<PAGE> 1
1999 ANNUAL REPORT
AN ANNUAL REPORT IS A
TIME TO BOTH LOOK BACK
AND GAZE FORWARD.
SO IT IS WITH PLEASURE THAT
WE PRESENT YOU WITH THE
GOOD RETURNS OF 1999.
AND IT IS WITH GREAT
ANTICIPATION THAT WE LOOK
TOWARD THE YEAR 2000.
[MARSICO FUNDS LOGO]
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders 1
Technology-Related Investments 11
Overview of Focus Fund 12
Overview of Growth & Income Fund 13
Schedule of Investments 14
Statements of Assets and Liabilities 20
Statements of Operations 21
Statements of Changes in Net Assets 22
Financial Highlights 23
Notes to Financial Statements 24
Report of Independent Accountants 29
</TABLE>
This report is submitted for the general information of Marsico Funds
shareholders. It is not authorized for distribution unless preceded or
accompanied by an effective prospectus, which contains more complete information
about the Funds.
[MARSICO FUNDS LOGO]
<PAGE> 3
DEAR FELLOW SHAREHOLDERS
We are pleased to have just celebrated the two-year anniversary of Marsico
Capital Management. We never forget that our investors have trusted us with
their hard-earned money, their hopes and their plans for the future. So we care
deeply about the returns we are able to provide you. This year, we are
especially proud to present to you the annual report of the Marsico Funds for
the fiscal year ended September 30, 1999. Over the past year, the Funds
significantly outperformed the S&P 500(R) Index, which is what we consider our
primary equity benchmark. For the 12 months ended September 30, the Focus Fund
gained 41.02%, while the Growth & Income Fund advanced by 41.16%. The S&P
500(R), over the same period, provided a return of 27.80%. Since the Funds' date
of inception (December 31, 1997) to September 30, 1999, the Focus Fund and
Growth & Income Fund have provided average annual total returns of 37.42% and
32.20%, respectively, while the S&P 500(R) Index returned 18.97%.*
A QUICK REVIEW OF THIS INVESTMENT YEAR
Fiscal year 1999 began under somewhat inauspicious circumstances, with a
variety of concerns (e.g., presidential impeachment proceedings, the emergency
bail-out of a major hedge fund, concerns over a possible global credit crunch)
conspiring to create a difficult environment for equity investors. However, due
in part to strong leadership exhibited by the Federal Reserve, which acted
quickly to reduce interest rates and ease monetary policy (there were three
interest rate cuts over a span of seven weeks), the S&P 500(R) Index staged a
powerful rally, surging by more than 21% in the quarter ended December 31, 1998.
This was the best quarterly performance for the S&P 500(R) Index since 1987. The
Focus Fund and Growth & Income Fund, helped in particular by their holdings in
the technology and financial services sectors, participated fully in the
market's recovery, gaining 22.41% and 24.26%, respectively, during this quarter.
U.S. stocks opened 1999 in seemingly benign fashion, with S&P 500(R) Index
returns during January and February being essentially "flat" and rising by about
4% in March. The S&P 500(R)'s overall return for the quarter (4.98%) masked
1
<PAGE> 4
TOM MARSICO
[PHOTO OF TOM MARSICO]
"It's not just about looking at a company's financials. It's about looking at
its ethics, its values, its dreams and its personality. It's about talking to
the top management and the hardest-working salesperson. It's about listening to
customers. Our funds are made up of smart companies and great industries with
good people and good ideas working inside."
2
<PAGE> 5
CONTINUED. . .
considerable volatility; during the quarter, there were many trading days where
the Index moved by 2% or more. On March 29, the Dow Jones Industrial Average
closed above 10,000 for the first time in its history. While this level may have
been important from a psychological perspective, a more telling expression of
the market environment, in our view, related to corporate earnings in the
quarter. Positive earnings surprises for S&P 500(R) Index companies outpaced
negative surprises by nearly 2-1/2 times. Technology-related companies were once
again among the market leaders performance-wise, accompanied by retail, consumer
and financial services stocks. Once again, the Marsico Funds fared well. The
Focus Fund posted a quarterly return of 12.56%, while the Growth & Income Fund
gained 9.55% for the quarter ended March 31, 1999.
As the second quarter of 1999 unfolded, the Federal Reserve's interest rate
policy and inflation indicators were at the center of investors' attention.
During April, the Consumer Price Index (CPI) was reported up 0.7% -- the CPI's
largest monthly gain since 1990. In May, the Fed announced that it had shifted
to a tightening bias. Many investors became more cautious, believing that the
Fed would possibly embark upon a series of interest rate increases as a means of
"cooling" the U.S. economy. The Fed did increase short-term rates on June 30,
but simultaneously signaled that it had shifted to a neutral interest rate bias.
Amidst the Federal Reserve's change in interest rate policy and fluctuating CPI
data, U.S. stock market leadership rotated dramatically. Over just six days in
April (subsequently dubbed the "cyclical" rally), the Russell 1000 Value Index
outperformed the Russell 1000 Growth Index by 11%. However, by the end of the
quarter, it appeared that growth stocks had regained their leadership role;
during June, the Russell 1000 Growth Index outperformed the Russell 1000 Value
Index by 141%. For the quarter as a whole, the Marsico Funds, while trailing the
S&P 500(R) Index's return of 7.05%, generated respectable performance. The Focus
Fund was up 2.35%, while the Growth & Income Fund posted a quarterly return of
5.98%. The Funds were buoyed once again by their positions
3
<PAGE> 6
[PHOTO]
[PHOTO]
[PHOTO]
[PHOTO]
Before we invest, we
don't just meet with a
company's manager.
We like to sit down with
the financial folks, the
engineers, the factory
workers, the suppliers
and the production
people. Then, for good
measure, we also like to
have a cup of coffee with
a few of their best
customers.
in the technology sector, while select retail and consumer-related positions
also fared well. However, results were adversely affected by the Funds'
positions in financial services stocks, which were under pressure from the
threat of potentially higher interest rates. Other areas that detracted from
performance were transportation and pharmaceutical companies.
The third quarter of 1999 was characterized by a continued high degree of
stock market volatility, which was attributable in large part to interest rate,
4
<PAGE> 7
CONTINUED. . .
inflation and yen-dollar worries. The Federal Reserve increased interest rates
again on August 24. Concerns over the Federal Reserve's longer-term interest
rate outlook, coupled with additional signs that the U.S. economic growth rate
remained strong, drove U.S. stocks -- as measured by the S&P 500(R) -- down more
than 6% in the quarter. Only two sectors of the U.S. stock market -- technology
and capital goods -- produced positive returns during the quarter. Companies in
the financial services sector, particularly banks, were hit hard due to the
pressure of rising interest rates. Healthcare-related and transportation stocks
also struggled, declining by 10% and 20%, respectively. Despite the difficult
overall environment for equities, the Marsico Funds fared well for the quarter
- -- the Focus Fund had a return of 0.00%, while the Growth & Income Fund declined
by 2.16%. Both Funds substantially outperformed the S&P 500(R) Index, which
returned a negative 6.24% for the quarter ended September 30, 1999. The Funds
were helped primarily by their holdings in a group of technology companies,
including EMC Corporation and Cisco Systems. Other Fund positions that performed
well included Home Depot, McDonald's and General Electric. Relative
[PHOTO]
[PHOTO]
[PHOTO]
(Left, from top to bottom)
JIM HILLARY,
Senior Analyst/Portfolio Manager
JENNIFER SACCOMANO, Analyst
DAN CROWE, Analyst
BRETT SPURR, Analyst
(Right, from top to bottom)
SUSAN DOYLE, Analyst
JORDON LAYCOB, Senior Analyst
JOE CHIN, Analyst
5
<PAGE> 8
[VARIOUS PHOTOS]
6
<PAGE> 9
CONTINUED. . .
underweightings in healthcare-related and transportation companies also
contributed positively to our performance. However, the Funds' allocations for
financial services, cable/media and entertainment companies detracted from
results.
INVESTMENT OUTLOOK
Our overall market perspective has not changed a great deal since our last
letter to shareholders that was included with your September 30 statement. On
balance, we remain positive about the outlook for equity investing. We continue
to believe there are important strengths to build on in the U.S. economy that
could augur well for financial markets over the long run. While U.S. economic
growth has been strong, we do not think inflation is currently a threat. We
believe that a continued low inflation environment should create the potential
- -- over time -- for lower interest rates. That, in turn, should create a
favorable backdrop for equities. We would attribute the low inflation rate in
part to productivity enhancements fostered by rapid, innovative technological
developments. Further, the U.S. consumer is strong, the U.S. employment rate
remains high and the amount of federal budget surpluses is projected to grow.
Our view is that the dollar remains strong and any perceived weakness compared
to the yen is a case of the yen returning to historical levels.
We do expect that volatility, in both the stock and bond markets, will
continue. We note that for the first nine months of 1999, 39% of the trading
days resulted in price changes of 1% or more in the S&P 500(R) Index. We believe
that the importance of good stock selection -- as opposed to being "right" on
the general sector or industry -- will increase even further as we move into the
new millennium. We believe our positions in technology are prudently diversified
across a variety of high quality companies, including telecommunications
equipment, data storage, hardware and software. Other areas we find attractive
include the financial services and retail sectors.
7
<PAGE> 10
[VARIOUS PHOTOS]
8
<PAGE> 11
CONTINUED. . .
As always, we are completely focused on conducting hands-on, intensive
analysis of companies in our investment universe. The Funds have our full
attention every single day. We are committed to doing our utmost to generate
competitive investment returns, no matter what the market environment.
We have assembled a cohesive, energetic, creative group of investment
professionals who work with the Funds on a daily basis. I am very proud of
their individual and collective efforts, and look forward to working closely
with them for many years.
We deeply appreciate having you as a shareholder in the Marsico Funds. We
think we have created a first-rate investment team here at Marsico Capital
Management, one that is 100% focused on generating strong investment results for
our shareholders. We look forward to being an integral part of your investment
program for a long time to come.
Sincerely,
/s/ THOMAS F. MARSICO
Thomas F. Marsico
Portfolio Manager
Sunstone Distribution Services, LLC, Distributor
*Past performance is no guarantee of future results. Total returns are based on
net change in net asset value (NAV) assuming reinvestment of distributions.
Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Because it is not diversified, the Focus Fund may take larger positions in fewer
companies, thereby concentrating its holdings in what the manager believes to be
the best investment ideas. Such concentration also increases the overall risk
profile of the Focus Fund. The S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation and is an unmanaged, broadly based index of the
common stock prices of 500 large U.S. companies. You cannot invest directly in
an index. References to specific securities or industries should not be
considered recommendations to buy or sell any securities.
9
<PAGE> 12
NETWORKING COMPANIES
[PICTURE]
Produce the equipment that enables voice and data communications delivered in
the form of voice or packets across a carrier's network. Customers include
service providers that must buy networking equipment to operate their
businesses.
Examples: Cisco Systems, Lucent Technologies
ISPS
[PICTURE]
Provide consumers and businesses with Internet access or an online service.
Examples: AT&T, MCI WorldCom, America Online, Microsoft
[PICTURE]
DATA STORAGE COMPANIES
[PICTURE]
Provide large file systems capable of storing massive amounts of data.
Example: EMC Corporation
The stocks mentioned in the Technology-Related Investments section are meant to
illustrate issuers representing different industries in this sector. The Marsico
Funds may or may not hold these securities.
10
<PAGE> 13
TECHNOLOGY-RELATED INVESTMENTS
[PICTURE]
Produce integrated circuits or "chips" used in computers, telecommunications and
data networking, cellular telephone technology and routers.
Examples: Intel (chips), QUALCOMM (wireless)
SEMICONDUCTOR COMPANIES
Operators of extensive networks used to provide voice/data services such as
local voice, long distance, data transport and cellular service.
[PICTURE]
Examples: AT&T, MCI WorldCom
SERVICE PROVIDERS/CARRIERS
[PICTURE]
Develop and manufacture computer-related products including software, PCs,
workstations, servers, storage devices and mainframes.
Examples: Sun Microsystems, Microsoft, Dell Computer
HARDWARE AND SOFTWARE
As you review the annual report, you may discover that the technology
sector weighting has increased since last year. Although these levels may appear
high at first, we wanted to share with you our rationale for investing in
technology and the manner in which we have diversified the Funds' holdings.
In our view, the United States has shifted toward being an
information-based economy, and a variety of "winning" technology companies is
emerging. In the context of a "connected world," we believe people throughout
the world want/need to be able to communicate everywhere -- at any time -- by a
variety of interactive media (e.g., voice, e-mail, video). The availability of
these communications channels, at affordable prices, underlies what we see as
escalating demand for products such as semiconductors, hardware, software,
networking services, wireless technology and data storage.
We have chosen to focus our investments in technology companies that have a
variety of important fundamental attributes. These include sustainable revenues
and earnings, product leadership, solid financial health, improving margins,
good distribution strategies and strong management teams.
Further, we believe that our technology positions are prudently allocated
across several types of companies. For instance, as of September 30, the
holdings spanned companies as diverse as wireless technology, data storage,
hardware, software and networking.
At times, investing in technology-related companies can entail a relatively
high degree of volatility -- even in established, "blue chip" firms that meet
our investment criteria and diversification parameters. Our research process --
which stresses hands-on, intensive industry and company analysis -- helps us
gain an understanding of the sustainability of an individual company's earnings
growth potential, viewed continuously in the context of the overall competitive
landscape.
11
<PAGE> 14
OVERVIEW OF FOCUS FUND
As of September 30, 1999
FUND PROFILE
The Focus Fund is a non-diversified fund
that seeks long-term growth of capital.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
one avg. annual
year since inception
---------- ----------------
<S> <C> <C>
Marsico Focus Fund 41.02% 37.42%
S&P 500(R) Index 27.80% 18.97%
- -------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------
9/30/99 $ 2,258,140,651
- -------------------------------------------------------------------------------
NET ASSET VALUE
- -------------------------------------------------------------------------------
Net Asset Value Per Share $ 17.43
- -------------------------------------------------------------------------------
TOP FIVE HOLDINGS
- -------------------------------------------------------------------------------
EMC Corporation 10.1%
Citigroup, Inc. 6.5
QUALCOMM Incorporated 6.3
Lucent Technologies, Inc. 5.8
Sun Microsystems, Inc. 5.3
- -------------------------------------------------------------------------------
SECTOR ALLOCATION(2)
- -------------------------------------------------------------------------------
Technology 47.5%
Consumer Cyclical 20.3
Consumer Non-cyclical 9.9
Financial 9.5
Energy 8.6
Industrial 4.2
</TABLE>
Growth of $10,000(1)
[ ] Marsico Focus Fund
[ ] S&P 500(R) Index
[GRAPH]
(1) This chart assumes an initial investment of $10,000 made on December 31,
1997 (commencement of operations). Returns for the Marsico Funds are based on
net change in net asset value (NAV) and are unannualized, represent past
performance and should not be considered as representative of future results.
The investment return and principal value of an investment in the Marsico Funds
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
(2) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one industry.
The Fund's portfolio composition is subject to change at any time.
12
<PAGE> 15
OVERVIEW OF GROWTH & INCOME FUND
As of September 30, 1999
FUND PROFILE
The Growth & Income Fund is a diversified fund that seeks growth of capital with
a limited emphasis on income. Although the Fund normally invests at least 25% of
total assets in securities that have income potential, it emphasizes equity
securities selected for their growth potential.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
one avg. annual
year since inception
------- -----------------
Marsico Growth
& Income Fund 41.16% 32.20%
S&P 500(R) Index 27.80% 18.97%
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
9/30/99 $ 688,489,798
- --------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------
Net Asset Value Per Share $ 16.29
- --------------------------------------------------------------------------------
TOP FIVE HOLDINGS
- --------------------------------------------------------------------------------
QUALCOMM Incorporated 6.2%
EMC Corporation 6.0
Citigroup, Inc. 4.9
Microsoft Corporation 4.5
Time Warner Inc. 3.8
- --------------------------------------------------------------------------------
SECTOR ALLOCATION(2)
- --------------------------------------------------------------------------------
Technology 40.3%
Consumer Cyclical 27.1
Consumer Non-cyclical 11.3
Financial 9.3
Energy 8.0
Industrial 4.0
Growth of $10,000(1)
[ ] Marsico Growth & Income Fund
[ ] S&P 500(R) Index
[GRAPH]
(1) This chart assumes an initial investment of $10,000 made on December 31,
1997 (commencement of operations). Returns for the Marsico Funds are based on
net change in net asset value (NAV) and are unannualized, represent past
performance and should not be considered as representative of future results.
The investment return and principal value of an investment in the Marsico Funds
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
(2) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one industry.
The Fund's portfolio composition is subject to change at any time.
13
<PAGE> 16
MARSICO FOCUS FUND
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
# of Shares Market Value in $ % of Net Assets
------------- ----------------- ---------------
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------
AIRLINES
<S> <C> <C> <C>
UAL Corporation* 997,435 $ 65,144,973 2.88%
BREWERY
Anheuser-Busch Companies, Inc. 1,325,197 92,846,615 4.11
CABLE TELEVISION
MediaOne Group, Inc.* 1,026,587 70,128,724 3.11
CELLULAR TELECOMMUNICATIONS
Vodafone AirTouch PLC - SP ADR 55,827 13,272,869 0.59
COMPUTER SOFTWARE
Microsoft Corporation* 1,161,523 105,190,427 4.66
COMPUTERS - INTEGRATED SYSTEMS
Fujitsu Limited 708,000 22,072,785 0.98
COMPUTERS - MEMORY DEVICES
EMC Corporation* 3,200,539 228,638,505 10.13
COMPUTERS - MICRO
Dell Computer Corporation* 1,420,143 59,379,729 2.63
Sun Microsystems, Inc.* 1,275,432 118,615,176 5.25
--------------- --------
177,994,905 7.88
CRUISE LINES
Carnival Corporation 362,224 15,756,744 0.70
DIVERSIFIED FINANCIAL SERVICES
Citigroup, Inc. 3,346,555 147,248,420 6.52
DIVERSIFIED MANUFACTURING OPERATIONS
General Electric Company 656,917 77,885,722 3.45
ELECTRONIC COMPONENTS - MISCELLANEOUS
NEC Corporation 845,000 16,974,387 0.75
ELECTRONIC COMPONENTS - SEMICONDUCTORS
Texas Instruments, Inc. 546,146 44,920,509 1.99
FINANCE - MORTGAGE LOAN/BANKER
Fannie Mae 1,020,710 63,985,758 2.83
INTERNET SOFTWARE
America Online, Inc.* 376,494 39,155,376 1.73
MEDICAL - BIOMEDICAL/GENE
Genentech, Inc.* 599,977 87,784,135 3.89
</TABLE>
14
<PAGE> 17
MARSICO FOCUS FUND
Schedule of Investments
September 30, 1999 (cont.)
<TABLE>
<CAPTION>
# of Shares Market Value in $ % of Net Assets
------------- ----------------- ---------------
<S> <C> <C> <C>
MEDICAL - DRUGS
Pfizer Inc. 1,862,376 $ 66,929,137 2.96%
MEDICAL - WHOLESALE DRUG DISTRIBUTORS
Cardinal Health, Inc. 1,132,842 61,739,889 2.73
MULTIMEDIA
Time Warner Inc. 1,467,946 89,177,719 3.95
NETWORKING PRODUCTS
Cisco Systems, Inc.* 1,030,761 70,671,551 3.13
OIL - FIELD SERVICES
Halliburton Company 621,630 25,486,830 1.13
Schlumberger Limited 1,104,224 68,806,958 3.05
94,293,788 4.18
OIL COMPANIES - INTEGRATED
Atlantic Richfield Company 383,001 33,943,464 1.50
Royal Dutch Petroleum Company 1,080,517 63,818,035 2.83
--------------- --------
97,761,499 4.33
RETAIL - BUILDING PRODUCTS
The Home Depot, Inc. 1,086,203 74,540,681 3.30
RETAIL - CONSUMER ELECTRONICS
Best Buy Co., Inc.* 214,651 13,321,778 0.59
RETAIL - DISCOUNT
Wal-Mart Stores, Inc. 1,514,439 72,030,505 3.19
RETAIL - RESTAURANTS
McDonald's Corporation 1,260,684 54,209,412 2.40
TELECOMMUNICATIONS EQUIPMENT
Lucent Technologies, Inc. 2,005,131 130,082,874 5.76
QUALCOMM Incorporated* 748,550 141,616,303 6.27
--------------- --------
271,699,177 12.03
--------------- --------
Total Common Stocks (cost $1,848,413,375) 2,235,375,990 98.99
--------------- --------
</TABLE>
15
<PAGE> 18
MARSICO FOCUS FUND
Schedule of Investments
September 30, 1999 (cont.)
<TABLE>
<CAPTION>
Principal/Shares Market Value in $ % of Net Assets
---------------- ----------------- ---------------
SHORT-TERM INVESTMENTS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal Home Loan Bank,
5.170%, 10/1/99 $ 60,100,000 $ 60,100,000 2.67%
SSgA Money Market Fund 80,889 80,889 --
Total Short-Term Investments
(cost $60,180,889) 60,180,889 2.67
Total Investments (cost $1,908,594,264) 2,295,556,879 101.66
Liabilities Less Other Assets (37,416,228) (1.66)
---------------- ---------
NET ASSETS $ 2,258,140,651 100.00%
================ =========
</TABLE>
*Non-income producing.
See notes to financial statements.
16
<PAGE> 19
MARSICO GROWTH & INCOME FUND
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
# of Shares Market Value in $ % of Net Assets
----------- ----------------- ---------------
COMMON STOCKS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADVERTISING AGENCIES
Young and Rubicam Inc. 153,936 $ 6,773,184 0.98%
AIRLINES
UAL Corporation* 265,292 17,326,884 2.52
BREWERY
Anheuser-Busch Companies, Inc. 292,824 20,515,981 2.98
BROADCAST SERVICES/PROGRAMMING
UnitedGlobalCom Inc. - Class A 82,621 5,917,729 0.86
BUILDING - RESIDENTIAL/COMMERCIAL
M.D.C. Holdings, Inc. 239,956 3,884,288 0.56
CABLE TELEVISION
MediaOne Group, Inc.* 317,626 21,697,826 3.15
CELLULAR TELECOMMUNICATIONS
Sprint Corporation* 96,473 7,193,268 1.04
COMPUTER SOFTWARE
Microsoft Corporation* 344,305 31,181,122 4.53
COMPUTERS - INTEGRATED SYSTEMS
Fujitsu Limited 212,000 6,609,365 0.96
COMPUTERS - MEMORY DEVICES
EMC Corporation* 575,191 41,090,207 5.97
COMPUTERS - MICRO
Dell Computer Corporation* 421,005 17,603,272 2.56
Sun Microsystems, Inc.* 181,368 16,867,224 2.45
------------- ----------
34,470,496 5.01
COSMETICS & TOILETRIES
Estee Lauder Companies Inc. - Class A 139,249 5,439,414 0.79
DIVERSIFIED FINANCIAL SERVICES
Citigroup, Inc. 764,198 33,624,712 4.88
DIVERSIFIED MANUFACTURING OPERATIONS
General Electric Company 178,497 21,163,051 3.07
ELECTRONIC COMPONENTS - MISCELLANEOUS
NEC Corporation - SP ADR 253,000 5,082,272 0.74
ELECTRONIC COMPONENTS - SEMICONDUCTORS
Texas Instruments, Inc. 111,142 9,141,429 1.33
FIBER OPTICS
JDS Uniphase Corporation* 80,234 9,131,632 1.33
</TABLE>
17
<PAGE> 20
MARSICO GROWTH & INCOME FUND
Schedule of Investments
September 30, 1999 (cont.)
<TABLE>
<CAPTION>
# of Shares Market Value in $ % of Net Assets
----------- ----------------- ---------------
<S> <C> <C> <C>
FINANCE - MORTGAGE LOAN/BANKER
Fannie Mae 306,825 $ 19,234,092 2.78%
HOTELS & MOTELS
Four Seasons Hotels, Inc. 268,365 9,812,095 1.43
INTERNET SOFTWARE
America Online, Inc.* 114,702 11,929,008 1.73
MEDICAL - BIOMEDICAL/GENE
Genentech, Inc.* 156,484 22,895,565 3.33
MEDICAL - DRUGS
Pfizer Inc. 383,202 13,771,322 2.00
MEDICAL - WHOLESALE DRUG DISTRIBUTORS
Cardinal Health, Inc. 338,738 18,461,221 2.68
Priority Healthcare
Corporation - Class B* 176,087 5,436,686 0.79
23,897,907 3.47
MULTIMEDIA
Time Warner Inc. 433,372 26,327,349 3.82
NETWORKING PRODUCTS
Cisco Systems, Inc.* 309,106 21,193,080 3.08
Juniper Networks, Inc.* 46,418 8,450,977 1.23
------------- --------
29,644,057 4.31
OIL - FIELD SERVICES
Halliburton Company 186,942 7,664,622 1.11
Schlumberger Limited 328,614 20,476,760 2.98
------------- --------
28,141,382 4.09
OIL COMPANIES - EXPLORATION & PRODUCTION
Anadarko Petroleum Corporation 170,277 5,204,091 0.76
OIL COMPANIES - INTEGRATED
Royal Dutch Petroleum Company 323,750 19,121,484 2.78
PUBLISHING - BOOKS
Houghton Mifflin Company 119,158 4,840,794 0.70
RENTAL AUTO/EQUIPMENT
The Hertz Corporation 251,784 11,078,496 1.61
RETAIL - BUILDING PRODUCTS
The Home Depot, Inc. 326,328 22,394,259 3.25
</TABLE>
18
<PAGE> 21
MARSICO GROWTH & INCOME FUND
Schedule of Investments
September 30, 1999 (cont.)
<TABLE>
<CAPTION>
# of Shares Market Value in $ % of Net Assets
----------- ----------------- ---------------
<S> <C> <C> <C>
RETAIL - CONSUMER ELECTRONICS
Best Buy Co., Inc.* 207,302 $ 12,865,680 1.87%
RETAIL - DISCOUNT
Wal-Mart Stores, Inc. 453,795 21,583,625 3.13
RETAIL - JEWELRY
Tiffany & Co. 197,203 11,819,855 1.72
RETAIL - RESTAURANTS
McDonald's Corporation 305,062 13,117,666 1.91
SUPER-REGIONAL BANKS
Northern Trust Corporation 97,753 8,162,376 1.19
TELECOMMUNICATIONS EQUIPMENT
Lucent Technologies, Inc. 301,231 19,542,361 2.84
QUALCOMM Incorporated* 225,579 42,676,727 6.20
------------- ---------
62,219,088 9.04
Total Common Stocks (cost $550,906,850) 658,303,051 95.62
</TABLE>
<TABLE>
<CAPTION>
Principal Amount in $ Market Value in $ % of Net Assets
--------------------- ----------------- ---------------
CORPORATE BONDS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BUILDING - RESIDENTIAL/COMMERCIAL
M.D.C. Holdings, Inc., $ 2,700,000 2,477,250 0.36
8.375%, 2/1/08
TELECOMMUNICATION SERVICES
Level 3 Communications, Inc.,
6.000%, 9/15/09 6,300,000 6,252,750 0.91
Total Corporate Bonds (cost $8,920,891) 8,730,000 1.27
</TABLE>
<TABLE>
<CAPTION>
Principal/Shares Market Value in $ % of Net Assets
--------------------- ----------------- ---------------
SHORT-TERM INVESTMENTS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal Home Loan Bank,
5.170%, 10/1/99 27,000,000 27,000,000 3.92
SSgA Money Market
Fund 95,149 95,149 0.01
Total Short-Term Investments
(cost $27,095,149) 27,095,149 3.93
Total Investments (cost $586,922,890) 694,128,200 100.82
Liabilities less Other Assets (5,638,402) (0.82)
------------- ---------
NET ASSETS $ 688,489,798 100.00%
============= =========
</TABLE>
*Non-income producing.
See notes to financial statements.
19
<PAGE> 22
STATEMENTS OF ASSETS & LIABILITIES
September 30, 1999
<TABLE>
<CAPTION>
Growth &
Focus Fund Income Fund
(000s) (000s)
------------- -------------
ASSETS
- -----------------------------------------------------------------------------------
<S> <C> <C>
Investments, at value (cost $1,908,594
and $586,923, respectively) $ 2,295,557 $ 694,128
Receivable for investments sold 41,905 5,610
Receivable for capital stock sold 2,558 2,452
Interest and dividends receivable 639 290
Organizational expenses, net of
accumulated amortization 89 89
Prepaid expenses and other assets 72 39
------------- -------------
Total Assets 2,340,820 702,608
============= =============
- -----------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------
Payable for investments purchased 77,576 12,811
Payable for capital stock redeemed 2,336 320
Accrued investment advisory fee 1,595 480
Accrued distribution fee 420 221
Accrued expenses and other liabilities 752 286
------------- -------------
Total Liabilities 82,679 14,118
------------- -------------
Net Assets $ 2,258,141 $ 688,490
============= =============
- -----------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- -----------------------------------------------------------------------------------
Paid-in-capital $ 1,886,559 $ 579,674
Accumulated net realized gain (loss)
on investments (18,888) 1,554
Accumulated net realized gain on foreign
currency transactions 3,507 57
Net unrealized appreciation on investments and
foreign currency translations 386,963 107,205
------------- -------------
Net Assets $ 2,258,141 $ 688,490
============= =============
Shares Outstanding, $0.0001 par value
(Unlimited shares authorized) 129,525 42,269
Net Asset Value, Redemption Price
and Offering Price Per Share
(Net Assets/Shares Outstanding)* $ 17.43 $ 16.29
============= =============
</TABLE>
*Not in thousands.
See notes to financial statements.
20
<PAGE> 23
STATEMENTS OF OPERATIONS
For The Year Ended September 30, 1999
<TABLE>
<CAPTION>
Growth &
Focus Fund Income Fund
(000s) (000s)
------------- -------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Interest $ 3,835 $ 1,525
Dividends (net of $102 and $59 of
non-reclaimable foreign withholding taxes) 10,841 3,368
------------- -------------
Total Investment Income 14,676 4,893
------------- -------------
- ----------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------
Investment advisory fees 14,486 4,570
Distribution fees 4,261 1,271
Transfer agent fees and expenses 1,994 635
Federal and state registration fees 507 189
Fund administration fees 355 236
Printing and postage expenses 279 82
Custody and fund accounting fees 228 113
Professional fees 81 81
Trustees' fees and expenses 76 76
Amortization of organizational costs 28 28
Miscellaneous 27 10
------------- -------------
Total Expenses 22,322 7,291
Less expenses paid indirectly (335) (50)
------------- -------------
Net Expenses 21,987 7,241
------------- -------------
Net Investment Loss (7,311) (2,348)
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (Loss)
- ----------------------------------------------------------------------------------------
Net realized gain on investments 29,235 19,293
Net realized loss on options written (764) (264)
Net realized gain on foreign currency transactions 3,073 --
Change in unrealized appreciation on
investments and foreign currency translations 401,160 110,403
------------- -------------
Net Gain on Investments 432,704 129,432
------------- -------------
Net Increase in Net Assets
Resulting from Operations $ 425,393 $ 127,084
============= =============
</TABLE>
See notes to financial statements.
21
<PAGE> 24
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Focus Fund Growth & Income Fund
-------------------------------- --------------------------------
Year Ended 12/31/97* to Year Ended 12/31/97* to
9/30/99 (000s) 9/30/98 (000s) 9/30/99 (000s) 9/30/98 (000s)
-------------- -------------- -------------- --------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment loss $ (7,311) $ (814) $ (2,348) $ (118)
Net realized gain (loss)
on investments 29,235 (40,088) 19,293 (15,147)
Net realized loss on options written (764) -- (264) --
Net realized gain on
foreign currency transactions 3,073 434 -- 57
Change in unrealized appreciation/
depreciation on investments and
foreign currency translations 401,160 (14,198) 110,403 (3,198)
------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations 425,393 (54,666) 127,084 (18,406)
------------- ------------- ------------- -------------
- -----------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------
Proceeds from sale of shares 1,659,307 1,280,834 512,070 368,490
Redemption of shares (684,816) (367,961) (214,183) (86,615)
------------- ------------- ------------- -------------
Net increase from
capital share transactions 974,491 912,873 297,887 281,875
------------- ------------- ------------- -------------
Total Increase in Net Assets 1,399,884 858,207 424,971 263,469
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Beginning of period 858,257 50 263,519 50
End of period $ 2,258,141 $ 858,257 $ 688,490 $ 263,519
============= ============= ============= =============
- -----------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
- -----------------------------------------------------------------------------------------------------------------------
Shares sold 103,441 97,470 32,231 29,846
Shares redeemed (43,360) (28,031) (12,795) (7,018)
------------- ------------- ------------- -------------
Net increase 60,081 69,439 19,436 22,828
============= ============= ============= =============
</TABLE>
*Commencement of operations.
See notes to financial statements.
22
<PAGE> 25
FINANCIAL HIGHLIGHTS
For a Fund Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Focus Fund Growth & Income Fund
------------------------------- -------------------------------
Year Ended 12/31/97* to Year Ended 12/31/97* to
9/30/99 9/30/98 9/30/99 9/30/98
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.36 $ 10.00 $ 11.54 $ 10.00
- ----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment loss (0.06) (0.01) (0.06) (0.01)
Net realized and unrealized gains
on investments 5.13 2.37 4.81 1.55
------------- ------------- ------------- -------------
Total from investment operations 5.07 2.36 4.75 1.54
------------- ------------- ------------- -------------
Net Asset Value, End of Period $ 17.43 $ 12.36 $ 16.29 $ 11.54
============= ============= ============= =============
Total Return 41.02% 23.60%(1) 41.16% 15.40%(1)
- ----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $ 2,258,141 $ 858,257 $ 688,490 $ 263,519
Ratio of expenses to average net assets,
less waivers and before expenses
paid indirectly 1.31% 1.56%(2) 1.43% 1.51%(2)
Ratio of net investment loss to average
net assets, net of waivers and
expenses paid indirectly (0.43)% (0.27)%(2) (0.46)% (0.14)%(2)
Ratio of expenses to average net
assets, before waivers and expenses
paid indirectly 1.31% 1.56%(2) 1.43% 1.78%(2)
Ratio of net investment loss to average
net assets, before waivers and
expenses paid indirectly (0.45)% (0.27)%(2) (0.47)% (0.41)%(2)
Portfolio turnover rate 173% 170%(1) 137% 141%(1)
</TABLE>
(1) Not annualized.
(2) Annualized.
*Commencement of operations.
See notes to financial statements.
23
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
- --------------------------------------------------------------------------------
1. ORGANIZATION
- --------------------------------------------------------------------------------
The Marsico Investment Fund (the "Trust") was organized on October 1, 1997, as a
Delaware Business Trust and is registered under the Investment Company Act of
1940 (the "1940 Act") as an open-end management investment company. The Focus
Fund and the Growth & Income Fund (collectively, the "Funds") are separate
investment portfolios of the Trust. The Focus Fund is a non-diversified fund
that seeks long-term growth of capital by normally investing in a core position
of 20-30 common stocks. The Growth & Income Fund is a diversified fund, as
defined in the 1940 Act, that seeks long-term growth of capital with a limited
emphasis on income. The Funds commenced operations 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") for investment companies. The presentation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
(a) INVESTMENT VALUATION - A security traded on a recognized stock exchange
is valued at the last sale price prior to the time when assets are valued
on the principal exchange on which the security is traded. If no sale is
reported on the valuation date, the most current bid price will be used.
All other securities for which over-the-counter market quotations are
readily available are valued at the most current closing price. Debt
securities that will mature in more than 60 days are valued at prices
furnished by a pricing service. Securities that will mature in 60 days or
less are valued at amortized cost, which approximates market value. Any
securities for which market quotations are not readily available are valued
at their fair value as determined in good faith by the Funds' investment
adviser pursuant to guidelines established by the Board of Trustees.
(b) ORGANIZATION COSTS - Costs incurred by the 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 pro rata 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) EXPENSES - The Funds are charged for those expenses that are directly
attributable to each Fund, such as advisory and custodian
24
<PAGE> 27
fees. Expenses that are not directly attributable to a Fund are typically
allocated among the Funds in proportion to their respective net assets. The
Funds' expenses may be reduced by voluntary advisory fee waivers, brokerage
credits and uninvested cash balances earning interest or credits. Such
credits are included in Expenses Paid Indirectly in the Statement of
Operations.
Banc of America Securities is an affiliate of Marsico Capital Management,
LLC through a degree of common ownership and is designated as an
introductory broker on certain Fund transactions. For the year ended
September 30, 1999, brokerage commissions paid to Banc of America
Securities were $300,062 and $71,067 for the Focus Fund and Growth & Income
Fund, respectively. Also, brokerage commissions were paid to an
unaffiliated broker which reduced certain transfer agent fees and expenses
in the amount of $304,014 and $40,367 for the Focus Fund and Growth &
Income Fund, respectively, for the year ended September 30, 1999.
(d) FEDERAL INCOME TAXES - Each Fund intends to comply with the
requirements of the Internal Revenue Code necessary to qualify as a
regulated investment company and to make the requisite distributions of
income to its shareholders which will be sufficient to relieve it from all
or substantially all federal and state income and excise taxes.
(e) DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income
and net realized capital gains, if any, will be declared and paid at least
annually. Distributions to shareholders are recorded on the ex-dividend
date. Each Fund may periodically make reclassifications among certain of
its capital accounts as a result of the timing and characterization of
certain income and capital gains distributions determined in accordance
with federal tax regulations, which may differ from GAAP. These
reclassifications are due to differing treatment for items such as deferral
of wash sales, foreign currency transactions, net operating losses and
Post-October capital losses. Accordingly, at September 30, 1999,
reclassifications were recorded to decrease undistributed net investment
loss by $7,311 and $2,348, decrease accumulated net realized gain on
investments by $7,294 and $2,331, and decrease paid-in-capital by $17 and
$17 for the Focus and Growth & Income Funds, respectively.
(f) FOREIGN CURRENCY TRANSLATION - The accounting records of the Funds are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of
exchange. Amounts related to the purchase and sale of foreign securities
and investment income are translated at the rates of exchange prevailing on
the respective dates of such transactions.
Reported realized gains on foreign currency transactions arise from sales
of portfolio securities, forward currency contracts, currency gains or
losses realized between the trade and settlement dates on securities
transactions, the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Funds' books, and the U.S.
dollar equivalent of the amounts actually received or paid.
25
<PAGE> 28
The Funds do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held at
fiscal year end. Net unrealized appreciation on investments and foreign
currency translations arise from changes in the value of assets and
liabilities including investments in securities at fiscal year end,
resulting from changes in the exchange rates and changes in market prices
of securities held.
(g) FORWARD CURRENCY CONTRACTS AND FUTURES CONTRACTS - The Funds may enter
into forward currency contracts to reduce their exposure to changes in
foreign currency exchange rates on their foreign holdings and to lock in
the U.S. dollar cost of firm purchase and sale commitments for securities
denominated in foreign currencies. A forward currency contract is a
commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The gain or loss arising from the difference
between the U.S. dollar cost of the original contract and the value of the
foreign currency in U.S. dollars upon closing of such contract is included
in net realized gain or loss from foreign currency transactions.
Forward currency contracts held by the Funds are fully collateralized by
other securities. If held by the Funds, such collateral would be in the
possession of the Funds' custodian. The collateral would be evaluated daily
to ensure its market value equals or exceeds the current market value of
the corresponding forward currency contracts.
Futures contracts are marked to market daily and the resultant variation
margin is recorded as an unrealized gain or loss. When a contract is
closed, a realized gain or loss is recorded equal to the difference between
the opening and closing value of the contract. Generally, open forward and
futures contracts are marked to market (i.e., treated as realized and
subject to distribution) for federal income tax purposes at fiscal
year-end.
Foreign-denominated assets and forward currency contracts may involve more
risks than domestic transactions, including currency risk, political and
economic risk, regulatory risk and market risk. Risks may arise from the
potential inability of a counterparty to meet the terms of a contract and
from unanticipated movements in the value of foreign currencies relative to
the U.S. dollar.
The Funds may enter into "futures contracts" and "options" on securities,
financial indexes and foreign currencies, forward contracts, and interest
rate swaps and swap-related products. The Funds intend to use such
derivative instruments primarily to hedge or protect from adverse movements
in securities prices, currency rates or interest rates. The use of futures
contracts and options may involve risks such as the possibility of illiquid
markets or imperfect correlation between the value of the contracts and the
underlying securities, or that the counterparty will fail to perform its
obligations.
26
<PAGE> 29
(h) OPTIONS CONTRACTS - The Funds may purchase and write (sell) put and
call options on foreign and domestic stock indices, foreign currencies and
U.S. and foreign securities that are traded on U.S. and foreign securities
exchanges and over-the-counter markets. These transactions are for hedging
purposes or for the purpose of earning additional income. In addition, the
Funds may enter into such transactions for cross-hedging purposes.
The risk associated with purchasing an option is that the Fund pays a
premium whether or not the option is exercised. Additionally, the Fund
bears the risk of loss of premium and change in market value should the
counterparty not perform under the contract. Put and call options purchased
are accounted for in the same manner as portfolio securities. The cost of
securities acquired through the exercise of call options is increased by
premiums paid. The proceeds from securities sold through the exercise of
put options are decreased by the premiums paid.
When the Fund writes an option, the premium received by the Fund is
recorded as a liability and is subsequently adjusted to the current market
value of the option written. Premiums received from writing options that
expire are recorded by the Fund on the expiration date as realized gains
from option transactions. The difference between the premium and the amount
paid on effecting a closing purchase transaction, including brokerage
commissions, is also treated as a realized gain, or if the premium is less
than the amount paid for the closing purchase transaction, as a realized
loss. If a call option is exercised, the premium is added to the proceeds
from the sale of the underlying security or currency in determining whether
the Fund has realized a gain or loss. If a put option is exercised, the
premium reduces the cost basis of the security or currency purchased by the
Fund. In writing an option, the Fund bears the market risk of an
unfavorable change in the price of the security or currency underlying the
written option. Exercise of an option written by the Fund could result in
the Fund selling or buying a security or currency at a price different from
the current market value. Transactions in put options written for the year
ended September 30, 1999, for the Funds, were as follows:
<TABLE>
<CAPTION>
Focus Fund Growth & Income Fund
--------------------- ----------------------
Number of Number of
Contracts Premiums Contracts Premiums
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Options outstanding at 9/30/98 -- -- -- --
Options written 2,223 2,437,010 677 743,158
Options terminated in closing
purchase transactions (2,223) (2,437,010) (677) (743,158)
Options exercised -- -- -- --
Options expired -- -- -- --
Options outstanding at 9/30/99 -- -- -- --
</TABLE>
The Funds did not write call options during the year ended September 30, 1999.
27
<PAGE> 30
(i) OTHER - Investment transactions are accounted for on a trade date
basis. Each Fund determines the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with
the net sale proceeds. Dividend income is recognized on the ex-dividend
date. Certain dividends from foreign securities will be recorded as soon as
the Trust is informed of the dividend if such information is obtained
subsequent to the ex-dividend date. Interest income is recognized on an
accrual basis.
- --------------------------------------------------------------------------------
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. The Adviser has
voluntarily agreed to limit the total expenses of each Fund (excluding interest,
taxes, brokerage and extraordinary expenses) to an annual rate of 1.60% of the
Focus Fund's average net assets and 1.50% of the Growth & Income Fund's average
net assets until January 1, 2001. This fee waiver is voluntary and may be
terminated at any time. The Adviser is entitled to reimbursement from a Fund of
any fees waived pursuant to this arrangement if such reimbursements do not cause
a Fund to exceed existing expense limitations. For the year ended September 30,
1999, the Adviser recovered previously waived fees of $249,672 in the Growth &
Income Fund.
- --------------------------------------------------------------------------------
4. SERVICE AND DISTRIBUTION PLAN
- --------------------------------------------------------------------------------
The Funds have adopted a Service and Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. The Plan authorizes payments by the Funds in
connection with the distribution of their shares at an annual rate, as
determined from time to time by the Board of Trustees, of up to 0.25% of a
Fund's average daily net assets.
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the period ended September 30, 1999, were as
follows:
<TABLE>
<CAPTION>
Focus Fund (000s) Growth & Income Fund (000s)
----------------- ---------------------------
<S> <C> <C>
PURCHASES
U.S. Government 90,068 11,259
Other 3,719,173 939,701
SALES
U.S. Government 86,208 22,497
Other 2,744,532 649,061
</TABLE>
28
<PAGE> 31
The cost of securities on a tax basis for the Focus and Growth & Income Funds is
$1,929,216 and $590,539, respectively. At September 30, 1999, gross unrealized
appreciation and depreciation on investments for federal income tax purposes
were as follows:
<TABLE>
<CAPTION>
Focus Fund (000s) Growth & Income Fund (000s)
----------------- ---------------------------
<S> <C> <C>
Unrealized Appreciation $ 415,272 $ 120,116
(Unrealized Depreciation) (48,931) (16,527)
Net Unrealized Appreciation
on Investments $ 366,341 $ 103,589
--------- ---------
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
The Marsico Investment Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Marsico Focus Fund and the
Marsico Growth & Income Fund (constituting the Marsico Investment Fund,
hereafter referred to as the "Trust") at September 30, 1999, the results of each
of their operations for the year then ended, the changes in each of their net
assets and the financial highlights for 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 Trust's 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, 1999, by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
Denver, Colorado
November 3, 1999
[LOGO] Recycled Paper.
29
<PAGE> 32
[MARSICO FUNDS LOGO]
Sunstone Distribution Services, LLC, Distributor
