<PAGE>
THE 2000 ANNUAL REPORT
September 30, 2000
MARSICO FUNDS [logo]
<PAGE>
<PAGE>
TABLE OF
CONTENTS
A LETTER TO OUR VALUED SHAREHOLDERS 1
MARSICO FOCUS FUND
Fund Overview 10
Schedule of Investments 11
Statement of Assets and Liabilities 14
Statement of Operations 15
Statements of Changes in Net Assets 16
Financial Highlights 17
MARSICO GROWTH & INCOME FUND
Fund Overview 18
Schedule of Investments 19
Statement of Assets and Liabilities 23
Statement of Operations 24
Statements of Changes in Net Assets 25
Financial Highlights 26
MARSICO 21ST CENTURY FUND
Letter from Fund Manager 27
Fund Overview 30
Schedule of Investments 31
Statement of Assets and Liabilities 34
Statement of Operations 35
Statement of Changes in Net Assets 36
Financial Highlights 37
MARSICO INTERNATIONAL OPPORTUNITIES FUND
Letter from Fund Manager 38
Fund Overview 40
Schedule of Investments 41
Statement of Assets and Liabilities 45
Statement of Operations 46
Statement of Changes in Net Assets 47
Financial Highlights 48
NOTES TO FINANCIAL STATEMENTS 49
Report of Independent Accountants 56
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>
<PAGE>
November 2000 [PHOTO]
-- Tom Marsico, president
DEAR SHAREHOLDERS
Writing an annual report tends to present a few challenges, particularly
when the capital markets have been so volatile and "news" appears to be
obsolete within a few days. I know you're anxious to hear our updated
thoughts regarding performance, the investment outlook, and portfolio
strategy for our Funds.
Before doing that, however, it's appropriate for me--on behalf of the 40
employees here at Marsico Capital Management--to express our thanks and
appreciation for your support. We've just passed our third anniversary,
a special occasion for all of us both professionally and personally. I'm
excited by what we have accomplished so far, not just in terms of the
investment results we have produced, but also with respect to the
organization we've created. I'm very proud of our investment team--a
dedicated, cohesive group--that in my opinion has become stronger and
stronger with the passing of time. In this update, Jim Hillary and Jim
Gendelman, who manage Marsico 21st Century Fund (inception 2/1/00) and
Marsico International Opportunities Fund (inception 6/30/00)
respectively, share their thoughts.
I'm also looking forward to the upcoming expansion of our strategic
relationship with Bank of America. The shareholders of each Fund
approved new advisory agreements at the special meeting of shareholders
held on November 9. The transaction is scheduled to close on January 2,
2001. It is important to stress that the proposed transaction will have
no effect on Marsico Capital Management's day-to-day operations, our
investment process, or our investment team. As I mentioned before, my
commitment to this firm, our shareholders, and our clients is
unequivocal. I fully intend to
1
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
continue to serve as Chief Investment Officer, CEO and Senior Portfolio
Manager for Marsico Capital. Investing has always been a passion for me
and it fully remains so today. I have no intention of reducing my role
in the investment process, or relinquishing operational control of the
firm. All of us expect to be working here for a long time.
MARSICO FOCUS FUND AND
MARSICO GROWTH & INCOME FUND
In the March 31, 2000 semi-annual report, we commented on the previous
six months and described that period of time as a "roller
coaster." Indeed, that observation remains valid today. The U.S. stock
market has continued to experience significant fluctuations. At times,
the market seems to make major moves based on hard news, such as
cyclically rising interest rates, or higher energy prices, or a
corporation's earnings announcement. However, the market also--at times
to a disconcerting degree--seems to trade based on short-term sentiment
or perception, thereby creating a high degree of volatility that can
affect most, if not all, of the market. Throughout this year, we have
seen dramatic valuation changes, often occurring in a very compressed
period of time. The Nasdaq Composite Index fell in value by more than
40% over the course of just several weeks beginning last March; this
Index's high-low spread for the calendar year-to-date, as of October 4,
2000, was a remarkable 62%. Biotechnology companies soared early in the
year, sold off sharply, and then rallied. Telecommunications-related
companies, which arguably were the story in 1999, have been out-of-favor
with investors for much of this year. Recently, some companies have
mentioned the possibility of decelerating growth and then experienced
enormous price declines. And yet, the volatility hasn't been confined to
technology, internet-related, or other so-called New Economy companies.
2
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
Stocks of well-established retail companies have risen and fallen
substantially over the past year.
With these facts as background, I'd like to review the Focus Fund and
Growth & Income Fund performance for the fiscal year ended September 30,
2000.(1)
Despite the turbulent markets, the Funds have performed well for the
fiscal year ended September 30, 2000 compared to the S&P 500(R)
Index,(2) which we consider to be our primary benchmark. For the 12
months ending September 30, 2000, the Focus Fund and Growth & Income
Fund had total returns of 27.42% and 28.53%, respectively. Over that
same period, the S&P 500(R) Index posted a total return of 13.28%. The
Funds' value-added over the past year is attributable to strong
performance in the fourth quarter of 1999 and third quarter of 2000. The
Funds' performance was mixed in the first quarter of 2000, and was weak
in the second quarter.
In the fourth quarter of 1999, we were fortunate that a majority of the
Funds' portfolio holdings registered strong gains. The overall market
environment was quite positive during this period. Performance was
buoyed by the Funds' technology-related holdings such as QUALCOMM, EMC
Corporation, Cisco Systems and Sun Microsystems.(3) Retail stocks such
as Tiffany & Co., Home Depot, and Wal-Mart Stores were strong
performers. In addition, a diverse group of companies also positively
impacted investment results, including Citigroup, Time Warner,
Genentech, and General Electric.
On the heels of such strong gains, the first quarter of 2000 was
characterized by a high degree of downside volatility, particularly in
the month of March. That volatility was masked by the Funds' total
returns for the quarter: 0.21% for Focus and 2.84% for Growth & Income.
The S&P 500(R) Index had a total return of 2.29% for the same period.
Month-by-month returns were much
3
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
more variable. The Funds' investment results lagged in January but then
staged a strong recovery in February and through approximately the first
half of March. Performance subsequently fell off, in part due to a
violent decline in technology-related stocks that began in mid-March.
Some of the Funds' holdings in this sector were able to produce solid
returns for the quarter as a whole, while others (notably Lucent
Technologies, QUALCOMM, and Dell Computer) struggled. 3Com, a position
that was established early in the year, initially rose substantially,
and then sold off sharply in March. Genentech, which had been a very
strong performer for the Funds since the Company's IPO in July 1999, was
hit hard by the March biotechnology sell-off. The Funds were also
adversely affected by their positions in UAL Corporation (the parent
company of United Airlines) and investments in several B2B companies.
The second quarter of 2000 was a very difficult period for the Funds. In
fact, it is hard for me to identify a silver lining performance-wise,
other than several individual Fund holdings such as Corning (a new
position), EMC Corporation, Oracle, and Four Seasons Hotels, which
performed well. The Focus Fund had a return of -8.30%, while the Growth
& Income Fund's total return was -10.05%. The S&P 500(R) Index had a
total return of -2.66% for the same period. The technology sell-off that
began in March continued to do damage to many of the Funds' holdings,
with networking, semiconductor, and telecommunications in particular
taking it on the chin. Unfortunately, the damage didn't stop there.
Retail positions came under substantial pressure, due to the perception
that rising interest rates might negatively impact consumer spending.
The Funds' positions in cable, media, and entertainment companies also
did not perform well. In addition, the Funds' relative lack of exposure
to health care-related companies (particularly pharmaceuticals and HMOs)
negatively impacted performance as compared to the S&P 500(R) Index.
4
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
Over the past four months, a number of changes to the Funds' holdings
have been implemented. In general, we took these steps to attempt to add
more balance to the Funds, as well as to strategically reposition the
Funds for the possibility of a slower-growth economic environment. We
have reduced a number of higher multiple stock positions, generally in
the technology-related area (e.g., semiconductors, cellular
telecommunications). We have increased positions in the financial
services sector, with an emphasis on companies with global franchises in
corporate finance, asset management, and trading. We added selectively
to health care and consumer-related companies. Our primary rationale for
these investments was that we felt these were attractive companies from
a valuation perspective while simultaneously offering the potential of
producing relatively stable, predictable earnings growth. In addition,
we initiated some new positions in "life cycle change" companies;
organizations that, in our view, are experiencing a positive fundamental
change (e.g., new product, acquisition, new management) that creates the
potential for improved future earnings growth.
As you will see from the enclosed inventories of Fund holdings as of
September 30, 2000, the Funds were well represented in technology-
related companies, with an emphasis on Internet infrastructure, optical
systems and components, and software. However, the aggregate allocations
to the technology sector have declined quite substantially compared to
earlier year levels.
While it is difficult to draw any conclusions regarding the effect of
these strategic changes given their recent implementation, performance
for the Funds has improved considerably since May. In the third quarter
of 2000, the Focus Fund and Growth & Income Fund had total returns of
2.88% and 2.97%, while the S&P 500(R) Index had a total return of
-0.97%. Interestingly, this was the second consecutive quarterly decline
for the S&P 500(R) Index,
5
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
which hasn't occurred since 1984. A number of the Funds' technology-
related holdings registered strong gains last quarter, including EMC
Corporation, Corning, Sun Microsystems, and Adobe Systems.
The Funds' holdings in financial services stocks were positive
contributors to performance during the quarter. Retail stocks in
aggregate added value to the Funds' results.
A diverse array of companies also contributed to positive performance.
These included General Electric, Four Seasons Hotels, Time Warner,
Anheuser-Busch Cos., and General Dynamics.
Areas of weakness last quarter included cellular telecommunications and
semiconductors. In most cases, we have sold our positions in these
areas.
INVESTMENT OUTLOOK
For some time, we have been articulating the thesis that long-term
prospects for equities are quite positive. We continue to stand by that
point of view. In our opinion, there are a number of very important
macroeconomic underpinnings that collectively create a solid backdrop
for equity performance. We believe that the U.S. is moving into a more
favorable interest rate environment. At the October 3rd Federal Open
Market Committee (FOMC) meeting, there was no change made in interest
rate policy although the FOMC made it clear that it remains watchful for
signs of inflation. In our opinion, the Fed has most likely completed
its series of interest rate increases. Even if that is not the case,
however, we think it's clear that the majority of the Fed's move to
raise rates is behind us. We do believe there is increasing evidence
that an economic slowdown is at hand in the U.S., which should mitigate
the need to further tighten monetary policy. At the same time, we do not
feel there is a high risk of recession in the U.S.
6
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
We continue to believe that U.S. inflation remains relatively benign,
despite the spike in energy prices. We note that, as of this writing,
oil prices have come off substantially from their peaks. We are not
expecting a return to $10/barrel oil, but we think the price increase to
approximately $35/barrel was overdone. We would expect that oil prices
could stabilize in the area of $25/barrel. We also would point out that
oil comprises a considerably smaller percentage of U.S. Gross Domestic
Product than it has historically, which--we think--should help mitigate
any negative effects of higher prices on the economy as a whole.
Further, we note that many commodity prices (including lumber and
gypsum) have either stabilized or fallen over the past year. Housing
starts and automobile sales appear to have slowed to some degree. Real
unit labor costs have declined. Real wage increases to date have been
relatively modest, despite the tight labor markets that have prevailed
for the last several years. Productivity gains, even in the wake of
economic expansion, continued to surprise on the upside. For the quarter
ended June 30, 2000, the most recent reported quarter tracked by the
Government, productivity rose by 5.7% in the nonfarm business sector, a
remarkable level. We believe that productivity gains are sustainable and
quite possibly may accelerate as technological innovation continues.
Higher productivity, in our view, should essentially be disinflationary
in nature because it helps create a more efficient economy.
Another important factor we would cite as being positive for the U.S.
economy is budget surpluses at the federal and state levels. While we
are watchful for signs that the federal surplus may not be spent
prudently, thus far it has been primarily earmarked for debt reduction,
which we applaud.
Globally, our macroeconomic view parallels the U.S. outlook. On balance,
we are quite positive. While it is difficult to generalize about so many
different
7
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
markets, we think there is abundant evidence that growth is slowing
overseas, but at an acceptable rate. There have been many central bank
interest rate increases in non-U.S. countries over the past year; as in
the case of the U.S., we think the majority of those increases are now
behind us. We believe the twin possibilities that the Euro has
"bottomed" and oil prices have peaked potentially creates a considerably
more favorable environment for international equities. Despite the
Euro's valuation decline, the restructuring of European corporations is
still very much at work, which we believe could create compelling
investment opportunities in a variety of industries. We are seeing
continued evidence of better corporate management, rationalization of
businesses, and improved productivity.
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.
Fund prices change daily and performance may change significantly during
periods of market volatility. To receive current Fund prices and
performance information, please call 888-860-8686.
8
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
[FN]
(1) Average annual returns for the Funds since their inception are
included in the accompanying financial statements.
(2) 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 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 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 and is an unmanaged
broadly based index of the common stock prices of 500 large U.S.
companies that includes the reinvestment of dividends. You cannot
invest directly in an index.
(3) Portfolio composition is subject to change at any time and
references to specific securities, industries and sectors in this
letter are not recommendations to purchase or sell any particular
security. See the accompanying Schedules of Investments for the
percent of each Fund's portfolio represented by the securities
mentioned in this letter.
9
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<PAGE>
MARSICO FOCUS FUND FUND
SEPTEMBER 30, 2000 OVERVIEW
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.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
PERFORMANCE COMPARISON ONE YEAR AVERAGE ANNUAL SINCE
(10/1/99 - 9/30/00) INCEPTION (12/31/97-9/30/00)
----------------------------------------------------------------------------
<S> <C> <C>
Marsico Focus Fund 27.42% 33.69%
----------------------------------------------------------------------------
S&P 500(R) Index 13.28% 16.87%
----------------------------------------------------------------------------
NET ASSETS
----------------------------------------------------------------------------
9/30/00 $2,853,805,008
----------------------------------------------------------------------------
<CAPTION>
----------------------------------
NET ASSET VALUE
----------------------------------
<S> <C>
Net Asset Value Per Share $22.17
----------------------------------
TOP FIVE HOLDINGS
----------------------------------
EMC Corp. 8.60%
----------------------------------
Genentech, Inc. 8.08
----------------------------------
Home Depot, Inc. 6.48
----------------------------------
Corning, Inc. 4.93
----------------------------------
Oracle, Corp. 4.77
----------------------------------
SECTOR ALLOCATION(2)
----------------------------------
Technology 45.61%
----------------------------------
Consumer Cyclical 19.57
----------------------------------
Financial 16.29
----------------------------------
Industrial 8.67
----------------------------------
Consumer Non-Cyclical 5.39
----------------------------------
Diversified 2.68
----------------------------------
Energy 1.79
----------------------------------
</TABLE>
GROWTH OF $10,000(1)
/ / Marsico Focus Fund
/ / S&P 500(R) Index
[GRAPH]
[FN]
(1) This chart assumes an initial investment of $10,000 made on
December 31, 1997 (inception). 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 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.
10
<PAGE>
<PAGE>
<TABLE>
SCHEDULE
MARSICO FOCUS FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
<CAPTION>
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------
COMMON STOCKS
-----------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE
Boeing Company 1,405,014 $ 88,515,882 3.10%
General Dynamics Corporation 1,122,502 70,507,157 2.47
-------------------------------
159,023,039 5.57
-----------------------------------------------------------------------------------------------
BREWERY
Anheuser-Busch Companies, Inc. 1,269,722 53,725,112 1.88
-----------------------------------------------------------------------------------------------
COMPUTER SOFTWARE
Adobe Systems, Inc. 668,606 103,801,082 3.64
-----------------------------------------------------------------------------------------------
COMPUTERS - MEMORY DEVICES
EMC Corporation* 2,476,704 245,503,284 8.60
-----------------------------------------------------------------------------------------------
COMPUTERS - MICRO
Sun Microsystems, Inc.* 1,010,987 118,032,732 4.14
-----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES
Citigroup, Inc. 1,849,784 100,003,948 3.50
-----------------------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING
Corning, Inc. 473,770 140,709,690 4.93
General Electric Company 1,744,936 100,660,995 3.53
-------------------------------
241,370,685 8.46
-----------------------------------------------------------------------------------------------
ENTERPRISE SOFTWARE SERVICES
Oracle Corporation* 1,728,496 136,119,060 4.77
-----------------------------------------------------------------------------------------------
FINANCE - INVESTMENT BANKER/BROKER
Goldman Sachs Group, Inc. 793,089 90,362,578 3.17
Lehman Brothers Holdings, Inc. 339,277 50,128,177 1.76
Merrill Lynch & Company, Inc. 1,609,338 106,216,308 3.72
Morgan Stanley Dean Witter & Co. 1,168,189 106,816,282 3.74
-------------------------------
353,523,345 12.39
-----------------------------------------------------------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc.* 826,862 60,515,963 2.12
-----------------------------------------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENE
Genentech, Inc.* 1,242,180 230,657,299 8.08
-----------------------------------------------------------------------------------------------
MEDICAL - DRUGS
Pfizer, Inc. 2,142,440 96,275,897 3.38
-----------------------------------------------------------------------------------------------
11
<PAGE>
<PAGE>
<CAPTION>
SCHEDULE
MARSICO FOCUS FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------
COMMON STOCKS CONTINUED
-----------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS
Guidant Corporation* 1,057,322 $ 74,739,449 2.62%
-----------------------------------------------------------------------------------------------
MULTIMEDIA
Time Warner, Inc. 1,096,270 85,783,127 3.01
-----------------------------------------------------------------------------------------------
NETWORKING PRODUCTS
Cisco Systems, Inc.* 2,083,554 115,116,359 4.03
-----------------------------------------------------------------------------------------------
OIL COMPANIES - INTEGRATED
BP Amoco PLC ADR 941,713 49,910,789 1.75
-----------------------------------------------------------------------------------------------
RETAIL - BUILDING PRODUCTS
The Home Depot, Inc. 3,486,725 185,014,345 6.48
-----------------------------------------------------------------------------------------------
RETAIL - DISCOUNT
Costco Wholesale Corporation* 1,860,559 65,003,280 2.28
Wal-Mart Stores, Inc. 1,418,600 68,270,125 2.39
-------------------------------
133,273,405 4.67
-----------------------------------------------------------------------------------------------
RETAIL - JEWELRY
Tiffany & Co. 2,083,074 80,328,541 2.81
-----------------------------------------------------------------------------------------------
SATELLITE TELECOMMUNICATIONS
General Motors Class H* 2,168,172 80,612,635 2.83
-----------------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT
Nortel Networks Corporation 1,364,496 81,272,793 2.85
-----------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $1,928,345,198) $2,784,602,889 97.58
-------------------------------
12
<PAGE>
<PAGE>
<CAPTION>
SCHEDULE
MARSICO FOCUS FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
PRINCIPAL/ MARKET VALUE PERCENT OF
SHARES IN DOLLARS NET ASSETS
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
-----------------------------------------------------------------------------------------------
Federal Home Loan Bank,
6.18%, 10/2/00 $93,300,000 $ 93,283,983 3.27%
SSgA Money Market Fund 117,651 117,651 -
-----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $93,401,634) 93,401,634 3.27
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $2,021,746,832) 2,878,004,523 100.85
Liabilities less Cash and Other Assets (24,199,515) (0.85)
-----------------------------------------------------------------------------------------------
NET ASSETS $2,853,805,008 100.00%
===============================
<FN>
* Non-income producing.
See notes to financial statements.
</TABLE>
13
<PAGE>
<PAGE>
<TABLE>
STATEMENT
MARSICO FOCUS FUND OF ASSETS
SEPTEMBER 30, 2000 AND
LIABILITIES
<CAPTION>
(AMOUNTS IN THOUSANDS)
<S> <C>
-------------------------------------------------------------------------------
ASSETS
-------------------------------------------------------------------------------
Investments, at value (cost $2,021,747) $2,878,005
Foreign currency (cost $51) 48
Receivable for investments sold 91,277
Receivable for capital stock sold 1,469
Interest and dividends receivable 675
Organizational expenses, net of accumulated amortization 62
Prepaid expenses and other assets 16
----------------------
TOTAL ASSETS 2,971,552
----------------------
-------------------------------------------------------------------------------
LIABILITIES
-------------------------------------------------------------------------------
Payable for investments purchased 109,636
Payable for capital stock redeemed 4,677
Accrued investment advisory fee 2,049
Accrued distribution fee 628
Accrued expenses and other liabilities 757
----------------------
TOTAL LIABILITIES 117,747
----------------------
NET ASSETS $2,853,805
======================
-------------------------------------------------------------------------------
NET ASSETS CONSIST OF
-------------------------------------------------------------------------------
Paid-in-capital $1,874,426
Undistributed net investment loss (42)
Undistributed net realized gain on
investments and options written 122,607
Undistributed net realized gain on
foreign currency transactions 559
Net unrealized appreciation on investments
and foreign currency translations 856,255
----------------------
NET ASSETS $2,853,805
======================
SHARES OUTSTANDING, $0.001 par value
(UNLIMITED SHARES AUTHORIZED) 128,702
----------------------
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $ 22.17
======================
<FN>
* Not in thousands.
See notes to financial statements.
</TABLE>
14
<PAGE>
<PAGE>
<TABLE>
MARSICO FOCUS FUND STATEMENT
FOR THE YEAR ENDED OF
SEPTEMBER 30, 2000 OPERATIONS
<CAPTION>
(AMOUNTS IN THOUSANDS)
<S> <C>
-------------------------------------------------------------------------------
INVESTMENT INCOME
-------------------------------------------------------------------------------
Interest $ 5,952
Dividends (net of $129 of non-reclaimable
foreign withholding taxes) 10,752
----------------------
TOTAL INVESTMENT INCOME 16,704
----------------------
-------------------------------------------------------------------------------
EXPENSES
-------------------------------------------------------------------------------
Investment advisory fees 25,072
Distribution fees 7,374
Transfer agent fees and expenses 3,156
Printing and postage expenses 531
Custody and fund accounting fees 382
Fund administration fees 338
State registration fees 159
Trustees' fees and expenses 149
Professional fees 48
Amortization of organizational costs 27
Miscellaneous 109
----------------------
TOTAL EXPENSES 37,345
Less expenses paid indirectly (316)
----------------------
NET EXPENSES 37,029
----------------------
NET INVESTMENT LOSS (20,325)
----------------------
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
-------------------------------------------------------------------------------
Net realized gain on investments 187,280
Net realized loss on options written (16,028)
Net realized gain on foreign currency transactions 583
Change in unrealized appreciation/depreciation on
investments and foreign currency translations 469,292
----------------------
Net Gain on Investments 641,127
----------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $620,802
======================
See notes to financial statements.
</TABLE>
15
<PAGE>
<PAGE>
<TABLE>
STATEMENTS
MARSICO FOCUS FUND OF CHANGES
IN NET ASSETS
<CAPTION>
YEAR YEAR
ENDED ENDED
(AMOUNTS IN THOUSANDS) 9/30/00 9/30/99
<S> <C> <C>
-------------------------------------------------------------------------------
OPERATIONS
-------------------------------------------------------------------------------
Net investment loss $ (20,325) $ (7,311)
Net realized gain on investments 187,280 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 469,292 401,160
---------------------------
Net increase in net assets
resulting from operations 620,802 425,393
---------------------------
-------------------------------------------------------------------------------
DISTRIBUTIONS
-------------------------------------------------------------------------------
Net realized gains (5,242) -
---------------------------
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
-------------------------------------------------------------------------------
Proceeds from sale of shares 1,298,521 1,659,307
Proceeds from reinvestment of distributions 5,128 -
Redemption of shares (1,323,545) (684,816)
---------------------------
Net increase (decrease)
from capital share transactions (19,896) 974,491
---------------------------
TOTAL INCREASE IN NET ASSETS 595,664 1,399,884
---------------------------
-------------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------------
Beginning of period 2,258,141 858,257
END OF PERIOD $2,853,805 $2,258,141
===========================
-------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
-------------------------------------------------------------------------------
Shares sold 60,056 103,441
Shares issued in reinvestment of distributions 239 -
Shares redeemed (61,118) (43,360)
---------------------------
NET INCREASE (DECREASE) (823) 60,081
===========================
See notes to financial statements.
</TABLE>
16
<PAGE>
<PAGE>
<TABLE>
MARSICO FOCUS FUND FINANCIAL
FOR A FUND SHARE OUTSTANDING HIGHLIGHTS
THROUGHOUT THE PERIOD
<CAPTION>
YEAR YEAR 12/31/97*
ENDED ENDED TO
9/30/00 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 (0.16) (0.06) (0.01)
Net realized and unrealized
gains on investments 4.94 5.13 2.37
-----------------------------------------------
Total from investment operations 4.78 5.07 2.36
-----------------------------------------------
----------------------------------------------------------------------------------------------
DISTRIBUTIONS
----------------------------------------------------------------------------------------------
Net realized gains (0.04) - -
-----------------------------------------------
NET ASSET VALUE, END OF PERIOD $22.17 $17.43 $12.36
===============================================
TOTAL RETURN 27.42% 41.02% 23.60%(1)
----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
----------------------------------------------------------------------------------------------
Net assets, end of period (000s) $2,853,805 $2,258,141 $858,257
Ratio of expenses to average
net assets, before expenses
paid indirectly 1.27% 1.31% 1.56%(2)
Ratio of net investment loss to
average net assets, net of
expenses paid indirectly (0.69)% (0.43)% (0.27)%(2)
Ratio of net investment loss to
average net assets, before
expenses paid indirectly (0.70)% (0.45)% (0.27)%(2)
Portfolio turnover rate 176% 173% 170%(1)
<FN>
* Inception.
(1) Not annualized for periods less than one year.
(2) Annualized for periods less than one year.
See notes to financial statements.
</TABLE>
17
<PAGE>
<PAGE>
MARSICO GROWTH & FUND
INCOME FUND OVERVIEW
SEPTEMBER 30, 2000
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.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
PERFORMANCE COMPARISON ONE YEAR AVERAGE ANNUAL SINCE
(10/1/99 - 9/30/00) INCEPTION (12/31/97 - 9/30/00)
----------------------------------------------------------------------------------
<S> <C> <C> <C>
Marsico Growth & Income Fund 28.53% 30.86%
----------------------------------------------------------------------------------
S&P 500(R) Index 13.28% 16.87%
----------------------------------------------------------------------------------
NET ASSETS
----------------------------------------------------------------------------------
9/30/00 $1,002,721,610
----------------------------------------------------------------------------------
-------------------------------------------
NET ASSET VALUE
-------------------------------------------
Net Asset Value Per Share $20.82
-------------------------------------------
TOP FIVE EQUITY HOLDINGS
-------------------------------------------
EMC Corp. 7.54%
-------------------------------------------
Genentech, Inc. 6.82
-------------------------------------------
Oracle Corp. 4.66
-------------------------------------------
Corning, Inc. 4.53
-------------------------------------------
Citigroup, Inc. 4.32
-------------------------------------------
SECTOR ALLOCATION(2)
-------------------------------------------
Technology 39.99%
-------------------------------------------
Consumer Cyclical 20.75
-------------------------------------------
Financial 16.07
-------------------------------------------
Industrial 9.85
-------------------------------------------
Consumer Non-Cyclical 8.97
-------------------------------------------
Energy 1.89
-------------------------------------------
Utilities 1.40
-------------------------------------------
Diversified 1.08
-------------------------------------------
GROWTH OF $10,000(1)
/ / Marsico Growth & Income Fund
/ / S&P 500(R) Index
[GRAPH]
<FN>
(1) This chart assumes an initial investment of $10,000 made on
December 31, 1997 (inception). 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 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.
</TABLE>
18
<PAGE>
<PAGE>
<TABLE>
MARSICO GROWTH & SCHEDULE
INCOME FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
<CAPTION>
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
-----------------------------------------------------------------------------------------------
ADVERTISING AGENCIES
Omnicom Group, Inc. 36,459 $ 2,659,228 0.27%
-----------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE
Boeing Company 283,728 17,874,864 1.78
General Dynamics Corporation 392,565 24,657,989 2.46
----------------------------
42,532,853 4.24
-----------------------------------------------------------------------------------------------
AUDIO/VIDEO PRODUCTS
Sony Corporation - ADR* 123,500 12,465,781 1.24
-----------------------------------------------------------------------------------------------
AUTOMOTIVE - CARS & LIGHT TRUCKS
Ford Motor Company 41,978 1,062,568 0.11
-----------------------------------------------------------------------------------------------
BEVERAGES NON-ALCOHOLIC
Coca-Cola Enterprises, Inc. 196,491 3,131,575 0.31
Pepsi Bottling Group, Inc. 156,737 4,711,906 0.47
----------------------------
7,843,481 0.78
-----------------------------------------------------------------------------------------------
BREWERY
Anheuser-Busch Companies, Inc. 433,978 18,362,694 1.83
-----------------------------------------------------------------------------------------------
BUILDING - RESIDENTIAL/COMMERCIAL
M.D.C. Holdings, Inc. 239,956 6,238,856 0.62
-----------------------------------------------------------------------------------------------
COMPUTER SOFTWARE
Adobe Systems, Inc. 179,504 27,867,996 2.78
-----------------------------------------------------------------------------------------------
COMPUTERS - MEMORY DEVICES
EMC Corporation* 763,068 75,639,116 7.54
Veritas Software Corporation* 14,545 2,065,390 0.21
----------------------------
77,704,506 7.75
-----------------------------------------------------------------------------------------------
COMPUTERS - MICRO
Sun Microsystems, Inc.* 330,495 38,585,291 3.85
-----------------------------------------------------------------------------------------------
COSMETICS & TOILETRIES
Estee Lauder Companies, Inc. - Class A 57,837 2,118,280 0.21
-----------------------------------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT
Automatic Data Processing, Inc. 114,758 7,674,441 0.77
-----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES
Citigroup, Inc. 801,340 43,322,444 4.32
-----------------------------------------------------------------------------------------------
19
<PAGE>
<PAGE>
<CAPTION>
MARSICO GROWTH & SCHEDULE
INCOME FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS CONTINUED
------------------------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING
Corning, Inc. 152,962 $45,429,714 4.53%
General Electric Company 639,550 36,894,041 3.68
-----------------------------
82,323,755 8.21
------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - MISCELLANEOUS
Celestica, Inc.* 13,062 904,543 0.09
Flextronics International Ltd.* 127,992 10,511,343 1.05
Sanmina Corporation* 18,972 1,776,254 0.18
-----------------------------
13,192,140 1.32
------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS
Applied Micro Circuits Corporation 44,268 9,166,243 0.91
------------------------------------------------------------------------------------------------
ENTERPRISE SOFTWARE SERVICES
Oracle Corporation* 593,389 46,729,384 4.66
------------------------------------------------------------------------------------------------
FINANCE - CREDIT CARD
American Express Company 84,721 5,146,801 0.52
------------------------------------------------------------------------------------------------
FINANCE - INVESTMENT BANKER/BROKER
Goldman Sachs Group, Inc. 278,418 31,722,251 3.16
Lehman Brothers Holdings, Inc. 48,479 7,162,772 0.71
Merrill Lynch & Company, Inc. 347,188 22,914,408 2.29
Morgan Stanley Dean Witter & Co. 386,472 35,338,033 3.52
-----------------------------
97,137,464 9.68
------------------------------------------------------------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc.* 345,914 25,316,581 2.53
------------------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCER
Calpine Corporation* 71,106 7,421,689 0.74
Southern Energy, Inc.* 198,870 6,239,546 0.62
-----------------------------
13,661,235 1.36
------------------------------------------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENE
Genentech, Inc.* 368,323 68,392,977 6.82
------------------------------------------------------------------------------------------------
MEDICAL - DRUGS
Merck & Co., Inc. 132,326 9,850,017 0.98
Pfizer, Inc. 756,421 33,991,669 3.39
-----------------------------
43,841,686 4.37
------------------------------------------------------------------------------------------------
20
<PAGE>
<PAGE>
<CAPTION>
MARSICO GROWTH & SCHEDULE
INCOME FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS CONTINUED
------------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS
Guidant Corporation* 149,560 $ 10,572,023 1.05%
------------------------------------------------------------------------------------------------
MEDICAL - WHOLESALE DRUG DISTRIBUTORS
Priority Healthcare Corporation - Class B* 177,087 13,502,884 1.35
------------------------------------------------------------------------------------------------
MULTIMEDIA
Comcast Corporation - Class A 565,027 23,130,793 2.31
Time Warner, Inc. 370,658 29,003,988 2.89
------------------------------
52,134,781 5.20
------------------------------------------------------------------------------------------------
NETWORKING PRODUCTS
Cisco Systems, Inc. * 313,629 17,328,002 1.73
------------------------------------------------------------------------------------------------
OIL COMPANIES - INTEGRATED
BP Amoco PLC ADR 349,321 18,514,013 1.85
------------------------------------------------------------------------------------------------
RETAIL - BUILDING PRODUCTS
The Home Depot, Inc. 678,144 35,984,016 3.59
------------------------------------------------------------------------------------------------
RETAIL - DISCOUNT
Costco Wholesale Corporation* 649,506 22,692,116 2.26
Wal-Mart Stores, Inc. 496,072 23,873,465 2.38
------------------------------
46,565,581 4.64
------------------------------------------------------------------------------------------------
RETAIL - FOOD
Safeway, Inc.* 43,624 2,036,696 0.20
------------------------------------------------------------------------------------------------
RETAIL - JEWELRY
Tiffany & Co. 531,060 20,479,001 2.04
------------------------------------------------------------------------------------------------
SATELLITE TELECOMMUNICATIONS
General Motors Class H* 650,877 24,199,607 2.41
------------------------------------------------------------------------------------------------
SUPER-REGIONAL BANKS U.S.
Northern Trust Corporation 130,320 11,582,190 1.16
------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT
Nortel Networks Corporation 317,005 18,881,610 1.88
------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $658,015,085) $965,127,089 96.25
------------------------------
21
<PAGE>
<PAGE>
<CAPTION>
MARSICO GROWTH & SCHEDULE
INCOME FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
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 $ 2,578,500 0.26%
------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - MISCELLANEOUS
Analog Devices, Inc.,
4.75%, 10/1/05(1) 10,000,000 10,293,750 1.03
------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $12,627,532) 12,872,250 1.29
-----------------------------
<CAPTION>
PRINCIPAL/ MARKET VALUE PERCENT OF
SHARES IN DOLLARS NET ASSETS
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
------------------------------------------------------------------------------------------------
Federal Home Loan Bank,
6.18%, 10/2/00 44,600,000 44,592,343 4.45
SSgA Money Market Fund 43,395 43,395 -
------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $44,635,738) 44,635,738 4.45
------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $715,278,355) 1,022,635,077 101.99
Liabilities less Cash and Other Assets (19,913,467) (1.99)
------------------------------------------------------------------------------------------------
NET ASSETS $1,002,721,610 100.00%
================================
<FN>
* 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 September 30, 2000, the value of those
securities amounted to approximately $10,293,750 or 1.03% of net
assets.
See notes to financial statements.
</TABLE>
22
<PAGE>
<PAGE>
<TABLE>
MARSICO GROWTH & STATEMENT OF ASSETS
INCOME FUND AND
SEPTEMBER 30, 2000 LIABILITIES
<CAPTION>
(AMOUNTS IN THOUSANDS)
-------------------------------------------------------------------------------
<S> <C>
ASSETS
-------------------------------------------------------------------------------
Investments, at value (cost $715,278) $1,022,635
Foreign currency (cost $15) 14
Receivable for investments sold 22,240
Receivable for capital stock sold 509
Interest and dividends receivable 318
Organizational expenses, net of accumulated amortization 62
Prepaid expenses and other assets 11
----------------------
TOTAL ASSETS 1,045,789
----------------------
-------------------------------------------------------------------------------
LIABILITIES
-------------------------------------------------------------------------------
Payable for investments purchased 38,444
Payable for capital stock redeemed 3,292
Accrued investment advisory fee 716
Accrued distribution fee 278
Accrued expenses and other liabilities 337
----------------------
TOTAL LIABILITIES 43,067
----------------------
NET ASSETS $1,002,722
======================
-------------------------------------------------------------------------------
NET ASSETS CONSIST OF
-------------------------------------------------------------------------------
Paid-in-capital $ 689,945
Undistributed net investment loss (42)
Undistributed net realized gain on investments
and options written 5,045
Undistributed net realized gain on
foreign currency transactions 418
Net unrealized appreciation on investments and foreign
currency translations 307,356
----------------------
NET ASSETS $1,002,722
======================
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 48,157
----------------------
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $ 20.82
======================
<FN>
* Not in thousands.
See notes to financial statements.
</TABLE>
23
<PAGE>
<PAGE>
<TABLE>
MARSICO GROWTH & STATEMENT
INCOME FUND OF
FOR THE YEAR ENDED OPERATIONS
SEPTEMBER 30, 2000
<CAPTION>
(AMOUNTS IN THOUSANDS)
-------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
-------------------------------------------------------------------------------
Interest $ 3,667
Dividends (net of $37 non-reclaimable foreign
withholding taxes) 3,838
----------------------
TOTAL INVESTMENT INCOME 7,505
----------------------
-------------------------------------------------------------------------------
EXPENSES
-------------------------------------------------------------------------------
Investment advisory fees 8,433
Distribution fees 2,480
Transfer agent fees and expenses 1,069
Fund administration fees 217
Printing and postage expenses 182
Custody and fund accounting fees 171
Trustees' fees and expenses 149
Federal and state registration fees 114
Professional fees 48
Amortization of organizational costs 27
Miscellaneous 33
----------------------
TOTAL EXPENSES 12,923
Less expenses paid indirectly (66)
----------------------
NET EXPENSES 12,857
----------------------
NET INVESTMENT LOSS (5,352)
----------------------
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
-------------------------------------------------------------------------------
Net realized gain on investments 13,005
Net realized loss on options written (4,345)
Net realized gain on foreign currency transactions 422
Change in unrealized appreciation/depreciation on
investments and foreign currency translations 200,151
----------------------
Net Gain on Investments 209,233
----------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $203,881
======================
See notes to financial statements.
</TABLE>
24
<PAGE>
<PAGE>
<TABLE>
STATEMENTS
MARSICO GROWTH & OF CHANGES
INCOME FUND IN NET ASSETS
<CAPTION>
YEAR ENDED YEAR ENDED
(AMOUNTS IN THOUSANDS) 9/30/00 9/30/99
-------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
-------------------------------------------------------------------------------
Net investment loss $ (5,352) $ (2,348)
Net realized gain on investments 13,005 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 200,151 110,403
--------------------------
Net increase in net assets
resulting from operations 203,881 127,084
--------------------------
-------------------------------------------------------------------------------
DISTRIBUTIONS
-------------------------------------------------------------------------------
Net realized gains (5,226) -
--------------------------
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
-------------------------------------------------------------------------------
Proceeds from sale of shares 551,926 512,070
Proceeds from reinvestment of distributions 5,019 -
Redemption of shares (441,368) (214,183)
--------------------------
Net increase from capital share transactions 115,577 297,887
--------------------------
TOTAL INCREASE IN NET ASSETS 314,232 424,971
--------------------------
-------------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------------
Beginning of period 688,490 263,519
END OF PERIOD $1,002,722 $ 688,490
==========================
-------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
-------------------------------------------------------------------------------
Shares sold 27,162 32,231
Shares issued in reinvestment of distributions 250 -
Shares redeemed (21,524) (12,795)
--------------------------
NET INCREASE 5,888 19,436
==========================
See notes to financial statements.
</TABLE>
25
<PAGE>
<PAGE>
<TABLE>
MARSICO GROWTH & FINANCIAL
INCOME FUND HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING
THROUGHOUT THE PERIOD
<CAPTION>
YEAR YEAR 12/31/97*
ENDED ENDED TO
9/30/00 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 (0.11) (0.06) (0.01)
Net realized and unrealized
gains on investments 4.75 4.81 1.55
---------------------------------------------
Total from investment operations 4.64 4.75 1.54
---------------------------------------------
----------------------------------------------------------------------------------------------
DISTRIBUTIONS
----------------------------------------------------------------------------------------------
Net realized gains (0.11) - -
NET ASSET VALUE, END OF PERIOD $20.82 $16.29 $ 11.54
TOTAL RETURN 28.53% 41.16% 15.40%(1)
=============================================
----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
----------------------------------------------------------------------------------------------
Net assets, end of period (000s) $1,002,722 $688,490 $263,519
Ratio of expenses to average net assets,
less waivers and before expenses
paid indirectly 1.30% 1.43% 1.51%(2)
Ratio of net investment loss to average
net assets, net of waivers and expenses
paid indirectly (0.54)% (0.46)% (0.14)%(2)
Ratio of expenses to average net assets,
before waivers and expenses paid indirectly 1.30% 1.43% 1.78%(2)
Ratio of net investment loss to average
net assets, before waivers and expenses
paid indirectly (0.55)% (0.47)% (0.41)%(2)
Portfolio turnover rate 137% 137% 141%(1)
<FN>
* Inception.
(1) Not annualized for periods less than one year.
(2) Annualized for periods less than one year.
See notes to financial statements.
</TABLE>
26
<PAGE>
<PAGE>
November 2000 [PHOTO]
-- James Hillary, portfolio manager
MARSICO 21ST CENTURY FUND
I was very pleased when Tom Marsico asked me to manage the Marsico 21st
Century Fund--the first Marsico Fund without Tom at the helm. The Fund
is a logical extension of the Focus Fund and the Growth & Income Fund.
As we at Marsico Capital Management research many of the primarily large
capitalization ideas for those Funds, we discover many companies that,
while representing compelling opportunities to us, may not be
appropriate for those Funds. The 21st Century Fund can take advantage of
these investment opportunities in smaller capitalization companies and
can share the ideas and research on the larger capitalization companies
we follow in our other portfolios.
The 21st Century Fund shares the same investment process and philosophy
with the other Marsico Funds using, however, a more aggressive approach
to managing the portfolio. We blend "top-down" economic analysis with
"bottom-up" stock selection. We analyze broad macroeconomic data and
industry trends and then identify companies we believe will benefit from
those trends. We look for companies that have strong management teams
and sound business models. In constructing the portfolio for the 21st
Century Fund, we focus not only on core growth companies (e.g., EMC,
Merck and Citigroup) but also on aggressive growth companies (e.g.
Qualcomm, Xilinx and Intermune) and companies undergoing significant
changes.(1) When we find companies that meet our investment standards,
we try to weather short-term setbacks that we don't believe impact the
overall long-term valuation of a security. We typically sell when the
equity becomes overvalued, it is displaced by a better opportunity, when
the management of
27
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
the company fails to deliver results on key metrics or when an external
event impairs the long-term potential of the company.
The Fund opened on February 1st and produced strong gains during its
initial weeks of operation, led primarily by its technology-related
positions (particularly aerospace/defense, semiconductors, and
telecommunications equipment and services). The sharp decline in the
Nasdaq that began in mid-March adversely affected the Fund's returns
throughout most of the second and third quarters of 2000. The Fund's
performance in the third quarter improved over the second quarter with
four of the more significant technology-related positions in the Fund,
Corning, EMC Corporation, Applied Micro Circuits, and Adobe Systems,
producing solid returns. Performance was also helped in the third
quarter by new security issuances and the Fund's positions in certain
health care-related and financial services positions. Areas of weakness
included cellular-related positions, aerospace/defense, and certain
other technology-related holdings, particularly semiconductors,
software, and Internet "content" companies.
The total return of the Fund from its February 1st inception to
September 30th was 8.60%. That result compares favorably to the S&P
500(R) Index and the Nasdaq which had total returns of 3.83% and -6.69%
respectively for the same period.(2)
As you will note from the accompanying financial statements, over 50% of
the Fund was invested in technology-related companies as of September
30, 2000, the end of the Fund's fiscal year. I believe that,
notwithstanding the inherent volatility and additional risks in
technology stocks, this sector offers potential for long-term growth and
capital appreciation. The remainder of the portfolio as of September 30,
2000 was invested in a diverse group of leading companies
28
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
ranging from financial services (e.g., Citigroup) to health care (e.g.,
Merck) to energy (e.g., Cooper Cameron).
The volatility in the market and the decline in the Nasdaq have
generally worked against the Fund since March. To the extent the Fed is
accomplishing its task of slowing the economy, I believe that there
could be significant buying opportunities and the potential to generate
positive returns. Thank you for being an investor in the Fund.
Sincerely,
/s/ James Hillary
James Hillary
Portfolio Manager
SUNSTONE DISTRIBUTION SERVICES, LLC, DISTRIBUTOR FOR THE MARSICO FUNDS.
Fund prices change daily and performance may change significantly during
periods of market volatility. To receive current Fund prices and
performance information, please call 888-860-8686.
[FN]
(1) Portfolio composition is subject to change at any time and
references to specific securities, industries and sectors
referenced in this letter are not recommendations to purchase or
sell any particular security. See the accompanying Schedule of
Investments for the percent of the Fund's portfolio represented by
the securities mentioned in this letter.
(2) 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 their original cost. The S&P 500(R) Index is a
registered trademark of Standard & Poor's and is an unmanaged
broadly based index of the common stock prices of 500 large U.S.
companies that includes the reinvestment of dividends. You cannot
invest directly in an index. The performance return for the 21st
Century Fund reflects a fee waiver in effect; in the absence of
such a waiver, the return would be reduced. The Fund achieved its
short-term performance through, among other things, investments in
favorable markets, new security issuances and investments in
technology issuers, which may not be sustainable. The Fund's
performance, especially for short time periods, should not be the
sole factor in making an investment decision.
29
<PAGE>
<PAGE>
MARSICO 21ST FUND
CENTURY FUND OVERVIEW
SEPTEMBER 30, 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.
<TABLE>
<CAPTION>
------------------------------------------------------------------------
PERFORMANCE COMPARISON SINCE INCEPTION (2/1/00)
------------------------------------------------------------------------
<S> <C> <C>
Marsico 21st Century Fund 8.60%(1)
------------------------------------------------------------------------
S&P 500(R) Index 3.83%
------------------------------------------------------------------------
NET ASSETS
------------------------------------------------------------------------
9/30/00 $130,172,642
------------------------------------------------------------------------
-------------------------------------
NET ASSET VALUE
-------------------------------------
Net Asset Value Per Share $10.86
-------------------------------------
TOP FIVE HOLDINGS
-------------------------------------
EMC Corporation 5.41%
-------------------------------------
Corning, Inc. 4.76
-------------------------------------
Genentech, Inc. 4.28
-------------------------------------
Citigroup, Inc. 4.19
-------------------------------------
Guidant Corporation 3.92
-------------------------------------
SECTOR ALLOCATION(3)
-------------------------------------
Technology 58.38%
-------------------------------------
Industrial 9.82
-------------------------------------
Consumer Non-Cyclical 7.89
-------------------------------------
Financial 6.78
-------------------------------------
Energy 5.11
-------------------------------------
Utilities 4.82
-------------------------------------
Diversified 3.94
-------------------------------------
Consumer Cyclical 3.12
-------------------------------------
Transportation 0.14
-------------------------------------
GROWTH OF $10,000(2)
/ / Marsico 21st Century Fund
/ / S&P 500(R) Index
[GRAPH]
<FN>
(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, among other things, 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 (inception). 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 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.
(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.
</TABLE>
30
<PAGE>
<PAGE>
<TABLE>
MARSICO 21ST SCHEDULE
CENTURY FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
<CAPTION>
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
-----------------------------------------------------------------------------------------------
CELLULAR TELECOMMUNICATIONS
Sprint Corporation* 50,369 $ 1,766,063 1.36%
-----------------------------------------------------------------------------------------------
CHEMICALS - DIVERSIFIED
Cabot Microelectronics Corporation* 10,000 480,000 0.37
-----------------------------------------------------------------------------------------------
CIRCUITS
Analog Devices, Inc.* 61,000 5,036,313 3.87
-----------------------------------------------------------------------------------------------
COMMERCIAL SERVICES
Wireless Facilities, Inc.* 37,400 2,157,513 1.66
-----------------------------------------------------------------------------------------------
COMPUTER SOFTWARE
Adobe Systems, Inc. 26,397 4,098,134 3.15
-----------------------------------------------------------------------------------------------
COMPUTERS - MEMORY DEVICES
EMC Corporation* 70,982 7,036,091 5.41
-----------------------------------------------------------------------------------------------
COMPUTERS - MICRO
Sun Microsystems, Inc.* 23,270 2,716,772 2.09
-----------------------------------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT
Automatic Data Processing, Inc. 42,467 2,839,981 2.18
-----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES
Citigroup, Inc. 100,998 5,460,204 4.19
-----------------------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING
Corning, Inc. 20,882 6,201,954 4.76
-----------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - MISCELLANEOUS
Celestica, Inc.* 48,881 3,385,009 2.60
-----------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS
Advanced Micro Devices, Inc.* 75,000 1,771,875 1.36
Applied Micro Circuits Corporation 23,403 4,845,884 3.72
Parthus Technologies, PLC* 106,200 424,060 0.33
PMC Sierra, Inc.* 7,311 1,573,693 1.21
Xilinx, Inc.* 30,000 2,568,750 1.97
----------------------------
11,184,262 8.59
-----------------------------------------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS
Agilent Technologies, Inc.* 64,574 3,160,090 2.43
-----------------------------------------------------------------------------------------------
ENTERPRISE SOFTWARE SERVICES
Oracle Corporation* 33,818 2,663,167 2.04
-----------------------------------------------------------------------------------------------
31
<PAGE>
<PAGE>
<CAPTION>
MARSICO 21ST SCHEDULE
CENTURY FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS CONTINUED
-----------------------------------------------------------------------------------------------
FINANCE - INVESTMENT BANKER/BROKER
Merrill Lynch & Company, Inc. 50,672 $ 3,344,352 2.57%
-----------------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCER
Calpine Corporation* 38,835 4,053,403 3.11
Southern Energy, Inc.* 70,000 2,196,250 1.69
----------------------------
6,249,653 4.80
-----------------------------------------------------------------------------------------------
INTERNET SOFTWARE
America Online, Inc.* 57,697 3,101,214 2.38
Exodus Communications, Inc.* 50,359 2,486,476 1.91
Liberate Technologies, Inc.* 55,000 1,591,563 1.22
Software.com, Inc.* 10,560 1,915,980 1.47
Vitria Technology, Inc.* 15,000 699,375 0.54
----------------------------
9,794,608 7.52
-----------------------------------------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENE
Genentech, Inc.* 30,000 5,570,625 4.28
Intermune Pharmaceuticals, Inc.* 77,277 4,192,277 3.22
Large Scale Biology Corporation* 41,829 1,369,900 1.05
----------------------------
11,132,802 8.55
-----------------------------------------------------------------------------------------------
MEDICAL - DRUGS
Merck & Co., Inc. 61,080 4,546,642 3.49
Pfizer, Inc. 48,290 2,170,032 1.67
----------------------------
6,716,674 5.16
-----------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS
Cytyc Corporation* 50,000 2,156,250 1.66
Guidant Corporation* 72,273 5,108,798 3.92
----------------------------
7,265,048 5.58
-----------------------------------------------------------------------------------------------
NETWORKING PRODUCTS
Avici Systems, Inc.* 16,643 1,583,165 1.22
-----------------------------------------------------------------------------------------------
OIL - FIELD MACHINERY & EQUIPMENT
Cooper Cameron Corporation* 55,735 4,106,973 3.15
-----------------------------------------------------------------------------------------------
OIL - FIELD SERVICES
Halliburton Company 51,475 2,519,058 1.94
-----------------------------------------------------------------------------------------------
32
<PAGE>
<PAGE>
<CAPTION>
MARSICO 21ST SCHEDULE
CENTURY FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS CONTINUED
-----------------------------------------------------------------------------------------------
POWER CONVERTERS/POWER SUPPLY EQUIPMENT
Proton Energy Systems, Inc.* 5,000 $ 143,125 0.11%
-----------------------------------------------------------------------------------------------
RADIO
Clear Channel Communications, Inc.* 63,345 3,578,993 2.75
-----------------------------------------------------------------------------------------------
RETAIL - BUILDING PRODUCTS
The Home Depot, Inc. 57,191 3,034,697 2.33
-----------------------------------------------------------------------------------------------
RETAIL - JEWELRY
Tiffany & Co. 26,432 1,019,284 0.78
-----------------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT
Nortel Networks Corporation 76,735 4,570,528 3.51
QUALCOMM, Inc.* 54,726 3,899,227 3.00
-----------------------------
8,469,755 6.51
-----------------------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES
Floware Wireless Systems Ltd.* 48,729 1,213,657 0.93
Level 3 Communications, Inc.* 16,090 1,240,941 0.95
-----------------------------
2,454,598 1.88
-----------------------------------------------------------------------------------------------
TRANSPORTATION - MARINE
Teekay Shipping Corporation 3,773 177,095 0.14
-----------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $115,923,773) 129,775,433 99.69
-----------------------------
<CAPTION>
PRINCIPAL/ MARKET VALUE PERCENT OF
SHARES IN DOLLARS NET ASSETS
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
-----------------------------------------------------------------------------------------------
Federal Home Loan Bank,
6.18%, 10/2/00 6,300,000 6,298,918 4.84
SSgA Money Market Fund 87,573 87,573 0.07
-----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $6,386,491) 6,386,491 4.91
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $122,310,264) 136,161,924 104.60
Liabilities less Other Assets (5,989,282) (4.60)
-----------------------------------------------------------------------------------------------
NET ASSETS $130,172,642 100.00%
=============================
<FN>
* Non-income producing.
See notes to financial statements.
</TABLE>
33
<PAGE>
<PAGE>
<TABLE>
STATEMENT
MARSICO 21ST OF ASSETS
CENTURY FUND AND
SEPTEMBER 30, 2000 LIABILITIES
<CAPTION>
(AMOUNTS IN THOUSANDS)
-------------------------------------------------------------------------------
<S> <C>
ASSETS
-------------------------------------------------------------------------------
Investments, at value (cost $122,310) $136,162
Receivable for capital stock sold 48
Interest and dividends receivable 25
Prepaid expenses and other assets 11
----------------------
TOTAL ASSETS 136,246
----------------------
-------------------------------------------------------------------------------
LIABILITIES
-------------------------------------------------------------------------------
Payable for investments purchased 5,708
Payable for capital stock redeemed 96
Accrued investment advisory fee 69
Accrued distribution fee 40
Accrued expenses and other liabilities 160
----------------------
TOTAL LIABILITIES 6,073
----------------------
NET ASSETS $130,173
======================
-------------------------------------------------------------------------------
NET ASSETS CONSIST OF
-------------------------------------------------------------------------------
Paid-in-capital $146,210
Undistributed net investment loss (65)
Undistributed net realized loss on investments (29,722)
Undistributed net realized loss on
foreign currency transactions (102)
Net unrealized appreciation on investments and foreign
currency translations 13,852
----------------------
NET ASSETS $130,173
======================
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 11,982
----------------------
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $ 10.86
======================
<FN>
* Not in thousands.
See notes to financial statements.
</TABLE>
34
<PAGE>
<PAGE>
<TABLE>
MARSICO 21ST STATEMENT
CENTURY FUND OF
FOR THE PERIOD FEBRUARY 1, 2000* OPERATIONS
TO SEPTEMBER 30, 2000
<CAPTION>
(AMOUNTS IN THOUSANDS)
-------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
-------------------------------------------------------------------------------
Interest $ 281
Dividends (net of $3 non-reclaimable foreign
withholding taxes) 233
----------------------
TOTAL INVESTMENT INCOME 514
----------------------
-------------------------------------------------------------------------------
EXPENSES
-------------------------------------------------------------------------------
Investment advisory fees 756
Distribution fees 223
Transfer agent fees and expenses 147
Federal and state registration fees 89
Professional fees 83
Trustees' fees and expenses 74
Fund administration fees 66
Custody and fund accounting fees 49
Printing and postage expenses 23
Miscellaneous 6
----------------------
TOTAL EXPENSES 1,516
Less waiver of expenses (179)
Less expenses paid indirectly (2)
----------------------
NET EXPENSES 1,335
----------------------
NET INVESTMENT LOSS (821)
----------------------
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (loss)
-------------------------------------------------------------------------------
Net realized loss on investments (29,722)
Net realized loss on foreign currency transactions (103)
Change in unrealized appreciation/depreciation on
investments and foreign currency translations 13,852
----------------------
Net Loss on Investments (15,973)
----------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(16,794)
======================
<FN>
* Inception.
See notes to financial statements.
</TABLE>
35
<PAGE>
<PAGE>
<TABLE>
STATEMENT
MARSICO 21ST OF CHANGES
CENTURY FUND IN NET ASSETS
<CAPTION>
2/1/00* TO
(AMOUNTS IN THOUSANDS) 9/30/00
-------------------------------------------------------------------------------
<S> <C>
OPERATIONS
-------------------------------------------------------------------------------
Net investment loss $ (821)
Net realized loss on investments (29,722)
Net realized loss on foreign currency transactions (103)
Change in unrealized appreciation/depreciation
on investments and foreign currency translations 13,852
----------------------
Net decrease in net assets resulting from operations (16,794)
----------------------
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
-------------------------------------------------------------------------------
Proceeds from sale of shares 205,161
Redemption of shares (58,194)
----------------------
Net increase from capital share transactions 146,967
----------------------
TOTAL INCREASE IN NET ASSETS 130,173
----------------------
-------------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------------
Beginning of period -
END OF PERIOD $130,173
======================
-------------------------------------------------------------------------------
TRANSACTIONS IN SHARES
-------------------------------------------------------------------------------
Shares sold 17,114
Shares redeemed (5,132)
----------------------
NET INCREASE 11,982
======================
<FN>
* Inception.
See notes to financial statements.
</TABLE>
36
<PAGE>
<PAGE>
<TABLE>
MARSICO 21ST FINANCIAL
CENTURY FUND HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING
THROUGHOUT THE PERIOD
<CAPTION>
2/1/00* TO
(AMOUNTS IN THOUSANDS) 9/30/00
-----------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
-----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-----------------------------------------------------------------------------------
Net investment loss (0.07)
Net realized and unrealized gains on investments 0.93
-----------------
Total from investment operations 0.86
-----------------
NET ASSET VALUE, END OF PERIOD $ 10.86
=================
TOTAL RETURN 8.60%(1)
-----------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
-----------------------------------------------------------------------------------
Net assets, end of period (000s) $130,173
Ratio of expenses to average net assets, less
waivers and before expenses paid indirectly 1.50%(2)
Ratio of net investment loss to average net assets,
net of waivers and expenses paid indirectly (0.92)%(2)
Ratio of expenses to average net assets, before
waivers and expenses paid indirectly 1.70%(2)
Ratio of net investment loss to average net assets,
before waivers and expenses paid indirectly (1.13)%(2)
Portfolio turnover rate 267%(1)
<FN>
* Inception.
(1) Not annualized for periods less than one year.
(2) Annualized for periods less than one year.
See notes to financial statements.
</TABLE>
37
<PAGE>
<PAGE>
November 2000 [PHOTO]
-- James Gendelman, portfolio manager
MARSICO INTERNATIONAL OPPORTUNITIES FUND
The International Opportunities Fund was launched on June 30th. While
the Fund is obviously young, I am very pleased by the shareholder
support it has received and by the Fund's early investment results. For
the three months ending September 30, 2000, the Fund had a total return
of 3.60%.(1) Over the same period, the Morgan Stanley Capital
International EAFE Index,(2) which we consider to be our primary non-
U.S. equity benchmark, had a total return (U.S.$) of -8.07%.
International Opportunities Fund, I should stress, is very much a
Marsico Fund. The investment approach blends "top-down" macroeconomic
analysis with "bottom-up" stock selection. The process stresses hands-on,
intensive, internal research of well-established companies that are
considered to be global leaders, and which offer the potential for
above-average earnings growth. Like other Marsico Funds, the
International Opportunities Fund is relatively concentrated, typically
owning 35 to 50 positions, which I think of in three categories: core
growth, aggressive growth, and life cycle change. The international
investment team works very closely with the rest of the Marsico Capital
Management investment team, particularly in macroeconomic analysis and
the idea generation process.
During the third quarter, the Fund's management team experienced many of
the challenges that have been faced by our U.S. funds, including the
effects of higher energy prices, multiple interest rate increases by
central banks, and potential for decelerating growth in the technology
sector. The Fund also had to contend with another major issue: currency
translation losses. During the quarter, the Euro depreciated versus the
U.S. dollar, which negatively impacted investment results.
38
<PAGE>
<PAGE>
LETTER
TO THE
SHAREHOLDERS
[CONTINUED]
Performance in the third quarter was helped by several factors,
including the Fund's Canadian-domiciled holdings (the EAFE Index does
not include an allocation to Canada) including Bombardier Corp. and
Thomson Corp.(3) The Fund's positions in Canadian dollar-denominated
companies had the ancillary effect of avoiding Euro-related currency
losses. The Fund's minimal exposure to Japan and emerging market
countries also contributed positively to performance compared to the
EAFE Index. Japan, as represented by the Morgan Stanley Capital
International Japan Index fell in value by nearly 11% in dollar terms
for the third quarter, while emerging market countries, as represented
by the Morgan Stanley Capital International Emerging Markets Free Index,
lost more than 13% in dollar terms for the same period. Thank you for
being an investor in the Fund.
Sincerely,
/s/ James Gendelman
James Gendelman
Portfolio Manager
SUNSTONE DISTRIBUTION SERVICES, LLC, DISTRIBUTOR FOR THE MARSICO FUNDS.
Fund prices change daily and performance may change significantly during
periods of market volatility. To receive current Fund prices and
performance information, please call 888-860-8686.
[FN]
(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 their original cost. The performance return for the
International Opportunities Fund reflects a fee waiver in effect;
in the absence of such a waiver, the return would be reduced. The
Fund achieved its short-term performance through, among other
things, investments in favorable markets, new security issuances
and investments in technology issuers, which may not be
sustainable. The Fund's performance, especially for short time
periods, should not be the sole factor in making an investment
decision.
(2) The Morgan Stanley Capital International EAFE Index tracks the
stocks of about 1,000 companies in Europe, Australasia, and the
Far East (EAFE). You cannot invest directly in an index.
(3) Portfolio composition is subject to change at any time and
references to specific securities, industries and sectors
referenced in this letter are not recommendations to purchase or
sell any particular security. See the accompanying Schedule of
Investments for the percent of the Fund's portfolio represented by
the securities mentioned in this letter.
39
<PAGE>
<PAGE>
MARSICO INTERNATIONAL FUND
OPPORTUNITIES FUND OVERVIEW
SEPTEMBER 30, 2000
The International Opportunities Fund invests primarily in common stocks
of foreign companies that are selected for their long-term growth
potential. The Fund may invest in companies of any size throughout the
world. It normally invests in issuers from at least three different
countries, not including the United States and maintains a core position
of between 35 and 50 common stocks.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
PERFORMANCE COMPARISON SINCE INCEPTION (6/30/00)
-------------------------------------------------------------------------
<S> <C>
Marsico International Opportunities Fund 3.60%(1)
-------------------------------------------------------------------------
Morgan Stanley Capital International EAFE Index (8.07)%
-------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------
9/30/00 $15,480,423
-------------------------------------------------------------------------
--------------------------------------
<S> <C>
NET ASSET VALUE
--------------------------------------
Net Asset Value Per Share $10.36
--------------------------------------
TOP FIVE HOLDINGS
--------------------------------------
Nortel Networks Corp. 3.78%
--------------------------------------
ING Groep N.V. 3.75
--------------------------------------
Sema Group PLC 3.63
--------------------------------------
Sony Corp. 3.39
--------------------------------------
Embraer Empresa Brasileira PFD 3.39
--------------------------------------
SECTOR ALLOCATION(3)
--------------------------------------
Technology 34.14%
--------------------------------------
Consumer Non-Cyclical 18.39
--------------------------------------
Financial 15.73
--------------------------------------
Consumer Cyclical 11.34
--------------------------------------
Industrial 9.03
--------------------------------------
Energy 6.24
--------------------------------------
Diversified 3.31
--------------------------------------
Utilities 1.82
--------------------------------------
GROWTH OF $10,000(2)
/ / Marsico International
Opportunities Fund
/ / Morgan Stanley Capital
International EAFE Index
[GRAPH]
<FN>
(1) The performance returns for the International Opportunities 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, among other things, 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 June
30, 2000 (inception). 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 Morgan Stanley
Capital International EAFE Index tracks the stocks of about 1,000
companies in Europe, Australasia, and the Far East (EAFE). 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.
</TABLE>
40
<PAGE>
<PAGE>
<TABLE>
MARSICO INTERNATIONAL SCHEDULE
OPPORTUNITIES FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
<CAPTION>
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
----------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE
Embraer -
Empresa Brasileira de Aeronautica ADR 16,910 $ 524,210 3.39%
----------------------------------------------------------------------------------------------
AUDIO/VIDEO PRODUCTS
Sony Corporation* 3,800 386,184 2.49
Sony Corporation-ADR* 1,373 138,587 0.90
--------------------------
524,771 3.39
----------------------------------------------------------------------------------------------
BEVERAGES WINES/SPIRITS
Diageo PLC 33,725 301,500 1.95
Diageo PLC ADR 4,200 148,313 0.96
--------------------------
449,813 2.91
----------------------------------------------------------------------------------------------
CELLULAR TELECOMMUNICATIONS
NTT DoCoMo, Inc. 12 344,940 2.23
----------------------------------------------------------------------------------------------
COMMERCIAL BANKS
Allied Irish Banks PLC 29,884 322,730 2.08
Bank of Ireland 40,025 320,471 2.07
Julius Baer Holding 62 322,099 2.08
--------------------------
965,300 6.23
----------------------------------------------------------------------------------------------
COMPUTERS - INTEGRATED SYSTEMS
ASM Lithography Holding N.V.* 13,393 445,036 2.87
Sema Group PLC 32,740 561,663 3.63
--------------------------
1,006,699 6.50
----------------------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING
Bombardier, Inc. Class B 28,174 485,984 3.14
----------------------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS
Hutchison Whampoa Ltd. 35,000 464,632 3.00
----------------------------------------------------------------------------------------------
DRUG DELIVERY SYSTEMS
Elan Corp. PLC ADR* 9,086 497,459 3.21
----------------------------------------------------------------------------------------------
EDUCATIONAL SOFTWARE
Riverdeep Group, Inc. ADR* 18,114 403,037 2.60
----------------------------------------------------------------------------------------------
41
<PAGE>
<PAGE>
<CAPTION>
MARSICO INTERNATIONAL SCHEDULE
OPPORTUNITIES FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS CONTINUED
------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - MISCELLANEOUS
Celestica, Inc.* 6,389 $ 442,438 2.86%
Koninklijke Philips Electronics N.V.* 7,832 337,563 2.18
Koninklijke Philips Electronics N.V. ADR 1,175 49,937 0.32
----------------------------
829,938 5.36
------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS
ARC International PLC* 74,874 453,444 2.93
Parthus Technologies PLC* 107,679 429,966 2.78
----------------------------
883,410 5.71
------------------------------------------------------------------------------------------------
FOOD MISCELLANEOUS/DIVERSIFIED
Groupe Danone 2,765 380,219 2.46
------------------------------------------------------------------------------------------------
HOTELS & MOTELS
Four Seasons Hotels, Inc.* 3,616 264,646 1.71
------------------------------------------------------------------------------------------------
MEDICAL - DRUGS
Aventis S.A. 5,768 433,285 2.80
Novo Nordisk 1,961 435,349 2.81
Shire Pharmaceuticals Group PLC* 11,526 198,925 1.29
Shire Pharmaceuticals Group PLC ADR* 3,570 184,301 1.19
----------------------------
1,251,860 8.09
------------------------------------------------------------------------------------------------
MONEY CENTER BANKS
ING Groep N.V. 8,700 580,337 3.75
------------------------------------------------------------------------------------------------
MULTI-LINE INSURANCE
Axa 1,909 249,688 1.61
Axa ADR 2,089 135,132 0.87
----------------------------
384,820 2.48
------------------------------------------------------------------------------------------------
MULTIMEDIA
Pearson PLC 4,307 119,685 0.77
Reuters Group PLC 16,496 312,756 2.02
----------------------------
432,441 2.79
------------------------------------------------------------------------------------------------
OIL - FIELD SERVICES
Schlumberger Ltd. 2,766 227,676 1.47
------------------------------------------------------------------------------------------------
OIL COMPANIES - EXPLORATION & PRODUCTION
Bonavista Petroleum Ltd.* 8,200 155,045 1.00
------------------------------------------------------------------------------------------------
42
<PAGE>
<PAGE>
<CAPTION>
MARSICO INTERNATIONAL SCHEDULE
OPPORTUNITIES FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
NUMBER MARKET VALUE PERCENT OF
OF SHARES IN DOLLARS NET ASSETS
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS CONTINUED
------------------------------------------------------------------------------------------------
OIL COMPANIES - INTEGRATED
Petro-Canada 13,586 $ 301,951 1.95%
Total Fina ELF SA 1,295 189,751 1.23
-----------------------------
491,702 3.18
------------------------------------------------------------------------------------------------
PUBLISHING - NEWSPAPERS
The Thompson Corporation 9,319 367,863 2.38
------------------------------------------------------------------------------------------------
REINSURANCE
Swiss Reinsurance Co.* 144 275,375 1.78
------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT
Alcatel* 2,746 175,941 1.14
Alcatel ADR* 2,577 162,029 1.05
Ericsson L M TEL 16,611 253,095 1.63
Ericsson L M TEL-ADR 1,406 20,826 0.13
Nortel Networks Corporation 9,826 585,261 3.78
-----------------------------
1,197,152 7.73
------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES
BCE, Inc. 16,252 377,916 2.44
------------------------------------------------------------------------------------------------
TELEPHONE - INTEGRATED
Nippon Telephone & Telegraph Corporation 26 255,552 1.65
------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $14,022,817) 14,022,797 90.58
-----------------------------
43
<PAGE>
<PAGE>
<CAPTION>
MARSICO INTERNATIONAL SCHEDULE
OPPORTUNITIES FUND OF
SEPTEMBER 30, 2000 INVESTMENTS
[CONTINUED]
PRINCIPAL/ MARKET VALUE PERCENT OF
SHARES IN DOLLARS NET ASSETS
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
------------------------------------------------------------------------------------------------
Federal Home Loan Bank,
6.18%, 10/2/00 $1,300,000 $ 1,299,777 8.40%
SSgA Money Market Fund 8,222 8,222 0.05
------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,307,999) 1,307,999 8.45
------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $15,330,816) 15,330,796 99.03
Other Assets less Liabilities 149,627 0.97
------------------------------------------------------------------------------------------------
NET ASSETS $15,480,423 100.00%
=============================
<CAPTION>
MARKET PERCENT OF
VALUE INVESTMENT SECURITIES
---------------------------------------------------------------------------------------------
<S> <C> <C>
SUMMARY OF INVESTMENTS BY COUNTRY
---------------------------------------------------------------------------------------------
Brazil $ 524,210 3.4%
---------------------------------------------------------------------------------------------
Canada 2,981,104 19.5
---------------------------------------------------------------------------------------------
Denmark 435,349 2.8
---------------------------------------------------------------------------------------------
France 1,726,045 11.3
---------------------------------------------------------------------------------------------
Hong Kong 464,632 3.0
---------------------------------------------------------------------------------------------
Ireland 1,543,697 10.1
---------------------------------------------------------------------------------------------
Japan 1,125,263 7.3
---------------------------------------------------------------------------------------------
Netherlands 1,412,873 9.2
---------------------------------------------------------------------------------------------
Sweden 273,921 1.8
---------------------------------------------------------------------------------------------
Switzerland 597,474 3.9
---------------------------------------------------------------------------------------------
United Kingdom 2,710,553 17.7
---------------------------------------------------------------------------------------------
United States** 1,535,675 10.0
---------------------------------------------------------------------------------------------
TOTAL $15,330,796 100.0%
---------------------------------------------------------------------------------------------
<FN>
* Non-income producing.
** Includes short-term securities (1.5% excluding short-term
securities).
See notes to financial statements.
</TABLE>
44
<PAGE>
<PAGE>
<TABLE>
STATEMENT
MARSICO INTERNATIONAL OF ASSETS
OPPORTUNITIES FUND AND
SEPTEMBER 30, 2000 LIABILITIES
<CAPTION>
(AMOUNTS IN THOUSANDS)
----------------------------------------------------------------------
<S> <C>
ASSETS
----------------------------------------------------------------------
Investments, at value (cost $15,331) $15,331
Receivable for investments sold 1,497
Receivable for capital stock sold 17
Interest and dividends receivable 13
Receivable from Adviser 30
Prepaid expenses and other assets 11
----------------------
TOTAL ASSETS 16,899
----------------------
----------------------------------------------------------------------
LIABILITIES
----------------------------------------------------------------------
Payable for investments purchased 1,295
Due to custodian 45
Payable for capital stock redeemed 1
Accrued distribution fee 3
Accrued expenses and other liabilities 75
----------------------
TOTAL LIABILITIES 1,419
----------------------
NET ASSETS $15,480
======================
----------------------------------------------------------------------
NET ASSETS CONSIST OF
----------------------------------------------------------------------
Paid-in-capital $15,067
Undistributed net investment income 31
Undistributed net realized gain on investments 660
Undistributed net realized loss on
foreign currency transactions (277)
Net unrealized depreciation on investments and foreign
currency translations (1)
----------------------
NET ASSETS $15,480
======================
SHARES OUTSTANDING, $0.001 PAR VALUE
(UNLIMITED SHARES AUTHORIZED) 1,494
----------------------
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING)* $ 10.36
======================
<FN>
* Not in thousands.
See notes to financial statements.
</TABLE>
45
<PAGE>
<PAGE>
<TABLE>
MARSICO INTERNATIONAL STATEMENT
OPPORTUNITIES FUND OF
FOR THE PERIOD JUNE 30, 2000* OPERATIONS
TO SEPTEMBER 30, 2000
<CAPTION>
(AMOUNTS IN THOUSANDS)
--------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
--------------------------------------------------------------------------
Interest $ 37
Dividends (net of $3 non-reclaimable
foreign withholding taxes) 30
----------------------
TOTAL INVESTMENT INCOME 67
----------------------
--------------------------------------------------------------------------
EXPENSES
--------------------------------------------------------------------------
Professional fees 44
Investment advisory fees 30
Trustees' fees and expenses 21
Transfer agent fees and expenses 19
Custody and fund accounting fees 15
Federal and state registration fees 13
Fund administration fees 12
Distribution fees 9
Printing and postage expenses 1
Miscellaneous 2
----------------------
TOTAL EXPENSES 166
Less waiver of expenses (110)
----------------------
NET EXPENSES 56
----------------------
NET INVESTMENT INCOME 11
----------------------
--------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
--------------------------------------------------------------------------
Net realized gain on investments 660
Net realized loss on foreign currency transactions (268)
Change in unrealized appreciation/depreciation on
investments and foreign currency translations (1)
----------------------
Net Gain on Investments 391
----------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $402
======================
<FN>
* Inception.
See notes to financial statements.
</TABLE>
46
<PAGE>
<PAGE>
<TABLE>
STATEMENT
MARSICO INTERNATIONAL OF CHANGES
OPPORTUNITIES FUND IN NET ASSETS
<CAPTION>
(AMOUNTS IN THOUSANDS) 6/30/00* TO 9/30/00
---------------------------------------------------------------------------
<S> <C>
OPERATIONS
---------------------------------------------------------------------------
Net investment income $ 11
Net realized gain on investments 660
Net realized loss on foreign currency transactions (268)
Change in unrealized appreciation/depreciation
on investments and foreign currency translations (1)
----------------------
Net increase in net assets resulting from operations 402
----------------------
---------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
---------------------------------------------------------------------------
Proceeds from sale of shares 15,903
Redemption of shares (825)
----------------------
Net increase from capital share transactions 15,078
----------------------
TOTAL INCREASE IN NET ASSETS 15,480
----------------------
---------------------------------------------------------------------------
NET ASSETS
---------------------------------------------------------------------------
Beginning of period -
END OF PERIOD $15,480
======================
---------------------------------------------------------------------------
TRANSACTIONS IN SHARES
---------------------------------------------------------------------------
Shares sold 1,576
Shares redeemed (82)
----------------------
NET INCREASE 1,494
======================
<FN>
* Inception.
See notes to financial statements.
</TABLE>
47
<PAGE>
<PAGE>
<TABLE>
MARSICO INTERNATIONAL FINANCIAL
OPPORTUNITIES FUND HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING
THROUGHOUT THE PERIOD
<CAPTION> 6/30/00* TO
(AMOUNTS IN THOUSANDS) 9/30/00
-------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
-------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-------------------------------------------------------------------------------
Net investment income 0.01
Net realized and unrealized gains on investments 0.35
-----------------
Total from investment operations 0.36
-----------------
NET ASSET VALUE, END OF PERIOD $ 10.36
=================
TOTAL RETURN 3.60%(1)
-------------------------------------------------------------------------------
SUPPLEMENTAL DATA AND RATIOS
-------------------------------------------------------------------------------
Net assets, end of period (000s) $15,480
Ratio of expenses to average net assets, less
waivers and before expenses paid indirectly 1.60%(2)
Ratio of net investment income to average net assets,
net of waivers and expenses paid indirectly 0.33%(2)
Ratio of expenses to average net assets, before
waivers and expenses paid indirectly 4.76%(2)
Ratio of net investment loss to average net assets,
before waivers and expenses paid indirectly (2.83)%(2)
Portfolio turnover rate 190%(1)
<FN>
* Inception.
(1) Not annualized for periods less than one year.
(2) Annualized for periods less than one year.
See notes to financial statements.
</TABLE>
48
<PAGE>
<PAGE>
NOTES TO
MARSICO FUNDS FINANCIAL
SEPTEMBER 30, 2000 STATEMENTS
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, the 21st Century Fund and the International Opportunities Fund
(collectively, the "Funds") are separate investment portfolios of the
Trust. The Focus Fund is a non-diversified fund and the Growth &
Income Fund, 21st Century Fund and the International Opportunities
Fund are diversified funds. The Focus and Growth & Income Funds
commenced operations on December 31, 1997, the 21st Century Fund
commenced operations on February 1, 2000 and the International
Opportunities Fund commenced operations on June 30, 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
49
<PAGE>
<PAGE>
NOTES TO
MARSICO FUNDS FINANCIAL
SEPTEMBER 30, 2000 STATEMENTS
[CONTINUED]
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.
Organizational costs of the 21st Century Fund and the
International Opportunities Fund were expensed by the Funds as
incurred.
(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 and is designated as an introductory broker on
certain Fund transactions. For the year ended September 30,
2000, brokerage commissions paid to Banc of America Securities
were $419,280, $87,007, $9,902 and $0 for the Focus Fund, Growth
& Income Fund, 21st Century Fund and International Opportunities
Fund, respectively. Also, brokerage commissions were paid to
unaffiliated brokers which reduced certain transfer agent fees
and expenses in the amount of $267,152, $49,457, $0 and $0 for
the Focus Fund, Growth & Income Fund, 21st Century Fund and
International Opportunities Fund, respectively, for the period
ended September 30, 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. Certain Funds may utilize
earnings and profits on redemption of shares as part of the
dividends paid deduction. The 21st Century Fund incurred post-
October currency and capital losses (in thousands) of $1 and
$25,756, respectively, and the International Opportunities Fund
incurred post-October currency losses of $5, which are treated
as arising in 2001.
(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
50
<PAGE>
<PAGE>
NOTES TO
MARSICO FUNDS FINANCIAL
SEPTEMBER 30, 2000 STATEMENTS
[CONTINUED]
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, 2000, reclassifications (in
thousands) were recorded to increase (decrease) paid-in-capital
by $7,763, ($5,306), ($757), and ($11), decrease net investment
loss by $20,283, $5,310, $0 and $20, increase (decrease)
accumulated net realized gain (loss) on investments and options
written by ($28,021), $0, $756, and $0, and increase (decrease)
accumulated net realized gain (loss) on foreign currency
transactions by ($25), ($4), $1, and ($9) for the Focus,
Growth & Income, 21st Century and International Opportunities
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 or depreciation 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
51
<PAGE>
<PAGE>
NOTES TO
MARSICO FUNDS FINANCIAL
SEPTEMBER 30, 2000 STATEMENTS
[CONTINUED]
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.
(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.
52
<PAGE>
<PAGE>
NOTES TO
MARSICO FUNDS FINANCIAL
SEPTEMBER 30, 2000 STATEMENTS
[CONTINUED]
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 call options written for the year ended
September 30, 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 9/30/00 - -
----------------------------------------------------------------------
</TABLE>
The Fund did not write put options during the year ended
September 30, 2000.
53
<PAGE>
<PAGE>
NOTES TO
MARSICO FUNDS FINANCIAL
SEPTEMBER 30, 2000 STATEMENTS
[CONTINUED]
<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 9/30/00 - -
----------------------------------------------------------------------
</TABLE>
The Fund did not write put options during the year ended
September 30, 2000.
(i) TRUSTEES' COMPENSATION - Effective February 1, 2000, the Board
of Trustees adopted the Marsico Deferred Fee Plan (the "Plan")
that allows the independent Trustees to defer the receipt of all
or a portion of the Trustees' fees payable. The deferred fees
are invested in certain of the Funds until distribution in
accordance with the Plan.
(j) 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, 21st Century and International Opportunities 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 and International
Opportunities Funds' average net assets and 1.50% of the Growth &
Income and the 21st Century Funds' average net assets until June 30,
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.
54
<PAGE>
<PAGE>
NOTES TO
MARSICO FUNDS FINANCIAL
SEPTEMBER 30, 2000 STATEMENTS
[CONTINUED]
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, 2000,
were as follows:
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS) PURCHASES SALES
----------------------------------------------------------------------
<S> <C> <C>
Focus Fund $4,994,375 $5,102,304
----------------------------------------------------------------------
Growth & Income Fund 1,403,856 1,306,476
----------------------------------------------------------------------
21st Century Fund 471,843 326,095
----------------------------------------------------------------------
International Opportunities Fund 33,519 19,878
----------------------------------------------------------------------
</TABLE>
There were no purchases or sales of U.S. government securities.
The cost of securities on a tax basis (in thousands) for the Focus,
Growth & Income, 21st Century and International Opportunities Funds
was $2,034,117, $716,558, $126,377 and $15,341 respectively. At
September 30, 2000, gross unrealized appreciation and (depreciation)
on investments for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
GROWTH & 21ST INTERNATIONAL
FOCUS INCOME CENTURY OPPORTUNITIES
(AMOUNTS IN THOUSANDS) FUND FUND FUND FUND
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unrealized appreciation $849,196 $314,017 $18,858 $ 664
------------------------------------------------------------------------------------------------
Unrealized depreciation (5,260) (7,926) (9,074) (675)
------------------------------------------------------------------------------------------------
NET UNREALIZED APPRECIATION
(DEPRECIATION) $843,936 $306,091 $ 9,784 $ (11)
========================================================
</TABLE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For federal income tax purposes, Focus Fund and Growth & Income Fund
designated capital gain dividends of $31,156,762 and $3,499,089,
respectively, for the year ended September 30, 2000.
Dividends paid by the Focus Fund and Growth & Income Fund during the
fiscal year ended September 30, 2000, which are not designated as
capital gain distributions, should be multiplied by 100% and 100%,
respectively, to arrive at the net amount eligible for the corporate
dividend-received deduction.
55
<PAGE>
<PAGE>
REPORT OF
MARSICO FUNDS 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, the Marsico Growth & Income Fund, the Marsico 21st
Century Fund and the Marsico International Opportunities Fund
(constituting the Marsico Investment Fund, hereafter referred to as the
"Trust") at September 30, 2000, the results of each of their operations
for the year or periods then ended, the changes in each of their net
assets and the financial highlights for each of the periods indicated,
in conformity with accounting principles generally accepted in the
United States of America. 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
auditing standards generally accepted in the United States of America,
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, 2000 by correspondence with the custodian,
provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
November 3, 2000
56
<PAGE>
<PAGE>
MARSICO FUNDS [logo]
P.O. Box 3210, Milwaukee, WI 53201-3210
888-860-8686
[logo] Recycled Paper
<PAGE>
<PAGE>
MARSICO FUNDS [logo]
P.O. Box 3210, Milwaukee, WI 53201-3210
www.marsicofunds.com
888-860-8686
Sunstone Distribution Services, LLC, Distributor MA4080900
