Approach & Process

Fundamental, Intensive, Hands-on Research

Our investment approach emphasizes the selection of what we believe are stocks of high-quality companies with compelling long-term capital appreciation potential. A fundamental aspect of our research process is that we do the work ourselves, meaning that we internally formulate an investment hypothesis and then rigorously test that hypothesis through multipronged, hands-on analysis. We constantly seek new information and work hard to be earlier than others in understanding what is occurring and why it is important to investors.

Our approach of blending top-down macroeconomic analysis and theme development with bottom-up stock selection sets us apart from other fund managers. It is a time-tested approach that has been consistently applied through various market conditions.

Top-Down Macroeconomic Analysis

Marsico's fundamental investment approach combines "top-down" macroeconomic analysis and investment theme development with "bottom-up" company and security analysis to identify attractive opportunities. Our macroeconomic analysis - which may include an assessment of certain factors such as, without limitation, global and U.S. GDP levels and direction, interest rates, inflationary and deflationary forces, employment, fiscal and monetary policy, trade policy, currency movements, credit conditions, demographic trends, the regulatory environment, and the global competitive landscape - serves to create the strategic backdrop for actual portfolio construction. We may also examine other factors that may include, without limitation, the most attractive global investment opportunities, sector and industry trends, industry consolidation, and the sustainability of financial trends.

Bottom-Up Company and Security Analysis

In our bottom-up analysis, stocks and other securities are evaluated and selected on the basis of attributes that may include without limitation, a company's specific market expertise or dominance; its market-share position; strong brand franchise, durability, and pricing power; superior scale and distribution; attractive fundamentals (e.g., one or more factors such as a solid balance sheet, improving profit margins and returns on equity, the ability to generate free cash flow, apparent use of conservative accounting standards, and transparent financial disclosure); excellent management team; commitment to shareholder interests; a security's reasonable current valuation in the context of projected growth rates and peer group comparisons; current income; and other positive, transformational catalysts or indications that a company or security may be an attractive investment prospect, such as a major new innovative product or new management team.

A Flexible Approach to Defining "Growth"

The majority of the Marsico Funds' assets (i.e., the primary investments held by the Funds over time) are generally invested in common stocks of core growth companies, which are typically well-established seasoned companies and securities that we believe may offer the potential for long-term, attractive, above-market, relatively predictable future earnings growth rates. Depending on our macroeconomic view and company-specific investment opportunities, we may allocate smaller portions of the Funds' portfolios to aggressive growth or life cycle change companies. Aggressive growth companies are innovative companies that we believe may produce rapidly accelerating earnings growth in excess of overall market performance, such as less mature companies or other companies with more aggressive growth characteristics. Life cycle change companies are companies that, in our opinion, are undergoing a positive transformational change in their business model that we believe could serve as a catalyst for substantially improved earnings growth in the future. Often, these are companies whose stocks may be trading at low multiples and which may be out of favor with other growth-oriented equity investors. Some examples of a positive change would include a merger, acquisition, new product, new management team, favorable regulatory development, or other positive industry-level change.

Life Cycle Change

0-25%

Companies that, in our opinion, are undergoing a positive, transformational change in their business model that we believe could serve as a catalyst for substantially improved earnings growth in the future. Often, these are companies whose stocks may be trading at low multiples and which may be out of favor with other growth-oriented equity investors. Some examples of a positive change would include a merger, acquisition, new product, new management team, favorable regulatory development, or other positive industry-level change.

Core Growth

60%-75%

Typically well-established, seasoned companies and securities that we believe may offer long-term, attractive, above-market, relatively predictable future earnings growth rates.

Aggressive Growth

0-25%

Innovative companies that we believe may produce rapidly accelerating earnings growth in excess of overall market performance, such as less mature companies or other companies with more aggressive growth characteristics.