The Marsico Investment Fund
Semi-Annual Report
April l4, 1998
Dear Fellow Shareholders:
You may be wondering why a semi-annual report for the Marsico Funds has reached
your mailbox even though the Funds only began operations on December 31, 1997.
With a September 30 fiscal year end, our semi-annual reports will always cover
the six month period ending March 31. Obviously, we don't yet have six months
worth of operating data, but we are extremely pleased with the performance we
have demonstrated for the period ended March 31, 1998.
The stock market was strong during the first quarter of 1998 with the Dow moving
up almost 900 points. The S&P 500 increased 13.9% during the quarter. The
Marsico Funds significantly outperformed the S&P 500 for the quarter, posting
unannualized gains of 23.1% in the Focus Fund and 19.6% in the Growth & Income
Fund. Of course, prior performance is not an indication of future results.* The
weighted average market capitalization of the stocks held in the portfolios
during the quarter was in the range of $50 to $60 billion.
* Investment return and principal value of an investment in Marsico Funds will
fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost.
Our top down-bottom up stock selection methodology was successful during the
quarter. My team and I look at global political, social and economic trends to
discover investment themes. From those themes, we target industries that can
benefit from the trends we see occurring in the world. We then analyze companies
in the selected industries to find those with strong fundamentals, consistent
predictable earnings and strong management.
We like to consider ourselves information magnets. We talk frequently with our
contacts worldwide--discussing matters ranging from the Asian crisis to the
manner by which a seed can be genetically engineered. My team and I continue to
have access to chief executive officers and chief financial officers of the
various companies in which we invest or are thinking of investing. We prefer
meeting at their offices so that we can get a feel for the dynamics of the
company--from the factory floor to the executive suites.
As we examine global trends, we see the spread of capitalism in developing
countries and an even greater capitalistic spirit in more mature countries where
government run industries are becoming privatized. The decline in deficit
spending worldwide has helped interest rates stay low. Oil prices have fallen
dramatically. Although there are tight labor conditions in the unskilled market,
we do not believe this will increase inflationary pressure, as salary increases
are being offset with lower commodity prices and greater productivity.
In creating the portfolios during the first quarter of 1998, we looked for core
holdings in companies that could take advantage of a lower interest rate
environment, and which we believe demonstrate strong management and consistent
predictable earnings growth. The pharmaceutical and financial service industries
fit our criteria during the quarter. Over 14% of the Focus Fund and over 9% of
the Growth & Income Fund were invested in the pharmaceutical industry. Our
holdings in the Focus Fund and the Growth & Income Fund in some facet of the
financial services industry (from money center banks to investment banking
companies) were over 11% and 19%, respectively.
An example of our work in the pharmaceutical industry is our investment in
Warner-Lambert. In January, Warner-Lambert announced that Resulin its drug to
combat kidney disease had caused an increase in liver enzymes and had been
pulled from the shelves in Europe. As a result, Wall Street analysts issued
sells on the stock and Warner-Lambert's market capitalization dropped by over $8
billion. We were intrigued by these developments and thought it was important to
explore the implications for investing in Warner-Lambert further. As a result,
we contacted dialysis centers, kidney doctors, patients and others. We found
that Resulin had improved the quality of life of those suffering from kidney
disease and that the U.S. medical community was aware of the possibility of
increased liver enzymes and was monitoring patients carefully. After our
in-depth research, we bought the stock in this down cycle and within weeks it
had appreciated considerably.
I have personally followed the financial services industry for over 18 years.
Our investment in Merrill Lynch continues to be solid. Merrill Lynch is growing
its global franchise with its acquisition of Mercury Asset Management in England
and the brokerage offices of Yamaichi Securities in Japan. Merrill Lynch may be
poised to take advantage of the European Union and the Big Bang in Japan as the
financial markets there become deregulated.
The more aggressive portion of the portfolios benefited from stocks such as Dell
Computer. Our in-depth knowledge of Dell has made us a believer in their finely
tuned distribution systems and in their cash management abilities. Dell's
inventory system not only significantly reduces inventory costs but also the
probability of inventory obsolescence in the rapidly changing technology arena.
All in all we are very pleased with the portfolios we have developed. The gain
in each portfolio was spread among virtually all the investments, not just a
select few.
Winston Churchill once said, In an absorbing vocation, working hours are never
long enough. Each day is a holiday, and ordinary holidays are grudged as
enforced interruptions. Investing is my passion--there is nothing I would rather
be doing. I, and my team, are all investors in the Marsico Funds with you. We
understand that performance is critical to our success and yours.
We hope to continue the trend we began this quarter with performance
significantly outpacing the S&P 500. We thank you for investing with us and hope
that you will keep the Marsico Funds as a core holding in your portfolios.
Very truly yours,
Thomas F. Marsico
President
[Depicted alongside this letter is a three-column bar chart, and accompanying
disclosure, illustrating total returns for the quarter ended 3/31/98 for the
Marsico Focus Fund, the Marsico Growth & Income Fund, and the S&P 500 Composite
Index. The disclosure accompanying this chart states: Returns shown are based
on net change in NAV and are unannualized. Performance figures reflect fee
waivers in effect and represent past performance which is no guarantee of future
results. The S&P Composite is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The returns for this
index do not reflect any fees or expenses. It is not possible to make a direct
investment in an Index.]
<PAGE>
MARSICO FOCUS FUND
Schedule of Investments
March 31, 1998
(Unaudited)
Number of Shares Value
COMMON STOCKS 94.80%
Agricultural Operations 4.24%
121,668 Delta & Pine Land Company $ 6,326,736
Applications Software 3.92%
111,000 PeopleSoft, Inc. * 5,848,313
Automotive - Cars & Light
Trucks 18.79%
213,787 Ford Motor Company 13,856,070
180,000 Ford Motor Company (when issued) 7,931,250
7,975 Volkswagen AG 6,243,573
28,030,893
Beverages - Non-Alcoholic 4.00%
162,649 Coca-Cola Enterprises Inc. 5,967,185
Building - Residential/
Commercial 0.92%
77,348 M.D.C. Holdings, Inc. 1,372,927
Chemicals - Diversified 3.59%
103,026 Monsanto Company 5,357,352
Computer Software 3.05%
50,910 Microsoft Corporation * 4,556,445
Computers - Micro 8.03%
176,776 Dell Computer Corporation * 11,976,574
Diversified Manufacturing
Operations 2.44%
42,247 General Electric Company 3,641,163
Finance - Consumer Loans 2.26%
77,190 SLM Holding Corporation 3,367,414
Finance - Investment
Bankers/Brokers 4.32%
77,680 Merrill Lynch & Company, Inc. $ 6,447,440
Hotels & Motels 1.91%
83,576 Four Seasons Hotels, Inc. 2,852,031
Machinery - Construction &
Mining 3.13%
84,929 Caterpillar Inc. 4,676,403
Medical - Drugs 14.21%
110,943 Pfizer Inc. 11,059,630
20,414 Schering-Plough Corporation 1,667,569
49,750 Warner-Lambert Company 8,473,047
21,200,246
Money Center Banks 5.35%
56,207 Citicorp 7,981,394
Multimedia 4.20%
86,920 Time Warner Inc. 6,258,240
<PAGE>
MARISCO FOCUS FUND
Schedule of Investments (continued)
March 31, 1998
(Unaudited)
Number of Shares Value
Retail - Building Products 0.53%
11,649 The Home Depot, Inc. 785,579
Retail - Discount 2.44%
71,695 Wal-Mart Stores, Inc. 3,643,002
Telecommunication Equipment 7.47%
40,447 Lucent Technologies Inc. 5,172,160
92,467 Northern Telecom Ltd. 5,975,680
11,147,840
Total Common Stocks
(cost $127,099,067) 141,437,177
RIGHTS 0.10%
7,975 Volkswagen AG, expiring 4/7/98 * $ 144,878
Total Rights (cost $0) 144,878
Principal
Amount
U.S. GOVERNMENT AGENCIES 3.22%
$4,800,000 Federal Home Loan Bank, 5.65%, 4/1/98 4,800,000
Total U.S. Government Agencies
(cost $4,800,000) 4,800,000
U.S. TREASURY BILLS 5.46%
8,150,000 4/9/98 8,140,637
Total U.S. Treasury Bills
(cost $8,140,637) 8,140,637
Number of
Shares
SHORT-TERM INVESTMENTS 1.76%
2,624,531 SSgA Money Market Fund 2,624,531
Total Short-Term Investments
(cost $2,624,531) 2,624,531
Total Investments
(cost $142,664,235) 105.34% 157,147,223
Liabilities less Other Assets (5.34)% (7,962,411)
NET ASSETS 100.00% $149,184,812
MARSICO FOCUS FUND
Schedule of Investments (continued)
March 31, 1998
(Unaudited)
Forward Currency Contracts
Open at March 31, 1998
Currency Sold Currency Currency Unrealized
and Settlement Date Units Sold Value in $US Gain/(Loss)
German Deutschemark 894,273 $483,203 $9,781
4/8/98
Currency Purchased Currency Currency
and Units Value in Unrealized
Settlement Date Purchased $US Gain/(Loss)
German Deutschemark 894,273 483,203 (11,155)
4/8/98
Total $(1,374)
* Non-income producing
See notes to financial statements.
<PAGE>
MARSICO GROWTH & INCOME FUND
Schedule of Investments
March 31, 1998
(Unaudited)
Number of Shares Value
COMMON STOCKS 92.07%
Aerospace and Defense 1.46%
19,718 AlliedSignal Inc. $ 828,156
Aerospace and Defense -
Equipment 2.04%
5,025 Lockheed Martin Corporation 565,313
6,375 United Technologies Corporation 588,492
1,153,805
Agricultural Operations 3.34%
36,340 Delta & Pine Land Company 1,889,680
Airlines 2.65%
50,725 Southwest Airlines Company 1,499,558
Apparel Manufacturers 0.94%
17,675 Polo Ralph Lauren Corporation * 531,355
Applications Software 1.85%
19,825 PeopleSoft, Inc. * 1,044,530
Automotive - Cars & Light
Trucks 8.19%
37,703 Ford Motor Company 2,443,626
2,800 Volkswagen AG 2,192,101
4,635,727
Beverages - Non-Alcoholic 2.27%
35,058 Coca-Cola Enterprises Inc. 1,286,190
Building - Residential/
Commercial 0.90%
28,840 M.D.C. Holdings, Inc. 511,910
Chemicals - Diversified 2.46%
26,784 Monsanto Company 1,392,768
Commercial Banks - Western U.S. 0.56%
6,000 Zions Bancorp $ 315,750
Computer Software 2.60%
16,417 Microsoft Corporation * 1,469,321
Computers - Micro 4.54%
37,932 Dell Computer Corporation * 2,569,893
Direct Marketing 1.11%
29,513 PC Connection, Inc. * 627,151
Diversified Manufacturing
Operations 2.58%
16,950 General Electric Company 1,460,878
Diversified Operations 1.48%
10,851 Textron, Inc. 835,527
Finance - Consumer Loans 1.95%
25,291 SLM Holding Corporation 1,103,320
Finance - Investment
Bankers/Brokers 3.57%
24,345 Merrill Lynch & Company, Inc. 2,020,635
Finance - Mortgage Loan Banker 3.09%
27,600 Fannie Mae 1,745,700
Finance - Other Services 3.16%
35,760 Newcourt Credit Group Inc. 1,788,000
Hotels & Motels 1.20%
19,844 Four Seasons Hotels, Inc. 677,177
Machinery -Construction &
Mining 2.11%
21,728 Caterpillar 1,196,398
<PAGE>
MARSICO GROWTH & INCOME FUND
Schedule of Investments (continued)
March 31, 1998
(Unaudited)
Number of Shares Value
Medical - Drugs 9.29%
21,834 Pfizer Inc. $ 2,176,577
14,117 Schering-Plough Corporation 1,153,182
11,313 Warner-Lambert Company 1,926,745
5,256,504
Money Center Banks 3.46%
13,772 Citicorp 1,955,624
Multimedia 2.19%
17,225 Time Warner Inc. 1,240,200
Networking Products 1.66%
13,700 Cisco Systems, Inc. * 936,737
Office Furnishings - Original 2.12%
32,925 Steelcase Inc., Class A* 1,201,762
Rental - Auto & Equipment 1.99%
24,432 The Hertz Corp. 1,123,872
Resorts & Theme Parks 4.61%
45,000 Premier Parks, Inc. * 2,610,000
Retail - Building Products 1.44%
12,089 The Home Depot, Inc. 815,252
Retail - Discount 1.49%
16,619 Wal-Mart Stores, Inc. 844,453
Retail - Drug Stores 0.29%
4,729 Rite Aid Corporation 161,968
Savings/Loan/Thrifts -
Eastern U.S. 0.38%
10,400 Staten Island Bancorp, Inc. * 213,200
Super-Regional Banks 2.76%
4,720 Wells Fargo & Company $1,563,500
Telecommunication Equipment 6.34%
16,772 Lucent Technologies Inc. 2,144,720
22,280 Northern Telecom Ltd. 1,439,845
3,584,565
Total Common Stocks(cost $47,031,258) 52,091,066
RIGHTS 0.09%
2,800 Volkswagen AG, expiring 4/7/98 * 50,867
Total Rights (cost $0) 50,867
Principal
Amount
CORPORATE BONDS 0.54%
Building - Residential/
Commercial 0.54%
$ 300,000 M.D.C. Holdings, Inc., 8.375%, 2/1/08 303,750
Total Corporate Bonds (cost $298,794) 303,750
U.S. GOVERNMENT AGENCIES 8.84%
5,000,000 Federal Home Loan Bank, 5.65%, 4/1/98 5,000,000
Total U.S. Government Agencies
(cost $5,000,000) 5,000,000
Number of
Shares
SHORT-TERM INVESTMENTS 2.19%
1,236,179 SSgA Money Market Fund 1,236,179
Total Short-Term Investments
(cost $1,236,179) 1,236,179
<PAGE>
MARSICO GROWTH & INCOME FUND
Schedule of Investments (continued)
March 31, 1998
(Unaudited)
Number of Value
Shares
Total Investments
(cost $53,566,231) 103.73% $ 58,681,862
Liabilities less Other Assets (3.73)% (2,110,249)
NET ASSETS 100.00% $ 56,571,613
* Non-income producing
See notes to financial statements.
THE MARSICO INVESTMENT FUND
Statements of Assets and Liabilities
March 31, 1998
(Unaudited)
Growth &
Focus Income
Fund Fund
ASSETS:
Investments, at value
(cost $142,664,235 and $53,566,231,
respectively) $157,147,223 $58,681,862
Interest and dividends receivable 71,244 38,901
Receivable for investments sold - 252,000
Organizational expenses, net of
accumulated amortization 102,201 102,201
Prepaid expenses and other assets 29,494 22,717
Total Assets 157,350,162 59,097,681
LIABILITIES:
Payable for investments purchased 8,008,290 2,430,000
Accrued investment advisory fee 35,902 1,531
Accrued distribution fee 28,907 8,697
Forward currency contracts 1,374 -
Accrued expenses and other liabilities 90,877 85,840
Total Liabilities 8,165,350 2,526,068
NET ASSETS $149,184,812 $56,571,613
NET ASSETS CONSIST OF:
Capital stock $ 10,078 $ 4,732
Paid-in capital 133,911,925 51,388,890
Undistributed net investment income 4,831 21,349
Accumulated net realized
gain on investments
and foreign currency transactions 776,364 41,011
Net unrealized appreciation
on investments and
foreign currency translations 14,481,614 5,115,631
Net Assets $149,184,812 $56,571,613
Shares Outstanding, $0.001 par value
(unlimited shares authorized) 12,116,938 4,731,711
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING) $12.31 $11.96
See notes to financial statements.
THE MARSICO INVESTMENT FUND
Statements of Operations
Three Months Ended March 31, 1998
(Unaudited)
Growth &
Focus Income
Fund Fund
INVESTMENT INCOME:
Interest $ 144,752 $ 67,909
Dividends (net of $3,223 and $0
of foreign withholding taxes) 97,100 39,155
Total Investment Income 241,852 107,064
<PAGE>
THE MARSICO INVESTMENT FUND
Statements of Operations
Three Months Ended March 31, 1998
(Unaudited)
Growth &
Focus Income
Fund Fund
EXPENSES:
Investment advisory fees 126,103 49,931
Transfer agent fees and expenses 50,086 48,301
Distribution fees 37,089 14,686
Printing and postage expenses 24,041 11,698
Federal and state registration fees 23,555 21,718
Fund administration fees 19,626 15,411
Custody and fund accounting fees 17,407 17,938
Professional fees 11,342 11,342
Trustees' fees and expenses 8,840 8,840
Amortization of organizational costs 5,624 5,624
Miscellaneous 3,944 3,824
Total expenses before waiver 327,657 209,313
Less reimbursement of expenses (90,201) (121,202)
Net Expenses 237,456 88,111
NET INVESTMENT INCOME 4,396 18,953
REALIZED AND UNREALIZED GAIN:
Net realized gain on investments
and foreign currency transactions 773,357 39,965
Change in unrealized appreciation
on investments and
foreign currency translations 14,481,614 5,115,631
Net Gain on Investments 15,254,971 5,155,596
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $15,259,367 $5,174,549
See notes to financial statements.
THE MARSICO INVESTMENT FUND
Statements of Changes in Net Assets
Three Months Ended March 31, 1998
(Unaudited)
Growth &
Focus Income
Fund Fund
OPERATIONS:
Net investment income $ 4,396 18,953
Net realized gain on investments
and foreign currency transactions 773,357 39,965
Change in unrealized appreciation
on investments and foreign
currency translations 14,481,614 5,115,631
Net increase in net assets resulting
from operations 15,259,367 5,174,549
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 137,112,340 52,255,929
Redemption of shares (3,236,895) (908,865)
Net increase from capital
share transactions 133,875,445 51,347,064
TOTAL INCREASE IN NET ASSETS 149,134,812 56,521,613
NET ASSETS:
Beginning of period 50,000 50,000
End of period (including $4,396
and $18,953 of undistributed
net investment income) $149,184,812 $56,571,613
TRANSACTIONS IN SHARES:
Shares sold 12,402,120 4,809,143
Shares redeemed (290,182) (82,432)
Net increase 12,111,938 4,726,711
See notes to financial statements.
<PAGE>
THE MARSICO INVESTMENT FUND
Financial Highlights
Three Months Ended March 31, 1998
(Unaudited)
For a Fund share outstanding throughout the period.
Growth &
Focus Income
Fund Fund
Net Asset Value, Beginning of Period $10.00 $10.00
Income from Investment Operations:
Net investment income - -
Net realized and unrealized gains
on investments 2.31 1.96
Total from investment operations 2.31 1.96
Net Asset Value, End of Period 12.31 $11.96
Total Return (1) 23.10% 19.60%
Supplemental Data and Ratios:
Net assets, end of period (000s) $149,185 $56,572
Ratio of expenses to average net assets,
net of waivers and reimbursements (2) 1.60% 1.50%
Ratio of net investment income to average
net assets, net of waivers
and reimbursements (2) 0.03% 0.32%
Ratio of expenses to average net assets,
before waivers and reimbursements (2) 2.21% 3.56%
Ratio of net investment loss to average
net assets, before waivers
and reimbursements (2) (0.58)% (1.74)%
Portfolio turnover rate (1) 28% 20%
(1)Not annualized
(2)Annualized
See notes to financial statements.
THE MARSICO INVESTMENT FUND
Notes to Financial Statements
March 31, 1998
(Unaudited)
1. Organization
The Marsico Investment Fund (the "Trust") was organized on October 1, 1997 as a
Delaware Business Trust and is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end management investment company.
The Focus Fund and the Growth & Income Fund (collectively, the "Funds") are
separate investment portfolios of the Trust. The Growth & Income Fund is
diversified as defined in the 1940 Act; the Focus Fund is non-diversified. The
Funds commenced operations after the close of business on December 31, 1997.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles
("GAAP"). The presentation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of investment income and expenses during the reporting
period. Actual results could differ from those estimates.
(a) Investment Valuation - A security traded on a recognized stock exchange or
quoted on Nasdaq is valued at the last sale price prior to the time when assets
are valued on the principal exchange on which the security is traded or on
Nasdaq. If no sale is reported on the valuation date, the most current bid price
will be used. All other securities for which over-the-counter market quotations
are readily available are valued at the most current bid price. Debt securities
which will mature in more than 60 days are valued at prices furnished by a
pricing service. Securities which will mature in 60 days or less are valued at
amortized cost, which approximates market value. Any securities for which market
quotations are not readily available are valued at their fair values determined
in good faith by the Funds' investment adviser pursuant to guidelines
established by the Board of Trustees.
(b) Organization Costs - Costs incurred by the Funds in connection with their
organization, registration and the initial public offering of shares have been
deferred and will be amortized over the period of benefit, but not to exceed
five years. If any of the original shares of a Fund are redeemed by any holder
thereof prior to the end of the amortization period, the redemption proceeds
will be reduced by the prorata share of the unamortized expenses as of the date
of redemption. The pro rata share by which the proceeds are reduced will be
derived by dividing the number of original shares of the Funds being redeemed by
the total number of original shares outstanding at the time of redemption.
(c) Repurchase Agreements - During the term of a repurchase agreement, the
market value of the underlying collateral, including accrued interest, is
required to equal or exceed the market value of the repurchase agreement. The
underlying collateral for all repurchase agreements is held by the Funds'
custodian.
(d) Expenses - The Funds are charged for those expenses that are directly
attributable to each portfolio, such as advisory and custodian fees. Expenses
that are not directly attributable to a portfolio are typically allocated among
the portfolios in proportion to their respective net assets.
(e) Federal Income Taxes - Each Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment company
and to make the requisite distributions of income to its shareholders which will
be sufficient to relieve it from all or substantially all federal and state
income and excise taxes.
(f) Distributions to Shareholders - Dividends from net investment income and net
realized capital gains, if any, will be declared and paid at least annually.
Distributions to shareholders are recorded on the ex-dividend date. Each Fund
may periodically make reclassifications among certain of its capital accounts as
a result of the timing and characterization of cetain income and capital gains
distributions determined in accordance with federal tax regulations, which may
differ from GAAP. Accordingly, at March 31, 1998, reclassifications were
recorded to increase undistributed net investment income by $435 and $2,396,
increase accumulated net realized gain on investments by $3,007 and $1,046 and
decrease paid-in capital by $3,442 and $3,442 in the Focus and Growth & Income
Funds, respectively.
(g) Forward Currency Transactions and Futures Contracts - The Funds enter into
forward currency contracts in order to reduce their exposure to changes in
foreign currency exchange rates on their foreign portfolio holdings and to lock
in the U.S. dollar cost of firm purchase and sale commitments for securities
denominated in foreign currencies. A forward currency contract is a commitment
to purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the U.S. dollar cost
of the original contract and the value of the foreign currency in U.S. dollars
upon closing of such contract is included in net realized gain or loss from
foreign currency transactions.
Currency gain and loss is also calculated on payables and receivables that are
denominated in foreign currencies. The payables and receivables are generally
related to security transactions and income.
Futures contracts are marked to market daily and the resultant variation margin
is recorded as an unrealized gain or loss. When a contract is closed, a realized
gain or loss is recorded equal to the difference between the opening and closing
value of the contract. Generally, open forward and futures contracts are marked
to market (i.e., treated as realized and subject to distribution) for federal
income tax purposes at fiscal year end.
Foreign-denominated assets and forward currency contracts may involve more risks
than domestic transactions, including currency risk, political and economic
risk, regulatory risk and market risk. Risks may arise from the potential
liability of a counter party to meet the terms of a contract and from
unanticipated movements in the value of foreign currencies relative to the U.S.
dollar.
The Funds may enter into "futures contracts" and "options" on securities,
financial indices and foreign currencies, forward contracts, and interest rate
swaps and swap-related products. The Funds intend to use such derivative
instruments primarily to hedge or protect from adverse movements in securities
prices, currency rates or interest rates. The use of futures contracts and
options may involve risks such as the possibility of illiquid markets or
imperfect correlation between the value of the contracts and the underlying
securities, or that the counter party will fail to perform its obligations.
(h) Other - Investment transactions are accounted for on a trade date plus one
basis. Each Fund determines the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with the
net sale proceeds. Dividend income is recognized on the ex-dividend date.
Certain dividends from foreign securities will be recorded as soon as the Trust
is informed of the dividend if such information is obtained subsequent to the
ex-dividend date. Interest income is recognized on an accrual basis.
3. Investment Advisory Agreement
The Funds have an agreement with Marsico Capital Management, LLC (the "Adviser")
to furnish investment advisory services to the Funds. Under the terms of this
agreement, the Adviser is compensated at the rate of 0.85% of the average daily
net assets of each of the Focus and Growth & Income Funds, respectively. The
Adviser has agreed to reimburse all expenses (exclusive of brokerage, interest,
taxes and extraordinary expenses) that exceed the expense limitation of 1.60%
and 1.50% for the Focus and the Growth & Income Funds, respectively, until
January 1, 1999. Expenses of $90,201 and $121,202 were reimbursed to the Focus
and Growth & Income Funds, respectively.
4. Service and Distribution Plan
The Funds have adopted a Service and Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. The Plan authorizes payments by the Funds in
connection with the distribution of their shares at an annual rate, as
determined from time to time by the Board of Directors, of up to 0.25% of a
Fund's average daily net assets.
5. Investment Transactions
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the three months ended March 31, 1998 were as
follows:
Growth &
Focus Income
Fund Fund
Purchases $143,081,377 $51,644,132
Sales 16,758,675 4,555,121
For the three months ended March 31, 1998, there were no purchases or sales of
long-term U.S. government securities.
The cost of securities on a tax basis for the Focus and Growth & Income Funds is
$142,684,742 and $53,589,502, respectively. At March 31, 1998, gross unrealized
appreciation and depreciation on investments for federal income tax purposes
were as follows:
Growth &
Focus Income
Fund Fund
Unrealized appreciation $14,744,655 $ 5,188,540
(Unrealized depreciation) (282,174) (96,180)
Net unrealized appreciation
on investments $14,462,481 $ 5,092,360
This report is submitted for the general information of shareholders of the
Marsico Funds. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Funds. The
prospectus includes more complete information about management fees and
expenses, investment objectives, risks and operating policies of the Funds.
Please read the prospectus carefully.
Sunstone Distribution Services, LLC, Distributor
If you have questions about the Marsico Funds, call 1-888-860-8686.
MA-410-0598Growth & Income Fund
