, $0, $1,030,299, $0 and $0, respectively) - - 1,056,190 - -
Common stocks sold short, at value (proceeds of
$0, $0, $0, $0 and $8,897,151, respectively) - - - - 9,150,363
Payables:
Due to custodian bank - - - - 352,361
Investments bought 700,483 543,201 - 1,393,246 -
Fund shares redeemed 3,040 4,424 31,846 67,306 1,789
Distributions due to shareholders 244,482 - - 335,133 -
Advisory fees & fee waiver recoupment 35,700 84,720 34,728 89,877 44,213
Accrued distribution fees 15,098 70,283 13,000 30,778 17,166
Fund accounting, custodial and transfer agent
fees 20,703 23,122 16,037 24,715 16,648
Administration fees 2,975 5,648 2,315 5,992 2,601
Accrued expenses 44,095 26,011 42,390 51,569 43,768
----------- ------------ ----------- ------------ -----------
Total Liabilities 1,066,576 757,409 1,196,506 1,998,616 9,628,909
----------- ------------ ----------- ------------ -----------
NET ASSETS - ALL SHARE CLASSES $71,269,479 $134,546,491 $52,903,611 $138,131,308 $61,067,091
=========== ============ =========== ============ ===========
NET ASSETS - CLASS I $70,414,847 $ 67,432,909 $49,892,578 $134,991,317 $52,248,068
=========== ============ =========== ============ ===========
NET ASSETS - CLASS C $ 852,887 $ 67,029,350 $ 3,007,803 $ 3,118,128 $ 8,726,609
=========== ============ =========== ============ ===========
NET ASSETS - CLASS Z $ 1,745 $ 84,232 $ 3,230 $ 21,863 $ 92,414
=========== ============ =========== ============ ===========
NET ASSETS CONSIST OF
Paid-in capital $70,947,851 $117,708,500 $47,573,783 $119,834,653 $55,282,459
Accumulated undistributed net investment
income/(loss) 8,425 (472,567) (147,577) 709,220 (162,371)
Accumulated undistributed net realized
gain/(loss) from investments 22,980 (2,178,707) (842,960) 3,203,477 257,584
Unrealized appreciation/(depreciation) on
securities, written options and securities
sold short 290,223 19,489,265 6,320,365 14,383,958 5,689,419
----------- ------------ ----------- ------------ -----------
NET ASSETS $71,269,479 $134,546,491 $52,903,611 $138,131,308 $61,067,091
=========== ============ =========== ============ ===========
Shares outstanding (unlimited shares
authorized, no par value)
Class I 6,876,591 4,869,850 3,733,034 8,994,261 3,469,768
Class C 83,155 5,004,637 229,367 208,730 590,291
Class Z 171 6,067 241 1,457 6,123
Net asset value (offering and redemption price
per share)
Class I $ 10.24 $ 13.85 $ 13.37 $ 15.01 $ 15.06
Class C $ 10.26 $ 13.39 $ 13.11 $ 14.94 $ 14.78
Class Z $ 10.24(a) $ 13.88 $ 13.40 $ 15.01 $ 15.09
</Table>
(a) Net assets divided by shares outstanding may not recalculate due to the
rounding of net assets and/or shares outstanding.
The accompanying notes are an integral part of the financial statements.
Financial Statements 69
Statements of Operations
For the period ended March 31, 2005 (unaudited)
<Table>
<Caption>
ICON ICON ICON ICON
ICON CORE COVERED EQUITY LONG/SHORT
BOND FUND EQUITY FUND CALL FUND INCOME FUND FUND
----------- ----------- ----------- ----------- ----------
INVESTMENT INCOME
Interest $ 1,644,364 $ 30,977 $ 1,837 $ 486,914 $ 23,242
Dividends - 477,309 228,481 1,579,284 196,756
Foreign taxes withheld - (1,154) (139) (12,818) (498)
----------- ----------- ----------- ----------- ----------
Total Investment Income 1,644,364 507,132 230,179 2,053,380 219,500
----------- ----------- ----------- ----------- ----------
EXPENSES
Advisory fees 195,069 442,203 190,653 502,554 195,269
Distribution fees:
Class I 80,346 70,888 60,494 164,266 49,935
Class C 3,165 305,729 12,213 12,916 29,687
Fund accounting, custodial and transfer
agent fees 56,977 62,451 45,502 70,094 44,724
Administration fees 15,725 28,552 12,299 32,418 11,180
Audit fees 4,203 7,309 3,116 8,537 2,562
Registration fees:
Class I 9,777 9,137 8,611 12,128 8,972
Class C 8,236 8,563 8,136 8,248 8,488
Legal fees 683 1,197 527 1,407 406
Insurance expense 1,747 2,741 1,226 3,385 757
Trustee fees and expenses 3,711 6,538 2,843 7,647 2,172
Shareholder reports 11,733 20,747 9,084 24,079 7,533
Interest Expense 57 - 10,640 144 421
Dividends on short positions - - - - 3,380
Other expenses 28,838 13,644 54,942 42,138 23,369
----------- ----------- ----------- ----------- ----------
Total expenses before expense
(reimbursement)/recoupment 420,267 979,699 420,286 889,961 388,855
----------- ----------- ----------- ----------- ----------
Expense (reimbursement)/recoupment by
Advisor due to expense limitation
agreement (29,697) - (42,530) (13,645) (7,206)
----------- ----------- ----------- ----------- ----------
Net Expenses 390,570 979,699 377,756 876,316 381,649
----------- ----------- ----------- ----------- ----------
NET INVESTMENT INCOME (LOSS) 1,253,794 (472,567) (147,577) 1,177,064 (162,149)
----------- ----------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS
Net realized gain/(loss) from:
Investment transactions 6,320 5,959,817 1,935,632 3,067,845 401,107
Written options - - (2,308,345) - -
Securities sold short - - - - (143,482)
----------- ----------- ----------- ----------- ----------
Total net realized gain/(loss) 6,320 5,959,817 (372,713) 3,067,845 257,625
----------- ----------- ----------- ----------- ----------
Change in net unrealized
appreciation/(depreciation) on securities,
written options and securities sold short (1,418,089) 2,901,102 3,020,957 3,622,533 4,033,424
----------- ----------- ----------- ----------- ----------
Net realized and unrealized gain/(loss) on
investments (1,411,769) 8,860,919 2,648,244 6,690,378 4,291,049
----------- ----------- ----------- ----------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (157,975) $8,388,352 $ 2,500,667 $7,867,442 $4,128,900
=========== =========== =========== =========== ==========
</Table>
The accompanying notes are an integral part of the financial statements.
70 Financial Statements
THIS PAGE INTENTIONALLY LEFT BLANK
Statements of Changes in Net Assets
<Table>
<Caption>
ICON BOND FUND ICON CORE EQUITY FUND
------------------------------------ ------------------------------------
PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------
OPERATIONS
Net investment income/(loss) $ 1,253,794 $ 1,994,678 $ (472,567) $ (861,159)
Net realized gain/(loss) from
investments transactions, written
options and securities sold short 6,320 772,882 5,959,817 5,419,845
Change in net unrealized
appreciation/(depreciation) on
securities, written options and
securities sold short (1,418,089) (160,120) 2,901,102 6,605,972
-------------- ------------------ -------------- ------------------
Net increase/(decrease) in net
assets resulting from operations (157,975) 2,607,440 8,388,352 11,164,658
-------------- ------------------ -------------- ------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Net investment income
Class I (1,383,631) (1,972,705) - -
Class C (14,833) (11,095) - -
Class Z (28) (10) - -
Net realized gains
Class I (338,815) - - -
Class C (4,379) - - -
Class Z (6) - - -
-------------- ------------------ -------------- ------------------
Net decrease from dividends and
distributions (1,741,692) (1,983,810) - -
-------------- ------------------ -------------- ------------------
FUND SHARE TRANSACTIONS
Shares sold
Class I 33,422,193 33,416,648 20,587,176 16,988,164
Class C 714,238 342,757 13,432,647 18,403,784
Class Z 1,210 645 47,558 35,784
Reinvested dividends and
distributions
Class I 1,475,479 1,971,854 - -
Class C 16,655 10,191 - -
Class Z 27 10 - -
Shares repurchased
Class I (24,108,781) (13,848,513) (4,440,191) (13,079,331)
Class C (224,998) (241,960) (3,876,031) (6,132,345)
Class Z (120) - (2,830) (1,884)
-------------- ------------------ -------------- ------------------
Net increase/(decrease) from fund
share transactions 11,295,903 21,651,632 25,748,329 16,214,172
-------------- ------------------ -------------- ------------------
Total net increase/(decrease) in net
assets 9,396,236 22,275,262 34,136,681 27,378,830
NET ASSETS
Beginning of period 61,873,243 39,597,981 100,409,810 73,030,980
-------------- ------------------ -------------- ------------------
End of period $ 71,269,479 $ 61,873,243 $134,546,491 $100,409,810
============== ================== ============== ==================
</Table>
72 Financial Statements
<Table>
<Caption>
ICON COVERED CALL FUND ICON EQUITY INCOME FUND ICON LONG/SHORT FUND
------------------------------------ ------------------------------------ ------------------------------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------ -------------- ------------------
$ (147,577) $ (169,445) $ 1,177,064 $ 1,986,249 $ (162,149) $ (108,267)
(372,713) 2,216,139 3,067,845 1,009,178 257,625 1,862,548
3,020,957 701,636 3,622,533 6,839,072 4,033,424 108,880
-------------- ------------------ -------------- ------------------ -------------- ------------------
2,500,667 2,748,330 7,867,442 9,834,499 4,128,900 1,863,161
-------------- ------------------ -------------- ------------------ -------------- ------------------
- - (1,145,392) (1,955,243) - -
- - (12,764) (18,936) (222) -
- - (202) (169) - -
(2,014,072) (813,994) (690,470) - (1,266,628) (122,911)
(97,417) (11,304) (13,763) - (183,132) (7,238)
(118) - (103) - (1,524) -
-------------- ------------------ -------------- ------------------ -------------- ------------------
(2,111,607) (825,298) (1,862,694) (1,974,348) (1,451,506) (130,149)
-------------- ------------------ -------------- ------------------ -------------- ------------------
11,982,321 28,282,997 24,437,117 84,251,666 31,375,755 21,568,653
1,275,119 1,905,597 1,230,905 1,466,895 4,691,414 3,489,408
671 3,139 6,658 13,644 55,269 32,109
1,901,482 802,492 1,410,925 1,849,956 1,158,739 121,354
88,746 10,975 20,035 17,806 163,651 7,238
118 - 235 169 1,524 -
(7,328,866) (9,000,921) (14,307,753) (18,768,921) (7,084,535) (8,589,480)
(333,296) (127,212) (122,189) (296,277) (199,517) (129,159)
(790) - - (19) (395) -
-------------- ------------------ -------------- ------------------ -------------- ------------------
7,585,505 21,877,067 12,675,933 68,534,919 30,161,905 16,500,123
-------------- ------------------ -------------- ------------------ -------------- ------------------
7,974,565 23,800,099 18,680,681 76,395,070 32,839,299 18,233,135
44,929,046 21,128,947 119,450,627 43,055,557 28,227,792 9,994,657
-------------- ------------------ -------------- ------------------ -------------- ------------------
$52,903,611 $44,929,046 $138,131,308 $119,450,627 $61,067,091 $28,227,792
============== ================== ============== ================== ============== ==================
</Table>
Financial Statements 73
Statements of Changes in Net Assets (continued)
<Table>
<Caption>
ICON BOND FUND ICON CORE EQUITY FUND
------------------------------------ ------------------------------------
PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------
TRANSACTIONS IN FUND SHARES
Shares sold
Class I 3,190,547 3,199,688 1,493,982 1,380,045
Class C 67,743 32,748 1,015,224 1,535,906
Class Z 115 63 3,467 2,959
Reinvested dividends and
distributions
Class I 140,980 188,665 - -
Class C 1,589 979 - -
Class Z 3 1 - -
Shares repurchased
Class I (2,301,332) (1,319,789) (323,604) (1,060,722)
Class C (21,340) (23,478) (290,809) (511,842)
Class Z (11) - (205) (154)
-------------- ------------------ -------------- ------------------
Net increase/(decrease) 1,078,294 2,078,877 1,898,055 1,346,192
-------------- ------------------ -------------- ------------------
Shares outstanding beginning of
period 5,881,623 3,802,746 7,982,499 6,636,307
-------------- ------------------ -------------- ------------------
Shares outstanding end of period 6,959,917 5,881,623 9,880,554 7,982,499
============== ================== ============== ==================
PURCHASE AND SALES OF INVESTMENT
SECURITIES
(excluding short-term securities and
written options)
Purchase of securities (including
short sale transactions) $ 9,511,989 $ 14,692,029 $ 75,252,919 $117,495,384
Proceeds from sales of securities
(including short sale
transactions) 11,425,721 14,436,998 51,298,016 101,917,674
Purchases of long-term U.S.
government securities 12,119,067 22,260,709 - -
Proceeds from sales of long-term
U.S. government securities 14,226,978 1,889,387 - -
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME/(LOSS) $ 8,425 $ 153,123 $ (472,567) $ -
============== ================== ============== ==================
</Table>
The accompanying notes are an integral part of the financial statements.
74 Financial Statements
<Table>
<Caption>
ICON COVERED CALL FUND ICON EQUITY INCOME FUND ICON LONG/SHORT FUND
------------------------------------ ------------------------------------ ------------------------------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------ -------------- ------------------
894,739 2,169,073 1,650,754 5,938,018 2,108,811 1,570,724
96,921 147,349 83,549 104,841 322,166 257,198
50 239 437 995 3,739 2,309
141,902 63,040 92,036 128,188 77,095 9,511
6,733 877 1,313 1,248 11,065 574
9 - 15 12 101 -
(546,524) (681,412) (952,265) (1,336,866) (474,581) (632,107)
(24,686) (9,841) (8,225) (21,597) (13,650) (9,606)
(57) - - (1) (26) -
-------------- ------------------ -------------- ------------------ -------------- ------------------
569,087 1,689,325 867,614 4,814,838 2,034,720 1,198,603
-------------- ------------------ -------------- ------------------ -------------- ------------------
3,393,555 1,704,230 8,336,834 3,521,996 2,031,462 832,859
-------------- ------------------ -------------- ------------------ -------------- ------------------
3,962,642 3,393,555 9,204,448 8,336,834 4,066,182 2,031,462
============== ================== ============== ================== ============== ==================
$39,073,508 $74,412,247 $ 81,352,956 $111,360,137 $42,583,445 $38,171,546
35,551,590 53,342,570 72,435,871 44,139,424 13,764,630 22,620,730
- - - - - -
- - - - - -
$ (147,577) $ 249,818 $ 709,220 $ 690,514 $ (162,371) $ -
============== ================== ============== ================== ============== ==================
</Table>
Financial Statements 75
Financial Highlights
<Table>
<Caption>
INCOME FROM INVESTMENT
OPERATIONS
-------------------------------------------
NET ASSET NET NET REALIZED TOTAL
VALUE, INVESTMENT AND UNREALIZED FROM
BEGINNING INCOME/ GAINS/(LOSSES) INVESTMENT
OF PERIOD (LOSS)(x) ON INVESTMENTS OPERATIONS
--------- ---------- ----------------- ----------
ICON BOND FUND
CLASS I
Period Ended March 31, 2005
(unaudited) $10.52 $ 0.20 $(0.20) $ 0.00
Year Ended September 30,
2004 10.41 0.45 0.10 0.55
October 1, 2002 (inception)
to September 30, 2003 10.00 0.42 0.38 0.80
CLASS C
Period Ended March 31, 2005
(unaudited) 10.54 0.17 (0.20) (0.03)
Year Ended September 30,
2004 10.42 0.38 0.12 0.50
October 21, 2002 (inception)
to September 30, 2003 9.79 0.37 0.60 0.97
CLASS Z
Period Ended March 31, 2005
(unaudited) 10.51 0.22 (0.19) 0.03
May 6, 2004 (inception) to
September 30, 2004 10.26 0.46 (0.02) 0.44
ICON CORE EQUITY FUND
CLASS I
Period Ended March 31, 2005
(unaudited) 12.78 (0.03) 1.10 1.07
Year Ended September 30,
2004 11.12 (0.07) 1.73 1.66
Year Ended September 30,
2003 9.50 (0.04) 1.66 1.62
Year Ended September 30,
2002 10.04 (0.07) (0.20) (0.27)
October 12, 2000 (inception)
to September 30, 2001 10.00 (0.05) 0.09 0.04
CLASS C
Period Ended March 31, 2005
(unaudited) 12.41 (0.08) 1.06 0.98
Year Ended September 30,
2004 10.88 (0.16) 1.69 1.53
Year Ended September 30,
2003 9.36 (0.11) 1.63 1.52
Year Ended September 30,
2002 9.98 (0.15) (0.20) (0.35)
November 28, 2000
(inception) to September
30, 2001 10.62 (0.10) (0.54) (0.64)
CLASS Z
Period Ended March 31, 2005
(unaudited) 12.79 (0.01) 1.10 1.09
May 6, 2004 (inception) to
September 30, 2004 12.07 (0.03) 0.75 0.72
ICON COVERED CALL FUND
CLASS I
Period Ended March 31, 2005
(unaudited) 13.25 (0.04) 0.73 0.69
Year Ended September 30,
2004 12.40 (0.07) 1.36 1.29
October 1, 2002 (inception)
to September 30, 2003 10.00 (0.07) 2.47 2.40
<Caption>
LESS DIVIDENDS AND DISTRIBUTIONS
-------------------------------------------------------
DIVIDENDS
FROM DISTRIBUTIONS TOTAL
NET FROM NET RETURN DIVIDENDS
INVESTMENT REALIZED OF AND
INCOME GAINS CAPITAL DISTRIBUTIONS
---------- ------------- ---------- -------------
ICON BOND FUND
CLASS I
Period Ended March 31, 2005
(unaudited) $(0.22) $(0.06) - $(0.28)
Year Ended September 30,
2004 (0.44) - - (0.44)
October 1, 2002 (inception)
to September 30, 2003 (0.39) - - (0.39)
CLASS C
Period Ended March 31, 2005
(unaudited) (0.19) (0.06) - (0.25)
Year Ended September 30,
2004 (0.38) - - (0.38)
October 21, 2002 (inception)
to September 30, 2003 (0.34) - - (0.34)
CLASS Z
Period Ended March 31, 2005
(unaudited) (0.24) (0.06) - (0.30)
May 6, 2004 (inception) to
September 30, 2004 (0.19) - - (0.19)
ICON CORE EQUITY FUND
CLASS I
Period Ended March 31, 2005
(unaudited) - - - -
Year Ended September 30,
2004 - - - -
Year Ended September 30,
2003 - - - -
Year Ended September 30,
2002 - (0.27) - (0.27)
October 12, 2000 (inception)
to September 30, 2001 - - - -
CLASS C
Period Ended March 31, 2005
(unaudited) - - -
Year Ended September 30,
2004 - - - -
Year Ended September 30,
2003 - - - -
Year Ended September 30,
2002 - (0.27) - (0.27)
November 28, 2000
(inception) to September
30, 2001 - - - -
CLASS Z
Period Ended March 31, 2005
(unaudited) - - - -
May 6, 2004 (inception) to
September 30, 2004 - - - -
ICON COVERED CALL FUND
CLASS I
Period Ended March 31, 2005
(unaudited) - (0.57) - (0.57)
Year Ended September 30,
2004 - (0.44) - (0.44)
October 1, 2002 (inception)
to September 30, 2003 - - - -
</Table>
76 Financial Highlights
<Table>
<Caption>
RATIO OF NET INVESTMENT
RATIO OF EXPENSES TO INCOME TO AVERAGE
AVERAGE NET ASSETS(a) NET ASSETS(a)
------------------------- -------------------------
NET ASSET AVERAGE NET BEFORE AFTER BEFORE AFTER
VALUE, NET ASSETS, ASSETS FOR EXPENSE EXPENSE EXPENSE EXPENSE PORTFOLIO
END OF TOTAL END OF PERIOD THE PERIOD LIMITATION/ LIMITATION/ LIMITATION/ LIMITATION/ TURNOVER
PERIOD RETURN* (IN THOUSANDS) (IN THOUSANDS) RECOUPMENT RECOUPMENT RECOUPMENT RECOUPMENT RATE(b)
--------- --------- -------------- -------------- ----------- ----------- ----------- ----------- ---------
$10.24 (0.03)% $70,415 $64,549 1.26% 1.19% 3.79% 3.86% 36.85%
10.52 5.41% 61,502 46,295 1.29% 1.30% 4.28% 4.27% 37.98%
10.41 8.19% 39,338 33,787 1.45% 1.30% 4.01% 4.16% 41.65%
10.26 (0.29)% 853 749 4.05% 1.79% 1.01% 3.27% 36.85%
10.54 4.83% 371 317 6.84% 1.90% 3.63% 8.57% 37.98%
10.42 9.98% 260 199 2.05% 1.90% 3.48% 3.63% 41.65%
10.24 0.22% 2 1 0.94% 0.84% 4.10% 4.20% 36.85%
10.51 4.33% 1 1 0.86% 0.86% 4.60% 4.60% 37.98%
13.85 8.37% 67,433 57,047 1.28% N/A (0.41)% N/A 44.06%
12.78 14.93% 47,273 43,044 1.33% N/A (0.59)% N/A 116.26%
11.12 17.05% 37,603 34,007 1.39% N/A (0.37)% N/A 188.07%
9.50 (3.23)% 42,232 37,577 1.36% N/A (0.58)% N/A 107.82%
10.04 0.40% 23,261 23,802 1.60% N/A (0.36)% N/A 124.61%
13.39 7.90% 67,029 61,436 2.02% N/A (1.16)% N/A 44.06%
12.41 14.06% 53,101 45,114 2.08% N/A (1.34)% N/A 116.26%
10.88 16.24% 35,428 30,459 2.14% N/A (1.12)% N/A 188.07%
9.36 (4.07)% 27,744 19,849 2.11% N/A (1.33)% N/A 107.82%
9.98 (6.03)%+ 6,324 2,920 2.23% N/A (1.24)% N/A 124.61%
13.88 8.52% 84 65 0.99% N/A (0.14)% N/A 44.06%
12.79 5.97% 36 32 1.12% N/A (0.28)% N/A 116.26%
13.37 5.19% 49,893 48,596 1.59% 1.45% (0.68)% (0.54)% 68.20%
13.25 10.53% 42,962 30,305 1.60% 1.45% (0.67)% (0.52)% 167.57%
12.40 24.00% 20,981 14,544 2.07% 1.45% (1.27)% (0.65)% 184.24%
</Table>
Financial Highlights 77
Financial Highlights (continued)
<Table>
<Caption>
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------
NET ASSET NET NET REALIZED
VALUE, INVESTMENT AND UNREALIZED TOTAL FROM
BEGINNING INCOME/ GAINS/(LOSSES) INVESTMENT
OF PERIOD (LOSS)(X) ON INVESTMENTS OPERATIONS
--------- ---------- -------------- ----------
CLASS C
Period Ended March 31, 2005
(unaudited) $13.06 $(0.08) $ 0.70 $ 0.62
Year Ended September 30, 2004 12.32 (0.16) 1.34 1.18
November 21, 2002 (inception) to
September 30, 2003 10.75 (0.17) 1.74 1.57
CLASS Z
Period Ended March 31, 2005
(unaudited) 13.29 (0.02) 0.70 0.68
May 6, 2004 (inception) to
September 30, 2004 12.86 (0.01) 0.44 0.43
ICON EQUITY INCOME FUND
CLASS I
Period Ended March 31, 2005
(unaudited) 14.33 0.13 0.83 0.96
Year Ended September 30, 2004 12.22 0.31 2.09 2.40
October 1, 2002 (inception) to
September 30, 2003 10.00 0.25 2.20 2.45
CLASS C
Period Ended March 31, 2005
(unaudited) 14.27 0.06 0.81 0.87
Year Ended September 30, 2004 12.21 0.20 2.06 2.26
November 8, 2002 (inception) to
September 30, 2003 10.63 0.16 1.59 1.75
CLASS Z
Period Ended March 31, 2005
(unaudited) 14.33 0.15 0.85 1.00
May 10, 2004 (inception) to
September 30, 2004 13.43 0.39 0.70 1.09
ICON LONG/SHORT FUND(D)
CLASS I
Period Ended March 31, 2005
(unaudited) 13.92 (0.05) 1.69 1.64
Year Ended September 30, 2004 12.00 (0.08) 2.16 2.08
October 1, 2002 (inception) to
September 30, 2003 10.00 (0.07) 2.07 2.00
CLASS C
Period Ended March 31, 2005
(unaudited) 13.73 (0.10) 1.65 1.55
Year Ended September 30, 2004 11.92 (0.18) 2.15 1.97
October 17, 2002 (inception) to
September 30, 2003 10.61 (0.15) 1.46 1.31
CLASS Z
Period Ended March 31, 2005
(unaudited) 13.94 (0.03) 1.68 1.65
May 6, 2004 (inception) to
September 30, 2004 13.99 (0.04) (0.01) (0.05)
<Caption>
LESS DIVIDENDS AND DISTRIBUTIONS
-------------------------------------------------------
DIVIDENDS DISTRIBUTIONS
FROM NET FROM NET TOTAL
INVESTMENT REALIZED RETURN DIVIDENDS AND
INCOME GAINS OF CAPITAL DISTRIBUTIONS
---------- ------------- ---------- -------------
CLASS C
Period Ended March 31, 2005
(unaudited) - $(0.57) - $(0.57)
Year Ended September 30, 2004 - (0.44) - (0.44)
November 21, 2002 (inception) to
September 30, 2003 - - - -
CLASS Z
Period Ended March 31, 2005
(unaudited) - (0.57) - (0.57)
May 6, 2004 (inception) to
September 30, 2004 - - - -
ICON EQUITY INCOME FUND
CLASS I
Period Ended March 31, 2005
(unaudited) $(0.20) (0.08) - (0.28)
Year Ended September 30, 2004 (0.29) - - (0.29)
October 1, 2002 (inception) to
September 30, 2003 (0.23) - - (0.23)
CLASS C
Period Ended March 31, 2005
(unaudited) (0.12) (0.08) - (0.20)
Year Ended September 30, 2004 (0.20) - - (0.20)
November 8, 2002 (inception) to
September 30, 2003 (0.17) - - (0.17)
CLASS Z
Period Ended March 31, 2005
(unaudited) (0.24) (0.08) - (0.32)
May 10, 2004 (inception) to
September 30, 2004 (0.19) - - (0.19)
ICON LONG/SHORT FUND(D)
CLASS I
Period Ended March 31, 2005
(unaudited) - (0.50) - (0.50)
Year Ended September 30, 2004 - (0.16) - (0.16)
October 1, 2002 (inception) to
September 30, 2003 - - - -
CLASS C
Period Ended March 31, 2005
(unaudited) - (0.50) - (0.50)
Year Ended September 30, 2004 - (0.16) - (0.16)
October 17, 2002 (inception) to
September 30, 2003 - - - -
CLASS Z
Period Ended March 31, 2005
(unaudited) - (0.50) - (0.50)
May 6, 2004 (inception) to
September 30, 2004 - - - -
</Table>
(x) Calculated using the average share method.
* The total return calculation is for the period indicated.
(a) Annualized for periods less than a year.
(b) Portfolio turnover is calculated at the Fund level. The rate shown is for
the longest period indicated of the three share classes.
(c) The limitation on expenses for Class Z shares occurred when the Advisor
reimbursed the Fund for excise and income taxes incurred during the period
(Note 5). These expenses were extraordinary expenses not subject to the
contractual expense limitation discussed in Note 2.
(d) The Fund's operating expenses, not including dividends on short positions,
are contractually limited to 2.30% for Class C, 1.55% for Class I, and 1.30%
for Class Z. The ratios in these financial highlights reflect the
limitation, including the dividends on short positions.
+ The total return for the Class C shares for the period November 28, 2000
(inception) to September 30, 2001 has been restated due to a mathematical
error. The previous total return was (0.20%) (See Note 7).
The accompanying notes are an integral part of the financial statements.
78 Financial Highlights
<Table>
<Caption>
RATIO OF NET INVESTMENT
RATIO OF EXPENSES TO INCOME TO AVERAGE
AVERAGE AVERAGE NET ASSETS(a) NET ASSETS(a)
NET NET ASSETS, NET ------------------------- -------------------------
ASSET END OF ASSETS FOR BEFORE AFTER BEFORE AFTER
VALUE, PERIOD THE PERIOD EXPENSE EXPENSE EXPENSE EXPENSE PORTFOLIO
END OF TOTAL (IN (IN LIMITATION/ LIMITATION/ LIMITATION/ LIMITATION/ TURNOVER
PERIOD RETURN* THOUSANDS) THOUSANDS) RECOUPMENT RECOUPMENT RECOUPMENT RECOUPMENT RATE(b)
--------- --------- -------------- -------------- ----------- ----------- ----------- ----------- ---------
$13.11 4.72% $ 3,008 $ 2,457 2.98% 2.20% (2.05)% (1.27)% 68.20%
13.06 9.69% 1,964 838 3.89% 2.20% (2.93)% (1.23)% 167.57%
12.32 14.60% 148 50 2.83% 2.20% (2.13)% (1.50)% 184.24%
13.40 5.26% 3 3 1.24% 1.16% (0.33)% (0.25)% 68.20%
13.29 3.34% 3 2 1.12% 1.12% (0.11)% (0.11)% 167.57%
15.01 6.17% 134,991 131,977 1.30% 1.29% 1.76% 1.77% 55.43%
14.33 19.69% 117,552 88,318 1.35% 1.37% 2.25% 2.23% 51.84%
12.22 24.72% 42,474 25,288 1.72% 1.45% 2.23% 2.30% 35.17%
14.94 5.71% 3,118 2,602 2.68% 2.20% 0.39% 0.87% 55.43%
14.27 18.56% 1,885 1,053 3.47% 2.20% 0.12% 1.40% 51.84%
12.21 16.63% 581 348 2.48% 2.20% 1.10% 1.38% 35.17%
15.01 6.30% 22 19 1.04% 1.03% 2.00% 2.01% 55.43%
14.33 8.12% 14 12 1.11% 0.97%(c) 2.62% 2.76% 51.84%
15.06 11.79% 52,248 40,293 1.57% 1.57% (0.59)% (0.59)% 32.38%
13.92 17.42% 24,480 14,374 2.15% 1.74% (1.03)% (0.62)% 148.32%
12.00 20.00% 9,726 6,997 3.09% 1.55% (2.20)% (0.66)% 162.25%
14.78 11.28% 8,727 5,994 2.55% 2.31% (1.57)% (1.33)% 32.38%
13.73 16.61% 3,716 1,417 3.70% 2.49% (2.57)% (1.35)% 148.32%
11.92 12.35% 269 186 3.84% 2.30% (2.99)% (1.45)% 162.25%
15.09 11.84% 92 61 1.27% 1.31% (0.30)% (0.34)% 32.38%
13.94 (0.36)% 32 29 1.98% 1.76% (0.50)% (0.28)% 148.32%
</Table>
Financial Highlights 79
Notes to Financial Statements
March 31, 2005
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The ICON Bond Fund ("Bond Fund"), ICON Core Equity Fund ("Core Equity Fund")
ICON Covered Call Fund ("Covered Call Fund"), ICON Equity Income Fund ("Equity
Income Fund"), and ICON Long/Short Fund ("Long/Short Fund") are series funds
(individually a "Fund" and collectively, the "Funds"). The Funds are part of the
ICON Funds (the "Trust"), a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act") as an open-end
investment management company. The ICON Core Equity Fund commenced operations on
October 12, 2000; the other Funds commenced operations on October 1, 2002. Each
Fund offers three classes of shares, Class I, Class C and Class Z. All classes
have equal rights as to earnings, assets and voting privileges except that each
Class may bear different distribution fees, registration costs and each Class
has exclusive voting rights with respect to its distribution plan. There are
currently 12 other active funds within the Trust. Those funds are covered by
separate prospectuses and shareholder reports.
Each Fund is authorized to issue an unlimited number of no par shares. The
investment objective of the Bond Fund is maximum total return. The investment
objective of the Core Equity Fund is long-term capital appreciation with a
secondary objective of capital preservation. The investment objective of the
Covered Call Fund is modest capital appreciation and to maximize realized gains
from writing covered call options. The investment objective of the Equity Income
Fund is modest capital appreciation and income. The investment objective of the
Long/Short Fund is capital appreciation.
The Funds may have elements of risk, including the risk of loss of principal.
There is no assurance that the investment process will consistently lead to
successful results. An investment concentrated in sectors and industries may
involve greater risk and volatility than a more diversified investment.
Investing in fixed income securities such as bonds involves interest rate risk.
When interest rates rise, the value of fixed income securities generally
decreases. Additionally, the Bond Fund may invest in medium- and lower-quality
debt securities. High-yield bonds involve a greater risk of default and price
volatility than U.S. government and other high-quality bonds. The Covered Call
Fund invests in call options; call options involve certain risks, such as
limited gains and lack of liquidity of the underlying securities, and are not
suitable for all investors. The Long/Short Fund invests short in securities;
there are risks associated with selling short, including the risk that the
Long/Short Fund may have to cover its short position at a higher price than the
short sale, resulting in a loss. The Fund's loss on a short sale is potentially
unlimited as a loss occurs when the value of a security sold short increases.
There are also risks associated with small and mid-cap investing, including
limited product lines, less liquidity and small market share. Investments in
foreign securities and currency transactions may involve certain considerations
and risks not typically
80 Notes to Financial Statements
associated with those of U.S. dollar-denominated transactions as a result of,
among other factors, the possibility of lower government supervision and
regulation of foreign securities markets and the possibility of political or
economic instability.
In addition, in the normal course of business, the Funds may enter into various
agreements that provide for general indemnifications. Each Fund's maximum
exposure under these arrangements is unknown as any potential exposure involves
future claims that may be made against each Fund. However, based on experience,
the Funds expect the risk of loss to be remote.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent 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 these estimates.
INVESTMENT VALUATION
The Funds' securities and other assets are valued as of the close of regular
trading on the New York Stock Exchange (the "NYSE") (normally 4 p.m. Eastern
time) each day the NYSE is open, except that securities traded primarily on the
NASDAQ Stock Market ("NASDAQ") are normally valued by a Fund at the NASDAQ
Official Closing Price provided by NASDAQ each business day. The Funds use
pricing services to determine the market value of securities in their
portfolios; if a pricing service is not able to provide a price, or the pricing
service quote of valuation is inaccurate or does not reflect the market value of
the security, prices may be obtained through market quotations from independent
broker/dealers. If market quotations from these sources are not readily
available, the Funds' securities or other assets are valued at fair value as
determined in good faith by the Funds' Board of Trustees ("Board") or pursuant
to procedures approved by the Board. The valuation assigned to fair-valued
securities for purposes of calculating a Fund's net asset value ("NAV") may
differ from the security's most recent closing market price and from the prices
used by other mutual funds to calculate their NAVs.
Foreign securities traded in countries outside of the Western Hemisphere are
fair valued daily by utilizing the quotations of an independent pricing service,
unless the Funds' adviser determines that use of another valuation methodology
is appropriate. The pricing service uses statistical analyses and quantitative
models to adjust local market prices using factors such as subsequent movement
and changes in the prices of indexes, securities and exchange rates
Notes to Financial Statements 81
Notes to Financial Statements (continued)
in other markets in determining fair value as of the time a Fund calculates its
net asset value.
A security listed or traded primarily on a securities exchange or in the
over-the-counter market is generally valued at its last sale price on the
exchange or market where it is principally traded, except that securities
primarily traded on NASDAQ are normally valued at the NASDAQ Official Closing
Price. Lacking any sales that day, the security is valued at the current closing
bid price (or yield equivalent thereof) or based on quotes obtained from dealers
making a market for the security. Options are valued at their closing mid-price
on the principal market where the option is traded. Mid-price is the average of
the closing bid and closing ask prices. Debt securities with a remaining
maturity of greater than sixty days are valued in accordance with the evaluated
bid price supplied by the pricing service. Short-term securities with remaining
maturities of sixty days or less are generally valued at amortized cost or
original cost plus accrued interest, which approximates market value. Prior to
February 22, 2005, London closing exchange rates were used to convert foreign
security values into U.S. dollars. After that date, currency rates as of the
close of the New York Stock Exchange were used to convert foreign security
values into U.S. dollars.
REPURCHASE AGREEMENTS
Repurchase agreements, if held by the Funds, are fully collateralized by U.S.
Government securities and such collateral is in the possession of the Funds'
custodian. The collateral is evaluated daily to ensure its market value exceeds
the current market value of the repurchase agreements including accrued
interest. In the event of default on the obligation to purchase, the Funds have
the right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation. In the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings. No repurchase agreements were purchased or sold by
the Funds during the period ended March 31, 2005.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign currency
are translated into U.S. dollars at the prevailing rates of exchange daily.
Income and expenses are translated into U.S. dollars at the prevailing exchange
rate on the respective dates of the transactions. Purchases and sales of
securities are translated into U.S. dollars at the contractual currency exchange
rates established at the time of each trade.
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. Net unrealized
appreciation or
82 Notes to Financial Statements
depreciation on investments and foreign currency translations arise from changes
in the value of assets and liabilities, resulting from changes in the exchange
rates and changes in market prices of securities held.
FORWARD FOREIGN CURRENCY CONTRACTS
The Funds may enter into short-term forward foreign currency contracts in
connection with planned purchases or sales of securities as a hedge against
fluctuations in foreign exchange rates pending the settlement of transactions in
foreign securities. A forward foreign currency contract is an agreement between
contracting parties to exchange an amount of currency at some future time with
an agreed upon rate.
These contracts are marked-to-market daily and the related appreciation or
depreciation of the contract is presented in the Statements of Assets and
Liabilities. Net realized gains and losses on foreign currency transactions
represent disposition of foreign currencies, and the difference between the
amount recorded at the time of the transaction and the U.S. dollar amount
actually received. Any realized gain or loss incurred by the Funds due to
foreign currency translation is included in the Statements of Operations. The
Funds did not enter into any forward foreign currency contracts during the
period ended March 31, 2005.
FUTURES CONTRACTS
The Funds may invest in financial futures contracts for the purpose of hedging
their existing securities or securities it intends to purchase against
fluctuations in fair value caused by changes in prevailing markets. Upon
entering into a financial futures contract, the Fund is required to pledge to
the broker an amount of cash and/or other assets equal to a certain percentage
of the contract amount (initial margin deposit). Subsequent payments, known as
"variation margin," are made or received by the Fund each day, depending on the
daily fluctuations in the fair value of the underlying security. The Fund
recognizes a gain or loss equal to the daily variation margin. Should market
conditions move unexpectedly, the Fund may not achieve the anticipated benefits
of the financial futures contracts and may realize a loss. The use of futures
transactions involves the risk of imperfect correlation in movements in the
price of futures contracts and the underlying hedged assets. The Funds held no
financial futures contracts as of March 31, 2005.
OPTIONS TRANSACTIONS
The Covered Call Fund writes (sells) call options as part of its normal
investment activities. Each Fund may write (sell) put and call options only if
it owns an offsetting position in the underlying security.
Notes to Financial Statements 83
Notes to Financial Statements (continued)
When a Fund writes a put or call option, an amount equal to the premium received
is included in the Statement of Assets and Liabilities as a liability. The
amount of the liability is subsequently marked-to-market to reflect the current
market value of the option. Such liability is subject to off balance sheet risks
to the extent of any future increases in market value of the written options. If
an option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized. If a written call
option is exercised, a gain or loss is realized for the sale of the underlying
security and the proceeds from the sale are increased by the premium originally
received. If a written put option is assigned, the cost of the security acquired
is decreased by the premium originally received. As a writer of an option, a
Fund has no control over whether the underlying securities are subsequently sold
(call) or purchased (put) and, as a result, bears the market risk of an
unfavorable change in the price of the security underlying the written option.
Each Fund may also purchase put and call options. When a Fund purchases a put or
call option, an amount equal to the premium paid is included in the Fund's
Statement of Assets and Liabilities as an investment, and is subsequently
marked-to-market to reflect the current market value of the option. If an option
expires on the stipulated expiration date or if the Fund enters into a closing
sale transaction, a gain or loss is realized. If the Fund exercises a call, the
cost of the security acquired is increased by the premium paid for the call. If
the Fund exercises a put option, a gain or loss is realized from the sale of the
underlying security, and the proceeds from such a sale are decreased by the
premium originally paid. Written and purchased options are non-income producing
securities.
SHORT SALES
The Long/Short Fund may engage in short sales (selling securities it does not
own) as part of its normal investment activities. These short sales are
collateralized by cash equivalents or securities with the Fund's prime broker
and segregated account at the Fund's custodian. The collateral required is
determined daily by reference to the market value of the short positions. Such
collateral for the Fund is held by one broker. Dividend expense on short sales
is treated as an expense on the Statement of Operations. Liabilities for
securities sold short are reported at market value in the financial statements.
Such liabilities are subject to off-balance sheet risk to the extent of any
future increases in market value of the securities sold short. The ultimate
liability for securities sold short could exceed the liabilities recorded in the
Statement of Assets and Liabilities. Liabilities for securities sold short are
closed out by purchasing the applicable securities for delivery to the Fund's
prime broker.
84 Notes to Financial Statements
INCOME TAXES
The Funds intend to qualify as regulated investment companies under Subchapter M
of the Internal Revenue Code and, accordingly, the Funds will generally not be
subject to federal and state income taxes, or federal excise taxes to the extent
that they intend to make sufficient distributions of net investment income and
net realized capital gain.
Dividends paid by the Funds from net investment income and distributions of net
realized short-term gains are, for federal income tax purposes, taxable as
ordinary income to shareholders.
Dividends and distributions to shareholders are recorded by the Funds on the
ex-dividend/distribution date. The Bond Fund distributes net investment income,
if any, to shareholders monthly. The Equity Income Fund distributes net
investment income, if any, to shareholders quarterly. The Funds distribute net
realized capital gains, if any, to shareholders at least annually, if not offset
by capital loss carryovers. Income distributions and capital gain distributions
are determined in accordance with income tax regulations, which may differ from
generally accepted accounting principles generally accepted in the United States
of America.
INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date. Non-cash dividends included
in dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Discounts and
premiums on securities purchased are amortized over the life of the respective
securities.
INVESTMENT TRANSACTIONS
Security transactions are accounted for no later than one business day after
trade date. However, for financial reporting purposes security transactions are
accounted for on trade date. Gains and losses on securities sold are determined
on the basis of identified cost.
ALLOCATION OF INCOME AND EXPENSES
Each class of a Fund's shares bears expenses incurred specifically on its behalf
and, in addition, each class bears a portion of general expenses, based upon
relative net assets of each class. Expenses which cannot be directly attributed
to a specific fund in the Trust are apportioned between all funds in the Trust
based upon relative net assets. In calculating the net asset value per share of
each class, investment income, realized and unrealized gains and losses and
expenses other than class specific expenses are allocated daily to each class of
shares based upon the proportion of net assets.
Notes to Financial Statements 85
Notes to Financial Statements (continued)
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEES
ICON Advisers, Inc. ("ICON") serves as investment adviser to the Funds and is
responsible for managing the Funds' portfolios of securities. ICON receives a
monthly management fee that is computed daily at an annual rate of 0.60% of
average daily nets assets of the Bond Fund, 0.75% of average daily net assets of
the Core Equity, Covered Call and Equity Income Funds, and 0.85% of average
daily net assets of the Long/Short Fund. ICON has contractually agreed to limit
its investment advisory fee and/or reimburse certain of the Funds' operating
expenses (exclusive of brokerage, interest, taxes, and extraordinary expenses)
to the extent necessary to ensure that the Funds' operating expenses do not
exceed 1.60% for Class C, 1.00% for Class I and 0.75% for Class Z shares of the
Bond Fund effective January 29, 2005. Prior to that date, ICON had contractually
agreed to limit the expenses of the Bond Fund to 1.90% for Class C, 1.30% for
Class I and 1.05% for Class Z shares. ICON has also contractually agreed to
limit its investment advisory fee and/or reimburse certain operating expenses
(exclusive of brokerage, interest, taxes, and extraordinary expenses) to the
extent necessary to ensure that operating expenses do not exceed 2.20% for Class
C, 1.45% for Class I and 1.20% for Class Z shares of the Covered Call and Equity
Income Funds, and 2.30% for Class C, 1.55% for Class I and 1.30% for Class Z
shares of the Long/Short Fund. The Bond Fund expense limitation will continue in
effect until at least January 31, 2016 and the expenses limitation for the other
Funds will continue until at least January 31, 2006.
To the extent ICON reimburses or absorbs fees and expenses, it may seek payment
of such amounts for up to three years after the expenses were reimbursed or
absorbed. A Fund will make no such payment, however, if the total Fund operating
expenses exceed the expense limits in effect at the time the expenses were
reimbursed or at the time these payments are proposed. For the period ended
March 31, 2005, ICON's net reimbursement/(recoupment) during the period ended
March 31, 2005 was $8,395 on Class C and $21,302 on Class I shares of the Bond
Fund; $9,487 on Class C and $33,043 on Class I shares of the Covered Call Fund;
$7,478 on Class C and $6,167 on Class I shares of the Equity Income Fund; and
$7,229 on Class C and $(23) on Class I shares of the Long/Short Fund,
respectively. These expense reimbursements are subject to recovery by ICON based
on a rolling three-year period.
TRANSFER AGENT, CUSTODY AND ACCOUNTING FEES
U.S. Bank N.A. ("U.S. Bank") and U.S. Bancorp Fund Services, LLC ("U.S.
Bancorp") provided domestic custodial services, transfer agent services and fund
accounting for the Funds during the period. For these services the Trust paid a
fee for transfer agent and custody services at an annual rate of 0.055% on the
first $500 million of average daily net assets, 0.05% on the next
86 Notes to Financial Statements
$1 billion of average daily net assets, and 0.04% on the average daily net
assets in excess of $1.5 billion. The Funds paid a minimum fee for fund
accounting of $45,000 on the Core Equity Fund; $58,250 on the Bond Fund, Covered
Call Fund, and Long/Short Fund; and $48,750 on the Equity Income Fund on the
first $100 million of average net assets. Any amount above $100 million was
charged 0.025% on the next $200 million of average daily net assets and 0.0125%
on the daily average net assets in excess of $300 million for the Bond Fund,
Covered Call Fund, Equity Income Fund and the Long/Short Fund. The Core Equity
Fund was charged 0.0125% on any amount over $100 million and 0.0075% on any
amount over $200 million. The Trust also paid for various out-of-pocket costs
incurred by U.S. Bancorp that are estimated to be 0.02% of average daily net
assets.
Effective April 1, 2005, the Trust retained BISYS Fund Services Ohio, Inc.
("BISYS") as Fund Accounting and Administration Services Agent for the Funds.
For its services, the Trust pays BISYS 0.03% on the first $1.75 billion of Trust
Assets, 0.0175% on assets over $1.75 billion and up to $5 billion, and 0.01% on
assets in excess of $5 billion. Effective April 18, 2005, the Trust retained
Brown Brothers Harriman ("BBH") as custodian of the Trust's investments. For
domestic custody services, the Trust pays BBH 0.0065% on the first $50 million
of average net assets and 0.0050% on domestic assets above $50 million, plus
certain transaction charges. For foreign custody services, the Trust pays BBH
0.03% on foreign assets plus certain transaction charges. Effective April 25,
2005, the Trust retained Boston Financial Data Services, Inc. as the Trust's
transfer agent. For these services, the Trust pays an account fee of $13.25 per
open account, $7.00 per networked account, $1.80 per closed account, plus
certain other transaction and cusip charges.
ADMINISTRATIVE SERVICES
The Trust has entered into an administrative services agreement with ICON
pursuant to which ICON oversees the administration of the Trust's business and
affairs, including regulatory reporting and all necessary office space,
equipment, personnel and facilities. This agreement provides for an annual fee
to ICON of 0.05% on the Funds' first $1.5 billion of average daily net assets
and 0.045% on average daily net assets in excess of $1.5 billion. The
administrative services agreement provides that ICON will not be liable for any
error of judgment, mistake of law, or any loss suffered by the Trust in
connection with matters to which the administrative services agreement relates,
except for a loss resulting from willful misfeasance, bad faith or negligence by
ICON in the performance of its duties.
During the period, U.S. Bancorp provided sub-administration services to ICON for
a sub-administration fee of 0.02% on the Trust's first $1.5 billion of average
daily net assets and 0.015% on assets above $1.5 billion, subject to a minimum
annual fee of $140,000. Effective April 1, 2005, ICON entered into a sub-
Notes to Financial Statements 87
Notes to Financial Statements (continued)
administration agreement with BISYS pursuant to which BISYS assists ICON with
the administration and business affairs of the Trust. For its services, ICON
pays BISYS at an annual rate of 0.025% on the first $1.75 billion of Trust
assets and 0.015% on assets above $1.75 billion.
DISTRIBUTION FEES
The Funds have adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940
Act ("12b-1 Plan") under which the Funds are authorized to compensate the Funds'
distributor, ICON Distributors, Inc. ("IDI") (an affiliate of the adviser) for
the sale and distribution of shares. Under the 12b-1 Plan, Bond Fund Class C
shareholders pay an annual 12b-1 and service fee of 0.85% of average daily net
assets and Class I shareholders pay an annual 12b-1 fee of 0.25% of average
daily net assets. The shareholders of the other Funds pay an annual 12b-1 and
service fee of 1.00% of average daily net assets for Class C shares and an
annual 12b-1 and service fee of 0.25% of average daily net assets for Class I
shares. For the period ended March 31, 2005 the total amounts paid or payable to
IDI pursuant to the 12b-1 Plan were $3,165 on Class C shares and $80,346 on
Class I shares of the Bond Fund, $305,729 on Class C shares and $70,888 on Class
I shares of the Core Equity Fund, $12,213 on Class C shares and $60,494 on Class
I shares of the Covered Call Fund, $12,916 on Class C shares and $164,266 on
Class I shares of the Equity Income Fund, and $29,687 on Class C shares and
$49,935 on Class I shares of the Long/Short Fund.
RELATED PARTIES
Certain Officers and Directors of ICON are also Officers and Trustees of the
Funds; however, such Officers and Trustees (with the exception of the Chief
Compliance Officer) receive no compensation from the Funds. There are certain
employees of ICON, such as the Chief Compliance Officer and staff who administer
the compliance program, for which the Funds reimburse ICON for certain amounts
related to compensation and certain other expenses incurred. For the period
ended March 31, 2005, the total related amounts paid by the Trust are included
in Other Expenses on the Statements of Operations.
3. LINE OF CREDIT
The Funds had entered into Lines of Credit agreements with U.S. Bank that allows
the Funds to borrow funds, subject to certain conditions for temporary purposes.
Interest on these borrowings was calculated at prime, which was 5.5% at March
31, 2005. A commitment fee of $500 per line of credit has been
88 Notes to Financial Statements
paid by each Fund. The maximum borrowing was limited to 25% of eligible
securities held by the portfolio subject to the following maximums:
<Table>
ICON Bond Fund $ 9,000,000
ICON Core Equity Fund $15,000,000
ICON Covered Call Fund $ 7,000,000
ICON Equity Income Fund $25,000,000
ICON Long/Short Fund $ 3,000,000
</Table>
The Long/Short Fund had $352,361 outstanding on its line of credit as of March
31, 2005.
Effective April 18, 2005, the Fund entered into Lines of Credit agreements with
BBH; the maximum borrowing is limited to 25% of eligible securities held by the
portfolio subject to a maximum borrowing limit by the Trust of $135 million.
4. OPTIONS CONTRACTS WRITTEN
The number of option contracts written and the premiums received by the ICON
Covered Call Fund during the period ended March 31, 2005, were as follows:
<Table>
<Caption>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
- -------------------------------------------------------------------------------------
Options outstanding, beginning of period 11,776 $ 1,035,052
Options written during period 6,997 6,242,196
Options expired during period (1,474) (1,361,600)
Options closed during period (4,095) (4,460,399)
Options assigned during period (413) (424,950)
Options outstanding, end of period 12,791 1,030,299
</Table>
5. FEDERAL INCOME TAX
Income and capital gain distributions are determined in accordance with income
tax regulations that may differ from accounting principles that are generally
accepted in the United States of America. These differences are due to differing
treatments for items such as net short-term gains, deferrals of wash losses,
foreign currency transactions, net investment losses, and capital loss
carryovers.
Notes to Financial Statements 89
Notes to Financial Statements (continued)
The tax character of distributions paid during the periods indicated were as
follows:
<Table>
<Caption>
ORDINARY LONG-TERM RETURN OF TOTAL
INCOME CAPITAL GAIN CAPITAL DISTRIBUTIONS
- ------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2004
ICON Bond Fund $1,983,810 $ - $- $1,963,810
ICON Core Equity Fund - - - -
ICON Covered Call Fund 825,244 54 - 825,298
ICON Equity Income Fund 1,974,348 - - 1,974,348
ICON Long/Short Fund 102,417 27,732 - 130,149
YEAR ENDED SEPTEMBER 30, 2003
ICON Bond Fund 1,394,730 - - 1,394,730
ICON Core Equity Fund - - - -
ICON Covered Call Fund - - - -
ICON Equity Income Fund 555,767 - - 555,767
ICON Long/Short Fund - - - -
</Table>
Accumulated capital losses noted below represent net capital loss carryovers as
of September 30, 2004 that may be available to offset future realized capital
gains and thereby reduce future taxable income distributions. These carryovers
expire on September 30, 2010 and 2011.
During the year ended September 30, 2004, the following capital loss
carryforwards were used:
<Table>
ICON Bond Fund $ 716
ICON Core Equity Fund 3,759,872
ICON Covered Call Fund -
ICON Equity Income Fund -
ICON Long/Short Fund 445
</Table>
The tax components of capital shown in the table below represent: (1) losses or
deductions the portfolio may be able to offset against income and gains
recognized in future years, and (2) post October loss deferrals.
<Table>
<Caption>
ACCUMULATED UNDISTRIBUTED UNDISTRIBUTED POST OCTOBER
CAPITAL LOSSES ORDINARY INCOME LONG-TERM GAIN DEFERRALS
- ----------------------------------------------------------------------------------------
ICON Bond Fund $ - $ 153,122 $359,860 $ -
ICON Core Equity Fund 8,138,524 - - -
ICON Covered Call Fund - 1,404,286 707,268 -
ICON Equity Income
Fund - 690,544 898,315 -
ICON Long/Short Fund - 605,334 845,915 -
</Table>
90 Notes to Financial Statements
As of March 31, 2005, book cost for financial reporting purposes is
substantially the same for federal income tax purposes and differs from fair
value by net unrealized appreciation/(depreciation) of securities as follows:
<Table>
<Caption>
UNREALIZED UNREALIZED NET APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
- -----------------------------------------------------------------------------------------
ICON Bond Fund $ 70,278,229 $ 927,479 $ (637,256) $ 290,223
ICON Core Equity Fund 114,299,422 21,270,379 (1,781,114) 19,489,265
ICON Covered Call Fund 47,463,524 7,191,148 (870,783) 6,320,365
ICON Equity Income Fund 119,865,936 16,247,879 (1,863,921) 14,383,958
ICON Long/Short Fund 54,885,184 7,239,884 (1,550,465) 5,689,419
</Table>
6. SEGREGATED ACCOUNT AND SHORT SALE COLLATERAL
As of March 31, 2005 the ICON Long/Short Fund had securities or cash deposits
with the counterparty to the short sales in the amount of $9,073,172 as
collateral for the short sales.
7. TOTAL RETURN RESTATEMENT
The ICON Core Equity Fund, Class C has restated its total return for the period
ended September 30, 2001 from (0.20%) to (6.03%). The resulting decrease in
total return of 5.83% was due to a mathematical error.
Notes to Financial Statements 91
PORTFOLIO HOLDINGS
A list of each ICON Fund's Top 10 holdings is available at www.iconadvisers.com
on or about 15 days following each month-end. Each ICON Fund also files a
complete schedule of portfolio holdings for the first and third quarters of its
fiscal year with the SEC on Form N-Q. The ICON Funds' Forms N-Q are available at
www.sec.gov or may be reviewed and copied at the Commission's Public Reference
Room in Washington, DC. Information about the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
PROXY VOTING
A description of the policies and procedures the ICON Funds use to vote proxies
is available at www.iconadvisers.com; without charge upon request by calling
1-800-764-0442; or on the SEC's website at www.sec.gov.
Information about how the ICON Funds voted proxies related to each Fund's
portfolio securities during the 12-month period ended June 30 is available at
www.iconadvisers.com or on the SEC's website at www.sec.gov.
FOR MORE INFORMATION
This report is for the general information of the Funds' shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by a current prospectus. You may obtain a copy of the prospectus,
which contains information about the investment objectives, risks, charges,
expenses, and share classes of each ICON Fund, by visiting www.iconadvisers.com
or by calling 1-800-764-0442. Please read the prospectus carefully before
investing.
ICON Distributors, Inc., Distributor.
92
[ICON FUNDS LOGO]
<Table>
For more information about the ICON Funds, contact us:
By Telephone 1-800-764-0442
By Mail ICON Funds
P.O. Box 55452
Boston, MA 02205-8165
In Person ICON Funds
5299 DTC Boulevard, 12(th) Floor
Greenwood Village, CO 80111
On the Internet www.iconadvisers.com
By E-Mail info@iconadvisers.com
</Table>
[ICON FUNDS LOGO]
1-800-764-0442
www.iconadvisers.com
ICRPANNUDIV I-142-DIV
> March 31, 2005
Investment Update
ICON FOREIGN FUNDS
ICON ASIA-PACIFIC REGION FUND
ICON EUROPE FUND
ICON INTERNATIONAL EQUITY FUND
Semiannual Report
(unaudited)
(ICON FUNDS LOGO)
Table of Contents
<Table>
ABOUT THIS REPORT 2
MESSAGE FROM ICON FUNDS 4
MANAGEMENT OVERVIEWS AND SCHEDULES OF INVESTMENTS
ICON Asia-Pacific Region Fund 7
ICON Europe Fund 16
ICON International Equity Fund 26
HYPOTHETICAL EXPENSE EXAMPLE 37
FINANCIAL STATEMENTS 39
FINANCIAL HIGHLIGHTS 46
NOTES TO FINANCIAL STATEMENTS 48
</Table>
About This Report
HISTORICAL RETURNS
All total returns mentioned in this report account for the change in a Fund's
per-share price and the reinvestment of any dividends, capital gain
distributions, and tax return of capital. If your account is set up to receive
Fund distributions in cash rather than to reinvest them, your actual return may
differ from these figures. The Funds' performance results do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or on the
redemption of Fund shares.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance results represent
past performance, and current performance may be higher or lower. Please call
1-800-764-0442 or visit www.iconadvisers.com for performance results current to
the most recent month-end.
PORTFOLIO DATA
This report reflects ICON's views, opinions and portfolio holdings as of March
31, 2005, the end of the reporting period. The information is not a complete
analysis of every aspect of any sector, industry, security or the Funds.
Opinions and forecasts regarding industries, companies and/or themes, and
portfolio composition and holdings, are subject to change at any time based on
market and other conditions, and should not be construed as a recommendation of
any specific security. Each Fund's percentage holdings as of March 31, 2005 are
included in each Fund's Schedule of Investments.
Certain companies' stock performance during the period is mentioned throughout
the Management Overviews. While ICON's quantitative investment methodology does
not consider company-specific factors beyond financial data, these factors may
impact a stock's performance, and therefore, Fund performance.
There are risks associated with mutual fund investing, including the risk of
loss of principal. There is no assurance that the investment process will
consistently lead to successful results. Investments in foreign securities may
entail unique risks, including political, market and currency risks. An
investment in a region fund may involve greater risk and volatility than a
diversified fund. An investment concentrated in sectors and industries may
involve greater risk and volatility than a more diversified investment. There
are also risks associated with small- and mid-cap investing, including limited
product lines, less liquidity and small market share.
2 About This Report
COMPARATIVE INDEXES
The comparative indexes discussed in this report are meant to provide a basis
for judging a Fund's performance against specific securities indexes. Each index
shown accounts for both change in security price and reinvestment of dividends
and distributions (except as noted), but does not reflect the costs of managing
a mutual fund. The total return figures for the Morgan Stanley Capital
International (MSCI) indexes assume change in security prices and the deduction
of local taxes. The Funds' portfolios may significantly differ in holdings and
composition from the indexes. Individuals cannot invest directly in an index.
- - The unmanaged MSCI Europe Index comprises approximately 600 stocks traded in
developed markets from 15 European countries. The capitalization-weighted
index attempts to capture at least 60% of investable capitalization in those
markets subject to constraints governed by industry representation, maximum
liquidity, maximum float, and minimum cross-ownership.
- - The unmanaged MSCI All Country Pacific Index comprises stocks traded in the
developed and emerging markets of the Pacific Basin (Australia, China, Hong
Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore,
Taiwan and Thailand). The capitalization-weighted index attempts to capture
at least 60% of investable capitalization in those markets subject to
constraints governed by industry representation, maximum liquidity, maximum
float, and minimum cross-ownership.
- - The MSCI All Country World Index ex-United States (ACWI ex-U.S.) is a leading
unmanaged benchmark of international stock performance. The
capitalization-weighted index is representative of the performance of
securities of companies located in developed and emerging markets outside of
the United States.
- - The unmanaged Bloomberg European 500 Index measures the weighted average
performance in U.S. dollars of the 500 most highly capitalized European
companies.
Index returns and statistical data included in this report are provided by
Bloomberg and FactSet.
About This Report 3
Message from ICON Funds
- --------------------------------------------------------------------------------
The fact that most countries have been in the midst of a two-year bull market
may come as a surprise to many investors.
- --------------------------------------------------------------------------------
Thank you for your continued investment in the ICON Foreign Funds and welcome to
those of you receiving this report for the first time.
As you may know, ICON employs a value-based, bottom-up investment system of
industry rotation to try to capture leading market themes that evolve over time.
While intrinsic value is dynamic and always changing, stock prices have
continued in their move toward fair value, even as a number of distractions have
made for a volatile setting.
DEALING WITH DISTRACTIONS
At times like these, I often think of Douglas Adams, author of The Hitchhiker's
Guide to the Galaxy, who wrote, "Nothing travels faster than the speed of light
with the possible exception of bad news, which follows its own special laws."
Over the course of the past six months, investors worldwide have been inundated
by a litany of bad news, ranging from Iraq, terrorism and oil prices to interest
rates and budget deficits. Although foreign markets seemed to rise above these
distractions during the first half of the reporting period, investors have since
found it difficult to sort through these events despite the presence of
generally solid economic and investment fundamentals -- and no clear signs of
inflation.
Investors' behavior is highly reminiscent of patterns established last year,
which featured fear-driven sell-offs and highly correlated industry dynamics in
international markets. During market setbacks, economically sensitive and
cyclical industries have declined the most while industries considered
recession-proof have been the most resilient. In contrast, when the markets have
advanced, cyclical industries have led the way while recession-proof industries
have lagged.
PARTICIPATING IN THE ADVANCE
Given myriad doubts about international economies and earnings, and the
volatility typically associated with a cyclical rally, the fact that most
countries have been in the midst of a bull market may come as a surprise to many
investors. International stocks have actually recorded a two-year advance.
Research into market history and investor behavior indicates to us that many
investors assign the horrible and distasteful aspects of war as negatives for
economic growth and company valuations. However, we have found no concrete
evidence, past or present, to support such a relationship. For this reason, we
believe that successful investors need to stay focused on the divergence between
price and value, while also drawing a distinction between geopolitical concerns
and the realities of investment fundamentals.
4 Message from ICON Funds
We apply our value-based, bottom-up industry rotation
across the entire market in order to identify
leading industry themes wherever they may emerge.
[CRAIG T. CALLAHAN PHOTO]
Craig T. Callahan
President
Our research has shown these fundamentals to be generally healthy and
encouraging. By invoking the valuation-driven discipline that enables us to
patiently ride through market turbulence, we have participated in the advance.
A MORE DIVERSE INDUSTRY COMPOSITION
No matter what the market environment, our approach remains consistent. At the
end of the period, we measured the broad international market as significantly
below our estimate of fair value. This discount makes sense to us as investors
seemingly braced for a slowdown in economic growth and corporate earnings,
although we believe the market has overreacted to these short-term concerns.
Nevertheless, what has become gradually apparent amid the market turmoil is that
our recent focus on highly cyclical industries is no longer warranted. While
economically sensitive sectors such as Energy, Materials and Industrials were
clear market leaders during the first half of our reporting period, value and
relative strength readings have since pointed us toward a more diverse
composition of industries, including those widely considered to be defensive or
recession-proof.
Accordingly, we were able to capture second-half upside within the Healthcare,
Consumer Staples and Utilities sectors, where combinations of value and relative
strength became increasingly more attractive. Healthcare, in particular, offered
considerable breadth, with all eight industries in the sector trading at
double-digit discounts to their intrinsic value and six posting above-average
relative strength. Utilities were also quite compelling. Despite their so-called
defensive tendencies, we view them as prospective market leaders.
International equity markets have apparently decoupled from domestic equity
markets, with Europe and Japan moving in more of a steady upward path compared
to the trading range seen in the U.S. However, due to the strengthening U.S.
dollar, positive international returns appear to be benefiting from stock
appreciation rather than currency strength, as opposed to events in 2004.
Message from ICON Funds 5
Message from ICON Funds (continued)
SEARCHING FOR VALUE
Having sustained market leadership for the past three years, it comes as no
surprise that cyclical industries were decidedly volatile. Because of their
sensitivity to economic fluctuations, these industries typically exhibit a
higher standard deviation or variability, which often serves as a measure of
risk. Capturing their leadership has been a challenge and has certainly made for
some unpleasant periods. However, our system dictates that we not be swayed by
emotion. We simply allow our system to direct us to the best values in the
international markets.
ICON does not subscribe to the traditional style grid that classifies stocks by
size -- small-cap, mid-cap or large-cap -- and by style, either value or growth.
Instead, we apply our value-based, bottom-up industry rotation across the entire
market in order to identify leading industry themes wherever they may emerge. In
doing so, we are an all-cap manager and thus avoid arbitrary barriers or
restrictions in our pursuit of value.
THE PRIVILEGE OF GUIDING YOU
In January, we had the good fortune to announce the promotions of three
investment team members. We'd like to again take a moment to share the news.
Portfolio Managers Robert Straus, Derek Rollingson and J.C. Waller, III have
been promoted to Vice Presidents and have been named Chief Investment Officer,
Director of Research and Director of Institutional Portfolio Management,
respectively. Additionally, Scott Snyder has been named Assistant Portfolio
Manager for the ICON Foreign Funds. These promotions recognize the outstanding
and valuable contributions each has made to your investment.
In closing, we wish to thank you for the privilege of guiding you through these
challenging markets. For current market updates, as well as up-to-date Fund,
performance and account information, we invite you to visit our website at
www.iconadvisers.com.
Yours truly,
/s/ Craig T. Callahan
Craig T. Callahan, DBA
Chairman of the Board of Trustees and President of the Adviser
6 Message from ICON Funds
Management Overview
ICON Asia-Pacific Region Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 100.7%
Top 10 Equity Holdings 18.3%
Number of Stocks 94
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
Shimano, Inc. 2.0%
Cosco Pacific Ltd. 2.0%
Sumitomo Metal Industries Ltd. 2.0%
LG Engineering and Construction Corp. 1.9%
LG Corp. 1.8%
Esprit Holdings Ltd. 1.8%
Marubeni Corp. 1.7%
Singamas Container Holdings Ltd. 1.7%
TechTronic Industries Co., Ltd. 1.7%
Terumo Corp. 1.7%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Asia-Pacific Region Fund appreciated 12.95% for the six-month period
ended March 31, 2005, keeping pace with its benchmark, the MSCI All Country
Pacific Index, which returned 13.06% over the same period. Total returns for
other periods as of March 31, 2005 appear on page 11.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. In what could be described as a tale of two quarters, the Fund trailed its
benchmark during the first half of the reporting period, but made up
considerable ground during the second half to finish the period virtually in
line with the index. While our focus on leading industry themes enhanced
relative performance throughout the fiscal half-year, the Fund also profited
from the weak U.S. dollar, which translated into currency gains for companies
domiciled in non-dollar-denominated countries.
On average, Asian markets outperformed U.S. markets during the period, as
Asian shares continued to trade at deeper discounts and therefore closed a
wider valuation gap. However, while performance in the U.S. market was
attributed to small- and medium-capitalization stocks, the Fund maintained
more of a large-cap bias during the period. Although this tilt was still
underweight the Fund's predominantly large-cap benchmark, the Fund's relative
overweight in small- and mid-cap stocks benefited relative performance.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying Asia-Pacific
region securities we believe are underpriced regardless of their location on
the conventional style grid. Our system is not limited by restrictions on
market capitalization, investment style or country origin, and searches for
potential industry leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Conflicting markets characterized the six-month period, as a year-end
cyclical theme gave way to volatility. Nevertheless, there are few signs that
Management Overview 7
Management Overview (continued)
ICON Asia-Pacific Region Fund
the Tsunami disaster in December 2004 will have lasting long-term effects on
the region's economic development. For that reason, Asian markets are
expected to remain key contributors to global economic growth, supported by
healthy domestic demand, strengthening interregional trade and increased
economic integration.
At the country level, after appearing to emerge from its protracted malaise,
Japan once again slipped into a mild recession. Prospects for future growth
appear uncertain, especially within the context of Asia's developing
economies, where income growth has boosted consumer confidence and spending.
Meanwhile, structural reforms are expected to moderate China's robust
expansion to more sustainable levels. Given signs that domestic demand and
investment growth are slowing, a soft landing should prove positive for this
burgeoning economic powerhouse.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. While cyclical industries drove much of the Fund's upside momentum, the
Industrials sector in particular contributed most to the Fund's performance
versus the benchmark. The Fund maintained an active overweighting with broad
participation throughout the sector, a move that paid off handsomely.
Industry standouts included construction & farm machinery & heavy trucks and
marine, which were linked to regional strength in shipbuilding. Positions in
the Consumer Discretionary sector were also significant contributors,
highlighted by vigorous gains in the distributors industry.
Primary detractors surfaced within the Telecommunication & Utilities sector,
specifically the electric utilities and integrated telecommunication services
industries, while Leisure and Consumer Staples saw weakness in defensive
industries such as packaged foods & meats.
Stocks that contributed to Fund performance included shipbuilder Hanjin Heavy
Industries & Construction, which capitalized on surging demand for cargo
vessels and containers. Industrial products manufacturer Sumitomo Metal
Industries boosted earnings by way of rising steel prices, while automotive
distributor Jardine Cycle & Carriage Ltd. benefited from record-low finance
rates that helped boost car and motorcycle sales.
Among the Fund's principal company detractors, cargo shipper Kawasaki Kisen
Kaisha declined when a convertible bond issue raised dilution fears related
to the company's stock price. Also retreating was Jiangxi Copper Co. Ltd. as
market woes came to bear on this leading Chinese copper producer. Meanwhile,
lowered earnings guidance and an unfavorable currency exchange rate hurt
industrial conglomerate Hyosung Corp. All three companies were sold from the
Fund as their relative strength declined.
8 Management Overview
[J.C. WALLER, III PHOTO]
J.C. Waller, III
Portfolio Manager
[SCOTT SNYDER PHOTO]
Scott Snyder
Assistant Portfolio Manager
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE ASIA-PACIFIC REGION?
A. Although the overall Asia-Pacific region remains economically robust, our
focus remains on demonstrated industry valuation and relative strength to
drive our investment decisions. While economically sensitive and defensive
sectors alike have shown contradictory strength indicators, the Industrials
sector continues to exhibit clear leadership, with Healthcare now emerging as
a potential theme. Nevertheless, lagging sectors such as Information
Technology and Financials are contributing to volatile markets, convincing us
to be evermore vigilant in sticking to our discipline.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund trailed its benchmark early in the period, but made up considerable
ground later on to finish virtually in line with the index.
- - Our focus on leading industry themes enhanced relative performance during the
period, as did the Fund's relative overweight position in small- and mid-cap
stocks.
- - Cyclical industries such as construction & farm machinery & heavy trucks,
marine and distributors were significant contributors to Fund performance,
while defensive-oriented electric utilities, integrated telecommunication
services and packaged foods & meats detracted from performance.
- - Stocks that contributed to Fund performance included Hanjin Heavy Industries
& Construction, Sumitomo Metal Industries and Jardine Cycle & Carriage Ltd.
- - Among the Fund's principal company detractors were Kawasaki Kisen Kaisha,
Jiangxi Copper Co. Ltd. and Hyosung Corp.
Management Overview 9
Management Overview (continued)
TOP COUNTRIES
March 31, 2005
<Table>
Japan
38.7%
South Korea
23.7%
Hong Kong
17.5%
Singapore
8.1%
Australia
6.4%
Indonesia
3.0%
China
2.7%
Malaysia
0.6%
</Table>
Percentages are based upon net assets.
TOP SECTORS
March 31, 2005
<Table>
Industrials
29.5%
Materials
16.0%
Financial
13.4%
Leisure & Consumer Staples
11.6%
Consumer Discretionary
10.6%
Healthcare
7.6%
Energy
6.3%
Information Technology
4.2%
Telecommunications & Utilities
1.5%
</Table>
Percentages are based upon net assets.
10 Management Overview
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 2/25/97
- -------------------------------------------------------------------------------------------
ICON Asia-Pacific Region Fund 12.95% 2.42% -4.39% -0.91%
- -------------------------------------------------------------------------------------------
MSCI All Country Pacific Index 13.06% 4.84% -3.00% 0.61%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative index can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON ASIA-PACIFIC REGION FUND MSCI ALL COUNTRY PACIFIC INDEX
----------------------------- ------------------------------
2/25/1997 10000 10000
3/31/1998 8310 7839
3/31/1999 8569 8616
3/31/2000 11620 12234
3/31/2001 9011 8111
3/31/2002 6625 7264
3/31/2003 5801 5976
3/31/2004 9067 10020
3/31/2005 9287 10505
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 2/25/97 to a
$10,000 investment made in an unmanaged securities index on that date. The
Fund's performance in this chart and the performance table assumes the
reinvestment of dividends, capital gain distributions and tax return of capital
but does not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or on the redemption of Fund shares.
Management Overview 11
Schedule of Investments
ICON Asia-Pacific Region Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 100.7%
AUSTRALIA 6.4%
CONSUMER DISCRETIONARY 1.1%
APPAREL ACCESSORIES AND LUXURY GOODS 1.1%
11,000 Billabong
International Ltd. $ 113,028
------------
TOTAL CONSUMER DISCRETIONARY 113,028
ENERGY 0.6%
OIL & GAS EXPLORATION & PRODUCTION 0.6%
9,200 Santos Ltd. 64,126
------------
TOTAL ENERGY 64,126
FINANCIAL 0.9%
DIVERSIFIED BANKS 0.9%
3,700 Commonwealth Bank of
Australia 99,971
------------
TOTAL FINANCIAL 99,971
HEALTHCARE 1.3%
BIOTECHNOLOGY 1.3%
5,300 CSL Ltd. 139,951
------------
TOTAL HEALTHCARE 139,951
MATERIALS 2.5%
DIVERSIFIED METALS & MINING 2.5%
5,800 BHP Billiton Ltd. 80,946
16,000 Iluka Resources Ltd. 70,228
51,700 Zinifex Ltd.(a)v 118,570
------------
TOTAL MATERIALS 269,744
------------
TOTAL AUSTRALIA 686,820
CHINA 2.7%
ENERGY 1.4%
INTEGRATED OIL & GAS 1.4%
158,000 China Petroleum &
Chemical Corp. 64,088
148,000 PetroChina Co., Ltd. 92,857
------------
TOTAL ENERGY 156,945
INDUSTRIALS 0.7%
MARINE 0.7%
86,000 China Shipping
Development Co.,
Ltd. 75,238
------------
TOTAL INDUSTRIALS 75,238
MATERIALS 0.6%
COMMODITY CHEMICALS 0.6%
150,000 SINOPEC Shanghai
Petrochemical Co.,
Ltd. 60,911
------------
TOTAL MATERIALS 60,911
------------
TOTAL CHINA 293,094
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
HONG KONG 17.5%
CONSUMER DISCRETIONARY 5.2%
APPAREL RETAIL 1.9%
28,000 Esprit Holdings Ltd. $ 190,898
------------
DISTRIBUTORS 1.6%
96,000 Li & Fung Ltd. 174,521
------------
HOUSEHOLD APPLIANCES 1.7%
82,000 Techtronic
Industries Co., Ltd. 181,165
------------
TOTAL CONSUMER DISCRETIONARY 546,584
FINANCIAL 2.6%
REAL ESTATE MANAGEMENT & DEVELOPMENT 1.9%
104,000 Sino Land Co., Ltd. 93,790
14,000 Swire Pacific Ltd. 110,637
------------
204,427
SPECIALIZED FINANCE 0.7%
30,000 Hong Kong Exchanges
& Clearing Ltd. 77,362
------------
TOTAL FINANCIAL 281,789
INDUSTRIALS 4.8%
INDUSTRIAL CONGLOMERATES 0.5%
18,000 CITIC Pacific Ltd. 52,667
------------
MARINE 1.5%
33,000 Orient Overseas
International Ltd. 158,930
------------
MARINE PORTS & SERVICES 2.8%
46,000 China Merchants
Holdings
International Co.,
Ltd. 90,070
100,000 Cosco Pacific Ltd. 216,835
------------
306,905
------------
TOTAL INDUSTRIALS 518,502
INFORMATION TECHNOLOGY 1.2%
SEMICONDUCTOR EQUIPMENT 1.2%
31,000 ASM Pacific
Technology Ltd. 133,140
------------
TOTAL INFORMATION TECHNOLOGY 133,140
LEISURE & CONSUMER STAPLES 1.3%
HOTELS & RESORTS & CRUISE LINES 1.3%
246,000 China Travel
International
Investment Hong Kong
Ltd. 75,526
68,000 Hong Kong and
Shanghai Hotels Ltd. 62,670
------------
TOTAL LEISURE & CONSUMER
STAPLES 138,196
</Table>
12 Schedule of Investments
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
MATERIALS 1.7%
METAL & GLASS CONTAINERS 1.7%
208,000 Singamas Container
Holdings Ltd.(a)v $ 181,350
------------
TOTAL MATERIALS 181,350
TELECOMMUNICATIONS & UTILITIES 0.7%
ELECTRIC UTILITIES 0.7%
27,000 Cheung Kong
Infrastructure
Holdings Ltd. 77,422
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 77,422
------------
TOTAL HONG KONG 1,876,983
INDONESIA 3.0%
FINANCIAL 1.3%
DIVERSIFIED BANKS 1.3%
296,000 PT Bank Danamon
Indonesia 148,418
------------
TOTAL FINANCIAL 148,418
INDUSTRIALS 0.8%
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
0.8%
280,000 PT United Tractors 84,822
------------
TOTAL INDUSTRIALS 84,822
MATERIALS 0.9%
DIVERSIFIED METALS & MINING 0.9%
390,000 PT Aneka Tambang 92,697
------------
TOTAL MATERIALS 92,697
------------
TOTAL INDONESIA 325,937
JAPAN 38.7%
CONSUMER DISCRETIONARY 1.1%
COMPUTER & ELECTRONICS RETAIL 1.1%
2,200 Yamada Denki Co.,
Ltd. 115,118
------------
TOTAL CONSUMER DISCRETIONARY 115,118
ENERGY 3.3%
OIL & GAS EXPLORATION & PRODUCTION 1.4%
20,000 Teikoku Oil Co.,
Ltd. 145,880
------------
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.9%
33,000 Cosmo Oil Co., Ltd. 106,806
18,000 Nippon Mining
Holdings, Inc. 98,866
------------
205,672
------------
TOTAL ENERGY 351,552
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
FINANCIAL 4.5%
CONSUMER FINANCE 2.5%
1,300 Aeon Credit Service
Co., Ltd. $ 87,616
2,500 Credit Saison Co.,
Ltd. 89,631
700 Orix Corp. 89,209
------------
266,456
DIVERSIFIED BANKS 0.8%
12 Sumitomo Mitsui
Financial Group,
Inc. 81,010
------------
REGIONAL BANKS 1.2%
8,000 Suruga Bank Ltd. 70,990
10,000 The Bank of Fukuoka
Ltd. 62,646
------------
133,636
------------
TOTAL FINANCIAL 481,102
HEALTHCARE 4.6%
HEALTH CARE DISTRIBUTORS 2.0%
1,400 Alfresa Holdings
Corp. 57,861
12,000 Mediceo Holdings
Co., Ltd. 159,277
------------
217,138
HEALTH CARE EQUIPMENT 2.6%
4,000 Olympus Corp. 93,100
5,900 Terumo Corp. 177,332
------------
270,432
------------
TOTAL HEALTHCARE 487,570
INDUSTRIALS 8.8%
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
1.2%
17,000 Komatsu Ltd. 127,403
------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.8%
28,000 Fuji Electric
Holdings Co., Ltd. 88,021
------------
INDUSTRIAL MACHINERY 2.9%
15,000 Daifuku Co., Ltd. 110,764
56,000 Japan Steel Works
Ltd. 119,761
22,000 Sumitomo Heavy
Industries Ltd. 86,327
------------
316,852
MARINE 1.0%
17,000 Nippon Yusen K.K 102,206
------------
</Table>
Schedule of Investments 13
Schedule of Investments (continued)
ICON Asia-Pacific Region Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
TRADING COMPANIES & DISTRIBUTORS 2.9%
58,000 Marubeni Corp. $ 185,600
13,000 Mitsui & Co., Ltd. 119,594
------------
305,194
------------
TOTAL INDUSTRIALS 939,676
INFORMATION TECHNOLOGY 3.0%
ELECTRONIC EQUIPMENT MANUFACTURERS 1.9%
800 Nidec Corp. 99,385
25,000 Oki Electric
Industry Co., Ltd. 105,057
------------
204,442
SEMICONDUCTOR EQUIPMENT 1.1%
1,600 Advantest Corp. 122,114
------------
TOTAL INFORMATION TECHNOLOGY 326,556
LEISURE & CONSUMER STAPLES 7.4%
BREWERS 1.5%
7,400 Asahi Breweries Ltd. 95,787
14,000 Sapporo Holdings
Ltd. 65,423
------------
161,210
LEISURE PRODUCTS 2.8%
1,700 Sankyo Co., Ltd. 82,144
6,500 Shimano, Inc. 218,163
------------
300,307
PACKAGED FOODS & MEATS 0.8%
24,000 Nippon Suisan Kaisha
Ltd. 81,136
------------
PHOTOGRAPHIC PRODUCTS 1.1%
10,000 Nikon Corp. 114,553
------------
TOBACCO 1.2%
12 Japan Tobacco, Inc. 133,067
------------
TOTAL LEISURE & CONSUMER
STAPLES 790,273
MATERIALS 6.0%
CONSTRUCTION MATERIALS 1.1%
42,000 Taiheiyo Cement
Corp. 117,621
------------
DIVERSIFIED CHEMICALS 1.2%
61,000 Ube Industries Ltd. 125,481
------------
STEEL 3.7%
58,000 Kobe Steel Ltd. 101,973
34,000 Nippon Steel Corp. 85,694
117,000 Sumitomo Metal
Industries Ltd. 210,039
------------
397,706
------------
TOTAL MATERIALS 640,808
------------
TOTAL JAPAN 4,132,655
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
MALAYSIA 0.6%
FINANCIAL 0.6%
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.6%
65,000 Sp Setia Bhd $ 68,463
------------
TOTAL FINANCIAL 68,463
------------
TOTAL MALAYSIA 68,463
SINGAPORE 8.1%
CONSUMER DISCRETIONARY 1.6%
DISTRIBUTORS 1.6%
24,000 Jardine Cycle &
Carriage Ltd. 170,003
------------
TOTAL CONSUMER DISCRETIONARY 170,003
ENERGY 1.0%
OIL & GAS EQUIPMENT & SERVICES 1.0%
110,000 KS Tech Ltd. 105,919
------------
TOTAL ENERGY 105,919
FINANCIAL 1.1%
REAL ESTATE MANAGEMENT & DEVELOPMENT 1.1%
82,000 Keppel Land Ltd. 114,122
------------
TOTAL FINANCIAL 114,122
HEALTHCARE 0.8%
HEALTH CARE FACILITIES 0.8%
92,000 Parkway Holdings
Ltd. 90,785
------------
TOTAL HEALTHCARE 90,785
INDUSTRIALS 3.6%
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
1.5%
144,000 Sembcorp Marine
Ltd.(a) 168,264
------------
INDUSTRIAL CONGLOMERATES 1.1%
18,000 Keppel Corp., Ltd. 118,713
------------
TRUCKING 1.0%
74,000 SBS Transit Ltd.(a)v 103,076
------------
TOTAL INDUSTRIALS 390,053
------------
TOTAL SINGAPORE 870,882
SOUTH KOREA 23.7%
CONSUMER DISCRETIONARY 1.6%
DISTRIBUTORS 1.6%
5,700 Hyundai Department
Store H&S Co., Ltd. 167,923
------------
TOTAL CONSUMER DISCRETIONARY 167,923
FINANCIAL 2.4%
DIVERSIFIED BANKS 1.5%
6,300 Shinhan Financial
Group Co., Ltd. 168,264
------------
</Table>
14 Schedule of Investments
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.9%
9,800 LG Investment &
Securities Co.,
Ltd.(a) $ 91,746
------------
TOTAL FINANCIAL 260,010
HEALTHCARE 0.9%
PHARMACEUTICALS 0.9%
1,049 Yuhan Corp.v 92,870
------------
TOTAL HEALTHCARE 92,870
INDUSTRIALS 10.8%
CONSTRUCTION & ENGINEERING 4.7%
2,900 Daelim Industrial
Co., Ltd. 153,379
20,500 Daewoo Engineering &
Construction Co.,
Ltd. 139,049
7,200 LG Engineering And
Construction Corp. 198,193
------------
490,621
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
1.8%
4,500 Daewoo Shipbuilding
& Marine Engineering
Co., Ltd. 84,414
9,500 Hanjin Heavy
Industries &
Construction Co.,
Ltd. 110,046
------------
194,460
ELECTRICAL COMPONENTS & EQUIPMENT 1.2%
5,400 LS Cable Ltd 131,000
------------
INDUSTRIAL CONGLOMERATES 1.8%
8,300 LG Corp. 197,896
------------
MARINE 1.3%
4,657 Hanjin Shipping Co.,
Ltd. 134,730
------------
TOTAL INDUSTRIALS 1,148,707
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
LEISURE & CONSUMER STAPLES 2.9%
PACKAGED FOODS & MEATS 2.0%
300 Nong Shim Co., Ltd. $ 85,495
3,000 Samyang Corp. 125,777
------------
211,272
TOBACCO 0.9%
3,000 KT&G Corp.v 97,364
------------
TOTAL LEISURE & CONSUMER
STAPLES 308,636
MATERIALS 4.3%
COMMODITY CHEMICALS 1.4%
11,700 Hanwha Chemical
Corp. 153,666
------------
DIVERSIFIED CHEMICALS 0.6%
3,000 Samsung Fine
Chemicals Co., Ltd. 60,974
------------
DIVERSIFIED METALS & MINING 1.4%
4,400 Korea Zinc Co., Ltd. 146,416
------------
STEEL 0.9%
500 POSCO 98,892
------------
TOTAL MATERIALS 459,948
------------
TELECOMMUNICATIONS & UTILITIES 0.8%
INTEGRATED TELECOMMUNICATION SERVICES 0.8%
2,300 KT Corp. 89,337
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 89,337
------------
TOTAL SOUTH KOREA 2,527,431
------------
TOTAL INVESTMENTS 100.7% (COST
$9,866,214) 10,782,265
LIABILITIES LESS OTHER ASSETS
(0.7)% (73,610)
------------
NET ASSETS 100.0% $10,708,655
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
v All securities were fair valued (Note 1) as of March 31, 2005 unless noted
with a v. Total value of securities fair valued was $10,188,855.
Schedule of Investments 15
Management Overview
ICON Europe Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 99.1%
Top 10 Equity Holdings 15.7%
Number of Stocks 102
Short-Term Investments 0.7%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
DSV A/S 1.9%
Kingspan Group plc 1.8%
Boehler-Uddeholm AG 1.8%
HeidelbergCement AG 1.6%
Meda AB 1.5%
DIS Deutsche Industries Svc. 1.5%
Umicore 1.4%
Kobenhavns Lufthavne A/S 1.4%
Titan Cement Co. 1.4%
OMV AG 1.4%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Europe Fund appreciated 15.55% for the six-month period ended March
31, 2005. Relative to its benchmarks, this performance outpaced the 11.22%
return of the Bloomberg European 500 Index, while trailing the 16.55% return
for the MSCI Europe Index over the same period. Total returns for other
periods as of March 31, 2005 appear on page 20.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. The Fund's focus on leading industry themes benefited relative performance
during the period, as did weakness in the U.S. dollar. With the dollar's
decline peaking in late 2004, the Fund profited from direct exposure to gains
in the euro, which helped boost returns in the underlying equities. Having
recorded strong fourth-quarter advances, European shares outperformed the
broad U.S. market before flattening in conjunction with the dollar's
first-quarter rebound.
Despite the dollar's rebound, U.S. markets lost ground, as European shares
continued to trade at deeper discounts and therefore closed a wider valuation
gap. Although ICON does not utilize market capitalization as a valuation
measure, the Fund's large-cap bias during the period was still underweight
the Fund's predominantly large-cap benchmarks, which served to benefit
relative performance.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying European
securities we believe are underpriced regardless of their location on the
conventional style grid. Our system is not limited by restrictions on market
capitalization, investment style or country of origin, and searches for
potential industry leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
16 Management Overview
[ROBERT STRAUS, CMT PHOTO]
Robert Straus, CMT
Portfolio Manager
[SCOTT SNYDER PHOTO]
Scott Snyder
Assistant Portfolio Manager
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. An early-period cyclical theme surrendered to volatile first-quarter markets
as surging oil prices fueled inflation fears and growth concerns in the
United States. European markets once again found themselves in the throes of
an economic slowdown, characterized by continued high unemployment in Germany
and France, as well as lower exports due to the strong euro.
Also contributing to the downturn in business conditions was a decrease in
personal consumption, reflecting stagnant consumer confidence within the
region. Although discouraging, steady gains in foreign investment and capital
spending helped to offset the effects of this untimely deceleration.
Nevertheless, globalization and economic integration continued to be viewed
as key to a broad economic recovery, evidenced by the ongoing expansion of
the European Union.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Cyclical groups in the Industrials and Materials sectors continued to
register strong returns while serving as leading contributors to the Fund.
From our standpoint, the Fund was well positioned to capture this theme,
having maintained an active overweight in both sectors based on valuation and
relative strength. Within Industrials, the trucking and industrial machinery
industries proved to be the Fund's top performers, while payoffs in Materials
were realized from exposure to the steel and diversified metals & mining
industries.
Meanwhile, tepid consumer spending weighed heavily on the Consumer
Discretionary sector, highlighted by markedly poor performance among
homebuilding companies. Telecommunication & Utilities was another sector that
produced poor relative performance, triggered by the Fund's underweight
exposure and subsequent weakness in integrated telecommunications services
and electric utilities.
Among the Fund's meaningful stock contributors, trucking and logistics
company DSV A/S benefited from consolidation trends that enabled it to triple
its 2004 profit. Specialty steel producer Boehler-Uddeholm AG took advantage
of acquisitions and favorable supply-demand dynamics to boost earnings.
Elsewhere, telecommunication services firm Anscom Holding AG returned to
profitability by virtue of a 25% cut in operating expenses.
In contrast, specialty shipper Star Reefers, Inc. came under pressure as
operating expenses were negatively impacted by the weak U.S. dollar and
higher interest rates in China, an area where it operates. Tire manufacturer
Michelin also suffered when high-profile institutional investors cut their
stake in the company. The Fund continued to hold both stocks at period-end,
as they had not reached our sell criteria.
Management Overview 17
Management Overview (continued)
ICON Europe Fund
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE EUROPEAN MARKET?
A. Despite signs of economic softening, we continue to detect compelling
opportunities within the European market. Stocks in the Industrials sector
remain attractive, particularly among the electrical components & equipment
and construction & engineering groups, while shifts in industry leadership
have brought Healthcare to the forefront. Meanwhile, the Materials sector
appears to be waning alongside persistent weakness in Information Technology
and Financials.
That said, in the absence of a clear theme going forward, we remain committed
to our discipline, looking for value and relative strength wherever they may
emerge.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - Our focus on leading industry themes enhanced relative performance during the
period, as did the Fund's position in large-cap stocks.
- - The Fund profited from direct exposure to currency gains, which helped boost
returns in the underlying equities.
- - Active overweights in the top-performing Industrials and Materials sectors
enabled the Fund to capture cyclical upside, while poor showings in the
Consumer Discretionary and Telecommunication & Utilities sectors worked
against Fund performance.
- - Meaningful stock contributors included DSV A/S, Boehler-Uddeholm AG and Ascom
Holding AG.
- - Stocks that detracted from Fund performance included Star Reefers Inc. Co.
and Michelin.
18 Management Overview
TOP COUNTRIES
March 31, 2005
<Table>
Germany
13.4%
Austria
10.1%
Switzerland
10.0%
Belgium
8.1%
Netherlands
8.1%
United Kingdom
7.8%
France
7.2%
Italy
6.4%
Greece
6.2%
Sweden
4.7%
</Table>
Percentages are based upon net assets.
TOP SECTORS
March 31, 2005
<Table>
Industrials
26.5%
Financial
17.5%
Materials
14.1%
Leisure & Consumer Staples
9.6%
Healthcare
8.4%
Energy
7.0%
Telecommunications & Utilities
6.0%
Consumer Discretionary
5.6%
Information Technology
4.4%
</Table>
Percentages are based upon net assets.
Management Overview 19
Management Overview (continued)
ICON Europe Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 2/20/97
- -------------------------------------------------------------------------------------------
ICON Europe Fund 15.55% 17.00% 5.96% 7.88%
- -------------------------------------------------------------------------------------------
MSCI Europe Index 16.55% 20.88% 0.50% 8.07%
- -------------------------------------------------------------------------------------------
Bloomberg European 500 Index 11.22% 13.93% -5.15% 6.63%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative indexes can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
BLOOMBERG EUROPEAN
ICON EUROPE FUND MSCI EUROPE INDEX 500 INDEX
---------------- ----------------- ------------------
2/20/1997 10000 10000 10000
3/31/1998 15104 14684 15466
3/31/1999 14245 15401 15808
3/31/2000 13848 18298 21916
3/31/2001 12653 14181 17706
3/31/2002 11980 13480 17566
3/31/2003 9623 10038 10728
3/31/2004 15812 15519 14770
3/31/2005 18500 18759 16828
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 2/20/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
20 Management Overview
Schedule of Investments
ICON Europe Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
COMMON & PREFERRED STOCKS 99.1%
AUSTRIA 10.1%
CONSUMER DISCRETIONARY 1.1%
TIRES & RUBBER 1.1%
6,300 Semperit AG Holding $ 200,897
------------
TOTAL CONSUMER DISCRETIONARY 200,897
ENERGY 1.4%
INTEGRATED OIL & GAS 1.4%
760 OMV AG 241,580
------------
TOTAL ENERGY 241,580
INDUSTRIALS 2.9%
BUILDING PRODUCTS 0.7%
2,700 Wienerberger AG 122,911
ENVIRONMENTAL SERVICES 0.9%
4,530 BWT AGv 153,219
INDUSTRIAL MACHINERY 1.3%
2,700 Andritz AG(a) 241,338
------------
TOTAL INDUSTRIALS 517,468
MATERIALS 3.1%
STEEL 3.1%
2,300 Boehler - Uddeholm
AGv 313,674
3,100 voestalpine AG 239,295
------------
552,969
------------
TOTAL MATERIALS 552,969
TELECOMMUNICATIONS & UTILITIES 1.6%
ELECTRIC UTILITIES 0.8%
600 Verbund AG 136,087
------------
INTEGRATED TELECOMMUNICATION SERVICES 0.8%
7,600 Telekom Austria AG 148,865
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 284,952
------------
TOTAL AUSTRIA 1,797,866
BELGIUM 8.1%
FINANCIAL 2.2%
DIVERSIFIED BANKS 1.2%
2,700 KBC Group N.V. 227,673
------------
OTHER DIVERSIFIED FINANCIAL SERVICES 1.0%
5,900 Fortis 168,243
------------
TOTAL FINANCIAL 395,916
INDUSTRIALS 0.8%
ELECTRICAL COMPONENTS & EQUIPMENT 0.8%
1,600 Bekaert NV 134,432
------------
TOTAL INDUSTRIALS 134,432
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
INFORMATION TECHNOLOGY 1.0%
COMMUNICATIONS EQUIPMENT 1.0%
1,400 EVS Broadcast
Equipment S.A.v $ 179,422
------------
TOTAL INFORMATION TECHNOLOGY 179,422
LEISURE & CONSUMER STAPLES 0.8%
FOOD RETAIL 0.8%
900 Colruyt SA 139,889
------------
TOTAL LEISURE & CONSUMER
STAPLES 139,889
MATERIALS 2.7%
COMMODITY CHEMICALS 1.3%
1,900 Solvay S.A. 226,384
------------
DIVERSIFIED METALS & MINING 1.4%
2,500 Umicore 253,881
------------
TOTAL MATERIALS 480,265
TELECOMMUNICATIONS & UTILITIES 0.6%
WIRELESS TELECOMMUNICATION SERVICES 0.6%
1,135 Mobistar, S.A.(a)v 99,620
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 99,620
------------
TOTAL BELGIUM 1,429,544
DENMARK 4.1%
ENERGY 0.8%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 0.8%
2,500 Dampskibsselskabet
Torm A/S(a) 133,071
------------
TOTAL ENERGY 133,071
INDUSTRIALS 3.3%
AIRPORT SERVICES 1.4%
1,060 Kobenhavns Lufthavne
A/S(a) 252,535
------------
TRUCKING 1.9%
4,500 DSV A/S 343,128
------------
TOTAL INDUSTRIALS 595,663
------------
TOTAL DENMARK 728,734
FRANCE 7.2%
CONSUMER DISCRETIONARY 0.8%
TIRES & RUBBER 0.8%
2,100 Michelin (CGDE) - B 138,034
------------
TOTAL CONSUMER DISCRETIONARY 138,034
FINANCIAL 1.9%
DIVERSIFIED BANKS 1.1%
1,820 Societe Generale 189,281
------------
</Table>
Schedule of Investments 21
Schedule of Investments (continued)
ICON Europe Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
LIFE & HEALTH INSURANCE 0.8%
2,000 CNP Assurances $ 141,569
------------
TOTAL FINANCIAL 330,850
INDUSTRIALS 1.9%
BUILDING PRODUCTS 1.0%
2,780 Compagnie de Saint-
Gobain 169,491
------------
CONSTRUCTION & ENGINEERING 0.9%
1,100 Vinci SA 158,595
------------
TOTAL INDUSTRIALS 328,086
LEISURE & CONSUMER STAPLES 1.8%
LEISURE PRODUCTS 0.9%
2,000 Trigano S.A. 177,779
------------
MOVIES & ENTERTAINMENT 0.9%
5,197 Vivendi Universal(a) 159,126
------------
TOTAL LEISURE & CONSUMER
STAPLES 336,905
TELECOMMUNICATIONS & UTILITIES 0.8%
MULTI-UTILITIES & UNREGULATED POWER 0.8%
5,200 SUEZ 140,055
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 140,055
------------
TOTAL FRANCE 1,273,930
GERMANY 13.4%
CONSUMER DISCRETIONARY 2.0%
APPAREL ACCESSORIES & LUXURY GOODS 0.8%
4,600 Hugo Boss AG 142,150
------------
TIRES & RUBBER 1.2%
2,800 Continental AG 216,668
------------
TOTAL CONSUMER DISCRETIONARY 358,818
FINANCIAL 0.5%
MULTI-LINE INSURANCE 0.5%
715 Dem Allianz Ag 90,752
------------
TOTAL FINANCIAL 90,752
HEALTHCARE 1.1%
PHARMACEUTICALS 1.1%
2,900 Schering AG 193,240
------------
TOTAL HEALTHCARE 193,240
INDUSTRIALS 3.6%
CONSTRUCTION & ENGINEERING 0.5%
3,000 Hochtief AG 95,816
------------
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
0.7%
2,500 Vossloh AGv 126,863
------------
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.9%
1,900 Leoni AG(a)v $ 156,923
------------
EMPLOYMENT SERVICES 1.5%
6,200 DIS Deutscher
Industries Servicesv 257,345
------------
TOTAL INDUSTRIALS 636,947
INFORMATION TECHNOLOGY 1.1%
INTERNET SOFTWARE & SERVICES 1.1%
5,900 United Internet AG 188,234
------------
TOTAL INFORMATION TECHNOLOGY 188,234
LEISURE & CONSUMER STAPLES 0.9%
HOUSEHOLD PRODUCTS 0.9%
1,700 Henkel KGaA 154,016
------------
TOTAL LEISURE & CONSUMER
STAPLES 154,016
MATERIALS 3.2%
CONSTRUCTION MATERIALS 1.6%
4,500 HeidelbergCement AGv 283,179
------------
DIVERSIFIED CHEMICALS 1.6%
3,100 BASF AG 219,287
2,500 Bayer AG 82,723
------------
302,010
------------
TOTAL MATERIALS 585,189
TELECOMMUNICATIONS & UTILITIES 1.0%
MULTI-UTILITIES & UNREGULATED POWER 1.0%
2,800 RWE AG 169,389
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 169,389
------------
TOTAL GERMANY 2,376,585
GREECE 6.2%
ENERGY 0.5%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 0.5%
9,210 Hellenic Petroleum
S.A. 92,162
------------
TOTAL ENERGY 92,162
FINANCIAL 2.2%
DIVERSIFIED BANKS 2.2%
4,900 Alpha Bank(a) 165,415
6,900 National Bank Of
Greece SA 233,323
------------
398,738
------------
TOTAL FINANCIAL 398,738
</Table>
22 Schedule of Investments
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
INFORMATION TECHNOLOGY 0.6%
COMMUNICATIONS EQUIPMENT 0.6%
20,500 Intracom SA $ 102,472
------------
TOTAL INFORMATION TECHNOLOGY 102,472
LEISURE & CONSUMER STAPLES 0.8%
LEISURE PRODUCTS 0.8%
15,000 Jumbo S.A. 143,469
------------
TOTAL LEISURE & CONSUMER
STAPLES 143,469
MATERIALS 1.4%
CONSTRUCTION MATERIALS 1.4%
7,400 Titan Cement Co.(a)v 245,387
------------
TOTAL MATERIALS 245,387
TELECOMMUNICATIONS & UTILITIES 0.7%
ELECTRIC UTILITIES 0.7%
4,000 Public Power Corp. 115,301
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 115,301
------------
TOTAL GREECE 1,097,529
IRELAND 3.2%
INDUSTRIALS 2.5%
BUILDING PRODUCTS 1.8%
26,600 Kingspan Group plcv 314,503
------------
INDUSTRIAL CONGLOMERATES 0.7%
5,300 DCC plcv 123,267
------------
TOTAL INDUSTRIALS 437,770
TELECOMMUNICATIONS & UTILITIES 0.7%
INTEGRATED TELECOMMUNICATION SERVICES 0.7%
45,000 Eircom Group plc(a)v 118,428
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 118,428
------------
TOTAL IRELAND 556,198
ITALY 6.4%
ENERGY 1.8%
INTEGRATED OIL & GAS 1.1%
6,900 Eni S.p.A 179,340
------------
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 0.7%
9,500 Erg S.p.A 130,139
------------
TOTAL ENERGY 309,479
FINANCIAL 2.7%
DIVERSIFIED BANKS 1.9%
11,339 Sanpolo IMI S.p.A 177,672
29,560 Banco Intesa S.p.A 150,205
------------
327,877
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
MULTI-LINE INSURANCE 0.8%
6,300 Riunione Adiatica di
Sicurta S.p.A. $ 148,350
------------
TOTAL FINANCIAL 476,227
LEISURE & CONSUMER STAPLES 0.9%
BROADCASTING & CABLE TV 0.9%
10,847 Mediaset S.p.A 155,994
------------
TOTAL LEISURE & CONSUMER
STAPLES 155,994
MATERIALS 1.0%
CONSTRUCTION MATERIALS 1.0%
11,720 Buzzi Unicem S.p.A 181,549
------------
TOTAL MATERIALS 181,549
------------
TOTAL ITALY 1,123,249
LUXEMBOURG 0.7%
MATERIALS 0.7%
STEEL 0.7%
5,180 Arcelor NPV 118,291
------------
TOTAL MATERIALS 118,291
------------
TOTAL LUXEMBOURG 118,291
NETHERLANDS 8.1%
ENERGY 1.7%
INTEGRATED OIL & GAS 0.8%
2,300 Royal Dutch
Petroleum Co. 137,856
------------
OIL & GAS EQUIPMENT & SERVICES 0.9%
2,600 IHC Caland NV 165,237
------------
TOTAL ENERGY 303,093
FINANCIAL 1.0%
OTHER DIVERSIFIED FINANCIAL SERVICES 1.0%
5,600 ING Groep NV 169,203
------------
TOTAL FINANCIAL 169,203
HEALTHCARE 1.2%
HEALTH CARE DISTRIBUTORS 1.2%
3,400 OPG Groep NV 216,416
------------
TOTAL HEALTHCARE 216,416
INDUSTRIALS 4.2%
EMPLOYMENT SERVICES 1.2%
4,900 Randstad Holding NV 218,232
------------
INDUSTRIAL CONGLOMERATES 1.2%
4,200 Aalberts Industries
N.V.(a) 216,870
------------
</Table>
Schedule of Investments 23
Schedule of Investments (continued)
ICON Europe Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
TRADING COMPANIES & DISTRIBUTORS 1.8%
1,800 Eriks Group N.V.(a) $ 125,947
5,500 Univar NV 181,922
------------
307,869
------------
TOTAL INDUSTRIALS 742,971
------------
TOTAL NETHERLANDS 1,431,683
NORWAY 3.6%
ENERGY 0.8%
OIL & GAS EQUIPMENT & SERVICES 0.8%
4,800 TPS - Nopec
Geophysical Co.
ASA(a)v 140,456
------------
TOTAL ENERGY 140,456
FINANCIAL 0.9%
MULTI-LINE INSURANCE 0.9%
16,400 Storebrand ASA 148,602
------------
TOTAL FINANCIAL 148,602
INDUSTRIALS 1.3%
MARINE 1.3%
5,400 Star Reefers,
Inc.(a) 130,224
4,400 Wilhelm Wilhelmsen
ASA(a) 112,915
------------
TOTAL INDUSTRIALS 243,139
TELECOMMUNICATIONS & UTILITIES 0.6%
INTEGRATED TELECOMMUNICATION SERVICES 0.6%
12,000 Telenor ASA 107,994
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 107,994
------------
TOTAL NORWAY 640,191
PORTUGAL 1.1%
LEISURE & CONSUMER STAPLES 1.1%
FOOD RETAIL 1.1%
12,715 Jeronimo Martins(a)v 193,687
------------
TOTAL LEISURE & CONSUMER
STAPLES 193,687
------------
TOTAL PORTUGAL 193,687
SPAIN 4.4%
CONSUMER DISCRETIONARY 0.8%
APPAREL RETAIL 0.8%
4,600 Inditex S.A. 137,531
------------
TOTAL CONSUMER DISCRETIONARY 137,531
FINANCIAL 0.9%
MULTI-LINE INSURANCE 0.9%
10,000 Corporacion Mapfre,
S.A. 154,182
------------
TOTAL FINANCIAL 154,182
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
INDUSTRIALS 1.6%
CONSTRUCTION & ENGINEERING 1.6%
6,700 ACS, Actividades de
Construccion y
Servicios, S.A. $ 165,865
2,200 Fomento de
Construcciones y
Contratas S.A. 112,458
------------
278,323
------------
TOTAL INDUSTRIALS 278,323
LEISURE & CONSUMER STAPLES 1.1%
TOBACCO 1.1%
4,900 Altadis, S.A. 200,359
------------
TOTAL LEISURE & CONSUMER
STAPLES 200,359
------------
TOTAL SPAIN 770,395
SWEDEN 4.7%
FINANCIAL 0.8%
DIVERSIFIED BANKS 0.8%
13,800 Nordea Bank AB 139,435
------------
TOTAL FINANCIAL 139,435
HEALTHCARE 3.9%
HEALTH CARE DISTRIBUTORS 1.4%
5,600 Meda AB(a)v 257,434
------------
HEALTH CARE EQUIPMENT 1.3%
15,300 Getinge AB - B
Shares 228,440
------------
HEALTH CARE FACILITIES 1.2%
14,100 Capio AB(a) 213,464
------------
TOTAL HEALTHCARE 699,338
------------
TOTAL SWEDEN 838,773
SWITZERLAND 10.0%
FINANCIAL 2.8%
DIVERSIFIED CAPITAL MARKETS 1.9%
4,170 Credit Suisse Group 178,333
1,904 UBS AG 160,810
------------
339,143
REINSURANCE 0.9%
2,100 Swiss Reinsurance
Co. 150,408
------------
TOTAL FINANCIAL 489,551
HEALTHCARE 1.2%
HEALTH CARE EQUIPMENT 1.2%
1,000 Nobel Biocare
Holding AG 210,518
------------
TOTAL HEALTHCARE 210,518
</Table>
24 Schedule of Investments
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
INDUSTRIALS 3.5%
DIVERSIFIED COMMERCIAL SERVICES 1.1%
2,900 Amazys Holding
AG(a)v $ 196,577
------------
INDUSTRIAL MACHINERY 2.4%
535 Schindler Holding AG
Reg 203,303
525 Sulzer AG 226,364
------------
429,667
------------
TOTAL INDUSTRIALS 626,244
INFORMATION TECHNOLOGY 1.7%
COMMUNICATIONS EQUIPMENT 0.7%
7,738 Ascom Holding AG(a) 130,808
------------
COMPUTER STORAGE & PERIPHERALS 1.0%
2,900 Logitech
International
S.A.(a) 176,183
------------
TOTAL INFORMATION TECHNOLOGY 306,991
MATERIALS 0.8%
FERTILIZERS & AGRICULTURAL CHEMICALS 0.8%
1,300 Syngenta AG 136,041
------------
TOTAL MATERIALS 136,041
------------
TOTAL SWITZERLAND 1,769,345
UNITED KINGDOM 7.8%
CONSUMER DISCRETIONARY 0.9%
HOMEBUILDING 0.9%
9,400 Bellway plcv 156,361
------------
TOTAL CONSUMER DISCRETIONARY 156,361
FINANCIAL 1.6%
CONSUMER FINANCE 1.6%
20,200 Cattles plc 129,028
11,500 Provident Financial
plcv 153,872
------------
282,900
------------
TOTAL FINANCIAL 282,900
HEALTHCARE 1.0%
HEALTH CARE DISTRIBUTORS 1.0%
11,900 Alliance UniChem plc 174,011
------------
TOTAL HEALTHCARE 174,011
</Table>
<Table>
<Caption>
SHARES MARKET VALUE
- ---------------------------------------------
INDUSTRIALS 0.9%
TRUCKING 0.9%
15,700 Bps Arriva plcv $ 155,765
------------
TOTAL INDUSTRIALS 155,765
LEISURE & CONSUMER STAPLES 2.2%
FOOD RETAIL 0.5%
14,500 Tesco plc 86,703
------------
RESTAURANTS 0.9%
12,300 Enterprise Inns plc 179,182
------------
TOBACCO 0.8%
5,200 Imperial Tobacco
Group plc 136,435
------------
TOTAL LEISURE & CONSUMER
STAPLES 402,320
MATERIALS 1.2%
DIVERSIFIED METALS & MINING 1.2%
15,300 BHP Billiton plc 205,527
------------
TOTAL MATERIALS 205,527
------------
TOTAL UNITED KINGDOM 1,376,884
------------
TOTAL COMMON & PREFERRED STOCKS
(COST $15,494,972) 17,522,884
SHORT-TERM INVESTMENTS 0.7%
118,395 Chase Icon South
European Sweep,
0.920%, # 118,395
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $118,395) 118,395
------------
TOTAL INVESTMENTS 99.8% (COST
$15,613,367) 17,641,279
OTHER ASSETS LESS LIABILITIES
0.2% 42,726
------------
NET ASSETS 100.0% $ 17,684,005
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates. The
rates listed are as of March 31, 2005.
v All securities were fair valued (Note 1) as of March 31, 2005 unless noted
with a v. Total value of securities fair valued was $14,015,297.
Schedule of Investments 25
Management Overview
ICON International Equity Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 100.4%
Top 10 Equity Holdings 15.0%
Number of Stocks 114
Short-Term Investments 3.3%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
DSV A/S 1.9%
Shimano Inc. 1.8%
Boehler-Uddeholm AG 1.7%
Umicore 1.6%
Sembcorp Marine, Ltd. 1.5%
Meda AB 1.4%
BHP Billiton plc 1.3%
Kobenhavns Lufthavne A/S 1.3%
Canadian Tire Corp., Class A 1.3%
Union Fenosa, S.A. 1.2%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. For the six months ended March 31, 2005, the ICON International Equity Fund
returned 13.77% for Class I shares, 11.36% for Class C shares, and 14.15% for
Class Z shares, underperforming the 15.79% return of the MSCI All Country
World Index ex-U.S., the Fund's benchmark, over the same period. Total
returns for other periods as of March 31, 2005 appear on page 30.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. While the Fund's focus on leading industry themes yielded meaningful
contributions to relative performance, underlying returns were enhanced by
way of direct exposure to currency gains in the euro, pound and yen. With the
U.S. dollar's decline peaking in late 2004, a broad late-period rally ran its
course just as the dollar embarked on a first-quarter rebound. Nevertheless,
Asian shares continued to eke out modest gains whereas European markets
traded flat.
Foreign shares, which continued to trade at deeper discounts, closed a wider
valuation gap and outperformed. Market capitalization also played a role, as
the Fund's relative underweighting in large-cap stocks placed greater
emphasis on small- and mid-cap names. Although ICON does not utilize market
capitalization as a valuation measure, ICON's investment methodology led to
the Fund's overweight position in mid-caps which added to relative
performance. Conversely, the overweight in small-caps detracted from relative
performance.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying international
securities we believe are underpriced regardless of their location on the
conventional style grid. Our system is not limited by restrictions on market
capitalization, investment style or country origin, and searches for
potential industry leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
26 Management Overview
[ROBERT STRAUS, CMT PHOTO]
Robert Straus, CMT
Portfolio Manager
[J.C. WALLER, III PHOTO]
J.C. Waller, III
Portfolio Manager
[DEREK ROLLINGSON PHOTO]
Derek Rollingson
Portfolio Manager
[SCOTT SNYDER PHOTO]
Scott Snyder
Assistant Portfolio Manager
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. European markets outperformed Asian markets during the period, yet vast
differences underscored the challenges and opportunities facing each region.
With few clear signs that the tsunami disaster will have lasting effects,
Asian markets are expected to play a key role in the ongoing global
expansion. Although Japan remains a question mark, China's receptivity to
structural reforms should lead to more sustainable growth rates, while income
growth in South Asia's developing economies bodes well for consumer spending.
In contrast, European markets once again found themselves in the throes of an
economic slowdown, characterized by continued high unemployment in Germany
and France, as well as lower net exports due to the strong euro.
Nevertheless, a decrease in personal consumption, reflecting stagnant
consumer confidence, belies steady gains in foreign investment and capital
spending, not to mention a benign inflation picture.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. From a sector perspective, Industrials was the principal contributor to
returns and the Fund's largest overall weighting. The Fund enjoyed broad
participation throughout the group. Active overweights in trucking and
building products outpaced their industry counterparts and contributed to
Fund performance. Meanwhile, active underweighting in the Information
Technology sector provided the most outperformance versus the benchmark,
where selective exposure to communications equipment and computer storage &
peripherals proved positive.
In contrast, the Telecommunication & Utilities sector surrendered significant
upside, triggered by underweight exposure and subsequent underperformance in
integrated telecommunication services and wireless telecommunication
services.
Among the Fund's principal company contributors, specialty steel producer
Boehler-Uddeholm AG took advantage of acquisitions and favorable pricing
dynamics to boost earnings. Trucking and logistics company DSV A/S benefited
from consolidation trends that enabled it to triple its 2004 profit.
Elsewhere, higher crude oil prices and wider refining margins bolstered
exploration and production firm OMV AG, which reported a 51% rise in
fourth-quarter profits.
As for the Fund's primary detractors, railroad operator Global Railway
Industries fell as adverse foreign exchange trends cut into reported
revenues. Cargo shipper Kawasaki Kisen Kaisha also declined when a
convertible bond issue raised dilution fears related to the company's stock.
Moreover, wireless services provider Vimpel Communications tumbled on news
that the company could face back tax claims of $300 million, although the
final
Management Overview 27
Management Overview (continued)
ICON International Equity Fund
liability was reduced to $17.6 million. All three stocks were liquidated from
the Fund when they reached our sell criteria.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE INTERNATIONAL MARKET?
A. Despite robust fundamentals in Asia and signs of softening in Europe, we
continue to focus on industry valuation and relative strength to drive our
investment decisions. As cyclical and defensive sectors alike exhibit
contradictory strength indicators, we are currently still seeing clear
leadership within the Industrials sector, with Healthcare now emerging as a
potential theme. Given increasingly volatile markets and significant risks in
sectors such as Information Technology and Financials, we remain evermore
vigilant in sticking to our discipline and following themes outside the
United States.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - While the Fund's focus on leading industry themes yielded meaningful
contributions to relative performance, underlying returns were enhanced by
currency gains.
- - Our methodology led us to overweight mid-cap stocks, which added to relative
performance, and small-cap stocks, which detracted from relative performance.
- - The Industrials sector was the principal contributor to absolute return and
the Fund's largest overall weighting, while Telecommunication & Utilities
surrendered upside on underweight exposure and subsequent underperformance.
- - Among the Fund's principal company contributors to performance were
Boehler-Uddeholm AG, DSV A/S, and OMV AG.
- - Primary individual detractors included Global Railway Industries, Kawasaki
Kisen Kaisha and Vimpel Communications.
28 Management Overview
TOP COUNTRIES
March 31, 2005
<Table>
Canada
10.0%
United Kingdom
8.1%
Hong Kong
7.7%
Japan
8.2%
Germany
7.9%
Austria
7.2%
Netherlands
6.9%
Spain
6.8%
Switzerland
6.5%
Belgium
5.7%
</Table>
Percentages are based upon net assets.
TOP SECTORS
March 31, 2005
<Table>
Industrials
26.6%
Financial
17.0%
Materials
12.7%
Consumer Discretionary
9.1%
Leisure & Consumer Staples
8.8%
Health Care
8.1%
Energy
7.4%
Telecommunications & Utilities
6.2%
Information Technology
4.5%
</Table>
Percentages are based upon net assets.
Management Overview 29
Management Overview (continued)
ICON International Equity Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
INCEPTION SINCE
DATE 6 MONTHS* 1 YEAR 5 YEARS INCEPTION
- ---------------------------------------------------------------------------------------------
ICON International Equity
Fund-Class Z 2/18/97 14.15% 11.93% 2.49% 7.23%
- ---------------------------------------------------------------------------------------------
MSCI ACWI ex-U.S. 15.79% 16.16% -0.07% 5.50%
- ---------------------------------------------------------------------------------------------
ICON International Equity
Fund-Class I 2/6/04 13.77% 11.45% N/A 8.60%
- ---------------------------------------------------------------------------------------------
MSCI ACWI ex-U.S. 15.79% 16.16% N/A 15.77%
- ---------------------------------------------------------------------------------------------
ICON International Equity
Fund-Class C 2/19/04 11.36% 8.88% N/A 3.65%
- ---------------------------------------------------------------------------------------------
MSCI ACWI ex-U.S. 15.79% 16.16% N/A 13.26%
- ---------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative index can be found on pages 2 and 3.
Class Z shares are available only to grandfathered and institutional investors.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON INTERNATIONAL EQUITY
FUND CLASS Z MSCI ACWI EX-U.S.
------------------------- -----------------
2/18/1997 10000 10000
3/31/1998 12900 11659
3/31/1999 12171 12019
3/31/2000 15585 15490
3/31/2001 12239 11337
3/31/2002 11145 10680
3/31/2003 8382 8312
3/31/2004 15742 13291
3/31/2005 17621 15438
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund's Class Z shares on the Class' inception
date of 2/18/97 to a $10,000 investment made in an unmanaged securities index on
that date. Performance for the Fund's other share classes will vary due to
differences in charges and expenses. The Fund's performance in this chart and
the performance table assumes the reinvestment of dividends, capital gain
distributions and tax return of capital but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
30 Management Overview
Schedule of Investments
ICON International Equity Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCK 100.4%
AMERICAN DEPOSITARY RECEIPTS 1.5%
BRAZIL 0.6%
ENERGY 0.6%
INTEGRATED OIL & GAS 0.6%
3,000 Petroleo Brasileiro,
S.A.v $ 132,540
------------
TOTAL ENERGY 132,540
------------
TOTAL BRAZIL 132,540
MEXICO 0.9%
MATERIALS 0.9%
CONSTRUCTION MATERIALS 0.9%
4,803 Cemex, S.A. De
C.V.*v 174,109
------------
TOTAL MATERIALS 174,109
------------
TOTAL MEXICO 174,109
------------
TOTAL AMERICAN DEPOSITORY
RECEIPTS 306,649
AUSTRALIA 1.9%
HEALTH CARE 1.0%
BIOTECHNOLOGY 1.0%
7,600 CSL, Ltd. 200,685
------------
TOTAL HEALTH CARE 200,685
MATERIALS 0.9%
DIVERSIFIED METALS & MINING 0.9%
78,400 Zinifex, Ltd.(a)v 179,805
------------
TOTAL MATERIALS 179,805
------------
TOTAL AUSTRALIA 380,490
AUSTRIA 7.2%
ENERGY 1.1%
INTEGRATED OIL & GAS 1.1%
731 OMV Ag 232,362
------------
TOTAL ENERGY 232,362
FINANCIAL 0.9%
DIVERSIFIED BANKS 0.9%
3,500 Erste Bank Der
Oesterreichischen
Sparkassen Ag 183,098
------------
TOTAL FINANCIAL 183,098
INDUSTRIALS 2.0%
BUILDING PRODUCTS 1.0%
4,500 Wienerberger Ag 204,851
------------
INDUSTRIAL MACHINERY 1.0%
2,200 Andritz Ag(a) 196,645
------------
TOTAL INDUSTRIALS 401,496
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
MATERIALS 2.3%
STEEL 2.3%
2,490 Boehler - Uddeholm
Agv $ 339,586
1,600 Voestalpine Ag 123,507
------------
TOTAL MATERIALS 463,093
TELECOMMUNICATIONS & UTILITIES 0.9%
INTEGRATED TELECOMMUNICATION SERVICES 0.9%
9,600 Telekom Austria Ag 188,040
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 188,040
------------
TOTAL AUSTRIA 1,468,089
BELGIUM 5.7%
FINANCIAL 2.2%
DIVERSIFIED BANKS 1.1%
2,765 KBC Group N.V. 233,154
------------
OTHER DIVERSIFIED FINANCIAL SERVICES 1.1%
7,900 Fortis 225,275
------------
TOTAL FINANCIAL 458,429
MATERIALS 2.6%
COMMODITY CHEMICALS 0.9%
1,600 Solvay, S.A. 190,640
------------
DIVERSIFIED METALS & MINING 1.7%
3,200 Umicore S.A. 324,966
------------
TOTAL MATERIALS 515,606
TELECOMMUNICATIONS & UTILITIES 0.9%
WIRELESS TELECOMMUNICATION SERVICES 0.9%
2,200 Mobistar, S.A.(a)v 193,095
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 193,095
------------
TOTAL BELGIUM 1,167,130
CANADA 10.0%
CONSUMER DISCRETIONARY 3.6%
APPAREL RETAIL 0.5%
4,900 Reitmans Ltd., Class
Av 111,345
------------
DISTRIBUTORS 0.9%
7,400 Uni-Select, Inc.v 179,222
------------
GENERAL MERCHANDISE STORES 1.2%
5,500 Canadian Tire Corp.,
Class Av 259,276
------------
HOME IMPROVEMENT RETAIL 1.0%
10,800 Rona, Inc.(a)v 211,056
------------
TOTAL CONSUMER DISCRETIONARY 760,899
</Table>
Schedule of Investments 31
Schedule of Investments (continued)
ICON International Equity Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
ENERGY 2.4%
OIL & GAS DRILLING 0.7%
6,900 Ensign Resource
Service Group, Inc.v $ 153,656
------------
OIL & GAS EQUIPMENT & SERVICES 1.7%
1,900 CHC Helicopter
Corp., Class Av 87,134
15,800 Savanna Energy
Services Corp.(a)v 248,320
------------
335,454
------------
TOTAL ENERGY 489,110
FINANCIAL 0.5%
OTHER DIVERSIFIED FINANCIAL SERVICES 0.5%
2,900 Brascan Corp.v 109,511
------------
TOTAL FINANCIAL 109,511
LEISURE & CONSUMER STAPLES 2.6%
FOOD DISTRIBUTORS 0.7%
8,100 Van Houtte, Inc.v 149,725
------------
FOOD RETAIL 1.1%
3,400 Loblaw Cos., Ltd.v 204,107
------------
TOBACCO 0.8%
8,600 Rothmans, Inc.v 170,479
------------
TOTAL LEISURE & CONSUMER
STAPLES 524,311
TELECOMMUNICATIONS & UTILITIES 0.9%
MULTI-UTILITIES & UNREGULATED POWER 0.9%
3,500 Atco Ltd., Class Iv 185,816
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 185,816
------------
TOTAL CANADA 2,069,647
CHINA 1.1%
INDUSTRIALS 1.1%
MARINE 1.1%
266,000 China Shipping
Development Co.,
Ltd. 232,714
------------
TOTAL INDUSTRIALS 232,714
------------
TOTAL CHINA 232,714
DENMARK 4.8%
FINANCIAL 0.7%
DIVERSIFIED BANKS 0.7%
5,085 Danske Bank A/S 147,481
------------
TOTAL FINANCIAL 147,481
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
INDUSTRIALS 4.1%
AIRPORT SERVICES 1.3%
1,100 Kobenhavns Lufthavne
A/S(a) $ 262,065
------------
INDUSTRIAL MACHINERY 0.9%
5,500 NKT Holding A/Sv 190,534
------------
TRUCKING 1.9%
5,100 DSV A/S 388,878
------------
TOTAL INDUSTRIALS 841,477
------------
TOTAL DENMARK 988,958
FINLAND 2.5%
FINANCIAL 0.6%
MULTI-LINE INSURANCE 0.6%
9,000 Sampo Oyj 130,795
------------
TOTAL FINANCIAL 130,795
INDUSTRIALS 1.9%
BUILDING PRODUCTS 0.4%
4,150 Uponor Oyj 87,226
------------
ELECTRICAL COMPONENTS & EQUIPMENT 0.6%
7,400 Vacon Oyj 130,829
------------
INDUSTRIAL MACHINERY 0.9%
2,100 Kone Oyj(a)v 163,452
------------
TOTAL INDUSTRIALS 381,507
------------
TOTAL FINLAND 512,302
FRANCE 1.7%
CONSUMER DISCRETIONARY 0.8%
TIRES & RUBBER 0.8%
2,700 Michelin (Cgde) - B 177,472
------------
TOTAL CONSUMER DISCRETIONARY 177,472
INDUSTRIALS 0.9%
BUILDING PRODUCTS 0.9%
2,900 Compagnie De Saint-
Gobain 176,808
------------
TOTAL INDUSTRIALS 176,808
------------
TOTAL FRANCE 354,280
GERMANY 7.9%
CONSUMER DISCRETIONARY 2.5%
APPAREL ACCESSORIES & LUXURY GOODS 0.8%
5,576 Hugo Boss Ag 172,311
------------
SPECIALTY STORES 0.7%
3,747 Douglas Holding Ag 136,777
------------
TIRES & RUBBER 1.0%
2,806 Continental Ag 217,133
------------
TOTAL CONSUMER DISCRETIONARY 526,221
</Table>
32 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
FINANCIAL 0.8%
REINSURANCE 0.8%
4,000 Hannover
Rueckversicherungs
Ag $ 158,232
------------
TOTAL FINANCIAL 158,232
HEALTH CARE 0.7%
PHARMACEUTICALS 0.7%
2,100 Schering Ag 139,932
------------
TOTAL HEALTH CARE 139,932
INDUSTRIALS 1.9%
ELECTRICAL COMPONENTS & EQUIPMENT 0.7%
1,700 Leoni Ag(a)v 140,405
------------
EMPLOYMENT SERVICES 1.2%
6,000 DIS Deutscher
Industries Service
Agv 249,043
------------
TOTAL INDUSTRIALS 389,448
INFORMATION TECHNOLOGY 1.1%
INTERNET SOFTWARE & SERVICES 1.1%
6,800 United Internet Ag 216,882
------------
TOTAL INFORMATION TECHNOLOGY 216,882
MATERIALS 0.9%
CONSTRUCTION MATERIALS 0.9%
3,200 HeidelbergCement AGv 201,371
------------
TOTAL MATERIALS 201,371
------------
TOTAL GERMANY 1,632,086
HONG KONG 7.7%
CONSUMER DISCRETIONARY 0.9%
APPAREL RETAIL 0.9%
28,000 Esprit Holdings Ltd. 190,898
------------
TOTAL CONSUMER DISCRETIONARY 190,898
FINANCIAL 1.6%
REAL ESTATE MANAGEMENT & DEVELOPMENT 1.6%
182,000 Sino Land Co., Ltd. 164,133
21,000 Swire Pacific Ltd.,
Class A 165,955
------------
TOTAL FINANCIAL 330,088
INDUSTRIALS 1.8%
MARINE 0.9%
34,000 Orient Overseas
International, Ltd. 163,746
------------
MARINE PORTS & SERVICES 0.9%
88,000 Cosco Pacific, Ltd. 190,815
------------
TOTAL INDUSTRIALS 354,561
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
INFORMATION TECHNOLOGY 1.0%
SEMICONDUCTOR EQUIPMENT 1.0%
46,000 ASM Pacific
Technology, Ltd. $ 197,563
------------
TOTAL INFORMATION TECHNOLOGY 197,563
LEISURE & CONSUMER STAPLES 0.6%
HOTELS RESORTS & CRUISE LINES 0.6%
422,000 China Travel
International
Investment Hong Kong
Ltd. 129,560
------------
TOTAL LEISURE & CONSUMER
STAPLES 129,560
MATERIALS 1.0%
METAL & GLASS CONTAINERS 1.0%
240,000 Singamas Container
Holdings, Ltd.(a)v 209,250
------------
TOTAL MATERIALS 209,250
TELECOMMUNICATIONS & UTILITIES 0.8%
ELECTRIC UTILITIES 0.8%
56,000 Cheung Kong
Infrastructure
Holdings, Ltd. 160,578
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 160,578
------------
TOTAL HONG KONG 1,572,498
IRELAND 1.4%
FINANCIAL 0.6%
DIVERSIFIED BANKS 0.6%
5,100 Anglo Irish Bank
Corp., Plc 127,533
------------
TOTAL FINANCIAL 127,533
INDUSTRIALS 0.8%
INDUSTRIAL CONGLOMERATES 0.8%
6,500 DCC Plcv 151,176
------------
TOTAL INDUSTRIALS 151,176
------------
TOTAL IRELAND 278,709
ITALY 0.7%
FINANCIAL 0.7%
MULTI-LINE INSURANCE 0.7%
6,100 Riunione Adiatica Di
Sicurta S.P.A. 143,640
------------
TOTAL FINANCIAL 143,640
------------
TOTAL ITALY 143,640
</Table>
Schedule of Investments 33
Schedule of Investments (continued)
ICON International Equity Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
JAPAN 8.2%
FINANCIAL 0.6%
CONSUMER FINANCE 0.6%
1,000 Orix Corp. $ 127,441
------------
TOTAL FINANCIAL 127,441
HEALTH CARE 2.1%
HEALTH CARE DISTRIBUTORS 1.1%
18,000 Mediceo Holdings
Co., Ltd. 238,916
------------
HEALTH CARE EQUIPMENT 1.0%
6,900 Terumo Corp. 207,383
------------
TOTAL HEALTH CARE 446,299
INDUSTRIALS 2.5%
ELECTRICAL COMPONENTS & EQUIPMENT 0.7%
44,000 Fuji Electric
Holdings Co., Ltd. 138,319
------------
INDUSTRIAL MACHINERY 0.4%
22,000 Sumitomo Heavy
Industries Ltd. 86,327
------------
TRADING COMPANIES & DISTRIBUTORS 1.4%
13,000 Mitsui & Co., Ltd. 119,594
19,000 Sumitomo Corporation 162,450
------------
282,044
------------
TOTAL INDUSTRIALS 506,690
INFORMATION TECHNOLOGY 0.6%
ELECTRONIC EQUIPMENT MANUFACTURERS 0.6%
1,000 Nidec Corp. 124,232
------------
TOTAL INFORMATION TECHNOLOGY 124,232
LEISURE & CONSUMER STAPLES 2.4%
LEISURE PRODUCTS 1.8%
11,100 Shimano Inc. 372,554
------------
PHOTOGRAPHIC PRODUCTS 0.6%
10,000 Nikon Corp. 114,553
------------
TOTAL LEISURE & CONSUMER
STAPLES 487,107
------------
TOTAL JAPAN 1,691,769
MEXICO 1.8%
LEISURE & CONSUMER STAPLES 0.9%
SOFT DRINKS 0.9%
33,000 Fomento Economico
Mexicano, S.A. De
C.V.v 176,835
------------
TOTAL LEISURE & CONSUMER
STAPLES 176,835
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
MATERIALS 0.2%
STEEL 0.2%
10,197 Hylsamex, S.A. De
C.V.(a)v $ 33,877
------------
TOTAL MATERIALS 33,877
TELECOMMUNICATIONS & UTILITIES 0.7%
WIRELESS TELECOMMUNICATION SERVICES 0.7%
61,000 America Movil S.A.
De C.V.v 157,212
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 157,212
------------
TOTAL MEXICO 367,924
NETHERLANDS 6.9%
ENERGY 1.7%
INTEGRATED OIL & GAS 0.8%
2,900 Royal Dutch
Petroleum Co. 173,819
------------
OIL & GAS EQUIPMENT & SERVICES 0.9%
2,800 IHC Caland N.V. 177,947
------------
TOTAL ENERGY 351,766
FINANCIAL 0.7%
OTHER DIVERSIFIED FINANCIAL SERVICES 0.7%
5,000 ING Groep N.V. 151,074
------------
TOTAL FINANCIAL 151,074
HEALTHCARE 0.9%
HEALTH CARE DISTRIBUTORS 0.9%
2,800 OPG Groep NV 177,986
------------
TOTAL HEALTHCARE 177,986
INDUSTRIALS 1.9%
INDUSTRIAL CONGLOMERATES 0.9%
3,800 Aalberts Industries
N.V.(a) 196,216
------------
TRADING COMPANIES & DISTRIBUTORS 1.0%
5,900 Univar N.V. 195,152
------------
TOTAL INDUSTRIALS 391,368
MATERIALS 1.7%
DIVERSIFIED CHEMICALS 0.7%
3,355 Akzo Nobel N.V. 153,478
------------
SPECIALTY CHEMICALS 1.0%
2,740 DSM N.V. 193,033
------------
TOTAL MATERIALS 346,511
------------
TOTAL NETHERLANDS 1,418,705
</Table>
34 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
NORWAY 1.3%
FINANCIAL 0.7%
MULTI-LINE INSURANCE 0.7%
15,800 StoreBrand ASA $ 143,166
------------
TOTAL FINANCIAL 143,166
INDUSTRIALS 0.6%
MARINE 0.6%
5,100 Wilhelm Wilhelmsen
Asa(a) 130,879
------------
TOTAL INDUSTRIALS 130,879
------------
TOTAL NORWAY 274,045
SINGAPORE 2.4%
ENERGY 0.9%
OIL & GAS EQUIPMENT & SERVICES 0.9%
184,800 KS Technology, Ltd. 177,945
------------
TOTAL ENERGY 177,945
INDUSTRIALS 1.5%
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
1.5%
264,000 Sembcorp Marine,
Ltd.(a) 308,485
------------
TOTAL INDUSTRIALS 308,485
------------
TOTAL SINGAPORE 486,430
SPAIN 6.8%
ENERGY 0.7%
INTEGRATED OIL & GAS 0.7%
5,230 Repsol YPF, S.A. 138,561
------------
TOTAL ENERGY 138,561
FINANCIAL 1.3%
DIVERSIFIED BANKS 0.7%
11,000 Banco Santander
Central Hispano,
S.A. 133,868
------------
MULTI-LINE INSURANCE 0.6%
9,000 Corporacion Mapfre,
S.A. 138,764
------------
TOTAL FINANCIAL 272,632
INDUSTRIALS 1.9%
CONSTRUCTION & ENGINEERING 1.9%
6,800 ACS, Actividades De
Construccion Y
Servicios, S.A. 168,340
3,800 Grupo Ferrovial,
S.A. 215,220
------------
TOTAL INDUSTRIALS 383,560
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
LEISURE & CONSUMER STAPLES 0.9%
TOBACCO 0.9%
4,600 Altadis, S.A. $ 188,093
------------
TOTAL LEISURE & CONSUMER
STAPLES 188,093
TELECOMMUNICATIONS & UTILITIES 2.0%
ELECTRIC UTILITIES 1.3%
8,500 Union Fenosa, S.A. 252,545
------------
WATER UTILITIES 0.7%
7,000 Sociedad General De
Aguas De Barcelona,
S.A. 151,424
------------
TOTAL TELECOMMUNICATIONS &
UTILITIES 403,969
------------
TOTAL SPAIN 1,386,815
SWEDEN 4.3%
FINANCIAL 1.1%
DIVERSIFIED BANKS 1.1%
22,900 Nordea Bank Ab 231,381
------------
TOTAL FINANCIAL 231,381
HEALTH CARE 2.4%
HEALTH CARE DISTRIBUTORS 1.5%
6,300 Meda Ab(a)v 289,613
------------
HEALTH CARE FACILITIES 0.9%
12,700 Capio Ab(a) 192,269
------------
TOTAL HEALTH CARE 481,882
INDUSTRIALS 0.8%
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
0.8%
3,907 Volvo Ab 173,241
------------
TOTAL INDUSTRIALS 173,241
------------
TOTAL SWEDEN 886,504
SWITZERLAND 6.5%
FINANCIAL 1.8%
DIVERSIFIED CAPITAL MARKETS 1.8%
4,300 Credit Suisse Group 183,893
2,100 UBS Ag 177,364
------------
TOTAL FINANCIAL 361,257
HEALTH CARE 1.0%
HEALTH CARE EQUIPMENT 1.0%
1,000 Nobel Biocare
Holding Ag 211,009
------------
TOTAL HEALTH CARE 211,009
</Table>
Schedule of Investments 35
Schedule of Investments (continued)
ICON International Equity Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
INDUSTRIALS 1.0%
DIVERSIFIED COMMERCIAL SERVICES 1.0%
2,900 Amazys Holding
Ag(a)v $ 196,577
------------
TOTAL INDUSTRIALS 196,577
INFORMATION TECHNOLOGY 1.8%
COMMUNICATIONS EQUIPMENT 0.9%
12,000 Ascom Holding Ag(a) 202,856
------------
COMPUTER STORAGE & PERIPHERALS 0.9%
3,100 Logitech
International
S.A.(a) 188,333
------------
TOTAL INFORMATION TECHNOLOGY 391,189
MATERIALS 0.9%
FERTILIZERS & AGRICULTURAL CHEMICALS 0.9%
1,700 Syngenta Ag 177,899
------------
TOTAL MATERIALS 177,899
------------
TOTAL SWITZERLAND 1,337,931
UNITED KINGDOM 8.1%
CONSUMER DISCRETIONARY 1.3%
HOMEBUILDING 1.3%
11,400 Bellway Plcv 189,629
5,000 The Berkeley Group
Holdings Plc(a)v 76,563
------------
TOTAL CONSUMER DISCRETIONARY 266,192
FINANCIAL 2.2%
CONSUMER FINANCE 1.5%
17,400 Cattles Plc 111,143
14,200 Provident Financial
Plcv 189,998
------------
301,141
LIFE & HEALTH INSURANCE 0.7%
71,980 Legal & General
Group Plc 153,992
------------
TOTAL FINANCIAL 455,133
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
INDUSTRIALS 1.9%
BUILDING PRODUCTS 1.0%
20,328 BPB Plcv $ 190,718
------------
INDUSTRIAL CONGLOMERATES 0.9%
11,800 Smiths Group Plc 189,743
------------
TOTAL INDUSTRIALS 380,461
LEISURE & CONSUMER STAPLES 1.4%
FOOD RETAIL 0.5%
17,000 Tesco Plc 101,652
------------
RESTAURANTS 0.9%
14,200 Punch Taverns Plc 184,611
------------
TOTAL LEISURE & CONSUMER
STAPLES 286,263
MATERIALS 1.3%
DIVERSIFIED METALS & MINING 1.3%
20,500 BHP Billiton Plc 275,379
------------
TOTAL MATERIALS 275,379
------------
TOTAL UNITED KINGDOM 1,663,428
------------
TOTAL COMMON STOCKS (COST
$18,246,324) 20,620,743
SHORT-TERM INVESTMENTS 3.3%
675,279 Chase Icon North
European Sweep 675,279
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $675,279) 675,279
------------
TOTAL INVESTMENTS 103.7% (COST
$18,921,603) 21,296,022
LIABILITIES LESS OTHER ASSETS
(3.7)% (755,065)
------------
NET ASSETS 100.0% $ 20,540,957
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
v All securities were fair valued (Note 1) as of March 31, 2005 unless noted
with a v. Total value of securities fair valued was $15,400,987.
36 Schedule of Investments
Six Month Hypothetical Expense Example
March 31, 2005 (unaudited)
EXAMPLE
As a shareholder of a Fund you may pay two types of fees: transaction fees and
fund-related fees. Certain funds charge transactions fees, including sales
charges (loads) on purchase payments, reinvested dividends, or other
distributions; redemption fees; and exchange fees. The ICON Funds do not charge
these types of fees. Funds also incur various ongoing expenses, including
management fees, distribution and/or service fees, and other fund expenses,
which are indirectly paid by shareholders.
This Example is intended to help you understand your ongoing costs (in dollars)
of investing in the various ICON Funds and to compare these costs with the
ongoing costs of investing in other mutual funds. This Example is based on an
investment of $1,000 invested at the beginning of the period and held for the
six-month period (10/1/04 - 3/31/05).
ACTUAL EXPENSES
The first line in the table for each Fund provides information about actual
account values and actual expenses. The Example includes, but is not limited to,
management fees, fund accounting, custody and transfer agent fees. However, the
Example does not include client specific fees, such as the $15.00 fee charged to
IRA accounts, or the $15.00 fee charged for wire redemptions. The Example also
does not include portfolio trading commissions and related trading expenses. You
may use this information, together with the amount you invested, to estimate the
expenses that you paid over the period. Simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number in the first line for each Fund under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the table for each Fund provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not the Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds. Please note that the expenses shown in
the table are meant to highlight your ongoing costs only and do not reflect any
transactional costs, such as sales charges (loads), redemption fees, or exchange
fees that may be charged by other funds. Therefore, this information is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds.
Expense Example 37
Six Month Hypothetical Expense Example (continued)
March 31, 2005 (unaudited)
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD
10/1/04 3/31/05 10/1/04-3/31/05*
- ----------------------------------------------------------------------------------------------
ICON ASIA-PACIFIC REGION FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,130 $12.48
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,013 $11.80
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON EUROPE FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,156 $10.80
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,015 $10.10
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON INTERNATIONAL EQUITY FUND
- ----------------------------------------------------------------------------------------------
CLASS C
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,114 $33.20
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $ 994 $31.31
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
CLASS I
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,138 $12.42
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,013 $11.70
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
CLASS Z
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,142 $ 9.98
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,016 $ 9.40
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
</Table>
* Expenses are equal to the Fund's six month expense ratio annualized,
multiplied by the average account value over the period, multiplied by 182/365
to reflect the one-half year period.
38 Expense Example
Statements of Assets and Liabilities
March 31, 2005 (unaudited)
<Table>
<Caption>
ICON ICON
ASIA-PACIFIC ICON INTERNATIONAL
REGION FUND EUROPE FUND EQUITY FUND
------------ ----------- -------------
ASSETS
Investments, at cost $ 9,866,214 $15,613,367 $18,921,603
------------ ----------- -------------
Investments, at value 10,782,265 17,641,279 21,296,022
Cash - 3,341 -
Receivables:
Fund shares sold 85,653 25,178 12,726
Investments sold 89,167 344,921 328,859
Interest 222 295 179
Dividends 79,883 30,095 39,776
Other assets 783 361 576
------------ ----------- -------------
Total Assets 11,037,973 18,045,470 21,678,138
------------ ----------- -------------
LIABILITIES
Payables:
Due to custodian bank 233,932 - 425,134
Investments bought 45,104 311,469 657,969
Advisory fees 8,773 14,881 16,970
Accrued distribution fees - - 1,723
Fund accounting, custodial and transfer agent fees 22,889 15,063 17,568
Administration fees 449 744 848
Accrued expenses 18,171 19,308 16,969
------------ ----------- -------------
Total Liabilities 329,318 361,465 1,137,181
------------ ----------- -------------
NET ASSETS - ALL SHARE CLASSES $10,708,655 $17,684,005 $20,540,957
============ =========== =============
NET ASSETS - CLASS I $ - $ - $ 7,874,115
============ =========== =============
NET ASSETS - CLASS C $ - $ - $ 461,078
============ =========== =============
NET ASSETS - CLASS Z $ - $ - $12,205,764
============ =========== =============
NET ASSETS CONSIST OF
Paid-in capital $17,513,529 $15,435,512 $17,201,075
Accumulated undistributed net investment income/(loss) (6,994) (60,583) (63,585)
Accumulated undistributed net realized gain/(loss) from
investments (7,713,931) 281,164 1,029,048
Accumulated net realized gain/(loss) from foreign currency
translations
Unrealized appreciation/(depreciation):
on securities and other assets and liabilities
denominated in foreign currency 916,051 2,027,912 2,374,419
------------ ----------- -------------
NET ASSETS $10,708,655 $17,684,005 $20,540,957
============ =========== =============
Shares outstanding (unlimited shares authorized, no par
value) 1,164,048 1,272,209 -
Class I - - 711,762
Class C - - 42,799
Class Z - - 1,099,049
Net asset value (offering and redemption price per share) $ 9.20 $ 13.90 $ -
Class I $ - $ - $ 11.06
Class C $ - $ - $ 10.77
Class Z $ - $ - $ 11.11
</Table>
The accompanying notes are an integral part of the financial statements.
Financial Statements 39
Statements of Operations
For the year ended March 31, 2005 (unaudited)
<Table>
<Caption>
ICON ICON
ASIA-PACIFIC ICON INTERNATIONAL
REGION FUND EUROPE FUND EQUITY FUND
------------ ----------- -------------
INVESTMENT INCOME
Interest $ 331 $ 931 $ 609
Dividends 141,614 86,463 131,694
Foreign taxes withheld (18,474) (7,018) (16,086)
------------ ----------- -------------
Total Investment Income 123,471 80,376 116,217
------------ ----------- -------------
EXPENSES
Advisory fees 55,581 69,684 86,530
Distribution fees:
Class I - - 6,527
Class C - - 1,435
Fund accounting, custodial and transfer agent fees 39,721 35,227 38,147
Administration fees 2,666 3,385 4,193
Audit fees 679 696 906
Registration fees 8,932 9,570 9,974
Legal fees 142 126 170
Insurance expense 509 229 372
Trustee fees and expenses 779 687 812
Shareholder reports 8,449 8,793 8,032
Interest expense 857 82 651
Other expenses 12,150 11,723 22,053
------------ ----------- -------------
Total Expenses 130,465 140,202 179,802
------------ ----------- -------------
NET INVESTMENT INCOME (LOSS) (6,994) (59,826) (63,585)
------------ ----------- -------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain/(loss) from investment transactions 2,036,079 1,115,189 1,029,051
Net realized gain/(loss) from foreign currency
translations - - 14
Change in unrealized net appreciation/(depreciation) on
securities (772,808) 605,674 1,077,587
------------ ----------- -------------
Net realized and unrealized gain/(loss) on investments 1,263,271 1,720,863 2,106,652
------------ ----------- -------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $1,256,277 $1,661,037 $2,043,067
============ =========== =============
</Table>
The accompanying notes are an integral part of the financial statements.
40 Financial Statements
THIS PAGE INTENTIONALLY LEFT BLANK
Statements of Changes in Net Assets
<Table>
<Caption>
ICON ASIA-PACIFIC REGION FUND
------------------------------------
PERIOD ENDED
MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------
OPERATIONS
Net investment income/(loss) $ (6,994) $ 30,021
Net realized gain/(loss) from investment transactions 2,036,079 176,502
Net realized gain/(loss) from foreign currency
translations - (3,454)
Change in net unrealized appreciation/(depreciation) on
securities and foreign currency translations (772,808) 115,601
-------------- ------------------
Net increase/(decrease) in net assets resulting from
operations 1,256,277 318,670
-------------- ------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (26,459) (39,164)*
Class I - -
Class C - -
Class Z - -
Net realized gains - -
Class I - -
Class C - -
Class Z - -
-------------- ------------------
Net decrease from dividends and distributions (26,459) (39,164)
-------------- ------------------
FUND SHARE TRANSACTIONS
Shares sold 4,771,474 20,963,976
Class I - -
Class C - -
Class Z - -
Reinvested dividends and distributions 26,163 39,063
Class I - -
Class C - -
Class Z - -
Shares repurchased (12,366,012) (10,319,543)
Class I - -
Class C - -
Class Z - -
-------------- ------------------
Net increase/(decrease) from fund share transactions (7,568,375) 10,683,496
-------------- ------------------
Total net increase/(decrease) in net assets (6,338,557) 10,963,002
NET ASSETS
Beginning of period 17,047,212 6,084,210
-------------- ------------------
End of period $ 10,708,655 $ 17,047,212
============== ==================
</Table>
42 Financial Statements
<Table>
<Caption>
ICON EUROPE FUND ICON INTERNATIONAL EQUITY FUND
------------------------------------ ------------------------------------
PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------
$ (59,826) $ (27,710) $ (63,585) $ 8,851
1,115,189 1,242,857 1,029,051 3,949,314
- (765) 14 (2,877)
605,674 365,375 1,077,587 (1,455,011)
-------------- ------------------ -------------- ------------------
1,661,037 1,579,757 2,043,067 2,500,277
-------------- ------------------ -------------- ------------------
- - - -
- - - -
- - - -
- - - (57,934)*
- - - -
- - (422,167) -
- - (37,935) -
- - (1,003,360) -
-------------- ------------------ -------------- ------------------
- - (1,463,462) (57,934)
-------------- ------------------ -------------- ------------------
10,495,179 5,686,345 - -
- - 4,639,809 3,425,609
- - 479,297 267,290
- - 3,294,142 3,833,056
- - - -
- - 407,049 -
- - 36,352 -
- - 994,866 57,394
(2,298,291) (8,702,471) - -
- - (500,470) (265,090)
- - (224,645) (75,175)
- - (1,862,184) (7,575,790)
-------------- ------------------ -------------- ------------------
8,196,888 (3,016,126) 7,264,216 (332,706)
-------------- ------------------ -------------- ------------------
9,857,925 (1,436,369) 7,843,821 2,109,637
7,826,080 9,262,449 12,697,136 10,587,499
-------------- ------------------ -------------- ------------------
$17,684,005 $ 7,826,080 $20,540,957 $12,697,136
============== ================== ============== ==================
</Table>
Financial Statements 43
Statements of Changes in Net Assets (continued)
<Table>
<Caption>
ICON ASIA-PACIFIC REGION FUND
------------------------------------
PERIOD ENDED
MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------
TRANSACTIONS IN FUND SHARES
Shares sold 521,320 2,524,850
Class I - -
Class C - -
Class Z - -
Reinvested dividends and distributions 2,994 4,835
Class I - -
Class C - -
Class Z - -
Shares repurchased (1,446,615) (1,241,267)
Class I - -
Class C - -
Class Z - -
-------------- ------------------
Net increase/(decrease) (922,301) 1,288,418
-------------- ------------------
Shares outstanding beginning of period 2,086,349 797,931
-------------- ------------------
Shares outstanding end of period 1,164,048 2,086,349
============== ==================
PURCHASE AND SALES OF INVESTMENT SECURITIES
(excluding short-term securities)
Purchase of securities $12,413,104 $18,808,223
Proceeds from sales of securities 19,671,638 8,416,715
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) $ (6,994) $ 26,459
============== ==================
</Table>
* The tax character of distributions to shareholders from net investment income
for the period ending September 30, 2004 is ordinary income.
The accompanying notes are an integral part of the financial statements.
44 Financial Statements
<Table>
<Caption>
ICON EUROPE FUND ICON INTERNATIONAL EQUITY FUND
------------------------------------ ------------------------------------
PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------
788,692 505,470 - -
- - 415,741 328,830
- - 43,063 24,806
- - 295,377 375,261
- - - -
- - 37,655 -
- - 3,420 -
- - 91,777 5,845
(167,093) (796,013) - -
- - (44,991) (25,473)
- - (21,060) (7,430)
- - (165,680) (762,885)
-------------- ------------------ -------------- ------------------
621,599 (290,543) 655,302 (61,046)
-------------- ------------------ -------------- ------------------
650,610 941,153 1,198,308 1,259,354
-------------- ------------------ -------------- ------------------
1,272,209 650,610 1,853,610 1,198,308
============== ================== ============== ==================
$15,570,543 $5,496,870 $18,089,237 $12,810,296
7,482,924 8,124,419 12,187,552 13,098,694
$ (60,583) $ (757) $ (63,585) $ -
============== ================== ============== ==================
</Table>
Financial Statements 45
Financial Highlights
<Table>
<Caption>
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------
NET ASSET NET NET REALIZED
VALUE, INVESTMENT AND UNREALIZED TOTAL FROM
BEGINNING INCOME/ GAINS/(LOSSES) INVESTMENT
OF PERIOD (LOSS) ON INVESTMENTS OPERATIONS
--------- ---------- -------------- ----------
ICON ASIA-PACIFIC REGION FUND
Period Ended March 31, 2005
(unaudited) $ 8.17 $(0.01)(x) $ 1.07 $ 1.06
Year Ended September 30, 2004 7.62 0.02(x) 0.55 0.57
Year Ended September 30, 2003 5.68 0.04(x) 1.90 1.94
Year Ended September 30, 2002 6.81 (0.19)(x) (0.91) (1.10)
Year Ended September 30, 2001 10.25 0.07(x) (3.51) (3.44)
Year Ended September 30, 2000 10.87 0.03(x) (0.65) (0.62)
ICON EUROPE FUND
Period Ended March 31, 2005
(unaudited) 12.03 (0.06)(x) 1.93 1.87
Year Ended September 30, 2004 9.84 (0.04) 2.23 2.19
Year Ended September 30, 2003 7.40 (0.02)(x) 2.46 2.44
Year Ended September 30, 2002 8.13 (0.04)(x) (0.67) (0.71)
Year Ended September 30, 2001 10.14 0.05(x) (2.06) (2.01)
Year Ended September 30, 2000 10.12 0.02(x) - 0.02
ICON INTERNATIONAL EQUITY
CLASS I
Period Ended March 31, 2005(b)
(unaudited) 10.59 (0.05)(x) 1.49 1.44
February 6, 2004 (inception)
to September 30, 2004 10.96 0.04(x) (0.41) (0.37)
CLASS C
Period Ended March 31, 2005(b)
(unaudited) 10.55 (0.27)(x) 1.46 1.19
February 19, 2004 (inception)
to September 30, 2004 11.29 (0.02)(x) (0.72) (0.74)
CLASS Z
Period Ended March 31, 2005(b)
(unaudited) 10.60 (0.03)(x) 1.51 1.48
Year Ended September 30, 2004 8.41 0.01(x) 2.24 2.25
Year Ended September 30, 2003 5.96 0.06(x) 2.45 2.51
Year Ended September 30, 2002 7.24 0.04(x) (1.25) (1.21)
Year Ended September 30, 2001 11.79 0.09(x) (3.31) (3.22)
Year Ended September 30, 2000 11.74 0.04(x) 1.21 1.25
<Caption>
LESS DIVIDENDS AND DISTRIBUTIONS
-------------------------------------------------------
DIVIDENDS DISTRIBUTIONS TOTAL
FROM NET FROM NET DIVIDENDS
INVESTMENT REALIZED RETURN AND
INCOME GAINS OF CAPITAL DISTRIBUTIONS
---------- ------------- ---------- -------------
ICON ASIA-PACIFIC REGION FUND
Period Ended March 31, 2005
(unaudited) $(0.03) - - $(0.03)
Year Ended September 30, 2004 (0.02) - - (0.02)
Year Ended September 30, 2003 - - - -
Year Ended September 30, 2002 - - $(0.03) (0.03)
Year Ended September 30, 2001 - - - -
Year Ended September 30, 2000 - - - -
ICON EUROPE FUND
Period Ended March 31, 2005
(unaudited) - - - -
Year Ended September 30, 2004 - - - -
Year Ended September 30, 2003 - - - -
Year Ended September 30, 2002 (0.02) - - (0.02)
Year Ended September 30, 2001 - - - -
Year Ended September 30, 2000 - - - -
ICON INTERNATIONAL EQUITY
CLASS I
Period Ended March 31, 2005(b)
(unaudited) - $(0.97) - (0.97)
February 6, 2004 (inception)
to September 30, 2004 - - - -
CLASS C
Period Ended March 31, 2005(b)
(unaudited) - (0.97) - (0.97)
February 19, 2004 (inception)
to September 30, 2004 - - - -
CLASS Z
Period Ended March 31, 2005(b)
(unaudited) - (0.97) - (0.97)
Year Ended September 30, 2004 (0.06) - - (0.06)
Year Ended September 30, 2003 - (0.06) - (0.06)
Year Ended September 30, 2002 (0.04) - (0.03) (0.07)
Year Ended September 30, 2001 - (1.33) - (1.33)
Year Ended September 30, 2000 - (1.20) - (1.20)
</Table>
(x) Calculated using the average share method.
* The total return calculation is for the period indicated.
(a) Annualized for periods less than a year.
(b) Portfolio turnover is calculated at the Fund level. The rate shown is for
the longest period indicated of the three share classes.
The accompanying notes are an integral part of the financial statements.
46 Financial Highlights
<Table>
<Caption>
RATIO OF NET
NET ASSET AVERAGE NET RATIO OF INVESTMENT
VALUE, NET ASSETS, ASSETS EXPENSES INCOME/(LOSS) PORTFOLIO
END OF TOTAL END OF PERIOD FOR THE PERIOD TO AVERAGE TO AVERAGE TURNOVER
PERIOD RETURN* (IN THOUSANDS) (IN THOUSANDS) NET ASSETS(A) NET ASSETS(A) RATE
--------- ------- -------------- -------------- ------------- ------------- ---------
$ 9.20 12.95% $10,709 $11,111 2.35% (0.13)% 104.76%
8.17 7.51% 17,047 14,976 1.91% 0.20% 58.62%
7.62 34.15% 6,084 6,683 1.98% 0.68% 81.44%
5.68 (16.29)% 6,927 12,142 1.66% (0.23)% 14.43%
6.81 (33.56)% 19,684 18,749 1.70% 0.75% 55.58%
10.25 (5.70)% 25,710 32,629 1.53% 0.24% 101.88%
13.90 15.55% 17,684 14,030 2.01% (0.86)% 55.63%
12.03 22.26% 7,826 7,230 2.24% (0.38)% 78.57%
9.84 32.97% 9,262 6,774 1.87% (0.29)% 101.37%
7.40 (8.76)% 4,619 5,706 2.14% (0.42)% 12.26%
8.13 (19.82)% 7,397 7,935 1.96% 0.55% 84.49%
10.14 0.20% 6,560 7,109 1.80% 0.18% 62.17%
11.06 11.36% 7,874 5,261 2.33% (0.92)% 71.24%
10.59 (3.38)% 3,211 1,960 2.32% 0.44% 117.74%
10.77 13.77% 461 290 6.30% (4.95)% 71.24%
10.55 (6.55)% 183 162 3.06% (0.16)% 117.74%
11.11 14.15% 12,206 11,844 1.87% (0.56)% 71.24%
10.60 26.79% 9,303 10,063 1.98% 0.03% 117.74%
8.41 42.60% 10,587 8,571 2.00% 0.88% 98.91%
5.96 (16.94)% 8,222 13,347 1.72% 0.48% 91.99%
7.24 (30.29)% 14,196 18,204 1.65% 0.97% 41.67%
11.79 10.43% 33,315 29,412 1.52% 0.30% 34.24%
</Table>
Financial Highlights 47
Notes to Financial Statements
March 31, 2005
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The ICON Asia-Pacific Region Fund ("Asia-Pacific Region Fund"), ICON Europe Fund
("Europe Fund") and ICON International Equity Fund ("International Equity Fund")
are series funds (individually a "Fund" and collectively, the "Funds"). The
Funds are part of the ICON Funds (the "Trust"), a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended (the "1940 Act")
as an open-end investment management company. The International Equity Fund
offers three classes of shares Class I, Class C and Class Z. All classes have
equal rights as to earnings, assets and voting privileges except that each Class
may bear different distribution fees and registration costs and each Class has
exclusive voting rights with respect to its distribution plan. There are 14
other active funds within the Trust. Those funds are covered by separate
prospectuses and shareholder reports.
Each Fund is authorized to issue an unlimited number of no par shares. The Funds
primarily invest in foreign securities; the Asia-Pacific Region Fund and Europe
Fund primarily invest in companies whose principal business activities fall
within specific regions. The investment objective of each Fund is long-term
capital appreciation.
The Funds may have elements of risk, including the risk of loss of principal.
There is no assurance that the investment process will consistently lead to
successful results. An investment concentrated in sectors and industries may
involve greater risk and volatility than a more diversified investment.
Investments in foreign securities and currency transactions may involve certain
considerations and risks not typically associated with those of U.S. dollar-
denominated transactions as a result of, among other factors, the possibility of
lower government supervision and regulation of foreign securities markets and
the possibility of political or economic instability. There are also risks
associated with small- and mid-cap investing, including limited product lines,
less liquidity, and small market share.
In addition, in the normal course of business the Funds may enter into various
agreements that provide for general indemnifications. Each Fund's maximum
exposure under these arrangements is unknown as any potential exposure involves
future claims that may be made against each Fund. However, based on experience,
the Funds expect the risk of loss to be remote.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent 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 these estimates.
48 Notes to Financial Statements
INVESTMENT VALUATION
The Funds' securities and other assets are valued at the close of the regular
trading session of the New York Stock Exchange (the "NYSE") (normally 4 p.m.
Eastern time) each day the NYSE is open, except that (a) securities traded
primarily on the NASDAQ Stock Market ("NASDAQ") are normally valued by a Fund at
the NASDAQ Official Closing Price provided by NASDAQ each business day; and (b)
any foreign investments in the Funds traded in countries outside of the Western
Hemisphere are fair valued daily based on procedures established by the Funds'
Board of Trustees ("Board") to avoid stale prices and to take into account,
among other things, any significant events occurring after the close of a
foreign market in those regions. The Funds use pricing services to determine the
market value of securities in their portfolios; if a pricing service is not able
to provide a price, or the pricing service quote of valuation is inaccurate or
does not reflect the market value of the security, prices may be obtained
through market quotations from independent broker/dealers. If market quotations
from these sources are not readily available, the Funds' securities or other
assets are valued at fair value as determined in good faith by the Funds' Board
or pursuant to procedures approved by the Board. The valuation assigned to
fair-valued securities for purposes of calculating a Fund's net asset value
("NAV") may differ from the security's most recent closing market price and from
the prices used by other mutual funds to calculate their NAVs.
Foreign securities traded in countries outside of the Western Hemisphere are
fair valued daily by utilizing the quotations of an independent pricing service,
unless the Funds' adviser determines that use of another valuation methodology
is appropriate. The pricing service uses statistical analyses and quantitative
models to adjust local market prices using factors such as subsequent movement
and changes in the prices of indexes, securities and exchange rates in other
markets in determining fair value as of the time a Fund calculates its net asset
value.
A security listed or traded primarily on a securities exchange or in the
over-the-counter market is generally valued at the last sale price on the
exchange or market where the security is principally traded, except that
securities primarily traded on NASDAQ are normally valued at the NASDAQ Official
Closing Price. Lacking any sales that day, the security is valued at the current
closing bid price (or yield equivalent thereof) or based on quotes from dealers
making a market for the security. Options are valued at their closing mid-price
on the principal market where the option is traded. Mid-price is the average of
the closing bid and closing ask prices. Debt securities with a remaining
maturity of greater than sixty days are valued in accordance with the evaluated
bid price supplied by the pricing service. Short-term securities with remaining
maturities of sixty days or less are generally valued at amortized cost or
original cost plus accrued interest, which approximates market value. Prior to
February 22, 2005, London closing exchange rates were used to convert foreign
security values into
Notes to Financial Statements 49
Notes to Financial Statements (continued)
U.S. dollars. After that date, currency rates as of the close of the New York
Stock Exchange were used to convert foreign security values into U.S. dollars.
REPURCHASE AGREEMENTS
Repurchase agreements, if held by the Funds, are fully collateralized by U.S.
Government securities and such collateral is in the possession of the Funds'
custodian. The collateral is evaluated daily to ensure its market value exceeds
the current market value of the repurchase agreements including accrued
interest. In the event of default on the obligation to repurchase, the Funds
have the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. In the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral or
proceeds may be subject to legal proceedings. No repurchase agreements were
purchased or sold by the Funds during the period ended March 31, 2005.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign currency
are translated into U.S. dollars at the prevailing rates of exchange daily.
Income and expenses are translated into U.S. dollars at the prevailing exchange
rate on the respective dates of the transactions. Purchases and sales of
securities are translated into U.S. dollars at the contractual currency exchange
rates established at the time of each trade.
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. Net unrealized
appreciation or depreciation on investments and foreign currency translations
arise from changes in the value of assets and liabilities, resulting from
changes in the exchange rates and changes in market prices of securities held.
FORWARD FOREIGN CURRENCY CONTRACTS
The Funds may enter into short-term forward foreign currency contracts in
connection with planned purchases or sales of securities as a hedge against
fluctuations in foreign exchange rates pending the settlement of transactions in
foreign securities. A forward foreign currency contract is an agreement between
contracting parties to exchange an amount of currency at some future time with
an agreed upon rate.
These contracts are marked-to-market daily and the related appreciation or
depreciation of the contract is presented in the Statements of Assets and
Liabilities. Net realized gains and losses on foreign currency transactions
represent disposition of foreign currencies, and the difference between the
amount recorded at the time of the transaction and the U.S. dollar amount
50 Notes to Financial Statements
actually received. Any realized gain or loss incurred by the Funds due to
foreign currency translation is included in the Statements of Operations. The
Funds did not enter into any foreign currency contracts during the period ended
March 31, 2005.
FUTURES CONTRACTS
The Funds may invest in financial futures contracts for the purpose of hedging
their existing securities or securities it intends to purchase against
fluctuations in fair value caused by changes in prevailing markets. Upon
entering into a financial futures contract, the Fund is required to pledge to
the broker an amount of cash and/or other assets equal to a certain percentage
of the contract amount (initial margin deposit). Subsequent payments, known as
"variation margin," are made or received by the Fund each day, depending on the
daily fluctuations in the fair value of the underlying security. The Fund
recognizes a gain or loss equal to the daily variation margin. Should market
conditions move unexpectedly, the Fund may not achieve the anticipated benefits
of the financial futures contracts and may realize a loss. The use of futures
transactions involves the risk of imperfect correlation in movements in the
price of futures contracts and the underlying hedged assets. The Funds held no
financial futures contracts as of March 31, 2005.
OPTIONS TRANSACTIONS
Each Fund may write put and call options only if it owns an offsetting position
in the underlying security. When a Fund writes a put or call option, an amount
equal to the premium received is included in the Statement of Assets and
Liabilities as a liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. If an option
expires on its stipulated expiration date or if the Fund enters into a closing
purchase transaction, a gain or loss is realized. If a written call option is
exercised, a gain or loss is realized for the sale of the underlying security
and the proceeds from the sale are increased by the premium originally received.
If a written put option is exercised, the cost of the security acquired is
decreased by the premium originally received. As a writer of an option, a Fund
has no control over whether the underlying securities are subsequently sold
(call) or purchased (put) and, as a result, bears the market risk of an
unfavorable change in the price of the security underlying the written option.
Each Fund may also purchase put and call options. When a Fund purchases a call
or put option, an amount equal to the premium paid is included in the Fund's
Statement of Assets and Liabilities as an investment, and is subsequently
marked-to-market to reflect the current market value of the option. If an option
expires on the stipulated expiration date or if the Fund enters into a closing
sale transaction, a gain or loss is realized. If the Fund exercises a call, the
cost of the security acquired is increased by the premium paid for the call. If
the Fund
Notes to Financial Statements 51
Notes to Financial Statements (continued)
exercises a put option, a gain or loss is realized from the sale of the
underlying security, and the proceeds from such a sale are decreased by the
premium originally paid. Written and purchased options are non-income producing
securities. The Funds did not enter into any option transactions during the
period ended March 31, 2005.
INCOME TAXES
The Funds intend to qualify as regulated investment companies under Subchapter M
of the Internal Revenue Code and, accordingly, the Funds will generally not be
subject to federal and state income taxes, or federal excise taxes to the extent
that they intend to make sufficient distributions of net investment income and
net realized capital gain.
Dividends received by shareholders of the Funds which are derived from foreign
source income and foreign taxes paid by the Funds are to be treated, to the
extent allowable under the Code, as if received and paid by the shareholders of
the Funds. Dividends paid by the Funds from net investment income and
distributions of net realized short-term gains are, for federal income tax
purposes, taxable as ordinary income to shareholders.
Dividends and distributions to shareholders are recorded by the Funds on the
ex-dividend/distribution date. The Funds distribute net realized capital gains,
if any, to shareholders at least annually, if not offset by capital loss
carryovers. Income distributions and capital gain distributions are determined
in accordance with income tax regulations, which may differ from generally
accepted accounting principles generally accepted in the United States of
America.
INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date. Non-cash dividends included
in dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Certain dividends
from foreign securities will be recorded as soon as the Funds are informed of
the dividend if such information is obtained subsequent to the ex-dividend date.
INVESTMENT TRANSACTIONS
Security transactions are accounted for no later than one business day after
trade date. However, for financial reporting purposes security transactions are
accounted for on trade date. Gains and losses on securities sold are determined
on the basis of identified cost.
ALLOCATION OF INCOME AND EXPENSES
Expenses which cannot be directly attributed to a specific fund in the Trust are
apportioned between all funds based upon relative net assets. Each class of the
52 Notes to Financial Statements
International Equity Fund's bears expenses incurred specifically on its behalf
and, in addition, each class bears a portion of general expenses, based upon
relative net assets of each class. In calculating the net asset value of the
shares in the various classes of the International Equity Fund, investment
income, realized and unrealized gains and losses and expenses other than class
specific expenses are allocated daily to each class of shares based upon the
proportion of net assets.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEES
ICON Advisers, Inc. ("ICON") serves as the investment adviser to the Funds and
is responsible for managing the Funds' portfolios of securities. ICON receives a
monthly management fee that is computed daily at an annual rate of 1.00% of each
Fund's average daily net assets.
Effective May 1, 2005, ICON has contractually agreed to reimburse operating
expenses (exclusive of brokerage, interest, taxes, and extraordinary expenses)
of the International Equity Fund to the extent necessary to ensure that the
Fund's operating expenses do not exceed 2.55% for Class C, 1.80% for Class I and
1.55% for Class Z. The International Equity Fund expense limitation will
continue in effect until at least January 29, 2007. To the extent ICON
reimburses or absorbs fees and expenses, it may seek payment of such amounts for
up to three years after the expenses were reimbursed or absorbed. The
International Equity Fund will make no such payment, however, if the total Fund
operating expenses exceed the expense limits in effect at the time the expenses
were reimbursed or at the time these payments are proposed.
TRANSFER AGENT, CUSTODY AND ACCOUNTING FEES
U.S. Bank, N.A. ("U.S. Bank") and U.S. Bancorp Fund Services, LLC ("U.S.
Bancorp") provided domestic custodial services, transfer agent services and fund
accounting for the Funds during the period. For these services, the Trust paid a
fee for transfer agent services at an annual rate of 0.055% on the Trust's first
$500 million of daily average net assets, 0.05% on the next $1 billion of
average daily net assets, and 0.04% on the balance of average daily net assets
in excess of $1.5 billion. The Funds paid a fund accounting fee at an annual
rate of 0.1025% on the Trust's first $500 million of average daily net assets,
0.0875% on the next $500 million of average daily net assets, and 0.05% on the
balance of average daily net assets in excess of $1 billion for these services.
The Funds also paid for various out-of-pocket costs incurred by U.S. Bancorp
that are estimated to be 0.02% of average daily net assets.
U.S. Bancorp had entered into an agreement with JP Morgan Chase Co. ("Chase") on
behalf of the Funds to provide international custodial services.
Notes to Financial Statements 53
Notes to Financial Statements (continued)
The Funds paid an annual rate of 0.125% of average daily net assets plus a per
trade transaction cost for these custodial services.
Effective April 1, 2005, the Trust retained BISYS Fund Services Ohio, Inc.
("BISYS") as Fund Accounting and Administration Services Agent for the Funds.
For its services, the Trust pays BISYS 0.03% on the first $1.75 billion of Trust
Assets, 0.0175% on assets over $1.75 billion and up to $5 billion, and 0.01% on
assets in excess of $5 billion. Effective April 18, 2005, the Trust retained
Brown Brothers Harriman ("BBH") as custodian of the Trust's investments. For
domestic custody services, the Trust pays BBH 0.0065% on the first $50 million
of average net assets and 0.0050% on domestic assets above $50 million, plus
certain transaction charges. For foreign custody services, the Trust pays BBH
0.03% on foreign assets plus certain transaction charges. Effective April 25,
2005, the Trust retained Boston Financial Data Services, Inc. as the Trust's
transfer agent. For these services, the Trust pays an account fee of $13.25 per
open account, $7.00 per networked account, $1.80 per closed account, plus
certain other transaction and cusip charges.
ADMINISTRATIVE SERVICES
The Trust has entered into an administrative services agreement with ICON
pursuant to which ICON oversees the administration of the Trust's business and
affairs, including regulatory reporting and all necessary office space,
equipment, personnel and facilities. This agreement provides for an annual fee
to ICON of 0.05% on the Funds' first $1.5 billion of average daily net assets
and 0.045% on average daily net assets in excess of $1.5 billion. The
administrative services agreement provides that ICON will not be liable for any
error of judgment, mistake of law, or any loss suffered by the Trust in
connection with matters to which the administrative services agreement relates,
except for a loss resulting from willful misfeasance, bad faith or negligence by
ICON in the performance of its duties.
During the period, U.S. Bancorp provided sub-administration services to ICON for
a sub-administration fee of 0.02% on the Trust's first $1.5 billion of average
daily net assets and 0.015% on assets above $1.5 billion, subject to a minimum
annual fee of $140,000. Effective April 1, 2005, ICON entered into a sub-
administration agreement with BISYS pursuant to which BISYS assists ICON with
the administration and business affairs of the Trust. For its services, ICON
pays BISYS at an annual rate of 0.025% on the first $1.75 billion of Trust
assets and 0.015% on assets above $1.75 billion.
DISTRIBUTION FEES
The International Equity Fund has adopted a Distribution Plan pursuant to Rule
12b-1 under the 1940 Act ("12b-1 Plan") under which the Funds are authorized to
compensate the Funds' distributor, ICON Distributors, Inc. ("IDI")
54 Notes to Financial Statements
(an affiliate of the adviser) for the sale and distribution of shares. Under the
12b-1 Plan, Class I shareholders of the International Equity Fund pay an annual
12b-1 and service fee of 0.25% of average daily net assets. The Class C
shareholders pay an annual 12b-1 and service fee of 1.00% of average daily net
assets. For the period ended March 31, 2005 the total amounts paid or payable to
IDI pursuant to the 12b-1 Plan were $1,435 on Class C shares and $6,527 on Class
I shares of the International Equity Fund.
RELATED PARTIES
Certain Officers and Directors of ICON are also Officers and Trustees of the
Funds; however, such Officers and Trustees (with the exception of the Chief
Compliance Officer) receive no compensation from the Funds. There are certain
employees of ICON, such as the Chief Compliance Officer and staff who administer
the compliance program, for which the Funds reimburse ICON for certain amounts
related to compensation and certain other expenses incurred. For the period
ended March 31, 2005, the total related amounts paid by the Trust are included
in Other Expenses on the Statement of Operations.
3. LINE OF CREDIT
Effective April 18, 2005, the Fund entered into Lines of Credit agreements with
BBH; the maximum borrowing is limited to 25% of eligible securities held by the
portfolio subject to a maximum borrowing limit by the Trust of $135 million.
4. FEDERAL INCOME TAX
Income and capital gain distributions are determined in accordance with income
tax regulations that may differ from accounting principles that are generally
accepted in the United States of America. These differences are due to differing
treatments for items such as net short-term gains, deferrals of wash losses,
foreign currency transactions, net investment losses, and capital loss
carryovers.
The tax components of capital shown in the following tables represent losses or
deductions the Funds may be able to offset against income and gains recognized
in future years and post October loss deferrals. The accumulated losses noted in
the following tables represent net capital loss carryovers as of September 30,
2004 that may be available to offset future realized capital gains
Notes to Financial Statements 55
Notes to Financial Statements (continued)
and thereby reduce future taxable income distributions. These carryovers expire
between September 30, 2007 and September 30, 2011.
<Table>
<Caption>
ACCUMULATED UNDISTRIBUTED UNDISTRIBUTED CAPITAL
CAPITAL LOSSES ORDINARY INCOME LONG-TERM GAIN LOSSES
- -----------------------------------------------------------------------------------------
ICON Asia-Pacific Region
Fund $9,631,893 $26,459 0 0
ICON Europe Fund 832,262 0 0 0
ICON International Equity
Fund 0 $66,857 $1,396,592 0
</Table>
During the year ended September 30, 2004 the ICON Asia-Pacific Region Fund
utilized capital loss carryforwards of $137,275, the ICON Europe Fund utilized
capital loss carryforwards of $1,244,634 and the ICON International Equity Fund
utilized capital loss carryforwards of $2,433,905.
As of March 31, 2005, book cost for financial reporting purposes is
substantially the same for federal income tax purposes and differs from fair
value by net unrealized appreciation/(depreciation) of securities as follows:
<Table>
<Caption>
UNREALIZED UNREALIZED NET APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
- -----------------------------------------------------------------------------------------
ICON Asia-Pacific Region
Fund $ 9,866,214 $1,160,823 $(244,772) $ 916,051
ICON Europe Fund 15,613,367 2,287,552 (259,640) 2,027,912
ICON International Equity
Fund 18,921,603 2,653,466 (279,047) 2,374,419
</Table>
56 Notes to Financial Statements
PORTFOLIO HOLDINGS
A list of each ICON Fund's Top 10 holdings is available at www.iconadvisers.com
on or about 15 days following each month end. Each ICON Fund also files a
complete schedule of portfolio holdings for the first and third quarters of its
fiscal year with the SEC on Form N-Q. The ICON Funds' Forms N-Q are available at
www.sec.gov or may be reviewed and copied at the Commission's Public Reference
Room in Washington, DC. Information about the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
PROXY VOTING
A description of the policies and procedures the ICON Funds use to vote proxies
is available at www.iconadvisers.com; without charge upon request by calling
1-800-764-0442; or on the SEC's website at www.sec.gov.
Information about how the ICON Funds voted proxies related to each Fund's
portfolio securities during the 12-month period ended June 30 is available at
www.iconadvisers.com or on the SEC's website at www.sec.gov.
FOR MORE INFORMATION
This report is for the general information of the Funds' shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by a current prospectus. You may obtain a copy of the prospectus,
which contains information about the investment objectives, risks, charges,
expenses, and share classes of each ICON Fund, by visiting www.iconadvisers.com
or by calling 1-800-764-0442. Please read the prospectus carefully before
investing.
ICON Distributors, Inc., Distributor
57
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[ICON FUNDS LOGO]
<Table>
For more information about the ICON Funds, contact us:
By Telephone 1-800-764-0442
By Mail ICON Funds
P.O. Box 55452
Boston, MA 02205-8165
In Person ICON Funds
5299 DTC Boulevard, 12(th) Floor
Greenwood Village, CO 80111
On the Internet www.iconadvisers.com
By E-Mail info@iconadvisers.com
</Table>
[ICON FUNDS LOGO]
1-800-764-0442
www.iconadvisers.com
ICRPANNUINTL I-144-FOR
> March 31, 2005
Investment Update
ICON SECTOR FUNDS
ICON CONSUMER DISCRETIONARY FUND
ICON ENERGY FUND
ICON FINANCIAL FUND
ICON HEALTHCARE FUND
ICON INDUSTRIALS FUND
ICON INFORMATION TECHNOLOGY FUND
ICON LEISURE AND CONSUMER STAPLES FUND
ICON MATERIALS FUND
ICON TELECOMMUNICATION & UTILITIES FUND
Semiannual Report
(unaudited)
(ICON FUNDS LOGO)
Table of Contents
<Table>
ABOUT THIS REPORT 2
MESSAGE FROM ICON FUNDS 4
MANAGEMENT OVERVIEW AND SCHEDULE OF INVESTMENTS
ICON Consumer Discretionary Fund 7
ICON Energy Fund 14
ICON Financial Fund 22
ICON Healthcare Fund 29
ICON Industrials Fund 36
ICON Information Technology Fund 44
ICON Leisure and Consumer Staples Fund 51
ICON Materials Fund 58
ICON Telecommunication & Utilities Fund 65
HYPOTHETICAL EXPENSE EXAMPLE 72
FINANCIAL STATEMENTS 74
FINANCIAL HIGHLIGHTS 82
NOTES TO FINANCIAL STATEMENTS 86
</Table>
About This Report
HISTORICAL RETURNS
All total returns mentioned in this report account for the change in a Fund's
per-share price and the reinvestment of any dividends, capital gain
distributions, and tax return of capital. If your account is set up to receive
Fund distributions in cash rather than to reinvest them, your actual return may
differ from these figures. The Funds' performance results do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or on the
redemption of Fund shares.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance results represent
past performance, and current performance may be higher or lower. Please call
1-800-764-0442 or visit www.iconadvisers.com for performance results current to
the most recent month-end.
PORTFOLIO DATA
This report reflects ICON's views, opinions, and portfolio holdings as of March
31, 2005, the end of the reporting period. The information is not a complete
analysis of every aspect of any sector, industry, security, or the Funds.
Opinions and forecasts regarding industries, companies and/or themes, and
portfolio composition and holdings, are subject to change at any time based on
market and other conditions, and should not be construed as a recommendation of
any specific security. Each Fund's percentage holdings as of March 31, 2005 are
included in each Fund's Schedule of Investments.
Certain companies' stock performance during the period is mentioned throughout
the Management Overviews. While ICON's quantitative investment methodology does
not consider company-specific factors beyond financial data, these factors may
impact a stock's performance, and therefore, Fund performance.
There are risks associated with mutual fund investing, including the risk of
loss of principal. There is no assurance that the investment process will
consistently lead to successful results. An investment concentrated in sectors
and industries may involve greater risk and volatility than a more diversified
investment. Investments in foreign securities may entail unique risks, including
political, market and currency risks. There are also risks associated with
small- and mid-cap investing, including limited product lines, less liquidity
and small market share.
2 About This Report
COMPARATIVE INDEXES
The comparative indexes discussed in this report are meant to provide a basis
for judging the Funds' performance against specific securities indexes. Each
index shown accounts for both change in security price and reinvestment of
dividends and distributions (except as noted), but does not reflect the costs of
managing a mutual fund. The Funds' portfolios may significantly differ in
holdings and composition from the indexes. Individuals cannot invest directly in
an index.
- - The unmanaged Standard & Poor's (S&P) Super Composite 1500 Index is a
broad-based capitalization-weighted index comprising 1,500 stocks of large-
cap, mid-cap, and small-cap U.S. companies.
- - The capitalization-weighted S&P 1500 Sector and Industry Indexes are based on
specific classifications determined by S&P.
- - The unmanaged NASDAQ Composite ("NASDAQ") Index is a broad-based
capitalization-weighted index of all NASDAQ National Market and Small-Cap
stocks.
- - The unmanaged Merrill Lynch 1-Year U.S. Treasury Bill Index consists of a
single issue with the longest maturity. The issue is replaced on a monthly
basis to maintain the characteristics of the index.
Index returns and statistical data included in this report are provided by
Bloomberg and FactSet.
About This Report 3
Message from ICON Funds
- --------------------------------------------------------------------------------
The fact that stocks have been in the midst of a two-year bull market may come
as a surprise to many investors.
- --------------------------------------------------------------------------------
Thank you for your continued investment in the ICON Sector Funds and welcome to
those of you receiving this report for the first time.
As you may know, ICON employs a value-based, bottom-up investment system of
industry rotation to try to capture leading market themes that evolve over time.
While you may have been introduced to us through your investment in the ICON
Sector Funds, we would like to point out that we apply the same discipline
across the entire ICON fund family. We invite you to consider the ICON U.S.
Diversified Funds, such as the ICON Core Equity Fund and the ICON Long/Short
Fund, as well as the ICON Foreign Funds, based on your investment objectives,
risk tolerance, and time horizon.
DEALING WITH DISTRACTIONS
At times like these, I often think of Douglas Adams, author of The Hitchhiker's
Guide to the Galaxy, who wrote, "Nothing travels faster than the speed of light
with the possible exception of bad news, which follows its own special laws."
Over the course of the past six months, investors have been inundated by a
litany of bad news, ranging from Iraq, terrorism and oil prices to interest
rates and budget deficits. Although the markets seemed to rise above these
distractions during the first half of the reporting period, investors have since
found it difficult to sort through these events despite the presence of solid
economic and investment fundamentals -- and no clear signs of inflation.
Investors' behavior is highly reminiscent of patterns established last year,
which featured fear-driven sell-offs and highly correlated industry dynamics.
During market setbacks, economically sensitive and cyclical industries have
declined the most while industries considered recession-proof have been the most
resilient. In contrast, when the market has advanced, cyclical industries have
led the way while recession-proof industries have lagged.
PARTICIPATING IN THE ADVANCE
Given myriad doubts about the economy and earnings, and the volatility typically
associated with a cyclical rally, the fact that stocks have been in the midst of
a bull market may come as a surprise to many investors. But that is in fact the
case. Having hit significant multi-year lows on March 11, 2003 just
- ---------------
There are risks associated with selling short, including the risk that the
Long/Short Fund may have to cover its short position at a higher price than the
short price, resulting in a loss. The Fund's loss on a short sale is potentially
unlimited as a loss occurs when the value of a security sold short increases.
An investment in a region fund may involve greater risk and volatility than a
more diversified fund.
4 Message from ICON Funds
We apply our value-based, bottom-up industry
rotation across the entire market in order to identify
leading industry themes wherever they may emerge.
[CRAIG T. CALLAHAN PHOTO]
Craig T. Callahan
President
prior to the Iraq war, and near-term lows on August 12, 2004, stocks have
actually recorded a two-year advance.
Research into market history and investor behavior indicates to us that many
investors assign the horrible and distasteful aspects of war as negatives for
economic growth and company valuations. However, we have found no concrete
evidence, past or present, to support such a relationship. For this reason, we
believe that successful investors need to stay focused on the divergence between
price and value, while also drawing a distinction between geopolitical concerns
and the realities of investment fundamentals.
Our research has shown these fundamentals to be generally healthy and
encouraging. By invoking the valuation-driven discipline that enables us to
patiently ride through market turbulence, we have participated in the advance.
A MORE DIVERSE INDUSTRY COMPOSITION
No matter what the market environment, our approach remains consistent. At the
end of the period, we measured the broad market as significantly below our
estimate of fair value. This discount makes sense to us as investors seemingly
braced for a slowdown in economic growth and corporate earnings, although we
believe the market has overreacted to these short-term concerns.
Nevertheless, what has become gradually apparent amid the market turmoil is that
our recent focus on highly cyclical industries is no longer warranted. While
economically sensitive sectors such as Energy, Materials and Industrials were
clear market leaders during the first half of our reporting period, value and
relative strength readings have since pointed us toward a more diverse
composition of industries, including those widely considered to be defensive or
recession-proof.
Accordingly, we were able to capture second-half upside within the Healthcare,
Consumer Staples and Utilities sectors, where combinations of value and relative
strength became increasingly more attractive. Healthcare, in particular, offered
considerable breadth, with all eight industries in the sector trading at
double-digit discounts to their intrinsic value and six posting above-average
relative strength. Utilities were also quite compelling. Despite their so-called
defensive tendencies, we view them as prospective market leaders.
Message from ICON Funds 5
Message from ICON Funds (continued)
SEARCHING FOR VALUE
Having sustained market leadership for the past three years, it comes as no
surprise that cyclical industries were decidedly volatile. Because of their
sensitivity to economic fluctuations, these industries typically exhibit a
higher standard deviation or variability, which serves as a measure of risk.
Capturing their leadership has been a challenge and has certainly made for some
unpleasant periods. However, our system dictates that we not be swayed by
emotion. We simply calculate value and allow it to direct us to industries that
are showing value above price and relative strength.
ICON does not subscribe to the traditional style grid that classifies stocks by
size -- small-cap, mid-cap or large-cap -- and by style, either value or growth.
Instead, we apply our value-based, bottom-up industry rotation across the entire
market in order to identify leading industry themes wherever they may emerge. In
doing so, we are an all-cap manager and thus avoid arbitrary barriers or
restrictions in our pursuit of value.
THE PRIVILEGE OF GUIDING YOU
In January, we had the good fortune to announce the promotions of three
investment team members. We'd like to again take a moment to share the news.
Portfolio Managers Robert Straus, Derek Rollingson and J.C. Waller, III have
been promoted to Vice Presidents and have been named Chief Investment Officer,
Director of Research and Director of Institutional Portfolio Management,
respectively. These promotions recognize the outstanding and valuable
contributions each has made to your investment.
In closing, we wish to thank you for the privilege of guiding you through these
challenging markets. For current market updates, as well as up-to-date Fund,
performance and account information, we invite you to visit our website at
www.iconadvisers.com.
Yours truly,
/s/ Craig T. Callahan
Craig T. Callahan, DBA
Chairman of the Board of Trustees and President of the Adviser
6 Message from ICON Funds
Management Overview
ICON Consumer Discretionary Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 99.7%
Top 10 Equity Holdings 28.7%
Number of Stocks 58
Short-Term Investments 0.1%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
The Finish Line, Inc. 3.4%
Pacific Sunwear of California, Inc. 3.4%
Federated Department Stores, Inc. 3.0%
Lowe's Cos., Inc. 2.9%
Reebok International Ltd. 2.8%
V.F. Corp. 2.8%
Ross Stores, Inc. 2.6%
Hovnanian Enterprises, Inc. - Class A 2.6%
Quiksilver, Inc. 2.6%
Brown Shoe Co., Inc. 2.6%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Consumer Discretionary Fund gained 9.29% for the six-month period
ended March 31, 2005, outpacing the 8.61% return of its sector-specific
benchmark, the S&P 1500 Consumer Discretionary Index, as well as the 7.45%
return for its broad benchmark, the S&P 1500 Index. Total returns for other
periods as of March 31, 2005 appear on page 11.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. Value-driven identification of industry themes led the Fund to be positioned
favorably during the reporting period. However, much of the overall advance
was recorded between October 25 and December 31, 2004, in conjunction with
strong gains in cyclically oriented consumer issues. During that time, the
S&P 1500 Consumer Discretionary Index grew by 13.90% while the Fund virtually
kept pace, rising 13.69%. Both returns surpassed a same-period increase in
the S&P 1500 Index of 11.38%.
Subsequently, the Fund's valuation-based discipline also held up well during
the first quarter of 2005, when consumer cyclical stocks suffered
considerable setbacks. For this period, the S&P Consumer Discretionary Index
declined 4.56% while the Fund and the S&P 1500 Index fell by 2.25% and 1.99%,
respectively.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Surging investor confidence characterized the early months of the reporting
period as oil prices eased and election-year uncertainties subsided. However,
crude oil futures soon reversed course, rising sharply from $40.71
Management Overview 7
Management Overview (continued)
ICON Consumer Discretionary Fund
a barrel in early December to $55.40 a barrel by period-end, in part due to
prolonged weakness in the U.S. dollar.
Although higher energy costs were slow to pass through to consumers,
inflation fears weighed heavily on market sentiment, as benchmark 10-year
Treasury yields soared from 3.99% in early February to 4.64% in late March.
This steep, sudden rise in both oil prices and interest rates took its toll
on consumer cyclical issues, as gains amassed during the fourth quarter of
2004 were pared amid worries that inflationary pressures would crimp consumer
spending.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Leading industry contributors during the period included apparel retail,
homebuilding and footwear, which accounted for almost two-thirds of the
Fund's return. Valuation and relative strength had previously led us to
overweight apparel retail, the Fund's top contributor and largest overall
average industry weight. Homebuilding, as well, continued to benefit from
historically low mortgage rates and a continued strong economy despite
ongoing monetary tightening by the Federal Reserve.
Principal company contributors to Fund performance included specialty
retailer Abercrombie & Fitch Co., which continued to boost sales on the basis
of its brand rather than promotional incentives. Homebuilder Toll Brothers
also advanced, as the company experienced strong growth in the face of robust
new home sales. Meanwhile, Federated Department Stores rose on news that its
proposed merger with May Department Stores would drive significant
competitive synergies.
In contrast, core detracting industry positions included computer &
electronics retail, airlines, consumer electronics, and automobile
manufacturers. Although computer & electronics retail comprised the largest
weighting of these four laggards, its total average weighting accounted for
less than 5% of net assets during the period. The industry suffered on the
heels of Radio Shack's lowered earnings guidance in mid-February.
Among the Fund's primary individual detractors was video game retailer
GameStop Corp., which missed earnings forecasts when inventory shortages hurt
holiday sales. Other laggards included homebuilder Pulte Homes, which faced
weather-related slowdowns in its primary Florida and California markets, and
women's apparel retailer Cache Inc, which reported flat same-store sales.
GameStop and Pulte Homes were liquidated when they met our sell criteria.
8 Management Overview
[ROBERT STRAUS, CMT PHOTO]
Robert Straus, CMT
Portfolio Manager
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE CONSUMER DISCRETIONARY SECTOR?
A. Growing concerns over rising oil prices and interest rates appeared to be
catalysts for a sell-off in consumer cyclical issues early in 2005. Not
surprisingly, as the reporting period came to a close, the Consumer
Discretionary sector was trading at more than a 20% discount to our estimate
of fair value. We believe these concerns are short-term overreactions, and
have created opportunities to fortify existing positions. In particular, we
have focused on the apparel retail industry as it currently represents the
sector's most attractive combination of value and relative strength.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund's value driven approach at the industry level was the primary
contributor to relative outperformance during the period.
- - Valuation and relative strength led us to overweight apparel retail, the
Fund's top contributor and largest overall average industry weight.
- - In contrast, core industry detractors included computer & electronics retail,
airlines, consumer electronics, and automobile manufacturers.
- - Stocks that boosted Fund performance included Abercrombie & Fitch Co., Toll
Brothers and Federated Department Stores.
- - Among the Fund's poorest-performing holdings were GameStop Corp., Pulte Homes
and Cache Inc.
Management Overview 9
Management Overview (continued)
ICON Consumer Discretionary Fund
TOP 10 INDUSTRIES
as of March 31, 2005
<Table>
Apparel Retail
22.0%
Footwear
11.4%
Specialty Stores
9.4%
Apparel Accessories & Luxury Goods
8.6%
Restaurants
8.4%
Home Building
8.0%
General Merchandise Stores
7.3%
Home Improvement Retail
6.3%
Department Stores
4.8%
Advertising
3.1%
</Table>
Percentages are based upon net assets.
10 Management Overview
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 7/9/97
- -------------------------------------------------------------------------------------------
ICON Consumer Discretionary Fund 9.29% 0.22% 6.23% 4.65%
- -------------------------------------------------------------------------------------------
S&P 1500 Consumer Discretionary Index 8.61% 6.50% -0.62% 7.17%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 5.67%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The performance of the
S&P 1500 Consumer Discretionary Index includes the reinvestment of dividends and
capital gain distributions beginning on January 1, 2002. Additional information
about these performance results and the comparative indexes can be found on
pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON CONSUMER S&P 1500 CONSUMER
DISRETIONARY FUND DISCRETIONARY INDEX S&P 1500 INDEX
----------------- ------------------- --------------
7/9/97 10000 10000 10000
3/31/98 11141 13276 12321
3/31/99 10033 16371 14207
3/31/00 10504 17620 16994
3/31/01 9757 13937 13550
3/31/02 13380 14959 13837
3/31/03 9080 11069 10425
3/31/04 14178 16036 14275
3/31/05 14208 17079 15313
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 7/9/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
Management Overview 11
Schedule of Investments
ICON Consumer Discretionary Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
COMMON STOCKS 99.7%
UNITED STATES OF AMERICA 99.7%
CONSUMER DISCRETIONARY 88.2%
ADVERTISING 3.1%
121,300 Harte-Hanks, Inc. $ 3,343,028
139,600 Interpublic Group
of Cos., Inc.(a) 1,714,288
------------
5,057,316
APPAREL ACCESSORIES & LUXURY GOODS 8.6%
158,300 Ashworth, Inc.(a) 1,803,037
82,700 Perry Ellis
International,
Inc.(a) 1,855,788
42,900 Polo Ralph Lauren
Corp. 1,664,520
146,200 Quiksilver,
Inc.(a) 4,244,186
77,900 V.F. Corp. 4,607,006
------------
14,174,537
APPAREL RETAIL 22.0%
64,200 Abercrombie &
Fitch Co. 3,674,808
86,000 AnnTaylor Stores
Corp.(a) 2,200,740
183,600 Cache, Inc.(a) 2,487,780
57,100 Foot Locker, Inc. 1,673,030
130,100 Hot Topic, Inc.(a) 2,842,685
98,000 Jos. A. Bank
Clothiers, Inc.(a) 2,871,400
200,000 Pacific Sunwear of
California,
Inc.(a) 5,596,000
146,400 Ross Stores, Inc. 4,266,096
242,000 The Finish Line,
Inc. 5,602,300
102,700 Too, Inc.(a) 2,533,609
49,300 Urban Outfitters,
Inc.(a) 2,364,921
------------
36,113,369
COMPUTER & ELECTRONICS RETAIL 2.0%
31,900 Best Buy Co., Inc. 1,722,919
34,300 Electronics
Boutique Holdings
Corp.(a) 1,473,871
------------
3,196,790
DEPARTMENT STORES 4.8%
78,300 Federated
Department Stores,
Inc. 4,983,012
56,100 Kohl's Corp.(a) 2,896,443
------------
7,879,455
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
DISTRIBUTORS 0.9%
31,800 Building Materials
Holding Corp. $ 1,414,464
------------
FOOTWEAR 11.4%
123,300 Brown Shoe Co.,
Inc. 4,225,491
68,700 K-Swiss, Inc. 2,269,161
42,800 NIKE, Inc. - Class
B 3,565,668
105,200 Reebok
International Ltd. 4,660,360
56,900 Timberland Co. -
Class A(a) 4,035,917
------------
18,756,597
GENERAL MERCHANDISE STORES 7.3%
92,600 Dollar General
Corp. 2,028,866
97,800 Dollar Tree
Stores, Inc. 2,809,794
81,500 Family Dollar
Stores, Inc. 2,474,340
63,100 Shopko Stores,
Inc.(a) 1,402,082
64,300 Target Corp. 3,216,286
------------
11,931,368
HOME FURNISHINGS 2.0%
38,100 Mohawk Industries
Co.(a) 3,211,830
------------
HOME IMPROVEMENT RETAIL 6.3%
82,800 Lowe's Cos., Inc. 4,727,052
63,900 The Home Depot,
Inc. 2,443,536
71,900 The Sherwin-
Williams Co. 3,162,881
------------
10,333,469
HOME BUILDING 8.0%
137,866 D.R. Horton, Inc. 4,031,202
83,300 Hovnanian
Enterprises,
Inc. - Class A(a) 4,248,300
47,000 M/I Homes, Inc. 2,299,710
41,800 Ryland Group, Inc. 2,592,436
------------
13,171,648
HOUSEWARES & SPECIALTIES 1.2%
37,000 Tupperware Corp. 753,320
36,500 The Yankee Candle
Co. Inc.(a) 1,157,050
------------
1,910,370
</Table>
12 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
Rx
SPECIALTY STORES 9.4%
67,200 Borders Group,
Inc. $ 1,788,864
44,300 Dick's Sporting
Goods, Inc.(a) 1,627,139
65,200 Michaels Stores,
Inc. 2,366,760
85,100 O'Reilly
Automotive,
Inc.(a) 4,215,003
115,800 Pier 1 Imports,
Inc. 2,111,034
59,300 Staples, Inc. 1,863,799
68,500 West Marine,
Inc.(a) 1,456,310
------------
15,428,909
TIRE & RUBBER 1.2%
144,500 The Goodyear Tire
& Rubber Co.(a) 1,929,075
------------
TOTAL CONSUMER DISCRETIONARY 144,509,197
INDUSTRIALS 1.5%
AIRLINES 1.5%
134,800 SkyWest, Inc. 2,505,932
------------
TOTAL INDUSTRIALS 2,505,932
LEISURE & CONSUMER STAPLES 8.4%
RESTAURANTS 8.4%
43,100 Brinker
International,
Inc.(a) 1,561,082
78,500 CBRL Group, Inc. 3,242,050
53,200 Jack In the Box,
Inc.(a) 1,973,720
110,800 Sonic Corp.(a) 3,700,720
91,500 The Cheesecake
Factory, Inc. 3,243,675
------------
TOTAL LEISURE & CONSUMER
STAPLES 13,721,247
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
MATERIALS 1.6%
CONSTRUCTION MATERIALS 1.6%
32,711 Eagle Materials,
Inc. $ 2,647,628
------------
TOTAL MATERIALS 2,647,628
------------
TOTAL UNITED STATES OF AMERICA 163,384,004
------------
TOTAL COMMON STOCKS
(COST $145,429,767) 163,384,004
SHORT-TERM INVESTMENTS 0.1%
VARIABLE RATE DEMAND NOTES 0.1%
$199,715 American Family
Demand Note,
2.4663%# 199,715
------------
TOTAL VARIABLE RATE DEMAND
NOTES 199,715
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $199,715) 199,715
------------
TOTAL INVESTMENTS 99.8%
(COST $145,629,482) 163,583,719
OTHER ASSETS LESS LIABILITIES
0.2% 300,925
------------
NET ASSETS 100.0% $163,884,644
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005.
Schedule of Investments 13
Management Overview
ICON Energy Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 88.0%
Top 10 Equity Holdings 24.2%
Number of Stocks 67
Short-Term Investments 11.9%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
Petroleo Brasileiro S.A. 3.6%
Petro-Canada 2.6%
Suncor Energy, Inc. 2.6%
Cal Dive International, Inc. 2.5%
Shell Transport & Trading Co. plc 2.4%
Petroleum Development Corp. 2.3%
Ultra Petroleum Corp. 2.1%
Tsakos Energy Navigation Ltd. 2.1%
Superior Energy Services, Inc. 2.1%
National-OilWell, Inc. 1.9%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Energy Fund appreciated 19.35% for the six-month period ended March
31, 2005, trailing the 22.75% return for its sector-specific benchmark, the
S&P 1500 Energy Index, while outperforming the 7.45% return of its broad
benchmark, the S&P 1500 Index. Total returns for other periods as of March
31, 2005 appear on page 18.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. The Fund benefited during the period from a positive correlation between
crude oil prices and energy stock prices. As continued strong demand growth
in the face of limited supply capacity pushed crude oil prices higher, energy
company earnings strengthened, providing the necessary support for stock
prices to trend upward. Nevertheless, the sector experienced considerable
volatility as crude oil prices fluctuated.
This is reflected in the Fund's six-month performance in which it outpaced
the S&P 1500 Energy Index during the first half of the reporting period but
was unable to keep pace with the large-cap dominated index during the second
half. Leading integrated oil & gas companies Exxon Mobil, Occidental
Petroleum and ConocoPhillips led the benchmark higher during this advance.
However, our valuation-related lack of exposure to Exxon Mobil and Occidental
Petroleum, and underweight exposure to ConocoPhillips, worked against the
Fund.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Equity markets registered substantial early gains, as investors welcomed
lower energy prices, improving job creation, and decisive election-year
14 Management Overview
[J.C. WALLER III, PORTFOLIO MANAGER PHOTO]
J.C. Waller, III
Portfolio Manager
results. While this year-end rally suggested growing confidence in a
sustainable economic recovery, macroeconomic news was decidedly mixed.
Concern over the persistently weak U.S. dollar belied a widening trade
deficit, even as higher short-term interest rates and inflation appeared to
be manageable risks.
However, these risks ultimately turned more worrisome when supply-demand
issues pushed the price of crude oil futures from $40.71 a barrel in early
December to $55.40 a barrel by period-end. As benchmark 10-year Treasury
yields jumped from 3.99% in early February to 4.64% in late March, inflation
fears intensified, weighing heavily on market sentiment. Energy stocks proved
immune to this pressure, as the rise in crude oil prices bolstered
valuations.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Given no convincing evidence to the contrary, valuation and relative strength
readings led us to maintain relatively stable industry weightings during the
period. The Fund remained overweighted in leading industry performers oil &
gas refining & marketing & transportation, oil & gas exploration &
production, and oil & gas equipment & services. Generally, the Fund was
either slightly underweighted or equal weighted in oil & gas drilling, yet
significantly underweighted in integrated oil & gas. While much of the sector
hovered at fair value, we found the large-cap dominated integrated oil & gas
industry, which comprises nearly 61% of the index, to be unattractive from a
valuation standpoint.
Among the Fund's top-performing stocks, offshore services company Cal Dive
International enjoyed robust revenue gains, reflecting increases in
production volumes and commodity prices. Also profiting from higher energy
prices was Brazil's national oil company Petrobras, which reported earnings
growth in both its upstream and downstream operations. Elsewhere, General
Maritime, a provider of oil transportation services, profited from stronger
spot charter rates.
In contrast, oil and gas developers Harvest Natural Resources and Petroleum
Development Corp. saw their market value decline. Harvest experienced
drilling delays and production setbacks, while Petroleum Development reported
accounting difficulties. Meanwhile, feedstock supplier TETRA Technologies,
Inc. encountered integration issues amid several major acquisitions. None of
these three stocks had met our sell criteria, so the Fund continued to own
them at period-end.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE ENERGY SECTOR?
A. Although the Energy sector as a whole continues to linger at fair value, we
believe certain industries, particularly oil & gas refining & marketing &
Management Overview 15
Management Overview (continued)
ICON Energy Fund
transportation, remain undervalued. While the other industry groups are
featuring fewer bargains, selected companies are still trading at discounts
to their estimated intrinsic value, and those are currently being targeted.
As long as valuations do not become overextended, we remain cautiously
optimistic.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund benefited during the period from a positive correlation between
crude oil prices and energy stock prices.
- - Our methodology led us to overweight leading industry performer oil & gas
refining & marketing & transportation.
- - We found the large-cap dominated integrated oil & gas industry, which
comprises nearly 61% of the index, to be unattractive from a valuation
standpoint.
- - Cal Dive International, Petrobras, and General Maritime were among the Fund's
top-performing stocks.
- - Stocks that saw their market value decline during the period included Harvest
Natural Resources, Petroleum Development Corp. and TETRA Technologies Inc.
16 Management Overview
TOP INDUSTRIES
March 31, 2005
<Table>
Oil & Gas Exploration & Production
22.4%
Integrated Oil & Gas
21.0%
Oil & Gas Equipment & Services
17.8%
Oil & Gas Refining, Marketing &
Transportation 17.3%
Oil & Gas Drilling
5.8%
Construction Materials
1.6%
Construction & Engineering
1.3%
Industrial Machinery
0.8%
</Table>
Percentages are based upon net assets.
Management Overview 17
Management Overview (continued)
ICON Energy Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 11/5/97
- -------------------------------------------------------------------------------------------
ICON Energy Fund 19.35% 43.10% 21.06% 15.38%
- -------------------------------------------------------------------------------------------
S&P 1500 Energy Index 22.75% 47.21% 12.08% 9.68%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 5.17%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative indexes can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON ENERGY FUND S&P 1500 ENERGY INDEX S&P 1500 INDEX
---------------- --------------------- --------------
11/5/97 10000 10000 10000
3/31/98 9330 9872 11683
3/31/99 6726 9455 13472
3/31/00 11092 11203 16115
3/31/01 15010 11875 12849
3/31/02 16385 12350 13121
3/31/03 13539 10230 9886
3/31/04 20154 13460 13536
3/31/05 28840 19815 14521
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 11/5/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
18 Management Overview
Schedule of Investments
ICON Energy Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
COMMON STOCKS 88.0%
UNITED STATES OF AMERICA 57.0%
ENERGY 53.9%
INTEGRATED OIL & GAS 2.4%
80,000 ConocoPhillips $ 8,627,200
155,000 Marathon Oil
Corp. 7,272,600
------------
15,899,800
OIL & GAS DRILLING 2.9%
19,100 Helmerich &
Payne, Inc. 758,079
15,600 Noble Corp. 876,876
400,000 Patterson-UTI
Energy, Inc. 10,008,000
175,000 Unit Corp.(a) 7,904,750
------------
19,547,705
OIL & GAS EQUIPMENT & SERVICES 17.8%
375,000 Cal Dive
International,
Inc.(a) 16,987,500
200,000 FMC
Technologies,
Inc.(a) 6,636,000
375,000 Grand Prideco,
Inc.(a) 9,060,000
125,000 Gulf Island
Fabrication,
Inc. 2,932,500
164,700 Hydril Co.(a) 9,620,127
275,000 Maverick Tube
Corp.(a) 8,940,250
271,800 National-
OilWell Varco,
Inc.(a) 12,693,060
88,700 Oceaneering
International,
Inc.(a) 3,326,250
134,400 Offshore
Logistics,
Inc.(a) 4,478,208
425,000 Oil States
International,
Inc.(a) 8,733,750
800,000 Superior Energy
Services,
Inc.(a) 13,760,000
200,000 TETRA
Technologies,
Inc.(a) 5,688,000
250,000 Tidewater, Inc. 9,715,000
300,000 W-H Energy
Services,
Inc.(a) 7,179,000
------------
119,749,645
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
OIL & GAS EXPLORATION & PRODUCTION 22.4%
24,200 Anadarko
Petroleum Corp. $ 1,841,620
50,000 Berry Petroleum
Co. 2,572,500
450,000 Chesapeake
Energy Corp. 9,873,000
117,514 Cimarex Energy
Co.(a) 4,583,046
80,000 Comstock
Resources,
Inc.(a) 2,299,200
320,000 Denbury
Resources,
Inc.(a) 11,273,600
270,000 Encore
Acquisition
Co.(a) 11,151,000
475,000 Energy Partners
Ltd.(a) 12,335,750
406,800 Harvest Natural
Resources,
Inc.(a) 4,836,852
525,000 KCS Energy,
Inc.(a) 8,064,000
132,000 Newfield
Exploration
Co.(a) 9,802,320
21,200 Noble Energy,
Inc. 1,442,024
150,036 Patina Oil &
Gas Corp. 6,001,440
130,800 Penn Virginia
Corp. 6,003,720
414,000 Petroleum
Development
Corp.(a) 15,603,660
403,900 Range Resources
Corp. 9,435,104
325,000 Remington Oil &
Gas Corp.(a) 10,244,000
283,100 Ultra Petroleum
Corp.(a) 14,381,480
265,433 XTO Energy,
Inc. 8,716,820
------------
150,461,136
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 8.4%
125,000 Ashland, Inc. 8,433,750
275,000 Frontier Oil
Corp. 9,971,500
250,000 General
Maritime
Corp.(a) 12,110,000
475,000 OMI Corp. 9,096,250
</Table>
Schedule of Investments 19
Schedule of Investments (continued)
ICON Energy Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
100,000 Overseas
Shipholding
Group, Inc. $ 6,291,000
534,300 The Williams
Companies, Inc. 10,050,183
------------
55,952,683
------------
TOTAL ENERGY 361,610,969
INDUSTRIALS 1.5%
CONSTRUCTION & ENGINEERING 0.7%
153,000 URS Corp.(a) 4,398,750
INDUSTRIAL MACHINERY 0.8%
223,900 Flowserve
Corp.(a) 5,792,293
------------
TOTAL INDUSTRIALS 10,191,043
MATERIALS 1.6%
CONSTRUCTION MATERIALS 1.6%
320,000 Headwaters,
Inc.(a) 10,502,400
------------
TOTAL MATERIALS 10,502,400
------------
TOTAL UNITED STATES OF AMERICA 382,304,412
AMERICAN DEPOSITARY RECEIPT 11.4%
BRAZIL 3.6%
ENERGY 3.6%
INTEGRATED OIL & GAS 3.6%
540,000 Petroleo
Brasileiro
S.A. - ADR 23,857,200
------------
TOTAL ENERGY 23,857,200
------------
TOTAL BRAZIL 23,857,200
DENMARK 1.0%
ENERGY 1.0%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.0%
125,000 Dampskibsselskabet
Torm - ADR 6,686,250
------------
TOTAL ENERGY 6,686,250
------------
TOTAL DENMARK 6,686,250
CHINA 2.4%
ENERGY 2.4%
INTEGRATED OIL & GAS 2.4%
240,000 China Petroleum
and Chemical
Corp. - ADR 9,784,800
100,000 Petrochina Co.,
Ltd. - ADR 6,322,000
------------
TOTAL ENERGY 16,106,800
------------
TOTAL CHINA 16,106,800
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
ITALY 0.7%
ENERGY 0.7%
INTEGRATED OIL & GAS 0.7%
36,000 ENI
S.p.A. - ADR $ 4,685,760
------------
TOTAL ENERGY 4,685,760
------------
TOTAL ITALY 4,685,760
NETHERLANDS 2.4%
ENERGY 1.8%
INTEGRATED OIL & GAS 1.8%
200,000 Royal Dutch
Petroleum - ADR 12,008,000
------------
TOTAL ENERGY 12,008,000
INDUSTRIALS 0.7%
CONSTRUCTION & ENGINEERING 0.6%
100,000 Chicago Bridge
and Iron Co.
N.V. - ADR 4,403,000
------------
TOTAL INDUSTRIALS 4,403,000
------------
TOTAL NETHERLANDS 16,411,000
SPAIN 1.3%
ENERGY 1.3%
INTEGRATED OIL & GAS 1.3%
330,000 Repsol YPF
S.A. - ADR 8,761,500
TOTAL ENERGY 8,761,500
------------
TOTAL SPAIN 8,761,500
------------
TOTAL AMERICAN DEPOSITORY
RECEIPT 76,508,510
BAHAMAS 1.7%
ENERGY 1.7%
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 1.7%
250,000 Teekay Shipping
Corp. 11,237,500
------------
TOTAL ENERGY 11,237,500
------------
TOTAL BAHAMAS 11,237,500
BERMUDA 4.8%
ENERGY 4.8%
OIL & GAS DRILLING 1.8%
200,000 Nabors
Industries
Ltd.(a) 11,828,000
------------
</Table>
20 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 3.0%
318,008 Ship Finance
International
Ltd. $ 6,455,562
320,000 Tsakos Energy
Navigation Ltd. 14,089,600
------------
TOTAL ENERGY 20,545,162
------------
TOTAL BERMUDA 32,373,162
CANADA 7.5%
ENERGY 7.5%
INTEGRATED OIL & GAS 6.4%
300,000 Petro-Canada 17,358,000
215,000 Petrokazakhstan,
Inc. 8,636,550
425,000 Suncor Energy,
Inc. 17,089,250
------------
43,083,800
OIL & GAS DRILLING 1.1%
94,900 Precision
Drilling
Corp.(a) 7,085,234
------------
TOTAL ENERGY 50,169,034
------------
TOTAL CANADA 50,169,034
UNITED KINGDOM 5.6%
ENERGY 5.6%
INTEGRATED OIL & GAS 2.4%
300,000 Shell Transport
& Trading Co.
PLC 16,308,000
------------
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
OIL & GAS REFINING & MARKETING &
TRANSPORTATION 3.2%
180,000 Frontline Ltd. $ 8,820,000
650,000 Top Tankers,
Inc. 12,057,500
------------
20,877,500
------------
TOTAL ENERGY 37,185,500
------------
TOTAL UNITED KINGDOM 37,185,500
------------
TOTAL COMMON STOCKS (COST
$459,397,668) 589,778,118
SHORT-TERM INVESTMENTS 11.9%
U.S. GOVERNMENT NOTE 10.2%
$68,000,000 FHLB Discount
Note, 2.2810%,
04/01/05 68,000,000
------------
VARIABLE RATE DEMAND NOTE 1.7%
11,305,221 American Family
Demand Note,
2.4663%# 11,305,221
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $79,305,221) 79,305,221
------------
TOTAL INVESTMENTS 99.9% (COST
$538,702,889) 669,083,339
OTHER ASSETS LESS LIABILITIES
0.1% 698,922
------------
NET ASSETS 100.0% $669,782,261
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
Dates shown on securities are the due dates of the obligation.
Schedule of Investments 21
Management Overview
ICON Financial Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 96.4%
Top 10 Equity Holdings 27.8%
Number of Stocks 48
Short-Term Investments 1.6%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
The Hartford Financial Services Group, Inc. 3.0%
Loews Corp. 2.9%
A.G. Edwards, Inc. 2.9%
American Financial Corp. 2.8%
Prudential Financial, Inc. 2.8%
HCC Insurance Holdings, Inc. 2.8%
Morgan Stanley 2.7%
Philadelphia Consolidated Holding Corp. 2.7%
The Goldman Sachs Group, Inc. 2.6%
ING Groep N.V. 2.6%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Financial Fund gained 3.29% for the six-month period ended March 31,
2005, outperforming the 1.43% return for its sector-specific benchmark, the
S&P 1500 Financials Index, but trailing the 7.45% return for its broad
benchmark, the S&P 1500 Index. Total returns for other periods as of March
31, 2005 appear on page 26.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. The Fund reflected overall weakness in the Financials sector during the
period, as investors became increasingly concerned that rising interest rates
and the inflationary effects of higher oil prices would pressure the shares
of financial services companies. Fallout from the New York attorney general's
investigation into the insurance industry and credit quality trends in the
consumer finance industry also contributed to widespread headline risk.
Nevertheless, the Fund outpaced its narrow benchmark in large part due to a
valuation-driven tilt toward the top-performing investment banking &
brokerage industry, which on average was the Fund's largest industry
weighting during the period. Valuations remained attractive, with the group
trading at a discount to the broader market, while relative strength has
compared favorably.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Although the Fund participated in a broad year-end rally favoring
economically sensitive industries, much of those gains were erased during the
first quarter of 2005. As strong corporate earnings and sound underlying
22 Management Overview
[DEREK ROLLINGSON PHOTO]
Derek Rollingson
Portfolio Manager
fundamentals gave way to perceptions of slowing growth and rising prices,
stocks abruptly retreated before settling into a volatile trading range.
While defensive groups fared better amid this sideways market, cyclical
industries gave back considerable ground. Investment performance, a key
"product" of the Financials sector, further exacerbated an already difficult
environment, as mutual fund flows proved weak and considerable assets
remained on the sidelines. For that reason, companies with diverse revenue
streams, capital markets exposure and less reliance on spread revenue
appeared to best weather the storm, even as investor sentiment reflected
pervasive negativity.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. The Fund's largest industry exposure, investment banking & brokerage, turned
in the strongest performance during the period, capitalizing on an overweight
position relative to the benchmark. Comprising 9.9% of net assets at the
start of the period, by period-end the industry accounted for 19.6% of net
assets, due to its attractive V/P and RS characteristics. Also contributing
to Fund performance was life & health insurance, which continues to benefit
from demographic trends supporting an aging population.
Meanwhile, regional banks remained among the weakest industries in the sector
and consequently worked against Fund performance. Having begun the fiscal
year at 12.0% of net assets, by period-end all exposure had been removed.
Conversely, multi-line insurance was increased to 11.6% from 7.4%, as V/P and
RS improved despite concerns surrounding from the New York State insurance
probe.
Among the Fund's leading stock contributors, brokerage firm A.G. Edwards Inc.
profited from a pickup in market activity coupled with effective cost
controls. By focusing on fast-growing segments of the insurance business,
particularly the Japanese market, Prudential Financial Inc. repeatedly posted
better-than-expected earnings. Elsewhere, global investment banking giant
Goldman Sachs Group Inc. saw transaction volume increase after two quarterly
declines.
In contrast, specialty finance company First Cash Financial Inc. slid when
Federal regulators announced new guidelines governing the payday lending
business. Multi-line insurer American International Group Inc. also struggled
when it was named in the New York State insurance investigation, as did
residential mortgage lender Countrywide Financial Corp. upon revealing
accounting irregularities. Although the Fund continues to hold First Cash
Financial, Countrywide and AIG were liquidated due to declining relative
strength.
Management Overview 23
Management Overview (continued)
ICON Financial Fund
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE FINANCIALS SECTOR?
A. While sector valuations currently demonstrate considerable upside potential,
we remain on the lookout for market leadership that has been slow to develop.
In light of these still challenging conditions, we continue to apply our
discipline, investing with a keen eye toward valuation and relative strength.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund reflected overall weakness in the Financials sector though
outperformed its narrow benchmark.
- - Our valuation methodology led us to overweight investment banking &
brokerage, the Fund's largest industry exposure and top performer.
- - Regional banking was among the sector's weakest industries during the period
and consequently worked against Fund performance.
- - A.G. Edwards Inc., Prudential Financial Inc. and Goldman Sachs Group Inc. all
made meaningful individual contributions to Fund performance
- - Principal company detractors included First Cash Financial Inc., American
International Group Inc. and Countrywide Financial Corp.
24 Management Overview
TOP 10 INDUSTRIES
March 31, 2005
<Table>
Investment Banking & Brokerage
19.6%
Consumer Finance
12.8%
Property & Casualty Insurance
12.5%
Life & Health Insurance
11.7%
Multi-Line Insurance
11.6%
Asset Management & Custody Banks
10.9%
Other Diversified Financial
Services 6.2%
Diversified Banks
4.9%
Reinsurance
4.2%
Thrifts & Mortgage Finance
1.2%
</Table>
Percentages are based upon net assets.
Management Overview 25
Management Overview (continued)
ICON Financial Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 7/1/97
- -------------------------------------------------------------------------------------------
ICON Financial Fund 3.29% 3.29% 13.89% 10.54%
- -------------------------------------------------------------------------------------------
S&P 1500 Financials Index 1.43% -0.29% 6.31% 8.57%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 5.91%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative indexes can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON FINANCIAL FUND S&P 1500 FINANCIALS INDEX S&P 1500 INDEX
------------------- ------------------------- --------------
7/1/97 10000 10000 10000
3/31/98 12003 13426 12552
3/31/99 11878 14190 14474
3/31/00 11342 13923 17314
3/31/01 15598 15435 13804
3/31/02 17625 16526 14097
3/31/03 13011 13027 10621
3/31/04 21045 18958 14543
3/31/05 21736 18903 15601
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 7/1/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
26 Management Overview
Schedule of Investments
ICON Financial Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 96.4%
UNITED STATES OF AMERICA 93.8%
FINANCIAL 93.8%
ASSET MANAGEMENT & CUSTODY BANKS 10.9%
75,300 Affiliated
Managers Group,
Inc.(a) $ 4,670,859
105,000 American Capital
Strategies, Ltd. 3,298,050
166,400 Eaton Vance Corp. 3,900,416
96,400 Investors
Financial
Services Corp. 4,714,924
53,300 Legg Mason, Inc. 4,164,862
43,100 SEI Investments
Co. 1,558,496
------------
22,307,607
CONSUMER FINANCE 12.8%
161,700 AmeriCredit
Corp.(a) 3,790,248
49,000 Capital One
Financial Corp. 3,663,730
79,000 First Cash
Financial
Services, Inc.(a) 1,672,430
191,000 Metris Companies,
Inc.(a) 2,213,690
296,100 Providian
Financial
Corp.(a) 5,081,076
102,800 SLM Corp. 5,123,552
175,700 World Acceptance
Corp.(a) 4,483,864
------------
26,028,590
DIVERSIFIED BANKS 4.9%
92,600 Bank of America
Corp. 4,083,660
80,600 Wachovia Corp. 4,103,346
31,200 Wells Fargo & Co. 1,865,760
------------
10,052,766
INVESTMENT BANKING & BROKERAGE 19.6%
132,500 A.G. Edwards,
Inc. 5,936,001
135,400 E*TRADE Financial
Corp. 1,624,800
260,700 Investment
Technology Group,
Inc.(a) 4,562,250
491,200 Labranche and
Co., Inc.(a) 4,568,160
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
47,100 Lehman Brothers
Holding, Inc. $ 4,434,936
96,700 Morgan Stanley 5,536,075
123,000 Raymond James
Financial, Inc. 3,726,900
43,700 The Bear Stearns
Cos., Inc. 4,365,630
48,700 The Goldman Sachs
Group, Inc. 5,356,513
------------
40,111,265
LIFE & HEALTH INSURANCE 11.7%
110,500 AmerUs Group Co. 5,221,125
54,450 Delphi Financial
Group, Inc. 2,341,350
60,900 Lincoln National
Corp. 2,749,026
78,800 MetLife, Inc. 3,081,080
100,100 Prudential
Financial, Inc. 5,745,740
55,300 StanCorp
Financial Group,
Inc. 4,688,334
------------
23,826,655
MULTI-LINE INSURANCE 11.6%
160,700 Allmerica
Financial
Corp.(a) 5,777,165
156,100 HCC Insurance
Holdings, Inc. 5,644,576
81,800 Loews Corp. 6,015,572
90,400 The Hartford
Financial
Services Group,
Inc. 6,197,824
------------
23,635,137
OTHER DIVERSIFIED FINANCIAL SERVICES 3.6%
84,200 Citigroup, Inc. 3,783,948
93,600 Principal
Financial Group,
Inc. 3,602,664
------------
7,386,612
PROPERTY & CASUALTY INSURANCE 12.5%
89,610 Fidelity National
Financial, Inc. 2,951,753
79,800 LandAmerica
Financial Group,
Inc. 3,992,394
71,400 Philadelphia
Consolidated
Holding Corp.(a) 5,535,642
111,600 Selective
Insurance Group,
Inc. 5,159,268
</Table>
Schedule of Investments 27
Schedule of Investments (continued)
ICON Financial Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
79,000 The Allstate
Corp. $ 4,270,740
73,400 W.R. Berkley
Corp. 3,640,640
------------
25,550,437
REINSURANCE 4.2%
47,400 Everest Re Group
Ltd. 4,034,214
67,500 Transatlantic
Holdings, Inc. 4,469,850
------------
8,504,064
SPECIALIZED FINANCE 0.8%
276,900 Instinet Group,
Inc.(a) 1,628,172
------------
THRIFTS & MORTGAGE INSURANCE 1.2%
72,900 IndyMac Bancorp,
Inc. 2,478,600
------------
TOTAL FINANCIAL 191,509,905
------------
TOTAL UNITED STATES OF AMERICA 191,509,905
AMERICAN DEPOSITARY RECEIPT 2.6%
NETHERLANDS 2.6%
FINANCIAL 2.6%
OTHER DIVERSIFIED FINANCIAL SERVICES 2.6%
174,658 ING Groep
NV - ADR 5,279,911
------------
TOTAL FINANCIAL 5,279,911
------------
TOTAL NETHERLANDS 5,279,911
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 5,279,911
------------
TOTAL COMMON STOCKS (COST
$174,446,865) 196,789,816
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
SHORT-TERM INVESTMENTS 1.6%
U.S. GOVERNMENT AGENCIES 1.4%
$2,900,000 FHLB Discount
Note,
2.2810%, 4/1/05 $ 2,900,000
------------
VARIABLE DEMAND RATE NOTES 0.2%
362,176 American Family
Demand Note,
2.4663%# 362,176
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $3,262,176) 3,262,176
------------
TOTAL INVESTMENTS 98.0%
(COST $177,709,041) 200,051,992
OTHER ASSETS LESS LIABILITIES
2.0% 4,040,149
------------
NET ASSETS 100.0% $204,092,141
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
Dates shown on securities are the due dates of the obligation.
28 Schedule of Investments
Management Overview
ICON Healthcare Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 97.7%
Top 10 Equity Holdings 25.7%
Number of Stocks 64
Short-Term Investments 2.5%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
UnitedHealth Group, Inc. 3.7%
Aetna, Inc. 3.0%
Centene Corp. 2.7%
AMERIGROUP Corp. 2.5%
Wellpoint, Inc. 2.5%
Humana, Inc. 2.3%
CIGNA Corp. 2.3%
WellChoice, Inc. 2.3%
Coventry Health Care, Inc. 2.2%
HCA, Inc. 2.2%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Healthcare Fund appreciated 20.40% for the six-month period ended
March 31, 2005, outperforming the 5.53% return for its sector-specific
benchmark, the S&P 1500 Healthcare Index, in addition to the 7.45% return for
its broad benchmark, the S&P 1500 Index. Total returns for other periods as
of March 31, 2005 appear on page 33.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. The Fund's focus on valuation benefited relative performance during the six-
month period. Given the breadth of stocks trading at significant discounts to
intrinsic value as well as the overall market, the Fund was rewarded in the
fourth quarter of 2004 when investors bid shares higher in a broad cyclical
rally.
Although this upward sector move mirrored the cyclical rally, the defensive
nature of Healthcare stocks enabled the Fund to withstand subsequent setbacks
during the second half of the reporting period. Despite the presence of value
and relative strength within the sector, a disparity in industry returns was
noticeable. While the managed health care, health care facilities and health
care services industries were among the leaders, biotechnology and
pharmaceuticals proved to be laggards.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. For the first half of the reporting period, improving fundamentals and strong
growth in corporate profits drove stock prices higher. Investors warmed to an
easing of energy prices, positive news on the job front and the removal of
election-year uncertainties, all of which suggested an increasingly
sustainable and resilient U.S. economy.
Management Overview 29
Management Overview (continued)
ICON Healthcare Fund
While this heightened expectations for the coming year, the second half of
the reporting period got off to a shaky start, as surging commodity prices
pushed interest rates higher and rekindled inflation fears. Meanwhile, a
widening U.S. trade gap in the face of a persistently weak dollar also
weighed heavily on investors. As these distractions permeated the market,
stocks came under considerable downward pressure, erasing a portion of the
previous quarter's gains.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Among the Fund's leading industry contributors during the period, managed
health care, replete with well-managed companies and a powerfulcombination of
value and relative strength, proved to be a standout.In gravitating toward
this compelling market theme, the Fund took asignificantly overweight
position, which boosted upside performance.
The Fund's lack of exposure to pharmaceuticals, which comprise over half of
the S&P 1500 Healthcare Index, also attributed positively. Because overall
industry weakness did not warrant their inclusion, the Fund was able to avoid
the fallout associated with the recall of several popular anti-inflammatory
drugs. Conversely, several of the Fund's health care equipment holdings
worked against performance.
On the company level, notable contributors included Centene Corp., a provider
of Medicaid and Medicaid-related programs, which benefited from a series of
new contracts. Managed healthcare giant Aetna Inc. also advanced as
management raised its expectations for earnings and membership growth.
Meanwhile, healthcare services provider Humana Inc. capitalized on
consolidation trends, acquiring CarePlus Health Plans.
In contrast, principal detractors included medical device manufacturer Boston
Scientific, which encountered legal difficulties involving a patent
infringement suit and was sold from the Fund. Elsewhere, information services
firm Dendrite International retreated on concerns that consolidation efforts
would dilute earnings, while Stryker Corp. saw its shares slump when the
maker of orthopedic implants faced a Justice Department probe into its sales
and marketing practices. The Fund continued to own Dendrite International and
Stryker Corp. as they had not met our sell criteria.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE HEALTHCARE SECTOR?
A. Even as investors come to recognize the significant relative discounts within
the Healthcare sector, value remains widespread. Managed health care, health
care facilities and health care services all remain attractive based on
valuation, and continue to be worthy of their overweight positions. Although
pharmaceuticals and biotechnology are trading at deep discounts to
30 Management Overview
[J.C. WALLER III PHOTO]
J.C. Waller, III
Portfolio Manager
estimated fair value, we are still looking for more convincing signs of
relative strength.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund's focus on valuation benefited relative performance as it was able
to find value throughout the Healthcare sector.
- - Our methodology led us to significantly overweight industry standout managed
health care, a compelling market theme combining value and relative strength.
- - Conversely, weak relative strength readings convinced us to avoid
pharmaceuticals, which came under severe pressure due to safety concerns.
- - Centene Corp., Aetna Inc. and Humana Inc. were among the Fund's
strongest-performing holdings during the period.
- - Stocks that detracted from performance included Boston Scientific, Dendrite
International and Stryker Corp.
Management Overview 31
Management Overview (continued)
ICON Healthcare Fund
TOP INDUSTRIES
March 31, 2005
<Table>
Managed Health Care
27.1%
Health Care Services
24.4%
Health Care Facilities
14.2%
Health Care Equipment
14.0%
Health Care Supplies
11.0%
Health Care Distributors
3.6%
Biotechnology
2.5%
Office Services & Supplies
0.9%
</Table>
Percentages are based upon net assets.
32 Management Overview
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 2/24/97
- -------------------------------------------------------------------------------------------
ICON Healthcare Fund 20.40% 16.90% 12.89% 13.53%
- -------------------------------------------------------------------------------------------
S&P 1500 Healthcare Index 5.53% 2.67% 3.36% 8.20%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 6.96%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative indexes can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
S&P 1500 HEALTHCARE
ICON HEALTHCARE FUND INDEX S&P 1500 INDEX
-------------------- ------------------- --------------
2/24/97 10000 10000 10000
3/31/98 13319 14014 13874
3/31/99 13500 17464 15999
3/31/00 15234 16050 19137
3/31/01 18731 18405 15258
3/31/02 19845 19189 15582
3/31/03 17337 15824 11740
3/31/04 23895 18439 16075
3/31/05 27934 18932 17244
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 2/24/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
Management Overview 33
Schedule of Investments
ICON Healthcare Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 97.7%
UNITED STATES OF AMERICA 97.1%
HEALTH CARE 96.2%
BIOTECHNOLOGY 2.5%
70,000 Martek
Biosciences
Corp.(a) $ 4,073,300
53,200 Serologicals
Corp.(a) 1,300,208
110,000 United
Therapeutics
Corp.(a) 5,026,450
------------
10,399,958
HEALTH CARE DISTRIBUTORS 3.6%
170,000 Henry Schein,
Inc.(a) 6,092,800
150,000 Owens & Minor,
Inc. 4,072,500
96,000 Patterson Cos.,
Inc.(a) 4,795,200
------------
14,960,500
HEALTH CARE EQUIPMENT 14.0%
165,000 Baxter
International,
Inc. 5,606,700
92,700 Beckman Coulter,
Inc. 6,159,915
87,300 Becton, Dickinson
& Co. 5,100,066
79,200 Biosite, Inc.(a) 4,120,776
238,500 CONMED Corp.(a) 7,183,620
138,700 Diagnostic
Products Corp. 6,699,210
108,000 Integra
LifeSciences
Holdings Corp.(a) 3,803,760
47,600 Invacare Corp. 2,124,388
144,500 Matthews
International
Corp. 4,733,820
57,400 ResMed, Inc.(a) 3,237,360
70,000 Respironics,
Inc.(a) 4,078,900
120,000 Stryker Corp. 5,353,200
------------
58,201,715
HEALTH CARE FACILITIES 14.2%
185,800 AmSurg Corp.(a) 4,700,740
250,000 Community Health
Systems, Inc.(a) 8,727,500
170,000 HCA, Inc. 9,106,900
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
125,000 Health Management
Associates Inc. $ 3,272,500
200,000 LifePoint
Hospitals,
Inc.(a) 8,768,000
140,000 Manor Care, Inc. 5,090,400
138,000 Triad Hospitals,
Inc.(a) 6,913,800
134,000 United Surgical
Partners
International,
Inc.(a) 6,133,180
120,000 Universal Health
Services, Inc. 6,288,000
------------
59,001,020
HEALTH CARE SERVICES 23.8%
208,500 American
Healthways,
Inc.(a) 6,884,670
173,200 Caremark Rx,
Inc.(a) 6,889,896
90,500 Cerner Corp.(a) 4,752,155
172,100 Cross Country
Healthcare,
Inc.(a) 2,884,396
190,500 DaVita, Inc.(a) 7,972,425
351,500 Dendrite
International,
Inc.(a) 4,935,060
83,100 Express Scripts,
Inc.(a) 7,245,489
175,000 Laboratory
Corporation of
America
Holdings(a) 8,435,000
136,700 Lincare Holdings,
Inc.(a) 6,046,241
150,000 Medco Health
Solutions,
Inc.(a) 7,435,500
162,800 Pharmaceutical
Product
Development,
Inc.(a) 7,887,660
85,400 Quest
Diagnostics, Inc. 8,978,102
248,300 RehabCare Group,
Inc.(a) 7,128,693
200,050 Renal Care Group,
Inc.(a) 7,589,897
109,500 SFBC
International,
Inc.(a) 3,858,780
------------
98,923,964
</Table>
34 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
HEALTH CARE SUPPLIES 11.0%
158,200 Advanced Medical
Optics, Inc.(a) $ 5,728,422
193,300 Arrow
International,
Inc. 6,639,855
71,600 DENTSPLY
International,
Inc. 3,895,756
81,500 Edwards
Lifesciences
Corp.(a) 3,522,430
110,000 Gen-Probe Inc.(a) 4,901,600
110,300 Surmodics,
Inc.(a) 3,519,673
66,500 Sybron Dental
Specialties,
Inc.(a) 2,387,350
116,700 The Cooper Cos.,
Inc. 8,507,430
268,500 West
Pharmaceutical
Services, Inc. 6,417,150
------------
45,519,666
MANAGED HEALTH CARE 27.1%
167,200 Aetna, Inc. 12,531,640
289,600 AMERIGROUP
Corp.(a) 10,587,776
378,600 Centene Corp.(a) 11,354,214
105,000 CIGNA Corp. 9,376,500
135,000 Coventry Health
Care, Inc.(a) 9,198,900
294,700 Humana, Inc.(a) 9,412,718
159,900 Molina
Healthcare,
Inc.(a) 7,369,791
126,600 PacifiCare Health
Systems, Inc.(a) 7,206,072
161,112 UnitedHealth
Group, Inc. 15,366,862
175,700 WellChoice,
Inc.(a) 9,366,567
83,000 Wellpoint,
Inc.(a) 10,404,050
------------
112,175,090
------------
TOTAL HEALTH CARE 399,181,913
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
INDUSTRIALS 0.9%
OFFICE SERVICES & SUPPLIES 0.9%
99,500 Mine Safety
Appliances Co. $ 3,854,630
------------
TOTAL INDUSTRIALS 3,854,630
------------
TOTAL UNITED STATES OF AMERICA 403,036,543
AMERICAN DEPOSITARY RECEIPT 0.6%
IRELAND 0.6%
HEALTH CARE 0.6%
HEALTH CARE SERVICES 0.6%
70,100 Icon PLC-ADR(a) 2,630,152
------------
TOTAL HEALTH CARE 2,630,152
------------
TOTAL IRELAND 2,630,152
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 2,630,152
------------
TOTAL COMMON STOCKS
(COST $312,925,110) 405,666,695
SHORT-TERM INVESTMENTS 2.5%
U.S. GOVERNMENT AGENCIES 2.2%
$9,300,000 FHLB Discount
Note,
2.2810%, 4/1/05 9,300,000
------------
VARIABLE RATE DEMAND NOTES 0.3%
1,328,912 American Family
Demand Note,
2.4663%# 1,328,912
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $10,628,912) 10,628,912
------------
TOTAL INVESTMENTS 100.2%
(COST $323,554,022) 416,295,607
OTHER ASSETS LESS LIABILITIES
(0.2)% (897,288)
------------
NET ASSETS 100.0% $415,398,319
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
Date shown on securities are the due dates of the obligation.
Schedule of Investments 35
Management Overview
ICON Industrials Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 98.0%
Top 10 Equity Holdings 22.2%
Number of Stocks 85
Short-Term Investments 1.9%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
Labor Ready, Inc. 2.8%
Norfolk Southern Corp. 2.5%
The Manitowoc Co, Inc. 2.4%
L-3 Communications Holdings, Inc. 2.3%
Terex Corporation 2.1%
Goodrich Corp. 2.1%
Oshkosh Truck Corp. 2.0%
Simpson Manufacturing Co., Inc. 2.0%
Burlington Northern Santa Fe Corp. 2.0%
Lockheed Martin Corp. 2.0%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Industrials Fund advanced 12.74% for the six-month period ended
March 31, 2005, outperforming both the 8.80% return for its sector-specific
benchmark, the S&P 1500 Industrials Index, and the 7.45% return of its broad
benchmark, the S&P 1500 Index. Total returns for other periods as of March
31, 2005 appear on page 40.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. The Fund's valuation-driven investment approach captured significant upside
in conjunction with a year-end cyclical rally favoring economically sensitive
industries. As is often the case, this type of environment was conducive to
the Industrials sector, which tends to perform best during times of economic
expansion. Against this seemingly strengthening backdrop, bargains were
plentiful, and helped to bolster returns as stocks closed the gap between
market price and intrinsic value.
Later in the period, concerns over possible economic softening, rising
commodity costs, and perceived inflationary pressures severely dampened
investor sentiment. While cyclical industries bore the brunt of subsequent
market pullbacks, our value discipline proved increasingly resilient,
enabling the Fund to stay well ahead of its benchmarks.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Inflation fears intensified during the period, as investors questioned
whether higher energy and raw material costs would curb economic growth and,
more specifically, manufacturing output. Although we continued to see limited
pricing power and virtually no signs of runaway inflation, the first-quarter
surge in crude oil futures and Treasury yields shaved earlier gains
36 Management Overview
[J.C. WALLER, III PHOTO]
J.C. Waller, III
Portfolio Manager
amid concerns that recent momentum in capital spending would ultimately come
under pressure.
This was in stark contrast to the first half of the reporting period, when
expectations for a sustainable economic recovery led to robust gains in
cyclical stocks. While the year-end rally reportedly gathered steam thanks to
lower energy prices, improving job creation and decisive election-year
results, we believe that there was no triggering event, and that the rise in
stocks, particularly those we viewed as underpriced, was part of a natural
move back toward fair value.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Despite higher fuel costs, transportation stocks in the railroads, trucking,
and marine industries turned in strong returns due to improving manufacturing
output and freight volumes. The Fund was tilted toward these leading industry
themes based on valuation and relative strength, thereby profiting from
direct exposure to the expanding economy. Building products and industrial
machinery were also actively overweighted, as value and relative strength
persisted in both industries.
Furthermore, the Fund benefited from its lack of exposure to two benchmark
bellwethers, General Electric and United Parcel Service, both of which
underperformed the sector-specific index. Although overvaluation led to their
exclusion, active avoidance of highly weighted benchmark components points to
the delicate nature of comparing oneself to a market-cap weighted index.
As for the Fund's top performance contributors, temporary employment agency
Labor Ready Inc. turned higher gross margins and improved cost controls into
better-than-expected earnings. Oshkosh Truck also advanced, as the ongoing
construction boom boosted demand for cement mixers and other specialty
vehicles. Meanwhile, railroad operator Burlington Northern Santa Fe Corp. was
successful in instituting fuel surcharges while experiencing double-digit
volume growth.
In contrast, detractors included SOURCECORP, a provider of document
outsourcing services, which fell after it restated financial results due to a
revenue recognition error. We liquidated this stock as its relative strength
declined. Insituform Technologies, a provider of pipeline rehabilitation
services, also retreated when higher labor and overhead costs led to a gross
margin adjustment. Elsewhere, Coinstar Inc., an operator of coin counting
machines, declined after reporting flat earnings despite a doubling of
revenue. The latter two companies had not met our sell criteria so the Fund
continued to own them at period-end.
Management Overview 37
Management Overview (continued)
ICON Industrials Fund
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE INDUSTRIALS SECTOR?
A. Although value remains widespread across the sector, inflation fears and
growth concerns have led to a difficult environment. While the economic
expansion will likely continue, the pace could very well decelerate. In light
of these conditions, we continue to apply our discipline, investing on the
basis of valuation and relative strength.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund's valuation-driven approach captured sizable gains in conjunction
with a year-end rally favoring economically sensitive industries.
- - Our methodology led us to overweight transportation industries such as
railroads, trucking and marine, all of which turned in strong returns.
- - The Fund benefited from avoiding benchmark bellwethers General Electric and
United Parcel Service, both of which underperformed the sector-specific
index.
- - Labor Ready Inc., Oshkosh Truck and Burlington Northern Santa Fe Corp. were
among the Fund's top performance contributors.
- - Stocks that detracted from performance included SOURCECORP, Insituform
Technologies and Coinstar Inc.
38 Management Overview
TOP 10 INDUSTRIES
March 31, 2005
<Table>
Aerospace & Defense
14.5%
Industrial Machinery
12.7%
Building Products
12.3%
Railroads
12.3%
Trucking
9.2%
Construction & Farm Machinery & Heavy
Trucks 6.3%
Diversified Commercial Services
5.9%
Employment Services
5.3%
Electrical Components & Equipment
4.0%
Construction & Engineering
3.1%
</Table>
Percentages are based upon net assets.
Management Overview 39
Management Overview (continued)
ICON Industrials Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 5/9/97
- -------------------------------------------------------------------------------------------
ICON Industrials Fund 12.74% 16.73% 5.05% 4.50%
- -------------------------------------------------------------------------------------------
S&P 1500 Industrials Index 8.80% 17.17% 3.03% 6.74%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 6.88%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative indexes can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON INDUSTRIALS FUND S&P 1500 INDUSTRIALS INDEX S&P 1500 INDEX
--------------------- -------------------------- --------------
5/9/97 10000 10000 10000
3/31/98 12995 12970 13604
3/31/99 11503 12572 15687
3/31/00 11068 14412 18764
3/31/01 10706 13632 14961
3/31/02 13164 14377 15278
3/31/03 8462 10266 11511
3/31/04 12127 14277 15761
3/31/05 14155 16729 16908
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 5/9/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
40 Management Overview
Schedule of Investments
ICON Industrials Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 98.0%
UNITED STATES OF AMERICA 92.1%
INDUSTRIALS 90.2%
AEROSPACE & DEFENSE 13.3%
17,000 Alliant
Techsystems,
Inc.(a) $ 1,214,650
75,300 Armor Holdings,
Inc.(a) 2,792,877
37,800 Curtiss-Wright
Corp. 2,154,600
93,400 EDO Corp. 2,806,670
22,900 General Dynamics
Corp. 2,451,445
121,900 Goodrich Corp. 4,667,551
71,600 L-3
Communications
Holdings, Inc. 5,085,032
71,700 Lockheed Martin
Corp. 4,378,002
76,400 Northrop Grumman
Corp. 4,124,072
------------
29,674,899
AIRLINES 2.6%
185,000 Continental
Airlines, Inc. -
Class B(a) 2,227,400
134,100 Frontier
Airlines, Inc.(a) 1,405,368
114,300 SkyWest, Inc. 2,124,837
------------
5,757,605
BUILDING PRODUCTS 12.3%
42,600 American Standard
Companies, Inc. 1,980,048
50,000 American Woodmark
Corp. 1,814,000
84,500 Apogee
Enterprises, Inc. 1,206,660
110,200 ElkCorp 4,238,292
143,600 Griffon Corp.(a) 3,074,476
123,400 Masco Corp. 4,278,278
109,100 NCI Building
Systems, Inc.(a) 4,211,260
145,800 Simpson
Manufacturing
Co., Inc. 4,505,220
47,000 Trex Company,
Inc.(a) 2,087,270
------------
27,395,504
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMERCIAL PRINTING 0.4%
27,500 John H. Harland
Co. $ 944,900
------------
CONSTRUCTION & ENGINEERING 2.1%
33,000 Granite
Construction,
Inc. 866,910
75,000 Insituform
Technologies,
Inc.(a) 1,088,250
100,000 The Shaw Group,
Inc.(a) 2,180,000
18,300 URS Corp.(a) 526,125
------------
4,661,285
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS
6.3%
14,000 Caterpillar, Inc. 1,280,160
38,300 Lindsay
Manufacturing Co. 730,764
55,300 Oshkosh Truck
Corp. 4,534,047
109,000 Terex Corp.(a) 4,719,700
30,500 The Toro Co. 2,699,250
------------
13,963,921
DIVERSIFIED COMMERCIAL SERVICES 5.9%
85,200 Bright Horizons
Family Solutions,
Inc.(a) 2,874,648
32,200 ChoicePoint,
Inc.(a) 1,291,542
66,000 Coinstar, Inc.(a) 1,399,200
42,400 Equifax, Inc. 1,301,256
26,200 Portfolio
Recovery
Associates,
Inc.(a) 891,586
205,950 Rollins, Inc. 3,830,670
48,700 West Corp.(a) 1,558,400
------------
13,147,302
ELECTRICAL COMPONENTS & EQUIPMENT 4.0%
43,000 Acuity Brands,
Inc. 1,161,000
79,000 AMETEK, Inc. 3,179,750
34,800 Cooper
Industries, Ltd. 2,488,896
21,300 Hubbell, Inc. 1,088,430
36,500 Regal-Beloit
Corp. 1,050,835
------------
8,968,911
</Table>
Schedule of Investments 41
Schedule of Investments (continued)
ICON Industrials Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
EMPLOYMENT SERVICES 5.3%
89,200 Administaff, Inc. $ 1,302,320
338,200 Labor Ready,
Inc.(a) 6,307,430
200,000 On Assignment,
Inc.(a) 1,020,000
84,600 Resources
Connection,
Inc.(a) 1,770,678
139,000 Spherion Corp.(a) 1,041,110
18,500 Volt Information
Sciences, Inc.(a) 446,775
------------
11,888,313
ENVIRONMENTAL SERVICES 1.8%
21,800 Stericycle,
Inc.(a) 963,560
88,800 Waste
Connections,
Inc.(a) 3,085,800
------------
4,049,360
INDUSTRIAL CONGLOMERATES 1.5%
44,200 Textron, Inc. 3,298,204
------------
INDUSTRIAL MACHINERY 12.7%
23,600 Actuant Corp.(a) 1,060,112
105,600 Albany
International
Corp. - Class A 3,260,928
56,600 Briggs & Stratton
Corp. 2,060,806
20,400 Eaton Corp. 1,334,160
140,500 Flowserve
Corp.(a) 3,634,735
39,000 Harsco Corp. 2,324,790
49,000 Ingersoll-Rand
Co. Ltd. - Class
A 3,902,850
109,500 Kaydon Corp. 3,438,300
22,300 Robbins & Myers,
Inc. 490,823
134,900 The Manitowoc
Co., Inc. 5,448,611
38,700 Watts Water
Technologies,
Inc. - Class A 1,262,007
------------
28,218,122
MARINE 1.0%
27,400 Alexander &
Baldwin, Inc. 1,128,880
28,000 Kirby Corp.(a) 1,176,840
------------
2,305,720
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
OFFICE SERVICES & SUPPLIES 1.6%
30,000 Brady Corp. $ 970,500
55,500 United
Stationers,
Inc.(a) 2,511,375
------------
3,481,875
RAILROADS 8.6%
82,400 Burlington
Northern Santa Fe
Corp. 4,443,832
93,200 CSX Corp. 3,881,780
111,000 Genesee &
Wyoming, Inc.(a) 2,876,010
151,100 Norfolk Southern
Corp. 5,598,255
193,000 RailAmerica,
Inc.(a) 2,408,640
------------
19,208,517
TRADING COMPANIES & DISTRIBUTORS 1.6%
80,000 Applied
Industrial
Technology, Inc. 2,176,000
21,000 W.W. Grainger,
Inc. 1,307,670
------------
3,483,670
TRUCKING 9.2%
81,400 Arkansas Best
Corp. 3,075,292
138,300 Knight
Transportation,
Inc. 3,411,861
111,025 Old Dominion
Freight Line,
Inc.(a) 3,458,429
165,000 Swift
Transportation
Co., Inc.(a) 3,653,100
127,650 Werner
Enterprises, Inc. 2,480,240
73,600 Yellow Roadway
Corp.(a) 4,308,543
------------
20,387,465
------------
TOTAL INDUSTRIALS 200,835,573
MATERIALS 1.9%
STEEL 1.9%
106,500 Reliance Steel &
Aluminum Co. 4,261,065
------------
TOTAL MATERIALS 4,261,065
------------
TOTAL UNITED STATES OF AMERICA 205,096,638
</Table>
42 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
AMERICAN DEPOSITARY RECEIPT 2.2%
BRAZIL 1.2%
INDUSTRIALS 1.2%
AEROSPACE & DEFENSE 1.2%
86,700 Empresa
Brasileira de
Aeronautica
S.A. - ADR $ 2,713,710
------------
TOTAL INDUSTRIALS 2,713,710
------------
TOTAL BRAZIL 2,713,710
NETHERLANDS 1.0%
INDUSTRIALS 1.0%
CONSTRUCTION & ENGINEERING 1.0%
50,000 Chicago Bridge
and Iron Co.
N.V. - ADR 2,201,500
------------
TOTAL INDUSTRIALS 2,201,500
------------
TOTAL NETHERLANDS 2,201,500
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 4,915,210
CANADA 3.7%
INDUSTRIALS 3.7%
RAILROADS 3.7%
65,100 Canadian National
Railway Co. 4,121,481
112,000 Canadian Pacific
Railway Ltd. 4,028,640
------------
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
TOTAL INDUSTRIALS $ 8,150,121
------------
TOTAL CANADA 8,150,121
------------
TOTAL COMMON STOCKS
(COST $162,294,881) 218,161,969
SHORT-TERM INVESTMENTS 1.9%
U.S. GOVERNMENT AGENCIES 1.6%
$3,600,000 FHLB Discount
Note,
2.2810%,
4/1/05 3,600,000
------------
VARIABLE RATE DEMAND NOTES 0.3%
701,558 American Family
Demand Note,
2.4663%# 701,558
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $4,301,558) 4,301,558
------------
TOTAL INVESTMENTS 99.9%
(COST $166,596,439) 222,463,527
OTHER ASSETS LESS LIABILITIES
0.1% 227,589
------------
TOTAL NET ASSETS 100.0% $222,691,116
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
Dates shown on securities are the due dates of the obligation.
Schedule of Investments 43
Management Overview
ICON Information Technology Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 99.6%
Top 10 Equity Holdings 28.8%
Number of Stocks 56
Short-Term Investments 0.0%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
Texas Instruments, Inc. 4.2%
Intel Corp. 3.8%
Amphenol Corp. - Class A 3.0%
Dell, Inc. 3.0%
Nokia Corp. 2.8%
Anteon International Corp. 2.5%
International Rectifier Corp. 2.5%
America Movil S.A. de C.V. 2.4%
EMC Corp. 2.3%
Mettler Toledo International, Inc. 2.3%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Information Technology Fund returned 2.66% for the six-month period
ended March 31, 2005, trailing its narrow benchmarks, the S&P 1500
Information Technology Index and the NADSAQ Composite Index, which returned
5.27% and 5.74%, respectively, while also lagging its broad benchmark, the
S&P 1500 Index, which returned 7.45%. Total returns for other periods as of
March 31, 2005 appear on page 48.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. Based on our methodology, the Fund was relatively underweight in the
semiconductor and computer hardware industries, both of which were
above-average contributors to the gains in S&P 1500 Information Technology
Index during the period. Although these particular industries were among the
most heavily weighted industries in the Fund, we either did not own or owned
a relatively smaller portion of the handful of large-cap companies in these
industries that drove performance in the narrow benchmark.
The decision to tilt away from these large-cap names was driven by our
valuation and relative strength readings, which favored exposure to small-
and mid-cap issues. While our process primarily guides us to emphasize
specific industries and securities, a by-product of the process may be a
heavier weighting within a given capitalization range. Unfortunately, the
Fund did not benefit from this residual effect of the investment process
during the six-month period, and as large-cap technology issues outperformed
their small- and mid-cap counterparts, the Fund lagged its narrow benchmark.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
44 Management Overview
[ROBERT STRAUS, CMT PHOTO]
Robert Straus, CMT
Portfolio Manager
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Concerns over rising oil prices dominated the investment environment for much
of the period, even as Technology issues rose sharply alongside a year-end
cyclical rally. During this time, investors appeared to set aside their fears
of inflationary pressures and slowing economic growth, and instead focused on
strong corporate earnings and sound underlying fundamentals.
By mid-December, however, the tone of the market changed dramatically, as
crude oil futures surged higher followed in early February by a sudden rise
in 10-year Treasury yields. This convergence of events stoked inflation
concerns while raising fears that a more aggressive stance toward monetary
tightening might restrict economic growth. In light of this, Technology
investors abruptly reversed course, before sending the sector into a sideways
trading pattern.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Typically, the Fund is broadly diversified among industries in the
Information Technology sector. Because our quantitative analysis did not
detect a strong combination of value and relative strength, the Fund did not
take a large position in any of the 15 industries within the sector. However,
the Fund's single most aggressive overweight relative to the benchmark was in
the technology distributors industry, which, on a relative basis had a slight
negative effect. In contrast, the Fund's single most aggressive underweight
versus the benchmark was the complete avoidance of the systems software
group, which, on a relative basis, contributed positively to Fund
performance.
Industries that made significant contributions to performance during the
period included IT consulting & other services, computer storage &
peripherals and semiconductors, the Fund's largest industry weighting at
period-end. Specific stocks that enhanced performance included IT services
provider Cognizant Technology Solutions Corp., telecom equipment manufacturer
Comtech Telecommunications Corp. and Marvel Technology Group Ltd, all of
which capitalized on better-than-expected earnings.
Conversely, holdings from the internet software & services and application
software industries detracted from overall performance. Furthermore, the Fund
was underweight in semiconductor giant Intel as well as computer hardware
bellwethers Dell Computer and Hewlett Packard, and did not own Apple
Computer. All four contributed to the outperformance of the S&P 1500
Information Technology Index.
Also at the company level, noteworthy detractors included networking
equipment supplier UTStarcom Inc., which fell on news that it had
Management Overview 45
Management Overview (continued)
ICON Information Technology Fund
encountered financial reporting issues. Meanwhile, shipping delays and
softening demand plagued Ditech Communications Corp., a provider of voice
quality enhancement products, while Stratasys Inc., a maker of rapid
prototyping devices, struggled with higher compliance and commission costs.
All three companies were removed from the Fund when their relative strength
declined.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE INFORMATION TECHNOLOGY SECTOR?
A. While the Technology sector remains underpriced relative to our estimate of
fair value, we are not seeing sufficient relative strength at the industry
level to justify a broad upward move. Thus, until we detect significant
improvement in this important comparative metric, we believe investors should
exercise near-term caution regarding the outlook for the sector.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund benefited early in the period as Technology shares rose sharply, yet
gave up significant ground when inflation fears and growth concerns
distracted investors.
- - Because our quantitative analysis did not detect a strong combination of
value and relative strength, the Fund did not take large industry positions.
- - IT consulting & services, computer storage & peripherals and semiconductors
contributed to performance while Internet software & services and application
software detracted.
- - Noteworthy company detractors during the period included UTStarcom Inc.,
Ditech Communications Corp. and Stratasys Inc.
- - Specific stocks that enhanced performance included Cognizant Technology
Solutions Corp., Comtech Telecommunications Corp. and Marvel Technology Group
Ltd.
46 Management Overview
TOP 10 INDUSTRIES
as of March 31, 2005
<Table>
Semiconductors
13.8%
Electronic Equipment Manufacturers
11.3%
Computer Storage & Peripherals
10.5%
Computer Hardware
10.3%
Internet Software & Services
9.1%
Technology Distributors
8.6%
IT Consulting & Other Services
6.5%
Application Software
5.8%
Aerospace & Defense
3.9%
Electronic Manufacturing Services
3.7%
</Table>
Percentages are based upon net assets.
Management Overview 47
Management Overview (continued)
ICON Information Technology Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 2/19/97
- -------------------------------------------------------------------------------------------
ICON Information Technology Fund 2.66% -8.15% -8.40% 11.02%
- -------------------------------------------------------------------------------------------
S&P 1500 Information Technology Index 5.27% -3.13% -17.98% 4.62%
- -------------------------------------------------------------------------------------------
NASDAQ Composite Index 5.74% 0.83% -14.91% 5.22%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 6.90%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative indexes can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON INFORMATION S&P 1500 INFORMATION NASDAQ COMPOSITE
TECHNOLOGY FUND TECHNOLOGY INDEX INDEX S&P 1500 INDEX
---------------- -------------------- ---------------- --------------
2/19/97 10000 10000 10000 10000
3/31/98 11524 13581 13511 13824
3/31/99 15490 21379 18185 15941
3/31/00 36190 38844 33868 19068
3/31/01 28149 16075 13657 15203
3/31/02 29699 15416 13738 15525
3/31/03 15568 10196 10030 11697
3/31/04 25411 14887 14982 16016
3/31/05 23340 14420 15106 17181
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 2/19/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
48 Management Overview
Schedule of Investments
ICON Information Technology Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
COMMON STOCKS 99.6%
UNITED STATES OF AMERICA 87.8%
HEALTH CARE 2.3%
HEALTH CARE SERVICES 2.3%
73,700 Computer Programs
& Systems, Inc. $ 2,069,496
42,100 Quest Diagnostics,
Inc. 4,425,973
------------
TOTAL HEALTH CARE 6,495,469
INDUSTRIALS 3.9%
AEROSPACE & DEFENSE 3.9%
48,200 Alliant
Techsystems,
Inc.(a) 3,443,890
93,500 Argon State,
Inc.(a) 3,085,500
70,200 Lockheed Martin
Corp. 4,286,412
------------
TOTAL INDUSTRIALS 10,815,802
INFORMATION TECHNOLOGY 81.6%
APPLICATION SOFTWARE 5.8%
124,600 Fair Issac Corp. 4,291,224
82,000 Intuit, Inc.(a) 3,589,140
242,800 SS&C Technologies,
Inc. 5,535,840
81,600 Verint Systems,
Inc.(a) 2,851,104
------------
16,267,308
COMMUNICATIONS EQUIPMENT 1.6%
309,200 SpectraLink Corp. 4,365,904
------------
COMPUTER HARDWARE 10.3%
64,800 Avid Technology,
Inc.(a) 3,506,976
219,000 Dell, Inc.(a) 8,413,980
117,300 Diebold, Inc. 6,433,905
253,400 Hewlett Packard
Co. 5,559,596
54,300 International
Business Machines
Corp. 4,961,934
------------
28,876,391
COMPUTER STORAGE & PERIPHERALS 8.2%
532,900 EMC Corp.(a) 6,565,328
218,900 Komag, Inc.(a) 4,892,415
393,100 Overland Storage,
Inc.(a) 5,770,708
201,900 SanDisk Corp.(a) 5,612,820
------------
22,841,271
DATA PROCESSING & OUTSOURCED SERVICES 2.6%
112,400 Efunds Corp.(a) 2,508,768
122,100 Fiserv, Inc.(a) 4,859,580
------------
7,368,348
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
ELECTRONIC EQUIPMENT MANUFACTURERS 9.3%
228,700 Amphenol Corp. -
Class A $ 8,471,048
64,300 Itron, Inc.(a) 1,905,852
136,600 Mettler-Toledo
International,
Inc.(a) 6,488,500
124,300 National
Instruments Corp. 3,362,315
276,100 Paxar Corp.(a) 5,891,974
------------
26,119,689
ELECTRONIC MANUFACTURING SERVICES 3.7%
196,000 Benchmark
Electronics,
Inc.(a) 6,238,680
139,700 Jabil Circuit,
Inc.(a) 3,984,244
------------
10,222,924
HOME ENTERTAINMENT SOFTWARE 1.2%
86,000 Take-Two
Interactive
Software, Inc.(a) 3,362,600
------------
INTERNET SOFTWARE SERVICES 9.1%
343,300 Digital Insight
Corp.(a) 5,630,120
67,100 Digital River,
Inc.(a) 2,090,836
31,800 Google, Inc.(a) 5,740,218
89,500 Infospace, Inc.(a) 3,654,285
140,500 j2 Global
Communications,
Inc.(a) 4,820,555
166,600 WebEx
Communications,
Inc.(a) 3,596,894
------------
25,532,908
IT CONSULTING & OTHER SERVICES 6.5%
182,200 Anteon
International
Corp.(a) 7,093,046
120,500 Cognizant
Technology
Solutions Corp.(a) 5,567,100
92,800 SRA International,
Inc.(a) 5,591,200
------------
18,251,346
OFFICE ELECTRONICS 1.5%
268,900 Xerox Corp.(a) 4,073,835
------------
SEMICONDUCTOR EQUIPMENT 1.7%
101,500 KLA-Tencor
Corp.(a) 4,670,015
------------
SEMICONDUCTORS 11.5%
453,200 Intel Corp. 10,527,836
152,400 International
Rectifier Corp.(a) 6,934,200
175,200 Omnivision
Technologies,
Inc.(a) 2,654,280
462,800 Texas Instruments,
Inc. 11,796,772
------------
31,913,088
</Table>
Schedule of Investments 49
Schedule of Investments (continued)
ICON Information Technology Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
TECHNOLOGY DISTRIBUTORS 8.6%
237,200 Agilysys, Inc. $ 4,663,352
133,900 Arrow Electronics,
Inc.(a) 3,394,365
185,200 Avnet, Inc.(a) 3,411,384
160,100 Global Imaging
Systems, Inc.(a) 5,677,146
213,800 Ingram Micro,
Inc.(a) 3,564,046
89,100 Tech Data Corp.(a) 3,302,046
------------
24,012,339
------------
TOTAL INFORMATION TECHNOLOGY 227,877,966
------------
TOTAL UNITED STATES OF AMERICA 245,189,237
AMERICAN DEPOSITARY RECEIPT 7.5%
FINLAND 2.8%
INFORMATION TECHNOLOGY 2.8%
COMMUNICATIONS EQUIPMENT 2.8%
504,100 Nokia Oyj 7,778,263
------------
TOTAL INFORMATION TECHNOLOGY 7,778,263
------------
TOTAL FINLAND 7,778,263
MEXICO 2.4%
INFORMATION TECHNOLOGY 2.4%
WIRELESS TELECOMMUNICATION SERVICES 2.4%
132,100 America Movil S.A.
de C.V. Mexico 6,816,360
------------
TOTAL INFORMATION TECHNOLOGY 6,816,360
------------
TOTAL MEXICO 6,816,360
SWITZERLAND 2.3%
INFORMATION TECHNOLOGY 2.3%
COMPUTER STORAGE & PERIPHERALS 2.3%
104,000 Logitech
International
S.A. - ADR(a) 6,331,520
------------
TOTAL INFORMATION TECHNOLOGY 6,331,520
------------
TOTAL SWITZERLAND 6,331,520
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 20,926,143
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- --------------------------------------------
BERMUDA 1.3%
INFORMATION TECHNOLOGY 1.3%
SEMICONDUCTORS 1.3%
97,600 Marvell Technology
Group, Ltd.(a) $ 3,741,984
------------
TOTAL INFORMATION TECHNOLOGY 3,741,984
------------
TOTAL BERMUDA 3,741,984
BRITISH VIRGIN ISLANDS 2.0%
INFORMATION TECHNOLOGY 2.0%
ELECTRONIC EQUIPMENT MANUFACTURERS 2.0%
207,900 Nam Tai
Electronics, Inc. 5,530,140
------------
TOTAL INFORMATION TECHNOLOGY 5,530,140
------------
TOTAL BRITISH VIRGIN ISLANDS 5,530,140
CANADA 1.0%
INFORMATION TECHNOLOGY 1.0%
SEMICONDUCTORS 1.0%
165,500 ATI Technologies,
Inc.(a) 2,856,530
------------
TOTAL INFORMATION TECHNOLOGY 2,856,530
------------
TOTAL CANADA 2,856,530
------------
TOTAL COMMON STOCKS (COST
$252,881,414) 278,244,034
SHORT-TERM INVESTMENTS 0.0%
VARIABLE RATE DEMAND NOTES (0.0%)
$ 507 American Family
Demand Note,
2.4663%# 507
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $507) 507
------------
TOTAL INVESTMENTS 99.6%
(COST $252,881,921) 278,244,541
OTHER ASSETS LESS LIABILITIES
0.4% 1,142,923
------------
NET ASSETS 100.0% $279,387,464
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
50 Schedule of Investments
Management Overview
ICON Leisure and Consumer Staples Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 99.6%
Top 10 Equity Holdings 29.3%
Number of Stocks 50
Short-Term Investments 1.0%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
Altria Group, Inc. 3.6%
The Walt Disney Co. 3.2%
Nash Finch Co. 3.1%
Sonic Corp. 3.0%
Panera Bread Co. - Class A 3.0%
Shuffle Master, Inc. 2.7%
CVS Corp. 2.7%
Constellation Brands, Inc. 2.7%
McDonald's Corp. 2.7%
Ralcorp Holdings, Inc. 2.6%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Leisure and Consumer Staples Fund gained 13.88% for the six-month
period ended March 31, 2005, outpacing its sector-specific benchmarks, the
S&P 1500 Consumer Discretionary Index and the S&P 1500 Consumer Staples
Index, which returned 8.61% and 9.15%, respectively. Although neither index
is an ideal comparison individually, together they provide a suitable
reference for the Fund's overall performance. Additionally, the Fund
outperformed its broad benchmark, the S&P 1500 Index, which returned 7.45%
over the same period. Total returns for other periods as of March 31, 2005
appear on page 55.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. Because our investment universe consists of both cyclical and defensive
industries, the Fund was able to capitalize on select groups that were
demonstrating leadership, regardless of their sensitivity to economic
movements or the current investment landscape. Since the market failed to
reveal a clear or consistent personality, the Fund's flexible mandate visibly
worked in its favor.
This was evident throughout the entire six-month reporting period. During the
fourth quarter of 2004, cyclical industries led a year-end rally as investors
focused on strong corporate earnings and solid underlying fundamentals. While
the Fund participated in this advance, its defensive components enabled it to
withstand subsequent setbacks during the first quarter of 2005, when record
oil prices, inflation fears, and growth concerns exerted considerable
downward pressure.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Management Overview 51
Management Overview (continued)
ICON Leisure and Consumer Staples Fund
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. The investment environment during the period could easily be characterized as
"a tale of two markets." Initially, stocks rose in a broad advance as
investor confidence soared in conjunction with easing energy prices, positive
job growth news and decisive election-year results. Moreover, steady
increases in gross domestic product and the measured pace of monetary
tightening suggested that the economy remained on solid footing.
However, the second half of the reporting period took a turn for the worse
when sudden surges in oil prices and interest rates fueled fears that
inflationary pressures would lead to a softening economy and dampen consumer
spending. Against this backdrop, cyclical industries lost significant ground,
while defensive industries held their own against ensuing pullbacks.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Fund performance benefited greatly from exposure to top-performing
industries, such as restaurants, distillers & vintners and food distributors.
In contrast, principal industry detractors included leisure products,
publishing and brewers.
As for noteworthy shifts in industry weightings, improving relative strength
led to increases in drug retail, from 4.3% to 7.0% of net assets, and
packaged foods & meats, from 4.2% to 8.7% of net assets, while the fully
valued hotels, resorts & cruise lines industry was reduced to 1.1% from 5.9%
of net assets.
At the company level, leading contributors included vintner Robert Mondavi
Corp., whose shares rallied strongly on news of its acquisition by
Constellation Brands. Meanwhile, drug retailer Longs Drug Stores posted wider
gross margins as the company instituted improvements in its merchandise mix
and inventory management. Drive-in restaurant operator Sonic Corp. also
advanced, having repeatedly boosted results on strong sales trends.
Among the Fund's primary detractors, collectibles marketer RC2 Corp. declined
when it reported lower year-over-year profits while also lowering its
earnings-per-share guidance. Toymaker JAAKS Pacific Inc. also retreated, as
the company faced profit pressures stemming from a civil lawsuit. Elsewhere,
Leapfrog Enterprises Inc. plunged when the learning products company warned
that earnings would miss expectations, citing distribution problems and weak
sales. Leapfrog was liquidated when its relative strength declined, but the
Fund continued to own RC2 Corp. and JAAKS Pacific as they had not met our
sell criteria.
52 Management Overview
[DEREK ROLLINGSON PHOTO]
Derek Rollingson
Portfolio Manager
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE LEISURE AND CONSUMER STAPLES SECTOR?
A. Despite solid performance trends during the period, sector valuations and
relative strength measures remain attractive compared to the broader market.
We will continue to keep a close eye on broadcast and cable TV and leisure
products as potential industry leaders based on their strong V/P, and
anticipate maintaining wide representation in both cyclical and defensive
industries.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund held select cyclical and defensive industries that demonstrated
leadership throughout the period.
- - Our valuation methodology led us to maintain exposure to top-performing
industries such as restaurants, distillers & vintners and food distributors.
- - Principal industry detractors included leisure products, publishing and
brewers.
- - Robert Mondavi Corp., Longs Drug Stores and Sonic Corp. were leading company
contributors to Fund performance.
- - Among the Fund's primary individual detractors were RC2 Corp., Leapfrog
Enterprises Inc. and JAAKS Pacific Inc.
Management Overview 53
Management Overview (continued)
ICON Leisure and Consumer Staples Fund
TOP 10 INDUSTRIES
March 31, 2005
<Table>
Restaurants
19.4%
Leisure Products
10.7%
Movies & Entertainment
8.7%
Packaged Foods & Meats
8.7%
Food Distributors
8.5%
Tobacco
7.1%
Drug Retail
7.0%
Casinos & Gaming
6.8%
Household Products
4.9%
Agricultural Products
4.6%
</Table>
Percentages are based upon net assets.
54 Management Overview
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 5/9/97
- -------------------------------------------------------------------------------------------
ICON Leisure and Consumer Staples Fund 13.88% 11.42% 15.17% 12.66%
- -------------------------------------------------------------------------------------------
S&P 1500 Consumer Discretionary Index 8.61% 6.50% -0.62% 8.05%
- -------------------------------------------------------------------------------------------
S&P 1500 Consumer Staples Index 9.15% 3.55% 4.52% 5.45%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 6.88%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The performance of the
S&P 1500 Consumer Discretionary Index includes the reinvestment of dividends and
capital gain distributions beginning on January 1, 2002. Additional information
about these performance results and the comparative indexes can be found on
pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON LEISURE AND
CONSUMER STAPLES S&P 1500 CONSUMER S&P 1500 CONSUMER
FUND DISCRETIONARY INDEX STAPLES INDEX S&P 1500 INDEX
---------------- ------------------- ----------------- --------------
5/9/97 10000 10000 10000 10000
3/31/98 12688 14320 12925 13606
3/31/99 14416 17659 13631 15689
3/31/00 12647 19006 12188 18768
3/31/01 15042 15034 12860 14963
3/31/02 21074 16136 14032 15281
3/31/03 16129 11940 11560 11513
3/31/04 22999 17298 14683 15764
3/31/05 25627 18422 15205 16911
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 5/9/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
Management Overview 55
Schedule of Investments
ICON Leisure and Consumer Staples Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 99.6%
UNITED STATES OF AMERICA 98.8%
CONSUMER DISCRETIONARY 2.6%
COMPUTER & ELECTRONICS RETAIL 1.3%
23,800 Electronics
Boutique Holdings
Corp.(a) $ 1,022,686
------------
SPECIALTY STORES 1.3%
63,600 Trans World
Entertainment
Corp.(a) 936,828
------------
TOTAL CONSUMER DISCRETIONARY 1,959,514
INFORMATION TECHNOLOGY 0.9%
HOME ENTERTAINMENT SOFTWARE 0.9%
23,600 THQ, Inc.(a) 664,104
------------
TOTAL INFORMATION TECHNOLOGY 664,104
LEISURE & CONSUMER STAPLES 95.3%
AGRICULTURE PRODUCTS 4.6%
73,200 Corn Products
International, Inc. 1,902,468
48,700 Fresh Del Monte
Produce, Inc. 1,486,324
------------
3,388,792
CASINOS & GAMING 6.8%
24,200 Harrah's
Entertainment, Inc. 1,562,836
70,650 Shuffle Master,
Inc.(a) 2,046,024
248,400 Youbet.com, Inc.(a) 1,455,624
------------
5,064,484
DISTILLERS & VINTNERS 2.7%
37,800 Constellation
Brands, Inc.(a) 1,998,486
------------
DRUG RETAIL 7.0%
38,600 CVS Corp. 2,031,132
54,400 Longs Drug Stores
Corp. 1,861,568
335,300 Rite Aid Corp.(a) 1,327,788
------------
5,220,488
FOOD DISTRIBUTORS 8.5%
60,400 Nash Finch Co. 2,294,596
54,300 Performance Food
Group Co.(a) 1,503,024
110,400 Spartan Stores,
Inc.(a) 1,174,656
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
47,500 United Natural
Foods, Inc.(a) $ 1,359,925
------------
6,332,201
HOTELS, RESORTS & CRUISE LINES 1.1%
12,700 Marriott
International,
Inc. - Class A 849,122
------------
HOUSEHOLD PRODUCTS 4.9%
51,100 Church & Dwight Co. 1,812,517
30,800 Energizer Holdings,
Inc.(a) 1,841,840
------------
3,654,357
HYPERMARKETS & SUPER CENTERS 2.2%
52,200 BJ's Wholesale
Club, Inc.(a) 1,621,332
------------
LEISURE FACILITIES 0.9%
19,200 Speedway
Motorsports, Inc. 685,440
------------
LEISURE PRODUCTS 10.7%
59,800 Action Performance
Cos., Inc. 791,154
26,800 Arctic Cat, Inc. 725,208
26,600 Brunswick Corp. 1,246,210
107,800 Callaway Golf Co. 1,379,840
41,100 JAKKS Pacific,
Inc.(a) 882,417
66,100 Mattel, Inc. 1,411,235
21,900 RC2 Corp.(a) 744,600
23,200 SCP Pool Corp. 739,152
------------
7,919,816
MOVIES & ENTERTAINMENT 8.7%
174,300 Image
Entertainment,
Inc.(a) 953,421
101,184 News Corp. - Class
A 1,712,033
82,900 The Walt Disney Co. 2,381,717
82,700 Time Warner,
Inc.(a) 1,451,385
------------
6,498,556
PACKAGED FOODS & MEATS 8.7%
51,300 American Italian
Pasta Co. 1,405,620
34,900 General Mills, Inc. 1,715,335
30,600 J & J Snack Foods
Corp. 1,432,998
</Table>
56 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
40,300 Ralcorp Holdings,
Inc. $ 1,908,205
------------
6,462,158
PHOTOGRAPHIC PRODUCTS 2.0%
46,800 Eastman Kodak Co. 1,523,340
------------
RESTAURANTS 19.4%
42,200 Buffalo Wild Wings,
Inc.(a) 1,596,426
42,200 CBRL Group, Inc. 1,742,860
35,500 CEC Entertainment,
Inc.(a) 1,299,300
54,400 Darden Restaurants,
Inc. 1,668,992
43,600 Jack In the Box,
Inc.(a) 1,617,560
63,500 McDonald's Corp. 1,977,390
39,200 Panera Bread Co.(a) 2,215,976
66,800 Sonic Corp.(a) 2,231,120
------------
14,349,624
TOBACCO 7.1%
41,300 Altria Group, Inc. 2,700,607
20,100 Reynolds American,
Inc. 1,619,859
19,400 UST, Inc. 1,002,980
------------
5,323,446
------------
TOTAL LEISURE & CONSUMER
STAPLES 70,891,642
------------
TOTAL UNITED STATES OF AMERICA 73,515,260
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
CANADA 0.8%
LEISURE & CONSUMER STAPLES 0.8%
PUBLISHING 0.8%
18,800 Thompson Corp. $ 626,980
------------
TOTAL LEISURE & CONSUMER
STAPLES 626,980
------------
TOTAL CANADA 626,980
------------
TOTAL COMMON STOCKS
(COST $59,146,946) 74,142,240
SHORT-TERM INVESTMENTS 1.0%
VARIABLE RATE DEMAND NOTES 1.0%
$756,203 American Family
Demand Note,
2.4663%# 756,203
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $756,203) 756,203
------------
TOTAL INVESTMENTS 100.6%
(COST $59,903,149) 74,898,443
LIABILITIES LESS OTHER ASSETS
(0.6)% (427,795)
------------
NET ASSETS 100.0% $74,470,648
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
Schedule of Investments 57
Management Overview
ICON Materials Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 98.8%
Top 10 Equity Holdings 35.0%
Number of Stocks 43
Short-Term Investments 1.0%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
E.I. du Pont de Nemours
and Co. 4.9%
Eagle Materials, Inc. 3.7%
PPG Industries, Inc. 3.6%
Nucor Corp. 3.5%
Owens-Illinois, Inc. 3.5%
Lafarge North
America, Inc. 3.3%
Myers Industries, Inc. 3.2%
Companhia Vale do Rio
Doce - ADR 3.1%
Methanex Corp. 3.1%
Martin Marietta
Materials, Inc. 3.1%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Materials Fund gained 13.53% for the six-month period ended March
31, 2005, comparing favorably to the 11.16% return for its sector-specific
benchmark, the S&P 1500 Materials Index, and the 7.45% return of its broad
benchmark, the S&P 1500 Index. Total returns for other periods as of March
31, 2005 appear on page 62.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. The Fund captured solid upside during the period given a relatively conducive
environment and the sector's positive correlation to expansionary cycles. All
the same, notable swings emerged from time to time as perceptions of global
demand varied, driven largely by concerns over the sustainability of China's
rapidly accelerating economy. Through it all, our discipline prevailed,
enabling the Fund to outpace its benchmarks.
This discipline manifested itself in a valuation-related tilt toward mid-cap
stocks, a move that proved positive for the Fund. Although our process
primarily guides us to emphasize specific industries and securities,
ultimately it may identify potential leadership trends within a given
capitalization range. Such was the case for the Materials sector, where
stocks with a market capitalization of between $1 billion and $4 billion
produced the strongest overall returns.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Fears of inflationary pressures and slowing economic growth, two conditions
not often exhibited together, dotted the investment landscape during the
period. Despite sharp, sudden spikes in both commodity prices and interest
58 Management Overview
[DEREK ROLLINGSON PHOTO]
Derek Rollingson
Portfolio Manager
rates, these potent distractions, pricing power remained limited, with the
exception of the steel industry, while inflation was well under control. As
long as investors focused on strong corporate earnings and sound underlying
fundamentals, stocks maintained an upward move.
Ultimately, overriding worries took their toll on the market, as stocks
settled into a volatile trading range later in the period. Economically
sensitive industries bore the brunt of subsequent pullbacks, which in some
cases were quite severe. Nevertheless, the Materials sector demonstrated
considerable strength, having retained much of its year-end gains amid
concerns that recent gains in capital spending might come under pressure.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. As a whole, the Materials sector registered strong returns during the period,
with most of the 14 constituent industries reporting positive performance.
Leading industries included construction materials, steel and commodity
chemicals, all of which were well represented among the Fund's weightings.
Steel, in fact, comprised the Fund's largest industry weighting and accounted
for a large portion of the Fund's six-month total return.
At the same time, metals such as aluminum and gold, in which the Fund
maintained limited exposure, reached multi-year lows. The paper packaging
industry also detracted from performance. However, improving value and
relative strength in diversified chemicals provided a long overdue
opportunity for the Fund to hold larger names such as E.I. du Pont de Nemours
and Company.
Among the Fund's top individual contributors, polyester fiber and PET resin
producer Wellman Inc. benefited from pricing improvements and margin
recovery. Container manufacturer Owens-Illinois also widened margins, the
result of efforts to focus on core glass operations. Elsewhere, engineered
steel producer Quanex Corporation profited from continued high demand and
pricing for steel.
In contrast, diversified fertilizer producer Agrium Inc. fell on concerns
that declining input costs might mean lower crop nutrient prices. Meanwhile,
OM Group Inc., a maker of metal-based specialty chemicals, struggled in the
wake of management turmoil and accounting irregularities, while recycled
packaging provider Caraustar Industries Inc. took a charge against earnings
related to the closing of a production facility. The latter two stocks were
removed from the Fund on declining relative strength.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE MATERIALS SECTOR?
A. The Materials sector continues to perform well relative to the broader
market, although the gap between market price and fair value has closed
Management Overview 59
Management Overview (continued)
ICON Materials Fund
considerably. Given this decline in V/P, we will be watching valuations
closely and anticipate that we will need to exercise greater selectivity
going forward. With larger-cap valuations and relative strength showing
steady improvement, we also expect that our investment system may gradually
lead the Fund to stocks in that capitalization range.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund captured solid upside during the period due to the sector's positive
correlation to global economic expansion.
- - Our valuation methodology led us to tilt toward mid-cap stocks, a move that
proved net positive for the Fund.
- - Contributing industry groups included construction materials, steel and
commodity chemicals, while paper packaging and metals detracted from
performance.
- - Wellman Inc., Owens-Illinois and Quanex Corporation were among the Fund's top
individual contributors to performance.
- - Stocks that detracted from performance included Agrium Inc., OM Group Inc.
and Caraustar Industries Inc.
60 Management Overview
TOP 10 INDUSTRIES
March 31, 2005
<Table>
Construction Materials
21.3%
Steel
19.4%
Diversified Chemicals
18.6%
Metal & Glass Containers
8.7%
Specialty Chemicals
8.2%
Commodity Chemicals
5.1%
Fertilizers & Agricultural
Chemicals 4.8%
Aluminum
2.8%
Diversified Metals & Mining
2.7%
Paper Products
2.7%
</Table>
Percentages are based upon net assets.
Management Overview 61
Management Overview (continued)
ICON Materials Fund
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 5/5/97
- -------------------------------------------------------------------------------------------
ICON Materials Fund 13.53% 27.95% 8.29% 1.15%
- -------------------------------------------------------------------------------------------
S&P 1500 Materials Index 11.16% 19.92% 9.52% 6.60%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 6.79%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative indexes can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON MATERIALS FUND S&P 1500 MATERIALS INDEX S&P 1500 INDEX
------------------- ------------------------ --------------
5/5/97 10000 10000 10000
3/31/98 8632 11582 13528
3/31/99 6571 9728 15599
3/31/00 7352 10523 18660
3/31/01 6063 10046 14877
3/31/02 8036 12210 15193
3/31/03 5675 9429 11447
3/31/04 8555 13824 15673
3/31/05 10946 16578 16813
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 5/5/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
62 Management Overview
Schedule of Investments
ICON Materials Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 98.8%
UNITED STATES OF AMERICA 83.7%
INDUSTRIALS 2.2%
RAILROADS 2.2%
44,900 Burlington
Northern Santa Fe
Corp. $ 2,421,457
------------
TOTAL INDUSTRIALS 2,421,457
MATERIALS 81.5%
ALUMINUM 2.8%
62,800 Alcoa, Inc. 1,908,492
47,300 Aleris
International,
Inc.(a) 1,180,135
------------
3,088,627
COMMODITY CHEMICALS 2.1%
154,800 Wellman, Inc. 2,238,408
------------
CONSTRUCTION MATERIALS 16.6%
50,800 Eagle Materials,
Inc. 4,111,752
51,675 Florida Rock
Industries, Inc. 3,039,524
78,300 Headwaters,
Inc.(a) 2,569,806
62,700 Lafarge North
America, Inc. 3,664,815
60,500 Martin Marietta
Materials, Inc. 3,383,160
28,200 Texas Industries,
Inc. 1,515,750
------------
18,284,807
DIVERSIFIED CHEMICALS 18.6%
56,500 Dow Chemical Co. 2,816,525
106,000 E.I. du Pont de
Nemours and Co. 5,431,440
53,300 Eastman Chemical
Co. 3,144,700
102,100 Engelhard Corp. 3,066,063
144,300 Hercules, Inc.(a) 2,090,907
55,500 PPG Industries,
Inc. 3,969,360
------------
20,518,995
DIVERSIFIED METALS & MINING 2.7%
48,600 Freeport-McMoRan
Copper & Gold,
Inc. 1,925,046
45,000 RTI International
Metals, Inc.(a) 1,053,000
------------
2,978,046
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
FERTILIZERS & AGRICULTURAL CHEMICALS 2.2%
35,100 Scotts
Miracle-Gro
Co.(a) $ 2,465,073
------------
INDUSTRIAL GASES 2.3%
40,200 Air Products &
Chemicals, Inc. 2,544,258
------------
METAL & GLASS CONTAINERS 8.7%
251,900 Myers Industries,
Inc. 3,554,309
152,500 Owens-Illinois,
Inc.(a) 3,833,850
33,200 Silgan Holdings,
Inc. 2,157,336
------------
9,545,495
PAPER PRODUCTS 1.0%
31,600 Schweitzer-
Mauduit
International,
Inc. 1,060,180
------------
SPECIALTY CHEMICALS 8.2%
50,800 Cytec Industries,
Inc. 2,755,900
54,000 Lubrizol Corp. 2,194,560
30,700 Rohm & Haas Co. 1,473,600
139,300 RPM
International,
Inc. 2,546,404
------------
8,970,464
STEEL 16.3%
79,300 A.M. Castle and
Co.(a) 999,180
168,600 AK Steel Holding
Corp.(a) 1,864,716
50,500 Gibraltar
Industries, Inc. 1,107,970
79,856 NN, Inc. 983,826
67,600 Nucor Corp. 3,891,056
43,450 Quanex Corp. 2,316,754
47,400 Reliance Steel &
Aluminum Co. 1,896,474
77,000 Steel Dynamics,
Inc. 2,652,650
94,100 Steel
Technologies,
Inc. 2,257,459
------------
17,970,085
------------
TOTAL MATERIALS 89,664,438
------------
TOTAL UNITED STATES OF AMERICA 92,085,895
</Table>
Schedule of Investments 63
Schedule of Investments (continued)
ICON Materials Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
x
AMERICAN DEPOSITARY RECEIPT 9.5%
MATERIALS 9.5%
BRAZIL 4.8%
STEEL 3.1%
107,800 Companhia Vale do
Rio Doce - ADR $ 3,407,558
------------
PAPER PRODUCTS 1.7%
51,000 Aracruz Celulose
S.A. 1,825,800
------------
TOTAL BRAZIL 5,233,358
IRELAND 2.0%
CONSTRUCTION MATERIALS 2.0%
86,500 CRH plc - ADR 2,274,085
------------
TOTAL IRELAND 2,274,085
MEXICO 2.7%
CONSTRUCTION MATERIALS 2.7%
80,276 Cemex S.A. de
C.V. 2,910,005
------------
TOTAL MEXICO 2,910,005
------------
TOTAL MATERIALS 10,417,448
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 10,417,448
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
CANADA 5.6%
MATERIALS 5.6%
COMMODITY CHEMICALS 3.0%
174,600 Methanex Corp. $ 3,392,478
FERTILIZERS & AGRICULTURAL CHEMICALS 2.6%
154,500 Agrium, Inc. 2,819,625
------------
TOTAL MATERIALS 6,212,103
------------
TOTAL CANADA 6,212,103
------------
TOTAL COMMON STOCKS (COST
$86,594,457) 108,715,446
SHORT-TERM INVESTMENTS 1.0%
VARIABLE RATE DEMAND NOTES 1.0%
$1,051,220 American Family
Demand Note,
2.4663%# 1,051,220
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,051,220) 1,051,220
------------
TOTAL INVESTMENTS 99.8% (COST
$87,645,677) 109,766,666
OTHER ASSETS LESS LIABILITIES
0.2% 262,430
------------
NET ASSETS 100.0% $110,029,096
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
64 Schedule of Investments
Management Overview
ICON Telecommunication & Utilities Fund
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
March 31, 2005
Equities 99.7%
Top 10 Equity Holdings 32.2%
Number of Stocks 48
Short-Term Investments 0.0%
Percentages are based upon net assets.
TOP 10 EQUITY HOLDINGS
March 31, 2005
America Movil S.A. de C.V. 3.9%
California Water Service Group 3.6%
Constellation Energy Group 3.4%
El Paso Electric Co. 3.3%
PNM Resources, Inc. 3.3%
DTE Energy Co. 3.0%
Sempra Energy 3.0%
ONEOK, Inc. 3.0%
NII Holdings, Inc.-Class B 2.9%
Duke Energy Corp. 2.8%
Percentages are based upon net assets.
- --------------------------------------------------------------------------------
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARKS?
A. The ICON Telecommunication & Utilities Fund appreciated 9.41% for the
six-month period ended March 31, 2005, outperforming the -0.09% return for
S&P 1500 Telecommunication Index, while underperforming the 16.85% return for
the S&P 1500 Utilities Index. Although neither of these narrow benchmarks is
an ideal comparison for the Fund individually, together they provide a
suitable reference for the Fund's overall performance. Additionally, the Fund
outperformed its broad benchmark, the S&P 1500 Index, which returned 7.45%
over the same period. Total returns for other periods as of March 31, 2005
appear on page 69.
Q. WHAT PRIMARY FACTORS WERE BEHIND THE FUND'S RELATIVE PERFORMANCE?
A. As evidenced by the performance of the narrow benchmarks during the period,
the Fund's valuation-based tilt toward Utilities issues coupled with
overweight exposure to small- and medium-capitalization stocks benefited
relative performance. Although commonly thought of as defensive in nature, we
viewed Utilities industries as potential market leaders, given their
compelling combination of value and relative strength.
Over the period, the average exposure to Utilities-oriented industries was
approximately two-thirds of the Fund, while the average exposure to
Telecommunication issues was approximately one-third.
Q. HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
A. The Fund employs an all-cap investment strategy, identifying securities we
believe are underpriced regardless of their location on the conventional
style grid. Our system is not limited by restrictions on market
capitalization or investment style, and searches for potential industry
leadership wherever and whenever it may emerge.
Furthermore, the Fund does not utilize static valuation metrics such as
price-to-earnings (P/E) as these measures do not adequately represent
intrinsic value, which can vary over time. Instead, we calculate proprietary
value-to-price (V/P) ratios that consider the effects of earnings, projected
growth, risk, and interest rates (opportunity cost). By combining valuation
with relative strength (RS), we aim to capture leading industry themes poised
to outperform the broader market.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST SIX MONTHS?
A. Telecommunication and Utilities issues delivered solid gains during the
fourth quarter of 2004, as investors set aside fears of inflationary
pressures and slowing economic growth. However, as oil-related concerns
became
Management Overview 65
Management Overview (continued)
ICON Telecommunication & Utilities Fund
more pronounced during the first quarter of 2005, Telecommunication issues
retreated, while Utilities fared decidedly better. Against this volatile
backdrop, the Fund captured its gains during the first half of the reporting
period, but ended the second half of the period basically flat.
To further illustrate, large-cap integrated telecommunication services
issues, widely considered defensive holdings, came under extreme selling
pressure in light of intense pricing competition and higher cost structures.
At the same time, investors increasingly sought out safe havens in areas such
as Utilities, whose history of dividend payouts proved highly attractive,
particularly given last year's lowering of maximum tax rates on dividend
income.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Leading industry contributors to Fund performance included electric utilities
and multi-utilities & unregulated power. Both were top gainers in the
Utilities segment, in addition to being the Fund's most heavily weighted
industries based on value and relative strength.
Conversely, communications equipment was the largest industry detractor,
although it made up a relatively small portion of the Fund's net asset base.
While the industry, in our view, continues to trade at a discount to
intrinsic worth, investors avoided the group on concerns that diminished
provider demand would curb its growth prospects. Meanwhile, limited exposure
to integrated telecommunication services insulated the Fund from some of the
losses associated with this group.
Turning to meaningful company contributors, Constellation Energy Group Inc.
advanced, reflecting solid market share gains in competitive power supply
areas. Wireless communications provider America Movil, S.A. de C.V. also
gained, having secured seven million new subscribers in the fourth quarter
alone. Moreover, NII Holdings Inc., a provider of digital wireless services
aimed at businesses, reported better-than-expected quarterly profits, thus
raising the company's value.
Among the Fund's individual detractors, wireless services provider Vimpel
Communications tumbled on news that the company could face back tax claims of
$300 million, although the final liability amounted to $17.6 million.
Networking equipment supplier UTStarcom Inc. also declined, as the company
faced issues surrounding its financial reporting and internal controls. Both
stocks were sold due to declining relative strength. Elsewhere, even though
Sempra Energy fell on rumors suggesting a class action suit against the
company, the stock did not meet our sell discipline and the Fund held it at
period-end.
66 Management Overview
[ROBERT STRAUS, CMT PHOTO]
Robert Straus, CMT
Portfolio Manager
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR THE TELECOMMUNICATION & UTILITIES SECTOR?
A. Despite a defensive upward move in the Utilities segment, we continue to see
numerous opportunities in the sector, with electric utilities offering an
ideal combination of value and relative strength. In contrast, the
Telecommunication segment has been trading at a significant discount to fair
value, but apart from some encouraging signs in wireless telecommunication
services has yet to display broad relative strength. Thus, the Fund remains
heavily tilted toward Utilities.
PERFORMANCE HIGHLIGHTS
March 31, 2005
- - The Fund's valuation-based tilt toward Utilities, which we view as a
potential market leader, benefited relative performance.
- - Against a volatile backdrop, the Fund captured its gains during the first
half of the reporting period, ending the second half of the period flat.
- - Leading industry contributors to Fund performance included top-weighted and
top-performing electric utilities and multi-utilities & unregulated power.
- - Constellation Energy Group Inc., America Movil, S.A. de C.V. and NII Holdings
Inc. were among the Fund's most meaningful company contributors.
- - Individual detractors to Fund performance included Vimpel Communications,
UTStarcom Inc. and Sempra Energy.
Management Overview 67
Management Overview (continued)
ICON Telecommunication & Utilities Fund
TOP 10 INDUSTRIES
March 31, 2005
<Table>
Electric Utilities
33.0%
Multi-Utilities & Unregulated Power
19.4%
Wireless Telecommunication Services
15.9%
Gas Utilities
9.8%
Integrated Telecommunication Services
8.7%
Water Utilities
6.1%
Communications Equipment
3.3%
Semiconductors
2.4%
Internet Software & Services
1.1%
</Table>
Percentages are based upon net assets.
68 Management Overview
AVERAGE ANNUAL TOTAL RETURN
as of March 31, 2005
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 5 YEARS 7/9/97
- -------------------------------------------------------------------------------------------
ICON Telecommunication & Utilities Fund 9.41% 6.98% 2.99% 8.29%
- -------------------------------------------------------------------------------------------
S&P 1500 Telecommunications Services
Index -0.09% 5.38% -15.75% -0.37%
- -------------------------------------------------------------------------------------------
S&P 1500 Utilities Index 16.85% 23.07% 4.80% 7.25%
- -------------------------------------------------------------------------------------------
S&P 1500 Index 7.45% 7.28% -2.06% 5.67%
- -------------------------------------------------------------------------------------------
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Information about these
performance results and the comparative indexes can be found on pages 2 and 3.
* Not annualized.
VALUE OF A $10,000 INVESTMENT
through March 31, 2005
[LINE GRAPH]
<Table>
<Caption>
ICON S&P 1500
TELECOMMUNICATION & S&P 1500 UTILITIES TELECOMMUNICATION
UTILITIES FUND INDEX SERVICES INDEX S&P 1500 INDEX
---------------- ------------------ ----------------- --------------
7/9/97 10000 10000 10000 10000
3/31/98 13800 12775 14982 12321
3/31/99 15110 12192 20000 14207
3/31/00 15958 13585 22888 16994
3/31/01 15995 18172 14014 13550
3/31/02 15322 14813 10537 13837
3/31/03 11625 10216 7010 10425
3/31/04 17289 13959 9219 14275
3/31/05 18497 17175 9715 15313
</Table>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The above graph compares
a $10,000 investment made in the Fund on its inception date of 7/9/97 to a
$10,000 investment made in unmanaged securities indexes on that date. The Fund's
performance in this chart and the performance table assumes the reinvestment of
dividends and capital gain distributions but does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or on the redemption of
Fund shares.
Management Overview 69
Schedule of Investments
ICON Telecommunication & Utilities Fund
March 31, 2005 (unaudited)
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
COMMON STOCKS 99.7%
UNITED STATES OF AMERICA 81.5%
INFORMATION TECHNOLOGY 4.8%
COMMUNICATIONS EQUIPMENT 1.3%
82,200 SpectraLink Corp. $ 1,160,664
INTERNET & SOFTWARE SERVICES 1.1%
27,400 j2 Global
Communications,
Inc.()(a) 940,094
SEMICONDUCTORS 2.4%
82,200 Texas Instruments,
Inc. 2,095,278
------------
TOTAL INFORMATION TECHNOLOGY 4,196,036
TELECOMMUNICATIONS & UTILITIES 76.7%
ELECTRIC UTILITIES 33.0%
86,900 Allegheny Energy,
Inc. 1,795,354
73,100 CenterPoint Energy,
Inc. 879,393
97,800 Cleco Corp. 2,083,140
58,100 DTE Energy Co. 2,642,388
150,700 El Paso Electric Co. 2,863,300
50,400 FPL Group, Inc. 2,023,560
22,400 IDACORP, Inc. 635,488
59,200 Pepco Holdings, Inc. 1,242,608
64,500 PG&E Corp. 2,199,450
107,300 PNM Resources, Inc. 2,862,764
38,200 PPL Corp. 2,062,418
155,400 Sierra Pacific
Resources(a) 1,670,550
44,600 Southern Co. 1,419,618
153,500 TECO Energy, Inc. 2,406,880
25,200 TXU Corp. 2,006,676
------------
28,793,587
GAS UTILITIES 9.8%
20,600 Energen Corp. 1,371,960
22,900 Equitable Resources,
Inc. 1,315,376
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
36,300 NiSource, Inc. $ 827,277
29,500 Northwest Natural
Gas Co. 1,067,015
85,200 ONEOK, Inc. 2,625,864
21,800 Questar Corp. 1,291,650
------------
8,499,142
INTEGRATED TELECOMMUNICATION SERVICES 2.8%
25,400 Golden Telecom, Inc. 650,240
76,900 Sprint Corp. 1,749,475
------------
2,399,715
MULTI-UTILITIES & UNREGULATED POWER 19.4%
276,000 Aquila, Inc. 1,057,080
56,900 Constellation Energy
Group, Inc. 2,941,730
23,000 Dominion Resources,
Inc. of Virginia 1,711,890
87,600 Duke Energy Corp. 2,453,676
75,900 Energy East Corp. 1,990,098
43,100 Public Service
Enterprise Group,
Inc. 2,344,209
66,000 Sempra Energy 2,629,440
64,600 Vectren Corp. 1,720,944
------------
16,849,067
WATER UTILITIES 6.1%
31,600 American States
Water Co. 799,480
56,900 Aqua America, Inc. 1,386,084
94,800 California Water
Service Group 3,163,476
------------
5,349,040
WIRELESS TELECOMMUNICATION SERVICES 5.6%
44,400 NII Holdings, Inc. -
Class B(a) 2,553,000
39,600 SpectraSite, Inc.(a) 2,295,612
------------
4,848,612
TOTAL TELECOMMUNICATION &
UTILITIES 66,739,163
------------
TOTAL UNITED STATES OF AMERICA 70,935,199
</Table>
70 Schedule of Investments
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
AMERICAN DEPOSITARY RECEIPT 18.2%
CHINA 1.7%
INTEGRATED TELECOMMUNICATIONS SERVICES 1.7%
42,700 China Telecom Corp.
Ltd.(a) $ 1,487,668
------------
TOTAL CHINA 1,487,668
FINLAND 2.0%
COMMUNICATIONS EQUIPMENT 2.0%
112,000 Nokia Oyj - ADR 1,728,160
------------
TOTAL FINLAND 1,728,160
HONG KONG 1.3%
WIRELESS TELECOMMUNICATION SERVICES 1.3%
146,900 China Unicom Ltd. -
ADR 1,134,068
------------
TOTAL HONG KONG 1,134,068
ISRAEL 1.5%
WIRELESS TELECOMMUNICATIONS SERVICES 1.5%
148,600 Partner
Communications Co.
Ltd. - ADR()(a) 1,353,746
------------
TOTAL ISRAEL 1,353,746
MEXICO 6.6%
INTEGRATED TELECOMMUNICATION SERVICES 2.7%
69,400 Telefonos de Mexico
S.A de C.V 2,396,382
------------
WIRELESS TELECOMMUNICATIONS SERVICES 3.9%
65,900 America Movil S.A.
de C.V. 3,400,440
------------
TOTAL MEXICO 5,796,822
PHILIPPINES 1.5%
INTEGRATED TELECOMMUNICATION SERVICES 1.5%
51,100 Philippine Long
Distance Telephone
Co. 1,288,231
------------
TOTAL PHILIPPINES 1,288,231
</Table>
<Table>
<Caption>
SHARES OR PRINCIPAL AMOUNT MARKET VALUE
- ---------------------------------------------
RUSSIA 1.6%
WIRELESS TELECOMMUNICATION SERVICES 1.6%
38,400 Mobile Telesystems -
ADR $ 1,351,296
------------
TOTAL RUSSIA 1,351,296
UNITED KINGDOM 2.0%
WIRELESS TELECOMMUNICATION SERVICES 2.0%
64,400 Vodafone Group
PLC - ADR 1,710,464
------------
TOTAL UNITED KINGDOM 1,710,464
------------
TOTAL AMERICAN DEPOSITARY
RECEIPT 15,850,455
------------
TOTAL COMMON STOCKS
(COST $75,282,534) 86,785,654
SHORT-TERM INVESTMENTS 0.0%
VARIABLE RATE DEMAND NOTES 0.0%
$ 596 American Family
Demand Note,
2.4663%# 596
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $596) 596
------------
TOTAL INVESTMENTS 99.7%
(COST $75,283,130) 86,786,250
OTHER ASSETS LESS LIABILITIES
0.3% 230,785
------------
NET ASSETS 100.0% $87,017,035
============
</Table>
The accompanying notes are an integral part of the financial statements.
(a) Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rates listed are as of March 31, 2005
ADR American Depositary Receipt
Schedule of Investments 71
Six Month Hypothetical Expense Example
March 31, 2005 (unaudited)
EXAMPLE
As a shareholder of a Fund you may pay two types of fees: transaction fees and
fund-related fees. Certain funds charge transactions fees, including sales
charges (loads) on purchase payments, reinvested dividends, or other
distributions; redemption fees; and exchange fees. The ICON Funds do not charge
these types of fees. Funds also incur various ongoing expenses, including
management fees, distribution and/or service fees, and other fund expenses,
which are indirectly paid by shareholders.
This Example is intended to help you understand your ongoing costs (in dollars)
of investing in the various ICON Funds and to compare these costs with the
ongoing costs of investing in other mutual funds. This Example is based on an
investment of $1,000 invested at the beginning of the period and held for the
six-month period (10/1/04 - 3/31/05).
ACTUAL EXPENSES
The first line in the table for each Fund provides information about actual
account values and actual expenses. The Example includes, but is not limited to,
management fees, fund accounting, custody and transfer agent fees. However, the
Example does not include client specific fees, such as the $15.00 fee charged to
IRA accounts, or the $15.00 fee charged for wire redemptions. The Example also
does not include portfolio trading commissions and related trading expenses. You
may use this information, together with the amount you invested, to estimate the
expenses that you paid over the period. Simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number in the first line for each Fund under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the table for each Fund provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not the Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds. Please note that the expenses shown in
the table are meant to highlight your ongoing costs only and do not reflect any
transactional costs, such as sales charges (loads), redemption fees, or exchange
fees that may be charged by other funds. Therefore, this information is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds.
72 Expense Example
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD
10/1/04 3/31/05 10/1/04-3/31/05*
- ----------------------------------------------------------------------------------------------
ICON CONSUMER DISCRETIONARY FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,093 $6.78
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,019 $6.54
(5% return before expenses
- ----------------------------------------------------------------------------------------------
ICON ENERGY FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,194 $7.05
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,019 $6.49
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON FINANCIAL FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,033 $6.54
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,019 $6.49
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON HEALTHCARE FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,204 $7.14
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,019 $6.54
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON INDUSTRIALS FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,127 $6.84
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,019 $6.49
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON INFORMATION TECHNOLOGY FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,027 $6.67
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,018 $6.64
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON LEISURE AND CONSUMER STAPLES
FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,139 $7.52
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,018 $7.09
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON MATERIALS FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,135 $7.13
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,018 $6.74
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
ICON TELECOMMUNICATION &
UTILITIES FUND
- ----------------------------------------------------------------------------------------------
Actual Expenses $1,000 $1,094 $6.94
- ----------------------------------------------------------------------------------------------
Hypothetical Example $1,000 $1,018 $6.69
(5% return before expenses)
- ----------------------------------------------------------------------------------------------
</Table>
* Expenses are equal to the Fund's six month expense ratio annualized,
multiplied by the average account value over the period, multiplied by 182/365
to reflect the one-half year period.
Expense Example 73
Statements of Assets and Liabilities
March 31, 2005 (unaudited)
<Table>
<Caption>
ICON
CONSUMER ICON ICON ICON
DISCRETIONARY FUND ENERGY FUND FINANCIAL FUND HEALTHCARE FUND
------------------ ------------ -------------- ---------------
ASSETS
Investments, at cost $145,629,482 $538,702,889 $177,709,041 $323,554,022
------------------ ------------ -------------- ---------------
Investments, at value 163,583,719 669,083,339 200,051,992 416,295,607
Cash - 4,500 - -
Receivables:
Fund shares sold 220,497 1,542,264 240,826 958,686
Investments sold 211,510 - 4,307,457 -
Interest 628 25,504 288 2,284
Dividends 98,360 252,949 181,366 12,349
Other assets 6,353 7,845 7,875 13,197
------------------ ------------ -------------- ---------------
TOTAL ASSETS 164,121,067 670,916,401 204,789,804 417,282,123
------------------ ------------ -------------- ---------------
LIABILITIES
Payables:
Due to custodian bank - - - 2
Fund shares redeemed 1,260 256,077 8,828 28,566
Investments bought - - 384,405 1,306,000
Advisory fees 140,376 563,423 179,342 345,379
Fund accounting, custodial and transfer
agent fees 43,846 165,521 56,108 105,937
Administration fees 7,019 28,171 8,967 17,269
Accrued expenses 43,922 120,948 60,013 80,651
------------------ ------------ -------------- ---------------
Total Liabilities 236,423 1,134,140 697,663 1,883,804
------------------ ------------ -------------- ---------------
NET ASSETS $163,884,644 $669,782,261 $204,092,141 $415,398,319
================== ============ ============== ===============
NET ASSETS CONSIST OF
Paid-in Capital $133,791,936 $540,583,080 $172,892,038 $328,607,786
Accumulated undistributed net investment
income/(loss) (595,475) 320,315 1,378,755 (1,672,551)
Accumulated undistributed net realized
gain/(loss) from investments 12,733,946 (1,501,584) 7,478,397 (4,278,501)
Unrealized appreciation/(depreciation) on
securities 17,954,237 130,380,450 22,342,951 92,741,585
------------------ ------------ -------------- ---------------
NET ASSETS $163,884,644 $669,782,261 $204,092,141 $415,398,319
================== ============ ============== ===============
Shares outstanding (unlimited shares
authorized, no par value) 11,808,823 25,733,864 15,933,331 25,270,350
Net Asset Value (offering price and
redemption price per share) $ 13.88 $ 26.03 $ 12.81 $ 16.44
</Table>
The accompanying notes are an integral part of the financial statements.
74 Financial Statements
<Table>
<Caption>
ICON
ICON LEISURE AND ICON
ICON INFORMATION CONSUMER ICON TELECOMMUNICATION
INDUSTRIALS FUND TECHNOLOGY FUND STAPLES FUND MATERIALS FUND & UTILITIES FUND
---------------- --------------- ------------ -------------- -----------------
$166,596,439 $252,881,921 $59,903,149 $ 87,645,677 $75,283,130
---------------- --------------- ------------ -------------- -----------------
222,463,527 278,244,541 74,898,443 109,766,666 86,786,250
13,504 - - 11,873 -
348,747 255,193 74,113 188,927 150,733
- 3,220,328 - 350,256 336,221
844 134 1,442 2,187 1,030
173,043 95,740 75,638 159,524 108,464
9,650 12,571 5,130 4,136 2,189
---------------- --------------- ------------ -------------- -----------------
223,009,315 281,828,507 75,054,766 110,483,569 87,384,887
---------------- --------------- ------------ -------------- -----------------
- 259,012 - - 237,434
3,437 1,110 471,972 288,628 1,953
- 1,768,053 - - -
192,747 242,727 62,086 95,903 74,316
58,873 79,180 20,125 29,573 23,374
9,637 12,136 3,104 4,795 3,716
53,505 78,825 26,831 35,574 27,059
---------------- --------------- ------------ -------------- -----------------
318,199 2,441,043 584,118 454,473 367,852
---------------- --------------- ------------ -------------- -----------------
$222,691,116 $279,387,464 $74,470,648 $110,029,096 $87,017,035
================ =============== ============ ============== =================
$184,354,983 $316,842,041 $55,106,661 $ 90,450,626 $77,009,427
(507,556) (1,785,104) (131,309) (50,704) 316,150
(17,023,399) (61,032,093) 4,500,002 (2,491,815) (1,811,662)
55,867,088 25,362,620 14,995,294 22,120,989 11,503,120
---------------- --------------- ------------ -------------- -----------------
$222,691,116 $279,387,464 $74,470,648 $110,029,096 $87,017,035
================ =============== ============ ============== =================
18,778,166 34,466,123 5,743,250 10,723,149 12,169,500
$ 11.86 $ 8.11 $ 12.97 $ 10.26 $ 7.15
</Table>
Financial Statements 75
Statements of Operations
For the period ended March 31, 2005 (unaudited)
<Table>
<Caption>
ICON
CONSUMER ICON ICON ICON
DISCRETIONARY FUND ENERGY FUND FINANCIAL FUND HEALTHCARE FUND
------------------ ----------- -------------- ---------------
INVESTMENT INCOME
Interest $ 8,257 $ 382,370 $ 15,310 $ 81,812
Dividends 457,207 2,930,794 2,825,093 372,210
Foreign taxes withheld - (39,391) - -
------------------ ----------- -------------- ---------------
Total Investment Income 465,464 3,273,773 2,840,403 454,022
------------------ ----------- -------------- ---------------
EXPENSES
Advisory fees 814,007 2,283,884 1,012,533 1,631,254
Fund accounting, custodial and transfer agent
fees 112,685 345,162 140,364 231,802
Administration fees 39,326 111,007 48,936 79,019
Audit fees 9,016 22,126 11,149 17,191
Registration fees 11,820 25,270 14,871 19,023
Legal fees 1,757 4,041 2,123 3,153
Insurance expense 4,328 6,586 5,393 8,219
Trustee fees and expenses 9,707 14,840 11,706 17,921
Shareholder reports 20,055 50,873 25,007 38,786
Interest expense 5,003 - 2,978 18,079
Other expenses 33,235 89,669 36,202 62,086
------------------ ----------- -------------- ---------------
Total expenses 1,060,939 2,953,458 1,311,262 2,126,533
------------------ ----------- -------------- ---------------
NET INVESTMENT INCOME (LOSS) (595,475) 320,315 1,529,141 (1,672,511)
------------------ ----------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS
Net realized gain/(loss) from investment
transactions 18,827,092 6,145,870 9,350,336 (4,277,861)
Change in unrealized
appreciation/(depreciation) on securities (3,858,084) 70,779,908 (5,456,768) 59,888,821
------------------ ----------- -------------- ---------------
Net realized and unrealized gain/(loss) on
investments 14,969,008 76,925,778 3,893,568 55,610,960
------------------ ----------- -------------- ---------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $14,373,533 $77,246,093 $ 5,422,709 $53,938,449
================== =========== ============== ===============
</Table>
The accompanying notes are an integral part of the financial statements.
76 Financial Statements
<Table>
<Caption>
ICON
ICON LEISURE AND ICON
ICON INFORMATION CONSUMER ICON TELECOMMUNICATION
INDUSTRIALS FUND TECHNOLOGY FUND STAPLES FUND MATERIALS FUND & UTILITIES FUND
---------------- --------------- ------------ -------------- -----------------
$ 9,090 $ 16,534 $ 4,640 $ 14,119 $ 9,983
886,161 280,611 334,571 880,696 961,973
(15,941) - (2,072) (17,645) (1,907)
---------------- --------------- ------------ -------------- -----------------
879,310 297,145 337,139 877,170 970,049
---------------- --------------- ------------ -------------- -----------------
1,075,314 1,581,993 333,094 620,834 351,534
127,452 217,208 45,708 84,497 50,571
51,946 76,385 16,064 29,892 17,034
11,846 17,382 3,808 7,067 3,703
15,025 18,898 10,522 13,803 9,673
2,289 3,398 747 1,426 706
5,557 5,548 3,577 3,515 1,751
12,406 17,595 4,712 7,493 3,835
26,351 39,614 8,170 15,545 8,324
8,489 45,423 18,065 21,023 893
50,191 58,805 23,981 25,869 19,701
---------------- --------------- ------------ -------------- -----------------
1,386,866 2,082,249 468,448 830,964 467,725
---------------- --------------- ------------ -------------- -----------------
(507,556) (1,785,104) (131,309) 46,206 502,324
---------------- --------------- ------------ -------------- -----------------
7,258,149 3,539,735 7,808,059 17,326,804 3,041,157
18,246,589 5,195,740 1,238,806 (1,979,189) 2,039,257
---------------- --------------- ------------ -------------- -----------------
25,504,738 8,735,475 9,046,865 15,347,615 5,080,414
---------------- --------------- ------------ -------------- -----------------
$24,997,182 $ 6,950,371 $8,915,556 $15,393,821 $5,582,738
================ =============== ============ ============== =================
</Table>
Financial Statements 77
Statements of Changes in Net Assets
<Table>
<Caption>
ICON CONSUMER DISCRETIONARY FUND ICON ENERGY FUND
----------------------------------- -----------------------------------
PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------
OPERATIONS
Net investment income/(loss) $ (595,475) $ (671,699) $ 320,315 $ (261,112)
Net realized gain/(loss) from
investment transactions 18,827,092 17,989,808 6,145,870 6,377,507
Change in unrealized
appreciation/depreciation on
securities (3,858,084) (6,390,181) 70,779,908 51,219,049
-------------- ------------------ -------------- ------------------
Net increase/(decrease) in net assets
resulting from operations 14,373,533 10,927,928 77,246,093 57,335,444
-------------- ------------------ -------------- ------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Net investment income - - - -
Net realized gains - - - -
-------------- ------------------ -------------- ------------------
Net decrease from dividends and
distributions - - - -
-------------- ------------------ -------------- ------------------
FUND SHARE TRANSACTIONS
Shares sold 23,122,385 62,754,370 423,897,540 246,044,827
Reinvested dividends and distributions - -
Shares repurchased (25,533,018) (71,825,277) (118,975,276) (71,395,398)
-------------- ------------------ -------------- ------------------
Net increase/(decrease) from fund
share transactions (2,410,633) (9,070,907) 304,922,264 174,649,429
-------------- ------------------ -------------- ------------------
Total net increase/(decrease) in net
assets 11,962,900 1,857,021 382,168,357 231,984,873
NET ASSETS
Beginning of period 151,921,744 150,064,723 287,613,904 55,629,031
-------------- ------------------ -------------- ------------------
End of period $163,884,644 $151,921,744 $ 669,782,261 $287,613,904
============== ================== ============== ==================
TRANSACTIONS IN FUND SHARES
Shares sold 1,699,760 4,709,437 17,632,075 13,031,426
Reinvested dividends and distributions - - -
Shares repurchased (1,851,708) (5,477,472) (5,086,632) (3,903,835)
-------------- ------------------ -------------- ------------------
Net increase/(decrease) (151,948) (768,035) 12,545,443 9,127,591
Shares outstanding beginning of period 11,960,771 12,728,806 13,188,421 4,060,830
-------------- ------------------ -------------- ------------------
Shares outstanding end of period 11,808,823 11,960,771 25,733,864 13,188,421
============== ================== ============== ==================
PURCHASE AND SALES OF INVESTMENT
SECURITIES (excluding Short-term
Securities)
Purchase of Securities $111,558,467 $213,763,244 $ 252,909,186 $184,627,946
Proceeds from sales of securities 114,467,518 220,582,308 15,443,138 15,787,580
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME/(LOSS) $ (595,475) $ - $ 320,315 $ -
============== ================== ============== ==================
</Table>
* The tax character of distributions to shareholders from net investment income
for the year ended September 30, 2004 is ordinary income.
The accompanying notes are an integral part of the financial statements.
78 Financial Statements
<Table>
<Caption>
ICON FINANCIAL FUND ICON HEALTHCARE FUND ICON INDUSTRIALS FUND
----------------------------------- ----------------------------------- -----------------------------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------ -------------- ------------------
$ 1,529,141 $ 548,732 $ (1,672,511) $ (2,540,659) $ (507,556) $ (849,293)
9,350,336 17,877,672 (4,277,861) 10,762,480 7,258,149 5,713,298
(5,456,768) 13,429,005 59,888,821 6,619,577 18,246,589 22,171,644
-------------- ------------------ -------------- ------------------ -------------- ------------------
5,422,709 31,855,409 53,938,449 14,841,398 24,997,182 27,035,649
-------------- ------------------ -------------- ------------------ -------------- ------------------
(400,204) (576,093)* (40) - - -
(14,368,848) - (877,489) - - -
-------------- ------------------ -------------- ------------------ -------------- ------------------
(14,769,052) (576,093) (877,529) - - -
-------------- ------------------ -------------- ------------------ -------------- ------------------
41,110,948 99,493,912 167,042,774 196,893,511 26,036,908 119,436,391
14,495,645 570,282 842,844 - - -
(30,561,559) (82,211,184) (91,218,193) (67,323,826) (38,036,232) (69,333,095)
-------------- ------------------ -------------- ------------------ -------------- ------------------
25,045,034 17,853,010 76,667,425 129,569,685 (11,999,324) 50,103,296
-------------- ------------------ -------------- ------------------ -------------- ------------------
15,698,691 49,132,326 129,728,345 144,411,083 12,997,858 77,138,945
188,393,450 139,261,124 285,669,974 141,258,891 209,693,258 132,554,313
-------------- ------------------ -------------- ------------------ -------------- ------------------
$204,092,141 $188,393,450 $415,398,319 $285,669,974 $222,691,116 $209,693,258
============== ================== ============== ================== ============== ==================
3,054,494 7,735,769 10,629,828 14,262,864 2,245,029 11,909,801
1,066,640 47,802 53,244 - - -
(2,286,328) (6,605,919) (6,270,273) (4,910,162) (3,406,630) (7,036,857)
-------------- ------------------ -------------- ------------------ -------------- ------------------
1,834,806 1,177,652 4,412,799 9,352,702 (1,161,601) 4,872,944
14,098,525 12,920,873 20,857,551 11,504,849 19,939,767 15,066,823
-------------- ------------------ -------------- ------------------ -------------- ------------------
15,933,331 14,098,525 25,270,350 20,857,551 18,778,166 19,939,767
============== ================== ============== ================== ============== ==================
$126,904,833 $204,755,026 $120,748,585 $249,051,968 $ 20,050,008 $132,934,226
122,016,744 186,785,022 49,770,041 123,293,752 35,674,977 80,111,027
$ 1,378,755 $ 249,818 $ (1,672,551) $ - $ (507,556) $ -
============== ================== ============== ================== ============== ==================
</Table>
Financial Statements 79
Statements of Changes in Net Assets (continued)
<Table>
<Caption>
ICON INFORMATION TECHNOLOGY FUND
------------------------------------
PERIOD ENDED
MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------
OPERATIONS:
Net investment income/(loss) $ (1,785,104) $ (2,576,634)
Net realized gain/(loss) from investments transactions 3,539,735 30,876,230
Change in net unrealized appreciation/depreciation on
securities 5,195,740 (41,133,606)
-------------- ------------------
Net increase/(decrease) in net assets resulting from
operations 6,950,371 (12,834,010)
-------------- ------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - -
Net realized gains - -
-------------- ------------------
Net decrease from dividends and distributions - -
-------------- ------------------
FUND SHARE TRANSACTIONS
Shares sold 115,795,629 178,801,650
Reinvested dividends and distributions - -
Shares repurchased (87,610,939) (229,687,727)
-------------- ------------------
Net increase/(decrease) from fund share transactions 28,184,690 (50,886,077)
-------------- ------------------
Total net increase/(decrease) in net assets 35,135,061 (63,720,087)
NET ASSETS:
Beginning of period 244,252,403 307,972,490
-------------- ------------------
End of period $279,387,464 $244,252,403
============== ==================
TRANSACTIONS IN FUND SHARES
Shares sold 13,922,677 21,330,842
Reinvested dividends and distributions - -
Shares repurchased (10,367,298) (27,658,934)
-------------- ------------------
Net increase/(decrease) 3,555,379 (6,328,092)
Shares outstanding beginning of period 30,910,744 37,238,836
-------------- ------------------
Shares outstanding end of period 34,466,123 30,910,744
============== ==================
PURCHASE AND SALES OF INVESTMENT SECURITIES
(excluding Short-term Securities)
Purchase of Securities $227,044,972 $537,991,382
Proceeds from sales of securities 202,350,289 591,381,665
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) $ (1,785,104) $ -
============== ==================
</Table>
* The tax character of distributions to shareholders from net investment income
for the year ended September 30, 2004 is ordinary income.
The accompanying notes are an integral part of the financial statements.
80 Financial Statements
<Table>
<Caption>
ICON LEISURE AND ICON TELECOMMUNICATION &
CONSUMER STAPLES FUND ICON MATERIALS FUND UTILITIES FUND
----------------------------------- ----------------------------------- -----------------------------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED MARCH 31, 2005 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004 (UNAUDITED) SEPTEMBER 30, 2004
-------------- ------------------ -------------- ------------------ -------------- ------------------
$ (131,309) $ (326,799) $ 46,206 $ 87,329 $ 502,324 $ 580,886
7,808,059 11,738,085 17,326,804 1,298,590 3,041,157 3,885,662
1,238,806 2,299,602 (1,979,189) 22,065,303 2,039,257 3,437,864
-------------- ------------------ -------------- ------------------ -------------- ------------------
8,915,556 13,710,888 15,393,821 23,451,222 5,582,738 7,904,412
-------------- ------------------ -------------- ------------------ -------------- ------------------
- - (163,349) (198,911)* (767,065) (559,797)*
(13,572,229) - - - - -
-------------- ------------------ -------------- ------------------ -------------- ------------------
(13,572,229) - (163,349) (198,911) (767,065) (559,797)
-------------- ------------------ -------------- ------------------ -------------- ------------------
20,117,337 52,673,531 37,789,181 111,162,483 27,050,299 26,477,305
13,378,405 - 160,788 198,136 762,535 557,773
(37,390,850) (65,709,303) (82,989,664) (25,150,862) (6,936,835) (15,563,524)
-------------- ------------------ -------------- ------------------ -------------- ------------------
(3,895,108) (13,035,772) (45,039,695) 86,209,757 20,875,999 11,471,554
-------------- ------------------ -------------- ------------------ -------------- ------------------
(8,551,781) 675,116 (29,809,223) 109,462,068 25,691,672 18,816,169
83,022,429 82,347,313 139,838,319 30,376,251 61,325,363 42,509,194
-------------- ------------------ -------------- ------------------ -------------- ------------------
$ 74,470,648 $ 83,022,429 $110,029,096 $139,838,319 $87,017,035 $ 61,325,363
============== ================== ============== ================== ============== ==================
1,493,456 3,663,087 3,792,318 13,704,883 3,771,704 4,192,093
1,067,710 - 15,794 26,174 106,947 94,538
(2,541,439) (4,572,081) (8,531,811) (3,179,704) (984,943) (2,487,287)
-------------- ------------------ -------------- ------------------ -------------- ------------------
19,727 (908,994) (4,723,699) 10,551,353 2,893,708 1,799,344
5,723,523 6,632,517 15,446,848 4,895,495 9,275,792 7,476,448
-------------- ------------------ -------------- ------------------ -------------- ------------------
5,743,250 5,723,523 10,723,149 15,446,848 12,169,500 9,275,792
============== ================== ============== ================== ============== ==================
$ 38,436,590 $151,387,685 $ 54,215,396 $123,284,118 $57,991,975 $ 69,915,069
56,312,359 163,795,587 96,421,309 41,285,979 37,485,625 58,301,505
$ (131,309) $ - $ (50,704) $ 66,439 $ 316,150 $ 580,891
============== ================== ============== ================== ============== ==================
</Table>
Financial Statements 81
Financial Highlights
<Table>
<Caption>
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------
NET ASSET NET NET REALIZED
VALUE, INVESTMENT AND UNREALIZED TOTAL FROM
BEGINNING INCOME/ GAINS/(LOSSES) INVESTMENT
OF PERIOD (LOSS)(X) ON INVESTMENTS OPERATIONS
--------- ---------- -------------- ----------
ICON CONSUMER DISCRETIONARY FUND
Period Ended March 31, 2005
(unaudited) $12.70 $(0.05) $ 1.23 $ 1.18
Year Ended September 30, 2004 11.79 (0.05) 0.96 0.91
Year Ended September 30, 2003 10.12 (0.08) 1.75 1.67
Year Ended September 30, 2002 8.96 (0.06) 1.22 1.16
Year Ended September 30, 2001 9.23 (0.01) (0.26) (0.27)
Year Ended September 30, 2000 9.67 (0.02) (0.42) (0.44)
ICON ENERGY FUND
Period Ended March 31, 2005
(unaudited) 21.81 0.02 4.20 4.22
Year Ended September 30, 2004 13.70 (0.04) 8.15 8.11
Year Ended September 30, 2003 11.84 (0.04) 1.90 1.86
Year Ended September 30, 2002 11.29 (0.08) 0.65 0.57
Year Ended September 30, 2001 13.19 0.07 (0.76) (0.69)
Year Ended September 30, 2000 7.98 0.04 5.17 5.21
ICON FINANCIAL FUND
Period Ended March 31, 2005
(unaudited) 13.36 0.10 0.40 0.50
Year Ended September 30, 2004 10.78 0.04 2.60 2.64
Year Ended September 30, 2003 8.84 0.05 1.92 1.97
Year Ended September 30, 2002 12.04 (0.01) (1.08) (1.09)
Year Ended September 30, 2001 12.26 0.06 1.13 1.19
Year Ended September 30, 2000 8.99 0.11 3.28 3.39
ICON HEALTHCARE FUND
Period Ended March 31, 2005
(unaudited) 13.70 (0.08) 2.86 2.78
Year Ended September 30, 2004 12.28 (0.14) 1.56 1.42
Year Ended September 30, 2003 10.35 (0.09) 2.02 1.93
Year Ended September 30, 2002 11.57 (0.12) (0.49) (0.61)
Year Ended September 30, 2001 11.93 (0.10) 0.51 0.41
Year Ended September 30, 2000 7.98 (0.08) 4.34 4.26
ICON INDUSTRIALS FUND
Period Ended March 31, 2005
(unaudited) 10.52 (0.03) 1.37 1.34
Year Ended September 30, 2004 8.80 (0.05) 1.77 1.72
Year Ended September 30, 2003 7.96 (0.05) 0.89 0.84
Year Ended September 30, 2002 8.55 (0.02) (0.57) (0.59)
Year Ended September 30, 2001 9.07 (0.02) (0.48) (0.50)
Year Ended September 30, 2000 10.31 0.03 (0.47) (0.44)
<Caption>
LESS DIVIDENDS AND DISTRIBUTIONS
-------------------------------------------------------
DIVIDENDS DISTRIBUTIONS TOTAL
FROM NET FROM NET DIVIDENDS
INVESTMENT REALIZED RETURN AND
INCOME GAINS OF CAPITAL DISTRIBUTIONS
---------- ------------- ---------- -------------
ICON CONSUMER DISCRETIONARY FUND
Period Ended March 31, 2005
(unaudited) - - - -
Year Ended September 30, 2004 - - - -
Year Ended September 30, 2003 - - - -
Year Ended September 30, 2002 - - - -
Year Ended September 30, 2001 - - - -
Year Ended September 30, 2000 - - - -
ICON ENERGY FUND
Period Ended March 31, 2005
(unaudited) - - - -
Year Ended September 30, 2004 - - - -
Year Ended September 30, 2003 - - - -
Year Ended September 30, 2002 $(0.02) - - $(0.02)
Year Ended September 30, 2001 (0.09) $(1.12) - (1.21)
Year Ended September 30, 2000 - - - -
ICON FINANCIAL FUND
Period Ended March 31, 2005
(unaudited) (0.03) (1.02) - (1.05)
Year Ended September 30, 2004 (0.06) - - (0.06)
Year Ended September 30, 2003 (0.03) - - (0.03)
Year Ended September 30, 2002 - (2.11) - (2.11)
Year Ended September 30, 2001 (1.41) - - (1.41)
Year Ended September 30, 2000 (0.12) - - (0.12)
ICON HEALTHCARE FUND
Period Ended March 31, 2005
(unaudited) - (0.04) - (0.04)
Year Ended September 30, 2004 - - - -
Year Ended September 30, 2003 - - - -
Year Ended September 30, 2002 - (0.56) $(0.05) (0.61)
Year Ended September 30, 2001 - (0.77) - (0.77)
Year Ended September 30, 2000 - (0.31) - (0.31)
ICON INDUSTRIALS FUND
Period Ended March 31, 2005
(unaudited) - - - -
Year Ended September 30, 2004 - - - -
Year Ended September 30, 2003 - - - -
Year Ended September 30, 2002 - - - -
Year Ended September 30, 2001 (0.02) - - (0.02)
Year Ended September 30, 2000 - (0.80) - (0.80)
</Table>
(x) Calculated using the average share method.
* The total return calculation is for the period indicated.
(a) Annualized for periods less than a year.
The accompanying notes are an integral part of the financial statements.
82 Financial Highlights
<Table>
<Caption>
RATIO OF NET
NET ASSET AVERAGE RATIO OF INVESTMENT
VALUE, NET ASSETS, NET ASSETS EXPENSES INCOME/(LOSS) PORTFOLIO
END OF TOTAL END OF PERIOD FOR THE PERIOD TO AVERAGE TO AVERAGE TURNOVER
PERIOD RETURN* (IN THOUSANDS) (IN THOUSANDS) NET ASSETS(A) NET ASSETS(A) RATE
--------- ------- -------------- -------------- ------------- ------------- ---------
$13.88 9.29% $163,885 $163,285 1.30% (0.73)% 68.72%
12.70 7.72% 151,922 178,011 1.31% (0.38)% 120.63%
11.79 16.50% 150,065 118,834 1.40% (0.79)% 174.51%
10.12 12.95% 121,640 184,174 1.29% (0.49)% 128.06%
8.96 (2.93)% 107,075 78,281 1.37% (0.10)% 88.20%
9.23 (4.55)% 40,894 46,246 1.35% (0.27)% 88.44%
26.03 19.35% 669,782 460,023 1.29% 0.14% 3.60%
21.81 59.20% 287,614 127,920 1.35% (0.20)% 13.42%
13.70 15.71% 55,629 74,883 1.40% (0.29)% 42.53%
11.84 5.03% 104,220 71,434 1.35% (0.61)% 26.30%
11.29 (6.53)% 36,945 49,195 1.39% 0.54% 134.77%
13.19 65.29% 44,294 29,564 1.36% 0.43% 123.70%
12.81 3.29% 204,092 203,133 1.29% 1.51% 61.01%
13.36 24.53% 188,393 162,121 1.32% 0.34% 114.50%
10.78 22.35% 139,261 131,042 1.34% 0.54% 142.77%
8.84 (11.88)% 110,116 60,904 1.36% (0.06)% 69.58%
12.04 9.57% 54,318 59,425 1.41% 0.51% 174.41%
12.26 38.14% 100,404 43,690 1.33% 1.14% 28.99%
16.44 20.40% 415,398 327,734 1.30% (1.02)% 15.33%
13.70 11.56% 285,670 244,742 1.29% (1.04)% 52.72%
12.28 18.65% 141,259 120,068 1.34% (0.84)% 85.52%
10.35 (5.63)% 93,031 44,042 1.39% (1.05)% 104.90%
11.57 3.39% 33,646 35,981 1.45% (0.98)% 145.08%
11.93 55.35% 49,066 38,688 1.38% (0.74)% 115.05%
11.86 12.74% 222,691 215,691 1.29% (0.47)% 9.31%
10.52 19.55% 209,693 179,657 1.29% (0.47)% 45.77%
8.80 10.55% 132,554 70,382 1.43% (0.64)% 90.49%
7.96 (6.90)% 63,919 107,335 1.30% (0.24)% 99.22%
8.55 (5.55)% 76,325 55,928 1.38% (0.16)% 72.65%
9.07 (4.32)% 22,068 21,220 1.38% 0.34% 72.90%
</Table>
Financial Highlights 83
Financial Highlights (continued)
(unaudited)
<Table>
<Caption>
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------
NET ASSET NET NET REALIZED
VALUE, INVESTMENT AND UNREALIZED TOTAL FROM
BEGINNING INCOME/ GAINS/(LOSSES) INVESTMENT
OF PERIOD (LOSS) ON INVESTMENTS OPERATIONS
--------- ---------- -------------- ----------
ICON INFORMATION TECHNOLOGY FUND
Period Ended March 31, 2005
(unaudited) $ 7.90 $(0.05)(x) $ 0.26 $ 0.21
Year Ended September 30, 2004 8.27 (0.08) (0.29) (0.37)
Year Ended September 30, 2003 5.98 (0.08)(x) 2.37 2.29
Year Ended September 30, 2002 7.80 (0.10)(x) (1.72) (1.82)
Year Ended September 30, 2001 22.13 (0.10)(x) (4.03) (4.13)
Year Ended September 30, 2000 19.00 (0.05)(x) 9.62 9.57
ICON LEISURE AND CONSUMER STAPLES FUND
Period Ended March 31, 2005
(unaudited) 14.51 (0.03)(x) 1.92 1.89
Year Ended September 30, 2004 12.42 (0.04)(x) 2.13 2.09
Year Ended September 30, 2003 11.20 (0.06)(x) 1.28 1.22
Year Ended September 30, 2002 9.42 (0.07)(x) 1.85 1.78
Year Ended September 30, 2001 9.24 (0.05)(x) 0.26 0.21
Year Ended September 30, 2000 12.05 0.01(x) 0.25 0.26
ICON MATERIALS FUND
Period Ended March 31, 2005
(unaudited) 9.05 0.01 1.21 1.22
Year Ended September 30, 2004 6.20 0.01(x) 2.87 2.88
Year Ended September 30, 2003 5.68 0.03(x) 0.50 0.53
Year Ended September 30, 2002 5.70 0.02(x) (0.01) 0.01
Year Ended September 30, 2001 6.49 0.02(x) (0.74) (0.72)
Year Ended September 30, 2000 7.31 0.03(x) (0.85) (0.82)
ICON TELECOMMUNICATION & UTILITIES FUND
Period Ended March 31, 2005
(unaudited) 6.61 0.05(x) 0.57 0.62
Year Ended September 30, 2004 5.69 0.07(x) 0.92 0.99
Year Ended September 30, 2003 4.78 0.10(x) 0.87 0.97
Year Ended September 30, 2002 6.19 0.10(x) (1.45) (1.35)
Year Ended September 30, 2001 8.13 0.09(x) (1.52) (1.43)
Year Ended September 30, 2000 10.04 0.20(x) 0.99 1.19
<Caption>
LESS DIVIDENDS AND DISTRIBUTIONS
-------------------------------------------------------
DIVIDENDS DISTRIBUTIONS TOTAL
FROM NET FROM NET DIVIDENDS
INVESTMENT REALIZED RETURN AND
INCOME GAINS OF CAPITAL DISTRIBUTIONS
---------- ------------- ---------- -------------
ICON INFORMATION TECHNOLOGY FUND
Period Ended March 31, 2005
(unaudited) - - - -
Year Ended September 30, 2004 - - - -
Year Ended September 30, 2003 - - - -
Year Ended September 30, 2002 - - - -
Year Ended September 30, 2001 - $(10.20) - $(10.20)
Year Ended September 30, 2000 - (6.44) - (6.44)
ICON LEISURE AND CONSUMER STAPLES
Period Ended March 31, 2005
(unaudited) - (3.43) - (3.43)
Year Ended September 30, 2004 - - - -
Year Ended September 30, 2003 - - - -
Year Ended September 30, 2002 - - -
Year Ended September 30, 2001 $(0.01) (0.02) - (0.03)
Year Ended September 30, 2000 - (3.07) - (3.07)
ICON MATERIALS FUND
Period Ended March 31, 2005
(unaudited) (0.01) - - (0.01)
Year Ended September 30, 2004 (0.03) - - (0.03)
Year Ended September 30, 2003 (0.01) - - (0.01)
Year Ended September 30, 2002 (0.03) - - (0.03)
Year Ended September 30, 2001 (0.07) - - (0.07)
Year Ended September 30, 2000 - - - -
ICON TELECOMMUNICATION & UTILITIES
Period Ended March 31, 2005
(unaudited) (0.08) - - (0.08)
Year Ended September 30, 2004 (0.07) - - (0.07)
Year Ended September 30, 2003 (0.06) - - (0.06)
Year Ended September 30, 2002 (0.06) - - (0.06)
Year Ended September 30, 2001 (0.11) (0.40) - (0.51)
Year Ended September 30, 2000 (0.16) (2.94) - (3.10)
</Table>
(x) Calculated using the average share method.
* The total return calculation is for the period indicated.
(a) Annualized for periods less than a year.
The accompanying notes are an integral part of the financial statements.
84 Financial Highlights
<Table>
<Caption>
RATIO OF NET
NET ASSET AVERAGE NET RATIO OF INVESTMENT
VALUE, NET ASSETS, ASSETS FOR EXPENSES INCOME/(LOSS) PORTFOLIO
END OF TOTAL END OF PERIOD THE PERIOD TO AVERAGE TO AVERAGE TURNOVER
PERIOD RETURN* (IN THOUSANDS) (IN THOUSANDS) NET ASSETS(A) NET ASSETS(A) RATE
--------- ------- -------------- -------------- ------------- ------------- ---------
$ 8.11 2.66% $279,387 $317,373 1.32% (1.13)% 65.75%
7.90 (4.47)% 244,252 282,062 1.31% (0.91)% 189.67%
8.27 38.29% 307,972 190,287 1.35% (1.16)% 155.39%
5.98 (23.33)% 75,623 189,972 1.31% (1.09)% 190.09%
7.80 (32.90)% 118,851 99,875 1.37% (0.90)% 70.32%
22.13 59.24% 46,689 56,279 1.35% (0.23)% 137.69%
12.97 13.88% 74,471 66,742 1.41% (0.39)% 55.52%
14.51 16.83% 83,022 104,515 1.33% (0.31)% 148.43%
12.42 10.89% 82,347 80,928 1.38% (0.51)% 139.54%
11.20 18.90% 88,341 86,202 1.34% (0.55)% 90.43%
9.42 2.26% 41,162 41,086 1.40% (0.50)% 148.23%
9.24 5.27% 7,765 18,029 1.51% 0.13% 24.50%
10.26 13.53% 110,029 124,340 1.34% 0.07% 43.43%
9.05 46.61% 139,838 68,497 1.37% 0.13% 59.48%
6.20 9.36% 30,376 40,156 1.47% 0.59% 130.01%
5.68 0.06% 59,020 45,917 1.36% 0.23% 74.55%
5.70 (11.07)% 29,200 24,544 1.47% 0.40% 91.28%
6.49 (11.22)% 18,162 23,620 1.41% 0.42% 91.76%
7.15 9.41% 87,017 70,637 1.33% 1.43% 52.71%
6.61 17.57% 61,325 54,232 1.37% 1.07% 108.81%
5.69 20.36% 42,509 53,219 1.41% 2.05% 158.24%
4.78 (22.05)% 66,366 20,196 1.50% 1.78% 137.81%
6.19 (18.74)% 16,537 13,554 1.54% 1.22% 46.10%
8.13 14.99% 8,619 7,231 1.53% 2.43% 41.86%
</Table>
Financial Highlights 85
Notes to Financial Statements
March 31, 2005
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The ICON Consumer Discretionary Fund ("Consumer Discretionary Fund"), ICON
Energy Fund ("Energy Fund"), ICON Financial Fund ("Financial Fund"), ICON
Healthcare Fund ("Healthcare Fund"), ICON Industrials Fund ("Industrials Fund"),
ICON Information Technology Fund ("Information Technology Fund"), ICON Leisure
and Consumer Staples Fund ("Leisure and Consumer Staples Fund"), ICON Materials
Fund ("Materials Fund"), ICON Telecommunication & Utilities Fund
("Telecommunication & Utilities Fund") are series funds (individually a "Fund"
and collectively, the "Funds"). The Funds are part of the ICON Funds (the
"Trust"), a Massachusetts business trust registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end investment management
company. There are eight other active funds within the Trust. Those funds are
covered by separate prospectuses and shareholder reports.
The Funds invest primarily in securities of companies whose principal business
activities fall within specific industries and sectors. Each Fund is authorized
to issue an unlimited number of no par shares. The investment objective of each
of Fund is to provide long-term capital appreciation.
The Funds may have elements of risk, including the risk of loss of principal.
There is no assurance that the investment process will consistently lead to
successful results. An investment in a non-diversified sector fund may involve
greater risk and volatility than a diversified fund. Investments in foreign
securities and currency transactions may involve certain considerations and
risks not typically associated with those of U.S. dollar-denominated
transactions as a result of, among other factors, the possibility of lower
government supervision and regulation of foreign securities markets and the
possibility of political or economic instability. There are also risks
associated with small- and mid-cap investing, including limited product lines,
less liquidity and small market share.
In addition, in the normal course of business the Funds may enter into various
agreements that provide for general indemnifications. Each Fund's maximum
exposure under these arrangements is unknown as any potential exposure involves
future claims that may be made against each Fund. However, based on experience,
the Funds expect the risk of loss to be remote.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent 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 these estimates.
86 Notes to Financial Statements
INVESTMENT VALUATION
The Funds' securities and other assets are valued at the close of the regular
trading session of the New York Stock Exchange (the "NYSE") (normally 4 p.m.
Eastern time) each day the NYSE is open, except that securities traded primarily
on the NASDAQ Stock Market ("NASDAQ") are normally valued by a Fund at the
NASDAQ Official Closing Price provided by NASDAQ each business day. The Funds
use pricing services to determine the market value of securities in their
portfolios; if a pricing service is not able to provide a price, or the pricing
service quote of valuation is considered inaccurate or does not reflect the
market value of the security, prices may be obtained through market quotations
from independent broker/dealers. If market quotations from these sources are not
readily available, the Funds' securities or other assets are valued at fair
value as determined in good faith by the Funds' Board of Trustees ("Board") or
pursuant to procedures approved by the Board.
Foreign securities traded in countries outside of the Western Hemisphere are
fair valued daily by utilizing the quotations of an independent pricing service,
unless the Funds' adviser determines that use of another valuation methodology
is appropriate. The pricing service uses statistical analyses and quantitative
models to adjust local market prices using factors such as subsequent movement
and changes in the prices of indexes, securities and exchange rates in other
markets in determining fair value as of the time a Fund calculates its net asset
value. The valuation assigned to fair-valued securities for purposes of
calculating a Fund's net asset value ("NAV") may differ from the security's most
recent closing market price and from the prices used by other mutual funds to
calculate their NAVs.
A security listed or traded primarily on a securities exchange or in the
over-the-counter market is generally valued at its last sale price on the
exchange or market where it is principally traded, except that securities
primarily traded on NASDAQ are normally valued at the NASDAQ Official Closing
Price. Lacking any sales that day, the security is valued at the current closing
bid price (or yield equivalent thereof) or based on quotes from dealers making a
market for the security. Options are valued at their closing mid-price on the
principal market where the option is traded. Mid-price is the average of the
closing bid and closing ask prices. Debt securities with a remaining maturity of
greater than sixty days are valued in accordance with the evaluated bid price
supplied by the pricing service. Short-term securities with remaining maturities
of sixty days or less are generally valued at amortized cost or original cost
plus accrued interest, which approximates market value. Prior to February 22,
2005, London closing exchange rates were used to convert foreign security values
into U.S. dollars. After that date, currency rates as of the close of the New
York Stock Exchange were used to convert foreign security values into U.S.
dollars.
Notes to Financial Statements 87
Notes to Financial Statements (continued)
REPURCHASE AGREEMENTS
Repurchase agreements, if held by the Funds, are fully collateralized by U.S.
Government securities and such collateral is in the possession of the Funds'
custodian. The collateral is evaluated daily to ensure its market value exceeds
the current market value of the repurchase agreements including accrued
interest. In the event of default on the obligation to repurchase, the Funds
have the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. In the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral or
proceeds may be subject to legal proceedings. No repurchase agreements were
purchased or sold by the Funds during the period ended March 31, 2005.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign currency
are translated into U.S. dollars at the prevailing rates of exchange daily.
Income and expenses are translated into U.S. dollars at the prevailing exchange
rate on the respective dates of the transactions. Purchases and sales of
securities are translated into U.S. dollars at the contractual currency exchange
rates established at the time of each trade.
FORWARD FOREIGN CURRENCY CONTRACTS
The Funds may enter into short-term forward foreign currency contracts in
connection with planned purchases or sales of securities as a hedge against
fluctuations in foreign exchange rates pending the settlement of transactions in
foreign securities. A forward foreign currency contract is an agreement between
contracting parties to exchange an amount of currency at some future time with
an agreed upon rate. These contracts are marked-to-market daily and the related
appreciation or depreciation of the contract is presented in the Statements of
Assets and Liabilities. Net realized gains and losses on foreign currency
transactions represent disposition of foreign currencies, and the difference
between the amount recorded at the time of the transaction and the U.S. dollar
amount actually received. Any realized gain or loss incurred by the Funds due to
foreign currency translation is included in the Statements of Operations.
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. 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, resulting from changes in the exchange rates and changes in
market prices of securities held. The Funds did not enter into any forward
foreign currency contracts during the period ended March 31, 2005.
88 Notes to Financial Statements
FUTURES CONTRACTS
The Funds may invest in financial futures contracts for the purpose of hedging
their existing securities or securities it intends to purchase against
fluctuations in fair value caused by changes in prevailing markets. Upon
entering into a financial futures contract, the Fund is required to pledge to
the broker an amount of cash and/or other assets equal to a certain percentage
of the contract amount (initial margin deposit). Subsequent payments, known as
"variation margin," are made or received by the Fund each day, depending on the
daily fluctuations in the fair value of the underlying security. The Fund
recognizes a gain or loss equal to the daily variation margin. Should market
conditions move unexpectedly, the Fund may not achieve the anticipated benefits
of the financial futures contracts and may realize a loss. The use of futures
transactions involves the risk of imperfect correlation in movements in the
price of futures contracts and the underlying hedged assets. The Funds held no
financial futures contracts as of March 31, 2005.
OPTIONS TRANSACTIONS
Each Fund may write put and call options only if it owns an offsetting position
in the underlying security. When a Fund writes a put or call option, an amount
equal to the premium received is included in the Statement of Assets and
Liabilities as a liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. If an option
expires on its stipulated expiration date or if the Fund enters into a closing
purchase transaction, a gain or loss is realized. If a written call option is
exercised, a gain or loss is realized for the sale of the underlying security
and the proceeds from the sale are increased by the premium originally received.
If a written put option is exercised, the cost of the security acquired is
decreased by the premium originally received. As a writer of an option, a Fund
has no control over whether the underlying securities are subsequently sold
(call) or purchased (put) and, as a result, bears the market risk of an
unfavorable change in the price of the security underlying the written option.
Each Fund may also purchase put and call options. When a Fund purchases a call
or put option, an amount equal to the premium paid is included in the Fund's
Statement of Assets and Liabilities as an investment, and is subsequently
marked-to-market to reflect the current market value of the option. If an option
expires on the stipulated expiration date or if the Fund enters into a closing
sale transaction, a gain or loss is realized. If the Fund exercises a call, the
cost of the security acquired is increased by the premium paid for the call. If
the Fund exercises a put option, a gain or loss is realized from the sale of the
underlying
Notes to Financial Statements 89
Notes to Financial Statements (continued)
security, and the proceeds from such a sale are decreased by the premium
originally paid. Written and purchased options are non-income producing
securities. The Funds did not enter into any option transactions during the
period.
INCOME TAXES
The Funds intend to qualify as regulated investment companies under Subchapter M
of the Internal Revenue Code and, accordingly, the Funds will generally not be
subject to federal and state income taxes, or federal excise taxes to the extent
that they intend to make sufficient distributions of net investment income and
net realized capital gain.
Dividends received by shareholders of the Funds which are derived from foreign
source income and foreign taxes paid by the Funds are to be treated, to the
extent allowable under the Code, as if received and paid by the shareholders of
the Funds. Dividends paid by the Funds from net investment income and
distributions of net realized short-term gains are, for federal income tax
purposes, taxable as ordinary income to shareholders.
Dividends and distributions to shareholders are recorded by the Funds on the
ex-dividend/distribution date. The Funds distribute net realized capital gains,
if any, to shareholders at least annually, if not offset by capital loss
carryovers. Income distributions and capital gain distributions are determined
in accordance with income tax regulations, which may differ from generally
accepted accounting principles generally accepted in the United States of
America.
INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date. Non-cash dividends included
in dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Certain dividends
from foreign securities will be recorded as soon as the Funds are informed of
the dividend if such information is obtained subsequent to the ex-dividend date.
Discounts and premiums on securities purchased are amortized over the life of
the respective securities.
INVESTMENT TRANSACTIONS
Security transactions are accounted for no later than one business day after
trade date. However, for financial reporting purposes security transactions are
accounted for on trade date. Gains and losses on securities sold are determined
on the basis of identified cost.
90 Notes to Financial Statements
EXPENSES
Expenses which cannot be directly attributed to a specific fund in the Trust are
apportioned between all funds in the Trust based upon relative net assets.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEES
ICON Advisers, Inc. ("ICON") serves as the investment adviser to the Funds and
is responsible for managing the Funds' portfolios of securities. ICON receives a
monthly management fee that is computed daily at an annual rate of 1.00% of the
Funds' average daily net assets
TRANSFER AGENT, CUSTODY AND ACCOUNTING FEES
U.S. Bank N.A. ("U.S. Bank") and U.S. Bancorp Fund Services, LLC ("U.S.
Bancorp") provided domestic custodial services, transfer agent services and fund
accounting for the Funds during the period. For these services, the Trust paid a
fee for transfer agent and custody services at an annual rate of 0.055% on the
Trust's first $500 million of daily average net assets, 0.05% on the next $1
billion of average daily net assets, and 0.04% on the balance of average daily
net assets in excess of $1.5 billion. The Funds paid a fund accounting fee at an
annual rate of 0.1025% on the Trust's first $500 million of average daily net
assets, 0.0875% on the next $500 million of average daily net assets, and 0.05%
on the balance of average daily net assets in excess of $1 billion for these
services. The Funds also paid for various out-of-pocket costs incurred by U.S.
Bancorp that are estimated to be 0.02% of average daily net assets.
Effective April 1, 2005, the Trust retained BISYS Fund Services Ohio, Inc.
("BISYS") as Fund Accounting and Administration Services Agent for the Funds.
For its services, the Trust pays BISYS 0.03% on the first $1.75 billion of Trust
Assets, 0.0175% on assets over $1.75 billion and up to $5 billion, and 0.01% on
assets in excess of $5 billion. Effective April 18, 2005, the Trust retained
Brown Brothers Harriman ("BBH") as custodian of the Trust's investments. For
domestic custody services, the Trust pays BBH 0.0065% on the first $50 million
of average net assets and 0.0050% on domestic assets above $50 million, plus
certain transaction charges. For foreign custody services, the Trust pays BBH
0.03% on foreign assets plus certain transaction charges. Effective April 25,
2005, the Trust retained Boston Financial Data Services, Inc. as the Trust's
transfer agent. For these services, the Trust pays an account fee of $13.25 per
open account, $7.00 per networked account, $1.80 per closed account, plus
certain other transaction and cusip charges.
Notes to Financial Statements 91
Notes to Financial Statements (continued)
ADMINISTRATIVE SERVICES
The Trust has entered into an administrative services agreement with ICON
pursuant to which ICON oversees the administration of the Trust's business and
affairs, including regulatory reporting and all necessary office space,
equipment, personnel and facilities. This agreement provides for an annual fee
to ICON of 0.05% on the Funds' first $1.5 billion of average daily net assets
and 0.045% on average daily net assets in excess of $1.5 billion. The
administrative services agreement provides that ICON will not be liable for any
error of judgment, mistake of law, or any loss suffered by the Trust in
connection with matters to which the administrative services agreement relates,
except for a loss resulting from willful misfeasance, bad faith or negligence by
ICON in the performance of its duties.
During the period, U.S. Bancorp provided sub-administration services to ICON for
a sub-administration fee of 0.02% on the Trust's first $1.5 billion of average
daily net assets and 0.015% on assets above $1.5 billion, subject to a minimum
annual fee of $140,000. Effective April 1, 2005, ICON entered into a sub-
administration agreement with BISYS pursuant to which BISYS assists ICON with
the administration and business affairs of the Trust. For its services, ICON
pays BISYS at an annual rate of 0.025% on the first $1.75 billion of Trust
assets and 0.015% on assets above $1.75 billion.
RELATED PARTIES
Certain Officers and Directors of ICON are also Officers and Trustees of the
Funds; however, such Officers and Trustees (with the exception of the Chief
Compliance Officer) receive no compensation from the Funds. There are certain
employees of ICON, such as the Chief Compliance Officer and staff who administer
the compliance program, for which the Funds reimburse ICON for certain amounts
related to compensation and certain other expenses incurred. For the period
ended March 31, 2005, the total related amounts paid by the Trust are included
in Other Expenses on the Statements of Operations.
3. LINE OF CREDIT
The Funds had entered into Lines of Credit agreements with U.S. Bank that
allowed the Funds to borrow funds, subject to certain conditions, for temporary
purposes. Interest on these borrowings was calculated at prime, which was 5.5%
at March 31, 2005. A commitment fee of $500 per line of credit has been
92 Notes to Financial Statements
paid by each Fund. The maximum borrowing was limited to 25% of eligible
securities held by the portfolio subject to the following maximums:
<Table>
ICON Consumer Discretionary Fund $30,000,000
ICON Energy Fund $30,000,000
ICON Financial Fund $35,250,000
ICON Healthcare Fund $50,000,000
ICON Industrials Fund $17,250,000
ICON Information Technology Fund $56,500,000
ICON Leisure and Consumer Staples Fund $19,250,000
ICON Materials Fund $15,000,000
ICON Telecommunication & Utilities Fund $ 8,750,000
</Table>
The Information Technology Fund and the Telecommunication & Utilities Fund had
$259,012 and $237,434 outstanding, respectively, as of March 31, 2005.
Effective April 18, 2005, the Fund entered into Lines of Credit agreements with
BBH; the maximum borrowing is limited to 25% of eligible securities held by the
portfolio subject to a maximum borrowing limit by the Trust of $135 million.
4. FEDERAL INCOME TAX
Income and capital gain distributions are determined in accordance with income
tax regulations that may differ from accounting principles that are generally
accepted in the United States of America. These differences are due to differing
treatments for items such as net short-term gains, deferrals of wash losses,
foreign currency transactions, net investment losses, and capital loss
carryovers.
The tax components of capital shown in the following tables represent losses or
deductions the Funds may be able to offset against income and gains recognized
in future years and post October loss deferrals. The accumulated losses noted in
the following tables represent net capital loss carryovers as of September 30,
2004 that may be available to offset future realized capital gains
Notes to Financial Statements 93
Notes to Financial Statements (continued)
and thereby reduce future taxable income distributions. These carryovers expire
between September 30, 2007 and September 30, 2012.
<Table>
<Caption>
ACCUMULATED UNDISTRIBUTED UNDISTRIBUTED POST OCTOBER
CAPITAL LOSSES ORDINARY INCOME LONG-TERM GAIN DEFERRALS
- ----------------------------------------------------------------------------------------
ICON Consumer
Discretionary Fund $ 6,093,146 $ - $ - $ -
ICON Energy Fund 7,535,248 - - -
ICON Financial Fund - 4,356,214 8,570,377 -
ICON Healthcare Fund - - 877,473 -
ICON Industrials Fund 24,281,548 - - -
ICON Information
Technology Fund 64,435,458 - - -
ICON Leisure and
Consumer Staples
Fund - - 10,402,210 -
ICON Materials Fund 19,740,720 66,439 - -
ICON Telecommunication
& Utilities Fund 4,843,948 580,890 - -
</Table>
During the year ended September 30, 2004, the following capital loss
carryforwards were used:
<Table>
ICON Consumer Discretionary Fund $17,445,952
ICON Energy Fund 512,039
ICON Financial Fund 3,207,869
ICON Healthcare Fund 3,187,635
ICON Industrial Fund 707,191
ICON Information Technology Fund 30,004,747
ICON Leisure and Consumer Staples Fund 1,473,912
ICON Materials Fund 692,400
ICON Telecommunication & Utilities Fund 1,418,957
</Table>
94 Notes to Financial Statements
As of March 31, 2005, book cost for financial reporting purposes is
substantially the same for federal income tax purposes and differs from fair
value by net unrealized appreciation/(depreciation) of securities as follows:
<Table>
<Caption>
UNREALIZED UNREALIZED NET APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
- -----------------------------------------------------------------------------------------
ICON Consumer
Discretionary Fund $145,629,482 $ 20,343,000 $(2,388,763) $ 17,954,237
ICON Energy Fund 538,702,889 136,376,798 (5,996,348) 130,380,450
ICON Financial Fund 177,709,041 25,151,192 (2,808,241) 22,342,951
ICON Healthcare Fund 323,554,022 97,704,609 (4,963,024) 92,741,585
ICON Industrials Fund 166,596,439 58,321,880 (2,454,792) 55,867,088
ICON Information
Technology Fund 252,881,921 29,474,445 (4,111,825) 25,362,620
ICON Leisure and
Consumer Staples Fund 59,903,149 15,737,705 (742,411) 14,995,294
ICON Materials Fund 87,645,677 22,794,356 (673,367) 22,120,989
ICON Telecommunication &
Utilities Fund 75,283,130 12,978,003 (1,474,883) 11,503,120
</Table>
Notes to Financial Statements 95
PORTFOLIO HOLDINGS
A list of each ICON Fund's Top 10 holdings is available at www.iconadvisers.com
on or about 15 days following each month end. Each ICON Fund also files a
complete schedule of portfolio holdings for the first and third quarters of its
fiscal year with the SEC on Form N-Q. The ICON Funds' Forms N-Q are available at
www.sec.gov or may be reviewed and copied at the Commission's Public Reference
Room in Washington, DC. Information about the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
PROXY VOTING
A description of the policies and procedures the ICON Funds use to vote proxies
is available at www.iconadvisers.com; without charge upon request by calling
1-800-764-0442; or on the SEC's website at www.sec.gov.
Information about how the ICON Funds voted proxies related to each Fund's
portfolio securities during the 12-month period ended June 30 is available at
www.iconadvisers.com or on the SEC's website at www.sec.gov.
FOR MORE INFORMATION
This report is for the general information of the Funds' shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by a current prospectus. You may obtain a copy of the prospectus,
which contains information about the investment objectives, risks, charges,
expenses, and share classes of each ICON Fund, by visiting www.iconadvisers.com
or by calling 1-800-764-0442. Please read the prospectus carefully before
investing.
ICON Distributors, Inc., Distributor
96
[ICON FUNDS LOGO]
<Table>
For more information about the ICON Funds, contact us:
By Telephone 1-800-764-0442
By Mail ICON Funds
P.O. Box 55452
Boston, MA 02205-8165
In Person ICON Funds
5299 DTC Boulevard, 12(th) Floor
Greenwood Village, CO 80111
On the Internet www.iconadvisers.com
By E-Mail info@iconadvisers.com
</Table>
[ICON FUNDS LOGO]
1-800-764-0442
www.iconadvisers.com
ICRPANNUSECT I-143-SEC
ITEM 2. CODE OF ETHICS.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that
applies to the registrant's principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed by
the registrant or a third party, and that relates to any element of the code
of ethics definition enumerated in paragraph (b) of this Item. The
registrant must file a copy of any such amendment as an exhibit pursuant to
Item 11(a)(1), unless the registrant has elected to satisfy paragraph (f) of
this Item by posting its code of ethics on its website pursuant to paragraph
(f)(2) of this Item, or by undertaking to provide its code of ethics to any
person without charge, upon request, pursuant to paragraph (f)(3) of this
Item.
If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics
that applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these individuals are
employed by the registrant or a third party, that relates to one or more
items set forth in paragraph (b) of this Item, the registrant must briefly
describe the nature of the waiver, the name of the person to whom the waiver
was granted, and the date of the waiver.
DURING THE PERIOD COVERED BY THE REPORT, WITH RESPECT TO THE REGISTRANT'S
CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL
FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS
PERFORMING SIMILAR FUNCTIONS; THERE HAVE BEEN NO AMENDMENTS TO, NOR ANY
WAIVERS GRANTED FROM, A PROVISION THAT RELATES TO ANY ELEMENT OF THE CODE OF
ETHICS DEFINITION ENUMERATED IN PARAGRAPH (b) OF THIS ITEM 2.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of directors has determined
that the registrant either:
(i) Has at least one audit committee financial expert serving on
its audit committee; or
(ii) Does not have an audit committee financial expert serving
on its audit committee.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit
committee financial expert and whether that person is "independent."
In order to be considered "independent" for purposes of this Item, a
member of an audit committee may not, other than in his or her
capacity as a member of the audit committee, the board of directors,
or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or
other compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as
defined in Section 2(a)(19) of the Act (15 U.S.C. 80a-
2(a)(19)).
(3) If the registrant provides the disclosure required by paragraph
(a)(1)(ii) of this Item, it must explain why it does not have an
audit committee financial expert.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption Audit Fees, the aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees
billed in each of the last two fiscal years for assurance and related services
by the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in
each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
(d) Disclose, under the caption All Other Fees, the aggregate fees billed
in each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) Disclose the percentage of services described in each of paragraphs
(b) through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) If greater than 50 percent, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's financial
statements for the most recent fiscal year that were attributed to work
performed by persons other than the principal accountant's full-time, permanent
employees.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant for
each of the last two fiscal years of the registrant.
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services that were
rendered to the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) If the registrant is a listed issuer as defined in Rule 10A-3 under
the Exchange Act (17CFR 240.10A-3), state whether or not the
registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange
Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a
committee, however designated, identify each committee member. If
the entire board of directors is acting as the registrant's audit
committee as specified in Section 3(a)(58)(B) of the Exchange Act
(15 U.S.C. 78c(a)(58)(B)), so state.
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption
from the listing standards for all audit committees.
NOT APPLICABLE.
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule I - Investments in securities of unaffiliated issuers as of the
close of the reporting period as set forth in Section 210.12-12 of Regulation
S-X, unless the schedule is included as part of the report to shareholders filed
under Item 1 of this Form.
NOT APPLICABLE.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual
report on this Form N-CSR must, unless it invests exclusively in non-voting
securities, describe the policies and procedures that it uses to determine how
to vote proxies relating to portfolio securities, including the procedures that
the company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
NOT APPLICABLE.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
If the registrant is a closed-end management investment company that is filing
an annual report on this Form N-CSR, provide the information specified in
paragraphs (a) and (b) of this Item with respect to portfolio managers.
NOT APPLICABLE.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
If the registrant is a closed-end management investment company, provide the
information specified in paragraph (b) of this Item with respect to any purchase
made by or on behalf of the registrant or any "affiliated purchaser," as defined
in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares
or other units of any class of the registrant's equity securities that is
registered by the registrant pursuant to Section 12 of the Exchange Act (15
U.S.C. 781).
NOT APPLICABLE.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
NOT APPLICABLE.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive and
principal financial officers, or persons performing similar functions, regarding
the effectiveness of the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date
within 90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
HAVE CONCLUDED, BASED ON THEIR EVALUATION OF THE REGISTRANT'S DISCLOSURE
CONTROLS AND PROCEDURES AS CONDUCTED WITHIN 90 DAYS OF THE FILING DATE OF THIS
REPORT, THAT THESE DISCLOSURE CONTROLS AND PROCEDURES ARE ADEQUATELY DESIGNED
AND ARE OPERATING EFFECTIVELY TO ENSURE THAT INFORMATION REQUIRED TO BE
DISCLOSED BY THE REGISTRANT ON FORM N-CSR IS (i) ACCUMULATED AND COMMUNICATED TO
THE INVESTMENT COMPANY'S MANAGEMENT, INCLUDING ITS CERTIFYING OFFICERS, TO ALLOW
TIMELY DECISIONS REGARDING REQUIRED DISCLOSURE; AND (ii) RECORDED, PROCESSED,
SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SECURITIES AND
EXCHANGE COMMISSION'S RULES AND FORMS.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) 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.
THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL
REPORTING THAT OCCURRED DURING THE SECOND FISCAL QUARTER OF THE PERIOD COVERED
BY THIS REPORT THAT HAVE MATERIALLY AFFECTED OR ARE REASONABLY LIKELY TO
MATERIALLY AFFECT, THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING.
ITEM 12. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number
the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of
the disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit. NOT APPLICABLE -
ONLY EFFECTIVE FOR ANNUAL REPORTS.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2). CERTIFICATIONS PURSUANT TO RULE 30a-2(a) ARE
ATTACHED HERETO.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1
under the Act (17 CFR 270.23c-1) 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) If the report is filed under Section 13(a) or 15(d) of the Exchange
Act, provide the certifications required by rule 30a-2(b) under the Act as an
exhibit. A certification furnished pursuant to this paragraph will not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or
the Exchange Act, except to the extent that the registrant incorporates it by
reference. CERTIFICATIONS PURSUANT TO RULE 30a-2(b) ARE FURNISHED HEREWITH.
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.
(Registrant) ICON FUNDS
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By (Signature and Title)* /s/ Craig T. Callahan
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Craig T. Callahan, President and Chief Executive
Officer (Principal Executive Officer)
Date June 6, 2005
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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 (Signature and Title)* /s/ Craig T. Callahan
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Craig T. Callahan, President and Chief Executive
Officer (Principal Executive Officer)
Date June 6, 2005
------------------------------------------------
By (Signature and Title)* /s/ Erik L. Jonson
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Erik L. Jonson, Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer and Principal Accounting
Officer)
Date June 6, 2005
------------------------------------------------
* Print the name and title of each signing officer under his or her signature.