ICON FUNDS
SEMI-ANNUAL REPORT
Striking Our Target
1998
Dear ICON Funds Shareholders and Advisors: In late February of this year, five
ICON Sector Funds-Technology, Healthcare, South Europe, North Europe and
Asia-marked their first anniversary. Now that the Funds are several months into
their second year of operation, we can say with certainty they are doing what we
envisioned when creating them in late 1996. This Semi-Annual Report provides us
an opportunity to reflect on these Funds' first-year progress and to profile
achievements to date of other ICON Funds.
It is a story we are pleased to share with you.
You will identify several distinctions as you review this document. First, the
ICON Sector Funds are designed to serve investors who utilize the services of an
investment advisor. Accordingly, they have shown expense ratios suitable for
institutional requirements and in line with our original projections.
Second, portfolio turnover inside the funds is very low by sector mutual fund
standards, a fact that is extremely helpful to us in keeping trading costs down.
We are, as well, managing with a strong sensitivity to the new long-term capital
gains tax category.
Third, the funds have maintained their purity; that is, the securities inside
each sector fund really are classified in their respective sectors. Expense
ratios, turnover and purity are all critical issues for advisors and investors.
We are justifiably proud to be striking our targets and providing sector mutual
funds with these favorable characteristics.
To work most effectively with investment advisors, we have become members of the
Society of Asset Allocators and Fund Timers, Inc. (SAAFTI) and the National
Association of Personal Financial Advisors (NAPFA). These two professional
organizations serve fee-based investment advisors who use mutual funds to
implement portfolio strategies. ICON representatives who take part in these
organizations' meetings gain valuable feedback to help us to make sure our Funds
are meeting the needs of the investment advisor community.
Another important alliance is our association with the nation's leading
custodial platforms. ICON funds are now available to advisors through platforms
such as Charles Schwab, DataLynx, Jack White, Trust Company of America and
Fidelity Investment Advisor Group. These arrangements yield a two-fold
advantage: they facilitate advisors in their work, and represent an efficiency
to ICON as our transfer agent can simply deal with a few omnibus accounts.
Ultimately, our goal for ICON Sector Funds is performance for the individual
investor. We feel that we have done well in that regard. Although past
performance cannot predict future results, the last six-month period has been a
time to prove that our Funds have demonstrated planned characteristics and to
position ourselves administratively to meet the needs of advisors and their
investors.
We are pleased with our progress, and we are gratified to be working on your
behalf.
Very truly yours,
Craig T. Callahan, D.B.A.
Trustee, Chief Investment Officer of the Advisor
<PAGE>
Looking ahead it is our intention for the ICON menu to grow so as to
provide a broader opportunity for investors who rely on personal advisors.
ICON FUNDS
Management Discussion & Analysis
Basic Materials
Performance*
ICON Basic Materials Fund (the "Fund") opened on May 5, 1997. The Fund's return
since inception through 3/31/98 was (13.7%). The Standard & Poor's Basic
Materials Index return was 15.8% for the same period. The Fund's return from
9/30/97 through 3/31/98 was (20.8%). The Standard & Poor's Basic Materials Index
return from 9/30/97 through 3/31/98 was 1.7%. While disappointed with the Fund's
results during its first months, the Advisor believes it is positioned well for
the year ahead. The Fund has the ability to invest in the following industries:
Construction, Containers, Gold/Precious Metals, Mining Metal Fabricators, Metals
Mining, Aluminum, Paper and Forest Products, Chemicals, and Steel. These
industries are remarkably diverse and, accordingly, are impacted by a range of
factors. However, many of these industries are affected by the price of the base
commodity that is its manufacturing and/or marketing emphasis. Given this fact,
the ICON Basic Materials Fund is best suited for those investors who are willing
to assume a higher amount of investment risk. The Advisor believes that, all
else being equal, the ICON Basic Materials Fund has more downside risk, but also
more upside potential, than that of the broad market. This view has proven true
during the recent past as the Fund gained 13.5% during the first quarter of
1998. During the same period, the S&P Basic Materials Index gained only 10.7%.
The Advisor's strategy continues to focus on undervalued industries that are
growing at sustainable levels. It does not attempt to forecast the level of the
dollar or changes in commodity prices. Rather the emphasis is on valuation and
the fundamentals of each industry. Analysis indicates this sector remains
undervalued with significant upside potential.
Industry Highlights
The ICON Basic Materials Fund has invested in four industries: Gold/Precious
Metals Mining industry, Metals/Mining, Steel, and Aluminum. All four industries
have contributed to the appreciation of the Fund during the past quarter. The
Fund's largest holding is the Gold/Precious Metals Mining industry, which
comprises more than 50% of Fund resources. A number of negative factors
continued to depress gold stock prices in 1997 and early 1998. Several central
banks sold a large percentage of their gold reserves, citing their belief that
the reserves no longer store purchasing power. This action resulted in the price
of gold plummeting to 10-year lows. While the Fund's position in this industry
initially was a slowing force, that trend reversed in the last quarter. Gold
prices have stabilized, contributing to a more stable business environment for
gold-mining companies. This environment should have a positive impact on the
performance of stocks in the industry at large. The Advisor also believes that
the market has overreacted to the pessimism surrounding Gold. The many stocks in
this group are trading at the same range that they were in 1985, while others
have not appreciated since 1993. From a valuation perspective, this is clearly
an opportunity. With the stock market at all-time highs and trading at an
average price-to-earnings multiple of 26, this industry should be a defensive
investment in the upcoming year. Stocks in the Metals and Mining industry have
characteristics similar to those of the Gold/ Precious Metals Mining industry,
but their emphasis is the mining and milling of commodities such as copper,
gold, silver, lead and zinc. While stock prices have been depressed during the
past year, the industry's fundamentals have begun to improve. In response, the
Fund's Advisor has increased the weighting in the group over the last few
months. In addition, stocks within the Metals Fabrication industry were
liquidated as the average stock appreciated more than 9% during the last quarter
and more that 50% since their purchase early last year. These overvalued stocks
included four holdings involved in the manufacture and distribution of finished
metal products: Wolverine Tube, Inc., Kennametal, Inc., Brush Wellman, Inc. and
Mueller Industries. The Fund also has exposure to the Steel and Aluminum
industries. These positions have been beneficial to performance since the Fund's
inception. Both industries continue to remain undervalued and demonstrate good
fundamentals. The market has begun to recognize this value and some acquisitions
have taken place. Alumax, an aluminum manufacturer, was acquired recently by
Alcoa at almost a 40% premium to its stock price prior to the acquisition. The
market viewed this transaction favorably, and Alcoa has remained a good
investment. In addition, these industries tend to be uncorrelated to the
Gold/Precious Metals Mining industry. This should reduce the Fund's overall
volatility while also limiting its upside.
The Current Outlook
The improvement of fundamentals of industries within the Basic Materials sector
is a positive sign. Moreover, the U.S. economy continues to expand, accelerating
the demand for Basic Materials. This should enhance the sector in upcoming
months. While the Basic Materials sector is more volatile than the broad market,
investors have continued to view this sector with pessimism. This ICON Fund's
valuations continue to be attractive, however; and the Advisor believes stocks
in this sector are trading near their lows. The Fund should prove a good
investment for those seeking to diversify domestic or international portfolios.
<PAGE>
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 88.0% 90.9%
Top 10 Equities (% of Net Assets) 61.8% 65.7%
Number of Stocks 26 26
Cash & Cash Equivalents 6.6% 9.2%
- ---------------------------------------------------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
Barrick Gold Corporation 13.5% 12.0%
Battle Mountain Co. 12.2% 9.6%
Newmont Mining Corp. 9.3% 7.0%
Hecla Mining Corp. 5.0% 4.0%
Stillwater Mining Co. 4.6% 3.9%
Homestake Mining 4.2% 8.4%
Newmont Gold Company 3.9% 4.7%
Placer Dome Inc. 3.7% 8.2%
Alumax Inc. 3.1% -
Alcan Aluminum LTD. 2.3% -
- ---------------------------------------------------------------------------------------------------------------------------
Top Industries March 31, 1998 September 30, 1997
Gold/Precious Metals Mining 71.8% 73.9%
Steel 11.3% 8.7%
Metal Fabricators 4.9% 8.3%
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The S&P Basic Materials Index is a capitalization-weighted index
that measures the performance of the basic materials sector of the S&P
SuperComposite Index. It is comprised of 140 stocks. The Basic Materials Index
is an unmanaged index that includes the reinvestment of dividends and does not
reflect deductions for commission, management fees and all expenses. Individuals
cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
<PAGE>
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stock 88.0%
Gold/Precious Metals Mining 71.8%
21,000 Alcan Aluminum LTD $ 656,250
19,000 Alumax, Inc.a 858,563
9,200 Aluminum Co. Of America 633,075
14,500 Asarco Inc. 386,969
175,150 Barrick Gold Corp. 3,787,619
538,400 Battle Mountain Co. 3,432,300
31,500 Cyprus Amax Mineral
Company 523,688
22,600 Freeport-McMoran Copper
Class B 450,588
210,300 Hecla Mining Corp.a 1,393,238
107,300 Homestake Mining 1,166,887
29,500 INCO LTD 551,281
35,000 Newmont Gold Co. 1,095,937
85,500 Newmont Mining Corp. 2,613,094
5,000 Phelps Dodge 322,813
78,500 Placer Dome Inc. 1,035,219
51,400 Stillwater Mining Co.a 1,301,062
- -------------------------------------------------------------------------------
Total Gold/Precious Metals Mining20,208,583
Steel 11.3%
11,000 Carpenter Technology 594,000
10,300 Nucor Corp. 560,706
16,800 Quantex Corp. 505,050
32,900 Steel Technologies 393,772
10,200 Texas Industries Inc. 589,687
28,800 Worthington Industries, Inc.522,000
- ------------------------------------------------------------------------------
Shares or Principal Amount Market Value
Common Stocks - continued
Metal Fabricators 4.9%
9,500 Castle (AM) Co. $ 219,687
7,000 Commercial Metals Company 245,000
4,600 Mueller Industriesa 291,237
10,000 Reynolds Metals 614,375
- ------------------------------------------------------------------------------
Total Metal Fabricators 1,370,299
Total Common Stocks
(Cost $24,844,258) 24,744,097
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
$310,858 Johnson Controls
5.29% 9/28/98 310,858
- -------------------------------------------------------------------------------
$1,000,000 Pitney Bowes
5.29% 8/03/98 1,000,000
- -------------------------------------------------------------------------------
$542,066 Warner Lambert
5.27% 10/26/98 542,066
- -------------------------------------------------------------------------------
(Cost $1,852,924) 1,852,924
- -------------------------------------------------------------------------------
Total Investments (Cost $26,697,182)
94.6% 26,597,021
- -------------------------------------------------------------------------------
Other Assets less Liabilities 5.4%1,510,815
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 28,107,836
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
Consumer Cyclicals
Performance*
ICON Consumer Cyclicals Fund (the "Fund") opened on July 9, 1997. The Fund's
return since inception through 3/31/98 was 11.4%. The Standard & Poor's 1500
Index return was 23.2% for the same period. The Fund's return from 9/30/97
through 3/31/98 was 1.6%. The Standard & Poor's 1500 Index return from 9/30/97
through 3/31/98 was 16.3%. The strong first-quarter performance was driven by
price appreciation in the Retail Specialty industry (specifically among
companies selling office products) and in the Engineering and Construction
group. Both industries benefited from improved investor sentiment regarding
their prospects. Office products companies generally are exceeding earnings
estimates due to a continuing brisk economy. In the Engineering and Construction
industry, investors have realized that concerns over an Asian economic crisis
had driven prices far too low.
Industry Highlights
The Retail Specialty industry comprises the largest industry holding in the
Fund. One of the sub-groups within this industry is office products, which
includes companies such as Staples, Office Depot, OfficeMax and Viking Office
Products. These firms are benefiting from a strong economy and the healthy
business spending that results. Also, with their failed merger now behind them,
Staples and Office Depot have refocused their attention on business operations.
The Engineering and Construction industry is another major holding in the Fund.
This industry is composed of companies like Fluor Corp. and Foster Wheeler
Corp., designers and builders of large construction projects. The entire
industry suffered substantial price declines in their stocks, due in part to
concerns over an Asian economic crisis. Analysts also have been worried about
more fundamental industry factors, such as the level of competition and the
extent of margin contraction. Believing investors were overreacting to Asian
worries and fundamental industry concerns to be short-term in nature, the
Advisor added to portfolio positions in these companies at the end of 1997.
While performance suffered at the end of last year, price appreciation for these
companies has handily beaten the market in 1998. Footwear is another large
holding in the Fund. Like Engineering and Construction, it is one that seems to
have lost favor among investors. The Fund started buying companies such as Nike,
Reebok, Nine West and Wolverine World Wide at the end of 1997, as concerns about
inventories and the Asian economies were driving prices down. These stocks have
not rebounded as the Engineering and Construction companies have, but the Fund
Advisor believes patience will pay off. The depressed values offered the Fund an
opportunity to buy quality companies with good prospects at very reasonable
prices. In Housewares, one of the industry's smaller holdings, Newell, has been
a consistent and solid performer. Newell supplies large retailers such as
WalMart with a wide variety of products. In what is seen as a slow-growth
industry, this firm has been able to deliver 15% earnings gains, year after
year. It is one of the few consistent companies that has a reasonable price in
today's market.
The Current Outlook
The Advisor maintains a positive outlook for the Fund. Industries held continue
to demonstrate good value and solid long-term fundamentals. As such, the
portfolio is expected to maintain a low turnover ratio into the future.
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 96.9% 96.7%
Top 10 Equities (% of Net Assets) 50.3% 31.2%
Number of Stocks 29 41
Cash & Cash Equivalents 3.1% 3.4%
- ---------------------------------------------------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
Nike Class B 6.1% -
Nine West Group Inc. 5.9% -
Foster Wheeler Corp. 5.6% -
Reebok International LTD. 5.5% -
Wolverine World Wide 5.1% -
Fluor Corp. 5.0% -
Claire's Stores Inc. 4.5% -
Jacobs Engineering Group Inc. 4.5% 2.9%
Newell Co. 4.2% -
Rubbermaid Inc. 3.9% -
- ---------------------------------------------------------------------------------------------------------------------------
Top Industries March 31, 1998 September 30, 1997
Retail (Specialty) 35.9% 24.0%
Footwear 22.6% -
Engineering & Construction 18.8% 11.1%
Housewares 10.9% 6.7%
Retail (Home Shopping) 8.7% 13.9%
</TABLE>
<PAGE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The S&P 1500 SuperComposite is a broad-based
capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P
400, S&P 500 and the S&P 600. It is comprised of 1500 stocks. The S&P 1500 Index
is an unmanaged index that includes the reinvestment of dividends and does not
reflect deductions for commission, management fees and all expenses.
Individuals cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stocks 96.9%
Engineering & Construction 18.8%
41,900 Fluor Corp. $ 2,084,525
75,700 Foster Wheeler Corp. 2,313,581
34,300 Granite Construction 960,400
57,600 Jacobs Engineering
Group Inc.a 1,864,800
13,000 McDermott
International Inc. 537,062
- -------------------------------------------------------------------------------
Total Engineering & Construction 7,760,368
Retail (Home Shopping) 8.7%
11,200 CDW Computer Centers Inc.a670,600
23,100 Fingerhut Companies Inc. 599,156
38,900 Global Directmail Corp.a 719,650
14,500 Lands End Inc.a 534,687
66,000 Micro Warehouse Inc.a 1,076,625
- -------------------------------------------------------------------------------
Total Retail (Home Shopping) 3,600,718
Retail (Specialty) 35.9%
42,000 Autozone Inc.a 1,422,750
81,600 Claire's Stores Inc. 1,871,700
24,300 Discount Auto Parts Inc.a 589,275
77,800 Heilig-Meyers Co. 1,094,062
19,100 O'Reilly Automotive Inc.a 526,444
43,800 Office Depota 1,363,275
73,800 OfficeMax Inc.a 1,319,175
63,700 Pep Boys-Manny Moe
& Jacka 1,477,044
81,300 Sports Authority Inc.a 1,331,288
47,500 Staples Inc.a 1,101,406
42,700 Toys R Us Inc.a 1,283,669
60,700 Viking Office Products Inc.a1,411,275
- -------------------------------------------------------------------------------
Total Retail (Specialty) 14,791,363
<PAGE>
Shares or Principal Amount Market Value
Common Stocks - continued
Housewares 10.9%
35,600 Newell Companies $ 1,724,375
56,300 Rubbermaid Inc. 1,604,550
44,300 Tupperware Corp. 1,179,488
- -------------------------------------------------------------------------------
Total Housewares 4,508,413
Footwear 22.6%
57,200 Nike Class B 2,531,100
98,400 Nine West Group, Inc.a 2,423,100
74,800 Reebok International LTD 2,281,400
74,200 Wolverine World Wide 2,096,150
- --------------------------------------------------------------------------------
Total Footwear 9,331,750
Total Common Stocks
(Cost $37,711,582) 39,992,612
- --------------------------------------------------------------------------------
Short-Term Commercial Notes 3.1%
- --------------------------------------------------------------------------------
$244,704 Johnson Controls
5.29% 9/28/98 244,704
- --------------------------------------------------------------------------------
$840,980 Sara Lee
5.29% 10/28/98 840,980
- --------------------------------------------------------------------------------
$211,283 Wisconsin Electric
5.27% 10/19/98 211,283
- --------------------------------------------------------------------------------
Total Short-Term Commercial Notes
(Cost $1,296,967) 1,296,967
- --------------------------------------------------------------------------------
(Cost $39,008,549) 41,289,579
- --------------------------------------------------------------------------------
Liabilities less other Assets (0.0%) (47,004)
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 41,242,575
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
Energy
Performance*
ICON Energy Fund (the "Fund") opened on November 5, 1997. The Fund's return
since inception through 3/31/98 was (6.7%). The Standard & Poor's Energy Index
return was 1.1% for the same period.
The Energy sector has been very volatile since
the Fund's inception in November. Two key factors affecting the sector's
performance are energy demand and commodity prices. Most forecasts expect
worldwide oil demand to grow at 2-3% annually over the next 5 to 10 years, which
would be extremely favorable for the Energy sector in the long run.
Unfortunately, the market appears to be focusing on the short-term volatility of
crude prices. WTI Crude Oil fell from a high of $25 a barrel in 1997 to a low of
$11 a barrel in March of 1998. Within days of WTI Crude Oil's hitting $11 a
barrel, OPEC and many non-OPEC producing countries announced production cuts to
support the price of oil. Actions to support and stabilize crude oil prices by
the world's largest producers are very positive for the Energy sector going
forward. The Fund is invested in four oil and gas industries: International
Integrated, Domestic Integrated, Drilling & Equipment, and
Exploration/Production. Advisor believes value can be added through industry
rotation within the Fund. Benjamin Graham, a highly regarded value investor,
would buy undervalued stocks at the height of pessimism and then wait for up to
two years for them to appreciate to their intrinsic value. This Fund's strategy
is the same. Such a value-based strategy requires a highly disciplined,
unemotional and patient approach, and an eye to the long term.
Industry Highlights
The International Integrated and Domestic Integrated industries offer the most
stable returns in the Energy sector. The typical company in these two industries
has exploration (upstream) operations, which benefit from higher oil prices, and
refining (downstream) operations, which benefit from lower oil prices. Upstream
and downstream business diversification provides more stable returns in volatile
crude oil price environments. In addition, many of the companies derive a
growing percentage of their revenue and income from lines of business that are
less dependent on the price of crude, such as specialty chemical production. The
International and Domestic Integrated industries will benefit most from an
increasing worldwide demand for energy. The Drilling and Equipment industry has
dramatically underperformed the overall market since the Fund's inception in
November. The selling pressure and resulting underperformance in this group have
been triggered by many different factors. Concerns about Asian energy demand,
uncertainties about 1998 exploration budgets being cut due to lower oil prices,
uncertainties about OPEC production quotas, weakening natural gas prices, and
investors locking in profits after a very strong 1997 have negatively affected
the Drilling and Equipment industry. The Drilling and Equipment industry will
benefit the most from a stable crude oil price. A stable crude oil price will
ensure that the world's major oil producers will continue to expand their
exploration budgets and to increase the demand for the services of the Drilling
and Equipment industry. The Exploration and Production (upstream) industry is
historically one of the most volatile energy industries. The Exploration and
Production (E&P) industry has a high degree of institutional ownership, smaller
equity capitalizations and very volatile operating margins. The E&P industry was
one of the worst-performing industries in 1997 and has continued to trail the
overall market in 1998. As a result of poor price performance over the last 15
months, the E&P industry offers some of the most attractive valuations in the
market and is therefore heavily overweighted in this Fund. The recent
OPEC/Non-OPEC agreement and continual increase in worldwide energy demand should
lead to positive returns in the future.
The Current Outlook
It has been more than 11 years since the price of crude oil has declined as
sharply and precipitously as it has since early 1997. As the price of crude has
fallen, the doom-and-gloom perception about the energy sector has increased.
Fortunately, our highly disciplined and unemotional value approach can look
through the veil of uncertainty created by such events as short-term crude price
volatility and unpredictable OPEC production decisions. The long-term outlook
for the Energy sector is very strong. Worldwide energy demand is increasing at a
steady pace. World demand for oil is approaching 100% of current production
capacity. As companies continue to deplete their current reserves, they are
forced to look harder and drill deeper for new reserves. The Fund Advisor
believes that the current uncertainties surrounding the Energy sector and the
promising long-term demand environment have created very attractive valuations.
The Fund's strategy will continue to emphasize promising industries that can be
purchased at inexpensive prices.
Portfolio Profile March 31, 1998
Equities 94.2%
Top 10 Equities (% of Net Assets) 41.7%
Number of Stocks 49
Cash & Cash Equivalents 5.9%
- --------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998
Exxon Corp. 5.2%
Texaco Inc. 5.0%
Mobil Corp. 4.9%
Chevron Corp. 4.5%
Amoco Corp. 4.5%
Royal Dutch Petroleum ADR 4.3%
Shell Transport & Trading ADR 3.5%
USX-Marathon 3.3%
Occidental Petroleum Corp. 3.3%
Phillips Petroleum 3.2%
- --------------------------------------------------------------------------------
Top Industries March 31, 1998
Oil (Int'l Integrated) 32.0%
Oil & Gas (Drilling & Equip) 27.0%
Oil (Domestic Integrated) 18.2%
Oil & Gas (Exploration/Prod.) 17.0%
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The S&P Energy Index is a capitalization-weighted index of all
stocks designed to measure the performance of the energy sector of the S&P 500
Index. It is comprised of 28 stocks. The S&P Energy Index is an unmanaged index
that includes the reinvestment of dividends and does not reflect deductions for
commission, management fees and all expenses. Individuals cannot invest in the
index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stocks 94.2%
Oil & Gas (Drilling & Equip.) 27.0%
9,200 Baker Hughes, Inc. $ 370,300
9,500 B J Servicesa 346,156
3,000 Camco International Inc. 181,500
5,400 Cooper Cameron Corp.a 326,025
7,200 Diamond Offshore Drilling 326,700
3,000 Dresser Industries, Inc. 144,188
10,200 Ensco International, Inc. 283,050
13,600 Global Marine, Inc.a 336,600
4,300 Haliburton Co. 215,806
7,800 Helmerich & Payne 243,750
14,800 Nabors Industriesa 350,575
9,700 Noble Drilling Corp. 296,456
13,500 Parker Drilling Co.a 141,750
8,500 Rowan Cos, Inc.a 246,500
7,900 Santa Fe Intl. Corp. 299,706
5,200 Schlumberger 393,900
2,800 Smith International, Inc. 154,175
2,600 Tidewater, Inc. 113,912
6,700 Transocean Offshore, Inc. 344,631
4,000 Varco International, Inc. 103,000
- -------------------------------------------------------------------------------
Oil International Integrated 32.0%
10,100 AMOCO Corp. 872,388
10,900 Chevron Corp. 875,406
15,000 Exxon Corp. 1,014,375
12,500 Mobil Corp. 957,813
14,500 Royal Dutch Petroluem ADR 823,781
15,300 Shell Transport & Trading ADR677,025
16,200 Texaco 976,050
- -------------------------------------------------------------------------------
Total Oil International Integrated6,196,838
Oil Domestic Integrated 18.2%
9,300 Amerada Hess Corp. 542,306
7,000 Atlantic Richfield Co. 550,375
21,500 Occidental Petroleum Corp.630,219
12,400 Phillips Petroleum Co. 619,225
13,800 Unocal Corp. 533,887
16,900 USX-Marathon 635,863
- -------------------------------------------------------------------------------
Oil & Gas (Exploration/Prod) 17.0%
3,500 Anadarko Petroleum Corp. 241,500
6,300 Apache Corp. 231,525
5,100 Barrett Resources Corp. 178,181
7,300 Burlington Resources 349,944
3,900 Devon Energy Corporation 151,613
4,500 Kerr-Mcgee Co. 313,031
4,600 Murphy Oil Corp. 230,575
6,500 Newfield Exploration
Companya 169,406
5,300 Noble Affiliates 220,613
4,600 Pioneer Natural Resources 114,425
5,000 Pogo Producing Co. 158,750
19,600 Ranger Oil Ltd.a 127,400
Shares or Principal Amount Market Value
Common Stocks - continued
Oil & Gas (Exploration/Prod) - continued
13,300 Santa Fe Energy Resourcesa $ 146,300
7,300 Seagull Energy Corp.a 140,069
10,600 Union Pacific Resources
Group 253,075
11,600 Union Texas Petroleum
Holdings 256,650
- -------------------------------------------------------------------------------
Total Oil & Gas (Exploration/Prod)3,283,057
Total Common Stocks
(Cost $19,482,797) 18,210,450
- -------------------------------------------------------------------------------
Short Term Commercial Notes 5.9%
- -------------------------------------------------------------------------------
$148,399 General Mills
5.29% 05/18/98 148,399
- -------------------------------------------------------------------------------
$242,087 Warner Lambert
5.27% 10/26/98 242,087
- -------------------------------------------------------------------------------
$758,635 Johnson Controls
5.29% 09/28/98 758,635
- ------------------------------------------------------------------------------
Total Short-Term Commercial Notes
(Cost $1,149,121) 1,149,121
- -------------------------------------------------------------------------------
Total Investments 100.1%
(Cost $20,631,918) 19,359,571
- ------------------------------------------------------------------------------
Liabilities less Other Assets (0.1%) (22,534)
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 19,337,037
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
Financial Services
Performance*
ICON Financial Services Fund (the "Fund") opened on July 1, 1997. The Fund's
return since inception through 3/31/98 was 20.0%. The Lipper Financial Services
Index return was 32.9% for the same period. The Fund's return from 9/30/97
through 3/31/98 was 14.2%. The Lipper Financial Services Index return from
9/30/97 through 3/31/98 was 18.2%. The Financial Services sector, which has
recorded above-average returns for more than 10 years, continued to perform well
in 1998. The environment that has led to this superior performance remains;
interest rates are hovering at 20-year lows and inflation is subdued. Valuations
for the sector are high, a fact the Advisor believes reflects a continuation of
this theme. The Fund has exercised caution in this sector due to excessive
valuations, investing only in those industries trading at more reasonable
levels. The Advisor believes this strategy limits the Fund's downside risk while
achieving a secondary goal of capital preservation. In recent months, the market
has taken an interest in stocks trading at depressed levels. The Fund has
benefited from this materialization, gaining 14.0% during First Quarter 1998. In
contrast, the Lipper Financial Services Index gained only 9.8% during the same
period. In the Fund's 1997 annual report, the statement was made that volatile
interest rates and high multiples make valuations more important now than they
have been in the past. The Advisor continues to support this hypothesis,
believing that value investing will continue to be a successful strategy in the
years ahead.
Industry Highlights
In early October 1997, the Fund had a considerable position in Banks (Money
Centers), but remained cautious about near-term valuations. Stocks held included
Citibank, Chase Manhattan, BankAmerica and First Chicago--all of which were
trading near their intrinsic values. During the Asian currency crisis, these
stocks were punished due to the high percentage of revenues these firms generate
from Asian countries. The Fund Advisor took this opportunity to increase
exposure to this industry as the market overreacted to the economic situation.
Recent months have underscored the validity of the decision, as the Banks (Money
Centers) have outperformed regional banks. The Fund continues to be bullish on
the group; the average stock in the Banks (Money Center) industry trades at a
20% discount to the market's book multiple (a common, static measure of a
stock's value). In addition, the industry's near-term growth opportunities
appear to be favorable. The Fund's 1997 annual report also stated that stocks in
the Consumer Finance industry were trading at a significant discount to their
historical valuations as well as to the broad market. In addition, the statement
was made that the average stock held in the Fund was forecasted to grow at
approximately 16% over the next three to five years. The Fund Advisor was
particularly bullish on companies providing credit card products and certain
consumer lending and deposit services, such as Beneficial Corp. and Capital One
Financial. These firms have appreciated due to takeover speculation and
improving fundamentals, including declining credit card delinquencies.
Beneficial Corp. increased from the low $80s at the beginning of 1998 to the mid
$120s at the end of March. The Fund took this occasion to liquidate its position
in Beneficial to capture other opportunities. Capital One remains in the Fund
and, according to the valuation model employed, continues to trade below its
fair value. Other stocks in the Consumer Finance industry include MBNA,
Household International and Green Tree Corp. The fact that all display improving
fundamentals creates optimism about their investment potential. The Fund also
has positions within Insurance (Property and Casualty), Insurance (Multi-Line)
and Financial (Diversified). The Insurance (Property and Casualty) industry
continues to be under pressure due to pricing issues and heavy competition. Both
the Insurance (Multi-Line) and Financial (Diversified) industries have benefited
from their exposure to the global stock markets. The earnings of several stocks
(including American Express, Morgan Stanley, Dean Witter and Travelers Group)
have benefited from appreciating stock markets. While several of these companies
have brokerage divisions, they increasingly are deriving more of their revenue
from fee-for-service products. These products are structured so that companies
receive a fee, in the form of a percentage of assets-under management, for
providing investment advice and implementation. In the Fund Advisor's view, this
is a much higher value-added strategy that unites the interests of the client
and the financial advisor. With more "baby boomers" entering the saving
life-stage and cash flows into mutual funds growing at unprecedented rates, the
Advisor feels these firms will benefit well beyond the year 2000.
The Current Outlook
While the Fund Advisor continues to be cautious given the high valuations in the
financial sector, the economic environment is viewed as favorable. In addition,
considerable industry consolidation is taking place, which should benefit the
sector's profitability. Financial Services companies continue to evolve, to
introduce new products and to enter non-banking markets. While this makes
investing in the Financial Services sector more complex, the Fund continues to
act according to its singular philosophy: to invest in industries that can be
purchased at inexpensive prices. Maintaining this discipline assures Fund
investors they will receive the exposure and purity they require.
<PAGE>
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 97.4% 99.1%
Top 10 Equities (% of Net Assets) 38.0% 41.3%
Number of Stocks 54 49
Cash & Cash Equivalents 7.5% 0.9%
- ---------------------------------------------------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
Chase Manhattan Corp. 5.9% 4.1%
Citicorp. 5.6% 3.9%
BankAmerica Corp. 4.1% 3.4%
Bankers Trust New York Corp. 3.9% -
Household International Inc. 3.2% 4.0%
Green Tree Financial Corp. 3.2% 5.7%
MBNA Corp. 3.2% 4.8%
ContiFinancial Corp. 3.0% 3.1%
Travelers Group Inc. 3.0% -
First Chicago NBD Corp. 2.9% -
- ---------------------------------------------------------------------------------------------------------------------------
Top Industries March 31, 1998 September 30, 1997
Banks & Bank Holding Companies 43.0% 16.5%
Consumer Finance 15.4% 26.8%
Insurance (Property/Casualty) 11.9% 24.8%
Insurance (Multi-Line) 11.1% -
Financial (Diversified) 8.9% -
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The Lipper Financial Services Funds Index is a total return
performance index consisting of the largest mutual funds within its respective
investment objective category. It is comprised of 10 funds. The Lipper Financial
Services Index is an unmanaged index that includes the reinvestment of dividends
and does not reflect deductions for commission, management fees and all
expenses. Individuals cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stocks 97.4%
Financial Diversified 8.9%
5,900 American Express Company $ 541,694
4,400 American General Corp. 284,625
9,400 Federal Home Loan
Mtg. Corp. 445,913
9,000 Fannie Mae 569,250
6,400 Morgan Stanley &
Dean Witter 466,400
5,500 SunAmerica 263,313
- -------------------------------------------------------------------------------
Total Diversified 2,571,195
Banks & Bank Holding Companies 43.0%
8,600 Bank of New York 540,188
14,400 BankAmerica Corp. 1,189,800
5,400 BankBoston Corp. 595,350
9,400 Bankers Trust New
York Corp. 1,130,938
12,540 Banc One Corp. 793,155
12,600 Chase Manhattan Corp. 1,699,425
11,300 Citicorp 1,604,600
4,100 Comerica Inc. 433,831
9,500 First Chicago NBD Corp. 837,187
7,500 First Union Corp. 425,625
3,400 Fleet Financial Group, Inc. 289,213
5,900 Nations Bank Corporation 430,331
9,900 Norwest Corp. 411,469
7,000 PNC Financial Corp. 419,563
2,200 U.S. Bancorp 274,450
11,200 KeyCorp. 423,500
3,400 Republic New York Corp. 453,475
1,350 Wells Fargo & Co. 447,187
- -------------------------------------------------------------------------------
Total Banks & Bank Holding
Companies 12,399,287
Consumer Finance 15.4%
10,100 Capital One Financial Corp.796,637
28,800 Contifinancial Corp. 878,400
32,400 Green Tree Financial Co. 921,375
6,700 Household International Inc.922,925
25,500 MBNA Corp. 913,219
- ------------------------------------------------------------------------------
Total Consumer Finance 4,432,556
Insurance (Multi-Line) 11.1%
4,600 American International
Group 579,313
2,700 CIGNA Group 553,500
11,400 Conseco Inc. 645,525
2,680 Hartford Financial Services290,780
3,200 Lincoln National Corp. 271,600
14,450 Travelers Group Inc. 867,000
- ------------------------------------------------------------------------------
Total Insurance (Multi-Line) 3,207,718
Shares or Principal Amount Market Value
Common Stocks - continued
Insurance (Property/Casulty) 11.9%
7,400 Allstate Corp. $ 680,338
4,100 Capital Re Corp. 263,425
3,100 Chubb Corp. 242,962
4,000 CMAC Investment Corp. 267,000
4,300 Enhance Financial Svcs
Group 298,581
1,100 General Re Corp. 242,687
2,400 Ohio Casualty Corp. 115,200
5,400 Orion Capital Corp. 295,312
4,900 Safeco Corp. 267,816
9,100 Selective Insurance
Group Inc. 244,562
2,800 St Paul Co. 249,550
10,200 USF&G Corp. 254,362
- ------------------------------------------------------------------------------
Total Insurance (Property/Casualty)3,421,795
Savings & Loan Companies 7.1%
3,100 Ahmanson H. P. & Co. 240,250
3,600 Astoria Financial Corp. 222,525
3,200 Charter One Financial Inc. 214,200
2,200 Golden West Financial 210,787
11,520 Sovereign Bancorp. Inc. 209,520
6,710 Washington Federal Inc. 186,203
10,900 Washington Mutual Inc. 781,734
- -------------------------------------------------------------------------------
Total Savings & Loan Companies 2,065,219
Total Common Stocks
(Cost $23,953,490) 28,097,770
- -------------------------------------------------------------------------------
Short-Term Commercial Notes 7.5%
- -------------------------------------------------------------------------------
$117,793 General Mills
5.29% 05/18/98 117,793
- --------------------------------------------------------------------------------
$ 23,801 Sara Lee
5.29% 10/28/98 23,801
- -------------------------------------------------------------------------------
5.29% 08/03/98 416,964
- -------------------------------------------------------------------------------
5.27% 10/19/98 688,868
- -------------------------------------------------------------------------------
$912,663 Warner Lambert
5.27% 10/26/98 912,663
- --------------------------------------------------------------------------------
(Cost $2,160,089) 2,160,089
- -------------------------------------------------------------------------------
(Cost $26,113,579) 30,257,859
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Net Assets 100.0% $ 28,853,804 The accompanying notes are an integral part of
the financial statements.
<PAGE>
Healthcare
Performance*
ICON Healthcare Fund (the "Fund") opened on February 24, 1997. The Fund's return
since inception through 3/31/98 was 33.2%. The Lipper Health/Biotechnology Index
return was 25.5% for the same period. The Fund's return from 9/30/97 through
3/31/98 was 13.1%. The Lipper Health/ Biotechnology Index return from 9/30/97
through 3/31/98 was 10.4%. The Healthcare sector has maintained a strong
performance in comparison to other segments of the market. Investors have
continued to place a premium on the consistent earnings growth that the
Healthcare sector provides, and many have sought a "safe haven" from the Asian
currency crisis. Since most healthcare companies derive an insignificant amount
of their revenues and earnings from the Asian region, investors are less likely
to be disappointed with their returns. This has increased stock earnings
multiples. While the Advisor is cautious near-term, this sector is expected to
provide numerous investment opportunities. The Fund's performance since
inception deserves note, with First Quarter 1998 results a particular point of
pride. During this three-month period, the Fund gained 14.4%, while the Lipper
Health/ Biotechnology Index gained only 11.7%. The Fund's strategy--which
focuses on investing in under-valued industries that are growing at sustainable
levels--has proven to provide consistent returns over time. Value investors buy
at the point of highest pessimism and simply wait for stocks to appreciate to
their fair value. The Advisor believes a highly disciplined, unemotional and
patient approach can increase returns, as well as reduce downside risk and
volatility.
Industry Highlights
While the Healthcare sector includes several industries, they can be categorized
into three general groups: Life Sciences, Medical Products and Supplies, and
Service Providers. Industries within Life Sciences include Healthcare (Drugs and
Pharmaceuticals), Healthcare (Drugs) and Biotechnology. The companies in these
research-oriented industries create and deliver pharmaceutical-based healthcare
solutions--including human therapeutics, prescription medications and
over-the-counter medications--to improve life for people around the world.
Industries within Medical Products and Supplies include Medical Products and
Supplies and Healthcare (Diversified). The companies within these industries
focus on surgical instruments, dental products, pacemakers, heart valves and
other healthcare products. Most of these companies provide products to
hospitals, physicians and other medical institutions globally. Industries within
Service Providers include Hospital Management, Managed Care, Long-Term Care and
Special Services. Companies in these industries facilitate the administration
and coordination of healthcare services to individuals and corporations.
Products and services include health maintenance organization services,
point-of-service plans, nursing home care, assisted-living programs, hospital
care, and home health services. Clearly, the opportunities for investment within
these groups and their corresponding industries are many. The Advisor views this
large universe of alternative investments as an effective way to enhance
diversification and lower risk. While the Life Sciences, Medical Products and
Suppliers, and Service Providers can be highly volatile individually, investing
in a combination of industries within all groups lessens this volatility. The
Fund's primary strategy is to invest in only the most overlooked and undervalued
industries and stocks. Three industries have received emphasis in the Fund
during this reporting period: Drugs and Pharmaceuticals, Healthcare
(Diversified) and Healthcare (Managed Care). All three have contributed to the
appreciation of the Fund. The top performer in First Quarter 1998 has been the
Healthcare (Managed Care) industry, where the average stock in the group
appreciated over 25%. With below-market multiples and good growth prospects,
Managed Care stocks should continue to perform well during the remainder of the
year. Stocks such as United Healthcare, Wellpoint Health Networks and Humana
have been able to increase the prices they charge their networks. The price
increases have not slowed new-member growth, which should reflect positively on
these companies' earnings in future quarters. Healthcare (Drugs and
Pharmaceuticals) and Healthcare (Diversified) have experienced stable growth and
improving fundamentals, as well. Drug analysts continue to forecast high
single-digit growth rates, which has had a positive effect on valuations. While
stocks within these industries continue to appreciate during the current bull
market, they also show defensive characteristics, holding up in sideways and
down markets. This was shown to be true during the recent Asian currency crisis.
The Advisor continues to feel this Fund will be a solid contributor to a
diversified portfolio.
The Current Outlook
Despite uncertainties in the U.S. and international markets, the Fund has
appreciated steadily. Companies within this sector are driven continually to
improve the services and products they provide in order to improve quality of
life and grow their earnings. Demand should continue to increase in the decade
ahead. The Advisor believes healthcare stocks are well positioned to reap the
benefits of improving demographics. Given a favorable environment of increasing
earnings, low interest rates, improving fundamentals and advantageous
demographics, this ICON Fund shows all signs of being an excellent investment.
<PAGE>
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 97.5% 97.2%
Top 10 Equities (% of Net Assets) 44.9% 35.8%
Number of Stocks 62 73
Cash & Cash Equivalents 2.8% 2.8%
Top 10 Equity Holdings March 31, 1998
Pfizer Inc. 6.2% 5.2%
Merck & Co. 6.1% 3.2%
Schering-Plough Corp. 5.9% 4.2%
Bristol Myers Squibb 5.0% 4.7%
Lilly (Eli) & Co. 4.9% 5.2%
Johnson & Johnson Co. 3.5% -
American Home Products Corp. 3.5% 2.4%
Warner-Lambert Co. 3.4% 2.5%
Wellpoint Health Newtworks 3.2% -
Amgen 3.2% -
Top Industries March 31, 1998 September 30, 1997
Drugs/Pharmaceutical 26.3% 18.2%
Managed Care 21.1% 14.4%
Diversified 19.5% 16.6%
Long-Term Care 9.4% 13.3%
Biotechnology 8.9% 15.6%
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The Lipper Health/Biotechnology Funds Index is a total return
performance index consisting of the largest mutual funds within its respective
investment objective category. It is comprised of 10 funds. The Lipper
Health/Biotechnology Index is an unmanaged index that includes the reinvestment
of dividends and does not reflect deductions for commission, management fees and
all expenses. Individuals cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stocks & Rights 97.5%
Diversified 19.5%
11,100 Abbott Laboratories $ 835,969
7,700 Allergan Inc. 292,600
385 Allergan Specialty Therap-A 4,668
20,900 American Home Products Corp.1,993,338
27,650 Bristol Myers Squibb 2,884,241
27,400 Johnson & Johnson 2,008,763
30,200 Sierra Health Servicesa 1,204,225
11,400 Warner Lambert Co. 1,941,562
- -----------------------------------------------------------------------------
Drugs 6.6%
17,900 Alpharma Inc. Class A 388,206
13,300 Forest Laboratories Class Aa498,750
8,300 Medimmune, Inc.a 457,537
26,700 Mylan Laboratories 614,100
7,000 RP Scherer/DEa 472,500
26,600 Sequus Pharmaceuticals 280,962
26,100 US Bioscience Inc.a 264,262
22,600 Watson Pharmaceuticals
Com.a 813,600
- ------------------------------------------------------------------------------
Drugs/Pharmaceuticals 26.3%
4,100 Genentech, Inc.a 288,794
47,400 Lilly (Eli) & Co. 2,826,225
27,400 Merck & Co. 3,517,475
35,700 Pfizer, Inc. 3,558,844
34,500 Pharmacia & Upjohn Inc. 1,509,375
41,200 Schering-Plough Corp. 3,365,525
- -------------------------------------------------------------------------------
Total Drugs/Pharmaceuticals 15,066,238
Long-Term Care 9.4%
38,600 Beverly Enterprisesa 513,863
27,500 Genesis Health Ventures, Inc.a773,438
21,550 Health Care &
Retirement/DEa 925,303
34,530 Healthsouth Corp.a 968,998
12,100 Integrated Health
Services, Inc. 475,681
26,300 Mariner Health Group, Inc.a 450,387
30,000 Novacare, Inc.a 446,250
20,800 Sun Healthcare Group, Inc.a 387,400
14,100 Vencor, Inc.a 422,119
- -------------------------------------------------------------------------------
Managed Care 21.1%
15,900 Aetna Life and Casualty Co. 1,326,656
22,100 First Health Group Corp.a 1,198,925
7,800 Express Scripts Inc. Class Aa661,294
21,340 Foundation Health
Systems Corp.a 588,184
62,100 Humana Inc.a 1,540,856
22,450 Pacificare Health Systems
Class Ba 1,689,362
68,100 Phycor, Inc.a 1,536,506
Shares or Principal Amount Market Value
Common Stocks - continued
Managed Care - continued
26,550 United Healthcare Corp.a $ 1,719,112
27,400 Wellpoint Health Networks
Class Aa 1,849,500
- -------------------------------------------------------------------------------
Total Managed Care 12,110,395
Medical Products/Supplies 5.7%
12,000 ADAC Laboratoriesa 277,500
11,000 Ballard Medical Products 297,000
13,600 Biomet Inc. 408,000
9,500 Boston Scientific Corp.a 641,250
11,400 Guidant Corp. 836,475
10,300 Medtronic, Inc. 534,313
10,200 Respironics Inc.a 295,163
- -------------------------------------------------------------------------------
Biotechnology 8.9%
30,300 Amgen Inc.a 1,844,513
9,500 Biogen Inc.a 457,781
18,400 Cell Genesys Inc.a 121,900
14,600 Centocor Inc.a 651,525
14,000 Chiron Corp.a 293,125
10,400 Cor Therapeutics Inc.a 128,700
14,200 Genzyme Corp.a 454,400
7,100 Guilford Pharmaceuticl Inc.a156,200
2,100 Immunex Corp New Com.a 141,488
4,000 Inhale Therapeutic Sys Com.a108,500
9,400 Ligand Pharmaceuticals
Class Ba 149,813
12,700 Millennium Pharmaceutic
Com.a 236,537
7,700 Neurogen Corp. 118,387
11,100 Nexstar Pharmaceutical
Com.a 127,650
3,100 Protein Design Labs Inc.a 121,675
- --------------------------------------------------------------------------------
Total Common Stocks & Rights
(Cost $45,749,198) 55,897,250
- --------------------------------------------------------------------------------
Short Term Commercial Notes 2.8%
- --------------------------------------------------------------------------------
5.27% 10/26/98 930,251
- --------------------------------------------------------------------------------
$703,036 General Mills
5.29% 5/18/98 703,036
- --------------------------------------------------------------------------------
(Cost $1,633,287) 1,633,287
- -------------------------------------------------------------------------------
Total Investments 100.3%
(Cost $47,382,485) 57,530,537
Liabilities less other assets (0.3%) (198,400)
- ------------------------------------------------------------------------------
Net Assets 100.0% $ 57,332,137
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
Leisure
Performance*
ICON Leisure Fund (the "Fund") opened on May 9, 1997. The Fund's return since
inception through 3/31/98 was 26.9%. The Standard & Poor's Entertainment/Leisure
Composite Index return was 33.7% for the same period. The Fund's return from
9/30/97 through 3/31/98 was 11.8%. The Standard & Poor's Entertainment/Leisure
Composite Index return from 9/30/97 through 3/31/98 was 27.0%. The superior
performance of the Standard & Poor's Entertainment/Leisure Composite Index is
due to its concentrated weightings in three top-performing stocks: Disney, Time
Warner and McDonalds comprise 73% of this benchmark. All three stocks are held
in the Fund; however, they are held in much smaller weightings to allow adequate
diversification within the Fund. The Leisure sector of the market has
experienced steady appreciation over the preceding 12 months. Composed of a
diversified group of industries, the Fund has produced returns with less
volatility than many of its sector-fund peers. Industries emphasized in the Fund
include Restaurants, Broadcasting and Gaming. Since its inception, the Fund has
remained consistent with its core industry holdings. This has kept turnover low,
minimizing transaction costs and taxes. In the last year, performance of the
industries within the Fund has been mixed. The Fund's largest industry holding,
Restaurants, has provided market-matching returns in recent months. The returns
of Broadcasting (TV/Radio/Cable) stocks, the Fund's second biggest holding, have
been more spectacular. Stocks within this industry have approximately doubled
since their initial purchase on the Fund's inception in May 1997. Their stellar
performance has been consistent, as they have remained market leaders in recent
months. Gaming stocks have lagged the market in the past six months. Valuations
are very favorable for the group, and we continue to view this industry as
worthy of a significant investment.
Industry Highlights
Due to very attractive valuations, Restaurant stocks have been the Fund's
largest holding since its inception. These stocks initially were purchased for
the Fund when many Restaurant analysts and investors were negative on the group.
This pessimism created a good buying opportunity for value investors, as the
stocks did not remain out of favor for long. Recent analyst upgrades on
McDonalds, the largest stock in the industry, appear to have boosted investor
confidence in the Restaurant group. With renewed investor interest, McDonalds
was able to break out of a two-year trading range. Analysts cited improved food
quality and food preparation technology as reasons for their new-found
admiration for the stock. Other stocks in the industry also have benefited from
improved investor sentiment. In the last six months, Brinker, Cracker Barrel,
Darden and Outback Steakhouse have all posted returns in excess of the market.
Despite the success of some Restaurant stocks, others have yet to be recognized
as values by the market. Such stocks as Applebees, Wendy's and Lone Star
Steakhouse should offer considerable upside potential from current levels. The
Fund's holdings in the Broadcasting (TV/Radio/ Cable) industry--which include
Comcast, Cox Communications, TCA Cable, and TCI--continue to lead the Fund.
These cable companies have experienced a significant turnaround in the last
year. Investor sentiment toward cable companies, which was poor when the Fund
initially purchased these stocks, is now very positive. These companies continue
to improve their cash flow, pay down debt, gain additional subscribers and
explore new markets for their products. With the turnaround and recent success
of the companies, many brokerage houses currently have strong buy
recommendations on cable stocks. As value investors, the Fund Advisor is
continually working to determine the true worth of these stocks, and at current
levels, these stocks do remain attractive investments. Still, the Advisor
remains aware of the potential for extreme bullish sentiment to push stock
prices beyond reasonable levels. Gaming (Lottery & Parimutuel) stocks remain
undervalued during this reporting period, suggesting that they have considerably
more upside potential than the overall market. Although the takeover frenzy
within the industry has lifted the share prices of many smaller gaming
companies, the stock prices of the larger gaming companies have yet to benefit.
Circus Circus, initially thought to be a takeover target of Hilton, is currently
not an acquisition candidate. Further merger and acquisition is likely, however,
as share prices within the Gaming (Lottery & Parimutuel) industry have been
depressed. Such consolidation has the potential to benefit both small and large
capitalized companies in the industry. Although not one of the top-three
industry holdings, the Tobacco industry recently has received greater emphasis
in the Fund. The overhang of federal legislation has led to Tobacco stocks'
underperforming the market for some time, and the recent collapse of the Tobacco
deal has heightened the volatility of these shares. Given legislation
uncertainty and the potential liability of Tobacco companies, Tobacco stocks are
selling at deep discounts to their historical valuations. Although this
uncertainty will continue in the near future, the market appears to have already
priced the worst-case scenario into these shares. As such, they should offer
downside protection in the short term and solid long-term appreciation
potential.
Current Outlook
The general health of the economy continues to put disposable cash flow into the
pockets of consumers. Many Leisure industries, such as Restaurants, Gaming
(Lottery & Parimutuel) and Entertainment, benefit directly from an increase in
discretionary consumer spending. As incomes advance with little sign of
inflation, the consumer has more money to spend on dining out, gambling,
amusement parks and other leisure activities. As a number of its stocks remain
undervalued, the Fund should offer some downside risk versus the overall market.
Many of these stocks trade at price/earnings (P/E) multiples significantly less
than that of S&P 500, which currently has a P/E ratio of approximately 28. The
Fund Advisor is content with the Fund's current industry positions and does not
anticipate major changes. Despite the overall appreciation of the market and the
Leisure sector, the Advisor believes there are still undervalued opportunities
to exploit within the Fund.
<PAGE>
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 97.4% 97.9%
Top 10 Equities (% of Net Assets) 41.2% 37.7%
Number of Stocks 38 39
Cash & Cash Equivalents 2.7% 2.1%
- ---------------------------------------------------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
Telecommunications Inc. Class A 4.6% 3.8%
Harrahs Entertainment Inc. 4.4% 4.4%
Comcast Corp Class A 4.3% 3.6%
Phillip Morris Co. Inc. 4.3% -
TCA Cable TV Inc. 4.2% -
Cox Communications Class A 4.2% 3.1%
Intl. Game Technology 4.0% 4.5%
McDonalds Corp. 4.0% 3.1%
Viacom Inc. 3.8% -
Mirage Resorts Inc. 3.4% 4.4%
- ---------------------------------------------------------------------------------------------------------------------------
Top Industries March 31, 1998 September 30, 1997
Restaurants 25.3% 28.6%
Broadcasting, TV, Radio, Cable 17.3% 13.3%
Gaming, Lottery & Parimutuel 15.0% 17.4%
Leisure Time (Products) 14.4% 16.2%
Tobacco 12.1% 9.5%
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The S&P Entertainment & Leisure Composite is a
capitalization-weighted index of all the stocks in the Standard & Poor's 500
that are involved in the business of entertainment and leisure related products
and services. It is comprised of 13 stocks. The S&P Entertainment & Leisure
Composite Index is an unmanaged index that includes the reinvestment of
dividends and does not reflect deductions for commission, management fees and
all expenses. Individuals cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stocks 97.4%
Tobacco 12.1%
74,600 Gallagher Group PLC ADR $ 1,613,225
85,400 Philip Morris Cos. Inc. 3,560,112
71,000 RJR Nabisco Holdings
Corp. 2,223,187
83,300 UST Inc. 2,686,425
- ------------------------------------------------------------------------------
Total Tobacco 10,082,949
Broadcasting TV, Radio, Cable 17.3%
101,000 Comcast Corp. Class A 3,566,562
83,300 Cox Communications Inc.
Class Aa 3,498,600
60,000 TCA Cable TV Inc. 3,547,500
122,400 Telecommunications Inc.
Class Aa 3,805,875
- -------------------------------------------------------------------------------
Total Broadcasting TV, Radio, Cable14,418,537
Entertainment 8.9%
17,200 Disney (Walt) Company 1,836,100
33,800 Time Warner Inc. 2,433,600
59,500 Viacom Inc. Class Aa 3,160,938
- -------------------------------------------------------------------------------
Lodging Hotels 4.4%
55,500 Hilton Hotels 1,769,062
91,700 LaQuinta Inns Corp. 1,925,700
- -----------------------------------------------------------------------------
Leisure Time (Products) 14.4%
52,000 Arctic Cat Inc. 484,250
86,200 BAT Industries, PLC ADR 1,777,875
42,500 Brunswick Corp. 1,482,187
50,300 Callaway Golf Co. 1,458,700
40,300 GTech Holdings Corp.a 1,566,662
42,900 Harley-Davidson Inc. 1,415,700
34,300 Hasbro Inc. 1,211,219
33,200 K2 Inc. 740,775
26,400 Mattel Inc. 1,046,100
28,300 WMS Industries Inc.a 886,144
- -------------------------------------------------------------------------------
Total Leisure Time (Products) 12,069,612
Shares or Principal Amount Market Value
Common Stocks - continued
Restaurants 25.3%
112,300 Applebees International Inc. $ 2,596,938
85,200 Bob Evans Farms 1,805,175
198,100 Boston Chickena 996,691
93,900 Brinker International Inc.a2,054,063
20,130 CKE Restaurants Inc. 739,778
41,700 Cracker Barrell Old
Country Storesa 1,668,000
137,300 Darden Restaurants Inc. 2,136,731
94,500 Lone Star Steakhouse
Saloona 2,143,969
55,100 McDonalds Corp. 3,306,000
25,700 Outback Steakhouse Inc.a 1,005,513
120,000 Wendy's International Inc. 2,677,500
- -------------------------------------------------------------------------------
Total Restaurants 21,130,358
Gaming, Lottery, & Parimutuel 15.0%
131,500 Circus Circus Enterprises Inc.a2,761,500
148,500 Harrahs Entertainment Inc.a3,647,531
132,500 Intl Game Technology 3,312,500
116,300 Mirage Resorts Inc.a 2,827,544
- --------------------------------------------------------------------------------
Total Gaming, Lottery & Parimutuel12,549,075
Total Common Stocks
(Cost $68,502,964) 81,375,931
- -------------------------------------------------------------------------------
Short-Term Commercial Notes 2.7%
- -------------------------------------------------------------------------------
$1,610,569 American Family
5.27% 10/26/98 1,610,569
- -------------------------------------------------------------------------------
$203,000 General Mills
5.29% 05/18/98 203,000
- -------------------------------------------------------------------------------
5.29% 09/28/98 424,699
- -------------------------------------------------------------------------------
(Cost $2,238,268) 2,238,268
- -------------------------------------------------------------------------------
Total Investments 100.0%
(Cost $70,741,232) 83,614,199
- -------------------------------------------------------------------------------
Liabilities less other Assets (0.0%) (85,723)
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 83,528,476
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
Technology
Performance*
ICON Technology Fund (the "Fund") opened on February 19, 1997. The Fund's return
since inception through 3/31/98 was 15.2%. The Lipper Science/Technology Index
return was 17.7% for the same period. The Fund's return from 9/30/97 through
3/31/98 was (11.1%). The Lipper Science/ Technology Index return from 9/30/97
through 3/31/98 was (3.0%). Technology stocks in general have been highly
volatile during the past six months, revealing the high degree of uncertainty
associated with investing in this sector of the economy. The Asian currency
crisis, the proliferation of the sub-$1,000 PC market, the delayed setting of
modem standards, and the erosion of semiconductor pricing power have all added
to anxiety in this sector. Given this uncertainty, many investors have flocked
to certain technology stocks that are perceived to have less risk. These include
the largest and most expensive stocks in the technology sector. In addition,
investors are rewarding companies that have not disappointed with regards to
earnings. While this can continue, as value investors the Advisor has forgone
investing in firms that are trading at unsustainable valuations. For example,
the Fund avoided software stocks trading between 40 to 50 times this year's
earnings, yet growing at 20 to 30 percent a year. Instead, the search has been
for stocks that are trading at multiples below their long-term growth rate. The
Advisor believes this value strategy will generate attractive returns while
reducing risk over the years. This strategy should also generate lower turnover
rates within the Fund, and therefore reduce taxable transactions and trading
costs.
Industry Highlights
The Fund continued to have exposure to the Communications Equipment industry
over the past six months, including large positions in Lucent Technologies,
Motorola Inc., Tellabs Inc. and Northern Telecom Ltd. Investors may recall that
the Fund's exposure to these stocks was increased late last summer. At that time
most stocks within this group were depressed due to lower capital outlays by the
Regional Bell Companies, which are their main customers. This allowed the Fund
to invest in the group at substantial discounts. During the Asian crisis several
of these stocks benefited because they receive less of their revenues from
countries located in the Pacific Basin region and were therefore seen as "safe
havens." Industry fundamentals continue to benefit from the sustained build-out
of Regional Bell networks and corporate enterprise networks. Stocks within this
industry should continue to benefit, as well, from the expansion of the
internet. Internet Service Providers (ISPs) continue to increase their
<PAGE>
capital expenditures as demand reaches higher levels. This should not only help
stocks within the Communications Equipment industry, but also those in the
Computer Networking industry. The Fund has continued to invest in the four
largest Computer Networking stocks: Cisco Systems, 3COM Corp., Bay Networks and
Cabletron Systems. These stocks were purchased when they were suffering from a
wrongly perceived slowdown in end-user demand. Since that time, demand has been
strong and revenue growth has accelerated. Firms such as Cisco Systems and Bay
Networks that provide end-to-end solutions and multiple product lines have
benefited the most. 3COM's stock performance has lagged in the past two quarters
due to the industry's inability to set a standard for 56k modems. However, the
Fund Advisor expects modem sales to accelerate as the industry sets a standard
in early March. Cabletron's stock price has been depressed due to its inability
to execute its strategic plans. The Fund's valuation model indicates that the
market has overreacted and the Advisor believes the stock will recover from the
temporary uncertainty. The Fall 1997 sell-off in technology allowed the Fund to
buy high-growth companies in the Equipment Semiconductor industry. These stocks
provide the equipment for electronic semiconductor manufacturers such as Intel
and Advanced Micro Devices, Inc. The Fund purchased stocks within this industry
when they were selling at significant discounts to their historical multiples.
Among those chosen were Applied Materials, KLA-Tencor, Novellus Systems and
Teradyne Inc. A high percentage of these firms' sales come from Korea and other
Asian counties. While the currency crisis has slowed end-user demand and thus
slowed these firms' revenue growth in the short-term, the Advisor believes
industry fundamentals will improve in the second half of this year. These stocks
should benefit as a result. This example of buying undervalued industries which
are temporarily out of favor is indicative of the way the Fund is invested over
time.
The Current Outlook
While most technology companies continue to grow earnings at double-digit rates,
the Technology sector as a whole has produced market-like results in the past
six months. The Fund Advisor believes that, over time, earnings growth and stock
prices move together. However, the market is currently discounting near-term
uncertainty in this economic sector and ignoring long-term growth potential. The
Advisor is hopeful the market will recognize technology stocks' earnings growth
and believes that stock prices will rise in the upcoming year to reflect true
sector fundamentals. The Fund continually strives to identify promising
industries that can be purchased at inexpensive prices. Intensive quantitative
and fundamental research drives the investment process. While near-term results
are an easy focus, the Advisor's investment team takes a long-term investment
approach. The team recognizes that Asia has temporarily reduced growth
prospects, but that the economic climate in the U.S. is still very positive. The
way business is conducted is increasingly reliant on new technologies, and
today's businesses are more dependent on the companies that provide new
solutions. Companies are using technology to reduce their costs and increase
efficiency. This will allow firms to compete in the new global economy and has
helped lead to one of the best economic environments of the 20th century. The
Fund's Advisor foresees a continuation of this theme and views the Fund as a way
for investors to participate in this economic sector.
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
Portfolio Profile March 31, 1998 September 30, 1997
Equities 98.1% 97.4%
Top 10 Equities (% of Net Assets) 37.7% 39.8%
Number of Stocks 56 55
Cash & Cash Equivalents 2.2% 2.8%
- --------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
3Com Corp. 4.6% 5.6%
Cisco Systems, Inc. 4.2% 5.3%
Lucent Technologies 4.2% -
Intel Corp. 4.1% 5.9%
Cabletron Systems 3.9% 5.0%
Bay Networks, Inc. 3.8% 5.2%
Novellus Systems 3.5% -
Northern Telecom 3.4% -
Applied Materials Inc. 3.1% -
Motorola Inc. 2.9% -
- ---------------------------------------------------------------------------------------------------------------------------
Top Industries March 31, 1998 September 30, 1997
Electronic Semiconductor 30.2% 13.9%
Communications Equipment 29.2% 17.6%
Computer Networking 16.4% 23.1%
Peripherals 12.0% 19.3%
Computer Hardware 10.3% 17.5%
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The Lipper Science & Technology Funds Index is a total return
performance index consisting of the largest mutual funds within its respective
investment objective category. It is comprised of 10 funds. The Lipper Science &
Technology Index is an unmanaged index that includes the reinvestment of
dividends and does not reflect deductions for commission, management fees and
all expenses. Individuals cannot invest in the index itself.
<PAGE>
Growth of $50,000 investment since fund inception versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stocks 98.1%
Communications Equipment 29.2%
74,500 ADC Telecommunications
Inc.a $ 2,053,406
58,700 Allen Telecommunications
Inc.a 924,525
44,350 Andrew Corp.a 878,684
29,800 Analog Devicesa 990,850
51,850 Aspect Telecommunications
Corp.a 1,390,228
60,100 Checkpoint Systems Inc.a 1,277,125
31,500 Digital Microwave Corp.a 464,625
31,500 DSC Communications Corp.a 572,906
29,350 Lucent Technologiesa 3,753,131
42,600 Motorola Inc. 2,582,625
77,350 Newbridge Networks Corp.a 2,078,781
47,600 Northern Telecom Ltd. 3,076,150
31,550 Qualcom Inc.a 1,687,925
110,250 Scientific Atlanta Inc. 2,156,766
33,500 Tellabs Inc.a 2,248,688
- -------------------------------------------------------------------------------
Computer Hardware 10.3%
15,300 Adaptec, Inc.a 300,263
30,500 Ascend Communicationsa 1,155,188
25,000 Compaq Computer Corp. 646,875
36,800 Dell Computer Corp.a 2,493,200
7,300 Digital Equipmenta 381,881
20,200 Hewlett-Packard Co. 1,280,175
11,900 International Business
Machines 1,236,112
13,400 Sequent Computer
Systems, Inc.a 244,550
36,200 Sun Microsystems, Inc.a 1,510,219
- -------------------------------------------------------------------------------
Total Computer Hardware 9,248,463
Computer Networking 16.4%
113,700 3Com Corp.a 4,086,094
125,200 Bay Networks, Inc.a 3,396,050
237,900 Cabletron Systemsa 3,464,419
55,025 Cisco Systems, Inc.a 3,762,334
- -------------------------------------------------------------------------------
Total Computer Networking 14,708,897
Peripherals 12.0%
38,600 EmcCorp/MAa 1,459,562
104,900 Iomega Corp.a 721,187
65,900 Komag, Inc.a 955,550
22,500 Lexmark Intl. Grp., Inc.
Class Aa 1,015,313
39,200 Quantum Corp.a 835,450
59,600 Read-Rite Corp.a 823,225
39,800 Seagate Technologya 1,004,950
29,600 Storage Technology Corp.
Class Aa 2,251,450
94,100 Western Digital Corp.a 1,652,631
- -------------------------------------------------------------------------------
Total Peripherals 10,719,318
<PAGE>
Shares or Principal Amount Market Value
Common Stocks - continued
Semiconductors 30.2%
44,400 Advanced Micro Devicesa $ 1,290,375
25,800 Altera Corp.a 973,950
78,100 Applied Materialsa 2,757,906
52,700 Atmel Corp.a 793,794
17,900 Dallas Semiconductor Corp. 601,888
20,300 ETEC Systemsa 1,197,700
47,400 Intel Corp. 3,700,163
67,300 Kla-Tencor Corporationa 2,574,225
18,000 Lattice Semiconductor Corp.a 925,875
12,800 Linear Technology Corp. 883,200
35,300 LSI Logic Corp.a 891,325
23,300 Maxim Integrated Productsa 848,994
37,300 Microchip Technology Inc.a 783,300
31,400 National Semiconductor
Corp.a 657,438
26,400 Micron Technology Inc.a 767,250
72,300 Novellus Systems, Inc.a 3,126,975
64,400 Teradyne,Inc.a 2,580,025
15,400 Texas Instruments 833,525
23,500 Xilinx Inc.a 879,780
- -------------------------------------------------------------------------------
Total Electronic Semiconductors 27,067,688
Total Common Stocks
(Cost $85,338,459) 87,880,781
- --------------------------------------------------------------------------------
Short-Term Commercial Notes 2.2%
- --------------------------------------------------------------------------------
$611,050 American Family
5.27% 10/26/98 611,050
- --------------------------------------------------------------------------------
$425,040 Johnson Controls
5.29% 9/28/98 425,040
- --------------------------------------------------------------------------------
$213,000 Pitney Bowes
5.29% 8/03/98 213,000
- --------------------------------------------------------------------------------
$173,000 Sara Lee
5.29% 10/28/98 173,000
- --------------------------------------------------------------------------------
$530,762 Warner Lambert
5.27% 10/26/98 530,762
- -------------------------------------------------------------------------------
Total Short-Term Commercial Notes
(Cost $1,952,852) 1,952,852
- -------------------------------------------------------------------------------
Total Investments 100.3%
(Cost $87,291,311) 89,833,633
- -------------------------------------------------------------------------------
Liabilities less other Assets (0.3%) (245,879)
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 89,587,754
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
Telecommunication and Utilities
Performance*
ICON Telecommunication and Utilities Fund (the "Fund") opened on July 9, 1997.
The Fund's return since inception through 3/31/98 was 38.0%. The Lipper
Utilities Index return was 26.5% for the same period. The Fund's return from
9/30/97 through 3/31/98 was 29.8%. The Lipper Utilities Index return from
9/30/97 through 3/31/98 was 22.0%. The Telecommunication and Utilities sector of
the market has produced exceptional returns the last six months. As the volatile
market punished some sectors in the fourth quarter of 1997, Telephone Service,
Long Distance and Electric Utility stocks thrived. These three industries are
currently the three biggest industry holdings in the Fund. With these core
holdings, the Fund has outpaced most of its competition and the broad market
since its inception. Telecommunication and Utilities stocks have long been
thought to be defensive. They benefited from investor worries about the overall
level of the stock market in the final quarter of 1997, as investors rushed to
sectors thought to be "safe havens." Also in the last quarter of 1997, these
interest rate-sensitive stocks were lifted by the strength in the bond market.
After a brief pause in early 1998, the Telecommunication and Utilities sector
again advanced as the broad market recovered and headed higher.
Industry Highlights
The Fund's two largest holdings are Telephone Services and Electric Utilities.
Together, these two industries have comprised over 70% of the Fund. Telephone
Service stocks have led the market for much of the last 12 months. These stocks
have benefited from investor perception that the industry is defensive, the
strength in the bond market and industry trends. The Fund's largest stock
holdings in this industry have been Ameritech, BellSouth, SBC Communications,
Bell Atlantic, Century Telephone and US West. Because of the high correlation of
stocks within the industry, an active stock-picking approach is unnecessary.
Fund monies have been spread evenly over the large capitalized companies in the
group. Moreover, the Fund has minimized its turnover by avoiding buying and
selling these companies on stock-specific news. The Telecommunications Act of
1996 opened most local and long distance markets to more competition, with
certain restrictions. The process of demonopolization, however, has been slow.
Incumbents in the local phone markets, the Telephone Service companies, continue
to maintain monopoly-type status. In the short term, this has helped and will
continue to benefit the share prices of these companies. An additional factor
that has benefited the Telephone Service industry is the demand for new phone
lines. This demand has been boosted by the strong economy as well as the
proliferation of the Internet. Finally, consolidation continues to be a trend
within the industry. The Electric Utility industry is also experiencing
deregulation and consolidation. Although these factors have added uncertainty to
an industry that historically has been characterized by stability, the long-term
benefits are positive. In their newly competitive environment, Electric Utility
companies will need renewed focus on cost cutting, distribution and marketing.
The pace of deregulation in this industry also has been slow. Predicting which
companies will thrive in the new competitive environment is a daunting task.
However, the industry, with its attractive valuations and defensive
characteristics, remains a compelling investment opportunity. For this reason,
the Fund avoids stock picking and instead holds a diversified sample of stocks
within the industry. Currently, the Fund owns 16 Electric Utility companies,
including such names as Consolidated Edison, Duke Power, Pacificorp and
Southern. For the first quarter of 1998, Long Distance stocks should post their
first significant gain in revenue in nine quarters. Currently, AT&T is also on
track to report a year-over-year earnings-per-share increase. However, analysts
are calling for Sprint and MCI to post year-over-year earnings-per-share
declines, due mainly to spending on new ventures. As these companies attempt to
venture into newer markets, such as wireless and local, they incur large costs.
In addition to the three Long Distance stocks mentioned previously, the Fund
also owns Cincinnati Bell, LCI International and Worldcom. Despite the cloudy
outlook for these stocks and the low growth rates forecasted, they have been
market leaders over the last year. Further price run-ups could justify
alternative investments within the sector. The Fund also owns a position in the
Cellular and Wireless industry. These stocks, typically the most volatile in the
sector, have been good performers. Although the Telephone Service, Long
Distance, and Cellular and Wireless industries are all becoming more integrated,
these stocks still offer diversification within the Fund.
Current Outlook
The share price appreciation of many stocks within the Telecommunication and
Utilities sector has exceeded 40% in the last six months. As such, there are
currently fewer opportunities to exploit than those that existed just a few
months ago. A renewed rally in the bond market or further investor skittishness
could continue to draw investor attention to these shares. This sector still
offers some of the benefits of its traditional defensive labeling. As many of
these stocks pay dividends in excess of the overall market, they are popular
among defensive investors. Still, their appreciation in the most recent six
months has surpassed most growth-oriented sectors. The Advisor believes good
opportunities remain in the Fund, but that performance in the near future is
unlikely to match the spectacular returns posted in the last six months.
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 94.9% 95.2%
Top 10 Equities (% of Net Assets) 35.6% 31.8%
Number of Stocks 38 42
Cash & Cash Equivalents 5.1% 4.8%
- ---------------------------------------------------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
Ameritech Corportation 4.2% -
Bell South 4.0% 2.9%
SBC Communications Inc. 3.8% 2.9%
Century Telephone Enterprise 3.7% 3.6%
US West Inc-Communication 3.6% -
Bell Atlantic 3.6% 3.8%
Alltel Corp. 3.5% 3.0%
GTE Corp. 3.4% 2.8%
Houston Industries 2.9% -
Pacific Gas & Electric 2.9% -
- ---------------------------------------------------------------------------------------------------------------------------
Top Industries March 31, 1998 September 30, 1997
Electric Companies 41.7% 31.9%
Telephone Services 33.9% 32.2%
Telephone Long Distance 10.9% 11.6%
Cellular/Wireless Telecommunications 8.4% 11.5%
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The Lipper Utility Funds Index is a total return performance
index consisting of the largest mutual funds within its respective investment
objective category. It is comprised of 30 funds. The Lipper Utility Funds Index
is an unmanaged index that includes the reinvestment of dividends and does not
reflect deductions for commission, management fees and all expenses. Individuals
cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stocks 94.9%
Cellular/Wireless Telecommunications 8.4%
25,800 360 Communications Co.a $ 806,250
24,600 Airtouch Communications
Inc.a 1,203,863
21,800 Comsat Corp. 750,737
23,800 Nextel Communicationsa 803,250
27,500 Vanguard Cellular Systems
Class A 500,156
- -------------------------------------------------------------------------------
Total Cellular/Wireless
Telecommunications 4,064,256
Telephone Services 33.9%
19,200 Aliant Communications Inc.652,800
38,400 Alltel Corp. 1,677,600
41,500 Ameritech Corp. 2,051,656
17,035 Bell Alantic 1,746,088
28,800 Bell South Corp. 1,945,800
28,900 Century Telephone Enterprise 1,766,513
21,400 Frontier Corp. 696,837
27,900 GTE Corp. 1,670,513
41,800 SBC Communications Inc. 1,823,525
13,200 Telephone & Data 627,000
31,900 U S West Communications Grp. 1,746,525
- -------------------------------------------------------------------------------
Total Telephone Services 16,404,857
Telephone Long Distance 10.9%
11,100 AT&T Corp. 728,438
29,200 Cincinnati Bell 1,040,250
26,700 LCI International Inc.a 1,027,950
16,600 MCI Communications 821,700
9,800 Sprint Corp. 663,337
23,100 Worldcom Inc./Ga-Class A 994,744
- -------------------------------------------------------------------------------
Total Telephone Long Distance 5,276,419
Electric Companies 41.7%
23,400 American Electric Power 1,175,850
28,500 Carolina Power & Light 1,289,625
33,100 Cinergy Corp. 1,224,700
27,000 Consolidated Edison of NY1,262,250
30,000 Dominion Resources Inc. 1,260,000
21,800 Duke Power 1,298,463
43,000 Edison International 1,263,125
41,100 Entergy Corp. 1,222,725
20,800 FPL Group Inc. 1,336,400
49,500 Houston Industries Inc. 1,423,125
41,900 Pacific Gas & Electric 1,382,700
44,800 Pacificorp 1,103,200
48,000 Peco Energy Co. 1,062,000
35,900 Public Service Enterprises 1,359,712
48,600 Southern Co. 1,345,612
30,500 Texas Utilities Co. 1,199,031
- -------------------------------------------------------------------------------
Total Electric Companies 20,208,518
Shares or Principal Amount Market Value
Common Stocks - continued
Total Common Stocks
(Cost $37,961,899) $ 45,954,050
- -------------------------------------------------------------------------------
Short-Term Commercial Notes 5.1%
- -------------------------------------------------------------------------------
$834,629 General Mills
5.29% 05/18/98 834,629
- -------------------------------------------------------------------------------
$402,000 Pitney Bowes
5.29% 08/03/98 402,000
- -------------------------------------------------------------------------------
$283,000 Johnson Controls
5.29% 09/28/98 283,000
- -------------------------------------------------------------------------------
5.29% 10/28/98 324,054
- -------------------------------------------------------------------------------
5.27% 10/26/98 642,916
- -------------------------------------------------------------------------------
Total Short-Term Commercial Notes
(Cost $2,486,599) 2,486,599
- -------------------------------------------------------------------------------
Total Investments 100.0%
(Cost $40,448,498) 48,440,649
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 48,411,932
The accompanying notes are an integral part of the
financial statements.
a non-income producing security.
<PAGE>
Transportation
Performance*
ICON Transportation Fund (the "Fund") opened on May 9, 1997. The Fund's return
since inception through 3/31/98 was 30.0%. The Standard & Poor's Transportation
Index return was 32.0% for the same period. The Fund's return from 9/30/97
through 3/31/98 was 4.8%. The Standard & Poor's Transportation Index return from
9/30/97 through 3/31/98 was 10.2%. Transportation stocks were among market
leaders in the first three quarters of 1997. In the last six months, these
stocks have appreciated, yet have trailed the overall market. The outperformance
of the Fund relative to its benchmark is due to the performance of several
industries. Airline and Trucking and Parts stocks originally held in the Fund
were sold as their excessive price run-ups caused their valuations to look
expensive. Nearly all of these stocks were sold for gains that exceeded the
market return over the same holding period. The three industries still held in
the Fund--Auto Parts and Equipment, Truckers, and Railroads--have all
contributed positively to performance. In the last year, the environment for
Transportation stocks has been exceptional. The economy has experienced steady
growth with little sign of inflation. Strong business spending in areas such as
executive travel and product shipping has increased the demand for
Transportation goods and services. Consumer spending, too, has helped spark the
Airline and Automotive-related industries. Falling oil prices also have lifted
stock prices within the sector. As oil prices fall lower, the cost of business
for almost all Transportation companies is decreased, directly benefiting
earnings per share.
Industry Highlights
The Auto Parts and Equipment industry is currently the largest holding in the
Fund. A wide range of Auto Parts and Equipment companies are represented,
including both original equipment manufactures (OEMs) and replacement parts
companies. The OEMs have benefited from an outsourcing trend in the automotive
industry. Automotive companies, in an effort to be more efficient, are
outsourcing an increasing proportion of their work to the OEMs. Replacement
companies have faced a more difficult operating environment recently. With
inflation low, replacement companies face a tough pricing environment. To be
successful, they must cut costs, as the consumer is unwilling to pay premium
prices for these products. After suffering through many difficult years
following deregulation, Trucking stocks continue to show improvement. When
initially purchased for the Fund, Trucking stocks were out of favor with the
investing public. As fundamentals have gradually improved, however, these stocks
have rebounded. Falling oil prices have helped Trucking shares, as well,
reducing costs and boosting earnings per share. Finally, these stocks have been
helped by the problems at Railroad companies, which compete with Trucking
companies for business. Congested Railroad traffic has diverted some business
away from Railroads and to the Truckers. The news in the Railroad industry,
however, is not all bad. Despite well-publicized problems at Union Pacific,
other companies are doing quite well. Posting healthy gains, five of the Fund's
seven Railroad holdings have participated in the market's advance in 1998.
Currently, Railroad stocks have very low expectations built into their prices.
Thus, any positive operating news could have a strong impact on these shares. As
their short-term congestion problems are eventually solved, the investing public
should begin to look more favorably on these stocks. The Advisor views these
stocks as defensive in the short term, with considerable long term appreciation
potential. Negative sentiment, which has constrained share price advances,
should not persist much longer. Airline and Trucking and Parts stocks
contributed positively to the Fund's performance. Because they no longer
represented undervalued investments, these industries were sold in the Fund. The
Advisor believes that good news and prospects for both industries are already
priced into these shares and that more compelling investment opportunities will
be found elsewhere at this time.
Current Outlook
Transportation stocks have benefited from the strong economy, and many stocks
within the sector are trading on the high end of their valuation range.
Transportation stocks remain highly cyclical. If the "Goldilocks economy"
continues, with stable growth and low inflation, these companies will prosper.
However, an economic hiccup could remind investors of the downside of owning
cyclical investments. In the Fund Advisor's opinion, the most undervalued
industries within the sector are Auto Parts and Equipment, Truckers and
Railroads. All three of these have solid long-term appreciation potential and
should have downside protection versus other Transportation industries.
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 96.0% 99.20%
Top 10 Equities (% of Net Assets) 41.8% 35.6%
Number of Stocks 32 42
Cash & Cash Equivalents 4.1% 0.9%
- ---------------------------------------------------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
FDX Corporation 4.8% -
M S Carriers Inc. 4.7% 3.6%
Werner Enterprises, Inc. 4.4% 4.1%
Echlin Corporation 4.4% -
Burlington Northern Santa Fe 4.4% -
Landstar System Inc. 4.0% 3.2%
Dana Corp. 3.9% 3.3%
U.S. Freightways Corp. 3.8% 3.4%
ITT Industries Inc. 3.7% 3.2%
Union Pacific Corp. 3.7% -
- ---------------------------------------------------------------------------------------------------------------------------
Top Industries March 31, 1998 September 30, 1997
Auto Parts & Equipment 38.7% 35.0%
Truckers 32.0% 36.3%
Railroads 20.5% 11.0%
Diversified 4.8% -
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The S&P Transportation Index is a capitalization-weighted index
that measures the performance of the transportation sector of the S&P
SuperComposite Index. It is comprised of 41 stocks. The S&P Transportation Index
is an unmanaged index that includes the reinvestment of dividends and does not
reflect deductions for commission, management fees and all expenses. Individuals
cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares or Principal Amount Market Value
Common Stocks 96.0%
Diversified 4.8%
12,080 FDX Corp. $ 859,190
- -------------------------------------------------------------------------------
Auto Parts & Equipment 38.7%
21,000 Cooper Tire & Rubber 498,750
12,000 Dana Corp. 698,250
8,600 Danaher Corp. 653,063
15,300 Echlin Inc. 802,294
15,400 Genuine Parts Co. 587,125
7,900 Goodyear Tire & Rubber Co.598,425
17,700 ITT Industries Inc. 673,706
12,500 Mark IV Industries Inc. 284,375
13,800 Modine Manufacturing Co. 479,550
11,100 OEA Inc. 201,881
12,300 Snap-On Tools Inc. 561,188
16,500 Superior Industrials
International Inc. 547,594
7,300 TRW Inc. 402,412
- -------------------------------------------------------------------------------
Total Auto Parts & Equipment 6,988,613
Truckers 32.0%
36,800 American Frieghtways Corp.404,800
29,200 Arnold Industries Inc. 492,750
13,100 Heartland Express Inc. 363,525
22,400 Landstar Systems Inc. 722,400
25,000 M S Carriers Inc.a 846,875
44,250 Rollins Truck Leasing 611,203
13,600 Ryder Systems Inc. 516,800
18,900 U.S. Freightways Corp. 680,400
31,500 Werner Enterprises Inc. 803,250
18,000 Yellow Corp.a 344,250
- -------------------------------------------------------------------------------
<PAGE>
Shares or Principal Amount Market Value
Common Stocks - continued
Railroads 20.5%
7,700 Burlington Northern
Santa Fe $ 800,800
6,600 CSX Corp. 392,700
7,400 GATX 577,200
150 Illinois Central Corp. 5,897
9,800 Kansas City Southern Inds 431,200
11,000 Norfolk Southern Corp. 411,125
11,900 Union Pacific Corp. 668,631
14,700 Wisconsin Central
Transportation 413,897
- -------------------------------------------------------------------------------
Total Common Stocks
(Cost $14,473,341) 17,335,506
- -------------------------------------------------------------------------------
Short-Term Commercial Notes 4.1%
- -------------------------------------------------------------------------------
5.29% 10/28/98 450,614
- -------------------------------------------------------------------------------
$290,812 Warner Lambert
5.27% 10/26/98 290,812
- -------------------------------------------------------------------------------
(Cost $741,426) 741,426
- -------------------------------------------------------------------------------
(Cost $15,214,767) 18,076,932
- -------------------------------------------------------------------------------
Liabilities less other Assets (0.0%) (16,432)
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 18,060,500
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
ICON FUNDS
Management Discussion & Analysis
Short-Term Fixed Income
Performance*
ICON Short-Term Fixed Income Fund (the "Fund") opened February 7, 1998. The
Fund's return since inception through 3/31/98 was 5.1%. The Merrill Lynch 1 Year
Treasury Index return was 6.0% for the same period. The Fund's return from
9/30/97 through 3/31/98 was 2.7%. The Merrill Lynch 1 Year Treasury Index return
from 9/30/97 through 3/31/98 was 2.8%.
Fund Highlights
The objective of the ICON Short-Term Fixed Income Fund (the "Fund") is to attain
high current income consistent with the preservation of capital. Under normal
conditions the Fund invests in US Treasury and agency obligations. We are active
in duration management for the Fund, and are attempting to maintain a neutral
duration in the Fund despite heavy cash flows. As of March 31, 1998, portfolio
duration remained neutral at 0.9 years.
Current Outlook
While the timing of the next leg of the fixed income bull market has been
delayed, we remain constant in our view of low and possibly declining interest
rates. We remain constructive on the US bond market and plan to maintain a
neutral duration due to the small size of this portfolio. We expect Treasuries
to become dear as debt reduction begins. In a portfolio of this size, the most
efficient way to capitalize on this anticipated trend is to own agencies. With
the short-term yield curve flat out through 3 years, we intend to buy agencies
maturing in 1 year, the peak of the agency curve.
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. Past performance does not guarantee
future results. The Merrill Lynch 1 Year Treasury Index returns are unofficial
returns approximated by the Wellington Management Company OnLine system.
Schedule of Investments
March 31, 1998
(Unaudited)
Principal Amount Market Value
U.S. Government Agencies 60.5%
Federal Home Loan Bank
$4,000,000 5.80% $ 4,001,792
- --------------------------------------------------------------------------------
(Cost $3,995,938) $ 4,001,792
Repurchase Agreement 40.8%
Swiss Bank Corp.
Dated 3/31/98,
maturing 4/1/98
To be repurchased at
$2,703,000
Collateralized by
$1,233,000, in U.S.
Government Agencies 87/8%
Due 8/15/25, value
$1,383,557
(Cost $ 2,703,000) $ 2,703,000
- --------------------------------------------------------------------------------
(Cost $6,698,938) 6,704,792
- --------------------------------------------------------------------------------
Other Assets less Liabilities (1.3)% (92,352)
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 6,612,440 The accompanying notes are an integral part of the
financial statements.
ICON FUNDS
Management Discussion & Analysis
Asia Region
Performance*
ICON Asia Region Fund (the "Fund") opened on February 25, 1997. The Fund's
return since inception through 3/31/98 was (16.9%). The Morgan Stanley Capital
International Pacific Index (in U.S. dollars) return was (20.3%) for the same
period. The Fund's return from 9/30/97 through 3/31/98 was (16.4%). The Morgan
Stanley Capital International Pacific Index (in U.S. dollars) return from
9/30/97 through 3/31/98 was (18.7%). The Fund continues to be heavily invested
in Japan. However, as the Japanese market has faltered in the second half of
this quarter and the remaining Asian countries begin to rebound from the
currency crisis, the Japanese holding has taken a slightly lower position than
it did through 1997. The Japanese market hit a low for this calendar year on
January 12, 1998, and has been volatile since that time. Unfortunately, the
Japanese market opened the year poorly and hit a high on February 10, 1998.
Japan has since backtracked from that high and, through March 31, 1998, shows
only 1.86% appreciation according to the MSCI Japan Index (in U.S. dollars). The
remaining investments in the Fund have not changed since the 1997 ICON Funds
annual report. The Fund currently holds investments in Hong Kong, Malaysia and
Singapore, as well as Japan. Their valuations are promising and these holdings
reduce overall fund risk through diversification. The Hong Kong, Malaysia and
Singapore markets continued to depreciate through the fourth quarter of 1997 as
the effects of the Asian currency crisis reverberated through the region.
Investors overreacted and liquidated positions in those markets as the
currencies collapsed and the news reported their banking sectors were in a state
of crisis. However, these same markets have rebounded during First Quarter 1998.
The Malaysian market is one of the best performers in the world, year-to-date,
as the MSCI Malaysia Free Index (in U.S. dollars) has appreciated 29.50% to
March 31, 1998. Over the same time period, the MSCI Singapore Free Index (in
U.S. dollars) was up slightly and the MSCI Hong Kong Index (in U.S. dollars) was
down slightly. The Fund has held up well against the MSCI indices as performance
paralleled that of Singapore and Japan; these countries comprise the largest
portion of the Fund. Because the Fund is not hedged against foreign currency
weaknesses, it has lost some value as the U.S. Dollar has continued to
strengthen through March 31, 1998.
Country Highlights
Japanese Gross Domestic Product is expected to see 0% growth in 1998 and 1.0%
growth in 1999, according to the April 4-10, 1998 edition of The Economist.
Domestic demand is still sluggish, as the Japanese consumer tends to save in
periods of economic uncertainty. Japan has faltered as a "savior" for the rest
of Asia. The number of bankruptcies has grown, threatening some of the larger
companies on the Japanese landscape. The bad debt held by many of the large
banks is significantly greater than initially expected. Confidence in the
economy has fallen to an abysmal level as shown in the most recent Tankan survey
reflecting Japanese business assurance. The taxpayer seems to doubt the
government's ability to keep Japan out of a serious recession. And on and on and
onE The Japanese market has been very sensitive to any news that is released
about government actions to improve these statistics. Unfortunately, the market
has not seen a catalyst yet to spark a continued rally. However, the Fund will
maintain its current weightings as the Fund Advisor does not expect to predict
the catalytic event. This market is extremely undervalued even in view of the
state of the economy. Investors seem to fear that Japan will never recover from
the lows to which it has now fallen. Emotional overreaction has caused the
market to be at levels significantly different from fair value. The current
focus has been on a 16 trillion Yen ($123 billion in U.S. dollars) government
stimulus package that was announced at the end of March 1998. Details of the
package were not released, leading to fear that the package will not include tax
cuts necessary to spark the economy and consumer spending. News reports allow
that Japanese officials disagree on the structure of the package, but there has
been hope that those favoring tax cuts will eventually "win the vote". Package
details will not be divulged until the 1998 budget bill passes in late April.
However, the bad news in Japan seems to be priced into this market, and the Fund
Advisor expects the Fund to show improved performance as Japan begins to rally.
As noted previously, non-Japan holdings are divided among Malaysia, Singapore
and Hong Kong. Malaysia is a prime example of the path expected in Japan this
year. In the midst of the currency crisis, the Malaysian market lost a
significant portion of its market capitalization as well as much of the value of
its currency. Investors feared the worst as it seemed the Malaysian banking
system was on the verge of disaster. Their overreaction is reflected in the fact
that Malaysian market performance through March 31, 1998, was 29.50%
year-to-date. Hong Kong and Singapore have not helped Fund performance as those
markets have been flat. Their economic prospects fall somewhere between those of
Japan and Malaysia. Their economies are at better starting points than Malaysia,
but they do not have the strength or diversification of the Japanese economy to
ease the downturn. These markets are undervalued and will continue to hold small
positions in the Fund.
Current Outlook
History has shown that when market sentiment is at its worst, markets rally.
Investors have overestimated the negative consequences of the poor Japanese
economy. The Japan market is cheap, even after taking falling earnings and
estimates into consideration.
<PAGE>
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30,1997
Equities 96.3% 97.1%
Top 10 Equities (% of Net Assets) 33.3% 31.2%
Number of Stocks 135 138
Cash & Cash Equivalents 0.0% 2.9%
- ---------------------------------------------------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30,1997
Nippon Telephone & Telegraph 7.2% 6.9%
Toyota Motor Corporation 5.9% 5.4%
Bank of Tokyo-Mitsubishi, Ltd. 3.5% 2.4%
Kinki Nippon Railway 2.9% -
Matsushita Electric Industrial Co. 2.6% 2.4%
Honda Motor Company 2.4% 2.6%
Sony Corporation 2.3% 2.3%
Sumitomo Bank 2.3% 2.4%
Nomura Securities Company 2.1% -
Bridgestone Corp. First Sec Y 2.1% -
- ---------------------------------------------------------------------------------------------------------------------------
Top Countries March 31, 1998 September 30, 1997
Japan 77.2% 79.2%
Singapore 7.7% 7.6%
Malaysia 6.4% 4.0%
Hong Kong 5.0% 6.3%
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. International investing involves
greater risk than U.S. investments which include political, economic
uncertainties and the risk of currency fluctuations. Past performance does not
guarantee future results. The Morgan Stanley Capital International Pacific Index
is comprised of stocks traded in the developed markets of the Pacific Basin
(Australia, Hong Kong, Japan, Malaysia, New Zealand, and Singapore). The index
tries to capture at least 60% of investable capitalization in said markets
subject to constraints governed by industry representation, maximum liquidity,
maximum float, and minimum cross-ownership (companies with exposure in multiple
countries). The index is capitalization weighted. The MSCI Pacific Index is an
unmanaged index that does not include the reinvestment of dividends and does not
reflect deductions for commission, management fees and expenses.
Growth of $50,000 investment since fund inception
versus fund benchmark.
<PAGE>
Schedule of Investments
March 31, 1998
(Unaudited)
Shares Market Value
Common Stocks & Rights 96.3%
Hong Kong 5.0%
31,400 Bank of East Asiaa $ 65,248
77,000 Cathay Pacific Airwaysa 75,032
41,000 Cheung Kong Holdings 291,041
6,000 Cheung Kong Infrastructurea 17,888
32,000 China Light & Power 161,073
44,000 Chinese Estates HL 14,765
5,000 Citic Pacific Ltd. 17,682
14,000 Cosco Pacific Ltd. 11,745
22,500 Dickson Concepts Intl. 39,203
18,000 Guoco Group Ltd. 44,140
22,000 Hang Lung Dev. Co. 31,943
32,500 Hang Seng Bank 317,741
35,500 Hong Kong & Shanghai
Hotels 29,094
150,400 Hong Kong Telecom 310,581
47,000 Hong Kong & China Gasa 78,858
111,000 Hopewell Holdingsa 24,641
62,000 Hutchison Whampoa Ltd. 436,109
22,000 Hysan Developmenta 35,493
25,000 Miramar Hotel 30,008
34,000 New World Development 120,017
32,000 Peregrine Investment
Holdings 17,759
33,000 Shangri La Asis Ltd. 28,323
78,000 Shun Tak Holdingsa 18,121
36,000 Sun Hung Kai Properties 245,094
53,000 Swire Pacific Ltd. 50,961
10,000 Television Broadcasta 26,329
40,000 Wharf Holdings 78,471
- -------------------------------------------------------------------------------
Shares Market Value
Common Stocks - continued
Japan 77.2%
104,000 All Nipon Airways Company $ 552,947
151,000 Asahi Glass Co. Ltd. 835,675
145,000 Bank of Tokyo-Mitsubishi Ltd.1,761,517
46,000 Bridgestone Corp. First SEC 1,041,761
37,000 Canon Inc. Y50 835,164
27,800 Chubu Electric Power Co. 414,860
50,000 Dai Nippon Printing Co. Ltd. 824,890
45,000 Denso Corporation 843,638
100 East Apan Railway 463,438
27,000 Fuji Photo Filma 1,004,266
72,000 Fujitsu Ltd. Y50 750,500
134,000 Hitachi Y50 974,720
34,000 Honda Motor Company 1,223,837
129,000 Industrial Bank of Japan Ltd.880,308
15,000 Ito-Yokado Co. Ltd. 812,142
39,800 Kansai Electric Power 668,551
398,000 Kawaski Steel Corporation 584,982
264,000 Kinki Nippon Railway 1,441,248
95,000 Kirin Brewery Co. Ltd. 847,762
17,700 Kyocera Corp. 929,126
266,000 Marubeni Corporation 700,152
82,000 Matsushita Electric
Industrial, Ltd. 1,315,925
116,000 Mitsubishi Corporation 948,174
70,000 Mitsubishi Estate Co. Ltd. 682,409
248,000 Mitsubishi Hvy Indy Y50a 942,895
146,000 Mitsubishi Motors Y50a 405,096
79,000 Mitsui Fudosan 752,375
74,000 NEC Corporation Y50 743,601
429,000 Nippon Steel Company 688,453
439 Nippon Telephone
& Telegraph 3,654,189
132,000 Nissan Motor Company 504,833
89,000 Nomura Securities Co. 1,047,836
24,000 Sanyo Company Ltd. 665,911
7,000 Seven Eleven Japan 479,786
112,000 Sharp Corporation 764,298
13,500 Sony Corporation 1,143,973
112,000 Sumitomo Bank, Ltd. 1,142,248
37,000 Takeda Chemical 940,600
80,000 Tokio Marine & Fire 893,881
47,900 Tokyo Electric Power 905,190
140,000 Toshiba Corp. 566,925
112,000 Toyota Motor Corporation 2,981,603
- -------------------------------------------------------------------------------
Total Japan 40,561,685
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
Shares Market Value
Common Stocks - continued
Malaysia 6.4%
26,200 AMMB Holdings Berhad $ 30,088
36,000 Commerce Asset Holdings 31,451
22,000 Edaran Otomobil Nasional BHD40,495
100,400 Ekran Berhad 32,548
9,400 Berjaya Sports Toto Berhad 25,567
73,000 Golden Hope Plantations 92,255
30,000 Hicom Holdings Berhad 17,143
69,000 Hong Leong Bank Berhad 59,903
35,000 Hume Industries 38,078
33,000 Jaya Tiasa Holdings Berhad 56,663
61,000 Kuala Lumpur Kepon Berhad 146,638
163,000 Magnum Corp Berhad 139,718
10,000 Malakoff Berhad 26,786
67,000 Malayan Banking 257,698
61,000 Malaysian Helicopter Service17,932
58,000 Malaysian International
Shipping 111,541
83,333 Malaysian Resources Corp. 48,536
16,000 Nestle Berhad 88,793
22,000 New Straits Times Press 34,451
44,400 Oriental Holdings Berhad 92,705
31,000 Perusahaan Otomobil
Nasaional 54,081
24,000 Petronas Gas Berhad 63,958
86,400 Public Bank Berhad 51,034
73,000 RHB Capital BHD 64,177
31,000 Rashid Russain BHD 44,287
42,000 Resorts World Berhad 92,887
79,000 Renong Berhad 31,253
20,400 Rothmans of Pall Mall
Berhad 170,938
152,000 Sime Darby Malay Regd 170,378
185,500 Telekom Malaysia 642,131
168,000 Tenaga Nasional Berhad 424,625
54,000 United Engineers 63,199
54,000 YTL Corp. Berhad 90,498
- -------------------------------------------------------------------------------
Total Maylasia 3,352,435
<PAGE>
Shares Market Value
Common Stocks - continued
Singapore 7.7%
7,000 Cerebos Pacific Limited $ 16,558
57,000 City Developments 280,596
6,000 Creative Technology Limited 132,264
20,000 Cycle & Carriage Limited 90,405
104,000 DBS Land 175,807
31,900 Development Bank 233,084
5,800 Dev Bk Singapore Rights 0
20,000 Faser & Neave 84,832
10,000 Great Eastern Life Assurance 86,690
85,000 Hotel Properties SGDI 55,265
48,000 Inchcape Berhad 83,817
154,000 IPC Corporation 17,641
70,000 Keppel Corporation 210,656
16,000 Keppel Fels Ltd. 44,781
20,000 Keppel Land Ltd. 27,617
13,000 Marco Polo Developments 16,744
13,000 Metro Holdings Ltd. 16,583
39,000 Natsteel Ltd. 60,615
120,000 Neptune Orient Lines Ltd. 57,215
27,000 Overseas Chinese Bank 152,141
17,000 Overseas Union Bank 66,318
28,000 Overseas Union Enterprises 66,925
10,000 Sembawang Corporationa 22,292
46,000 Shangri La Hotel Ltd. 74,912
192,000 Sime Singapore Ltd. 61,822
79,000 Singapore International
Airlines 562,555
17,000 Singapore Land Ltd. 54,738
16,588 Singapore Press Holdings 190,023
63,000 Singapore Technologies 72,949
445,000 Singapore Telecom 782,561
156,000 United Industrial Corp. 68,101
25,000 United Overseas Bank 138,549
6,000 Venture Manufacturing 22,292
- --------------------------------------------------------------------------------
Total Common Stocks & Rights
(Cost $58,482,908) 50,558,828
- -------------------------------------------------------------------------------
(Cost $58,482,908) 50,558,828
- -------------------------------------------------------------------------------
Other Assets less Liabilities 3.7% 1,865,691
- -------------------------------------------------------------------------------
Net Assets 100.0% $ 52,424,519 The accompanying notes are an integral part of
the financial statements.
<PAGE>
Summary of Investments by Industry
% of Investments
Telecommunications 10.23%
Automobiles 9.98%
Banks 9.75%
Electronic Materials 8.28%
Electronic Components 6.18%
Real Estate 5.09%
Cash 3.70%
Transportation 3.61%
Trading 3.19%
Pharmacy 3.09%
Water Distribution 2.96%
Computers 2.81%
Financial Services 2.40%
Special Retail 2.40%
Steel Metal 2.39%
Airlines 2.30%
Energy Equipment 2.09%
Press Print 2.09%
Tires & Rubber 2.09%
Food 2.08%
Chemicals 1.90%
Insurance 1.90%
Industrial Equipment 1.89%
Multi-Industry 1.87%
Glass 1.60%
Sea Transportation 0.71%
Hotel/Tour 0.61%
Automobile Equipment 0.59%
Construction Materials 0.49%
Leisure ` 0.48%
Tobacco 0.29%
Breweries 0.20%
Engineering 0.20%
Wholesale 0.14%
TV, Radio 0.13%
Textiles 0.12%
Oil Production 0.11%
Department Stores 0.06%
- ------------------------------------------------------------------------------
The accompanying notes are an integral part of the
financial statements.
<PAGE>
North Europe Region
Performance*
ICON North Europe Region Fund (the "Fund") opened on February 18, 1997. The
Fund's return since inception through 3/31/98 was 28.9%. The Morgan Stanley
Capital International Europe Index (in U.S. dollars) return was 43.9% for the
same period. The Fund's return from 9/30/97 through 3/31/98 was 16.6%. The
Morgan Stanley Capital International Europe Index (in U.S.
dollars) return from 9/30/97 through 3/31/98 was 19.4%.
Fourth Quarter 1997 was a difficult period for North Europe markets. According
to the Morgan Stanley country indices, the average of those countries held in
the Fund were up only 1.55%. The Fund slightly outperformed this rough average
with performance of 1.94% in the fourth quarter. The outlook brightened in First
Quarter 1998. From December 31, 1997 through March 31, 1998, an average of the
Morgan Stanley country indices for the countries that are held in the Fund is up
16.47%. The Fund itself slightly underperformed in this period with appreciation
of 14.35%. The largest country holdings in the Fund are Germany and the United
Kingdom. These markets added significantly to performance with the UK up 17.31%
through First Quarter 1998, and Germany contributing 16.65%, according to the
Morgan Stanley Capital International (MSCI) indices (in U.S. dollars). Denmark
and Belgium also showed improvement from Fourth Quarter 1997. These markets
appreciated 14.65% and 17.26% respectively. The Fund continues to be unhedged
against foreign currency movement. Although the U.S. Dollar continues to
strengthen, as it has in the last few years, the European currency markets are
becoming more stable as they prepare for the run up to conversion to the Euro on
January 1, 1999. Exchange rates [of those currencies that will be included in
the European Union (EU)] against the Euro will be set on May 2, 1998.
Country Highlights
Europe as a whole has appreciated substantially in 1998. The countries
comprising the North Europe region, however, have lagged behind those of South
Europe (as defined by the ICON Funds). At the heart of the disparity is
fulfillment of the Maastricht criteria that will allow these countries to be
start-up members of the EU. Each individual country had to take steps to make
its economy more stable, and that stability is defined by the Maastricht
criteria. Inflation and interest rates have to be low relative to the lowest of
the joining countries. Government debt and deficit have to be low. Currencies
have to be stable within the Exchange Rate Mechanism (ERM). The economies of
South Europe began this shift from a financial position weaker than those in
North Europe. Accordingly, they have had more room for improvement and, as they
did improve, their markets benefited. Now, however, the North Europe markets
have lagged behind those of South Europe. As a result, the valuations of the
countries in North Europe reflect many bargains awaiting. The second major theme
as First Quarter 1998 ends is the crisis in Asia. There has been much
speculation that this event would have a large, negative impact on European
earnings. Markets in North Europe have remained undervalued, as investors feared
a market correction from negative-earnings surprises. Although external trade
with East Asia represents more than 25% of the EU's total external trade, this
correction has failed to materialize. Domestic demand in Europe and the United
States has been strong enough to take up the slack. Actually, a positive result
of the Asian crisis has been consistently low, long-term yields as the economies
have yet to overheat. Germany and Belgium will be initial members of the
European Union as it launches in January 1999. Germany is one of the larger
holdings in the Fund and has been a significant performer, as detailed
previously. Capital goods orders and capacity utilization have improved in the
country throughout 1997 and into 1998, which indicates companies are investing.
With low interest rates, capital spendings should continue. The German market is
cheap, and the economy holds much promise. Valuations show there is room for
growth. Great Britain and Denmark will remain outside the European Union for the
first round. Both economies are healthy and, if their constituencies desired,
both would be initial members. For now, however, they are members of the ERM and
their economies are progressing well. These markets, too, are undervalued and
should do well in the coming year.
The Current Outlook
Fears about the impact of the Asian crisis on Europe appear excessive. Sluggish
domestic demand has yet to materialize. This concern, however, has kept the
nations of North Europe undervalued. Although significant movement has been seen
in 1998, these markets have yet to reach fair value. The countries of North
Europe seem attractive, as they should be able to maintain an upswing until
value becomes stretched. Although the valuations for these four countries are
similar, the dynamics of the future for the economies are different. As noted
previously, Germany and Belgium will be initial members of the European Union.
Great Britain and Denmark will delay their entry. Because Germany and Belgium
have to maintain stability in their economies for convergence, they will act
similarly. They also will share the common benefits and common adjustments that
have yet to be discovered when the 11 members accept a single currency. Great
Britain and Denmark also have healthy economies. The diversification benefit of
this pool of countries will come as the European Union gains steam and the 11
members begin to act even more similarly. Great Britain and Denmark are taking a
"wait and see" approach, and in delaying, they will not have the same
experiences of Belgium and Germany. Given these differences, the Fund should be
well positioned going into the European Union conversion.
<PAGE>
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 97.9% 98.0%
Top 10 Equities (% of Net Assets) 26.7% 31.9%
Number of Stocks 120 118
Cash & Cash Equivalents 0.5% 2.5%
- --------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
D/S Svenborg 5.1% 5.2%
Den Danske Bank 3.5% 5.2%
Allianz AG 2.8% 2.9%
Tele Danmark 2.4% -
Daimler Benz AG 2.3% -
Deutsche Bank AG 2.3% 2.3%
British Petroleum Ord. 2.2% -
Muenchener Ruechkver AG Reg. 2.2% -
Novo Nordisk 2.0% 4.7%
Siemens AG 1.9% 2.1%
- --------------------------------------------------------------------------------
Top Countries March 31, 1998 September 30, 1997
Germany 32.3% 36.6%
United Kingdom 32.2% 7.5%
Denmark 24.4% 40.0%
Belgium 9.0% 13.9%
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. International investing involves
greater risk than U.S. investments which include political, economic
uncertainties and the risk of currency fluctuations. Past performance does not
guarantee future results. The Morgan Stanley Capital International Europe Index
is comprised of stocks traded in the developed markets of Europe. The index
tries to capture at least 60% of investable capitalization in said markets
subject to constraints governed by industry representation, maximum liquidity,
maximum float, and minimum cross-ownership (companies with exposure in multiple
countries). The index is capitalization weighted. The MSCI Europe Index is an
unmanaged index that does not include the reinvestment of dividends and does not
reflect deductions for commission, management fees and all expenses. Individuals
cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares Market Value
Common Stocks & Rights 98.0%
Belgium 9.0%
315 Banque Bruxelles Lambert $ 88,764
405 Barco (Belgium American
Radio Corp.) 104,677
118 Bekaert NV 86,453
1,180 Ciementeries CBR NPV 114,137
3,052 Delhaize-Le Lion 196,006
3,001 Electrabel SA 764,629
1,796 Fortis AG 499,034
781 Gevaert SA 43,709
346 Glaverbel SA 44,442
1,202 Groupe Bruxelles Lambert 207,639
639 Kredietbank NPV 343,378
1,572 Petrofina SA 567,626
703 Royale Belge 246,472
5,010 Solvay Et Cie NPV 379,537
4,350 Tractbel Inv. Intl. NPV 457,248
2,596 Union Miniere NPV 181,011
- ------------------------------------------------------------------------------
Denmark 24.4%
3,520 Bang & Olufsen Holdings 222,196
2,197 Bikuben Girobank 134,009
11,147 Carlsberg 721,763
4,452 Cheminova A/S B 112,411
746 Codan Forsikring 132,277
1,610 D/S Norden 176,196
10 D/S 1912 B 468,110
36 D/S Svenborg 2,448,641
13,394 Danisco 879,681
12,913 Den Danske 1,687,718
1,126 Det Danske Traelastkompagni111,807
6,066 Fin Industri Handvaerk 141,634
1,619 Finansieringsselsk Gefion 31,922
11,787 FLS Industries 334,401
4,611 ISS International Service
System 220,424
448 Jyske Bank 51,793
3,729 Korn OG Foderstofkomp 97,858
1,478 Lauritzen Holdings 153,049
5,791 Novo Dordisk 985,755
150 Potagua 4,702
4,468 Radiometer 221,827
3,919 Ratin A/S 694,895
3,919 Sophus Berendsen 152,321
1,379 Sydbank 68,465
12,915 Tele Danmark 1,172,488
922 Topdanmark 163,484
1,560 Tryg Baltica Forsikring 122,659
- -------------------------------------------------------------------------------
Total Denmark 11,712,486
Germany 32.3%
1,212 Adidas AG 214,929
4,470 Allianz AG 1,349,941
52 Allianz Lebenscersicherungs 50,613
1,210 Altana AG 93,596
16,783 BASF AG 746,431
14,915 Bayer AG 682,303
5,228 Bayerische Hypoth-und
Wechsel Bank 285,523
Shares Market Value
Common Stocks - continued
Germany - continued
146 Bayerische Motoren Werke AG $ 161,447
6,871 Bayerische Vereinsbank AG 501,577
2,601 Beiersdorf AG 127,565
7,011 Commerzbank AG 253,245
12,087 Daimler Benz AG 1,111,095
2,315 Degussa AG 131,815
11,611 Deutsche Bank AG 873,649
50,677 Deutsche Telecom 1,100,222
11,184 Dresdner Bank AG 509,206
1,440 Heidelberger Zement AG 112,127
5,252 Henkel KGAA 337,952
3,479 Hochtief AG 142,032
3,439 Hoschst AG 134,727
403 Karstadt AG 157,335
236 Linde AG 171,257
10,809 Lufthansa 227,655
525 MAN AG 174,873
873 Mannesmann AG 639,171
5,757 Metro AG 254,021
2,400 Muenchener Reuckver AG 1,038,210
509 Pruessag AG 173,535
7,607 RWE AG 409,280
1,304 SAP AG 520,377
1,263 Schering AG 148,746
13,727 Siemens AG 918,925
824 Thyssen AG 177,112
9,893 Veba AG 701,852
205 VEW AG 68,007
589 Viag AG 321,040
618 Volkswagen AG 483,884
- -------------------------------------------------------------------------------
Total Germany 15,505,275
Germany Rights 0.0%
4,470 Allianz AG Rights 22,116
618 Volkswagen AD Rights 11,228
- -------------------------------------------------------------------------------
Total Germany Rights 33,344
United Kingdom 32.2%
21,092 Barclays PLC 631,179
32,097 Bass PLC 615,977
41,898 BAT Industries 420,974
18,784 BG PLC 97,198
11,289 BG PLC-B 5,577
26,167 Boots Co. PLC 412,339
8,086 British Aerospace PLC 266,077
31,310 British Airways PLC 317,212
73,195 British Petroleum PLC 1,051,057
37,789 British Sky Broadcasting PLC282,868
75,980 British Telecommunications PLC825,762
150,795 BTR PLC 494,310
43,645 Cable Wireless PLC 546,332
15,200 Cadbury Schweppes PLC 207,449
20,447 Commercial Union 398,217
20,786 Diageo Plc\C 244,011
33,618 Glaxo Holdings PLC 892,865
25,182 Granada Group 452,692
The accompanying notes are an integral part of the financial statements.
Shares Market Value
Common Stocks - continued
United Kingdom - continued
14,630 Great Universal Stores $ 182,275
28,008 Land Securities 500,446
55,768 Lloyds TSB Group 870,386
43,227 Marks & Spencer PLC 425,279
12,245 National Power 124,673
13,422 National Westminster Bank PLC245,668
28,643 Prudential Corp. 420,178
32,628 Reed International PLC 330,018
22,837 Rueters Holdings 246,861
31,306 Rio Tinto PLC 420,973
12,695 Sainsbury (J) PLC 108,155
20,887 Scottish Power PLC 196,048
37,354 Shell Transport & Trading Co.273,982
8,914 Siebe 194,205
50,874 Smithkline Beecham PLC 637,248
37,076 Tesco 370,662
24,578 Thorn EMI 204,557
50,272 Unilever 472,701
30,914 United Utilities 458,410
25,229 Wolseley PLC 193,920
19,409 Yele Catto & Co. 124,646
6,742 Zeneca Group PLC 289,818
- -------------------------------------------------------------------------------
Total United Kingdom 15,453,205
Total Common Stock
(Cost $38,556,092) 47,029,072
- ------------------------------------------------------------------------------
Demand Deposit 0.5%
Chase Bank Interest
Bearing Demand Deposit
(Cost $ 250,730) 250,730
- ------------------------------------------------------------------------------
Total Investments 98.5%
(Cost $38,806,822) 47,279,802
- -------------------------------------------------------------------------------
Other assets less liabilities 1.5% 716,383
- -------------------------------------------------------------------------------
Summary of Investments by Industry
% of Investments
Bank 13.90%
Insurance Companies 7.90%
Telecommunications 7.50%
Water Distributors 7.40%
Sea transportation 6.80%
Pharmacy 6.30%
Chemcials 5.50%
Oil Integrated 4.00%
Automobile 3.60%
Brewers 2.80%
Food 2.80%
Electric Materials 2.60%
Cash 2.30%
Department Stores 1.70%
Multi Industry 1.70%
Steel metal 1.70%
Holding Companies 1.50%
Non ferrious metals 1.50%
Engineering 1.40%
Food Retail 1.40%
Industrial services 1.40%
Leisure 1.30%
Special Retailers 1.30%
Airlines 1.20%
Computer services 1.10%
Financial services 1.00%
Real estate 1.00%
Tobacco 0.90%
Press Print 0.80%
Alcohol beverage 0.60%
Construction Material 0.60%
Defense 0.60%
Medical Equipment 0.60%
TV, radio 0.60%
Services 0.50%
Shoes 0.50%
Cement 0.40%
Non alcoholic beverage 0.40%
Construction 0.30%
Cosmetics & Toiletries 0.30%
Animal feed 0.20%
Glass 0.10%
- -------------------------------------------------------------------------------
Total 100.00%
The accompanying notes are an integral part of the
financial statements.
<PAGE>
South Europe Region
Performance*
ICON South Europe Region Fund (the "Fund") opened on February 20, 1997. The
Fund's return since inception through 3/31/98 was 51.1%. The Morgan Stanley
Capital International Europe Index (in U.S. dollars) return was 43.9% for the
same period. The Fund's return from 9/30/97 through 3/31/98 was 26.9%. The
Morgan Stanley Capital International Europe Index (in U.S.
dollars) return from 9/30/97 through 3/31/98 was 19.4%.
All of the current country investments in the Fund have been held since
inception. The best performer of the countries held was Italy. The MSCI Italy
index (in U.S. dollars) appreciated 35.71% in the first quarter of 1998. This
performance followed a trend that started in South Europe in 1997. Countries
such as Spain, Italy and Portugal have all done very well as investors have
responded to potential positive results on company earnings as the European
Union (EU) emerges. Since inception of the South Europe Fund, the MSCI Italy
index (in U.S. dollars) has appreciated 72.6%. Italy has been an exceptional
performer for the Fund over this time period. Italy was the Fund's largest
position until October 1997. At that point, Italy was reduced and Switzerland
moved into the number one spot. Switzerland has appreciated 15.92% (in U.S.
dollars) in First Quarter 1998 according to the MSCI Switzerland Index. Although
Switzerland's performance has yet to match that of Italy, the Swiss holdings
have contributed positively and its securities are still undervalued. Austria
also has been a member of the Fund since inception, although its position is the
smallest. From December 31, 1997 through March 31, 1998, the MSCI Austrian Index
(in U.S. dollars) appreciated 16.0%. Performance from Fund inception through
March 31, 1998 is 22.02%. The Austrian market is smaller and less predictable
than the Swiss and Italian markets. Consequently, although value has kept the
Fund invested here and the country market has performed well, the position has
remained small.
Country Highlights
Recently, the European Monetary Institute released a paper stating the nations
it expected would be allowed in the EU from the first round. Italy, Spain and
Portugal were included in the list of 11 countries. This possibility has been
the driving force behind the exceptional performance of these markets in 1998.
The Fund has had a large position in Italy because Italy has been undervalued.
With the recent market appreciation, the companies in Italy are approaching fair
value. Spain, France and Portugal, however, have looked overvalued for an
extended period of time. Although the Fund was invested in France for a portion
of 1997, France was sold and the Fund has yet to own companies in Portugal or
Spain. These markets continue to look overvalued. As previously stated, the
Italian position has been reduced as the Fund is targeting better values. The
first of those better values is Switzerland. Switzerland offers diversification,
as it is the only holding in the Fund that will not become an EU member in 1999.
In comparison to Italy, Switzerland has been sluggish this year with performance
of 15.92% (MSCI in U.S. dollars) to March 31, 1998. The Swiss market offers
excellent values as the economy is coming out of seven years of stagnation and
most growth is expected for this and next year. Monetary policy remains loose to
bolster the recovery, and can continue to do so as inflation stays low. Although
the economy is just beginning to strengthen after years of slow growth, the
Swiss stock market has, with the exception of 1994, been strong since 1991.
However, the companies are still undervalued, suggesting this market will not
slow in 1998. Valuations in Austria are promising for this year. Compared to the
rest of Europe, Austria has been a sluggish performer since 1993. As one of the
11 countries expected to initially join the EU, its economy should experience
all of the benefits that the single currency should bring. As the EU expands
east, Austria (as well as Germany) will benefit from closer ties with its
eastern neighbors. This may be one benefit felt more by those nations on the
eastern borders of the EU than elsewhere. The Austrian economy is healthy. Its
trade deficit has improved over January 1997 levels; Gross Domestic Product is
expected to increase by 2.7% in 1998 and by 3.0% in 1999; earnings estimates for
1998 and 1999 are increasing; and long-term growth rates are stable. As noted
previously, Austria's valuations are encouraging as the economy improves. The
Austrian percentage of the Fund remains small but substantial, as performance
expectations are favorable.
The Current Outlook
The ICON South Europe Fund continues to be an exceptional performer. The Italian
holding has added tremendously to performance. However, price is nearing value,
and the Fund Advisor is watching this position closely. There are many markets
in the ICON South Europe Region that have become overvalued, and the Fund is not
currently invested in these. In Spain, France and Portugal, the Fund has missed
some short-term performance, but valuations show these are not places to be
invested for the long term. Emotion has carried these markets beyond their
current worth. Although the Fund holds only three distinct country markets, the
dynamics of these markets are so different at present that the Fund is well
diversified. Italy will be an initial member of the European Union, a fact that
has supported market performance over the year. The Italian economy had further
to improve than any of the other 10 initial members. Austria already has
significant ties to Germany but will benefit from cheaper and more efficient
linkages to Europe if the EU expands. Switzerland will not be an initial member
of the EU, choosing to wait on the sidelines for the time being. The emergence
of the EU will probably impact these markets in three entirely different ways.
However, the common denominator will be that the companies within these
countries should offer good values. Ultimately, we expect those values to
determine performance.
<PAGE>
<TABLE>
<S> <C> <C>
Portfolio Profile March 31, 1998 September 30, 1997
Equities 90.7% 99.1%
Top 10 Equities (% of Net Assets) 53.8% 46.5%
Number of Stocks 68 74
Cash & Cash Equivalents 6.2% 1.3%
- ---------------------------------------------------------------------------------------------------------------------------
Top 10 Equity Holdings March 31, 1998 September 30, 1997
Novartis 11.3% 7.4%
Nestle SA 7.5% 3.7%
Ente Nazionale Idrocarburi 6.8% 7.6%
Roche Holdings AG 6.6% 5.8%
Credit Suisse Group 4.9% -
TIM Telecom Italia Mobile 4.8% 4.6%
UBS 3.2% -
Telecom Italia SPA 3.1% 5.7%
Schw Ruckversicherungs Regd. 3.0% -
Assicurasioni Generali 2.6% 5.0%
- ---------------------------------------------------------------------------------------------------------------------------
Top Countries March 31, 1998 September 30, 1997
Switzerland 47.2% 33.1%
Italy 31.3% 54.7%
Austria 12.2% 11.3%
</TABLE>
Investment return and principal value represent past performance and are not a
guarantee of future results. Shares may be worth more or less at redemption than
at original purchase. The returns for the ICON Funds are since the inception of
the Fund through the dates shown. The returns are total returns, and include the
reinvestment of dividends and capital gains. International investing involves
greater risk than U.S. investments which include political, economic
uncertainties and the risk of currency fluctuations. Past performance does not
guarantee future results. The Morgan Stanley Capital International Europe Index
is comprised of stocks traded in the developed markets of Europe. The index
tries to capture at least 60% of investable capitalization in said markets
subject to constraints governed by industry representation, maximum liquidity,
maximum float, and minimum cross-ownership (companies with exposure in multiple
countries). The index is capitalization weighted. The MSCI Europe Index is an
unmanaged index that does not assume the reinvestment of dividends and does not
reflect deductions for commission, management fees and all expenses. Individuals
cannot invest in the index itself.
Growth of $50,000 investment since fund inception
versus fund benchmark.
Schedule of Investments
March 31, 1998
(Unaudited)
Shares Market Value
Common Stocks 90.7%
Austria 12.2%
868 Austria Micro Systeme $ 54,839
8,910 Austrian Airlines 275,983
5,446 Bank Austria AG 368,766
1,364 Bau Holdings AG 79,151
1,798 Boehler-Uddeholm 121,887
1,526 Brau Union Goess Reininghaus91,250
649 BWT AG 127,573
2,095 Creditanstalt 181,148
2,948 Die Erste Oesterreichiesche176,054
812 EA Generali AG 255,881
1,627 EVN Energie Versorgung 239,597
2,515 Flughafen Wien AG 113,545
1,365 Lenzing AG 84,036
1,397 Mayr Meknholf Karton AG 96,635
570 Oesterreichische Brau 33,602
1,902 Oesterreichische Elektriz 217,818
3,599 OMV AG 463,887
2,029 Radex Heraklith 85,522
2,706 Steyr Daimler Puch 73,210
1,561 VA Technologie AG 245,954
1,279 Versicherungsanstalt Der 70,778
2,189 Voest Alpine Stahl AG 95,900
1,076 Wienerberger Baustoffindustrie221,473
300 Wolford AG 18,792
- -------------------------------------------------------------------------------
Italy 31.3%
25,686 Assicurasioni Generali 791,913
46,776 Banca Commerciale Italiana233,383
15,527 Banco Ambrosiano Veneto SPA97,104
8,304 Banco Popolare Di Milano 75,393
6,698 Bennetton Group SPA 140,730
65,439 Credito Italiano 323,269
17,527 Edison SPA 147,543
307,089 Ente Nazionale Idrocarburi2,092,329
132,086 Fiat SPA 551,062
25,369 Instituto Bancario San
Paolo D'Torino 355,581
18,671 Instituto Mobiliare Italiano SPA303,182
99,869 INA - Institut Naz Assicur.323,789
25,478 Italgas Societa 128,168
41,107 Mediaset SPA 260,122
13,483 Mediobanca-Banca Di Credito196,749
146,467 Montedison SPA 215,739
1 Olivetti SPA 1
72,191 Parmalat Finanziaria SPA 155,243
71,164 Pirelli SPA 272,886
11,344 Rinascente LA SPA 121,351
10,100 Riunione Adriartica Di
Sicurta SPA 146,552
16,956 Sirti SPA 116,366
382,515 Telecom Italia Mobile 1,479,387
121,915 Telecom Italia SPA 960,742
45,167 TIM Telecom Italia Mobile 242,700
- -------------------------------------------------------------------------------
Total Italy 9,731,284
Shares Market Value
Common Stocks - continued
Switzerland 47.2%
518 Adecco SA $ 183,145
190 Alusuisse-Lonza 230,570
7,545 Credit Suisse Group 1,509,512
765 Danzas Holding AG 198,215
27 Grands Magasins Jelmoli SA 32,500
340 Holderbank Glarus 356,842
1,215 Nestle SA 2,321,636
1,964 Novartis 3,475,849
188 Roche Holdings AG 2,034,788
151 Sairgroup 210,877
423 Sche Ruckversicherunds 929,251
95 Schindler Holding 140,211
2,206 Schweiserischer Bankverein775,618
991 SMH Neuenburg 143,500
55 Soceite Generale Surveillance98,853
223 Sulzer Gebuder AG 174,365
601 Union Bank of Switzerland 981,638
341 Valora Holdings AG 85,670
1,345 Zurich Versicherungs 780,806
- --------------------------------------------------------------------------------
Total Common Stocks
(Cost $21,300,215) 28,188,411
- --------------------------------------------------------------------------------
Demand Deposit 6.2%
Chase Bank Interest
Bearing Demand Deposit
(Cost $1,909,866) 1,909,866
- --------------------------------------------------------------------------------
(Cost $23,210,081) 30,098,277
- -------------------------------------------------------------------------------
Other Assets less liabilities 3.1% 970,178
- -------------------------------------------------------------------------------
Net Assets 100% $ 31,068,455 The accompanying notes are an integral part of the
financial statements.
Summary of Investments by Industry
% of Investments
Bank Holding Companies 18.10%
Pharmacy 17.90%
Insurance Companies 10.70%
Telecommunications 9.10%
Cash 8.30%
Oil integrated 8.30%
Food 8.00%
Water Distribution 2.10%
Automobile 1.80%
Airlines 1.60%
Cement Producers 1.20%
Industrial Equipment 1.10%
Chemicals 1.00%
Construction Materials 1.00%
Transportation 1.00%
Electronic materials 0.90%
Tires/Rubber 0.90%
Engineering 0.80%
TV, Radio 0.80%
Non ferrious metals 0.70%
Steel metal 0.70%
Textiles 0.60%
Temporary Work 0.60%
Consumer goods 0.50%
Department Stores 0.50%
Brewers 0.40%
Construction 0.30%
Food retail 0.30%
Industrial services 0.30%
Pulp & Paper 0.30%
Automobile equipment 0.20%
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the
financial statements.
ICON FUNDS
Statements of Assets and Liabilities
As of March 31, 1998
<TABLE>
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
ICON Basic ICON Consumer ICON Energy ICON Financial ICON Healthcare
Materials Fund Cyclicals Fund Services Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
Assets
Investments at cost $ 26,697,182 $ 39,008,549 $ 20,631,918 $ 26,113,579 $ 47,382,485
- ---------------------------------------------------------------------------------------------------------------------------
Investments at value 26,597,021 41,289,579 19,359,571 30,257,859 57,530,537
- ---------------------------------------------------------------------------------------------------------------------------
Foreign Currencies (Cost $178;
$1,089; $3,134, respectively) - - - - -
Cash 55 - - - -
Receivables:
Investments sold 1,641,089 - - 1,205,085 -
Fund shares sold - 2,567 4,179 3,239 5,741
Interest 4,736 9,382 4,702 4,794 10,109
Dividends 2,337 37,197 10,344 35,634 14,735
Deferred organizational expenses 15,761 15,761 - 15,761 14,904
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets 28,260,999 41,354,486 19,378,796 31,522,372 57,576,026
Liabilities:
Payables:
Due to Custodian bank - - - - -
Investments purchased - - - 2,574,196 -
Fund shares redeemed 82,182 37,759 17,206 24,819 48,586
Advisory fee 22,169 34,374 14,953 23,463 49,296
Fund accounting, custodial and
transfer agent fees 11,764 9,947 5,328 9,363 26,131
Administration fee 1,279 1,827 821 1,318 2,831
Distributions due to shareholders - - - - -
Accrued Expenses 35,769 28,004 3,451 35,409 117,045
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities 153,163 111,911 41,759 2,668,568 243,889
Net Assets $ 28,107,836 $ 41,242,575 $ 19,337,037 $ 28,853,804 $ 57,332,137
Shares Outstanding (unlimited
shares authorized, no par value) 3,373,270 3,703,115 2,072,557 2,414,912 4,619,508
Net Asset Value (Offering price
and redemption price per share) $8.33 $11.14 $9.33 $11.95 $12.41
The accompanying notes are an integral part of the financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ICON Leisure ICON Technology ICON Telecomm & ICON Transpor- ICON Short-Term ICON Asia ICON N. Europe ICON S. Europe
Fund Fund Utilities Fund tation Fund Fixed Income FundRegion Fund Region Fund Region Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 70,741,232 $ 87,291,311 $ 40,448,498 $ 15,214,767 $ 6,698,938 $ 58,482,908 $ 38,806,822
$ 23,210,081
- ---------------------------------------------------------------------------------------------------------------------------
83,614,199 89,833,633 48,440,649 18,076,932 6,704,792 50,558,828 47,279,802 30,098,277
- ---------------------------------------------------------------------------------------------------------------------------
- - - - - 192 1,002 2,895
- - 23,000 - 189 696,683 211,087 -
8,515 - - - - 1,251,410 634,027 735,731
7,086 236 2,149 4,529 95,376 - - 323,987
157,660 8,580 5,824 3,040 - 754 1,612 2,370
- 8,315 77,493 13,799 - 169,976 137,703 8,796
15,761 14,904 15,761 15,761 14,903 14,904 14,904 14,904
- ---------------------------------------------------------------------------------------------------------------------------
83,803,221 89,865,668 48,564,876 18,114,061 6,815,260 52,692,747 48,280,137 31,186,960
- 3,536 - - - - - 23,445
- - - - - - - -
79,156 85,400 45,356 16,221 6,259 83,962 106,607 45,417
71,315 75,804 39,011 15,085 4,580 46,478 40,395 24,336
30,351 27,602 13,978 6,032 16,608 18,920 35,017 22,000
3,919 4,056 2,152 854 453 2,594 2,253 1,318
- - - - 28,355 - - -
90,004 81,516 52,447 15,369 146,565 116,274 99,680 1,989
- ---------------------------------------------------------------------------------------------------------------------------
274,745 277,914 152,944 53,561 202,820 268,228 283,952 118,505
$ 83,528,476 $ 89,587,754 $ 48,411,932 $ 18,060,500 $ 6,612,440 $ 52,424,519 $ 47,996,185
$ 31,068,455
6,602,238 8,083,135 3,522,242 1,421,403 680,366 6,312,134 3,788,348 2,187,706
$12.65 $11.08 $13.74 $12.71 $9.72 $8.31 $12.67 $14.20
</TABLE>
An Explanation of the Statement of Assets and Liabilities
This statement lists the assets and liabilities of the Funds as of the last day
of the fiscal period. The assets may consist of the market value of the
securities held in the Fund on that day, cash, any receivables (dividends
declared not paid, interest due to the Fund but not paid, securities sold but
not settled, and Fund shares purchased by investors but not settled). The
liabilities may consist of payables for expenses incurred but not yet paid, Fund
shares redeemed but not settled, securities for the portfolio bought but not
settled. The last line is the Net Asset Value (NAV) Per Share as of the last day
of the fiscal period. The NAV is calculated by dividing the Fund's net assets
(assets, at that day's market value, minus liabilities) by the number of Fund
shares outstanding.
ICON FUNDS
Statements of Operations
For the six months ended March 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
ICON Basic ICON Consumer ICON Energy ICON Financial ICON Healthcare
Materials Fund Cyclicals Fund Fundm Services Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
Investment Income:
<S> <C> <C> <C> <C> <C>
Interest $ 60,695 $ 30,274 $ 28,680 $ 23,750 $ 57,530
Dividends 128,445 115,458 111,961 245,475 226,840
Foreign taxes withheld - - - - -
- ---------------------------------------------------------------------------------------------------------------------------
189,140 145,732 140,641 269,225 284,370
Expenses:
Advisory fees 150,664 130,671 65,377 150,751 352,906
Fund accounting, custodial and
transfer agent fees 14,549 19,601 9,807 22,613 52,936
Administration fees 8,011 6,534 3,178 7,390 17,278
Audit and accounting fees 4,101 3,522 696 4,099 9,621
Registration fees 11,431 12,775 12,775 12,775 12,627
Legal fees 1,116 1,084 711 1,806 3,246
Insurance expense 411 358 282 411 964
Amortization of deferred
organizational expenses 1,836 1,836 - 1,836 1,836
Trustees fees & expenses 281 336 283 523 1,136
Shareholder reports 3,248 2,829 1,688 3,673 3,247
Other expenses 22,825 9,939 - 12,721 55,927
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses 218,473 189,485 94,797 218,598 511,724
Net Investment income/(loss) (29,333) (43,753) 45,844 50,627 (227,354)
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) on investments:
Net realized gain/(loss) from
investment transactions (6,861,830) 1,016,762 - 638,858 6,619,728
Net realized gain/(loss) from foreign
currency transactions - - - - -
Change in net unrealized appreciation or
(depreciation) on securities and foreign
currency transactions (3,163,682) 439,080 (1,272,347) 2,474,062 1,413,442
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(loss)
on investments: (10,025,512) 1,455,842 (1,272,347) 3,112,920 8,033,170
- ---------------------------------------------------------------------------------------------------------------------------
Net increase(decrease) in net assets
resulting from operations $ (10,054,845) $ 1,412,089 $ 1,226,503 $ 3,163,547 $ 7,805,816
</TABLE>
The accompanying notes are an integral part of the financial statements m For
the period November 5, 1997 (commencement of operations) to March 31, 1998 An
Explanation of the Statements of Operations This financial statement provides
details of the Fund's income, expenses, gains and losses on securities and
currency transactions (if any) and the change in appreciation or depreciation of
portfolio holdings. The first section, "Investment Income", reports the
dividends earned from stocks and interest earned from interest-bearing
securities held by the Fund. The next section reports the expenses incurred by
the Funds, including advisory fees, transfer agent fees, custodial fees, fund
accounting fees, legal fees, audit fees, administration fees, trustee fees and
expenses, printing and postage for mailing statements, financial reports, and
prospectuses to shareholders.
The last section lists the increase and decrease in the market value of
securities held in the Fund's portfolios. A realized gain (or loss) occurs when
a Fund sells a security held in the portfolio. Unrealized gain (or loss)
represents represents the change in the market value of the securities held in
the portfolio, either appreciation or depreciation. The net result of all these
sections is the net increase (decrease) in net assets resulting from operations.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
ICON Leisure ICON Technology ICON Telecomm & ICON Transpor- ICON Short-Term ICON Asia ICON N. Europe ICON S.Eu-
Fund Fund Utilities Fund tation Fund Fixed Income Fund Region Fund Region Fund ope Region
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 48,105 $ 98,505 $ 731,799 $ 18,501 $ 748,816 $ 1,242 $ 3,670 $ 3,353
471,066 35,101 58,268 138,664 - 348,849 246,403 18,371
- - - - - (46,720) (19,861) (830)
- ---------------------------------------------------------------------------------------------------------------------------
519,171 133,606 790,067 157,165 748,816 303,371 230,212 20,894
389,314 331,569 230,271 103,399 83,944 260,664 237,674 112,920
58,397 49,735 34,541 15,510 19,372 72,986 66,549 31,618
19,077 16,257 11,277 5,093 6,419 12,045 11,649 5,532
4,338 8,632 6,272 2,818 3,585 7,100 6,465 3,077
12,385 10,664 10,305 12,775 12,844 11,411 10,440 10,454
3,603 3,086 2,809 953 435 2,270 2,103 955
1,066 912 631 282 355 815 650 311
1,836 1,836 1,836 1,836 1,836 1,836 1,836 1,836
1,326 986 698 334 530 754 720 306
18,998 7,205 4,980 2,231 2,807 5,644 5,134 2,456
54,176 49,903 30,283 4,707 9,942 54,580 48,953 16,864
- ---------------------------------------------------------------------------------------------------------------------------
564,516 480,785 333,903 149,938 142,069 430,105 392,173 186,329
(45,345) (347,179) 456,164 7,227 606,747 (126,734) (161,961) (165,435)
- ---------------------------------------------------------------------------------------------------------------------------
2,202,286 843,637 4,903,104 1,360,001 140,233 (4,111,240) 2,844,112 2,486,857
- - - - - (136,339) (154,360) (97,559)
7,187,179 (4,437,900) 6,903,893 (860,769) (153,305) (5,854,264) 4,597,488 3,606,232
- ---------------------------------------------------------------------------------------------------------------------------
9,389,465 (3,594,263) 11,806,997 499,232 (13,072) (10,101,843) 7,287,240 5,995,530
- ---------------------------------------------------------------------------------------------------------------------------
$ 9,344,120 $ (3,941,442) $ 12,263,161 $ 506,459 $ 593,675 $ (10,228,577) $ 7,125,279$ 5,830,095
</TABLE>
ICON FUNDS
Statements of Changes in Net Assets
For the fiscal year or period as indicated
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
ICON Basic ICON Consumer
Materials Fund Cyclicals Fund
1998 1997a 1998 1997b
- ---------------------------------------------------------------------------------------------------------------------------
Operations:
<S> <C> <C> <C> <C>
Net investment income/(loss) $ (29,333) $ (43,832) $ (43,753) $ (29,486)
Net realized gain/(loss) from
investment transactions (6,861,830) 953,349 1,016,762 -
Net realized gain/(loss) from
foreign currency transactions - - - -
Changes in unrealized net appreciation/
(depreciation) on securities and foreign
currency transactions (3,163,682) 3,063,521 439,080 1,841,950
- ---------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net assets
resulting from operations (10,054,845) 3,973,038 1,412,089 1,812,464
Dividends and Distributions to Shareholders from:
Net investment income - - - -
Net capital gains (884,415) - - -
- ---------------------------------------------------------------------------------------------------------------------------
Net decrease from dividends and distributions (884,415) - - -
Fund Share Transactions:
Shares sold 6,689,565 53,268,925 25,165,147 19,949,294
Reinvested dividends and distributions 884,415 - - -
Shares repurchased (18,777,541) (6,991,306) (6,250,465) (845,954)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase from fund share transactions (11,203,561) 46,277,619 18,914,682 19,103,340
- ---------------------------------------------------------------------------------------------------------------------------
Total Net increase in Net Assets (22,142,821) 50,250,657 20,326,771 20,915,804
Net Assets:
Beginning of Period 50,250,657 - 20,915,804 -
- ---------------------------------------------------------------------------------------------------------------------------
End of Period $ 28,107,836 $ 50,250,657 $ 41,242,575 $20,915,804
Net Assets consist of:
Paid in capital (par value and paid in surplus) $ 35,074,059 $ 46,277,619 $ 37,988,534$19,073,854
Accumulated undistributed net
investment income/(loss) (73,165) - (43,751) -
Accumulated undistributed net realized
gain/(loss) from investments (6,792,897) 909,517 1,016,762 -
Accumulated net realized gain/(loss)
from foreign currency transactions - - - -
Unrealized appreciation/(depreciation) on
securities and foreign currency transactions (100,161) 3,063,521 2,281,030 1,841,950
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets $ 28,107,836 $ 50,250,657 $ 41,242,575 $20,915,804
Transactions in Fund Shares:
Shares sold 780,995 5,335,071 2,388,148 1,988,381
Reinvested dividends and distributions 121,988 - - -
Shares repurchased (2,138,958) (725,826) (593,739) (79,675)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) (1,235,975) 4,609,245 1,794,409 1,908,706
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding beginning of period 4,609,245 - 1,908,706 -
Shares outstanding end of period 3,373,270 4,609,245 3,703,115 1,908,706
Purchases and Sales of Investment Securities:
(excluding Short-Term Securities)
Purchase of securities $ 7,297,848 $ 56,209,755 $ 10,515,706 $18,387,007
Proceeds from sales of securities 18,216,264 14,538,600 28,823,520 -
Purchases of long-term
U.S. government securities - - - -
Proceeds from sales of long-term
U.S. government securities - - - -
</TABLE>
<PAGE>
An Explanation of the Statements of Changes in Net Assets
This statement reports the increase or decrease in the Fund's net assets during
the reporting period. Changes in the Fund's net assets can be attributed to
investment operations (The Statement of Operations), dividends or distributions
to Fund shareholders, and purchases and sales of Fund shares. This schedule may
be used by shareholders to determine if the Fund's growth was a result of
operations or an increase in the number of Fund shares being purchased. The
first section is a summary of the Statement of Operations discussed on a
previous page. The next section summarizes the change due to capital gain and
dividend distributions to Fund shareholders. If Fund shareholders receive their
dividends and distributions in cash, money is taken out of the Fund to make the
payment. If Fund shareholders reinvest their dividends and distributions, the
Fund's net assets will not be affected. The net increase (decrease) in net
assets from Fund share transactions includes the increase due to purchase of
Fund shares, the decrease due to Fund shares redeemed from shareholders, and the
reinvestment of Fund dividend and distributions. The final section "Net Assets
consist of " itemizes the components of the Fund's net assets. Since funds
usually distribute substantially all earnings so as to not incur a Fund level
income tax, a significant portion of the net assets is shareholder capital.
The accompanying notes are an integral part of the financial statements a-e
legend are at the bottom of page 56. m For the period November 5, 1997
(commencement of operations) to March 31, 1998 + For the period ended March 31,
1998
<PAGE>
<TABLE>
<CAPTION>
ICON Energy ICON Financial ICON Healthcare ICON Leisure
FundmServices Fund Fund Fund
1998 1997 1998 1997c 1998 1997d 1998 1997e
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 45,844 $ - $ 50,627 $ 8,720 $ (227,354) $ (282,337) $ (45,345)
$ (63,147)
- - 638,858 - 6,619,728 3,110,315 2,202,286 174,394
- - - - - - - -
(1,272,347) - 2,474,062 1,670,218 1,413,442 8,734,610 7,187,179 5,685,788
- ---------------------------------------------------------------------------------------------------------------------------
(1,226,503) - 3,163,547 1,678,938 7,805,816 11,562,588 9,344,120 5,797,035
- - (33,308) - - - - -
- - (104,229) - (5,107,561) - (231,012) -
- - (137,537) (5,107,561) - (231,012) -
22,641,160 - 6,150,960 31,979,831 25,982,085 83,783,679 24,365,077 64,256,980
- - 137,537 - 5,107,561 - 231,012 -
(2,077,620) - (12,697,748) (1,421,724) (53,762,610) (18,039,421) (16,789,052)(3,445,684)
- ---------------------------------------------------------------------------------------------------------------------------
20,563,540 - (6,409,251) 30,558,107 (22,672,964) 65,744,258 7,807,037 60,811,296
- ---------------------------------------------------------------------------------------------------------------------------
19,337,037 - (3,383,241) 32,237,045 (19,974,709) 77,306,846 16,920,145 66,608,331
- ---------------------------------------------------------------------------------------------------------------------------
- - 32,237,045 - 77,306,846 - 66,608,331 -
- ---------------------------------------------------------------------------------------------------------------------------
$ 19,337,037 $ - $ 28,853,804 $ 32,237,045 $ 57,332,137 $ 77,306,846 $
83,528,476 $ 66,608,331
$ 20,563,540 $ - $ 24,148,857 $ 30,558,107 $ 43,071,294 $ 65,744,258 $ 68,618,334
$ 60,811,296
45,844 - 26,038 8,720 (509,691) - (108,493) 0
- - 534,629 - - 2,827,978 - 111,247
- - - - 4,622,482 - 2,145,668 -
(1,272,347) - 4,144,280 1,670,218 10,148,052 8,734,610 12,872,967 5,685,788
- ---------------------------------------------------------------------------------------------------------------------------
$ 19,337,037 $ - $ 28,853,804 $ 32,237,045 $ 57,332,137 $ 77,306,846
83,528,476 $ 66,608,331
2,305,484 - 566,501 3,207,358 2,230,749 8,224,065 2,146,058 6,189,450
- - 13,658 - 486,898 - 20,626 -
(232,927) - (1,233,842) (138,763) (4,662,719) (1,659,485) (1,433,611) (320,285)
2,072,557 - (653,683) 3,068,595 (1,945,072) 6,564,580 733,073 5,869,165
- ---------------------------------------------------------------------------------------------------------------------------
- - 3,068,595 - 6,564,580 - 5,869,165 -
- ---------------------------------------------------------------------------------------------------------------------------
2,072,557 - 2,414,912 3,068,595 4,619,508 6,564,580 6,602,238 5,869,165
$ 19,482,797 $ - $ 15,304,829 $ 30,280,032 $ 24,008,658 $103,462,081 $ 15,559,656
$ 60,548,827
- - 22,270,230 - 51,338,311 40,116,738 8,805,066 1,177,134
- - - - - - - -
- - - - - - - -
<PAGE>
Statements of Changes in Net Assets
For the fiscal year or period as indicated
- ---------------------------------------------------------------------------------------------------------------------------
ICON Technology ICON Telecomm & ICON Transportation
Fund Utilities Fund Fund
1998 1997f 1998 1997g 1998 1997h
- ---------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income/(loss) $ (347,179) $ (158,812) $ 456,164 $ 70,915 $ 7,227
$ (2,707)
Net realized gain/(loss) from
investment transactions 843,637 2,302,870 4,903,104 43,406 1,360,001 475,866
Net realized gain/(loss) from
foreign currency transactions - - - - - -
Changes in unrealized net appreciation/
(depreciation) on securities and foreign
currency transactions (4,437,900) 6,980,222 6,903,893 1,088,257 (860,769) 3,722,935
- ---------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net assets
resulting from operations (3,941,442) 9,124,280 12,263,161 1,202,578 506,459 4,196,094
Dividends and Distributions to Shareholders from:
Net investment income - - (266,587) - (11,614) -
Net capital gains (2,209,608) - (42,972) - (471,107) -
- ---------------------------------------------------------------------------------------------------------------------------
Net decrease from dividends and distributions (2,209,608) - (309,559) -
(482,721) -
Fund Share Transactions:
Shares sold 70,943,622 39,084,848 55,440,685 19,991,740 4,328,773 19,745,008
Reinvested dividends and distributions 2,209,608 - 307,627 - 482,721 -
Shares repurchased (19,262,947) (6,360,607) (39,712,074) (772,226) (9,306,037) (1,409,797)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase from fund share transactions 53,890,283 32,724,241 16,036,238 19,219,514 (4,494,543) 18,335,211
- ---------------------------------------------------------------------------------------------------------------------------
Total Net increase in Net Assets 47,739,233 41,848,521 27,989,840 20,442,092 (4,470,805) 22,531,305
Net Assets:
Beginning of Period 41,848,521 - 20,442,092 - 22,531,305 -
- ---------------------------------------------------------------------------------------------------------------------------
End of Period $89,587,754 $ 41,848,521 $ 48,411,932 $ 20,442,092 $ 18,060,500
$ 22,531,305
Net Assets consist of:
Paid in capital (par value and paid in surplus) $ 86,614,525 $ 32,724,241 $ 35,255,751 $ 19,219,514 $
13,840,667 $18,335,211
Accumulated undistributed net
investment income/(loss) (505,991) - 260,493 70,915 (7,093) (2,707)
Accumulated undistributed net realized
gain/(loss) from investments 936,898 2,144,058 4,903,538 43,406 1,364,760 475,866
Accumulated net realized gain/(loss)
from foreign currency transactions - - - - - -
Unrealized appreciation/(depreciation) on
securities and foreign currency transactions 2,542,322 6,980,222 7,992,150 1,088,257
2,862,166 3,722,935
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets $89,587,754 $ 41,848,521 $ 48,411,932 $ 20,422,092 $ 18,060,500
$ 22,531,305
Transactions in Fund Shares:
Shares sold 6,413,699 3,786,744 4,851,867 1,997,744 366,547 1,943,015
Reinvested dividends and distributions 229,451 - 25,678 - 44,246 -
Shares repurchased (1,788,870) (557,889) (3,277,449) (75,598) (807,137) (125,268)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) 4,854,280 3,228,855 1,600,096 1,922,146 (396,344)
Shares outstanding beginning of period 3,228,855 - 1,922,146 - 1,817,747 -
Shares outstanding end of period 8,083,135 3,228,855 3,522,242 1,922,146 1,421,403 1,817,747
Purchases and Sales of Investment Securities:
(excluding Short-Term Securities)
Purchase of securities $57,668,360 $ 43,501,845 $ 46,623,185 $ 18,788,936 $ 1,811,710
$ 21,171,745
Proceeds from sales of securities 6,949,110 12,029,143 31,909,941 476,790 7,327,255 3,018,727
Purchases of long-term
U.S. government securities - - - - -
Proceeds from sales of long-term
U.S. government securities - - - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ICON Short-Term ICON AsiaICON N. EuropeICON S. Europe
Fixed Income Fund Region RegionRegion
1998 1997i 1998 1997j 1998 1997k 1998 1997l
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 606,747 $ 3,832,274 $ (126,734) $ (60,266) $ (161,961) $ 296,544 $ (165,435) $172,559
140,233 348,599 (4,111,240) 3,905 2,844,112 139,116 2,486,857 (2,426)
- - (136,339) 5,182 (154,360) (105,148) (97,559) 5,843
(153,305) 159,162 (5,854,264) (2,088,339) 4,597,488 3,870,951 3,606,232 3,271,044
593,675 4,340,035 (10,228,577) (2,139,518) 7,125,279 4,201,463 5,830,095 3,447,020
(606,747) - - - (236,890) - (113,918) -
(345,113) (3,832,274) - - (558,284) - (1,038,913) -
- ---------------------------------------------------------------------------------------------------------------------------
(951,860) (3,832,274) - - (795,174) - (1,152,831) -
- ---------------------------------------------------------------------------------------------------------------------------
49,245,284 421,179,461 23,549,405 64,894,833 6,834,910 50,603,747 15,653,567 20,262,386
943,107 3,832,274 - - 795,174 - 1,152,831 -
(124,599,698) (344,137,564) (19,175,130) (4,476,494) (15,910,669) (4,858,545) (11,502,954) (2,621,659)
- ---------------------------------------------------------------------------------------------------------------------------
(74,411,307) 80,874,171 4,374,275 60,418,339 (8,280,585) 45,745,202 5,303,444 17,640,727
- ---------------------------------------------------------------------------------------------------------------------------
(74,769,492) 81,381,932 (5,854,302) 58,278,821 (1,950,480) 49,946,665 9,980,708 21,087,747
- ---------------------------------------------------------------------------------------------------------------------------
81,381,932 - 58,278,821 - 49,946,665 - 21,087,747 -
- ---------------------------------------------------------------------------------------------------------------------------
$ 6,612,440 $ 81,381,932 $ 52,424,519 $ 58,278,821 $ 47,996,185 $ 49,946,665 $ 31,068,455
$21,087,747
$ 6,462,867 $ 80,874,171 $ 64,792,615 $ 60,367,161 $ 37,464,618 $ 45,745,202 $ 22,944,170 $ 17,640,727
- - - (187,000) - (102,307) 188,849 (106,794) 188,199
143,719 348,599 (4,107,335) (5,183) 2,424,944 246,811 1,445,519 (18,066)
- - (131,157) 5,182 (259,509) (105,148) (91,716) 5,843
- ---------------------------------------------------------------------------------------------------------------------------
5,854 159,162 (7,942,604) (2,088,339) 8,468,439 3,870,951 6,877,276 3,271,044
- ---------------------------------------------------------------------------------------------------------------------------
$ 6,612,440 $ 81,381,932 $ 52,424,519 $ 58,278,821 $ 47,996,185 $ 49,946,665 $ 31,068,455 $21,087,747
4,944,702 42,129,480 2,692,093 6,291,111 610,274 4,976,379 1,242,329 2,017,133
95,566 382,921 - - 72,619 - 101,037 -
- ---------------------------------------------------------------------------------------------------------------------------
(12,476,825) (34,395,478) (2,243,475) (427,595) (1,411,208) (459,716) (927,410) (245,383)
- ---------------------------------------------------------------------------------------------------------------------------
(7,436,557) 8,116,923 448,618 5,863,516 (728,315) 4,516,663 415,956 1,771,750
- ---------------------------------------------------------------------------------------------------------------------------
8,116,923 - 5,863,516 - 4,516,663 - 1,771,750 -
680,366 8,116,923 6,312,134 5,863,516 3,788,348 4,516,663 2,187,706 1,771,750
$ - $ - $ 17,007,313 $ 57,365,313 $ 14,137,382 $ 48,595,889 $ 11,562,562
$ 20,714,592
- - 13,101,280 - 23,423,562 4,951,697 10,259,410 1,124,737
$ 30,966,628 $145,207,871 - - - - - -
31,051,120 130,393,164 - - - - - -
</TABLE>
ICON FUNDS
Financial Highlights
For a share outstanding throughout each fiscal year or period as indicated
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
ICON Basic ICON Consumer
Materials Fund Cyclicals Fund
1998 1997a 1998 1997b
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.90 $ 10.00 $ 10.96 $ 10.00
Income from investment operations
Net investment income (0.01) (0.01) (0.02) (0.01)
Net gains or (losses) on securities
(both realized and unrealized) (2.30) 0.91 0.20 0.97
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations (2.31) 0.90 0.18 0.96
Less dividends and distributions
Dividends (from net investment income) - - - -
Dividend (from net realized gain) (0.26) - - -
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (0.26) - - -
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.33 $ 10.90 $ 11.14 $ 10.96
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (20.81%) 9.00% 1.64% 9.60%
Net assets, end of period (in thousands) $ 28,108 $ 50,251 $ 41,243 $ 20,916
Average net assets for the period
(in thousands) $ 30,102 $ 45,001 $ 26,377 $ 19,876
Ratio of expenses to average net assets* 1.45% 1.45% 1.44% 1.89%
Ratio of net investment income to
average net assets* (0.02%) (0.24%) (0.33%) (0.67%)
Portfolio turnover rate 24.81% 32.35% 41.18% 0.00%
Average commission rate per share $ 0.0481 $ 0.0505 $ 0.0462 $ 0.0308
<FN>
The accompanying notes are an integral part of the financial statements a For
the period May 5, 1997 (commencement of operations) to September 30, 1997 b For
the period July 9, 1997 (commencement of operations) to September 30, 1997 c For
the period July 1, 1997 (commencement of operations) to September 30, 1997 d For
the period February 24, 1997 (commencement of operations) to September 30, 1997
e For the period May 9, 1997 (commencement of operations) to September 30, 1997
m For the period November 5, 1997 (commencement of operations) to March 31, 1998
+ For the period ended March 31, 1998 * Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ICON Energy ICON Financial ICON Healthcare ICON Leisure
Fundm Services Fund Fund Fund
1998 1997 1998 1997c 1998 1997d 1998 1997e
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 10.00 $ - $ 10.51 $ $10.00 $ 11.78 $ 10.00 $ 11.35 $ 10.00
0.03 - - 0.01 (0.04) (0.04) (0.01) (0.01)
(0.70) - 1.48 0.50 1.43 1.82 1.34 1.36
- ---------------------------------------------------------------------------------------------------------------------------
(0.67) - 1.48 0.51 1.39 1.78 1.33 1.35
- - (0.01) - (0.76) - - -
- - (0.03) - - - (0.03) -
- ---------------------------------------------------------------------------------------------------------------------------
- - (0.04) - (0.76) - (0.03) -
- ---------------------------------------------------------------------------------------------------------------------------
$ 9.33 $ - $ 11.95 $ 10.51 $ 12.41 $ 11.78 $ 12.65 $ 11.35
- ---------------------------------------------------------------------------------------------------------------------------
(6.70%) - 14.19% 5.10% 13.07% 17.80% 11.78% 13.50%
$ 19,337 $ - $ 28,854 $ 32,237 $ 57,332 $ 77,307 $ 83,528 $ 66,608
$ 16,359 $ - $ 30,226 $ 29,803 $ 70,648 $ 59,164 $ 78,200
$ 45,444
1.45% - 1.45% 1.70% 1.45% 1.45% 1.44% 1.48%
0.70% - 0.34% 0.12% (0.64%) (0.80%) (0.11%) (0.36%)
0.00% - 53.45% 0.00% 36.02% 71.81% 11.70% 2.52%
$ 0.0329 $ - $ 0.0464 $ 0.0418 $ 0.0504 $ 0.0490 $ 0.0494
$ 0.0457
<FN>
An Explanation of the Financial Highlights
This schedule provides an analysis of the items that affected the Fund's net
asset value, on a per share basis. Since this is the first year for the Funds
there is no past year information. This schedule provides the total return,
distributions, assets in the Fund, expense ratios and portfolio turnover. The
first line is the beginning of period net asset value per share (NAV) and the
components of the current fiscal period's activity is shown in sections that
follow. The increase or (decrease) due to investment operations is first,
followed by gains or (losses), either realized or unrealized, then dividends and
distributions are subtracted to arrive at the NAV per share at the end of the
fiscal period. Also included in this schedule are the Fund's expense ratios, or
percentage of net assets that was used to cover the operating expenses of the
Fund during the period. This is determined by dividing the total expenses
incurred by the Fund by the average net assets in the Fund during the year. The
next item on the schedule is the ratio of net investment income, which is the
net investment income earned from investment operations divided by the average
net assets of the Funds during the reporting period.
The next item is the portfolio turnover rate, which is a measure of the amount
of buying and selling activity in the Fund's portfolio. The turnover is affected
by many things including, market conditions, changes in the size of the Fund,
the types of Fund investments, and the investment style of the portfolio
manager. A 100% rate implies that an amount equal to the value of the entire
portfolio is turned over during the reporting period, a 50% rate means that an
amount equal to the value of half the portfolio is traded during the reporting
period. The last item is the average commission rate per share. This number is
arrived at by taking the agency commissions paid on equity securities trades and
dividing by the number of shares purchased. Due to the method of paying for
securities (percentage points on principal) in certain foreign markets, the
average commission rate per share may not be as useful a measure in those
markets.
</FN>
</TABLE>
<PAGE>
Financial Highlights
For a share outstanding throughout each fiscal year or period as indicated
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
ICON Technology ICON Telecomm & ICON Transportation
Fund Utilities Fund Fund
1998 1997f 1998 1997g 1998 1997h
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.96 $ 10.00 $ 10.63 $ 10.00 $12.40 $ 10.00
Income from investment operations
Net investment income (0.06) (0.05) 0.11 0.06 0.00 0.00
Net gains or (losses ) on securities
(both realized and unrealized) (1.43) 3.01 3.05 0.57 0.56 2.40
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.49) 2.96 3.16 0.63 0.56 2.40
Less dividends and distributions
Dividends (from net investment income) - - (0.04) - (0.01)
-
Dividend (from net realized gain) (0.39) - (0.01) - (0.24) -
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (0.39) - (0.05) - (0.25) -
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.08 $ 12.96 $ 13.74 $ 10.63 $ 12.71 12.40
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (11.08%) 29.60% 29.82% 6.30% 4.81% 24.00%
Net assets, end of period (in thousands $ 89,588 $ 41,849 $ 48,412 $ 20,422 18,060 $ 22,531
Average net assets for the period
(in thousands) $ 66,822 $ 29,766 $ 46,433 $ 19,230 $ 20,734 $ 19,459
Ratio of expenses to average net assets* 1.44% 1.47% 1.45% 1.91%
1.45% 1.61%
Ratio of net investment income to
average net assets* (1.04%) (0.88%) 1.97% 1.62% 0.07% (0.04%)
Portfolio turnover rate 10.77% 44.57% 73.36% 2.55% 9.30% 15.97%
Average commission rate per share $ 0.0493 $ 0.0489 $ 0.0389 $ 0.0313 $ 0.0472 $ 0.0489
<FN>
The accompanying notes are an integral part of the financial statements f For
the period February 19, 1997 (commencement of operations) to September 30, 1997
g For the period July 9, 1997 (commencement of operations) to September 30, 1997
h For the period May 9, 1997 (commencement of operations) to September 30, 1997
i For the period February 7, 1997 (commencement of operations) to September 30,
1997 j For the period February 25, 1997 (commencement of operations) to
September 30, 1997 k For the period February 18, 1997 (commencement of
operations) to September 30, 1997 l For the period February 20, 1997
(commencement of operations) to September 30, 1997 + For the period ended March
31, 1998 * Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ICON Short-Term ICON Asia ICON N. Europe ICON S. Europe
Fixed Income FundRegion Fund Region Fund Region Fund
1998 1997i 1998 1997j 1998 1997k 1998 1997l
- ---------------------------------------------------------------------------------------------------------------------------
<S><C> <C> <C> <C> <C> <C> <C> <C>
$ 10.03 $ 10.00 $ 9.94 $ 10.00 $ 11.06 $ 10.00 $ 11.90 10.00
0.23 0.47 (0.02) (0.01) (0.04) 0.07 (0.08) 0.10
(0.18) 0.03 (1.61) (0.05) 1.84 0.99 3.00 1.80
- ---------------------------------------------------------------------------------------------------------------------------
0.05 0.50 (1.63) (0.06) 1.80 1.06 2.92 1.90
(0.23) (0.47) - - (0.05) - (0.06) -
(0.13) - - - (0.14) - (0.56) -
- ---------------------------------------------------------------------------------------------------------------------------
(0.36) (0.47) - - (0.19) - (0.62) -
- ---------------------------------------------------------------------------------------------------------------------------
$ 9.72 $ 10.03 $ 8.31 $ 9.94 $ 12.67 $ 11.06 $ 14.20 $ 11.90
- ---------------------------------------------------------------------------------------------------------------------------
2.70% 3.18% (16.40%) (0.60%) 16.57% $ 10.60% $ 26.90%
$ 19.00%
$ 6,612 $ 81,382 $ 52,424 $ 58,279 $ 47,996 $ 49,947 $ 31,068
$ 21,088
$ 25,910 $ 128,897 $ 52,270 $ 45,191 $ 47,668 $ 36,212 $ 22,702
$ 15,055
1.09% 1.10% 1.65% 1.66% 1.64% 1.66% 1.64% 1.69%
4.69% 4.66% (0.49%) (0.23%) (0.68%) 1.34% (1.46%) 1.92%
229.82% 297.62% 24.91% 0.00% 29.73% 13.89% 35.24% 7.29%
$ - $ - $ 0.0047 $ 0.0109 $ 0.0828 $ 0.1169 $ 0.0120
$ 0.0109
<FN>
An Explanation of the Financial Highlights
This schedule provides an analysis of the items that affected the Fund's net
asset value, on a per share basis. Since this is the first year for the Funds
there is no past year information. This schedule provides the total return,
distributions, assets in the Fund, expense ratios and portfolio turnover. The
first line is the beginning of period net asset value per share (NAV) and the
components of the current fiscal period's activity is shown in sections that
follow. The increase or (decrease) due to investment operations is first,
followed by gains or (losses), either realized or unrealized, then dividends and
distributions are subtracted to arrive at the NAV per share at the end of the
fiscal period. Also included in this schedule are the Fund's expense ratios, or
percentage of net assets that was used to cover the operating expenses of the
Fund during the period. This is determined by dividing the total expenses
incurred by the Fund by the average net assets in the Fund during the year. The
next item on the schedule is the ratio of net investment income, which is the
net investment income earned from investment operations divided by the average
net assets of the Funds during the reporting period.
The next item is the portfolio turnover rate, which is a measure of the amount
of buying and selling activity in the Fund's portfolio. The turnover is affected
by many things including, market conditions, changes in the size of the Fund,
the types of Fund investments, and the investment style of the portfolio
manager. A 100% rate implies that an amount equal to the value of the entire
portfolio is turned over during the reporting period, a 50% rate means that an
amount equal to the value of half the portfolio is traded during the reporting
period. The last item is the average commission rate per share. This number is
arrived at by taking the agency commissions paid on equity securities trades and
dividing by the number of shares purchased. Due to the method of paying for
securities (percentage points on principal) in certain foreign markets, the
average commission rate per share may not be as useful a measure in those
markets.
</FN>
</TABLE>
ICON FUNDS
Notes to Financial Statements
March 31, 1998
1. Organization and Significant Accounting Policies.
The ICON Basic Materials Fund (Basic Materials Fund), ICON Consumer Cyclicals
Fund (Consumer Cyclicals Fund), ICON Energy Fund (Energy Fund), ICON Financial
Services Fund, (Financial Services Fund) ICON Healthcare Fund (Healthcare Fund),
ICON Leisure Fund (Leisure Fund), ICON Technology Fund (Technology Fund), ICON
Telecommunication & Utilities Fund (Telecommunication and Utilities Fund), ICON
Transportation Fund (Transportation Fund)-(collectively, the Domestic Funds),
and ICON North Europe Region Fund (North Europe Fund), ICON South Europe Region
Fund (South Europe Fund) and ICON Asia Region Fund (Asia Fund) (collectively,
the International Funds) and ICON Short-Term Fixed Income Fund (Short-Term Fixed
Income Fund) are series funds (collectively, the Funds) which are part of the
ICON Funds (the Trust), a Massachusetts business trust, which is registered
under the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end, non-diversified management investment company. The Trust has sixteen
funds (of which eleven are currently in operations) which invest primarily in
securities of companies whose principal business activities fall within specific
industries or regions, and one short-term fixed income fund which invests in
short-term U.S. Treasury and U.S. Government Agency instruments. Each fund is
authorized to issue an unlimited number of no par shares. The investment
objective of the domestic and international equity funds is to provide long-term
capital appreciation. The investment objective of the Short-Term Fixed Income
Fund is to attain high current income consistent with preservation of capital.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of income and expenses during the reporting
period. Actual results could differ from these estimates.
Investment Valuation.
The Portfolio's securities and other assets are valued at the close of the
regular trading session of the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m. New York time) each day the Exchange is open. The
Portfolio's securities and other assets are valued as follows: securities listed
or traded primarily on foreign exchanges, national exchanges and the Nasdaq
Stock market are valued at the last sale price as of the close of the Exchange,
or, if such a price is lacking for the trading period immediately preceding the
time of determination, such securities are valued at the last bid price.
Securities that are traded in the over-the-counter market are valued at the last
quoted sales price lacking a last sales price a security is valued at it's last
bid price. The market value of individual securities held by the Portfolio are
determined by using pricing services which provide market prices to other mutual
funds or, as needed, by obtaining market quotations from independent
broker/dealers. Securities and assets for which quotations are not readily
available are valued at fair values determined in good faith pursuant to
consistently applied procedures established by the trustees. Short-term
securities including demand notes with remaining maturities of sixty days or
less for which quotations are not readily available are valued at amortized cost
or original cost plus accrued interest, both of which approximate market value.
Repurchase Agreements. Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to ensure
its market value exceeds the current market value of the repurchase agreements
including accrued interest. In the event of default on the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or retention of
the collateral or proceeds may be subject to legal proceedings. Foreign Currency
Translation. The accounting records of the Funds are maintained in U.S. dollars.
Investment securities and other assets and liabilities denominated in a foreign
currency are translated into U.S. dollars at the prevailing rates of exchange at
period end. Income and expenses are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions. Purchases
and sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade. Net realized
gains and losses on foreign currency transactions represent disposition of
foreign currencies, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. Income Taxes. The
Funds intend to qualify as regulated investment companies under Subchapter M of
the Internal Revenue Code and, accordingly, the Funds will not be subject to
federal and state income taxes, or federal excise taxes to the extent that they
intend to make sufficient distributions of net investment income and net
realized capital gain.
<PAGE>
Dividends received by shareholders of the Funds which are derived from foreign
source income and foreign taxes paid by the Funds are to be treated, to the
extent allowable under the Code, as if received and paid by the shareholders of
the Funds. Dividends paid by the Funds from net investment income and
distributions of net realized short-term gains are for federal income tax
purposes, taxable as ordinary income to shareholders. Dividends and
distributions to shareholders are recorded by the Fund on the ex
dividend/distribution date. The Fund distributes net realized capital gains, if
any, to its shareholders at least annually, if not offset by capital loss
carryovers. Income distributions and capital gain distributions are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions and net operating losses.
Investment Income. Dividend income is recorded on the ex-dividend date. Non-cash
dividends included in dividend income, if any, are recorded at the fair market
value of the securities received. Interest income is accrued as earned.
Expenses. Most expenses of the Funds can be directly attributed to each specific
fund. Expenses which cannot be directly attributed are apportioned between all
funds in the Trust. Deferred Organizational Costs. Meridian Investment
Management Corporation (MIMCO) (the Advisor to the Funds) and AmeriPrime
Financial Services, Inc. (AmeriPrime) (the Administrator) paid all
organizational expenses on behalf of the Funds. These costs will be reimbursed
and are being amortized over five years by the Funds. The amortization starts
once the Funds have assets and begin investment operations. Investment
Transactions. Security transactions are accounted for as of trade date. Gains
and losses on securities sold are determined on the basis of identified cost.
The Funds may have elements of risk due to concentrated investments in specific
industries or in foreign issuers located in a specific country. Such
concentrations may subject the Funds to additional risks resulting from future
political or economic conditions and/or possible impositions of adverse foreign
governmental laws or currency exchange restrictions.
2. Fees and Other Transactions with Affiliates.
Investment Advisory Fees
Domestic and International Funds
As the Funds' investment advisor, MIMCO receives a monthly fee that is computed
daily at an annual rate of 1.00% of the Domestic and International Fund's
average net assets. Short-Term Fixed Income Fund As the fund's investment
advisor, MIMCO receives a monthly fee that is computed daily at an annual rate
of .65% of the Fund's average net assets. MIMCO, in its capacity as advisor to
the Fund, has entered into a sub-advisory agreement with Wellington Management
Company, LLP (Wellington) to assist in advising the Fund. MIMCO pays Wellington
a fee based upon an annual rate of 0.20% of the fund's first $250 million of
average daily net assets, 0.15% on the next $250 million of average daily net
assets and 0.125% on average daily net assets over $500 million. The agreement
requires a minimum annual fee of $100,000. Transfer Agent, Custody and
Accounting Fees. Firstar Trust Company (Firstar) provides custodial services,
transfer agent services and fund accounting for the Funds. The Funds pay a fee
at an annual rate of 0.15% on the Trust's first $500 million average daily net
assets, 0.13% on the next $500 million of average daily net assets, and 0.12% on
the balance of average daily net assets. The Funds also pay for various out-of-
pocket costs incurred by Firstar that are estimated to be 0.02% of the average
daily net assets. The International Funds have also entered into an agreement
with Chase Manhattan Bank (Chase) to provide international custodial services.
The Funds pay an annual rate of 0.21% of average daily net assets plus an
estimated 0.02% of average daily net assets for out-of-pocket costs incurred by
Chase. Administrative Services The Funds have entered into an administrative
services agreement with AmeriPrime. This agreement provides for an annual fee of
0.05% on the Trust's first $500 million of average daily net assets and 0.04% on
average daily net assets in excess of $500 million. Related parties Certain
officers and directors of MIMCO are also officers and trustees of the Funds.
3. Federal Income Tax.
Net investment income distributions and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses and capital loss carryforwards. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of
March 31, 1998, are as follows:
<PAGE>
Notes to Financial Statements
<TABLE>
<CAPTION>
Fund Federal Tax Cost Unrealized Unrealized Net Appreciation
Appreciation (Depreciation) (Depreciation)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ICON Basic Materials Fund $ 26,697,182 1,817,871 (1,918,032) 100,161
ICON Consumer Cyclicals Fund 39,008,549 4,155,164 (1,874,134) 2,281,030
ICON Energy Fund 20,631,918 350,508 (1,622,855) (1,272,347)
ICON Financial Services Fund 26,113,579 4,457,414 (313,134) 4,144,280
ICON Healthcare Fund 47,382,485 10,756,206 (608,154) 10,148,052
ICON Leisure Fund 70,741,232 16,531,434 (3,658,467) 12,872,967
ICON Technology Fund 87,291,311 12,214,141 ($9,671,819) 2,542,322
ICON Telecommunication and
Utilities Fund 40,448,498 8,076,403 (84,252) 7,992,151
ICON Transportation Fund 15,214,767 3,440,822 (578,657) 2,862,165
ICON Short-Term
Fixed Income Fund 6,704,760 32 0 32
ICON Asia Region Fund 58,482,908 1,551,217 (9,475,297) (7,924,080)
ICON North Europe Region Fund 38,806,822 8,987,177 (513,197) 8,473,980
ICON South Europe Region Fund 23,210,081 7,035,558 (147,362) 6,888,196
</TABLE>
<TABLE>
<CAPTION>
ICON Asia Region Fund Cost Value
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Malaysian Ringgit $ 700 $ 192
ICON North Europe Region Fund Cost Value
- ---------------------------------------------------------------------------------------------------------------------------
Norwegian Kroner $ 1,843 $ 997
Deutsche Marks $ 5 $ 5
- ---------------------------------------------------------------------------------------------------------------------------
Total $ 1,848 $ 1,002
ICON South Europe Region Fund Cost Value
- ---------------------------------------------------------------------------------------------------------------------------
French Francs $ 6,266 $ 1,011
Italian Lira 3,134 1,884
...........................................................................................................................
Total $ 9,400 $ 2,895
</TABLE>
