0001193125-22-311695.txt : 20221223 0001193125-22-311695.hdr.sgml : 20221223 20221223133033 ACCESSION NUMBER: 0001193125-22-311695 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20221031 FILED AS OF DATE: 20221223 DATE AS OF CHANGE: 20221223 EFFECTIVENESS DATE: 20221223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMECAP Odyssey Funds CENTRAL INDEX KEY: 0001293967 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-21597 FILM NUMBER: 221484678 BUSINESS ADDRESS: STREET 1: 177 EAST COLORADO BOULEVARD, 11TH FLOOR CITY: PASADENA STATE: CA ZIP: 91105 BUSINESS PHONE: 626-304-9222 MAIL ADDRESS: STREET 1: 177 EAST COLORADO BOULEVARD, 11TH FLOOR CITY: PASADENA STATE: CA ZIP: 91105 FORMER COMPANY: FORMER CONFORMED NAME: PRIMECAP Management Co DATE OF NAME CHANGE: 20160621 FORMER COMPANY: FORMER CONFORMED NAME: PRIMECAP Odyssey Funds DATE OF NAME CHANGE: 20040629 FORMER COMPANY: FORMER CONFORMED NAME: PRIMECAP Funds DATE OF NAME CHANGE: 20040616 0001293967 S000005539 PRIMECAP Odyssey Stock Fund C000015069 PRIMECAP Odyssey Stock Fund POSKX 0001293967 S000005540 PRIMECAP Odyssey Growth Fund C000015070 PRIMECAP Odyssey Growth Fund POGRX 0001293967 S000005541 PRIMECAP Odyssey Aggressive Growth Fund C000015071 PRIMECAP Odyssey Aggressive Growth Fund POAGX N-CSR 1 d419919dncsr.htm N-CSR N-CSR

As filed with the Securities and Exchange Commission on December 23, 2022

 

 

 

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 811-21597

 

 

PRIMECAP Odyssey Funds

(Exact name of registrant as specified in charter)

 

 

177 East Colorado Boulevard, 11th Floor

Pasadena, CA 91105

(Address of principal executive offices) (Zip code)

 

 

Michael J. Ricks

PRIMECAP Management Company

177 East Colorado Boulevard, 11th Floor

Pasadena, CA 91105

(Name and address of agent for service)

(626) 304-9222

Registrant’s telephone number, including area code

 

 

Date of fiscal year end: October 31

Date of reporting period: October 31, 2022

 

 

 


Item 1. Reports to Stockholders.


Item 1. Reports to Stockholders.

ANNUAL REPORT

For the Year Ended October 31, 2022

 

LOGO

PRIMECAP ODYSSEY STOCK    (POSKX)

PRIMECAP ODYSSEY GROWTH (POGRX)

PRIMECAP ODYSSEY AGGRESSIVE GROWTH  (POAGX)


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Table of Contents

PRIMECAP Odyssey Funds

 

Letter to Shareholders

     2  

Performance Graphs

     10  

PRIMECAP Odyssey Stock Fund

     10  

PRIMECAP Odyssey Growth Fund

     11  

PRIMECAP Odyssey Aggressive Growth Fund

     12  

Sector Breakdown

     13  

Schedule of Investments

     15  

PRIMECAP Odyssey Stock Fund

     15  

PRIMECAP Odyssey Growth Fund

     20  

PRIMECAP Odyssey Aggressive Growth Fund

     26  

Statements of Assets and Liabilities

     34  

Statements of Operations

     35  

Statements of Changes in Net Assets

     36  

PRIMECAP Odyssey Stock Fund

     36  

PRIMECAP Odyssey Growth Fund

     37  

PRIMECAP Odyssey Aggressive Growth Fund

     38  

Financial Highlights

     39  

PRIMECAP Odyssey Stock Fund

     39  

PRIMECAP Odyssey Growth Fund

     40  

PRIMECAP Odyssey Aggressive Growth Fund

     41  

Notes to Financial Statements

     42  

Report of Independent Registered Public Accounting Firm

     51  

Expense Example

     52  

Additional Information

     54  

Management

     60  

Privacy Notice

  

 

1


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Letter to Shareholders

PRIMECAP Odyssey Funds

 

Dear Fellow Shareholders,

For the fiscal year ended October 31, 2022, the PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund produced total returns of -11.33%, -17.61%, and -28.21%, respectively. The unmanaged S&P 500® Index produced a total return of -14.61% during the period. Sector allocation benefited results relative to the S&P 500®, while the impact from stock selection varied widely by Fund.

The fiscal year marked an abrupt degradation in market conditions. The year began with a disruptive bout of COVID-19, courtesy of the contagious omicron variant that peaked in mid-January. But in this case the prognosis was mostly good news, and thereafter Covid’s inordinate societal influence largely faded.

Geopolitical hostility and widespread inflation, however, supplanted COVID-19 as fresh sources of market anxiety. Russia’s invasion-turned-quagmire in Ukraine devastated the region and posed substantial risks to Europe and the world. Meanwhile, at home, stimulus-driven excess demand continued to overwhelm structurally-impaired supply chains and an inadequate labor pool; in other words, too much money chased too few goods (and services). Inflation thus broadened and worsened during the period, notching 40-year highs, as price spikes in goods and commodities hemorrhaged into stickier categories, like wages and services.

The Federal Reserve (the “Fed,”) chagrined by its earlier complacency in the face of ramping inflation, executed a dramatic hawkish pivot, punctuated by an ongoing series of aggressive rate hikes. The real economy stalled somewhat; despite solid nominal economic growth and a tight labor market, real gross domestic product declined during the first half of 2022. Yet the Fed resolved to further reduce economic activity, raising the prospects of a hard landing.

Equities unsurprisingly faltered amid this tumult, plummeting more than 25 percent from their January peak to their October lows before staging a late rally. Elevated inflation and rising interest rates weighed especially on high-valuation growth stocks; the communication services (-41%), consumer discretionary (-29%), and information technology (-20%) sectors lagged the market. Energy (+65%) fared best, a repeat of last fiscal year’s accolade, boosted by yet higher oil prices. Defensive sectors also generally outperformed, including consumer staples (+5%), utilities (+3%), and health care (+1%).

The Funds again endured a mixed relative report card, with only the Stock Fund eclipsing the benchmark. This divergent performance persisted from April’s half-year results, and it echoed last year’s rank ordering, as well. For two consecutive years, value stocks have outpaced growth stocks, with the gap widening substantially this fiscal year. Indeed, consistent with our semiannual commentary, the Growth and Aggressive Growth Funds outperformed size-specific, growth-centric indices for the full year despite trailing the broader market.

The Funds’ sector positioning continues to evolve, with information technology now a very modest underweight position in the Aggressive Growth Fund, a new development; the Stock and

 

2


Letter to Shareholders

PRIMECAP Odyssey Funds

 

continued

 

Growth Funds had already expressed an underweight view. Otherwise, each of the Funds held an overweight position in the health care and industrials sectors, and an underweight position in the energy, real estate, consumer staples, communication services, materials, and utilities sectors. The Growth Fund was also underweight the financials and consumer discretionary sectors; of these, the Stock Fund was overweight financials while the Aggressive Growth Fund was overweight consumer discretionary.

A more detailed discussion of the results of each PRIMECAP Odyssey Fund follows.

PRIMECAP Odyssey Stock Fund

For the fiscal year ended October 31, 2022, the Stock Fund’s total return of -11.33% exceeded the S&P 500®’s total return of -14.61%. Relative to the S&P 500®, sector allocation and stock selection both provided tailwinds to Fund performance.

All three Odyssey Funds benefited from favorable sector allocation, albeit to different degrees. The Stock Fund was the best-positioned Fund, owing chiefly to its more limited exposure to communication services (3% of average Stock Fund assets versus 9% for the index), the worst-performing sector, and a more substantial industrials overweight position (18% versus 8%). As with the other Funds, the Stock Fund also benefited from a large overweight position in health care (24% versus 14%) and a modest cash position (4%). Partially offsetting these exposures were underweight positions in the three best-performing sectors, energy (2% versus 4%), consumer staples (1% versus 6%), and utilities (0% versus 3%).

The Stock Fund also generated favorable stock selection results, in contrast to the Growth and Aggressive Growth Funds. Health care was a primary differentiator, as the Stock Fund’s greater concentration in large-capitalization biopharmaceuticals fared better than its peer Funds’ outsized ownership of smaller-capitalization biotechnology stocks. Eli Lilly (+44%) delivered another stellar performance on the back of its new diabetes and obesity drug, Mounjaro; the stock finished the period as the largest investment in all three Funds, but the Stock Fund position was most pronounced. Complementing Eli Lilly were four additional Top 10 holdings from the health care sector: two pharmaceutical companies (Bristol-Myers Squibb +37% and Astrazeneca -3%) and two biotechnology giants (Amgen +35% and Biogen +6%).

Stock selection elsewhere was more mixed. All three Funds largely avoided Meta (-71%) and Netflix (-58%) in communication services, while the Stock Fund’s distinctly smaller position in Alphabet (-36%) provided an additional relative boost. Within consumer discretionary, no exposure to Amazon (-39%) and limited ownership of Tesla (-39%) roughly offset disappointing performances from CarMax (-54%) and Sony (-41%). Within information technology, slumping PC demand doomed Intel (-40%) while no ownership in heavyweight Apple (+3%) also hurt; this combined headwind more than offset a strong year from Flex (+16%). Finally, Raymond James (+21%) and AECOM (+11%) logged strong performances within financials and industrials, respectively.

 

3


Letter to Shareholders

PRIMECAP Odyssey Funds

 

continued

 

The top 10 holdings, which collectively represented 32.8% of the portfolio at the period end, are listed below:

 

   
PRIMECAP Odyssey Stock Fund
Top 10 Holdings as of 10/31/22
   Ending % of
Total Portfolio*
 

Eli Lilly & Co.

     7.8  

AstraZeneca PLC – ADR

     4.0  

AECOM

     3.9  

Amgen, Inc.

     2.9  

Biogen, Inc.

     2.7  

Wells Fargo & Co.

     2.6  

Microsoft Corp.

     2.4  

Bristol-Myers Squibb Co.

     2.3  

Flex Ltd.

     2.1  

FedEx Corp.

     2.1  

Total % of Portfolio

     32.8  

 

  *

The percentage is calculated by using the ending market value of the security divided by the ending market value of the total investments of the Fund.

PRIMECAP Odyssey Growth Fund

For the fiscal year ended October 31, 2022, the Growth Fund returned -17.61%, trailing the S&P 500®’s -14.61% total return but exceeding the Russell 1000 Growth Index’s total return of -24.60%. Unfavorable stock selection more than offset favorable sector allocation relative to the S&P 500®.

Sector allocation was slightly less advantageous than that of the Stock Fund given more exposure to communication services (5%) and less to industrials (13%). These incremental headwinds were partially offset by the Growth Fund’s larger health care overweight (30%) and less pronounced energy underweight (3%).

Stock selection was unfavorable overall. Despite several familiar health care outperformers –Eli Lilly, Amgen, and Biogen, plus BioMarin (+9%) – the Growth Fund’s greater biotechnology exposure detracted from results, especially Nektar (-75%) and BeiGene (-53%). Selection within consumer discretionary and information technology was also notably more unfavorable, with large positions in Alibaba (-61%) and Splunk (-50%), respectively, weighing heavily on sector-level performance.

 

4


Letter to Shareholders

PRIMECAP Odyssey Funds

 

continued

 

The top 10 holdings, which collectively represented 30.1% of the portfolio at the period end, are listed below:

 

   
PRIMECAP Odyssey Growth Fund
Top 10 Holdings as of 10/31/22
   Ending % of
Total Portfolio*
 

Eli Lilly & Co.

     6.5  

AECOM

     3.5  

Biogen, Inc.

     3.2  

Raymond James Financial, Inc.

     3.1  

Amgen, Inc.

     2.7  

Alphabet Inc. – Class A & C

     2.6  

ABIOMED, Inc.

     2.3  

BioMarin Pharmaceutical, Inc.

     2.1  

Insulet Corp.

     2.1  

Micron Technology, Inc.

     2.0  

Total % of Portfolio

     30.1  

 

  *

The percentage is calculated by using the ending market value of the security divided by the ending market value of the total investments of the Fund.

PRIMECAP Odyssey Aggressive Growth Fund

For the fiscal year ended October 31, 2022, the Aggressive Growth Fund’s total return of -28.21% trailed the S&P 500®’s total return of -14.61% but slightly exceeded the Russell Midcap Growth Index’s total return of -28.94%. Unfavorable stock selection was the primary driver of underperformance relative to the S&P 500®, while sector allocation provided a modest offset.

The Aggressive Growth Fund’s sector allocation benefit was quite limited. The main culprit relative to its Odyssey Fund peers was a reduced position (less than 1% of average assets) in the high-performing energy sector. Likewise, even more so than the Growth Fund, the Fund suffered from greater exposure to communication services (6%) and less exposure to industrials (12%).

Stock selection was more unfavorable than the Growth Fund, albeit for similar reasons. As its name implies, the Fund’s more ‘aggressive’ growth orientation amid an unforgiving landscape for growth stocks proved especially punitive relative to the benchmark. Health care selection was a significant headwind, as the familiar winners (such as Eli Lilly and Biogen) were less consequential while several key holdings struggled. BioNTech (-50%) retrenched after a two-year Covid-fueled explosion; Pulmonx (-66%) plus larger positions in Nektar and BeiGene also detracted from results. Rhythm Pharmaceuticals (+119%) was a notable offset, as its drug for severe obesity, Imcivree, cleared several milestones. Within information technology and consumer discretionary, growth stocks again

 

5


Letter to Shareholders

PRIMECAP Odyssey Funds

 

continued

 

dragged on relative results. The collapses in HubSpot (-63%) and MaxLinear (-51%), for instance, were representative of widespread weakness in high-multiple software and semiconductor stocks, respectively. And positions in Tesla and its Chinese EV competitor, Xpeng (-86%), contributed to underperformance in the consumer discretionary sector.

The top 10 holdings, which collectively represented 30.4% of the portfolio at the period end, are listed below:

 

   
PRIMECAP Odyssey Aggressive Growth Fund
Top 10 Holdings as of 10/31/22
   Ending % of
Total Portfolio*
 

Eli Lilly & Co.

     4.4  

Biogen, Inc.

     3.6  

Micron Technology, Inc.

     3.0  

Seagen, Inc.

     3.0  

Tesla, Inc.

     2.9  

BioNTech SE – ADR

     2.8  

Sony Group Corp. – ADR

     2.8  

ABIOMED, Inc.

     2.7  

AECOM

     2.7  

BioMarin Pharmaceutical, Inc.

     2.5  

Total % of Portfolio

     30.4  

 

  *

The percentage is calculated by using the ending market value of the security divided by the ending market value of the total investments of the Fund.

Outlook

Following late October’s market rebound, the S&P 500® Index’s valuation returned to modestly elevated levels (16.7x forward P/E versus 15.5x 20-year average). But interest rates soared during the period, undermining a key rationale for above-average equity multiples; the 4.1% 10-year Treasury yield is now comparable to its longer-term historical norm. Meanwhile, recent earnings reports have generally disappointed, and the stronger dollar has a direct negative impact on near-term earnings given companies’ substantial foreign exposures. Forward earnings expectations are thus likely too high. Additionally, we remain wary of above-average macroeconomic risks, most obviously a Fed intent on reducing aggregate demand. These concerns leave us somewhat cautious overall, even after the market’s recalibration.

More broadly, we assess this year’s developments as a potential paradigm shift in the market. Notwithstanding an occasional glitch, the decade-plus since the Great Recession had been remarkably benign: accommodative financial conditions, steady if modest global economic

 

6


Letter to Shareholders

PRIMECAP Odyssey Funds

 

continued

 

growth, and a relentless equity bull market. A pliant Fed, offering investors quasi-insurance in the form of a “Fed put,” underwrote a “buy the dip” mentality that became ubiquitous.

But the COVID-19 era, both the virus and especially the policy response, ultimately sowed enough dislocation to tip the proverbial apple cart. Ironically, it was Covid’s abrupt fade – its welcome shift to endemic status – that applied the final push. The mass normalization of society, coupled with two years of excessive money supply growth, unleashed the worst inflation in forty years.

The hallmarks of the prior paradigm – low interest rates, inflation, and growth – bred a certain type of winner. Big Tech stocks were perhaps the ultimate winners, highlighted by the ascendance of FAANG stocks (Apple, Amazon, Alphabet, Meta, and Netflix) – plus a few select peers. A new paradigm would presumably upend this dynamic, as investors migrate from yesterday’s darlings to fresh leadership. And, as previously mentioned, these stocks indeed struggled this year; Meta, Netflix, Amazon, and Alphabet all badly lagged the market’s decline.

That said, picking the next winners is never straightforward. Despite largely avoiding Big Tech weakness, the Growth and Aggressive Growth Funds still struggled in relative terms due to their own idiosyncratic miscues. The Funds’ unconventional ownership of small-capitalization biotechnology and Chinese technology stocks, for instance, discussed at length in recent letters, has fared poorly of late. The Funds continue to own numerous beaten-down stocks in these industries.

The Funds also own underappreciated successes, however, including Eli Lilly, the Funds’ largest position. Lilly has long been a meaningful Fund position – it was the Stock and Growth Funds’ largest holding at the start of the year, and a Top 10 Aggressive Growth Fund position, as well. Its outsized gains during the period (+44%) catapulted the stock to the top of all three Funds, and it finished the period between 4 and 8 percent of each Fund’s year-end assets, multiples above its benchmark weighting of less than 1 percent.

Like several Fund stock narratives, the Lilly story began nearly two decades ago. The Stock and Growth Funds initiated positions in the 2000s as Lilly was approaching patent cliffs for its so-called “twin towers” of Zyprexa and Cymbalta. The market, foreseeing a collapse in revenue and earnings, assigned Lilly an anemic valuation. But this ignored a key plotline: the company’s earnings were disproportionately depressed by healthy R&D spend, and its promising pipeline had huge potential. Looking through our long-term lens, we identified this latent opportunity, which had been obscured by the market’s obsession with near-term dynamics. It took time, but by the mid-2010s Lilly had returned to robust revenue growth on the back of a stable of new products. Its earnings climbed and its multiple expanded.

But the story was not over. The Funds stayed invested (and the Aggressive Growth Fund joined the bloc) because of our optimism regarding two pipeline drugs that were largely overlooked by Wall Street’s sell-side consensus, each with transformative blockbuster potential: tirzepatide

 

7


Letter to Shareholders

PRIMECAP Odyssey Funds

 

continued

 

(brand name Mounjaro) for obesity and donanemab for Alzheimer’s. Since then, tirzepatide surpassed trial expectations, achieving approval in diabetes with additional approval in obesity expected next year. And donanemab, despite skepticism regarding the beta amyloid hypothesis, continues to make regulatory progress. Following in Biogen’s choppy wake, donanemab faces ample investor doubt – but there persists an enormous unmet need for a desperate Alzheimer’s population, and the commercial opportunity is staggering. The stock’s spectacular run has generated a superficially-high valuation (40.0x forward P/E), but earnings could plausibly quadruple in the mid-term as these drugs are absorbed by Lilly’s income statement. We believe that combined with a best-in-class management team, these two drugs (and the rest of Lilly’s pipeline) can deliver another decade-long chapter in this remarkable success story.

Meanwhile, in stark juxtaposition, the Funds have no exposure to Apple. Unlike its Big Tech peers, Apple has thus far avoided a major stumble. Its market capitalization is north of two trillion dollars, and it now represents roughly 7 percent of the S&P 500® – a record-high weighting for any constituent since 1980. The company’s multiple re-rated higher pre-Covid and valuation has sustained at elevated levels (24.3x forward P/E). Apple is a premier brand that has made a habit of revolutionizing the consumer electronics industry. But it undeniably benefited from COVID-19, and its mid-term earnings outlook is uninspiring – in contrast to Lilly’s imminent inflection.

Each of these two Fund “positions” – a massive Lilly overweight and corresponding Apple underweight – is a material departure from the benchmark. Each position embodies a high-conviction, inherently contrarian belief. Such deviation is emblematic of the Funds’ differentiated investment philosophy and process. And on the eve – or in the midst – of a paradigm change, we prefer the Funds’ distinctive portfolios to the benchmark status quo.

Tomorrow’s longer-term winners are, as always, uncertain. The contours of this potential new paradigm have yet to take shape. Rapidly rising rates tend to break things, and we expect wreckage if the Fed perseveres. But eventually we believe a less Fed-centric market will arise, one where fundamentals and valuations feature more prominently than last decade’s artificial backstop. We are optimistic our holdings’ long-term fundamentals and attractive valuations will benefit from this evolution.

Sincerely,

PRIMECAP Management Company

November 6, 2022

Past performance is not a guarantee of future results.

The funds invest in smaller companies, which involve additional risks such as limited liquidity and greater volatility. All funds may invest in foreign securities, which involves greater volatility and political, economic and currency risks and differences in accounting methods. Mutual fund investing involves risk, and loss of principal is possible. Growth stocks typically are more volatile than value stocks; however, value stocks have a lower expected growth rate in earnings and sales.

 

8


Letter to Shareholders

PRIMECAP Odyssey Funds

 

continued

 

Please refer to the Schedule of Investments for details of fund holdings. Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security.

The S&P 500® is a market capitalization-weighted index of 500 large-capitalization stocks commonly used to represent the U.S. equity market. The Russell 1000 Growth Index is an index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values (the Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe). The Russell Midcap Growth Index measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. You cannot invest directly in an index.

Earnings per share (EPS) is calculated by taking the total earnings divided by the number of shares outstanding.

Price-to-earnings (P/E) ratio is calculated by dividing the current share price of a stock by its earnings per share.

Earnings growth is not a prediction of a fund’s future performance.

The information provided herein represents the opinions of PRIMECAP Management Company and is not intended to be a forecast of future events, a guarantee of future results, or investment advice.

 

9


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Performance Graphs

PRIMECAP Odyssey Stock Fund

 

The chart below illustrates the performance of a hypothetical $10,000 investment made on October 31, 2012 and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart assumes reinvestment of dividends and capital gains for the fund and dividends for the index.

 

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     Total Return
Period Ended October 31, 2022
 
     1 Year      Annualized
5 Year
     Annualized
10 Year
     Annualized
Since Inception^
 

Stock Fund

     -11.33%        8.15%        12.47%        9.83%  

S&P 500®*

     -14.61%        10.44%        12.79%        9.25%  

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-729-2307.

 

  *

The S&P 500® is a market capitalization-weighted index of 500 large-capitalization stocks commonly used to represent the U.S. equity market.

  ^

November 1, 2004

 

10


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Performance Graphs

PRIMECAP Odyssey Growth Fund

 

The chart below illustrates the performance of a hypothetical $10,000 investment made on October 31, 2012 and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart assumes reinvestment of dividends and capital gains for the fund and dividends for the index.

 

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     Total Return
Period Ended October 31, 2022
 
     1 Year      Annualized
5 Year
     Annualized
10 Year
     Annualized
Since Inception^
 

Growth Fund

     -17.61%        7.66%        13.05%        10.39%  

S&P 500®*

     -14.61%        10.44%        12.79%        9.25%  

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-729-2307.

 

  *

The S&P 500® is a market capitalization-weighted index of 500 large-capitalization stocks commonly used to represent the U.S. equity market.

  ^

November 1, 2004

 

11


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Performance Graphs

PRIMECAP Odyssey Aggressive Growth Fund

 

The chart below illustrates the performance of a hypothetical $10,000 investment made on October 31, 2012 and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart assumes reinvestment of dividends and capital gains for the fund and dividends for the index.

 

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     Total Return
Period Ended October 31, 2022
 
     1 Year      Annualized
5 Year
     Annualized
10 Year
     Annualized
Since Inception^
 

Aggressive Growth Fund

     -28.21%        5.27%        13.29%        11.47%  

S&P 500®*

     -14.61%        10.44%        12.79%        9.25%  

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-729-2307.

 

  *

The S&P 500® is a market capitalization-weighted index of 500 large-capitalization stocks commonly used to represent the U.S. equity market.

  ^

November 1, 2004

 

12


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Sector Breakdown

PRIMECAP Odyssey Funds

 

PRIMECAP Odyssey Stock Fund

 

Communication Services

     2.8%  

Consumer Discretionary

     9.0%  

Consumer Staples

     1.2%  

Energy

     2.9%  

Financials

     12.1%  

Health Care

     27.8%  

Industrials

     18.3%  

Information Technology

     20.0%  

Materials

     2.3%  

Short-Term Investments, net of Liabilities in Excess of Other Assets

     3.6%  

Total

     100.0%  

PRIMECAP Odyssey Growth Fund

 

Communication Services

     4.5%  

Consumer Discretionary

     10.4%  

Consumer Staples

     0.2%  

Energy

     3.5%  

Financials

     8.6%  

Health Care

     34.4%  

Industrials

     13.5%  

Information Technology

     21.7%  

Materials

     0.7%  

Rights (Health Care)

     0.0%  

Short-Term Investments, net of Liabilities in Excess of Other Assets

     2.5%  

Total

     100.0%  

The tables above list sector allocations as a percentage of each fund’s total net assets as of October 31, 2022. The management report may make reference to average allocations during the period. As a result, the sector allocations above may differ from those discussed in the management report.

 

13


Sector Breakdown

PRIMECAP Odyssey Funds

 

continued

 

PRIMECAP Odyssey Aggressive Growth Fund

 

Communication Services

     5.5%  

Consumer Discretionary

     11.8%  

Consumer Staples

     0.0%  

Energy

     1.2%  

Financials

     5.0%  

Health Care

     35.4%  

Industrials

     12.7%  

Information Technology

     25.1%  

Materials

     0.8%  

Real Estate

     0.1%  

Preferred Stocks (Financials)

     0.0%  

Warrants (Materials)

     0.0%  

Rights (Health Care)

     0.0%  

Short-Term Investments, net of Liabilities in Excess of Other Assets

     2.4%  

Total

     100.0%  

The table above lists sector allocations as a percentage of the fund’s total net assets as of October 31, 2022. The management report may make reference to average allocations during the period. As a result, the sector allocations above may differ from those discussed in the management report.

 

14


LOGO  

Schedule of Investments

PRIMECAP Odyssey Stock Fund

October 31, 2022

 

Shares            Value  
  COMMON STOCKS – 96.4%   
Communication Services – 2.8%       
  354,030     

Activision Blizzard, Inc.

   $ 25,773,384  
  372,480     

Alphabet, Inc. – Class A (a)

     35,203,085  
  490,600     

Alphabet, Inc. – Class C (a)

     46,440,196  
  138,600     

Comcast Corp. – Class A

     4,399,164  
  75,200     

Meta Platforms, Inc. – Class A (a)

     7,005,632  
  300,000     

Nintendo Co. Ltd. – JPY

     12,246,545  
  271,600     

Walt Disney Co. (The) (a)

     28,936,264  
     

 

 

 
        160,004,270  
     

 

 

 
Consumer Discretionary – 9.0%       
  424,100     

Bath & Body Works, Inc.

     14,156,458  
  369,100     

Brinker International, Inc. (a)

     12,324,249  
  25,700     

Burlington Stores, Inc. (a)

     3,674,072  
  212,600     

Capri Holdings Ltd. (a)

     9,711,568  
  521,900     

CarMax, Inc. (a)

     32,884,919  
  1,268,700     

Carnival Corp. (a)

     11,494,422  
  196,300     

Dollar Tree, Inc. (a)

     31,113,550  
  230,650     

eBay, Inc.

     9,189,096  
  217,800     

Leslie’s, Inc. (a)

     3,057,912  
  4,676,700     

Mattel, Inc. (a)

     88,670,232  
  82,310     

MGM Resorts International

     2,927,767  
  740,000     

Newell Brands, Inc.

     10,219,400  
  898,340     

Ross Stores, Inc.

     85,962,154  
  184,550     

Royal Caribbean Cruises Ltd. (a)

     9,851,279  
  1,496,819     

Sony Group Corp. – ADR

     100,990,378  
  230,400     

TJX Cos., Inc. (The)

     16,611,840  
  227,599     

Victoria’s Secret & Co. (a)

     8,557,722  
  526,529     

Whirlpool Corp.

     72,787,369  
     

 

 

 
        524,184,387  
     

 

 

 
Consumer Staples – 1.2%       
  207,300     

Altria Group, Inc.

     9,591,771  
  283,600     

BJ’s Wholesale Club Holdings, Inc. (a)

     21,950,640  
  105,300     

Philip Morris International, Inc.

     9,671,805  
  229,500     

Sysco Corp.

     19,865,520  
  149,800     

Tyson Foods, Inc. – Class A

     10,238,830  
     

 

 

 
        71,318,566  
     

 

 

 
Energy – 2.9%       
  172,400     

Cameco Corp.

     4,089,328  
  250,600     

EOG Resources, Inc.

     34,211,912  

 

The accompanying notes are an integral part of these financial statements.

 

15


Schedule of Investments

PRIMECAP Odyssey Stock Fund

 

October 31, 2022 – continued

 

Shares            Value  
Energy (continued)       
  348,400     

Hess Corp.

   $ 49,152,272  
  170,600     

Pioneer Natural Resources Co.

     43,743,546  
  1,390,000     

Southwestern Energy Co. (a)

     9,632,700  
  235,000     

TechnipFMC PLC (a)

     2,488,650  
  922,800     

Transocean Ltd. (a)

     3,395,904  
  177,600     

Valero Energy Corp.

     22,297,680  
     

 

 

 
        169,011,992  
     

 

 

 
Financials – 12.1%       
  2,036,330     

Bank of America Corp.

     73,389,333  
  265,000     

Charles Schwab Corp. (The)

     21,112,550  
  1,193,150     

Citigroup, Inc.

     54,717,859  
  236,000     

CME Group, Inc. – Class A

     40,898,800  
  690,220     

Discover Financial Services

     72,100,381  
  41,590     

Evercore, Inc. – Class A

     4,371,109  
  863,220     

JPMorgan Chase & Co.

     108,662,134  
  580,880     

Northern Trust Corp.

     48,997,228  
  75,130     

Progressive Corp. (The)

     9,646,692  
  974,765     

Raymond James Financial, Inc.

     115,158,737  
  3,305,908     

Wells Fargo & Co.

     152,038,709  
     

 

 

 
        701,093,532  
     

 

 

 
Health Care – 27.8%       
  255,960     

Abbott Laboratories

     25,324,682  
  459,100     

Agilent Technologies, Inc.

     63,516,485  
  46,500     

Alcon, Inc.

     2,821,620  
  624,200     

Amgen, Inc.

     168,752,470  
  3,978,680     

AstraZeneca PLC – ADR

     233,986,171  
  555,850     

Biogen, Inc. (a)

     157,550,124  
  349,800     

Boston Scientific Corp. (a)

     15,079,878  
  1,699,300     

Bristol-Myers Squibb Co.

     131,644,771  
  267,160     

CVS Health Corp.

     25,300,052  
  1,873,690     

Elanco Animal Health, Inc. (a)

     24,713,971  
  1,252,163     

Eli Lilly & Co.

     453,395,701  
  27,000     

IQVIA Holdings, Inc. (a)

     5,661,090  
  387,000     

LivaNova PLC (a)

     18,227,700  
  38,010     

Medtronic PLC

     3,319,793  
  85,300     

Merck & Co., Inc.

     8,632,360  
  712,020     

Novartis AG – ADR

     57,766,183  
  234,230     

PerkinElmer, Inc.

     31,288,443  
  79,011     

Roche Holding AG – CHF

     26,239,684  

 

The accompanying notes are an integral part of these financial statements.

 

16


Schedule of Investments

PRIMECAP Odyssey Stock Fund

 

October 31, 2022 – continued

 

Shares            Value  
Health Care (continued)       
  113,360     

Sanofi – ADR

   $ 4,900,553  
  262,398     

Siemens Healthineers AG – EUR

     12,078,881  
  24,700     

Stryker Corp.

     5,662,228  
  187,140     

Thermo Fisher Scientific, Inc.

     96,184,346  
  6,980     

Waters Corp. (a)

     2,088,207  
  312,790     

Zimmer Biomet Holdings, Inc.

     35,454,746  
  4,200     

ZimVie, Inc. (a)

     36,834  
     

 

 

 
        1,609,626,973  
     

 

 

 
Industrials – 18.3%       
  3,008,900     

AECOM

     226,509,992  
  448,400     

Airbus SE – EUR

     48,558,314  
  54,050     

Alaska Air Group, Inc. (a)

     2,403,063  
  2,350,490     

American Airlines Group, Inc. (a)

     33,329,948  
  34,900     

AMETEK, Inc.

     4,525,134  
  391,872     

Carrier Global Corp.

     15,580,831  
  142,223     

Caterpillar, Inc.

     30,785,590  
  332,700     

CSX Corp.

     9,668,262  
  274,940     

Curtiss-Wright Corp.

     46,143,180  
  23,100     

Deere & Co.

     9,143,442  
  916,450     

Delta Air Lines, Inc. (a)

     31,095,148  
  747,285     

FedEx Corp.

     119,774,840  
  85,070     

General Dynamics Corp.

     21,250,486  
  111,200     

GXO Logistics, Inc. (a)

     4,063,248  
  466,190     

Jacobs Solutions, Inc.

     53,714,412  
  267,000     

JELD-WEN Holding, Inc. (a)

     2,832,870  
  371,600     

Kirby Corp. (a)

     25,919,100  
  2,500     

Knight-Swift Transportation Holdings, Inc.

     120,075  
  23,300     

L3Harris Technologies, Inc.

     5,742,751  
  226,900     

Matson, Inc.

     16,695,302  
  594,120     

Maxar Technologies, Inc.

     13,272,641  
  92,200     

Norfolk Southern Corp.

     21,028,054  
  33,181     

Otis Worldwide Corp.

     2,343,906  
  13,562     

Raytheon Technologies Corp.

     1,285,949  
  18,310     

Rockwell Automation, Inc.

     4,674,543  
  14,700     

Saia, Inc. (a)

     2,923,242  
  1,055,708     

Siemens AG – EUR

     115,431,058  
  2,544,380     

Southwest Airlines Co. (a)

     92,488,213  
  30,400     

Union Pacific Corp.

     5,993,056  
  1,401,900     

United Airlines Holdings, Inc. (a)

     60,393,852  

 

The accompanying notes are an integral part of these financial statements.

 

17


Schedule of Investments

PRIMECAP Odyssey Stock Fund

 

October 31, 2022 – continued

 

Shares            Value  
Industrials (continued)       
  173,600     

United Parcel Service, Inc. – Class B

   $ 29,124,872  
  135,200     

XPO Logistics, Inc. (a)

     6,995,248  
     

 

 

 
        1,063,810,622  
     

 

 

 
Information Technology – 20.0%       
  126,000     

Adobe, Inc. (a)

     40,131,000  
  257,300     

Analog Devices, Inc.

     36,696,126  
  627,650     

Applied Materials, Inc.

     55,415,218  
  501,600     

Cisco Systems, Inc.

     22,787,688  
  263,698     

Corning, Inc.

     8,483,165  
  137,000     

Fidelity National Information Services, Inc.

     11,369,630  
  6,152,179     

Flex Ltd. (a)

     120,459,665  
  4,726,680     

Hewlett Packard Enterprise Co.

     67,449,724  
  1,286,260     

HP, Inc.

     35,526,501  
  3,598,610     

Intel Corp.

     102,308,482  
  146,320     

Keysight Technologies, Inc. (a)

     25,481,628  
  353,930     

KLA Corp.

     112,001,148  
  5,845,580     

L.M. Ericsson Telephone Co. – ADR

     32,559,880  
  602,450     

Microsoft Corp.

     139,846,718  
  970,900     

NetApp, Inc.

     67,254,243  
  19,310     

NVIDIA Corp.

     2,606,271  
  901,580     

Oracle Corp.

     70,386,351  
  175,510     

PayPal Holdings, Inc. (a)

     14,669,126  
  379,607     

QUALCOMM, Inc.

     44,664,560  
  20,000     

Seagate Technology Holdings PLC

     993,200  
  165,500     

Teradyne, Inc.

     13,463,425  
  514,540     

Texas Instruments, Inc.

     82,650,560  
  131,500     

Visa, Inc. – Class A

     27,241,540  
  145,140     

WEX, Inc. (a)

     23,823,280  
     

 

 

 
        1,158,269,129  
     

 

 

 
Materials – 2.3%       
  198,200     

Albemarle Corp.

     55,470,234  
  230,083     

Corteva, Inc.

     15,033,623  
  199,383     

Dow, Inc.

     9,319,162  
  215,784     

DuPont de Nemours, Inc.

     12,342,845  
  504,900     

Freeport-McMoRan, Inc.

     16,000,281  
  4,427,278     

Glencore PLC – GBP

     25,360,673  
     

 

 

 
        133,526,818  
     

 

 

 
 

TOTAL COMMON STOCKS
(Cost $3,090,099,522)

   $ 5,590,846,289  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

18


Schedule of Investments

PRIMECAP Odyssey Stock Fund

 

October 31, 2022 – continued

 

Shares            Value  
  SHORT-TERM INVESTMENTS – 3.7%   
  211,502,114     

Dreyfus Treasury Securities Cash Management Fund – Institutional Shares – 3.01% (b)

   $ 211,502,114  
     

 

 

 
 

TOTAL SHORT-TERM INVESTMENTS
(Cost $211,502,114)

     211,502,114  
     

 

 

 
 

TOTAL INVESTMENTS IN SECURITIES
(Cost $3,301,601,636) – 100.1%

     5,802,348,403  
 

Liabilities in Excess of Other Assets – (0.1)%

     (3,245,420
  

 

 

 
 

TOTAL NET ASSETS – 100.0%

   $ 5,799,102,983  
     

 

 

 

 

ADR

American Depository Receipt

CHF

Swiss Francs

EUR

Euros

GBP

British Pound Sterling

JPY

Japanese Yen

(a)

Non-Income Producing

(b)

Rate quoted is seven-day yield at period end.

The Global Industry Classification Standard (GICS ®) was developed by and is the exclusive property of MSCI Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by the fund’s administrator.

 

The accompanying notes are an integral part of these financial statements.

 

19


LOGO  

Schedule of Investments

PRIMECAP Odyssey Growth Fund

October 31, 2022

 

Shares            Value  
  COMMON STOCKS – 97.5%   
Communication Services – 4.5%       
  1,048,850     

Alphabet, Inc. – Class A (a)

   $ 99,126,814  
  872,750     

Alphabet, Inc. – Class C (a)

     82,614,515  
  631,870     

Baidu, Inc. – ADR (a)

     48,382,286  
  957,182     

comScore, Inc. (a)

     1,158,190  
  96,000     

Electronic Arts, Inc.

     12,092,160  
  220,100     

IMAX Corp. (a)

     2,801,873  
  69,180     

Live Nation Entertainment, Inc. (a)

     5,507,420  
  75,100     

Meta Platforms, Inc. – Class A (a)

     6,996,316  
  10,000     

Netflix, Inc. (a)

     2,918,800  
  550,000     

Nintendo Co. Ltd. – JPY

     22,451,999  
  247,700     

Walt Disney Co. (The) (a)

     26,389,958  
     

 

 

 
        310,440,331  
     

 

 

 
Consumer Discretionary – 10.4%       
  1,189,760     

Alibaba Group Holding Ltd. – ADR (a)

     75,644,941  
  499,498     

Bath & Body Works, Inc.

     16,673,243  
  137,410     

Brinker International, Inc. (a)

     4,588,120  
  75,600     

Burlington Stores, Inc. (a)

     10,807,776  
  510,300     

Capri Holdings Ltd. (a)

     23,310,504  
  728,840     

CarMax, Inc. (a)

     45,924,208  
  1,279,346     

Carnival Corp. (a)

     11,590,875  
  121,200     

Dollar Tree, Inc. (a)

     19,210,200  
  31,550     

DoorDash, Inc. – Class A (a)

     1,373,371  
  145,460     

eBay, Inc.

     5,795,126  
  1,801,124     

Entain PLC – GBP

     26,087,680  
  76,143     

Flutter Entertainment PLC – GBP (a)

     10,111,767  
  1,187,058     

iRobot Corp. (a)

     67,068,777  
  78,400     

Las Vegas Sands Corp. (a)

     2,979,984  
  247,900     

Leslie’s, Inc. (a)

     3,480,516  
  39,300     

Marriott International, Inc. – Class A

     6,292,323  
  3,196,850     

Mattel, Inc. (a)

     60,612,276  
  93,230     

MGM Resorts International

     3,316,191  
  633,800     

Norwegian Cruise Line Holdings Ltd. (a)

     10,704,882  
  75,700     

Ollie’s Bargain Outlet Holdings, Inc. (a)

     4,239,200  
  3,700     

O’Reilly Automotive, Inc. (a)

     3,097,529  
  110,550     

Ross Stores, Inc.

     10,578,530  
  621,571     

Royal Caribbean Cruises Ltd. (a)

     33,179,460  
  1,182,947     

Sony Group Corp. – ADR

     79,813,434  
  526,600     

Tesla, Inc. (a)

     119,822,564  

 

The accompanying notes are an integral part of these financial statements.

 

20


Schedule of Investments

PRIMECAP Odyssey Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Consumer Discretionary (continued)       
  202,200     

TJX Cos., Inc. (The)

   $ 14,578,620  
  265,099     

Victoria’s Secret & Co. (a)

     9,967,722  
  727,310     

Xometry, Inc. – Class A (a)

     43,682,239  
     

 

 

 
        724,532,058  
     

 

 

 
Consumer Staples – 0.2%       
  169,200     

Altria Group, Inc.

     7,828,884  
  95,590     

BJ’s Wholesale Club Holdings, Inc. (a)

     7,398,666  
  31,000     

Grocery Outlet Holding Corp. (a)

     1,071,670  
     

 

 

 
        16,299,220  
     

 

 

 
Energy – 3.5%       
  718,100     

Coterra Energy, Inc.

     22,354,453  
  106,900     

EOG Resources, Inc.

     14,593,988  
  412,021     

Hess Corp.

     58,127,923  
  447,400     

Pioneer Natural Resources Co.

     114,717,834  
  1,900,000     

Southwestern Energy Co. (a)

     13,167,000  
  6,291,104     

Transocean Ltd. (a)

     23,151,263  
     

 

 

 
        246,112,461  
     

 

 

 
Financials – 8.6%       
  302,800     

Bank of America Corp.

     10,912,912  
  407,000     

Citigroup, Inc.

     18,665,020  
  96,600     

CME Group, Inc. – Class A

     16,740,780  
  486,310     

Discover Financial Services

     50,799,943  
  12,380     

Evercore, Inc. – Class A

     1,301,138  
  174,100     

JPMorgan Chase & Co.

     21,915,708  
  102,600     

MarketAxess Holdings, Inc.

     25,038,504  
  746,140     

Morgan Stanley

     61,310,324  
  560,980     

Northern Trust Corp.

     47,318,663  
  1,826,375     

Raymond James Financial, Inc.

     215,767,942  
  100,000     

Tradeweb Markets, Inc. – Class A

     5,508,000  
  2,628,900     

Wells Fargo & Co.

     120,903,111  
     

 

 

 
        596,182,045  
     

 

 

 
Health Care – 34.4%       
  229,918     

Abbott Laboratories

     22,748,087  
  647,150     

ABIOMED, Inc. (a)

     163,133,572  
  161,690     

Agilent Technologies, Inc.

     22,369,812  
  62,860     

Alcon, Inc.

     3,814,345  
  408,100     

Alkermes PLC (a)

     9,263,870  
  704,660     

Amgen, Inc.

     190,504,831  
  2,345,230     

AstraZeneca PLC – ADR

     137,922,976  

 

The accompanying notes are an integral part of these financial statements.

 

21


Schedule of Investments

PRIMECAP Odyssey Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Health Care (continued)       
  703,427     

BeiGene Ltd. – ADR (a)

   $ 118,801,786  
  782,840     

Biogen, Inc. (a)

     221,888,170  
  1,702,716     

BioMarin Pharmaceutical, Inc. (a)

     147,506,287  
  165,100     

BioNTech SE – ADR

     22,724,364  
  831,700     

Boston Scientific Corp. (a)

     35,854,587  
  205,492     

Bridgebio Pharma, Inc. (a)

     2,143,282  
  1,186,500     

Bristol-Myers Squibb Co.

     91,918,155  
  240,900     

CVS Health Corp.

     22,813,230  
  55,000     

Edwards Lifesciences Corp. (a)

     3,983,650  
  1,958,671     

Elanco Animal Health, Inc. (a)

     25,834,870  
  1,258,078     

Eli Lilly & Co.

     455,537,463  
  97,766     

Enovis Corp. (a)

     4,834,529  
  1,868,340     

FibroGen, Inc. (a)

     30,416,575  
  53,800     

Guardant Health, Inc. (a)

     2,663,100  
  94,120     

Illumina, Inc. (a)

     21,536,538  
  551,609     

Insulet Corp. (a)

     142,761,925  
  22,860     

IQVIA Holdings, Inc. (a)

     4,793,056  
  772,100     

LivaNova PLC (a)

     36,365,910  
  28,800     

Merck & Co., Inc.

     2,914,560  
  4,798,916     

Nektar Therapeutics (a)

     18,043,924  
  1,000     

Neurocrine Biosciences, Inc. (a)

     115,120  
  776,156     

Novartis AG – ADR

     62,969,536  
  16,140     

Omnicell, Inc. (a)

     1,247,945  
  149,600     

OraSure Technologies, Inc. (a)

     652,256  
  73,120     

PerkinElmer, Inc.

     9,767,370  
  179,910     

QIAGEN N.V. – EUR (a)

     7,769,685  
  1,747,558     

Rhythm Pharmaceuticals, Inc. (a)

     43,986,035  
  116,494     

Roche Holding AG – CHF

     38,687,851  
  919,900     

Seagen, Inc. (a)

     116,974,484  
  81,080     

Siemens Healthineers AG – EUR

     3,732,329  
  165,000     

Thermo Fisher Scientific, Inc.

     84,805,050  
  863,503     

Xencor, Inc. (a)

     24,178,084  
  314,320     

Zimmer Biomet Holdings, Inc.

     35,628,172  
     

 

 

 
        2,393,607,371  
     

 

 

 
Industrials – 13.5%       
  3,218,022     

AECOM

     242,252,696  
  318,846     

Airbus SE – EUR

     34,528,600  
  2,576,261     

American Airlines Group, Inc. (a)

     36,531,381  
  60,000     

AMETEK, Inc.

     7,779,600  

 

The accompanying notes are an integral part of these financial statements.

 

22


Schedule of Investments

PRIMECAP Odyssey Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Industrials (continued)       
  95,000     

Carrier Global Corp.

   $ 3,777,200  
  238,900     

Curtiss-Wright Corp.

     40,094,587  
  1,335,500     

Delta Air Lines, Inc. (a)

     45,313,515  
  97,765     

ESAB Corp.

     3,646,634  
  218,700     

FedEx Corp.

     35,053,236  
  118,360     

General Dynamics Corp.

     29,566,328  
  62,600     

IDEX Corp.

     13,916,606  
  54,700     

J.B. Hunt Transport Services, Inc.

     9,357,529  
  939,794     

Jacobs Solutions, Inc.

     108,283,065  
  670,100     

JetBlue Airways Corp. (a)

     5,387,604  
  360,501     

Lyft, Inc. – Class A (a)

     5,277,735  
  22,200     

Old Dominion Freight Line, Inc.

     6,096,120  
  17,200     

Saia, Inc. (a)

     3,420,392  
  886,579     

Siemens AG – EUR

     96,938,502  
  2,554,030     

Southwest Airlines Co. (a)

     92,838,990  
  299,900     

Textron, Inc.

     20,525,156  
  11,400     

TransDigm Group, Inc.

     6,563,664  
  133,500     

Uber Technologies, Inc. (a)

     3,547,095  
  55,500     

Union Pacific Corp.

     10,941,270  
  1,855,750     

United Airlines Holdings, Inc. (a)

     79,945,710  
     

 

 

 
        941,583,215  
     

 

 

 
Information Technology – 21.7%       
  180,900     

Adobe, Inc. (a)

     57,616,650  
  583,500     

Altair Engineering, Inc. – Class A (a)

     28,620,675  
  281,600     

Analog Devices, Inc.

     40,161,792  
  328,100     

Applied Materials, Inc.

     28,967,949  
  55,300     

ASML Holding N.V. – ADR

     26,124,826  
  5,244,743     

BlackBerry Ltd. (a)

     24,440,502  
  661,100     

Cisco Systems, Inc.

     30,033,773  
  47,900     

Dell Technologies, Inc. – Class C

     1,839,360  
  548,600     

Descartes Systems Group, Inc. (The) (a)

     37,891,802  
  6,910,699     

Flex Ltd. (a)

     135,311,486  
  586,956     

FormFactor, Inc. (a)

     11,862,381  
  2,207,120     

Hewlett Packard Enterprise Co.

     31,495,602  
  602,476     

HP, Inc.

     16,640,387  
  1,420,440     

Intel Corp.

     40,383,109  
  14,400     

Intuit, Inc.

     6,156,000  
  585,000     

Jabil, Inc.

     37,586,250  
  88,070     

Keysight Technologies, Inc. (a)

     15,337,391  

 

The accompanying notes are an integral part of these financial statements.

 

23


Schedule of Investments

PRIMECAP Odyssey Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Information Technology (continued)       
  317,124     

KLA Corp.

   $ 100,353,890  
  2,533,300     

L.M. Ericsson Telephone Co. – ADR

     14,110,481  
  464,050     

MaxLinear, Inc. (a)

     14,329,864  
  2,568,600     

Micron Technology, Inc.

     138,961,260  
  501,900     

Microsoft Corp.

     116,506,047  
  821,811     

NetApp, Inc.

     56,926,848  
  572,800     

Nutanix, Inc. – Class A (a)

     15,694,720  
  88,580     

NVIDIA Corp.

     11,955,643  
  364,100     

Oracle Corp.

     28,425,287  
  55,000     

OSI Systems, Inc. (a)

     4,519,900  
  39,100     

Palo Alto Networks, Inc. (a)

     6,709,169  
  25,600     

PayPal Holdings, Inc. (a)

     2,139,648  
  324,600     

QUALCOMM, Inc.

     38,192,436  
  39,400     

Salesforce, Inc. (a)

     6,406,046  
  1,544,230     

Splunk, Inc. (a)

     128,340,955  
  1,827,599     

Stratasys Ltd. (a)

     26,445,358  
  142,900     

Teradyne, Inc.

     11,624,915  
  505,115     

Texas Instruments, Inc.

     81,136,622  
  392,050     

Trimble, Inc. (a)

     23,585,728  
  284,066     

Universal Display Corp.

     27,048,765  
  198,850     

Visa, Inc. – Class A

     41,193,766  
  23,000     

VMware, Inc. – Class A

     2,588,190  
  26,000     

Western Digital Corp. (a)

     893,620  
  84,810     

WEX, Inc. (a)

     13,920,713  
  326,700     

Wolfspeed, Inc. (a)

     25,727,625  
     

 

 

 
        1,508,207,431  
     

 

 

 
Materials – 0.7%       
  160,600     

Albemarle Corp.

     44,947,122  
     

 

 

 
 

TOTAL COMMON STOCKS
(Cost $3,732,013,290)

   $ 6,781,911,254  
     

 

 

 
  RIGHTS – 0.0%   
Health Care – 0.0%       
  4,207,543     

Epizyme, Inc. – CVR (Issue Date 8/15/22) (a) (b) (c)

     84,151  
     

 

 

 
 

TOTAL RIGHTS
(Cost $0)

     84,151  
     

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

24


Schedule of Investments

PRIMECAP Odyssey Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
  SHORT-TERM INVESTMENTS – 2.7%   
  191,463,748     

Dreyfus Treasury Securities Cash Management Fund – Institutional Shares – 3.01% (d)

   $ 191,463,748  
     

 

 

 
 

TOTAL SHORT-TERM INVESTMENTS
(Cost $191,463,748)

     191,463,748  
     

 

 

 
 

TOTAL INVESTMENTS IN SECURITIES
(Cost $3,923,477,038) – 100.2%

     6,973,459,153  
 

Liabilities in Excess of Other Assets – (0.2)%

     (15,874,834
  

 

 

 
 

TOTAL NET ASSETS – 100.0%

   $ 6,957,584,319  
     

 

 

 

 

ADR

American Depository Receipt

CHF

Swiss Francs

CVR

Contingent Value Rights

EUR

Euros

GBP

British Pound Sterling

JPY

Japanese Yen

(a)

Non-Income Producing

(b)

Illiquid security

(c)

Fair-valued security (Note 4)

(d)

Rate quoted is seven-day yield at period end.

The Global Industry Classification Standard (GICS ®) was developed by and is the exclusive property of MSCI Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by the fund’s administrator.

 

The accompanying notes are an integral part of these financial statements.

 

25


LOGO  

Schedule of Investments

PRIMECAP Odyssey Aggressive Growth Fund

October 31, 2022

 

Shares            Value  
  COMMON STOCKS – 97.6%   
Communication Services – 5.5%       
  769,550     

Alphabet, Inc. – Class A (a)

   $ 72,730,170  
  712,640     

Alphabet, Inc. – Class C (a)

     67,458,502  
  987,700     

Baidu, Inc. – ADR (a)

     75,628,189  
  3,571,140     

comScore, Inc. (a)

     4,321,079  
  100,800     

Electronic Arts, Inc.

     12,696,768  
  682,300     

IMAX Corp. (a)

     8,685,679  
  142,665     

Live Nation Entertainment, Inc. (a)

     11,357,561  
  586,128     

Madison Square Garden Entertainment Corp. – Class A (a)

     28,737,856  
  2,850     

Madison Square Garden Sports Corp. – Class A

     446,339  
  80,700     

Meta Platforms, Inc. – Class A (a)

     7,518,012  
  10,400     

Netflix, Inc. (a)

     3,035,552  
  1,615,150     

Pinterest, Inc. – Class A (a)

     39,732,690  
  25,900     

Roblox Corp. – Class A (a)

     1,158,766  
  105,300     

Snap, Inc. – Class A (a)

     1,043,523  
  218,120     

T-Mobile US, Inc. (a)

     33,058,267  
  6,709,170     

WildBrain Ltd. – CAD (a)

     10,194,137  
  94,319     

ZoomInfo Technologies, Inc. (a)

     4,200,025  
     

 

 

 
        382,003,115  
     

 

 

 
Consumer Discretionary – 11.8%       
  1,147,900     

Alibaba Group Holding Ltd. – ADR (a)

     72,983,482  
  146,500     

Amazon.com, Inc. (a)

     15,007,460  
  69,300     

Boot Barn Holdings, Inc. (a)

     3,936,240  
  104,900     

Burlington Stores, Inc. (a)

     14,996,504  
  143,537     

Capri Holdings Ltd. (a)

     6,556,770  
  785,000     

CarMax, Inc. (a)

     49,462,850  
  13,500     

Darden Restaurants, Inc.

     1,932,390  
  350     

Dollar General Corp.

     89,267  
  1,300     

Duolingo, Inc. (a)

     106,392  
  264,850     

eBay, Inc.

     10,551,624  
  3,659,109     

Entain PLC – GBP

     52,998,941  
  8,000     

Five Below, Inc. (a)

     1,170,800  
  22,700     

Flutter Entertainment PLC – GBP (a)

     3,014,553  
  1,712,185     

GAN Ltd. (a)

     3,441,492  
  104,000     

Gildan Activewear, Inc.

     3,281,200  
  846,100     

GrowGeneration Corp. (a)

     3,020,577  
  949,175     

iRobot Corp. (a)

     53,628,388  
  1,059,865     

Norwegian Cruise Line Holdings Ltd. (a)

     17,901,120  

 

The accompanying notes are an integral part of these financial statements.

 

26


Schedule of Investments

PRIMECAP Odyssey Aggressive Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Consumer Discretionary (continued)       
  199,610     

Ollie’s Bargain Outlet Holdings, Inc. (a)

   $ 11,178,160  
  61,200     

Restaurant Brands International, Inc.

     3,634,056  
  63,860     

Rivian Automotive, Inc. – Class A (a)

     2,233,184  
  969,676     

Royal Caribbean Cruises Ltd. (a)

     51,761,305  
  2,892,440     

Sony Group Corp. – ADR

     195,152,927  
  879,850     

Tesla, Inc. (a)

     200,201,069  
  945,200     

Tuesday Morning Corp. (a)

     125,239  
  27,400     

Ulta Beauty, Inc. (a)

     11,490,738  
  127,400     

Victoria’s Secret & Co. (a)

     4,790,240  
  3,015,250     

XPeng, Inc. – ADR (a)

     19,960,955  
     

 

 

 
        814,607,923  
     

 

 

 
Consumer Staples – 0.0%       
  18,300     

Calavo Growers, Inc.

     632,997  
  65,000     

Grocery Outlet Holding Corp. (a)

     2,247,050  
     

 

 

 
        2,880,047  
     

 

 

 
Energy – 1.2%       
  579,750     

Coterra Energy, Inc.

     18,047,617  
  149,700     

EOG Resources, Inc.

     20,437,044  
  167,500     

New Fortress Energy, Inc.

     9,224,225  
  8,883,882     

Transocean Ltd. (a)

     32,692,686  
     

 

 

 
        80,401,572  
     

 

 

 
Financials – 5.0%       
  192,700     

AssetMark Financial Holdings, Inc. (a)

     3,990,817  
  7,600     

Charles Schwab Corp. (The)

     605,492  
  144,471     

CME Group, Inc. – Class A

     25,036,824  
  340,743     

Discover Financial Services

     35,594,014  
  116,700     

Galaxy Digital Holdings Ltd. – CAD (a)

     567,931  
  76,000     

LPL Financial Holdings, Inc.

     19,429,400  
  530,220     

MarketAxess Holdings, Inc.

     129,394,889  
  915,752     

Morgan Stanley

     75,247,342  
  711,400     

NMI Holdings, Inc. – Class A (a)

     15,601,002  
  121,280     

Progressive Corp. (The)

     15,572,352  
  465,900     

Tradeweb Markets, Inc. – Class A

     25,661,772  
     

 

 

 
        346,701,835  
     

 

 

 
Health Care – 35.4%       
  284,100     

Abbott Laboratories

     28,108,854  
  749,973     

ABIOMED, Inc. (a)

     189,053,194  
  229,300     

Accuray, Inc. (a)

     467,772  
  108,200     

Adaptive Biotechnologies Corp. (a)

     841,796  

 

The accompanying notes are an integral part of these financial statements.

 

27


Schedule of Investments

PRIMECAP Odyssey Aggressive Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Health Care (continued)       
  1,474,410     

Alkermes PLC (a)

   $ 33,469,107  
  1,983,820     

Allogene Therapeutics, Inc. (a)

     20,433,346  
  1,298,200     

Amicus Therapeutics, Inc. (a)

     12,982,000  
  413,800     

Arbutus Biopharma Corp. (a)

     968,292  
  748,627     

BeiGene Ltd. – ADR (a)

     126,435,614  
  6,145     

Berkeley Lights, Inc. (a)

     13,642  
  879,739     

Biogen, Inc. (a)

     249,353,222  
  1,976,810     

BioMarin Pharmaceutical, Inc. (a)

     171,251,050  
  1,419,292     

BioNTech SE – ADR

     195,351,351  
  423,000     

Boston Scientific Corp. (a)

     18,235,530  
  478,338     

Bridgebio Pharma, Inc. (a)

     4,989,065  
  279,715     

Calithera Biosciences, Inc. (a) (b)

     702,085  
  9,212,700     

Cerus Corp. (a) (b)

     33,718,482  
  15,250     

Charles River Laboratories International, Inc. (a)

     3,236,812  
  90,300     

Edwards Lifesciences Corp. (a)

     6,540,429  
  673,092     

Elanco Animal Health, Inc. (a)

     8,878,083  
  848,294     

Eli Lilly & Co.

     307,158,774  
  437,600     

Exact Sciences Corp. (a)

     15,219,728  
  4,243,131     

FibroGen, Inc. (a)

     69,078,173  
  465,320     

Glaukos Corp. (a)

     26,090,492  
  108,269     

Guardant Health, Inc. (a)

     5,359,316  
  462,706     

Health Catalyst, Inc. (a)

     4,081,067  
  11,980     

Illumina, Inc. (a)

     2,741,264  
  219,500     

ImmunoGen, Inc. (a)

     1,303,830  
  566,846     

Insulet Corp. (a)

     146,705,413  
  887,000     

LivaNova PLC (a)

     41,777,700  
  218,030     

Mereo Biopharma Group PLC – ADR (a)

     218,008  
  10,301,870     

Nektar Therapeutics (a) (b)

     38,735,031  
  76,400     

NuVasive, Inc. (a)

     3,371,532  
  688,800     

OraSure Technologies, Inc. (a)

     3,003,168  
  19,500     

Penumbra, Inc. (a)

     3,343,665  
  3,685,191     

Pulmonx Corp. (a) (b)

     49,234,152  
  206,220     

QIAGEN N.V. – EUR (a)

     8,905,923  
  20,886     

Repligen Corp. (a)

     3,811,486  
  5,016,580     

Rhythm Pharmaceuticals, Inc. (a) (b)

     126,267,319  
  118,800     

Roche Holding AG – CHF

     39,453,678  
  72,700     

Sage Therapeutics, Inc. (a)

     2,737,882  
  1,621,093     

Seagen, Inc. (a)

     206,138,186  
  253,930     

Shockwave Medical, Inc. (a)

     74,439,580  

 

The accompanying notes are an integral part of these financial statements.

 

28


Schedule of Investments

PRIMECAP Odyssey Aggressive Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Health Care (continued)       
  14,400     

Sio Gene Therapies, Inc. (a)

   $ 4,219  
  3,943,132     

Standard BioTools, Inc. (a) (b)

     4,652,896  
  3,745,470     

Wave Life Sciences Ltd. (a)

     17,940,801  
  4,398,717     

Xencor, Inc. (a) (b)

     123,164,076  
  849,490     

Zentalis Pharmaceuticals, Inc. (a)

     21,313,704  
     

 

 

 
        2,451,280,789  
     

 

 

 
Industrials – 12.7%       
  2,486,500     

AECOM

     187,183,720  
  501,600     

Alaska Air Group, Inc. (a)

     22,301,136  
  25,100     

Allegiant Travel Co. (a)

     1,883,755  
  4,705,400     

American Airlines Group, Inc. (a)

     66,722,572  
  2,320,300     

Array Technologies, Inc. (a)

     41,997,430  
  3,503,800     

Aurora Innovation, Inc. – Class A (a)

     7,217,828  
  181,000     

Axon Enterprise, Inc. (a)

     26,324,640  
  49,600     

Bloom Energy Corp. – Class A (a)

     928,016  
  41,000     

Controladora Vuela Compania de Aviacion, S.A.B. de C.V. – ADR (a)

     343,580  
  232,310     

Curtiss-Wright Corp.

     38,988,587  
  2,555,947     

Delta Air Lines, Inc. (a)

     86,723,282  
  19,600     

FedEx Corp.

     3,141,488  
  42,400     

Frontier Group Holdings, Inc. (a)

     555,864  
  245,300     

Gibraltar Industries, Inc. (a)

     12,529,924  
  181,900     

Hawaiian Holdings, Inc. (a)

     2,624,817  
  567,700     

Hertz Global Holdings, Inc. (a)

     10,445,680  
  970,430     

Jacobs Solutions, Inc.

     111,812,945  
  3,076,900     

JetBlue Airways Corp. (a)

     24,738,276  
  2,008,700     

Li-Cycle Holdings Corp. (a)

     11,971,852  
  384,120     

Lyft, Inc. – Class A (a)

     5,623,517  
  179,500     

Masonite International Corp. (a)

     12,839,635  
  1,700,360     

NN, Inc. (a)

     4,233,896  
  13,600     

Old Dominion Freight Line, Inc.

     3,734,560  
  15,800     

Ryanair Holdings PLC – ADR (a)

     1,088,462  
  1,789,140     

Southwest Airlines Co. (a)

     65,035,239  
  242,400     

Spirit Airlines, Inc.

     5,332,800  
  28,815     

Sun Country Airlines Holdings, Inc. (a)

     469,108  
  38,150     

TransDigm Group, Inc.

     21,965,244  
  20,000     

TuSimple Holdings, Inc. – Class A (a)

     68,600  
  353,200     

Uber Technologies, Inc. (a)

     9,384,524  
  2,165,360     

United Airlines Holdings, Inc. (a)

     93,283,709  

 

The accompanying notes are an integral part of these financial statements.

 

29


Schedule of Investments

PRIMECAP Odyssey Aggressive Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Industrials (continued)       
  42,400     

WillScot Mobile Mini Holdings Corp. (a)

   $ 1,803,272  
     

 

 

 
        883,297,958  
     

 

 

 
Information Technology – 25.1%       
  175,300     

Adobe, Inc. (a)

     55,833,050  
  108,310     

Ambarella, Inc. (a)

     5,927,806  
  109,200     

Applied Materials, Inc.

     9,641,268  
  2,770,800     

Arlo Technologies, Inc. (a)

     14,269,620  
  46,200     

ASML Holding N.V. – ADR

     21,825,804  
  31,700     

Autodesk, Inc. (a)

     6,793,310  
  1,513,245     

Axcelis Technologies, Inc. (a)

     87,768,210  
  10,749,366     

BlackBerry Ltd. (a)

     50,092,046  
  49,500     

Cerence, Inc. (a)

     851,400  
  70,300     

Credo Technology Group Holding Ltd. (a)

     965,922  
  132,899     

CrowdStrike Holdings, Inc. – Class A (a)

     21,423,319  
  77,050     

CyberArk Software Ltd. (a)

     12,089,916  
  91,300     

Dell Technologies, Inc. – Class C

     3,505,920  
  721,341     

Descartes Systems Group, Inc. (The) (a)

     49,823,023  
  200     

DocuSign, Inc. (a)

     9,660  
  49,500     

FARO Technologies, Inc. (a)

     1,445,895  
  7,558,250     

Flex Ltd. (a)

     147,990,535  
  15,500     

Flywire Corp. (a)

     340,225  
  911,155     

FormFactor, Inc. (a)

     18,414,443  
  108,500     

Freshworks, Inc. – Class A (a)

     1,474,515  
  27,920     

GitLab, Inc. – Class A (a)

     1,353,003  
  997,100     

Hewlett Packard Enterprise Co.

     14,228,617  
  375,670     

HP, Inc.

     10,376,005  
  135,100     

HubSpot, Inc. (a)

     40,065,256  
  2,425,800     

indie Semiconductor, Inc. – Class A (a)

     18,969,756  
  116,250     

Intuit, Inc.

     49,696,875  
  696,500     

Jabil, Inc.

     44,750,125  
  88,800     

Jamf Holding Corp. (a)

     2,101,896  
  55,210     

Keysight Technologies, Inc. (a)

     9,614,821  
  128,904     

Keywords Studios PLC – GBP

     3,562,640  
  351,430     

KLA Corp.

     111,210,023  
  122,500     

Marqeta, Inc. – Class A (a)

     965,300  
  160,730     

Materialise NV – ADR (a)

     1,702,131  
  1,875,130     

MaxLinear, Inc. (a)

     57,904,014  
  3,839,700     

Micron Technology, Inc.

     207,727,770  
  350,400     

Mobileye Global, Inc. – Class A (a)

     9,243,552  

 

The accompanying notes are an integral part of these financial statements.

 

30


Schedule of Investments

PRIMECAP Odyssey Aggressive Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
Information Technology (continued)       
  24,550     

MongoDB, Inc. (a)

   $ 4,493,387  
  1,063,567     

NetApp, Inc.

     73,673,286  
  1,005,033     

nLIGHT, Inc. (a)

     10,824,205  
  1,977,465     

Nutanix, Inc. – Class A (a)

     54,182,541  
  208,300     

NVIDIA Corp.

     28,114,251  
  89,000     

Okta, Inc. – Class A (a)

     4,994,680  
  200,440     

OSI Systems, Inc. (a)

     16,472,159  
  74,410     

Palo Alto Networks, Inc. (a)

     12,768,012  
  320,050     

PROS Holdings, Inc. (a)

     7,985,248  
  344,623     

QUALCOMM, Inc.

     40,548,342  
  176,900     

Rapid7, Inc. (a)

     8,008,263  
  3,250     

RingCentral, Inc. – Class A (a)

     115,440  
  1,735,310     

Splunk, Inc. (a)

     144,221,614  
  1,429,800     

Stratasys Ltd. (a)

     20,689,206  
  45,800     

Tenable Holdings, Inc. (a)

     1,861,312  
  610,070     

Trimble, Inc. (a)

     36,701,811  
  150,540     

Unity Software, Inc. (a)

     4,440,930  
  844,169     

Universal Display Corp.

     80,381,772  
  130,700     

VMware, Inc. – Class A

     14,707,671  
  380,980     

Western Digital Corp. (a)

     13,094,283  
  115,480     

WEX, Inc. (a)

     18,954,887  
  521,500     

Wolfspeed, Inc. (a)

     41,068,125  
  70,300     

Zoom Video Communications, Inc. – Class A (a)

     5,865,832  
     

 

 

 
        1,738,124,928  
     

 

 

 
Materials – 0.8%       
  91,100     

Albemarle Corp.

     25,496,157  
  67,359     

Bioceres Crop Solutions Corp. (a)

     974,011  
  34,500     

Ingevity Corp. (a)

     2,320,815  
  2,699,400     

Ivanhoe Mines Ltd. – Class A – CAD (a)

     18,724,505  
  1,358,552     

Perimeter Solutions SA (a)

     10,854,831  
     

 

 

 
        58,370,319  
     

 

 

 
Real Estate – 0.1%       
  168,000     

EPR Properties

     6,484,800  
  53,600     

Safehold, Inc.

     1,567,800  
     

 

 

 
        8,052,600  
     

 

 

 
 

TOTAL COMMON STOCKS
(Cost $4,370,456,336)

   $ 6,765,721,086  
     

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

31


Schedule of Investments

PRIMECAP Odyssey Aggressive Growth Fund

 

October 31, 2022 – continued

 

Shares            Value  
  PREFERRED STOCKS – 0.0%   
Financials – 0.0%       
  595,000     

Freddie Mac Fixed-to-Floating Rate Non-Cumulative Preferred Stock Series Z, Perpetual Maturity 7.875% (a)

   $ 1,814,750  
     

 

 

 
 

TOTAL PREFERRED STOCKS
(Cost $3,289,811)

     1,814,750  
     

 

 

 
  WARRANTS – 0.0%   
Materials – 0.0%       
  364,100     

Perimeter Solutions SA
(Expiration Date 11/8/24) (a)

     709,995  
     

 

 

 
 

TOTAL WARRANTS
(Cost $3,641)

     709,995  
     

 

 

 
  RIGHTS – 0.0%   
Health Care – 0.0%       
  10,344,756     

Epizyme, Inc. – CVR (Issue Date 8/15/22) (a) (c) (d)

     206,895  
  3,786,300     

Mereo BioPharma Group PLC – CVR
(Issue Date 4/23/19) (a) (c) (d)

     0  
     

 

 

 
        206,895  
     

 

 

 
 

TOTAL RIGHTS
(Cost $0)

     206,895  
     

 

 

 
  SHORT-TERM INVESTMENTS – 2.5%   
  170,943,658     

Dreyfus Treasury Securities Cash Management Fund – Institutional Shares – 3.01% (e)

   $ 170,943,658  
     

 

 

 
 

TOTAL SHORT-TERM INVESTMENTS
(Cost $170,943,658)

     170,943,658  
     

 

 

 
 

TOTAL INVESTMENTS IN SECURITIES
(Cost $4,544,693,446) – 100.1%

     6,939,396,384  
 

Liabilities in Excess of Other Assets – (0.1)%

     (8,325,099
     

 

 

 
 

TOTAL NET ASSETS – 100.0%

   $ 6,931,071,285  
     

 

 

 

 

ADR

American Depository Receipt

CAD

Canadian Dollars

CHF

Swiss Francs

CVR

Contingent Value Rights

EUR

Euros

GBP

British Pound Sterling

(a)

Non-Income Producing

 

The accompanying notes are an integral part of these financial statements.

 

32


Schedule of Investments

PRIMECAP Odyssey Aggressive Growth Fund

 

October 31, 2022 – continued

 

(b)

Considered an affiliated company of the fund as the fund owns 5% or more of the outstanding voting securities of such company. (Note 7)

(c)

Illiquid security

(d)

Fair-valued security (Note 4)

(e)

Rate quoted is seven-day yield at period end.

The Global Industry Classification Standard (GICS ®) was developed by and is the exclusive property of MSCI Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by the fund’s administrator.

 

The accompanying notes are an integral part of these financial statements.

 

33


LOGO  

Statements of Assets and Liabilities

PRIMECAP Odyssey Funds

October 31, 2022

 

    PRIMECAP
Odyssey
Stock Fund
    PRIMECAP
Odyssey
Growth Fund
    PRIMECAP
Odyssey Aggressive
Growth Fund
 

ASSETS

     

Investments, at cost (unaffiliated)

  $ 3,301,601,636     $ 3,923,477,038     $ 4,008,563,537  
 

 

 

   

 

 

   

 

 

 

Investments, at cost (affiliated)

                536,129,909  
 

 

 

   

 

 

   

 

 

 

Investments, at value (unaffiliated)

    5,802,348,403       6,973,459,153       6,562,922,343  

Investments, at value (affiliated)

                376,474,041  

Receivable for investments sold

    1,802,728       7,884,200       3,583,554  

Receivable for dividends and interest

    7,253,216       7,850,496       2,735,618  

Receivable for fund shares sold

    2,281,651       2,434,490       1,733,276  

Prepaid expenses and other assets

    59,715       68,696       85,892  
 

 

 

   

 

 

   

 

 

 

Total assets

    5,813,745,713       6,991,697,035       6,947,534,724  
 

 

 

   

 

 

   

 

 

 
LIABILITIES      

Payable for investments purchased

    104,310       1,398,430       254,474  

Payable for fund shares repurchased

    5,762,106       21,907,520       5,230,691  

Payable to the advisor (Note 6)

    8,051,620       9,962,535       10,215,781  

Payable to custodian

    17,973       22,958       20,009  

Other accrued expenses and liabilities

    706,721       821,273       742,484  
 

 

 

   

 

 

   

 

 

 

Total liabilities

    14,642,730       34,112,716       16,463,439  
 

 

 

   

 

 

   

 

 

 

NET ASSETS

  $ 5,799,102,983     $ 6,957,584,319     $ 6,931,071,285  
 

 

 

   

 

 

   

 

 

 

Number of shares issued and outstanding (unlimited shares authorized, $0.01 par value)

    166,752,590       189,577,840       178,104,760  
 

 

 

   

 

 

   

 

 

 

NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE

  $ 34.78     $ 36.70     $ 38.92  
 

 

 

   

 

 

   

 

 

 
COMPONENTS OF NET ASSETS      

Paid-in capital

  $ 2,709,301,766     $ 3,205,113,503     $ 3,950,614,078  

Total distributable earnings

    3,089,801,217       3,752,470,816       2,980,457,207  
 

 

 

   

 

 

   

 

 

 

Net assets

  $ 5,799,102,983     $ 6,957,584,319     $ 6,931,071,285  
 

 

 

   

 

 

   

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

34


LOGO  

Statements of Operations

PRIMECAP Odyssey Funds

For the Year Ended October 31, 2022

 

    PRIMECAP
Odyssey
Stock Fund
    PRIMECAP
Odyssey
Growth Fund
    PRIMECAP
Odyssey Aggressive
Growth Fund
 

INVESTMENT INCOME

     

Dividends (unaffiliated)(1)

  $ 103,027,075     $ 84,589,306     $ 38,211,044  

Interest income

    1,931,756       1,647,590       1,942,294  
 

 

 

   

 

 

   

 

 

 

Total investment income

    104,958,831       86,236,896       40,153,338  
 

 

 

   

 

 

   

 

 

 

Expenses

     

Advisory fees (Note 6)

    36,416,482       45,180,706       48,029,077  

Shareholder servicing

    5,295,567       6,640,019       6,739,093  

Trustee fees

    237,285       237,285       237,285  

Custody

    122,242       151,820       138,963  

Other

    1,343,036       1,460,522       1,450,083  
 

 

 

   

 

 

   

 

 

 

Total expenses

    43,414,612       53,670,352       56,594,501  
 

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    61,544,219       32,566,544       (16,441,163
 

 

 

   

 

 

   

 

 

 
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY      

Net realized gain (loss) on:

     

Investments (unaffiliated)

    647,224,948       832,338,376       928,886,023  

Investments (affiliated)

                (172,600,404

Foreign currency transactions

    (27,449     (84,221     4,606  

Change in unrealized appreciation/depreciation on:

     

Investments (unaffiliated)

    (1,508,520,339     (2,524,938,381     (3,739,369,414

Investments (affiliated)

                (96,914,927

Foreign currency translations

    (542,347     (512,055     (127,296
 

 

 

   

 

 

   

 

 

 

Net realized and unrealized loss on investments and foreign currency

    (861,865,187     (1,693,196,281     (3,080,121,412
 

 

 

   

 

 

   

 

 

 

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ (800,320,968   $ (1,660,629,737   $ (3,096,562,575
 

 

 

   

 

 

   

 

 

 

 

  (1)

Net of foreign taxes withheld of $1,941,249, $1,756,660, and $916,745, respectively.

 

The accompanying notes are an integral part of these financial statements.

 

35


LOGO  

Statements of Changes in Net Assets

PRIMECAP Odyssey Stock Fund

 

    Year Ended
October 31, 2022
    Year Ended
October 31, 2021
 

INCREASE (DECREASE) IN NET ASSETS FROM:

   
OPERATIONS    

Net investment income

  $ 61,544,219     $ 50,107,278  

Net realized gain (loss) on:

   

Investments

    647,224,948       693,227,700  

Foreign currency transactions

    (27,449     109,255  

Change in unrealized appreciation/depreciation on:

   

Investments

    (1,508,520,339     1,906,515,848  

Foreign currency translations

    (542,347     (83,689
 

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (800,320,968     2,649,876,392  
 

 

 

   

 

 

 

NET DISTRIBUTIONS TO SHAREHOLDERS

    (663,331,689     (521,946,602
 

 

 

   

 

 

 
CAPITAL SHARE TRANSACTIONS    

Proceeds from shares sold

    667,871,168       820,313,951  

Proceeds from reinvestment of distributions

    625,946,173       469,381,159  

Cost of shares repurchased

    (1,764,672,183     (1,928,638,760
 

 

 

   

 

 

 

Net decrease from capital share transactions

    (470,854,842     (638,943,650
 

 

 

   

 

 

 

Total increase (decrease) in net assets

    (1,934,507,499     1,488,986,140  
 

 

 

   

 

 

 
NET ASSETS    

Beginning of year

    7,733,610,482       6,244,624,342  
 

 

 

   

 

 

 

End of year

  $ 5,799,102,983     $ 7,733,610,482  
 

 

 

   

 

 

 
CHANGE IN CAPITAL SHARES    

Shares outstanding, beginning of year

    179,968,262       195,799,339  
 

 

 

   

 

 

 

Shares sold

    17,904,467       20,815,677  

Shares issued on reinvestment of distributions

    15,899,064       13,511,260  

Shares repurchased

    (47,019,203     (50,158,014
 

 

 

   

 

 

 

Decrease in capital shares

    (13,215,672     (15,831,077
 

 

 

   

 

 

 

Shares outstanding, end of year

    166,752,590       179,968,262  
 

 

 

   

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

36


LOGO  

Statements of Changes in Net Assets

PRIMECAP Odyssey Growth Fund

 

    Year Ended
October 31, 2022
    Year Ended
October 31, 2021
 

INCREASE (DECREASE) IN NET ASSETS FROM:

   
OPERATIONS    

Net investment income

  $ 32,566,544     $ 9,957,571  

Net realized gain (loss) on:

   

Investments

    832,338,376       1,333,530,262  

Foreign currency transactions

    (84,221     85,833  

Change in unrealized appreciation/depreciation on:

   

Investments

    (2,524,938,381     2,004,621,861  

Foreign currency translations

    (512,055     (96,195
 

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (1,660,629,737     3,348,099,332  
 

 

 

   

 

 

 

NET DISTRIBUTIONS TO SHAREHOLDERS

    (1,188,273,747     (1,087,744,161
 

 

 

   

 

 

 
CAPITAL SHARE TRANSACTIONS    

Proceeds from shares sold

    764,196,219       922,066,332  

Proceeds from reinvestment of distributions

    1,137,615,421       1,047,279,976  

Cost of shares repurchased

    (2,263,851,289     (2,667,590,516
 

 

 

   

 

 

 

Net decrease from capital share transactions

    (362,039,649     (698,244,208
 

 

 

   

 

 

 

Total increase (decrease) in net assets

    (3,210,943,133     1,562,110,963  
 

 

 

   

 

 

 
NET ASSETS    

Beginning of year

    10,168,527,452       8,606,416,489  
 

 

 

   

 

 

 

End of year

  $ 6,957,584,319     $ 10,168,527,452  
 

 

 

   

 

 

 
CHANGE IN CAPITAL SHARES    

Shares outstanding, beginning of year

    200,231,866       213,490,110  
 

 

 

   

 

 

 

Shares sold

    19,065,925       19,494,793  

Shares issued on reinvestment of distributions

    26,388,667       25,066,538  

Shares repurchased

    (56,108,618     (57,819,575
 

 

 

   

 

 

 

Decrease in capital shares

    (10,654,026     (13,258,244
 

 

 

   

 

 

 

Shares outstanding, end of year

    189,577,840       200,231,866  
 

 

 

   

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

37


LOGO  

Statements of Changes in Net Assets

PRIMECAP Odyssey Aggressive Growth Fund

 

    Year Ended
October 31, 2022
    Year Ended
October 31, 2021
 

INCREASE (DECREASE) IN NET ASSETS FROM:

   
OPERATIONS    

Net investment loss

  $ (16,441,163   $ (44,974,829

Net realized gain on:

   

Investments

    756,285,619       1,277,061,756  

Foreign currency transactions

    4,606       165,129  

Change in unrealized appreciation/depreciation on:

   

Investments

    (3,836,284,341     2,070,409,100  

Unfunded commitment with a SPAC

          (2,927,075

Foreign currency translations

    (127,296     (117,845
 

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (3,096,562,575     3,299,616,236  
 

 

 

   

 

 

 

NET DISTRIBUTIONS TO SHAREHOLDERS

    (1,124,701,183     (822,100,806
 

 

 

   

 

 

 
CAPITAL SHARE TRANSACTIONS    

Proceeds from shares sold

    787,713,914       1,003,449,519  

Proceeds from reinvestment of distributions

    1,074,932,684       780,448,114  

Cost of shares repurchased

    (2,445,463,848     (2,097,662,877

Other capital contribution

          13,817  
 

 

 

   

 

 

 

Net decrease from capital share transactions

    (582,817,250     (313,751,427
 

 

 

   

 

 

 

Total increase (decrease) in net assets

    (4,804,081,008     2,163,764,003  
 

 

 

   

 

 

 
NET ASSETS    

Beginning of year

    11,735,152,293       9,571,388,290  
 

 

 

   

 

 

 

End of year

  $ 6,931,071,285     $ 11,735,152,293  
 

 

 

   

 

 

 
CHANGE IN CAPITAL SHARES    

Shares outstanding, beginning of year

    194,391,937       199,125,574  
 

 

 

   

 

 

 

Shares sold

    17,617,406       17,501,649  

Shares issued on reinvestment of distributions

    20,852,234       14,689,406  

Shares repurchased

    (54,756,817     (36,924,692
 

 

 

   

 

 

 

Decrease in capital shares

    (16,287,177     (4,733,637
 

 

 

   

 

 

 

Shares outstanding, end of year

    178,104,760       194,391,937  
 

 

 

   

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

38


LOGO  

Financial Highlights

PRIMECAP Odyssey Stock Fund

For a capital share outstanding throughout each year.

 

    Year
Ended
Oct. 31,
2022
    Year
Ended
Oct. 31,
2021
    Year
Ended
Oct. 31,
2020
    Year
Ended
Oct. 31,
2019
    Year
Ended
Oct. 31,
2018
 

Net asset value, beginning of year

  $ 42.97     $ 31.89     $ 34.33     $ 31.79     $ 31.02  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from investment operations:

         

Net investment income

    0.35 (1)      0.27 (1)      0.40 (1)      0.46       0.33  

Net realized and unrealized gain (loss) on investments and foreign currency

    (4.78     13.57       (0.76     2.95       1.13  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    (4.43     13.84       (0.36     3.41       1.46  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less:

         

Dividends from net investment income

    (0.28     (0.48     (0.47     (0.34     (0.30

Distributions from net realized gain

    (3.48     (2.28     (1.61     (0.53     (0.39
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

    (3.76     (2.76     (2.08     (0.87     (0.69
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of year

  $ 34.78     $ 42.97     $ 31.89     $ 34.33     $ 31.79  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total return

    (11.33 %)      45.44     (1.48 %)      11.22     4.70

Ratios/supplemental data:

         

Net assets, end of year (millions)

  $ 5,799.1     $ 7,733.6     $ 6,244.6     $ 10,274.3     $ 10,157.1  

Ratio of expenses to average net assets

    0.66     0.65     0.65     0.65     0.64

Ratio of net investment income to average net assets

    0.93     0.67     1.28     1.38     1.04

Portfolio turnover rate

    4     6     8     6     5

 

  (1) 

Calculated using the average shares method.

 

The accompanying notes are an integral part of these financial statements.

 

39


LOGO  

Financial Highlights

PRIMECAP Odyssey Growth Fund

For a capital share outstanding throughout each year.

 

    Year
Ended
Oct. 31,
2022
    Year
Ended
Oct. 31,
2021
    Year
Ended
Oct. 31,
2020
    Year
Ended
Oct. 31,
2019
    Year
Ended
Oct. 31,
2018
 

Net asset value, beginning of year

  $ 50.78     $ 40.31     $ 39.68     $ 38.43     $ 35.64  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from investment operations:

         

Net investment income

    0.16 (1)      0.05 (1)      0.16 (1)      0.22       0.10  

Net realized and unrealized gain (loss) on investments and foreign currency

    (8.21     15.72       2.57       1.88       3.26  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    (8.05     15.77       2.73       2.10       3.36  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less:

         

Dividends from net investment income

    (0.05     (0.17     (0.20     (0.12     (0.11

Distributions from net realized gain

    (5.98     (5.13     (1.90     (0.73     (0.46
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

    (6.03     (5.30     (2.10     (0.85     (0.57
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of year

  $ 36.70     $ 50.78     $ 40.31     $ 39.68     $ 38.43  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total return

    (17.61 %)      41.97     6.83     5.75     9.48

Ratios/supplemental data:

         

Net assets, end of year (millions)

  $ 6,957.6     $ 10,168.5     $ 8,606.4     $ 12,365.6     $ 13,144.9  

Ratio of expenses to average net assets

    0.65     0.65     0.65     0.64     0.64

Ratio of net investment income to average net assets

    0.40     0.10     0.42     0.53     0.26

Portfolio turnover rate

    4     7     9     6     4

 

  (1) 

Calculated using the average shares method.

 

The accompanying notes are an integral part of these financial statements.

 

40


LOGO  

Financial Highlights

PRIMECAP Odyssey Aggressive Growth Fund

For a capital share outstanding throughout each year.

 

    Year
Ended
Oct. 31,
2022
    Year
Ended
Oct. 31,
2021
    Year
Ended
Oct. 31,
2020
    Year
Ended
Oct. 31,
2019
    Year
Ended
Oct. 31,
2018
 

Net asset value, beginning of year

  $ 60.37     $ 48.07     $ 43.46     $ 44.71     $ 41.41  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from investment operations:

         

Net investment income (loss)

    (0.09 )(1)      (0.22 )(1)      (0.10 )(1)      0.03       0.00 (2) 

Net realized and unrealized gain (loss) on investments and foreign currency

    (15.51     16.73       7.10       1.72       3.68  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    (15.60     16.51       7.00       1.75       3.68  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less:

         

Dividends from net investment income

    —         —         —         (0.03     —    

Distributions from net realized gain

    (5.85     (4.21     (2.39     (2.97     (0.38
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

    (5.85     (4.21     (2.39     (3.00     (0.38
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of year

  $ 38.92     $ 60.37     $ 48.07     $ 43.46     $ 44.71  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total return

    (28.21 %)      35.53     16.52     4.71     8.90

Ratios/supplemental data:

         

Net assets, end of year (millions)

  $ 6,931.1     $ 11,735.2     $ 9,571.4     $ 9,851.4     $ 10,245.3  

Ratio of expenses to average net assets

    0.65     0.64     0.64     0.63     0.63

Ratio of net investment income (loss) to average net assets

    (0.19 %)      (0.39 %)      (0.23 %)      0.01     (0.19 %) 

Portfolio turnover rate

    4     9     17     7     12

 

  (1) 

Calculated using the average shares method.

  (2) 

Less than one cent per share.

 

The accompanying notes are an integral part of these financial statements.

 

41


LOGO  

Notes to Financial Statements

PRIMECAP Odyssey Funds

For the Year Ended October 31, 2022

 

(1)  Organization

PRIMECAP Odyssey Funds (the “Trust”) was organized on June 8, 2004 as a Delaware statutory trust and is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust is comprised of three series: PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund (the “Funds”), each of which is diversified within the meaning of the 1940 Act. PRIMECAP Management Company (the “Investment Advisor”) serves as investment advisor to the Funds. Each Fund commenced operations on November 1, 2004.

Each Fund’s investment objective is to achieve long-term capital appreciation. Each Fund is authorized to issue unlimited shares of beneficial interest. All shares of each Fund have equal rights with respect to voting. The PRIMECAP Odyssey Aggressive Growth Fund is closed to most new investors.

(2)  Significant Accounting Policies

The Funds consistently follow the accounting policies set forth below which are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Funds are considered investment companies under U.S. GAAP and follow the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Auditing Standards Codification Topic 946.

 

  A.

Security Valuation

Securities traded on a national securities exchange are valued at the last reported sales price at the close of regular trading on each day the exchanges are open for trading. Securities traded on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) are valued at the NASDAQ Official Closing Price, which may not necessarily represent the last sale price. Non-U.S. traded stocks are valued at the last sale price or official closing price in the primary local market where the stock is traded. Securities traded on an exchange for which there have been no sales are valued at the mean between the bid and ask price. Because trading on most non-U.S. exchanges is normally completed before the close of the New York Stock Exchange, the value of securities traded on foreign exchanges can change by the time a Fund calculates its net asset value per share (“NAV”). To address these changes, the Funds may utilize adjustment factors provided by an independent pricing service to systematically value foreign securities at fair value. These adjustment factors are based on statistical analyses of subsequent movement in securities indices, specific security prices, and exchange rates in foreign markets.

Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by a valuation committee of the Investment Advisor in accordance with procedures approved by the Trust’s Board of Trustees. Pursuant to those procedures, the Board of Trustees has designated the Investment Advisor as the Funds’ valuation designee responsible for determining whether market quotations are readily available and reliable, and making good faith determinations of fair value when

 

42


Notes to Financial Statements

PRIMECAP Odyssey Funds

 

For the Year Ended October 31, 2022 – continued

 

appropriate. In determining fair value, the Funds take into account all relevant factors and available information. Consequently, the price of a security used by a Fund to calculate its NAV may differ from quoted or published prices for the same security. Fair value pricing involves subjective judgments, and there is no single standard for determining a security’s fair value. As a result, different mutual funds could reasonably arrive at a different fair value for the same security. It is possible that the fair value determined for a security is materially different from the value that could be realized upon the sale of that security or from the values that other mutual funds may determine.

Investments in other funds are valued at their respective net asset values as determined by those funds, in accordance with the 1940 Act.

 

  B.

Share Valuation

The NAV of a Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses), by the total number of outstanding shares of the Fund. The result is rounded to the nearest cent. The Funds’ shares will not be priced on the days on which the New York Stock Exchange is closed for trading.

 

  C.

Foreign Currency

Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates as of 4 p.m. Eastern time on the valuation date. Purchases and sales of investments and dividend and interest income are converted into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such translations. Realized foreign exchange gains or losses may arise from 1) sales of foreign currencies; 2) currency gains or losses realized between the trade and settlement dates on securities transactions; and 3) the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. Foreign securities and currency transactions may involve risks not associated with U.S. securities and currency.

 

  D.

Federal Income Taxes

Each Fund has elected to be treated as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986 (the “IRC”). Each Fund intends to distribute substantially all of its taxable income and any accumulated net realized capital gains. Accordingly, no provision for federal income taxes has been made in the financial statements.

The Funds may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be reclaimed. The Funds will accrue such taxes and reclaims as applicable based upon their current interpretations of the tax rules and regulations that exist in the markets in which they invest.

 

43


Notes to Financial Statements

PRIMECAP Odyssey Funds

 

For the Year Ended October 31, 2022 – continued

 

Each Fund has adopted accounting standards regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year ended October 31, 2022, the Funds did not incur any interest or penalties. As of October 31, 2022, open tax years include the tax years ended October 31, 2019 through October 31, 2022. No Fund is aware of any tax positions for which it is more likely than not that the total amounts of unrecognized tax benefits or loss will significantly change in the next 12 months.

 

  E.

Allocation of Expenses

Each Fund is charged for those expenses directly attributable to it. Expenses that are not directly attributable to a Fund are allocated among the Funds by an appropriate method based on the nature of the expense.

 

  F.

Security Transactions, Investment Income, and Distributions

Security transactions are accounted for on the trade date. Dividend income and distributions to shareholders are recorded on the ex-dividend date, and interest income is recognized on the accrual basis. Realized gains and losses are evaluated on the basis of identified costs. Premiums and discounts on the purchase of securities are amortized/accreted using the effective interest method. U.S. GAAP requires that permanent financial reporting and tax differences be reclassified in the capital accounts.

 

  G.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates, and such differences could be material.

 

  H.

Indemnification Obligations

Under the Trust’s organizational documents, its current and former officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. Based on experience, the Funds would expect the risk of loss to be minimal.

 

44


Notes to Financial Statements

PRIMECAP Odyssey Funds

 

For the Year Ended October 31, 2022 – continued

 

(3)  Investment Transactions

The cost of purchases and the proceeds from sales of securities, excluding short-term investments, for the year ended October 31, 2022 were as follows:

 

Fund

  Purchases      Sales  

Stock Fund

  $ 253,792,778      $ 1,300,162,434  

Growth Fund

  $ 320,021,277      $ 1,783,446,713  

Aggressive Growth Fund

  $ 346,619,243      $ 1,957,715,110  

(4)  Valuation Measurements

The Funds have adopted fair valuation accounting standards which establish an authoritative definition of fair value and set forth a hierarchy for measuring fair value. These standards require additional disclosure about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs during the period. These standards define fair value as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy is organized into three levels based upon the assumptions (referred to as “inputs”) used to value the asset or liability. These standards state that “observable inputs” reflect the significant assumptions that market participants would use in valuing an asset or liability based on market data obtained from independent sources. “Unobservable inputs” reflect the Funds’ own assumptions about the inputs market participants would use to value the asset or liability.

Various inputs are used in determining the value of each Fund’s investments, and the lowest level for any significant input determines leveling. These inputs are summarized in the three broad levels below:

 

  Level 1 –

Unadjusted quoted prices in active markets for identical securities to which the Trust has access at the date of measurement.

 

 

  Level 2 –

Other significant observable inputs (including quoted prices for similar or related securities in both active and inactive markets, interest rates, foreign exchange rates, and fair value estimates for foreign securities indices).

 

 

  Level 3 –

Significant unobservable inputs to the extent observable inputs are unavailable (including the Funds’ own assumptions in determining fair value of investments based on the best available information).

 

 

45


Notes to Financial Statements

PRIMECAP Odyssey Funds

 

For the Year Ended October 31, 2022 – continued

 

The following table provides the fair value measurements of applicable Fund assets by level within the fair value hierarchy for each Fund as of October 31, 2022. These assets are measured on a recurring basis.

 

Fund

 

Description

  Quoted prices
in active
markets for
identical assets
(Level 1)
    Significant
other
observable
inputs
(Level 2)
    Significant
unobservable
inputs
(Level 3)
    Total  
Stock  

Common Stocks(1)

  $ 5,590,846,289     $     $     $ 5,590,846,289  
Fund  

Short-Term Investments

    211,502,114                   211,502,114  
   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total Investments in Securities

  $ 5,802,348,403     $     $     $ 5,802,348,403  
   

 

 

   

 

 

   

 

 

   

 

 

 
Growth  

Common Stocks(1)

  $ 6,781,911,254     $     $     $ 6,781,911,254  
Fund  

Rights(2)

                84,151       84,151  
 

Short-Term Investments

    191,463,748                   191,463,748  
   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total Investments in Securities

  $ 6,973,375,002     $     $ 84,151     $ 6,973,459,153  
   

 

 

   

 

 

   

 

 

   

 

 

 
Aggressive  

Common Stocks(1)

  $ 6,765,721,086     $     $     $ 6,765,721,086  
Growth  

Preferred Stocks(3)

    1,814,750                   1,814,750  
Fund  

Warrants(4)

    709,995                   709,995  
 

Rights(2)

                206,895       206,895  
 

Short-Term Investments

    170,943,658                   170,943,658  
   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total Investments in Securities

  $ 6,939,189,489     $     $ 206,895     $ 6,939,396,384  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

  (1) 

Refer to each Fund’s respective Schedule of Investments for the breakdown of major categories.

  (2) 

Health Care

  (3) 

Financials

  (4)

Materials

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

 

Epizyme, Inc. - CVR (Issue Date 8/15/22)

 
    Growth Fund      Aggressive
Growth Fund
 

Balance at October 31, 2021

  $      $  

Purchases (Received)

    84,151        206,895  

Sales (Proceeds)

            

Realized Gain (Loss)

            

Change in Unrealized Appreciation/Depreciation

            
 

 

 

    

 

 

 

Balance at October 31, 2022

  $ 84,151      $ 206,895  
 

 

 

    

 

 

 

During the year ended October 31, 2022, the Funds determined the fair value of Epizyme, Inc. (“Epizyme”) CVR considering available information, including the value of Epizyme stock prior to the issuance of the CVR. The likelihood of receiving payments pursuant to an agreement will depend on achievement of certain milestones.

 

46


Notes to Financial Statements

PRIMECAP Odyssey Funds

 

For the Year Ended October 31, 2022 – continued

 

(5)  Distribution to Shareholders

Net investment income and net realized gains differ for financial statement and tax purposes due to differing treatments of deferred wash sale losses.

As of October 31, 2022, the components of capital on a tax basis were as follows:

 

    PRIMECAP
Odyssey
Stock Fund
    PRIMECAP
Odyssey
Growth Fund
    PRIMECAP
Odyssey Aggressive
Growth Fund
 

Cost of investments for tax purposes(1)

  $ 3,323,509,538     $ 3,973,725,721     $ 4,586,591,584  
 

 

 

   

 

 

   

 

 

 

Gross tax unrealized appreciation

    2,790,740,603       3,557,621,010       3,544,311,611  

Gross tax unrealized depreciation

    (312,291,596     (558,179,002     (1,191,548,104
 

 

 

   

 

 

   

 

 

 

Net tax unrealized appreciation

    2,478,449,007       2,999,442,008       2,352,763,507  
 

 

 

   

 

 

   

 

 

 

Undistributed ordinary income

    58,348,538       46,160,486        

Undistributed long-term capital gain

    553,003,672       706,868,322       640,274,263  
 

 

 

   

 

 

   

 

 

 

Total distributable earnings

    611,352,210       753,028,808       640,274,263  
 

 

 

   

 

 

   

 

 

 

Other accumulated gain (loss)

                (12,580,563
 

 

 

   

 

 

   

 

 

 

Total accumulated gain

  $ 3,089,801,217     $ 3,752,470,816     $ 2,980,457,207  
 

 

 

   

 

 

   

 

 

 

 

  (1) 

At October 31, 2022 the differences in the basis for federal income tax purposes and financial reporting purposes are due to the tax deferral of losses on wash sales.

U.S. GAAP requires that permanent book-to-tax differences be reclassified among the components of net assets. These reclassifications have no effect on net assets or NAV. For the fiscal year ended October 31, 2022, the following reclassifications were made:

 

    Undistributed
Net Investment
Gain (Loss)
     Accumulated
Net Realized
Gain (Loss)
     Paid In Capital  

Stock Fund

  $ (27,449)      $ (89,795,892)      $ 89,823,341  

Growth Fund

  $ (84,221)      $ (117,059,635)      $ 117,143,856  

Aggressive Growth Fund

  $ 7,091,673      $ (125,642,491)      $ 118,550,818  

The Funds used a tax accounting practice to treat a portion of the price of capital shares redeemed during the year as distributions from net realized capital gains. The PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund reclassified $89,823,341, $117,143,856, and $118,550,818, respectively, from Accumulated Net Realized Gain to Paid In Capital. Other permanent book-to-tax differences that required reclassification among the Funds’ capital accounts related to foreign currency adjustments and net operating losses. The PRIMECAP Odyssey Aggressive Growth Fund deferred, on a tax basis, late-year ordinary losses of $12,580,563.

 

47


Notes to Financial Statements

PRIMECAP Odyssey Funds

 

For the Year Ended October 31, 2022 – continued

 

Tax components of dividends paid during the fiscal years ended October 31, 2022 and October 31, 2021 were as follows:

 

    October 31, 2022     October 31, 2021  
    Ordinary
Income
Distributions
    Long-Term
Capital Gain
Distributions
    Ordinary
Income
Distributions
     Long-Term
Capital Gain
Distributions
 

Stock Fund

  $ 56,748,200     $ 606,583,489     $ 91,207,885      $ 430,738,717  

Growth Fund

  $ 35,104,520     $ 1,153,169,227     $ 35,746,054      $ 1,051,998,107  

Aggressive Growth Fund

  $     $ 1,124,701,183     $      $ 822,100,806  

The Funds designated as long-term capital gain dividends, pursuant to IRC Section 852 (b) (3), the amounts necessary to reduce the earnings and profits of the Funds related to net capital gains to zero for the tax year ended October 31, 2022.

(6)  Investment Advisory and Other Agreements

The Trust has entered into an investment management agreement with the Investment Advisor on behalf of each Fund. For its services to the Funds, the Investment Advisor receives an annual fee, payable on a quarterly basis, at the annual rate of 0.60% on the first $100 million of each Fund’s average daily assets, 0.55% on the next $9.9 billion of each Fund’s average daily net assets, and 0.50% on each Fund’s average daily assets in excess of $10 billion. For the year ended October 31, 2022, each Fund paid the Investment Advisor at an effective annual rate of 0.55% of its respective average net assets.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services, serves as the administrator, fund accountant, and transfer agent to the Funds. U.S. Bank, N.A. serves as the Funds’ custodian. ALPS Distributors, Inc. serves as the Funds’ distributor.

 

48


Notes to Financial Statements

PRIMECAP Odyssey Funds

 

For the Year Ended October 31, 2022 – continued

 

(7)  Other Affiliates

Certain of the Funds’ investments are in companies that are considered to be affiliated companies of a Fund because the Fund owns 5% or more of the outstanding voting securities of the company. With respect to each such investment, refer to each Fund’s respective Schedule of Investments for the information on the sector of each such company, the number of shares of each such company held, and the percentages of net assets represented by such companies held in each sector. Transactions during the period in securities of these companies were as follows:

PRIMECAP Odyssey Aggressive Growth Fund

 

          Current Period Transactions        

Common Stock

  Market
Value at
October 31,
2021
    Purchases
at Cost
    Proceeds
from
Securities
Sold
    Dividend
Income
    Realized
Gain
(Loss)
    Change in
Unrealized
Gain
(Loss)
    Market
Value at
October 31,
2022
 

Axcelis Technologies, Inc.(1)

  $ 112,881,150     $     $ 33,090,337     $     $ 28,332,607     $ (20,355,210   $ N/A  

Calithera Biosciences, Inc.

    14,261,542       56,740       349,533             (9,018,520     (4,248,144     702,085  

Cerus Corp.

    65,404,680             3,863,780             29,730       (27,852,148     33,718,482  

Epizyme, Inc.(1)(2)

    41,220,089       1,281,038       16,531,884             (142,996,515     117,027,272       N/A  

Nektar Therapeutics

    168,252,957             7,891,066             (3,792,013     (117,834,847     38,735,031  

NN, Inc.(1)

    13,238,510             2,970,728             (13,325,146     7,291,260       N/A  

Pulmonx Corp.

    98,058,947       41,310,610       1,158,495             (2,816,596     (86,160,314     49,234,152  

Rhythm Pharmaceuticals, Inc.

    55,174,106       4,240,169       1,091,330             (3,847,741     71,792,115       126,267,319  

ServiceSource International, Inc.(1)(3)

    8,838,960             10,150,635             (23,714,097     25,025,772       N/A  

Standard BioTools, Inc.(4)

    21,584,845             667,649             (3,615,686     (12,648,614     4,652,896  

Wave Life Sciences Ltd.(1)

    17,762,290       62,348       297,683             (2,758,380     3,172,226       N/A  

Xencor, Inc.

    168,988,492       14,431,804       13,053,878             4,921,953       (52,124,295     123,164,076  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 785,666,568     $ 61,382,709     $ 91,116,998     $     $ (172,600,404   $ (96,914,927   $ 376,474,041  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

  (1) 

No longer an affiliate as of October 31, 2022.

  (2) 

Included in “Proceeds from Securities Sold” are proceeds received when Epizyme, Inc. was acquired.

  (3) 

Included in “Proceeds from Securities Sold” are proceeds received when ServiceSource International, Inc. was acquired.

  (4) 

Formerly Fluidigm Corp. Name change effective April 6, 2022.

 

49


Notes to Financial Statements

PRIMECAP Odyssey Funds

 

For the Year Ended October 31, 2022 – continued

 

(8)  Other Matters

Significant market disruptions, such as those caused by pandemics (e.g., COVID-19 pandemic), natural or environmental disasters, war (e.g., Russia’s invasion of Ukraine), acts of terrorism, or other events, can adversely affect local and global markets and normal market operations. The ultimate economic fallout from these disruptions and the long-term impact on economies, markets, industries, and individual issuers, are not known. The operational and financial performance of the issuers of securities in which each Fund invests depends on future developments and may negatively impact the value of each Fund’s investments and lead to losses.

(9)  Subsequent Events

The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

 

50


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Report of Independent Registered

Public Accounting Firm

 

To the Board of Trustees of PRIMECAP Odyssey Funds and Shareholders of

PRIMECAP Odyssey Stock Fund,

PRIMECAP Odyssey Growth Fund, and

PRIMECAP Odyssey Aggressive Growth Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund (constituting PRIMECAP Odyssey Funds, hereafter collectively referred to as the “Funds”) as of October 31, 2022, the related statements of operations for the year ended October 31, 2022, the statements of changes in net assets for each of the two years in the period ended October 31, 2022, including the related notes, and the financial highlights for each of the five years in the period ended October 31, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of October 31, 2022, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended October 31, 2022 and each of the financial highlights for each of the five years in the period ended October 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2022 by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinions.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California

December 13, 2022

We have served as the auditor of one or more investment companies in PRIMECAP Odyssey Funds Investment Company Complex since 2004.

 

51


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Expense Example

PRIMECAP Odyssey Funds

(Unaudited)

 

As a shareholder of one or more of the Funds, you incur ongoing costs including management fees and other Fund expenses. This expense example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The expense example is based on an investment of $1,000 invested for a six-month period beginning May 1, 2022 through October 31, 2022.

Actual Expenses

The information in the table adjacent to the heading “Actual Performance” provides actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the column entitled “Expenses Paid during Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table adjacent to the heading “Hypothetical Performance (5% return before expenses)” provides hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. 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 Funds and other mutual funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the information adjacent to the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different mutual funds. In addition, if transactional costs were included, your costs would have been higher.

 

52


Expense Example

PRIMECAP Odyssey Funds

 

(Unaudited) – continued

 

     Beginning
Account
Value
(5/1/22)
    Ending
Account
Value
(10/31/22)
    Expenses Paid
During Period(1)
(5/1/22 to
10/31/22)
    Expense Ratio
During Period(1)
(5/1/22 to
10/31/22)
 

PRIMECAP Odyssey Stock Fund

 

       

Actual Performance

  $ 1,000.00     $ 960.00     $ 3.26       0.66%  

Hypothetical Performance (5% return before expenses)

  $ 1,000.00     $ 1,021.88     $ 3.36       0.66%  

PRIMECAP Odyssey Growth Fund

 

       

Actual Performance

  $ 1,000.00     $ 957.20     $ 3.26       0.66%  

Hypothetical Performance (5% return before expenses)

  $ 1,000.00     $ 1,021.88     $ 3.36       0.66%  

PRIMECAP Odyssey Aggressive Growth Fund

 

   

Actual Performance

  $ 1,000.00     $ 932.20     $ 3.17       0.65%  

Hypothetical Performance (5% return before expenses)

  $ 1,000.00     $ 1,021.93     $ 3.31       0.65%  

 

  (1) 

Expenses are equal to a Fund’s annualized expense ratio as indicated, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year period (184), then divided by the number of days in the fiscal year (365) to reflect the one-half year period.

 

53


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Additional Information

PRIMECAP Odyssey Funds

(Unaudited)

 

Additional Tax Information

PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund designate 100%, 100%, and 0%, respectively, of ordinary income distributions paid during the fiscal year ended October 31, 2022 as qualified dividend income.

PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund designate 100%, 100%, and 0%, respectively, of ordinary income distributions paid during the fiscal year ended October 31, 2022 as dividends qualifying for the dividends received deduction available for corporate shareholders.

PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund designate 12.63%, 69.22%, and 0%, respectively, of ordinary income distributions paid during the fiscal year ended October 31, 2022 as short-term capital gain under Internal Revenue Code 871(k)(2)(C).

Proxy Voting Procedures

The Investment Advisor votes proxies relating to portfolio securities in accordance with procedures that have been approved by the Trust’s Board of Trustees. You may obtain a description of these procedures, free of charge, by calling toll-free 1-800-729-2307. This information is also available through the Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.

Proxy Voting Record

Information regarding how the Funds voted proxies relating to the portfolio securities during the most recent 12-month period ended June 30 is available, without charge, by calling toll-free 1-800-729-2307. This information is also available through the SEC’s website at www.sec.gov.

Portfolio Holdings Disclosure

The Funds file a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Part F of Form N-PORT. This information is available, without charge, by calling toll-free 1-800-729-2307. The Funds’ Part F of Form N-PORT is also available on the SEC’s website at www.sec.gov. The Funds’ Part F of Form N-PORT may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Board Approval of the Renewal of the Investment Advisory Agreement

The Board of Trustees (the “Board”) of PRIMECAP Odyssey Funds (the “Trust”) is comprised of seven Trustees, six of whom are not “interested persons” of the Trust as defined by the Investment Company Act of 1940, as amended (the “Independent Trustees”). In October 2022, the Board of Trustees, including the Independent Trustees, approved a one-year renewal of the Trust’s investment advisory agreement with PRIMECAP Management Company (the “Advisor”) with respect to the series of the Trust (the “Funds”).

General Information

As part of the annual contract review process, the Independent Trustees, through counsel to the Trust and the Independent Trustees, requested and received extensive materials, including

 

54


Additional Information

PRIMECAP Odyssey Funds

 

(Unaudited) – continued

 

information related to the nature, extent, and quality of the services provided to the Funds by the Advisor; information prepared by Broadridge Financial Solutions (“Broadridge”) comparing the performance and risk profile of each Fund to those of relevant market indices and of other funds in the relevant Morningstar, Inc. (“Morningstar”) categories and in a smaller group of funds selected by Broadridge; information prepared by Broadridge comparing the advisory fees and total expenses to those of other funds in the relevant Morningstar category and peer group; financial information for the Advisor and information related to the profitability to the Advisor of the investment advisory agreement with the Trust; the extent to which the Advisor expects to achieve economies of scale in connection with the services it provides to each Fund; any ancillary or “fall out” benefits that the Advisor may derive from its relationship with the Funds; and the personnel of the Advisor providing services to the Funds. The Independent Trustees also requested and received information regarding the Advisor’s risk controls, risk evaluation processes, compliance program (including brokerage and trading processes), information technology infrastructure (including cyber security measures), business continuity plans, and other matters.

The Trust engaged Broadridge to prepare an independent expense and performance analysis for each Fund. In performing its analyses, Broadridge used data compiled by Morningstar to compare the expenses and performance of each Fund to those of similar funds managed by other advisors identified by Broadridge. The Board reviewed the Broadridge materials, which included information regarding the performance of each Fund compared with the performance of its benchmark index and of the entire universe of funds in its Morningstar retail category, as well as the performance of a group of comparable funds selected by Broadridge from the relevant Morningstar category (each a “Peer Group”), for the one-, three-, five- and ten-year periods ended July 31, 2022 (in each case net of fees); as well as information regarding the advisory fees paid to the Advisor and the total expense ratio of each Fund compared to those of a peer group of comparable funds selected by Broadridge (each an “Expense Peer Group”) from the Fund’s Morningstar retail category.

With respect to investment performance, the Trustees noted that the Advisor had made quarterly presentations to the Board regarding the Funds’ portfolio construction, investment strategies, and results. The Trustees also noted that in addition to meeting with the Funds’ portfolio managers on a quarterly basis, they also received presentations from different investment analysts throughout the year on specific investment sectors and each Fund’s investments in those sectors. In considering the renewal of the agreement, the Board also took into account other information it had received at past Board and committee meetings with respect to various matters.

The Trustees reviewed information from counsel to the Trust and the Independent Trustees regarding their responsibilities in considering whether to renew the investment advisory agreement for an additional one-year period. In connection with their deliberations, the Board considered such information and factors that they believed to be relevant. The Board considered renewal of the investment advisory agreement separately for each Fund, although the Board took into account the common interests of all the Funds in its review. In considering these matters, the Board discussed the renewal of the investment advisory agreement with management, and the Independent Trustees met in a private session with counsel to the Trust and the Independent Trustees at which no employees of the Advisor were present.

 

55


Additional Information

PRIMECAP Odyssey Funds

 

(Unaudited) – continued

 

In deciding to approve the renewal of the investment advisory agreement, the Board and the Independent Trustees did not identify a single factor that was controlling. The Board and the Independent Trustees concluded that each of the various factors referred to below favored such approval. The following summary describes the key factors considered by the Trustees and their conclusions that formed the basis for approving the renewal of the investment advisory agreement in light of the legal advice furnished by counsel and their own business judgment. This summary is not inclusive of all of the factors considered, and each Trustee did not necessarily attribute the same weight to each factor.

Nature, Extent, and Quality of Services

The Board considered the services provided by the Advisor to the Funds under the investment advisory agreement, including the background, education, and experience of the Advisor’s key portfolio management, compliance, and operational personnel; its overall financial strength and stability; its resources and efforts to retain, attract, and motivate capable personnel to serve the Funds; and the overall general quality and depth of its organization. The Board also took into account the experience, capability, and integrity of the Advisor’s senior management, the time that senior management commits to the Funds, and the Advisor’s demonstrated commitment to the Funds; its investment philosophy and processes, including its brokerage and trading practices; its disaster recovery and contingency planning; its oversight of the Funds’ internal control environment with regard to compliance with applicable laws and regulations; and the significant investment by each portfolio manager in the Funds that he manages, which helps align his interests with those of Fund shareholders. The Trustees concluded that the nature, extent, and quality of services provided under the investment advisory agreement were of a high level and satisfactory.

Investment Performance

The Board assessed the performance of each Fund compared with the performance of its benchmark(s) and other funds in the Fund’s Morningstar retail category and Peer Group for the one-, three-, five- and ten-year periods ended July 31, 2022. The Board made the following observations in reviewing the Funds’ performance:

 

   

The annualized total return of the PRIMECAP Odyssey Stock Fund outperformed the S&P 500® Index for the since inception period ended July 31, 2022, but underperformed compared to the Index for the one-, three-, five-, and ten-year periods by 1.67%, 3.03%, 2.64% and 0.67%, respectively. The Fund’s return exceeded the median of funds in the Morningstar Large Relative Value category for the ten-year period by 0.45% but was below the median returns of the Morningstar category for the one-, three- and five-year periods by 0.64%, 1.47% and 1.04%, respectively. The Fund’s returns were above the median of the Peer Group for the one- and ten-year periods by 0.26% and 0.30%, respectively, but were below the median of the Peer group for the three- and five-year periods by 0.85% and 0.02%, respectively.

 

   

The annualized total returns of the PRIMECAP Odyssey Growth Fund outperformed its primary benchmark, the S&P 500® Index, for the since inception period ended July 31, 2022, but underperformed compared to the Index for the one-, three-, five- and ten-year

 

56


Additional Information

PRIMECAP Odyssey Funds

 

(Unaudited) – continued

 

 

periods by 6.45%, 4.38%, 2.53% and 0.12%, respectively. The Fund’s annualized total returns outperformed its secondary benchmark, the Russell 1000 Growth Index, for the one-year period by 0.84%, but underperformed relative to the Index for the three-, five-, ten-year and since inception periods by 7.07%, 6.00%, 2.27% and 0.65%, respectively. The Fund outperformed the medians of funds in the Morningstar Large Core Growth category and Peer Group for the one-year period. For the three-, five- and ten-year periods, the Fund’s annualized total returns were below the Morningstar category’s median return by 3.50%, 3.03% and 0.31%, respectively. The Fund’s annualized total returns were below the median returns of the Peer Group for the three-, five- and ten-year periods by 3.22%, 3.82%, and 0.75%, respectively.

 

   

The annualized total returns of the PRIMECAP Odyssey Aggressive Growth Fund were above the returns of the Fund’s primary benchmark, the S&P 500® Index, and its secondary benchmark, the Russell Mid Cap Growth Index, for the ten-year and since inception periods ended July 31, 2022. The Fund’s annualized total return was below the return of the S&P 500® Index for the one-, three- and five-year periods by 15.98%, 8.21% and 4.57%, respectively. The Fund’s annualized total returns for the one- and ten-year periods were above the returns of the Russell Mid Cap Growth Index by 1.14% and 1.44%, respectively, but below the three- and five-year periods by 2.36% and 2.80%, respectively. For the ten-year period, the Fund’s performance was above the median of funds in the Morningstar All Cap Growth category and Peer Group by 1.89% and 1.41%, respectively. For the one-, three- and five-year periods, the Fund returned 0.11%, 3.41% and 2.84% less than the category median, respectively. The Fund’s annualized total return for the one-year period was equal to the median of the Peer Group but was lower than the Peer Group medians for the three- and five-year periods by 3.46% and 2.89%, respectively.

In assessing the performance of the Funds, the Trustees considered the Advisor’s explanation that the Funds’ performance struggled to keep pace with that of their respective indices, Peer Groups, and Morningstar categories as the Advisor stayed committed to its investment philosophy and refused to chase momentum driven stocks during the height of the COVID-19 pandemic. The Board considered the Advisor’s explanation that the Funds’ performance was negatively impacted by a confluence of factors that worked against the Funds’ investment objectives and risk profiles during the COVID-19 pandemic, including: the Funds’ underweight positions in the “Big 5” tech stocks (Microsoft, Apple, Amazon, Alphabet, and Meta), since those companies benefited significantly from the pandemic; the Funds’ overweight positions in the airline and cruise line industries when the pandemic first began; and delays and cancellation of medical elective procedures, which negatively impacted the healthcare devices sector. The Board also considered that the Advisor feels the Funds are well positioned for the future as consumers are expected to rotate back to services such as air travel and cruises and the healthcare industry is expected to develop more drugs and treatments to address significant unmet medical needs. The Trustees noted that the Advisor believes that each Fund continues to hold considerable value in its portfolio despite the various periods of underperformance. The Trustees also noted that each Fund had performed well over the long term.

 

57


Additional Information

PRIMECAP Odyssey Funds

 

(Unaudited) – continued

 

Based on the information provided to them and in consideration of the specific investment objectives and risk profiles of each Fund, the Board and the Independent Trustees concluded that the performance of each Fund was satisfactory.

Advisory Fees and Fund Expenses

The Board reviewed the advisory fees and expenses paid by each Fund compared to those of other funds in the same Morningstar retail category (for the Stock Fund – Large Blend funds; for the Growth Fund – Large Growth funds; and for the Aggressive Growth Fund – Mid-Cap Growth funds), and of other funds in the Fund’s Expense Peer Group, which was selected by Broadridge and was comprised of funds comparable to the Fund with fee structures and characteristics similar to those of the Funds (e.g., no distribution or shareholder servicing fees, and excluding load funds, index and enhanced index funds, funds of funds, and multi-manager funds).

The materials for the meeting indicated as follows:

 

   

The advisory fee of the Stock Fund was the same as the medians of the Fund’s Expense Peer Group and the funds in the Morningstar Large Blend retail category.

 

   

The advisory fee of the Growth Fund was below the median fees of the funds in the Morningstar Large Growth category and the Fund’s Expense Peer Group.

 

   

The advisory fee of the Aggressive Growth Fund was below the median fees of the funds in the Morningstar Mid-Cap Growth category and the Fund’s Expense Peer Group.

 

   

The total expense ratios of the Stock Fund, the Growth Fund and the Aggressive Growth Fund were below the medians of the respective Expense Peer Groups and Morningstar retail categories.

The Board also reviewed the fees charged by the Advisor to other clients, including other mutual funds for which it provides sub-advisory services. The Board considered that although those fees were lower than those charged by the Advisor to the Funds, the differences appropriately reflected the investment, operational, and regulatory differences between advising other clients and the Funds, noting that mutual funds are subject to certain requirements under the 1940 Act that do not apply to the Advisor’s separate account clients. The Trustees considered the services provided by the Advisor under the Investment Advisory Agreement, including providing the Chief Compliance Officer, certain other officers of the Trust and other personnel involved in the oversight of the Trust’s service providers. The Board further noted that the advisory fee was the sole source of revenue from the Funds to the Advisor. The Board and the Independent Trustees determined that the advisory fees and expenses charged to the Funds were reasonable in consideration of the services provided.

Costs and Profits of the Advisor

The Board reviewed information regarding the Advisor’s financial position and concluded that the Advisor would be able to continue to provide advisory services to the Funds. The Board also reviewed information relating to the Advisor’s profitability. The Board recognized the competitiveness of the registered fund industry and the importance of an investment advisor’s

 

58


Additional Information

PRIMECAP Odyssey Funds

 

(Unaudited) – continued

 

long-term profitability, including for maintaining management stability and accountability. The Board noted that the Advisor had closed the Aggressive Growth Fund in January 2014 to most new investors, limiting the growth of the Fund and consequently future profits to the Advisor as it relates to the Fund. In considering the Advisor’s profitability, the Trustees recognized the importance of the profitability of the Advisor, not only in maintaining its own financial condition, but also in maintaining an environment in which it is able to attract and retain talented investment professionals. Recognizing the difficulty in evaluating an investment advisor’s profitability with respect to the funds it manages in the context of an advisor with multiple lines of business, and noting that other profitability methodologies might also be reasonable, the Board and the Independent Trustees concluded that the profit of the Advisor from its relationship with each Fund was reasonable.

Economies of Scale and Other Benefits to the Investment Advisor

The Trustees considered that the Investment Advisory Agreement provides fee breakpoints at $100 million and $10 billion in assets for each Fund, that the Advisor had added the $10 billion breakpoint effective May 1, 2021, and that that the fees continued to compare favorably to those of other actively managed funds with similar investment objectives. The Board considered that the Advisor had significant assets under management at the time the Funds commenced operations and that the Funds were offered advisory fee rates at inception that reflected scale within the Advisor’s business. The Board also acknowledged various diseconomies of scale experienced by the Advisor as the Funds have grown, including the hiring of additional personnel and the provision of additional services to the Funds including online access to shareholder accounts and improved technology, systems, and hardware. The Board and the Independent Trustees concluded that the Advisor had shared any economies of scale it had realized from the Funds with the Funds and their shareholders through advisory fee breakpoints, the hiring of additional personnel, and the provision of additional services to the Funds.

The Board also considered the benefits received by the Advisor as a result of its relationship with the Funds other than investment advisory fees, including any research provided to the Advisor by broker-dealers providing execution services to the Funds, the intangible benefits of the Advisor’s association with the Funds generally, and any favorable publicity arising in connection with the Funds’ performance.

Conclusions

Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation payable to the Advisor pursuant to the investment advisory agreement with respect to each Fund was fair and reasonable in light of the services being provided by the Advisor to the Fund and its shareholders and that renewal of the investment advisory agreement with respect to each Fund was in the best interest of the Fund and its shareholders.

 

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Management

PRIMECAP Odyssey Funds

(Unaudited)

 

Portfolio Managers

PRIMECAP Management Company has five portfolio managers who together have more than 150 years of investment experience. The portfolio managers primarily responsible for overseeing the Funds’ investments are:

 

Name   Years of Experience  

Theo A. Kolokotrones

    52  

Joel P. Fried

    37  

Alfred W. Mordecai

    25  

M. Mohsin Ansari

    22  

James Marchetti

    17  

Each of these five individuals manages a portion of the PRIMECAP Odyssey Stock Fund, the PRIMECAP Odyssey Growth Fund, and the PRIMECAP Odyssey Aggressive Growth Fund. A portion of each Fund’s assets may be managed by individuals in the Investment Advisor’s research department.

Officers and Trustees

The Trust’s officers, who oversee the Funds’ daily operations, are appointed by the Board of Trustees. The trustees are responsible for the overall management of the Trust, including establishing the Funds’ policies and general supervision and review of their investment activities. The Statement of Additional Information includes additional information about the trustees and is available, without charge, by calling 1-800-729-2307 or at the Funds’ website at www.primecap.com.

Executive Officers. The table below sets forth certain information about each of the Trust’s executive officers. The address for each officer is 177 East Colorado Boulevard, 11th Floor, Pasadena, CA 91105.

 

Name

Age

  Position(s)
Held
with Trust
  Term of Office;
Length of
Time Served
  Principal Occupation(s)
During Past 5 Years

Theo A. Kolokotrones

Age: 76

  Co-Chief Executive Officer   Indefinite;
Since 09/04
 

Chairman, Director, and Portfolio Manager

PRIMECAP Management Company

Joel P. Fried

Age: 60

  Co-Chief Executive Officer and Trustee   Indefinite;
Since 09/04
 

President, Director, and Portfolio Manager

PRIMECAP Management Company

 

60


Management

PRIMECAP Odyssey Funds

 

(Unaudited) – continued

 

Name
Age
  Position(s)
Held
with Trust
  Term of Office;
Length of
Time Served
  Principal Occupation(s)
During Past 5 Years

Alfred W. Mordecai

Age: 55

  Co-Chief Executive Officer   Indefinite;
Since 10/12
 

Vice Chairman, Director, and Portfolio Manager

PRIMECAP Management Company

Michael J. Ricks

Age: 44

  Chief Financial Officer, Secretary, Chief Administrative Officer   Indefinite;
Since 03/11
  Director of Fund Administration PRIMECAP Management Company; Chief Compliance Officer, PRIMECAP Odyssey Funds; Chief Compliance Officer PRIMECAP Management Company March 2019-March 2020

Jennifer Ottosen

Age: 62

  Chief Compliance Officer, AML Compliance Officer   Indefinite;
Since 02/20
 

Chief Compliance Officer,

PRIMECAP Management Company since March 2020; Senior Compliance Officer, PRIMECAP Management Company May 2019-March 2020; CCO Dividend Assets Capital, LLC; CCO & General Counsel, GW Capital, Inc.

“Independent” Trustees. The table below sets forth certain information about each of the trustees of the Trust who is not an “interested person” of the Trust as defined in the 1940 Act (“Independent Trustees”). The address for each Independent Trustee is 177 East Colorado Boulevard, 11th Floor, Pasadena, CA 91105.

 

Name
Age
  Position(s)
Held
with Trust
  Term of
Office;
Length of
Time Served
  Principal Occupation(s)
During Past 5 Years
  Number of
Portfolios in
Fund Complex
Overseen  by
Trustee(1)
  Other
Director-
ships Held
by  Trustee

Benjamin F. Hammon

Age: 87

  Chairman of the Board and Trustee   Indefinite;
Since 09/04
  Retired; Private investor   3   None

Wayne H. Smith

Age: 81

  Chairman of the Audit Committee and Trustee   Indefinite;
Since 09/04
  Retired; Private investor   3   None

Joseph G. Uzelac

Age: 78

  Trustee   Indefinite;
Since 10/07
  Retired; Private investor   3   None

Elizabeth D. Obershaw

Age: 62

  Trustee   Indefinite;
Since 06/08
  Retired; Formerly, Managing Director, Horsley Bridge Partners, an investment advisor (2007-2021)   3   None

J. Blane Grinstead

Age: 67

  Trustee   Indefinite;
Since 03/19
  Retired; Private investor   3   Orenda, Inc.,
a renewable
energy
technology
company
(May 2020 –
Present)

Michael Glazer

Age: 82

  Trustee   Indefinite;
Since 10/19
  Retired; Formerly, Partner and Senior Counsel, Morgan, Lewis & Bockius LLP   3   None

 

  (1) 

Fund Complex includes any funds, series of funds, or trusts that share the same advisor or that hold themselves out to investors as related companies.

 

61


Management

PRIMECAP Odyssey Funds

 

(Unaudited) – continued

 

“Interested” Trustee. The table below sets forth certain information about the trustee of the Trust who is an “interested person” of the Trust as defined by the 1940 Act. The address for the interested trustee is 177 East Colorado Boulevard, 11th Floor, Pasadena, CA 91105.

 

Name
Age
  Position(s)
Held
with Trust
  Term of
Office;
Length of
Time Served
 

Principal Occupation(s)

During Past 5 Years

  Number of
Portfolios in
Fund Complex
Overseen  by
Trustee(1)
  Other
Director-
ships Held
by  Trustee

Joel P. Fried(2)

Age: 60

  Co-Chief Executive Officer and Trustee   Indefinite;
Since 09/04
  President, Director, and Portfolio Manager
PRIMECAP Management Company
  3   None

 

  (1) 

Fund Complex means two or more registered investment companies that hold themselves out to investors as related companies for purposes of investment and investor services or have a common investment advisor or have an investment advisor that is an affiliated person of the investment advisor of any of the other registered investment companies.

  (2) 

Mr. Fried is an “interested person” of the Trust, as defined by the 1940 Act, because of his employment with PRIMECAP Management Company, the investment advisor to the Trust.

 

62


LOGO  

Privacy Notice

PRIMECAP Odyssey Funds

 

PRIMECAP Management Company

Maintaining the confidentiality of client personal financial information is very important to PRIMECAP Odyssey Funds (the “Trust”) and PRIMECAP Management Company (the “Advisor”). The Advisor and the Trust may collect several types of nonpublic personal information about investors, including:

 

   

Information from forms that investors may fill out and send to the Advisor or the Trust in connection with an account (such as name, address, and social security number).

 

   

Information an investor may give the Advisor or the Trust orally.

 

   

Information about the amount investors have invested in an account.

 

   

Information about any bank account investors may use for transfers between a bank account and a shareholder account.

The Advisor and the Trust will not sell or disclose client personal information to anyone except as permitted or required by law. For example, information collected may be shared with the independent auditors in the course of the annual audit of the Advisor or the Trust. The Advisor or the Trust may also share this information with the Advisor’s or the Trust’s legal counsel, as deemed appropriate, and with regulators. Finally, the Advisor or the Trust may disclose information about clients or investors at the client’s or investor’s request (for example, by sending duplicate account statements to someone designated by the client or investor), or as otherwise permitted or required by law.

Within the Advisor and the Trust, access to information about clients and investors is restricted to those employees or service providers who need to know the information to service client accounts. The Advisor’s employees are trained to follow its procedures to protect client privacy and are instructed to access information about clients only when they have a business reason to obtain it.

The Advisor and the Trust reserve the right to change this privacy policy in the future, but we will not disclose investor nonpublic personal information except as required or permitted by law without giving the investor an opportunity to instruct us not to do so.


Investment Advisor

PRIMECAP MANAGEMENT COMPANY

177 East Colorado Boulevard, 11th Floor

Pasadena, California 91105

 

Distributor

ALPS DISTRIBUTORS, INC.

1290 Broadway, Suite 1000

Denver, Colorado 80203

 

Custodian

U.S. BANK, N.A.

1555 North RiverCenter Drive, Suite 302

Milwaukee, Wisconsin 53212

 

Transfer Agent

U.S. BANCORP FUND SERVICES, LLC

615 East Michigan Street, 3rd Floor

Milwaukee, Wisconsin 53202

 

Administrator

U.S. BANCORP FUND SERVICES, LLC

2020 East Financial Way, Suite 100

Glendora, California 91741

 

Legal Counsel

MORGAN, LEWIS & BOCKIUS LLP

600 Anton Boulevard, Suite 1800

Costa Mesa, California 92626

 

Independent Registered Public Accounting Firm

PRICEWATERHOUSECOOPERS LLP

601 South Figueroa Street, Suite 900

Los Angeles, California 90017

This report is intended for the shareholders of the PRIMECAP Odyssey Funds and may not be used as sales literature unless preceded or accompanied by a current prospectus.

Past performance results shown in this report should not be considered a representation of future performance. Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are dated and are subject to change.

PRIMECAP, PRIMECAP Odyssey, and the PRIMECAP Odyssey logo are trademarks of PRIMECAP Management Company.


(b) Not applicable.

Item 2. Code of Ethics.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officers and principal financial officer. The registrant has not made any amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.

The registrant undertakes to provide to any person without charge, upon request, a copy of its code of ethics by mail when such person calls the registrant at 1-800-729-2307.

Item 3. Audit Committee Financial Expert.

The registrant’s Board of Trustees has determined that there is at least one audit committee financial expert serving on its audit committee. Wayne Smith is the registrant’s “audit committee financial expert” and is considered to be “independent” as each term is defined in Item 3 of Form N-CSR.

Item 4. Principal Accountant Fees and Services.

The registrant has engaged its principal accountant, PricewaterhouseCoopers LLP, to perform audit services, audit-related services, and tax services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning and specifically relate to the accountant’s review of the registrant’s federal and state tax returns. There were no other services provided by the principal accountant to the registrant during the past two fiscal years. The following table details the aggregate fees billed or expected to be billed to the registrant for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.

 

     FYE
10/31/2022
     FYE
10/31/2021
 

(a) Audit Fees

   $ 156,071      $ 142,888  

(b) Audit-Related Fees

   $ 0      $ 0  

(c) Tax Fees

   $ 18,927      $ 17,526  

(d) All Other Fees

   $ 0      $ 0  

(e)(1) The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant. All services were pre-approved and no waivers to the pre-approval requirement were made.


(e)(2) The percentage of fees billed by PricewaterhouseCoopers applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:

 

     FYE
10/31/2022
    FYE
10/31/2021
 

Audit-Related Fees

     0     0

Tax Fees

     0     0

All Other Fees

     0     0

(f) All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full-time permanent employees of the principal accountant.

(g) The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any entity controlling, controlled by, or under common control with the investment adviser) for the last two years.

 

Non-Audit Related Fees

   FYE
10/31/2022
     FYE
10/31/2021
 

Registrant

   $ 18,927      $ 17,526  

Registrant’s Investment Adviser

   $ 0      $ 0  

(h) The audit committee of the board of trustees/directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser is compatible with maintaining the principal accountant’s independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.

(i) Not applicable.

(j) Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).

Item 6. Investments.

 

(a)

The registrant’s Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.

 

(b)

Not applicable.

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 Purchasers.

Not applicable to open-end investment companies.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.

Item 11. Controls and Procedures.

 

(a)

The Registrant’s Co-Chief Executive Officers and Chief Financial Officer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.

 

(b)

There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 13. Exhibits.

 

(a)

(1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Incorporated by reference to the Registrant’s Form N-CSR filed July  7, 2022.

(2) A separate certification for each principal executive and principal financial officer pursuant to Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)). Filed herewith.

(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.

(4) Change in the registrant’s independent public accountant. There was no change in the registrant’s independent public accountant for the period covered by this report.

 

(b)

Certifications pursuant to Section  906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

PRIMECAP Odyssey Funds
By   /s/ Joel P. Fried
  Joel P. Fried, Co-Chief Executive Officer
Date   December 21, 2022
By   /s/ Theo A. Kolokotrones
  Theo A. Kolokotrones, Co-Chief Executive Officer
Date   December 21, 2022
By   /s/ Alfred W. Mordecai
  Alfred W. Mordecai, Co-Chief Executive Officer
Date   December 21, 2022

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/ Joel P. Fried
  Joel P. Fried, Co-Chief Executive Officer
Date   December 21, 2022
By   /s/ Theo A. Kolokotrones
  Theo A. Kolokotrones, Co-Chief Executive Officer
Date   December 21, 2022
By   /s/ Alfred W. Mordecai
  Alfred W. Mordecai, Co-Chief Executive Officer
Date   December 21, 2022
By   /s/ Michael J. Ricks
  Michael J. Ricks, Chief Financial Officer
Date   December 21, 2022

 

EX-99.CERT 2 d419919dex99cert.htm EX-99.CERT EX-99.CERT

EX.99.CERT

CERTIFICATIONS

I, Joel P. Fried, certify that:

 

1.

I have reviewed this report on Form N-CSR of PRIMECAP Odyssey Funds;

 

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 officers 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 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 officers 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:   December 21, 2022    

/s/ Joel P. Fried

     

Joel P. Fried

Co-Chief Executive Officer


EX.99.CERT

CERTIFICATIONS

I, Theo A. Kolokotrones, certify that:

 

1.

I have reviewed this report on Form N-CSR of PRIMECAP Odyssey Funds;

 

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 officers 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 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 officers 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:   December 21, 2022    

/s/ Theo A. Kolokotrones

     

Theo A. Kolokotrones

Co-Chief Executive Officer


EX.99.CERT

CERTIFICATIONS

I, Alfred W. Mordecai, certify that:

 

1.

I have reviewed this report on Form N-CSR of PRIMECAP Odyssey Funds;

 

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 officers 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 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 officers 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:   December 21, 2022    

/s/ Alfred W. Mordecai

     

Alfred W. Mordecai

Co-Chief Executive Officer


EX.99.CERT

CERTIFICATIONS

I, Michael J. Ricks, certify that:

 

1.

I have reviewed this report on Form N-CSR of PRIMECAP Odyssey Funds;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) 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 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 officers 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:   December 21, 2022    

/s/ Michael J. Ricks

     

Michael J. Ricks

Chief Financial Officer

EX-99.906CERT 3 d419919dex99906cert.htm EX-99.906CERT EX-99.906CERT

EX.99.906CERT

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the PRIMECAP Odyssey Funds does hereby certify, to such officer’s knowledge, that the report on Form N-CSR of the PRIMECAP Odyssey Funds for the year ended October 31, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the PRIMECAP Odyssey Funds for the stated period.

 

/s/ Joel P. Fried

Joel P. Fried

Co-Chief Executive Officer, PRIMECAP Odyssey Funds

Dated:   December 21, 2022
/s/ Theo A. Kolokotrones

Theo A. Kolokotrones

Co-Chief Executive Officer, PRIMECAP Odyssey Funds

Dated:   December 21, 2022
/s/ Alfred W. Mordecai

Alfred W. Mordecai

Co-Chief Executive Officer, PRIMECAP Odyssey Funds

Dated:   December 21, 2022
/s/ Michael J. Ricks

Michael J. Ricks

Chief Financial Officer, PRIMECAP Odyssey Funds

Dated:   December 21, 2022

This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by PRIMECAP Odyssey Funds for purposes of the Securities Exchange Act of 1934.

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