<PAGE> 1
[MARSICO INVESTMENT FUND LOGO]
A REPORT OF THE PAST SIX MONTHS
-------------
MARCH 31, 2000
[MARSICO FUNDS LOGO]
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Letter to the Shareholders................................................1
Marsico Focus Fund........................................................9
Fund Overview...........................................................9
Schedule of Investments................................................10
Statement of Assets and Liabilities....................................13
Statement of Operations................................................14
Statements of Changes in Net Assets....................................15
Financial Highlights...................................................16
Marsico Growth & Income Fund.............................................17
Fund Overview..........................................................17
Schedule of Investments................................................18
Statement of Assets and Liabilities....................................22
Statement of Operations................................................23
Statements of Changes in Net Assets....................................24
Financial Highlights...................................................25
Marsico 21st Century Fund................................................26
Fund Overview..........................................................26
Schedule of Investments................................................27
Statement of Assets and Liabilities....................................30
Statement of Operations................................................31
Statement of Changes in Net Assets.....................................32
Financial Highlights...................................................33
Notes to Financial Statements............................................34
</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
LETTER
TO THE
SHAREHOLDERS
APRIL 28, 2000
DEAR SHAREHOLDERS
The last six months have been a roller coaster ride for most investors. Despite
the turbulent market, the Marsico Funds performed well compared to the S&P
500(R) Index, which is what we consider our primary equity benchmark. For the
six months ended March 31, the Focus Fund's total return was 35.07%, while the
Growth & Income Fund's total return was 38.78%. The S&P 500(R) Index gained
17.51% over the same period.(1) For the three months ended March 31, the Focus
Fund gained 0.21%, the Growth & Income Fund gained 2.84% and the S&P 500(R)
Index gained 2.29%. Please see pages 9 and 17 for the one year and inception to
date average annual performance of the Focus Fund and the Growth & Income Fund.
The Marsico 21st Century Fund opened on February 1; the performance for its
first two months is shown in the enclosed financial statements.
MARSICO FOCUS FUND AND
MARSICO GROWTH & INCOME FUND
The last quarter of 1999 saw strong gains in the stock market. The S&P 500(R)
Index gained 14.88% during the quarter. The Nasdaq Composite Index, which is
characterized by its relatively large technology weighting, soared by 48.27% in
the quarter, including a stunning 22% rise in the month of December. The
performance of the Focus Fund and the Growth & Income Fund during the quarter
was buoyed in large part by technology related holdings. QUALCOMM, the best
performing stock in the S&P 500(R) Index in 1999, experienced significant
appreciation in 1999, including over 50% during the last few trading days of the
year. In addition to the positive impact of technology related companies such as
QUALCOMM, EMC Corporation,
1
<PAGE> 4
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
Cisco Systems and Sun Microsystems during the last quarter 1999, companies as
diverse as Citigroup, Time Warner, Tiffany & Co., Home Depot, Wal-Mart Stores,
Sprint Corporation PCS, Genentech and General Electric contributed to the Funds'
positive performance.(2)
The first quarter of 2000 turned out to be one of the most turbulent in history.
While the S&P 500(R) Index gained 2.29% and the Nasdaq Composite Index gained
12.37% during the quarter, nearly half of all trading days resulted in a price
change of at least 1% in the S&P 500(R) Index while the Nasdaq Composite Index
changed by that amount or more nearly 75% of the trading days in the quarter.
The S&P 500(R) Index was down nearly 7% in the first two months of 2000, then
rallied to gain almost 10% in March. Market leadership continued to be narrow,
with a small number of companies contributing to most of the gain in the S&P
500(R) Index. The Funds experienced good performance from companies such as
Cisco Systems, EMC Corporation, Genentech and Oracle during the quarter. These
gains were partially offset by losses in some holdings, including Lucent
Technologies, UAL Corp., QUALCOMM and Wal-Mart Stores. Although we believe that
Wal-Mart and QUALCOMM continue to have growth potential, we have sold our
positions in UAL and Lucent.
As you review the investment holdings of the Focus Fund and the Growth & Income
Fund at March 31, you may notice a number of new holdings. Most significant
among those are Corning, Sony and Oracle. We believe that Corning is on the
cutting edge of research and development in fiber optic cable, providing part of
the broadband pipeline to the Internet and telecom providers. We think Sony is
well positioned to become one of the strongest entertainment and electronics
companies in the broadband area. Oracle has created a variety of innovative
e-business solutions geared at reducing costs and increasing productivity and is
now selling those solutions to other companies.
2
<PAGE> 5
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
Marsico 21St Century Fund
The 21st Century Fund was launched on February 1, 2000. This Fund is managed by
my colleague, Jim Hillary, and can invest in companies across the market
capitalization spectrum. This Fund is a logical outgrowth of our research
effort. Many of the companies in the 21st Century Fund portfolio are
competitors, suppliers and/or customers of the primarily large capitalization
companies we follow for the Focus Fund and the Growth & Income Fund. Although
the 21st Century Fund has the ability to invest in companies of all sizes, its
investment philosophy and research process parallel those we apply for the Focus
Fund and the Growth & Income Fund.
Investment Outlook
An integral part of our investment process is the formulation of a macroeconomic
view. This analysis creates the strategic backdrop for actual portfolio
construction. While the market has experienced increased volatility, including a
sharp sell-off in the Nasdaq Index since mid-March, we believe the long-term
prospects for U.S. stocks remain quite good.
There are a number of factors that we consider in establishing our long-term
outlook.
First, we have believed for some time that we are experiencing a boom in
productivity. We have observed record levels of productivity gains even after
years and years of economic growth. Every day we have seen new examples of
enhanced productivity related to technology in e-commerce, business to business
enterprises and enhanced communications. We believe the Internet is
fundamentally altering the way business is conducted and, in fact, should serve
as a deflationary force over time.
3
<PAGE> 6
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
However, in selecting investments for the Funds, we have generally avoided pure
Internet plays, particularly those companies with unproven business models
and/or no earnings. Instead, we have emphasized investments in seasoned
companies with established business models and strong earnings that provide the
infrastructure to the Internet. In addition, many of the "old economy" companies
have begun to utilize the Internet as a means of changing the way they conduct
business, including improvements in the sales cycle, the procurement chain and
the supply chain. We believe there is solid growth potential for these
companies.
We feel that the strides made in productivity are a significant contributor to
our long-held thesis that the U.S. is in a long-term lower inflation/lower
interest rate environment. While the most recent CPI reading was higher than
expected, we point out several mitigating factors. Oil prices have retreated
substantially from their levels earlier this year. The just-released housing
data suggests a slowdown in this highly important, visible area of the economy.
In the universe of companies we follow, remarkably few have demonstrated the
ability to raise prices (other than oil prices). Wage pressures, in our view, do
not appear to be a pressing concern. The recent United Auto Workers agreement
called for modest wage increases over three years. Even some companies reporting
higher wage expenses are offsetting those increases with lower general and
administrative costs--usually through improved productivity.
Second, we believe that interest rates should decline further over a period of
time after possibly experiencing a cyclical increase. If we are right, a
declining long-term interest rate environment could have positive implications
for equity valuations.
4
<PAGE> 7
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
We are encouraged by several activities that are occurring or being discussed by
the U.S. government. We are heartened by indications that the lion's share of
the Federal budget surpluses are not being used for entitlement spending.
Instead, the surpluses are being earmarked for reducing government debt. Last
January, the U.S. Treasury announced plans to buy back $30 billion of debt, and
Secretary Summers repeated that figure in a Congressional hearing during March.
In addition, we believe the recent reforms in Social Security that eliminated
the earnings limitations for older workers will help with inflation by
increasing the labor supply. Federal Reserve Chairman Greenspan also recently
alluded to increasing immigration quotas in describing inflationary pressures
related to tight labor markets.
We also believe that the Nasdaq sell-off, while undeniably painful, may in fact
have some healthy aspects. The sharp decline may over time contribute to a
curtailing of consumer spending, which in turn would slow overall economic
growth. It may also help eliminate some of the speculative excesses we have
observed, including the practice known euphemistically as "day trading," record
levels of margin debt, and a feverish IPO and venture capital market. With
regard to the latter, we would note that in the past few years venture
capitalists and the IPO market have essentially provided free capital to the
market (some studies have estimated as much as $105 billion), particularly the
technology sector, which has in turn helped fuel the remarkable rise in
technology stock prices. We believe that as these sources of capital are
reduced, it will have the effect of slowing the overall economy.
Having made these positive comments, many of which anchor our long-term view on
the capital markets, we at the same time believe that a variety of
5
<PAGE> 8
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
other forces--perhaps shorter-term in nature--are becoming increasingly
important and need to be considered as we invest shareholder assets. The U.S.
continues to experience remarkably strong economic growth. Gross Domestic
Product ("GDP") was 7.3% on an annualized basis in the fourth quarter 1999 and
5.4% on an annualized basis in the first quarter 2000--well above the 3.5-4% the
Federal Reserve is targeting. We believe that this level of growth must slow,
even taking into account productivity gains, which also are at record levels. As
a result, we expect that the Federal Reserve will continue to gradually raise
interest rates as a means of reigning in GDP growth. And, while it may seem
counterintuitive, we believe the Nasdaq decline may work in concert with the
Fed's tightening monetary policy.
As this is written, we are in the midst of first quarter 2000 corporate
"earnings season." Thus far, earnings generally have been very strong--in some
cases materially higher than expected by many investors. The most recent data
for companies represented in the S&P 500(R) Index that have reported earnings
indicate that more than 70% were better than expected. While this is clearly
good news, a year from now earnings comparisons may be quite difficult given the
levels we are seeing presently.
We also are seeing other "pressure points" on the U.S. stock market, including
the uncertainty about Microsoft Corporation's future, reduced money supply and
widening interest rate spreads.
Weighing all the available macroeconomic data and company-specific information
for the universe that we follow, my team and I have determined that it is
prudent to implement some changes to the holdings in the Focus and Growth &
Income Funds. These are intended to increase the Funds' overall
6
<PAGE> 9
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
industry and sector diversification while potentially having the simultaneous
effect of reducing some of the Funds' volatility. This month, we have begun to
reduce our holdings in some higher multiple stocks, generally in the technology
sector. In turn, we are increasing investments in companies that--in our
opinion--are trading at attractive valuations and offer the potential for solid,
relatively predictable earnings streams in a slower-growth economic environment.
We remain optimistic about many technology companies, particularly "blue chip,"
proven companies that provide the infrastructure to the Internet (e.g., routers,
switchers, hardware, software, storage) such as Cisco Systems, EMC Corporation,
Oracle and Sun Microsystems. We have initiated investments in consumer products
and pharmaceutical companies while increasing exposure to the communications
sector (e.g., Sprint PCS, Vodafone)--areas that we think should be able to
produce solid growth rates even if interest rates cyclically move higher. We
continue to like the prospects for cable television and entertainment companies,
particularly those that have completed the bulk of their capital expenditures
and offer outstanding content. These include companies such as America Online
and Time Warner.
As always, we strive to invest in well-managed companies with global reach,
strong financial characteristics and good brand franchises--most of which are
either creating the technology that is spurring productivity or taking advantage
of the improvements in technology to better their businesses. We continue to
find a number of exciting investment opportunities that meet our investment
criteria. We believe overall valuations for the companies we follow will be
reasonable and there will be room for stock appreciation.
The volatility in the stock market can create opportunities for long-term
investors.
7
<PAGE> 10
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
We appreciate having you as a shareholder in the Marsico Funds and look forward
to being part of your investment program for a long time to come.
Sincerely,
/s/ THOMAS F. MARSICO
- ----------------------------------------
Thomas F. Marsico
Chairman and Chief Executive Officer
Sunstone Distribution Services, LLC, distributor for the Marsico Funds.
1 Past performance is no guarantee of future results. Total returns are based
on net change in NAV assuming reinvestment of distributions. Share price
and investment return will vary so that, when redeemed, an investor's
shares may be worth more or less than the 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 his
best investment ideas. Such concentration also increases the overall risk
profile of the 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.
2 Portfolio composition is subject to change at any time and should not be
considered a recommendation to purchase or sell a particular security. See
the accompanying Schedules of Investments for the percent of each Fund's
portfolio represented by the securities mentioned in this letter.
8
<PAGE> 11
FUND
OVERVIEW
MARSICO FOCUS FUND
MARCH 31, 2000 (UNAUDITED)
The Focus Fund invests primarily in the common stocks of large companies,
normally a core position of 20-30 common stocks that are selected for their
long-term growth potential.
One Year Average Annual Since
PERFORMANCE COMPARISON (4/1/99 - 3/31/00) Inception (12/31/97 - 3/31/00)
- --------------------------------------------------------------------------------
Marsico Focus Fund 38.24% 46.39%
S&P 500(R) Index 17.94% 23.00%
NET ASSETS
- --------------------------------------------------------------------------------
3/31/00 $3,331,886,848
NET ASSET VALUE
- ----------------------------------------
Net Asset Value Per Share $ 23.50
TOP FIVE HOLDINGS
- ----------------------------------------
Genentech, Inc. 8.03%
Cisco Systems, Inc. 7.93
EMC Corp. 6.97 [GRAPH]
Oracle, Inc. 5.53
Corning, Inc. 5.02
SECTOR ALLOCATION(2)
- ----------------------------------------
Technology 63.20%
Consumer Cyclical 20.48
Financial 9.89
Industrial 6.43
(1) This chart assumes an initial investment of $10,000 made on December 31,
1997 (commencement of operations). Past performance is no guarantee of
future results. Total returns are based on net change in NAV assuming
reinvestment of distributions. Share price and investment return will vary
so that, when redeemed, an investor's shares may be worth more or less than
the original cost.
(2) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one
industry. The Fund's portfolio composition is subject to change at any
time.
The S&P(R) 500 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.
The period covered by this report has been characterized by volatility in
the technology sector.
9
<PAGE> 12
SCHEDULE
OF
INVESTMENTS
Marsico Focus Fund
March 31, 2000 (unaudited)
<TABLE>
<CAPTION>
Number Market Value Percent of
of Shares in Dollars Net Assets
------------ ------------ ------------
<S> <C> <C> <C>
COMMON STOCKS
Audio/Video Products
Sony Corporation - ADR* 569,008 $ 159,393,366 4.78%
------------ ------------ ------------
Cellular Telecommunications
Sprint Corporation 1,715,358 112,034,319 3.36
Vodafone AirTouch PLC-SP ADR 1,832,453 101,820,670 3.06
------------ ------------
213,854,989 6.42
------------ ------------
Computer Data Security
Entrust Technologies, Inc.* 287,907 24,494,588 0.73
------------ ------------ ------------
Computer Software
Adobe Systems, Inc. 786,268 87,521,457 2.63
Oracle Corporation* 2,360,941 184,300,957 5.53
------------ ------------
271,822,414 8.16
------------ ------------
Computers - Memory Devices
EMC Corporation* 1,859,280 232,410,000 6.97
------------ ------------ ------------
Computers - Micro
Sun Microsystems, Inc.* 1,079,474 101,150,087 3.04
------------ ------------ ------------
Diversified Financial Services
Citigroup, Inc. 998,428 59,219,261 1.78
------------ ------------ ------------
Diversified Manufacturing
Corning, Inc. 862,625 167,349,250 5.02
General Electric Company 294,696 45,733,136 1.37
------------ ------------
213,082,386 6.39
------------ ------------
Electronic Components - Semiconductors
Applied Materials, Inc.* 1,029,642 97,043,758 2.91
Motorola, Inc. 617,590 87,929,376 2.64
Texas Instruments, Inc. 419,997 67,199,520 2.02
------------ ------------
252,172,654 7.57
------------ ------------
Fiber Optics
JDS Uniphase Corporation* 518,389 62,498,274 1.88
------------ ------------ ------------
</TABLE>
10
<PAGE> 13
SCHEDULE
OF
INVESTMENTS
[CONTINUED]
Marsico Focus Fund
March 31, 2000 (unaudited)
<TABLE>
<CAPTION>
Number Market Value Percent of
of Shares in Dollars Net Assets
------------ -------------- -------------
<S> <C> <C> <C>
COMMON STOCKS CONTINUED
Finance - Investment Banker/Broker
Morgan Stanley Dean Witter & Co. 1,407,012 $ 114,759,416 3.44%
------------ -------------- -------------
Finance - Mortgage Loan/Banker
Fannie Mae 2,726,699 153,888,075 4.62
------------ -------------- -------------
Hotels & Motels
Four Seasons Hotels, Inc.* 730,196 32,904,457 0.99
------------ -------------- -------------
Internet Software
America Online, Inc.* 1,529,559 102,862,843 3.09
------------ -------------- -------------
Medical - Biomedical/Gene
Genentech, Inc.* 1,759,337 267,419,224 8.03
------------ -------------- -------------
Multimedia
Time Warner, Inc. 1,513,198 151,319,800 4.54
------------ -------------- -------------
Networking Products
Cisco Systems, Inc.* 3,415,370 264,050,793 7.93
Juniper Networks, Inc.* 150,773 39,738,109 1.19
3Com Corporation* 2,196,980 122,207,013 3.67
-------------- -------------
425,995,915 12.79
-------------- -------------
Printers & Related Products
Lexmark International Group, Inc.* 262,629 27,773,017 0.83
------------ -------------- -------------
Radio
Clear Channel Communications, Inc.* 494,515 34,152,442 1.02
------------ -------------- -------------
Retail - Building Products
The Home Depot, Inc. 1,992,486 128,515,347 3.86
------------ -------------- -------------
Retail - Discount
Wal-Mart Stores, Inc. 1,806,438 100,257,309 3.01
------------ -------------- -------------
Retail - Jewelry
Tiffany & Co. 866,224 72,437,982 2.17
------------ -------------- -------------
Telecommunications Equipment
Qualcomm, Incorporated* 758,055 113,187,087 3.40
------------ -------------- -------------
Total Common Stocks
(cost $2,331,995,170) $3,315,570,933 99.51
-------------- -------------
</TABLE>
11
<PAGE> 14
SCHEDULE
OF
INVESTMENTS
[CONTINUED]
MARSICO FOCUS FUND
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Principal/ Market Value Percent of
Shares in Dollars Net Assets
--------------- --------------- ----------
<S> <C> <C> <C>
Short-Term Investments
Federal Home Loan Bank
5.90%, 4/3/00 $ 70,776,793 $ 70,776,793 2.12%
SSgA Money Market Fund 226,466 226,466 0.01
--------------- --------------- ----------
Total Short-Term Investments
(cost $71,003,259) 71,003,259 2.13
--------------- ----------
Total Investments (cost $2,402,998,429) 3,386,574,192 101.64
Liabilities less Cash and Other Assets (54,687,344) (1.64)
--------------- ----------
Net Assets $ 3,331,886,848 100.00%
--------------- ----------
</TABLE>
* Non-income producing
See notes to financial statements.
12
<PAGE> 15
STATEMENT
OF ASSETS
AND
LIABILITIES
MARSICO FOCUS FUND
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in thousands)
----------------------
<S> <C>
ASSETS
Investments, at value
(cost $2,402,998) $ 3,386,574
Cash and foreign currency 50
Receivable for investments sold 9,666
Receivable for capital stock sold 5,216
Interest and dividends receivable 466
Organizational expenses, net of
accumulated amortization 76
Prepaid expenses and other assets 108
TOTAL ASSETS 3,402,156
---------------
LIABILITIES
Payable for investments purchased 54,315
Payable for capital stock redeemed 12,170
Accrued investment advisory fee 2,457
Accrued distribution fee 741
Accrued expenses and other liabilities 586
Total Liabilities 70,269
NET ASSETS $ 3,331,887
---------------
NET ASSETS CONSIST OF
Paid-in-capital $ 2,141,871
Accumulated net realized gain on
investments and options written 202,352
Accumulated net realized gain on
foreign currency transactions 4,088
Net unrealized appreciation on investments and foreign
currency translations 983,576
NET ASSETS $ 3,331,887
SHARES OUTSTANDING, $0.001 par value
(Unlimited shares authorized) 141,757
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $ 23.50
---------------
</TABLE>
* Not in thousands.
See notes to financial statements.
13
<PAGE> 16
STATEMENT
OF
OPERATIONS
MARSICO FOCUS FUND
SIX MONTHS ENDED
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in thousands)
---------------------
<S> <C>
INVESTMENT INCOME
Interest $ 3,266
Dividends (net of $43 of non-reclaimable
foreign withholding taxes) 4,699
Total Investment Income 7,965
-------------
EXPENSES
Investment advisory fees 12,570
Distribution fees 3,697
Transfer agent fees and expenses 1,469
Fund administration fees 190
Custody and fund accounting fees 174
Printing and postage expenses 173
Federal and state registration fees 169
Trustees' fees and expenses 52
Professional fees 28
Amortization of organizational costs 13
Miscellaneous 48
Total expenses 18,583
Less expenses paid indirectly (186)
Net Expenses 18,397
NET INVESTMENT LOSS (10,432)
-------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments 252,933
Net realized loss on options written (16,028)
Net realized gain on foreign currency transactions 583
Change in unrealized appreciation on
investments and foreign currency translations 596,613
Net Gain on Investments 834,101
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 823,669
-------------
</TABLE>
See notes to financial statements.
14
<PAGE> 17
STATEMENTS
OF CHANGES
IN NET ASSETS
MARSICO FOCUS FUND
<TABLE>
<CAPTION>
Six Months Ended Year
3/31/00 Ended
(Amounts in thousands) (unaudited) 9/30/99
---------------- ---------------
<S> <C> <C>
OPERATIONS
Net investment loss $ (10,432) $ (7,311)
Net realized gain on investments 252,933 29,235
Net realized loss on options written (16,028) (764)
Net realized gain on foreign currency transactions 583 3,073
Change in unrealized appreciation/depreciation
on investments and foreign currency translations 596,613 401,160
Net increase in net assets
resulting from operations 823,669 425,393
--------------- ---------------
DISTRIBUTIONS
Net realized gains (5,242) --
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares 950,975 1,659,307
Proceeds from reinvestment of distributions 5,128 --
Redemption of shares (700,784) (684,816)
Net increase from capital share transactions 255,319 974,491
TOTAL INCREASE IN NET ASSETS 1,073,746 1,399,884
--------------- ---------------
NET ASSETS
Beginning of period 2,258,141 858,257
End of period $ 3,331,887 $ 2,258,141
--------------- ---------------
TRANSACTIONS IN SHARES
Shares sold 43,928 103,441
Shares issued in reinvestment of distributions 239 --
Shares redeemed (31,935) (43,360)
Net increase 12,232 60,081
--------------- ---------------
</TABLE>
See notes to financial statements.
15
<PAGE> 18
FINANCIAL
HIGHLIGHTS
MARSICO FOCUS FUND
FOR A FUND SHARE OUTSTANDING
THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
Six Months Year 12/31/97*
Ended 3/31/00 Ended to
(unaudited) 9/30/99 9/30/98
-------------- -------------- --------------
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 17.43 $ 12.36 $ 10.00
Income from Investment Operations
Net investment loss (0.07) (0.06) (0.01)
Net realized and unrealized
gains on investments 6.18 5.13 2.37
Total from investment operations 6.11 5.07 2.36
Distributions
Net realized gains (0.04) -- --
NET ASSET VALUE, END OF PERIOD $ 23.50 $ 17.43 $ 12.36
TOTAL RETURN 35.07%(1) 41.02% 23.60%(1)
Supplemental Data and Ratios
Net assets, end of period (000s) $ 3,331,887 $ 2,258,141 $ 858,257
Ratio of expenses to average
net assets, before expenses
paid indirectly 1.26%(2) 1.31% 1.56%(2)
Ratio of net investment loss to
average net assets, net of
expenses paid indirectly (0.71)%(2) (0.43)% (0.27)%(2)
Ratio of net investment loss to
average net assets, before
expenses paid indirectly (0.72)%(2) (0.45)% (0.27)%(2)
Portfolio turnover rate 105%(1) 173% 170%(1)
</TABLE>
* Commencement of operations.
(1) Not annualized.
(2) Annualized.
See notes to financial statements.
16
<PAGE> 19
FUND
OVERVIEW
MARSICO GROWTH &
INCOME FUND
MARCH 31, 2000 (UNAUDITED)
The Growth & Income Fund invests primarily in the common stocks of large
companies that are selected for their growth potential. In addition, at least
25% of its total assets are invested in securities that have income potential.
One Year Average Annual Since
PERFORMANCE COMPARISON (4/1/99 - 3/31/00) Inception (12/31/97 - 3/31/00)
- --------------------------------------------------------------------------------
Marsico Growth & Income Fund 43.90% 43.77%
S&P 500(R)Index 17.94% 23.00%
NET ASSETS
- --------------------------------------------------------------------------------
3/31/00 $1,152,808,434
NET ASSET VALUE
- -----------------------------------------
Net Asset Value Per Share $ 22.48
TOP FIVE EQUITY HOLDINGS
- -----------------------------------------
Cisco Systems, Inc. 6.47%
EMC Corp. 5.95
Sony Corp. 5.79 [GRAPH]
Genentech, Inc. 4.86
Time Warner, Inc. 4.30
SECTOR ALLOCATION(2)
- -----------------------------------------
Technology 61.57%
Consumer Cyclical 25.15
Financial 8.12
Industrial 2.27
Consumer Non-cyclical 2.14
Utilities 0.75
(1) This chart assumes an initial investment of $10,000 made on December 31,
1997 (commencement of operations). Past performance is no guarantee of
future results. Total returns are based on net change in NAV assuming
reinvestment of distributions. Share price and investment return will vary
so that, when redeemed, an investor's shares may be worth more or less than
the original cost.
(2) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one
industry. The Fund's portfolio composition is subject to change at any
time.
The S&P(R) 500 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. The period covered by this report has been characterized by
volatility in the technology sector.
17
<PAGE> 20
SCHEDULE
OF
INVESTMENTS
Marsico Growth &
Income Fund
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Number Market Value Percent of
of Shares in Dollars Net Assets
------------- ------------- -------------
<S> <C> <C> <C>
COMMON AND PREFERRED STOCKS
Advertising Agencies
Omicom Group, Inc. 127,302 $ 11,894,781 1.03%
------------- ------------- -------------
Audio/Video Products
Sony Corporation - ADR* 238,263 66,743,423 5.79
------------- ------------- -------------
Automotive Cars & Light Trucks
General Motors Corporation 228,055 18,885,805 1.64
------------- ------------- -------------
Brewery
Anheuser-Busch Companies, Inc. 168,761 10,505,372 0.91
------------- ------------- -------------
Broadcast Services/Programming
UnitedGlobalCom Inc. - Class A* 165,242 12,403,477 1.08
------------- ------------- -------------
Building - Residential/Commercial
M.D.C Holdings, Inc. 239,956 4,304,211 0.37
------------- ------------- -------------
Cellular Telecommunications
Sprint Corporation 599,326 39,143,479 3.40
Vodafone AirTouch PLC-SP ADR 487,900 27,108,944 2.35
------------- -------------
66,252,423 5.75
------------- -------------
Computer Data Security
Entrust Technologies, Inc.* 75,000 6,380,859 0.55
------------- ------------- -------------
Computer Software
Adobe Systems, Inc. 179,504 19,981,039 1.73
Oracle Corporation* 593,389 46,321,429 4.02
------------- -------------
66,302,468 5.75
------------- -------------
Computers - Memory Devices
EMC Corporation* 548,300 68,537,500 5.95
------------- ------------- -------------
Computers - Micro
Sun Microsystems, Inc.* 374,686 35,109,249 3.05
------------- ------------- -------------
Cosmetics & Toiletries
Estee Lauder Companies, Inc. - Class A 57,837 2,895,465 0.25
------------- ------------- -------------
Diversified Financial Services
Citigroup, Inc. 601,005 35,647,109 3.09
------------- ------------- -------------
Diversified Manufacturing
Corning, Inc. 122,371 23,739,975 2.06
------------- ------------- -------------
Electronic Components - Semiconductors
Applied Materials, Inc* 349,392 32,930,196 2.86
Broadcom Corporation - Class A* 22,987 5,582,968 0.48
Motorola, Inc. 38,844 5,530,414 0.48
------------- -------------
44,043,578 3.82
------------- -------------
</TABLE>
18
<PAGE> 21
SCHEDULE
OF
INVESTMENTS
[CONTINUED]
Marsico Growth &
Income Fund
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Number Market Value Percent of
of Shares in Dollars Net Assets
------------ ------------ ------------
<S> <C> <C> <C>
COMMON AND PREFERRED STOCKS continued
Electric Generation
AES Trust III Convertible Preferred,
6.75%, 10/15/29 128,050 $ 8,643,375 0.75%
------------ ------------ ------------
Fiber Optics
Flag Telecom Holdings Limited* 34,791 787,146 0.07
JDS Uniphase Corporation* 120,410 14,516,931 1.26
------------ ------------
15,304,077 1.33
------------ ------------ ------------
Finance - Investment Banker/Broker
Morgan Stanley Dean Witter & Co. 369,964 30,175,189 2.62
------------ ------------ ------------
Finance - Mortgage Loan/Banker
Fannie Mae 325,963 18,396,537 1.60
------------ ------------ ------------
Hotels & Motels
Four Seasons Hotels, Inc.* 345,914 15,587,750 1.35
------------ ------------ ------------
Internet Software
America Online, Inc.* 517,500 34,801,875 3.02
Commerce One, Inc.* 32,172 4,801,671 0.42
------------ ------------
39,603,546 3.44
------------ ------------ ------------
Medical - Biomedical/Gene
Genentech, Inc.* 368,323 55,985,096 4.86
------------ ------------ ------------
Medical - Wholesale Drug Distributors
Priority Healthcare Corporation - Class B* 176,087 8,848,372 0.77
------------ ------------ ------------
Multimedia
Comcast Corporation - Class A 353,733 15,343,169 1.33
Time Warner, Inc. 495,658 49,565,800 4.30
------------ ------------
64,908,969 5.63
------------ ------------ ------------
Networking Products
Cisco Systems, Inc.* 965,472 74,643,054 6.47
Juniper Networks, Inc.* 51,530 13,581,376 1.18
3Com Corporation* 600,484 33,401,921 2.90
------------ ------------
121,626,351 10.55
------------ ------------ ------------
Printers & Related Products
Lexmark International Group, Inc.* 10,000 1,057,500 0.09
------------ ------------ ------------
</TABLE>
19
<PAGE> 22
SCHEDULE
OF
INVESTMENTS
[CONTINUED]
Marsico Growth &
Income Fund
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Number Market Value Percent of
of Shares in Dollars Net Assets
-------------- -------------- --------------
<S> <C> <C> <C>
COMMON AND PREFERRED STOCKS continued
Radio
Clear Channel Communications, Inc.* 247,660 $ 17,104,019 1.48%
-------------- -------------- --------------
Retail - Building Products
The Home Depot, Inc. 489,492 31,572,234 2.74
-------------- -------------- --------------
Retail - Discount
Wal-Mart Stores, Inc. 453,795 25,185,622 2.18
-------------- -------------- --------------
Retail - Jewelry
Tiffany & Co. 231,927 19,394,895 1.68
-------------- -------------- --------------
Satellite Telecommunications
General Motors Class H* 138,015 17,182,868 1.49
-------------- -------------- --------------
Super-Regional Banks U.S.
Northern Trust Corporation 130,320 8,804,745 0.76
-------------- -------------- --------------
Telecommunications Equipment
QUALCOMM, Incorporated* 314,094 46,898,160 4.07
-------------- -------------- --------------
Total Common and Preferred Stocks
(cost $682,210,296) $1,019,925,000 88.48
-------------- --------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount Market Value Percent of
in Dollars in Dollars Net Assets
---------------- -------------- --------------
<S> <C> <C> <C>
CORPORATE BONDS
Building - Residential/Commercial
M.D.C. Holdings, Inc.,
8.375%, 2/1/08 $ 2,700,000 2,268,000 0.20
---------------- -------------- --------------
Cellular Telecommunications
Nextel Communications, Inc.,
5.25%, 1/15/10(1) 17,635,000 21,018,804 1.82
---------------- -------------- --------------
Computers - Integrated Systems
Redback Networks, Inc.,
5.00%, 4/1/07(1) 1,825,000 1,761,125 0.15
---------------- -------------- --------------
Drug Delivery Systems
Alkermes, Inc.,
3.75%, 2/15/07(1) 2,700,000 2,268,000 0.20
---------------- -------------- --------------
</TABLE>
20
<PAGE> 23
SCHEDULE
OF
INVESTMENTS
[CONTINUED]
Marsico Growth &
Income Fund
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Principal Amount Market Value Percent of
in Dollars in Dollars Net Assets
---------------- --------------- ---------------
<S> <C> <C> <C>
CORPORATE BONDS continued
Enterprise Software Services
BEA Systems, Inc.,
4.00%, 12/15/06(1) $ 8,220,000 $ 10,151,700 0.88%
--------------- ---------------
i2 Technologies, Inc.,
5.25%, 12/15/06(1) 9,225,000 16,051,500 1.39
--------------- ---------------
26,203,200 2.27
--------------- --------------- ---------------
Medical - Biomedical/Gene
Alexion Pharmaceuticals, Inc.,
5.75%, 3/15/07(1) 12,036,000 9,428,160 0.82
--------------- --------------- ---------------
Networking Products
Juniper Networks, Inc.,
4.75%, 3/15/07 49,087,000 51,408,815 4.46
--------------- --------------- ---------------
Telecommunications Services
Level 3 Communications, Inc.,
6.00%, 9/15/09 6,300,000 10,997,469 0.95
--------------- --------------- ---------------
Total Corporate Bonds (cost $109,652,133) 125,353,573 10.87
--------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount Market Value Percent of
in Dollars in Dollars Net Assets
---------------- --------------- ---------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
Federal Home Loan Bank,
5.90%, 4/3/00 5,998,033 5,998,033 0.52
SSgA Money Market Fund 10,892 10,892 --
--------------- --------------- ---------------
Total Short-Term Investments
(cost $6,008,925) 6,008,925 0.52
--------------- ---------------
Total Investments (cost $797,871,354) 1,151,287,498 99.87
--------------- ---------------
Cash and Other Assets less Liabilities 1,520,936 0.13
--------------- ---------------
NET ASSETS $ 1,152,808,434 100.00%
=============== ===============
</TABLE>
* Non-income producing
(1) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31,
2000, the value of those securities amounted to approximately $60,679,289
or 5.3% of net assets.
See notes to financial statements.
21
<PAGE> 24
STATEMENT
OF ASSETS
AND
LIABILITIES
MARSICO GROWTH &
INCOME FUND
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in thousands)
<S> <C>
ASSETS
Investments, at value
(cost $797,871) $ 1,151,287
Cash and foreign currency 16
Receivable for investments sold 321
Receivable for capital stock sold 2,666
Interest and dividends receivable 858
Organizational expenses, net of
accumulated amortization 76
Prepaid expenses and other assets 37
---------------
Total Assets $ 1,155,261
===============
LIABILITIES
Payable for capital stock redeemed 1,058
Accrued investment advisory fee 838
Accrued distribution fee 311
Accrued expenses and other liabilities 246
---------------
Total Liabilities 2,453
---------------
NET ASSETS $ 1,152,808
===============
NET ASSETS CONSIST OF
Paid-in-capital $ 757,419
Accumulated net realized gain on investments
and options written 41,495
Accumulated net realized gain on foreign currency transactions 478
Net unrealized appreciation on investments and foreign
currency translations 353,416
---------------
NET ASSETS $ 1,152,808
===============
Shares Outstanding, $0.001 par value
(Unlimited shares authorized) 51,278
---------------
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $ 22.48
===============
</TABLE>
* Not in thousands.
See notes to financial statements.
22
<PAGE> 25
STATEMENT
OF
OPERATIONS
MARSICO GROWTH &
INCOME FUND
SIX MONTHS ENDED
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in thousands)
<S> <C>
INVESTMENT INCOME
Interest $ 1,939
Dividends (net of $14 of non-reclaimable
foreign withholding taxes) 1,562
---------------
Total Investment Income 3,501
---------------
EXPENSES
Investment advisory fees 4,091
Distribution fees 1,203
Transfer agent fees and expenses 442
Fund administration fees 118
Federal and state registration fees 88
Custody and fund accounting fees 76
Printing and postage expenses 54
Trustees' fees and expenses 52
Professional fees 28
Amortization of organizational costs 13
Miscellaneous 15
---------------
Total expenses 6,180
Less expenses paid indirectly (30)
---------------
Net Expenses 6,150
---------------
NET INVESTMENT LOSS (2,649)
---------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on investments 52,152
Net realized loss on options written (4,345)
Net realized gain on foreign currency transactions 422
Change in unrealized appreciation on
investments and foreign currency translations 246,211
---------------
Net Gain on Investments 294,440
---------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 291,791
===============
</TABLE>
See notes to financial statements.
23
<PAGE> 26
STATEMENTS
OF CHANGES
IN NET ASSETS
MARSICO GROWTH &
INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED 3/31/00 ENDED
(AMOUNTS IN THOUSANDS) (UNAUDITED) 9/30/99
--------------- ---------------
<S> <C> <C>
OPERATIONS
Net investment loss $ (2,649) $ (2,348)
Net realized gain on investments 52,152 19,293
Net realized loss on options written (4,345) (264)
Net realized gain on foreign currency transactions 422 --
Change in unrealized appreciation/depreciation
on investments and foreign currency translations 246,211 110,403
--------------- ---------------
Net increase in net assets
resulting from operations 291,791 127,084
--------------- ---------------
DISTRIBUTIONS
Net realized gains (5,226) --
--------------- ---------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares 375,819 512,070
Proceeds from reinvestment of distributions 5,019 --
Redemption of shares (203,085) (214,183)
--------------- ---------------
Net increase from capital share transactions 177,753 297,887
--------------- ---------------
TOTAL INCREASE IN NET ASSETS 464,318 424,971
--------------- ---------------
NET ASSETS
Beginning of period 688,490 263,519
End of period $ 1,152,808 $ 688,490
=============== ===============
TRANSACTIONS IN SHARES
Shares sold 18,508 32,231
Shares issued in reinvestment of distributions 250 --
Shares redeemed (9,749) (12,795)
--------------- ---------------
Net increase 9,009 19,436
=============== ===============
</TABLE>
See notes to financial statements.
24
<PAGE> 27
FINANCIAL
HIGHLIGHTS
MARSICO GROWTH &
INCOME FUND
FOR A FUND SHARE OUTSTANDING
THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEAR 12/31/97*
ENDED 3/31/00 ENDED to
(UNAUDITED) 9/30/99 9/30/98
------------- ------------- ------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 16.29 $ 11.54 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.05) (0.06) (0.01)
Net realized and unrealized
gains on investments 6.35 4.81 1.55
------------- ------------- ------------
Total from investment operations 6.30 4.75 1.54
------------- ------------- ------------
DISTRIBUTIONS
Net realized gains (0.11) -- --
------------- ------------- ------------
NET ASSET VALUE, END OF PERIOD $ 22.48 $ 16.29 $ 11.54
============= ============= ============
TOTAL RETURN 38.78%(1) 41.16% 15.40%(1)
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $ 1,152,808 $ 688,490 $ 263,519
Ratio of expenses to average net assets,
less waivers and before expenses
paid indirectly 1.28%(2) 1.43% 1.51%(2)
Ratio of net investment loss to average
net assets, net of waivers and expenses
paid indirectly (0.55)%(2) (0.46)% (0.14)%(2)
Ratio of expenses to average net assets,
before waivers and expenses paid indirectly 1.28%(2) 1.43% 1.78%(2)
Ratio of net investment loss to average
net assets, before waivers and expenses
paid indirectly (0.56)%(2) (0.47)% (0.41)%(2)
Portfolio turnover rate 73%(1) 137% 141%(1)
</TABLE>
* Commencement of operations.
(1) Not annualized.
(2) Annualized.
See notes to financial statements.
25
<PAGE> 28
FUND
OVERVIEW
MARSICO 21ST
CENTURY FUND
MARCH 31, 2000
The 21st Century Fund invests primarily in common stocks that are selected for
their long-term growth potential. The Fund may invest in companies of any size,
and will normally hold a core position of between 35 and 50 common stocks.
PERFORMANCE COMPARISON Since Inception (1/31/00)
- --------------------------------------------------------------------------------
Marsico 21st Century Fund 28.10%(1)
S&P 500(R) Index 7.70%
NET ASSETS
- --------------------------------------------------------------------------------
3/31/00 $166,510,030
NET ASSET VALUE
- ------------------------------------
Net Asset Value Per Share $12.83 Growth of $10,000(2)
o Marsico 21st Century Fund
TOP FIVE HOLDINGS o S&P 500(R) Index
- ------------------------------------
Titan Corporation 9.19% [GRAPH]
Ciena Corporation 4.85
QUALCOMM, Incorporated 4.48
Advanced Micro Devices, Inc. 3.77
Sycamore Networks, Inc. 3.48
SECTOR ALLOCATION(3)
- ------------------------------------
Technology 74.83%
Industrial 12.10
Consumer Cyclical 6.44
Financial 2.83
Energy 2.35
Consumer Non-cyclical 1.45
(1) The performance returns for the 21st Century Fund reflect a fee waiver in
effect; in the absence of such a waiver, the returns would be reduced. The
Fund achieved its short-term performance through investments in favorable
markets, new security issuances and investments in technology issuers,
which may not be sustainable.
(2) This chart assumes an initial investment of $10,000 made on February 1,
2000 (commencement of operations). Past performance is no guarantee of
future results. Total returns are based on net change in NAV assuming
reinvestment of distributions. Share price and investment return will vary
so that, when redeemed, an investor's shares may be worth more or less than
the original cost. The S&P(R) 500 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.
(3) Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors may include more than one
industry. The Fund's portfolio composition is subject to change at any
time.
The period covered by this report has been characterized by volatility in
the technology sector.
26
<PAGE> 29
SCHEDULE
OF
INVESTMENTS
MARSICO 21ST
CENTURY FUND
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Number Market Value Percent of
of Shares in Dollars Net Assets
------------ ------------ ------------
<S> <C> <C> <C>
COMMON STOCKS
AEROSPACE/DEFENSE
Titan Corporation* 300,000 $ 15,300,000 9.19%
------------ ------------ ------------
AUDIO/VIDEO PRODUCTS
Sony Corporation - ADR* 15,737 4,408,327 2.65
------------ ------------ ------------
AUTOMOTIVE CARS & LIGHT TRUCKS
Ford Motor Company 40,000 1,837,500 1.10
------------ ------------ ------------
CELLULAR TELECOMMUNICATIONS
Alamosa PCS Holdings* 85,000 3,208,750 1.93
Vodafone AirTouch PLC-SP ADR 18,000 1,000,125 0.60
------------ ------------
4,208,875 2.53
------------ ------------ ------------
COMPUTER DATA SECURITY
Entrust Technologies, Inc.* 57,000 4,849,453 2.91
------------ ------------ ------------
COMPUTER INTEGRATED SYSTEMS
Psion PLC 43,870 2,880,427 1.73
------------ ------------ ------------
COMPUTER SOFTWARE
Adobe Systems, Inc. 29,964 3,335,368 2.01
Oracle Corporation* 50,000 3,903,125 2.34
------------ ------------
7,238,493 4.35
------------ ------------ ------------
COMPUTERS - MEMORY DEVICES
EMC Corporation* 19,000 2,375,000 1.43
Veritas Software* 20,000 2,600,000 1.56
------------ ------------
4,975,000 2.99
------------ ------------ ------------
Diversified Manufacturing
Corning Inc. 21,437 4,158,778 2.50
------------ ------------ ------------
ELECTRONIC COMPONENTS - MISCELLANEOUS
Blonder Tongue Labs, Inc.* 100,000 737,500 0.44
Learnout & Hauspie Company* 30,000 3,315,000 1.99
------------ ------------
4,052,500 2.43
------------ ------------ ------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS
Advanced Micro Devices, Inc.* 110,000 6,276,875 3.77
Applied Materials, Inc.* 49,174 4,634,649 2.78
Broadcom Corporation - Class A* 8,602 2,089,211 1.26
Motorola, Inc. 40,000 5,695,000 3.42
SDL, Inc.* 10,000 2,128,750 1.28
Texas Instruments, Inc. 30,000 4,800,000 2.88
Xilinx, Inc.* 40,000 3,312,500 1.99
------------ ------------
28,936,985 17.38
------------ ------------ ------------
</TABLE>
27
<PAGE> 30
SCHEDULE
OF
INVESTMENTS
(CONTINUED)
MARSICO 21ST
CENTURY FUND
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Number Market Value Percent of
of Shares in Dollars Net Assets
------------ ------------ ------------
<S> <C> <C> <C>
COMMON STOCKS continued
ELECTRONIC MEASURING INSTRUMENTS
Agilent Technologies, Inc.* 50,000 $ 5,200,000 3.12%
------------ ------------ ------------
ENTERPRISE SOFTWARE SERVICES
Novell, Inc.* 120,000 3,435,000 2.06
------------ ------------ ------------
FIBER OPTICS
Ciena Corporation* 64,000 8,072,000 4.85
Sycamore Networks, Inc.* 45,000 5,805,000 3.48
------------ ------------
13,877,000 8.33
------------ ------------ ------------
FINANCE - INVESTMENT BANKER/BROKER
Morgan Stanley Dean Witter & Company 57,575 4,695,960 2.82
------------ ------------ ------------
INSTRUMENTS - SCIENTIFIC
PE Corporation* 45,000 4,342,500 2.61
Perkinelmer, Inc. 35,000 2,327,500 1.40
------------ ------------
6,670,000 4.01
------------ ------------ ------------
INTERNET CONTENT
Doubleclick, Inc.* 35,000 3,276,875 1.97
------------ ------------ ------------
INTERNET SOFTWARE
America Online, Inc.* 55,000 3,698,750 2.22
------------ ------------ ------------
MEDICAL - BIOMEDICAL/GENE
Genentech, Inc.* 35,000 5,320,000 3.19
Intermune Pharmaceuticals, Inc.* 35,000 697,813 0.42
------------ ------------
6,017,813 3.61
------------ ------------ ------------
MEDICAL INSTRUMENTS
Cytyc Corporation* 50,000 2,412,500 1.45
------------ ------------ ------------
NETWORKING PRODUCTS
3Com Corporation* 50,625 2,816,016 1.69
Fibernet Group PLC* 69,000 2,423,554 1.46
------------ ------------
5,239,570 3.15
------------ ------------ ------------
OIL - FIELD SERVICES
Halliburton Company 95,000 3,895,000 2.34
------------ ------------ ------------
PRINTERS & RELATED PRODUCTS
Lexmark International Group, inc.* 33,000 3,489,750 2.10
------------ ------------ ------------
</TABLE>
28
<PAGE> 31
SCHEDULE
OF
INVESTMENTS
(CONTINUED)
MARSICO 21ST
CENTURY FUND
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Number Market Value Percent of
of Shares in Dollars Net Assets
------------ ------------ ------------
<S> <C> <C> <C>
COMMON STOCKS continued
RETAIL - DISCOUNT
Wal-Mart Stores, Inc. 60,000 $ 3,330,000 2.00%
------------ ------------ ------------
RETAIL - JEWELRY
Tiffany & Co. 13,216 1,105,188 0.66
------------ ------------ ------------
TELECOMMUNICATIONS EQUIPMENT
Ericsson L M TEL - ADR 30,000 2,814,375 1.69
QUALCOMM, Incorporated* 50,000 7,465,625 4.48
------------ ------------
10,280,000 6.17
------------ ------------ ------------
TELECOMMUNICATIONS SERVICES
Leap Wireless International, Inc.* 35,000 3,454,062 2.07
Sonera Group PLC - ADR 45,000 2,986,875 1.80
------------ ------------
6,440,937 3.87
------------ ------------ ------------
TOTAL COMMON STOCKS
(COST $158,842,087) 165,910,681 99.64
============ ============
</TABLE>
<TABLE>
<CAPTION>
Principal/ Market Value Percent of
Shares in Dollars Net Assets
------------- ------------- -------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
Federal Home Loan Bank
5.90%, 4/3/00 $ 2,299,246 2,299,246 1.38
SSgA Money Market Fund 79,141 79,141 0.05
------------- ------------- -------------
Total Short-Term Investments
(COST $2,378,387) 2,378,387 1.43
------------- ------------- -------------
Total Investments (cost $161,220,474) 168,289,068 101.07
Liabilities less Other Assets (1,779,038) (1.07)
------------- ------------- -------------
NET ASSETS $ 166,510,030 100.00%
============= =============
</TABLE>
* Non-income producing
See notes to financial statements.
29
<PAGE> 32
STATEMENT
OF ASSETS
AND
LIABILITIES
MARSICO 21ST
CENTURY FUND
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in thousands)
----------------------
<S> <C>
ASSETS
Investments, at value
(cost $161,220) $ 168,289
Receivable for investments sold 4,507
Receivable for capital stock sold 883
Interest and dividends receivable 21
Prepaid expenses and other assets 5
----------------------
Total Assets 173,705
======================
LIABILITIES
Payable for investments purchased 6,674
Payable for capital stock redeemed 316
Accrued investment advisory fee 117
Accrued distribution fee 32
Accrued expenses and other liabilities 56
----------------------
Total Liabilities 7,195
----------------------
NET ASSETS $ 166,510
======================
NET ASSETS CONSIST OF
Paid-in-capital $ 157,812
Accumulated net realized gain on investments 1,629
Accumulated net realized gain on foreign currency transactions --
Net unrealized appreciation on investments and foreign
currency translations 7,069
----------------------
NET ASSETS $ 166,510
======================
SHARES OUTSTANDING, $0.001 par value
(UNLIMITED SHARES AUTHORIZED) 12,982
----------------------
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $ 12.83
======================
</TABLE>
* Not in thousands.
See notes to financial statements.
30
<PAGE> 33
STATEMENT
OF
OPERATIONS
MARSICO 21ST
CENTURY FUND
FOR THE PERIOD FEBRUARY 1, 2000*
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in thousands)
----------------------
<S> <C>
INVESTMENT INCOME
Interest $ 121
Dividends (net of $1 of non-reclaimable
foreign withholding taxes) 29
----------------------
Total Investment Income 150
----------------------
EXPENSES
Investment advisory fees 152
Distribution fees 45
Transfer agent fees and expenses 21
Trustees' fees and expenses 17
Fund administration fees 15
Federal and state registration fees 12
Professional fees 10
Custody and fund accounting fees 3
Printing and postage expenses 2
Miscellaneous 1
----------------------
Total expenses 278
Less waiver of fees (10)
----------------------
NET EXPENSES 268
----------------------
NET INVESTMENT LOSS (118)
----------------------
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 1,735
Change in unrealized appreciation on
investments and foreign currency translations 7,069
----------------------
Net Gain on Investments 8,804
----------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 8,686
======================
</TABLE>
* Commencement of operations.
See notes to financial statements.
31
<PAGE> 34
STATEMENT
OF CHANGES
IN NET ASSETS
Marsico 21st
Century Fund
<TABLE>
<CAPTION>
2/1/00* to 3/31/00
(Amounts in thousands) (unaudited)
------------------
<S> <C>
OPERATIONS
Net investment loss $ (118)
Net realized gain on investments 1,735
Change in unrealized appreciation/depreciation
on investments and foreign currency translations 7,069
------------------
Net increase in net assets resulting from operations 8,686
------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares 168,519
Redemption of shares (10,695)
------------------
Net increase from capital share transactions 157,824
------------------
TOTAL INCREASE IN NET ASSETS 166,510
------------------
NET ASSETS
Beginning of period --
End of period $ 166,510
==================
TRANSACTIONS IN SHARES
Shares sold 13,783
Redemption of shares (10,695)
------------------
Shares redeemed (801)
------------------
Net increase 12,982
==================
</TABLE>
* Commencement of operations.
See notes to financial statements.
32
<PAGE> 35
FINANCIAL
HIGHLIGHTS
Marsico 21st
Century Fund
FOR A FUND SHARE OUTSTANDING
THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
2/1/00* to 3/31/00
(Amounts in thousands) (unaudited)
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.01)
Net realized and unrealized gains on investments 2.84
------------------
Total from investment operations 2.83
------------------
NET ASSET VALUE, END OF PERIOD $ 12.83
==================
TOTAL RETURN 28.10%(1)
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $ 166,510
Ratio of expenses to average net assets, less
waivers and before expenses paid indirectly 1.50%(2)
Ratio of net investment loss to average net assets,
net of waivers and expenses paid indirectly (0.66)%(2)
Ratio of expenses to average net assets, before
waivers and expenses paid indirectly 1.56%(2)
Ratio of net investment loss to average net assets,
before waivers and expenses paid indirectly (0.72)%(2)
Portfolio turnover rate 59%(1)
</TABLE>
* Commencement of operations.
(1) Not annualized.
(2) Annualized.
See notes to financial statements.
33
<PAGE> 36
NOTES TO
FINANCIAL
STATEMENTS
MARSICO FUNDS
MARCH 31, 2000 (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 (the "1940 Act") as an open-end management investment company.
The Focus Fund, the Growth & Income Fund and the 21st Century Fund
(collectively, the "Funds") are separate investment portfolios of the
Trust. The Focus Fund is a non-diversified fund and the Growth & Income
Fund and 21st Century Fund are diversified funds. The Focus and Growth &
Income Funds commenced operations on December 31, 1997 and the 21st Century
Fund commenced operations on February 1, 2000.
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 Focus and Growth & Income
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
34
<PAGE> 37
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
MARSICO FUNDS
MARCH 31, 2000 (UNAUDITED)
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. Organizational costs of the 21st Century Fund
were paid by Marsico Capital Management.
(c) EXPENSES - The Funds are charged for those expenses that are directly
attributable to each Fund, such as advisory and custodian fees.
Expenses that are not directly attributable to a Fund are typically
allocated among the Funds in proportion to their respective net
assets. The Funds' expenses may be reduced by voluntary advisory fee
waivers, brokerage credits and uninvested cash balances earning
interest or credits. Such credits are included in 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 six
months ended March 31, 2000, brokerage commissions paid to Banc of
America Securities were $217,418, $35,564 and $500 for the Focus Fund,
Growth & Income Fund and 21st Century Fund, respectively. Also,
brokerage commissions were paid to unaffiliated brokers which reduced
certain transfer agent fees and expenses in the amount of $163,172 and
$22,184 for the Focus Fund and Growth & Income Fund, respectively, for
the six months ended March 31, 2000.
(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 March 31, 2000, reclassifications were recorded to
decrease undistributed net investment loss by $10,432, $2,649 and
$118, decrease accumulated net realized gain on investments and
35
<PAGE> 38
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
MARSICO FUNDS
MARCH 31, 2000 (UNAUDITED)
foreign currency transactions by $10,425, $2,641 and $106 and decrease
paid-in-capital by $7, $8 and $12 for the Focus, Growth & Income and
21st Century Funds, respectively.
(f) FOREIGN CURRENCY TRANSLATION - The accounting records of the Funds are
maintained in U.S. dollars. Prices of securities denominated in
foreign currencies are translated into U.S. dollars at the closing
rates of exchange. Amounts related to the purchase and sale of foreign
securities and investment income are translated at the rates of
exchange prevailing on the respective dates of such transactions.
Reported realized gains on foreign currency transactions arise from
sales of portfolio securities, forward currency contracts, currency
gains or losses realized between the trade and settlement dates on
securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the
Funds' books, and the U.S. dollar equivalent of the amounts actually
received or paid.
The Funds do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities
held at fiscal year end. Net unrealized appreciation 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.
36
<PAGE> 39
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
MARSICO FUNDS
MARCH 31, 2000 (UNAUDITED)
Futures contracts are marked to market daily and the resultant
variation margin is recorded as an unrealized gain or loss. When a
contract is closed, a realized gain or loss is recorded equal to the
difference between the opening and closing value of the contract.
Generally, open forward and futures contracts are marked to market
(i.e., treated as realized and subject to distribution) for federal
income tax purposes at fiscal year-end.
Foreign-denominated assets and forward currency contracts may involve
more risks than domestic transactions, including currency risk,
political and economic risk, regulatory risk and market risk. Risks
may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar.
The Funds may enter into "futures contracts" and "options" on
securities, financial indexes and foreign currencies, forward
contracts, and interest rate swaps and swap-related products. The
Funds intend to use such derivative instruments primarily to hedge or
protect from adverse movements in securities prices, currency rates or
interest rates. The use of futures contracts and options may involve
risks such as the possibility of illiquid markets or imperfect
correlation between the value of the contracts and the underlying
securities, or that the counterparty will fail to perform its
obligations.
(h) OPTIONS CONTRACTS - The Funds may purchase and write (sell) put and
call options on foreign and domestic stock indices, foreign currencies
and U.S. and foreign securities that are traded on U.S. and foreign
securities exchanges and over-the-counter markets. These transactions
are for hedging purposes or for the purpose of earning additional
income. In addition, the Funds may enter into such transactions for
cross-hedging purposes.
The risk associated with purchasing an option is that the Fund pays a
premium whether or not the option is exercised. Additionally, the Fund
bears the risk of loss of premium and change in market value should
the counterparty not perform under the contract. Put and call options
purchased are accounted for in the same manner as portfolio
securities. The cost of securities acquired through the exercise of
call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by
the premiums paid.
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
37
<PAGE> 40
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
MARSICO FUNDS
MARCH 31, 2000 (UNAUDITED)
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 call options written
for the six months ended March 31, 2000, for the Funds, were as
follows:
<TABLE>
<CAPTION>
FOCUS FUND NUMBER
OF CONTRACTS PREMIUMS
------------ ----------
<S> <C> <C>
Options outstanding at 9/30/99 -- --
Options written 4,058 7,396,613
Options terminated in closing
purchase transactions (4,058) (7,396,613)
Options exercised -- --
Options expired -- --
Options outstanding at 3/31/00 -- --
</TABLE>
The Fund did not write put options during the six months ended March
31, 2000.
<TABLE>
<CAPTION>
GROWTH & INCOME FUND NUMBER
OF CONTRACTS PREMIUMS
------------ ----------
<S> <C> <C>
Options outstanding at 9/30/99 -- --
Options written 1,136 2,070,235
Options terminated in closing
purchase transactions (1,136) (2,070,235)
Options exercised -- --
Options expired -- --
Options outstanding at 3/31/00 -- --
</TABLE>
The Fund did not write put options during the six months ended March
31, 2000.
38
<PAGE> 41
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
MARSICO FUNDS
MARCH 31, 2000 (UNAUDITED)
(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, Growth &
Income and 21st Century 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
and 21st Century Funds' 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.
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.
39
<PAGE> 42
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
MARSICO FUNDS
MARCH 31, 2000 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the period ended March 31, 2000, were as
follows:
<TABLE>
<CAPTION>
FOCUS GROWTH & 21ST CENTURY
(AMOUNTS IN THOUSANDS) FUND INCOME FUND FUND
----------- ----------- ------------
<S> <C> <C> <C>
PURCHASES
U.S. Government -- -- --
----------- ----------- -----------
Other $ 3,235,680 $ 854,192 $ 210,724
----------- ----------- -----------
SALES
U.S. Government -- -- --
----------- ----------- -----------
Other $ 3,005,613 $ 674,735 $ 53,617
----------- ----------- -----------
</TABLE>
As of March 31, 2000, gross unrealized appreciation and depreciation on
investments, based on cost (in thousands) for federal income tax purposes
of $2,427,087, $801,236 and $161,373, were as follows:
<TABLE>
<CAPTION>
FOCUS GROWTH & 21ST CENTURY
(AMOUNTS IN THOUSANDS) FUND INCOME FUND FUND
----------- ----------- ------------
<S> <C> <C> <C>
Unrealized Appreciation $ 1,014,851 $ 369,492 $ 13,809
----------- ----------- -----------
(Unrealized Depreciation) (55,314) (19,425) (6,893)
----------- ----------- -----------
Net Unrealized Appreciation
on Investments $ 959,537 $ 350,067 $ 6,916
----------- ----------- -----------
</TABLE>
40
<PAGE> 43
USE THIS QUICK INVESTMENT SLIP
TO ADD TO YOUR MARSICO FUNDS ACCOUNT
Account Number
Name on Account
Street
City, State, Zip Code
( ) ( )
Daytime Telephone Evening Telephone
Social Security Number or Taxpayer Identification Number
Customer Signature
Enclosed is my check in the amount of $__________ made payable to the Marsico
Investment Fund.
PLEASE ADD TO THE FOLLOWING MARSICO FUNDS:
Marsico Focus Fund $
Marsico Growth & Income Fund $
Marsico 21st Century Fund $
Total $
PLEASE RETURN THIS FORM TO:
Marsico Funds
Sunstone Financial Group, Inc. - Transfer Agent
P.O. Box 3210, Milwaukee, WI 53201-3210
If you have any questions or would like to request a New Account Application,
please call us at 888-860-8686.
PLEASE NOTE THAT THIS FORM IS FOR EXISTING MARSICO FUNDS ACCOUNT HOLDERS ONLY.
Additional investments will receive the appropriate Fund's next calculated net
asset value after receipt and acceptance by the Marsico Funds of your order.
This material must be preceded or accompanied by a prospectus.
SUNSTONE DISTRIBUTION SERVICES, LLC, DISTRIBUTOR
<PAGE> 44
[Marsico Funds LOGO]
P.O. Box 3210, Milwaukee, WI 53201-3210
www.marsicofunds.com
888-860-8686
Sunstone Distribution Services, LLC Distributor MA4100300
