-----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, DM4rlmKRNqiO6p9Mj2gnG61eZ1Uj5hsZ7cJ/zUNgvNrbtLbzjulcf/+qm5BMNxwy vSqkajD5iGkHDOLHn8Y1tg== 0000891804-06-002149.txt : 20060630 0000891804-06-002149.hdr.sgml : 20060630 20060630113101 ACCESSION NUMBER: 0000891804-06-002149 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060430 FILED AS OF DATE: 20060630 DATE AS OF CHANGE: 20060630 EFFECTIVENESS DATE: 20060630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY CAPITAL MANAGMENT TRUST CENTRAL INDEX KEY: 0001093439 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-09561 FILM NUMBER: 06936072 BUSINESS ADDRESS: STREET 1: C/O CENTURY CAPITAL MANAGEMENT LLC STREET 2: 100 FEDERAL STREET, 29TH FLOOR CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174823060 MAIL ADDRESS: STREET 1: C/O CENTURY CAPITAL MANAGEMENT LLC STREET 2: 100 FEDERAL STREET, 29TH FLOOR CITY: BOSTON STATE: MA ZIP: 02110 0001093439 S000009298 CENTURY SMALL CAP SELECT FUND C000025372 CENTURY SMALL CAP SELECT FUND INVESTOR SHARES CSMVX C000025373 CENTURY SMALL CAP SELECT FUND INSTITUTIONAL SHARES CSMCX 0001093439 S000009299 CENTURY SHARES TRUST C000025374 CENTURY SHARES TRUST INVESTOR SHARES CENVX C000025375 CENTURY SHARES TRUST INSTITUTIONAL SHARES CENSX N-CSRS 1 file001.txt CENTURY CAPITAL MANAGEMENT TRUST 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: 811-09561 Century Capital Management Trust - ------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) c/o Century Capital Management, LLC 100 Federal Street, Boston, Massachusetts 02110 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Steven Alfano Century Capital Management, LLC 100 Federal Street, Boston, Massachusetts 02110 - ------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (617) 482-3060 -------------- Date of fiscal year end: October 31 ----------------- Date of reporting period: April 30, 2006 ----------------- ITEM 1. Report to Shareholders. [LOGO] CENTURY FUNDS Seventy-Eight Years of Investing 1928 - 2006 CENTURY PEOPLE and IDEAS that WORK TM Century Shares Trust Century Small Cap Select Fund Semi-Annual Report April 30, 2006 CENTURY FUNDS AVERAGE ANNUAL TOTAL RETURNS AS OF APRIL 30, 2006
CENTURY SHARES TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS Institutional Shares 13.23% 13.09% 6.85% 11.61% CENTURY SMALL CAP SELECT FUND 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION Investor Shares (02/24/00) 15.40% 20.68% 15.27% 19.27% Institutional Shares (12/09/99) 15.77% 21.11% 15.74% 19.29%
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. FOR THE MOST RECENT MONTH END PERFORMANCE, PLEASE CALL 1-800-321-1928 OR VISIT THE FUNDS' WEBSITE AT WWW.CENTURYFUNDS.COM. SHARES HELD LESS THAN 180 DAYS MAY BE SUBJECT TO A 1.0% REDEMPTION FEE. CENTURY SMALL CAP SELECT FUND INVESTS IN SMALLER COMPANIES WHICH POSE GREATER RISKS THAN THOSE ASSOCIATED WITH LARGER, MORE ESTABLISHED COMPANIES. CONCENTRATION OR FOCUS, AS THE CASE MAY BE, IN THE FINANCIAL SERVICES AND HEALTH CARE GROUP INDUSTRIES WILL SUBJECT THE FUNDS TO THE RISKS ASSOCIATED WITH THOSE FIELDS (E.G., GOVERNMENT REGULATION, INTEREST RATES, CLAIMS ACTIVITY, AND EXPOSURE TO NATURAL AND MAN-MADE DISASTERS) AND MAY RESULT IN GREATER FLUCTUATION IN SHARE VALUE THAN IS EXPERIENCED IN LESS CONCENTRATED PORTFOLIOS. RETURNS INCLUDE THE REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PERFORMANCE FOR CENTURY SMALL CAP SELECT FUND WOULD HAVE BEEN LOWER DURING RELEVANT PERIODS IF CERTAIN FEES HAD NOT BEEN WAIVED OR EXPENSES REIMBURSED. PERFORMANCE INFORMATION FOR THE FUNDS DOES NOT REFLECT THE DEDUCTION OF TAXES THAT SHAREHOLDERS WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution to prospective investors unless preceded or accompanied by the Funds' prospectus. PERFORMANCE OF A $10,000 INVESTMENT Line chart: CENTURY SHARES TRUST INSTITUTIONAL SHARES CST INSTITUTIONAL S&P 500 APR-96 $10,000 $10,000 APR-97 $13,048 $12,513 APR-98 $19,655 $17,652 APR-99 $19,503 $21,504 APR-00 $16,275 $23,682 APR-01 $21,536 $20,610 APR-02 $23,447 $18,008 APR-03 $20,735 $15,612 APR-04 $25,709 $19,183 APR-05 $26,488 $20,399 APR-06 $29,993 $23,543 This chart compares the performance over the past ten years, through April 30, 2006, of a hypothetical $10,000 investment in Century Shares Trust Institutional Shares, including reinvested dividends and distributions, with that of a broad-based securities market index. The S&P 500(R) Index is a well known gauge of how large capitalization U.S. equities are doing. On the other hand, its results are not adjusted for the costs to manage and trade a portfolio of securities, so they are not directly comparable to an actual investor's results, and it is not available for investment. Line chart: CENTURY SMALL CAP SELECT FUND CSCS INSTITUTIONAL CSCS INVESTOR RUSSELL 2000 12/09/99 $10,000 $10,000 1/31/00 $10,100 $10,000 $10,696 04/30/00 $11,150 $10,920 $10,940 07/31/00 $12,390 $12,130 $10,840 10/31/00 $14,570 $14,260 $10,819 1/31/01 $15,304 $14,978 $11,091 4/30/01 $14,862 $14,593 $10,627 7/31/01 $16,024 $15,727 $10,654 10/31/01 $15,099 $14,785 $9,445 1/31/02 $16,337 $15,990 $10,691 4/30/02 $17,592 $17,208 $11,337 7/31/02 $15,767 $15,412 $8,741 10/31/02 $15,985 $15,574 $8,352 1/31/03 $16,309 $15,871 $10,691 4/30/03 $17,376 $16,902 $11,337 7/31/03 $20,482 $19,883 $10,761 10/31/03 $22,980 $22,290 $11,974 1/31/04 $25,588 $24,792 $13,200 4/30/04 $24,419 $23,652 $12,757 7/31/04 $24,026 $23,246 $12,596 10/31/04 $25,239 $24,397 $13,378 1/31/05 $26,557 $25,649 $14,344 4/30/05 $26,661 $25,739 $13,358 7/31/05 $29,240 $28,211 $15,718 10/31/05 $27,812 $26,806 $14,994 1/31/06 $30,200 $29,089 $17,054 4/30/06 $30,866 $29,703 $17,829 This chart compares the performance through April 30, 2006 of a hypothetical $10,000 investment in Century Small Cap Select Fund's Investor shares (2/24/00 inception date), Institutional Shares (12/9/99 inception date) and the Russell 2000 Index (Institutional shares inception date). The Russell 2000(R) Index is widely regarded in the industry as the premier measure of small cap stocks. On the other hand, its results are not adjusted for the costs to manage and trade a portfolio of securities, so that they are not directly comparable to an actual investors' results. The index is not available for investment. CENTURY FUNDS DEAR FELLOW SHAREHOLDERS: Our Funds performed reasonably well during the six months ended April 30, 2006. Century Small Cap Select Fund was up 10.98% (Institutional shares) and 10.81% (Investor shares) versus the 18.91% return for the Russell 2000 Index during the six-month period ending April 30, 2006. Century Shares Trust was up 5.79% (Institutional shares) and 5.25% (Investor shares) versus the 9.64% return for the S&P 500 Index. Why do we use the words "reasonably well" to describe our Funds' performance? We say this because the Fund's positive performance was over such a brief period in which we lagged the respective benchmarks. We are naturally competitive and do not like losing, even over short periods of time. However, we focus on investing to win the long distance race. If the portfolios are well positioned and of high quality, we are less concerned about short-term performance. Century's Quality Growth investment philosophy strives to deliver strong risk-adjusted returns over time. So what does this mean to the investor? We hope to outperform when equity markets are normal or nervous, which we define as periods when the market's annualized returns are between 0% and 20%, or negative. We seek portfolio companies that are positioned to deliver a return on equity (ROE) over 15%, strong earnings and book value growth above 15% and a solid, unlevered balance sheet. In periods of very strong equity market returns (such as the last year ending in April), our Funds historically underperform, as many investors tend to reach for higher returns, while downplaying the potential risks inherent in faster growing, less predictable businesses. During these go-go periods, our consistent growth investment philosophy tends to lose favor with some investors, who gravitate toward rapidly growing companies benefiting from some cyclical or near-term trends. Our emphasis on risk-adjusted returns means that we think as much about the possible downside in an investment as we do about the potential upside. We believe that preserving capital and mitigating risk in a market downturn are as important as participating in the positive returns of a brief equity rally or long-term recovery. To illustrate with an analogy, the Century Funds are managed as if they are All-Weather radial tires in contrast with the high traction, less durable racing tires (aggressive growth) or the winter storm variety with extra tread depth (defensive value). We hope you share our investment philosophy, and we want you to understand where and how we invest and why it may or may not be appropriate for your investment goals, risk tolerance and time horizon. Please refer to our Investment Principles on Page 7 for additional perspective on our goals and objectives. CENTURY FUNDS 1 This report begins with a review of the current market and each Fund's performance, followed by a snapshot of our investments in two companies in the Financial Services and Energy sectors. Although regulatory changes have put a damper on communications with shareholders, we will do our best to be as informative as possible. MARKET CONDITIONS: HEALTHY GROWTH, BUT SLOWING AMID INFLATION Although the equity markets rallied very strongly over the 12-month period ending April 2006, a change in investor sentiment occurred in mid-May, when the equity market reversed course and gave back most of the strong gains achieved in early 2006. The current outlook is mostly sunny with a moderate chance of showers, given the mounting concerns regarding inflation, energy prices and the slowing business cycle. On the positive side, unemployment is low, job and earnings growth remain above average, while corporate balance sheets and profit margins remain stronger than they have been in over a decade. We expect these positive underlying trends to continue driving stronger than average productivity and grossdomestic product (GDP) growth, but at a more moderate pace than the 4% growth over the last few years. Looking forward, we remain optimistic about the resiliency of this recovery. The consumer continues to be the tired champion of the `post-9/11' recovery and expansion, but rising inflation, interest rates and energy costs are likely to slow consumer spending further. As we visit portfolio companies and prospective management teams on a regular basis, we are encouraged that expanding business spending and capital expenditures in research, development and new capacity might be able to offset much of the expected consumer slowdown. Our optimism is based on the belief that equity valuations (following the recent market pullback) are reasonable, considering the above-average growth prospects we see for both small cap and larger companies. The market does not like creeping inflation nor the rising cost of capital (the Federal Reserve has increased interest rates 16 times in 2 years), but so far, our companies appear to be managing through this headwind and maintaining their profitability. WHAT IS THE ECONOMIC IMPACT OF INFLATION? Inflation is now the largest headline economic concern, due to the combination of rising energy and housing costs over the past three years. The gasoline price per gallon has roughly doubled from $1.60 in 2003 to $3.00 currently. We estimate this `pump inflation' alone increases the average household's auto expenses by almost $1,700 per year - a meaningful drag on each consumer's disposal income. Housing prices have risen as well, up about 40% on a national basis since 2000. These two issues heighten the levels of economic uncertainty, along with the interest rate increases and the learning curve of a new Federal Reserve Board Chairman. This increased uncertainty makes equity investors nervous because it reduces their ability to forecast future market conditions and growth prospects. CENTURY FUNDS 2 While rising energy and housing costs impact each of us personally, they also affect the companies in which we invest. Many of our investments are service-based companies, which are less capital-intensive. We like these types of companies because they tend to generate consistently profitable results over time. However, employee compensation and distribution costs tend to be a higher percentage of their expenses. Given the importance of labor and transportation, each company seeks to manage the rising cost of wages and fuel in different ways. For example, in the retail industry, rising raw material costs as well as higher transportation, heating and leasing expenses negatively impact companies such as Casual Male, a men's clothing retailer and a holding of Century Small Cap Select Fund, and Tiffany, the luxury jeweler and a holding of Century Shares Trust. Casual Male is seeking to offset the higher costs through supply chain improvements and cutting out middlemen in the sourcing of goods from Asia. Tiffany is also facing a sharp increase in its raw material purchases. For example, the prices of gold, silver and platinum are up about 30% to 40% over the past year. Fortunately for Tiffany, its brand is well positioned in the luxury market, which is less price sensitive. This gives the company an above average ability to implement price increases whereas other retailers may have more difficulty. From a research standpoint, our goal is to understand what the revenue and expense implications might be for portfolio company facing rising inflation or interest rates and how the impact might affect its competitive position, profitability and future growth. CENTURY SHARES TRUST PERFORMANCE The Trust reported a +5.79% return (Institutional shares) and +5.25% return (Investor shares) for the six months ended April 30, 2006, versus a +9.64% return for the S&P 500 Index. In general, the Technology and Energy sectors accounted for much of our positive performance, while the Health Care and Financial Services sectors were a drag. Bar Chart:
PERFORMANCE COMPARISON 4/30/06 1 YEAR 3 YEARS 5 YEARS 10 YEARS CENTURY SHARES TRUST (Institutional Shares) 13.23% 13.09% 6.85% 11.61% S&P 500 INDEX 15.42% 14.68% 2.70% 8.94%
During the period, we modestly reduced our Financial Services and Health Care weightings while increasing our holdings in Consumer Discretionary and Staples. Generally, our sector weightings are a function of bottom up stock selection and changes in market value rather than a top-down macro approach to asset allocation. CENTURY FUNDS 3 FUND HOLDINGS 4/30/06 FINANCIAL SERVICES 42.2% HEALTH CARE 16.8% CONSUMER DISCRETIONARY 12.2% TECHNOLOGY 7.5% CONSUMER STAPLES 6.1% OTHER 5.5% CASH EQUIVALENTS 5.2% PRODUCER DURABLES 4.5% For the six months ended April 30, 2006, the Trust's best performers were Financial Services companies led by JP Morgan (banking), Protective Life (life insurer), Chubb (non-life insurer) and Torchmark (life insurer). Other notable contributors included United Technologies (diversified manufacturer), Peabody Energy (energy supplier), Nokia (mobile communication) and Staples (office product retailer). The Trust's underperformers include prior outperformers United Health Group (health benefits), Caremark Rx (pharmaceutical distribution), Progressive (auto insurer), Tiffany (luxury retailer) and Johnson & Johnson (health and consumer products). THE LARGE CAP VS. SMALL CAP DEBATE From time to time, we are asked our opinion regarding the outlook for large-capitalization stocks (those in Century Shares Trust) as compared to small capitalization stocks (those in Century Small Cap Select). To help analyze this question, we reference the following table, which highlights growth and valuation characteristics. We use checkmarks ([graphic of: check mark]) indicating attractive aspects of each market segment. MARKET GROWTH AND VALUATION
Current 2006 EPS Year 2006* PEG** Growth P/E Ratio Ratio S&P 500 Index (Large Cap) 9% [graphic of: checkmark] 14.7 x 1.63 x Russell 2000 Index (Small Cap) [graphic of: checkmark] 22% 21.5 x 0.98 x
Source: Baseline * Price Earnings Ratio (P/E) ** P/E-to-growth ratio (PEGRATIO) Price to earnings (P/E) ratio is the value of a company's stock price relative to company earnings. Estimated earnings growth is the year over year growth in earnings per share. The PEG Ratio is the P/E ratio relative to the company's earnings growth rate. Continuing a seven-year trend, the above data shows small cap stocks growing earnings 22%, faster than the larger cap 9% S&P 500 universe. In terms of valuation, the Russell 2000 Index is now selling at a sizable valuation premium to the S&P 500 Index. From an investment standpoint, we continue to find attractive growth prospects among small companies growing at a faster rate than their larger competitors, but we increasingly find that the valuations of larger, multinational firms are compelling as long term investments. CENTURY SMALL CAP SELECT FUND PERFORMANCE For the six-months ended April 30, 2006, the Institutional class and the Investor class returns were up +10.98% and +10.81%, respectively, versus 18.91% return for the Russell 2000 Index. During this same period, the Fund's exposure to the Health Care and Energy sectors increased while exposure to the Financial Services and Material Processing CENTURY FUNDS 4 sectors decreased. The increase in the Energy weighting was mostly appreciation. Generally, our sector weightings are a function of bottom-up stock selection and changes in market value rather than a top-down macro approach to asset allocation. PERFORMANCE COMPARISON 4/30/06 Bar Chart: 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION CSCS INSTITUTIONAL SHARES 15.77% 21.11% 15.74% 19.29% RUSSELL 2000 INDEX 33.47% 25.67% 10.90% 9.47% Institutional shares since inception 12/9/99 The largest contributors to fund performance over the last six months included Foundation Coal (energy), Jones Lang LaSalle (real estate services), Maverick Tube (energy), Scientific Games (lottery products), Blackbaud (nonprofit software), and Casual Male (male apparel retailer). The fund's underperformers included Usana Health (healthy living products), Avid Technology (video editing software), Semitool (technology assembly equipment) and Tuesday Morning (closeout retailer). FUND HOLDINGS 4/30/06 FINANCIAL SERVICES 24.4% CONSUMER DISCRETIONARY 22.0% HEALTH CARE 17.6% TECHNOLOGY 12.6% OTHER 9.3% OTHER ENERGY 8.5% CASH EQUIVALENTS 5.6% The Fund was closed to most new investors in July 2005 in order to preserve investment flexibility and performance integrity. We are happy to report that we are comfortable with the resulting stability in asset levels and investment opportunities. We believe it was the correct and prudent action to protect shareholder interests and returns. A CENTURY SNAPSHOT: INVESTING IN FRANCHISE BUSINESSES As we have done in the past, we share a couple of examples below of holdings that are owned in each of the Funds. These Companies highlight some of the characteristics and criteria that we consider when investing. The names have been left out to protect the innocent. One of Century Shares Trust's longer-term holdings is a personal auto insurer. The company is still an attractive investment because of its ability to consistently generate ROEs and growth in book-value per-share of 15% or better over time. It is a perfect example of a great management team being able to consistently execute better than the competition over a twenty-year period. CENTURY FUNDS 5 The company achieves these results by maximizing operating leverage and eliminating financial leverage. Its auto insurance focus, which is a relatively stable insurance type, facilitates higher levels of operating leverage. By minimizing debt and interest expense, the company is able to raise underwriting leverage. In positioning the firm in this way, they can generate high returns on capital versus competitors. One of the keys going forward is managing capital efficiently. The company, like many other firms, is flush with cash on its balance sheet. Some firms are using cash to make questionable acquisitions, but not this progressive company. It is focused on organic growth and as a result, is reducing its excess cash through share repurchases and an innovative dividend policy. A US coal producer is one of our largest holdings in the Small Cap Fund. The firm predominately sells its steam coal to utilities for base load electricity generation. Coal-fired generators make up more than 50% of the US electric supply annually. Years of under-investment in the energy industry have led to demand outstripping supply over the last three years. Industry consolidation has allowed for more rational production and pricing power for the major coal producers. Furthermore, coal currently enjoys a price advantage versus natural gas, its main competitor, for electricity generation. We also like the long-term nature (generally 3 to 5 years) of its contracts with utility customers, because it provides excellent earnings visibility. Since its IPO in 2004, it has produced industry leading cash flow margins and has consistently executed in the face of railroad constraints in the Powder River Basin. The company has a foundation of strong operating metrics including: a 28% ROE, strong book value per share growth, high recurring revenue, an attractive valuation and cash flow growing 20%-plus per year. Thank you for your continued interest and support. As always, we look forward to a continuing dialogue with our investors. Please contact us anytime via phone (1-800-321-1928) or our website (www.centuryfunds.com) with any questions or comments. We also welcome any feedback on our updated website or other improvements you would like to see from Century Funds. Respectfully submitted, /s/ Alexander L. Thorndike Alexander L. Thorndike Chairman & Chief Investment Officer /s/ Kevin W. Callahan Kevin W. Callahan Director of Research The views in this report were those of Century Funds' Chief Investment Officer and Director of Research as of April 30, 2006 and may not reflect their views on the date this report is first published or anytime thereafter. These views are intended to assist shareholders of the Funds in understanding their investments and do not constitute investment advice. There is no assurance that the Funds will continue to invest in the securities mentioned. Foreside Fund Services, LLC, Distributor. CENTURY FUNDS 6 CENTURY FUNDS INVESTMENT PRINCIPLES GOALS: > We strive to deliver exceptional risk-adjusted performance over time > We seek to develop long-term relationships with our shareholders and clients > We aim to be an ethical leader in the investment industry OBJECTIVES: o Performance is our primary goal - We pursue a research-intensive process, resulting in a disciplined investment strategy o Hire the best people - We seek curious individuals who challenge consensus, thrive on adversity and possess a competitive spirit - We value a sense of humor and humility o Continuous improvement is a high priority o Maintain a culture of teamwork and mutual respect CORE VALUES: Create a culture of excellence and integrity o Think long term ... always do the "right" thing o Remember why people entrust us with their money o Value our independence, entrepreneurial spirit and flexibility o Learn from our weaknesses o Encourage innovation and creativity o Leverage our talent, resources and contacts o Reward excellence INVESTMENT PHILOSOPHY: Growth Investors in Value Industries WE BELIEVE: o Capital markets are semi-efficient o In-depth original research is a competitive advantage o Reassessing each investment's risks and rewards will benefit performance WE SEEK: o Credible, capable management with a history of success o Franchises with high recurring revenues, barriers to entry and improving fundamentals o Firms with expanding profit margins and ROE's o Companies growing consistently faster than the overall market and peers o Attractively valued stocks relative to the overall market and peers o Firms operating in favorable competitive environments o Companies with shareholder orientation and transparent accounting CENTURY FUNDS 7 SHAREHOLDER EXPENSE EXAMPLE As a shareholder of a Fund, you incur two types of costs: (1) transaction costs including redemption fees, and (2) ongoing costs, including management fees, distribution and service fees (in the case of Investor Shares of both Funds) and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare those costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (November 1, 2005 to April 30, 2006). ACTUAL EXPENSES The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00=8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. An annual maintenance fee of $10.00 that is charged once a year may apply for certain IRA accounts. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing cost only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
CENTURY SHARES TRUST EXPENSES PAID BEGINNING ENDING DURING PERIOD* ACCOUNT VALUE ACCOUNT VALUE SIX MONTHS ENDING NOVEMBER 1, 2005 APRIL 30, 2006 APRIL 30, 2006 Based on Actual Fund Return Institutional Shares $1,000.00 $1,057.90 $ 5.87 Investor Shares $1,000.00 $1,052.50 $10.79 Based on Hypothetical 5% Yearly Return before expenses Institutional Shares $1,000.00 $1,019.09 $ 5.76 Investor Shares $1,000.00 $1,014.28 $10.59
* These calculations are based on expenses incurred in the most recent fiscal half-year. The Fund's annualized expense ratios are 1.15% for Institutional Shares and 2.12% for Investor Shares. The dollar amounts shown as "Expenses Paid" are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365.
CENTURY SMALL CAP SELECT FUND EXPENSES PAID BEGINNING ENDING DURING PERIOD* ACCOUNT VALUE ACCOUNT VALUE SIX MONTHS ENDING NOVEMBER 1, 2005 APRIL 30, 2006 APRIL 30, 2006 Based on Actual Fund Return Institutional Shares $1,000.00 $1,109.80 $ 5.60 Investor Shares $1,000.00 $1,108.10 $ 7.84 Based on Hypothetical 5% Yearly Return before expenses Institutional Shares $1,000.00 $1,019.49 $ 5.36 Investor Shares $1,000.00 $1,017.36 $ 7.50
* These calculations are based on expenses incurred in the most recent fiscal half-year. The Fund's annualized expense ratios are 1.07% for Institutional Shares and 1.50% for Investor Shares. The dollar amounts shown as "Expenses Paid" are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. CENTURY FUNDS 8 CENTURY SHARES TRUST APRIL 30, 2006 - (UNAUDITED) PORTFOLIO OF INVESTMENTS COMMON STOCK - 94.8% SHARES VALUE - -------- ------------ CONSUMER DISCRETIONARY - 12.2% 128,800 Bed Bath & Beyond, Inc. * $ 4,939,480 110,320 CDW Corp. 6,566,246 66,750 Chico's FAS, Inc. * 2,473,755 63,300 Costco Wholesale Corp. 3,445,419 59,220 Home Depot, Inc. 2,364,655 72,050 Nordstrom, Inc. 2,761,676 335,065 Staples, Inc. 8,849,067 35,950 Target Corp. 1,908,945 156,460 Tiffany & Co. 5,458,889 ------------ 38,768,132 ------------ CONSUMER STAPLES - 6.1% 92,200 PepsiCo, Inc. 5,369,728 67,250 Proctor & Gamble Co. 3,914,623 102,330 Sysco Corp. 3,058,644 111,620 Walgreen Co. 4,680,226 38,250 William Wrigley Jr. Co. 1,800,427 9,562 William Wrigley Jr. Co. CL B 450,370 ------------ 19,274,018 ------------ FINANCIAL SERVICES - 42.2% 190,800 AFLAC, Inc. 9,070,632 181,394 Allstate Corp. 10,246,947 234,016 American International Gr., Inc. 15,269,544 105,000 Aon Corp. 4,400,550 360,000 The Chubb Corp. 18,554,400 191,257 Cincinnati Financial Corp. 8,155,198 260,000 J.P. Morgan Chase & Co. 11,798,800 107,850 MBIA, Inc. 6,431,096 8,000 Ohio Casualty Corp. 237,200 103,400 The Progressive Corp. 11,222,002 290,000 Protective Life Corp. 14,616,000 111,750 RenaissanceRe Holdings Ltd. 4,699,088 71,500 SAFECO Corp. 3,710,850 218,300 Torchmark Corp. 13,122,013 87,666 Waddell & Reed Fin'l, Inc. CL A 2,061,904 ------------ 133,596,224 ------------ HEALTH CARE - 16.8% 70,870 Abbott Laboratories 3,028,984 29,500 Alcon, Inc. 3,000,445 70,650 C.R. Bard, Inc. 5,260,599 107,970 Caremark Rx, Inc. 4,918,034 21,400 Covance, Inc. * 1,248,690 128,950 IMS Health, Inc. 3,504,861 161,600 Johnson & Johnson, Inc. 9,471,375 74,500 Quest Diagnostics, Inc. 4,151,885 SHARES/FACE AMOUNT VALUE - ---------------------- ------------ HEALTH CARE (CONTINUED) 36,050 Stryker Corp. $ 1,577,188 187,481 UnitedHealth Group, Inc. 9,325,305 107,640 Wellpoint, Inc. * 7,642,440 ------------ 53,129,806 ------------ OTHER - 4.7% 165 Berkshire Hathaway, Inc. CL A * 14,685,000 ------------ OTHER ENERGY - 0.9% 43,800 Peabody Energy Corp. 2,797,068 ------------ PRODUCER DURABLES - 4.5% 174,400 Donaldson Co., Inc. 5,797,056 134,060 United Technologies Corp. 8,420,309 ------------ 14,217,365 ------------ TECHNOLOGY - 7.4% 128,350 Cisco Systems, Inc. * 2,688,932 55,750 Dell, Inc. * 1,460,650 380,540 Microsoft Corp. 9,190,041 252,450 Nokia Corp. 5,720,517 171,450 Seagate Technology 4,553,712 ------------ 23,613,852 ------------ TOTAL INVESTMENT IN COMMON STOCKS - 94.8% (Identified cost, $132,358,778) 300,081,465 ------------ CASH EQUIVALENTS - 5.3% $16,604,000 State Street Bank and Trust Eurodollar Time Deposit, at cost approximating value, maturity 05/01/06, 3.75% 16,604,000 ------------ TOTAL INVESTMENTS - 100.1% (Identified cost, $148,962,778) 316,685,465 ------------ OTHER ASSETS AND LIABILITIES - (0.1%) Liabilities in excess of other assets (272,500) ------------ NET ASSETS - 100% $316,412,965 ============ * Non-income producing security See notes to financial statements. CENTURY FUNDS 9 CENTURY SMALL CAP SELECT FUND APRIL 30, 2006 - (UNAUDITED) PORTFOLIO OF INVESTMENTS COMMON STOCK - 94.8% SHARES VALUE - -------- ------------ AUTO & TRANSPORT - 1.4% 332,650 Polaris Industries, Inc. $ 15,933,935 ------------ CONSUMER DISCRETIONARY - 22.1% 372,811 America's Car-Mart, Inc. * 7,586,704 465,350 CSK Auto Corp. * 5,979,747 1,208,100 Casual Male Retail Group, Inc. * 11,380,302 343,950 The Cato Corp. 7,783,589 263,500 ChoicePoint, Inc. * 11,601,905 662,150 Copart, Inc. * 17,778,728 1,459,030 Fred's, Inc. 20,703,636 591,700 Guitar Center, Inc. * 31,809,792 806,475 Jarden Corp. * 27,420,150 1,180,600 Kforce, Inc. * 16,587,430 769,150 Labor Ready, Inc. * 20,328,635 351,995 Providence Service Corp. * 11,024,482 436,450 Scientific Games Corp. * 16,624,381 179,170 Tractor Supply Co. * 11,608,424 726,915 Tuesday Morning Corp. 13,775,039 808,954 USANA Health Sciences, Inc. * 29,599,627 ------------ 261,592,571 ------------ CONSUMER STAPLES - 1.5% 200,200 Church & Dwight, Inc. 7,341,333 276,750 McCormick & Co., Inc. 9,639,203 ------------ 16,980,536 ------------ FINANCIAL SERVICES - 24.5% 690,200 AmeriCredit Corp. * 20,899,256 822,344 Blackbaud, Inc. 17,277,447 737,450 Bristol West Holdings, Inc. 13,613,327 351,430 Capital Trust, Inc. 10,929,473 462,822 CapitalSource, Inc. * 10,876,317 642,322 Encore Capital Group, Inc. * 9,487,096 60,451 First Community Bancorp, Inc. 3,506,158 320,200 GATX Corp. 14,985,360 484,950 Infinity Property and Casualty Corp. 21,745,158 764,400 Interactive Data Corp. * 17,023,188 356,700 Marlin Business Services Corp. * 7,776,060 669,850 Max Re Capital Ltd. 16,411,325 72,850 McGrath RentCorp. 1,958,936 415,390 Platinum Underwriters Holdings, Ltd. 11,452,302 357,550 Protective Life Corp. 18,020,520 352,330 Redwood Trust, Inc. 14,963,455 610,250 Republic Companies Group, Inc. 10,526,812 124,700 UMB Financial Corp. 8,467,130 779,300 Universal American Financial Corp. * 11,486,882 SHARES VALUE - -------- ------------ FINANCIAL SERVICES (CONTINUED) 1,287,350 Waddell & Reed Financial, Inc. $ 30,278,472 575,350 Wright Express Corp. * 17,715,027 ------------ 289,399,701 ------------ HEALTH CARE - 17.7% 253,900 Amedisys, Inc. * 8,419,324 402,350 Covance, Inc. * 23,477,123 174,100 Haemonetics Corp. * 9,488,450 269,700 Healthcare Services Group, Inc. 5,758,095 374,340 Healthways, Inc. * 18,365,120 427,550 IMS Health, Inc. 11,620,809 356,138 LCA-Vision, Inc. 20,000,710 918,123 Perrigo Co. 14,653,243 1,043,050 QIAGEN N.V. * 15,541,444 303,362 Quality Systems, Inc. * 10,180,829 389,600 Respironics, Inc. * 14,267,152 247,300 Sunrise Senior Living, Inc. * 9,199,560 631,901 Surmodics, Inc. * 22,470,400 785,755 United Surgical Partners Int'l, Inc. * 25,937,773 ------------ 209,380,032 ------------ MATERIALS & PROCESSING - 2.8% 388,350 Olin Corp. 7,980,593 1,378,680 RPM International, Inc. 25,367,712 ------------ 33,348,305 ------------ OTHER ENERGY - 8.5% 258,050 Berry Petroleum Co. 19,018,284 380,050 Bronco Drilling Co., Inc. * 10,265,151 866,100 Foundation Coal Holdings, Inc. 43,911,270 143,850 Holly Corp. 11,100,905 1,750,700 SMART Modular Technologies, Inc. * 16,281,510 ------------ 100,577,120 ------------ PRODUCER DURABLES - 3.7% 97,150 Dionex Corp. * 5,840,658 656,150 Donaldson Co., Inc. 21,810,426 80,150 MTS Systems Corp. 3,586,713 238,750 Nordson Corp. 12,761,187 ------------ 43,998,984 ------------ See notes to financial statements. CENTURY FUNDS 10 CENTURY SMALL CAP SELECT FUND (CONT.) APRIL 30, 2006 - (UNAUDITED) PORTFOLIO OF INVESTMENTS SHARES/FACE AMOUNTS VALUE - ----------------------- -------------- TECHNOLOGY - 12.6% 156,650 Avid Technology, Inc. * $ 6,038,858 1,267,595 Bell Microproducts, Inc. * 8,239,368 390,905 Benchmark Electronics, Inc. * 10,671,706 206,150 Cognos, Inc. * 7,683,211 627,800 FLIR Systems, Inc. * 15,349,710 1,474,000 Maxtor Corp. * 14,268,320 784,650 Mercury Interactive Corp. * 28,247,400 446,250 MICROS Systems, Inc. * 18,653,250 1,478,302 Semitool, Inc. * 13,733,425 737,980 Silicon Image, Inc. * 7,527,396 123,650 Western Digital Corp. * 2,601,596 703,150 Witness Systems, Inc. * 16,418,552 -------------- 149,432,792 -------------- TOTAL INVESTMENT IN COMMON STOCKS - 94.8% (Identified cost, $1,046,652,015) 1,120,643,976 -------------- CASH EQUIVALENTS - 5.6% $66,296,000 State Street Bank and Trust Eurodollar Time Deposit, at cost approximating value, maturity 05/01/06, 3.75% 66,296,000 -------------- TOTAL INVESTMENTS - 100.4% (Identified cost, $1,112,948,015) 1,186,939,976 -------------- OTHER ASSETS AND LIABILITIES - (0.4)% Liabilities in excess of other assets (4,649,606) -------------- NET ASSETS - 100% $1,182,290,370 ============== * Non-income producing security See notes to financial statements. CENTURY FUNDS 11 STATEMENT OF ASSETS AND LIABILITIES - APRIL 30, 2006 - (UNAUDITED)
Century Shares Century Small Cap Trust Select Fund -------------- -------------- ASSETS: Investments, at value (Note 1A) (Identified cost of, $148,962,778 and $1,112,948,015, respectively) $ 316,685,465 $1,186,939,976 Cash 634 465 Dividends and interest receivable 213,549 343,083 Receivable for investments sold -- 14,923,148 Receivable for Trust/Fund shares sold 5,754 3,045,092 -------------- -------------- Total Assets 316,905,402 1,205,251,764 -------------- -------------- LIABILITIES: Payable to Affiliates: Management fee (Note 4) 205,760 916,358 Administration fee (Note 5) 38,617 -- Distribution fees (Note 7) 1,948 109,490 Accrued expenses and other liabilities 194,207 144,337 Payable for investments purchased -- 20,770,183 Payable for Trust/Fund shares repurchased 51,905 1,021,026 -------------- -------------- Total Liabilities 492,437 22,961,394 -------------- -------------- NET ASSETS $ 316,412,965 $1,182,290,370 ============== ============== At April 30, 2006, net assets consisted of: Capital paid-in $ 124,019,420 $1,036,083,334 Accumulated distributions in excess of net investment income (247,377) -- Accumulated undistributed net realized gains on investments 24,918,235 72,215,074 Unrealized appreciation in value of investments 167,722,687 73,991,962 -------------- -------------- Net assets applicable to outstanding capital stock $ 316,412,965 $1,182,290,370 ============== ============== Net Assets consist of: Investor Shares $ 1,578,970 $ 416,833,507 Institutional Shares $ 314,833,995 $ 765,456,863 Shares Outstanding consist of (Note 2): Century Shares Trust Investor Shares 46,115 15,968,469 Institutional Shares 9,132,881 28,989,810 NET ASSET VALUE PER SHARE (Represents both the offering and redemption price*) Investor Shares $ 34.24 $ 26.10 Institutional Shares $ 34.47 $ 26.40
* In general, shares of the Trust and fund may be redeemed at net asset value. However, upon the redemption of shares held less than 180 days, a redemption fee of 1% of the current net asset value of the shares may be assessed and retained by each for the benefit of their respective remaining shareholders. The redemption fee is accounted for as an addition to paid-in-capital. See notes to financial statements. CENTURY FUNDS 12 STATEMENT OF OPERATIONS - SIX MONTHS ENDED APRIL 30, 2006 - (UNAUDITED)
Century Shares Century Small Cap Trust Select Fund -------------- ------------- INVESTMENT INCOME/(LOSS): Dividends (net of withholding tax of $25,449 and $0, respectively) $ 2,012,185 $ 7,539,808 Interest 297,869 1,636,953 -------------- ------------- Total income 2,310,054 9,176,761 EXPENSES: Investment adviser fee (Note 4) 1,279,362 5,189,423 Non-interested trustees' remuneration 28,320 62,470 Transfer agent Institutional Shares 113,000 19,005 Investor Shares 6,480 399,500 Custodian 36,550 94,500 Administration (Note 5) 239,880 -- Insurance 16,750 40,970 Professional fees 29,110 50,110 Registration 30,675 25,050 Printing and other 59,790 349,800 Distribution fee (Note 7) 1,726 514,066 -------------- ------------- Total expenses 1,841,643 6,744,894 Advisor reimbursement (Note 6) (1,036) -- -------------- ------------- Net expenses 1,840,607 6,744,894 -------------- ------------- Net investment income/(loss) 469,447 2,431,867 -------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain from investment transactions 24,533,850 74,916,142 (Decrease) in unrealized appreciation on investments (6,517,143) 35,294,803 -------------- ------------- Net realized and unrealized gain on investments 18,016,707 110,210,945 -------------- ------------- Net increase in net assets resulting from operations $ 18,486,154 $ 112,642,812 ============== =============
See notes to financial statements. CENTURY FUNDS 13 STATEMENT OF CHANGES IN NET ASSETS
Century Small Cap Century Shares Trust Select Fund Six Months Six Months INCREASE (DECREASE) Ended Ended IN NET ASSETS: April 30, 2006 Year Ended April 30, 2006 Year Ended (unaudited) October 31, 2005 (unaudited) October 31, 2005 -------------- -------------- -------------- -------------- Operations: Net investment income/(loss) $ 469,447 $ 1,775,849 $ 2,431,867 $ (62,758) Net realized gain on investment transactions 24,533,850 27,162,660 74,916,142 11,309,976 Change in net unrealized appreciation (6,517,143) 7,610,424 35,294,803 16,240,663 -------------- -------------- -------------- -------------- Net increase in net assets resulting from operations 18,486,154 36,548,933 112,642,812 27,487,881 Distributions to shareholders from: Net Investment Income Institutional Shares (5,557,383) (3,027,966) (2,271,807) -- Investor Shares (21,336) -- (512,585) -- Realized gain from investment transactions Institutional Shares (21,454,737) (35,121,376) (6,886,193) (3,513,749) Investor Shares (78,306) -- (4,754,075) (3,922,249) Trust/Fund share transactions -- net 253,886 (36,019,193) 91,223,860 682,027,208 Redemption fees 2,985 9,629 77,304 65,647 -------------- -------------- -------------- -------------- Total (decrease)/increase (8,368,737) (37,609,973) 189,519,316 702,144,738 NET ASSETS: At beginning of period 324,781,702 362,391,675 992,771,054 290,626,316 -------------- -------------- -------------- -------------- At end of period $ 316,412,965 $ 324,781,702 $1,182,290,370 $ 992,771,054 ============== ============== ============== ============== Distributions in excess of net investment income at end of period $ 247,377 $ 247,377 $ -- $ -- ============== ============== ============== ==============
See notes to financial statements. CENTURY FUNDS 14 FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED PERIOD APRIL 30, ENDED YEAR ENDED CENTURY SHARES TRUST 2006 YEAR ENDED OCTOBER 31, OCTOBER 31, DECEMBER 31, INSTITUTIONAL SHARES (UNAUDITED) 2005 2004 2003 2002 (a) 2001 2000 ----------- ------ ------ ------ ------ ------ ------ Net Asset Value, beginning of period $35.40 $35.62 $35.66 $33.95 $38.12 $42.97 $34.32 ------ ------ ------ ------ ------ ------ ------ Income/(loss) from Investment Operations: Net investment income (b) 0.05 0.19 0.03 0.07 0.08 0.17 0.39 Net realized and unrealized gain/(loss) on investments 1.95 3.54 3.02 5.03 (4.20) (1.26) 12.39 ------ ------ ------ ------ ------ ------ ------ Total income/(loss) from investment operations 2.00 3.73 3.05 5.10 (4.12) (1.09) 12.78 ------ ------ ------ ------ ------ ------ ------ Less Distributions From: Net investment income (0.58) (0.32) (0.34) (0.10) (0.05) (0.17) (0.38) Net realized gain on investment transactions (2.35) (3.63) (2.75) (3.29) -- (3.60) (3.75) ------ ------ ------ ------ ------ ------ ------ Total distributions (2.93) (3.95) (3.09) (3.39) (0.05) (3.77) (4.13) ------ ------ ------ ------ ------ ------ ------ Redemption fees --+ --+ --+ --+ --+ 0.01 -- ------ ------ ------ ------ ------ ------ ------ Net Asset Value, end of period $34.47 $35.40 $35.62 $35.66 $33.95 $38.12 $42.97 ====== ====== ====== ====== ====== ====== ====== Total Return 5.79%** 11.18% 9.06% 16.99% -10.82%** -2.52% 37.44% Ratios and supplemental data Net assets, end of period (000 omitted) $314,834 $323,643 $362,392 $342,679 $291,311 $345,849 $417,598 Ratio of expenses to average net assets 1.15%* 1.12% 1.15% 1.17% 1.19%* 1.05% 0.83% Ratio of net investment income to average net assets 0.30%* 0.55% 0.07% 0.21% 0.26%* 0.41% 1.05% Portfolio Turnover Rate 18% 19% 43% 37% 22% 17% 17%
(a) For the period from January 1, 2002 to October 31, 2002. Effective September 5, 2002, CST changed its fiscal year end from December 31 to October 31. (b) Calculated based on average shares outstanding during the period. + Amount represents less than $0.01 per share. * Annualized ** Not annualized See notes to financial statements. CENTURY FUNDS 15 FINANCIAL HIGHLIGHTS SIX MONTHS ENDED PERIOD APRIL 30, ENDED CENTURY SHARES TRUST 2006 OCTOBER 31, INVESTOR SHARES (UNAUDITED) 2005 (a) ----------- ----------- Net Asset Value, beginning of period $35.35 $35.00 ------ ------ Income/(loss) from Investment Operations: Net investment income (b) 0.10 (0.03) Net realized and unrealized gain/(loss) on investments 1.72 0.29 ------ ------ Total income/(loss) from investment operations 1.82 0.26 ------ ------ Less Distributions From: Net investment income (0.58) -- Net realized gain on investment transactions (2.35) -- ------ ------ Total distributions (2.93) -- ------ ------ Redemption fees --+ 0.09 ------ ------ Net Asset Value, end of period $34.24 $35.35 ====== ====== Total Return 5.25%** 1.00%** Ratios and supplemental data Net assets, end of period (000 omitted) $1,579 $1,139 Ratio of expenses to average net assets 2.12%* 1.20%* Ratio of expenses to average net assets without giving effect to voluntary expense agreement 2.27% 1.35%* Ratio of net investment income to average net assets -0.62%* -0.36%* Portfolio Turnover Rate 18% 19% (a) From the commencement date of operations, July 18, 2005 to October 31, 2005. (b) Calculated based on average shares outstanding during the period. + Amount represents less than $0.01 per share. * Annualized ** Not annualized See notes to financial statements. CENTURY FUNDS 16 FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED CENTURY SMALL CAP APRIL 30, 2006 YEAR ENDED OCTOBER 31, SELECT FUND - INSTITUTIONAL SHARES (UNAUDITED) 2005 2004 2003 2002 2001 ----------- ------ ------ ------ ------ ------ Net Asset Value, beginning of period $24.15 $22.46 $21.53 $15.42 $14.68 $14.57 ------ ------ ------ ------ ------ ------ Income from Investment Operations: Net investment (loss)/income (a) 0.07 0.03 (0.08) (0.09) (0.10) -- Net realized and unrealized gain on investments 2.55 2.22 2.14 6.64 0.93 0.52(b) ------ ------ ------ ------ ------ ------ Total income from investment operations 2.62 2.25 2.06 6.55 0.83 0.52 ------ ------ ------ ------ ------ ------ Less Distributions From: Net investment income (0.09) -- (0.94) (0.11) -- (0.02) Net realized gain on investment transactions (0.28) (0.56) (0.19) (0.35) (0.13) (0.41) ------ ------ ------ ------ ------ ------ Total distributions (0.37) (0.56) (1.13) (0.46) (0.13) (0.43) ------ ------ ------ ------ ------ ------ Redemption fees --+ --+ --+ 0.02 0.04 0.02 ------ ------ ------ ------ ------ ------ Net Asset Value, end of period $26.40 $24.15 $22.46 $21.53 $15.42 $14.68 ====== ====== ====== ====== ====== ====== Total Return 10.98%** 10.19% 9.83% 43.76% 5.87% 3.63% Ratios and supplemental data Net assets, end of period (000 omitted) $765,457 $585,723 $140,208 $42,936 $12,938 $6,093 Ratio of expenses to average net assets 1.07%* 1.06% 1.13% 1.26% 1.45% 1.45% Ratio of expenses to average net assets without giving effect to voluntary expense agreement 1.07%* 1.06% 1.13% 1.40% 1.87% 4.04% Ratio of net investment (loss)/income to average net assets 0.59%* 0.13% -0.36% -0.50% -0.70% -0.02% Portfolio Turnover Rate 71% 96% 103% 88% 123% 48%
(a) Calculated based on average shares outstanding during the period. (b) The per share amount is not in accord with the net realized and unrealized gain/loss for the period because of the timing of sales of Fund shares and the amount of per share realized and unrealized gains and losses at such time. + Amount represents less than $0.01 per share. * Annualized ** Not annualized See notes to financial statements. CENTURY FUNDS 17 FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED CENTURY SMALL CAP APRIL 30, 2006 YEAR ENDED OCTOBER 31, SELECT FUND - INVESTOR SHARES (UNAUDITED) 2005 2004 2003 2002 2001 ----------- ------ ------ ------ ------ ------ Net Asset Value, beginning of period $23.86 $22.26 $21.39 $15.35 $14.60 $14.26 ------ ------ ------ ------ ------ ------ Income from Investment Operations: Net investment (loss) (a) 0.03 (0.04) (0.15) (0.15) (0.18) (0.03) Net realized and unrealized gain on investments 2.52 2.20 2.12 6.60 0.94 0.53(b) ------ ------ ------ ------ ------ ------ Total income from investment operations 2.55 2.16 1.97 6.45 0.76 0.50 ------ ------ ------ ------ ------ ------ Less Distributions From: Net investment income (0.03) -- (0.91) (0.07) -- -- Net realized gain on investment transactions (0.28) (0.56) (0.19) (0.35) (0.03) (0.19) ------ ------ ------ ------ ------ ------ Total distributions (0.31) (0.56) (1.10) (0.42) (0.03) (0.19) ------ ------ ------ ------ ------ ------ Redemption fees --+ --+ --+ 0.01 0.02 0.03 ------ ------ ------ ------ ------ ------ Net Asset Value, end of period $26.10 $23.86 $22.26 $21.39 $15.35 $14.60 ====== ====== ====== ====== ====== ====== Total Return 10.81%** 9.87% 9.45% 43.12% 5.34% 3.68% Ratios and supplemental data Net assets, end of period (000 omitted) $416,834 $407,048 $150,418 $78,959 $10,119 $9,302 Ratio of expenses to average net assets 1.50%* 1.35% 1.50% 1.61% 1.80% 1.80% Ratio of expenses to average net assets without giving effect to voluntary expense agreement 1.50%* 1.35% 1.50% 1.76% 2.53% 4.38% Ratio of net investment (loss)/income to average net assets 0.21%* -0.17% -0.69% -0.86% -1.05% -0.48% Portfolio Turnover Rate 71% 96% 103% 88% 123% 48%
(a) Calculated based on average shares outstanding during the period. (b) The per share amount is not in accord with the net realized and unrealized gain/loss for the period because of the timing of sales of Fund shares and the amount of per share realized and unrealized gains and losses at such time. + Amount represents less than $0.01 per share. * Annualized ** Not annualized See notes to financial statements. CENTURY FUNDS 18 NOTES TO FINANCIAL STATEMENTS (1) SIGNIFICANT ACCOUNTING POLICIES -- Century Capital Management Trust (the "Master Trust") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Century Shares Trust (the "Trust") and Century Small Cap Select Fund (the "Fund" and together with the Trust, the "Funds") are diversified series of the Master Trust. The following is a summary of significant accounting policies consistently followed by both the Trust and the Fund in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America. A. Investment Security Valuations -- Securities listed on national securities exchanges are valued at closing prices. Unlisted securities or listed securities for which closing prices are not available generally are valued at the latest bid prices. Short-term obligations, maturing in 60 days or less, are valued at amortized cost, which approximates value. In the absence of readily available market quotes, the Funds' portfolio securities and other assets will be valued at fair value, as determined in good faith by the Board of Trustees, its Valuation Committee, or the Adviser or a Delegate pursuant to instructions from the Board of Trustees or its Valuation Committee. B. Securities Transactions -- Investment security transactions are recorded on a trade date basis. Gain or loss on sales is determined on the basis of identified cost. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Shares issuable to shareholders electing to receive income dividends and capital gain distributions in shares are recorded on the ex-dividend date. Interest income is recorded daily on an accrual basis. C. Use of Estimates -- The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America incorporates estimates made by management in determining the reported amounts of assets, liabilities, revenues and expenses of the Trust and Fund. Actual results could differ from those estimates. D. Risks and Uncertainty -- The Trust focuses its investments in securities issued by companies in the financial services sector, which will subject the Trust to risks associated with that sector (e.g., government regulation, interest rate changes, claims activity, and exposure to property casualty risks). The Fund concentrates its investments in the financial services and health care group of industries, which will subject the Fund to the risks associated with those industries and may result in greater fluctuation in share value than is experienced in less concentrated portfolios. In addition, the Fund invests in smaller companies, which generally involves greater risk than investing in larger, more established companies. E. Multiple Classes of Shares -- The Funds offers multiple classes of shares, which differ in their respective distribution and transfer agent fees. Transfer agent fees for each Fund's class are based on a per shareholder account charge. All shareholders bear the common expenses of the Funds based upon daily net assets of each class, without distinction between share classes. F. Redemption Fees -- In general, shares of the Trust and Fund may be redeemed at net asset value. However, upon the redemption of shares held less than 180 days, a fee of 1% of the current net asset value of the shares may be assessed and retained by each for the benefit of their respective remaining shareholders. The redemption fee is accounted for as an addition to paid-in-capital. G. Income Tax Information and Distributions to Shareholders -- Each year, each Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Income dividends and capital gain distributions are declared separately for each class. Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. CENTURY FUNDS 19 Book-tax differences are primarily due to equalization, partnership income, net operating losses and losses deferred due to wash sales and excise tax regulations. The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows: FOR THE TRUST APRIL 30, 2006 - ------------- Unrealized appreciation ..................................... $ 169,691,368 Unrealized depreciation ..................................... 1,968,681 -------------- Unrealized net appreciation ................................. $ 167,722,687 ============== Cost for federal income tax purposes ........................ $ 148,962,778 FOR THE FUND Unrealized appreciation ..................................... $ 112,603,088 Unrealized depreciation ..................................... 38,611,126 -------------- Unrealized net appreciation ................................. $ 73,991,962 ============== Cost for federal income tax purposes ........................ $1,112,948,015 (2) TRANSACTIONS IN SHARES A. TRUST SHARES-- The number of authorized shares is unlimited. Shares of the Trust are currently divided into Investor shares and Institutional shares. Transactions in Trust shares were as follows: CENTURY SHARES TRUST
PERIOD ENDED APRIL 30, 2006 INSTITUTIONAL SHARES INVESTOR SHARES SHARES AMOUNT SHARES AMOUNT ------------ ------------ ------------ ------------ Sold ........................................................ 89,587 $ 3,084,735 25,977 $ 884,692 Issued to shareholders in reinvestment of distributions from: Net investment income .................................... 124,211 4,184,682 635 21,336 Realized gain on investment transactions ................. 502,162 17,329,393 2,272 78,306 ------------ ------------ ------------ ------------ 715,960 24,598,810 28,884 984,334 Repurchased ................................................. (724,406) (24,817,336) (14,991) (511,922) ------------ ------------ ------------ ------------ Net increase (decrease) .................................. (8,446) $ (218,526) 13,893 $ 472,412 ============ ============ ============ ============ YEAR ENDED OCTOBER 31, 2005 INSTITUTIONAL SHARES INVESTOR SHARES SHARES AMOUNT SHARES AMOUNT ------------ ------------ ------------ ------------ Sold ........................................................ 436,413 $ 15,013,209 38,232 $ 1,320,066 Issued to shareholders in reinvestment of distributions from: Net investment income .................................... 847,946 28,406,204 -- -- Realized gain on investment transactions ................. 66,835 2,303,047 -- -- ------------ ------------ ------------ ------------ 1,351,194 45,722,460 38,232 1,320,066 Repurchased ................................................. (2,383,848) (82,852,859) (6,010) (208,860) ------------ ------------ ------------ ------------ Net increase (decrease) .................................. (1,032,654) $(37,130,399) 32,222 $ 1,111,206 ============ ============ ============ ============
CENTURY FUNDS 20 B. FUND SHARES - The number of authorized shares is unlimited. Shares of the Fund are currently divided into Investor shares and Institutional shares. Transactions in Fund shares were as follows:
CENTURY SMALL CAP SELECT FUND PERIOD ENDED APRIL 30, 2006 INSTITUTIONAL SHARES INVESTOR SHARES SHARES AMOUNT SHARES AMOUNT ------------- ------------- ------------- ------------- Sold ........................................................ 6,596,559 $ 167,006,222 1,960,009 $ 49,011,372 Issued to shareholders in reinvestment of distributions from: Net investment income .................................... 87,938 2,140,457 18,552 446,931 Realized gain on investment transactions ................. 276,459 6,693,063 174,747 4,179,953 ------------- ------------- ------------- ------------- 6,960,956 175,839,742 2,153,308 53,638,256 Repurchased ................................................. (2,228,907) (56,798,945) (3,241,193) (81,455,193) ------------- ------------- ------------- ------------- Net increase (decrease) .................................. 4,732,049 $ 119,040,797 (1,087,885) $ (27,816,937) ============= ============= ============= ============= YEAR ENDED OCTOBER 31, 2005 INSTITUTIONAL SHARES INVESTOR SHARES SHARES AMOUNT SHARES AMOUNT ------------- ------------- ------------- ------------- Sold ........................................................ 20,297,470 $ 493,078,854 12,763,403 $ 301,872,176 Issued to shareholders in reinvestment of distributions from: Net investment income .................................... -- -- -- -- Realized gain on investment transactions ................. 148,747 3,354,253 148,925 3,326,988 ------------- ------------- ------------- ------------- 20,446,217 496,433,107 12,912,328 305,199,164 Repurchased ................................................. (2,431,059) (57,909,605) (2,612,975) (61,695,458) ------------- ------------- ------------- ------------- Net increase ............................................. 18,015,158 $ 438,523,502 10,299,353 $ 243,503,706 ============= ============= ============= =============
(3) INVESTMENT SECURITY TRANSACTIONS FOR THE TRUST, other than U.S. Government obligations and certificates of deposit, purchases and sales of investment securities aggregated $53,278,972 and $75,544,190, respectively, during the period ended April 30, 2006. FOR THE FUND, other than U.S.Government obligations and certificates of deposit, purchases and sales of investment securities aggregated $815,139,093 and $739,804,248, respectively, during the period ended April 30, 2006. (4) INVESTMENT ADVISER FEE FOR THE TRUST, the investment adviser fee is earned by Century Capital Management, LLC ("CCM"), as compensation for providing investment advisory services to the Trust. CCM receives a monthly fee equal on an annualized basis to 0.8% of the first $500 million and 0.7% of the amounts exceeding $500 million of the Trust's net asset value. For the period ended April 30, 2006, the fee amounted to $1,279,362. Officers and Trustees of the Master Trust who are employed by CCM receive remuneration for their services out of such investment adviser fee. The Trust has guaranteed retirement benefits to be paid to one former Trustee. Under the terms of the Trust's Investment Advisory and Management Agreement with CCM, CCM has assumed the obligation to make all such payments on behalf of the Trust during the term of the agreement. The amount of potential future payments owed by the Trust cannot be estimated with certainty due to the variability of amounts used to determine the payment and therefore are not reflected in the Trust's financial statements. Retirement benefits are payable over various periods. CENTURY FUNDS 21 FOR THE FUND, the investment adviser fee is earned by CCM as compensation for providing investment advisory, management and administrative services to the Fund. CCM receives a monthly fee equal on an annualized basis to 0.95% of the Fund's net asset value. For the period ended April 30, 2006, the fee amounted to $5,189,423. Officers and Trustees of the Master Trust who are employed by CCM receive remuneration for their services out of such investment adviser fee. (5) ADMINISTRATION FEES -- The Trust has an Administration Agreement with CCM. Under the agreement CCM shall provide or procure, at its expense, non-investment advisory services to the Trust. CCMwill receive a monthly fee equal on an annualized basis to 0.15% of the Trust's net asset value. The fee was $239,880 for the period ended April 30, 2006. Per the Investment Advisory and Management Services Agreement between CSCS and CCM, the Fund will reimburse CCM for expenses associated with having the adviser's personnel perform shareholder service functions and certain financial, accounting, administrative and clerical services. (6) ADVISER REIMBURSEMENT -- CCM had voluntarily waived a portion of its management fee for both classes of the Fund and reimbursed certain other expenses to the extent necessary so that net fund annual operating expenses (exclusive of brokerage commissions, taxes, interest and litigation, indemnification and other extraordinary expenses) would not exceed certain expense limitations through February 28, 2006. The expense limitations for the Investor and Institutional Shares were 1.80% and 1.45%, respectively. During the period ended April 30, 2006, CCM did not make a voluntary reimbursement. CCM has contractually agreed to reimburse the Trust for 0.15% of the distribution and services fees paid by the Trust's Investor Shares through February 28, 2007. During the period ended April 30, 2006, CCM made a reimbursement of $1,036. (7) DISTRIBUTION AND SERVICE PLAN -- The Trust and the Fund have adopted a distribution and service plan for the Investor Shares under Rule 12b-1 of the 1940 Act. Distribution plans permit a fund to pay for all or a portion of the costs incurred in connection with the distribution and/or servicing of shares. The Investor Shares currently pays a distribution and service fee up to 0.25% of the average daily net assets of the class. During the period ended April 30, 2006, $1,726 and $514,066 for the Trust and Fund, respectively, was paid under the distribution and service plan. The plan may be terminated at any time by the vote of a majority of the independent Trustees or by the vote of the holders of a majority of the outstanding shares of the Investor Shares. CENTURY FUNDS 22 APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS The Board of Trustees, including the independent Trustees, approved the continuation of each Fund's investment management agreement with Century Capital Management, LLC (CCM) at a meeting held on December 15, 2005. In advance of the meeting, the Trustees received, among other things: (i) a Lipper Inc. report comparing each Fund's fees, expenses and performance to those of a peer group and peer universe for that Fund, each selected by Lipper; (ii) reports from CCM that described (a) the services provided to each Fund and information about the personnel providing those services, (b) the fees paid under the advisory and administration agreements, (c) compliance and oversight, (d) "fall-out" benefits to CCM, (e) brokerage and soft-dollar arrangements, and (f) information about fees paid by and services provided to comparable accounts; (iii) a profitability report prepared CCM and (iv) CCM's Form ADV. The independent Trustees also received a memorandum from their counsel outlining the legal standards and certain other considerations relevant to the Trustees' deliberations. In addition, at each regularly scheduled Board meeting, the Trustees receive and review, among other things, information concerning each Fund's performance and the services provided to each Fund by CCM. The performance information received by the Trustees on a quarterly basis includes (i) total return information for each Fund for the following periods: one month, three months, twelve months and year to date and (ii) average annual total return information for the following periods: three, five, ten and fifteen years for CST and two, three and five years and since inception (December, 1999) for CSCS. The Trustees also receive performance information for one or more selected securities indices at each quarterly meeting. After receiving the requested information, the independent Trustees met in executive session to consider the advisory and administrative arrangements. The Trustees then unanimously determined to approve the continuance of the advisory and administration agreements with respect to each Fund. This approval was based on the following conclusions: (i) that CCM has the capabilities, resources and personnel necessary to provide the advisory and administrative services currently required by each Fund; and (ii) that the advisory and administrative fees paid by each Fund represent reasonable compensation to CCM in light of the services provided, the costs to CCM of providing those services, the fees paid by similar funds, and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. In determining to approve the advisory and administration agreements, the Trustees considered a number of factors as outlined below. The Trustees did not identify any single factor as controlling. The Trustees evaluated all information available to them on a Fund-by-Fund basis, and their determinations were made separately in respect of each Fund. They also took into account the common interests of both of the Funds in their review. Throughout their deliberations, the independent Trustees were represented by counsel. NATURE, QUALITY AND EXTENT OF SERVICES PROVIDED In considering the nature, extent and quality of the services provided by CCM under the advisory and administration agreements, the Board considered the terms of those agreements and reviewed information provided by CCM relating to its operations and personnel. The Trustees also considered their knowledge of the nature and quality of the services provided by CCM to the Funds gained from their experience as trustees of the Funds and noted the expectations of the shareholders who had invested in the Funds. The Board considered that CCM was responsible for the management and administration of each Fund's operations. They also considered that CCM provides day-to day management of each Fund's portfolio of investments, including making purchases and sales of portfolio securities consistent with each Fund's investment objectives and policies. The Board considered CCM's resources and personnel, focusing in particular on investment and compliance resources and personnel. The Board noted that CCM had made considerable investments in technology to enhance investment management capabilities and to facilitate CCM's ability to monitor compliance with investment policies and regulatory requirements. The Board also noted that CCM had added equity analysts to the research team as well as compliance personnel. The Board reviewed each portfolio manager's experience and qualifications, as well as CCM's investment approach and research process. The Board also reviewed CCM's trading procedures and brokerage practices, including information regarding the average commissions per share paid by each Fund during CENTURY FUNDS 23 each semi-annual period since January 1, 2004 and noted that each Fund had experienced a significant decrease in commission costs. The Board also noted the steps CCM had taken generally to address conflicts of interest in its business, including the oversight of personal trading and the allocation of trades and investment opportunities among the Funds and CCM's other clients. The Board also considered that, as administrator, CCM is responsible for the administration of each Fund's business and other affairs. It was noted that CCM supervises and monitors the performance of each Fund's service providers and provides each Fund with personnel (including officers) as are necessary for the Fund's operations. The Board noted, in particular, that CCM had successfully negotiated reductions in custody, distribution and transfer agency fees for the Funds. It was also noted that CCM pays all of the compensation of Mr. Thorndike and Mr. Fulkerson, the interested Trustees, and the Funds' officers. The Board also noted that CCM assisted the Funds in meeting legal and regulatory requirements and considered, among other things, CCM's compliance program. The Board considered the fees paid to CCM for the provisions of such services. Taking all of the foregoing into account, the Trustees concluded that they were satisfied with the nature, extent and quality of services provided to the Funds under the advisory and administration agreements. COSTS OF SERVICES PROVIDED AND PROFITABILITY The Trustees reviewed information concerning the costs of services provided to the Funds by CCM, and the profitability to CCM of its advisory and administrative relationship with Funds for the fiscal year ended December 31, 2004 and the period ended September 30, 2005, along with a description of the methodology used by CCM in preparing the profitability information. It was noted, among other things, that profitability was shown on a Fund-by-Fund basis. The Trustees recognized that CCM should be entitled to earn a reasonable level of profit for the services provided to each Fund, and that it is difficult to make comparisons of profitability from fund advisory and administration contracts because comparative information is not generally available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions about allocations and the adviser's capital structure and cost of capital. The Trustees concluded that, taking all of the foregoing into account, they were satisfied that CCM's level of profitability from its relationship with each Fund was not excessive. FALL-OUT BENEFITS The Trustees considered the extent to which CCM benefited from soft dollar arrangements whereby it receives brokerage and research services from brokers that execute a Fund's purchases and sales of investment securities. It was noted that CCM had represented that it fulfills its fiduciary obligation of seeking best execution when engaging in portfolio transactions for the Funds. The Trustees also considered the indirect benefits, such as favorable publicity, experienced by CCM as a result of the performance track record of the Funds, particularly CSCS. The Trustees concluded that such direct and indirect benefits to CCM from its relationship with the Funds were reasonable. ECONOMIES OF SCALE The Trustees considered the extent to which CCM may realize economies of scale or other efficiencies in managing and supporting the Funds. It was noted that as assets increase certain fixed costs may be spread across a larger asset base, and it was noted that any economies of scale or other efficiencies might be realized (if at all) across a variety of products and services, including the Funds, and not only in respect of a single Fund. The Trustees noted that the advisory fee schedule for CST included breakpoints that would allow the shareholders of CST to share in the economies of scale experienced by CCM in managing that Fund as assets under management increased. The Trustees noted that the advisory fee schedule for CSCS did not include breakpoints that would reduce the fee rate on assets above specified levels. The Board determined that the current fee structure for CSCS was acceptable given the fee level, the fees waived by CCM in prior years in respect of CSCS, and the fact that CSCS was closed to most new investments and would not, therefore, experience a significant growth in Fund assets. INVESTMENT RESULTS The information obtained from Lipper for the meeting compared the investment results of each Fund to those of funds in both a peer group and a peer universe, each as selected for that Fund by Lipper, over the one, three, five, ten and fifteen year peri- CENTURY FUNDS 24 ods ended November 30, 2005 (for CST) and over the one, three and five year periods ended November 30, 2005 and since inception (December, 1999) (for CSCS). The Trustees also received information showing each Fund's percentile ranking in the appropriate Lipper peer group and peer universe for each of the applicable periods. The Trustees did not independently verify any of the information provided by Lipper. CST. The Trustees reviewed comparative information that showed that CST's average annual total return for the Institutional class of shares for each period was better than the average annual total return of both the Standard & Poor's 500 Index and the Russell 1000 for the same periods. The Trustees also noted that the average annual return for the Institutional class of shares for each period (other than the three year period) was better than that of CST's Lipper peer universe. The Trustees also reviewed information that showed that the CST's performance was above both the average and median performance of its Lipper peer group for all periods. The Trustees noted that CST had consistently ranked in the top third of all funds in the Lipper peer universe, with the exception of the three-year return. The Trustees also received comparative performance with respect to the Investor class of shares that was established in July 2005. Based on their review, the Trustees concluded that CST's relative investment performance over time had been sufficient along with other factors considered to merit approval of the continuation of the advisory agreement. CSCS. The Trustees reviewed comparative information that showed that CSCS's average annual total return for both the Institutional class of shares and the Investor class of shares for both the five years ended November 30, 2005 and period from December, 1999 through November 30, 2005 was better than the average annual return of the Russell 2000 and the Russell 200 Growth indices and CSCS's Lipper peer universe for the same periods, but that CSCS's average annual total return (for both classes) lagged the average annual total returns of those indices and the peer universe for the two and three year periods. The Trustees also reviewed information that showed that CSCS's total return for both the one year ended November 30, 2005 and year to date (for both classes) was slightly better than or in line with the total returns of the Russell 2000 and the Russell 2000 Growth indices and CSCS's Lipper peer universe for the same periods. The Trustees also reviewed information that showed that CSCS's performance was above both the average and median performance of its Lipper peer group for the three years and five years ended November 30, 2005. The Trustees considered CCM's explanation of CSCS's relative underperformance in the short term and noted that they were satisfied with CCM's investment strategy and CSCS's long term investment performance in light of that strategy. Based on their review, the Trustees concluded that CSCS's relative investment performance over time had been sufficient along with other factors considered to merit approval of the continuation of the advisory agreement. FEES AND OTHER EXPENSES The Trustees considered the advisory fees paid by each Fund to CCM. The Trustees also considered the administrative fee rate paid by CST to CCM. The Trustees considered (i) the level of each Fund's advisory fee versus its peer group and peer universe as shown in the Lipper materials and (ii) each Fund's total expense ratio as compared to its peer group and peer universe as shown in the Lipper materials. The Trustees also considered the fees that CCM charges other clients with investment objectives similar to the Funds. The Trustees reviewed materials from CCM describing the differences in services provided to these other clients, which noted that typically more services were provided to the Funds than these other clients and that, because of the constant issuance and redemption of Fund shares, the Funds were more difficult to manage than institutional accounts. The materials showed that the fee rates charged by CCM to other clients were generally similar to (but not necessarily as low as, in all cases) the fees paid by the Funds. The information obtained from Lipper for the meeting compared the advisory fee, transfer agency/custodian fees, distribution fees, other nonmanagement expenses and total expenses for the Institutional class of shares of each Fund and the CSCS Investor class of shares to those of a group of competitor funds of roughly equivalent size, as well as a universe of competitor funds. The expense groups of competitor funds were the same groups used for investment performance comparison, but the performance universes were broader than the expense universes. The Trustees did not independently verify any of the information provided by Lipper. CST. The Trustees reviewed information that showed that CST's advisory fees (which includes administration) were slightly higher than the Lipper peer group average but that CST's total expense ratio was less than the Lipper peer group average and also compared favorably to the average total expense ratio of the Lipper peer universe. The Trustee considered that certain of the funds in the CENTURY FUNDS 25 peer group had lower advisory fees than CST as a result of fee waivers that could be terminated. The Trustees concluded that the advisory fees and total expense ratios were acceptable in light of the performance and the other factors considered. CSCS. The Trustees reviewed information that showed that CSCS's advisory fees were slightly lower than the Lipper peer group average. The Trustees also reviewed information that showed that the total expense ratio for CSCS's Investor class of shares was slightly higher than the average total expense ratio of the Lipper peer group but slightly lower than the average total expense ratio of the Lipper peer universe. The Trustees considered CSCS's performance relative to the funds in the peer group that had lower expense ratios and noted that CSCS's performance was in line or better than the performance of those funds. The Trustees also considered information provided to them regarding the costs to CCM of providing advisory services to CSCS, noting in particular the competitive market for analysts and portfolio managers and that the research needed to implement CSCS's investment strategy was relatively costly. The Trustees concluded that the advisory fees, administrative fees and total expense ratios of both classes of shares of CSCS were acceptable in light of the performance of the Fund and the other factors considered. CENTURY FUNDS 26 Quarterly Portfolio Schedule and Proxy Voting Policies and Procedures. The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (the "SEC") for the first and third quarters of each fiscal year on Form N-Q. A description of the policies and procedures that each Fund uses to determine how to vote proxies relating to portfolio securities and each Fund's proxy voting record for the 12-month period ended June 30 is available, without charge, upon request, by calling 1-800-321-1928. The Funds' Form N-Q, a description of the Funds' proxy voting policies and procedures and proxy voting record are available on the SEC's website at http://www.sec.gov. These materials may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. TRUSTEES AND OFFICERS Alexander L. Thorndike, Chairman and Chief Investment Officer John E. Beard, Trustee Davis R. Fulkerson, Trustee Stephen W. Kidder, Trustee Jerrold Mitchell, Trustee Michael J. Poulos, Trustee* Jerry S. Rosenbloom, Trustee David D. Tripple, Trustee Steven Alfano, Secretary and Chief Compliance Officer INVESTMENT ADVISOR Century Capital Management, LLC 100 Federal Street Boston, Massachusetts 02110 SHAREHOLDER INFORMATION 800-303-1928 www.centuryfunds.com * In accordance with the Board's retirement policy, Mr. Poulos is expected to retire from the Board of Trustees as of July 31, 2006. CENTURY FUNDS 27 [LOGO] CENTURY CENTURY FUNDS 28 CENTURY FUNDS PRIVACY POLICY When you become a Century Funds shareholder, you entrust us with not only your investments but your personal and financial data as well. Century has always been committed to maintaining the confidentiality, security and integrity of personal information entrusted to us. We hold ourselves to the highest standards regarding our privacy practices, and we want you to know how we protect your information and how we use it to service your account. THIS MEANS, MOST IMPORTANTLY, THAT WE DO NOT SELL CLIENT INFORMATION--WHETHER IT IS YOUR PERSONAL INFORMATION OR THE FACT THAT YOU ARE A CENTURY FUNDS SHAREHOLDER--TO ANYONE. Instead, we use your information primarily to complete transactions that you request or we share your information within the Century Funds family in order to help us make you better aware of other financial products and services that we offer for your investing needs. In servicing your account, we may also share your information with unaffiliated third parties that perform administrative, marketing or research services for us, or with whom we are developing or offering investment products. When we enter into such a relationship, our contracts restrict these third parties from sharing or using your information for any purpose other than those for which they were hired. THE INFORMATION WE COLLECT ABOUT YOU You typically provide personal information when you complete a Century Funds account application or when you request a transaction that involves one of the Century Funds. This information may include your: o Name and address. o Social Security or taxpayer identification number. o Account balance. o Accounts at other institutions. WE MAINTAIN PHYSICAL, ELECTRONIC, AND PROCEDURAL SAFEGUARDS TO PROTECT YOUR PERSONAL INFORMATION. o We do not disclose any nonpublic personal information about our customers or former customers to unaffiliated third parties without the customer's authorization, except as necessary to process a transaction, service an account, respond to inquiries from governmental agencies, or as otherwise permitted by law. o We restrict access to your personal and account information to those employees and service agents who need to know that information to provide products and services to you. WHAT YOU CAN DO For your protection, we recommend that you do not provide your account information to anyone. If you become aware of any suspicious activity relating to your account, please contact us immediately at the number listed below. UPDATING YOUR PERSONAL INFORMATION. The accuracy of your personal information is important. If you need to correct or update your personal or account information, please call us at 800-303-1928. One of our customer service representatives will be happy to review, correct or update your personal or account information. - -------------------------------------------------------------------------------- This Privacy Policy applies to the following Century Funds: Century Shares Trust and Century Small Cap Select Fund. CENTURY FUNDS 29 [LOGO] CENTURY FUNDS 100 Federal Street Boston, Massachusetts 02110 QUALITY GROWTH INVESTORS [LOGO] CENTURY CCMT SAR 110 APR2006 Item 2. Code of Ethics. Not applicable. Item 3. Audit Committee Financial Expert. Not applicable. Item 4. Principal Accountant Fees and Services. Not applicable. Item 5. Audit Committee of Listed Registrants. Not applicable to open-end investment companies. Item 6. Schedule of Investments. Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable to open-end investment companies. Item 8. Portfolio Managers of Closed-End Management Investment Companies Not applicable to open-end investment companies. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchases. Not applicable to open-end investment companies. Item 10. Submission of Matters to a Vote of Security Holders. No changes. Item 11. Controls and Procedures. (a) The registrant's principal executive officer and principal financial officer, after evaluating the effectiveness of the registrant's "disclosure controls and procedures" (as defined in the Investment Company Act of 1940 Rule 30-a-2(c) under the Act (17 CFR 270.30a-2(c))) as of a date (the "Evaluation Date") within 90 days of the filing date of this report, have concluded that, as of the Evaluation Date, the registrant's disclosure controls and procedures were adequately designed to ensure that the information required to be disclosed by the registrant in this Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. Items 12. Exhibits. (a) Not applicable. (b) Attached hereto. Exhibit 99.CERT A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 of the Investment Company Act of 1940. Exhibit 99.906CERT Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. SIGNATURES Pursuant to the requirement 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. Century Capital Management Trust By: /s/ Alexander L. Thorndike -------------------------------- Alexander L. Thorndike, Chairman Date: June 30, 2006 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/ Alexander L. Thorndike -------------------------------- Alexander L. Thorndike, Chairman (Principal Executive Officer) Date: June 30, 2006 By: /s/ Steven Alfano -------------------------------- Steven Alfano, Secretary (Principal Financial Officer) Date: June 30, 2006 EX-99.CERT 2 file002.txt CERTIFICATIONS EX-99.CERT CERTIFICATION I, Steven Alfano, certify that: 1 I have reviewed this report on Form N-CSR of Century Capital Management Trust; 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 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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer 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: June 30, 2006 /s/ Steven Alfano Principal Financial Officer ADDITIONAL EX-99.CERT CERTIFICATION I, Alexander L. Thorndike, certify that: 1 I have reviewed this report on Form N-CSR of Century Capital Management Trust; 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 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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer 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: June 30, 2006 /s/ Alexander L. Thorndike Principal Executive Officer EX-99.906CERT 3 file003.txt CERTIFICATIONS EX-99.906CERT CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the shareholder report of Century Capital Management Trust (the "Registrant") on Form N-CSR for the period ended April 30, 2006, (the "Report"), each of the undersigned certifies pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to his knowledge, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: June 30, 2006 /s/ Alexander L. Thorndike ---------------------------- Alexander L. Thorndike Principal Executive Officer Dated: June 30, 2006 /s/ Steven Alfano ----------------------------- Steven Alfano Principal Financial Officer A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO CENTURY CAPITAL MANAGEMENT TRUST AND WILL BE RETAINED BY CENTURY CAPITAL MANAGEMENT TRUST AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----