-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AgpjJsmRn4Ntmo6WiZn7Idk53DZGotkEtg1lWyeFn9p5vxejDilR/MmccVDFUGcG xM+l3TaCFjRBA2WIWmx0Hw== 0001068800-03-000698.txt : 20031126 0001068800-03-000698.hdr.sgml : 20031126 20031126170620 ACCESSION NUMBER: 0001068800-03-000698 CONFORMED SUBMISSION TYPE: N-CSR/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031126 EFFECTIVENESS DATE: 20031126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARSICO INVESTMENT FUND CENTRAL INDEX KEY: 0001047112 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSR/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-08397 FILM NUMBER: 031027238 BUSINESS ADDRESS: STREET 1: 1200 17TH ST STREET 2: STE 1300 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3034545600 MAIL ADDRESS: STREET 1: 1200 17TH STREET SUTIE 1300 CITY: DENVER STATE: CO ZIP: 80202 N-CSR/A 1 ncsr.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-08397 THE MARSICO INVESTMENT FUND (Exact name of registrant as specified in charter) 1200 17th Street, Suite 1300 Denver, CO 80202 (Address of principal executive offices) (Zip code) Christopher J. Marsico The Marsico Investment Fund 1200 17th Street, Suite 1300 Denver, CO 80202 (Name and address of agent for service) Copies to: Sander M. Bieber, Esq. Dechert LLP 1775 I Street, N.W. Washington, D.C. 20006 Registrant's telephone number, including area code: (303)454-5600 Date of fiscal year end: September 30 Date of reporting period: September 30, 2003 Item 1 - Reports to Stockholders Having a strong portfolio is one thing. Having the means to share your dreams with those who matter most is another. Just like you, we at Marsico Funds have personal and family goals that are worth achieving. That is why we employ an inspired approach to seek exceptional investment opportunities. Because we apply both intuitive insight and rigorous research in managing your investment in the Marsico Funds, you may find that the investing steps you take today can help you toward your hopes and dreams tomorrow. [PHOTO] TABLE OF CONTENTS ANNUAL SHAREHOLDER LETTER 3 MARSICO FOCUS FUND 17 Fund Overview 17 Schedule of Investments 18 Statement of Assets and Liabilities 21 Statement of Operations 22 Statements of Changes in Net Assets 23 Financial Highlights 24 MARSICO GROWTH FUND 26 Fund Overview 26 Schedule of Investments 27 Statement of Assets and Liabilities 31 Statement of Operations 32 Statements of Changes in Net Assets 33 Financial Highlights 34 MARSICO 21ST CENTURY FUND 36 Fund Overview 36 Schedule of Investments 37 Statement of Assets and Liabilities 41 Statement of Operations 42 Statements of Changes in Net Assets 43 Financial Highlights 44 MARSICO INTERNATIONAL OPPORTUNITIES FUND 45 Fund Overview 45 Schedule of Investments 46 Statement of Assets and Liabilities 52 Statement of Operations 53 Statements of Changes in Net Assets 54 Financial Highlights 55 NOTES TO FINANCIAL STATEMENTS 56 REPORT OF INDEPENDENT AUDITORS 65 TRUSTEE AND OFFICER INFORMATION 66 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. O C T O B E R 2003 DEAR SHAREHOLDER: Writing an annual report for the Marsico Funds can present a challenge in attempting to summarize a year's worth of Fund performance in a manageable number of pages. This will be our sixth such letter; we celebrated Marsico Capital Management's six-year anniversary in early October 2003. The purpose of this report is to provide a retrospective summary of the Funds' investment results for the twelve-month fiscal period ending September 30, 2003. It is intended primarily as a means of discussing returns, and to explain the main underlying reasons for the Funds' performance. For a review of our economic and market outlook, please refer to the quarterly shareholder letter dated October 2003 that we previously sent to you, which is also available on our website at www.marsicofunds.com. 3 INVESTMENT REVIEW BY TOM MARSICO AND JIM HILLARY MARSICO FOCUS FUND AND MARSICO GROWTH FUND The Focus Fund and Growth Fund posted total returns of 15.50% and 18.60%, respectively, for the one-year period ending September 30, 2003.(1) For comparative purposes, the S&P 500(R) Index--which we consider to be the Fund's primary equity benchmark--had a total return of 24.40% over the same time period.(1) The Funds each had 5 3/4 years of operating history as of the end of September. Please see the Fund Overviews for more information regarding their longer-term investment performance. In happier contrast to our last annual report to shareholders (which, in light of the very weak equity returns that prevailed in the prior fiscal year, had an admittedly downcast tone), we can report to you here that the past 12 months have, overall, been a propitious time for equity investors. A summary comment would be to say that the investment experience for the 2002-2003 fiscal year period essentially was an about-face from the prior fiscal year. All 10 economic sectors (GICS classification) that comprise the S&P 500(R) Index had a positive return for the Funds' fiscal year. Seven sectors recorded gains of 20% or greater. The S&P Information Technology and Telecommunications Services sectors, after being resoundingly punished by investors during the 2001-2002 fiscal year, recovered strongly and rose by 60% and 30%, respectively. The weakest-performing area during the year was Consumer Staples, which had a relatively modest 4% gain. This sector had been the best performing area in the prior fiscal year.(2) As you may notice, these Funds--while having reasonably strong absolute returns--trailed their benchmark index during this fiscal year overall. While we are not pleased with those results, we do think it is important to mention that the vast majority of the performance "shortfall" was sustained during the fourth calendar quarter of 2002, a period in which the Funds' investment results were well behind the S&P 500(R) Index. More recent investment results, i.e., during calendar year 2003, have improved considerably. However, in terms of the 4 fiscal year reporting period, that recent experience has not been enough to offset the Funds' relatively weak returns in late 2002. The following is a summary of the Funds' investment performance for the entire fiscal year. On the positive side, the Funds benefited from several value-added areas last year. These included: o BIOTECHNOLOGY--Genentech and Amgen were among the Funds' best-performing holdings last year. Genentech rose by more than 100% during the period in which it was owned by the Funds, while Amgen gained 54%.(2) o CONSUMER DISCRETIONARY--Areas such as retailing (e.g., Tiffany & Co., Lowe's Cos.) and homebuilding-related (e.g., Lennar Corp.--Class A) were strong performers for the Funds.(2) o UNDERWEIGHTING IN INSURANCE INDUSTRY--The S&P Insurance Industry was one of the weakest-performing industry groups in the benchmark during the fiscal year, with a return of approximately 12%. On a relative basis, the Funds benefited performance-wise by having minimal exposure to these types of companies.(2) o UNDERWEIGHTING IN ENERGY SECTOR--The S&P Energy sector had a return of 16% during the fiscal year. While this return was strong on an absolute basis, it trailed the performance of the overall index. The Funds' relative results were helped by their maintaining minimal exposure to energy-related companies.(2) The Funds' performance was positively impacted by several individual investments, including SLM Corporation (formerly known as "Sallie Mae") and UnitedHealth Group. Certain technology-related investments--including Cisco Systems, Intel Corporation, Electronic Arts, and Dell Inc.--also contributed meaningfully to investment results.(2) 5 There were four primary factors that represented the bulk of the Funds' relative underperformance compared to their benchmark index: o HEALTH CARE EQUIPMENT AND SERVICES--During the fourth quarter of 2002, one of the Funds' largest individual holdings was Tenet Healthcare Corporation. Our investment in Tenet Healthcare generally performed well during most of the period in which it was owned in the Funds, producing significant overall gains in the aggregate. However, the company's earnings outlook and business operations suddenly came into question in the fall of 2002, as its billing practices were scrutinized and a variety of government investigations were initiated. We sold the Funds' entire position in Tenet Healthcare during the fourth quarter, but not before the Funds absorbed a 41% decline in the stock price during October 2002. In addition, the Funds' investment results were hurt by HCA, Inc., an investment we initiated subsequent to selling Tenet Healthcare.(2) o AEROSPACE/DEFENSE--The Funds had maintained substantial allocations to this industry during calendar year 2002, highlighted by positions in Lockheed Martin, General Dynamics, and L-3 Communications. Overall, prior to the fourth calendar quarter of 2002, these companies had been among the Funds' better performing investments and provided considerable added value. In the fourth quarter of 2002, however, aerospace/defense companies were among the Funds' weakest holdings performance-wise, as market leadership shifted to favor other sectors and industries, most notably technology-related and telecommunications companies.(2) o INFORMATION TECHNOLOGY--In almost complete contrast to the prior fiscal year, the Funds' investment results were negatively impacted during the 2002-2003 fiscal year by being underweighted on average (as compared to the S&P 500(R) Index) in technology-related companies, particularly in the hardware and equipment industry. In addition, stock selection within this 6 industry detracted from performance, which was most notably hurt by an investment we made in Hewlett-Packard (subsequently sold).(2) o MEDIA--The Funds' positions in the media industry which overall had produced quite a solid performance for much of the fiscal year, sold off sharply toward the end of the year, thereby creating a material "drag" on results. These holdings included Viacom and Clear Channel Communications.(2) Other areas that negatively impacted performance included select hotels/casinos (e.g., MGM Mirage), financial services companies (e.g., J.P. Morgan Chase), and health care companies (e.g., IDEC Pharmaceuticals, Eli Lilly & Co.).(2) The performance of the two Funds differed to a degree because of factors such as larger position sizes and industry concentration levels in the Focus Fund as compared with the Growth Fund. As of September 30, 2003, the Funds' primary sector allocations were in Consumer Discretionary, Health Care, Financials, Information Technology, and Industrials. The Funds had little or no exposure in areas such as Energy, Utilities, Materials and Telecommunications Services.(2) Thank you for your support. Sincerely, /s/ Thomas F. Marsico /s/ James Hillary THOMAS F. MARSICO JAMES A. HILLARY PORTFOLIO MANAGERS 7 INVESTMENT REVIEW BY CORY GILCHRIST MARSICO 21ST CENTURY FUND The 21st Century Fund had a total return of 33.64% for the one-year period ending September 30, 2003.(1) For comparative purposes, the S&P 500(R) Index and Nasdaq Composite Index had total returns of 24.40% and 53.17%, respectively, over the same period (we consider the S&P 500(R) Index to be the Fund's primary equity benchmark).(1) As a reminder, the Nasdaq Index consists primarily of technology-related companies. Please see the Fund Overviews for more information regarding the Fund's longer-term performance. Over the course of the 12-month period covered in this report, several primary factors contributed to the 21st Century Fund's performance. The most prolific positive factor in the Fund's outperformance (as compared to the S&P 500(R) Index) was the Fund's substantial emphasis on the Consumer Discretionary sector. This was a sector that we favored throughout the fiscal year, and continued to favor as of September 30, 2003. As of that date, nearly 38% of the Fund's net assets were allocated to Consumer Discretionary-related companies. The Fund's aggregate holdings in this sector--spanning five industries--gained 40% over the fiscal year. The Fund benefited from being relatively overweighted in the sector, while industry and individual stock selection also added value. In particular, investments in three industries were strong performers:(2) o CONSUMER DURABLES--Our investments in this industry experienced strong capital appreciation during the year. These included companies such as Marvel Enterprises (+66% during the period in which it was owned by the Fund) and Harman International (which rose 48%). We sold the Fund's position in Marvel Enterprises during the year. Harman International remained a significant holding as of September 30, 2003.(2) o HOTEL/LEISURE-RELATED--Positions in this industry, such as Four Seasons Hotels (+66%), were among the Fund's better-performing individual holdings.(2) 8 o RETAILING--The Fund's investment results were helped overall by its investments in the retail industry. In aggregate, the Fund's retailing positions gained nearly 54% for the year. Select Comfort Corporation (+133%) and The Sports Authority (+65%) were among two of the Fund's strongest individual performing holdings. We should note that as of September 30, 2003 the Fund's retailing positions totaled approximately 15% of net assets. As compared to the prior fiscal year-end, we increased the Fund's exposure to this area quite significantly.(2) The Fund's performance was also positively impacted in several other areas. Positions in the transportation industry, highlighted by investments in JetBlue Airways (+136%) and FedEx Corp. (+22%), were strong performers for the Fund.(2) In the Financials sector, the Fund benefited from its posture concerning three areas: Banks, Insurance, and Diversified Financials. With regard to banks, the Fund's underweighted posture (as compared to the S&P 500(R) Index) contributed positively to relative performance, as this industry was one of the weaker-performing areas during the fiscal year. In addition, the Fund's investment in UCBH Holdings, a company specializing in providing banking services for California's growing Chinese population, gained 42% during the year.(2) The Fund's relative investment performance also was buoyed by its maintaining an underweighted posture (as compared to the S&P 500(R) Index) in the Insurance industry. Additionally, during the year we made an investment in American International Group, which performed well (+22%) during the period in which it was owned in the Fund; we sold our position in the company prior to September 30, 2003.(2) 9 Performance was further helped by the Fund's generally benchmark-like allocation to Diversified Financials, which was one of the strongest performing industries in the S&P 500(R) Index, gaining 48% during the year. Jefferies Group (+49%), SLM Corporation (+28%), and Fannie Mae (+24%) were three relatively strong individual holdings for the Fund during the year. SLM Corporation and Fannie Mae were sold prior to September 30, 2003.(2) The Fund's biotechnology holdings--most notably Genentech and Amgen-- contributed materially to the Fund's value-added results (as compared to the S&P 500(R) Index). Genentech gained 61% and Amgen rose by 59% during the period in which they were owned by the Fund. Amgen was sold prior to September 30, 2003.(2) To be sure, we weren't perfect last year. There were three areas in particular that detracted significantly from investment results: o AEROSPACE/DEFENSE--As in the Focus and Growth Funds, aerospace/defense positions owned in the 21st Century Fund were major detriments to investment results for the fiscal year. As Tom and Jim noted earlier, the "damage" was largely confined to the fourth quarter of 2002, but it affected performance for the entire fiscal year. In particular, Lockheed-Martin (-30%) and L-3 Communications (-11%) were among the Fund's poorest-performing holdings during the year. (Both positions were sold prior to September 30, 2003.)(2) o HEALTH CARE EQUIPMENT AND SERVICES--Our overweighted posture in this industry (as compared to the S&P 500(R) Index) created an "opportunity cost", as this industry was one of the weaker-performing areas last year. In 10 addition, the Fund's position in Tenet Healthcare Corporation, which dropped sharply in value in the fourth quarter of 2002 before it was sold by the Fund, had a major negative impact on performance that continued to be felt in the Fund for the remainder of the fiscal year.(2) o INFORMATION TECHNOLOGY--We did not overwhelmingly distinguish ourselves in this sector last year. The biggest "culprit" was our stock selection, particularly Intuit (-21% return during the period in which it was owned) and Hewlett-Packard (-23% return during the period in which it was owned). Both of these positions were sold during the year. An underweighted posture in Semiconductors and Semiconductor Equipment (as compared to the Fund's primary benchmark, the S&P 500(R) Index) "cost" the Fund some relative return, as this industry was among the strongest-performing areas of the U.S. stock market last year. Finally, the Fund's position in Electronic Arts (-27% loss during the period in which it was owned) materially adversely impacted performance (Electronic Arts performed better for the Focus and Growth Funds as it was held during later periods).(2) As of September 30, 2003 the Fund maintained five areas of emphasis in terms of economic sector distribution. These included: Consumer Discretionary, Industrials (primarily transportation-related companies), Information Technology, and Financials. The Fund had a modest allocation to Telecommunications Services, and few or no investments in sectors such as Materials, Utilities, and Energy.(2) The Fund's portfolio turnover was relatively high during the fiscal year because of several factors including the transition to a new portfolio manager. Although the Fund may hold core positions for some time, it may change its portfolio 11 composition quickly to take advantage of new opportunities, or to address issues affecting particular holdings.(2) I became the portfolio manager of the Fund effective February 1, 2003, and am pleased to have the opportunity to serve you. Thank you for being an investor in the Fund. Sincerely, /s/ Corydon Gilchrist CORYDON J. GILCHRIST PORTFOLIO MANAGER 12 INVESTMENT REVIEW BY JIM GENDELMAN MARSICO INTERNATIONAL OPPORTUNITIES FUND The Marsico International Opportunities Fund had a (US$) return of 25.71% for the 12-month period ending September 30, 2003.(1) For comparative purposes, the Morgan Stanley Capital International EAFE Index, which we consider to be the Fund's primary non-U.S. equity benchmark index, had a total (US$) return of 26.01% for the same period.(1) Please see the Fund Overviews for more information regarding the Fund's longer-term investment performance. The Fund's investment results over the fiscal year period were helped by several factors. These included: o TELECOMMUNICATIONS SERVICES--This was a particularly strong area of performance for the Fund during the past fiscal year. In particular, NTL Inc. (+146%), Marconi Corp. (+54%), Mobile Telesystems (+46%), Sonera Oyj (+45%), France Telecom (+40%) and Tele Norte Este (+34%) generated solid returns. As of September 30, 2003 positions in France Telecom, Sonera Oyj, and Tele Norte Este had been sold. The Fund had approximately 7% of its net assets invested in this sector as of fiscal year-end.(2) o FINANCIALS--This sector was a consistently strong area of performance for the Fund throughout much of the past fiscal year. For the year as a whole, stock selection in two industries, banking and insurance, buoyed performance. Royal Bank of Scotland (+39%) and Unibanco-Unaio (+107%), a Brazilian-domiciled bank, were among the Fund's strongest-performing investments last year. In the insurance arena, Corporacion Mapfre (+97%) generated strong returns for the Fund. Additionally, certain diversified financial services companies--including UBS Ag (+56%) and Daiwa Securities (+42%)--performed well for the Fund during the year.(2) 13 o ENERGY--The Fund's relative performance benefited in two ways from its approach to this sector: through stock selection and through maintaining, on average, an underweighted posture (as compared to the benchmark index). The Fund's positions in CNOOC, a Chinese oil company, and Yukos Corp., a Russian energy company, each rose 28%. Additionally, while the Energy sector had a good absolute return last year, it only outperformed two other sectors (Consumer Staples and Health Care) over that period of time. As a result, the Fund's below-benchmark weighting in this sector added value to the Fund's investment results relative to the benchmark.(2) o HEALTH CARE--Performance was helped by the Fund's underweight posture on average (as compared to its benchmark index), in pharmaceutical and biotechnology companies.(2) There were several areas that detracted materially from the Fund's performance last year. Retailing, particularly our investment in Japanese retailer Seiyu, was the most significant "negative" on performance. (The Seiyu position, after declining by -61%, was sold relatively early in the fiscal year, but its performance created a "hangover effect" that affected the Fund's performance data for the rest of the fiscal year.) Our strategy to overweight the transportation industry negatively impacted performance, as did certain stock picks in the industry such as WestJet Airlines (-14%). Our decision to, on average, maintain an underweighted posture in the Materials sector was not on target, as this sector was among the better- performing areas last year. Additionally, our stock selection in the Information Technology sector, particularly in the hardware and equipment industry, significantly impacted performance. ARM Holdings (-67% 14 prior to being sold) was the primary "culprit," performance-wise, in this industry for the Fund.(2) Country allocations, in aggregate, had a somewhat positive effect on the Fund's performance. As discussed in previous letters to shareholders, the Fund's country allocations are typically a residual of our investment process; we usually focus more on sectors, industries, and individual companies when formulating our investment strategy and assembling the Fund's portfolio. However, at times country position can--intentionally or otherwise-- have a material effect on performance, particularly in the case of countries that are well represented in a benchmark index such as EAFE. The Fund's overweighted position on average in countries such as Brazil, Germany and Finland (primarily comprising a position in Nokia) added value to performance as compared to the EAFE Index. Maintaining a below-benchmark allocation to countries such as Japan and the United Kingdom also generally helped results. Currency gains and losses appear not to have materially affected overall Fund performance during the fiscal year as a whole.(2) As of September 30, 2003, the Fund's holdings by economic sector were allocated primarily to Consumer Discretionary, Financials, Information Technology and Industrials. The Fund's largest country-level allocations were in Japan, the United Kingdom, Switzerland, Hong Kong, Germany, Ireland and Brazil. For the year as a whole, compared to the prior fiscal year-end, we increased our positions in Japanese companies, and reduced holdings in countries such as Canada and the Netherlands.(2) 15 The Fund has tended to have a relatively high portfolio turnover level because of its investment style. Although the Fund may hold core positions for some time, it may change its portfolio composition quickly to take advantage of new opportunities, or to address issues affecting particular holdings. Thank you for your support. Sincerely, /s/ James Gendelman JAMES G. GENDELMAN PORTFOLIO MANAGER (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 returns for the 21st Century Fund and the International Opportunities Fund reflect a fee waiver in effect; in the absence of such a waiver, the returns would be reduced. 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. The Nasdaq Composite Index is an unmanaged, broad-based index of over 5,000 stocks that consists of all Nasdaq domestic and non-U.S. based common stocks listed on the Nasdaq Stock Market. 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. (2) 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 a Fund's portfolio represented by the securities or industries mentioned in this letter. Not authorized for distribution unless preceded or accompanied by a current Marsico Funds prospectus. UMB DISTRIBUTION SERVICES, LLC, DISTRIBUTOR FOR THE MARSICO FUNDS. 16 F U N D O V E R V I E W MARSICO FOCUS FUND SEPTEMBER 30, 2003 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. - ------------------------------------------------------------------------------ PERFORMANCE COMPARISON - ------------------------------------------------------------------------------ Five Year Average Annual One Year Average Annual Since Inception (10/1/02-9/30/03) (10/1/98-9/30/03) (12/31/97-9/30/03) Marsico Focus Fund 15.50% 4.15% 7.49% S&P 500(R) Index 24.40% 1.00% 1.90% - ------------------------------------------------------------------------------ NET ASSETS - ------------------------------------------------------------------------------ 9/30/03 $2,282,113,184 - ------------------------------------------------------------------------------ - ----------------------------------------- NET ASSET VALUE GROWTH OF $10,000(1) - ----------------------------------------- Net Asset Value Per Share $13.49 - ----------------------------------------- TOP FIVE HOLDINGS - ----------------------------------------- Intel Corp. 7.93% [graph] UnitedHealth Group, Inc. 7.49 SLM Corp. 6.21 Genentech, Inc. 5.29 Citigroup, Inc. 4.76 - ----------------------------------------- SECTOR ALLOCATION(2) - ----------------------------------------- Consumer Non-Cyclical 20.61% Financial 19.65 Consumer Cyclical 19.47 Technology 15.67 Communications 14.87 Industrial 9.73 The performance included in the table and graph do not reflect the deduction of taxes on Fund distributions or the redemption of Fund shares. (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. 17 S C H E D U L E O F I N V E S T M E N T S MARSICO FOCUS FUND SEPTEMBER 30, 2003
Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------------------- COMMON STOCKS - ------------------------------------------------------------------------------------------- AUTOMOTIVE - CARS/LIGHT TRUCKS Bayerische Motoren Werke AG** 1,868,508 $70,649,651 3.10% ---------------------------------------------- BUILDING - RESIDENTIAL/COMMERCIAL Lennar Corporation - Class A 658,975 51,261,665 2.25 ---------------------------------------------- COMPUTERS Dell, Inc.* 2,194,328 73,268,612 3.21 ---------------------------------------------- DIVERSIFIED MANUFACTURING OPERATIONS General Electric Company 2,311,122 68,894,547 3.02 ---------------------------------------------- E-COMMERCE/SERVICES eBay, Inc.* 930,376 49,784,420 2.18 ---------------------------------------------- ELECTRONIC COMPONENTS - SEMICONDUCTORS Intel Corporation 6,578,641 180,978,414 7.93 ---------------------------------------------- ENTERTAINMENT SOFTWARE Electronic Arts, Inc.* 929,175 85,697,810 3.76 ---------------------------------------------- FINANCE - CONSUMER LOANS SLM Corporation 3,635,997 141,658,443 6.21 ---------------------------------------------- FINANCE - INVESTMENT BANKER/BROKER Citigroup, Inc. 2,386,474 108,608,432 4.76 The Goldman Sachs Group, Inc. 197,181 16,543,486 0.73 Merrill Lynch & Company, Inc. 1,450,543 77,647,567 3.40 ---------------------------------------------- 202,799,485 8.89 ---------------------------------------------- FINANCE - MORTGAGE LOAN/BANKER Fannie Mae 1,165,004 81,783,281 3.58 ---------------------------------------------- HOTELS & MOTELS Four Seasons Hotels, Inc. 825,883 41,137,232 1.80 ---------------------------------------------- MACHINERY - CONSTRUCTION & MINING Caterpillar, Inc. 1,005,628 69,227,432 3.03 ---------------------------------------------- * Non-income producing. ** A portion of this security has been segregated by the custodian to cover segregation requirements on open forward currency contracts. See notes to financial statements. 18 S C H E D U L E O F I N V E S T M E N T S MARSICO FOCUS FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------------------- MEDICAL - BIOMEDICAL/GENETIC Amgen, Inc.* 930,381 $60,074,701 2.63% Genentech, Inc.* 1,507,144 120,782,520 5.29 ---------------------------------------------- 180,857,221 7.92 ---------------------------------------------- MEDICAL - HMO UnitedHealth Group, Inc. 3,399,181 171,046,788 7.49 ---------------------------------------------- MEDICAL INSTRUMENTS Boston Scientific Corporation* 813,020 51,870,676 2.27 ---------------------------------------------- MEDICAL LABS & TESTING SERVICES Quest Diagnostics, Inc.* 713,539 43,269,005 1.90 ---------------------------------------------- MULTIMEDIA Viacom, Inc. - Class B 2,233,359 85,537,650 3.75 The Walt Disney Company 497,041 10,025,317 0.44 ---------------------------------------------- 95,562,967 4.19 ---------------------------------------------- NETWORKING PRODUCTS Cisco Systems, Inc.* 5,548,959 108,426,659 4.75 ---------------------------------------------- RETAIL - BUILDING PRODUCTS Lowe's Companies, Inc. 1,390,369 72,160,151 3.16 ---------------------------------------------- RETAIL - DISCOUNT Wal-Mart Stores, Inc. 1,004,870 56,121,989 2.46 ---------------------------------------------- RETAIL - JEWELRY Tiffany & Company 2,062,337 76,987,040 3.37 ---------------------------------------------- RETAIL - MAJOR DEPARTMENT STORE Sears, Roebuck and Company 1,238,317 54,151,602 2.37 ---------------------------------------------- TRANSPORTATION - SERVICES FedEx Corporation 1,132,525 72,968,586 3.20 ---------------------------------------------- * Non-income producing. See notes to financial statements. 19 S C H E D U L E O F I N V E S T M E N T S MARSICO FOCUS FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------------------- WIRELESS EQUIPMENT QUALCOMM, Inc. 1,654,621 $68,898,418 3.02% ---------------------------------------------- TOTAL COMMON STOCKS (COST $1,776,308,936) 2,169,462,094 95.06 ---------------------------------------------- Principal/ Market Value Percent of Shares in Dollars Net Assets - ------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - ------------------------------------------------------------------------------------------- SSgA Money Market Funds 65,490,122 65,490,122 2.87 ---------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (COST $65,490,122) 65,490,122 2.87 ---------------------------------------------- TOTAL INVESTMENTS (COST $1,841,799,058) 2,234,952,216 97.93 Cash and Other Assets Less Liabilities 47,160,968 2.07 ---------------------------------------------- NET ASSETS $2,282,113,184 100.00% ============================================== - ------------------------------------------------------------------------------------------- FORWARD CURRENCY CONTRACT OPEN AT SEPTEMBER 30, 2003 - ------------------------------------------------------------------------------------------- Currency Currency Sold and Local U.S. Value in Unrealized Settlement Date Currency Dollars U.S. Dollars Loss - ------------------------------------------------------------------------------------------- Euro 12/17/03 57,104,407 $64,369,230 $66,395,882 $(2,026,652) ------------------------------------------------------------------------ TOTAL $(2,026,652) ======================================================================== * Non-income producing. See notes to financial statements.
20 S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S MARSICO FOCUS FUND SEPTEMBER 30, 2003 (Amounts in thousands) - ------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------- Investments, at value (cost $1,841,799) $2,234,952 Receivable for investments sold 67,498 Receivable for capital stock sold 2,548 Interest and dividends receivable 1,273 Prepaid expenses and other assets 495 -------------- TOTAL ASSETS 2,306,766 -------------- - ------------------------------------------------------------------------------- LIABILITIES - ------------------------------------------------------------------------------- Payable for investments purchased 18,011 Payable for capital stock redeemed 1,492 Payable for loss on foreign currency exchange contracts 128 Accrued investment advisory fee 1,623 Accrued distribution fee 195 Accrued trustees' fees 437 Unrealized loss on foreign currency exchange contracts 2,026 Accrued expenses and other liabilities 741 -------------- TOTAL LIABILITIES 24,653 -------------- NET ASSETS $2,282,113 ============== - ------------------------------------------------------------------------------- NET ASSETS CONSIST OF - ------------------------------------------------------------------------------- Paid-in-capital $2,274,862 Accumulated net investment loss (848) Accumulated net realized loss on investments and foreign currency transactions (383,072) Net unrealized appreciation on investments and foreign currency translations 391,171 -------------- NET ASSETS $2,282,113 ============== SHARES OUTSTANDING, $0.001 PAR VALUE (UNLIMITED SHARES AUTHORIZED) 169,218 NET ASSET VALUE, REDEMPTION PRICE, AND OFFERING PRICE PER SHARE (NET ASSETS/SHARES OUTSTANDING)* $13.49 ============== * Not in thousands. See notes to financial statements. 21 S T A T E M E N T O F O P E R A T I O N S MARSICO FOCUS FUND For the Year Ended September 30, 2003 (Amounts in thousands) - ------------------------------------------------------------------------------- INVESTMENT INCOME - ------------------------------------------------------------------------------- Interest $811 Dividends (net of $286 of non-reclaimable foreign withholding taxes) 12,481 -------------- TOTAL INVESTMENT INCOME 13,292 -------------- - ------------------------------------------------------------------------------- EXPENSES - ------------------------------------------------------------------------------- Investment advisory fees 14,955 Distribution fees 4,399 Transfer agent fees and expenses 2,084 Printing and postage expenses 919 Custody and fund accounting fees 275 Trustees' fees and expenses 268 Professional fees 253 Fund administration fees 235 State registration fees 146 Amortization of organizational costs 7 Miscellaneous 122 -------------- TOTAL EXPENSES 23,663 Less expenses paid indirectly (846) -------------- NET EXPENSES 22,817 -------------- NET INVESTMENT LOSS (9,525) -------------- - ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ------------------------------------------------------------------------------- Net realized loss on investments (44,296) Net realized gain on foreign currency transactions 5,675 Change in unrealized appreciation/depreciation on investments and foreign currency translations 354,257 -------------- Net Gain on Investments 315,636 -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $306,111 ============== See notes to financial statements. 22 S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S MARSICO FOCUS FUND Year Year Ended Ended (Amounts in thousands) 9/30/03 9/30/02 - ------------------------------------------------------------------------------- OPERATIONS - ------------------------------------------------------------------------------- Net investment loss $(9,525) $(8,834) Net realized loss on investments (44,296) (114,160) Net realized gain on foreign currency transactions 5,675 1,649 Change in unrealized appreciation/ depreciation on investments and foreign currency translations 354,257 64,375 ---------------------------- Net increase (decrease) in net assets resulting from operations 306,111 (56,970) ---------------------------- - ------------------------------------------------------------------------------- DISTRIBUTIONS - ------------------------------------------------------------------------------- Tax return of capital - (4,530) ---------------------------- Total distributions - (4,530) ---------------------------- - ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS - ------------------------------------------------------------------------------- Proceeds from sale of shares 1,273,020 544,645 Proceeds from reinvestment of distributions - 4,400 Redemption of shares (571,086) (524,972) ---------------------------- Net increase from capital share transactions 701,934 24,073 ---------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 1,008,045 (37,427) - ------------------------------------------------------------------------------- NET ASSETS - ------------------------------------------------------------------------------- Beginning of period 1,274,068 1,311,495 END OF PERIOD $2,282,113 $1,274,068 ---------------------------- Accumulated net investment loss (848) (218) - ------------------------------------------------------------------------------- TRANSACTIONS IN SHARES - ------------------------------------------------------------------------------- Shares sold 107,005 42,317 Shares issued in reinvestment of distributions - 330 Shares redeemed (46,887) (40,445) ---------------------------- NET INCREASE 60,118 2,202 ============================ See notes to financial statements. 23 F I N A N C I A L H I G H L I G H T S MARSICO FOCUS FUND For a Fund Share Outstanding Throughout the Period.
Year Year Ended Ended 9/30/03 9/30/02 ------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $11.68 $12.27 - ---------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ---------------------------------------------------------------------------------- Net investment loss (0.03) (0.08) Net realized and unrealized gains (losses) on investments 1.84 (0.47) ------------------------------- Total from investment operations 1.81 (0.55) ------------------------------- - ---------------------------------------------------------------------------------- DISTRIBUTIONS - ---------------------------------------------------------------------------------- Net realized gains - - Tax return of capital - (0.04) ------------------------------- Total distributions - (0.04) ------------------------------- NET ASSET VALUE, END OF PERIOD $13.49 $11.68 ------------------------------- TOTAL RETURN 15.50% (4.50)% - ---------------------------------------------------------------------------------- SUPPLEMENTAL DATA AND RATIOS - ---------------------------------------------------------------------------------- Net assets, end of period (000s) $2,282,113 $1,274,068 Ratio of expenses to average net assets, before expenses paid indirectly 1.34% 1.35% Ratio of net investment loss to average net assets, net of expenses paid indirectly (0.54)% (0.64)% Ratio of net investment loss to average net assets, before expenses paid indirectly (0.59)% (0.68)% Portfolio turnover rate 90% 117% See notes to financial statements. 24 Year Year Year Ended Ended Ended 9/30/01 9/30/00 9/30/99 - ------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $22.17 $17.43 $12.36 - ------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------------------------------------------------------------ Net investment loss (0.07) (0.16) (0.06) Net realized and unrealized gains (losses) on investments (7.87) 4.94 5.13 --------------------------------------------- Total from investment operations (7.94) 4.78 5.07 --------------------------------------------- - ------------------------------------------------------------------------------------------------ DISTRIBUTIONS - ------------------------------------------------------------------------------------------------ Net realized gains (1.96) (0.04) - Tax return of capital - - - --------------------------------------------- Total distributions (1.96) (0.04) - --------------------------------------------- NET ASSET VALUE, END OF PERIOD $12.27 $22.17 $17.43 --------------------------------------------- TOTAL RETURN (38.17)% 27.42% 41.02% - ------------------------------------------------------------------------------------------------ SUPPLEMENTAL DATA AND RATIOS - ------------------------------------------------------------------------------------------------ Net assets, end of period (000s) $1,311,495 $2,853,805 $2,258,141 Ratio of expenses to average net assets, before expenses paid indirectly 1.30% 1.27% 1.31% Ratio of net investment loss to average net assets, net of expenses paid indirectly (0.36)% (0.69)% (0.43)% Ratio of net investment loss to average net assets, before expenses paid indirectly (0.39)% (0.70)% (0.45)% Portfolio turnover rate 127% 176% 173%
25 F U N D O V E R V I E W MARSICO GROWTH FUND SEPTEMBER 30, 2003 The Growth Fund invests primarily in the common stocks of large companies that are selected for their growth potential. The Growth Fund will normally hold between 35 and 50 common stocks. - ------------------------------------------------------------------------------- PERFORMANCE COMPARISON - ------------------------------------------------------------------------------- Five Year Average Annual One Year Average Annual Since Inception (10/1/02-9/30/03) (10/1/98-9/30/03) (12/31/97-9/30/03) Marsico Growth Fund 18.60% 5.06% 7.02% S&P 500(R) Index 24.40% 1.00% 1.90% - ------------------------------------------------------------------------------- NET ASSETS - ------------------------------------------------------------------------------- 9/30/03 $789,219,606 - ------------------------------------------------------------------------------- - --------------------------------------- NET ASSET VALUE GROWTH OF $10,000(1) - --------------------------------------- Net Asset Value Per Share $14.09 - --------------------------------------- TOP FIVE HOLDINGS - --------------------------------------- Genentech, Inc. 5.07% [graph] Intel Corp. 5.00 Citigroup, Inc. 4.60 SLM Corp. 4.57 UnitedHealth Group, Inc. 4.39 - --------------------------------------- SECTOR ALLOCATION(2) - --------------------------------------- Consumer Non-Cyclical 25.84% Consumer Cyclical 21.47 Financial 16.70 Technology 12.98 Industrial 12.31 Communications 10.70 The performance included in the table and graph do not reflect the deduction of taxes on Fund distributions or the redemption of Fund shares. (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. 26 S C H E D U L E O F I N V E S T M E N T S MARSICO GROWTH FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS - ------------------------------------------------------------------------------- AEROSPACE/DEFENSE Lockheed Martin Corporation 248,496 $11,468,090 1.45% ------------------------------------------ AIRLINES JetBlue Airways Corporation* 118,579 7,229,762 0.92 Ryanair Holdings PLC ADR* 225,190 9,120,195 1.15 ------------------------------------------ 16,349,957 2.07 ------------------------------------------ BREWERY Anheuser-Busch Companies, Inc. 113,077 5,579,219 0.71 ------------------------------------------ BUILDING - RESIDENTIAL/COMMERCIAL Lennar Corporation - Class A 239,370 18,620,592 2.36 M.D.C. Holdings, Inc. 213,484 11,528,136 1.46 ------------------------------------------ 30,148,728 3.82 ------------------------------------------ CABLE TV EchoStar Communications Corporation - Class A* 163,692 6,264,493 0.79 ------------------------------------------ CASINO HOTELS Wynn Resorts Ltd.* 791,390 14,387,470 1.82 ------------------------------------------ COMPUTERS Dell, Inc.* 792,434 26,459,371 3.35 ------------------------------------------ COMPUTERS - MEMORY DEVICES EMC Corporation* 78,422 988,035 0.13 ------------------------------------------ COSMETICS & TOILETRIES The Procter & Gamble Company 194,507 18,054,140 2.29 ------------------------------------------ DIVERSIFIED MANUFACTURING OPERATIONS General Electric Company 925,859 27,599,857 3.50 Honeywell International, Inc. 135,381 3,567,289 0.45 ------------------------------------------ 31,167,146 3.95 ------------------------------------------ E-COMMERCE/SERVICES eBay, Inc.* 169,504 9,070,159 1.15 Monster Worldwide, Inc.* 74,333 1,871,705 0.24 ------------------------------------------ 10,941,864 1.39 ------------------------------------------ *Non-income producing. See notes to financial statements. 27 S C H E D U L E O F I N V E S T M E N T S MARSICO GROWTH FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------- ELECTRONIC COMPONENTS - SEMICONDUCTORS Intel Corporation 1,434,492 $39,462,875 5.00% ------------------------------------------ ENGINEERING/R&D SERVICES Jacobs Engineering Group, Inc.* 33,932 1,530,333 0.19 ------------------------------------------ ENTERTAINMENT SOFTWARE Electronic Arts, Inc.* 324,619 29,939,610 3.79 ------------------------------------------ FINANCE - CONSUMER LOANS SLM Corporation 925,740 36,066,830 4.57 ------------------------------------------ FINANCE - INVESTMENT BANKER/BROKER Citigroup, Inc. 796,903 36,267,056 4.60 The Goldman Sachs Group, Inc. 67,982 5,703,690 0.72 Merrill Lynch & Company, Inc. 481,771 25,789,202 3.27 ------------------------------------------ 67,759,948 8.59 ------------------------------------------ FINANCE - MORTGAGE LOAN/BANKER Fannie Mae 296,902 20,842,520 2.64 ------------------------------------------ HOTELS & MOTELS Four Seasons Hotels, Inc. 336,417 16,756,931 2.12 ------------------------------------------ MACHINERY - CONSTRUCTION & MINING Caterpillar, Inc. 341,213 23,489,103 2.98 ------------------------------------------ MEDICAL - BIOMEDICAL/GENETIC Amgen, Inc.* 307,526 19,856,954 2.52 Genentech, Inc.* 499,512 40,030,891 5.07 ------------------------------------------ 59,887,845 7.59 ------------------------------------------ MEDICAL - HMO UnitedHealth Group, Inc. 688,206 34,630,526 4.39 ------------------------------------------ MEDICAL INSTRUMENTS Boston Scientific Corporation* 280,157 17,874,017 2.27 ------------------------------------------ *Non-income producing. See notes to financial statements. 28 S C H E D U L E O F I N V E S T M E N T S MARSICO GROWTH FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------- MEDICAL LABS & TESTING SERVICES Quest Diagnostics, Inc.* 258,089 $15,650,517 1.98% ------------------------------------------ MEDICAL PRODUCTS Zimmer Holdings, Inc.* 345,479 19,035,893 2.41 ------------------------------------------ MOTORCYCLE/MOTOR SCOOTER MANUFACTURER Harley-Davidson, Inc. 67,364 3,246,945 0.41 ------------------------------------------ MULTIMEDIA Viacom, Inc. - Class B 490,976 18,804,381 2.38 The Walt Disney Company 167,163 3,371,678 0.43 ------------------------------------------ 22,176,059 2.81 ------------------------------------------ NETWORKING PRODUCTS Cisco Systems, Inc.* 1,299,269 25,387,716 3.22 ------------------------------------------ PHARMACY SERVICES Caremark Rx, Inc.* 980,940 22,169,244 2.81 ------------------------------------------ RETAIL - BUILDING PRODUCTS Lowe's Companies, Inc. 366,366 19,014,395 2.41 ------------------------------------------ RETAIL - DISCOUNT Wal-Mart Stores, Inc. 322,026 17,985,152 2.28 ------------------------------------------ RETAIL - JEWELRY Tiffany & Company 580,283 21,661,964 2.74 ------------------------------------------ RETAIL - MAJOR DEPARTMENT STORE Sears, Roebuck and Company 262,472 11,477,901 1.45 ------------------------------------------ TRANSPORTATION - SERVICES FedEx Corporation 375,643 24,202,679 3.07 ------------------------------------------ WIRELESS EQUIPMENT QUALCOMM, Inc. 362,211 15,082,466 1.91 ------------------------------------------ TOTAL COMMON STOCKS (COST $588,266,940) 737,139,982 93.40 ------------------------------------------ *Non-income producing. See notes to financial statements. 29 S C H E D U L E O F I N V E S T M E N T S MARSICO GROWTH FUND SEPTEMBER 30, 2003 Principal Amount Market Value Percent of in Dollars in Dollars Net Assets - ------------------------------------------------------------------------------- CORPORATE BOND - ------------------------------------------------------------------------------- AIRLINES JetBlue Airways Corporation 144A 3.50%, 7/15/33 $7,500,000 $9,187,500 1.16% -------------------------------------------- TOTAL CORPORATE BOND (COST $7,500,000) 9,187,500 1.16 -------------------------------------------- Principal/ Market Value Percent of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - ------------------------------------------------------------------------------- SSgA Money Market Funds 28,290,890 28,290,890 3.59 -------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (COST $28,290,890) 28,290,890 3.59 -------------------------------------------- TOTAL INVESTMENTS (COST $624,057,830) 774,618,372 98.15 Cash and Other Assets Less Liabilities 14,601,234 1.85 -------------------------------------------- NET ASSETS $789,219,606 100.00% ============================================ * Non-income producing. See notes to financial statements. 30 S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S MARSICO GROWTH FUND SEPTEMBER 30, 2003 (Amounts in thousands) - ------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------- Investments, at value (cost $624,057) $774,618 Receivable for investments sold 21,155 Receivable for capital stock sold 1,543 Interest and dividends receivable 422 Prepaid expenses and other assets 269 ------------- TOTAL ASSETS 798,007 ------------- - ------------------------------------------------------------------------------- LIABILITIES - ------------------------------------------------------------------------------- Payable for investments purchased 7,232 Payable for capital stock redeemed 404 Accrued investment advisory fee 552 Accrued distribution fee 76 Accrued trustees' fees 246 Accrued expenses and other liabilities 277 ------------- TOTAL LIABILITIES 8,787 ------------- NET ASSETS $789,220 ============= - ------------------------------------------------------------------------------- NET ASSETS CONSIST OF - ------------------------------------------------------------------------------- Paid-in-capital $784,903 Accumulated net investment loss (285) Accumulated net realized loss on investments and foreign currency transactions (145,991) Net unrealized appreciation on investments and foreign currency translations 150,593 ------------- NET ASSETS $789,220 ============= SHARES OUTSTANDING, $0.001 PAR VALUE (UNLIMITED SHARES AUTHORIZED) 55,996 NET ASSET VALUE, REDEMPTION PRICE, AND OFFERING PRICE PER SHARE (NET ASSETS/SHARES OUTSTANDING)* $14.09 ============= * Not in thousands. See notes to financial statements. 31 S T A T E M E N T O F O P E R A T I O N S MARSICO GROWTH FUND For the Year Ended September 30, 2003 (Amounts in thousands) - ------------------------------------------------------------------------------- INVESTMENT INCOME - ------------------------------------------------------------------------------- Interest $416 Dividends (net of $28 of non-reclaimable foreign withholding taxes) 4,323 ------------- TOTAL INVESTMENT INCOME 4,739 ------------- - ------------------------------------------------------------------------------- EXPENSES - ------------------------------------------------------------------------------- Investment advisory fees 5,665 Distribution fees 1,666 Transfer agent fees and expenses 798 Printing and postage expenses 357 Fund administration fees 177 Custody and fund accounting fees 147 Trustees' fees and expenses 128 Professional fees 109 State registration fees 59 Amortization of organizational costs 7 Miscellaneous 63 ------------- TOTAL EXPENSES 9,176 Less expenses paid indirectly (272) ------------- NET EXPENSES 8,904 ------------- NET INVESTMENT LOSS (4,165) ------------- - ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ------------------------------------------------------------------------------- Net realized loss on investments (23,520) Net realized gain on foreign currency transactions 8,532 Change in unrealized appreciation/depreciation on investments and foreign currency translations 132,227 ------------- Net Gain on Investments 117,239 ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $113,074 ============= See notes to financial statements. 32 S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S MARSICO GROWTH FUND Year Year Ended Ended (Amounts in thousands) 9/30/03 9/30/02 - ------------------------------------------------------------------------------- OPERATIONS - ------------------------------------------------------------------------------- Net investment loss $(4,165) $(3,115) Net realized loss on investments (23,520) (76,004) Net realized gain on foreign currency transactions 8,532 203 Change in unrealized appreciation/ depreciation on investments and foreign currency translations 132,227 20,913 ------------------------------- Net increase (decrease) in net assets resulting from operations 113,074 (58,003) ------------------------------- - ------------------------------------------------------------------------------- DISTRIBUTIONS - ------------------------------------------------------------------------------- Tax return of capital - (717) ------------------------------- Total distributions - (717) ------------------------------- - ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS - ------------------------------------------------------------------------------- Proceeds from sale of shares 356,489 430,675 Proceeds from reinvestment of distributions - 682 Redemption of shares (322,317) (261,567) ------------------------------- Net increase from capital share transactions 34,172 169,790 ------------------------------- TOTAL INCREASE IN NET ASSETS 147,246 111,070 - ------------------------------------------------------------------------------- NET ASSETS - ------------------------------------------------------------------------------- Beginning of period 641,974 530,904 END OF PERIOD $789,220 $641,974 ------------------------------- Accumulated net investment loss (285) (163) - ------------------------------------------------------------------------------- TRANSACTIONS IN SHARES - ------------------------------------------------------------------------------- Shares sold 28,383 32,129 Shares issued in reinvestment of distributions - 49 Shares redeemed (26,435) (19,908) ------------------------------- NET INCREASE 1,948 12,270 =============================== See notes to financial statements. 33 F I N A N C I A L H I G H L I G H T S MARSICO GROWTH FUND For a Fund Share Outstanding Throughout the Period.
Year Year Ended Ended 9/30/03 9/30/02 ------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $11.88 $12.71 - -------------------------------------------------------------------------- INCOME from INVESTMENT OPERATIONS - -------------------------------------------------------------------------- Net investment loss (0.07) (0.04) Net realized and unrealized gains (losses) on investments 2.28 (0.77) ------------------------- Total from investment operations 2.21 (0.81) ------------------------- - -------------------------------------------------------------------------- DISTRIBUTIONS - -------------------------------------------------------------------------- Net realized gains - - Tax return of capital - (0.02) ------------------------- Total distributions - (0.02) ------------------------- NET ASSET VALUE, END OF PERIOD $14.09 $11.88 ------------------------- TOTAL RETURN 18.60% (6.42)% - -------------------------------------------------------------------------- SUPPLEMENTAL DATA AND RATIOS - -------------------------------------------------------------------------- Net assets, end of period (000s) $789,220 $641,974 Ratio of expenses to average net assets, before expenses paid indirectly 1.38% 1.37% Ratio of net investment loss to average net assets, net of expenses paid indirectly (0.62)% (0.49)% Ratio of net investment loss to average net assets, before expenses paid indirectly (0.67)% (0.52)% Portfolio turnover rate 91% 111% 34 Year Year Year Ended Ended Ended 9/30/01 9/30/00 9/30/99 - ---------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $20.82 $16.29 $11.54 - ---------------------------------------------------------------------------------------- INCOME from INVESTMENT OPERATIONS - ---------------------------------------------------------------------------------------- Net investment loss (0.09) (0.11) (0.06) Net realized and unrealized gains (losses) on investments (7.32) 4.75 4.81 ------------------------------------- Total from investment operations (7.41) 4.64 4.75 ------------------------------------- - ---------------------------------------------------------------------------------------- DISTRIBUTIONS - ---------------------------------------------------------------------------------------- Net realized gains (0.70) (0.11) - Tax return of capital - - - ------------------------------------- Total distributions (0.70) (0.11) - ------------------------------------- NET ASSET VALUE, END OF PERIOD $12.71 $20.82 $16.29 ------------------------------------- TOTAL RETURN (36.45)% 28.53% 41.16% - ---------------------------------------------------------------------------------------- SUPPLEMENTAL DATA AND RATIOS - ---------------------------------------------------------------------------------------- Net assets, end of period (000s) $530,904 $1,002,722 $688,490 Ratio of expenses to average net assets, before expenses paid indirectly 1.33% 1.30% 1.43% Ratio of net investment loss to average net assets, net of expenses paid indirectly (0.53)% (0.54)% (0.46)% Ratio of net investment loss to average net assets, before expenses paid indirectly (0.55)% (0.55)% (0.47)% Portfolio turnover rate 120% 137% 137% See notes to financial statements.
35 F U N D O V E R V I E W MARSICO 21ST CENTURY FUND SEPTEMBER 30, 2003 The 21st Century Fund invests primarily in common stocks that are selected for their long-term growth potential. The Fund may invest in companies of any size, and will normally hold a core position of between 35 and 50 common stocks. - ------------------------------------------------------------------------------ PERFORMANCE COMPARISON - ------------------------------------------------------------------------------ One Year Average Annual Since (10/1/02-9/30/03) Inception (2/1/00-9/30/03) Marsico 21st Century Fund 33.64%(1) -3.61%(1) S&P 500(R) Index 24.40% -7.43% - ------------------------------------------------------------------------------ NET ASSETS - ------------------------------------------------------------------------------ 9/30/03 $104,038,335 - ------------------------------------------------------------------------------ - ----------------------------------- NET ASSET VALUE GROWTH OF $10,000(1)(2) - ----------------------------------- Net Asset Value Per Share $8.74 - ----------------------------------- TOP FIVE HOLDINGS - ----------------------------------- JetBlue Airways Corp. 5.66% [graph] Select Comfort Corp. 4.78 Harmon International Industries, Inc. 4.53 UCBH Holdings, Inc. 4.27 FedEx Corp. 4.11 - ----------------------------------- SECTOR ALLOCATION(3) - ----------------------------------- Consumer Cyclical 43.73% Communications 19.15 Financial 13.51 Technology 11.32 Industrial 7.38 Consumer Non-Cyclical 4.91 The performance included in the table and graph do not reflect the deduction of taxes on Fund distributions or the redemption of Fund shares. (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. (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. (3) Sector weightings represent the percentage of the Fund's equity investments in certain general sectors. These sectors may include more than one industry. The Fund's portfolio composition is subject to change at any time. The 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. 36 S C H E D U L E O F I N V E S T M E N T S MARSICO 21ST CENTURY FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS - ------------------------------------------------------------------------------- AIRLINES JetBlue Airways Corporation* 96,549 $5,886,593 5.66% Ryanair Holdings PLC ADR* 90,115 3,649,658 3.51 --------------------------------------- 9,536,251 9.17 --------------------------------------- AUDIO/VIDEO PRODUCTS Digital Theater Systems, Inc.* 39,670 1,129,841 1.09 Harman International Industries, Inc. 47,967 4,717,554 4.53 --------------------------------------- 5,847,395 5.62 --------------------------------------- AUTOMOTIVE - CARS/LIGHT TRUCKS Bayerische Motoren Werke AG** 86,380 3,266,091 3.14 --------------------------------------- BUILDING - RESIDENTIAL/COMMERCIAL WCI Communities, Inc.* 173,108 2,856,282 2.75 --------------------------------------- CABLE TV EchoStar Communications Corporation - Class A* 89,461 3,423,672 3.29 --------------------------------------- CASINO HOTELS Wynn Resorts Ltd.* 102,887 1,870,486 1.80 --------------------------------------- CELLULAR TELECOMMUNICATIONS Nextel Communications, Inc. - Class A* 107,291 2,112,560 2.03 --------------------------------------- COMMERCIAL BANKS - WESTERN US UCBH Holdings, Inc. 146,835 4,438,822 4.27 --------------------------------------- COMPUTERS Dell, Inc.* 98,922 3,303,006 3.17 --------------------------------------- COMPUTERS - MEMORY DEVICES VERITAS Software Corporation* 67,952 2,133,693 2.05 --------------------------------------- DATA PROCESSING/MANAGEMENT Fair Isaac Corporation 54,557 3,216,681 3.09 --------------------------------------- * Non-income producing. ** A portion of this security has been segregated by the custodian to cover segregation requirements on open forward currency contracts. See notes to financial statements. 37 S C H E D U L E O F I N V E S T M E N T S MARSICO 21ST CENTURY FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------- E-COMMERCE/SERVICES Monster Worldwide, Inc.* 110,935 $2,793,343 2.68% --------------------------------------- ELECTRONIC COMPONENTS - SEMICONDUCTORS Intel Corporation 111,126 3,057,076 2.94 --------------------------------------- FINANCE - INVESTMENT BANKER/BROKER Citigroup, Inc. 69,067 3,143,239 3.02 Jefferies Group, Inc. 124,975 3,593,031 3.45 --------------------------------------- 6,736,270 6.47 --------------------------------------- FINANCIAL GUARANTEE INSURANCE MGIC Investment Corporation 53,832 2,803,032 2.69 --------------------------------------- HOTELS & MOTELS Four Seasons Hotels, Inc. 38,022 1,893,876 1.82 --------------------------------------- MACHINERY - CONSTRUCTION & MINING Caterpillar, Inc. 48,779 3,357,946 3.23 --------------------------------------- MEDICAL - BIOMEDICAL/GENETIC Genentech, Inc.* 35,282 2,827,500 2.72 --------------------------------------- MEDICAL - HMO UnitedHealth Group, Inc. 44,764 2,252,525 2.17 --------------------------------------- MOTORCYCLE/MOTOR SCOOTER MANUFACTURER Harley-Davidson, Inc. 46,486 2,240,625 2.15 --------------------------------------- NETWORKING PRODUCTS Cisco Systems, Inc.* 174,730 3,414,224 3.28 Foundry Networks, Inc.* 100,963 2,171,714 2.09 --------------------------------------- 5,585,938 5.37 --------------------------------------- RADIO Cumulus Media, Inc. - Class A* 168,440 2,871,902 2.76 --------------------------------------- * Non-income producing. See notes to financial statements. 38 S C H E D U L E O F I N V E S T M E N T S MARSICO 21ST CENTURY FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------- RETAIL - BEDDING Select Comfort Corporation* 187,650 $4,972,725 4.78% --------------------------------------- RETAIL - COMPUTER EQUIPMENT Electronics Boutique Holdings Corporation* 102,165 2,918,854 2.81 --------------------------------------- RETAIL - JEWELRY Tiffany & Company 53,897 2,011,975 1.93 --------------------------------------- RETAIL - MAJOR DEPARTMENT STORE Sears, Roebuck and Company 68,780 3,007,749 2.89 --------------------------------------- RETAIL - RESTAURANTS Starbucks Corporation* 65,639 1,890,403 1.82 --------------------------------------- RETAIL - SPORTING GOODS The Sports Authority, Inc.* 93,211 2,932,418 2.82 --------------------------------------- TRANSPORTATION - SERVICES FedEx Corporation 66,445 4,281,051 4.11 --------------------------------------- WIRELESS EQUIPMENT QUALCOMM, Inc. 72,654 3,025,313 2.91 --------------------------------------- TOTAL COMMON STOCKS (COST $88,386,518) 103,465,460 99.45 --------------------------------------- * Non-income producing. See notes to financial statments. 39 S C H E D U L E O F I N V E S T M E N T S MARSICO 21ST CENTURY FUND SEPTEMBER 30, 2003 Principal/ Market Value Percent of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - ------------------------------------------------------------------------------- SSgA Money Market Funds 1,374,222 $1,374,222 1.32% --------------------------------------- TOTAL SHORT-TERM INVESTMENTS (COST $1,374,222) 1,374,222 1.32 --------------------------------------- TOTAL INVESTMENTS (COST $89,760,740) 104,839,682 100.77 Liabilities Less Cash and Other Assets (801,347) (0.77) --------------------------------------- NET ASSETS $104,038,335 100.00% ======================================= - ------------------------------------------------------------------------------- FORWARD CURRENCY CONTRACT OPEN AT SEPTEMBER 30, 2003 - ------------------------------------------------------------------------------- Currency Currency Sold and Local U.S. Value in Unrealized Settlement Date Currency Dollars U.S. Dollars Loss - ------------------------------------------------------------------------------- Euro 12/17/03 2,639,902 $2,975,751 $3,069,442 $(93,691) ---------------------------------------------------------- TOTAL $(93,691) ========================================================== * Non-income producing. See notes to financial statements. 40 S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S MARSICO 21ST CENTURY FUND SEPTEMBER 30, 2003 (Amounts in thousands) - ------------------------------------------------------------------------------ ASSETS - ------------------------------------------------------------------------------ Investments, at value (cost $89,761) $104,840 Receivable for investments sold 3,882 Receivable for capital stock sold 184 Interest and dividends receivable 33 Prepaid expenses and other assets 135 ------------ TOTAL ASSETS $109,074 ------------ - ------------------------------------------------------------------------------ LIABILITIES - ------------------------------------------------------------------------------ Payable for investments purchased 4,453 Payable for capital stock redeemed 56 Payable for loss on foreign currency exchange contracts 63 Accrued investment advisory fee 72 Accrued distribution fee 105 Accrued trustees' fees 124 Unrealized loss on foreign currency exchange contracts 94 Accrued expenses and other liabilities 69 ------------ TOTAL LIABILITIES 5,036 ------------ NET ASSETS $104,038 ============ - ------------------------------------------------------------------------------ NET ASSETS CONSIST OF - ------------------------------------------------------------------------------ Paid-in-capital $152,302 Accumulated net investment loss (113) Accumulated net realized loss on investments and foreign currency transactions (63,166) Net unrealized appreciation on investments and foreign currency translations 15,015 ------------ NET ASSETS $104,038 ============ SHARES OUTSTANDING, $0.001 PAR VALUE (UNLIMITED SHARES AUTHORIZED) 11,909 NET ASSET VALUE, REDEMPTION PRICE, AND OFFERING PRICE PER SHARE (NET ASSETS/SHARES OUTSTANDING)* $8.74 ============ * Not in thousands. See notes to financial statements. 41 S T A T E M E N T O F O P E R A T I O N S MARSICO 21ST CENTURY FUND For the Year Ended September 30, 2003 (Amounts in thousands) - ------------------------------------------------------------------------------ INVESTMENT INCOME - ------------------------------------------------------------------------------ Interest $17 Dividends (net of $7 of non-reclaimable foreign withholding taxes) 312 -------------- TOTAL INVESTMENT INCOME 329 -------------- - ------------------------------------------------------------------------------ EXPENSES - ------------------------------------------------------------------------------ Investment advisory fees 562 Distribution fees 165 Transfer agent fees and expenses 116 Fund administration fees 70 Custody and fund accounting fees 65 Trustees' fees and expenses 38 Printing and postage expenses 37 State registration fees 20 Professional fees 13 Miscellaneous 6 -------------- TOTAL EXPENSES 1,092 Less waiver of expenses and expenses paid indirectly (70) -------------- NET EXPENSES 1,022 -------------- NET INVESTMENT LOSS (693) - ------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN - ------------------------------------------------------------------------------ Net realized gain on investments 6,230 Net realized gain on foreign currency transactions 322 Change in unrealized appreciation/depreciation on investments and foreign currency translations 13,359 Increase from payment by service provider 68 -------------- Net Gain on Investments 19,979 -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $19,286 ============== See notes to financial statements. 42 S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S MARSICO 21ST CENTURY FUND Year Year Ended Ended (Amounts in thousands) 9/30/03 9/30/02 - ------------------------------------------------------------------------------ OPERATIONS - ------------------------------------------------------------------------------ Net investment loss $(693) $(570) Net realized gain (loss) on investments 6,230 (904) Net realized gain on foreign currency transactions 322 540 Change in unrealized appreciation/ depreciation on investments and foreign currency translations 13,359 4,194 Increase from payment by service provider 68 - ------------------------ Net increase in net assets resulting from operations 19,286 3,260 ------------------------ - ------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS - ------------------------------------------------------------------------------ Proceeds from sale of shares 56,312 13,740 Redemption of shares (27,581) (21,103) ------------------------ Net increase (decrease) from capital share transactions 28,731 (7,363) ------------------------ TOTAL INCREASE (DECREASE) IN NET ASSETS 48,017 (4,103) - ------------------------------------------------------------------------------ NET ASSETS - ------------------------------------------------------------------------------ Beginning of period 56,021 60,124 END OF PERIOD $104,038 $56,021 ------------------------ Accumulated net investment loss (113) (121) - ------------------------------------------------------------------------------ TRANSACTIONS IN SHARES - ------------------------------------------------------------------------------ Shares sold 7,212 1,969 Shares redeemed (3,875) (3,000) ------------------------ NET INCREASE (DECREASE) 3,337 (1,031) ======================== See notes to financial statements. 43 F I N A N C I A L H I G H L I G H T S MARSICO 21ST CENTURY FUND For a Fund Share Outstanding Throughout the Period.
Year Year Year 2/01/00* Ended Ended Ended to 9/30/03 9/30/02 9/30/01 9/30/00 --------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $6.54 $6.26 $10.86 $10.00 - ------------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------------------------------------------------------------------ Net investment loss (0.04) (0.08) (0.08) (0.07) Net realized and unrealized gains (losses) on investments 2.23 0.36 (4.52) 0.93 --------------------------------------------------------------- Total from investment operations 2.19 0.28 (4.60) 0.86 --------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------ OTHER - ------------------------------------------------------------------------------------------------------ Increase from payment by service provider 0.01 - - - --------------------------------------------------------------- Total other 0.01 - - - --------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $8.74 $6.54 $6.26 $10.86 --------------------------------------------------------------- TOTAL RETURN 33.64% 4.47% (42.36)% 8.60%(1) - ------------------------------------------------------------------------------------------------------ SUPPLEMENTAL DATA AND RATIOS - ------------------------------------------------------------------------------------------------------ Net assets, end of period (000s) $104,038 $56,021 $60,124 $130,173 Ratio of expenses to average net assets, less waivers and before expenses paid indirectly 1.55%(4) 1.50% 1.50% 1.50%(2) Ratio of net investment loss to average net assets, net of waivers and expenses paid indirectly (1.05)% (0.89)% (0.76)% (0.92)%(2) Ratio of expenses to average net assets, before waivers and expenses paid indirectly 1.65% 1.60% 1.57% 1.70%(2) Ratio of net investment loss to average net assets, before waivers and expenses paid indirectly (1.15)% (0.99)% (0.83)% (1.13)%(2) Portfolio turnover rate(3) 236% 388% 399% 267%(1) * Inception. (1) Not annualized for the periods less than one year. (2) Annualized for the periods less than one year. (3) Portfolio turnover is greater than most funds due to the investment style of the Fund. (4) See Note 3 for information regarding the voluntary fee waiver. See notes to financial statements.
44 F U N D O V E R V I E W MARSICO INTERNATIONAL OPPORTUNITIES FUND SEPTEMBER 30, 2003 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. - ------------------------------------------------------------------------------ PERFORMANCE COMPARISON - ------------------------------------------------------------------------------ One Year Average Annual Since (10/1/02-9/30/03) Inception (6/30/00-9/30/03) Marsico International Opportunities Fund 25.71%(1) -2.82%(1) Morgan Stanley Capital International EAFE Index 26.01% -10.42% - ------------------------------------------------------------------------------ NET ASSETS - ------------------------------------------------------------------------------ 9/30/03 $28,408,577 - ------------------------------------------------------------------------------ - -------------------------------------- NET ASSET VALUE GROWTH OF $10,000(1)(2) - -------------------------------------- Net Asset Value Per Share $8.80 - -------------------------------------- TOP FIVE HOLDINGS - -------------------------------------- Ryanair Holdings PLC ADR 5.27% [graph] UBS AG ADR 4.03 Roche Holding AG 3.92 Bayerische Motoren Werke AG 3.70 HSBC Holdings PLC 3.61 - -------------------------------------- SECTOR ALLOCATION(3) - -------------------------------------- Financial 25.45% Consumer Cyclical 25.09 Communications 19.36 Industrial 11.43 Consumer Non-Cyclical 7.45 Technology 7.25 Energy 1.84 Basic Materials 1.10 Exchange Traded Fund 1.03 The performance included in the table and graph do not reflect the deduction of taxes on Fund distributions or the redemption of Fund shares. (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 have been 25.08% for the one year period ended 9/30/03, -3.78% since inception through 9/30/03, and the ending value of a $10,000 investment would have been $8,823 on 9/30/03. (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. (3) Sector weightings represent the percentage of the Fund's equity investments in certain general sectors. These sectors may include more than one industry. The Fund's portfolio composition is subject to change at any time. The 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. 45 S C H E D U L E O F I N V E S T M E N T S MARSICO INTERNATIONAL OPPORTUNITIES FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS - ------------------------------------------------------------------------------- ADVERTISING SERVICES JC Decaux S.A.* 21,394 $300,884 1.06% ----------------------------------------- AIRLINES Cathay Pacific Airway Ltd. 180,000 304,478 1.07 Ryanair Holdings PLC ADR* 36,968 1,497,204 5.27 ----------------------------------------- 1,801,682 6.34 ----------------------------------------- AUDIO/VIDEO PRODUCTS Yamaha Corporation 32,600 618,848 2.18 ----------------------------------------- AUTOMOTIVE - CARS/LIGHT TRUCKS Bayerische Motoren Werke AG 27,751 1,049,285 3.70 Nissan Motor Company Ltd. 76,000 821,972 2.89 ----------------------------------------- 1,871,257 6.59 ----------------------------------------- BROADCAST SERVICE/PROGRAMMING SKY Perfect Communications, Inc.* 250 302,921 1.07 ----------------------------------------- CABLE TV Sogecable S.A.* 23,436 563,902 1.98 ----------------------------------------- CASINO HOTELS Wynn Resorts Ltd.* 18,579 337,766 1.19 ----------------------------------------- CELLULAR TELECOMMUNICATIONS Mobile Telesystems ADR 8,200 603,110 2.12 NTT DoCoMo, Inc.* 118 289,135 1.02 ----------------------------------------- 892,245 3.14 ----------------------------------------- COMMERCIAL BANKS - NON US Credit Agricole S.A. 20,548 400,558 1.41 OTP Bank Rt. GDR 144A 13,997 333,129 1.17 Unibanco Uniao de Bancos Brasileiros S.A. ADR 21,490 425,502 1.50 ----------------------------------------- 1,159,189 4.08 ----------------------------------------- * Non-income producing. See notes to financial statements. 46 S C H E D U L E O F I N V E S T M E N T S MARSICO INTERNATIONAL OPPORTUNITIES FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------- DISTRIBUTION/WHOLESALE Esprit Holdings Ltd. 155,000 $471,341 1.66% ----------------------------------------- DIVERSIFIED FINANCIAL SERVICES UBS AG ADR 20,415 1,146,197 4.03 ----------------------------------------- DIVERSIFIED MINERALS Companhia Vale do Rio Doce ADR 7,319 298,762 1.05 ----------------------------------------- ELECTRIC PRODUCTS - MISCELLANEOUS Samsung Electronics Company Ltd. 2,510 855,471 3.01 Sharp Corporation 62,000 909,842 3.20 Toshiba Corporation 69,000 291,074 1.03 ----------------------------------------- 2,056,387 7.24 ----------------------------------------- ELECTRONIC COMPONENTS - MISCELLANEOUS Koninklijke (Royal) Philips Electronics N.V. 18,367 416,468 1.47 ----------------------------------------- ENTERPRISE SOFTWARE/SERVICES SAP AG 4,191 512,166 1.80 ----------------------------------------- FINANCE - INVESTMENT BANKER/BROKER Daiwa Securities Group, Inc. 85,000 576,000 2.03 ----------------------------------------- MACHINE TOOLS & RELATED PRODUCTS THK Company Ltd. 20,300 350,192 1.23 ----------------------------------------- MEDICAL - DRUGS Roche Holding AG 13,409 1,112,506 3.92 ----------------------------------------- MEDICAL PRODUCTS Synthes-Stratec, Inc. 506 448,568 1.58 ----------------------------------------- * Non-income producing. See notes to financial statements. 47 S C H E D U L E O F I N V E S T M E N T S MARSICO INTERNATIONAL OPPORTUNITIES FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------- MONEY CENTER BANKS Erste Bank der oesterreichischen Sparkassen AG 2,956 $299,140 1.05% HSBC Holdings PLC 77,802 1,026,205 3.61 Royal Bank of Scotland Group PLC 22,514 572,586 2.02 UFJ Holdings, Inc. 143 563,452 1.98 ----------------------------------------- 2,461,383 8.66 ----------------------------------------- MULTI-LINE INSURANCE Corporacion Mapfre S.A. 26,788 292,469 1.03 Zurich Financial Services AG 4,335 541,957 1.91 ----------------------------------------- 834,426 2.94 ----------------------------------------- MULTIMEDIA The News Corporation Ltd. ADR 25,114 823,739 2.90 ----------------------------------------- MUSIC EMI Group PLC 314,958 773,529 2.72 ----------------------------------------- OFFICE AUTOMATION & EQUIPMENT Canon, Inc. 9,000 441,054 1.55 ----------------------------------------- OIL COMPANIES - EXPLORATION & PRODUCTION CNOOC Ltd. ADR 14,607 502,043 1.77 ----------------------------------------- REAL ESTATE OPERATING/DEVELOPMENT Mitsui Fudosan Company Ltd. 32,000 284,342 1.00 Sun Hung Kai Properties, Ltd. 57,000 461,850 1.63 ----------------------------------------- 746,192 2.63 ----------------------------------------- RETAIL - CONSUMER ELECTRONICS Yamada Denki Company Ltd. 22,200 657,542 2.31 ----------------------------------------- RETAIL - HYPERMARKETS Wal-Mart de Mexico - Series V 100,759 291,876 1.03 ----------------------------------------- * Non-income producing. See notes to financial statements. 48 S C H E D U L E O F I N V E S T M E N T S MARSICO INTERNATIONAL OPPORTUNITIES FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- COMMON STOCKS CONTINUED - ------------------------------------------------------------------------------- SEMICONDUCTOR COMPONENTS - INTEGRATED CIRCUITS Taiwan Semiconductor Manufacturing Co., Ltd. ADR* 67,406 $730,007 2.57% ----------------------------------------- SEMICONDUCTOR EQUIPMENT ASM Pacific Technology Ltd. 85,500 289,254 1.02 ----------------------------------------- TELECOMMUNICATION EQUIPMENT Marconi Corporation PLC* 53,131 397,427 1.40 ----------------------------------------- TELEPHONE - INTEGRATED NTL, Inc.* 16,731 788,365 2.77 ----------------------------------------- TELEVISION British Sky Broadcasting Group PLC ADR* 56,576 577,897 2.03 ----------------------------------------- TRANSPORTATION - MARINE Golar LNG Ltd.* 25,400 286,222 1.01 ----------------------------------------- WEB PORTALS/ISP Sohu.com, Inc.* 8,027 249,640 0.88 Yahoo Japan Corporation* 26 368,712 1.30 ----------------------------------------- 618,352 2.18 ----------------------------------------- TOTAL COMMON STOCKS (COST $21,536,110) 26,456,589 93.13 ----------------------------------------- * Non-income producing. See notes to financial statements. 49 S C H E D U L E O F I N V E S T M E N T S MARSICO INTERNATIONAL OPPORTUNITIES FUND SEPTEMBER 30, 2003 Number Market Value Percent of of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- PREFERRED STOCK - ------------------------------------------------------------------------------- BREWERY Companhia de Bebidas das Americas ADR 21,529 $466,103 1.64% ----------------------------------------- TOTAL PREFERRED STOCK (COST $337,409) 466,103 1.64 ----------------------------------------- - ------------------------------------------------------------------------------- EXCHANGE-TRADED FUND - ------------------------------------------------------------------------------- iShares MSCI Japan Index Fund 25,402 279,168 0.98 ----------------------------------------- TOTAL EXCHANGE-TRADED FUND (COST $287,307) 279,168 0.98 ----------------------------------------- Principal/ Market Value Percent of Shares in Dollars Net Assets - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - ------------------------------------------------------------------------------- SSgA Money Market Funds 1,210,134 1,210,134 4.26 ----------------------------------------- TOTAL SHORT-TERM INVESTMENTS (COST $1,210,134) 1,210,134 4.26 ----------------------------------------- TOTAL INVESTMENTS (COST $23,370,960) 28,411,994 100.01 Liabilities Less Cash and Other Assets (3,417) (0.01) ----------------------------------------- NET ASSETS $28,408,577 100.00% ========================================= * Non-income producing. See notes to financial statements. 50 S C H E D U L E O F I N V E S T M E N T S MARSICO INTERNATIONAL OPPORTUNITIES FUND SEPTEMBER 30, 2003 - ------------------------------------------------------------------------------- SUMMARY OF INVESTMENTS BY COUNTRY - ------------------------------------------------------------------------------- Percent of Investment Country Market Value Securities - ------------------------------------------------------------------------------- Australia $823,739 2.9% Austria 299,140 1.1 Brazil 1,190,367 4.2 China 2,278,606 8.0 France 701,442 2.4 Germany 1,561,451 5.5 Hungary 333,129 1.2 Ireland 1,497,204 5.3 Japan 6,754,254 23.8 Mexico 291,876 1.0 Netherlands 416,468 1.5 Russia 603,110 2.1 Scotland 572,586 2.0 South Korea 855,471 3.0 Spain 856,371 3.0 Switzerland 3,249,228 11.4 Taiwan 730,007 2.6 United Kingdom 3,061,280 10.8 United States(1) 2,336,265 8.2 ---------------------------------- TOTAL $28,411,994 100.0% ---------------------------------- (1) Includes short-term securities. See notes to financial statements. 51 S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S MARSICO INTERNATIONAL OPPORTUNITIES FUND SEPTEMBER 30, 2003 (Amounts in thousands) - ------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------- Investments, at value (cost $23,371) $28,412 Receivable for investments sold 127 Receivable for capital stock sold 6 Interest and dividends receivable 138 Prepaid expenses and other assets 98 ----------- TOTAL ASSETS $28,781 ----------- - ------------------------------------------------------------------------------- LIABILITIES - ------------------------------------------------------------------------------- Payable for investments purchased 126 Payable for capital stock redeemed 3 Payable for loss on foreign currency exchange contracts 100 Accrued investment advisory fee 7 Accrued distribution fee 4 Accrued trustees' fees 90 Accrued expenses and other liabilities 42 ----------- TOTAL LIABILITIES 372 ----------- NET ASSETS $28,409 =========== - ------------------------------------------------------------------------------- NET ASSETS CONSIST OF - ------------------------------------------------------------------------------- Paid-in-capital $30,726 Accumulated net investment loss (181) Accumulated net realized loss on investments and foreign currency transactions (7,195) Net unrealized appreciation on investments and foreign currency translations 5,059 ----------- NET ASSETS $28,409 =========== SHARES OUTSTANDING, $0.001 PAR VALUE (UNLIMITED SHARES AUTHORIZED) 3,228 NET ASSET VALUE, REDEMPTION PRICE, AND OFFERING PRICE PER SHARE (NET ASSETS/SHARES OUTSTANDING)* $8.80 =========== * Not in thousands. See notes to financial statements. 52 S T A T E M E N T O F O P E R A T I O N S MARSICO INTERNATIONAL OPPORTUNITIES FUND For the Year Ended September 30, 2003 (Amounts in thousands) - ------------------------------------------------------------------------------- INVESTMENT INCOME - ------------------------------------------------------------------------------- Interest $9 Dividends (net of $50 of non-reclaimable foreign withholding taxes) 421 ---------- TOTAL INVESTMENT INCOME 430 ---------- - ------------------------------------------------------------------------------- EXPENSES - ------------------------------------------------------------------------------- Investment advisory fees 196 Custody and fund accounting fees 129 Distribution fees 58 Fund administration fees 51 Transfer agent fees and expenses 42 Trustees' fees and expenses 21 State registration fees 15 Printing and postage expenses 12 Professional fees 8 Miscellaneous 3 ---------- TOTAL EXPENSES 535 Less waiver of expenses and expenses paid indirectly (147) ---------- NET EXPENSES 388 ---------- NET INVESTMENT INCOME 42 ---------- - ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ------------------------------------------------------------------------------- Net realized loss on investments (699) Net realized gain on foreign currency transactions 1,560 Change in unrealized appreciation/depreciation on investments and foreign currency translations 4,489 ---------- Net Gain on Investments 5,350 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $5,392 ========== See notes to financial statements. 53 S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S MARSICO INTERNATIONAL OPPORTUNITIES FUND Year Year Ended Ended (Amounts in thousands) 9/30/03 9/30/02 - ------------------------------------------------------------------------------- OPERATIONS - ------------------------------------------------------------------------------- Net investment income (loss) $42 $(55) Net realized loss on investments (699) (1,300) Net realized gain on foreign currency transactions 1,560 593 Change in unrealized appreciation/ depreciation on investments and foreign currency translations 4,489 735 Increase from payment by affiliate - 21 --------------------------- Net increase (decrease) in net assets resulting from operations 5,392 (6) --------------------------- - ------------------------------------------------------------------------------- DISTRIBUTIONS - ------------------------------------------------------------------------------- Net investment income - (24) --------------------------- Total distributions - (24) --------------------------- - ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS - ------------------------------------------------------------------------------- Proceeds from sale of shares 7,109 15,955 Proceeds from reinvestment of distributions - 23 Redemption fees 9 133 Redemption of shares (4,733) (13,058) --------------------------- Net increase from capital share transactions 2,385 3,053 --------------------------- TOTAL INCREASE IN NET ASSETS 7,777 3,023 - ------------------------------------------------------------------------------- NET ASSETS - ------------------------------------------------------------------------------- Beginning of period 20,632 17,609 END OF PERIOD $28,409 $20,632 =========================== Accumulated net investment loss (181) (110) - ------------------------------------------------------------------------------- TRANSACTIONS IN SHARES - ------------------------------------------------------------------------------- Shares sold 919 2,052 Shares issued in reinvestment of distributions - 3 Shares redeemed (637) (1,707) --------------------------- NET INCREASE 282 348 =========================== See notes to financial statements. 54 F I N A N C I A L H I G H L I G H T S MARSICO INTERNATIONAL OPPORTUNITIES FUND For a Fund Share Outstanding Throughout the Period.
Year Year Year 6/30/00* Ended Ended Ended to 9/30/03 9/30/02 9/30/01 9/30/00 ---------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $7.00 $6.78 $10.36 $10.00 - ------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------------------------------------------------------------- Net investment income (loss) 0.02 (0.02) - 0.01 Net realized and unrealized gains (losses) on investments 1.78 0.19 (3.27) 0.35 ---------------------------------------------------- Total from investment operations 1.80 0.17 (3.27) 0.36 ---------------------------------------------------- - ------------------------------------------------------------------------------------------------- DISTRIBUTIONS & OTHER - ------------------------------------------------------------------------------------------------- Net investment income - (0.01) (0.04) - Net realized gains - - (0.27) - Redemption fees -(1) 0.05 - - Payment by affiliate - 0.01 - - ---------------------------------------------------- Total distributions - 0.05 (0.31) - ---------------------------------------------------- NET ASSET VALUE, END OF PERIOD $8.80 $7.00 $6.78 $10.36 ---------------------------------------------------- TOTAL RETURN 25.71% 3.37% (32.32)% 3.60%(2) - ------------------------------------------------------------------------------------------------- SUPPLEMENTAL DATA AND RATIOS - ------------------------------------------------------------------------------------------------- Net assets, end of period (000s) $28,409 $20,632 $17,609 $15,480 Ratio of expenses to average net assets, less waivers and before expenses paid indirectly 1.68%(5) 1.60% 1.60% 1.60%(3) Ratio of net investment income (loss) to average net assets, net of waivers and expenses paid indirectly 0.18% (0.25)% 0.05% 0.33%(3) Ratio of expenses to average net assets, before waivers and expenses paid indirectly 2.31% 2.07% 2.60% 4.76%(3) Ratio of net investment loss to average net assets, before waivers and expenses paid indirectly (0.45)% (0.73)% (0.94)% (2.83)%(3) Portfolio turnover rate(4) 211% 192% 534% 190%(2) * Inception. (1) Less than $0.01. (2) Not annualized for the periods less than one year. (3) Annualized for the periods less than one year. (4) Portfolio turnover is greater than most funds due to the investment style of the Fund. (5) See Note 3 for information regarding the voluntary fee waiver. See notes to financial statements.
55 N O T E S T O F I N A N C I A L S T A T E M E N T S MARSICO FUNDS SEPTEMBER 30, 2003 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 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 Fund, the 21st Century Fund and the International Opportunities Fund are diversified funds. The Focus and Growth 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. Affiliates of the Adviser hold approximately 34% of the International Opportunities Fund. 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. Certain prior year information has been reformatted to conform to the current year presentation. (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 Funds in connection with their organization, registration and the initial public offering 56 N O T E S T O F I N A N C I A L S T A T E M E N T S continued MARSICO FUNDS SEPTEMBER 30, 2003 of shares were deferred and amortized during the five-year period ended December 31, 2002. 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 Waiver of Expenses and Expenses Paid Indirectly in the Statement of Operations. Brokerage commissions were paid to unaffiliated brokers which reduced certain transfer agent fees and expenses in the amount of $840,468 and $269,631 for the Focus Fund and Growth Fund, respectively, for the year ended September 30, 2003. Also, the Funds received credits on certain custody account balances which reduced certain transfer agent fees and expenses in the amount of $5,692, $2,156, $214 and $75 for the Focus Fund, Growth Fund, 21st Century Fund and International Opportunities Fund, respectively, for the year ended September 30, 2003. Brokerage commission credits and custody account earnings credits are included in Expenses Paid Indirectly on the Statements of Operations. (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. (e) Distributions to Shareholders--Dividends from net investment income and net realized capital gains, if any, will be declared and paid at least annually. Distributions to shareholders are recorded on the ex-dividend date. Each Fund may periodically make reclassifications among certain of its capital accounts as a result of the timing and characterization of certain income and capital gains distributions determined in accordance with federal tax regulations, which may differ from GAAP. These reclassifications are due to differing treatment for items such as deferral of wash sales, foreign currency transactions, net operating losses and post-October capital losses. Accordingly, at September 30, 2003, reclassifications (in thousands) were recorded to decrease paid-in-capital 57 N O T E S T O F I N A N C I A L S T A T E M E N T S continued MARSICO FUNDS SEPTEMBER 30, 2003 by $9,326, $4,071, $660 and $0, increase (decrease) net investment income by $8,895, $4,043, $701 and $(113), and increase (decrease) accumulated net realized gain (loss) on investments and foreign currency transactions by $431, $28, $(41) and $113 for the Focus, Growth, 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 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 58 N O T E S T O F I N A N C I A L S T A T E M E N T S continued MARSICO FUNDS SEPTEMBER 30, 2003 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. 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. 59 N O T E S T O F I N A N C I A L S T A T E M E N T S continued MARSICO FUNDS SEPTEMBER 30, 2003 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. (i) Trustees' Compensation--Effective February 1, 2000, the Board of Trustees adopted the Marsico Investment Fund 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 Trustees are deemed to be notionally invested in the Funds until distribution in accordance with the Plan. Included in the Trustees' Fees and Expenses on the Statement of Operations is the unrealized appreciation of $43,761, $31,510, $30,090 and $17,937 related to the mark-to-market of the shares of the deferred plan for the Focus Fund, Growth Fund, 21st Century Fund and International Opportunities Fund, respectively. (j) Redemption Fee--A 2.00% redemption fee is retained by the International Opportunities Fund to offset transaction costs and other expenses associated with short-term investing. The fee is imposed on redemptions or exchanges of shares held three months or less from their purchase date and is recorded by the Fund as a reduction of shares redeemed and as a credit to paid-in-capital. For the year ended September 30, 2003, the International Opportunities Fund received $8,820 in redemption fees. (k) 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. 60 N O T E S T O F I N A N C I A L S T A T E M E N T S continued MARSICO FUNDS SEPTEMBER 30, 2003 During the year ended September 30, 2003, the fund accounting agent reimbursed the 21st Century Fund $67,752 for an investment transaction loss, which had resulted from an unintended error in available cash balances for investment transactions. This reimbursement is included in the Statement of Operations and Financial Highlights as an Increase From Payment By Service Provider and did not have a significant effect on the Fund's total return. 3. INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH AFFILIATES 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, 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 daily net assets and 1.50% of the Growth and 21st Century Funds' average daily net assets until December 31, 2003. This fee waiver is voluntary and may be terminated at any time. The voluntary waiver of expenses for the year ended September 30, 2003 excludes as an extraordinary item the unrealized appreciation of $30,090 and $17,937, respectively, for the 21st Century Fund and International Opportunities Fund. The unrealized appreciation is included in the Change in Unrealized Appreciation/Depreciation on Investment and Foreign Currency Translations on the Statement of Operations. As a result, the unrealized appreciation is retained by the Funds in accordance with the Plan. 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 and the reimbursement is made within three years after the year in which the Adviser incurred the expense. As of September 30, 2003, the reimbursements that may potentially be made by the 21st Century Fund and the International Opportunities Fund to the Adviser are $204,436 and $453,175, respectively, which expire between 2004 and 2006. 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, 2003, brokerage commissions paid to Banc of America Securities were $19,585, $4,402 and $13,226 for the Focus Fund, Growth Fund, and 21st Century Fund, respectively. 61 N O T E S T O F I N A N C I A L S T A T E M E N T S continued MARSICO FUNDS SEPTEMBER 30, 2003 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 year ended September 30, 2003, were as follows: (Amounts in thousands) Purchases Sales ------------------------------------------------------------------------- Focus Fund $2,173,201 $1,507,824 Growth Fund 635,222 586,913 21st Century Fund 184,025 155,148 International Opportunities Fund 48,597 47,130 There were no purchases or sales of U.S. government securities. 6. FEDERAL INCOME TAX INFORMATION At September 30, 2003, gross unrealized appreciation and depreciation of investments, based on cost for federal income tax purposes were as follows: 21st International (Amounts in Focus Growth Century Opportunities thousands) Fund Fund Fund Fund ------------------------------------------------------------------------- Cost of investments $1,847,999 $626,257 $89,849 $23,883 --------------------------------------------------- Gross unrealized appreciation 389,887 153,715 16,385 4,762 Gross unrealized depreciation (2,934) (5,354) (1,394) (233) --------------------------------------------------- Net unrealized appreciation on investments $386,953 $148,361 $14,991 $4,529 The difference between cost amounts for financial statement and federal income tax purposes is due primarily to wash sale loss deferrals and foreign currency transactions. 62 N O T E S T O F I N A N C I A L S T A T E M E N T S continued MARSICO FUNDS SEPTEMBER 30, 2003 The Focus Fund and Growth Fund had realized capital losses (in thousands) from transactions between November 1, 2002 and September 30, 2003 of $47,093 and $10,671, respectively. The Focus, Growth, 21st Century and International Opportunities Funds had realized currency losses (in thousands) from transactions between November 1, 2002 and September 30, 2003 of $2,455, $26, $51 and $73, respectively. Post-October currency losses and capital losses are treated as arising in the Funds next fiscal year. At September 30, 2003, Focus, Growth, 21st Century and International Opportunities Funds had accumulated capital loss carryforwards (in thousands) of $329,779, $133,120, $63,078 and $6,683, with $0, $0, $34,555 and $480 expiring in 2009, $242,309, $54,527, $28,523 and $6,125 expiring in 2010 and $87,470, $78,593, $0 and $78 expiring in 2011, respectively. To the extent that a fund may realize future net capital gains, those gains will be offset by any of its unused capital loss carryforward. The tax character of distributions paid during the fiscal years ended September 30, 2003, and September 30, 2002 were as follows (in thousands):
21st International Focus Growth Century Opportunities Fund Fund Fund Fund --------------------------------------------------------------------------------------------- 2003 2002 2003 2002 2003 2002 2003 2002 --------------------------------------------------------------------------------------------- Ordinary income - - - - - - - $24 Return of capital - $4,530 - $717 - - - - ---------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID - $4,530 - $717 - - - $24
63 N O T E S T O F I N A N C I A L S T A T E M E N T S continued MARSICO FUNDS SEPTEMBER 30, 2003 As of September 30, 2003, the components of accumulated earnings (deficit) on a tax basis were as follows:
21st International Focus Growth Century Opportunities (Amounts in thousands) Fund Fund Fund Fund --------------------------------------------------------------------------------- Undistributed ordinary income (deficit) $(804) $(253) $(83) $(163) Undistributed long-term capital gains - - - - ------------------------------------------------------ Tax accumulated earnings (deficit) (804) (253) (83) (163) ------------------------------------------------------ Accumulated capital and other losses (376,872) (143,791) (63,078) (6,683) Unrealized appreciation on investments 386,953 148,361 14,991 4,529 ------------------------------------------------------ TOTAL ACCUMULATED EARNINGS (DEFICIT) $9,277 $4,317 $(48,170) $(2,317) ------------------------------------------------------
64 R E P O R T O F I N D E P E N D E N T A U D I T O R S MARSICO FUNDS SEPTEMBER 30, 2003 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 Fund, the Marsico 21st Century Fund and the Marsico International Opportunities Fund (constituting the Marsico Investment Fund, hereafter referred to as the "Funds") at September 30, 2003, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended 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 Funds' 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, 2003 by correspondence with the custodian and broker and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for the opinion expressed above. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Denver, Colorado November 7, 2003 65 T R U S T E E A N D O F F I C E R I N F O R M A T I O N MARSICO FUNDS SEPTEMBER 30, 2003 (Unaudited) INDEPENDENT TRUSTEES Term of Office(1) Position(s) Held and Length of Name, Address and Age with the Trust Time Served - ------------------------------------------------------------------------------- Rono Dutta Trustee Since August 1998 1200 17th Street Suite 1300 Denver, CO 80202 Age: 52 Walter A. Koelbel, Jr. Trustee Since December 1997 5291 Yale Avenue Denver, CO 80222 Age: 51 Larry A. Mizel Trustee Since December 1997 3600 South Yosemite Street Suite 900 Denver, CO 80237 Age: 61 Federico Pena Trustee Since February 1999 1225 17th Street Denver, CO 80202 Age: 56 Michael D. Rierson Trustee Since November 1998 4202 East Fowler Avenue ADM 214 Tampa, FL 33620 Age: 50 Joseph T. Willett Trustee Since November 2002 1200 17th Street Suite 1300 Denver, CO 80202 Age: 52 (1) Each Trustee serves an indefinite term until the election of a successor. Each Officer serves an indefinite term, renewed annually, until the election of a successor. The Statement of Additional Information includes additional information about the Trustees and is available upon request, without charge, by calling 1-888-860-8686. 66
Number of Portfolios Other Principal Occupation(s) in Fund Complex Directorships During Past 5 Years Overseen by Trustee Held by Trustee - ------------------------------------------------------------------------------------------------------------- President, United Airlines (1999-September 2002); 4 None Senior Vice President--Planning, United Airlines (1994-1999); other positions with United Airlines (1985-1994); previously, Manager for Planning, Bell & Howell, and Management Consultant, Booz, Allen and Hamilton. President, and other positions, Koelbel and Company 4 None (real estate development company) (December 1976-Present). President, M.D.C. Holdings, Inc. (homebuilding and 4 M.D.C. mortgage banking) (March 1996-Present); Chairman Holdings, Inc. and Chief Executive Officer, M.D.C. Holdings, Inc. (more than five years). Managing Director, Vestar Capital Partners (August 1998- 4 Principal Financial Present); Secretary, U.S. Department of Energy (March 1997- Group, Inc. July 1998); Secretary, U.S. Department of Transportation Sonic Corp. (January 1993-February 1997). Vice President of University Advancement, University of South 4 None Florida (May 2001-Present); Vice President, University Advancement at University of Miami (September 1998- March 2001); Associate Dean, Kenan-Flagler Business School at University of North Carolina at Chapel Hill (November 1993- September 1998); Various positions at Duke University, Durham, N.C. (October 1983-November 1993). Chief Operating Officer, Merrill Lynch Europe 4 Merrill Lynch (1998-2002); Chief Financial Officer, Capital Markets Merrill Lynch & Co. (1993-1998). Bank Limited (Ireland)
67 T R U S T E E A N D O F F I C E R I N F O R M A T I O N MARSICO FUNDS SEPTEMBER 30, 2003 (Unaudited) INTERESTED TRUSTEES AND OFFICERS Term of Office(1) Position(s) Held and Length of Name, Address and Age with the Trust Time Served - ------------------------------------------------------------------------------- Thomas F. Marsico(2)(3) Trustee, President and Since December 1997 1200 17th Street Chief Executive Officer Suite 1300 Denver, CO 80202 Age: 48 J. Jeffrey Riggs(2) Trustee Since December 1997 8400 East Prentice Avenue Suite 1310 Englewood, CO 80111 Age: 50 Christopher J. Marsico(3) Vice President and Since September 2002 1200 17th Street Treasurer Suite 1300 Denver, CO 80202 Age: 42 Mary L. Watson Vice President and Since September 2002 1200 17th Street Secretary Suite 1300 Denver, CO 80202 Age: 44 Sander M. Bieber Assistant Secretary Since December 1997 1775 I Street, N.W. Washington, D.C. 20005 Age: 53 (1) Each Trustee serves an indefinite term until the election of a successor. Each Officer serves an indefinite term, renewed annually, until the election of a successor. (2) Mr. T. Marsico is considered an Interested Trustee of the Trust within the meaning of the Investment Company Act of 1940, as amended, because of his affiliation with Marsico Capital Management, LLC. The Trust treats Mr. Riggs as an Interested Trustee due to a business relationship with Mr. T. Marsico whereby Mr. T. Marsico has invested personal assets in certain partnerships for which Mr. Riggs acts as principal. (3) Mr. T. Marsico and Mr. C. Marsico are brothers. The Statement of Additional Information includes additional information about the Trustees and is available upon request, without charge, by calling 1-888-860-8686. 68
Number of Portfolios Other Principal Occupation(s) in Fund Complex Directorships During Past 5 Years Overseen by Trustee Held by Trustee - ------------------------------------------------------------------------------------------------------------- Chief Executive Officer, Marsico Capital 4 None Management, LLC (September 1997-Present); Executive Vice President, Janus Capital Corp. (1986-1997). President, Essex Financial Group, Inc. (commercial 4 None mortgage bank) (more than five years); Principal, Metropolitan Homes, Inc. (January 1992-2000); Principal, Baron Properties, LLC (January 1997-Present). President, Marsico Capital Management, LLC N/A N/A (June 2002-Present); Chief Operations Officer, Marsico Capital Management, LLC (September 1997- June 2002); Vice President, US West (1988-September 1997). Chief Operations Officer, Marsico Capital Management, LLC N/A N/A (June 2002-Present); Vice President of Client Services, Marsico Capital Management, LLC (September 1997-Present); Vice President of Institutional Services and other positions, Janus Capital (1986-September 1997). Partner, Dechert LLP (law firm) (more than five years). N/A N/A
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------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 72 APPENDIX Pages 17, 26, 36 and 45 of the Annual Report contain Performance Graphs reflecting the growth of a $10,000 investment in certain Marsico Funds. Item 2 - Code of Ethics (a) The Registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party. A copy of this code of ethics is attached hereto as Exhibit (a). (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party, and that relates to any element of the code of ethics description. (d) The Registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. Item 3 - Audit Committee Financial Expert (a)(1) The Registrant's Board of Trustees has determined that the Registrant has at least one audit committee financial expert serving on its audit committee. (a)(2) Mr. Joseph T. Willett is the audit committee financial expert. Mr. Willett is "independent" under the applicable rules. Item 4 - Principal Accountant Fees and Services Disclosure requirement not currently effective. Item 5 - Audit Committee of Listed Registrants Not applicable. Item 6 - [Reserved] Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies Not applicable. Item 8 - [Reserved] Item 9 - Controls and Procedures (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended, are effective based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR. (b) There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 10 - Exhibits (a)(1) Code of Ethics. (a)(2) Certification for each principal executive and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2(a)). (b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) - Filed as an attachment to this filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. The Marsico Investment Fund By: /s/ Thomas F. Marsico Thomas F. Marsico President Date: November 25, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Thomas F. Marsico Thomas F. Marsico President Date: November 25, 2003 By: /s/ Christopher J. Marsico Christopher J. Marsico Vice President and Treasurer Date: November 25, 2003 EX-99.(A)(1) 3 ex99pa1.txt THE MARSICO INVESTMENT FUND CODE OF ETHICS FOR COVERED OFFICERS I. COVERED OFFICERS/PURPOSE OF THE CODE This Code of Ethics for Covered Officers ("Code") of the portfolios of The Marsico Investment Fund (individually or collectively the "Fund" or "Funds") applies to the Fund's Principal Executive Officer and Principal Financial Officer (the "Covered Officers" identified in Exhibit A). The Code is intended to promote: o Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o Compliance with applicable laws and governmental rules and regulations; o The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o Accountability for adherence to the Code. II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST Each Covered Officer should adhere to a high standard of business ethics, and should be sensitive to situations that may give rise to either an actual or an apparent conflict of interest. OVERVIEW. An actual "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of the Fund or the Officer's service to the Fund. For example, a conflict of interest may arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fund. - 2 - A potential conflict of interest occurs when a Covered Officer's private interest is such that it might, under certain circumstances, interfere with the interests of the Fund or the Officer's service to the Fund, but those circumstances do not now exist. Appearances may create an apparent conflict of interest even when an actual conflict does not exist. For example, an apparent conflict may exist if a Covered Officer owns a security that the Fund is buying, even if there is no actual conflict of interest. Though some potential or apparent conflicts are permissible, all conflicts should be handled sensitively and ethically. SOME CONFLICTS ADDRESSED BY OTHER LAWS AND PROCEDURES. Certain actual or potential conflicts of interest may arise from the relationships between the Covered Officers and the Fund. These conflicts generally are subject to restrictions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not purchase or sell portfolio securities or other property from or to the Fund, or engage in certain joint transactions with the Fund, because of their status as "affiliated persons" of the Fund. The compliance programs and procedures of the Fund and Marsico Capital Management, LLC, the Fund's investment adviser ("adviser" or "MCM") are designed to prevent, or identify and correct, violations of these restrictions. This Code is not intended to replace the procedures designed to address these conflicts, which fall outside of the parameters of this Code. Other actual or potential conflicts may arise from the contractual relationship between the Fund and MCM, which also employs the Covered Officers. This relationship may not necessarily present an opportunity for improper personal benefit. Covered Officers must necessarily establish policies and implement decisions that may have differing effects on MCM compared to the Fund. The Covered Officers' participation in such activities is inherent in the contractual relationship between the Fund and MCM, and is consistent with their performance of their duties as officers of the Fund. Such activities will be deemed to have been handled ethically as long as they are in conformity with the Investment Company Act, the Investment Advisers Act and the Fund's contract(s) with MCM. CONFLICTS ADDRESSED BY THE CODE. This Code covers certain other actual or apparent conflicts of interest that are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The overarching principle is that the personal interests of a Covered Officer should not be - 3 - placed improperly before the interests of the Fund. Here are some actions that each Covered Officer should avoid in order to avoid placing the Covered Officer's interests before those of the Fund: Among other restricted actions, each Covered Officer must not: o Use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund so that the Covered Officer would benefit personally to the detriment of the Fund; o Cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than for the benefit of the Fund; o Use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; o Retaliate against any other Covered Officer, or any employee of the Fund, MCM, or their affiliated persons, for good faith reports of potential violations of the Code. POTENTIAL CONFLICTS TO BE DISCUSSED. A Covered Officer should discuss potential conflicts of interest with MCM's General Counsel if they are material. Covered Officers are encouraged to discuss with MCM's General Counsel any potential conflict the materiality of which is uncertain. Examples include:(1) o Certain situations discussed in the separate Code of Ethics of the Fund and MCM under Rule 17j-1 under the Investment Company Act, such as service as a director of a for-profit company; or the receipt of gifts or entertainment that are not nominal or customary, business-related, reasonable in cost, appropriate as to time and place, and insufficiently frequent to raise any question of impropriety. o Any ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers other than its investment adviser, principal underwriter, administrator or any affiliated person thereof. - -------- (1) Any activity or relationship that would present a conflict if a Covered Officer engages in the activity or has such a relationship may also present a conflict if a member of the Covered Officer's family engages in the activity or has such a relationship. - 4 - o A direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares, other than an interest arising from the Covered Officer's employment (such as compensation or equity ownership). III. DISCLOSURE AND COMPLIANCE Each Covered Officer should promote appropriate disclosure of accurate information about the Fund in required reports and other communications, and promote compliance with applicable laws and regulations. o Each Covered Officer must familiarize himself with the disclosure requirements generally applicable to the Fund and the Fund's Disclosure Controls and Procedures. o Each Covered Officer must not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, either within or outside the Fund, including to the Fund's trustees and auditors, and to governmental regulators and self-regulatory organizations. o Each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Fund and MCM, and with outside professionals when he deems it necessary, with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds. o Each Covered Officer has the responsibility to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. REPORTING AND ACCOUNTABILITY Each Covered Officer must: o Upon adoption of the Code (or thereafter, upon becoming a Covered Officer), affirm in writing to the Fund's Board of Trustees (the "Board") that the Covered Officer has received, read, and understands this Code. o Thereafter, annually affirm to the Board that the Covered Officer has complied with the requirements of this Code. - 5 - o Report at least annually on the Fund's Questionnaire for Directors and Officers all categories of affiliations or other relationships concerning possible conflicts of interest. o Notify MCM's General Counsel promptly if the Covered Officer is aware of facts and circumstances that he knows are a violation of this Code. Failure to do so is a violation of this Code. V. INVESTIGATION AND ENFORCEMENT MCM's General Counsel is responsible for applying this Code to specific situations in which questions are presented under it, and has the authority to interpret this Code in any situation. However, any approvals or waivers(2) sought by the Principal Executive Officer will be considered by the Audit Committee of the Board (the "Committee"). The Fund will follow these procedures in investigating and enforcing this Code: o The General Counsel will take all appropriate action to investigate any potential violations reported to him;(3) o If, after such investigation, the General Counsel believes that no violation has occurred, the General Counsel is not required to take any further action. o Any matter that the General Counsel believes is a violation will be reported to the Committee. o If the Committee concurs that a violation has occurred, it will inform the Board. The Board will consider appropriate action, which may include review of and appropriate modifications to applicable policies and procedures, notification to appropriate personnel of MCM, or a recommendation to dismiss the Covered Officer. - --------- (2) Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of a material departure from a provision of the code of ethics." Both waivers and "implicit waivers" must be disclosed as provided by SEC rules. Form N-CSR defines "implicit waiver" as "the registrant's failure to take action within a reasonable period of time regarding a material departure from a provision of the code of ethics that has been made known to an executive officer" of the registrant. (3) The General Counsel is authorized to consult, as appropriate, with the chair of the Committee, counsel to the Independent Trustees of the Fund, and counsel to the Fund, and is encouraged to do so. - 6 - o The Committee will be responsible for granting waivers, as appropriate. o Any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. VI. OTHER POLICIES AND PROCEDURES This Code shall be the sole Code of Ethics for Covered Officers adopted by the Fund for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Fund, the Fund's adviser, principal underwriter, or other service providers may govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they conflict with the provisions of this Code. The separate Code of Ethics of the Fund and MCM under Rule 17j-1 under the Investment Company Act contains separate requirements applying to the Covered Officers and others, and is not part of this Code. VII. AMENDMENTS Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, and disclosed as required by SEC rules. VIII. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code will be considered confidential and be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Fund, MCM, the Board (and any committee of the Board) and their counsel. IX. INTERNAL USE The Code is intended solely for internal use by the Fund, and does not constitute an admission by any Fund as to any fact, circumstance, or legal conclusion. Dated: August 14, 2003 - 7 - EXHIBIT A Persons Covered by this Code of Ethics for Covered Officers: Thomas F. Marsico, President, CEO, and Trustee of the Marsico Investment Fund Christopher J. Marsico, Vice President and Treasurer of the Marsico Investment Fund EX-99.CERT 4 ex99cert.txt SECTION 302 CERTIFICATION I, Thomas F. Marsico, certify that: 1. I have reviewed this report on Form N-CSR of the Marsico Investment Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [omitted] (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 25, 2003 /s/ Thomas F. Marsico ------------------------ Thomas F. Marsico President SECTION 302 CERTIFICATION I, Christopher J. Marsico, certify that: 1. I have reviewed this report on Form N-CSR of the Marsico Investment Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [omitted] (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 25, 2003 /s/ Christopher J. Marsico ---------------------------- Christopher J. Marsico, Vice President and Treasurer EX-99.906CERT 5 ex99p906.txt CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT I, Thomas F. Marsico, Principal Executive Officer of the Marsico Investment Fund (the "Registrant"), certify that: 1. The Form of the N-CSR of the Registrant (the "Report") for the period ended September 30, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: November 25, 2003 /s/ Thomas F. Marsico ------------------------- ----------------------------- Thomas F. Marsico, President (principal executive officer) A signed original of this written statement required by Section 906 has been provided to the Marsico Investment Fund and will be retained by the Marsico Investment Fund and furnished to the SEC or its staff upon request. CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT I, Christopher J. Marsico, Principal Financial Officer of the Marsico Investment Fund (the "Registrant"), certify that: 1. The Form of the N-CSR of the Registrant (the "Report") for the period ended September 30, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date:November 25, 2003 /s/ Christopher J. Marsico ------------------------- ----------------------------- Christopher J. Marsico, Vice President and Treasurer (principal financial officer) A signed original of this written statement required by Section 906 has been provided to the Marsico Investment Fund and will be retained by the Marsico Investment Fund and furnished to the SEC or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----