UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08397
THE MARSICO INVESTMENT FUND
(Exact name of registrant as specified in charter)
1200 17th Street, Suite 1300
Denver, CO 80202
(Address of principal executive offices) (Zip code)
Christopher J. Marsico
The Marsico Investment Fund
1200 17th Street, Suite 1300
Denver, CO 80202
(Name and address of agent for service)
Copies to:
Sander M. Bieber, Esq.
Dechert LLP
1775 I Street, N.W.
Washington, D.C. 20006
Registrant's telephone number, including area code: (303)454-5600
Date of fiscal year end: September 30
Date of reporting period: September 30, 2003
Item 1 - Reports to Stockholders
Having a strong portfolio is one thing. Having the means to share your
dreams with those who matter most is another.
Just like you, we at Marsico Funds have personal and family goals that
are worth achieving. That is why we employ an inspired approach to seek
exceptional investment opportunities. Because we apply both intuitive
insight and rigorous research in managing your investment in the Marsico
Funds, you may find that the investing steps you take today can help you
toward your hopes and dreams tomorrow.
[PHOTO]
TABLE OF CONTENTS
ANNUAL SHAREHOLDER LETTER 3
MARSICO FOCUS FUND 17
Fund Overview 17
Schedule of Investments 18
Statement of Assets and Liabilities 21
Statement of Operations 22
Statements of Changes in Net Assets 23
Financial Highlights 24
MARSICO GROWTH FUND 26
Fund Overview 26
Schedule of Investments 27
Statement of Assets and Liabilities 31
Statement of Operations 32
Statements of Changes in Net Assets 33
Financial Highlights 34
MARSICO 21ST CENTURY FUND 36
Fund Overview 36
Schedule of Investments 37
Statement of Assets and Liabilities 41
Statement of Operations 42
Statements of Changes in Net Assets 43
Financial Highlights 44
MARSICO INTERNATIONAL OPPORTUNITIES FUND 45
Fund Overview 45
Schedule of Investments 46
Statement of Assets and Liabilities 52
Statement of Operations 53
Statements of Changes in Net Assets 54
Financial Highlights 55
NOTES TO FINANCIAL STATEMENTS 56
REPORT OF INDEPENDENT AUDITORS 65
TRUSTEE AND OFFICER INFORMATION 66
This report is submitted for the general information of Marsico Funds
shareholders. It is not authorized for distribution unless preceded or
accompanied by an effective prospectus, which contains more complete
information about the Funds.
O C T O B E R 2003
DEAR SHAREHOLDER:
Writing an annual report for the Marsico Funds can present a challenge in
attempting to summarize a year's worth of Fund performance in a manageable
number of pages. This will be our sixth such letter; we celebrated Marsico
Capital Management's six-year anniversary in early October 2003.
The purpose of this report is to provide a retrospective summary of the
Funds' investment results for the twelve-month fiscal period ending
September 30, 2003. It is intended primarily as a means of discussing
returns, and to explain the main underlying reasons for the Funds'
performance. For a review of our economic and market outlook, please refer
to the quarterly shareholder letter dated October 2003 that we previously
sent to you, which is also available on our website at www.marsicofunds.com.
3
INVESTMENT REVIEW BY TOM MARSICO AND JIM HILLARY
MARSICO FOCUS FUND AND MARSICO GROWTH FUND
The Focus Fund and Growth Fund posted total returns of 15.50% and 18.60%,
respectively, for the one-year period ending September 30, 2003.(1) For
comparative purposes, the S&P 500(R) Index--which we consider to be the
Fund's primary equity benchmark--had a total return of 24.40% over the same
time period.(1) The Funds each had 5 3/4 years of operating history as of the
end of September. Please see the Fund Overviews for more information
regarding their longer-term investment performance.
In happier contrast to our last annual report to shareholders (which, in
light of the very weak equity returns that prevailed in the prior fiscal
year, had an admittedly downcast tone), we can report to you here that the
past 12 months have, overall, been a propitious time for equity investors. A
summary comment would be to say that the investment experience for the
2002-2003 fiscal year period essentially was an about-face from the prior
fiscal year. All 10 economic sectors (GICS classification) that comprise the
S&P 500(R) Index had a positive return for the Funds' fiscal year. Seven
sectors recorded gains of 20% or greater. The S&P Information Technology and
Telecommunications Services sectors, after being resoundingly punished by
investors during the 2001-2002 fiscal year, recovered strongly and rose by
60% and 30%, respectively. The weakest-performing area during the year was
Consumer Staples, which had a relatively modest 4% gain. This sector had
been the best performing area in the prior fiscal year.(2)
As you may notice, these Funds--while having reasonably strong absolute
returns--trailed their benchmark index during this fiscal year overall.
While we are not pleased with those results, we do think it is important to
mention that the vast majority of the performance "shortfall" was sustained
during the fourth calendar quarter of 2002, a period in which the Funds'
investment results were well behind the S&P 500(R) Index. More recent
investment results, i.e., during calendar year 2003, have improved
considerably. However, in terms of the
4
fiscal year reporting period, that recent experience has not been enough to
offset the Funds' relatively weak returns in late 2002.
The following is a summary of the Funds' investment performance for the
entire fiscal year.
On the positive side, the Funds benefited from several value-added areas
last year. These included:
o BIOTECHNOLOGY--Genentech and Amgen were among the Funds' best-performing
holdings last year. Genentech rose by more than 100% during the period
in which it was owned by the Funds, while Amgen gained 54%.(2)
o CONSUMER DISCRETIONARY--Areas such as retailing (e.g., Tiffany & Co.,
Lowe's Cos.) and homebuilding-related (e.g., Lennar Corp.--Class A) were
strong performers for the Funds.(2)
o UNDERWEIGHTING IN INSURANCE INDUSTRY--The S&P Insurance Industry was one
of the weakest-performing industry groups in the benchmark during the
fiscal year, with a return of approximately 12%. On a relative basis,
the Funds benefited performance-wise by having minimal exposure to
these types of companies.(2)
o UNDERWEIGHTING IN ENERGY SECTOR--The S&P Energy sector had a return of
16% during the fiscal year. While this return was strong on an absolute
basis, it trailed the performance of the overall index. The Funds'
relative results were helped by their maintaining minimal exposure to
energy-related companies.(2)
The Funds' performance was positively impacted by several individual
investments, including SLM Corporation (formerly known as "Sallie Mae") and
UnitedHealth Group. Certain technology-related investments--including Cisco
Systems, Intel Corporation, Electronic Arts, and Dell Inc.--also contributed
meaningfully to investment results.(2)
5
There were four primary factors that represented the bulk of the Funds'
relative underperformance compared to their benchmark index:
o HEALTH CARE EQUIPMENT AND SERVICES--During the fourth quarter of 2002,
one of the Funds' largest individual holdings was Tenet Healthcare
Corporation. Our investment in Tenet Healthcare generally performed
well during most of the period in which it was owned in the Funds,
producing significant overall gains in the aggregate. However, the
company's earnings outlook and business operations suddenly came into
question in the fall of 2002, as its billing practices were scrutinized
and a variety of government investigations were initiated. We sold the
Funds' entire position in Tenet Healthcare during the fourth quarter,
but not before the Funds absorbed a 41% decline in the stock price
during October 2002. In addition, the Funds' investment results were
hurt by HCA, Inc., an investment we initiated subsequent to selling
Tenet Healthcare.(2)
o AEROSPACE/DEFENSE--The Funds had maintained substantial allocations to
this industry during calendar year 2002, highlighted by positions in
Lockheed Martin, General Dynamics, and L-3 Communications. Overall,
prior to the fourth calendar quarter of 2002, these companies had been
among the Funds' better performing investments and provided
considerable added value. In the fourth quarter of 2002, however,
aerospace/defense companies were among the Funds' weakest holdings
performance-wise, as market leadership shifted to favor other sectors
and industries, most notably technology-related and telecommunications
companies.(2)
o INFORMATION TECHNOLOGY--In almost complete contrast to the prior fiscal
year, the Funds' investment results were negatively impacted during the
2002-2003 fiscal year by being underweighted on average (as compared to
the S&P 500(R) Index) in technology-related companies, particularly in
the hardware and equipment industry. In addition, stock selection
within this
6
industry detracted from performance, which was most notably hurt by an
investment we made in Hewlett-Packard (subsequently sold).(2)
o MEDIA--The Funds' positions in the media industry which overall had
produced quite a solid performance for much of the fiscal year, sold
off sharply toward the end of the year, thereby creating a material
"drag" on results. These holdings included Viacom and Clear Channel
Communications.(2)
Other areas that negatively impacted performance included select
hotels/casinos (e.g., MGM Mirage), financial services companies (e.g., J.P.
Morgan Chase), and health care companies (e.g., IDEC Pharmaceuticals, Eli
Lilly & Co.).(2)
The performance of the two Funds differed to a degree because of factors
such as larger position sizes and industry concentration levels in the Focus
Fund as compared with the Growth Fund.
As of September 30, 2003, the Funds' primary sector allocations were in
Consumer Discretionary, Health Care, Financials, Information Technology, and
Industrials. The Funds had little or no exposure in areas such as Energy,
Utilities, Materials and Telecommunications Services.(2)
Thank you for your support.
Sincerely,
/s/ Thomas F. Marsico /s/ James Hillary
THOMAS F. MARSICO JAMES A. HILLARY
PORTFOLIO MANAGERS
7
INVESTMENT REVIEW BY CORY GILCHRIST
MARSICO 21ST CENTURY FUND
The 21st Century Fund had a total return of 33.64% for the one-year period
ending September 30, 2003.(1) For comparative purposes, the S&P 500(R) Index
and Nasdaq Composite Index had total returns of 24.40% and 53.17%,
respectively, over the same period (we consider the S&P 500(R) Index to be the
Fund's primary equity benchmark).(1) As a reminder, the Nasdaq Index
consists primarily of technology-related companies. Please see the Fund
Overviews for more information regarding the Fund's longer-term performance.
Over the course of the 12-month period covered in this report, several
primary factors contributed to the 21st Century Fund's performance. The most
prolific positive factor in the Fund's outperformance (as compared to the
S&P 500(R) Index) was the Fund's substantial emphasis on the Consumer
Discretionary sector. This was a sector that we favored throughout the
fiscal year, and continued to favor as of September 30, 2003. As of that
date, nearly 38% of the Fund's net assets were allocated to Consumer
Discretionary-related companies. The Fund's aggregate holdings in this
sector--spanning five industries--gained 40% over the fiscal year. The Fund
benefited from being relatively overweighted in the sector, while industry
and individual stock selection also added value. In particular, investments
in three industries were strong performers:(2)
o CONSUMER DURABLES--Our investments in this industry experienced strong
capital appreciation during the year. These included companies such as
Marvel Enterprises (+66% during the period in which it was owned by the
Fund) and Harman International (which rose 48%). We sold the Fund's
position in Marvel Enterprises during the year. Harman International
remained a significant holding as of September 30, 2003.(2)
o HOTEL/LEISURE-RELATED--Positions in this industry, such as Four Seasons
Hotels (+66%), were among the Fund's better-performing individual
holdings.(2)
8
o RETAILING--The Fund's investment results were helped overall by its
investments in the retail industry. In aggregate, the Fund's retailing
positions gained nearly 54% for the year. Select Comfort Corporation
(+133%) and The Sports Authority (+65%) were among two of the Fund's
strongest individual performing holdings. We should note that as of
September 30, 2003 the Fund's retailing positions totaled approximately
15% of net assets. As compared to the prior fiscal year-end, we
increased the Fund's exposure to this area quite significantly.(2)
The Fund's performance was also positively impacted in several other
areas. Positions in the transportation industry, highlighted by investments
in JetBlue Airways (+136%) and FedEx Corp. (+22%), were strong performers
for the Fund.(2)
In the Financials sector, the Fund benefited from its posture concerning
three areas: Banks, Insurance, and Diversified Financials. With regard to
banks, the Fund's underweighted posture (as compared to the S&P 500(R) Index)
contributed positively to relative performance, as this industry was one of
the weaker-performing areas during the fiscal year. In addition, the Fund's
investment in UCBH Holdings, a company specializing in providing banking
services for California's growing Chinese population, gained 42% during the
year.(2)
The Fund's relative investment performance also was buoyed by its
maintaining an underweighted posture (as compared to the S&P 500(R) Index) in
the Insurance industry. Additionally, during the year we made an investment
in American International Group, which performed well (+22%) during the
period in which it was owned in the Fund; we sold our position in the
company prior to September 30, 2003.(2)
9
Performance was further helped by the Fund's generally benchmark-like
allocation to Diversified Financials, which was one of the strongest
performing industries in the S&P 500(R) Index, gaining 48% during the year.
Jefferies Group (+49%), SLM Corporation (+28%), and Fannie Mae (+24%) were
three relatively strong individual holdings for the Fund during the year.
SLM Corporation and Fannie Mae were sold prior to September 30, 2003.(2)
The Fund's biotechnology holdings--most notably Genentech and Amgen--
contributed materially to the Fund's value-added results (as compared to the
S&P 500(R) Index). Genentech gained 61% and Amgen rose by 59% during the period
in which they were owned by the Fund. Amgen was sold prior to September 30,
2003.(2)
To be sure, we weren't perfect last year. There were three areas in
particular that detracted significantly from investment results:
o AEROSPACE/DEFENSE--As in the Focus and Growth Funds, aerospace/defense
positions owned in the 21st Century Fund were major detriments to
investment results for the fiscal year. As Tom and Jim noted earlier,
the "damage" was largely confined to the fourth quarter of 2002, but it
affected performance for the entire fiscal year. In particular,
Lockheed-Martin (-30%) and L-3 Communications (-11%) were among the
Fund's poorest-performing holdings during the year. (Both positions
were sold prior to September 30, 2003.)(2)
o HEALTH CARE EQUIPMENT AND SERVICES--Our overweighted posture in this
industry (as compared to the S&P 500(R) Index) created an "opportunity
cost", as this industry was one of the weaker-performing areas last
year. In
10
addition, the Fund's position in Tenet Healthcare Corporation, which
dropped sharply in value in the fourth quarter of 2002 before it was sold
by the Fund, had a major negative impact on performance that continued to
be felt in the Fund for the remainder of the fiscal year.(2)
o INFORMATION TECHNOLOGY--We did not overwhelmingly distinguish ourselves
in this sector last year. The biggest "culprit" was our stock
selection, particularly Intuit (-21% return during the period in which
it was owned) and Hewlett-Packard (-23% return during the period in
which it was owned). Both of these positions were sold during the year.
An underweighted posture in Semiconductors and Semiconductor Equipment
(as compared to the Fund's primary benchmark, the S&P 500(R) Index)
"cost" the Fund some relative return, as this industry was among the
strongest-performing areas of the U.S. stock market last year. Finally,
the Fund's position in Electronic Arts (-27% loss during the period in
which it was owned) materially adversely impacted performance
(Electronic Arts performed better for the Focus and Growth Funds as it
was held during later periods).(2)
As of September 30, 2003 the Fund maintained five areas of emphasis in terms
of economic sector distribution. These included: Consumer Discretionary,
Industrials (primarily transportation-related companies), Information
Technology, and Financials. The Fund had a modest allocation to
Telecommunications Services, and few or no investments in sectors such as
Materials, Utilities, and Energy.(2)
The Fund's portfolio turnover was relatively high during the fiscal year
because of several factors including the transition to a new portfolio
manager. Although the Fund may hold core positions for some time, it may
change its portfolio
11
composition quickly to take advantage of new opportunities, or to address
issues affecting particular holdings.(2)
I became the portfolio manager of the Fund effective February 1, 2003, and
am pleased to have the opportunity to serve you. Thank you for being an
investor in the Fund.
Sincerely,
/s/ Corydon Gilchrist
CORYDON J. GILCHRIST
PORTFOLIO MANAGER
12
INVESTMENT REVIEW BY JIM GENDELMAN
MARSICO INTERNATIONAL OPPORTUNITIES FUND
The Marsico International Opportunities Fund had a (US$) return of 25.71%
for the 12-month period ending September 30, 2003.(1) For comparative
purposes, the Morgan Stanley Capital International EAFE Index, which we
consider to be the Fund's primary non-U.S. equity benchmark index, had a
total (US$) return of 26.01% for the same period.(1) Please see the Fund
Overviews for more information regarding the Fund's longer-term investment
performance.
The Fund's investment results over the fiscal year period were helped by
several factors. These included:
o TELECOMMUNICATIONS SERVICES--This was a particularly strong area of
performance for the Fund during the past fiscal year. In particular,
NTL Inc. (+146%), Marconi Corp. (+54%), Mobile Telesystems (+46%),
Sonera Oyj (+45%), France Telecom (+40%) and Tele Norte Este (+34%)
generated solid returns. As of September 30, 2003 positions in France
Telecom, Sonera Oyj, and Tele Norte Este had been sold. The Fund had
approximately 7% of its net assets invested in this sector as of fiscal
year-end.(2)
o FINANCIALS--This sector was a consistently strong area of performance
for the Fund throughout much of the past fiscal year. For the year as a
whole, stock selection in two industries, banking and insurance, buoyed
performance. Royal Bank of Scotland (+39%) and Unibanco-Unaio (+107%),
a Brazilian-domiciled bank, were among the Fund's strongest-performing
investments last year. In the insurance arena, Corporacion Mapfre
(+97%) generated strong returns for the Fund. Additionally, certain
diversified financial services companies--including UBS Ag (+56%) and
Daiwa Securities (+42%)--performed well for the Fund during the year.(2)
13
o ENERGY--The Fund's relative performance benefited in two ways from its
approach to this sector: through stock selection and through
maintaining, on average, an underweighted posture (as compared to the
benchmark index). The Fund's positions in CNOOC, a Chinese oil company,
and Yukos Corp., a Russian energy company, each rose 28%. Additionally,
while the Energy sector had a good absolute return last year, it only
outperformed two other sectors (Consumer Staples and Health Care) over
that period of time. As a result, the Fund's below-benchmark weighting
in this sector added value to the Fund's investment results relative to
the benchmark.(2)
o HEALTH CARE--Performance was helped by the Fund's underweight posture
on average (as compared to its benchmark index), in pharmaceutical and
biotechnology companies.(2)
There were several areas that detracted materially from the Fund's
performance last year. Retailing, particularly our investment in Japanese
retailer Seiyu, was the most significant "negative" on performance. (The
Seiyu position, after declining by -61%, was sold relatively early in the
fiscal year, but its performance created a "hangover effect" that affected
the Fund's performance data for the rest of the fiscal year.) Our strategy
to overweight the transportation industry negatively impacted performance,
as did certain stock picks in the industry such as WestJet Airlines (-14%).
Our decision to, on average, maintain an underweighted posture in the
Materials sector was not on target, as this sector was among the better-
performing areas last year. Additionally, our stock selection in the
Information Technology sector, particularly in the hardware and equipment
industry, significantly impacted performance. ARM Holdings (-67%
14
prior to being sold) was the primary "culprit," performance-wise, in this
industry for the Fund.(2)
Country allocations, in aggregate, had a somewhat positive effect on the
Fund's performance. As discussed in previous letters to shareholders, the
Fund's country allocations are typically a residual of our investment
process; we usually focus more on sectors, industries, and individual
companies when formulating our investment strategy and assembling the Fund's
portfolio. However, at times country position can--intentionally or otherwise--
have a material effect on performance, particularly in the case of countries
that are well represented in a benchmark index such as EAFE. The Fund's
overweighted position on average in countries such as Brazil, Germany and
Finland (primarily comprising a position in Nokia) added value to
performance as compared to the EAFE Index. Maintaining a below-benchmark
allocation to countries such as Japan and the United Kingdom also generally
helped results. Currency gains and losses appear not to have materially
affected overall Fund performance during the fiscal year as a whole.(2)
As of September 30, 2003, the Fund's holdings by economic sector were
allocated primarily to Consumer Discretionary, Financials, Information
Technology and Industrials. The Fund's largest country-level allocations
were in Japan, the United Kingdom, Switzerland, Hong Kong, Germany, Ireland
and Brazil. For the year as a whole, compared to the prior fiscal year-end,
we increased our positions in Japanese companies, and reduced holdings in
countries such as Canada and the Netherlands.(2)
15
The Fund has tended to have a relatively high portfolio turnover level
because of its investment style. Although the Fund may hold core positions
for some time, it may change its portfolio composition quickly to take
advantage of new opportunities, or to address issues affecting particular
holdings.
Thank you for your support.
Sincerely,
/s/ James Gendelman
JAMES G. GENDELMAN
PORTFOLIO MANAGER
<FN>
(1) Past performance is no guarantee of future results. Total returns are
based on net change in NAV assuming reinvestment of distributions.
Share price and investment return will vary so that, when redeemed, an
investor's shares may be worth more or less than their original cost.
The performance returns for the 21st Century Fund and the International
Opportunities Fund reflect a fee waiver in effect; in the absence of
such a waiver, the returns would be reduced.
The S&P 500(R) Index is a registered trademark of Standard & Poor's
corporation and is an unmanaged broadly based index of the common stock
prices of 500 large U.S. companies. The Nasdaq Composite Index is an
unmanaged, broad-based index of over 5,000 stocks that consists of all
Nasdaq domestic and non-U.S. based common stocks listed on the Nasdaq
Stock Market. The Morgan Stanley Capital International EAFE Index
tracks the stocks of about 1,000 companies in Europe, Australasia, and
the Far East (EAFE). You cannot invest directly in an index.
(2) Portfolio composition is subject to change at any time and references
to specific securities, industries and sectors referenced in this
letter are not recommendations to purchase or sell any particular
security. See the accompanying Schedule of Investments for the percent
of a Fund's portfolio represented by the securities or industries
mentioned in this letter.
Not authorized for distribution unless preceded or accompanied by a
current Marsico Funds prospectus.
UMB DISTRIBUTION SERVICES, LLC, DISTRIBUTOR FOR THE MARSICO FUNDS.
16
F U N D O V E R V I E W
MARSICO FOCUS FUND
SEPTEMBER 30, 2003
The Focus Fund invests primarily in the common stocks of large companies,
normally a core position of 20-30 common stocks that are selected for their
long-term growth potential.
- ------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- ------------------------------------------------------------------------------
Five Year Average Annual
One Year Average Annual Since Inception
(10/1/02-9/30/03) (10/1/98-9/30/03) (12/31/97-9/30/03)
Marsico Focus Fund 15.50% 4.15% 7.49%
S&P 500(R) Index 24.40% 1.00% 1.90%
- ------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------
9/30/03 $2,282,113,184
- ------------------------------------------------------------------------------
- -----------------------------------------
NET ASSET VALUE GROWTH OF $10,000(1)
- -----------------------------------------
Net Asset Value Per Share $13.49
- -----------------------------------------
TOP FIVE HOLDINGS
- -----------------------------------------
Intel Corp. 7.93% [graph]
UnitedHealth Group, Inc. 7.49
SLM Corp. 6.21
Genentech, Inc. 5.29
Citigroup, Inc. 4.76
- -----------------------------------------
SECTOR ALLOCATION(2)
- -----------------------------------------
Consumer Non-Cyclical 20.61%
Financial 19.65
Consumer Cyclical 19.47
Technology 15.67
Communications 14.87
Industrial 9.73
The performance included in the table and graph do not reflect the
deduction of taxes on Fund distributions or the redemption of Fund
shares.
<FN>
(1) This chart assumes an initial investment of $10,000 made on December
31, 1997 (inception). Past performance is no guarantee of future
results. Total returns are based on net change in NAV, assuming
reinvestment of distributions. Share price and investment return will
vary so that, when redeemed, an investor's shares may be worth more or
less than the original cost.
(2) Sector weightings represent the percentage of the Fund's equity
investments in certain general sectors. These sectors may include more
than one industry. The Fund's portfolio composition is subject to
change at any time.
The S&P 500(R) Index is a registered trademark of Standard & Poor's
Corporation and is an unmanaged, broadly based index of the common
stock prices of 500 large U.S. companies. You cannot invest directly in
an index.
17
S C H E D U L E O F I N V E S T M E N T S
MARSICO FOCUS FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------------------
AUTOMOTIVE - CARS/LIGHT TRUCKS
Bayerische Motoren Werke AG** 1,868,508 $70,649,651 3.10%
----------------------------------------------
BUILDING - RESIDENTIAL/COMMERCIAL
Lennar Corporation - Class A 658,975 51,261,665 2.25
----------------------------------------------
COMPUTERS
Dell, Inc.* 2,194,328 73,268,612 3.21
----------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS
General Electric Company 2,311,122 68,894,547 3.02
----------------------------------------------
E-COMMERCE/SERVICES
eBay, Inc.* 930,376 49,784,420 2.18
----------------------------------------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS
Intel Corporation 6,578,641 180,978,414 7.93
----------------------------------------------
ENTERTAINMENT SOFTWARE
Electronic Arts, Inc.* 929,175 85,697,810 3.76
----------------------------------------------
FINANCE - CONSUMER LOANS
SLM Corporation 3,635,997 141,658,443 6.21
----------------------------------------------
FINANCE - INVESTMENT BANKER/BROKER
Citigroup, Inc. 2,386,474 108,608,432 4.76
The Goldman Sachs Group, Inc. 197,181 16,543,486 0.73
Merrill Lynch & Company, Inc. 1,450,543 77,647,567 3.40
----------------------------------------------
202,799,485 8.89
----------------------------------------------
FINANCE - MORTGAGE LOAN/BANKER
Fannie Mae 1,165,004 81,783,281 3.58
----------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc. 825,883 41,137,232 1.80
----------------------------------------------
MACHINERY - CONSTRUCTION & MINING
Caterpillar, Inc. 1,005,628 69,227,432 3.03
----------------------------------------------
<FN>
* Non-income producing.
** A portion of this security has been segregated by the custodian to cover
segregation requirements on open forward currency contracts.
See notes to financial statements.
18
S C H E D U L E O F I N V E S T M E N T S
MARSICO FOCUS FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
Amgen, Inc.* 930,381 $60,074,701 2.63%
Genentech, Inc.* 1,507,144 120,782,520 5.29
----------------------------------------------
180,857,221 7.92
----------------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 3,399,181 171,046,788 7.49
----------------------------------------------
MEDICAL INSTRUMENTS
Boston Scientific Corporation* 813,020 51,870,676 2.27
----------------------------------------------
MEDICAL LABS & TESTING SERVICES
Quest Diagnostics, Inc.* 713,539 43,269,005 1.90
----------------------------------------------
MULTIMEDIA
Viacom, Inc. - Class B 2,233,359 85,537,650 3.75
The Walt Disney Company 497,041 10,025,317 0.44
----------------------------------------------
95,562,967 4.19
----------------------------------------------
NETWORKING PRODUCTS
Cisco Systems, Inc.* 5,548,959 108,426,659 4.75
----------------------------------------------
RETAIL - BUILDING PRODUCTS
Lowe's Companies, Inc. 1,390,369 72,160,151 3.16
----------------------------------------------
RETAIL - DISCOUNT
Wal-Mart Stores, Inc. 1,004,870 56,121,989 2.46
----------------------------------------------
RETAIL - JEWELRY
Tiffany & Company 2,062,337 76,987,040 3.37
----------------------------------------------
RETAIL - MAJOR DEPARTMENT STORE
Sears, Roebuck and Company 1,238,317 54,151,602 2.37
----------------------------------------------
TRANSPORTATION - SERVICES
FedEx Corporation 1,132,525 72,968,586 3.20
----------------------------------------------
<FN>
* Non-income producing.
See notes to financial statements.
19
S C H E D U L E O F I N V E S T M E N T S
MARSICO FOCUS FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------------------
WIRELESS EQUIPMENT
QUALCOMM, Inc. 1,654,621 $68,898,418 3.02%
----------------------------------------------
TOTAL COMMON STOCKS
(COST $1,776,308,936) 2,169,462,094 95.06
----------------------------------------------
Principal/ Market Value Percent of
Shares in Dollars Net Assets
- -------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- -------------------------------------------------------------------------------------------
SSgA Money Market Funds 65,490,122 65,490,122 2.87
----------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $65,490,122) 65,490,122 2.87
----------------------------------------------
TOTAL INVESTMENTS
(COST $1,841,799,058) 2,234,952,216 97.93
Cash and Other Assets Less Liabilities 47,160,968 2.07
----------------------------------------------
NET ASSETS $2,282,113,184 100.00%
==============================================
- -------------------------------------------------------------------------------------------
FORWARD CURRENCY CONTRACT OPEN AT SEPTEMBER 30, 2003
- -------------------------------------------------------------------------------------------
Currency
Currency Sold and Local U.S. Value in Unrealized
Settlement Date Currency Dollars U.S. Dollars Loss
- -------------------------------------------------------------------------------------------
Euro 12/17/03 57,104,407 $64,369,230 $66,395,882 $(2,026,652)
------------------------------------------------------------------------
TOTAL $(2,026,652)
========================================================================
<FN>
* Non-income producing.
See notes to financial statements.
20
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S
MARSICO FOCUS FUND
SEPTEMBER 30, 2003
(Amounts in thousands)
- -------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------
Investments, at value (cost $1,841,799) $2,234,952
Receivable for investments sold 67,498
Receivable for capital stock sold 2,548
Interest and dividends receivable 1,273
Prepaid expenses and other assets 495
--------------
TOTAL ASSETS 2,306,766
--------------
- -------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------
Payable for investments purchased 18,011
Payable for capital stock redeemed 1,492
Payable for loss on foreign currency exchange contracts 128
Accrued investment advisory fee 1,623
Accrued distribution fee 195
Accrued trustees' fees 437
Unrealized loss on foreign currency exchange contracts 2,026
Accrued expenses and other liabilities 741
--------------
TOTAL LIABILITIES 24,653
--------------
NET ASSETS $2,282,113
==============
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- -------------------------------------------------------------------------------
Paid-in-capital $2,274,862
Accumulated net investment loss (848)
Accumulated net realized loss on investments and
foreign currency transactions (383,072)
Net unrealized appreciation on investments
and foreign currency translations 391,171
--------------
NET ASSETS $2,282,113
==============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 169,218
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $13.49
==============
<FN>
* Not in thousands.
See notes to financial statements.
21
S T A T E M E N T O F O P E R A T I O N S
MARSICO FOCUS FUND
For the Year Ended September 30, 2003
(Amounts in thousands)
- -------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------
Interest $811
Dividends (net of $286 of non-reclaimable
foreign withholding taxes) 12,481
--------------
TOTAL INVESTMENT INCOME 13,292
--------------
- -------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------
Investment advisory fees 14,955
Distribution fees 4,399
Transfer agent fees and expenses 2,084
Printing and postage expenses 919
Custody and fund accounting fees 275
Trustees' fees and expenses 268
Professional fees 253
Fund administration fees 235
State registration fees 146
Amortization of organizational costs 7
Miscellaneous 122
--------------
TOTAL EXPENSES 23,663
Less expenses paid indirectly (846)
--------------
NET EXPENSES 22,817
--------------
NET INVESTMENT LOSS (9,525)
--------------
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------
Net realized loss on investments (44,296)
Net realized gain on foreign currency transactions 5,675
Change in unrealized appreciation/depreciation on
investments and foreign currency translations 354,257
--------------
Net Gain on Investments 315,636
--------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $306,111
==============
See notes to financial statements.
22
S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S
MARSICO FOCUS FUND
Year Year
Ended Ended
(Amounts in thousands) 9/30/03 9/30/02
- -------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------
Net investment loss $(9,525) $(8,834)
Net realized loss on investments (44,296) (114,160)
Net realized gain on foreign
currency transactions 5,675 1,649
Change in unrealized appreciation/
depreciation on investments and
foreign currency translations 354,257 64,375
----------------------------
Net increase (decrease) in net assets
resulting from operations 306,111 (56,970)
----------------------------
- -------------------------------------------------------------------------------
DISTRIBUTIONS
- -------------------------------------------------------------------------------
Tax return of capital - (4,530)
----------------------------
Total distributions - (4,530)
----------------------------
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- -------------------------------------------------------------------------------
Proceeds from sale of shares 1,273,020 544,645
Proceeds from reinvestment
of distributions - 4,400
Redemption of shares (571,086) (524,972)
----------------------------
Net increase from
capital share transactions 701,934 24,073
----------------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 1,008,045 (37,427)
- -------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------
Beginning of period 1,274,068 1,311,495
END OF PERIOD $2,282,113 $1,274,068
----------------------------
Accumulated net investment loss (848) (218)
- -------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- -------------------------------------------------------------------------------
Shares sold 107,005 42,317
Shares issued in reinvestment
of distributions - 330
Shares redeemed (46,887) (40,445)
----------------------------
NET INCREASE 60,118 2,202
============================
See notes to financial statements.
23
F I N A N C I A L H I G H L I G H T S
MARSICO FOCUS FUND
For a Fund Share Outstanding Throughout the Period.
Year Year
Ended Ended
9/30/03 9/30/02
-------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $11.68 $12.27
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------
Net investment loss (0.03) (0.08)
Net realized and unrealized gains
(losses) on investments 1.84 (0.47)
-------------------------------
Total from investment
operations 1.81 (0.55)
-------------------------------
- ----------------------------------------------------------------------------------
DISTRIBUTIONS
- ----------------------------------------------------------------------------------
Net realized gains - -
Tax return of capital - (0.04)
-------------------------------
Total distributions - (0.04)
-------------------------------
NET ASSET VALUE, END OF PERIOD $13.49 $11.68
-------------------------------
TOTAL RETURN 15.50% (4.50)%
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------------------------------------------------------------
Net assets, end of period (000s) $2,282,113 $1,274,068
Ratio of expenses to average net assets,
before expenses paid indirectly 1.34% 1.35%
Ratio of net investment loss to average
net assets, net of expenses paid indirectly (0.54)% (0.64)%
Ratio of net investment loss to average
net assets, before expenses paid indirectly (0.59)% (0.68)%
Portfolio turnover rate 90% 117%
See notes to financial statements.
24
Year Year Year
Ended Ended Ended
9/30/01 9/30/00 9/30/99
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $22.17 $17.43 $12.36
- ------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------------------------
Net investment loss (0.07) (0.16) (0.06)
Net realized and unrealized gains
(losses) on investments (7.87) 4.94 5.13
---------------------------------------------
Total from investment
operations (7.94) 4.78 5.07
---------------------------------------------
- ------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------
Net realized gains (1.96) (0.04) -
Tax return of capital - - -
---------------------------------------------
Total distributions (1.96) (0.04) -
---------------------------------------------
NET ASSET VALUE, END OF PERIOD $12.27 $22.17 $17.43
---------------------------------------------
TOTAL RETURN (38.17)% 27.42% 41.02%
- ------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- ------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $1,311,495 $2,853,805 $2,258,141
Ratio of expenses to average net assets,
before expenses paid indirectly 1.30% 1.27% 1.31%
Ratio of net investment loss to average
net assets, net of expenses paid indirectly (0.36)% (0.69)% (0.43)%
Ratio of net investment loss to average
net assets, before expenses paid indirectly (0.39)% (0.70)% (0.45)%
Portfolio turnover rate 127% 176% 173%
25
F U N D O V E R V I E W
MARSICO GROWTH FUND
SEPTEMBER 30, 2003
The Growth Fund invests primarily in the common stocks of large companies
that are selected for their growth potential. The Growth Fund will normally
hold between 35 and 50 common stocks.
- -------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- -------------------------------------------------------------------------------
Five Year Average Annual
One Year Average Annual Since Inception
(10/1/02-9/30/03) (10/1/98-9/30/03) (12/31/97-9/30/03)
Marsico Growth Fund 18.60% 5.06% 7.02%
S&P 500(R) Index 24.40% 1.00% 1.90%
- -------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------
9/30/03 $789,219,606
- -------------------------------------------------------------------------------
- ---------------------------------------
NET ASSET VALUE GROWTH OF $10,000(1)
- ---------------------------------------
Net Asset Value Per Share $14.09
- ---------------------------------------
TOP FIVE HOLDINGS
- ---------------------------------------
Genentech, Inc. 5.07% [graph]
Intel Corp. 5.00
Citigroup, Inc. 4.60
SLM Corp. 4.57
UnitedHealth Group, Inc. 4.39
- ---------------------------------------
SECTOR ALLOCATION(2)
- ---------------------------------------
Consumer Non-Cyclical 25.84%
Consumer Cyclical 21.47
Financial 16.70
Technology 12.98
Industrial 12.31
Communications 10.70
The performance included in the table and graph do not reflect the
deduction of taxes on Fund distributions or the redemption of Fund shares.
<FN>
(1) This chart assumes an initial investment of $10,000 made on December
31, 1997 (inception). Past performance is no guarantee of future
results. Total returns are based on net change in NAV, assuming
reinvestment of distributions. Share price and investment return will
vary so that, when redeemed, an investor's shares may be worth more or
less than the original cost.
(2) Sector weightings represent the percentage of the Fund's equity
investments in certain general sectors. These sectors may include more
than one industry. The Fund's portfolio composition is subject to
change at any time.
The S&P 500(R) Index is a registered trademark of Standard & Poor's
Corporation and is an unmanaged, broadly based index of the common
stock prices of 500 large U.S. companies. You cannot invest directly in
an index.
26
S C H E D U L E O F I N V E S T M E N T S
MARSICO GROWTH FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------
AEROSPACE/DEFENSE
Lockheed Martin Corporation 248,496 $11,468,090 1.45%
------------------------------------------
AIRLINES
JetBlue Airways Corporation* 118,579 7,229,762 0.92
Ryanair Holdings PLC ADR* 225,190 9,120,195 1.15
------------------------------------------
16,349,957 2.07
------------------------------------------
BREWERY
Anheuser-Busch Companies, Inc. 113,077 5,579,219 0.71
------------------------------------------
BUILDING - RESIDENTIAL/COMMERCIAL
Lennar Corporation - Class A 239,370 18,620,592 2.36
M.D.C. Holdings, Inc. 213,484 11,528,136 1.46
------------------------------------------
30,148,728 3.82
------------------------------------------
CABLE TV
EchoStar Communications
Corporation - Class A* 163,692 6,264,493 0.79
------------------------------------------
CASINO HOTELS
Wynn Resorts Ltd.* 791,390 14,387,470 1.82
------------------------------------------
COMPUTERS
Dell, Inc.* 792,434 26,459,371 3.35
------------------------------------------
COMPUTERS - MEMORY DEVICES
EMC Corporation* 78,422 988,035 0.13
------------------------------------------
COSMETICS & TOILETRIES
The Procter & Gamble Company 194,507 18,054,140 2.29
------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS
General Electric Company 925,859 27,599,857 3.50
Honeywell International, Inc. 135,381 3,567,289 0.45
------------------------------------------
31,167,146 3.95
------------------------------------------
E-COMMERCE/SERVICES
eBay, Inc.* 169,504 9,070,159 1.15
Monster Worldwide, Inc.* 74,333 1,871,705 0.24
------------------------------------------
10,941,864 1.39
------------------------------------------
<FN>
*Non-income producing.
See notes to financial statements.
27
S C H E D U L E O F I N V E S T M E N T S
MARSICO GROWTH FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS
Intel Corporation 1,434,492 $39,462,875 5.00%
------------------------------------------
ENGINEERING/R&D SERVICES
Jacobs Engineering Group, Inc.* 33,932 1,530,333 0.19
------------------------------------------
ENTERTAINMENT SOFTWARE
Electronic Arts, Inc.* 324,619 29,939,610 3.79
------------------------------------------
FINANCE - CONSUMER LOANS
SLM Corporation 925,740 36,066,830 4.57
------------------------------------------
FINANCE - INVESTMENT BANKER/BROKER
Citigroup, Inc. 796,903 36,267,056 4.60
The Goldman Sachs Group, Inc. 67,982 5,703,690 0.72
Merrill Lynch & Company, Inc. 481,771 25,789,202 3.27
------------------------------------------
67,759,948 8.59
------------------------------------------
FINANCE - MORTGAGE LOAN/BANKER
Fannie Mae 296,902 20,842,520 2.64
------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc. 336,417 16,756,931 2.12
------------------------------------------
MACHINERY - CONSTRUCTION & MINING
Caterpillar, Inc. 341,213 23,489,103 2.98
------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
Amgen, Inc.* 307,526 19,856,954 2.52
Genentech, Inc.* 499,512 40,030,891 5.07
------------------------------------------
59,887,845 7.59
------------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 688,206 34,630,526 4.39
------------------------------------------
MEDICAL INSTRUMENTS
Boston Scientific Corporation* 280,157 17,874,017 2.27
------------------------------------------
<FN>
*Non-income producing.
See notes to financial statements.
28
S C H E D U L E O F I N V E S T M E N T S
MARSICO GROWTH FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES
Quest Diagnostics, Inc.* 258,089 $15,650,517 1.98%
------------------------------------------
MEDICAL PRODUCTS
Zimmer Holdings, Inc.* 345,479 19,035,893 2.41
------------------------------------------
MOTORCYCLE/MOTOR SCOOTER MANUFACTURER
Harley-Davidson, Inc. 67,364 3,246,945 0.41
------------------------------------------
MULTIMEDIA
Viacom, Inc. - Class B 490,976 18,804,381 2.38
The Walt Disney Company 167,163 3,371,678 0.43
------------------------------------------
22,176,059 2.81
------------------------------------------
NETWORKING PRODUCTS
Cisco Systems, Inc.* 1,299,269 25,387,716 3.22
------------------------------------------
PHARMACY SERVICES
Caremark Rx, Inc.* 980,940 22,169,244 2.81
------------------------------------------
RETAIL - BUILDING PRODUCTS
Lowe's Companies, Inc. 366,366 19,014,395 2.41
------------------------------------------
RETAIL - DISCOUNT
Wal-Mart Stores, Inc. 322,026 17,985,152 2.28
------------------------------------------
RETAIL - JEWELRY
Tiffany & Company 580,283 21,661,964 2.74
------------------------------------------
RETAIL - MAJOR DEPARTMENT STORE
Sears, Roebuck and Company 262,472 11,477,901 1.45
------------------------------------------
TRANSPORTATION - SERVICES
FedEx Corporation 375,643 24,202,679 3.07
------------------------------------------
WIRELESS EQUIPMENT
QUALCOMM, Inc. 362,211 15,082,466 1.91
------------------------------------------
TOTAL COMMON STOCKS
(COST $588,266,940) 737,139,982 93.40
------------------------------------------
<FN>
*Non-income producing.
See notes to financial statements.
29
S C H E D U L E O F I N V E S T M E N T S
MARSICO GROWTH FUND
SEPTEMBER 30, 2003
Principal Amount Market Value Percent of
in Dollars in Dollars Net Assets
- -------------------------------------------------------------------------------
CORPORATE BOND
- -------------------------------------------------------------------------------
AIRLINES
JetBlue Airways Corporation 144A
3.50%, 7/15/33 $7,500,000 $9,187,500 1.16%
--------------------------------------------
TOTAL CORPORATE BOND
(COST $7,500,000) 9,187,500 1.16
--------------------------------------------
Principal/ Market Value Percent of
Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- -------------------------------------------------------------------------------
SSgA Money Market Funds 28,290,890 28,290,890 3.59
--------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $28,290,890) 28,290,890 3.59
--------------------------------------------
TOTAL INVESTMENTS
(COST $624,057,830) 774,618,372 98.15
Cash and Other Assets Less Liabilities 14,601,234 1.85
--------------------------------------------
NET ASSETS $789,219,606 100.00%
============================================
<FN>
* Non-income producing.
See notes to financial statements.
30
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S
MARSICO GROWTH FUND
SEPTEMBER 30, 2003
(Amounts in thousands)
- -------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------
Investments, at value (cost $624,057) $774,618
Receivable for investments sold 21,155
Receivable for capital stock sold 1,543
Interest and dividends receivable 422
Prepaid expenses and other assets 269
-------------
TOTAL ASSETS 798,007
-------------
- -------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------
Payable for investments purchased 7,232
Payable for capital stock redeemed 404
Accrued investment advisory fee 552
Accrued distribution fee 76
Accrued trustees' fees 246
Accrued expenses and other liabilities 277
-------------
TOTAL LIABILITIES 8,787
-------------
NET ASSETS $789,220
=============
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- -------------------------------------------------------------------------------
Paid-in-capital $784,903
Accumulated net investment loss (285)
Accumulated net realized loss on investments and
foreign currency transactions (145,991)
Net unrealized appreciation on investments
and foreign currency translations 150,593
-------------
NET ASSETS $789,220
=============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 55,996
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE (NET
ASSETS/SHARES OUTSTANDING)* $14.09
=============
<FN>
* Not in thousands.
See notes to financial statements.
31
S T A T E M E N T O F O P E R A T I O N S
MARSICO GROWTH FUND
For the Year Ended September 30, 2003
(Amounts in thousands)
- -------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------
Interest $416
Dividends (net of $28 of non-reclaimable
foreign withholding taxes) 4,323
-------------
TOTAL INVESTMENT INCOME 4,739
-------------
- -------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------
Investment advisory fees 5,665
Distribution fees 1,666
Transfer agent fees and expenses 798
Printing and postage expenses 357
Fund administration fees 177
Custody and fund accounting fees 147
Trustees' fees and expenses 128
Professional fees 109
State registration fees 59
Amortization of organizational costs 7
Miscellaneous 63
-------------
TOTAL EXPENSES 9,176
Less expenses paid indirectly (272)
-------------
NET EXPENSES 8,904
-------------
NET INVESTMENT LOSS (4,165)
-------------
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------
Net realized loss on investments (23,520)
Net realized gain on foreign currency transactions 8,532
Change in unrealized appreciation/depreciation on
investments and foreign currency translations 132,227
-------------
Net Gain on Investments 117,239
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $113,074
=============
See notes to financial statements.
32
S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S
MARSICO GROWTH FUND
Year Year
Ended Ended
(Amounts in thousands) 9/30/03 9/30/02
- -------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------
Net investment loss $(4,165) $(3,115)
Net realized loss on investments (23,520) (76,004)
Net realized gain on foreign
currency transactions 8,532 203
Change in unrealized appreciation/
depreciation on investments and
foreign currency translations 132,227 20,913
-------------------------------
Net increase (decrease) in net assets
resulting from operations 113,074 (58,003)
-------------------------------
- -------------------------------------------------------------------------------
DISTRIBUTIONS
- -------------------------------------------------------------------------------
Tax return of capital - (717)
-------------------------------
Total distributions - (717)
-------------------------------
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- -------------------------------------------------------------------------------
Proceeds from sale of shares 356,489 430,675
Proceeds from reinvestment
of distributions - 682
Redemption of shares (322,317) (261,567)
-------------------------------
Net increase from
capital share transactions 34,172 169,790
-------------------------------
TOTAL INCREASE
IN NET ASSETS 147,246 111,070
- -------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------
Beginning of period 641,974 530,904
END OF PERIOD $789,220 $641,974
-------------------------------
Accumulated net investment loss (285) (163)
- -------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- -------------------------------------------------------------------------------
Shares sold 28,383 32,129
Shares issued in reinvestment
of distributions - 49
Shares redeemed (26,435) (19,908)
-------------------------------
NET INCREASE 1,948 12,270
===============================
See notes to financial statements.
33
F I N A N C I A L H I G H L I G H T S
MARSICO GROWTH FUND
For a Fund Share Outstanding Throughout the Period.
Year Year
Ended Ended
9/30/03 9/30/02
-------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $11.88 $12.71
- --------------------------------------------------------------------------
INCOME from INVESTMENT OPERATIONS
- --------------------------------------------------------------------------
Net investment loss (0.07) (0.04)
Net realized and unrealized gains
(losses) on investments 2.28 (0.77)
-------------------------
Total from investment
operations 2.21 (0.81)
-------------------------
- --------------------------------------------------------------------------
DISTRIBUTIONS
- --------------------------------------------------------------------------
Net realized gains - -
Tax return of capital - (0.02)
-------------------------
Total distributions - (0.02)
-------------------------
NET ASSET VALUE, END OF PERIOD $14.09 $11.88
-------------------------
TOTAL RETURN 18.60% (6.42)%
- --------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- --------------------------------------------------------------------------
Net assets, end of period (000s) $789,220 $641,974
Ratio of expenses to average net assets,
before expenses paid indirectly 1.38% 1.37%
Ratio of net investment loss to average net
assets, net of expenses paid indirectly (0.62)% (0.49)%
Ratio of net investment loss to average net
assets, before expenses paid indirectly (0.67)% (0.52)%
Portfolio turnover rate 91% 111%
34
Year Year Year
Ended Ended Ended
9/30/01 9/30/00 9/30/99
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $20.82 $16.29 $11.54
- ----------------------------------------------------------------------------------------
INCOME from INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment loss (0.09) (0.11) (0.06)
Net realized and unrealized gains
(losses) on investments (7.32) 4.75 4.81
-------------------------------------
Total from investment
operations (7.41) 4.64 4.75
-------------------------------------
- ----------------------------------------------------------------------------------------
DISTRIBUTIONS
- ----------------------------------------------------------------------------------------
Net realized gains (0.70) (0.11) -
Tax return of capital - - -
-------------------------------------
Total distributions (0.70) (0.11) -
-------------------------------------
NET ASSET VALUE, END OF PERIOD $12.71 $20.82 $16.29
-------------------------------------
TOTAL RETURN (36.45)% 28.53% 41.16%
- ----------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------------------------------------------------------------------
Net assets, end of period (000s) $530,904 $1,002,722 $688,490
Ratio of expenses to average net assets,
before expenses paid indirectly 1.33% 1.30% 1.43%
Ratio of net investment loss to average net
assets, net of expenses paid indirectly (0.53)% (0.54)% (0.46)%
Ratio of net investment loss to average net
assets, before expenses paid indirectly (0.55)% (0.55)% (0.47)%
Portfolio turnover rate 120% 137% 137%
See notes to financial statements.
35
F U N D O V E R V I E W
MARSICO 21ST CENTURY FUND
SEPTEMBER 30, 2003
The 21st Century Fund invests primarily in common stocks that are selected
for their long-term growth potential. The Fund may invest in companies of
any size, and will normally hold a core position of between 35 and 50 common
stocks.
- ------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- ------------------------------------------------------------------------------
One Year Average Annual Since
(10/1/02-9/30/03) Inception (2/1/00-9/30/03)
Marsico 21st Century Fund 33.64%(1) -3.61%(1)
S&P 500(R) Index 24.40% -7.43%
- ------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------
9/30/03 $104,038,335
- ------------------------------------------------------------------------------
- -----------------------------------
NET ASSET VALUE GROWTH OF $10,000(1)(2)
- -----------------------------------
Net Asset Value
Per Share $8.74
- -----------------------------------
TOP FIVE HOLDINGS
- -----------------------------------
JetBlue Airways Corp. 5.66% [graph]
Select Comfort Corp. 4.78
Harmon International
Industries, Inc. 4.53
UCBH Holdings, Inc. 4.27
FedEx Corp. 4.11
- -----------------------------------
SECTOR ALLOCATION(3)
- -----------------------------------
Consumer Cyclical 43.73%
Communications 19.15
Financial 13.51
Technology 11.32
Industrial 7.38
Consumer Non-Cyclical 4.91
The performance included in the table and graph do not reflect the
deduction of taxes on Fund distributions or the redemption of Fund
shares.
<FN>
(1) The performance returns for the 21st Century Fund reflect a fee waiver
in effect; in the absence of such a waiver, the returns would be
reduced.
(2) This chart assumes an initial investment of $10,000 made on February 1,
2000 (inception). Past performance is no guarantee of future results.
Total returns are based on net change in NAV, assuming reinvestment of
distributions. Share price and investment return will vary so that,
when redeemed, an investor's shares may be worth more or less than the
original cost.
(3) Sector weightings represent the percentage of the Fund's equity
investments in certain general sectors. These sectors may include more
than one industry. The Fund's portfolio composition is subject to
change at any time.
The S&P 500(R) Index is a registered trademark of Standard & Poor's
Corporation and is an unmanaged, broadly based index of the common stock
prices of 500 large U.S. companies. You cannot invest directly in an index.
36
S C H E D U L E O F I N V E S T M E N T S
MARSICO 21ST CENTURY FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------
AIRLINES
JetBlue Airways Corporation* 96,549 $5,886,593 5.66%
Ryanair Holdings PLC ADR* 90,115 3,649,658 3.51
---------------------------------------
9,536,251 9.17
---------------------------------------
AUDIO/VIDEO PRODUCTS
Digital Theater Systems, Inc.* 39,670 1,129,841 1.09
Harman International Industries, Inc. 47,967 4,717,554 4.53
---------------------------------------
5,847,395 5.62
---------------------------------------
AUTOMOTIVE - CARS/LIGHT TRUCKS
Bayerische Motoren Werke AG** 86,380 3,266,091 3.14
---------------------------------------
BUILDING - RESIDENTIAL/COMMERCIAL
WCI Communities, Inc.* 173,108 2,856,282 2.75
---------------------------------------
CABLE TV
EchoStar Communications
Corporation - Class A* 89,461 3,423,672 3.29
---------------------------------------
CASINO HOTELS
Wynn Resorts Ltd.* 102,887 1,870,486 1.80
---------------------------------------
CELLULAR TELECOMMUNICATIONS
Nextel Communications, Inc. -
Class A* 107,291 2,112,560 2.03
---------------------------------------
COMMERCIAL BANKS - WESTERN US
UCBH Holdings, Inc. 146,835 4,438,822 4.27
---------------------------------------
COMPUTERS
Dell, Inc.* 98,922 3,303,006 3.17
---------------------------------------
COMPUTERS - MEMORY DEVICES
VERITAS Software Corporation* 67,952 2,133,693 2.05
---------------------------------------
DATA PROCESSING/MANAGEMENT
Fair Isaac Corporation 54,557 3,216,681 3.09
---------------------------------------
<FN>
* Non-income producing.
** A portion of this security has been segregated by the custodian to cover
segregation requirements on open forward currency contracts.
See notes to financial statements.
37
S C H E D U L E O F I N V E S T M E N T S
MARSICO 21ST CENTURY FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------
E-COMMERCE/SERVICES
Monster Worldwide, Inc.* 110,935 $2,793,343 2.68%
---------------------------------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS
Intel Corporation 111,126 3,057,076 2.94
---------------------------------------
FINANCE - INVESTMENT BANKER/BROKER
Citigroup, Inc. 69,067 3,143,239 3.02
Jefferies Group, Inc. 124,975 3,593,031 3.45
---------------------------------------
6,736,270 6.47
---------------------------------------
FINANCIAL GUARANTEE INSURANCE
MGIC Investment Corporation 53,832 2,803,032 2.69
---------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc. 38,022 1,893,876 1.82
---------------------------------------
MACHINERY - CONSTRUCTION & MINING
Caterpillar, Inc. 48,779 3,357,946 3.23
---------------------------------------
MEDICAL - BIOMEDICAL/GENETIC
Genentech, Inc.* 35,282 2,827,500 2.72
---------------------------------------
MEDICAL - HMO
UnitedHealth Group, Inc. 44,764 2,252,525 2.17
---------------------------------------
MOTORCYCLE/MOTOR SCOOTER MANUFACTURER
Harley-Davidson, Inc. 46,486 2,240,625 2.15
---------------------------------------
NETWORKING PRODUCTS
Cisco Systems, Inc.* 174,730 3,414,224 3.28
Foundry Networks, Inc.* 100,963 2,171,714 2.09
---------------------------------------
5,585,938 5.37
---------------------------------------
RADIO
Cumulus Media, Inc. - Class A* 168,440 2,871,902 2.76
---------------------------------------
<FN>
* Non-income producing.
See notes to financial statements.
38
S C H E D U L E O F I N V E S T M E N T S
MARSICO 21ST CENTURY FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------
RETAIL - BEDDING
Select Comfort Corporation* 187,650 $4,972,725 4.78%
---------------------------------------
RETAIL - COMPUTER EQUIPMENT
Electronics Boutique Holdings
Corporation* 102,165 2,918,854 2.81
---------------------------------------
RETAIL - JEWELRY
Tiffany & Company 53,897 2,011,975 1.93
---------------------------------------
RETAIL - MAJOR DEPARTMENT STORE
Sears, Roebuck and Company 68,780 3,007,749 2.89
---------------------------------------
RETAIL - RESTAURANTS
Starbucks Corporation* 65,639 1,890,403 1.82
---------------------------------------
RETAIL - SPORTING GOODS
The Sports Authority, Inc.* 93,211 2,932,418 2.82
---------------------------------------
TRANSPORTATION - SERVICES
FedEx Corporation 66,445 4,281,051 4.11
---------------------------------------
WIRELESS EQUIPMENT
QUALCOMM, Inc. 72,654 3,025,313 2.91
---------------------------------------
TOTAL COMMON STOCKS
(COST $88,386,518) 103,465,460 99.45
---------------------------------------
<FN>
* Non-income producing.
See notes to financial statments.
39
S C H E D U L E O F I N V E S T M E N T S
MARSICO 21ST CENTURY FUND
SEPTEMBER 30, 2003
Principal/ Market Value Percent of
Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- -------------------------------------------------------------------------------
SSgA Money Market Funds 1,374,222 $1,374,222 1.32%
---------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,374,222) 1,374,222 1.32
---------------------------------------
TOTAL INVESTMENTS
(COST $89,760,740) 104,839,682 100.77
Liabilities Less Cash and Other Assets (801,347) (0.77)
---------------------------------------
NET ASSETS $104,038,335 100.00%
=======================================
- -------------------------------------------------------------------------------
FORWARD CURRENCY CONTRACT OPEN AT SEPTEMBER 30, 2003
- -------------------------------------------------------------------------------
Currency
Currency Sold and Local U.S. Value in Unrealized
Settlement Date Currency Dollars U.S. Dollars Loss
- -------------------------------------------------------------------------------
Euro 12/17/03 2,639,902 $2,975,751 $3,069,442 $(93,691)
----------------------------------------------------------
TOTAL $(93,691)
==========================================================
<FN>
* Non-income producing.
See notes to financial statements.
40
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S
MARSICO 21ST CENTURY FUND
SEPTEMBER 30, 2003
(Amounts in thousands)
- ------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------
Investments, at value (cost $89,761) $104,840
Receivable for investments sold 3,882
Receivable for capital stock sold 184
Interest and dividends receivable 33
Prepaid expenses and other assets 135
------------
TOTAL ASSETS $109,074
------------
- ------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------
Payable for investments purchased 4,453
Payable for capital stock redeemed 56
Payable for loss on foreign currency
exchange contracts 63
Accrued investment advisory fee 72
Accrued distribution fee 105
Accrued trustees' fees 124
Unrealized loss on foreign currency
exchange contracts 94
Accrued expenses and other liabilities 69
------------
TOTAL LIABILITIES 5,036
------------
NET ASSETS $104,038
============
- ------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- ------------------------------------------------------------------------------
Paid-in-capital $152,302
Accumulated net investment loss (113)
Accumulated net realized loss on investments and
foreign currency transactions (63,166)
Net unrealized appreciation on investments
and foreign currency translations 15,015
------------
NET ASSETS $104,038
============
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 11,909
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE (NET
ASSETS/SHARES OUTSTANDING)* $8.74
============
<FN>
* Not in thousands.
See notes to financial statements.
41
S T A T E M E N T O F O P E R A T I O N S
MARSICO 21ST CENTURY FUND
For the Year Ended September 30, 2003
(Amounts in thousands)
- ------------------------------------------------------------------------------
INVESTMENT INCOME
- ------------------------------------------------------------------------------
Interest $17
Dividends (net of $7 of non-reclaimable
foreign withholding taxes) 312
--------------
TOTAL INVESTMENT INCOME 329
--------------
- ------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------
Investment advisory fees 562
Distribution fees 165
Transfer agent fees and expenses 116
Fund administration fees 70
Custody and fund accounting fees 65
Trustees' fees and expenses 38
Printing and postage expenses 37
State registration fees 20
Professional fees 13
Miscellaneous 6
--------------
TOTAL EXPENSES 1,092
Less waiver of expenses and expenses paid indirectly (70)
--------------
NET EXPENSES 1,022
--------------
NET INVESTMENT LOSS (693)
- ------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- ------------------------------------------------------------------------------
Net realized gain on investments 6,230
Net realized gain on foreign currency transactions 322
Change in unrealized appreciation/depreciation on
investments and foreign currency translations 13,359
Increase from payment by service provider 68
--------------
Net Gain on Investments 19,979
--------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $19,286
==============
See notes to financial statements.
42
S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S
MARSICO 21ST CENTURY FUND
Year Year
Ended Ended
(Amounts in thousands) 9/30/03 9/30/02
- ------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------
Net investment loss $(693) $(570)
Net realized gain (loss) on investments 6,230 (904)
Net realized gain on
foreign currency transactions 322 540
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 13,359 4,194
Increase from payment by
service provider 68 -
------------------------
Net increase in net assets
resulting from operations 19,286 3,260
------------------------
- ------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------
Proceeds from sale of shares 56,312 13,740
Redemption of shares (27,581) (21,103)
------------------------
Net increase (decrease) from
capital share transactions 28,731 (7,363)
------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 48,017 (4,103)
- ------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------
Beginning of period 56,021 60,124
END OF PERIOD $104,038 $56,021
------------------------
Accumulated net investment loss (113) (121)
- ------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- ------------------------------------------------------------------------------
Shares sold 7,212 1,969
Shares redeemed (3,875) (3,000)
------------------------
NET INCREASE (DECREASE) 3,337 (1,031)
========================
See notes to financial statements.
43
F I N A N C I A L H I G H L I G H T S
MARSICO 21ST CENTURY FUND
For a Fund Share Outstanding Throughout the Period.
Year Year Year 2/01/00*
Ended Ended Ended to
9/30/03 9/30/02 9/30/01 9/30/00
---------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $6.54 $6.26 $10.86 $10.00
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------------------------------
Net investment loss (0.04) (0.08) (0.08) (0.07)
Net realized and unrealized
gains (losses) on investments 2.23 0.36 (4.52) 0.93
---------------------------------------------------------------
Total from investment
operations 2.19 0.28 (4.60) 0.86
---------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
OTHER
- ------------------------------------------------------------------------------------------------------
Increase from payment by
service provider 0.01 - - -
---------------------------------------------------------------
Total other 0.01 - - -
---------------------------------------------------------------
NET ASSET VALUE,
END OF PERIOD $8.74 $6.54 $6.26 $10.86
---------------------------------------------------------------
TOTAL RETURN 33.64% 4.47% (42.36)% 8.60%(1)
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- ------------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $104,038 $56,021 $60,124 $130,173
Ratio of expenses to average net
assets, less waivers and before
expenses paid indirectly 1.55%(4) 1.50% 1.50% 1.50%(2)
Ratio of net investment loss to
average net assets, net of
waivers and expenses
paid indirectly (1.05)% (0.89)% (0.76)% (0.92)%(2)
Ratio of expenses to average
net assets, before waivers and
expenses paid indirectly 1.65% 1.60% 1.57% 1.70%(2)
Ratio of net investment loss to
average net assets, before
waivers and expenses
paid indirectly (1.15)% (0.99)% (0.83)% (1.13)%(2)
Portfolio turnover rate(3) 236% 388% 399% 267%(1)
<FN>
* Inception.
(1) Not annualized for the periods less than one year.
(2) Annualized for the periods less than one year.
(3) Portfolio turnover is greater than most funds due to the investment
style of the Fund.
(4) See Note 3 for information regarding the voluntary fee waiver.
See notes to financial statements.
44
F U N D O V E R V I E W
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SEPTEMBER 30, 2003
The International Opportunities Fund invests primarily in common stocks of
foreign companies that are selected for their long-term growth potential.
The Fund may invest in companies of any size throughout the world. It
normally invests in issuers from at least three different countries, not
including the United States, and maintains a core position of between 35 and
50 common stocks.
- ------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- ------------------------------------------------------------------------------
One Year Average Annual Since
(10/1/02-9/30/03) Inception (6/30/00-9/30/03)
Marsico International
Opportunities Fund 25.71%(1) -2.82%(1)
Morgan Stanley Capital
International EAFE Index 26.01% -10.42%
- ------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------
9/30/03 $28,408,577
- ------------------------------------------------------------------------------
- --------------------------------------
NET ASSET VALUE GROWTH OF $10,000(1)(2)
- --------------------------------------
Net Asset Value Per Share $8.80
- --------------------------------------
TOP FIVE HOLDINGS
- --------------------------------------
Ryanair Holdings PLC ADR 5.27% [graph]
UBS AG ADR 4.03
Roche Holding AG 3.92
Bayerische Motoren Werke AG 3.70
HSBC Holdings PLC 3.61
- --------------------------------------
SECTOR ALLOCATION(3)
- --------------------------------------
Financial 25.45%
Consumer Cyclical 25.09
Communications 19.36
Industrial 11.43
Consumer Non-Cyclical 7.45
Technology 7.25
Energy 1.84
Basic Materials 1.10
Exchange Traded Fund 1.03
The performance included in the table and graph do not reflect the
deduction of taxes on Fund distributions or the redemption of Fund
shares.
<FN>
(1) The performance returns for the International Opportunities Fund
reflect a fee waiver in effect; in the absence of such a waiver, the
returns would have been 25.08% for the one year period ended 9/30/03,
-3.78% since inception through 9/30/03, and the ending value of a
$10,000 investment would have been $8,823 on 9/30/03.
(2) This chart assumes an initial investment of $10,000 made on June 30,
2000 (inception). Past performance is no guarantee of future results.
Total returns are based on net change in NAV, assuming reinvestment of
distributions. Share price and investment return will vary so that,
when redeemed, an investor's shares may be worth more or less than the
original cost.
(3) Sector weightings represent the percentage of the Fund's equity
investments in certain general sectors. These sectors may include more
than one industry. The Fund's portfolio composition is subject to
change at any time.
The Morgan Stanley Capital International EAFE Index tracks the stocks
of about 1,000 companies in Europe, Australasia, and the Far East (EAFE).
You cannot invest directly in an index.
45
S C H E D U L E O F I N V E S T M E N T S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------
ADVERTISING SERVICES
JC Decaux S.A.* 21,394 $300,884 1.06%
-----------------------------------------
AIRLINES
Cathay Pacific Airway Ltd. 180,000 304,478 1.07
Ryanair Holdings PLC ADR* 36,968 1,497,204 5.27
-----------------------------------------
1,801,682 6.34
-----------------------------------------
AUDIO/VIDEO PRODUCTS
Yamaha Corporation 32,600 618,848 2.18
-----------------------------------------
AUTOMOTIVE - CARS/LIGHT TRUCKS
Bayerische Motoren Werke AG 27,751 1,049,285 3.70
Nissan Motor Company Ltd. 76,000 821,972 2.89
-----------------------------------------
1,871,257 6.59
-----------------------------------------
BROADCAST SERVICE/PROGRAMMING
SKY Perfect Communications, Inc.* 250 302,921 1.07
-----------------------------------------
CABLE TV
Sogecable S.A.* 23,436 563,902 1.98
-----------------------------------------
CASINO HOTELS
Wynn Resorts Ltd.* 18,579 337,766 1.19
-----------------------------------------
CELLULAR TELECOMMUNICATIONS
Mobile Telesystems ADR 8,200 603,110 2.12
NTT DoCoMo, Inc.* 118 289,135 1.02
-----------------------------------------
892,245 3.14
-----------------------------------------
COMMERCIAL BANKS - NON US
Credit Agricole S.A. 20,548 400,558 1.41
OTP Bank Rt. GDR 144A 13,997 333,129 1.17
Unibanco Uniao de
Bancos Brasileiros S.A. ADR 21,490 425,502 1.50
-----------------------------------------
1,159,189 4.08
-----------------------------------------
<FN>
* Non-income producing.
See notes to financial statements.
46
S C H E D U L E O F I N V E S T M E N T S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------
DISTRIBUTION/WHOLESALE
Esprit Holdings Ltd. 155,000 $471,341 1.66%
-----------------------------------------
DIVERSIFIED FINANCIAL SERVICES
UBS AG ADR 20,415 1,146,197 4.03
-----------------------------------------
DIVERSIFIED MINERALS
Companhia Vale do Rio Doce ADR 7,319 298,762 1.05
-----------------------------------------
ELECTRIC PRODUCTS - MISCELLANEOUS
Samsung Electronics Company Ltd. 2,510 855,471 3.01
Sharp Corporation 62,000 909,842 3.20
Toshiba Corporation 69,000 291,074 1.03
-----------------------------------------
2,056,387 7.24
-----------------------------------------
ELECTRONIC COMPONENTS - MISCELLANEOUS
Koninklijke (Royal)
Philips Electronics N.V. 18,367 416,468 1.47
-----------------------------------------
ENTERPRISE SOFTWARE/SERVICES
SAP AG 4,191 512,166 1.80
-----------------------------------------
FINANCE - INVESTMENT BANKER/BROKER
Daiwa Securities Group, Inc. 85,000 576,000 2.03
-----------------------------------------
MACHINE TOOLS & RELATED PRODUCTS
THK Company Ltd. 20,300 350,192 1.23
-----------------------------------------
MEDICAL - DRUGS
Roche Holding AG 13,409 1,112,506 3.92
-----------------------------------------
MEDICAL PRODUCTS
Synthes-Stratec, Inc. 506 448,568 1.58
-----------------------------------------
<FN>
* Non-income producing.
See notes to financial statements.
47
S C H E D U L E O F I N V E S T M E N T S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------
MONEY CENTER BANKS
Erste Bank der oesterreichischen
Sparkassen AG 2,956 $299,140 1.05%
HSBC Holdings PLC 77,802 1,026,205 3.61
Royal Bank of Scotland Group PLC 22,514 572,586 2.02
UFJ Holdings, Inc. 143 563,452 1.98
-----------------------------------------
2,461,383 8.66
-----------------------------------------
MULTI-LINE INSURANCE
Corporacion Mapfre S.A. 26,788 292,469 1.03
Zurich Financial Services AG 4,335 541,957 1.91
-----------------------------------------
834,426 2.94
-----------------------------------------
MULTIMEDIA
The News Corporation Ltd. ADR 25,114 823,739 2.90
-----------------------------------------
MUSIC
EMI Group PLC 314,958 773,529 2.72
-----------------------------------------
OFFICE AUTOMATION & EQUIPMENT
Canon, Inc. 9,000 441,054 1.55
-----------------------------------------
OIL COMPANIES - EXPLORATION & PRODUCTION
CNOOC Ltd. ADR 14,607 502,043 1.77
-----------------------------------------
REAL ESTATE OPERATING/DEVELOPMENT
Mitsui Fudosan Company Ltd. 32,000 284,342 1.00
Sun Hung Kai Properties, Ltd. 57,000 461,850 1.63
-----------------------------------------
746,192 2.63
-----------------------------------------
RETAIL - CONSUMER ELECTRONICS
Yamada Denki Company Ltd. 22,200 657,542 2.31
-----------------------------------------
RETAIL - HYPERMARKETS
Wal-Mart de Mexico - Series V 100,759 291,876 1.03
-----------------------------------------
<FN>
* Non-income producing.
See notes to financial statements.
48
S C H E D U L E O F I N V E S T M E N T S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
- -------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS - INTEGRATED CIRCUITS
Taiwan Semiconductor
Manufacturing Co., Ltd. ADR* 67,406 $730,007 2.57%
-----------------------------------------
SEMICONDUCTOR EQUIPMENT
ASM Pacific Technology Ltd. 85,500 289,254 1.02
-----------------------------------------
TELECOMMUNICATION EQUIPMENT
Marconi Corporation PLC* 53,131 397,427 1.40
-----------------------------------------
TELEPHONE - INTEGRATED
NTL, Inc.* 16,731 788,365 2.77
-----------------------------------------
TELEVISION
British Sky Broadcasting Group
PLC ADR* 56,576 577,897 2.03
-----------------------------------------
TRANSPORTATION - MARINE
Golar LNG Ltd.* 25,400 286,222 1.01
-----------------------------------------
WEB PORTALS/ISP
Sohu.com, Inc.* 8,027 249,640 0.88
Yahoo Japan Corporation* 26 368,712 1.30
-----------------------------------------
618,352 2.18
-----------------------------------------
TOTAL COMMON STOCKS
(COST $21,536,110) 26,456,589 93.13
-----------------------------------------
<FN>
* Non-income producing.
See notes to financial statements.
49
S C H E D U L E O F I N V E S T M E N T S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SEPTEMBER 30, 2003
Number Market Value Percent of
of Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
PREFERRED STOCK
- -------------------------------------------------------------------------------
BREWERY
Companhia de Bebidas
das Americas ADR 21,529 $466,103 1.64%
-----------------------------------------
TOTAL PREFERRED STOCK
(COST $337,409) 466,103 1.64
-----------------------------------------
- -------------------------------------------------------------------------------
EXCHANGE-TRADED FUND
- -------------------------------------------------------------------------------
iShares MSCI Japan Index Fund 25,402 279,168 0.98
-----------------------------------------
TOTAL EXCHANGE-TRADED FUND
(COST $287,307) 279,168 0.98
-----------------------------------------
Principal/ Market Value Percent of
Shares in Dollars Net Assets
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
- -------------------------------------------------------------------------------
SSgA Money Market Funds 1,210,134 1,210,134 4.26
-----------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,210,134) 1,210,134 4.26
-----------------------------------------
TOTAL INVESTMENTS
(COST $23,370,960) 28,411,994 100.01
Liabilities Less Cash and Other Assets (3,417) (0.01)
-----------------------------------------
NET ASSETS $28,408,577 100.00%
=========================================
<FN>
* Non-income producing.
See notes to financial statements.
50
S C H E D U L E O F I N V E S T M E N T S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SEPTEMBER 30, 2003
- -------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS BY COUNTRY
- -------------------------------------------------------------------------------
Percent of
Investment
Country Market Value Securities
- -------------------------------------------------------------------------------
Australia $823,739 2.9%
Austria 299,140 1.1
Brazil 1,190,367 4.2
China 2,278,606 8.0
France 701,442 2.4
Germany 1,561,451 5.5
Hungary 333,129 1.2
Ireland 1,497,204 5.3
Japan 6,754,254 23.8
Mexico 291,876 1.0
Netherlands 416,468 1.5
Russia 603,110 2.1
Scotland 572,586 2.0
South Korea 855,471 3.0
Spain 856,371 3.0
Switzerland 3,249,228 11.4
Taiwan 730,007 2.6
United Kingdom 3,061,280 10.8
United States(1) 2,336,265 8.2
----------------------------------
TOTAL $28,411,994 100.0%
----------------------------------
<FN>
(1) Includes short-term securities.
See notes to financial statements.
51
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
SEPTEMBER 30, 2003
(Amounts in thousands)
- -------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------
Investments, at value (cost $23,371) $28,412
Receivable for investments sold 127
Receivable for capital stock sold 6
Interest and dividends receivable 138
Prepaid expenses and other assets 98
-----------
TOTAL ASSETS $28,781
-----------
- -------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------
Payable for investments purchased 126
Payable for capital stock redeemed 3
Payable for loss on foreign currency exchange contracts 100
Accrued investment advisory fee 7
Accrued distribution fee 4
Accrued trustees' fees 90
Accrued expenses and other liabilities 42
-----------
TOTAL LIABILITIES 372
-----------
NET ASSETS $28,409
===========
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- -------------------------------------------------------------------------------
Paid-in-capital $30,726
Accumulated net investment loss (181)
Accumulated net realized loss on investments and
foreign currency transactions (7,195)
Net unrealized appreciation on investments
and foreign currency translations 5,059
-----------
NET ASSETS $28,409
===========
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 3,228
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE (NET
ASSETS/SHARES OUTSTANDING)* $8.80
===========
<FN>
* Not in thousands.
See notes to financial statements.
52
S T A T E M E N T O F O P E R A T I O N S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
For the Year Ended September 30, 2003
(Amounts in thousands)
- -------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------
Interest $9
Dividends (net of $50 of non-reclaimable
foreign withholding taxes) 421
----------
TOTAL INVESTMENT INCOME 430
----------
- -------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------
Investment advisory fees 196
Custody and fund accounting fees 129
Distribution fees 58
Fund administration fees 51
Transfer agent fees and expenses 42
Trustees' fees and expenses 21
State registration fees 15
Printing and postage expenses 12
Professional fees 8
Miscellaneous 3
----------
TOTAL EXPENSES 535
Less waiver of expenses and expenses paid indirectly (147)
----------
NET EXPENSES 388
----------
NET INVESTMENT INCOME 42
----------
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------
Net realized loss on investments (699)
Net realized gain on foreign currency transactions 1,560
Change in unrealized appreciation/depreciation on
investments and foreign currency translations 4,489
----------
Net Gain on Investments 5,350
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,392
==========
See notes to financial statements.
53
S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
Year Year
Ended Ended
(Amounts in thousands) 9/30/03 9/30/02
- -------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------
Net investment income (loss) $42 $(55)
Net realized loss on investments (699) (1,300)
Net realized gain on foreign
currency transactions 1,560 593
Change in unrealized appreciation/
depreciation on investments and foreign
currency translations 4,489 735
Increase from payment by affiliate - 21
---------------------------
Net increase (decrease) in net assets
resulting from operations 5,392 (6)
---------------------------
- -------------------------------------------------------------------------------
DISTRIBUTIONS
- -------------------------------------------------------------------------------
Net investment income - (24)
---------------------------
Total distributions - (24)
---------------------------
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- -------------------------------------------------------------------------------
Proceeds from sale of shares 7,109 15,955
Proceeds from reinvestment of
distributions - 23
Redemption fees 9 133
Redemption of shares (4,733) (13,058)
---------------------------
Net increase from
capital share transactions 2,385 3,053
---------------------------
TOTAL INCREASE IN NET ASSETS 7,777 3,023
- -------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------
Beginning of period 20,632 17,609
END OF PERIOD $28,409 $20,632
===========================
Accumulated net investment loss (181) (110)
- -------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- -------------------------------------------------------------------------------
Shares sold 919 2,052
Shares issued in reinvestment of distributions - 3
Shares redeemed (637) (1,707)
---------------------------
NET INCREASE 282 348
===========================
See notes to financial statements.
54
F I N A N C I A L H I G H L I G H T S
MARSICO INTERNATIONAL OPPORTUNITIES FUND
For a Fund Share Outstanding Throughout the Period.
Year Year Year 6/30/00*
Ended Ended Ended to
9/30/03 9/30/02 9/30/01 9/30/00
----------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $7.00 $6.78 $10.36 $10.00
- -------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------
Net investment income (loss) 0.02 (0.02) - 0.01
Net realized and unrealized
gains (losses) on investments 1.78 0.19 (3.27) 0.35
----------------------------------------------------
Total from investment operations 1.80 0.17 (3.27) 0.36
----------------------------------------------------
- -------------------------------------------------------------------------------------------------
DISTRIBUTIONS & OTHER
- -------------------------------------------------------------------------------------------------
Net investment income - (0.01) (0.04) -
Net realized gains - - (0.27) -
Redemption fees -(1) 0.05 - -
Payment by affiliate - 0.01 - -
----------------------------------------------------
Total distributions - 0.05 (0.31) -
----------------------------------------------------
NET ASSET VALUE, END OF PERIOD $8.80 $7.00 $6.78 $10.36
----------------------------------------------------
TOTAL RETURN 25.71% 3.37% (32.32)% 3.60%(2)
- -------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- -------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $28,409 $20,632 $17,609 $15,480
Ratio of expenses to average net
assets, less waivers and before
expenses paid indirectly 1.68%(5) 1.60% 1.60% 1.60%(3)
Ratio of net investment income (loss)
to average net assets, net of waivers
and expenses paid indirectly 0.18% (0.25)% 0.05% 0.33%(3)
Ratio of expenses to average
net assets, before waivers and
expenses paid indirectly 2.31% 2.07% 2.60% 4.76%(3)
Ratio of net investment loss to
average net assets, before waivers
and expenses paid indirectly (0.45)% (0.73)% (0.94)% (2.83)%(3)
Portfolio turnover rate(4) 211% 192% 534% 190%(2)
<FN>
* Inception.
(1) Less than $0.01.
(2) Not annualized for the periods less than one year.
(3) Annualized for the periods less than one year.
(4) Portfolio turnover is greater than most funds due to the investment
style of the Fund.
(5) See Note 3 for information regarding the voluntary fee waiver.
See notes to financial statements.
55
N O T E S T O F I N A N C I A L S T A T E M E N T S
MARSICO FUNDS
SEPTEMBER 30, 2003
1. ORGANIZATION
The Marsico Investment Fund (the "Trust") was organized on October 1, 1997,
as a Delaware Business Trust and is registered under the Investment
Company Act of 1940 (the "1940 Act") as an open-end management
investment company. The Focus Fund, the Growth Fund, the 21st Century
Fund and the International Opportunities Fund (collectively, the
"Funds") are separate investment portfolios of the Trust. The Focus
Fund is a non-diversified fund and the Growth Fund, the 21st Century
Fund and the International Opportunities Fund are diversified funds.
The Focus and Growth Funds commenced operations on December 31, 1997,
the 21st Century Fund commenced operations on February 1, 2000 and the
International Opportunities Fund commenced operations on June 30, 2000.
Affiliates of the Adviser hold approximately 34% of the International
Opportunities Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their
financial statements. These policies are in conformity with generally
accepted accounting principles ("GAAP") for investment companies. The
presentation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Certain prior year information has been reformatted to conform to the
current year presentation.
(a) Investment Valuation--A security traded on a recognized stock
exchange is valued at the last sale price prior to the time when
assets are valued on the principal exchange on which the security
is traded. If no sale is reported on the valuation date, the most
current bid price will be used. All other securities for which
over-the-counter market quotations are readily available are
valued at the most current closing price. Debt securities that
will mature in more than 60 days are valued at prices furnished by
a pricing service. Securities that will mature in 60 days or less
are valued at amortized cost, which approximates market value. Any
securities for which market quotations are not readily available
are valued at their fair value as determined in good faith by the
Funds' investment adviser pursuant to guidelines established by
the Board of Trustees.
(b) Organization Costs--Costs incurred by the Focus and Growth Funds in
connection with their organization, registration and the initial
public offering
56
N O T E S T O F I N A N C I A L S T A T E M E N T S continued
MARSICO FUNDS
SEPTEMBER 30, 2003
of shares were deferred and amortized during the five-year period
ended December 31, 2002. Organizational costs of the 21st Century
Fund and the International Opportunities Fund were expensed by the
Funds as incurred.
(c) Expenses--The Funds are charged for those expenses that are
directly attributable to each Fund, such as advisory and custodian
fees. Expenses that are not directly attributable to a Fund are
typically allocated among the Funds in proportion to their
respective net assets. The Funds' expenses may be reduced by
voluntary advisory fee waivers, brokerage credits and uninvested
cash balances earning interest or credits. Such credits are
included in Waiver of Expenses and Expenses Paid Indirectly in the
Statement of Operations.
Brokerage commissions were paid to unaffiliated brokers which reduced
certain transfer agent fees and expenses in the amount of $840,468
and $269,631 for the Focus Fund and Growth Fund, respectively, for
the year ended September 30, 2003. Also, the Funds received
credits on certain custody account balances which reduced certain
transfer agent fees and expenses in the amount of $5,692, $2,156,
$214 and $75 for the Focus Fund, Growth Fund, 21st Century Fund
and International Opportunities Fund, respectively, for the year
ended September 30, 2003. Brokerage commission credits and custody
account earnings credits are included in Expenses Paid Indirectly
on the Statements of Operations.
(d) Federal Income Taxes--Each Fund intends to comply with the
requirements of the Internal Revenue Code necessary to qualify as
a regulated investment company and to make the requisite
distributions of income to its shareholders which will be
sufficient to relieve it from all or substantially all federal and
state income and excise taxes. Certain Funds may utilize earnings
and profits on redemption of shares as part of the dividends paid
deduction.
(e) Distributions to Shareholders--Dividends from net investment income
and net realized capital gains, if any, will be declared and paid
at least annually. Distributions to shareholders are recorded on
the ex-dividend date. Each Fund may periodically make
reclassifications among certain of its capital accounts as a
result of the timing and characterization of certain income and
capital gains distributions determined in accordance with federal
tax regulations, which may differ from GAAP.
These reclassifications are due to differing treatment for items such
as deferral of wash sales, foreign currency transactions, net
operating losses and post-October capital losses. Accordingly, at
September 30, 2003, reclassifications (in thousands) were recorded
to decrease paid-in-capital
57
N O T E S T O F I N A N C I A L S T A T E M E N T S continued
MARSICO FUNDS
SEPTEMBER 30, 2003
by $9,326, $4,071, $660 and $0, increase (decrease) net investment
income by $8,895, $4,043, $701 and $(113), and increase (decrease)
accumulated net realized gain (loss) on investments and foreign
currency transactions by $431, $28, $(41) and $113 for the Focus,
Growth, 21st Century and International Opportunities Funds,
respectively.
(f) Foreign Currency Translation--The accounting records of the Funds
are maintained in U.S. dollars. Prices of securities denominated
in foreign currencies are translated into U.S. dollars at the
closing rates of exchange. Amounts related to the purchase and
sale of foreign securities and investment income are translated at
the rates of exchange prevailing on the respective dates of such
transactions.
Reported realized gains on foreign currency transactions arise from
sales of portfolio securities, forward currency contracts,
currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes
recorded on the Funds' books, and the U.S. dollar equivalent of
the amounts actually received or paid.
The Funds do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments
from the fluctuations arising from changes in market prices of
securities held at fiscal year-end. Net unrealized appreciation or
depreciation on investments and foreign currency translations
arise from changes in the value of assets and liabilities,
including investments in securities at fiscal year-end, resulting
from changes in the exchange rates and changes in market prices of
securities held.
(g) Forward Currency Contracts and Futures Contracts--The Funds may
enter into forward currency contracts to reduce their exposure to
changes in foreign currency exchange rates on their foreign
holdings and to lock in the U.S. dollar cost of firm purchase and
sale commitments for securities denominated in foreign currencies.
A forward currency contract is a commitment to purchase or sell a
foreign currency at a future date at a negotiated forward rate.
The gain or loss arising from the difference between the U.S.
dollar cost of the original contract and the value of the foreign
currency in U.S. dollars upon closing of such contract is included
in net realized gain or loss from foreign currency transactions.
Forward currency contracts held by the Funds are fully collateralized
by other securities. If held by the Funds, such collateral would
be in the possession of the Funds' custodian. The collateral would
be evaluated daily
58
N O T E S T O F I N A N C I A L S T A T E M E N T S continued
MARSICO FUNDS
SEPTEMBER 30, 2003
to ensure its market value equals or exceeds the current market
value of the corresponding forward currency contracts.
Futures contracts are marked to market daily and the resultant
variation margin is recorded as an unrealized gain or loss. When a
contract is closed, a realized gain or loss is recorded equal to
the difference between the opening and closing value of the
contract. Generally, open forward and futures contracts are marked
to market (i.e., treated as realized and subject to distribution)
for federal income tax purposes at fiscal year-end.
Foreign-denominated assets and forward currency contracts may involve
more risks than domestic transactions, including currency risk,
political and economic risk, regulatory risk and market risk.
Risks may arise from the potential inability of a counterparty to
meet the terms of a contract and from unanticipated movements in
the value of foreign currencies relative to the U.S. dollar.
The Funds may enter into "futures contracts" and "options" on
securities, financial indexes and foreign currencies, forward
contracts, and interest rate swaps and swap-related products. The
Funds intend to use such derivative instruments primarily to hedge
or protect from adverse movements in securities prices, currency
rates or interest rates. The use of futures contracts and options
may involve risks such as the possibility of illiquid markets or
imperfect correlation between the value of the contracts and the
underlying securities, or that the counterparty will fail to
perform its obligations.
(h) Options Contracts--The Funds may purchase and write (sell) put and
call options on foreign and domestic stock indices, foreign
currencies and U.S. and foreign securities that are traded on U.S.
and foreign securities exchanges and over-the-counter markets.
These transactions are for hedging purposes or for the purpose of
earning additional income. In addition, the Funds may enter into
such transactions for cross-hedging purposes.
The risk associated with purchasing an option is that the Fund pays a
premium whether or not the option is exercised. Additionally, the
Fund bears the risk of loss of premium and change in market value
should the counterparty not perform under the contract. Put and
call options purchased are accounted for in the same manner as
portfolio securities. The cost of securities acquired through the
exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options
are decreased by the premiums paid.
59
N O T E S T O F I N A N C I A L S T A T E M E N T S continued
MARSICO FUNDS
SEPTEMBER 30, 2003
When the Fund writes an option, the premium received by the Fund is
recorded as a liability and is subsequently adjusted to the
current market value of the option written. Premiums received from
writing options that expire are recorded by the Fund on the
expiration date as realized gains from option transactions. The
difference between the premium and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than
the amount paid for the closing purchase transaction, as a
realized loss. If a call option is exercised, the premium is added
to the proceeds from the sale of the underlying security or
currency in determining whether the Fund has realized a gain or
loss. If a put option is exercised, the premium reduces the cost
basis of the security or currency purchased by the Fund. In
writing an option, the Fund bears the market risk of an
unfavorable change in the price of the security or currency
underlying the written option. Exercise of an option written by
the Fund could result in the Fund selling or buying a security or
currency at a price different from the current market value.
(i) Trustees' Compensation--Effective February 1, 2000, the Board of
Trustees adopted the Marsico Investment Fund Deferred Fee Plan
(the "Plan") that allows the independent Trustees to defer the
receipt of all or a portion of the Trustees' fees payable. The
Trustees are deemed to be notionally invested in the Funds until
distribution in accordance with the Plan. Included in the
Trustees' Fees and Expenses on the Statement of Operations is the
unrealized appreciation of $43,761, $31,510, $30,090 and $17,937
related to the mark-to-market of the shares of the deferred plan
for the Focus Fund, Growth Fund, 21st Century Fund and
International Opportunities Fund, respectively.
(j) Redemption Fee--A 2.00% redemption fee is retained by the
International Opportunities Fund to offset transaction costs and
other expenses associated with short-term investing. The fee is
imposed on redemptions or exchanges of shares held three months or
less from their purchase date and is recorded by the Fund as a
reduction of shares redeemed and as a credit to paid-in-capital.
For the year ended September 30, 2003, the International
Opportunities Fund received $8,820 in redemption fees.
(k) Other--Investment transactions are accounted for on a trade date
basis. Each Fund determines the gain or loss realized from the
investment transactions by comparing the original cost of the
security lot sold with the net sale proceeds. Dividend income is
recognized on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Trust is informed of
the dividend if such information is obtained subsequent to the
ex-dividend date. Interest income is recognized on an accrual
basis.
60
N O T E S T O F I N A N C I A L S T A T E M E N T S continued
MARSICO FUNDS
SEPTEMBER 30, 2003
During the year ended September 30, 2003, the fund accounting agent
reimbursed the 21st Century Fund $67,752 for an investment
transaction loss, which had resulted from an unintended error in
available cash balances for investment transactions. This
reimbursement is included in the Statement of Operations and
Financial Highlights as an Increase From Payment By Service
Provider and did not have a significant effect on the Fund's total
return.
3. INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH AFFILIATES
The Funds have an agreement with Marsico Capital Management, LLC (the
"Adviser") to furnish investment advisory services to the Funds. Under
the terms of this agreement, the Adviser is compensated at the rate of
0.85% of the average daily net assets of each of the Focus, Growth,
21st Century and International Opportunities Funds. The Adviser has
voluntarily agreed to limit the total expenses of each Fund (excluding
interest, taxes, brokerage and extraordinary expenses) to an annual
rate of 1.60% of the Focus and International Opportunities Funds'
average daily net assets and 1.50% of the Growth and 21st Century
Funds' average daily net assets until December 31, 2003. This fee
waiver is voluntary and may be terminated at any time. The voluntary
waiver of expenses for the year ended September 30, 2003 excludes as an
extraordinary item the unrealized appreciation of $30,090 and $17,937,
respectively, for the 21st Century Fund and International Opportunities
Fund. The unrealized appreciation is included in the Change in
Unrealized Appreciation/Depreciation on Investment and Foreign Currency
Translations on the Statement of Operations. As a result, the
unrealized appreciation is retained by the Funds in accordance with the
Plan.
The Adviser is entitled to reimbursement from a Fund of any fees waived
pursuant to this arrangement if such reimbursements do not cause a Fund
to exceed existing expense limitations and the reimbursement is made
within three years after the year in which the Adviser incurred the
expense.
As of September 30, 2003, the reimbursements that may potentially be made
by the 21st Century Fund and the International Opportunities Fund to
the Adviser are $204,436 and $453,175, respectively, which expire
between 2004 and 2006.
Banc of America Securities is an affiliate of Marsico Capital Management,
LLC and is designated as an introductory broker on certain Fund
transactions. For the year ended September 30, 2003, brokerage
commissions paid to Banc of America Securities were $19,585, $4,402 and
$13,226 for the Focus Fund, Growth Fund, and 21st Century Fund,
respectively.
61
N O T E S T O F I N A N C I A L S T A T E M E N T S continued
MARSICO FUNDS
SEPTEMBER 30, 2003
4. SERVICE AND DISTRIBUTION PLAN
The Funds have adopted a Service and Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments
by the Funds in connection with the distribution of their shares at an
annual rate, as determined from time to time by the Board of Trustees,
of up to 0.25% of a Fund's average daily net assets.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the year ended September 30, 2003, were
as follows:
(Amounts in thousands) Purchases Sales
-------------------------------------------------------------------------
Focus Fund $2,173,201 $1,507,824
Growth Fund 635,222 586,913
21st Century Fund 184,025 155,148
International Opportunities Fund 48,597 47,130
There were no purchases or sales of U.S. government securities.
6. FEDERAL INCOME TAX INFORMATION
At September 30, 2003, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes were as
follows:
21st International
(Amounts in Focus Growth Century Opportunities
thousands) Fund Fund Fund Fund
-------------------------------------------------------------------------
Cost of investments $1,847,999 $626,257 $89,849 $23,883
---------------------------------------------------
Gross unrealized
appreciation 389,887 153,715 16,385 4,762
Gross unrealized
depreciation (2,934) (5,354) (1,394) (233)
---------------------------------------------------
Net unrealized
appreciation
on investments $386,953 $148,361 $14,991 $4,529
The difference between cost amounts for financial statement and federal
income tax purposes is due primarily to wash sale loss deferrals and
foreign currency transactions.
62
N O T E S T O F I N A N C I A L S T A T E M E N T S continued
MARSICO FUNDS
SEPTEMBER 30, 2003
The Focus Fund and Growth Fund had realized capital losses (in thousands)
from transactions between November 1, 2002 and September 30, 2003 of
$47,093 and $10,671, respectively.
The Focus, Growth, 21st Century and International Opportunities Funds had
realized currency losses (in thousands) from transactions between
November 1, 2002 and September 30, 2003 of $2,455, $26, $51 and $73,
respectively. Post-October currency losses and capital losses are treated
as arising in the Funds next fiscal year.
At September 30, 2003, Focus, Growth, 21st Century and International
Opportunities Funds had accumulated capital loss carryforwards (in
thousands) of $329,779, $133,120, $63,078 and $6,683, with $0, $0,
$34,555 and $480 expiring in 2009, $242,309, $54,527, $28,523 and
$6,125 expiring in 2010 and $87,470, $78,593, $0 and $78 expiring in
2011, respectively. To the extent that a fund may realize future net
capital gains, those gains will be offset by any of its unused capital
loss carryforward.
The tax character of distributions paid during the fiscal years ended
September 30, 2003, and September 30, 2002 were as follows (in
thousands):
21st International
Focus Growth Century Opportunities
Fund Fund Fund Fund
---------------------------------------------------------------------------------------------
2003 2002 2003 2002 2003 2002 2003 2002
---------------------------------------------------------------------------------------------
Ordinary income - - - - - - - $24
Return of capital - $4,530 - $717 - - - -
----------------------------------------------------------------------
TOTAL DISTRIBUTIONS
PAID - $4,530 - $717 - - - $24
63
N O T E S T O F I N A N C I A L S T A T E M E N T S continued
MARSICO FUNDS
SEPTEMBER 30, 2003
As of September 30, 2003, the components of accumulated earnings (deficit)
on a tax basis were as follows:
21st International
Focus Growth Century Opportunities
(Amounts in thousands) Fund Fund Fund Fund
---------------------------------------------------------------------------------
Undistributed ordinary
income (deficit) $(804) $(253) $(83) $(163)
Undistributed long-term
capital gains - - - -
------------------------------------------------------
Tax accumulated
earnings (deficit) (804) (253) (83) (163)
------------------------------------------------------
Accumulated capital and
other losses (376,872) (143,791) (63,078) (6,683)
Unrealized appreciation
on investments 386,953 148,361 14,991 4,529
------------------------------------------------------
TOTAL ACCUMULATED
EARNINGS (DEFICIT) $9,277 $4,317 $(48,170) $(2,317)
------------------------------------------------------
64
R E P O R T O F I N D E P E N D E N T A U D I T O R S
MARSICO FUNDS
SEPTEMBER 30, 2003
To the Board of Trustees and Shareholders of
the Marsico Investment Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of the
Marsico Focus Fund, the Marsico Growth Fund, the Marsico 21st Century
Fund and the Marsico International Opportunities Fund (constituting the
Marsico Investment Fund, hereafter referred to as the "Funds") at
September 30, 2003, the results of each of their operations for the
year then ended, the changes in each of their net assets for each of
the two years in the period then ended and the financial highlights for
each of the periods indicated, in conformity with accounting principles
generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at September 30, 2003 by correspondence with the
custodian and broker and the application of alternative auditing
procedures where securities purchased had not been received, provide a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
November 7, 2003
65
T R U S T E E A N D O F F I C E R I N F O R M A T I O N
MARSICO FUNDS
SEPTEMBER 30, 2003 (Unaudited)
INDEPENDENT TRUSTEES
Term of Office(1)
Position(s) Held and Length of
Name, Address and Age with the Trust Time Served
- -------------------------------------------------------------------------------
Rono Dutta Trustee Since August 1998
1200 17th Street
Suite 1300
Denver, CO 80202
Age: 52
Walter A. Koelbel, Jr. Trustee Since December 1997
5291 Yale Avenue
Denver, CO 80222
Age: 51
Larry A. Mizel Trustee Since December 1997
3600 South Yosemite Street
Suite 900
Denver, CO 80237
Age: 61
Federico Pena Trustee Since February 1999
1225 17th Street
Denver, CO 80202
Age: 56
Michael D. Rierson Trustee Since November 1998
4202 East Fowler Avenue
ADM 214
Tampa, FL 33620
Age: 50
Joseph T. Willett Trustee Since November 2002
1200 17th Street
Suite 1300
Denver, CO 80202
Age: 52
<FN>
(1) Each Trustee serves an indefinite term until the election of a
successor. Each Officer serves an indefinite term, renewed annually, until
the election of a successor.
The Statement of Additional Information includes additional information
about the Trustees and is available upon request, without charge, by calling
1-888-860-8686.
66
Number of Portfolios Other
Principal Occupation(s) in Fund Complex Directorships
During Past 5 Years Overseen by Trustee Held by Trustee
- -------------------------------------------------------------------------------------------------------------
President, United Airlines (1999-September 2002); 4 None
Senior Vice President--Planning, United Airlines
(1994-1999); other positions with United Airlines
(1985-1994); previously, Manager for Planning,
Bell & Howell, and Management Consultant, Booz,
Allen and Hamilton.
President, and other positions, Koelbel and Company 4 None
(real estate development company)
(December 1976-Present).
President, M.D.C. Holdings, Inc. (homebuilding and 4 M.D.C.
mortgage banking) (March 1996-Present); Chairman Holdings, Inc.
and Chief Executive Officer, M.D.C. Holdings, Inc.
(more than five years).
Managing Director, Vestar Capital Partners (August 1998- 4 Principal Financial
Present); Secretary, U.S. Department of Energy (March 1997- Group, Inc.
July 1998); Secretary, U.S. Department of Transportation Sonic Corp.
(January 1993-February 1997).
Vice President of University Advancement, University of South 4 None
Florida (May 2001-Present); Vice President, University
Advancement at University of Miami (September 1998-
March 2001); Associate Dean, Kenan-Flagler Business School at
University of North Carolina at Chapel Hill (November 1993-
September 1998); Various positions at Duke University,
Durham, N.C. (October 1983-November 1993).
Chief Operating Officer, Merrill Lynch Europe 4 Merrill Lynch
(1998-2002); Chief Financial Officer, Capital Markets
Merrill Lynch & Co. (1993-1998). Bank Limited
(Ireland)
67
T R U S T E E A N D O F F I C E R I N F O R M A T I O N
MARSICO FUNDS
SEPTEMBER 30, 2003 (Unaudited)
INTERESTED TRUSTEES AND OFFICERS
Term of Office(1)
Position(s) Held and Length of
Name, Address and Age with the Trust Time Served
- -------------------------------------------------------------------------------
Thomas F. Marsico(2)(3) Trustee, President and Since December 1997
1200 17th Street Chief Executive Officer
Suite 1300
Denver, CO 80202
Age: 48
J. Jeffrey Riggs(2) Trustee Since December 1997
8400 East Prentice Avenue
Suite 1310
Englewood, CO 80111
Age: 50
Christopher J. Marsico(3) Vice President and Since September 2002
1200 17th Street Treasurer
Suite 1300
Denver, CO 80202
Age: 42
Mary L. Watson Vice President and Since September 2002
1200 17th Street Secretary
Suite 1300
Denver, CO 80202
Age: 44
Sander M. Bieber Assistant Secretary Since December 1997
1775 I Street, N.W.
Washington, D.C. 20005
Age: 53
<FN>
(1) Each Trustee serves an indefinite term until the election of a
successor. Each Officer serves an indefinite term, renewed annually,
until the election of a successor.
(2) Mr. T. Marsico is considered an Interested Trustee of the Trust within
the meaning of the Investment Company Act of 1940, as amended, because
of his affiliation with Marsico Capital Management, LLC. The Trust
treats Mr. Riggs as an Interested Trustee due to a business
relationship with Mr. T. Marsico whereby Mr. T. Marsico has invested
personal assets in certain partnerships for which Mr. Riggs acts as
principal.
(3) Mr. T. Marsico and Mr. C. Marsico are brothers.
The Statement of Additional Information includes additional
information about the Trustees and is available upon request, without
charge, by calling 1-888-860-8686.
68
Number of Portfolios Other
Principal Occupation(s) in Fund Complex Directorships
During Past 5 Years Overseen by Trustee Held by Trustee
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Chief Executive Officer, Marsico Capital 4 None
Management, LLC (September 1997-Present);
Executive Vice President, Janus Capital Corp.
(1986-1997).
President, Essex Financial Group, Inc. (commercial 4 None
mortgage bank) (more than five years); Principal,
Metropolitan Homes, Inc. (January 1992-2000);
Principal, Baron Properties, LLC (January 1997-Present).
President, Marsico Capital Management, LLC N/A N/A
(June 2002-Present); Chief Operations Officer,
Marsico Capital Management, LLC (September 1997-
June 2002); Vice President, US West
(1988-September 1997).
Chief Operations Officer, Marsico Capital Management, LLC N/A N/A
(June 2002-Present); Vice President of Client Services,
Marsico Capital Management, LLC (September 1997-Present);
Vice President of Institutional Services and other positions,
Janus Capital (1986-September 1997).
Partner, Dechert LLP (law firm) (more than five years). N/A N/A
69
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72
APPENDIX
Pages 17, 26, 36 and 45 of the Annual Report contain Performance
Graphs reflecting the growth of a $10,000 investment in certain Marsico
Funds.
Item 2 - Code of Ethics
(a) The Registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the Registrant's principal
executive officer, principal financial officer, principal accounting officer
or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the
Registrant or a third party. A copy of this code of ethics is attached
hereto as Exhibit (a).
(c) There have been no amendments, during the period covered by this report,
to a provision of the code of ethics that applies to the Registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the Registrant or a
third party, and that relates to any element of the code of ethics
description.
(d) The Registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
Registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
Registrant or a third party, that relates to one or more of the items set
forth in paragraph (b) of this item's instructions.
Item 3 - Audit Committee Financial Expert
(a)(1) The Registrant's Board of Trustees has determined that the Registrant
has at least one audit committee financial expert serving on its audit
committee.
(a)(2) Mr. Joseph T. Willett is the audit committee financial expert. Mr.
Willett is "independent" under the applicable rules.
Item 4 - Principal Accountant Fees and Services
Disclosure requirement not currently effective.
Item 5 - Audit Committee of Listed Registrants
Not applicable.
Item 6 - [Reserved]
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8 - [Reserved]
Item 9 - Controls and Procedures
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940, as amended, are effective based on their evaluation of these
disclosure controls and procedures within 90 days of the filing date of this
report on Form N-CSR.
(b) There were no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Item 10 - Exhibits
(a)(1) Code of Ethics.
(a)(2) Certification for each principal executive and principal financial
officer of the registrant as required by Rule 30a-2 under the Act (17 CFR
270.30a-2(a)).
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17
CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title
18 of the United States Code (18 U.S.C. 1350) - Filed as an attachment to
this filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
The Marsico Investment Fund
By: /s/ Thomas F. Marsico
Thomas F. Marsico
President
Date: November 25, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ Thomas F. Marsico
Thomas F. Marsico
President
Date: November 25, 2003
By: /s/ Christopher J. Marsico
Christopher J. Marsico
Vice President and Treasurer
Date: November 25, 2003