<PAGE>
CENTURY CAPITAL MANGEMENT
INVESTING FOR LONG-TERM GROWTH AND INCOME SINCE 1928
[Logo]
CENTURY
CENTURY
SHARES
TRUST
SEVENTY-SECOND
ANNUAL REPORT
<PAGE>
[Graphic Omitted]
CENTURY SHARES TRUST IS FOR INVESTORS SEEKING LONG-TERM GROWTH OF PRINCIPAL AND
INCOME BY INVESTING PRIMARILY IN THE EQUITY SECURITIES OF FINANCIAL SERVICES
COMPANIES, INCLUDING THOSE ENGAGED IN BANKING AND INSURANCE.
Companies can be evaluated from many perspectives. One measurement that we look
for when investing is excellent management. We expect management to build
shareholder value. We seek businesses capable of growing book value plus
dividends per share 15% per year compounded over rolling five- year periods.
[Logo]
CENTURY
SHARES TRUST
One Liberty Square
Boston, Massachusetts 02109
617-482-3060 800-321-1928
SHAREHOLDER HOTLINE
800-303-1928
OFFICERS AND TRUSTEES
Allan W. Fulkerson, Trustee and Chairman
William O. Bailey, Trustee
John E. Beard, Trustee
John R. Casey, Trustee
William W. Dyer, Jr., Trustee
Ernest E. Monrad, Trustee
Michael J. Poulos, Trustee
Jerry S. Rosenbloom, Trustee
Alexander L. Thorndike, Trustee
Richard F. Cook, Jr., Secretary
INVESTMENT ADVISER
Century Capital Management, Inc.
AUDITORS
Deloitte Touche LLP
CUSTODIAN
State Street Bank and Trust
TRANSFER AGENT
Boston Financial Data Services, Inc.
LEGAL COUNSEL
Palmer and Dodge LLP
Regarding the indexes cited in this annual report:
o The Standard & Poor's Composite Index of 500 Stocks (S&P 500) is a group of
unmanaged equities regarded by many investors to be representative of the
stock market in general.
o The Lipper Growth and Income Fund Index (Lipper G&I) tracks the results of 30
large mutual funds that seek growth of capital and income. Those funds are
managed investment accounts with all the associated requirements and costs.
o These indexes are not available for investment. Unless otherwise indicated,
index results include reinvested dividends.
The Trust's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their original
cost. This report may be distributed only to current shareholders or to other
persons who have received a current prospectus of the Fund.
<PAGE>
DEAR FELLOW SHAREHOLDERS
The 1990s were an outstanding decade in American economic history, with 1999
being the fifth consecutive year in which the S&P 500, a leading stock market
index, rose by more than 20%. Analysis reveals sharply different performance for
individual stocks, with a handful of technology-oriented companies driving the
cap-weighted indexes to new highs. While the action of the market index is
unprecedented, the pattern of increasingly narrow focus on a small number of
wildly popular stocks is reminiscent of 1972 and 1987, and the current
enthusiasm for technology is a reminder of the early 1960s.
Without question, the world has changed. Technology is creating major new
enterprises. Existing businesses must adapt and lead or become extinct. In this
environment, the Trust's total annual return of -12.4% was disappointing, but it
is important to keep perspective. As shown on page seven of this report, over
the past 24 years there have been 18 up years and six down years. Of those down
years many were followed by a one or two-year period of combined gains exceeding
50%. Importantly, each such period was followed by positive results reflecting
the underlying growth of portfolio companies.
In the 1997 annual report, I said: "Looking to the period ahead, I must suggest
caution. There are many risks investing today, some controllable, some not. What
I have found enduring over the years is to own the best businesses, to invest in
the best people, and to focus on quality, consistency, and profitability.
Regardless of short-term fluctuations, remaining true to these principles should
enable an investor to cope and prosper far better than with most other
investment alternatives. We remain highly positive about the long-run ability of
the excellent companies in which we are invested to provide competitive returns
in the years ahead."
For decades, the risk management industry in which we specialize has been
characterized by growth, consolidation, and change. Now must be added the forces
of convergence and technology. The single most important story of 1999 was the
passage of the Gramm-Leach-Bliley Act, effectively repealing the 1933
Glass-Steagal Act. This legislation sets the stage for consolidation among
financial services organizations on a much broader scale than has been allowed
in 67 years. The winners will focus on implementing new technologies to maximize
cost efficiencies in bringing their products to consumers.
Looking beyond the months ahead, I see an exciting future for our areas of
specialization. Remarkably, this potential is virtually unrecognized in current
absolute and relative valuations. At year-end, the Trust's weighted portfolio
reflected a 45% discount to that of the S&P 500, one of the largest such
discounts in 50 years and more than double the average discount of this period.
As discussed in prior reports, the Trust's adviser has added depth and breadth
to its investment professional staff. In December, John Casey and Lanny
Thorndike were also elected trustees. We are delighted that they have assumed
these additional responsibilities. Their initiative has enabled the Trust's
adviser to organize Century Small Cap Select Fund, a new fund designed to invest
in smaller companies that offer superior growth prospects at a reasonable price.
Investing entails risk; there are global risks and excess in some areas of the
stock market. There will be price corrections, but we have found over the years
that investing in well-managed businesses can be rewarding. We look to the
future with confidence.
Respectfully submitted,
/s/ Allan W. Fulkerson
Allan W. Fulkerson
Chairman
February 10, 2000
<PAGE>
ADVISER'S OVERVIEW AND MARKET COMMENTARY
INSURANCE AND FINANCIAL SERVICE COMPANY STOCKS SOLD OFF THROUGHOUT THE YEAR.
WHAT DO YOU THINK CAUSED THESE DECLINES?
As our long-time shareholders know, the Trust's investment objective is
long-term growth of capital and income, our goal since 1928. The Trust and its
investment adviser have long specialized in insurance and bank stocks. During
the past year, financial stocks, as well as many "value" stocks, were not in
favor, as the market focussed on a relatively narrow band of technology-oriented
companies. Modestly rising interest rates are typically beneficial for the
earnings of insurance companies. In the 1999 environment, however, short-term
traders used the potential of higher rates, coupled with cyclical pricing and
profit pressures for some insurance companies, to sell these "value" stocks
aggressively. Current prices now reflect some of the most attractive relative
valuations seen in decades.
HOW DID THE TRUST'S INVESTMENTS PERFORM ON A FUNDAMENTAL BASIS IN THIS
ENVIRONMENT?
Overall, the Trust's holdings are estimated to report a weighted 2% earnings
growth for 1999; such results reflect an operating environment for several
property-casualty insurers that had catastrophic losses and margin deterioration
among personal auto insurers. Excluding these areas, portfolio companies should
post a weighted 11% growth in operating earnings during the year, with strength
across life insurance, brokerage, and banking stocks. The rising interest rate
environment should have a positive impact on earnings for many of the Trust's
portfolio holdings.
We expect our companies to weather occasional difficult years. This is why we
evaluate a company's progress over a number of years. At year-end 1999, the
Trust's portfolio reported an estimated weighted compounded annual growth rate
in book value per share plus dividends of 16.3%, which compares favorably to the
S&P 500's 14.0%.
HOW HAVE YOU MANAGED THE TRUST IN THIS ENVIRONMENT?
Cautiously. We do not want to get caught up in the reactionary mood of the
market. That said, the best buying opportunities emerge when a sector is grossly
out of favor; 1999 was no exception. During the year, we had the opportunity to
invest in several attractive growth companies at favorable absolute and relative
valuations.
INSURANCE AND BANK STOCKS 1999 MEDIAN PRICE PERFORMANCE
- -18% BANKS (29)
- -15% LIFE & HEALTH INSURERS (30)
- -18% PROPERTY CASUALTY INSURERS (34)
- -17% SPECIALTY INSURERS (14)
NOTE: ALL U.S. LISTED INSURANCE COMPANY STOCKS WITH MARKET VALUES IN EXCESS OF
$500MM AT 12/31/99. BANKS REPRESENT MONEY CENTER AND REGIONAL BANKS AS REPORTED
IN THE STANDARD AND POORS S&P 500 INDEX FOR 12/31/99. SOURCE: SNL, STOCKVAL, S&P
AND CCM RESEARCH.
RELATIVE PRICE-TO-EARNINGS RATIO CST VS S&P 500 AS OF 12/31/99
1979 71.6%
1980 61.1%
1981 81.4%
1982 77.3%
1983 80.8%
1984 125.4%
1985 120.3%
1986 68.8%
1987 63.7%
1988 72.7%
1989 82.8%
1990 63.2%
1991 50%
1992 68%
1993 62.3%
1994 75.6%
1995 78%
1996 78.4%
1997 81.1%
1998 66.2%
1999 55%
COMPANIES IN THE TRUST'S PORTFOLIO ARE AT ATTRACTIVE VALUATION
RELATIVE TO THE S&P 500
<PAGE>
ADVISER'S OVERVIEW AND MARKET COMMENTARY
HOW IS THE TRUST POSITIONED TODAY?
Over the year, ten new companies were added, one was eliminated, and eight
others were pared back significantly. Broadly speaking, we reallocated capital
to "specialty" financial firms that we believe will benefit from changes in the
competitive landscape, legislation, and technology and that exhibit attractive
growth opportunities. Being confident in management's ability to execute in the
current environment, we initiated positions in specialty property-casualty
insurers, fee-based banking, and technology-based outsourcing companies that
service banks and insurers.
WHERE DO YOU SEE OPPORTUNITIES FOR 2000 AND BEYOND?
Frankly, just about everywhere. Last year not only created unusually attractive
buying opportunities from a valuation standpoint, but also saw the repeal of the
1933 Glass-Steagall Act, representing a major move forward for insurance and
banking deregulation. We expect some merger and acquisition activity from this,
as well as new alliances among insurers, banks, and securities firms. In
addition, internet and e-finance applications are beginning to make meaningful
inroads in affecting consumer behavior and corporate strategies. Finally, last
year we began to see real evidence of a bottom in the 15- year-old
property-casualty pricing cycle. Many companies are feeling the pain of poor
underwriting decisions from prior years. In this environment, we believe there
will be winners, particularly within reinsurance, brokerage, and specialty
markets like Bermuda.
INSURANCE
With this in mind, we initiated positions for the Trust in XL Capital,
Renaissance Re, and Mutual Risk Management, all Bermuda- based specialists. We
also added Everest Re, as well as commercial broker AJ Gallagher and specialty
insurer HCC Holdings. Earnings growth and return on capital for these companies
are attractive, and their business models are well positioned for changes in the
market. The Trust's overall exposure to the brokerage (15%) and specialty
segments (29%) stood at 44% at year-end.
LIFE INSURANCE
On the life insurance side, we were in a holding pattern most of last year in
anticipation of a large supply of brand name demutualizations early in 2000 and
of exposure to equity market volatility through variable annuity products.
Keeping an eye on valuations in this group, we expect several of these players
will be direct beneficiaries of recent financial services reform legislation
that allows banks, brokers, and insurance companies to buy one another.
BANKING
In the banking area, the Trust's exposure was reduced to regional banks with
large credit card receivables and focused directly on fee-based models with
recurring revenue and sustainable advantages, such as Bank of New York's
leadership in securities processing. We also added Fiserv, a
database-outsourcing provider to the banking and insurance industries and, we
believe, a direct beneficiary of consolidation within those markets.
HEALTHCARE INSURERS
We made a foray into the health insurance arena with an opportunistic purchase
of United Healthcare last year. Relative to the price we paid, this company,
too, has unique profitability leverage in the current medical care environment
and a growing portfolio of intriguing fee-based businesses.
SPEAKING OF FINANCIAL SERVICES REFORM, HOW DO YOU THINK THIS IMPORTANT PIECE OF
LEGISLATION WILL AFFECT YOUR PORTFOLIO COMPANIES AND THEIR INDUSTRIES OVER THE
NEAR AND LONG TERM?
We are excited about the visibility aspects of the legislation from a short-term
perspective. Insurance, banking, and financial services firms provide two
functions - asset protection and wealth management - and they produce over a
trillion dollars of revenues in the United States. The legislation comes at a
time when retirement planning and risk management needs are expanding on a
global scale. These businesses also are ideal in an e-commerce environment,
i.e., contract-based products and data-intensive front and back offices. So we
see a lot of opportunities for certain companies to grow and for these
industries to rationalize capital and operating costs overall.
We believe reform-related consolidation will begin with some acquisitions and
several joint venture alliances between these previously separated sectors. We
consider companies that have distribution advantages to be most attractive
candidates for acquisitions and joint venture opportunities, particularly in the
areas of asset accumulation and consumer-oriented products. European companies
will continue to seek U.S. market exposure and expertise through acquisition.
All said, U.S. companies will be a major focal point for growth and merger
activity over the next few years.
HOW DO YOU EVALUATE WHEN IS A GOOD TIME TO SELL STOCKS OR HARVEST GAINS?
Our sell discipline is straightforward and based upon the same fundamental logic
that drives our buy decisions. Generally speaking, we sell a stock when we see a
fundamental deterioration in a company's three to five-year growth prospects
relative to its stock valuation. That can be driven by changes in the
competitive environment (e.g., pricing pressure, cost of capital, or
distribution), by changes in a company's management or strategy, or, what is
more likely, by the lack thereof. That said, we hold to a two to five-year
outlook and resist selling solely on short-term volatility in any particular
stock's price.
We try to maximize after-tax returns to shareholders in the selling process. As
fundamental research investors, we model all of our companies from a financial
perspective and assign stock valuations predominately on a conservative
discounted cash flow basis, adjusted to reflect after-tax realized gains or
losses. Timing depends upon when and where we can redeploy that capital at more
attractive returns over a reasonable time frame. In 1999, there were several
attractive opportunities to do just that, and we have already earned back half
of the estimated tax exposure realized.
The table to the left lists the Trust's ten largest holdings, ranked by
percentage of the year-end invested assets. Although they all fall into the
categories of insurance and banking, there is very little direct overlap of core
markets across the group. This reflects not only how diverse these industries
are, but also the success of our long-term investment philosophy in selecting
market leaders.
/s/ John Casey /s/ Lanny Thorndike
John Casey Lanny Thorndike
Trustee and Member of Trustee and Member of
Investment Committee Investment Committee
PORTFOLIO COMPOSITION
12/31/99
PROPERTY & CASUALTY INSURANCE 29%
SPECIALTY INSURANCE 29%
LIFE & HEALTH INSURERS 17%
INSURANCE BROKERS 15%
BANKS 9%
CASH 1%
PORTFOLIO COMPOSITION
12/31/98
PROPERTY & CASUALTY INSURANCE 38%
SPECIALTY INSURANCE 22%
LIFE & HEALTH INSURERS 22%
INSURANCE BROKERS 9%
BANKS 7%
CASH 2%
AMERICAN INTERNATIONAL
GROUP 7.7%
Global insurance and financial services, particularly in the U.S. and Asia.
AON CORPORATION 7.2%
Global brokerage, consulting and specialty insurance.
CINCINNATI FINANCIAL 7.2%
Regional commercial property-casualty insurance.
MBIA INC. 6.5%
Financial guaranty and credit enhancement products worldwide.
BERKSHIRE HATHAWAY 5.9%
Financial investment and insurance.
PROGRESSIVE CORP. 5.2%
Personal automobile insurance.
AMERICAN GENERAL CORP. 4.7%
Life, annuity and consumer finance.
CHUBB CORP. 4.5%
Specialty commercial and personal insurance.
TORCHMARK CORP. 4.5%
Life insurance and distribution.
JP MORGAN & CO. 4.1%
Global finance and private banking.
<PAGE>
INVESTMENT RESULTS
As noted in the Century Shares Trust prospectus and repeated often in
shareholder reports, our investment objective is long-term growth of principal
and income. Thus, we focus on long-term results whether evaluating the companies
in which we invest or the investment performance of the Trust. Below we show
details of an investment made in the Trust on December 31, 1975, the beginning
of the year in which the senior members of current management assumed
accountability. Data are shown for each year in order to provide some historical
perspective for long-term investors. This year, we are showing the Trust's
performance in comparison with both the S&P Index and the Lipper Growth and
Income Fund Index, a performance measurement covering mutual funds that have
investment objectives similar to the Trust. For investors interested in results
for other periods, including since inception in March, 1928, please contact the
Shareholder Services Department of the Trust.
<TABLE>
TWENTY-FOUR YEAR INVESTMENT RECORD PER SHARE
<CAPTION>
Value of Annual Total Returns
Year Number of Value of Reinvested Value of Total ----------------------------------------
Ended Shares Original Capital Gain Reinvested Value of Lipper
12/31 Owned Share Distributions Dividends Investment CST S&P 500 G&I
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1975 1.000 $ 9.07 $ 9.07
1976 1.029 12.05 $ 0.00 $ 0.35 12.40 36.7% 23.9% 25.7%
1977 1.087 11.17 0.30 0.67 12.14 -2.1 -7.2 -3.6
1978 1.191 11.20 1.00 1.14 13.34 9.9 6.6 8.0
1979 1.336 12.15 2.18 1.90 16.23 21.7 18.6 23.9
1980 1.526 11.32 3.35 2.61 17.28 6.4 32.5 28.3
1981 1.706 12.17 4.82 3.77 20.76 20.2 -4.9 -1.4
1982 1.881 12.25 5.73 5.06 23.04 11.0 21.6 24.2
1983 2.047 13.62 7.35 6.91 27.88 21.0 22.6 22.8
1984 2.296 14.02 9.63 8.55 32.20 15.5 6.3 4.3
1985 2.534 18.22 15.43 12.52 46.17 43.4 31.7 28.6
1986 2.765 18.30 18.47 13.83 50.60 9.6 18.7 17.6
1987 3.154 14.76 19.41 12.38 46.55 -8.0 5.3 2.6
1988 3.683 14.62 25.43 13.80 53.85 15.7 16.6 18.4
1989 3.927 19.42 36.53 20.32 76.27 41.6 31.7 23.7
1990 4.179 16.82 33.99 19.47 70.28 -7.8 -3.1 -6.0
1991 4.395 21.03 44.95 26.45 92.43 31.5 30.5 27.8
1992 4.571 25.68 57.40 34.30 117.38 27.0 7.6 9.6
1993 4.865 24.04 58.85 34.07 116.96 -0.4 10.1 14.6
1994 5.163 21.77 57.66 32.97 112.40 -3.9 1.3 -0.4
1995 5.415 28.07 79.17 44.76 152.00 35.2 37.6 31.1
1996 5.690 31.30 94.30 52.48 178.08 17.2 23.0 20.7
1997 5.987 44.66 145.52 77.18 267.36 50.1 33.4 26.9
1998 6.405 44.66 161.96 79.44 286.06 7.0 28.6 13.6
1999 7.303 34.32 152.91 63.41 250.64 -12.4 21.0 11.9
24-year annualized total returns 14.8% 16.5% 15.0%
</TABLE>
The dollar amount of shares accepted at the time reinvestment occurred was
$108.98 for capital gains and $36.93 for income dividends. If capital gains
distributions and dividends had been withdrawn in cash, the total dollar amount
received would have been $26.08 and $11.54, respectively. Computation of results
assumes that all income dividends were reinvested at the then effective net
asset value (which is the Trust's current practice as a no-load fund) and not at
offering prices which applied when the Trust's shares were sold with a sales
charge prior to 1982.
<PAGE>
PERFORMANCE OF A $10,000 INVESTMENT
The following charts compare the performance over the past ten years of a
hypothetical $10,000 investment in Century Shares Trust, the S&P 500 Stock
Index, and the Lipper Growth and Income Fund Index. The S&P 500 is a well known
gauge of how large capitalization U.S. equities are doing. On the other hand,
its results are not adjusted for the costs to manage and trade a portfolio of
securities, so that it is not directly comparable to an actual investor's
results. The Lipper Growth and Income Fund Index tracks the results of 30 large
mutual funds that seek growth of capital and income. While these mutual fund
strategies and portfolios differ from each other and from the Trust, they are
real managed investment accounts with all the associated requirements and costs.
CENTURY SHARES TRUST AND S&P 500
YEARS CENTURY S&P 500
- ----- ------- -------
1989 $10,000 $10,000
1990 9,216 9,690
1991 12,119 12,643
1992 15,390 13,606
1993 15,335 14,977
1994 14,737 15,175
1995 19,929 20,878
1996 23,350 25,671
1997 35,056 34,235
1998 37,508 44,020
1999 32,863 53,280
CENTURY SHARES TRUST AND LIPPER G&I
YEARS CENTURY LIPPER G&I
- ----- ------- ----------
1989 $10,000 $10,000
1990 9,216 9,401
1991 12,119 12,010
1992 15,390 13,166
1993 15,335 14,092
1994 14,737 15,029
1995 19,929 19,709
1996 23,350 23,784
1997 35,056 30,176
1998 37,508 34,274
1999 32,863 38,338
Century Shares Trust's investment results for various periods ended
December 31, 1999 are shown below:
AVERAGE ANNUAL
TOTAL RETURN
1 Year -12.38%
5 Years 17.40%
10 Years 12.63%
20 Years 14.67%
Past performance does not represent the income or capital gain or loss that may
be realized from an investment in the Trust today. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Achievement
of objectives cannot be assured; however, the Trust's management seeks to reduce
risks and to provide rewarding results through diversification and careful
supervision of investments. The illustrations throughout this report do not take
into account income taxes that a shareholder might have to pay on distributions
received or reinvested or upon sale of the investment.
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1999
Common Stocks: Insurance Companies - 90.6%
Shares Value
------ ------------
<S> <C> <C>
200,000 AFLAC Inc. ...................................... $ 9,437,500
486,394 The Allstate Corp. .............................. 11,673,456
190,000 American General Corp. .......................... 14,416,250
220,000 American International Group, Inc. .............. 23,787,500
555,000 AON Corp. ....................................... 22,200,000
325 Berkshire Hathaway Inc. CL A .................... 18,232,500
245,000 The Chubb Corp. ................................. 13,796,562
708,000 Cincinnati Financial Corp. ...................... 22,080,750
78,400 Everest Reinsurance Holdings, Inc. .............. 1,749,300
52,200 Gallagher (Arthur J.) & Co. ..................... 3,379,950
220,000 HCC Insurance Holdings, Inc. .................... 2,901,250
149,100 HSB Group, Inc. ................................. 5,041,444
60,000 Horace Mann Educators Corp. ..................... 1,177,500
380,000 MBIA Inc. ....................................... 20,068,750
130,000 Marsh & McLennan Companies, Inc. ................ 12,439,375
329,100 Mercury General Corp. ........................... 7,322,475
205,000 Mutual Risk Management Ltd. ..................... 3,446,562
342,500 Ohio Casualty Corp. ............................. 5,501,406
220,000 The Progressive Corp. ........................... 16,087,500
300,000 Protective Life Corp. ........................... 9,543,750
217,000 RenaissanceRe Holdings Ltd. ..................... 8,869,875
199,500 SAFECO Corp. .................................... 4,962,563
260,000 St. Paul Companies, Inc. ........................ 8,758,750
473,300 Torchmark Corp. ................................. 13,755,281
80,000 United Healthcare Corp. ......................... 4,250,000
157,900 UnumProvident Corp. ............................. 5,062,669
29,872 Waddell & Reed Financial, Inc. CL A ............. 810,278
48,572 Waddell & Reed Financial, Inc. CL B ............. 1,220,372
160,000 XL Capital Ltd. ................................. 8,300,000
------------
280,273,568
------------
COMMON STOCKS: BANKING AND OTHER FINANCIAL INSTITUTIONS - 9.1%
80,000 Bank One Corp. .................................. 2,565,000
50,000 The Bank of New York Company, Inc. .............. 2,000,000
30,000 Fiserv, Inc. .................................... 1,149,375
100,000 J.P. Morgan & Co., Inc. ......................... 12,662,500
40,000 U.S. Bancorp .................................... 952,500
130,000 Wachovia Corp. .................................. 8,840,000
------------
28,169,375
TOTAL INVESTMENTS IN COMMON STOCKS - 99.7%
(Identified Cost, $101,271,996) .................................. 308,442,943
------------
CASH EQUIVALENTS - 0.3%
1,019,000 State Street Bank and Trust Eurodollar Time
Deposit, at cost approximating value,
maturity 01/03/00 ............................. 1,019,000
------------
Total Investments - 100% (Identified cost, $102,290,996) $309,461,943
============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 1999
- ------------------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at value (Note 1A) (Identified cost, $102,290,996) ........ $309,461,943
Dividends and interest receivable ...................................... 604,442
Receivable for Trust shares sold ....................................... 67,990
------------
Total Assets ..................................................... 310,134,375
------------
LIABILITIES:
Payable for Trust shares repurchased ........................ $201,544
Accrued investment adviser fee (Note 5) ..................... 175,730
Accrued expenses and other liabilities ...................... 112,837
--------
Total liabilities 490,111
------------
NET ASSETS (Note 3) .................................................... $309,644,264
============
Per share net asset value, offering price and redemption price
($309,644,264 / 9,023,396 shares of $1.00 par value capital stock
outstanding) (Note 2) ................................................ $ 34.32
============
</TABLE>
<TABLE>
Statement of Operations - Year Ended December 31, 1999
- ------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends .......................................................... $ 6,484,370
Interest ........................................................... 160,151
------------
Total Income ..................................................... 6,644,521
Expenses:
Investment adviser fee (Note 5) ...................... $2,418,933
Non-interested trustees' remuneration ................ 96,001
Transfer agent ....................................... 209,348
Custodian ............................................ 56,764
Insurance ............................................ 19,801
Professional fees .................................... 86,456
Registration costs ................................... 66,415
Printing and other ................................... 53,096
----------
Total expenses ................................................... 3,006,814
------------
Net investment income ........................................ 3,637,707
------------
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions ......................... 44,149,086
Decrease in unrealized appreciation on investments ..................... (95,998,695)
------------
Net realized and unrealized loss on investments .............. (51,849,609)
------------
Net decrease in net assets resulting from operations ................... $(48,211,902)
============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998
---- ----
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................................... $ 3,637,707 3,681,227
Net realized gain on investment transactions .................... 44,149,086 24,282,825
Decrease in net unrealized appreciation of investments .......... (95,998,695) (176,974)
------------- ---------
Net increase (decrease) in net assets resulting from operations (48,211,902) 27,787,078
Net equalization (Note 1C) ...................................... (68,842) (41,282)
Distributions to shareholders from:
Net Investment income ......................................... (3,326,274) (3,609,921)
In excess of net investment income ............................ (122,364) --
Realized gain from investment transactions .................... (35,324,476) (24,160,837)
Trust share transactions - net (Note 2) ......................... (18,430,813) 578,375
------------- ---------
Total increase (decrease) ..................................... (105,484,671) 553,413
NET ASSETS:
At beginning of year ................................................ 415,128,935 414,575,522
------------- ---------
At end of year (including accumulated distributions in excess of net
investment income of $380,276 and $311,434, respectively) ........... $ 309,644,264 415,128,935
============= ===========
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of year ...................... $44.66 $44.66 $31.30 $28.07 $21.77
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... $ 0.42 $ 0.41 $ 0.39 $ 0.46 $ 0.41
Net realized and unrealized gain
(loss) on investments ............................. (6.05) 2.71 15.25 4.34 7.22
------ ------ ------ ------ ------
Total income (loss) from investment operations ..... $(5.63) $ 3.12 $15.64 $ 4.80 $ 7.63
------ ------ ------ ------ ------
LESS DISTRIBUTIONS FROM:
Net investment income ............................... $(0.40) $(0.40) $(0.38) $(0.46) $(0.41)
In excess of net investment income .................. (0.01) -- -- -- --
Net realized gain on investment transactions ........ (4.30) (2.72) (1.90) (1.11) (0.92)
------ ------ ------ ------ ------
Total distributions ................................ $(4.71) $(3.12) $(2.28) $(1.57) $(1.33)
------ ------ ------ ------ ------
NET ASSET VALUE, end of year ............................ $34.32 $44.66 $44.66 $31.30 $28.07
====== ====== ====== ====== ======
TOTAL RETURN ............................................ (12.4%) 7.0% 50.1% 17.2% 35.2%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000 omitted) ............... $309,644 $415,129 $414,576 $270,781 $267,181
Ratio of expenses to average net assets ............. 0.82% 0.78% 0.82% 0.87% 0.94%
Ratio of net investment income to average net assets 1.00% 0.88% 1.04% 1.58% 1.60%
Portfolio Turnover Rate ................................. 11% 6% 6% 3% 5%
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES -- The Trust is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The following is a summary of significant
accounting policies consistently followed by the Trust in the preparation of
financial statements. The policies are in conformity with generally accepted
accounting principles.
A. Investment Security Valuations -- Securities listed on national securities
exchanges are valued at closing prices. Unlisted securities or listed securities
for which closing prices are not available are valued at the latest bid prices.
Short-term obligations, maturing in 60 days or less, are valued at amortized
cost, which approximates value.
B. Federal Taxes -- It is the Trust's policy to comply with the provisions of
the Internal Revenue Code applicable to investment companies and to distribute
to shareholders each year all of its taxable income, including any net realized
gain on investments. Accordingly, no provision for Federal income or excise tax
is necessary.
C. Equalization -- The Trust follows the accounting practice known as
equalization by which a portion of the proceeds from sales and costs of
repurchases of Trust shares equivalent, on a per share basis, to the amount of
undistributed net investment income on the date of the transaction, is credited
or charged to undistributed net investment income. As a result, undistributed
net investment income per share is unaffected by sales or repurchases of Trust
shares.
D. Other -- Investment security transactions are accounted for on the date the
securities are purchased or sold. Gain or loss on sales is determined on the
basis of identified cost. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Shares issuable to shareholders electing to
receive income dividends and capital gain distributions in shares are recorded
on the ex-dividend date.
E. Use of Estimates -- The preparation of these financial statements in
accordance with generally accepted accounting principles incorporates estimates
made by management in determining the reported amounts of assets, liabilities,
revenues and expenses of the Fund. Actual results could differ from those
estimates.
(2) Trust Shares -- At December 31, 1999, 9,023,396 shares were outstanding. The
number of authorized shares of $1.00 par value is unlimited. Transactions in
Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Sold .............................................................. 1,190,034 $ 48,808,793 1,893,592 $ 88,413,021
Issued to shareholders in reinvestment of distributions from:
Net investment income ......................................... 61,653 2,368,084 53,174 2,523,968
Realized gain on investment transactions ...................... 816,478 27,254,035 420,247 18,742,997
---------- ------------ ---------- -------------
2,068,165 78,430,912 2,367,013 109,679,986
Repurchased ....................................................... (2,340,143) (96,861,725) (2,354,844) (109,101,611)
---------- ------------ ---------- -------------
Net increase (decrease) ....................................... (271,978) $(18,430,813) 12,169 $ 578,375
========== ============ ========== =============
</TABLE>
(3) SOURCES OF NET ASSETS -- At December 31, 1999, net assets consisted of:
<TABLE>
<S> <C>
Capital paid-in ..................................................................................... $ 103,453,489
Accumulated distributions in excess of net investment income ........................................ (380,276)
Accumulated undistributed net realized loss on investment transactions .............................. (599,896)
Unrealized appreciation in value of investments ..................................................... 207,170,947
-------------
Net assets applicable to outstanding capital stock ................................................ $ 309,644,264
=============
</TABLE>
(4) INVESTMENT SECURITY TRANSACTIONS -- Other than U.S. Government obligations
and certificates of deposit, purchases and sales of investment securities
aggregated $41,551,398 and $84,634,487 respectively, during the year ended
December 31, 1999. In addition, investment securities having an aggregate market
value of $8,412,500 at date of redemption were distributed in payment for Trust
shares redeemed, resulting in realized gains of $7,986,614. At December 31,
1999, the cost of investments for federal tax purposes was $102,379,236. Net
unrealized appreciation for all securities at that date was $207,082,707. This
consisted entirely of aggregate gross unrealized appreciation.
5) INVESTMENT ADVISER FEE -- The investment adviser fee is earned by Century
Capital Management, Inc. ("CCM"), as compensation for providing investment
advisory, management and administrative services to the Trust. CCM receives a
monthly fee equal on an annualized basis to 0.7% of the first $250 million and
0.6% of the amounts exceeding $250 million of the Trust's net asset value. For
the year ended December 31, 1999, the fee amounted to $2,418,933. Officers and
Trustees of the Trust who are employed by CCM receive remuneration for their
services out of such investment adviser fee.
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of Century Shares Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Century Shares Trust as of December 31, 1999,
the related statement of operations for the year then ended, the statements of
changes in net assets for the years ended December 31, 1999 and 1998, and the
financial highlights for each of the years in the five year period ended
December 31, 1999. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. Our procedures included
confirmation of securities owned as of December 31, 1999 by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Century Shares Trust
at December 31, 1999, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Boston, Massachusetts
January 14, 2000
<PAGE>
FEDERAL INCOME TAX INFORMATION
The federal tax status of distributions per share in 1999 is as follows:
TAXABLE AS
TAXABLE AS CAPITAL GAIN
DATE PAID DIVIDENDS (SEE NOTE BELOW)
--------- --------- ----------------
June 24, 1999 ................. $.20
December 21, 1999 ............. .21
December 21, 1999 ............. $4.30
---- -----
Total .................... $.41 $4.30
==== =====
An amount equal to $.41 per share of the dividends listed above will qualify for
the dividends received deduction for corporate shareholders provided by the
Internal Revenue Code. The capital gain distribution of $4.30 per share is
taxable in 1999 as a long-term capital gain, whether received in cash or shares
and irrespective of the period shareholders may have held shares of the Trust.
Please consult your tax advisor with questions you may have regarding the
application of this information to your tax return.
---------------------------
Capital gain distributions since 1952 have been paid, at the option of each
shareholder, either in cash or shares of the Trust. The amount of such
distributions and tax basis of shares issued are shown below.
FEDERAL TAX BASIS OF SHARES ISSUED IN PAYMENT OF CAPITAL GAIN DISTRIBUTIONS
PER SHARE(A)
---------------------------------
AMOUNT OF TAX COST
CAPITAL GAIN BASIS OF
DISTRIBUTION SHARES ISSUED
------------ -------------
1952 $ .04 1/3 $ 5.25 1/3
1953 -- --
1954 .08 1/3 5.62
1955 .20 2/3 7.91 2/3
1956 .27 1/3 8.29 1/3
1957 .26 7.32 2/3
1958 .21 6.85 1/3
1959 .16 1/3 9.35 2/3
1960 .26 9.34
1961 .41 9.58
1962 .46 13.35
1963 .15 13.20
1964 .23 15.49
1965 .30 14.89
1966 .37 13.67
1967 .30 11.09
1968 .30 9.67
1969 .38 12.42
1970 .35 11.05
1971 .30 11.77
1972 .35 13.72
1973 .54 15.94
1974 .51 12.85
1975 .29 8.32
1976 -- --
1977 .30 11.62
1978 .60 10.41
1979 .79 10.40
1980 .96 11.06
1981 .70 10.64
1982 .49 11.70
1983 .45 11.71
1984 .91 12.69
1985 .91 13.04
1986 (1-2-86) .71 17.43
1986 (12-30-86) .40 18.25
1987 1.61 14.75
1988 1.90 14.58
1989 .71 18.73
1990 .58 16.72
1991 .57 20.91
1992 .56 25.72
1993 1.10 24.04
1994 .88 21.77
1995 .92 28.07
1996 1.11 31.72
1997 1.90 44.41
1998 2.72 44.60
1999 4.30 33.38
------
Total since 1952 $32.82
(a) Adjusted for the 3 for 1 stock split on March 9, 1959
---------------------------
This annual report is submitted for the general information of the shareholders
of the Trust. It is not authorized for distribution to prospective investors in
the Trust unless preceded or accompanied by an effective prospectus.
<PAGE>
THE CENTURY ADVANTAGE
Century Capital Management's team of industry professionals, with expertise in
analyzing risk-based businesses, proprietary research, and industry presence,
uniquely positions the Trust to capitalize on change affecting its investment
universe.
DEVELOPING AND LEVERAGING AN INFORMATION ADVANTAGE
Century Capital Management's investment professionals have an average of more
than 15 years' experience working and investing in the financial services,
insurance, and health care industries. Bringing this depth and diversity of
backgrounds together yields valuable perspectives in the investment process. One
shared perspective is that the industries within the Trust's investment universe
are growing, evolving, and converging. Much like "seeing the forest as well as
the trees," we evaluate investment opportunities in insurance, banking, health
care, and technology within a larger context - the risk management supersector.
FOCUS
Century Capital Management's investment business is built around a focus within
specific industries where it's collective expertise adds value. Century Capital
Management pursues opportunities for the Trust that hold unusual long-term
growth potential for its investors.
HISTORY
Century Shares Trust, one of the oldest mutual funds in America, traces its
origins back to 1928. Today, the Trust maintains the same growth and income
mandate and focus on risk management businesses laid out over 70 years ago in
its initial prospectus. When it comes to investing, history and consistency
matter.
SERVICE
Service to the Trust's shareholders is of utmost importance. You will find our
professional staff responsive and resourceful. Please call us if you have any
questions (800-303-1928). In addition, please visit our website at
www.centurycap.com.
<PAGE>
[Logo] CENTURY FUNDS
One Liberty Square
Boston, Massachusetts 02109
www.centurycap.com
