Sector purity
provides ICON Fund investors access to the industries they seek and only those
industries.
[GRAPHIC OMITTED]
<PAGE>
Letter to Shareholders & Advisors
Sector Purity
ICON FUNDS
a successful start
The ICON family of funds
now represents the largest menu of no-load, no 12b-1 fee, advisor-only sector
mutual funds in existence.
Dear ICON Funds Shareholders and Advisors:
Because money and retirement investing is very personal and emotional, a growing
number of investors are relying on investment advisors for discipline, long-term
direction, guidance and objectivity. Having worked with investment advisors for
more than a decade, the management team of the Advisor to the ICON Funds (the
"Advisor") realized that the menu of sector mutual funds for these investors was
inadequate.
This insight led to the ICON Funds.
When we opened the first ICON Funds in February 1997, it was with the firm
belief that a fresh approach to sector investing could prove valuable. We felt
strongly that mutual fund investors served by personal investment advisors could
benefit from a broader selection of sector funds and a higher degree of purity
within those funds.
I am pleased to report, some seven months later, that our perception was
accurate. As of September 30, 1997, ICON Fund assets totaled $542 million.
Moreover, the ICON family of funds now represents the largest menu of no-load,
no 12b-1 fee, advisor-only sector mutual funds in the marketplace.
Several factors contributed to ICON's rapid and successful start. This report
recaps those elements in detail, as well as the performance of the eight
domestic funds, three international funds and one short-term fixed income fund.
For those preferring a quick review, I offer the following:
o ICON Funds benefit from active industry rotation. Domestically, we hold our
favorite industries. Internationally, we focus on country rotation within each
regional fund. Our emphasis is on timely industry exposure, not the selection of
specific stocks. Stock selection, in fact, becomes a semi-passive endeavor. We
achieve the level of exposure we believe critical by assembling a basket of
stocks in each industry we own, which allows us to simply participate in an
industry move. While it is too early for conclusive evidence, it appears we can
markedly reduce trading costs and taxable events by keeping baskets fairly
constant over the holding period for an industry. As you will read later in this
report, our current turnover rates are quite low by industry standards.
o ICON Funds, unlike many other mutual funds, are subject to a strict management
discipline. We compute fair, or intrinsic, value for individual stocks using a
modified version of a latter-day Benjamin Graham equation. Dividing this value
by market price yields a Value/Price Ratio for all 1700 domestic and 800
international stocks in our data base. U.S. stocks
<PAGE>
are grouped into over 115 industries according to Standard & Poors'
definitions. International stocks are grouped by country. Once a Value/Price
Ratio is obtained for each industry and country, they are ranked to allow us to
identify the most attractive domestic industries and international country
markets.
o ICON relies on competent team members and partners at all levels. Our two
independent trustees, James Hire and Michael Sentel, offer valuable insight
drawn from their long business and legal careers. AmeriPrime Financial Services,
Inc. handles administrative duties expertly and at a reasonable cost to you, our
shareholders--a point critical to the success of this new menu of mutual funds.
Firstar Trust Company, which provides custodial, transfer agent and fund
accounting services to over 300 mutual funds totaling $85 billion in holdings,
is proving an excellent choice for ICON. The same is true for Chase Manhattan
Global Investor Services, sub-custodian for our international funds. Given its
position as one of the world's two largest international custodial banks, we
anticipated such performance. Finally, Price Waterhouse LLP, which audits more
mutual funds than any other accounting firm, is delivering financial expertise
to ICON Funds, its management and shareholders, as reliably as its reputation
suggested it would. When I say the synthesis of efforts of all these partners is
directly related to ICON's early, positive performance, I say it wholeheartedly.
o ICON is committed to advisors and the investors they serve. This has led us to
retain the custodial platforms of Charles Schwab, Resources Trust, DataLynx and
Jack White, among others. With these arrangements, investors receive complete
and accurate account and trading efficiencies while lessening the burden of
transfer agent and custodial fees common to small public investors.
Looking ahead, it is our hope that the ICON menu will continue to grow to afford
investors relying on personal advisors broader opportunity. Thank you for your
belief in us in bringing this new concept to the marketplace.
Sincerely,
[GRAPHIC OMITTED]
Craig T. Callahan, D.B.A
Trustee, Chief Investment Officer of the Advisor
Custodial
Platforms
[GRAPHIC OMITTED]
ICON works with many of the well established custodial platforms to meet
the needs of its clients
<PAGE>
Distinctive Features
ICON FUNDS
continued growth
Philosophy
Valuation Model
[GRAPHIC OMITTED]
Philosophy
The philosophy guiding the ICON Funds is one of value-based industry and country
rotation. The Funds' Advisor believes that advances in world financial markets
are defined by themes. Themes are led by specific industries and countries that,
properly combined and weighted, can outperform broader benchmarks. The most
undervalued industries and countries are typically the leaders when new themes
in world markets emerge. The key to identifying these future leaders is through
application of a valuation model.
Valuation Model
ICON Funds' Advisor employs a multi-variable model including a valuation model.
Developed by the Advisor's chief investment officer over the course of 20 years
of market analysis, the model is based upon the methods and teachings of
Benjamin Graham, the "Father of Securities Analysis." This model, as well as
classic valuation criteria, are used to calculate the intrinsic value of more
than 1700 domestic stocks and 800 international stocks. The domestic universe is
purposely diversified, including the 1500 issues in the "S&P SuperComposite 1500
Index" (composed of the S&P 500, MidCap 400 and SmallCap 600) and 200 additional
securities from smaller-cap companies. The 800 issues in the international
universe represent the markets of over 30 countries.
A stock's valuation is determined by dividing its average earnings and growth
rate by the beta coefficient (reflecting volatility or risk) and the AAA bond
yield (reflecting opportunity). This intrinsic value is an appropriate starting
point as it is unbiased with regard to industries. Value is then divided by
price to arrive at the Value/Price Ratio ("V/P"). Traditional valuation
criteria, such as Price-to-Earnings and Price-to-Book, are used as supplementary
criteria.
<PAGE>
Trustees
Dr. Craig Thomas Callahan
Dr. Callahan serves as Trustee of the ICON Funds and as Chief Investment
Officer and Chairman of the Investment Management Committee for Meridian
Investment Management Corporation, the Funds' Advisor. A recognized authority on
global asset allocation and sector investing, he directs investment research and
analysis for ICON. Dr. Callahan's experience and unique approach to stock
valuation dates back to the mid-1970s. He has appeared on CNBC and is quoted
frequently by the financial press in such publications as the Wall Street
Journal and Business Week. Dr. Callahan received his BS degree in Psychology
from The Ohio State University and his Doctorate in Business Administration from
Kent State University. Previously, Dr. Callahan was a finance professor at the
University of Denver.
Michael Jon Hart
Michael Hart serves as Trustee of the ICON Funds and President of Meridian
Investment Management Corporation, the Funds' Advisor. He is also a member of
Meridian's Investment Committee. Mr. Hart brings more than twenty years of
investment and business management experience to his direction of ICON. Prior to
forming Meridian, he was President of MAMCO, a money management firm he
co-founded in 1986 and a research analyst with First Financial Securities. From
1973 to 1982, Mr. Hart held operational and marketing management positions with
United Airlines. He is a General Securities Principal with the National
Association of Securities Dealers, Inc. Mr. Hart received his BSBA and his MBA
in Finance from the University of Denver.
James W. Hire
James Hire is the owner of Hire & Associates, a Denver-based consulting
firm specializing in the hospitality and tourism industries. The firm provides
financial consulting for hotels, resorts, convention centers and mixed-use
tourism developments nationwide. Prior to forming Hire & Associates in 1988, Mr.
Hire was a Senior Principal in the international accounting and consulting firm,
Pannell Kerr Forster. He is also a Charter Member of the International Society
of Hospitality Consultants, a by-invitation-only organization of the world's
foremost hospitality advisors. He joined the ICON Funds as a Trustee in 1996.
Mr. Hire holds a Bachelor of Science degree in Business Administration from Tri
State University and a BSBA in Hotel & Restaurant Management from the University
of Denver.
R. Michael Sentel
Michael Sentel is an attorney with over 20 years experience in securities,
professional liability and corporate law. He became an independent ICON Trustee
in 1996. Mr. Sentel began his legal career with the U. S. Securities and
Exchange Commission in the Denver Regional Office. He has owned a private law
practice specializing in corporate and securities law for over 15 years. Mr.
Sentel acted as general counsel and director to numerous public companies during
this time and was in charge of the FDIC's Professional Liability Section for the
Rocky Mountain Region from 1992 to 1994. He earned his BS in Accounting and
Economics from Eastern Illinois University and his JD from Saint Louis
University School of Law. The U. S. Department of Education currently employs
him as a civil rights attorney specializing in disability laws.
<PAGE>
ICON FUNDS
a new concept
Greater Opportunities
We believe the ICON Funds offer investors the most sophisticated menu of sector
funds available today. Specifically, ICON is access to:
Access Turnover
Domestic Sectors
Basic Materials 32%
(12 industries)
Capital Goods *
(8 industries)
Consumer Cyclicals 0%
(20 industries)
Consumer Staples *
(11 industries)
Energy *
(5 industries)
Financial Services 0%
(12 industries)
Healthcare 72%
(10 industries)
Leisure 3%
(9 industries)
Technology 45%
(14 industries)
Telecommunication & Utilities 3%
(7 industries)
Transportation 16%
(9 industries)
International Regions
Asia 0%
(7 countries)
North Europe 14%
(9 countries)
South Europe 7%
(7 countries)
South Pacific *
(5 countries)
Western Hemisphere *
(5 countries)
Among mutual funds, it is not uncommon to see an annual turnover rate of 100
percent for stocks held within an industry. The ICON Funds' emphasis on timely
industry exposure-achieved by assembling baskets of stocks and keeping those
baskets fairly constant over the holding period-sharply lessens turnover. In so
doing, it also reduces trading costs and taxable events. The chart to the left
reflects approximate percentages of stock turnover since inception by ICON
Funds.
Short-term Fixed Income Fund
* Not funded as of 9/30/97
<PAGE>
Assets Under Management
As of September 30, 1997, ICON Fund assets totaled $542 million.
Domestic = $332 million
International = $129 million
Short-Term Fixed Income = $81 million
[GRAPHIC OMITTED]
SECTOR PURITY
A survey of sector funds easily reveals funds that own stocks of unrelated
industries and sectors. The ICON Funds take a totally different approach: one of
purposeful purity. Stocks are purchased and industries are included in each of
the 11 domestic funds according to our industry and sector definitions. Only
targeted countries are included in each of the five international regions.
Professional Services
Administrative Services AmeriPrime Financial Services, Inc.
Fund Distribution AmeriPrime Financial Securities, Inc.
Custodial, Transfer Agent &
Fund Accounting Services Firstar Trust Co. Mutual Fund Services
Independent Accountants Price Waterhouse LLP
International Sub-Custodian Chase Manhattan Bank Global
Investor Services
<PAGE>
Looking Ahead
it is our hope that the ICON menu will continue to grow to afford investors
relying on personal advisors broader opportunity.
<PAGE>
[GRAPHIC OMITTED]
ICON FUNDS
management discussion & analysis
<PAGE>
Basic Materials
Performance
ICON Basic Materials Fund (the "Fund") gained 9.0% from its inception on May 5,
1997 to September 30, 1997. The S&P Basic Materials Index gained 12.9% for the
same period. Both returns include reinvested dividends.
The Basic Materials sector has provided a bumpy ride for investors during most
of 1997. The fund has the ability to invest in the following industries:
Construction, Containers, Gold/Precious Metals, Mining, Metal/Aluminum, Paper
and Forest Products, Chemicals, and Steel. These industries generally produce
commodity-like materials used in the manufacture of end-user products. A wide
range of factors--commodity prices, supply-versus-demand, value of the dollar
and worldwide competition--affect companies within this sector.
The ICON Funds Advisor's strategy is to focus on undervalued industries that are
growing at sustainable levels. The Advisor does not attempt to forecast the
level of the dollar or changes in commodity prices. Rather, focus is placed on
valuation in the belief that it will provide a "margin of error." By buying
stocks selling at a discount to their fair value, the Fund should be less prone
to earnings disappointments and benefit more from upside surprises. The Advisor
believes this strategy will reduce downside risk as well as the Fund's
volatility.
From a valuation perspective, many industries within the Basic Materials sector
look attractive. This sector has underperformed the market for the past five
years and select industries recently have become undervalued. Fund strategy will
continue to be the identification of promising industries that can be purchased
at inexpensive prices.
Industry Highlights
The Gold/Precious Metals industry is the Fund's largest holding at more than 70%
of the Fund. Several negative factors have depressed gold stock prices in 1997.
During the summer, several central banks sold a large percentage of their gold
reserves in the belief that gold no longer stores purchasing power. This caused
the price of gold to plummet to 10-year lows. During this period the average
gold stock fell more than 10 to 15 percent. Gold stocks were trading at a
substantial discount to their intrinsic values. The Advisor took this
opportunity to increase the Fund's exposure to the Gold/Precious Metals
industry.
Low gold prices affect gold companies in several ways. Only the largest and the
most capitalized gold companies can withstand a prolonged period in which gold
prices are depressed. Smaller firms are more likely to either sell out or go
bankrupt. The large gold companies tend to be the lowest-cost producers of gold.
Therefore, they can continue to make profits, even if gold prices continue to
fall. The large producers also can shut down unprofitable mines, increasing the
profitability of their overall operations. These factors should reduce the
supply of gold in the upcoming months. This should happen at the same time that
demand for gold increases. Demand from India and China, the world's largest gold
consumers, is at all time highs. Most analysts feel this trend will continue.
While the ICON Funds Advisor does not attempt to forecast these events,
recognizing the possibility can generate more patience for the group.
While the Gold/Precious Metals industry rallied at the end of the third quarter,
the industry is still under-valued. In addition, the Fund's largest positions
are in large-cap names such as Barrick Gold Corporation and Newmont Mining
Corporation. These large-cap stocks generally have outperformed smaller gold
stocks. The Advisor continues to feel the fundamentals are favorable for this
industry and looks for further appreciation in the upcoming months.
The Fund also has exposure to the Metal Fabricator industry and the Steel
industry. These positions have been beneficial to performance since the Fund's
inception. Both industries are undervalued and have good fundamentals. In
addition, these industries tend to be uncorrelated to the Gold/Precious Metals
industry. This should reduce the Fund's overall volatility without limiting its
upside.
The Current Outlook
The fundamentals of the Basic Materials sector are highly fragmented. Growth in
sales and earnings continue within the Metal Fabricator industry, while the
Paper and Forest industry is still suffering from depressed prices. More than
ever before, the Fund's Advisor believes it is important to be invested in the
right industries within the Basic Materials sector. The Advisor will continue to
focus on valuations and intensive quantitative and fundamental research.
While the Basic Materials sector is not as glamorous as other sectors of the
market, it can be just as profitable. Investors continually become overly
pessimistic and overly optimistic within this sector. The Advisor's valuation
strategy helps identify these occurrences and draw profits from them. By
focusing on industry selection, this Fund is able to target specifically those
areas perceived as most attractive. In addition, the Fund has a broad menu of
industries in which to invest, increasing its ability to find attractive
investment opportunities in this sector. The Advisor strongly believes that
holding firm to the Fund's core valuation discipline, can create value for
shareholders while reducing risk in an otherwise volatile sector.
<PAGE>
Portfolio Profile September 30, 1997
Equities 90.9%
Top 10 Equities (% of Net Assets) 65.7%
Number of Stocks 26
Cash & Cash Equivalents 9.2%
Top 10 Equity Holdings September 30, 1997
Barrick Gold Corporation 12.0%
Battle Mountain Co. 9.6%
Homestake Mining 8.4%
Placer Dome Inc. 8.2%
Newmont Mining Corp. 7.0%
Newmont Gold Company 4.7%
Amax Gold Inc. 4.1%
Hecla Mining Corp. 4.0%
Stillwater Mining Co. 3.9%
Echo Bay Mines Ltd. 3.8%
Top Industries September 30, 1997
Gold/Precious Metals Mining 73.9%
Metal Fabricators 8.7%
Steel 8.3%
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.
[GRAPHIC OMITTED]
<PAGE>
Schedule of Investments
September 30, 1997
Shares or Principal Amount Market Value
Common Stocks 90.9%
<TABLE>
<CAPTION>
Gold/Precious Metals Mining 73.9%
<S> <C> <C>
310,000 AMAX Gold Inc.a $ 2,053,750
244,650 Barrick Gold Corp. 6,055,088
669,400 Battle Mountain Co. 4,811,313
335,000 Echo Bay Mines Ltd. 1,905,313
22,600 Freeport-McMoran Copper
Class B 651,163
42,000 Getchell Gold Corp.a 1,722,000
332,000 Hecla Mining Corp.a 2,012,750
277,000 Homestake Mining 4,241,563
51,000 Newmont Gold Co. 2,352,375
78,500 Newmont Mining Corp. 3,527,594
200,000 Pegasus Gold Inc. 1,125,000
216,000 Placer Dome Inc. 4,131,000
91,000 Stillwater Mining Co.a 1,939,438
100,000 TVX Gold Inc.a 625,000
Total Gold/Precious Metals Mining 37,153,347
Steel 8.3%
15,000 Carpenter Technology 742,500
16,000 Nucor Corp. 843,000
25,000 Quantex Corp. 876,562
35,500 Steel Technologies 441,530
13,000 Texas Industries Inc. 551,688
36,000 Worthington Industries, Inc. 729,000
Total Steel 4,184,280
Metal Fabricators 8.7%
26,100 Brush Wellman Inc. 670,444
20,300 Castle (AM) Co. 527,800
22,400 Commercial Metals Company 715,400
17,300 Kennametal Inc. 839,050
17,900 Mueller Industriesa 813,330
25,000 Wolverine Tube Inc.a 784,374
Total Metal Fabricators 4,350,398
Shares or Principal Amount Market Value
Total Common Stocks
(Cost $42,624,504) $ 45,688,025
Short-Term Commercial Notes 9.2%
$369,000 American Family
5.155% 2/17/98 369,000
$464,941 General Mills
5.135% 5/18/98 464,941
$1,737,388 Johnson Controls
5.165% 12/30/97 1,737,388
$823,863 Pitney Bowes
5.144% 2/4/98 823,863
$490,672 Sara Lee
5.124% 1/31/98 490,672
$126,857 Wisconsin Electric
5.185% 11/30/97 126,857
$607,400 Warner Lambert
</TABLE>
5.115% 1/29/98 607,400
Total Short-Term Commercial Notes
(Cost $4,620,121) 4,620,121
Total Investments (Cost $47,244,625)
100.1% 50,308,146
Liabilities less other Assets
(0.1%) (57,489)
Net Assets 100.0% 50,250,657
The accompanying notes are an integral part of the financial statements.
a non-income producing security
<PAGE>
management discussion & analysis
Consumer Cyclicals
Performance
ICON Consumer Cyclicals Fund (the "Fund") gained 9.6% from its inception on July
9, 1997 to September 30, 1997. The S&P 1500 Index gained 5.6% for the same
period. Both returns include reinvested dividends.
The ICON Consumer Cyclicals Fund has 20 S&P industry groups to chose from. These
20 industry groups have many different characteristics. One of the most striking
characteristics is in the range of market capitalization. The five largest
industries in terms of market capitalization represent approximately 3.83% of
the S&P Super 1500. The remaining 15 industries together make up only 2.54%
(approximately) of the S&P Super 1500. While we have not consciously sought out
small cap stocks, our valuation strategy has directed our investments into many
of the smaller market cap industries.
By being constantly aware of the various industry valuations, we believe we can
add value through industry rotation within the consumer cyclicals sector.
However, we do not feel that an industry rotation strategy will lead to higher
turnover. Value investors buy at the point of highest pessimism and simply wait
for stocks to appreciate to their fair value-sometimes as long as two years.
This strategy requires a highly disciplined, unemotional, and patient approach,
which we believe will add value over the long-term.
Industry Highlights
The Retail Specialty industry is one of the largest S&P industry groups with
over 30 companies. This industry is also comprised of a diverse group of
companies, ranging from Discount Auto Parts Inc. to OfficeMax Inc.. We
identified value primarily in two subgroups within the industry: the auto repair
and auto parts retailing group, and the office products group. Since July, our
Retail Specialty stocks are up an average of 10%. Looking forward, these
companies continue to demonstrate strong growth prospects at attractive
valuations.
The Homebuilding industry has been one of the best-performing industries in the
fund. On average, these stocks are up 19% from July. The group is benefiting
from a favorable interest rate environment and the continuing, steady growth of
the economy. In addition, these companies have done a better job than in the
past of keeping supply in line with demand, and of keeping a close eye on their
costs.
The Retail (Home Shopping) industry has broken three straight years of negative
performance and has been one of the best performing S&P industry groups for
1997. Since the ICON Consumer Cyclicals Fund inception date of July 9, 1997, the
S&P Retail (Home Shopping) index has appreciated 16.9%. The ICON Consumer
Cyclicals Fund has maintained a position in Home Shopping stocks since its
inception date. During the summer of 1997, many of the companies in the Home
Shopping industry were affected by the UPS strike. However, the impact of the
strike was minimal as many of the retailers were able to switch to secondary
carriers with few, if any, difficulties.
The Textiles (Home Furnishings) industry consists of companies that primarily
manufacture carpet and other commercial and home floor coverings. Our Benjamin
Graham based valuation models have looked favorably upon the home furnishings
industry for quite some time. Not only has this industry been a great value, it
has also been a compliment to our position in the Homebuilding industry.
The Current Outlook
One of the more dominant themes throughout the year has been the dichotomy of
the "small cap" versus the "large cap." The last several years have been led by
many of the large cap issues. During the second half of 1997, we have seen the
reemergence of the "small cap" market. Our industry selections within the ICON
Consumer Cyclicals Fund are consistent with this theme. Using our Benjamin
Graham based valuation model, we have been led to many of the smaller
capitalized industries.
The performance of the Consumer Cyclicals sector
is very dependent on the strength of the overall economy and the interest rate
environment. Lately, we have heard phrases like "the new world economy," or
"paradise found," or even the "new economic paradigm" to describe a scenario
that will allow the market to appreciate 15-30% per year with little resistance.
Unfortunately, our highly disciplined, unemotional, quantitative, and
fundamental research continues to conclude that future stock prices will be
dictated by a past earnings base, the future growth in earnings, beta, and
interest rates--not by a "new paradigm." Given a favorable environment of
earnings and interests rates, we feel that the ICON Consumer Cyclicals Fund will
continue to be an excellent investment. The Fund will continue to focus on
under-valued industries that are growing at sustainable levels, while avoiding
those industries that the "new paradigm" has carried to historically high
valuation levels.
<PAGE>
Portfolio Profile September 30, 1997
Equities 96.7%
Top 10 Equities (% of Net Assets) 31.2%
Number of Stocks 41
Cash & Cash Equivalents 3.4%
Top 10 Equity Holdings September 30, 1997
Clayton Homes Inc. 3.6%
Shaw Industries Inc. 3.5%
Autozone Inc. 3.4%
Global Directmail Corp. 3.2%
Champion Enterprises Inc. 3.1%
Jacobs Engineering Group Inc. 2.9%
Centex Corp. 2.9%
CDW Computer Centers Inc. 2.9%
Micro Warehouse Inc. 2.9%
Lands End Inc. 2.8%
Top 5 Industries September 30, 1997
Retail (Specialty) 24.0%
Homebuilding 22.5%
Retail (Home Shopping) 13.9%
Engineering & Construction 11.1%
Textiles (Home Furnishings)` 9.9%
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.
[GRAPHIC OMITTED]
<PAGE>
Schedule of Investments
September 30, 1997
Shares or Principal Amount Market Value
Common Stocks 96.7%
Engineering & Construction 11.1%
9,700 Fluor Corp. $ 520,163
10,300 Foster Wheeler Corp. 452,556
13,300 Granite Construction 307,563
19,800 Jacobs Engineering
Group Inc.a 606,375
11,700 McDermott
International Inc. 427,050
Total Engineering & Construction 2,313,707
Homebuilding 22.5%
10,400 Centex Corp. 607,100
34,200 Champion Enterprises Inc.a 654,075
40,900 Clayton Homes Inc 759,206
14,900 Fleetwood Enterprises 500,081
20,500 Kaufmann & Broad Home 444,594
10,800 Lennar Corp. 459,000
17,500 Oakwood Homes 496,563
9,800 Pulte Corp. 374,850
18,300 Toll Brothers Inc.a 425,476
Total Homebuilding 4,720,945
Retail (Home Shopping) 13.9%
9,500 CDW Computer Centers Inc.a 615,125
19,300 Fingerhut Companies Inc. 434,250
29,600 Global Directmail Corp.a 662,300
19,100 Lands End Inc. 588,519
27,400 Micro Warehouse Inc.a 599,375
Total Retail (Home Shopping) 2,899,569
Retail (Specialty) 24.0%
23,600 Autozone Inc.a 708,000
18,500 Claire's Stores Inc. 413,938
13,900 Discount Auto Parts Inc.a 333,600
25,300 Heilig-Meyers Co. 388,988
18,200 O'Reilly Automotive Inc.a 414,050
32,100 OfficeMax Inc.a 487,519
20,000 Pep Boys-Manny Moe & Jack 545,000
12,900 Sports Authority Inc.a 240,263
19,000 Staples Inc.a 524,875
13,400 Toys R Us Inc. 475,700
22,600 Viking Office Products Inc.a 491,550
Total Retail (Specialty 5,023,483
Shares or Principal Amount Market Value
Common Stocks - continued
Textiles (Home Furnishings) 9.9%
15,600 Interface Inc. Class A $ 454,350
18,900 Mohawk Industries Inc.a 517,388
58,500 Shaw Industries Inc. 734,906
6,900 Springs Industries Class A 362,250
Total Textiles (Home Furnishings) 2,068,894
Textiles (Speciality) 8.6%
27,100 Burlington Industries Inc. 379,400
20,500 Guilford Mills Inc. 533,000
14,000 UNIFI Inc. 573,125
13,700 Wellman Inc. 317,669
Total Textiles (Speciality) 1,803,194
Housewares 6.7%
13,300 Newell Companies 532,000
18,300 Rubbermaid Inc. 467,792
14,200 Tupperware Corp. 399,372
Total Housewares 1,399,164
Total Common Stocks
(Cost $18,387,006) 20,228,956
Short-Term Commercial Notes 3.4%
$649,686 Johnson Controls
5.165% 12/30/97 649,686
$64,316 Wisconsin Electric
5.185% 11/30/97 64,316
Total Short-Term Commercial Notes
(Cost $714,002) 714,002
Total Investments (Cost $19,101,008)
100.1% 20,942,958
Liabilities less other Assets (0.1%) (27,154)
Net Assets 100.0% $ 20,915,80
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
management discussion & analysis
Financial Services
Performance
ICON Financial Services Fund (the "Fund") gained 5.1% from its inception on July
1, 1997 to September 30, 1997. The Lipper Financial Services Index gained 12.4%
for the same period. Both returns include reinvested dividends.
The Financial Services sector has performed well during most of 1997; however,
its momentum has slowed during the third quarter compared to other sectors of
the market. Multiples have expanded and interest rate volatility has increased.
Both these factors increase the downside risk of financial services stocks.
Such factors make valuations more important now than they have been in the past.
During the 1980s, most financial services stocks were trading at only book value
or below book value (a common, static measure of a stock's value). Any good news
had a positive effect on this sector's stock performance. In comparison,
financial stocks now trade, on average, at two to two-and-one-half times book
value. Your Fund's Advisor believes any bad news will have a significant
negative effect on stock performance. Therefore, the Fund strategy will continue
to focus on undervalued industries that are growing at sustainable levels.
By being constantly aware of the various industry valuations, the Advisor
believes value can be added through industry rotation within the Financial
Services sector. However, it does not believe that an industry-rotation strategy
will lead to higher turnover. On the contrary, turnover is expected to be lower
than average due to the Fund's valuation strategy. Value investors buy at the
point of the highest pessimism and simply wait for stocks to appreciate to their
fair value. Benjamin Graham, a highly regarded value investor, bought
undervalued stocks and would wait for up to two years for them to appreciate to
their intrinsic value. This Fund's strategy is the same. It requires a highly
disciplined, unemotional, and patient approach, which the Advisor feels will add
value over the long-term.
Industry Highlights
Banks (Money Centers) are trading near their intrinsic values; however, they
have the most stable earnings within the financial sector and their fundamentals
look bright. On average, they trade at a 20% discount to the market's book
multiple, but are trading at higher multiples than they have in the past. This
makes your Fund cautious towards the group, and it will continue to watch for
overvalued situations.
The Consumer Finance industry is trading at a significant discount to their
historical valuations, as well as to the broad market. In addition, the Fund's
average stock is forecasted to grow at approximately 16% over the next three to
five years. This growth is higher than most other industries the Fund follows in
the sector. The Consumer Finance industry is the Fund's largest holding. The
Advisor continues to feel that, over the next few quarters, these stocks will
help the performance of the fund.
The Fund also has large positions within the Insurance (Property and Casualty)
and Insurance (Life/Health) industries. The Insurance (Property and Casualty)
industry has been under pressure due to pricing issues and high competition. The
Insurance (Life/Health) industry also has been depressed due to decreasing
margins and higher medical costs. However, both industries have benefited from
acquisitions as well as a stable stock and interest rate environment. Going
forward, the Advisor feels there are numerous opportunities within these
industries. Your Fund will continue to focus on the fundamentals of these
industries and on valuations.
The Current Outlook
Valuations are getting stretched in the financial sector as financial assets
have performed well during the 1980s and 1990s. With virtually no inflation and
a wave of industry consolidation, the environment has been good for insurance
and banking stocks. This has lead to higher multiples within the financial
services sector. However, your Fund has identified several industries that are
trading at discounts to their intrinsic value. These include the Insurance
industries and the Consumer Finance industry, both of which have had fundamental
difficulties over the last year. Slowing revenues have hampered the Insurance
industries while the Consumer Finance industry has had credit card debt default
issues. Your Fund's Advisor believes current pessimism is excessive and that
these industries represent good values.
This sector's sensitivity to interest rates is higher now than it was in the
1980s. Some investors believe they can add value by forecasting interest rates.
Your Fund's Advisor does not. Therefore, it does not focus time on guessing
inflation, the Federal Reserve or the direction of the dollar, but rather on
fundamental research and valuations as the main determinants of industry
selection.
During the 1980's, pessimism regarding U.S. financial institutions was
excessive. Investors believed that Japanese financial institutions would expand
globally, leaving U.S. financial institutions behind. Not only has this scenario
been avoided, domestic financial companies have thrived and are now among the
most efficient and profitable financial institutions in the world. Your Fund
Advisor feels this trend will continue. In addition, it believes that as the
sector consolidates, economies of scale will develop which will increase the
profitability of the group. The Fund's strategy will continue to be to identify
promising industries that can be purchased at inexpensive prices. Intensive
quantitative and fundamental research will drive the investment process.
<PAGE>
Portfolio Profile September 30, 1997
Equities 99.1%
Top 10 Equities (% of Net Assets) 41.3%
Number of Stocks 49
Cash & Cash Equivalents 0.9%
Top 10 Equity Holdings September 30, 1997
Green Tree Financial Corp. 5.7%
MBNA Corp. 4.8%
Capital One Financial Corp. 4.7%
Beneficial Corp. 4.4%
Chase Manhattan Corp. 4.1%
Household International Inc. 4.0%
Citicorp 3.9%
BankAmerica Corp. 3.4%
Marsh & McLennan Cos. 3.2%
ContiFinancial Corp. 3.1%
Top 5 Industries September 30, 1997
Consumer Finance 26.8%
Insurance (Property/Casualty) 24.8%
Banks & Bank Holding Companies 16.5%
Insurance (Life/Health) 13.5%
Insurance Brokers 8.8%
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.
[GRAPHIC OMITTED]
<PAGE>
Schedule of Investments
September 30, 1997
Shares or Principal Amount Market Value
Common Stocks 99.1%
Banks & Bank Holding Companies 16.5%
15,000 BankAmerica Corp. $ 1,099,688
6,200 Bankers Trust New York Corp. 759,500
11,300 Chase Manhattan Corp. 1,333,400
9,400 Citicorp 1,259,013
11,500 First Chicago NBD Corp. 865,375
Total Banks & Bank Holding Companies 5,316,976
Consumer Finance 26.8%
18,500 Beneficial Corp. 1,409,469
33,400 Capital One Financial Corp. 1,528,050
30,900 Contifinancial Corp.a 1,004,250
39,200 Green Tree Financial Corp. 1,842,400
11,500 Household International Inc. 1,301,656
38,000 MBNA Corp. 1,539,000
Total Consumer Finance 8,624,825
Insurance Brokers 8.8%
16,100 Aon Corp. 851,288
2,600 Erie Indemnity Corp. 84,500
8,000 Gallagher (Arthur J.) & Co. 298,000
13,300 Marsh & McLennan Cos. 1,019,113
55,900 Willis Corroon Group, PLC ADR 586,950
Total Insurance Brokers 2,839,851
Insurance (Life/Health) 13.5%
12,000 AETNA Inc. 977,250
11,100 AFLAC Inc. 602,175
5,800 Equitable of Iowa Co. 388,600
4,300 Life RE Corp. 226,825
4,200 Protective Life Corp. 212,100
7,700 Provident Cos Inc. 538,519
7,600 Reliastar Financial Corp. 302,575
5,800 TransAmerica Corp. 577,100
12,000 Unum Corp. 547,500
Total Insurance (Life/Health) 4,372,644
Insurance (Multi-Line) 8.7%
5,500 American International Group 567,531
3,000 CIGNA Group 558,750
13,000 Conseco Inc. 634,563
3,400 Hartford Financial Services 292,613
4,400 Lincoln National Corp. 306,350
6,700 Travelers Group Inc. 457,275
Total Insurance (Multi-Line) 2,817,082
Shares or Principal Amount Market Value
Common Stocks - continued
Insurance (Property/Casulty) 24.8%
7,600 Allstate Corp. $ 610,850
6,700 American Financial
Group, Inc. 298,150
7,500 Berkley (W R) 322,970
5,400 Capital Re Corp. 329,400
10,900 Chubb Corp. 774,582
4,500 CMAC Investment Corp. 241,314
5,200 CNA Financial Corp.a 660,076
6,200 Enhance Financial Svcs Group 339,450
3,900 General Re Corp. 774,150
5,500 HSB Inc. 306,282
6,600 Ohio Casualty Corp. 306,075
9,600 Orion Capital Corp. 435,000
4,800 Progressive Corp Ohio 514,200
9,400 Safeco Corp. 498,200
5,700 Selective Insurance Group Inc. 293,550
5,400 St Paul Co. 440,428
11,100 Trenwick Group Inc. 419,025
18,100 USF&G Corp. 415,170
Total Insurance (Property/Casualty) 7,978,872
Total Common Stocks
(Cost $30,280,032) 31,950,250
Short-Term Commercial Notes 0.9%
$2,008 American Family
5.155% 2/17/98 2,008
$144,555 Johnson Controls
5.165% 12/30/97 144,555
$146,826 Wisconsin Electric
5.185% 11/30/97 146,826
Total Short-Term Commercial Notes
(Cost $293,389) 293,389
Total Investments (Cost $30,573,421)
100.0% 32,243,639
Liabilities less other Assets (0.0%) (6,594)
Net Assets 100.0% $ 32,237,045
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
management discussion & analysis
Healthcare
Performance
ICON Healthcare Fund (the "Fund") gained 17.8% from its inception on February
24, 1997 to September 30, 1997. The Lipper Health/Biotechnology Index gained
13.8% for the same period. Both returns include reinvested dividends.
The Healthcare sector performed well compared to other sectors of the market. As
multiples expanded during the year, investors have put a premium on the
consistent earnings growth that the Healthcare sector provides. This has
benefited the Fund's performance. However, the Advisor has noticed that industry
fundamentals and, specifically, valuations, have been more important now than in
previous years. Portfolio strategy continues to focus on undervalued industries
that are growing at sustainable levels.
As value investors, your Fund looks to invest in undervalued industries in an
otherwise high P/E sector. In addition, the Fund Advisor constantly screens for
valuations in order to exploit inefficient pricing in the market. Recently, the
Fund has reduced its position in the Managed Care industry in favor of
bargain-priced Biotechnology stocks. The Advisor feels this value strategy
reduces the risk of investing in healthcare stocks because it gives the Fund a
substantial "margin of error." The Advisor feels strongly that this reduces
downside risk and volatility.
Industry Highlights
The Healthcare sector performed well compared to other sectors of the market
during 1997. However, industry performance has varied dramatically. During the
beginning of the year the Healthcare Long-Term Care industry was the best
performer. This industry included companies that provide nursing home care and
assisted living care. They benefited from two factors: acquisitions and
cross-selling. It is very difficult to enter new long-term care markets, as
growing firms need to obtain a "certificate of need" from the HCFA (Healthcare
Financing Administration) to build new healthcare facilities. This is both
expensive and time consuming. Thus, large long-term care providers would rather
buy smaller providers than build new facilities. Cross-selling entails selling
pharmacy products, as well as providing extra services, within the long-term
facility. By providing these extra products and services, rather than
subcontracting them out, the long-term care providers have been able to increase
their margins. Both factors were catalysts for the industry to approach their
fair value. This has benefited the Fund, as we had over 25% of the Fund's assets
invested in this industry in the first part of the year. The fund has since
lowered its position, as the industry has appreciated and other industries
currently stand out as better bargains.
The Fund continues to maintain substantial positions in the Healthcare Drugs and
Pharmaceuticals industry. The sell-off of these large drug companies during the
summer allowed the Fund to increase its position in this undervalued industry.
While historical valuation techniques show these stocks to be expensive, they
fail to take into account their higher growth rates. The typical stock in the
Fund basket is forecasted to grow 15% or more in the next three to five years.
The Fund's valuation process recognizes this future growth and indicates that
these industries continue to be undervalued. In addition, these earnings are
very stable and highly predictable, which makes the Advisor feel even more
confident in the Fund's large position.
The Biotechnology industry has caught the Advisor's attention, as the market
rally over the past few years has left this industry behind. The Fund Advisor
believes this is one of the best investment opportunities in the Healthcare
sector. Not only are valuations historically low, but these stocks are
significantly less risky than they have been in the past. Biotechnology
companies are now developing numerous products and are partnering up with large
pharmaceutical companies in order to bring the final product to market.
Biotechnology companies are no longer "betting the ranch" on one product, and
they now have additional financing provided by their larger partners. The
Advisor feels these two factors have improved the fundamentals of the industry.
In addition, we believe this will lead to appreciation in this undervalued
industry.
The Current Outlook
Improving demographics should help the healthcare industry over the next
few years, as the "graying of America" increases the demand for the products and
services it provides. However, the Fund's Advisor believes it more important now
than ever before to be invested in the right industries within Healthcare.
Industry fundamentals deviate highly from industry to industry within the
sector. For example, pricing within the drugs and pharmaceutical industry has
been growing at two to three percent a year, closely resembling the national
inflation rate. Pricing within the generic drug industry has actually fallen by
10 to 15% over the last few years. This decreases the profitability and
negatively impacts earnings, which ultimately affects valuations within this
segment of the sector. In addition, valuations vary dramatically from industry
to industry. Your Fund's strategy is to identify promising industries that can
be purchased at inexpensive prices. Intensive quantitative and fundamental
research drives the Fund's investment process. The Fund's Advisor believes
adhering to value discipline will reduce risk and improve long-term performance
for investors.
<PAGE>
Portfolio Profile September 30, 1997
Equities 97.2%
Top 10 Equities (% of Net Assets) 35.8%
Number of Stocks 73
Cash & Cash Equivalents 2.8%
Top 10 Equity Holdings September 30, 1997
Lilly (Eli) & Co. 5.2%
Pfizer Inc. 5.2%
Bristol Myers Squibb 4.7%
Schering-Plough Corp. 4.2%
Merck & Co. 3.2%
Mylan Laboratories 3.0%
Watson Pharmaceuticals Com. 2.7%
Humana Inc. 2.7%
Warner-Lambert Co. 2.5%
American Home Products Corp. 2.4%
Top 5 Industries September 30, 1997
Drugs/Pharmaceuticals 18.2%
Diversified 16.6%
Biotechnology 15.6%
Managed Care 14.4%
Long-Term Care 13.3%
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.
[GRAPHIC OMITTED]
<PAGE>
Schedule of Investments
September 30, 1997
Shares or Principal Amount Market Value
Common Stocks & Rights 97.2%
Distributors (Food & Health) 5.8%
25,100 Allegiance Corp. Com. $ 778,100
21,000 Bergen Brunswig Corp. Class A 847,875
17,000 Cardinal Health Inc. 1,207,000
11,900 McKesson Corp. 1,213,056
12,400 Sola International 425,475
Total Distributors (Food & Health) 4,471,506
Diversified 16.6%
15,500 Abbott Laboratories 991,031
12,500 Allergan Inc. 452,344
25,900 American Home Products Corp. 1,890,700
44,250 Bristol Myers Squibb 3,661,688
72,800 IVAX Corp. 855,400
30,800 Johnson & Johnson 1,774,850
35,300 Sierra Health Servicesa 1,292,863
14,200 Warner Lambert Co. 1,916,113
Total Diversified 12,834,989
Drugs 9.7%
70,200 Alpharma Inc. Class A 1,570,725
11,700 Alpharma Inc. Rights 65,812
32,950 Forest Laboratories Class Aa 1,388,019
7,000 Medimmune, Inc. 257,250
102,400 Mylan Laboratoriesa 2,297,600
14,700 RP Scherer/DEa 910,481
40,000 Sequus Pharmaceuticals 345,000
62,400 US Bioscience Inc.a 709,800
Total Drugs 7,544,687
Drugs/Pharmaceuticals 18.2%
5,500 Genentech, Inc. 319,688
33,450 Lilly (Eli) & Co. 2,458,463
66,700 Pfizer, Inc. 4,006,169
63,500 Schering-Plough Corp. 3,270,250
Total Drugs/Pharmaceuticals 14,083,204
Long-Term Care 13.3%
79,100 Beverly Enterprisesa 1,374,363
42,700 Genesis Health Ventures, Inc.a 1,662,631
20,650 Health Care & Retirement/DEa 767,922
46,900 Healthsouth Corp.a 1,251,644
36,200 Horizons/CMS Healthcare Corp.a 809,975
16,000 Integrated Health
Services, Inc.a 535,000
3,000 Living Centers of America, Inc.a 122,250
98,000 Mariner Health Group, Inc.a 1,543,500
75,000 Novacare, Inc.a 1,293,750
44,700 Sun Healthcare Group, Inc. 919,144
Total Long-Term Care 10,280,179
Managed Care 14.4%
8,500 Express Scripts Inc. Class Aa 457,938
49,040 Foundation Health
Systems Corp.a 1,569,280
13,000 Healthcare Compare Corp.a 830,375
88,500 Humana Inc. 2,107,406
18,200 Oxford Healthplans, Inc.a 1,362,725
26,850 Pacificare Health System
Class Ba 1,829,156
11,300 Phycor, Inc. 328,406
Shares or Principal Amount Market Value
Common Stocks - continued
Managed Care - continued
36,150 United Healthcare Corp. $ 1,807,500
14,100 Wellpoint Health Networks
Class A 816,919
Total Managed Care 11,109,705
Medical Products/Supplies 3.7%
16,400 ADAC Laboratories 306,475
19,700 Ballard Medical Products 475,263
24,600 Biomet Inc. 590,400
10,800 Boston Scientific Corp. 596,025
7,600 Dentsply Internantional Inc. 425,600
16,500 Respironics Inc. 453,750
Total Medical Products/Supplies 2,847,513
Biotechnology 15.5%
22,500 Amgen Inc. 1,078,594
8,700 Anesta Corp Com 202,275
16,000 Biogen Inc. 519,000
37,000 Cell Genesys Inc. 291,375
29,800 Centocor Inc. 1,417,363
66,000 Chiron Corp. 1,493,250
13,500 Cor Therapeutics Inc. 224,438
22,000 Genome Therapeutics Corp. 192,500
41,000 Genzyme Corp. 1,219,750
11,000 Guilford Pharmaceuticl Inc. 324,500
8,000 Human Genome Sciences Com. 344,500
4,500 Immunex Corp New Com. 302,625
7,700 Inhale Therapeutic Sys Com. 241,587
13,500 Intercardia Inc. 303,750
20,500 Ligand Pharmaceuticals Class B 338,250
18,300 Magainin Pharaceutics Com. 209,305
17,000 Millennium Pharmaceutic Com.a 331,500
7,500 Neurogen Corp. 202,500
11,300 Nexstar Pharmaceutical Com. 200,574
6,500 Protein Design Labs Inc. 251,874
13,000 Sugen Inc. Com. 261,624
34,600 Watson Pharmaceuticals Com. 2,067,350
Total Biotechnology 12,018,484
Total Common Stocks & Rights
(Cost $66,455,657) 75,190,267
Short Term Commercial Notes 1.2%
$123,000 American Family
5.155% 2/17/98 123,000
$136,000 Johnson Controls
5.165% 12/30/97 136,000
$263,000 General Mills
5.135% 5/18/98 263,000
$240,000 Pitney Bowes
5.144% 2/4/98 240,000
$143,316 Sara Lee
5.124% 1/31/98 143,316
Total Short-Term Commercial Notes
(Cost $905,316) 905,316
Total Investments (Cost $67,360,973)
98.4% 76,095,583
Other Assets less Liabilities 1.6% 1,211,263
Net Assets 100.0% $ 77,306,846
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
management discussion & analysis
Leisure
Performance
The ICON Leisure Fund (the "Fund") gained 13.5% from its inception on May 9,
1997 to September 30, 1997. The Standard & Poor's Entertainment/Leisure
Composite Index gained 5.1% over that same period. Both return figures include
reinvested dividends.
The Leisure sector of the market has experienced steady appreciation in 1997.
Although the Leisure sector has not been among the market leaders, several
industries stand out with above-average performance. The Broadcasting industry
has been the strongest performer since the ICON Leisure Fund has been opened.
The ICON Leisure Fund has emphasized four industries: Restaurants, Leisure Time
(Products), Gaming and Broadcasting. All four industries have contributed to the
appreciation of the Fund. As previously mentioned, the Broadcasting industry has
been the top performer within the Leisure sector. The Broadcasting industry has
been led by Cable stocks, which appreciated rapidly in the most recent quarter.
Leisure Time (Products), which include such strong performers as Mattel Inc. and
Harley Davidson Inc., have also been steady contributors to the ICON Leisure
Fund. Gaming, Lottery & Parimutuel stocks, initially a drag on the portfolio,
rebounded and have since become market leaders. Finally, performance of stocks
within the Restaurant industry has been mixed. Several issues, such as CKE
Restaurants and Darden Restaurants Inc., have outpaced the market while the
potential for such names as McDonalds Corp. and Boston Chicken has yet to be
realized.
Industry Highlights
Due to very attractive valuations, Restaurant stocks have been the largest
holding in the ICON Leisure Fund. With reasonable multiples and above average
growth potential, Restaurant stocks look poised to become market leaders. Thus
far, some Restaurant issues, including McDonalds Corp. and Boston Chicken, have
been negatively impacted by disappointing short-term results. When this causes
investors to be overly pessimistic and pushes prices below their fair value, a
buying opportunity can result. If addressed by competent management,
disappointing short-term results and their associated problems are generally
resolved. On average, Restaurant stocks have increased 10% since the fund has
been opened; however, many stocks have fared much better. CKE Restaurants Inc.,
with earnings that continue to surprise on the upside, has appreciated well in
excess of 50% since being purchased. Darden Restaurants Inc. and Brinker
International, two classic value stocks, were purchased shortly after
disappointing news releases and subsequent price declines. Since being
purchased, both stocks have approximately doubled the performance of the broad
market. Despite appreciation in some issues, the Restaurant industry remains one
of the most attractively valued industries within the U.S. stock market.
Within the Broadcasting industry, Cable stocks have recently regained their
favor among market participants. Just one or two years ago, most Cable companies
were assumed to be relics, as new technologies were deemed to replace existing
Cable assets. Because of this, most Cable stocks underperformed the market the
last few years. For value investors, this created a wonderful buying
opportunity. The bad news was already out and share prices had suffered a
dramatic setback. Many times, reality turns out to be less adverse than
initially feared. Cable companies have not gone out of business and have not
been replaced by new satellite and digital technologies. Rather, these new
technologies have stumbled as they have not provided all the benefits their
proponents initially promised. Cable companies, however, have been improving
their cash flow, paying down debt, and attempting to enter new markets. The four
Cable stocks owned in the ICON Leisure Fund include Telecommunications, Inc.,
Cox Communications Inc., Comcast Corp., and TCA Cable TV Inc.. Time Warner, an
ICON Leisure Fund stock which also has cable operations, is classified by
Standard & Poor's as an entertainment company. Time Warner has also been a
strong performer in recent months.
Similar to Cable stocks, Gaming, Lottery & Parimutuel stocks were also being
bombarded by bad news when they were initially purchased for the ICON Leisure
Fund. Gaming analysts were calling the industry growth rate to subside. In
addition, analysts predicted that traditional Las Vegas-style casinos would lose
key business to new gaming developments. This news may or may not prove to be
true in the future. However, Gaming stocks were being priced as though they had
no growth potential. With pessimism high, the Fund made its initial purchases in
early May. The stocks were initially a drag on the portfolio; however, analysts
recently began singing a different tune as Gaming stock performance turned
around. The growth prospects are now not as negative as once thought. Those
stocks classified by Standard & Poor's as Gaming, Lottery & Parimutuel stocks
and held in the portfolio include Mirage, Circus Circus, International Gaming
Technology and Harrah's. The Leisure Products industry has been a solid
contributor to performance. Many stocks within this industry have growth rates
that are in line with their P/E multiples. Top performing stocks include Mattel
Inc., Hasbro Inc., Brunswick Corp., Harley-Davidson Inc. and WMS Industries
Inc.. Despite appreciation, these stocks continue to look like good values.
Current Outlook
Despite volatility in the broad market, many Leisure stocks have appreciated
steadily. Because of this, the ICON Leisure Fund has exhibited a very low
correlation with the broad market. With approximately market-matching returns,
the fund has been a good diversification tool for domestic investors.
Arguments can be made that many Leisure stocks are well positioned to reap the
benefits of current demographic and economic trends within the United States.
The strong economy has given consumers the disposable cash flow to pursue
leisurely activities such as dining, gambling, or riding
<PAGE>
Harley-Davidson motorcycles. The Fund Advisor believes that significant
opportunities exist for growth within the Leisure sector. As such, stocks within
the Leisure sector remain attractively valued. The high growth potential and
reasonable multiples make many industries within the Leisure sector compelling
investment opportunities. As current industries held remain undervalued with
strong appreciation potential, the Advisor does not anticipate much turnover
within the fund.
Portfolio Profile September 30, 1997
Equities 97.9%
Top 10 Equities (% of Net Assets) 37.7%
Number of Stocks 39
Cash & Cash Equivalents 2.1%
Top 10 Equity Holdings September 30, 1997
Intl. Game Technology 4.5%
Harrahs Entertainment Inc. 4.4%
Mirage Resorts Inc. 4.4%
Circus Circus Enterprises Inc. 4.0%
Telecommunications Inc. Class A 3.8%
Cracker Barrel Old Country Store 3.7%
Comcast Corp Class A 3.6%
Cox Communications Class A 3.1%
McDonalds Corp. 3.1%
Top 5 Industries September 30, 1997
Restaurants 28.6%
Gaming, Lottery & Parimutuel 17.4%
Leisure Time (Products) 16.2%
Broadcasting, TV, Radio, Cable 13.3%
Entertainment 9.5%
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.
[GRAPHIC OMITTED]
<PAGE>
Schedule of Investments
September 30, 1997
Shares or Principal Amount Market Value
Common Stocks 97.9%
Tobacco 8.7%
52,000 Gallagher Group PLC ADR $ 997,750
47,700 Philip Morris Cos. Inc. 1,982,531
49,800 RJR Nabisco Holdings Corp. 1,711,875
37,400 UST Inc. 1,143,038
Total Tobacco 5,835,194
Broadcasting TV, Radio, Cable 13.3%
93,300 Comcast Corp. Class A 2,402,475
73,900 Cox Communications Inc.
Class A 2,036,869
48,800 TCA Cable TV Inc. 1,903,200
122,300 Telecommunications Inc.
Class A 2,507,150
Total Broadcasting TV, Radio, Cable 8,849,694
Entertainment 9.5%
23,900 Disney (Walt) Company 1,926,938
24,600 Regal Cinemas Inc. 661,125
34,300 Time Warner Inc. 1,858,631
60,300 Viacom Inc. Class A 1,895,681
Total Entertainment 6,342,375
Lodging Hotels 4.2%
43,700 Hilton Hotels 1,472,144
56,100 LaQuinta Inns Corp. 1,321,856
Total Lodging Hotels 2,794,000
Leisure Time (Products) 16.2%
52,000 Arctic Cat Inc. 598,000
63,000 BAT Industries, PLC ADR 1,122,188
42,500 Brunswick Corp. 1,498,125
29,400 Callaway Golf Co. 1,025,325
40,300 GTech Holdings Corp. 1,377,756
52,800 Harley-Davidson Inc. 1,541,100
46,000 Hasbro Inc. 1,293,750
19,200 K2 Inc. 482,400
30,700 Mattel Inc. 1,016,938
28,300 WMS Industries Inc. 854,306
Total Leisure Time (Products) 10,809,888
Shares or Principal Amount Market Value
Common Stocks - continued
Restaurants 28.6%
58,900 Applebees International Inc. $ 1,472,500
85,200 Bob Evans Farms 1,618,800
117,100 Boston Chickena 1,727,225
112,800 Brinker International Inc. 2,009,250
18,300 CKE Restaurants Inc. 768,600
76,500 Cracker Barrell Old
Country Stores 2,476,688
158,600 Darden Restaurants Inc. 1,833,813
80,800 Lone Star Steakhouse Saloon 1,686,700
43,800 McDonalds Corp. 2,085,975
46,300 Outback Steakhouse Inc. 1,279,038
97,500 Wendy's International Inc. 2,071,875
Total Restaurants 19,030,464
Gaming, Lottery, & Parimutuel 17.4%
106,800 Circus Circus Enterprises Inc.a 2,690,025
131,600 Harrahs Entertainment Inc. 2,952,774
132,500 Intl Game Technology 3,014,374
96,700 Mirage Resorts Inc.a 2,913,087
Total Gaming, Lottery, & Parimutuel 11,570,260
Total Common Stocks
(Cost $59,546,087) 65,231,875
Short-Term Commercial Notes 2.1%
$257,284 American Family
5.155% 2/17/98 257,284
$16,837 General Mills
5.135% 5/18/98 16,837
$745,041 Johnson Controls
5.165% 12/30/97 745,041
$203,942 Pitney Bowes
5.144% 2/4/98 203,942
$160,578 Wisconsin Electric
5.185% 11/30/97 160,578
Total Short Term Commercial Notes
(Cost $1,383,682) 1,383,682
Total Investments 100.0%
(Cost $60,929,769) 66,615,557
Liabilities less other Assets (0.0%) (7,226)
Net Assets 100.0% $ 66,608,331
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
management discussion & analysis
Technology
Performance
ICON Technology Fund (the "Fund") gained 29.6% from its inception on February
19, 1997 to September 30, 1997. The Lipper Science and Technology Index gained
21.5% for the same period. Both returns include reinvested dividends.
The Fund delivered solid performance despite a volatile domestic stock market.
With virtually no inflation and higher earnings growth, the investment
environment within technology has been superb. Portfolio strategy continues to
focus on under-valued industries that are growing at sustainable levels.
Following a February/March decline, the broad market experienced a dramatic
rebound which carried over through the third quarter, The Technology sector was
one of the beneficiaries of this appreciation and displayed good performance
versus other sectors of the market. This was mainly due to unexpected earnings
growth during the second and third quarters and a technology sell-off earlier in
the year that was overdone. Several industries within the Technology sector were
selling at significant discounts to their historical multiples. This is exactly
the type of situation the Fund looks to exploit. As a value investor, the Fund
Advisor looks to invest in undervalued industries in an otherwise high P/E
sector. The Advisor feels this reduces the risk of investing in technology
stocks by providing a substantial "margin of error." It is further believed that
this reduces downside risk and reduces volatility.
Even though valuations are getting stretched in the Technology sector as a
whole, the Fund has has identified several industries worth owning. Over the
past year, the largest technology stocks have driven the sector's performance.
However, many of these large-cap stocks have become too expensive for the Fund
to purchase. The Advisor believes it has identified some good opportunities in
mid-to-small cap industries that will lead to higher performance.
Industry Highlights
The sell-off in technology allowed the Fund to
buy high-growth companies at bargain-priced levels. Depressed prices also proved
a good opportunity to increase exposure to several industries. Computer
Networking stocks suffered from the perception that demand was slowing. The
pessimism was overdone, and the Fund Advisor believe business momentum in
networking remains strong. During the past six months, the Fund's Computer
Networking companies performed well and remain the largest industry holding.
Computer Hardware stocks also recovered nicely from a late-winter sell-off.
Stocks such as Dell Computer Corp. and Compaq Computer Corp. have increased
their sales and improved margins through a direct-to-consumer marketing
campaign. Other companies, such as International Business Machines and
Hewlett-Packard Co., are showing good revenue growth as well. This unexpected
growth has lead to marked appreciation in the group. While the Fund remains
comfortable with its position, holdings have been reduced over the last several
months. It is common for the fund to take profits in industries that have
appreciated and are either near or above their fair value. This strategy is
based on the belief that "whatever goes up must come down," which is typical for
a value fund.
The Fund has increased its position within the Communications Equipment
industry. Most stocks within this group have been pressured due to lower capital
outlays by the Regional Bell Companies, which are their main customers. However,
this has allowed the Fund to invest in the group at significant discounts and
investors should benefit from any upside surprises. The Fund has tended to equal
weight stocks within the group as it found more value in small to mid-cap stocks
such as Qualcom Inc., and Allen Telecommunications Inc.. The Fund Advisor
continues to feel the fundamentals are favorable for this industry and looks for
further appreciation in the upcoming months.
The Current Outlook
Technology stock prices have staged a powerful rally during the past six months.
The Fund Advisor is hopeful there will be a return to a market that takes into
consideration earnings growth and valuations rather than size and liquidity.
Industries this Fund is invested in should do well going forward. However, the
Fund will continue to be vigilant with regard to fundamentals and to any
over-valued situations.
The technology business climate in the U.S. is still very positive. Companies
are increasing their spending on corporate infrastructure, which should benefit
the Technology sector. In addition, other countries around the world are
increasing their capital outlays on technology in order to increase
productivity. This spending should continue to increase as the global economy
becomes more competitive. This Fund wants to identify promising industries that
can be purchased at inexpensive prices. Intensive quantitative and fundamental
research drives the Fund's investment process. In addition, the Advisor believes
investors will be rewarded in the long-term if this discipline is followed.
<PAGE>
Portfolio Profile September 30, 1997
Equities 97.4%
Top 10 Equities (% of Net Assets) 39.8%
Number of Stocks 55
Cash & Cash Equivalents 2.8%
Top 10 Equity Holdings September 30, 1997
Intel Corp. 5.9%
3Com Corp. 5.6%
Cisco Systems, Inc. 5.3%
Bay Networks, Inc. 5.2%
Cabletron Systems 2.8%
EMC Corp/MA 2.7%
Qualcom Inc. 2.5%
Iomega Corp. 2.4%
Read-Rite Corp. 2.4%
Top 5 Industries September 30, 1997
Computer Networking 23.1%
Peripherals 19.3%
Communications Equipment 17.6%
Computer Hardware 17.5%
Electronic Semiconductors 13.9%
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.
[GRAPHIC OMITTED]
Schedule of Investments
September 30, 1997
Shares or Principal Amount Market Value
Common Stocks 97.4%
Communications Equipment 17.6%
10,300 ADC Telecommunications
Inc.a $ 334,750
15,000 Allen Telecommunications
Inc.a 427,500
11,350 Andrew Corp.a 297,228
15,550 Aspect Telecommunications
Corp.a 363,481
22,800 Checkpoint Systems Inc. 333,450
13,700 DSC Communications Corp.a 369,044
5,250 Lucent Technologiesa 427,219
12,200 Motorola Inc. 876,875
15,950 Newbridge Networks Corp.a 955,006
5,500 Northern Telecom Ltd. 571,656
16,750 Qualcom Inc.a 1,066,766
37,750 Scientific Atlanta Inc.a 854,094
9,300 Tellabs Inc. 478,950
Total Communications Equipment 7,356,019
Computer Hardware 17.5%
15,300 Adaptec, Inc.a 715,275
20,000 Ascend Communicationsa 647,500
12,500 Compaq Computer Corp.a 934,375
11,100 Data General Corp.a 295,538
7,400 Dell Computer Corp.a 716,875
7,300 Digital Equipmenta 316,181
5,000 ETEC Systemsa 285,000
17,000 Hewlett-Packard Co. 1,182,563
7,200 International Business
Machines 762,750
13,400 Sequent Computer Systems, Inc.a 332,488
13,800 Silicon Graphics, Inc.a 362,250
16,700 Sun Microsystems, Inc.a 781,769
Total Computer Hardware 7,332,564
Computer Networking 23.1%
45,700 3Com Corp.a 2,342,125
56,400 Bay Networks, Inc.a 2,178,450
65,600 Cabletron Systemsa 2,099,200
30,650 Cisco Systems, Inc.a 2,239,366
45,900 Network Equipment
Technology Inc.a 800,381
Total Computer Networking 9,659,522
Peripherals 19.3
19,300 EmcCorp/MAa 1,126,638
37,950 Iomega Corp.a 991,444
34,500 Komag, Inc.a 702,938
19,700 Lexmark Intl. Grp., Inc.
Class Aa 650,100
19,000 Quantum Corp.a 727,938
40,300 Read-Rite Corp.a 987,350
25,700 Seagate Technologya 928,413
20,000 Storage Technology Corp.
Class Aa 956,250
2,000 Texas Instruments 270,250
18,000 Western Digital Corp.a 721,125
Total Peripherals 8,062,446
Shares or Principal Amount Market Value
Common Stocks - continued
Electronic Semiconductors 13.9%
11,000 Advanced Micro Devices $ 358,188
7,000 Atmel Corp. 255,062
26,800 Intel Corp. 2,473,974
8,000 International Rectifier Corp. 187,000
6,500 Lattice Semiconductor Corp. 423,312
4,000 Linear Technology Corp. 275,000
7,500 LSI Logic Corp.a 240,937
10,500 Microchip Technology Inc. 474,140
12,500 National Semiconductor Corp. 512,500
12,500 Xilinx Inc. 632,812
Total Electronic Semiconductors 5,832,925
Computer Systems Services 6.0%
21,700 DST Systems, Inc.a 802,900
9,200 Gerber Scientific, Inc. 222,525
6,900 Policy Management Systems Co. 429,093
11,200 Shared Medical Systems Corp. 592,200
19,200 Sungard Data Systems, Inc.a 465,600
Total Computer Systems Services 2,512,318
Total Common Stocks
(Cost $33,775,572) 40,755,794
Short-Term Commercial Notes 2.8%
$123,000 American Family
5.155% 2/17/98 123,000
$263,000 General Mills
5.135% 5/18/98 263,000
$136,000 Johnson Controls
5.165% 12/30/97 136,000
$240,000 Pitney Bowes
5.144% 2/4/98 240,000
$220,000 Sara Lee
5.124% 1/31/98 220,000
$180,089 Warner Lambert
5.115% 1/29/98 180,089
Total Short-Term Commercial Notes
(Cost $1,162,089) 1,162,089
Total Investments (Cost $34,937,661)
100.2% 41,917,883
Liabilities less other Assets (0.2%) (69,362)
Net Assets 100.0% 41,848,521
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
management discussion & analysis
Telecommunication and Utilities
Performance
The ICON Telecommunication & Utilities Fund (the "Fund") gained 6.3% from its
inception on July 9, 1997 to September 30, 1997. The Lipper Utilities Index
gained 3.7% over that same period. Both return figures include reinvested
dividends.
The ICON Telecommunication & Utilities Fund has outpaced the Lipper average in
the short time period since its inception. The strong performance is primarily
due to holdings in: Cellular/Wireless, Telephone Services and Telephone Long
Distance. The Cellular/Wireless industry has been the top performer in the Fund.
Cellular/Wireless stocks currently comprise over 10% of the ICON
Telecommunication & Utilities Fund. As these companies are not standard
utilities, they add diversification to the portfolio. Airtouch Communications
Inc., Nextel Communications, and 360 Communications Co. have all posted
excellent returns thus far.
Both Telephone Services and Telephone Long Distance companies have benefited
from recent merger and acquisition activity. This type of takeover activity
generally increases the value of the target company. MCI Communications,
operating in the Telephone Long Distance industry, is being courted by three
companies. This has been a positive influence on MCI's stock. On average, stocks
within the Telephone Services and Telephone Long Distance industries have
appreciated approximately 10% since being purchased. Electric Company stocks,
which make up approximately one third of the Fund, are up approximately 2.5%
since the Fund's inception. These attractively valued stocks are typically
defensive, holding up in sideways and down markets.
Industry Highlights
Cellular/Wireless companies, typically the most volatile within the sector, have
recently performed well. As analog phones are phased out and digital technology
prevails, growth opportunities present themselves. Companies able to exploit
these new technologies while controlling costs should be successful. The
competition among participants, however, is fierce. Traditional Cellular
companies, as well as Telephone Services, Telephone Long Distance and new
start-up companies are all competing for wireless clients. This creates
volatility among the stocks in the industry. Prospects for the industry remain
bright, as the global wireless market remains in its growth phase. Given the
growth opportunities and reasonable prices of these stocks, the industry looks
like a good value.
The Telecommunications Act of 1996 has changed the operations of Telephone
Services and Telephone Long Distance companies. In general, this monumental
piece of legislation opened most local and long distance markets to more
competition, with certain restrictions. This new competitive environment will be
a blessing to some companies and a curse to others. Further, volatility within
these industries should persist. Local Telephone Services companies are being
forced to compete for their local turf. However, these companies are also now
allowed to venture into new markets from which they were previously barred.
Consolidation continues to be a dominant theme in the industry. Nynex,
originally part of the Fund, was acquired by Bell Atlantic, which we continue to
hold. Consolidation in the industry allows companies to benefit from economies
of scale and increased network and distribution access.
Merger and acquisition activity is prevalent in the Long Distance industry as
well. Recently, MCI Communications has been the takeover target of British
Telecom, GTE Inc., and WorldCom Inc.. The two U.S. companies, GTE Inc. and
WorldCom Inc., have each bid in excess of $32 billion for MCI Communications.
This will likely push MCI Communications stock up to its most likely takeover
price, in addition to adding volatility to the stock. Within this new
competitive environment, companies are merging to take advantage of synergies
not previously available. This should have a positive long term impact on the
industry.
Electric Company companies are also transitioning into a new, more competitive
environment. This has added volatility and uncertainty to an industry normally
characterized by stability. Consolidation will continue to reduce the number of
major players in the industry. Electric Company stocks are known for their
defensive characteristics, high dividend yields, and sensitivity to interest
rates. In the last few years, Electric Company stocks have underperformed the
market, creating a good opportunity to buy stocks in this industry at discount
prices. Currently, Electric Companies comprise approximately one third of the
ICON Telecommunication & Utilities Fund.
Current Outlook
The fund has benefited from its diversification
within the Telecommunication & Utilities sector. Cellular/Wireless, Telephone
Services and Telephone Long Distance stocks have all outpaced the broad market
thus far. However, stocks within these industries are capable of rapid price
movements. The Fund is alert to this volatility is prepared to rotate out of an
industry if it is no longer a compelling investment opportunity.
Similar to other utility funds, the ICON Telecommunication & Utilities Fund is
sensitive to movements in interest rates. Thus, a favorable bond market could
benefit the Fund. The Electric Company component of the Fund, in addition to
adding to interest rate sensitivity, also gives the Fund defensive
characteristics.
All industries currently held within the Fund have been impacted by changes in
government regulation. Many industries are transitioning from heavy government
regulation to an environment in which competition will be the driving force.
This should be a long-term benefit to the customers and stockholders of most
companies in the sector.
<PAGE>
Portfolio Profile September 30, 1997
Equities 95.2%
Top 10 Equities (% of Net Assets) 31.8%
Number of Stocks 42
Cash & Cash Equivalents 4.8%
Top 10 Equity Holdings September 30, 1997
Bell Atlantic 3.8%
Airtouch Communications Inc. 3.6%
Century Telephone Enterprise 3.6%
AT&T Corp. 3.3%
Nextel Communications 3.1%
Alltel Corp. 3.0%
Bell South 2.9%
SBC Communications Inc. 2.9%
GTE Corp. 2.8%
Telephone & Data 2.8%
Top 5 Industries September 30, 1997
Telephone Services 32.2%
Electric Companies 31.9%
Telephone Long Distance 11.6%
Cellular/Wireless Telecommunications 11.5%
Natural Gas 8.0%
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.
[GRAPHIC OMITTED]
<PAGE>
Schedule of Investments
September 30, 1997
Shares or Principal Amount Market Value
Common Stocks 95.2%
Cellular/Wireless Telecommunications 11.5%
18,100 360 Communications Co. $ 377,838
20,500 Airtouch Communications Inc. 726,469
16,900 Comsat Corp. 402,436
21,700 Nextel Communications 626,588
14,000 Vanguard Cellular Systems
Class A 220,500
Total Cellular/Wireless
Telecommunications 2,353,831
Telephone Services 32.2%
21,700 Aliant Communications Inc. 526,225
17,900 Alltel Corp. 617,550
8,300 Ameritech Corp. 551,950
9,535 Bell Alantic 766,972
12,700 Bell South Corp. 587,375
16,700 Century Telephone Enterprise 734,800
23,500 Frontier Corp. 540,500
12,600 GTE Corp. 571,725
9,600 SBC Communications Inc. 589,200
12,800 Telephone & Data 576,000
13,100 U S West Communications Grp. 504,350
Total Telephone Services 6,566,647
Telephone Long Distance 11.
15,000 AT&T Corp. 664,688
11,200 Cincinnati Bell 318,500
9,500 LCI International Inc. 252,938
11,000 MCI Communications 323,125
7,100 Sprint Corp. 355,000
13,000 Worldcom Inc/Ga-Class A 459,875
Total Telephone Long Distance 2,374,126
Electric Companies 31.9%
9,200 American Electric Power 418,600
9,900 Carolina Power & Light 355,780
10,300 Cinergy Corp. 344,403
13,300 Consolidated Edison of NY 452,200
9,600 Dominion Resources Inc. 363,600
11,000 Duke Power 543,813
17,900 Edison International 451,975
12,800 Entergy Corp. 333,600
8,600 FPL Group Inc. 440,750
16,400 Houston Industries Inc. 356,700
18,200 Pacific Gas & Electric 422,013
15,400 Pacificorp 344,575
16,000 Peco Energy Co. 375,000
13,800 Public Service Enterprises 355,350
24,200 Southern Co. 546,012
11,400 Texas Utilities Co. 410,400
Total Electric Companies 6,514,771
Shares or Principal Amount Market Value
Common Stocks - continued
Natural Gas 8.0%
6,300 Coastal Corp. $ 385,874
6,300 Consolidated Natural Gas 366,580
12,800 Enron Corp. 492,800
8,100 Williams Cos. Inc. 379,180
Total Natural Gas 1,624,434
Total Common Stocks
(Cost $18,345,552) 19,433,809
Short-Term Commercial Notes 4.8%
$159,639 American Family
5.1553% 2/17/98 159,639
$45,043 Pitney Bowes
5.1441% 2/4/98 45,043
$720,339 Johnson Controls
5.165% 12/30/97 720,339
$62,668 Wisconsin Electric
5.182% 11/30/97 62,668
Total Short-Term Commercial Notes
(Cost $987,689) 987,689
Total Investments (Cost $19,333,241)
100.0% 20,421,498
Other Assets less Liabilities 0.0% 594
Net Assets 100.0% $20,422,092
The accompanying notes are an integral part of the financial
statements.
<PAGE>
management discussion & analysis
Transportation
Performance
The ICON Transportation Fund (the "Fund")
gained 24.0% from its inception on May 9, 1997 to September 30, 1997. The
Standard & Poor's Transportation Index gained 19.1% over that same period. Both
return figures include reinvested dividends.
The Transportation sector ended the fiscal year
as one of the hottest performers in the market. Stocks within this cyclical
sector have benefited from a strong economy, and many industries within the
Transportation sector have outpaced the broad market in 1997. Since the fund's
inception on May 9, Trucks & Parts, Truckers and Airlines have all been among
the best-performing industries in the market. All three of these industries have
been part of the ICON Transportation Fund since its inception. Because of these
holdings, the Fund has posted exceptional returns in a short time period.
Trucks & Parts, recently one of the top-performing industries within the broad
market, has been led by Navistar International and Wabash International Corp..
Market perception that both companies have finally recovered from a recession in
the Trucks & Parts industry has boosted performance. In addition, the strong
economy has benefited these cyclical industries. Navistar International has more
than doubled since its initial purchase, and Wabash International Corp. has
increased more than 50%. Stocks within the Truckers industry, also aided by an
industry-wide recovery and economic strength, have come alive and added to the
fund's impressive performance. Truckers stocks such as Caliber Systems, Inc.,
Yellow Corp., and American Freightways Corp. have all been strong performers.
The largest industry holding within the ICON Transportation Fund for much of the
year has been Auto Parts & Equipment. Although not the top-performing industry
within the sector, Auto Parts & Equipment stocks have been a steady contributor
to returns. They have beaten the broad market since the inception of Fund, with
less volatility than other industries within the Transportation sector. Many of
the larger-capitalized Auto Parts & Equipment stocks, such as Goodyear Tire &
Rubber Co. and Dana Corp., have been leaders.
Industry Highlights
Within the Transportation sector, our valuations have favored smaller
- -capitalized industries as larger-capitalization industries appear fully priced.
The Automotive and Aerospace/Defense industries, comprising over half of the
market capitalization of the Transportation sector, have thus far been avoided.
Auto Parts & Equipment stocks have been the Fund's most significant holdings.
They have benefited from a strong automotive market, a strong economy, and most
importantly, attractive valuations. Before the general surge in Transportation
stocks, many Auto Parts & Equipment stocks were selling at better valuations and
higher growth rates than the general market. As these stocks have appreciated,
they have approached their fair value; however, many good opportunities remain
within the Auto Parts industry.
Currently the largest holding in the ICON Transportation Fund, Truckers stocks
have recently been among the best in the market. According to Standard & Poor's
Super 1500, the Truckers industry represents less than 3% of the market
capitalization of the Transportation sector. Currently, Truckers stocks
represent approximately 36% of the ICON Transportation Fund. The Fund has
overweighted Truckers stocks since its inception because of their compelling
valuations. When Truckers stocks initially were purchased, news within the
industry was just beginning to turn positive. Traditional valuation measures, as
well as our proprietary methods, dictated emphasizing these stocks in the
portfolio. Their significant underperformance relative to the market in the
period before we purchased Truckers stocks was an additional reason to own these
stocks. Value managers are often drawn to stocks that have underperformed the
market and are starting to show signs of a turnaround. Most Truckers stocks,
including such names as Caliber Systems, Inc. and Yellow Corp., have uniformly
posted strong returns.
The biggest turnaround within the Transportation sector has been in the Trucks &
Parts industry. Trucks & Parts stocks underperformed the market from 1993
through 1996. An industry-wide recession had a very negative impact on Trucks &
Parts stocks. However, in late 1996 and early 1997, fundamentals within the
industry began to improve. Demand strengthened and efficiencies were improved by
managements' internal focus. At Navistar International, for example, the company
has renewed its focus on building a better product. The market has recognized
the success of this, as the stock has more than doubled in the last six months.
In addition to refocusing on product, Trucks & Parts companies are making
efforts to clean up their balance sheets as free cash flow is now more readily
available.
Airlines and Railroads are also held in the portfolio. Airline companies have
been in the news recently, as they are posting record profits in this time of
economic strength and prosperity. While the Fund's Advisor believes much of the
appreciation in Airline stocks is past, Railroad stocks remain good values.
Consolidation within the Railroad industry should fuel cost reduction and
benefit these stocks in the long run.
Current Outlook
Transportation stocks have been among the best
in the broad market the last six months. Many industries still represent
attractive investment opportunities. However, sector-wide valuations are not as
compelling as they were when the fund was initially opened on May 9, 1997. As a
value
<PAGE>
investor, the Fund Advisor will continue to search for the most
undervalued industries within the Transportation sector.
Industries where valuations suggest additional appreciation potential include
Auto Parts, Truckers and Railroads. Because these industries remain reasonably
priced, they should be more resilient to a potential economic downturn than
other industries within the sector. They will all likely be key components of
the ICON Transportation Fund in the coming months.
Portfolio Profile September 30, 1997
Equities 99.20%
Top 10 Equities (% of Net Assets) 35.6%
Number of Stocks 42
Cash & Cash Equivalents 0.9%
Top 10 Equity Holdings September 30, 1997
Caliber Systems, Inc. 4.4%
Werner Enterprises, Inc. 4.1%
American Freightways Corp. 3.7%
Arnold Industries Inc. 3.6%
M S Carriers Inc. 3.6%
U.S. Freightways Corp. 3.4%
Dana Corp. 3.3%
ITT Industries Inc. 3.2%
Landstar System Inc. 3.2%
Snap-On Tools Inc. 3.1%
Top 5 Industries September 30, 1997
Truckers 36.3%
Auto Parts & Equipment 35.0%
Railroads 11.0%
Trucks & Parts 10.1%
Airlines 6.8%
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.
[GRAPHIC OMITTED]
<PAGE>
Schedule of Investments
September 30, 1997
Shares or Principal Amount Market Value
Common Stocks 99.2%
Airlines 6.8%
7,300 Alaska Air Group, Inc. $ 239,988
10,700 ASA Holdings 300,938
11,700 Comair Holdings Inc. 314,438
6,900 Northwest Airlines Corp.
Class A 286,781
12,300 Southwest Airlines Corp. 392,831
Total Airlines 1,534,976
Auto Parts & Equipment 35.0%
25,600 Cooper Tire & Rubber 680,000
15,200 Dana Corp. 750,500
10,400 Danaher Corp. 603,200
18,500 Echlin Inc. 648,656
19,300 Genuine Parts Co. 594,681
9,900 Goodyear Tire & Rubber Co. 680,625
21,900 ITT Industries Inc. 726,806
15,300 Mark IV Industries Inc. 411,188
17,000 Modine Manufacturing Co. 592,875
13,300 OEA Inc. 457,188
15,300 Snap-On Tools Inc. 704,756
20,100 Superior Industrials
International Inc. 556,519
8,900 TRW Inc. 488,388
Total Auto Parts & Equipment 7,895,382
Trucks & Parts 10.1%
5,700 Cummins Engine 444,956
16,000 Navistar International 442,000
8,100 Paccar Inc. 453,600
24,200 Titan Wheel International 484,000
15,400 Wabash International Corp. 445,638
Total Trucks & Parts 2,270,194
Truckers 36.3%
44,200 American Frieghtways Corp. 839,800
35,100 Arnold Industries Inc. 820,463
18,200 Caliber Systems Inc. 987,350
15,800 Heartland Express Inc. 436,475
26,900 Landstar Systems Inc. 719,575
30,100 M S Carriers Inc.a 801,413
35,500 Rollins Truck Leasing 605,719
16,400 Ryder Systems Inc. 589,375
22,700 U.S. Freightways Corp. 763,288
37,800 Werner Enterprises Inc. 916,650
21,600 Yellow Corp.a 703,350
Total Truckers 8,183,458
Shares or Principal Amount Market Value
Common Stocks - continued
Railroads 11.0%
4,600 Burlington Northern
Santa Fe $ 444,474
3,800 CSX Corp. 222,300
5,200 GATX 351,324
5,800 Illinois Central Corp. 213,150
2,100 Norfolk Southern Corp. 216,824
6,800 Union Pacific Corp. 425,850
9,900 Wisconsin Central
Transportation 314,944
Total Railroads 2,467,809
Total Common Stocks
(Cost $18,628,884) 22,351,819
Short-Term Commercial Notes 0.9%
$94,520 Johnson Controls
5.165% 12/30/97 94,520
$109,709 Wisconsin Electric
5.185% 11/30/97 109,709
Total Short-Term Commercial Notes
(Cost $204,229) 204,229
Total Investments 100.1%
(Cost $18,833,113) 22,556,048
Liabilities less other Assets (0.1%) (24,743)
Net Assets 100.0% $ 22,531,305
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
<PAGE>
management discussion & analysis
Short-Term Fixed Income
Performance
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. The Fund
gained 2.8% since the end of February, the first full month of the Fund's
operation, versus 3.7% for the Merrill Lynch 1 Year Treasury Index.
We are active in duration management in the Fund, and are moving to longer
maturity Treasuries as our medium. Our above all bias, along with the Fed's, was
for higher short term interest rates so we have maintained the Fund's duration
lower than that of the benchmark during the recent period and ended the fiscal
year at 0.6 years. This is near the lower end of the normal operating range
(0.5- 1.5 years). Recent longer duration purchases consisted of Treasuries.
Shorter duration purchases were mainly agency discount notes as Treasury Bills
were viewed as expensive.
We believe the market is focusing on the important factors in assessing the
direction of interest rates. In the short term, despite recent volatility, the
upward momentum of the current business expansion could be stronger and longer
lasting than expected, leading to Fed intervention. The risk of Fed tightening
is not priced into the short end of the yield curve. In the longer term, the US
is moving toward a balanced budget and inflation appears to remain in check, so
the outlook for government paper should be favorable. In conclusion, we are
cautious in the near term, but we remain bullish in the longer term.
<PAGE>
Schedule of Investments
September 30, 1997
Principal Amount Market Value
U.S. Government Agencies 73.5%
Federal Farm Credit Bank
$160,000 5.44% 10/31/97 $ 159,275
Federal National Mortgage Association
Discount Notes
$10,150,000 5.47% 11/4/97 10,097,564
Federal Home Loan Bank Agency
$20,000,000 6.54% 4/16/99 20,103,578
Federal Home Loan Bank Discount Notes
$20,900,000 5.47% 12/10/97 20,679,331
$120,000 5.44% 11/7/97 119,329
$4,060,000 5.59% 11/13/97 4,032,892
Total Federal Home Loan Bank
Discount Notes 24,831,552
Federal Home Loan Mortgage Corp.
Discount Notes
$4,700,000 5.60% 10/21/97 4,685,377
Total U.S. Government Agencies
(Cost $59,751,565) 59,877,346
U.S. Government Obligations 18.5%
U.S. Treasury Notes
$15,000,000 6.00% 6/30/99
(Cost $15,018,187) 15,051,568
Principal Amount Market Value
Repurchase Agreement 7.3%
5,911,000 Paine Webber & Co., Inc., 6.03% dated 9/30/97, maturing 10/1/97, to be
repurchased at $5,911,990, collateralized
by $6,025,000, in U.S.
Treasury Notes 5.875%
due 3/31/99, value
$6,034,414
(Cost $5,911,000) $ 5,911,000
Total Investments 99.3%
(Cost $80,680,752) 80,839,914
Other Assets less Liabilities 0.7% 542,018
Net Assets 100.0% $ 81,381,932
The accompanying notes are an integral part of the
financial statements.
management discussion & analysis
Asia Region
Performance
The ICON Asia Region Fund (the "Fund") opened on February 25, 1997. The
Fund return was (0.60)% through September 30, 1997, ending with an NAV of $9.94.
The Morgan Stanley Capital International (MSCI) Pacific Index (in U.S. dollars)
was (2.1%) for the same period.
Because the Fund is heavily invested in Japan,its returns follow those of the
Japanese market to a great extent. As the Nikkei 225 Index gained momentum
through April and May and the Japanese Yen appreciated against the U.S. Dollar,
the ICON Asia Region Fund performed well. However, the recent Asian currency
crisis, along with a decline in most markets of that region, has caused the Fund
to retrace some of its prior gains. Current investments include Japan, Hong
Kong, Malaysia and Singapore. Of these, the currency crisis has had the greatest
effect on the markets and currencies of Malaysia and Singapore. However, the
Fund's investment in these countries is minimal. These holdings attempt to
reduce overall portfolio risk through diversification.
The Asian currency crisis began when investors started converting their Asian
currency holdings to currencies of countries deemed to be "safer." The emerging
markets in the Asian region were generating large current account deficits, and
the countries made no attempt to stem that growth. As the public sold these
"unsafe" currencies, local governments purchased large blocs in an attempt to
maintain the currencies' value. Eventually, the pressure to devalue became too
great, and the currencies were allowed to float freely. Quick and extreme
currency depreciation ensued. The ICON Asia Region Fund has not been hedged
against foreign currency movements. The Asian currency crisis had a negative
effect on the Singapore and Malaysian holdings of the Fund. However, these
markets were undervalued before the currency crisis. They remain undervalued as
the current prices reflect an amount that is far below the worth of these
companies.
The Fund's overweight in Japan allowed some protection from the performance
numbers turned in by these developing markets. Japan posted slightly positive
performance since inception through September 30, 1997, with the MSCI Japan in
U.S. Dollar Index up 2.32%. The Fund's valuation measures indicate that
performance in these markets should begin to turn around. Emotion has carried
prices far under value. Depreciation has slowed; the markets have turned in some
significantly positive performance which, according to valuations, should
continue.
Country Highlights
The Japanese market last saw double-digit growth in 1993. It has not seen growth
over 20% since 1988. No significant appreciation in the Japanese market has been
seen thus far in 1997 because of public perception about the course of the
economy. Domestic demand in Japan is still sluggish after the April rise in the
consumption tax; however, real Gross Domestic Product (GDP) is expected to rise
2.1% in 1997 and 2.6% in 1998. There has been discussion about the possibility
of a Japanese recession or depression if domestic demand does not accelerate and
exports are hurt by the Asian currency crisis. However, there is also positive
economic news.
Japan's largest Asian trading partners are China and Korea. The currency crisis
has not affected Japanese exports to these countries. The depreciation of the
Yen over the past 2 years is still reflected in the relative cheapness of
Japanese goods for consumers in those countries that have experienced currency
appreciation versus the Yen. Exports are still rising and Japan benefits from a
trade surplus. Demand for final goods has weakened only slightly as reported in
the last Tankan survey (Japanese survey of business confidence). Considering
that domestic demand has yet to rebound from the April consumption tax hike,
this means that export demand has partially offset the domestic reduction.
Further, the low interest rate environment has allowed for increasing capital
expenditures.
Growth in investment for 1997 is expected to be 4.6%. Although this figure is
below last year's, it is still substantial. Greater investment is positive for
the overall economy.
The Tankan survey for the third quarter showed that employment conditions are
improving. Instead of restructuring through headcount reduction, companies are
shifting excess employees to their smaller subsidiaries. Weak prices and weak
demand are not leading to reduced employment numbers. Accordingly, there should
be a limit to how much domestic demand will continue to deteriorate. There is
potential for improvement in the economic condition in Japan in 1998. GDP
figures are still expected to increase for 1997 and 1998. As previously stated,
employment conditions are not worsening. Although a catalyst to spark domestic
demand might translate to optimism in the market, the weak Yen is providing
strong export growth to pick up some of the slack.
Emotional reaction by investors can pull the market away from fair value. This
seems to be the case in the Asian region. Negative economic news has already
been priced into these markets. They have become substantially undervalued as
emotional investors have oversold. Consensus earnings estimates are increasing
and interest rates are low (especially in Japan). Investment in this region
right now seems contrarian, but valuations show that this is the place to be.
Current Outlook
As we look forward, many countries in the Asian region are attempting to change
the conditions that brought about the currency devaluation. The International
Monetary Fund (IMF) has stepped in to lend support in the form of funds with
policy requirements that should help to improve the economic environment. Large
government projects were postponed. A slowing of currency depreciation is now
being seen, and performance of the ICON Asia Region Fund is now more dependent
upon the movement of the markets in which we are invested.
Prior to the crisis, valuations showed that there were bargains to be exploited
in these countries. The markets are now cheaper and the outlook continues to be
promising. The Hong Kong economy is stable and earnings estimates continue to
grow. There is still high demand for property in the region, as the British
handover to the Chinese has not deterred immigration. Market reaction to the
Asian currency crisis in Singapore and Malaysia has been emotional and overdone.
Although both countries have some economic restructuring to sustain (Malaysia
more than Singapore), there are bargains to be found in these markets.
And finally, there is the Japanese market. Here, too, the Fund Advisor sees
bargains given the market's overreaction to economic conditions. Economic
officials in Japan have begun to recognize the state of the economy openly.
Public opinion of Prime Minister Hashimoto has begun to deteriorate. The
Japanese government is feeling the pressure to do something to spark the
economy. Currently, monetary policy is loose and fiscal policy is tight. If the
Japanese government announces plans to stimulate the domestic economy through a
loosening of fiscal policy, the markets should expect improved domestic demand.
The domestic economy will benefit greatly from such an announcement.
Portfolio Profile September 30, 1997
Equities 97.1%
Top 10 Equities (% of Net Assets) 31.2%
Number of Stocks 138
Cash & Cash Equivalents 2.9%
Top 10 Equity Holdings September 30, 1997
Nippon Telephone & Telegraph 6.9%
Toyota Motor Corporation 5.4%
Honda Motor Company 2.6%
Bank of Tokyo-Mitsubishi, Ltd. 2.4%
Matsushita Electric Industrial Co. 2.4%
Sumitomo Bank 2.4%
Industrial Bank of Japan 2.3%
Sony Corporation 2.3%
Tokyo Electric Power First SEC 2.3%
Mitsubishi Corporation 2.2%
Top Countries September 30, 1997
Japan 79.2%
Singapore 7.6%
Hong Kong 6.3%
Malaysia 4.0%
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.
[GRAPHIC OMITTED]
Schedule of Investments
September 30, 1997
Shares Market Value
Common Stocks & Rights 97.1%
Hong Kong 6.3%
34,200 AMMB Holdings Berhad $ 89,679
19,400 Bank of East Asiaa 72,451
39,400 Berjaya Sports Toto Berhad 113,038
32,000 Cahya Mata Sarawak 57,750
53,000 Cathay Pacific Airwaysa 74,310
26,000 Cheung Kong Holdings 292,304
11,000 Cheung Kong Infrastructurea 32,836
32,000 China Light & Power 176,158
32,000 Chinese Estates HL 28,946
14,000 Citic Pacific Ltd. 79,421
48,000 Commerce Asset Holdings 53,900
22,000 Cosco Pacific Ltd. 39,090
7,500 Dickson Concepts Intl. 27,961
10,000 Edaran Ototmobil
Nasional Berhad 40,104
6,000 Guoco Group Ltd. 23,958
15,000 Hang Lung Dev. Co. 28,203
26,900 Hang Seng Bank 331,100
23,000 Hong Kong & Shanghai Hotels 27,938
158,000 Hong Kong Telecom 357,304
43,000 Hong Kong & China Gasa 88,628
66,000 Hopewell Holdingsa 40,085
44,000 Hutchison Whampoa Ltd. 433,546
13,000 Hysan Developmenta 38,890
94,000 Magnum Corp. Berhad 82,646
26,000 Malayan Banking 130,740
13,000 Miramar Hotel 33,178
20,000 National Mutual Asia Ltd. 21,451
24,000 New World Development 145,144
16,000 Peregrine Investment Holdings 27,189
95,000 Renong Berhad 93,782
26,000 Shangri La Asis Ltd. 26,711
44,000 Shun Tak Holdingsa 28,145
26,000 Sun Hung Kai Properties 305,743
45,000 Swire Pacific Ltd. 66,583
8,000 Television Broadcasta 28,326
33,000 Wharf Holdings 121,535
Total Hong Kong 3,658,773
Shares Market Value
Common Stocks - continued
Japan 79.2%
122,000 All Nipon Airways Company $ 682,100
115,000 Asahi Glass Co. Ltd. 893,481
74,000 Bank of Tokyo-Mitsubishi Ltd. 1,409,757
42,000 Bridgestone Corp. First SEC 1,008,862
33,000 Canon Inc. Y50 964,880
41,700 Chubu Electric Power Co. 708,067
38,000 Dai Nippon Printing Co. Ltd. 812,060
38,000 Denso Corporation 922,223
24,000 Fuji Photo Filma 989,977
69,000 Fujitsu Ltd. Y50 863,000
138,000 Hitachi Y50 1,200,198
44,000 Honda Motor Company 1,534,332
106,000 Industrial Bank of Japan Ltd. 1,316,988
17,000 Ito-Yokado Co. Ltd. 920,898
50,900 Kansai Electric Power 906,444
368,000 Kawaski Steel Corporation 704,116
167,000 Kinki Nippon Railway 953,060
89,000 Kirin Brewery Co. Ltd. 732,759
9,300 Kyocera Corp. 607,777
192,000 Marubeni Corporation 636,130
76,000 Matsushita Electric
Industrial, Ltd. 1,372,318
132,000 Mitsubishi Corporation 1,279,218
67,000 Mitsubishi Estate Co. Ltd. 976,725
180,000 Mitsubishi Hvy Indy Y50a 985,505
122,000 Mitsubishi Motors Y50a 626,522
68,000 Mitsui Fudosan 827,963
70,000 NEC Corporation Y50 852,315
359,000 Nippon Steel Company 790,971
439 Nippon Telephone
& Telegraph 4,036,195
113,000 Nissan Motor Company 673,900
94,000 Nomura Securities Co. 1,222,397
23,000 Sanyo Company Ltd. 796,322
32,000 Seibu Railway 1,269,609
16,000 Seven Eleven Japan 1,200,695
64,000 Sharp Corporation 583,119
14,100 Sony Corporation 1,331,400
93,000 Sumitomo Bank, Ltd. 1,401,971
32,000 Takeda Chemical 959,496
78,000 Tokio Marine & Fire 936,801
71,100 Tokyo Electric Power 1,366,288
153,000 Toshiba Corp 775,582
102,000 Toyota Motor Corporation 3,125,983
Total Japan 46,158,404
The accompanying notes are an integral part of the
financial statements.
Shares Market Value
Common Stocks - continued
Malaysia 4.0%
32,400 Ekran Berhad $ 42,580
28,800 Genting Berhad 89,735
83,000 Golden Hope Plantations 120,856
70,000 Hicom Holdings Berhad 82,491
56,000 Hong Leong Bank Berhad 83,960
32,000 Hume Industries 69,103
28,000 Jaya Tiasa Holdings Berhad 77,309
55,000 Kuala Lumpur Kepon Berhad 135,738
29,000 Malakoff Berhad 83,648
113,000 Malaysian Helicopter Service 51,941
37,000 Malaysian International
Shipping 70,769
53,333 Malaysian Resources Corp. 46,562
13,000 Nestle Berhad 76,599
16,000 New Straits Times Press 48,372
14,000 Oriental Holdings Berhad 57,010
21,000 Perusahaan Otomobil
Nasaional 58,629
52,000 Petronas Gas Berhad 154,000
77,000 Public Bank Berhad 66,749
43,000 Resorts World Berhad 94,183
43,000 RHB Capital Berhad 50,939
12,400 Rothmans of Pall Mall Berhad 100,415
58,000 Sime Darby Malay Regd 120,776
70,500 Telekom Malaysia 214,226
63,000 Tenaga Nasional Berhad 170,058
20,000 United Engineers 64,167
61,500 YTL Corp. Berhad 77,407
Total Maylasia 2,308,222
Singapore 7.6%
16,000 Cerebos Pacific Limited 55,424
35,000 City Developments 226,467
6,000 Creative Technology Limited 158,037
11,000 Cycle & Carriage Limited 66,502
42,000 DBS Land 102,116
29,000 Development Bank 295,682
18,000 Faser & Neave 102,940
5,000 Great Eastern Life Assurance 50,653
53,000 Hotel Properties SGDI 65,470
Shares Market Value
Common Stocks - continued
Singapore - continued
20,000 Inchcape Berhad $ 69,934
120,000 IPC Corporation 28,627
24,000 IPC Corporation Rights -
29,000 Keppel Corporation 115,619
19,000 Keppel Fels Ltd. 55,881
33,000 Keppel Land Ltd. 83,254
40,000 Marco Polo Developments 71,371
23,000 Metro Holdings Ltd. 64,639
24,000 Natsteel Ltd. 65,568
60,000 Neptune Orient Lines Ltd. 46,666
42,000 Overseas Chinese Bank 290,976
27,000 Overseas Union Bank 119,998
18,000 Overseas Union Enterprises 71,764
12,000 Sembawang Corporationa 55,685
36,000 Shangri La Hotel Ltd. 94,116
72,000 Sime Singapore Ltd. 41,411
31,000 Singapore International
Airlines 228,951
23,000 Singapore Land Ltd. 102,221
15,000 Singapore Press Holdings 220,585
42,000 Singapore Technologies 76,038
495,000 Singapore Telecom 837,928
36,000 Straits Trading Company 63,528
103,000 United Industrial Corp. 71,358
42,000 United Overseas Bank 310,191
15,000 Venture Manufacturing 63,724
32,000 Wing Tai Holdings 66,090
Total Singapore 4,439,414
Thailand 0.0%
19,000 Rashid Russian 43,667
Total Common Stocks & Rights
(Cost $58,689,117) 56,608,480
Money Market Fund Shares 2.6%
1,505,334 Vista U.S. Government
Money Market Fund
(Cost $1,505,334) 1,505,334
Total Investments (Cost $60,194,451)
99.7% 58,113,814
Other Assets less Liabilities 0.3% 165,007
NET ASSETS 100.0% $ 58,278,821
The accompanying notes are an integral part of the
financial statements.
a non-income producing security
Summary of Investments by Industry
% of Investments
Diversified Automotive Manufacturers 10.30%
Banks 10.00%
Telecommunications 9.30%
Electric Power Companies 5.40%
Diversified Electronics 4.70%
Land & Real Estate 4.12%
Business Machines & Office Equipment 3.20%
Ethical Drug Manufacturers 3.00%
Cash 2.80%
National Regional Food Store Chains 2.80%
Radio & T.V. Broadcasts 2.35%
Wholesalers 2.30%
Railroad Holding Companies 2.20%
Securities Brokerage 2.15%
Electronic Components 2.10%
Airlines 1.80%
General Diversified 1.80%
Insurance 1.75%
Industrial Machinery 1.70%
Photographic Equipment & Supplies 1.70%
Rubber & Tire Manufacturers 1.70%
Original Parts & Accessories Manufacturers 1.60%
Soft Drink Producers & Bottlers 1.60%
Breweries 1.50%
Glass 1.50%
Systems & Subsystems 1.50%
Diversified Construction Companies 1.40%
Printers 1.40%
Steel Producers Integrated 1.40%
Department Store Chains 1.21%
Diversified Metal Products Manufacturers 1.20%
Parts & Components 1.00%
Financial Services 0.70%
Leisure 0.50%
Summary of Investments by Industry - continued
% of Investments
Press Print 0.50%
Sea Transport 0.50%
Hotel & Motel Chains 0.47%
Auto Equipment 0.40%
Multi Industry 0.40%
Electrical Materials 0.30%
Engineering 0.30%
Food 0.30%
Oil Production 0.30%
Water distribution 0.30%
Agricultural Products 0.20%
Automobile 0.20%
Investment Management 0.20%
Natural Gas Distributors 0.20%
Tobacco 0.20%
Building Heavy Construction 0.10%
Cement 0.10%
Computers 0.10%
Construction Materials 0.10%
Industrial Equipment 0.10%
Industrial Services 0.10%
Miscellaneous Recreation 0.10%
Non Ferrious Metals 0.10%
Other Financial Services 0.10%
Rental & Leasing 0.10%
Restaurant 0.10%
Specialty Retailers 0.10%
Textiles 0.10%
Tires & Rubber 0.10%
Transport 0.10%
Shipping 0.05%
Total 100.00%
The accompanying notes are an integral part of the
financial statements.
management discussion & analysis
North Europe Region
Performance
The ICON North Europe Region Fund (the "Fund") opened on February 18, 1997. The
Fund had a total return of 10.6% from its inception to September 30, 1997 with
an ending NAV of $11.06. The Morgan Stanley Capital International (MSCI) Europe
Index (in U.S. dollars) appreciated 20.5% for the same period.
Markets in Northern Europe moved sideways to negative through the first few
months of ICON investment. In addition to market depreciation, the Fund has not
been hedged against U.S. Dollar movement and the U.S. Dollar appreciated
substantially against most currencies in this region through July 1997. These
combined factors had a negative effect on performance of the ICON North Europe
Region Fund in the first few months. The news does improve as local market
performance changed course after mid-April and the Fund participated. In
addition, many European currencies followed the lead of the Deutsche Mark and
gained steadily against the U.S.
Dollar after the beginning of August.
The Fund is invested according to relative valuation ratios of the countries
that comprise the region. Initially, the Fund invested in Germany, Denmark,
Belgium and Norway. Germany and Denmark have remained the largest holdings since
inception and have added significantly to performance. The MSCI German index in
US Dollars has appreciated 20.93% from February 19, 1997 through September 30,
1997. The MSCI Denmark index in U.S. Dollars has appreciated 18.47% over the
same period. Norway added slightly to performance before it began to look
overvalued; it was sold for a position in Great Britain. These are the current
Fund holdings as Germany, Denmark, Belgium and Great Britain are still the most
undervalued markets in North Europe.
Country Highlights
There has been a common thread relating the returns of the North European
markets. This thread is the European Monetary Union (EMU). Next year, all
countries that would like to participate in the first round of countries
adopting the single currency must fulfill the EMU criteria. These criteria all
involve the stability and health of the local economies. All country economies
must converge on interest rate, inflation rate, government debt, public debt,
and exchange rate levels. German economic health has historically been the most
stable in the region because the Bundesbank, the German central bank, is
committed to maintaining low inflation levels. The EMU criteria then defaults to
the idea that all countries must converge to German standards.
Germany is one of the largest holdings in the Fund, comprising almost 36.6% of
equity holdings. German returns fell through August, along with many world
markets. The Fund saw rallies begin in September and, according to valuations,
there is no reason for these to halt. Here, as well as in Denmark, interest
rates are the lowest seen since 1994. There are some noticeable differences when
comparing these two time periods. German Gross Domestic Product (GDP) growth in
1994 was steadily increasing; in 1997 German GDP growth was lower in the second
quarter than it was in the first quarter. The German unemployment rate has been
steadily increasing since 1994 until, at this point, German unemployment is the
highest it has been since WWII. Obviously the German economy in 1994 was much
healthier than the German economy is in 1997; and so, although interest rates
rose steadily from this point in 1994, there is no reason for them to follow the
same pattern in 1997.
Denmark is the second country that has a large position in this Fund. Denmark is
a small percentage of the MSCI Europe index; however, our weighting is large
because the valuations for Denmark are some of the best that we see in Europe at
this time. This country continues to be attractive for reasons that differ from
Germany. Danish 1998 consensus earnings estimates have experienced upward
revisions of around 19% since May of this year. Analysts are currently
predicting an average earnings increase of 43% for 1997 over 1996 earnings and
expect this to continue with an earnings increase of 13% for 1998 over 1997
earnings. Although Danish prices have shown a significant increase since Fund
inception, earnings have been an upwardly moving target. Interest rates are low,
there has not been a surge of inflation fear, and further, Denmark is under the
interest rate constraints of EMU criteria. Prices have been unable to reach fair
value because fair value is not a static measure; rising earnings estimates and
low interest rates allow valuations to continually increase.
Belgium and United Kingdom are currently the smallest holdings in the ICON North
Europe Region Fund. Although their valuations are promising, they do not show
quite the potential of Germany or Denmark. Both have added positively to
performance this year. Their economies are healthy, with Great Britain expecting
a 3.5% increase in real GDP this year and Belgium's budget deficit expected to
be 2.8% this year (falling within the EMU criteria).
The Current Outlook
The ICON North Europe Region Fund has performed well this year as there have
been significant price increases in the region. However, prices have yet to
approach fair value. Fundamentals continue to improve across Europe as the
export-driven recoveries begin to flow through economies to ignite domestic
demand. The Fund Advisor sees economic strengths; however, weaknesses exist that
provide an environment still in need of stimulation. Although, it must be
remembered that there also exists an environment where the growing
export-economy can boost the domestic economy. It seems that the European
governments are attempting to create healthy economies that will fulfill the EMU
criteria for participation. Your Fund Advisor sees low interest rate
environments for monetary convergence with tight fiscal policy for budget
deficit fulfillment.
Interest rates should not need to increase any further. The Bundesbank took what
can be called a preemptive strike against inflation and raised the interest rate
recently in response to rising factory orders among other things. France
followed suit and interest rates in the remainder of Europe edged up as well.
Your Fund Advisor questions the continuance of these increases because of
factors that show continued economic weakness, high unemployment and slowing GDP
growth. Privatization and restructuring continue as many of these countries
attempt to fulfill the EMU criteria in time to participate in the upcoming
single currency.
The desire to fulfill EMU criteria allows for bright prospects for the different
economies in this region. Budget and public deficits must be low, exchange rates
must be stable within a range, and inflation and interest rates need to
converge. These demands make for healthier economies in the region. Again,
prospects are bright and fundamentals continue to improve as prices to attempt
to reach a continually improving value target.
Portfolio Profile September 30, 1997
Equities 98.0%
Top 10 Equities (% of Net Assets) 31.9%
Number of Stocks 118
Cash & Cash Equivalents 2.5%
Top 10 Equity Holdings September 30, 1997
D/S Svenborg 5.2%
Den Danske Bank 5.2%
Novo Nordisk 4.7%
Allianz AG 2.9%
Danisco 2.7%
Carlsberg 2.3%
Sophus Berendsen 2.3%
Deutsche Bank AG 2.3%
Hoschst AG 2.2%
Siemens AG 2.1%
Top Countries September 30, 1997
Denmark 40.0%
Germany 36.6%
Belgium 13.9%
United Kingdom 7.5%
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.
[GRAPHIC OMITTED]
Schedule of Investments
September 30, 1997
Shares Market Value
Common Stocks 98.0%
Belgium 13.9%
1,315 Banque Bruxelles Lambert $ 338,818
1,105 Barco (Belgium American
Radio Corp.) 231,648
,318 Bekaert NV 226,432
2,680 Ciementeries CBR NPV 234,584
2,011 CMB Cie Maritime Belge 153,126
6,152 Delhaize-Le Lion 303,852
4,901 Electrabel SA 1,027,428
3,696 Fortis AG 740,335
4,562 Gevaert SA 197,782
1,246 Glaverbel SA 202,743
1,902 Groupe Bruxelles Lambert 301,656
1,139 Kredietbank NPV 469,582
2,172 Petrofina SA 850,765
1,103 Royale Belge 287,220
9,710 Solvay Et Cie NPV 586,159
1,470 Tractbel Inv Intl NPV 597,977
2,596 Union Miniere NPV 212,629
Total Belgium 6,962,736
Denmark 40.0%
5,820 Bang & Olufsen Holdings 346,183
11,597 Bikuben Girobank 663,940
20,947 Carlsberg 1,146,283
21,452 Cheminova 570,563
3,746 Codan Forsikring 515,266
2,410 D/S Norden 344,041
36 D/S Svenborg 2,596,370
23,194 Danisco 1,320,981
23,913 Den Danske 2,606,519
3,726 Det Danske Traelastkompagni 335,213
13,866 Fin Industri Handvaerk 360,837
17,319 Finansieringsselsk Gefion 373,433
28,087 FLS Industries 835,329
12,711 ISS International Service
System 417,729
4,448 Jyske Bank 417,365
10,729 Korn OG Foderstofkomp 335,043
6,278 Lauritzen Holdings 644,158
20,791 Novo Nordisk 2,324,960
9,650 Potagua 308,523
8,468 Radiometer 395,370
7,219 Sophus Berendsen 1,157,053
7,379 Sydbank 341,255
2,715 Tele Danmark 669,332
2,122 Topdanmark 312,394
10,660 Tryg Baltica Forsikring 608,710
Total Denmark 19,946,850
Germany 36.6%
1,512 Adidas AG 196,813
5,970 Allianz AG 1,440,963
352 Allianz Lebenscersicherungs 290,977
2,810 Altana AG 206,830
18,783 BASF AG 678,498
20,415 Bayer AG 813,161
Shares Market Value
Common Stocks - continued
Germany - continued
8,728 Bayerische Hypoth-und
Wechsel Bank $ 373,100
446 Bayerische Motoren Werke AG 379,918
7,371 Bayerische Vereinsbank AG 429,025
3,101 Beiersdorf AG 141,339
13,511 Commerzbank AG 487,293
12,087 Daimler Benz AG 997,790
4,215 Degussa AG 231,251
6,511 Deutsche Bank AG 1,162,939
50,677 Deutsche Telecom 981,296
15,084 Dresdner Bank AG 693,483
1,940 Heidelberger Zement AG 154,876
9,252 Henkel KGAA 459,408
3,979 Hochtief AG 181,807
24,439 Hoschst AG 1,084,832
503 Karstadt AG 174,294
236 Linde AG 164,621
10,809 Lufthansa 212,669
525 MAN AG 165,777
1,173 Mannesmann AG 559,208
5,757 Metro AG 264,676
2,400 Muenchener Reuckver AG 808,521
609 Pruessag AG 170,681
12,107 RWE AG 586,435
1,504 SAP AG 387,030
2,363 Schering AG 248,115
15,727 Siemens AG 1,062,751
824 Thyssen AG 192,215
15,893 Veba AG 929,093
805 VEW AG 264,355
589 Viag AG 263,721
618 Volkswagen AG 429,335
Total Germany 18,269,096
United Kingdom 7.5%
5,192 Barclays PLC 140,443
4,149 Bass PLC 56,031
13,117 BAT Industries 115,057
19,289 BG PLC 83,975
43,967 Boots Co. PLC 623,948
1,886 British Aerospace PLC 50,681
4,099 British Airways PLC 44,927
13,248 British Petroleum PLC 200,205
7,589 British Sky Broadcasting PLC 57,251
19,284 British Telecommunications PLC 127,565
18,795 BTR PLC 76,359
7,145 Cable Wireless PLC 60,884
5,300 Cadbury Schweppes PLC 51,156
4,647 Commercial Union 60,392
8,018 Glaxo Holdings PLC 180,620
4,182 Granada Group 59,179
5,230 Great Universal Stores 58,337
5,888 Guiness PLC 55,595
3,708 Land Securities 58,731
12,568 Lloyds TSB Group 169,423
The accompanying notes are an integral part of the
financial statements.
Shares Market Value
Common Stocks - continued
United Kingdom - continued
8,413 Marks & Spencer PLC $ 86,095
5,645 National Power 51,932
5,922 National Westminster Bank PLC 89,589
7,843 Prudential Corp. 87,483
4,628 Reed International PLC 39,249
8,520 Rueters Holdings 101,160
3,706 Rio Tinto PLC 59,298
6,895 Sainsbury (J) PLC 51,737
6,287 Scottish Power PLC 48,698
23,854 Shell Transport & Trading Co. 174,751
2,414 Siebe 48,686
15,874 Smithkline Beecham PLC 154,242
7,024 Tesco 53,386
4,279 Thorn EMI 42,096
2,318 Unilever 67,906
3,814 United Utilities 47,225
5,829 Wolseley PLC 48,352
14,409 Yele Catto & Co. 79,489
2,642 Zeneca Group PLC 86,276
Total United Kingdom 3,748,409
Total Common Stock
(Cost $45,052,979) 48,927,091
Money Market Fund Shares 2.2%
1,117,387 Vista U.S. Government
Money Market Fund
(Cost $1,117,387) 1,117,387
Total Investments
(Cost $46,170,366)
100.2% 50,044,478
Liabilities less other Assets (0.2%) (97,813)
NET ASSETS 100.0% $ 49,946,665
Summary of Investments by Industry
% of Investments
Commercial Banks, Bank
Holding Companies 16.70%
Insurance Companies 8.80%
Shipping 7.50%
Diverisified Chemicals Manufacturers 6.60%
Ethical Drug Manufacturers 6.20%
Electric Power & Gas Companies 5.20%
Service Organizations 5.00%
General Diversified 3.80%
Diversified Automotive Manufacturers 3.70%
Telecommunications 3.70%
Diversified Food 3.50%
Other Financial Services 3.30%
Brewers 2.40%
Diversified Electronics 2.20%
Crude Oil & Natural Gas Producers 1.70%
Cash 1.60%
Diversified Contruction Cos. 1.30%
Drug Store Chains 1.30%
Department Store Chains 1.10%
Diversified Machinery 1.10%
Miscellaneous Chemicals 1.10%
Diversified Metal Producers 1.00%
Chemcials 0.90%
Medical, Surgical & Dental Suppliers 0.80%
Radio & T.V. Broadcasts 0.80%
Systems & Subsystems 0.80%
Wholesalers 0.80%
Investment Companies 0.70%
Food 0.60%
Airlines 0.50%
Building Production 0.50%
Miscellaneous Electronics 0.50%
Wire, Chain & Spring 0.50%
Athletic Footwear 0.40%
Glass 0.40%
Holding Companies 0.40%
Oil Refiners & Distributors 0.40%
Cosmetics & Toiletries 0.30%
Diversified Drugs, Cosmetics,
& Healthcare 0.30%
Industrial Machinery 0.30%
National Regional Food Store Chains 0.20%
Natural Gas Distributors 0.20%
Automatic Controls 0.10%
Distillers 0.10%
Land & Real Estate 0.10%
Military & Commercial Aircraft
Manufacturers 0.10%
Miscellaneous Printing & Publishing 0.10%
Miscellaneous Recreation 0.10%
Miscellaneous Retailers 0.10%
Soft Drink Producers & Bottlers 0.10%
Water Companies 0.10%
Total 100.00%
The accompanying notes are an integral part of the
financial statements.
management discussion & analysis
South Europe Region
Performance
The ICON South Europe Region Fund (the "Fund") opened on February 20, 1997. The
Fund had a total return of 19.0% from its inception to September 30, 1997 with
an ending NAV of $11.90. The Morgan Stanley Capital International (MSCI) Europe
Index (in U.S. dollars) appreciated 20.5% over the same period.
Performance was sluggish in the initial months. The largest country holdings in
this fund--Italy and Switzerland--exhibited unspectacular performance, and their
currencies depreciated against the U.S. Dollar. The ICON South Europe Region
Fund has not been hedged against U.S. Dollar movement. In a period where a
foreign currency exposure loses value against the U.S. Dollar, the ICON South
Europe Region Fund will also lose value commensurate with the Fund's holding of
that currency. The month of May proved to be the beginning of a rally for both
countries as market performance began to improve. Through August and September,
U.S. Dollar weakness also contributed to Fund appreciation.
Initially, the Fund was invested in the markets of Italy, Switzerland, France
and Austria. As the French market appreciated approximately 7.17% according to
the MSCI France index in U.S. Dollars through June 30, 1997, it was sold.
Valuations began to show that all of the other holdings were better bargains;
thus, they were increased at the expense of the French position. For the
remainder of the period, the same French index underperformed the other
positions in the Fund.
Country Highlights
As previously shown, the Italian market has been the Fund's best performer for
the three months ended September 30, 1997. This market has not seen double-digit
growth since 1993, and valuations show that the current rally has not yet led to
overvaluation. The Fund has seen broad optimism in Italy this year because it is
the country farthest away from fulfilling the European Monetary Union (EMU)
criteria, and the Italian government determination to join in the first round
forces economic austerity. Economic theory states that a government must follow
through with stated economic policy to maintain government credibility. The EMU
criteria forces economic discipline on the Italian economy if the public
believes the government's commitment to join in the first round. Joining the EMU
lends credibility to Italy's efforts to strengthen its fiscal condition.
The Austrian market has not seen an exceptional year since 1993 (as with Italy)
and the valuations indicate extremely undervalued securities. Consensus earnings
estimates for this market have increased 14.32% through September 1997, while
the market has appreciated 6.73% over the same period. Further, the EMU is also
having a positive effect on the Austrian market. However, the reasons differ as
the Austrian economy is expected to easily fulfill the first round criteria. The
Austrian economy is well integrated with the German economy but less so with the
remainder of Western Europe. The EMU benefits Austria in that it provides a
means by which the Austrian economy can become further integrated with the
countries of Western Europe. Austria also will gain financial support from this
union as it continues to aid in the growth of Eastern Europe.
The news in Switzerland is altogether different. Here, EMU is only an issue
insofar as it affects the economies with which Switzerland trades. The Swiss are
neutral; they will not join the EMU. Through 1995 and 1996, the Swiss market
performed exceptionally well, exhibiting over 20% growth in both years. However,
this market is still undervalued as consensus estimates for earnings and growth
rates continue to increase. Many of the larger stocks in Switzerland are large
drug companies. This sectoris one of the Fund Advisor's favored sectors in the
U.S. market at the moment, and as such, supports the Fund's positive value
ratings for the Swiss market as a whole.
The Current Outlook
The ICON South Europe Region Fund has been an exceptional performer this year
and valuations continue to show that this should continue. Consensus earnings
estimates in Italy, Austria and Switzerland have been steadily increasing.
Company fundamentals are improving, and interest rates remain low throughout
Europe. Switzerland is recovering from a six-year recession, and Gross Domestic
Product (GDP) is expected to grow in 1997 and 1998. Austrian inflation is
expected to remain under 2% for the next two years. Italian GDP is also
improving and Italian interest rates have been converging with low German rates.
Strict fiscal measures in Italy will dampen hopes for an improved employment
climate. Unemployment is currently 12.4%. However, this could suggest that
monetary policy will remain relatively loose in the form of lower interest
rates. Low interest rates motivate capital expenditure and investment which then
holds promise for greater company value. Consensus earnings estimates are
increasing as are estimates of long term growth rates. Therefore, as much as the
Italian market has appreciated this year, the reason to maintain the Fund's
investment in Italy remains. Valuations still show the market to be a bargain.
The same is true for Switzerland and Austria.
Portfolio Profile September 30, 1997
Equities 99.1%
Top 10 Equities (% of Net Assets) 46.5%
Number of Stocks 74
Cash & Cash Equivalents 1.3%
Top 10 Equity Holdings September 30, 1997
Ente Nazionale Idrocarburi 7.6%
Novartis 7.4%
Roche Holdings AG 5.8%
Telecom Italia SPA 5.7%
Assicurasioni Generali 5.0%
TIM Telecom Italia Mobile 4.6%
Nestle SA 3.7%
Fiat SPA 2.6%
Banco Ambrosiano Veneto SPA 2.1%
Zurich Versicherungs 2.0%
Top Countries September 30, 1997
Italy 54.7%
Switzerland 33.1%
Austria 11.3%
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.
[GRAPHIC OMITTED]
Schedule of Investments
September 30, 1997
Shares Market Value
Common Stocks 99.1%
Austria 11.3%
568 Austria Micro Systeme $ 40,076
3,710 Austrian Airlines 95,215
4,046 Bank Austria AG 196,934
564 Bau Holdings AG 36,890
698 Boehler-Uddeholm 58,683
826 Brau Union Goess Reininghaus 49,335
349 BWT AG 61,350
3,595 Creditanstalt 187,419
1,671 Die Erste Oesterreichiesche 90,207
612 EA Generali AG 166,027
1,027 EVN Energie Versorgung 125,672
1,315 Flughafen Wien AG 54,384
3,066 Girocredit Bank AG 75,234
565 Lenzing AG 33,410
897 Mayr Meknholf Karton AG 53,547
570 Oesterreichische Brau 31,183
1,302 Oesterreichische Elektriz 92,232
1,399 OMV AG 208,786
829 Radex Heraklith 34,415
95 Schindler Holding AG 118,401
1,806 Steyr Daimler Puch 56,375
761 VA Technologie AG 163,224
1,279 Versicherungsanstalt Der 35,397
1,889 Voest Alpine Stahl AG 91,489
776 Wienerberger Baustoffindustrie 161,884
595 Wolford AG 53,707
Total Austria 2,371,476
Italy 54.7%
30,698 Alleanza Assicurazioni 296,191
47,086 Assicurasioni Generali 1,064,152
95,076 Banca Commerciale Italiana 273,275
63,027 Banco Ambrosiano Veneto SPA 443,214
26,704 Banco Popolare Di Milano 156,295
13,098 Bennetton Group SPA 218,989
148,939 Credito Italiano 403,063
44,827 Edison SPA 241,325
255,389 Ente Nazionale Idrocarburi 1,608,714
155,687 Fiat SPA 555,747
592,486 Gemina SPA 217,678
227,263 Holding Di Particpazioni 124,980
195,669 Instituto Nazionale Delle
Assicurasionis 312,385
40,669 Instituto Bancario San
Paolo D'Torino 322,401
34,371 Instituto Mobiliare Italiano SPA 368,876
64,078 Italgas Societa 226,324
65,807 Mediaset SPA 339,398
25,483 Mediobanca-Banca Di Credito 199,357
37,718 Mondadori Editore SPA 231,960
271,267 Montedison SPA 198,068
277,687 Olivetti SPA 152,871
130,191 Parmalat Finanziaria SPA 223,316
64,664 Pirelli SPA 189,610
Shares Market Value
Common Stocks - continued
Italy - continued
33,344 Rinascente LA SPA $ 255,831
20,400 Riunione Adriartica Di
Sicurta SPA 181,935
24,496 Saipem SPA 147,630
25,256 Sirti SPA 158,431
121,515 Telecom Italia Mobile 253,501
181,916 Telecom Italia SPA 1,212,317
242,267 TIM Telecom Italia Mobile 961,683
Total Italy 11,539,517
Switzerland 33.1%
318 Adecco SA 128,096
240 Alusuisse-Lonza 235,493
2,545 Credit Suisse Group 344,352
765 Danzas Holding AG 163,559
177 Grands Magasins Jelmoli SA 142,597
240 Holderbank Glarus 228,056
565 Nestle SA 788,206
1,014 Novartis 1,557,022
138 Roche Holdings AG 1,225,804
151 Sairgroup 202,232
223 Sche Ruckversicherunds 334,898
1,206 Schweiserischer Bankverein 326,357
991 SMH Neuenburg 136,647
55 Soceite Generale Surveillance 96,384
223 Sulzer Gebuder AG 169,830
301 Union Bank of Switzerland 352,138
641 Valora Holdings AG 136,607
945 Zurich Versicherungs 411,897
Total Switzerland 6,980,175
Total Common Stocks
(Cost $17,618,159) 20,891,168
Money Market Fund Shares 0.6%
125,118 Vista U.S. Government
Money Market Fund
(Cost $125,118) 125,118
Total Investments 99.7%
(Cost $17,743,277) 21,016,286 Other Assets less liabilities 0.3% 71,461 NET
ASSETS 100% $ 21,087,747 The accompanying notes are an integral part of the
financial statements.
Summary of Investments by Industry
% of Investments
Bank Holding Companies 15.80%
Insurance Companies 13.40%
Telecommunications 11.50%
Miscellaneous Oil Gas & Coal 7.60%
Medical 7.40%
Ethical Drug Manufacturers 5.80%
Diversified Food 3.70%
Diversified Automotive Manufacturers 2.90%
Electronic Power & Gas Companies 2.10%
Land & Real Estate 1.70%
Broadcasting 1.60%
Other Financial Services 1.60%
Airlines 1.50%
Engineering & Contract Services 1.50%
Miscellaneous Companies 1.40%
Construction Materials 1.20%
Miscellaneous Retailers 1.20%
Aluminum Producers 1.10%
Cement Producers 1.10%
Dairy Products 1.10%
Natural Gas Holding Companies 1.10%
Newspaper Publishers 1.10%
Apparel Manufacturers 1.00%
Oil Refiners & Distributors 1.00%
Cash 0.90%
General Diversified 0.90%
Power Transmission Equipment 0.90%
Diversified Machinery 0.80%
Other Transportation 0.80%
Department Store Chains 0.70%
Diversified Electonics 0.70%
Steelmetal 0.70%
Human Resources 0.60%
Industrial Machinery 0.60%
Restaurants 0.60%
Commercial Services 0.50%
Brewers 0.30%
Miscellaneous Machinery & Equipment 0.30%
Packaging Products 0.30%
Service Organizations 0.30%
Textiles 0.30%
Electronic Materials 0.20%
Synthetic Fibers 0.20%
Total 100.00%
The accompanying notes are an integral part of the
financial statements.
<PAGE>
[GRAPHIC OMITTED]
<TABLE>
<S> <C> <C> <C> <C>
ICON FUNDS
statements of assets and liabilities
ICON Basic ICON Consumer ICON Financial ICON Healthcare
Materials Fund Cyclicals Fund Services Fund Fund
Assets
Investments at cost $ 47,244,625 $ 19,101,008 $ 30,573,421 $ 67,360,973
Investments at value 50,308,146 20,942,958 32,243,639 76,095,583
Foreign Currencies (Cost $80,649;
$102,967; $132,271, respectively) - - - -
Cash - - - 1,317,025
Receivables:
Fund shares sold 54,048 22,968 37,039 68,180
Interest 12,539 4,271 2,994 1,110
Dividends 1,600 8,484 43,339 24,005
Deferred organizational expenses 17,598 17,598 17,597 16,740
Total Assets 50,393,931 20,996,279 32,344,608 77,522,643
Liabilities:
Payables:
Due to Custodian bank 12,373 8,528 13,782 -
Investments purchased - - - -
Fund shares redeemed 7,090 47 1,670 3,785
Advisor & administrator for
organizational expenses 18,415 18,415 18,415 18,910
Advisory fee 37,583 16,982 26,033 62,501
Fund accounting, custodial and
transfer agent fees 2,529 1,484 2,564 7,412
Administration fee 1,831 829 1,302 3,048
Accrued Expenses 63,453 34,190 43,797 120,141
Total Liabilities 143,274 80,475 107,563 215,797
Net Assets $ 50,250,657 $ 20,915,804 $ 32,237,045 $ 77,306,846
Shares Outstanding (unlimited
shares authorized, no par value) 4,609,245 1,908,706 3,068,595 6,564,580
Net Asset Value (Offering price
and redemption price per share) $10.90 $10.96 $10.51 $11.78
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
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 Fund Region Fund Region Fund Region Fund
$ 60,929,769 $ 34,937,661 $ 19,333,241 $ 18,833,113 $ 80,680,752 $ 60,194,451 $ 46,170,366 $ 17,743,277
66,615,557 41,917,883 20,421,498 22,556,048 80,839,914 58,113,814 50,044,478
21,016,286
- - - - - 74,813 100,786 130,550
- - - - - 130,133 36,515 22,556
77,548 39,620 22,788 22,504 112,429 48,282 32,652 12,205
3,829 680 2,518 733 828,829 - - -
70,776 6,536 37,368 15,225 - 142,892 75,704 28,246
17,598 16,740 17,598 17,598 16,740 16,740 16,740 16,740
66,785,308 41,981,459 20,501,770 22,612,108 81,797,912 58,526,674 50,306,875 21,226,583
30,157 13,971 8,348 8,069 45,392 - 148,999 -
- - - - - - 45,854
3,351 2,111 461 1,346 - 31,555 30,218 12,047
18,415 18,960 18,415 18,415 19,060 18,899 18,970 18,950
53,219 34,486 16,363 17,935 45,764 47,321 39,434 16,555
4,151 5,320 1,489 1,942 11,319 69,337 56,721 22,415
2,600 1,680 800 875 3,434 2,230 1,920 809
65,084 56,410 33,802 32,221 291,011 78,511 63,948 22,206
176,977 132,938 79,678 80,803 415,980 247,853 360,210 138,836
$ 66,608,331 $ 41,848,521 $ 20,422,092 $ 22,531,305 $ 81,381,932 $ 58,278,821 $ 49,946,665 $ 21,087,747
5,869,165 3,228,855 1,922,146 1,817,747 8,116,923 5,863,516 4,516,663 1,771,750
$11.35 $12.96 $10.63 $12.40 $10.03 $9.94 $11.06 $11.90
<FN>
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 receivable (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.
</FN>
</TABLE>
<TABLE>
statements of operations
For the fiscal period ended September 30, 1997
<S> <C> <C> <C> <C>
1
ICON Basic ICON Consumer ICON Financial ICON Healthcare
Materials FundaCyclicals Fundb Services Fundc Fundd
Investment Income:
Interest $ 54,847 $ 22,765 $ 30,624 $ 76,008
Dividends 166,324 33,258 103,067 155,767
Foreign taxes withheld
221,171 56,023 133,691 231,775
Expenses:
Advisory fees 182,197 45,054 72,579 351,884
Fund accounting, custodial and
transfer agent fees 23,231 5,744 9,254 44,866
Administration fees 9,062 2,233 3,600 17,517
Audit fees 9,236 4,080 6,117 12,143
Registration fees 29,742 20,409 24,314 36,261
Legal fees 2,323 1,026 1,539 3,055
Insurance expense 2,012 889 1,333 2,646
Amortization of deferred
organizational expenses 817 817 817 2,169
Trustees fees & expenses 730 322 483 960
Shareholder reports 4,935 4,935 4,935 7,015
Other expenses 718 - - 35,596
Total Expenses 265,003 85,509 124,971 514,112
Net Investment income/(loss) (43,832) (29,486) 8,720 (282,337)
Net Realized and Unrealized Gain/(Loss)
on investments:
Net realized gain/(loss) from
investment transactions 953,349 - - 3,110,315
Net realized gain/(loss) from foreign
currency transactions - - - -
Unrealized gain/(loss) from foreign
currency translations - - - -
Change in net unrealized appreciation or
depreciation of investments 3,063,521 1,841,950 1,670,218 8,734,610
Net Realized and Unrealized Gain/(loss)
on investments: 4,016,870 1,841,950 1,670,218 11,844,925
Net increase(decrease) in net assets
resulting from operations $ 3,973,038 $ 1,812,464 $ 1,678,938 $ 11,562,588
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ICON Leisure ICON Technology ICON Telecomm & ICON Transpor- ICON Short-Term ICON Asia ICON N. Europe ICON S. Europe
Funde Fundf Utilities Fundg tation Fundh Fixed Income Fundi Region Fundj Region Fundk Region Fundl
$ 51,714 $ 77,054 $ 18,295 $ 27,506 $ 4,739,455 $ 12,084 $ 15,858 $ 5,953
146,991 29,726 136,223 91,749 - 423,694 734,462 363,734
(54,692) (86,721) (45,238)
198,705 106,780 154,518 119,255 4,739,455 381,086 663,599 324,449
176,283 180,491 43,602 76,320 533,769 265,135 220,106 89,704
22,463 23,013 5,559 9,731 104,700 74,238 61,630 25,117
8,749 8,980 2,162 3,816 40,973 13,190 10,953 4,466
9,327 6,109 3,947 3,994 26,456 9,275 7,432 3,090
34,163 24,968 20,416 20,158 43,813 35,253 29,204 19,758
2,346 1,537 993 1,005 6,655 2,333 1,870 777
2,032 1,331 860 870 5,764 2,021 1,619 673
817 2,220 817 817 2,321 2,159 2,230 2,210
737 483 312 316 2,091 733 587 244
4,935 7,015 4,935 4,935 9,437 4,983 4,983 4,983
- 9,445 - - 131,202 32,032 26,441 868
261,852 265,592 83,603 121,962 907,181 441,352 367,055 151,890
(63,147) (158,812) 70,915 (2,707) 3,832,274 (60,266) 296,544 172,559
174,394 2,302,870 43,406 475,866 348,599 3,905 139,116 (2,426)
- - - - - 5,182 (105,148) 5,843
- - - - - (7,702) (3,161) (1,965)
5,685,788 6,980,222 1,088,257 3,722,935 159,162 (2,080,637) 3,874,112 3,273,009
5,860,182 9,283,092 1,131,663 4,198,801 507,761 (2,079,252) 3,904,919 3,274,461
$ 5,797,035 $ 9,124,280 $ 1,202,578 $ 4,196,094 $ 4,340,035 $ (2,139,518) $ 4,201,463 $3,447,020
<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
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
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.
statements of changes in net assets
</FN>
</TABLE>
<TABLE>
For the fiscal period ended September 30, 1997
<S> <C> <C> <C> <C>
ICON Basic ICON Consumer ICON Financial ICON Healthcare
Materials Funda Cyclicals Fundb Services Fundc Fundd
Operations:
Net investment income/(loss) $ (43,832) $ (29,486) $ 8,720 $ (282,337)
Net realized gain/(loss) from
investment transactions 953,349 - - 3,110,315
Net realized gain/(loss) from
foreign currency transactions - - - -
Unrealized gain/(loss) from foreign
currency translations - - - -
Change in unrealized net appreciation/
(depreciation) of investments 3,063,521 1,841,950 1,670,218 8,734,610
Net increase/(decrease) in net assets
resulting from operations 3,973,038 1,812,464 1,678,938 11,562,588
Dividends and Distributions to Shareholders from:
Net investment income - - - -
Net decrease from dividends and distributions - - - -
Fund Share Transactions:
Shares sold 53,268,925 19,949,294 31,979,831 83,783,679
Reinvested dividends and distributions - - - -
Shares repurchased (6,991,306) (845,954) (1,421,724) (18,039,421)
Net increase from fund share transactions 46,277,619 19,103,340 30,558,107 65,744,258
Total Net increase in Net Assets 50,250,657 20,915,804 32,237,045 77,306,846
Net Assets:
Beginning of Period - - - -
End of Period $ 50,250,657 $ 20,915,804 $ 32,237,045 $ 77,306,846
Net Assets consist of:
Paid in capital $ 46,277,619 $ 19,073,854 $ 30,558,107 $ 65,744,258
Accumulated undistributed net
investment income/(loss) 0 0 8,720 0
Accumulated undistributed net realized
gain/(loss) from investments 909,517 - - 2,827,978
Accumulated net realized gain/(loss)
from foreign currency transactions - - - -
Unrealized gain/(loss) from foreign
currency translations - - - -
Unrealized appreciation/(depreciation)
of investments 3,063,521 1,841,950 1,670,218 8,734,610
Net Assets $ 50,250,657 $ 20,915,804 $ 32,237,045 $ 77,306,846
Transactions in Fund Shares:
Shares sold 5,335,071 1,988,381 3,207,358 8,224,065
Reinvested dividends and distributions - - - -
Shares repurchased (725,826) (79,675) (138,763) (1,659,485)
Net increase/(decrease) 4,609,245 1,908,706 3,068,595 6,564,580
Shares outstanding beginning of period - - - -
Shares outstanding end of period 4,609,245 1,908,706 3,068,595 6,564,580
Purchases and Sales of Investment Securities:
(excluding Short-Term Securities)
Purchase of securities $ 56,209,755 $ 18,387,007 $ 30,280,032 $ 103,462,081
Proceeds from sales of securities 14,538,600 - - 40,116,738
Purchases of long-term
U.S. government securities - - - -
Proceeds from sales of long-term
U.S. government securities - - - -
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ICON Leisure ICON Technology ICON Telecomm & ICON Transpor- ICON Short-Term ICON Asia ICON N. Europe ICON S. Europe
Funde FundF Utilities Fundg tation FundhFixed Income Fundi Region Fundj Region Fundk Region Fundl
$ (63,147) $ (158,812) $ 70,915 $ (2,707) $ 3,832,274 $ (60,266) $ 296,544 $ 172,559
174,394 2,302,870 43,406 475,866 348,599 3,905 139,116 (2,426)
- - - - - 5,182 (105,148) 5,843
- - - - - (7,702) (3,161) (1,965)
5,685,788 6,980,222 1,088,257 3,722,935 159,162 (2,080,637) 3,874,112
3,273,009
5,797,035 9,124,280 1,202,578 4,196,094 4,340,035 (2,139,518) 4,201,463
3,447,020
- - - - (3,832,274) - - -
- - - - (3,832,274) - - -
64,256,980 39,084,848 19,991,740 19,745,008 421,179,461 64,894,833
50,603,747 20,262,386
- - - - 3,832,274 - - -
(3,445,684) (6,360,607) (772,226) (1,409,797) (344,137,564) (4,476,494) (4,858,545)
(2,621,659)
60,811,296 32,724,241 19,219,514 18,335,211 80,874,171 60,418,339
45,745,202 17,640,727
66,608,331 41,848,521 20,442,092 22,531,305 81,381,932 58,278,821 49,946,665 21,087,747
- - - - - - - -
$ 66,608,331 $ 41,848,521 $ 20,442,092 $ 22,531,305 $ 81,381,932 $ 58,278,821 $ 49,946,665 $ 21,087,747
$ 60,811,296 $ 32,724,241 $ 19,219,514 $ 18,335,211 $ 80,874,171 $ 60,367,161 $ 45,745,202 $ 17,640,727
0 0 70,915 (2,707) - 0 188,849 188,199
111,247 2,144,058 43,406 475,866 348,599 (5,183) 246,811 (18,066)
- - - - - 5,182 (105,148) 5,843
- - - - - (7,702) (3,161) (1,965)
5,685,788 6,980,222 1,088,257 3,722,935 159,162 (2,080,637) 3,874,112
3,273,009
$ 66,608,331 $ 41,848,521 $ 20,422,092 $ 22,531,305 $ 81,381,932 $ 58,278,821
49,946,665 $ 21,087,747
6,189,450 3,786,744 1,997,744 1,943,015 42,129,480 6,291,111 4,976,379 2,017,133
- - - - 382,921 - - -
(320,285) (557,889) (75,598) (125,268) (34,395,478) (427,595) (459,716) (245,383)
5,869,165 3,228,855 1,922,146 1,817,747 8,116,923 5,863,516 4,516,663 1,771,750
- - - - - - - -
5,869,165 3,228,855 1,922,146 1,817,747 8,116,923 5,863,516 4,516,663 1,771,750
$ 60,548,827 43,501,845 $ 18,788,936 $ 21,171,745 - $ 57,365,313 $ 48,595,889
20,714,592
1,177,134 12,029,143 476,790 3,018,727 - - 4,951,697 1,124,737
- - - - $ 145,207,871 - - -
- - - - 130,393,164 - - -
<FN>
The accompanying notes are an integral part of the financial statements
a-l legend are at the bottom of page 54.
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.
</FN>
</TABLE>
financial highlights
<TABLE>
For a share outstanding through the period ended September 30, 1997
<S> <C> <C> <C> <C>
ICON Basic ICON Consumer ICON FinancialICON Healthcare
Materials FundaCyclicals Fundb Services FundcFundd
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from investment operations
Net investment income (0.01) (0.01) 0.01 (0.04)
Net gains or (losses ) on securities
(both realized and unrealized) 0.91 0.97 0.50 1.82
Total from investment operations 0.90 0.96 0.51 1.78
Less dividends and distributions
Dividends (from net investment income) - - - -
Total distributions - - - -
Net asset value, end of period $ 10.90 $ 10.96 $ 10.51 $ 11.78
Total Return 9.00% 9.60% 5.10% 17.80%
Net assets, end of period (in thousands) $ 50,251 $ 20,916 $ 32,237 $ 77,307
Average net assets for the period
(in thousands) $ 45,001 $ 19,876 $ 29,803 $ 59,164
Ratio of expenses to average net assets* 1.45% 1.89% 1.70% 1.45%
Ratio of net investment income to
average net assets* (0.24)% (0.67)% 0.12% (0.80%)
Portfolio turnover rate 32.35% 0.00% 0.00% 71.81%
Average commission rate per share $ 0.0505 $ 0.0308 $ 0.0418 $ 0.0490
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ICON Leisure ICON TechnologyICON Telecomm & ICON Transpor- ICON Short-Term ICON Asia ICON N. Europe ICON S. Europe
Funde Fundf Utilities Fundg tation Fundh Fixed Income Fundi Region Fundj Region Fundk Region Fundl
$ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
(0.01) (0.05) 0.06 0.00 0.47 (0.01) 0.07 0.10
1.36 3.01 0.57 2.40 0.03 (0.05) 0.99 1.80
1.35 2.96 0.63 2.40 0.50 (0.06) 1.06 1.90
- - - - (0.47) - - -
- - - - (0.47) - - -
$ 11.35 $ 12.96 $ 10.63 $ 12.40 $ 10.03 $ 9.94 $ 11.06 $ 11.90
13.50% 29.60% 6.30% 24.00% 3.18% (0.60%) $ 10.60% $ 19.00%
$ 66,608 $ 41,849 $ 20,422 $ 22,531 $ 81,382 $ 58,279 $ 49,947 $ 21,088
$ 45,444 $ 29,766 $ 19,230 $ 19,459 $ 128,897 $ 45,191 $ 36,212 $ 15,055
1.48% 1.47% 1.91% 1.61% 1.10% 1.66% 1.66% 1.69%
(0.36%) (0.88%) 1.62% (0.04%) 4.66% (0.23%) 1.34% 1.92%
2.52% 44.57% 2.55% 15.97% 297.62% 0.00% 13.89% 7.29%
$ 0.0457 $ 0.0489 $ 0.0313 $ 0.0489 $ 0.000 $ 0.0109 $ 0.1169 $ 0.0109
<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
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
* Annualized
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>
notes to financial statements
September 30, 1997
1. Organization and Significant Accounting Policies.
The ICON Basic Materials Fund (Basic Materials Fund), ICON Consumer Cyclicals
Fund (Consumer Cyclicals), 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.
Equity securities for which quotations are readily available are valued at the
last sale price, or if no sale price, at the closing bid price. Debt securities
for which quotations are readily available are valued by a pricing service at
their market values as determined by their most recent bid prices in the
principal market (the principal market is an exchange in which such securities
are normally traded). Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value as
determined in good faith under consistently applied procedures under the general
supervision of the Board of 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.
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. For the
year ended September 30, 1997, the effects of such differences are shown on the
next page under the statement ICON Funds, ROCSOP Disclosure.
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) and AmeriPrime Financial
Services, Inc. (AmeriPrime) paid all organizational expenses on behalf of the
Funds. These costs will be reimbursed and are being amortized over five years.
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 Funds'
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 will pay 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 0.12% 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
September 30, 1997, are as follows:
<TABLE>
<S> <C> <C> <C> <C>
Fund Federal Tax Cost Unrealized Unrealized Net Appreciation
Appreciation (Depreciation) (Depreciation)
ICON Basic Materials Fund $ 47,244,957 $ 3,613,270 ($550,082) $ 3,063,189
ICON Consumer Cyclicals Fund $ 19,101,008 $ 2,344,137 ($502,187) $ 1,841,950
ICON Financial Services Fund $ 30,573,421 $ 2,346,415 ($676,197) $ 1,670,218
ICON Healthcare Fund $ 67,699,846 $ 10,155,082 ($1,758,345) $ 8,395,737
ICON Leisure Fund $ 60,929,769 $ 7,290,494 ($1,604,703) $ 5,685,791
ICON Technology Fund $ 34,937,661 $ 8,158,461 ($1,178,245) $ 6,980,222
ICON Telecommunication and
Utilities Fund $ 19,333,241 $ 1,322,451 ($234,194) $ 1,008,257
ICON Transportation Fund $ 18,833,113 $ 3,896,743 ($173,808) $ 3,722,935
ICON Short-Term
Fixed Income Fund $ 80,680,752 $ 159,162 $ 0 $ 159,162
ICON Asia Region Fund $ 60,200,287 $ 4,139,593 ($6,226,066) $ (2,086,473)
ICON North Europe Region Fund $ 46,274,311 $ 4,913,068 ($1,115,901) $ 3,797,167
ICON South Europe Region Fund $ 18,057,182 $ 3,163,021 ($203,917) $ 2,959,104
</TABLE>
4. Cost and Value of Foreign Currency Positions.
The table below summarizes the International Fund's investments in foreign
currencies:
<TABLE>
<S> <C> <C>
ICON Asia Region Fund Cost Value
Japanese Yen $ 38,275 $ 36,283
Malaysian Ringgit 9,744 7,768
Singapore Dollars 32,630 30,762
Total $ 80,649 $ 74,813
ICON North Europe Region Fund Cost Value
Deutsche Marks $ 102,967 $ 100,786
ICON South Europe Region Fund Cost Value
Austrian Schilling $ 17,459 $ 17,154
French Francs 3,539 3,523
Italian Lira 111,273 109,873
Total $ 132,271 $ 130,550
</TABLE>
<TABLE>
<S> <C> <C> <C>
ICON Funds, ROCSOP Disclosure
Fund Accumulated Accumulated
Undistributed Undistributed Net
Net Investment Realized Gain on Paid-in
Income Investment Securities Capital
Basic Materials $ 43,832 $ (43,832) $ -
Consumer Cyclicals 29,486 - (29,486)
Healthcare 282,337 (282,337) -
Leisure 63,148 (63,148) -
Technology 158,812 (158,812) -
South Europe 15,640 (15,640) -
Asia 60,266 (9,088) (51,178)
North Europe (107,695) 107,695 -
</TABLE>
report of independent accountants
To the Shareholders & Board of Trustees of ICON Funds
To the Shareholders & Board of Trustees of Icon Funds
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the portfolios constituting
ICON Funds (the "Funds") at September 30, 1997, the results of each of their
operations for each of the periods indicated, the changes in each of their net
assets for each of the periods indicated and the financial highlights for each
of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1997 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where securities purchased had not been received, provide a reasonable basis for
the opinion expressed above.
Price Waterhouse LLP
[GRAPHIC OMITTED]
Denver, Colorado
November 18, 1997
