the final quarter of 2017, global financial markets were dominated by U.S.
equity market strength driven by expectations of a major reduction in corporate
tax liabilities. Domestic GDP strengthened a bit, and employment gains
rebounded. Bond yields climbed modestly, the dollar moved sideways, and
commodity prices rose in dollar terms.
the quarter, the S&P 500 Index2 advanced +6.64% and the NASDAQ
Composite Index2 rose by +6.55%, capping a powerful year of gains
for U.S. share prices. Although foreign shares generally performed well during
the year, equities in Europe struggled during the quarter, with the MSCI Euro
Index2 falling by -1.12% (EUR). In contrast, Asian shares did well,
with Japanese shares leaping +12.00% (YEN), as measured by the Nikkei 225 Stock
Average Index2. The MSCI China Index2 was up +7.62%, and
other emerging market shares, in general, also were quite strong, with a
quarterly gain of +7.44% for the MSCI Emerging Market Index2.
In terms of market capitalization and equity style characteristics,
the quarter favored large cap and growth stocks. Large cap stocks advanced
nicely during the quarter and outperformed small cap stocks as the Russell 10002 and Russell 20002 indexes posted quarterly returns of 6.59% and
3.34%, respectively. As for investment style, growth stocks once again gained
some ground in the quarter as the Russell 1000 Growth2 and the
Russell 1000 Value2 indexes posted quarterly returns of 7.86% and
The Marsico Focus Fund posted a return of 3.07% for the fourth quarter
and underperformed its benchmark, the S&P 500 Index, which returned 6.64%.
Primary Detractors4: Stock selection in the Information Technology and Health Care sectors3 was a detractor from performance during the quarter. In addition, stock selection in the Financials sector hindered performance. As the benchmark index gained more than +6% in the quarter, the Fund incurred an opportunity cost by maintaining a slightly elevated allocation to cash and cash equivalents (the Fund had 7% in cash and cash equivalents at the end of the period).
Contributors4: An overweight allocation in the
Information Technology sector, one of the strongest-performing sectors of the
benchmark index, was the largest driver of performance during the period. The
Fund’s underweight allocation to the Utilities sector, the weakest-performing
sector of the benchmark index, also aided performance. The Fund benefitted from
stock selection in the Materials sector as well.
For more information, please click here for the Marsico Focus Fund Quarterly Investment Update.
1 Performance data quoted represents past performance. Past performance is no guarantee of future results. A Fund's performance, especially for short time periods, should not be the sole factor in making an investment decision. Please keep in mind that our views on investments discussed herein are subject to change at any time and the holdings represented here do not represent all of the securities purchased, sold, or recommended by Marsico Capital Management, LLC ("MCM"). Certain less-material factors may not be presented.
2 The S&P 500 Index is a registered trademark of S&P and is an unmanaged broadly-based index of the common stock prices of 500 large U.S. companies, and includes the reinvestment of dividends. The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000 Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership, and includes the reinvestment of dividends. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership, and includes the reinvestment of dividends. The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values, and includes the reinvestment of dividends. The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values, and includes the reinvestment of dividends.The MSCI Emerging Markets Index captures large and mid-cap representation across 23 Emerging Markets (EM)
countries. With 835 constituents, the index covers approximately 85% of the
free float-adjusted market capitalization in each country. The NASDAQ Composite
Index is the market capitalization-weighted index of
approximately 3,000 common equities listed on the Nasdaq stock exchange. The
types of securities in the index include American
depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited
partnership interests. The index includes all Nasdaq-listed stocks that are not
derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. The MSCI China Index captures large and
mid cap representation across China H shares, B shares, Red chips, P chips and
foreign listings (e.g. ADRs). With 12 constituents, the index covers about 85%
of the China equity universe. The MSCI
Euro Index captures large cap representation across the 10 Developed
Markets countries in the European Monetary Union (“EMU”). With 124
constituents, the index covers approximately 70% of the free float-adjusted
market capitalization of the EMU. The
Nikkei 225 Stock Average Index is a price-weighted index comprised of 225
top-rated Japanese companies listed in the First Section of the Tokyo Stock
Exchange, excluding ETFs, REITs, preferred equity contribution securities,
and tracking stocks (on subsidiary dividend), etc., other than common stocks.
Sources of foreign exchange rates may be different between a portfolio and the
benchmarks. The indexes mentioned above are unmanaged and not available for
direct investment. For comparison purposes, it should be noted that the indexes
do not charge fees and have no expenses.
3 Sector and industry weightings are determined using the Global Industry Classification Standard (“GICS”). GICS was developed by and is the exclusive property and service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s (“S&P”), and is licensed for use by MCM. Neither MSCI, S&P, MCM, nor any third party involved in compiling GICS makes any express or implied warranties or representations with respect to such standard or classification (or the results from use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any such standard or classification. MSCI, S&P, and MCM, and any of their affiliates or third parties involved in compiling GICS shall not have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
4Source: UMB Fund Services, Inc., FactSet, and Marsico Capital Management, LLC “(MCM”). Data shown such as portfolio holdings, percentages, country, and sector weightings generally applied on the date shown above, and may have changed substantially since then. References to specific securities and sectors are not recommendations to buy or sell such securities or related investments.