DAVIS
SERIES, INC.
PROSPECTUS
May 1, 2023
|
Class A |
Class C |
Class Y |
Davis Financial Fund |
RPFGX |
DFFCX |
DVFYX |
Davis Opportunity Fund |
RPEAX |
DGOCX |
DGOYX |
Davis Real Estate Fund |
RPFRX |
DRECX |
DREYX |
Davis Appreciation & Income Fund |
RPFCX |
DCSCX |
DCSYX |
Davis Government Bond Fund |
RFBAX |
DGVCX |
DGVYX |
Davis Government Money Market Fund |
RPGXX
for all share
classes |
The
Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
LOGO
OVER 50 YEARS OF RELIABLE INVESTINGSM
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This
prospectus contains important information. Please read it carefully before
investing and keep it for future reference.
No financial adviser,
dealer, salesperson or any other person has been authorized to give any
information or to make any representations, other than those contained in this
prospectus, in connection with the offer contained in this prospectus and, if
given or made, such other information or representations must not be relied on
as having been authorized by the Funds, the Funds’ investment adviser or the
Funds’ distributor.
This prospectus does not constitute an offer by
the Funds or by the Funds’ distributor to sell or a solicitation of an offer to
buy any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful for the Funds to make such an offer.
Investment
Objective
The Fund seeks long-term growth
of capital.
Fees and Expenses of the
Fund
These tables describe the fees
and expenses that you may pay if you buy, hold, and sell shares of the Fund.
You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below. You may qualify for sales charge discounts
with respect to Class A shares if you and your family invest, or agree to invest
in the future, at least $100,000 in Davis
Funds. More information about these and other discounts
is available from your financial professional and in the “How to Choose a Share Class” section of the
Fund’s prospectus on page 49 and in the “Selecting the Appropriate Class of Shares”
section of the Fund’s statement of additional information on page 37. In
addition, descriptions of the sales load waivers and/or discounts for Class A
shares with respect to certain financial intermediaries are reproduced in “Appendix A: Intermediary-Specific Sales Charge
Waivers and Discounts” to the prospectus based on information provided by
the financial intermediary.
Shareholder Fees
(fees
paid directly from your investment) |
Class A shares |
Class C shares |
Class Y
shares |
Maximum Sales Charge (Load) Imposed on Purchases
(as a
percentage of offering price) |
4.75% |
None |
None |
Maximum Deferred Sales Charge (Load)
(as a
percentage of the lesser of the net asset value of the shares redeemed or
the total cost of such shares) |
0.50%* |
1.00% |
None |
Redemption Fee
(as a
percentage of total redemption proceeds) |
None |
None |
None |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class A shares |
Class C shares |
Class Y
shares |
Management Fees |
0.55% |
0.55% |
0.55% |
Distribution and/or Service (12b-1) Fees |
0.24% |
1.00% |
0.00% |
Other Expenses |
0.16% |
0.18% |
0.17% |
Total Annual Operating Expenses |
0.95% |
1.73% |
0.72% |
Example. This Example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other
mutual funds. The Example assumes that you invest $10,000 in the Fund for the
time periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and the Fund’s operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
If you redeem your shares
in: |
If you did not redeem
your shares in: |
|
1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years |
Class A shares |
$567 |
$763 |
$976 |
$1,586 |
$567 |
$763 |
$976 |
$1,586 |
Class C shares |
276 |
545 |
939 |
1,834 |
176 |
545 |
939 |
1,834 |
Class Y shares |
74 |
230 |
401 |
894 |
74 |
230 |
401 |
894 |
|
1 Year |
3 Years |
5 Years |
10 Years |
|
If you did not redeem
your shares in: |
Class A shares |
567 |
763 |
976 |
1,586 |
Class C shares |
176 |
545 |
939 |
1,834 |
Class Y shares |
74 |
230 |
401 |
894 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the example, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s
portfolio turnover rate was 10% of the average value of its
portfolio.
Principal Investment
Strategies
Davis Selected Advisers, L.P.
(“Davis Advisors” or the “Adviser”), the Fund’s investment adviser, uses the
Davis Investment Discipline to invest at least 80% of the Fund’s net assets,
plus any borrowing for investment purposes, in securities issued by companies
principally engaged in the financial services sector. The Fund invests
principally in common stocks (including indirect holdings of common stock
through depositary receipts). The Fund may invest in large, medium or small
companies without regard to market capitalization and may invest in issuers in
foreign countries, including countries with developed or emerging markets.
A company is principally
engaged in financial services if it owns financial services-related assets that
constitute at least 50% of the value of all of its assets, or if it derives at
least 50% of its revenues from providing financial services. Companies are
classified by GICS based on their principal business activity. Revenue is a key
factor in determining a firm’s principal business activity. Companies with their
principal business activity in one of the following areas are considered
financial services firms: banks, thrifts and mortgage, specialized finance,
consumer finance, asset management & custody banks, investment banking &
brokerage, diversified capital markets, financial exchanges & data, mortgage
REITs and insurance.
Davis Investment
Discipline. Davis Advisors manages equity funds using the Davis
Investment Discipline. Davis Advisors conducts extensive research to try to
identify businesses that possess characteristics that Davis Advisors believes
foster the creation of long-term value, such as proven management, a durable
franchise and business model, and sustainable competitive advantages. Davis
Advisors aims to invest in such businesses when they are trading at discounts to
their intrinsic worth. Davis Advisors emphasizes individual stock selection and
believes that the ability to evaluate management is critical. Davis Advisors
routinely visits managers at their places of business in order to gain insight
into the relative value of different businesses. Such research, however
rigorous, involves predictions and forecasts that are inherently uncertain.
After determining which companies Davis Advisors believes the Fund should own,
Davis Advisors then turns its analysis to determining the intrinsic value of
those companies’ equity securities. Davis Advisors seeks companies whose equity
securities can be purchased at a discount from Davis Advisors’ estimate of the
company’s intrinsic value based upon fundamental analysis of cash flows, assets
and liabilities, and other criteria that Davis Advisors deems to be material on
a company-by-company basis. Davis Advisors’ goal is to invest in companies for
the long term (ideally, five years or longer, although this goal may not be
met). Davis Advisors considers selling a company’s equity securities if the
securities’ market price exceeds Davis Advisors’ estimates of intrinsic value,
if the ratio of the risks and rewards of continuing to own the company’s equity
securities is no longer attractive, to raise cash to purchase a more attractive
investment opportunity, to satisfy net redemptions or for other
purposes.
Principal Risks of Investing in Davis Financial
Fund
You
may lose money by investing in the Fund. Investors in the
Fund should have a long-term perspective and be able to tolerate potentially
sharp declines in value.
The principal risks of
investing in the Fund include:
Stock Market Risk. Stock
markets tend to move in cycles, with periods of rising prices and periods of
falling prices, including the possibility of sharp declines.
Common Stock Risk. Common
stock represents an ownership position in a company. An adverse event may have a
negative impact on a company and could result in a decline in the price of its
common stock. Common stock is generally subordinate to an issuer’s other
securities, including preferred, convertible and debt securities.
Financial Services
Risk. Risks of investing in
the financial services sector include: (i) systemic risk: factors outside the
control of a particular financial institution may adversely affect the ability
of the financial institution to operate normally or may impair its financial
condition; (ii) regulatory actions: financial services companies may suffer
setbacks if regulators change the rules under which they operate; (iii) changes
in interest rates: unstable and/or rising interest rates may have a
disproportionate effect on companies in the financial services sector; (iv)
non-diversified loan portfolios: financial services companies may have
concentrated portfolios that makes them vulnerable to economic conditions that
affect an industry; (v) credit: financial services companies may have exposure
to investments or agreements that may lead to losses; and (vi) competition: the
financial services sector has become increasingly competitive.
Credit Risk. Financial institutions are often highly
leveraged and may not be able to make timely payments of interest and
principal.
Interest Rate Sensitivity
Risk. Interest rates may have
a powerful influence on the earnings of financial institutions.
Focused Portfolio
Risk. Funds that invest in a
limited number of companies may have more risk because changes in the value of a
single security may have a more significant effect, either negative or positive,
on the value of the Fund’s total portfolio.
Headline Risk. The Fund may
invest in a company when the company becomes the center of controversy after
receiving adverse media attention concerning its operations, long-term
prospects, management or for other reasons. While Davis Advisors researches
companies subject to such contingencies, it cannot be correct every time, and
the company’s stock may never recover or may become worthless.
Foreign Country Risk. Securities of foreign companies
(including depositary receipts) may be subject to greater risk, as foreign
economies may not be as strong or diversified, foreign political systems may not
be as stable and foreign financial reporting standards may not be as rigorous as
they are in the United States. There may also be less information publicly
available regarding the non-U.S. issuers and their securities. These securities
may be less liquid (and, in some cases, may be illiquid) and could be harder to
value than more liquid securities.
Large-Capitalization Companies
Risk. Companies with $10 billion or more in market capitalization are
considered by the Adviser to be large-capitalization companies.
Large-capitalization companies generally experience slower rates of growth in
earnings per share than do mid- and small-capitalization companies.
Manager Risk. Poor security
selection or focus on securities in a particular sector, category or group of
companies may cause the Fund to underperform relevant benchmarks or other funds
with a similar investment objective. Even if the Adviser implements the intended
investment strategies, the implementation of the strategies may be unsuccessful
in achieving the Fund’s investment objective.
Depositary Receipts Risk.
Depositary receipts, consisting of American Depositary Receipts, European
Depositary Receipts and Global Depositary Receipts, are certificates evidencing
ownership of shares of a foreign issuer. Depositary receipts are subject to many
of the risks associated with investing directly in foreign securities.
Depositary receipts may trade at a discount, or a premium, to the underlying
security and may be less liquid than the underlying securities listed on an
exchange.
Fees and Expenses Risk. The
Fund may not earn enough through income and capital appreciation to offset the
operating expenses of the Fund. All mutual funds incur operating fees and
expenses. Fees and expenses reduce the return that a shareholder may earn by
investing in a fund, even when a fund has favorable performance. A low-return
environment, or a bear market, increases the risk that a shareholder may lose
money.
Foreign Currency Risk. The change in value of a foreign currency
against the U.S. dollar will result in a change in the U.S. dollar value of
securities denominated in that foreign currency. For example, when the Fund
holds a security that is denominated in a foreign currency, a decline of that
foreign currency against the U.S. dollar would generally cause the value of the
Fund’s shares to decline.
Emerging Market Risk.
Securities of issuers in emerging and developing markets may offer special
investment opportunities, but present risks relating to political, economic or
regulatory conditions not found in more mature markets, such as government
controls on foreign investments, government restrictions on the transfer of
securities and less developed trading markets, exchanges, reporting standards
and legal and accounting systems. These securities may be more volatile and less
liquid, which may also make them more difficult to value than securities in
countries with developed economies.
Mid- and Small-Capitalization
Companies Risk. Companies with less than $10 billion in market
capitalization are considered by the Adviser to be mid- or small-capitalization
companies. Mid- and small-capitalization companies typically have more limited
product lines, markets and financial resources than larger companies, and their
securities may trade less frequently and in more limited volume than those of
larger, more mature companies.
Your investment in the Fund is not
a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency, entity or
person.
Performance
Results
The bar chart
below provides some indication of the risks of investing in Davis Financial Fund
by showing how the Fund’s investment results have varied from year to
year. The following table shows how the Fund’s average
annual total returns, for the periods indicated, compare with those of the
S&P 500 Index, a broad-based securities market index. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. Updated information on the Fund’s
results can be obtained by visiting www.davisfunds.com
or by calling 1‑800‑279‑0279.
After-tax returns are shown
only for Class A shares; after-tax returns for other share classes will
vary. After-tax returns are
calculated using the highest individual federal marginal income tax rates and do
not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns shown are not relevant to investors who hold their Fund shares
through a tax-deferred arrangement, such as a 401(k) plan or an individual
retirement account.
Calendar Year Total Returns for
Class A Shares
(Sales loads are not reflected
in the bar chart and, if these amounts were reflected, returns would be
less than those
shown.) |
|
|
2013 |
31.45 |
2014 |
13.01 |
2015 |
1.74 |
2016 |
15.04 |
2017 |
19.27 |
2018 |
-11.78 |
2019 |
26.31 |
2020 |
-5.88 |
2021 |
31.46 |
2022 |
-8.91 |
|
Highest/Lowest quarterly results during the time
period were:
Highest
26.98% (quarter ended December 31,
2020)
Lowest -34.71% (quarter ended March 31,
2020)
Total return for the three months ended
March 31,
2023 (non-annualized) was
‑3.50%. |
Average Annual Total Returns
(For
the periods ended December 31, 2022, with maximum sales
charge) |
Past 1 Year |
Past 5 Years |
Past 10
Years |
Class A shares return before taxes |
-13.24% |
3.65% |
9.51% |
Class A shares return after taxes on
distributions |
-13.92% |
2.15% |
8.23% |
Class A shares return after taxes on distributions and sale of
Fund shares |
-7.35% |
2.69% |
7.59% |
Class C shares return before taxes |
-10.49% |
3.85% |
9.31% |
Class Y shares return before taxes |
-8.70% |
4.90% |
10.27% |
S&P 500 Index
reflects no deduction for
fees, expenses or
taxes |
-18.11% |
9.42% |
12.56% |
Management
Investment Adviser. Davis
Selected Advisers, L.P. serves as the Fund’s investment adviser.
Sub-Adviser. Davis Selected
Advisers–NY, Inc., a wholly owned subsidiary of the Adviser, serves as the
Fund’s sub-adviser.
Portfolio Managers |
Experience with this Fund |
Primary Title with Investment Adviser or
Sub-Adviser |
Christopher Davis |
Since January 2014; and from May 1991 until May 2007 |
Chairman, Davis Selected Advisers, L.P. |
Pierce Crosbie |
Since December 2018 |
Vice President, Davis Selected Advisers–NY, Inc. |
Purchase
and Sale of Fund Shares
|
Class A and C
shares |
Class Y
shares |
Minimum Initial Investment |
$1,000 |
$5,000,000 |
Minimum Additional Investment |
$25 |
$25 |
You may
sell (redeem) shares each day the New York Stock Exchange is open. Your
transaction may be placed through your dealer or financial adviser, by writing
to Davis Funds, P.O. Box 219197, Kansas City, MO
64121-9197, telephoning 1‑800‑279‑0279 or accessing Davis Funds’
website (www.davisfunds.com). Certain
financial intermediaries may impose different restrictions than those shown
above.
Tax
Information
If the Fund earns income or realizes capital gains, it
intends to make distributions that may be taxed as ordinary income, qualified
dividend income or capital gains by federal, state and local authorities.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you purchase Davis Financial Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your individual financial adviser to recommend the Fund over
another investment. Ask your individual financial adviser or visit your
financial intermediary’s website for more information.
Investment
Objective
The Fund seeks long-term growth
of capital.
Class A Shares
Class C Shares
Class Y
Shares
Fees and Expenses of the
Fund
These tables describe the fees
and expenses that you may pay if you buy, hold, and sell shares of the Fund.
You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below. You may qualify for sales charge discounts
with respect to Class A shares if you and your family invest, or agree to invest
in the future, at least $100,000 in Davis
Funds. More information about these and other discounts
is available from your financial professional and in the “How to Choose a Share Class” section of the
Fund’s prospectus on page 49 and in the “Selecting the Appropriate Class of Shares”
section of the Fund’s statement of additional information on page 37. In
addition, descriptions of the sales load waivers and/or discounts for Class A
shares with respect to certain financial intermediaries are reproduced in “Appendix A: Intermediary-Specific Sales Charge
Waivers and Discounts” to the prospectus based on information provided by
the financial intermediary.
Shareholder Fees
(fees
paid directly from your investment) |
Class A shares |
Class C shares |
Class Y
shares |
Maximum Sales Charge (Load) Imposed on Purchases
(as a
percentage of offering price) |
4.75% |
None |
None |
Maximum Deferred Sales Charge (Load)
(as a
percentage of the lesser of the net asset value of the shares redeemed or
the total cost of such shares) |
0.50%* |
1.00% |
None |
Redemption Fee
(as a
percentage of total redemption proceeds) |
None |
None |
None |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class A shares |
Class C shares |
Class Y
shares |
Management Fees |
0.55% |
0.55% |
0.55% |
Distribution and/or Service (12b-1) Fees |
0.22% |
1.00% |
0.00% |
Other Expenses |
0.17% |
0.21% |
0.14% |
Total Annual Operating Expenses |
0.94% |
1.76% |
0.69% |
Less Fee Waiver or Expense Reimbursement(1) |
0.00% |
-0.01% |
0.00% |
Net Expenses |
0.94% |
1.75% |
0.69% |
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. The Example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and the Fund’s operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions, your costs
would be:
|
|
|
|
|
|
|
|
|
|
If you redeem your shares
in: |
If you did not redeem
your shares in: |
|
1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years |
Class A shares |
$566 |
$760 |
$970 |
$1,575 |
$566 |
$760 |
$970 |
$1,575 |
Class C shares |
278 |
553 |
953 |
1,856 |
178 |
553 |
953 |
1,856 |
Class Y shares |
70 |
221 |
384 |
859 |
70 |
221 |
384 |
859 |
|
1 Year |
3 Years |
5 Years |
10 Years |
|
If you did not redeem
your shares in: |
Class A shares |
566 |
760 |
970 |
1,575 |
Class C shares |
178 |
553 |
953 |
1,856 |
Class Y shares |
70 |
221 |
384 |
859 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the example, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 12% of the average value of its
portfolio.
Principal Investment
Strategies
Davis Selected Advisers, L.P.
(“Davis Advisors” or the “Adviser”), the Fund’s investment adviser, uses the
Davis Investment Discipline to invest Davis Opportunity Fund’s portfolio
principally in common stocks (including indirect holdings of common stock
through depositary receipts). The Fund may invest in large, medium or small
companies without regard to market capitalization and may invest in issuers in
foreign countries, including countries with developed or emerging markets.
Davis Investment
Discipline. Davis Advisors manages equity funds using the Davis
Investment Discipline. Davis Advisors conducts extensive research to try to
identify businesses that possess characteristics that Davis Advisors believes
foster the creation of long-term value, such as proven management, a durable
franchise and business model, and sustainable competitive advantages. Davis
Advisors aims to invest in such businesses when they are trading at discounts to
their intrinsic worth. Davis Advisors emphasizes individual stock selection and
believes that the ability to evaluate management is critical. Davis Advisors
routinely visits managers at their places of business in order to gain insight
into the relative value of different businesses. Such research, however
rigorous, involves predictions and forecasts that are inherently uncertain.
After determining which companies Davis Advisors believes the Fund should own,
Davis Advisors then turns its analysis to determining the intrinsic value of
those companies’ equity securities. Davis Advisors seeks companies whose equity
securities can be purchased at a discount from Davis Advisors’ estimate of the
company’s intrinsic value based upon fundamental analysis of cash flows, assets
and liabilities, and other criteria that Davis Advisors deems to be material on
a company-by-company basis. Davis Advisors’ goal is to invest in companies for
the long term (ideally, five years or longer, although this goal may not be
met). Davis Advisors considers selling a company’s equity securities if the
securities’ market price exceeds Davis Advisors’ estimates of intrinsic value,
if the ratio of the risks and rewards of continuing to own the company’s equity
securities is no longer attractive, to raise cash to purchase a more attractive
investment opportunity, to satisfy net redemptions or for other
purposes.
Principal Risks of Investing in Davis Opportunity
Fund
You
may lose money by investing in the Fund. Investors in the
Fund should have a long-term perspective and be able to tolerate potentially
sharp declines in value.
The principal risks of
investing in the Fund include:
Stock Market Risk. Stock
markets tend to move in cycles, with periods of rising prices and periods of
falling prices, including the possibility of sharp declines.
Common Stock Risk. Common
stock represents an ownership position in a company. An adverse event may have a
negative impact on a company and could result in a decline in the price of its
common stock. Common stock is generally subordinate to an issuer’s other
securities, including preferred, convertible and debt securities.
Foreign Country Risk. Securities of foreign companies
(including depositary receipts) may be subject to greater risk, as foreign
economies may not be as strong or diversified, foreign political systems may not
be as stable and foreign financial reporting standards may not be as rigorous as
they are in the United States. There may also be less information publicly
available regarding the non-U.S. issuers and their securities. These securities
may be less liquid (and, in some cases, may be illiquid) and could be harder to
value than more liquid securities.
Headline Risk. The Fund may
invest in a company when the company becomes the center of controversy after
receiving adverse media attention concerning its operations, long-term
prospects, management or for other reasons. While Davis Advisors researches
companies subject to such contingencies, it cannot be correct every time and the
company’s stock may never recover or may become worthless.
Large-Capitalization Companies
Risk. Companies with $10 billion or more in market capitalization are
considered by the Adviser to be large-capitalization companies.
Large-capitalization companies generally experience slower rates of growth in
earnings per share than do mid- and small-capitalization companies.
Mid- and Small-Capitalization
Companies Risk. Companies with less than $10 billion in market
capitalization are considered by the Adviser to be mid- or small-capitalization
companies. Mid- and small-capitalization companies typically have more limited
product lines, markets and financial resources than larger companies, and their
securities may trade less frequently and in more limited volume than those of
larger, more mature companies.
Manager Risk. Poor security
selection or focus on securities in a particular sector, category or group of
companies may cause the Fund to underperform relevant benchmarks or other funds
with a similar investment objective. Even if the Adviser implements the intended
investment strategies, the implementation of the strategies may be unsuccessful
in achieving the Fund’s investment objective.
Depositary Receipts Risk.
Depositary receipts, consisting of American Depositary Receipts, European
Depositary Receipts and Global Depositary Receipts, are certificates evidencing
ownership of shares of a foreign issuer. Depositary receipts are subject to many
of the risks associated with investing directly in foreign securities.
Depositary receipts may trade at a discount, or a premium, to the underlying
security and may be less liquid than the underlying securities listed on an
exchange.
Emerging Market Risk. Securities of issuers in emerging and
developing markets may offer special investment opportunities, but present risks
relating to political, economic or regulatory conditions not found in more
mature markets, such as government controls on foreign investments, government
restrictions on the transfer of securities and less developed trading markets,
exchanges, reporting standards and legal and accounting systems. These
securities may be more volatile and less liquid, which may also make them more
difficult to value than securities in countries with developed economies.
Fees and Expenses Risk. The
Fund may not earn enough through income and capital appreciation to offset the
operating expenses of the Fund. All mutual funds incur operating fees and
expenses. Fees and expenses reduce the return that a shareholder may earn by
investing in a fund, even when a fund has favorable performance. A low-return
environment, or a bear market, increases the risk that a shareholder may lose
money.
Foreign Currency Risk. The change in value of a foreign currency
against the U.S. dollar will result in a change in the U.S. dollar value of
securities denominated in that foreign currency. For example, when the Fund
holds a security that is denominated in a foreign currency, a decline of that
foreign currency against the U.S. dollar would generally cause the value of the
Fund’s shares to decline.
Your investment in the Fund is not
a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency, entity or
person.
Performance
Results
The bar chart
below provides some indication of the risks of investing in Davis Opportunity
Fund by showing how the Fund’s investment results have varied from year to
year. The following table shows how the Fund’s average
annual total returns, for the periods indicated, compare with the S&P 1500
Index, each broad-based securities market indices. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. Updated information on the Fund’s
results can be obtained by visiting www.davisfunds.com
or by calling 1‑800‑279‑0279.
After-tax returns are shown
only for Class A shares; after-tax returns for other share classes will
vary. After-tax returns are
calculated using the highest individual federal marginal income tax rates and do
not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns shown are not relevant to investors who hold their Fund shares
through a tax-deferred arrangement, such as a 401(k) plan or an individual
retirement account.
Calendar Year Total
Returns for Class A Shares
(Sales loads are not reflected
in the bar chart and, if these amounts were reflected, returns would be
less than those
shown.) |
|
|
2013 |
42.03 |
2014 |
7.31 |
2015 |
4.91 |
2016 |
15.26 |
2017 |
23.09 |
2018 |
-13.50 |
2019 |
25.49 |
2020 |
12.79 |
2021 |
24.96 |
2022 |
-14.08 |
|
Highest/Lowest quarterly results during the time
period were:
Highest
19.47% (quarter ended June 30,
2020)
Lowest
-24.05% (quarter ended March 31,
2020)
Total return for the three months ended
March 31,
2023 (non-annualized) was
‑0.09%. |
Average Annual Total Returns
(For
the periods ended December 31, 2022, with maximum sales
charge) |
Past 1 Year |
Past 5 Years |
Past 10
Years |
Class A
shares return before
taxes |
-18.16% |
4.60% |
11.00% |
Class A
shares return after taxes on
distributions |
-19.66% |
2.78% |
9.10% |
Class A
shares return after taxes on
distributions and sale of Fund shares |
-9.65% |
3.43% |
8.68% |
Class C
shares return before
taxes |
-15.53% |
4.77% |
10.84% |
Class Y
shares return before
taxes |
-13.85% |
5.87% |
11.81% |
S&P 1500 Index reflects no deduction for
fees, expenses or
taxes |
-17.78% |
9.15% |
12.39% |
Management
Investment Adviser. Davis
Selected Advisers, L.P. serves as the Fund’s investment adviser and uses a
system of multiple portfolio managers to manage the Fund’s assets. The portfolio
managers listed below are primarily responsible for the day-to-day management of
the Fund’s assets.
Sub-Adviser. Davis Selected
Advisers–NY, Inc., a wholly owned subsidiary of the Adviser, serves as the
Fund’s sub-adviser.
Portfolio Managers.
As of the date of this prospectus, the portfolio managers listed below
managed the five largest segments of the Fund’s assets. This list is subject to
change for reasons including, but not limited to, market fluctuation.
Portfolio Managers |
Experience with this Fund |
Primary Title with Investment Adviser or
Sub-Adviser |
Dwight Blazin |
Since December 2001 |
Vice President, Davis Selected Advisers–NY, Inc. |
Christopher Davis |
Since January 1999 |
Chairman, Davis Selected Advisers, L.P. |
Danton Goei |
Since December 2001 |
Vice President, Davis Selected Advisers–NY, Inc. |
Darin Prozes |
Since November 2013 |
Vice President, Davis Selected Advisers–NY, Inc. |
Edward Yen |
Since January 2022 |
Vice President, Davis Selected Advisers–NY,
Inc. |
Purchase
and Sale of Fund Shares
|
Class A and C
shares |
Class Y
shares |
Minimum Initial Investment |
$1,000 |
$5,000,000 |
Minimum Additional Investment |
$25 |
$25 |
You may
sell (redeem) shares each day the New York Stock Exchange is open. Your
transaction may be placed through your dealer or financial adviser, by writing
to Davis Funds, P.O. Box 219197, Kansas City, MO
64121-9197, telephoning 1‑800‑279‑0279 or accessing Davis Funds’
website (www.davisfunds.com). Certain
financial intermediaries may impose different restrictions than those shown
above.
Tax
Information
If the Fund earns income or
realizes capital gains, it intends to make distributions that may be taxed as
ordinary income, qualified dividend income or capital gains by federal, state
and local authorities.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you purchase Davis
Opportunity Fund through a broker-dealer or other financial intermediary (such
as a bank), the Fund and its related companies may pay the intermediary for the
sale of Fund shares and related services. These payments may create a conflict
of interest by influencing the broker-dealer or other intermediary and your
individual financial adviser to recommend the Fund over another investment. Ask
your individual financial adviser or visit your financial intermediary’s website
for more information.
Investment
Objective
The Fund seeks total return
through a combination of growth and income.
Class A Shares
Class C Shares
Class Y
Shares
Fees and Expenses of the
Fund
These tables describe the fees
and expenses that you may pay if you buy, hold, and sell shares of the Fund.
You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below. You may qualify for sales charge discounts
with respect to Class A shares if you and your family invest, or agree to invest
in the future, at least $100,000 in Davis
Funds. More information about these and other discounts
is available from your financial professional and in the “How to Choose a Share Class” section of the
Fund’s prospectus on page 49 and in the “Selecting the Appropriate Class of Shares”
section of the Fund’s statement of additional information on page 37. In
addition, descriptions of the sales load waivers and/or discounts for Class A
shares with respect to certain financial intermediaries are reproduced in “Appendix A: Intermediary-Specific Sales Charge
Waivers and Discounts” to the prospectus based on information provided by
the financial intermediary.
Shareholder Fees
(fees
paid directly from your investment) |
Class A shares |
Class C shares |
Class Y
shares |
Maximum Sales Charge (Load) Imposed on Purchases
(as a
percentage of offering price) |
4.75% |
None |
None |
Maximum Deferred Sales Charge (Load)
(as a
percentage of the lesser of the net asset value of the shares redeemed or
the total cost of such shares) |
0.50%* |
1.00% |
None |
Redemption Fee
(as a
percentage of total redemption proceeds) |
None |
None |
None |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class A shares |
Class C shares |
Class Y
shares |
Management Fees |
0.55% |
0.55% |
0.55% |
Distribution and/or Service (12b-1) Fees |
0.19% |
1.00% |
0.00% |
Other Expenses |
0.21% |
0.38% |
0.17% |
Total Annual Operating Expenses |
0.95% |
1.93% |
0.72% |
Less Fee Waiver or Expense Reimbursement(1) |
0.00% |
-0.18% |
0.00% |
Net Expenses |
0.95% |
1.75% |
0.72% |
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. The Example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and the Fund’s operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions, your costs
would be:
|
|
|
|
|
|
|
|
|
|
If you redeem your shares
in: |
If you did not redeem
your shares in: |
|
1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years |
Class A shares |
$567 |
$763 |
$976 |
$1,586 |
$567 |
$763 |
$976 |
$1,586 |
Class C shares |
278 |
589 |
1,025 |
1,984 |
178 |
589 |
1,025 |
1,984 |
Class Y shares |
74 |
230 |
401 |
894 |
74 |
230 |
401 |
894 |
|
1 Year |
3 Years |
5 Years |
10 Years |
|
If you did not redeem
your shares in: |
Class A shares |
567 |
763 |
976 |
1,586 |
Class C shares |
178 |
589 |
1,025 |
1,984 |
Class Y shares |
74 |
230 |
401 |
894 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the example, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 22% of the average value of its
portfolio.
Principal Investment
Strategies
Davis Selected Advisers, L.P.
(“Davis Advisors” or the “Adviser”), the Fund’s investment adviser, uses the
Davis Investment Discipline to invest at least 80% of the Fund’s net assets,
plus any borrowing for investment purposes, in securities issued by companies
principally engaged in the real estate industry. The Fund invests principally in
common stocks of domestic companies and may invest in foreign companies
(including indirect holdings of a foreign issuer’s common stock through
depositary receipts).
A company is principally
engaged in the real estate industry if it owns real estate or real
estate-related assets that constitute at least 50% of the value of all of its
assets, or if it derives at least 50% of its revenues or net profits from
owning, financing, developing, managing or selling real estate, or from offering
products or services that are related to real estate. Issuers of real estate
securities include real estate investment trusts (REITs), brokers, developers,
lenders and companies with substantial real estate holdings, such as paper,
lumber, hotel and entertainment companies. Most of Davis Real Estate Fund’s real
estate securities are, and will likely continue to be, interests in publicly
traded REITs. REITs pool investors’ funds to make real estate-related
investments, such as buying interests in income-producing property or making
loans to real estate developers.
Davis Investment
Discipline. Davis Advisors manages equity funds using the Davis
Investment Discipline. Davis Advisors conducts extensive research to try to
identify businesses that possess characteristics that Davis Advisors believes
foster the creation of long-term value, such as proven management, a durable
franchise and business model, and sustainable competitive advantages. Davis
Advisors aims to invest in such businesses when they are trading at discounts to
their intrinsic worth. Davis Advisors emphasizes individual stock selection and
believes that the ability to evaluate management is critical. Davis Advisors
routinely visits managers at their places of business in order to gain insight
into the relative value of different businesses. Such research, however
rigorous, involves predictions and forecasts that are inherently uncertain.
After determining which companies Davis Advisors believes the Fund should own,
Davis Advisors then turns its analysis to determining the intrinsic value of
those companies’ equity securities. Davis Advisors seeks companies whose equity
securities can be purchased at a discount from Davis Advisors’ estimate of the
company’s intrinsic value based upon fundamental analysis of cash flows, assets
and liabilities, and other criteria that Davis Advisors deems to be material on
a company-by-company basis. Davis Advisors’ goal is to invest in companies for
the long term (ideally, five years or longer, although this goal may not be
met). Davis Advisors considers selling a company’s equity securities if the
securities’ market price exceeds Davis Advisors’ estimates of intrinsic value,
if the ratio of the risks and rewards of continuing to own the company’s equity
securities is no longer attractive, to raise cash to purchase a more attractive
investment opportunity, to satisfy net redemptions or for other
purposes.
Principal Risks of Investing in Davis Real Estate
Fund
You
may lose money by investing in the Fund. Investors in the
Fund should have a long-term perspective and be able to tolerate potentially
sharp declines in value.
The principal risks of
investing in the Fund include:
Stock Market Risk. Stock
markets tend to move in cycles, with periods of rising prices and periods of
falling prices, including the possibility of sharp declines.
Common Stock Risk. Common
stock represents an ownership position in a company. An adverse event may have a
negative impact on a company and could result in a decline in the price of its
common stock. Common stock is generally subordinate to an issuer’s other
securities, including preferred, convertible and debt securities.
Real Estate Risk. Real estate securities are susceptible to
the many risks associated with the direct ownership of real estate, including
declines in property values, increases in property taxes, operating expenses,
interest rates or competition, overbuilding, changes in zoning laws, or losses
from casualty or condemnation.
Headline Risk. The Fund may
invest in a company when the company becomes the center of controversy after
receiving adverse media attention concerning its operations, long-term
prospects, management or for other reasons. While Davis Advisors researches
companies subject to such contingencies, it cannot be correct every time, and
the company’s stock may never recover or may become worthless.
Large-Capitalization Companies
Risk. Companies with $10 billion or more in market capitalization are
considered by the Adviser to be large-capitalization companies.
Large-capitalization companies generally experience slower rates of growth in
earnings per share than do mid- and small-capitalization companies.
Manager Risk. Poor security
selection or focus on securities in a particular sector, category or group of
companies may cause the Fund to underperform relevant benchmarks or other funds
with a similar investment objective. Even if the Adviser implements the intended
investment strategies, the implementation of the strategies may be unsuccessful
in achieving the Fund’s investment objective.
Fees and Expenses Risk. The
Fund may not earn enough through income and capital appreciation to offset the
operating expenses of the Fund. All mutual funds incur operating fees and
expenses. Fees and expenses reduce the return that a shareholder may earn by
investing in a fund, even when a fund has favorable performance. A low-return
environment, or a bear market, increases the risk that a shareholder may lose
money.
Mid- and Small-Capitalization
Companies Risk. Companies with less than $10 billion in market
capitalization are considered by the Adviser to be mid- or small-capitalization
companies. Mid- and small-capitalization companies typically have more limited
product lines, markets and financial resources than larger companies, and their
securities may trade less frequently and in more limited volume than those of
larger, more mature companies.
Variable Current Income
Risk. The income that the
Fund pays to investors is not stable.
Your investment in the Fund is not
a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency, entity or
person.
Performance
Results
The bar chart
below provides some indication of the risks of investing in Davis Real Estate
Fund by showing how the Fund’s investment results have varied from year to
year. The following table shows how the Fund’s average
annual total returns, for the periods indicated, compare with those of the
S&P 500 Index, a broad-based securities market index, and of the Wilshire
U.S. Real Estate Securities Index. The Wilshire U.S. Real Estate Securities
Index is a measure of the performance of publicly traded real estate securities.
The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. Updated information on the Fund’s
results can be obtained by visiting www.davisfunds.com
or by calling 1‑800‑279‑0279.
After-tax returns are shown
only for Class A shares; after-tax returns for other share classes will
vary. After-tax returns are
calculated using the highest individual federal marginal income tax rates and do
not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns shown are not relevant to investors who hold their Fund shares
through a tax-deferred arrangement, such as a 401(k) plan or an individual
retirement account.
Calendar Year Total Returns for
Class A Shares
(Sales loads are not reflected
in the bar chart and, if these amounts were reflected, returns would be
less than those
shown.) |
|
|
2013 |
-1.67 |
2014 |
27.68 |
2015 |
1.69 |
2016 |
9.71 |
2017 |
8.30 |
2018 |
-4.52 |
2019 |
25.39 |
2020 |
-8.23 |
2021 |
43.24 |
2022 |
-26.74 |
|
Highest/Lowest quarterly results during the time
period were:
Highest
16.64% (quarter ended March 31,
2019)
Lowest
-26.34% (quarter ended March 31,
2020)
Total return for the three months ended
March 31,
2023 (non-annualized) was
0.90%. |
Average Annual Total Returns
(For
the periods ended December 31, 2022, with maximum sales
charge) |
Past 1 Year |
Past 5 Years |
Past 10
Years |
Class A shares return before taxes |
-30.22% |
1.89% |
5.24% |
Class A shares return after taxes on
distributions |
-31.26% |
0.74% |
4.24% |
Class A shares return after taxes on distributions and sale of
Fund shares |
-17.49% |
1.08% |
3.81% |
Class C shares return before taxes |
-28.01% |
2.05% |
5.02% |
Class Y shares return before taxes |
-26.56% |
3.11% |
5.98% |
S&P 500 Index reflects no deduction for
fees, expenses or
taxes |
-18.11% |
9.42% |
12.56% |
Wilshire U.S. Real Estate Securities
Index reflects no deductions for
fees, expenses or taxes |
-26.75% |
3.36% |
6.48% |
Davis Real
Estate Fund Yield for Class A Shares (For the period ended December
31, 2022) |
30-Day SEC
Yield: |
1.64% |
You can
obtain the Fund’s most recent 30-day SEC Yield by calling Investor Services
toll-free at 1‑800‑279‑0279,
Monday through Friday, from 9 a.m. to 6 p.m. Eastern time.
Management
Investment Adviser. Davis
Selected Advisers, L.P. serves as the Fund’s investment adviser.
Sub-Adviser. Davis Selected
Advisers–NY, Inc., a wholly owned subsidiary of the Adviser, serves as the
Fund’s sub-adviser.
Portfolio Managers |
Experience with this Fund |
Primary Title with Investment Adviser or
Sub-Adviser |
Andrew Davis |
Since January 1994 |
President, Davis Selected Advisers, L.P. |
Chandler Spears |
Since August 2002 |
Vice President, Davis Selected Advisers–NY,
Inc. |
Purchase
and Sale of Fund Shares
|
Class A and C
shares |
Class Y
shares |
Minimum Initial Investment |
$1,000 |
$5,000,000 |
Minimum Additional
Investment |
$25 |
$25 |
You may
sell (redeem) shares each day the New York Stock Exchange is open. Your
transaction may be placed through your dealer or financial adviser, by writing
to Davis Funds, P.O. Box 219197, Kansas City, MO
64121-9197, telephoning 1‑800‑279‑0279 or accessing Davis Funds’
website (www.davisfunds.com). Certain
financial intermediaries may impose different restrictions than those shown
above.
Tax
Information
If the Fund earns income or
realizes capital gains, it intends to make distributions that may be taxed as
ordinary income, qualified dividend income or capital gains by federal, state
and local authorities.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you purchase Davis Real
Estate Fund through a broker-dealer or other financial intermediary (such as a
bank), the Fund and its related companies may pay the intermediary for the sale
of Fund shares and related services. These payments may create a conflict of
interest by influencing the broker-dealer or other intermediary and your
individual financial adviser to recommend the Fund over another investment. Ask
your individual financial adviser or visit your financial intermediary’s website
for more information.
Investment
Objective
The Fund seeks total return
through a combination of growth and income.
Class A Shares
Class C Shares
Class Y
Shares
Fees and Expenses of the
Fund
These tables describe the fees
and expenses that you may pay if you buy, hold, and sell shares of the Fund.
You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below. You may qualify for sales charge discounts
with respect to Class A shares if you and your family invest, or agree to invest
in the future, at least $100,000 in Davis
Funds. More information about these and other discounts
is available from your financial professional and in the “How to Choose a Share Class” section of the
Fund’s prospectus on page 49 and in the “Selecting the Appropriate Class of Shares”
section of the Fund’s statement of additional information on page 37. In
addition, descriptions of the sales load waivers and/or discounts for Class A
shares with respect to certain financial intermediaries are reproduced in “Appendix A: Intermediary-Specific Sales Charge
Waivers and Discounts” to the prospectus based on information provided by
the financial intermediary.
Shareholder Fees
(fees
paid directly from your investment) |
Class A shares |
Class C shares |
Class Y
shares |
Maximum Sales Charge (Load) Imposed on Purchases
(as a
percentage of offering price) |
4.75% |
None |
None |
Maximum Deferred Sales Charge (Load)
(as a
percentage of the lesser of the net asset value of the shares redeemed or
the total cost of such shares) |
0.50%* |
1.00% |
None |
Redemption Fee
(as a
percentage of total redemption proceeds) |
None |
None |
None |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class A shares |
Class C shares |
Class Y
shares |
Management Fees |
0.55% |
0.55% |
0.55% |
Distribution and/or Service (12b-1) Fees |
0.24% |
1.00% |
0.00% |
Other Expenses |
0.21% |
0.42% |
0.13% |
Total Annual Operating Expenses |
1.00% |
1.97% |
0.68% |
Less Fee Waiver or Expense Reimbursement(1) |
0.00% |
-0.22% |
0.00% |
Net Expenses |
1.00% |
1.75% |
0.68% |
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. The Example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and the Fund’s operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions, your costs
would be:
|
|
|
|
|
|
|
|
|
|
If you redeem your shares
in: |
If you did not redeem
your shares in: |
|
1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years |
Class A shares |
$572 |
$778 |
$1,001 |
$1,641 |
$572 |
$778 |
$1,001 |
$1,641 |
Class C shares |
278 |
597 |
1,042 |
2,026 |
178 |
597 |
1,042 |
2,026 |
Class Y shares |
69 |
218 |
379 |
847 |
69 |
218 |
379 |
847 |
|
1 Year |
3 Years |
5 Years |
10 Years |
|
If you did not redeem
your shares in: |
Class A shares |
572 |
778 |
1,001 |
1,641 |
Class C shares |
178 |
597 |
1,042 |
2,026 |
Class Y shares |
69 |
218 |
379 |
847 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the example, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 9% of the average value of its
portfolio.
Principal Investment
Strategies
Davis Selected Advisers, L.P.
(“Davis Advisors” or the “Adviser”), the Fund’s investment adviser, uses the
Davis Investment Discipline to invest Davis Appreciation & Income Fund’s
assets in a balanced portfolio of common stock, convertible securities,
preferred stock and bonds. The Fund may also hold cash. The Fund may invest in
large, medium or small companies without regard to market capitalization and may
invest in securities issued by either domestic or foreign companies.
The Fund’s investments in
common stock issued by companies across the spectrum of market capitalizations
are purchased primarily for their growth potential. Fixed income securities,
consisting of both investment grade and high-yield, high-risk debt securities
(“junk bonds”), are purchased both for current income and to provide
diversification. Convertible securities, which include both preferred stock and
bonds and may be “converted” into common stock if the company grows, offer both
growth potential, some income and may provide downside protection. In the
current market, Davis Advisors’ portfolio managers expect to continue investing
a significant portion of the Fund’s assets in convertible securities.
Davis Investment
Discipline. Davis Advisors manages equity funds using the Davis
Investment Discipline. Davis Advisors conducts extensive research to try to
identify businesses that possess characteristics that Davis Advisors believes
foster the creation of long-term value, such as proven management, a durable
franchise and business model, and sustainable competitive advantages. Davis
Advisors aims to invest in such businesses when they are trading at discounts to
their intrinsic worth. Davis Advisors emphasizes individual stock selection and
believes that the ability to evaluate management is critical. Davis Advisors
routinely visits managers at their places of business in order to gain insight
into the relative value of different businesses. Such research, however
rigorous, involves predictions and forecasts that are inherently uncertain.
After determining which companies Davis Advisors believes the Fund should own,
Davis Advisors then turns its analysis to determining the intrinsic value of
those companies’ equity securities. Davis Advisors seeks companies whose equity
securities can be purchased at a discount from Davis Advisors’ estimate of the
company’s intrinsic value based upon fundamental analysis of cash flows, assets
and liabilities, and other criteria that Davis Advisors deems to be material on
a company-by-company basis. Davis Advisors’ goal is to invest in companies for
the long term (ideally, five years or longer, although this goal may not be
met). Davis Advisors considers selling a company’s equity securities if the
securities’ market price exceeds Davis Advisors’ estimates of intrinsic value,
if the ratio of the risks and rewards of continuing to own the company’s equity
securities is no longer attractive, to raise cash to purchase a more attractive
investment opportunity, to satisfy net redemptions or for other
purposes.
Principal Risks of Investing in Davis Appreciation &
Income Fund
You
may lose money by investing in the Fund. Investors in the
Fund should have a long-term perspective and be able to tolerate potentially
sharp declines in value.
The principal risks of
investing in the Fund include:
Stock Market Risk. Stock
markets tend to move in cycles, with periods of rising prices and periods of
falling prices, including the possibility of sharp declines.
Common Stock Risk. Common
stock represents an ownership position in a company. An adverse event may have a
negative impact on a company and could result in a decline in the price of its
common stock. Common stock is generally subordinate to an issuer’s other
securities, including preferred, convertible and debt securities.
Headline Risk. The Fund may
invest in a company when the company becomes the center of controversy after
receiving adverse media attention concerning its operations, long-term
prospects, management or for other reasons. While Davis Advisors researches
companies subject to such contingencies, it cannot be correct every time, and
the company’s stock may never recover or may become worthless.
Large-Capitalization Companies
Risk. Companies with $10 billion or more in market capitalization are
considered by the Adviser to be large-capitalization companies.
Large-capitalization companies generally experience slower rates of growth in
earnings per share than do mid- and small-capitalization companies.
Manager Risk. Poor security
selection or focus on securities in a particular sector, category or group of
companies may cause the Fund to underperform relevant benchmarks or other funds
with a similar investment objective. Even if the Adviser implements the intended
investment strategies, the implementation of the strategies may be unsuccessful
in achieving the Fund’s investment objective.
Preferred Stock Risk. Preferred stock is a form of equity
security and is generally ranked behind an issuer’s debt securities in claims
for dividends and assets of an issuer in a liquidation or bankruptcy. An adverse
event may have a negative impact on a company and could result in a decline in
the price of its preferred stock.
Bonds and Other Debt Securities
Risk. Corporations,
governments and other issuers sell bonds and other debt securities to borrow
money. Issuers pay investors interest and generally must repay the amount
borrowed at maturity. Bonds and other debt securities generally are subject to
credit risk and interest rate risk.
Interest Rate Risk. Interest rate increases can cause the
price of a debt security to decrease.
Variable Current Income
Risk. The income that the
Fund pays to investors is not stable.
Credit Risk. The issuer of a fixed income security
(potentially even the U.S. Government) may be unable to make timely payments of
interest and principal.
Convertible Securities
Risk. The Fund often invests
a substantial portion of its assets in convertible securities. Convertible
securities are often lower-quality debt securities.
Changes in Debt Rating
Risk. If a rating agency
gives a fixed income security or its issuer a low rating, the value of the
security will decline because investors will demand a higher rate of
return.
Extension and Prepayment
Risk. Extension risk occurs when
borrowers maintain their existing debt obligations until they come due instead
of choosing to prepay them. Prepayment risk occurs when borrowers prepay their
debt obligations more quickly than usual so that they can refinance at a lower
rate. The pace at which borrowers prepay affects the yield and the cash flow to
holders of securities and the market value of those securities.
Foreign Country Risk.
Securities of foreign companies (including depositary receipts) may be subject
to greater risk, as foreign economies may not be as strong or diversified,
foreign political systems may not be as stable and foreign financial reporting
standards may not be as rigorous as they are in the United States. There may
also be less information publicly available regarding the non-U.S. issuers and
their securities. These securities may be less liquid (and, in some cases, may
be illiquid) and could be harder to value than more liquid securities.
Depositary Receipts Risk.
Depositary receipts, consisting of American Depositary Receipts, European
Depositary Receipts and Global Depositary Receipts, are certificates evidencing
ownership of shares of a foreign issuer. Depositary receipts are subject to many
of the risks associated with investing directly in foreign securities.
Depositary receipts may trade at a discount, or a premium, to the underlying
security and may be less liquid than the underlying securities listed on an
exchange.
Fees and Expenses Risk. The
Fund may not earn enough through income and capital appreciation to offset the
operating expenses of the Fund. All mutual funds incur operating fees and
expenses. Fees and expenses reduce the return that a shareholder may earn by
investing in a fund, even when a fund has favorable performance. A low-return
environment, or a bear market, increases the risk that a shareholder may lose
money.
Mid- and Small-Capitalization
Companies Risk. Companies with less than $10 billion in market
capitalization are considered by the Adviser to be mid- or small-capitalization
companies. Mid- and small-capitalization companies typically have more limited
product lines, markets and financial resources than larger companies, and their
securities may trade less frequently and in more limited volume than those of
larger, more mature companies.
High-Yield, High-Risk Debt
Securities Risk. Issuers of these
debt securities are unlikely to have a cushion from which to make their payments
when their earnings are poor or when the economy in general is in decline. These
issuers are likely to have a substantial amount of other debt, which will be
senior to the high-yield, high-risk debt securities. An issuer must be current
on its senior obligations before it can pay bondholders.
Your investment in the Fund is not
a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency, entity or
person.
Performance
Results
The bar chart
below provides some indication of the risks of investing in Davis Appreciation
& Income Fund by showing how the Fund’s investment results have varied from
year to year. The following table shows how the Fund’s
average annual total returns for the periods indicated compare with those of the
S&P 500 Index, a broad-based securities market index. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. Updated information on the Fund’s
results can be obtained by visiting www.davisfunds.com or
by calling 1‑800‑279‑0279.
After-tax returns are shown
only for Class A shares; after-tax returns for other share classes will
vary. After-tax returns are
calculated using the highest individual federal marginal income tax rates and do
not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns shown are not relevant to investors who hold their Fund shares
through a tax-deferred arrangement, such as a 401(k) plan or an individual
retirement account.
Calendar Year Total Returns for
Class A Shares
(Sales loads are not reflected
in the bar chart and, if these amounts were reflected, returns would be
less than those
shown.) |
|
|
2013 |
28.44 |
2014 |
5.37 |
2015 |
-10.27 |
2016 |
9.20 |
2017 |
16.35 |
2018 |
-8.02 |
2019 |
20.33 |
2020 |
4.75 |
2021 |
25.73 |
2022 |
-15.64 |
|
Highest/Lowest quarterly results during the time
period were:
Highest
15.48% (quarter ended December 31,
2020)
Lowest
-22.46% (quarter ended March 31,
2020)
Total return for the three months ended
March 31,
2023 (non-annualized) was
3.60%. |
Average Annual Total Returns
(For
the periods ended December 31, 2022, with maximum sales
charge) |
Past 1 Year |
Past 5 Years |
Past 10
Years |
Class A shares return before taxes |
-19.65% |
3.21% |
6.10% |
Class A shares return after taxes on
distributions |
-20.15% |
2.86% |
5.78% |
Class A shares return after taxes on distributions and sale of
Fund shares |
-11.29% |
2.45% |
4.85% |
Class C shares return before taxes |
-17.10% |
3.42% |
5.93% |
Class Y shares return before taxes |
-15.37% |
4.56% |
6.90% |
S&P 500 Index reflects no deduction for
fees, expenses or
taxes |
-18.11% |
9.42% |
12.56% |
Davis Appreciation & Income Fund Yield
for Class A Shares
(For
the period ended December 31, 2022) |
30-Day SEC
Yield: |
1.57% |
You can obtain the Fund’s
most recent 30-day SEC Yield by calling Investor Services toll-free at 1‑800‑279‑0279,
Monday through Friday, from 9 a.m. to 6 p.m. Eastern time.
Management
Investment Adviser. Davis
Selected Advisers, L.P. serves as the Fund’s investment adviser.
Sub-Adviser. Davis Selected
Advisers–NY, Inc., a wholly owned subsidiary of the Adviser, serves as the
Fund’s sub-adviser.
Portfolio Managers |
Experience with this Fund |
Primary Title with Investment Adviser or
Sub-Adviser |
Christopher Davis |
Since July 2016 |
Chairman, Davis Selected Advisers, L.P. |
Creston King |
Since July 2016 |
Vice President, Davis Selected Advisers–NY, Inc. |
Darin Prozes |
Since October 2021 |
Vice President, Davis Selected Advisers–NY,
Inc. |
Purchase
and Sale of Fund Shares
|
Class A and C
shares |
Class Y
shares |
Minimum Initial Investment |
$1,000 |
$5,000,000 |
Minimum Additional
Investment |
$25 |
$25 |
You may sell (redeem)
shares each day the New York Stock Exchange is open. Your transaction may be
placed through your dealer or financial adviser, by writing to Davis Funds, P.O. Box 219197, Kansas City, MO
64121-9197, telephoning 1‑800‑279‑0279 or accessing Davis Funds’
website (www.davisfunds.com). Certain financial intermediaries may impose
different restrictions than those shown above.
Tax
Information
If the Fund earns income or
realizes capital gains, it intends to make distributions that may be taxed as
ordinary income, qualified dividend income or capital gains by federal, state
and local authorities.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you purchase Davis
Appreciation & Income Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your individual financial adviser to recommend the Fund over
another investment. Ask your individual financial adviser or visit your
financial intermediary’s website for more information.
Investment
Objective
The Fund seeks current
income.
Class A Shares
Class C Shares
Class Y
Shares
Fees and Expenses of the
Fund
These tables describe the fees
and expenses that you may pay if you buy, hold, and sell shares of the Fund.
You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below. You may qualify for sales charge discounts
with respect to Class A shares if you and your family invest, or agree to invest
in the future, at least $100,000 in Davis
Funds. More information about these and other discounts
is available from your financial professional and in the “How to Choose a Share Class” section of the
Fund’s prospectus on page 49 and in the “Selecting the Appropriate Class of Shares”
section of the Fund’s statement of additional information on page 37. In
addition, descriptions of the sales load waivers and/or discounts for Class A
shares with respect to certain financial intermediaries are reproduced in “Appendix A: Intermediary-Specific Sales Charge
Waivers and Discounts” to the prospectus based on information provided by
the financial intermediary.
Shareholder Fees
(fees
paid directly from your investment) |
Class A shares |
Class C shares |
Class Y
shares |
Maximum Sales Charge (Load) Imposed on Purchases
(as a
percentage of offering price) |
4.75% |
None |
None |
Maximum Deferred Sales Charge (Load)
(as a
percentage of the lesser of the net asset value of the shares redeemed or
the total cost of such shares) |
0.50%* |
1.00% |
None |
Redemption Fee
(as a
percentage of total redemption proceeds) |
None |
None |
None |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class A shares |
Class C shares |
Class Y
shares |
Management Fees |
0.30% |
0.30% |
0.30% |
Distribution and/or Service (12b-1) Fees |
0.23% |
1.00% |
0.00% |
Other Expenses |
0.73% |
1.54% |
0.65% |
Total Annual Operating Expenses |
1.26% |
2.84% |
0.95% |
Less Fee Waiver or Expenses Reimbursement(1) |
-0.26% |
-1.09% |
-0.20% |
Net Expenses |
1.00% |
1.75% |
0.75% |
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. The Example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and the Fund’s operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions, your costs
would be:
|
|
|
|
|
|
|
|
|
|
If you redeem your shares
in: |
If you did not redeem
your shares in: |
|
1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years |
Class A shares |
$572 |
$831 |
$1,110 |
$1,904 |
$572 |
$831 |
$1,110 |
$1,904 |
Class C shares |
278 |
777 |
1,402 |
2,706 |
178 |
777 |
1,402 |
2,706 |
Class Y shares |
77 |
283 |
506 |
1,148 |
77 |
283 |
506 |
1,148 |
|
1 Year |
3 Years |
5 Years |
10 Years |
|
If you did not redeem
your shares in: |
Class A shares |
572 |
831 |
1,110 |
1,904 |
Class C shares |
178 |
777 |
1,402 |
2,706 |
Class Y shares |
77 |
283 |
506 |
1,148 |
Portfolio
Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the example, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 3% of the average value of its
portfolio.
Principal Investment
Strategies
Davis Government Bond Fund
invests exclusively in U.S. Treasury securities, U.S. Government agency
securities, U.S. Government agency mortgage securities (collectively “U.S.
Government Securities”) and repurchase agreements collateralized by U.S.
Government Securities. Under normal circumstances, the Fund’s portfolio will
maintain a weighted average maturity of three years or
less.
Principal Risks of Investing in Davis Government Bond
Fund
You
may lose money by investing in the Fund. Investors in the Fund should have a
long-term perspective and be able to tolerate potentially sharp declines in
value.
The principal risks of
investing in the Fund include:
U.S. Government Securities
Risk. Generally, government securities, like other debt securities, are
interest rate sensitive. During periods of falling interest rates, the values of
debt securities held by the Fund generally rise. Conversely, during periods of
rising interest rates, the values of such securities generally decline. Changes
by recognized rating services in their ratings of debt securities and changes in
the ability of an issuer to make payments of interest and principal also will
affect the value of these investments.
Repurchase Agreement
Risk. The repurchase
obligation of the seller is, in effect, secured by the underlying securities. In
the event of a bankruptcy or other default of a seller of a repurchase
agreement, the Fund could experience both delays in liquidating the underlying
securities and losses.
Credit Risk. The issuer of a fixed income security
(potentially even the U.S. Government) may be unable to make timely payments of
interest and principal.
Changes in Debt Rating
Risk. If a rating agency
gives a fixed income security or its issuer a low rating, the value of the
security will decline because investors will demand a higher rate of
return.
Fees and Expenses
Risk. The Fund may not earn
enough through income and capital appreciation to offset the operating expenses
of the Fund. All mutual funds incur operating fees and expenses. Fees and
expenses reduce the return that a shareholder may earn by investing in a fund,
even when a fund has favorable performance. A low-return environment, or a bear
market, increases the risk that a shareholder may lose money.
Inflation Risk. Also called purchasing power risk, this
is the chance that the cash flows from an investment won't be worth as much in
the future because of changes in purchasing power due to inflation.
Interest Rate Risk. Interest rate increases can cause the
price of a debt security to decrease.
Extension and Prepayment
Risk. Extension risk occurs
when borrowers maintain their existing debt obligations until they come due
instead of choosing to prepay them. Prepayment risk occurs when borrowers prepay
their debt obligations more quickly than usual so that they can refinance at a
lower rate. The pace at which borrowers prepay affects the yield and the cash
flow to holders of securities and the market value of those securities.
Variable Current Income
Risk. The income that the
Fund pays to investors is not stable.
Your investment in the Fund is not
a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency, entity or
person.
Performance
Results
The bar chart
below provides some indication of the risks of investing in Davis Government
Bond Fund by showing how the Fund’s investment results have varied from year to
year. The following table shows how the Fund’s average
annual total returns, for the periods indicated, compare with the Bloomberg U.S.
Government 1-3 Year Bond Index. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. Updated information on the Fund’s
results can be obtained by visiting www.davisfunds.com,
or by calling 1‑800‑279‑0279.
After-tax returns are shown
only for Class A shares; after-tax returns for other share classes will
vary. After-tax returns are
calculated using the highest individual federal marginal income tax rates and do
not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns shown are not relevant to investors who hold their Fund shares
through a tax-deferred arrangement, such as a 401(k) plan or an individual
retirement account.
Calendar Year Total Returns for
Class A Shares
(Sales loads are not reflected
in the bar chart and, if these amounts were reflected, returns would be
less than those
shown.) |
|
|
2013 |
-1.52 |
2014 |
1.14 |
2015 |
0.38 |
2016 |
-0.26 |
2017 |
0.21 |
2018 |
0.42 |
2019 |
3.23 |
2020 |
1.69 |
2021 |
-1.48 |
2022 |
-5.29 |
|
Highest/Lowest quarterly results during the time
period were:
Highest
1.68% (quarter ended March 31,
2020)
Lowest
-2.96% (quarter ended March 31,
2022)
Total return for the three months ended
March 31,
2023 (non-annualized) was
1.21%. |
Average Annual Total Returns
(For
the periods ended December 31, 2022, with maximum sales
charge) |
Past 1 Year |
Past 5 Years |
Past 10
Years |
Class A shares return before taxes |
-9.79% |
-1.30% |
-0.66% |
Class A shares return after taxes on
distributions |
-10.08% |
-1.71% |
-1.03% |
Class A shares return after taxes on distributions and sale of
Fund shares |
-5.79% |
-1.14% |
-0.65% |
Class C shares return before taxes |
-6.82% |
-1.07% |
-0.80% |
Class Y shares return before taxes |
-5.01% |
-0.08% |
0.11% |
Bloomberg U.S. Government 1-3 Year
Bond Index reflects no deduction for
fees, expenses or
taxes |
-3.81% |
0.74% |
0.66% |
Davis Government Bond Fund Yield for Class
A Shares
(For
the period ended December 31, 2022) |
30-Day SEC
Yield: |
3.69% |
You can obtain the Fund’s
most recent 30-day SEC Yield by calling Investor Services toll-free at 1‑800‑279‑0279,
Monday through Friday, from 9 a.m. to 6 p.m. Eastern time.
Management
Investment Adviser. Davis
Selected Advisers, L.P. serves as the Fund’s investment adviser.
Sub-Adviser. Davis Selected
Advisers–NY, Inc., a wholly owned subsidiary of the Adviser, serves as the
Fund’s sub-adviser.
Portfolio Manager |
Experience with this Fund |
Primary Title with Investment Adviser or
Sub-Adviser |
Creston King |
Since August 1999 |
Vice President, Davis Selected Advisers–NY,
Inc. |
Purchase
and Sale of Fund Shares
|
Class A and C
shares |
Class Y
shares |
Minimum Initial Investment |
$1,000 |
$5,000,000 |
Minimum Additional
Investment |
$25 |
$25 |
You may
sell (redeem) shares each day the New York Stock Exchange is open. Your
transaction may be placed through your dealer or financial adviser, by writing
to Davis Funds, P.O. Box 219197, Kansas City, MO
64121-9197, telephoning 1‑800‑279‑0279 or accessing Davis Funds’
website (www.davisfunds.com). Certain
financial intermediaries may impose different restrictions than those shown
above.
Tax
Information
If the Fund earns income or
realizes capital gains, it intends to make distributions that may be taxed as
ordinary income, qualified dividend income or capital gains by federal, state
and local authorities.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you purchase Davis
Government Bond Fund through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your individual financial adviser to recommend the Fund over another investment.
Ask your individual financial adviser or visit your financial intermediary’s
website for more information.
Investment
Objective
The Fund seeks as high a level
of current income as is consistent with the principle of preservation of capital
and maintenance of liquidity.
Class A Shares
Class C Shares
Class Y
Shares
Fees and Expenses of the
Fund
These tables describe the fees
and expenses that you may pay if you buy and hold shares of the
Fund.
Shareholder Fees
(fees
paid directly from your investment) |
Class A, C and Y
shares |
Maximum Sales Charge (Load) Imposed on Purchases
(as a
percentage of offering price) |
None |
Maximum Deferred Sales Charge (Load)
(as a
percentage of the lesser of the net asset value of the shares redeemed or
the total cost of such shares) |
None |
Redemption Fee
(as a
percentage of total redemption proceeds) |
None |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class A, C and Y
shares |
Management Fees |
0.30% |
Distribution and/or Service (12b-1) Fees |
0.00% |
Other Expenses |
0.30% |
Total Annual Operating Expenses |
0.60% |
Less Fee Waiver or Expense Reimbursement(1) |
-0.15% |
Net Expenses |
0.45% |
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. The Example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and the Fund’s operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions, your costs
would be:
|
1 Year |
3 Years |
5 Years |
10 Years |
Class A, C, and Y shares |
$46 |
$177 |
$320 |
$736 |
Principal Investment
Strategies
The Fund is a money market fund
that seeks to preserve the value of your investment at $1.00 per share. There
can be no guarantee that the Fund will be successful in maintaining a $1.00
share price.
Davis Government Money
Market Fund invests exclusively in U.S. Treasury securities, U.S. Government
agency securities, U.S. Government agency mortgage securities (collectively
“U.S. Government Securities”) and repurchase agreements collateralized by U.S.
Government Securities. As a government money market fund, the Fund normally
invests at least 99.5% of its total assets in U.S. Government Securities,
repurchase agreements collateralized by cash and/or U.S. Government Securities,
and cash. The Fund seeks to maintain liquidity and preserve capital by carefully
monitoring the maturity of its investments. The Fund’s portfolio maintains a
dollar-weighted average maturity of sixty days or less.
Principal Risks of Investing in Davis Government Money
Market Fund
The principal risks of investing
in the Fund include:
Changes
in Debt Rating Risk. If a rating agency gives a fixed income security or
its issuer a low rating, the value of the security will decline because
investors will demand a higher rate of return.
Credit Risk. The
issuer of a fixed income security (potentially even the U.S. Government) may be
unable to make timely payments of interest and principal.
Fees and Expenses Risk. The
Fund may not earn enough through income to offset the operating expenses of the
Fund. All mutual funds incur operating fees and expenses. Fees and expenses
reduce the return that a shareholder may earn by investing in a fund, even when
a fund has favorable performance. A low-return environment, or a bear market,
increases the risk that a shareholder may lose money.
Inflation Risk. Also called
purchasing power risk, this is the chance that the cash flows from an investment
won't be worth as much in the future because of changes in purchasing power due
to inflation.
Interest Rate Risk.
Interest rate increases can cause the price of a debt security to
decrease.
Repurchase Agreement Risk.
The repurchase obligation of the seller is, in effect, secured by the underlying
securities. In the event of a bankruptcy or other default of a seller of a
repurchase agreement, the Fund could experience both delays in liquidating the
underlying securities and losses.
U.S. Government Securities
Risk. Generally, government securities, like other debt securities, are
interest rate sensitive. During periods of falling interest rates, the values of
debt securities held by the Fund generally rise. Conversely, during periods of
rising interest rates, the values of such securities generally decline. Changes
by recognized rating services in their ratings of debt securities and changes in
the ability of an issuer to make payments of interest and principal also will
affect the value of these investments.
Variable Current Income
Risk. The income that the Fund pays to investors is not stable.
You
could lose money by investing in the Fund. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it cannot guarantee it
will do so. An investment in the Fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
Performance
Results
The bar chart
below provides some indication of the risks of investing in Davis Government
Money Market Fund by showing how the Fund’s investment results have varied from
year to year. The Fund’s past performance is
not necessarily an indication of how the Fund will perform in the
future. Updated information on the Fund’s results can be
obtained by visiting www.davisfunds.com
or by calling 1‑800‑279‑0279.
Calendar Year Total Returns for All Share
Classes |
|
|
2013 |
0.04 |
2014 |
0.03 |
2015 |
0.06 |
2016 |
0.08 |
2017 |
0.35 |
2018 |
1.30 |
2019 |
1.74 |
2020 |
0.23 |
2021 |
0.04 |
2022 |
1.12 |
|
Highest/Lowest quarterly results during the time
period were:
Highest
0.78% (quarter ended December 31,
2022)
Lowest
0.00% (quarter ended December 31,
2021)
Total return for the three months ended
March 31,
2023 (non-annualized) was
0.95%. |
Average Annual Total Returns
(For
the periods ended December 31, 2022) |
Past 1 Year |
Past 5 Years |
Past 10
Years |
Class A, C, and Y shares |
1.12% |
0.88% |
0.50% |
Davis Government Money Market Fund Yield
for Class A Shares
(For
the period ended December 31, 2022) |
7-Day
Yield: |
3.74% |
You can
obtain the Fund’s most recent 7-day Yield by calling Investor Services toll-free
at 1‑800‑279‑0279,
Monday through Friday, from 9 a.m. to 6 p.m. Eastern time.
Management
Investment Adviser. Davis
Selected Advisers, L.P. serves as the Fund’s investment adviser.
Sub-Adviser. Davis Selected
Advisers–NY, Inc., a wholly owned subsidiary of the Adviser, serves as the
Fund’s sub-adviser.
Portfolio Manager |
Experience with this Fund |
Primary Title with Investment Adviser or
Sub-Adviser |
Creston King |
Since August 1999 |
Vice President, Davis Selected Advisers–NY,
Inc. |
Purchase
and Sale of Fund Shares
|
Class A and C
shares |
Class Y
shares |
Minimum Initial Investment |
$1,000 |
$5,000,000 |
Minimum Additional Investment |
$25 |
$25 |
You may sell (redeem)
shares each day the New York Stock Exchange is open. Your transaction may be
placed through your dealer or financial adviser, by writing to Davis Funds, P.O. Box 219197, Kansas City, MO
64121-9197, telephoning 1‑800‑279‑0279 or accessing Davis Funds’
website (www.davisfunds.com). Certain
financial intermediaries may impose different restrictions than those shown
above.
Tax
Information
Distributions (if any) may
be taxed as ordinary income or capital gains by federal, state and local
authorities. Generally, the Fund does not distribute capital gains. Redemptions,
including exchanges, will not normally result in a capital gain or loss for
federal or state income tax purposes.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you purchase Davis
Government Money Market Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your individual financial adviser to recommend the Fund over
another investment. Ask your individual financial adviser or visit your
financial intermediary’s website for more information.
This prospectus contains
important information about investing in the Funds. Please read this prospectus
carefully before you make any investment decisions. Additional information
regarding the Funds is available at www.davisfunds.com.
Investment Objectives |
Financial Fund |
Opportunity
Fund |
Real Estate
Fund |
Appreciation &
Income Fund |
Government Bond
Fund |
Government Money Market
Fund |
Long-term growth of capital: |
* |
* |
|
|
|
|
Total return through a combination of growth and income: |
|
|
* |
* |
|
|
Current income: |
|
|
|
|
* |
|
Current income along with preservation of capital and
liquidity: |
|
|
|
|
|
* |
The
Funds’ investment objectives are not fundamental policies and may be changed by
the Board of Directors without a vote of shareholders. The Funds’
prospectus would be amended prior to any change in
investment objective and shareholders would be provided at least 30 days’ notice
before the change in investment objective was implemented.
Principal
Investment Strategies
The principal investment
strategies and risks for the Funds are described above and below. The prospectus
and statement of additional information (“SAI”) contain a number of investment
strategies and risks that may be important to consider even though they are not
principal investment strategies or principal risks for a Fund. The prospectus
also contains disclosure that describes Davis Advisors’ process for determining
when a Fund may pursue a non-principal investment strategy.
Davis Financial Fund. Davis
Advisors uses the Davis Investment Discipline to invest at least 80% of the
Fund’s net assets, plus any borrowing for investment purposes, in securities
issued by companies principally engaged in the financial services sector. The
Fund invests principally in common stocks (including indirect holdings of common
stock through depositary receipts). The Fund may invest in large, medium or
small companies without regard to market capitalization and may invest in
issuers in foreign countries, including countries with developed or emerging
markets.
A company is principally
engaged in financial services if it owns financial services-related assets that
constitute at least 50% of the value of all of its assets, or if it derives at
least 50% of its revenues from providing financial services. Companies are
classified by GICS based on their principal business activity. Revenue is a key
factor in determining a firm’s principal business activity. Companies with their
principal business activity in one of the following areas are considered
financial services firms: banks, thrifts and mortgage, specialized finance,
consumer finance, asset management & custody banks, investment banking &
brokerage, diversified capital markets, financial exchanges & data, mortgage
REITs and insurance.
Davis Opportunity Fund.
Davis Advisors uses the Davis Investment Discipline to invest Davis Opportunity
Fund’s portfolio principally in common stock (including indirect holdings of
common stock through depositary receipts). The Fund may invest in large, medium
or small companies without regard to market capitalization and may invest in
issuers in foreign countries, including countries with developed or emerging
markets.
Davis Real Estate Fund.
Davis Advisors uses the Davis Investment Discipline to invest at least
80% of the Fund’s net assets, plus any borrowing for investment purposes, in
securities issued by companies principally engaged in the real estate industry.
The Fund invests principally in common stocks of domestic and foreign companies
(including indirect holdings of common stock through depositary receipts).
A company is principally
engaged in the real estate industry if it owns real estate or real
estate-related assets that constitute at least 50% of the value of all of its
assets or if it derives at least 50% of its revenues or net profits from owning,
financing, developing, managing or selling real estate, or from offering
products or services that are related to real estate. Issuers of real estate
securities include real estate investment trusts (REITs), brokers, developers,
lenders and companies with substantial real estate holdings, such as paper,
lumber, hotel and entertainment companies. Most of Davis Real Estate Fund’s real
estate securities are, and will likely continue to be, interests in publicly
traded REITs. REITs pool investors’ funds to make real estate-related
investments, such as buying interests in income-producing property or making
loans to real estate developers.
Davis Appreciation & Income
Fund. Davis Advisors uses the Davis Investment Discipline to invest Davis
Appreciation & Income Fund’s assets in a balanced portfolio of common stock,
convertible securities, preferred stock and bonds. The Fund may also hold cash.
The Fund may invest in large, medium or small companies without regard to market
capitalization and may invest in securities issued by either domestic or foreign
companies.
The Fund’s investments in
common stock issued by companies across the spectrum of market capitalizations
are purchased primarily for their growth potential. Fixed income securities,
consisting of both investment grade and high-yield, high-risk debt securities
(“junk bonds”), are purchased both for current income and to provide
diversification. Convertible securities include both preferred stock and bonds,
and may be “converted” into common stock if the company grows. They offer both
growth potential, some income and may provide downside protection. In the
current market, Davis Advisors’ portfolio managers expect to continue investing
a significant portion of the Fund’s assets in convertible securities.
The Fund may invest in
high-yield, high-risk debt securities rated BB or lower by Standard & Poor’s
Corporation (“S&P”) or Ba or lower by Moody’s Investors Service (“Moody’s”)
or unrated securities. Securities rated BB or lower by S&P and Ba or lower
by Moody’s are referred to in the financial community as “junk bonds” and may
include D-rated securities of issuers in default. The Fund will not purchase
unrated debt securities, or debt securities rated BB or Ba or lower if the
securities are in default at the time of purchase or if such purchase would then
cause more than 20% of the Fund’s net assets to be invested in such lower-rated
securities. The Fund may continue to retain a security whose rating has changed,
that becomes unrated, or if the security has defaulted.
Davis Government Bond Fund.
Davis Government Bond Fund invests exclusively in U.S. Treasury
securities, U.S. Government agency securities, U.S. Government agency mortgage
securities (collectively “U.S. Government Securities”), and repurchase
agreements collateralized by U.S. Government Securities. Under normal
circumstances the Fund’s portfolio will maintain a weighted average maturity of
three years or less.
Davis Government Bond Fund
does not attempt to maintain a fixed net asset value per share. Fluctuations in
portfolio values and therefore fluctuations in the net asset value of its shares
are more likely to be greater when Davis Government Bond Fund’s average
portfolio maturity is longer. Davis Government Bond Fund seeks to maintain a
weighted average maturity of three years or less. The portfolio is likely to be
principally invested in securities with short-term maturities in periods when
the Adviser deems a more defensive position is advisable. Davis Government Bond
Fund may invest a substantial portion of its assets in short-term money market
instruments, including repurchase agreements.
Davis Government Money Market
Fund. Davis Government Money Market Fund is a money market fund that
seeks to preserve the value of your investment at $1.00 per share. There can be
no guarantee that the Fund will be successful in maintaining a $1.00 share
price.
Davis Government Money
Market Fund invests exclusively in U.S. Treasury securities, U.S. Government
agency securities, U.S. Government agency mortgage securities (collectively
“U.S. Government Securities”), and repurchase agreements collateralized by U.S.
Government Securities. As a government money market
fund, the Fund normally invests at least 99.5% of its total assets in U.S.
Government Securities, repurchase agreements collateralized by cash and/or U.S.
Government Securities, and cash. The Fund seeks to maintain liquidity and
preserve capital by carefully monitoring the maturity of its investments. The
Fund’s portfolio maintains a dollar-weighted average maturity of sixty days or
less.
Principal Risks of Investing in the Funds
If you buy shares of a
Fund, you may lose some or all of the money that you invest. The investment
return and principal value of an investment in a Fund will fluctuate so that an
investor’s shares, when redeemed, may be worth more or less than their original
cost. The likelihood of loss may be greater if you invest for a shorter period
of time. This section describes the principal risks (but not the only risks)
that could cause the value of your investment in the Funds to decline, and which
could prevent the Funds from achieving their stated investment objectives.
|
Financial Fund |
Opportunity
Fund |
Real Estate
Fund |
Appreciation &
Income Fund |
Government Bond
Fund |
Government Money Market
Fund |
Equity Risks |
|
|
|
|
|
|
Common Stock Risk |
* |
* |
* |
* |
|
|
Convertible Securities Risk |
|
|
|
* |
|
|
Depositary Receipts Risk |
* |
* |
|
* |
|
|
Emerging Market Risk |
* |
* |
|
|
|
|
Financial Services Risk |
* |
|
|
|
|
|
Focused Portfolio Risk |
* |
|
|
|
|
|
Foreign Country Risk |
* |
* |
|
* |
|
|
Foreign Currency Risk |
* |
* |
|
|
|
|
Headline Risk |
* |
* |
* |
* |
|
|
Interest Rate Sensitivity Risk |
* |
|
|
|
|
|
Large-Capitalization Companies Risk |
* |
* |
* |
* |
|
|
Manager Risk |
* |
* |
* |
* |
|
|
Mid- and Small-Capitalization Companies
Risk |
* |
* |
* |
* |
|
|
Preferred Stock Risk |
|
|
|
* |
|
|
Real Estate Risk |
|
|
* |
|
|
|
Stock Market Risk |
* |
* |
* |
* |
|
|
Debt Risks |
|
|
|
|
|
|
Bonds and Other Debt Securities Risk |
|
|
|
* |
|
|
Changes in Debt Rating Risk |
|
|
|
* |
* |
* |
Credit Risk |
* |
|
|
* |
* |
* |
Extension and Prepayment Risk |
|
|
|
* |
* |
|
High-Yield, High-Risk Debt Securities
Risk |
|
|
|
* |
|
|
Inflation Risk |
|
|
|
|
* |
* |
Interest Rate Risk |
|
|
|
* |
* |
* |
Repurchase Agreements Risk |
|
|
|
|
* |
* |
U.S. Government Securities Risk |
|
|
|
|
* |
* |
Variable Current Income Risk |
|
|
* |
* |
* |
* |
Other Risks |
|
|
|
|
|
|
Fees and Expenses Risk |
* |
* |
* |
* |
* |
* |
Equity
Risks
Common Stock Risk. Common
stock represents ownership positions in companies. The prices of common stock
fluctuate based on changes in the financial condition of their issuers and on
market and economic conditions. Events that have a negative impact on a business
probably will be reflected in a decline in the price of its common stock.
Furthermore, when the total value of the stock market declines, most common
stocks, even those issued by strong companies, likely will decline in value.
Common stock is generally subordinate to an issuer’s other securities, including
preferred, convertible and debt securities.
Convertible Securities
Risk. Convertible securities are a form of equity security.
Generally, convertible securities are: bonds, debentures, notes, preferred
stocks, warrants or other securities that convert or are exchangeable into
shares of the underlying common stock at a stated exchange ratio. Usually, the
conversion or exchange is solely at the option of the holder. However, some
convertible securities may be convertible or exchangeable at the option of the
issuer or are automatically converted or exchanged at a certain time, on the
occurrence of certain events, or have a combination of these characteristics.
Usually a convertible security provides a long-term call on the issuer’s common
stock and therefore tends to appreciate in value as the underlying common stock
appreciates in value. A convertible security also may be subject to redemption
by the issuer after a certain date and under certain circumstances (including a
specified price) established on issue. If a convertible security held by the
Fund is called for redemption, the Fund could be required to tender it for
redemption, convert it into the underlying common stock or sell it.
Convertible bonds,
debentures and notes are varieties of debt securities, and as such are subject
to many of the same risks, including interest rate sensitivity, changes in debt
rating and credit risk. In addition, convertible securities are often viewed by
the issuer as future common stock subordinated to other debt and carry a lower
rating than the issuer’s non-convertible debt obligations. Thus, convertible
securities are subject to many of the same risks as high-yield, high-risk
securities. A more complete discussion of these risks is provided below in the
sections titled “Bonds and Other Debt
Securities” and “High-Yield, High-Risk
Debt Securities.”
Due to its conversion
feature, the price of a convertible security normally will vary in some
proportion to changes in the price of the underlying common stock. A convertible
security will also normally provide a higher yield than the underlying common
stock (but generally lower than comparable non-convertible securities). Due to
their higher yield, convertible securities generally sell above their
“conversion value,” which is the current market value of the stock to be
received on conversion. The difference between this conversion value and the
price of convertible securities will vary over time depending on the value of
the underlying common stocks and interest rates. When the underlying common
stocks decline in value, convertible securities will tend not to decline to the
same extent because the yield acts as a price support. When the underlying
common stocks rise in value, the value of convertible securities also may be
expected to increase, but generally will not increase to the same extent as the
underlying common stocks.
Fixed income securities
generally are considered to be interest rate sensitive. The market value of
convertible securities will change in response to changes in interest rates.
During periods of falling interest rates, the value of convertible bonds
generally rises. Conversely, during periods of rising interest rates, the value
of such securities generally declines. Changes by recognized rating services in
their ratings of debt securities and changes in the ability of an issuer to make
payments of interest and principal also will affect the value of these
investments.
Depositary Receipts Risk.
Securities of a foreign company may involve investing in Depositary Receipts,
which include American Depositary Receipts, European Depositary Receipts and
Global Depositary Receipts, which are certificates evidencing ownership of
shares of a foreign issuer. These certificates, which may be sponsored or
unsponsored, are issued by depositary banks and, generally, trade on an
established market in the United States or elsewhere. The underlying shares are
held in trust by a custodian bank or similar financial institution in the
issuer's home country. The depositary bank may not have physical custody of the
underlying securities at all times and may charge fees for various services,
including forwarding dividends, interest and corporate actions. Depositary
receipts are alternatives to directly purchasing the underlying foreign
securities in their national markets and currencies. However, depositary
receipts continue to be subject to many of the risks associated with investing
directly in foreign securities. These risks include foreign exchange risk, as
well as the political and economic risks of the underlying issuer's country.
Depositary receipts may trade at a discount, or a premium, to the underlying
security and may be less liquid than the underlying securities listed on an
exchange.
Emerging Market Risk.
Securities of issuers in emerging and developing markets may offer
special investment opportunities, but present risks not found in more mature
markets. Those securities may be more difficult to sell at an acceptable price
and their prices may be more volatile than securities of issuers in more
developed markets. For example, Chinese securities may be subject to increased
volatility and pricing anomalies resulting from governmental influence, a lack
of publicly available information and/or political and social instability.
Settlements of trades may be subject to greater delays so that the Fund might
not receive the proceeds of a sale of a security on a timely basis. In unusual
situations, it may not be possible to repatriate sales proceeds in a timely
fashion. These investments may be very speculative.
Emerging markets might have
less developed trading markets and exchanges. These countries may have
less-developed legal and accounting systems and investments may be subject to
greater risks of government restrictions on withdrawing the sale proceeds of
securities from the country. Companies operating in emerging markets may not be
subject to U.S. prohibitions against doing business with countries that are
state sponsors of terrorism. Economies of developing countries may be more
dependent on relatively few industries that may be highly vulnerable to local
and global changes. Governments may be more unstable and present greater risks
of nationalization, expropriation or restrictions on foreign ownership of stocks
of local companies.
Financial Services Risk. A
company is “principally engaged” in financial services if it owns financial
services related assets constituting at least 50% of the total value of its
assets, or if at least 50% of its revenues are derived from its provision of
financial services. The financial services sector consists of several different
industries that behave differently in different economic and market
environments, including, e.g., banking, insurance and securities brokerage
houses. Companies in the financial services sector include commercial banks,
industrial banks, savings institutions, finance companies, diversified financial
services companies, investment banking firms, securities brokerage houses,
investment advisory companies, leasing companies, insurance companies and
companies providing similar services. Due to the wide variety of companies in
the financial services sector, they may react in different ways to changes in
economic and market conditions.
Risks of investing in the
financial services sector include: (i) systemic risk: factors outside the
control of a particular financial institution–like the failure of another,
significant financial institution or material disruptions to the credit
markets–may adversely affect the ability of the financial institution to operate
normally or may impair its financial condition; (ii) regulatory actions:
financial services companies may suffer setbacks if regulators change the rules
under which they operate; (iii) changes in interest rates: unstable and/or
rising interest rates may have a disproportionate effect on companies in the
financial services sector; (iv) non-diversified loan portfolios: financial
services companies, whose securities the Fund purchases, may themselves have
concentrated portfolios, such as a high level of loans to real estate
developers, which makes them vulnerable to economic conditions that affect that
industry; (v) credit: financial services companies may have exposure to
investments or agreements, which, under certain circumstances, may lead to
losses, e.g., sub-prime loans; and (vi) competition: the financial services
sector has become increasingly competitive.
Banking. Commercial banks (including “money
center” regional and community banks), savings and loan associations and holding
companies of the foregoing are especially subject to adverse effects of volatile
interest rates, concentrations of loans in particular industries or
classifications (such as real estate, energy or sub-prime mortgages), and
significant competition. The profitability of these businesses is to a
significant degree dependent on the availability and cost of capital funds.
Economic conditions in the real estate market may have a particularly strong
effect on certain banks and savings associations. Commercial banks and savings
associations are subject to extensive federal and, in many instances, state
regulation. Neither such extensive regulation nor the federal insurance of
deposits ensures the solvency or profitability of companies in this industry,
and there is no assurance against losses in securities issued by such
companies.
Insurance. Insurance companies are
particularly subject to government regulation and rate setting, potential
anti-trust and tax law changes, and industry-wide pricing and competition
cycles. Property and casualty insurance companies also may be affected by
weather, terrorism, long-term climate changes and other catastrophes. Life and
health insurance companies may be affected by mortality and morbidity rates,
including the effects of epidemics. Individual insurance companies may be
exposed to reserve inadequacies, problems in investment portfolios (e.g., real
estate or “junk” bond holdings) and failures of reinsurance carriers.
Other Financial Services Companies. Many of
the investment considerations discussed in connection with banks and insurance
companies also apply to other financial services companies. These companies are
subject to extensive regulation, rapid business changes and volatile performance
dependent on the availability and cost of capital and prevailing interest rates
and significant competition. General economic conditions significantly affect
these companies. Credit and other losses resulting from the financial difficulty
of borrowers or other third parties have a potentially adverse effect on
companies in this industry. Investment banking, securities brokerage and
investment advisory companies are particularly subject to government regulation
and the risks inherent in securities trading and underwriting activities.
Other Regulatory Limitations. Regulations of
the Securities and Exchange Commission (“SEC”) impose limits on: (i) investments
in the securities of companies that derive more than 15% of their gross revenues
from the securities or investment management business (although there are
exceptions, the Fund is prohibited from investing more than 5% of its total
assets in a single company that derives more than 15% of its gross revenues from
the securities or investment management business); and (ii) investments in
insurance companies. The Fund generally is prohibited from owning more than 10%
of the outstanding voting securities of an insurance company.
Focused Portfolio Risk.
Funds that invest in a limited number of companies may have more risk because
changes in the value of a single security may have a more significant effect,
either negative or positive, on the value of the Fund’s total portfolio.
A fund may be classified as
a “non-diversified” fund under the 1940 Act, which means that it is permitted to
invest its assets in a more limited number of issuers than “diversified”
investment companies. A diversified investment company may not, with respect to
75% of its total assets, invest more than 5% of its total assets in the
securities of any one issuer (other than U.S. Government securities and
securities of other investment companies) and may not own more than 10% of the
outstanding voting securities of any one issuer. While a fund may be a
non-diversified investment company, and therefore not subject to the statutory
diversification requirements discussed above, the Fund may still intend to
diversify its assets to the extent necessary to qualify for tax treatment as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the “Internal Revenue Code”).
At any given point in time,
a diversified fund may not meet the diversification test outlined above due to
appreciation in its portfolio holdings. In such case, the Fund is not required
to sell portfolio holdings to meet the diversification test.
The diversification
standards under the Internal Revenue Code require that a fund diversify its
holdings so that, at the end of each fiscal quarter, (i) at least 50% of the
market value of a fund’s assets are represented by cash, U.S. Government
securities, securities of other regulated investment companies and other
securities limited with respect to any one issuer to an amount not greater than
5% of a fund’s assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of a fund’s assets is invested
in the securities of any one issuer (other than U.S. Government securities and
the securities of other regulated investment companies), or of two or more
issuers which a fund controls (i.e., owns, directly or indirectly, 20% of the
voting stock) and which are determined to be engaged in the same or similar
trades or businesses or related trades or businesses.
Foreign Country Risk. Foreign companies may issue both equity
and fixed income securities. A company may be classified as either “domestic” or
“foreign,” depending upon which factors the Adviser considers most important for
a given company. Factors that the Adviser considers in classifying a company as
domestic or foreign include (i) whether the company is organized under the laws
of the United States or a foreign country; (ii) whether the company’s securities
principally trade in securities markets outside of the United States; (iii) the
source of the majority of the company’s revenues or profits; and (iv) the
location of the majority of the company’s assets. The Adviser generally follows
the country classification indicated by a third-party service provider, but may
use a different country classification if the Adviser’s analysis of the four
factors provided above, or other factors that the Adviser deems relevant,
indicate that a different country classification is more appropriate. Foreign
country risk can be more focused on factors concerning specific countries or
geographic areas when a Fund’s holdings are more focused in these countries or
geographic areas.
The equity Funds may invest
a significant portion of their assets in securities issued by companies
operating, incorporated, or principally traded in foreign countries. Investing
in foreign countries involves risks that may cause the Funds’ performance to be
more volatile than it would be if the Funds invested solely in the United
States. Foreign economies may not be as strong or as diversified, foreign
political systems may not be as stable and foreign financial reporting standards
may not be as rigorous as they are in the United States. In addition, foreign
capital markets may not be as well developed, so securities may be less liquid,
transaction costs may be higher and investments may be subject to more
government regulation. When the Funds invest in foreign securities, the Funds’
operating expenses are likely to be higher than those of an investment company
investing exclusively in U.S. securities, since the custodial and certain other
expenses associated with foreign investments are expected to be higher.
Foreign Currency Risk. Securities issued by foreign companies in
foreign markets are frequently denominated in foreign currencies. The change in
value of a foreign currency against the U.S. dollar will result in a change in
the U.S. dollar value of securities denominated in that foreign currency. For
example, when the Fund holds a security that is denominated in a foreign
currency, a decline of that foreign currency against the U.S. dollar would
generally cause the value of the Fund’s shares to decline. The Fund may, but
generally does not, hedge its currency risk.
Headline Risk. Davis
Advisors seeks to acquire companies with durable business models that can be
purchased at attractive valuations relative to what Davis Advisors believes to
be the companies’ intrinsic values. Davis Advisors may make such investments
when a company becomes the center of controversy after receiving adverse media
attention. The company may be involved in litigation, the company’s financial
reports or corporate governance may be challenged, the company’s public filings
may disclose a weakness in internal controls, greater government regulation may
be contemplated or other adverse events may threaten the company’s future. While
Davis Advisors researches companies subject to such contingencies, Davis
Advisors cannot be correct every time, and the company’s stock may never recover
or may become worthless.
Interest Rate Sensitivity
Risk. Interest rates may have
a powerful influence on the earnings of financial institutions.
Large-Capitalization Companies
Risk. Companies with $10
billion or more in market capitalization are considered by the Adviser to be
large-capitalization companies. Large-capitalization companies generally
experience slower rates of growth in earnings per share than do mid- and
small-capitalization companies.
Manager Risk. Poor security
selection or focus on securities in a particular sector, category or group of
companies may cause the Funds to underperform relevant benchmarks or other funds
with a similar investment objective. Even if the Adviser implements the intended
investment strategies, the implementation of the strategies may be unsuccessful
in achieving a Fund’s investment objective.
Mid- and Small-Capitalization
Companies Risk. Companies
with less than $10 billion in market capitalization are considered by the
Adviser to be mid- or small-capitalization companies. Investing in mid- and
small-capitalization companies may be more risky than investing in
large-capitalization companies. Smaller companies typically have more limited
product lines, markets and financial resources than larger companies, and their
securities may trade less frequently and in more limited volume than those of
larger, more mature companies. Securities of these companies may be subject to
volatility in their prices. They may have a limited trading market, which may
adversely affect the Fund’s ability to dispose of them and can reduce the price
the Fund might be able to obtain for them. Other investors that own a security
issued by a mid- or small-capitalization company for whom there is limited
liquidity might trade the security when the Fund is attempting to dispose of its
holdings in that security. In that case, the Fund might receive a lower price
for its holdings than otherwise might be obtained. Mid-and small-capitalization
companies also may be unseasoned. These include companies that have been in
operation for less than three years, including the operations of any
predecessors.
Preferred Stock Risk. Preferred stock is a form of equity
security and is generally ranked behind an issuer’s debt securities in claims
for dividends and assets of an issuer in a liquidation or bankruptcy. An adverse
event may have a negative impact on a company and could result in a decline in
the price of its preferred stock.
Real Estate Risk. Real estate securities are issued by
companies that have at least 50% of the value of their assets, gross income or
net profits attributable to ownership, financing, construction, management or
sale of real estate, or to products or services that are related to real estate
or the real estate industry. The Fund does not invest directly in real estate.
Real estate companies include real estate investment trusts (“REITs”) or other
securitized real estate investments, brokers, developers, lenders and companies
with substantial real estate holdings such as paper, lumber, hotel and
entertainment companies. REITs pool investors’ funds for investment primarily in
income-producing real estate or real estate-related loans or interests. A REIT
is not taxed on income distributed to shareholders if it complies with various
requirements relating to its organization, ownership, assets and income, and
with the requirement that it distribute to its shareholders at least 90% of its
taxable income (other than net capital gains) each taxable year. REITs generally
can be classified as equity REITs, mortgage REITs and hybrid REITs. Equity REITs
invest the majority of their assets directly in real property and derive their
income primarily from rents. Equity REITs also can realize capital gains by
selling property that has appreciated in value. Mortgage REITs invest the
majority of their assets in real estate mortgages and derive their income
primarily from interest payments. Hybrid REITs combine the characteristics of
both equity REITs and mortgage REITs. To the extent that the management fees
paid to a REIT are for the same or similar services as the management fees paid
by the Fund, there will be a layering of fees, which would increase expenses and
decrease returns. Securities issued by REITs may trade less frequently and be
less liquid than common stock issued by other companies.
Real estate securities,
including REITs, are subject to risks associated with the direct ownership of
real estate including: (i) declines in property values because of changes in the
economy or the surrounding area or because a particular region has become less
appealing to tenants; (ii) increases in property taxes, operating expenses,
interest rates or competition; (iii) overbuilding; (iv) changes in zoning laws;
(v) losses from casualty or condemnation;. (vi) declines in the value of real
estate and risks related to general and local economic conditions, (vii)
uninsured casualties or condemnation losses; (viii) fluctuations in rental
income; (ix) changes in neighborhood values; (x) the appeal of properties to
tenants; (xi) increases in interest rates; and (xii) access to the credit
markets. The Fund also could be subject to such risks by reason of direct
ownership as a result of a default on a debt security it may own.
Equity REITs may be
affected by changes in the value of the underlying property owned by the trusts,
while mortgage REITs may be affected by the quality of credit extended. Equity
and mortgage REITs are dependent on management skill, may not be diversified and
are subject to project financing risks. REITs also are subject to: heavy cash
flow dependency, defaults by borrowers, self-liquidation and the possibility of
failing to qualify for the favorable federal income tax treatment generally
available to REITs under the Internal Revenue Code, and failing to maintain
exemption from registration under the 1940 Act. Changes in interest rates also
may affect the value of the debt securities in the Fund’s portfolio. By
investing in REITs indirectly through the Fund, a shareholder will bear not only
his or her proportionate share of the expense of the Fund but also, indirectly,
similar expenses of the REITs, including compensation of management. Some real
estate securities may be rated less than investment grade by rating services.
Such securities may be subject to the risks of high-yield, high-risk securities
discussed below.
Stock Market Risk. Stock
markets tend to move in cycles, with periods of rising prices and periods of
falling prices, including the possibility of sharp declines. As an example, U.S.
and international markets have experienced volatility in recent months and years
due to a number of economic, political and global macro factors including the
impact of the coronavirus (COVID-19) as a global pandemic, uncertainties
regarding interest rates, rising inflation, trade tensions and the threat of
tariffs imposed by the U.S. and other countries. The recovery from COVID-19 is
proceeding at slower than expected rates and may last for a prolonged period of
time. In addition, as a result of continuing political tensions and armed
conflicts, including the war between Ukraine and Russia, the U.S. and the
European Union imposed sanctions on certain Russian individuals and companies,
including certain financial institutions, and have limited certain exports and
imports to and from Russia. The war has contributed to recent market volatility
and may continue to do so. These developments as well as other events could
result in further market volatility and negatively affect financial asset
prices, the liquidity of certain securities and the normal operations of
securities exchanges and other markets. Continuing market volatility as a result
of recent market conditions or other events may have an adverse effect on the
performance of the Funds
Debt
Risks
Bonds and Other Debt Securities
Risk. Bonds and other debt
securities may be purchased by a Fund if the Adviser believes that such
investments are consistent with a Fund’s investment strategies, may contribute
to the achievement of the Fund’s investment objective and will not violate any
of the Fund’s investment restrictions. The U.S. Government, corporations and
other issuers sell bonds and other debt securities to borrow money. Issuers pay
investors interest and generally must repay the amount borrowed at maturity.
Some debt securities, such as zero-coupon bonds, do not pay current interest,
but are purchased at discounts from their face values. The prices of debt
securities fluctuate, depending on such factors as interest rates, credit
quality and maturity.
Bonds and other debt
securities, generally, are subject to credit risk and interest rate risk. While
debt securities issued by the U.S. Treasury generally are considered free of
credit risk, debt issued by agencies and corporations all entail some level of
credit risk. Investment grade debt securities have less credit risk than do
high-yield, high-risk debt securities. Credit risk is described more fully in
the section titled “High-Yield, High-Risk Debt Securities.”
Bonds and other debt
securities, generally, are interest rate sensitive. During periods of falling
interest rates, the values of debt securities held by a Fund generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Changes by recognized rating services in their
ratings of debt securities and changes in the ability of an issuer to make
payments of interest and principal also will affect the value of these
investments.
Changes in Debt Rating
Risk. If a rating agency
gives a fixed income security a low rating, the value of the security will
decline because investors will demand a higher rate of return.
Credit Risk. Like any
borrower, the issuer of a fixed income security may be unable to make timely
payments of interest and principal. If the issuer is unable to make payments in
a timely fashion the value of the security will decline and may become
worthless. Financial institutions are often highly leveraged and may not be able
to make timely payments of interest and principal. Even U.S. Government
Securities are subject to credit risk.
Extension and Prepayment
Risk. Market prices of the
mortgage-backed securities and collateralized mortgage obligations that the Fund
owns are affected by how quickly borrowers elect to prepay the mortgages
underlying the securities. Changes in market interest rates affect borrowers’
decisions about whether to prepay their mortgages. Rising interest rates lead to
extension risk, which occurs when borrowers maintain their existing mortgages
until they come due instead of choosing to prepay them. Falling interest rates
lead to prepayment risk, which occurs when borrowers prepay their mortgages more
quickly than usual so that they can refinance at a lower rate. A government
agency that has the right to call (prepay) a fixed-rate security may respond the
same way. The pace at which borrowers prepay affects the yield and the cash flow
to holders of securities and the market value of those securities.
High-Yield, High-Risk Debt
Securities Risk. The real estate securities, convertible securities,
bonds and other debt securities in which the Fund may invest may include
high-yield, high-risk debt securities rated BB or lower by Standard & Poor’s
Corporation (“S&P”) or Ba or lower by Moody’s Investors Service (“Moody’s”)
or unrated securities. Securities rated BB or lower by S&P and Ba or lower
by Moody’s are referred to in the financial community as “junk bonds” and may
include D-rated securities of issuers in default. See Appendix A for a more detailed description of
the rating system. Ratings assigned by credit agencies do not evaluate market
risks. The Adviser considers the ratings assigned by S&P® or
Moody’s as one of several factors in its independent credit analysis of issuers.
A description of each bond quality category is set forth in Appendix A titled “Quality Ratings of Debt Securities.” The
ratings of Moody’s and S&P represent their opinions as to the quality of the
securities that they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of quality.
There is no assurance that any rating will not change.
The Fund will not purchase
unrated debt securities, or debt securities rated BB or Ba or lower (“Junk
Bonds”) if the securities are in default at the time of purchase or if such
purchase would then cause more than 20% of the Fund’s net assets to be invested
in such lower-rated securities. The Fund may continue to retain a security whose
rating has changed, become unrated, or if the security has defaulted.
High-yield, high-risk debt
securities, whether or not convertible into common stock, usually involve
increased risk as to payment of principal and interest. Issuers of such
securities may be highly leveraged and may not have traditional methods of
financing available to them. Therefore, the risks associated with acquiring the
securities of such issuers generally are greater than is the case with
higher-rated securities. For example, during an economic downturn or a sustained
period of rising interest rates, issuers of high-yield securities may be more
likely to experience financial stress, especially if such issuers are highly
leveraged. During such periods, such issuers may not have sufficient revenues to
meet their principal and interest payment obligations. The issuer’s ability to
service its debt obligations also may be adversely affected by specific issuer
developments, or the issuer’s inability to meet specific projected business
forecasts or the unavailability of additional financing. The risk of loss due to
default by the issuer is significantly greater for the holders of high-yield
securities because such securities may be unsecured and may be subordinated to
other creditors of the issuer.
High-yield, high-risk debt
securities are subject to greater price volatility than higher-rated securities,
tend to decline in price more steeply than higher-rated securities in periods of
economic difficulty or accelerating interest rates, and are subject to greater
risk of non-payment in adverse economic times. There may be a thin trading
market for such securities, which may have an adverse impact on market price and
the ability of the Fund to dispose of particular issues and may cause the Fund
to incur special securities’ registration responsibilities, liabilities and
costs, and liquidity and valuation difficulties. Unexpected net redemptions may
force the Fund to sell high-yield, high-risk debt securities without regard to
investment merit, thereby possibly reducing return rates. Such securities may be
subject to redemptions or call provisions, which, if exercised when investment
rates are declining, could result in the replacement of such securities with
lower-yielding securities, resulting in a decreased return. To the extent that
the Fund invests in bonds that are original issue discount, zero-coupon,
pay-in-kind or deferred interest bonds, the Fund may have taxable interest
income greater than the cash actually received on these issues. In order to
avoid taxation at the Fund level, the Fund may have to sell portfolio securities
to meet distribution requirements.
The market values of
high-yield, high-risk debt securities tend to reflect individual corporate
developments to a greater extent than higher-rated securities, which react
primarily to fluctuations in the general level of interest rates. Lower-rated
securities also tend to be more sensitive to economic and industry conditions
than higher-rated securities. Adverse publicity and investor perceptions,
whether or not based on fundamental analysis regarding individual lower-rated
bonds, may result in reduced prices for such securities. If the negative factors
such as these adversely impact the market value of high-yield, high-risk
securities and the Fund holds such securities, the Fund’s net asset value will
be adversely affected.
The Fund may have
difficulty disposing of certain high-yield, high-risk bonds because there may be
a thin trading market for such bonds. Because not all dealers maintain markets
in all high-yield, high-risk bonds, the Fund anticipates that such bonds could
be sold only to a limited number of dealers or institutional investors. The lack
of a liquid secondary market may have an adverse impact on market price and the
ability to dispose of particular issues and also may make it more difficult to
obtain accurate market quotations or valuations for purposes of valuing the
Fund’s assets. Market quotations generally are available on many high-yield
issues only from a limited number of dealers and may not necessarily represent
firm bid prices of such dealers or prices for actual sales. In addition, adverse
publicity and investor perceptions may decrease the values and liquidity of
high-yield, high-risk bonds regardless of a fundamental analysis of the
investment merits of such bonds. To the extent that the Fund purchases illiquid
or restricted bonds, it may incur special securities’ registration
responsibilities, liabilities and costs, and liquidity and valuation
difficulties relating to such bonds.
Bonds may be subject to
redemption or call provisions. If an issuer exercises these provisions when
investment rates are declining, the Fund will be likely to replace such bonds
with lower-yielding bonds, resulting in decreased returns. Zero-coupon,
pay-in-kind and deferred interest bonds involve additional special
considerations. Zero-coupon bonds are debt obligations that do not entitle the
holder to any periodic payments of interest prior to maturity or a specified
cash payment date when the securities begin paying current interest (the “cash
payment date”) and therefore are issued and traded at discounts from their face
amounts or par value. The market prices of zero-coupon securities generally are
more volatile than the market prices of securities that pay interest
periodically and are likely to respond to changes in interest rates to a greater
degree than securities paying interest currently with similar maturities and
credit quality. Pay-in-kind bonds pay interest in the form of other securities
rather than cash. Deferred interest bonds defer the payment of interest to a
later date. Zero-coupon, pay-in-kind or deferred interest bonds carry additional
risk in that, unlike bonds that pay interest in cash throughout the period to
maturity, the Fund will realize no cash until the cash payment date unless a
portion of such securities are sold. There is no assurance of the value or the
liquidity of securities received from pay-in-kind bonds. If the issuer defaults,
the Fund may obtain no return at all on its investment. To the extent that the
Fund invests in bonds that are original issue discount, zero-coupon, pay-in-kind
or deferred interest bonds, the Fund may have taxable interest income greater
than the cash actually received on these issues. In order to distribute such
income to avoid taxation, the Fund may have to sell portfolio securities to meet
its distribution requirements under circumstances that could be adverse.
Federal tax legislation
limits the tax advantages of issuing certain high-yield, high-risk bonds. This
could have a materially adverse effect on the market for high-yield, high-risk
bonds.
Inflation Risk. Also called
purchasing power risk, this is the chance that the cash flows from an investment
won't be worth as much in the future because of changes in purchasing power due
to inflation.
Interest Rate Risk. Interest rate increases can cause the
price of a debt security to decrease. If a security pays a fixed interest rate,
and market rates increase, the value of the fixed-rate security usually decline.
Interest rates may also have a powerful influence on the earnings of financial
institutions.
Repurchase Agreements
Risk. The Funds may enter
into repurchase agreements. A repurchase agreement is an agreement to purchase a
security and to sell that security back to the original owner at an agreed-on
price. The resale price reflects the purchase price plus an agreed-on
incremental amount, which is unrelated to the coupon rate or maturity of the
purchased security. The repurchase obligation of the seller is, in effect,
secured by the underlying securities. In the event of a bankruptcy or other
default of a seller of a repurchase agreement, the Funds could experience both
delays in liquidating the underlying securities and losses, including: (i)
possible decline in the value of the collateral during the period, while the
Funds seek to enforce its rights thereto; (ii) possible loss of all or a part of
the income during this period; and (iii) expenses of enforcing its rights.
The Funds will enter into
repurchase agreements only when the seller agrees that the value of the
underlying securities, including accrued interest (if any), will at all times be
equal to or exceed the value of the repurchase agreement. The Funds may enter
into tri-party repurchase agreements in which a third-party custodian bank
ensures the timely and accurate exchange of cash and collateral. The majority of
these transactions run from day to day, and delivery pursuant to the resale
typically occurs within one to seven days of the purchase. The Funds normally
will not enter into repurchase agreements maturing in more than seven
days.
U.S. Government Securities
Risk. U.S. Government securities are debt securities that are obligations
of or guaranteed by the U.S. Government, its agencies or instrumentalities.
There are two basic types of U.S. Government securities: (i) direct obligations
of the U.S. Treasury; and (ii) obligations issued or guaranteed by an agency or
instrumentality of the U.S. Government, which includes the Federal Farm Credit
System (“FFCS”), Student Loan Marketing Association (“SLMA”), Federal Home Loan
Mortgage Corporation (“FHLMC”), Federal Home Loan Banks (“FHLB”), Federal
National Mortgage Association (“FNMA”) and Government National Mortgage
Association (“GNMA”). Some obligations issued or guaranteed by agencies or
instrumentalities, such as those issued by GNMA, are fully guaranteed by the
U.S. Government. Others, such as FNMA bonds, rely on the assets and credit of
the instrumentality with limited rights to borrow from the U.S. Treasury. Still
other securities, such as obligations of the FHLB, are supported by more
extensive rights to borrow from the U.S. Treasury.
U.S. Government securities
include mortgage-related securities issued by an agency or instrumentality of
the U.S. Government. GNMA certificates are mortgage-backed securities
representing part ownership of a pool of mortgage loans. These loans issued by
lenders such as mortgage bankers, commercial banks and savings and loan
associations are either insured by the Federal Housing Administration or
guaranteed by the Veterans Administration. A “pool” or group of such mortgages
is assembled and, after being approved by GNMA, is offered to investors through
securities dealers. Once approved by GNMA, the timely payment of interest and
principal on each mortgage is guaranteed by GNMA and backed by the full faith
and credit of the U.S. Government. GNMA certificates differ from bonds in that
principal is paid back monthly by the borrower over the term of the loan rather
than returned in a lump sum at maturity. GNMA certificates are characterized as
“pass-through” securities because both interest and principal payments
(including prepayments) are passed through to the holder of such
certificates.
As of September 7, 2008,
the Federal Housing Finance Agency (“FHFA”) was appointed as the conservator of
FHLMC and FNMA for an indefinite period. In accordance with the Federal Housing
Finance Regulatory Reform Act of 2008 and the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992, as conservator, the FHFA will
control and oversee these entities until the FHFA deems them financially sound
and solvent. During the conservatorship, each entity’s obligations are expected
to be paid in the normal course of business. Although no express guarantee
exists for the debt or mortgage-backed securities issued by these entities, the
U.S. Department of the Treasury, through a securities lending credit facility
and a senior preferred stock purchase agreement, has attempted to enhance the
ability of the entities to meet their obligations.
Pools of mortgages also are
issued or guaranteed by other agencies of the U.S. Government. The average life
of pass-through pools varies with the maturities of the underlying mortgage
instruments. In addition, a pool’s term may be shortened or lengthened by
unscheduled or early payment, or by slower than expected prepayment of principal
and interest on the underlying mortgages. The occurrence of mortgage prepayments
is affected by the level of interest rates, general economic conditions, the
location and age of the mortgage and other social and demographic conditions. As
prepayment rates of individual pools vary widely, it is not possible to
accurately predict the average life of a particular pool.
A collateralized mortgage
obligation (“CMO”) is a debt security issued by a corporation, trust or
custodian, or by a U.S. Government agency or instrumentality that is
collateralized by a portfolio or pool of mortgages, mortgage-backed securities,
U.S. Government securities or corporate debt obligations. The issuer’s
obligation to make interest and principal payments is secured by the underlying
pool or portfolio of securities. CMOs are most often issued in two or more
classes (each of which is a separate security) with varying maturities and
stated rates of interest. Interest and principal payments from the underlying
collateral (generally a pool of mortgages) are not necessarily passed directly
through to the holders of the CMOs; these payments typically are used to pay
interest on all CMO classes and to retire successive class maturities in a
sequence. Thus, the issuance of CMO classes with varying maturities and interest
rates may result in greater predictability of maturity with one class and less
predictability of maturity with another class than a direct investment in a
mortgage-backed pass-through security (such as a GNMA certificate). Classes with
shorter maturities, typically, have lower volatility and yield while those with
longer maturities, typically, have higher volatility and yield. Thus,
investments in CMOs provide greater or lesser control over the investment
characteristics than mortgage pass-through securities and offer more defensive
or aggressive investment alternatives.
Investments in
mortgage-related U.S. Government securities, such as GNMA certificates and CMOs,
also involve other risks. The yield on a pass-through security typically is
quoted based on the maturity of the underlying instruments and the associated
average life assumption. Actual prepayment experience may cause the yield to
differ from the assumed average life yield. Accelerated prepayments adversely
impact yields for pass-through securities purchased at a premium; the opposite
is true for pass-through securities purchased at a discount. During periods of
declining interest rates, prepayment of mortgages underlying pass-through
certificates can be expected to accelerate. When the mortgage obligations are
prepaid, the Fund reinvests the prepaid amounts in securities, the yields of
which reflect interest rates prevailing at that time. Therefore, the Fund’s
ability to maintain a portfolio of high-yielding, mortgage-backed securities
will be adversely affected to the extent that prepayments of mortgages must be
reinvested in securities that have lower yields than the prepaid mortgages.
Moreover, prepayments of mortgages that underlie securities purchased at a
premium could result in capital losses. Investment in such securities also could
subject the Fund to “maturity extension risk,” which is the possibility that
rising interest rates may cause prepayments to occur at a slower than expected
rate. This particular risk may effectively change a security that was considered
a short- or intermediate-term security at the time of purchase into a long-term
security. Long-term securities generally fluctuate more widely in response to
changes in interest rates than short or intermediate-term securities.
If a Fund purchases
mortgage-backed securities that are “subordinated” to other interests in the
same mortgage pool, the Fund, as a holder of those securities, may only receive
payments after the pool’s obligations to other investors have been satisfied. An
unexpectedly high rate of defaults on the mortgages held by a mortgage pool may
limit substantially the pool’s ability to make payments of principal or interest
to the Fund as a holder of such subordinated securities, reducing the values of
those securities or in some cases rendering them worthless; the risk of such
defaults is generally higher in the case of mortgage pools that include
so-called “subprime” mortgages. An unexpectedly high or low rate of prepayment
on a pool’s underlying mortgages may have similar effects on subordinated
securities. A mortgage pool may issue securities subject to various levels of
subordination; the risk of non-payment affects securities at each level,
although the risk is greatest in the case of more highly subordinate
securities.
The guarantees of the U.S.
Government, its agencies and instrumentalities are guarantees of the timely
payment of principal and interest on the obligations purchased. The value of the
shares issued by the Fund is not guaranteed and will fluctuate with the value of
the Fund’s portfolio. Generally, when the level of interest rates rise, the
value of the Fund’s investment in U.S. Government securities is likely to
decline and, when the level of interest rates decline, the value of the Fund’s
investment in U.S. Government securities is likely to rise.
The Fund may engage in
portfolio trading primarily to take advantage of yield disparities. Such trading
strategies may result in minor temporary increases or decreases in the Fund’s
current income and in its holding of debt securities that sell at substantial
premiums or discounts from face value. If expectations of changes in interest
rates or the price of the securities prove to be incorrect, the Fund’s potential
income and capital gain will be reduced or its potential loss will be
increased.
Variable Current Income
Risk. The income that the
Fund pays to investors is not stable. When interest rates increase, the Fund’s
income distributions are likely to increase. When interest rates decrease, the
Fund’s income distributions are likely to decrease.
Other
Risks
Fees and Expenses Risk. The
Funds may not earn enough through income and capital appreciation to offset the
operating expenses of the Funds. All mutual funds incur operating fees and
expenses. Fees and expenses reduce the return that a shareholder may earn by
investing in a fund even when a fund has favorable performance. A low-return
environment, or a bear market, increases the risk that a shareholder may lose
money.
The
Funds’ shares are not deposits or obligations of any bank, are not guaranteed by
any bank, are not insured by the FDIC or any other agency, and involve
investment risks, including possible loss of the principal amount
invested.
All Fund results in this
prospectus reflect the reinvestment of dividends and capital gain distributions,
if any. Unless otherwise noted, Fund results reflect any fee waivers and/or
expense reimbursements in effect during the periods presented.
Information Concerning the
Example within the Fees and Expenses of the Fund
Class C shares’ expenses
for the 10-year and Life of Class periods include eight years of Class C shares’
expenses and Class A shares thereafter since Class C shares automatically
convert to Class A shares after eight years.
Information Concerning the
Annual Total Returns for the Life of Class
(For the periods ended
December 31, 2022, with maximum sales charge)
|
Financial Fund |
Opportunity
Fund |
Real Estate
Fund |
Appreciation &
Income Fund |
Government Bond
Fund |
Class A shares return before taxes |
10.67% |
9.98% |
8.33% |
7.40% |
2.32% |
Class C shares return before taxes |
6.71% |
7.46% |
6.65% |
5.17% |
1.75% |
Class Y shares return before taxes |
7.73% |
7.80% |
7.99% |
6.56% |
2.02% |
Davis Financial Fund.
Average annual total returns for life are for the periods from the commencement
of each class’s investment operations: Class A shares, 5/1/91; Class C shares,
8/12/97; and Class Y shares, 3/10/97.
Davis Opportunity Fund.
Average annual total returns for life are for the periods from the commencement
of each class’s investment operations: Class A shares, 12/1/94; Class C shares,
8/15/97; and Class Y shares, 9/18/97.
Davis Real Estate Fund.
Average annual total returns for life are for the periods from the commencement
of each class’s investment operations: Class A shares, 1/3/94; Class C shares,
8/13/97; and Class Y shares, 11/8/96.
Davis Appreciation & Income
Fund. Average annual total returns for life are for the periods from the
commencement of each class’s investment operations: Class A shares, 5/1/92;
Class C shares, 8/12/97; and Class Y shares, 11/13/96. From inception (May 1,
1992) until July 1, 2003, Davis Appreciation & Income Fund was named Davis
Convertible Securities Fund and invested primarily in convertible
securities.
Davis Government Bond Fund.
Average annual total returns for life are for the periods from the commencement
of each class’s investment operations: Class A shares, 12/1/94; Class C shares,
8/19/97, Class Y shares, 9/1/98.
Class C shares
automatically convert to Class A shares after eight years. Class C shares’
performance for the periods exceeding eight years include the first eight years
of Class C share performance and Class A share performance thereafter.
Information
Concerning Annual Total Returns
Davis Opportunity Fund.
Davis Opportunity Fund made favorable investments in initial public
offerings (IPO), which had a material impact on the investment performance in
2013 and 2014. The rapid appreciation was an unusual occurrence and such
performance may not continue in the future.
Information
Concerning After-Tax Returns for Class A Shares
As of the date of this
prospectus, the tax rates are 37% for ordinary income, 20% for qualified income
and 20% for long-term capital gains. An additional 3.8% tax imposed by the
Affordable Care Act is included on all investment income as part of the highest
marginal rate used in all after-tax performance calculations.
Information
Concerning the Example within the Fees and Expenses of the Funds
The Adviser is
contractually committed to waive fees and/or reimburse the expenses of Davis
Financial Fund, Davis Opportunity Fund, Davis Appreciation & Income Fund,
Davis Government Bond Fund, and Davis Real Estate Fund to the extent necessary
to cap total annual fund operating expenses for Class A shares at 1.00%, Class C
shares at 1.75%, and Class Y shares at 0.75%. The Adviser is obligated to
continue the expense cap through May 1, 2024. The expense cap cannot be modified
prior to this date without the consent of the Board of Directors. After that
date, there is no assurance that the Adviser will continue to cap expenses. The
Adviser may not recoup any of the operating expenses it has reimbursed to the
Fund.
The Adviser is
contractually committed to waive fees and/or reimburse Davis Government Money
Market Fund’s expenses such that net investment income will not be less than
zero until May 1, 2024. After that date, there is no assurance that Davis
Advisors will continue to cap expenses. Davis Advisors may recapture from Davis
Government Money Market Fund any of the operating expenses it has reimbursed
(but not any of the management fees which it has waived) until the end of the
third calendar year after the end of the calendar year in which such
reimbursement occurs. Any potential recovery is limited to an amount such that
(i) Davis Government Money Market Fund’s net investment income will not be less
than zero for any class of shares; and (ii) may not exceed 0.10 percent of net
assets (ten basis points) in any calendar year.
This recapture could negatively affect Davis Government Money Market
Fund's future yield.
Information
Concerning the Bloomberg U.S. Government 1‑3 Year Bond Index
“Bloomberg®”
and the Bloomberg indices listed herein (the “Indices”) are service marks of
Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services
Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”),
and have been licensed for use for certain purposes by the distributor hereof
(the “Licensee”).
The financial products
named herein (the “Products”) are not sponsored, endorsed, sold or promoted by
Bloomberg. Bloomberg does not make any representation or warranty, express or
implied, to the owners of or counterparties to the Products or any member of the
public regarding the advisability of investing in securities or commodities
generally or in the Product particularly. The only relationship of Bloomberg to
Licensee is the licensing of certain trademarks, trade names and service marks
and of the Indices, which are determined, composed and calculated by BISL
without regard to Licensee or the Products. Bloomberg has no obligation to take
the needs of Licensee or the owners of the Products into consideration in
determining, composing or calculating the Indices. Bloomberg is not responsible
for and has not participated in the determination of the timing, price, or
quantities of the Products to be issued. Bloomberg shall not have any obligation
or liability, including, without limitation, to customers of the Products, in
connection with the administration, marketing or trading of the Products.
BLOOMBERG DOES NOT
GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDICES OR ANY DATA
RELATED THERETO AND SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS OR
INTERRUPTIONS THEREIN. BLOOMBERG DOES NOT MAKE ANY WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDICES OR ANY DATA RELATED THERETO.
BLOOMBERG DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE INDICES OR ANY DATA RELATED THERETO. WITHOUT LIMITING
ANY OF THE FOREGOING, TO THE MAXIMUM EXTENT ALLOWED BY LAW, BLOOMBERG, ITS
LICENSORS, AND ITS AND THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, AGENTS,
SUPPLIERS, AND VENDORS SHALL HAVE NO LIABILITY OR RESPONSIBILITY WHATSOEVER FOR
ANY INJURY OR DAMAGES—WHETHER DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL,
PUNITIVE OR OTHERWISE—ARISING IN CONNECTION WITH THE PRODUCT OR INDICES OR ANY
DATA OR VALUES RELATING THERETO—WHETHER ARISING FROM THEIR NEGLIGENCE OR
OTHERWISE, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
Davis Funds may implement
investment strategies that are not principal investment strategies if, in the
Adviser’s professional judgment, the strategies are appropriate. A strategy
includes any policy, practice or technique used by the Fund to achieve its
investment objectives. Whether a particular strategy, including a strategy to
invest in a particular type of security, is a principal investment strategy
depends on the strategy’s anticipated importance in achieving the Fund’s
investment objectives, and how the strategy affects the Fund’s potential risks
and returns. In determining what is a principal investment strategy, the Adviser
considers among other things, the amount of the Fund’s assets expected to be
committed to the strategy, the amount of the Fund’s assets expected to be placed
at risk by the strategy and the likelihood of the Fund’s losing some or all of
those assets from implementing the strategy. Non-principal investment strategies
are generally those investments that constitute less than 5% to 10% of a Fund’s
assets, depending upon their potential impact on the investment performance of
the Fund.
While the Adviser expects
to pursue the Funds’ investment objectives by implementing the principal
investment strategies described in the Funds’ prospectus, the Funds may employ
non-principal investment strategies or securities if, in Davis Advisors’
professional judgment, the securities, trading or investment strategies are
appropriate. Factors that Davis Advisors considers in pursuing these other
strategies include whether the strategy: (i) is likely to be consistent with
shareholders’ reasonable expectations; (ii) is likely to assist the Adviser in
pursuing the Funds’ investment objective; (iii) is consistent with the Funds’
investment objective; (iv) will not cause a Fund to violate any of its
fundamental or non-fundamental investment restrictions; and (v) will not
materially change the Funds’ risk profile from the risk profile that results
from following the principal investment strategies as described in the Funds’
prospectus and further explained in the SAI, as amended from time to time.
Short-Term Investments. The
Funds use short-term investments, such as treasury bills and repurchase
agreements, to maintain flexibility while evaluating long-term opportunities.
Davis Government Money Market Fund routinely uses short-term investments.
Temporary Defensive
Investments. The Funds may,
but are not required to, use short-term investments for temporary defensive
purposes. In the event that Davis Advisors’ Portfolio Managers anticipate a
decline in the market values of the companies in which the Funds invest (due to
economic, political or other factors), the Funds may reduce their risk by
investing in short-term securities until market conditions improve. While the
Funds are invested in short-term investments, they will not be pursuing the
long-term growth of capital investment objective. Unlike equity securities,
these investments will not appreciate in value when the market advances and will
not contribute to long-term growth of capital.
Repurchase Agreements. The
Funds may enter into repurchase agreements. A repurchase agreement is an
agreement to purchase a security and to sell that security back to the original
owner at an agreed-on price. The resale price reflects the purchase price plus
an agreed-on incremental amount, which is unrelated to the coupon rate or
maturity of the purchased security. The repurchase obligation of the seller is,
in effect, secured by the underlying securities. In the event of a bankruptcy or
other default of a seller of a repurchase agreement, the Funds could experience
both delays in liquidating the underlying securities and losses, including (i)
possible decline in the value of the collateral during the period, while the
Funds seek to enforce its rights thereto; (ii) possible loss of all or a part of
the income during this period; and (iii) expenses of enforcing its rights.
The Funds will enter into
repurchase agreements only when the seller agrees that the value of the
underlying securities, including accrued interest (if any), will at all times be
equal to or exceed the value of the repurchase agreement. The Funds may enter
into tri-party repurchase agreements in which a third-party custodian bank
ensures the timely and accurate exchange of cash and collateral. The majority of
these transactions run from day to day, and delivery pursuant to the resale
typically occurs within one to seven days of the purchase. The Funds normally
will not enter into repurchase agreements maturing in more than seven
days.
Restricted and Illiquid
Securities. The Funds may invest in restricted securities that are
subject to contractual restrictions on resale. Each Fund is prohibited from
purchasing or holding illiquid securities (which may include restricted
securities) if more than 15% of the Fund’s net assets would then be illiquid. If
illiquid securities were to exceed 15% of the value of a Fund’s net assets, the
Adviser would attempt to reduce the Fund’s investment in illiquid securities in
an orderly fashion. Companies whose securities are not publicly traded may not
be subject to the disclosure and other investor protection requirements that
would be applicable if their securities were publicly traded.
The
restricted securities that the Funds may purchase include securities that have
not been registered under the Securities Act of 1933, as amended (the “1933
Act”) but are eligible for purchase and sale pursuant to Rule 144A (“Rule 144A
Securities”). This Rule permits certain qualified institutional buyers, such as
the Funds, to trade in privately placed securities even though such securities
are not registered under the 1933 Act. The Adviser, under criteria established
by the Funds’ Board of Directors, will consider whether Rule 144A Securities
being purchased or held by the Funds are illiquid and thus subject to the Funds’
policy limiting investments in illiquid securities. In making this
determination, the Adviser will consider the frequency of trades and quotes, the
number of dealers and potential purchasers, dealer undertakings to make a market
and the nature of the security and the marketplace trades (for example, the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer). The liquidity of Rule 144A Securities also will be
monitored by the Adviser and if, as a result of changed conditions, it is
determined that a Rule 144A Security is no longer liquid, the Funds’ holding of
illiquid securities will be reviewed to determine what, if any, action is
required in light of the policy limiting investments in such securities.
Investing in Rule 144A Securities could have the effect of increasing the amount
of investments in illiquid securities if qualified institutional buyers are
unwilling to purchase such securities.
The Funds
may also invest in securities of U.S. and non-U.S. issuers that are issued
through private offerings pursuant to Regulation S of the 1933 Act, as amended.
Regulation S securities are subject to legal or contractual restrictions on
resale, these securities may be considered illiquid, as described above.
Although Regulation S securities may be resold in privately negotiated
transactions, the price realized from these sales could be less than the price
paid by the Funds. Companies whose securities are not publicly traded may not be
subject to the disclosure and other investor protection requirements that would
be applicable if their securities were publicly traded.
See the
Funds’ SAI for additional information regarding restricted and illiquid
securities.
For more
details concerning current investments and market outlook, please see the Fund’s
most recent shareholder report.
Davis Selected Advisers,
L.P. (“Davis Advisors”) serves as the investment adviser for each of the Davis
Funds. Davis Advisors’ offices are located at 2949 East Elvira Road, Suite 101,
Tucson, Arizona 85756. Davis Advisors provides investment advice for Davis
Funds, manages their business affairs and provides day-to-day administrative
services. Davis Advisors also serves as investment adviser for other mutual
funds, exchange-traded funds and institutional and individual clients. For the
fiscal year-ended December 31, 2022, Davis Advisors’ net management fee paid by
the Funds for its services (based on average net assets) was: Davis Financial
Fund, 0.55%; Davis Opportunity Fund, 0.55%; Davis Real Estate Fund, 0.55%; Davis
Appreciation & Income Fund, 0.55%; Davis Government Bond Fund, 0.10%; and
Davis Government Money Market Fund, 0.15%. A discussion regarding the basis for
the approval of the Funds’ investment advisory and service agreement by the
Funds’ Board of Directors is contained in the Funds’ most recent semi-annual
report to shareholders.
Davis Selected Advisers–NY,
Inc. serves as the sub-adviser for each of the Davis Funds. Davis Selected
Advisers–NY, Inc.’s offices are located at 620 Fifth Avenue, 3rd
Floor, New York, New York 10020. Davis Selected Advisers–NY, Inc. provides
investment management and research services for Davis Funds and other
institutional clients, and is a wholly owned subsidiary of Davis Advisors. Davis
Selected Advisers–NY, Inc.’s fee is paid by Davis Advisors, not Davis
Funds.
Execution of Portfolio
Transactions. Davis Advisors places orders with broker-dealers for Davis
Funds’ portfolio transactions. Davis Advisors seeks to place portfolio
transactions with brokers or dealers who will execute transactions as
efficiently as possible and at the most favorable net price. In placing
executions and paying brokerage commissions or dealer markups, Davis Advisors
considers price, commission, timing, competent block trading coverage, capital
strength and stability, research resources and other factors. Subject to best
price and execution, Davis Advisors may place orders for Davis Funds’ portfolio
transactions with broker-dealers who have sold shares of Davis Funds. However,
when Davis Advisors places orders for Davis Funds’ portfolio transactions, it
does not give any consideration to whether a broker-dealer has sold shares of
Davis Funds. In placing orders for Davis Funds’ portfolio transactions, the
Adviser does not commit to any specific amount of business with any particular
broker-dealer.
Over the last three fiscal
years, the Funds paid the following brokerage commissions:
Fiscal Year Ended December 31, |
2022 |
2021 |
2020 |
Davis Financial Fund |
|
|
|
Brokerage Commissions Paid |
$95,444 |
$69,086 |
$89,710 |
Brokerage as a Percentage of Average Net
Assets |
0.01% |
0.01% |
0.01% |
Davis Opportunity Fund |
|
|
|
Brokerage Commissions Paid |
$71,134 |
$338,794 |
$190,402 |
Brokerage as a Percentage of Average Net
Assets |
0.01% |
0.05% |
0.04% |
Davis Appreciation & Income
Fund |
|
|
|
Brokerage Commissions Paid |
$8,029 |
$20,610 |
$10,927 |
Brokerage as a Percentage of Average Net
Assets |
0.01% |
0.01% |
0.01% |
Davis Real Estate Fund |
|
|
|
Brokerage Commissions Paid |
$62,673 |
$63,385 |
$73,383 |
Brokerage as a Percentage of Average Net
Assets |
0.03% |
0.03% |
0.04% |
Davis Government Bond Fund |
|
|
|
Brokerage Commissions Paid |
None |
None |
None |
Brokerage as a Percentage of Average Net
Assets |
None |
None |
None |
Davis Government Money Market Fund |
|
|
|
Brokerage Commissions Paid |
None |
None |
None |
Brokerage as a Percentage of Average Net
Assets |
None |
None |
None |
Portfolio
Managers
Davis
Financial Fund
◾ |
Christopher Davis has served as Portfolio
Manager of Davis Financial Fund since January 2014 and from May 1991 until
May 2007. Mr. Davis also manages other equity funds advised by Davis
Advisors. Mr. Davis has served as an analyst and portfolio manager for
Davis Advisors since September 1989. |
◾ |
Pierce Crosbie has managed a segment of
Davis Financial Fund since December 2018, manages other equity funds
advised by Davis Advisors, and also serves as a research analyst for Davis
Advisors. Mr. Crosbie joined Davis Advisors in November
2008. |
Davis
Opportunity Fund
Davis Advisors uses a
system of multiple Portfolio Managers to manage Davis Opportunity Fund. Under
this approach, the portfolio of the Fund is divided into segments managed by
individual Portfolio Managers. Christopher Davis serves as the Chair of Davis
Advisors’ Portfolio Review Committee and, as part of this service, Mr. Davis has
general oversight responsibilities for the Fund, which may include allocating
segments of the Fund’s assets among the Portfolio Managers.
The other Portfolio
Managers listed below are primarily responsible for the day-to-day management of
a substantial majority of the Fund’s assets. In addition, a limited portion of
the Fund’s assets are managed by Davis Advisors’ research analysts, subject to
review by the Portfolio Review Committee. Portfolio Managers decide how their
respective segments will be invested. All investment decisions are made within
the parameters established by the Fund’s investment objectives, strategies, and
restrictions.
◾ |
Dwight Blazin has managed a segment of
Davis Opportunity Fund since December 2001, manages other equity funds
advised by Davis Advisors, and also serves as a research analyst for Davis
Advisors. Mr. Blazin joined Davis Advisors in August
1997. |
◾ |
Christopher Davis has served as the
research adviser of Davis Opportunity Fund since January 1999 and also
manages other equity funds advised by Davis Advisors. Mr. Davis has served
as an analyst and portfolio manager for Davis Advisors since September
1989. As research adviser, Mr. Davis oversees the research analysts of
Davis Opportunity Fund and allocates segments of the Fund to each of them
to invest. |
◾ |
Danton Goei has managed a segment of
Davis Opportunity Fund since December 2001, manages other equity funds
advised by Davis Advisors, and also serves as a research analyst for Davis
Advisors. Mr. Goei joined Davis Advisors in November
1998. |
◾ |
Darin Prozes has managed a segment of
Davis Opportunity Fund since November 2013, manages other equity funds
advised by Davis Advisors, and also serves as a research analyst for Davis
Advisors. Mr. Prozes joined Davis Advisors in September
2004. |
◾ |
Edward Yen has managed a segment of Davis
Opportunity Fund since January 2022, manages other equity funds advised by
Davis Advisors, and also serves as a research analyst for Davis Advisors.
Mr. Yen joined Davis Advisors in 2013. |
Davis
Real Estate Fund
◾ |
Andrew Davis has served as a Portfolio
Manager of Davis Real Estate Fund since January 1994 and also manages
other equity funds advised by Davis Advisors. Mr. Davis has served as a
portfolio manager for Davis Advisors since February
1993. |
◾ |
Chandler Spears has served as a Portfolio
Manager of Davis Real Estate Fund since August 2002 and also manages other
equity funds advised by Davis Advisors. Mr. Spears has served as a
research analyst at Davis Advisors since November
2000. |
Davis
Appreciation & Income Fund
Christopher Davis serves as
the Chair of Davis Advisors’ Portfolio Review Committee. In this role, Mr. Davis
has general oversight responsibilities for the Fund, which includes capital
allocation of the Fund’s assets among the Portfolio Managers. The Portfolio
Managers listed below are primarily responsible for the day-to-day management of
a substantial majority of the Fund’s assets. All investment decisions are made
within the parameters established by the Fund’s investment objectives,
strategies and restrictions.
◾ |
Christopher Davis has served as a
Portfolio Manager of Davis Appreciation & Income Fund since July 2016
and also manages other equity funds advised by Davis Advisors. Mr. Davis
has served as an analyst and portfolio manager for Davis Advisors since
September 1989. |
◾ |
Creston King has served as a Portfolio
Manager of Davis Appreciation & Income Fund since July 2016 and also
manages fixed income and money market funds advised by Davis Advisors. Mr.
King has served as a portfolio manager for Davis Advisors since August
1999. Mr. King is responsible for the management of the fixed income
segment of the Fund. |
◾ |
Darin Prozes has served as a Portfolio
Manager of Davis Appreciation & Income Fund since October 2021,
manages other equity funds advised by Davis Advisors, and also serves as a
research analyst for Davis Advisors. Mr. Prozes joined Davis Advisors in
September 2004. |
Davis
Government Bond Fund and Davis Government Money Market Fund
◾ |
Creston King has served as a Portfolio
Manager of Davis Government Bond Fund and Davis Government Money Market
Fund since August 1999. |
The SAI provides additional
information about the Portfolio Managers’ compensation, other accounts managed
by the Portfolio Managers and the Portfolio Managers’ investments in the
Funds.
Certain Portfolio Managers
may serve on the board(s) of public companies where they, from time to time, may
have access to material, non-public information (“MNPI”). Davis Advisors has
instituted policies and procedures to ensure that these Portfolio Managers will
not be able to utilize MNPI for their own benefit or for any of the accounts
they manage.
Procedures
and Shareholder Rights Are Described by Current Prospectus and Other Disclosure
Documents
Investors should look to
the most recent prospectus and SAI, as amended or supplemented from time to
time, for information concerning the Funds, including information on how to
purchase and redeem Fund shares and how to contact the Funds. The most recent
prospectus and SAI (including any supplements or amendments thereto) will be on
file with the Securities and Exchange Commission as part of the Funds’
registration statement. Please also see the back cover of this prospectus for
information on other ways to obtain information about the Funds.
Once you open your Davis
Fund account, you may purchase or sell shares at the net asset value (“NAV”)
next determined after Davis Funds’ transfer agent or other “qualified financial
intermediary” (a financial institution that has entered into a contract with
Davis Advisors or its affiliates to offer, sell and redeem shares of the Funds)
receives your request to purchase or sell shares in “good order.” A request is
in good order when all documents, which are required to constitute a legal
purchase or sale of shares, have been received by Davis Funds’ transfer agent or
other qualified financial intermediary (as defined above). The documents
required to achieve good order vary depending upon a number of factors (e.g.,
are shares held in a joint account or a corporate account, has the account had a
recent address change, etc.). Contact your broker or Davis Funds if you have
questions about what documents will be required.
If your purchase or sale
order is received in good order prior to the close of trading on the New York
Stock Exchange (“NYSE”), your transaction will be executed that day at that
day’s NAV. If your purchase or sale order is received in good order after the
close of the NYSE, your transaction will be processed the next day at the next
business day’s NAV. Davis Funds calculate the NAV of each class of shares issued
by the Funds as of the close of trading on the NYSE, normally 4:00 p.m., Eastern
time, on each day when the NYSE is open. NYSE holidays currently include New
Year’s Day, Martin Luther King, Jr. Day, Washington’s Birthday, Good Friday,
Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The NAV of each class of
shares is determined by taking the market value of the class of shares’ total
assets, subtracting the class of shares’ liabilities and then dividing the
result (net assets) by the number of outstanding shares of the class of shares.
Since the equity funds invest in securities that may trade in foreign markets on
days other than when Davis Funds calculate their NAVs, the value of the Funds’
portfolio may change on days that shareholders will not be able to purchase or
redeem shares in the Funds.
If you have access to the
Internet, you can also check the NAV on the Funds’ website (www.davisfunds.com).
Valuation
of Portfolio Securities
The Board of Directors of
the Davis Funds has delegated the determination of fair value of securities to
Davis Selected Advisers, L.P. The Adviser has implemented policies and
procedures that govern the pricing of securities for the Davis Funds, as
discussed below:
Davis Funds value
securities for which market quotations are readily available at current market
value. Short-term securities are valued at amortized cost. Securities listed on
the NYSE, NASDAQ and other national exchanges are valued at the last reported
sales price on the day of valuation. Listed securities for which no sale was
reported on that date are valued at the last quoted bid price. Securities traded
on foreign exchanges are valued based upon the last sales price on the principal
exchange on which the security is traded, prior to the time when the Fund’s
assets are valued.
Securities, including
restricted securities, for which market quotations are not readily available are
valued at their fair value. Securities whose values have been materially
affected by a significant event occurring before the Fund’s assets are valued,
but after the close of their respective exchanges will be fair valued. Fair
value is determined in good faith using consistently applied procedures. Fair
valuation is based on subjective factors and, as a result, the fair value price
of a security may differ from the security’s market price and may not be the
price at which the security may be sold. Fair valuation could result in a
different NAV than an NAV determined by using market quotations. The Board of
Directors reviews and discusses with management a summary of fair valued
securities in quarterly Board meetings.
In general, foreign
securities are more likely to require a fair value determination than domestic
securities because circumstances may arise between the close of the market on
which the securities trade and the time when a Fund values its portfolio
securities, which may affect the value of such securities. Securities
denominated in foreign currencies and traded in foreign markets will have their
values converted into U.S. dollar equivalents at the prevailing exchange rates
as computed by State Street Bank and Trust Company. Fluctuation in the values of
foreign currencies in relation to the U.S. dollar may affect the net asset value
of a Fund’s shares even if there has not been any change in the foreign currency
prices of that Fund’s investments.
Securities of smaller
companies are also generally more likely to require a fair value determination
because they may be thinly traded and less liquid than traditional securities of
larger companies.
The Fund may occasionally
be entitled to receive award proceeds from litigation relating to an investment
security. The Fund generally does not recognize a gain on contingencies until
such payment is certain, which in most cases is when it receives payment.
To the extent that a Fund’s
portfolio investments trade in markets on days when the Fund is not open for
business, the Fund’s NAV may vary on those days. In addition, trading in certain
portfolio investments may not occur on days the Fund is open for business
because markets or exchanges other than the NYSE may be closed. If the exchange
or market on which the Fund’s underlying investments are primarily traded closes
early, the NAV may be calculated prior to its normal market calculation time.
For example, the primary trading markets for a Fund may close early on the day
before certain holidays and the day after Thanksgiving.
Fixed income securities may
be valued at prices supplied by Davis Funds’ pricing agent based on broker or
dealer supplied valuations or matrix pricing, a method of valuing securities by
reference to the value of other securities with similar characteristics, such as
rating, interest rate and maturity. Government bonds, corporate bonds,
asset-backed bonds, convertible securities and high-yield or junk bonds are
normally valued on the basis of prices provided by independent pricing services.
Prices provided by the pricing services may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors such as
institutional trading in similar groups of securities, developments related to
special securities, dividend rate, maturity and other market data. Prices for
fixed income securities received from pricing services sometimes represent best
estimates. In addition, if the prices provided by the pricing service and
independent quoted prices are unreliable, Davis Funds will arrive at their own
fair valuation using the Funds’ fair value procedures.
Davis Government Money
Market Fund typically values all of its securities at amortized cost. Normally,
the share price of Davis Government Money Market Fund does not fluctuate.
However, if there are unusually rapid changes in interest rates that the Fund’s
Board of Directors believes will cause a material deviation between the
amortized cost of the Fund’s debt securities and the market value of those
securities, the Board will consider taking temporary action to maintain a fixed
price or to prevent material dilution or other unfavorable consequences to Fund
shareholders. This temporary action could include withholding dividends, paying
dividends out of surplus, realizing gains or losses, or using market valuation
to calculate net asset value rather than amortized cost.
A description of Davis
Funds’ policies and procedures with respect to the disclosure of the Funds’
portfolio holdings is available in the SAI.
The Funds file their
complete schedule of investments with the SEC on Form N-CSR (as of the end of
the second and fourth quarters) and on Form N-PORT Part F (as of the end of the
first and third quarters). The Funds’ Forms N-CSR (Annual and Semi-Annual
Reports) and N-PORT Part F are available without charge, upon request, by
calling 1-800-279-0279, on the Funds’ website at www.davisfunds.com, and on the
SEC’s website at www.sec.gov. A list of the Funds’ quarter-end holdings is also
available at www.davisfunds.com on or about the 15th day following each quarter
end and remains available on the website until the list is updated for the
subsequent quarter.
There are two ways you can
receive payments from the Davis Fund you invest in:
◾ |
Dividends. Dividends are distributions to
shareholders of net investment income and short-term capital gains on
investments. |
◾ |
Capital Gains. Capital gains are profits received
by a fund from the sale of securities held for the long term, which are
then distributed to shareholders. |
If you would like
information about when a particular Davis Fund pays dividends and distributes
capital gains, please call 1‑800‑279‑0279. Unless you choose otherwise,
Davis Funds will automatically reinvest your dividends and capital gains in
additional Fund shares.
You can request to have
your dividends and capital gains paid to you by check or deposited directly into
your bank account. Dividends and capital gains of $50 or less will not be sent
by check but will be reinvested in additional Fund shares.
Davis Funds also offer a
Dividend Diversification Program, which
allows you to have your dividends and capital gains from one Davis Fund
reinvested in shares of another Davis Fund.
You will receive a
statement each year detailing the amount of all dividends and capital gains paid
to you during the previous year. To ensure that these distributions are reported
properly to the U.S. Treasury, you must certify on your Davis Funds Application
Form, or on IRS Form W-9, that your Taxpayer Identification Number is correct
and you are not subject to backup withholding. If you are subject to backup
withholding, or if you did not certify your Taxpayer Identification Number, the
IRS requires Davis Funds to withhold a percentage of any dividends paid and
redemption or exchange proceeds received.
How
to Put Your Dividends and Capital Gains to Work
You can have all of your
dividends and capital gains automatically invested in the same Fund or the same
share class of any other Davis Fund. To be eligible for the Dividend Diversification Program, all accounts
involved must be registered under the same name and same class of shares and
have a minimum initial value of $1,000 for Class A and C shares. The minimum for
Class Y shares varies. See “How to Open an
Account” for details. Shares are purchased at the chosen Fund’s net asset
value on the dividend payment date. You can make changes to your selection or
withdraw from the program at any time. To participate in this program, fill out
the “Distribution Options” section of
the Application Form. If you wish to establish this program after your account
has been opened, call for more information.
Dividends
and Distributions
◾ |
Davis New York
Venture Fund ordinarily distributes its dividends and capital gains, if
any, in June and December. |
◾ |
Other Davis long-term
growth funds (i.e., Davis Opportunity Fund, Davis Financial Fund, Davis
Global Fund and Davis International Fund) ordinarily distribute dividends
and capital gains, if any, in December. |
◾ |
The Davis growth
& income funds (i.e., Davis Real Estate Fund and Davis Appreciation
& Income Fund) ordinarily distribute dividends quarterly and capital
gains, if any, in December. |
◾ |
Davis Government Bond
Fund and Davis Government Money Market Fund ordinarily distribute
dividends monthly. Davis Government Bond Fund ordinarily distributes
capital gains, if any, in December. Davis Government Money Market Fund
does not ordinarily distribute capital
gains. |
◾ |
When a dividend or
capital gain is distributed, the net asset value per share is reduced by
the amount of the payment. Davis Government Bond Fund’s and Davis
Government Money Market Fund’s net asset values are not affected by
dividend payments. |
◾ |
You may elect to
reinvest dividend and/or capital gain distributions to purchase additional
shares of any Davis Fund or you may elect to receive them in cash. Many
shareholders do not elect to take capital gain distributions in cash
because these distributions reduce principal
value. |
◾ |
If a dividend or
capital gain distribution is for an amount less than $50, the Fund will
not issue a check. Instead, the dividend or capital gain distribution will
be automatically reinvested in additional shares of the
Fund. |
◾ |
If a dividend or
capital gain distribution check remains uncashed for four months or is
undeliverable by the United States Postal Service, the Fund may reinvest
the dividend or capital gain distribution in additional shares of the Fund
promptly after making this determination, and future dividends and capital
gains distributions will be automatically reinvested in additional shares
of the Fund. |
Taxes on
Distributions
Distributions you receive
from the Funds may be subject to income tax and may also be subject to state or
local taxes, unless you are exempt from taxation. Shareholders that are
investing through a taxable account should consider the embedded gains or losses
of a Fund. For example, a new shareholder could be subject to taxes on a
distribution they receive from a Fund that was earned when they were not a
shareholder. It is important to note that investors are only taxed on their own
economic income over the life of the investment. The embedded gains or losses
for a Fund are disclosed in the most recent annual and semi-annual report.
For federal tax purposes,
any taxable dividends and distributions of short-term capital gains are treated
as ordinary income. The Funds’ distributions of net long-term capital gains are
taxable to you as long-term capital gains. Any taxable distributions you receive
from the Funds will normally be taxable to you when made, regardless of whether
you reinvest distributions or receive them in cash.
Davis Funds will send you a
statement each year showing the tax status of your Fund distributions.
Taxes on
Transactions
Your redemptions, including
exchanges, may result in a capital gain or loss for federal tax purposes. A
capital gain or loss on your investment is the difference between the cost of
your shares, including any sales charges, and the price you receive when you
sell them.
More information concerning
federal taxes is available in the SAI. Davis Advisors recommends that you
consult with a tax advisor about dividends and capital gains that you may
receive from Davis Funds.
Each Fund must pay
operating fees and expenses.
Management
Fee
The management fee covers
the normal expenses of managing the Funds, including compensation, research
costs, corporate overhead expenses and related expenses. The difference in the
fee structure between the Classes is primarily the result of their separate
arrangements for shareholder and distribution services and is not the result of
any difference in the amounts charged by Davis Advisors for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by Class. Different fees and expenses will affect performance.
12b-1
Fees
The Davis Funds have Plans
of Distribution, or “12b-1 Plans” under which the Funds may use their own assets
to finance distribution activities. The 12b-1 Plans are used primarily to pay
dealers and other institutions for providing services to the Funds’
shareholders. The 12b-1 Plans provide for annual distribution expenses of up to
0.25% of the average daily net asset value of the Class A shares and up to the
lesser of 1.25% of the average daily net asset value of the Class C shares or
the maximum amount provided by applicable rules or regulations of the Financial
Industry Regulatory Authority (“FINRA”), which is 1.00% at present.
For Class A or C shares, up
to 0.25% of distribution expenses may be used to pay service fees to qualified
dealers providing certain shareholder services. These services may include, but
are not limited to, assessing a client’s investment needs and recommending
suitable investments on an ongoing basis. In lieu of a front-end sales charge
(as assessed upon the sale of Class A shares), up to an additional 1.00% of
distribution expenses may be paid for Class C shares. Because distribution
expenses are paid out of a Fund’s assets on an ongoing basis, these fees will
increase the cost of your investment over time and may cost you more than paying
other types of sales charges. Thus, the higher fees for Class C shares may cost
you more over time than paying the initial sales charge for Class A
shares.
Class C shares’ contingent
deferred sales charges and asset-based sales charges have the same purpose as
the front-end sales charge on sales of Class A shares, i.e., to compensate
dealers and other financial institutions for their services. The fees are paid
by the Funds to dealers and financial institutions for providing services to
their clients.
Class Y shares do not have
a Plan of Distribution.
Other
Expenses
Other expenses include
miscellaneous fees from affiliated and outside service providers. These fees may
include legal, audit, custodial fees, the costs of printing and mailing of
reports and statements, automatic reinvestment of distributions and other
conveniences, and payments to third parties that provide recordkeeping services
or administrative services for investors in the Funds.
Total Fund
Operating Expenses
The total cost of operating
a mutual fund is reflected in its expense ratio. A shareholder does not pay
operating costs directly; instead, operating costs are deducted before the
Fund’s NAV is calculated and are expressed as a percentage of the Fund’s average
daily net assets. The effect of these fees is reflected in the performance
results for that Class of shares. Investors should examine total operating
expenses closely in the prospectus, especially when comparing one fund with
another fund in the same investment category.
Broker-dealers and other
financial intermediaries (“Qualifying dealers”) may charge Davis Distributors,
LLC (the “Distributor”), or the Adviser, substantial fees for selling Davis
Funds’ shares and providing continuing support to shareholders. The fees charged
by Qualifying dealers may include, but are not limited to: (i) sales commissions
from sales charges paid by purchasing shareholders; (ii) distribution and
service fees from the Funds’ 12b-1 distribution plans; (iii) recordkeeping fees
from the Funds for providing recordkeeping services to investors who hold Davis
Funds’ shares through dealer-controlled omnibus accounts; and (iv) other fees,
described below, paid by Davis Advisors, or the Distributor, from their own
resources.
Qualifying dealers may, as
a condition to distributing shares of Davis Funds, request that the Distributor,
or the Adviser, pay or reimburse the Qualifying dealer for (i) marketing support
payments, including business planning assistance, client servicing and data
analytics, educating personnel about Davis Funds and shareholder financial
planning needs, placement on the Qualifying dealer’s list of offered funds and
access to sales meetings, sales representatives and management representatives
of the Qualifying dealer; and (ii) financial assistance charged to allow the
Distributor to participate in and/or present at conferences or seminars, sales
or training programs for invited registered representatives and other employees,
client and investor events and other dealer-sponsored events. These additional
fees are sometimes referred to as “revenue sharing” payments. A number of
factors are considered in determining fees paid to Qualifying dealers, including
the dealer’s sales and assets, and the quality of the dealer’s relationship with
the Distributor. Fees are generally based on the value of shares of the Fund
held by the Qualifying dealer, or financial institution, for its customers or
based on sales of Fund shares by the dealer, or financial institution, or a
combination thereof. In some cases the charges or fees may be a negotiated lump
sum payment. Davis Advisors may use its profits from the advisory fee it
receives from the Funds to pay some, or all, of these fees. Some Qualifying
dealers may also choose to pay additional compensation to their registered
representatives who sell the Funds. Such payments may be associated with the
status of a Fund on a Qualifying dealer’s preferred list of funds or otherwise
associated with the Qualifying dealer’s marketing and other support activities.
The foregoing arrangements may create an incentive for the Qualifying dealers,
brokers or other financial institutions, as well as their registered
representatives, to sell Davis Funds rather than other funds.
In 2022, the Distributor,
or the Adviser, was charged additional fees by the Qualifying dealers listed
below. The Distributor paid these fees from its own resources. These Qualifying
dealers may provide Davis Funds enhanced sales and marketing support and
financial advisers employed by the Qualifying dealers may recommend Davis Funds
rather than other funds. Qualifying dealers may be added or deleted at any
time.
ADP Broker Dealer, Inc.;
Ameriprise Financial Services, Inc.; Charles Schwab & Co., Inc.; Fidelity
Brokerage Services LLC; Fidelity Investments Institutional Services Company
Inc.; Genworth Life and Annuity Insurance Company; Genworth Life Insurance
Company of New York; Great-West Life & Annuity Insurance Company of New
York; Hartford Life Insurance Company; ING Financial Advisers, LLC; John Hancock
Trust Co., LLC; LPL Financial Corporation; Marshall & Ilsley Trust Company;
Massachusetts Mutual Life Insurance Co.; Matrix Settlement; Merrill Lynch Life
Insurance Co.; Merrill Lynch, Pierce, Fenner & Smith, Inc.; Morgan Stanley
Smith Barney LLC; Nationwide Financial Services, Inc.; Pershing LLC; Principal
Financial Group; Raymond James & Associates, Inc.; T. Rowe Price Retirement
Plan Services, Inc.; Teachers Insurance and Annuity Association of America;
Transamerica Advisors Life Insurance Company; Transamerica Advisors Life
Insurance Company of New York; Transamerica Retirement Solutions Corp.; UBS
Financial Services, Inc.; The Vanguard Group, Inc.; Vanguard Marketing
Corporation; Voya Retirement; Voya Retirement Insurance & Annuity; and Wells
Fargo Advisors LLC.
In addition, the
Distributor may, from time to time, pay additional cash compensation or other
promotional incentives to authorized dealers or agents who sell shares of Davis
Funds. In some instances, such cash compensation or other incentives may be
offered only to certain dealers or agents who employ registered representatives
who have sold or may sell significant amounts of shares of Davis Funds during
specified periods of time.
Although Davis Funds may
use brokers who sell shares of the Funds to execute portfolio transactions, the
Funds do not consider the sale of Fund shares as a factor when selecting brokers
to execute portfolio transactions.
Investors should consult
their financial intermediaries regarding the details of payments they may
receive in connection with the sale of Fund shares.
Due Diligence Meetings. The
Distributor routinely sponsors due diligence meetings for registered
representatives, during which they receive updates on various Davis Funds and
are afforded the opportunity to speak with the Funds’ Portfolio Managers.
Invitation to these meetings is not conditioned on selling a specific number of
shares. Those who have shown an interest in Davis Funds, however, are more
likely to be considered. To the extent permitted by their firm’s policies and
procedures, registered representatives’ expenses in attending these meetings may
be covered by the Distributor.
Seminars and Educational
Meetings. The Distributor may
defray certain expenses of Qualifying dealers incurred in connection with
seminars and other educational efforts subject to the Distributor’s policies and
procedures governing payments for such seminars. The Distributor may share
expenses with Qualifying dealers for costs incurred in conducting training and
educational meetings about various aspects of the Funds for the employees of
Qualifying dealers. In addition, the Distributor may share expenses with
Qualifying dealers for costs incurred in hosting client seminars at which the
Fund is discussed.
Recordkeeping Fees. Certain Qualifying dealers have chosen to
maintain “omnibus accounts” with Davis Funds. In an omnibus account, the Fund
maintains a single account in the name of the Qualifying dealer and the dealer
maintains all of its clients’ individual shareholder accounts. Likewise, for
many retirement plans, a third-party administrator may open an omnibus account
with Davis Funds and the administrator will then maintain all of the participant
accounts. Davis Advisors, on behalf of the Funds, enters into agreements whereby
the Funds are charged by the Qualifying dealer or administrator for such
recordkeeping services.
Recordkeeping services
typically include: (i) establishing and maintaining shareholder accounts and
records; (ii) recording shareholder account balances and changes thereto; (iii)
arranging for the wiring of funds; (iv) providing statements to shareholders;
(v) furnishing proxy materials, periodic Davis Funds reports, prospectuses, and
other communications to shareholders as required; (vi) transmitting shareholder
transaction information; and (vii) providing information in order to assist
Davis Funds in their compliance with state securities laws. Each Davis Fund
typically would be paying these shareholder servicing fees directly if a
Qualifying dealer did not hold all customer accounts in a single omnibus account
with each Davis Fund.
Other Compensation. The
Distributor may, from its own resources and not from the Funds’, pay additional
fees to the extent not prohibited by state or federal laws, the Securities and
Exchange Commission (SEC), or any self-regulatory agency, such as the Financial
Industry Regulatory Authority (FINRA).
Before you buy shares in
any Davis Fund, you need to decide which Class of shares best suits your needs.
Davis Funds offer three classes of shares for new purchases: A, C and Y. Each
class is subject to different expenses and sales charges. As described in
“Appendix A: Intermediary-Specific Sales Charge Waivers and Discount,” your
sales charge may vary depending on your financial intermediary. Class Y shares
are generally available only to qualified institutional investors. Each Class is
essentially identical in legal rights and invests in the same portfolio of
securities.
The difference in the fee
structure between the Classes is primarily the result of their separate
arrangements for shareholder and distribution services, and is not the result of
any difference in the amounts charged by Davis Advisors for investment advisory
services. Accordingly, the investment advisory expenses do not vary by
class.
You may choose to buy one
class of shares rather than another depending on the amount of the purchase and
the expected length of time of your investment. Long-term shareholders of Class
C shares may pay more than the maximum front-end sales charge allowed by
FINRA.
Class
A Shares
Class A shares may be best
for you if you are a long-term investor who is willing to pay the entire sales
charge at the time of purchase. In return, you pay a lower distribution fee than
Class C shares. In addition, descriptions of the sales load waivers and/or
discounts for Class A shares with respect to certain financial intermediaries
are reproduced in “Appendix A:
Intermediary-Specific Sales Charge Waivers and Discounts” to this
prospectus based on information provided by the financial intermediary.
◾ |
For any investment
below $100,000, you buy Class A shares at their net asset value per share
plus a sales charge, which is approximately 4.75% of the offering price
(see table below). The term “offering price” includes the front-end sales
charge. |
◾ |
There is no limit to
how much you can invest in this share
class. |
◾ |
Davis Funds (other
than Davis Government Money Market Fund) pay a distribution fee — of up to
0.25% of the average daily net assets — each year you hold the shares.
This fee is lower than the fee you pay for Class C shares. Lower expenses
of Class A shares translate into higher annual returns on net asset value
than Class C shares. |
Class A
Shares Sales Charges
(For
all Davis Funds, except Davis Government Money Market Fund)
Amount of Purchase |
Sales Charge
Approximate percentage of offering
price |
Sales Charge
Approximate percentage of net amount
invested |
Amount of Sales Charge
Retained by Dealer
Percentage of offering price |
Under $100,000 |
4.75% |
4.99% |
4.00% |
$100,000 - $249,999 |
3.50% |
3.63% |
3.00% |
$250,000 - $499,999 |
2.50% |
2.56% |
2.00% |
$500,000 - $749,999 |
2.00% |
2.04% |
1.75% |
$750,000 - $999,999 |
1.00% |
1.01% |
0.75% |
$1 million or more(1) |
None |
None |
None |
(1) |
You
pay no front-end sales charge on purchases of $1 million or more, but if
you sell those shares (in any Davis Fund other than Davis Government Money
Market Fund) within the first year, a deferred sales charge of 0.50% may
be deducted from the redemption proceeds as a percentage of the lesser of
the net asset value of the shares redeemed or the total cost of such
shares. |
Because
of rounding, the front-end sales charge you pay, when expressed as a percentage
of the offering price, may be higher or lower than the amount stated in the
above fee table. In addition, descriptions of the sales load waivers and/or
discounts for Class A shares with respect to certain financial intermediaries
are reproduced in “Appendix A-Intermediary-Specific Sales Charge Waivers and
Discounts.”
The
Distributor may pay commissions to the dealer of record (on Davis Funds other
than Davis Government Money Market Fund) on purchases at the annual rate
described in the table below. Commissions may be paid on either: (i) Class A
share purchases of $1 million or more; or (ii) Class A share purchases (net of
redemptions) in retirement plans that qualify for sales at net asset value. The
commission will be paid only on purchases that were not previously subject to a
front-end sales charge or dealer concession.
Amount of Purchase |
Commission |
First $5 million |
0.50% |
Amounts thereafter |
0.25% |
The Funds
may reimburse the Distributor for these payments through its Plans of
Distribution. If distribution fee limits have already been reached for the year,
the Distributor itself will pay the commissions.
Reduction
of Class A Shares Initial Sales Charge
To
receive a reduction in your Class A initial sales charge, you must let your
financial adviser or Davis Funds know at the time you purchase shares that you
qualify for such a reduction. If you do not let your adviser or Davis Funds know
that you are eligible for a reduction, you may not receive a sales charge
discount to which you are otherwise entitled.
As the table above shows,
the sales charge gets smaller as your purchase amount increases. There are
several ways you may combine purchases to qualify for a lower sales charge. To
qualify for a reduction in Class A shares’ initial sales charge, you must
provide records (generally, account statements are sufficient; your broker may
require additional documents) of all Davis Funds shares owned that you wish to
count towards the sales charge reduction.
You
Can Combine Purchases of Class A Shares
◾ |
With other “immediate
family” members. To receive a reduced Class A sales charge,
investments made by yourself, your spouse and any children under the age
of 21 may be aggregated if made for your own account(s) and/or certain
other accounts, such as: |
- |
Trust accounts
established by the above individuals. However, if the person(s) who
established the trust is (are) deceased, then the trust account may only
be aggregated with accounts of the primary beneficiary of the
trust; |
- |
Solely controlled
business accounts; or |
- |
Single-participant
retirement plans. |
◾ |
Through Employee Benefit
Plans. If you buy
shares through trust or fiduciary accounts, or Individual Retirement
Accounts (IRAs) of a single employer, the purchases will be treated as a
single purchase. |
◾ |
Under a Statement of
Intention. If you enter
a Statement of Intention and agree to buy shares of $100,000 or more over
a thirteen-month period, all of the shares you buy during that period will
be counted as a single purchase, with the exception of purchases into
Davis Government Money Market Fund. Before entering a Statement of
Intention, please read the terms and conditions in the SAI. Under a
Statement of Intention, you agree to permit the Funds’ transfer agent,
SS&C Technologies, Inc., to hold Fund shares in escrow to guarantee
payment of any sales charges that may be due if you ultimately invest less
than you agreed to invest over the covered thirteen-month period. Money
Market Fund purchases do not count toward a Statement of Intention, unless
the shares were exchanged from another Davis Fund and the shares were
previously subject to a sales charge. |
◾ |
Under Rights of
Accumulation. If you notify your dealer, or the Distributor, you
can include the Class A, B, C, R, and Y shares in Davis Funds you already
own (excluding shares in Davis Government Money Market Fund) when
calculating the price for your current purchase. These shares are valued
at current offering price to determine whether or not you qualify for a
reduction in the sales charge. Davis Government Money Market Fund
purchases do not count toward Rights of Accumulation, unless the shares
were exchanged from another Davis Fund and the shares were previously
subject to a sales charge. |
◾ |
Combining Rights of
Accumulation (ROA) with Statement of Intention. A shareholder can use a Statement
of Intention and Rights of Accumulation in conjunction with one another;
the Statement of Intention will take precedence over the Rights of
Accumulation. Once the Statement of Intention has been satisfied, any new
purchases into any of the linked Class A share accounts will receive the
reduced sales charge. |
For more information about
how to reduce Class A shares’ initial sales charge, please visit Davis Funds’
website, free of charge, at www.davisfunds.com (which includes additional
information in a clear and prominent format that includes hyperlinks), consult
your broker or financial intermediary or refer to the Funds’ SAI, which is
available through your financial intermediary or from the Funds by calling
Investor Services at 1‑800‑279‑0279.
Class
A Shares Front-End Sales Charge Waivers
To
receive a waiver of your Class A initial sales charge, you must let your
financial adviser, or Davis Funds, know at the time you purchase shares that you
qualify for such a waiver. If you do not let your adviser or Davis Funds know
that you are eligible for a waiver, you may not receive a sales charge waiver to
which you are otherwise entitled.
The Funds do not impose a
sales charge on purchases of Class A shares for:
◾ |
Purchases by group
omnibus retirement plans under section 401(a), 401(k), 403(b) or 457 of
the Internal Revenue Code; |
◾ |
Rollover purchases in
a Davis Funds IRA held directly with the transfer agent made with the
proceeds of a retirement plan distribution that was previously invested in
a Davis Fund; |
◾ |
Registered investment
advisers, trust companies and bank trust departments exercising
discretionary investment authority with respect to amounts to be invested
in the Funds; |
◾ |
Purchases by dealers,
brokers, banks, registered investment advisers and other financial
intermediaries that have entered into an agreement with the Distributor to
offer the Funds on an advisory fee or wrap fee-based
platform; |
◾ |
Financial
intermediaries who have entered into an agreement with the Distributor and
have been approved by the Distributor to offer Fund shares to
self-directed investment brokerage accounts that may or may not charge a
transaction fee; |
◾ |
Certain state
sponsored 529 college savings plans; |
◾ |
Persons involuntarily
liquidated from a Fund, who, within 60 days of liquidation, buy new shares
of another Davis Fund (but only up to the amount that was
liquidated); |
◾ |
Insurance company
separate accounts; |
◾ |
Investments in Davis
Government Money Market Fund; |
◾ |
Shareholders making
purchases with dividends or capital gains that are automatically
reinvested; |
◾ |
Current and former
directors, officers and employees of any Davis Fund or Davis Advisors (or
its affiliates), and their extended family. The term “extended family”
includes “immediate family,” which is one’s spouse and children under 21,
and also one’s grandchildren, grandparents, parents, parents-in-law,
brothers and sisters, sons- and daughters-in-law, a sibling’s spouse, a
spouse’s sibling, aunts, uncles, and nieces and nephews; relatives by
virtue of a remarriage (step-children, step-parents, etc.) are included.
Extended family shall include any child regardless of
age; |
◾ |
Davis Advisors or its
affiliates; |
◾ |
Registered
representatives, principals and employees (and any extended family member)
of securities dealers having a sales agreement with the
Distributor; |
◾ |
Financial
institutions, acting as fiduciaries, making single purchases of $250,000
or more; |
◾ |
State and local
governments purchasing directly from the Funds. Please consult your legal
and investment advisers to determine if an investment in the Fund is
permissible and suitable for you; |
◾ |
Shareholders making
purchases in certain accounts offered by securities firms that have
entered into contracts with Davis Funds and charge fees based on assets in
the account; |
◾ |
Shareholder accounts
established prior to December 2014 as a result of a merger with a Davis
Fund; and |
◾ |
Purchases by taxable
accounts held directly with the transfer agent that are established with
the proceeds of Required Minimum Distributions from retirement plans and
accounts. |
Rollovers
from Retirement Plans to IRAs
For qualifying rollovers,
you must send the Funds’ custodial agent, UMB Bank, a written request for the
rollover.
Assets from retirement
plans may be invested in Class A or C shares through an IRA rollover. Rollovers
invested in Class A shares from retirement plans will be subject to applicable
sales charges. Rollovers to Class A shares will be made without a sales charge
if they meet the following requirements:
◾ |
The assets being
rolled over were invested in Davis Funds at the time of distribution;
and |
◾ |
The rolled over
assets are contributed to a Davis Funds IRA with UMB Bank as the plan’s
custodian. |
IRA assets that rollover
without a sales charge, as described above, will not be subject to a contingent
deferred sales charge.
IRA rollover assets
invested in Class A shares that are not attributable to investments in Davis
Funds, as well as future contributions to the IRA, will be subject to sales
charges and the terms and conditions generally applicable to Class A share
investments as described in the prospectus and SAI.
Class
C Shares
Class C shares may be best
for you if you are willing to pay a higher distribution fee than Class A shares
in order to avoid paying a front-end sales charge. The Class C contingent
deferred sales charge and asset-based sales charge have the same purpose as the
front-end sales charge on sales of Class A shares, i.e., to compensate the
broker. Class C shares assess a higher distribution fee to pay fees and expenses
charged by dealers and financial institutions for services provided to
clients.
Class C shares (including a
proportionate number of shares acquired through reinvestment of dividends and
distributions) will automatically convert to Class A shares in the month of or
the month following the 8 year anniversary of the purchase date. A conversion
between share classes in the same fund is a nontaxable event. The automatic
conversion will be based on the relative net asset values of the two share
classes without the imposition of a sales charge or fee. As this is a dollar for
dollar conversion, you may receive more or fewer Class A shares due to the
difference in the NAV of the two share classes.
◾ |
You buy the shares at
net asset value (no initial sales charge). |
◾ |
The maximum purchase
per transaction for Class C shares is
$500,000. |
◾ |
If you have
significant Davis Funds holdings, you may not be eligible to invest in
Class C shares. You may not purchase Class C shares if you are eligible to
purchase Class A shares at the $1 million or more sales charge discount
rate (i.e., at net asset value). See “Class A Shares Sales Charges” and “Reduction of Class A Shares Initial Sales
Charge” for more information regarding sales charge
discounts. |
◾ |
If you sell Class C
shares in any of the Davis Funds (other than Davis Government Money Market
Fund) within one year of purchase, you must pay a deferred sales charge of
one percent. At redemption, the deferred sales charge for each purchase
will be calculated from the date of purchase, excluding any time the
shares were held in the Davis Government Money Market
Fund. |
◾ |
Investors in Class C
shares (other than Davis Government Money Market Fund) pay a distribution
fee of one percent of the average daily net asset value each year they
hold the shares. Higher distribution fees translate into lower annual
return on net asset value. |
Deferred
Sales Charge
If you purchase shares
subject to a contingent deferred sales charge and redeem any of those shares
during the applicable holding period for the class of shares you own, the
contingent deferred sales charge will be deducted from the redemption proceeds,
unless you are eligible for one of the waivers described below. At redemption,
the deferred sales charge will be calculated from the date of each purchase,
excluding any time that shares were held in the Davis Government Money Market
Fund. You will pay a deferred sales charge in the following cases:
◾ |
As a Class A
shareholder, only if you buy shares valued at $1 million or more without a
sales charge and sell the shares within one year of
purchase. |
◾ |
As a Class C
shareholder, if you sell shares within one year of
purchase. |
To keep deferred sales
charges as low as possible, the Funds will first sell shares in your account
that are not subject to a deferred sales charge (if any). The Funds do not
impose a deferred sales charge on the amount of your account value represented
by an increase in net asset value over the initial purchase price, or on shares
acquired through dividend reinvestments or capital gains distributions. If the
net asset value has decreased the sales charge will be based on the current NAV.
To determine whether the deferred sales charge applies to a redemption, shares
are redeemed in the following order:
◾ |
Shares in your
account represented by an increase in NAV over the initial purchase price
(appreciation). |
◾ |
Shares acquired by
reinvestment of dividends and capital gain
distributions. |
◾ |
Shares that are no
longer subject to the deferred sales
charge. |
◾ |
Shares held the
longest, but which are still subject to the deferred sales
charge. |
Note: Investors who buy
Class C shares of Davis Government Money Market Fund will not pay a deferred
sales charge unless Fund shares were received in exchange for shares of another
Davis Fund (see “Exchanging Shares” in this prospectus).
Deferred
Sales Charge Waivers
The Funds will waive the
deferred sales charge on sales of Class A and C shares of any Davis Fund
if:
◾ |
You sell Class A
shares that were not subject to a commission at the time of purchase (the
amount of purchase totaled $1 million or more) and the shares were held
for more than a year. |
◾ |
You die and were the
sole owner of the account. Otherwise, shares can be redeemed without a
contingent deferred sales charge following the death or disability of the
last surviving shareholder, including a trustee of a grantor trust or
revocable living trust for which the trustee is also the sole beneficiary.
The death or disability must have occurred after the account was
established. If you claim a disability you must provide evidence of a
determination of disability by the Social Security
Administration. |
◾ |
You sell shares under
a qualified retirement plan or IRA that constitutes a tax-free return of
excess contributions to avoid a penalty. |
◾ |
Your Fund redeems the
remaining shares in your account under an Involuntary
Redemption. |
◾ |
You qualify for an
exception related to defined contribution plans. These exceptions are
described in the SAI. |
◾ |
You are a director,
officer or employee of Davis Advisors or one of its affiliates (or an
extended family member of a director, officer or
employee). |
◾ |
You sell Class C
shares under the Systematic Withdrawal Plan and the aggregate value of the
redeemed shares does not exceed twelve percent of the account’s
value.* |
If the net asset value of
the shares that you sell has increased since you purchased them, any deferred
sales charge will be based on the original cost of the shares.
|
* |
A Systematic Withdrawal
Plan may be established as either a percentage or a fixed-dollar amount.
The shares that may be redeemed without a sales charge are recalculated as
a percentage of the current market value of the account as of the date of
each withdrawal. If established as a percentage, no sales charge will be
incurred regardless of market fluctuations. If established as a
fixed-dollar amount, a sales charge may be incurred if the market value of
the account decreases. If you redeem shares in addition to those redeemed
pursuant to the Systematic Withdrawal Plan, a deferred sales charge may be
imposed on those shares and on any subsequent redemptions within a
twelve-month period, regardless of whether such redemptions are pursuant
to a Systematic Withdrawal Plan. |
If you have any additional
questions about choosing a share class, please call the Fund, toll free, at
1‑800‑279‑0279, Monday through Friday,
from 9 a.m. to 6 p.m. Eastern time. If you still are not sure about which class
is best for you, contact your financial adviser.
Class
Y Shares
Class Y shares may be best
for you if you qualify. Class Y shares are sold at net asset value per share,
without a sales charge, directly to institutional investors. Investors in Class
Y shares do not pay a distribution fee. For details on what types of
institutions may purchase shares and what fund minimums apply see “How to Open an Account” in this
prospectus.
To open an account with
Davis Funds you must meet the initial minimum investment for each Fund you
choose to invest in. For each Class A or C share account you must invest at
least $1,000. For Class Y shares, the minimum investment amount is dependent on
how you invest:
◾ |
At least $5 million
for an institution (e.g., trust company, bank trust, endowment, pension
plan or foundation) acting on behalf of its own account or one or more
clients. |
◾ |
At least $5 million
for a government entity (e.g., a state, county, city, department,
authority or similar government agency). |
◾ |
With an account
established under a “wrap account” or other fee-based program that is
sponsored and maintained by a registered broker-dealer approved by the
Distributor. |
◾ |
At least $500,000 for
a 401(k) plan, 457 plan, employer-sponsored 403(b) plan, profit-sharing
and money purchase pension plan, defined benefit plan or non-qualified
deferred compensation plan where plan level or omnibus accounts are held
on the books of the Fund. |
◾ |
Through a registered
investment adviser (RIA) who initially invests for clients an aggregate of
at least $100,000 in Davis Funds through a fund “supermarket” or other
mutual fund trading platform sponsored by a broker-dealer or trust company
and has entered into an agreement with Davis Distributors,
LLC. |
At the Distributor’s
discretion, the minimum may be waived for an account established under a “wrap
account” or other fee-based program that is sponsored and maintained by a
registered broker-dealer approved by the Distributor.
Two
Ways You Can Open an Account
◾ |
Mail. Complete and
sign the Application Form and mail it to the Davis Funds. Include a check
made payable to Davis Funds. All
purchases by check should be in U.S. dollars. Davis Funds will not accept third-party checks,
starter checks, traveler’s checks or money
orders. |
◾ |
Dealer. You may have
your dealer order and pay for the shares. In this case, you must pay your
dealer directly. Your dealer will then order the shares from the
Distributor. Please note that your dealer may charge a service fee or
commission for these transactions. |
Davis Funds and the
Distributor are required to comply with various anti-money laundering laws and
regulations and have appointed an anti-money laundering compliance officer.
Consequently, Davis Funds, or the Distributor, may request additional
information from you to verify your identity and the source of your funds. If
you do not provide the requested information, Davis Funds may not be able to
open your account. If at any time the Davis Funds believe an investor may be
involved in suspicious activity or if certain account information matches
information on government lists of suspicious persons, Davis Funds and the
Distributor may choose not to establish a new account or may be required to
“freeze” a shareholder’s account. They may also be required to provide a
government agency or another financial institution with information about
transactions that have occurred in a shareholder’s account or to transfer monies
received to establish a new account, transfer an existing account or transfer
the proceeds of an existing account to a governmental agency. In some
circumstances, the law may not permit the Davis Funds, or the Distributor, to
inform the shareholder that it has taken the actions described above.
You can invest in Davis
Funds using any of these types of retirement plan accounts:
◾ IRAs |
SIMPLE
IRAs |
Roth
IRAs |
◾ Simplified
Employee Pension (SEP) IRAs |
Coverdell
Education Savings Accounts |
403(b)
Plans |
UMB Bank
acts as custodian for these retirement plans and charges each participant a $15
custodial fee each year per Social Security Number. This fee will be waived for
accounts sharing the same Social Security Number if the accounts total at least
$50,000 at Davis Funds. This custodial fee is automatically deducted from each
account in December, unless you elect to pay the fee directly. Checks for the
custodial fee should be made payable to UMB
Bank. If an account is closed before this fee is paid, it will be
deducted from the proceeds at the time of the redemption. To open a retirement
plan account, you must fill out a Retirement Account Application Form. You can
request this form by calling Investor Services or by visiting Davis Funds’
website (www.davisfunds.com). Class Y
shares cannot be purchased in an IRA. If you do not list a financial advisor and
their brokerage firm on the account application, the Distributor may be
designated as the broker of record, but solely for purposes of acting as your
agent to purchase or redeem shares. The Distributor and its employees do not
provide recommendations on these accounts or any other account where the
Distributor is listed as the broker of record.
Once you have established
an account with Davis Funds, you can add to or withdraw from your investment.
This prospectus describes the types of transactions you can perform as a Davis
Funds shareholder, including how to initiate these transactions and the charges
that you may incur (if any) when buying, selling or exchanging shares. A
transaction will not be executed until all required documents have been received
in a form meeting all legal requirements. Legal requirements vary depending upon
the type of transaction and the type of account. Call Investor Services for
instructions. These procedures and charges may change over time and the
prospectus in effect at the time a transaction is initiated will describe the
procedures and charges that will apply to the transaction.
Right
to Reject or Restrict any Purchase or Exchange Order
Purchases and exchanges
(other than for Davis Government Money Market Fund) should be made for long-term
investment purposes only. Davis Funds and the Distributor reserve the right to
reject any purchase or exchange order for any reason prior to the end of the
first business day after the date that a purchase or exchange order was
processed. Davis Funds, or the Distributor, may “reject” a current purchase
order or “restrict” an investor from placing future purchase orders. Davis Funds
and the Distributor will not reject or restrict a redemption order without
adequate reason, including but not limited to allowing a purchase check to
clear, a court order, etc. Exchanges involve both a redemption and a purchase,
only the purchase side of the exchange may be rejected or restricted. Davis
Funds are not designed to serve as a vehicle for frequent trading in response to
short-term fluctuations in the securities markets. Accordingly, purchases or
exchanges that are part of activity that Davis Funds, or the Distributor, have
determined may involve actual or potential harm to a Fund may be rejected.
Four
Ways to Buy, Sell and Exchange Shares
◾ |
Telephone. Call 1‑800‑279‑0279. You can speak directly
with an Investor Services Professional, Monday through Friday, from 9 a.m.
to 6 p.m. Eastern time or use the Funds’ automated telephone system at any
time, day or night. |
◾ |
Online Account
Access. You may
initiate most account transactions through online account access on the
Funds’ website (www.davisfunds.com). Please note that
certain account types, including all Class Y share accounts, may be
restricted from online access. |
◾ |
Mail. Send the request to the Davis Funds
at either address listed below. |
Regular mail:
Davis Funds P.O.
Box 219197 Kansas City, MO 64121-9197 |
Express
shipping:
Davis Funds 430 W
7th
Street Suite 219197 Kansas City, MO
64105-1407 |
◾ |
Dealer. Contact a dealer who will execute
the transaction through the Distributor. Please note that your dealer may
charge service fees or commissions for these
transactions. |
The Davis Funds do not
issue certificates for any class of shares. Instead, shares purchased are
automatically credited to an account maintained for you on the books of Davis
Funds by State Street Bank and Trust Company. Transactions in the account, such
as additional investments, will be reflected on regular confirmation statements
from Davis Funds. Dividend and capital gain distributions, purchases through
automatic investment plans and certain retirement plans, and automatic exchanges
and withdrawals will be confirmed at least quarterly.
When
Your Transactions Are Processed
Purchases, sales and
exchanges will be processed at 4 p.m. Eastern time after Davis Funds’ transfer
agent or other qualified financial intermediary receives your request to
purchase or sell shares in good order, including all documents that are required
to constitute a legal purchase, sale or exchange of shares.
You may buy more shares at
any time, by mail, through a dealer, by telephone, through online account
access, or by wire. The minimum additional purchase amount for all share classes
is $25.
Mail. When you purchase shares by mail:
◾ |
Make the check
payable to Davis
Funds. |
◾ |
If you have the
investment slip from your most recent statement, include it with the
check. If you do not have an investment slip, include a letter with your
check stating the name of the Fund, the class of shares you wish to buy
and your account number. |
Regular mail:
Davis Funds P.O.
Box 219197 Kansas City, MO 64121-9197 |
Express
shipping:
Davis Funds 430 W
7th
Street Suite 219197 Kansas City, MO
64105-1407 |
Dealer. When you buy shares
through a dealer, you may be charged service fees or commissions for these
transactions.
Telephone. If you have a
bank account listed on your account you may purchase shares via ACH (Automated
Clearing House) and the funds will be pulled directly from your bank account to
purchase shares. Call 1‑800‑279‑0279 to
use the Funds’ automated phone system 24 hours a day or speak to an Investor
Services Professional, Monday through Friday, from 9 a.m. to 6 p.m. Eastern
time.
Online Account Access. If
you have a bank account listed on your account you may purchase shares via ACH
(Automated Clearing House) and the funds will be pulled directly from your bank
account to purchase shares. See “Internet
Transactions” in this prospectus for details on how to access your
account through the internet.
Wire. You may wire federal
funds directly to the Funds’ service provider, State Street Bank and Trust
Company. To ensure that the purchase is credited properly, follow these wire
instructions:
State
Street Bank and Trust Company
Boston, MA 02210
Attn: Mutual Fund
Services
[Name of Davis Fund and Class of shares that you are
buying]
Shareholder Name
Shareholder Account Number
Federal Routing
Number: 011000028
DDA Number: 9904-606-2
Inactive
Accounts
If shareholder-initiated
contact does not occur on your account within the timeframe specified by the law
in your state of record, or if Fund mailings are returned as undeliverable
during that timeframe, the assets of your account (shares and/or any uncashed
checks) may be transferred to your last known recorded state of residence as
unclaimed property, in accordance with specific state law. NOTE: If you fail to initiate such contact,
your property will be escheated to your last known state of residency after
which you will need to claim the property from that state.
If a check remains uncashed
for four months, or is undeliverable by the United States Postal Service, the
Fund may reinvest the proceeds in additional shares of the Fund.
Making
Automatic Investments
An easy way to increase
your investment in any Davis Fund is to sign up for the Automatic Investment
Plan. Under this plan, you arrange for a predetermined amount of money to be
withdrawn from your bank account and invested in Fund shares. The minimum amount
you can invest under the plan each month is $25. The account minimum of $1,000
must be met prior to establishing an automatic investment plan.
Purchases can be processed
electronically on any day of the month if the institution that services your
bank account is a member of the Automated Clearing House (ACH) system. Each
debit should be reflected on your next bank statement.
To sign up for the
Automatic Investment Plan, complete the appropriate section of the Application
Form or complete an Account Service Form. You can modify your Automatic
Investment Plan at any time by calling Investor Services.
You may sell back all or
part of your shares in any Davis Fund in which you invest (also known as
redeeming your shares) on any day that the Funds are open at net asset value
minus any sales charges that may be due. You can sell the shares by mail,
through a dealer, by telephone, or through online account access. The Funds
typically expect to pay redemption proceeds one business day following receipt
and acceptance of a proper redemption request. However, in some cases, payment
from the Funds may take longer than one business day and may take up to seven
days as is generally permitted by the Investment Company Act of 1940, as
amended. The Funds may, under limited circumstances, be permitted to pay
redemption proceeds beyond seven days following receipt and acceptance of a
proper redemption request. You may redeem shares on any day that the Funds are
open. If you recently purchased shares and subsequently request a redemption of
those shares, redemption proceeds may be withheld until a sufficient period of
time has passed to reasonably ensure that all checks or drafts (including
certified or cashier’s checks) have cleared, normally not exceeding fifteen
calendar days from the purchase date.
Under normal conditions,
the Funds typically expect to meet shareholder redemption requests by using
available cash (or cash equivalents) or by selling portfolio securities. The
Funds may use additional methods to meet shareholder redemption requests, if
they become necessary. These methods may be used during both normal and stressed
market conditions. These methods may include, but are not limited to, the use of
overdraft protection afforded by the Funds’ custodian bank or borrowing from a
line of credit.
In addition to paying
redemption proceeds in cash, the Funds reserve the right to pay part or all of
your redemption proceeds with Fund securities or other Fund assets instead of
cash (in-kind redemption). On the same redemption date, some shareholders may be
paid in whole or in part in securities (which may differ among those
shareholders), while other shareholders may be paid entirely in cash. The
disposal of the securities received in-kind may be subject to brokerage costs
and, until sold, such securities remain at market risk and liquidity risk,
including the risk that such securities are or become difficult to sell. If the
Funds pay your redemption with illiquid or less liquid securities, you will bear
the risk of not being able to sell such securities.
Mail. To sell shares by mail, send the request
to one of the addresses below. All registered shareholders must sign the
request.
Regular mail:
Davis Funds P.O.
Box 219197 Kansas City, MO 64121-9197 |
Express
shipping:
Davis Funds 430 W
7th
Street Suite 219197 Kansas City, MO
64105-1407 |
◾ |
A
Medallion Signature Guarantee is required if the redemption request
is: |
- |
For a check greater
than $100,000; |
- |
Made payable to
someone other than the registered
shareholder(s); |
- |
Sent to an address
other than to the address of record or to an address of record that has
been changed in the last 30 days; or |
- |
To a bank account not
on record. |
Dealer. When you sell
shares through a dealer, you may be charged service fees or commissions for
these transactions.
Telephone. Call 1‑800‑279‑0279 to use the Funds’ automated
phone system 24 hours a day or speak to an Investor Services Professional,
Monday through Friday, from 9 a.m. to 6 p.m. Eastern time.
- |
Are limited to
$100,000; |
- |
Must be mailed to the
address of record that has been on the account for at least 30 days;
and |
- |
Must be made payable
to the registered shareholder. |
◾ |
Redemptions via wire
or ACH can only be sent to a bank currently on the
account. |
Online Account Access. See “Internet Transactions” in this prospectus for
details on how to access your account through the internet.
- |
Are limited to
$100,000; |
- |
Must be mailed to the
address of record that has been on the account for at least 30 days;
and |
- |
Must be made payable
to the registered shareholder. |
◾ |
Redemptions via wire
or ACH can only be sent to a bank currently on the
account. |
Unless you decide not to
have telephone, fax or internet services on your account(s), you agree to hold
the Fund, Davis Funds, any of its affiliates or mutual funds managed by such
affiliates and each of their respective directors, officers, employees and
agents harmless from any losses, expenses, costs or liabilities (including
attorney’s fees) that may be incurred in connection with the exercise of these
privileges when Davis Funds, acting in good faith, has complied with
instructions that are believed to be genuine. Davis Advisors uses certain
procedures to confirm that your instructions are genuine. If these procedures
are not used, the Funds may be liable for any loss from unauthorized
instructions.
Check
Writing Privilege for Davis Government Money Market Fund
You can request check
writing privileges on your Davis Government Money Market Fund account if you
hold Class A shares and are not investing through a retirement plan or an IRA.
Davis Government Money Market Fund investors with check writing privileges can
write checks:
◾ |
For
$250 or more from their accounts. Checks written for less than $250 will
be honored and a $25 service fee will be debited from the
account; |
◾ |
So
long as the account balance is at least $1,000 after the check has been
paid. If a check is presented for payment which would bring the account
balance to less than $1,000 a $25 service fee will be debited from the
account and check writing privileges will be suspended; and Subject to the
rules prescribed by State Street Bank and Trust Company. Davis Funds and
State Street Bank and Trust Company reserve the right to modify these
rules at any time. |
Writing a check is a way of
selling shares and directing the proceeds to a third party. When a Davis
Government Money Market Fund check is presented to State Street Bank and Trust
Company for payment, the bank will redeem a sufficient number of shares in your
account to cover the amount of the check. If you have had recent activity in
your Davis Government Money Market Fund account, funds may not be available to
cover your checks. For example: (i) if you have redeemed or exchanged funds out
of your Davis Government Money Market Fund account, there may not be sufficient
funds remaining to cover your check; (ii) if you have recently purchased shares
in your Davis Government Money Market Fund account, the Funds may still be
within the fifteen-day uncollected status; or (iii) if funds were exchanged into
your Davis Government Money Market Fund account from another Davis Fund, those
funds may still be within the fifteen-day uncollected status.
To qualify for Check Writing Privileges, fill out the
appropriate section in your Application Form. If you write a check on your Davis
Government Money Market Fund account and you do not have sufficient shares in
your account to cover the check, or if your check is presented for payment
before your purchase check has cleared, the check will be returned and your
account will be assessed an insufficient funds fee of $25. You can find more
information about check writing privileges in the SAI. Davis Funds and State
Street Bank and Trust Company reserve the right to modify or terminate the check
writing service at any time.
What
You Need to Know Before You Sell Your Shares
◾ |
You will always
receive cash for sales that total less than $250,000 or one percent of a
Fund’s net asset value during any ninety-day period. Any sales above the
cash limit may be paid in securities. |
◾ |
In certain
circumstances, such as the death of a shareholder or when acting as power
of attorney, additional documentation may be required. Please contact
Investor Services at 1‑800‑279‑0279
to determine if your situation requires such
documentation. |
◾ |
In the past, Davis
Funds issued certificates for its shares. If a certificate was issued for
the shares you wish to sell, the certificate must be sent by certified
mail to Davis Funds, accompanied by a letter of instruction signed by the
owner(s). |
◾ |
A sale may produce a
gain or loss. Gains may be subject to tax. |
◾ |
The Securities and
Exchange Commission may suspend redemption of shares under certain
emergency circumstances if the New York Stock Exchange is closed for
reasons other than customary closings and
holidays. |
Medallion
Signature Guarantee
To protect you and Davis
Funds against fraud, certain redemption requests must be made in writing with
your signature guaranteed. A Medallion Signature Guarantee is a written
endorsement from an eligible guarantor institution that the signature(s) on the
written request is (are) valid. Certain commercial banks, trust companies,
savings associations, credit unions and members of a United States stock
exchange participate in the Medallion Signature Guarantee Program. No other form
of signature verification will be accepted.
Stock
Power
This is a letter of
instruction signed by the owner of Fund shares that gives State Street Bank and
Trust Company permission to transfer ownership of the shares to another person
or group. Any transfer of ownership requires that all shareholders have their
signatures Medallion-guaranteed.
If
You Decide to Buy Back Shares You Sold
If you sold Davis Funds
Class A shares on which you have paid a sales charge (other Classes of shares
are not entitled to this privilege) and decide to repurchase some or all shares
within 60 days of sale, you may notify the Funds in writing of your intent to
exercise the Subsequent Repurchase
Privilege. This privilege can only be exercised once. With this privilege
you may purchase Class A shares at current net asset value without a sales
charge. You may purchase Class A shares of the same fund/account in an amount up
to, but not exceeding, the dollar amount of Class A shares which you previously
redeemed. To exercise this privilege, you must send a letter to Davis Funds,
along with a check for the repurchased shares.
Involuntary
Redemption
If your fund/account
balance declines to less than the minimum for your share class in any fund as a
result of a redemption, exchange or transfer, the Fund will redeem your
remaining shares in the Fund at net asset value. You will be notified before
your account is involuntarily redeemed. Telephone redemptions will receive
immediate notice that the redemption will result in the entire account being
redeemed upon execution of the transaction. All other redemptions will receive a
letter notifying account holders that their accounts will be involuntarily
redeemed unless the account balance is increased to the Fund minimum within 30
days. For Class A and C shares this is typically $1,000. Class Y share minimums
vary. Please see “How to Open an
Account” for details.
Making
Systematic Withdrawals
You can sell a
predetermined dollar or percentage amount each month or quarter (for retirement
accounts or IRAs, withdrawals may be established on an annual basis). Because
withdrawals are sales, they may produce a gain or loss. If you purchase
additional fund shares at around the same time that you make a withdrawal, you
may have to pay taxes and a sales charge. When you participate in this plan,
known as the Systematic Withdrawal Plan,
shares are sold so that you will receive payment by one of three methods:
◾ |
You may receive a
check at the address of record provided that this address has not changed
for a period of at least 30 days. |
◾ |
You may also choose
to receive funds by ACH by completing an Account Service Form. If you wish
to execute a Systematic Withdrawal Plan by ACH after your account has been
established, please complete an Account Service Form and have your
signature Medallion-guaranteed. |
◾ |
You may have funds
sent by check to a third party at an address other than the address of
record. In order to do so, you must complete the appropriate section of
the Application Form. If you wish to designate a third-party payee after
your account has been established, you must submit a letter of instruction
with a Medallion Signature Guarantee. |
You may stop systematic
withdrawals at any time without charge or penalty by calling Investor
Services.
Wiring Sale
Proceeds to Your Bank Account
You may be eligible to have
your redemption proceeds electronically transferred to a commercial bank account
by federal funds wire. There is a $5 charge by State Street Bank and Trust
Company for wire service and receiving banks may also charge for this service.
Proceeds of redemption by federal funds wire are usually credited to your bank
account on the next business day after the sale. Alternatively, redemption
through ACH will usually arrive at your bank two banking days after the sale. To
have redemption proceeds sent by federal funds wire to your bank, you must first
fill out the “Banking Instructions”
section on the Account Application Form and attach a voided check or deposit
slip. If the account has already been established, an Account Service Form must
be submitted with a Medallion Signature Guarantee and a voided check.
You can sell shares of any
Davis Fund to buy shares in the same class of any other Davis Fund without
having to pay a sales charge. This is known as an exchange. You can only
exchange shares from your account within the same share class and under the same
registration. You can exchange shares by telephone, by internet, by mail or
through a dealer. The initial exchange must be for at least the minimum for your
share class. For Class A and C shares, this is typically $1,000. Class Y share
minimums vary. Please see “How to Open an
Account” for details. Exchanges are normally performed on the same day of
the request if received in proper form (all necessary documents, signatures,
etc.) by 4 p.m. Eastern time.
Shares in different Davis
Funds may be exchanged at relative net asset value. However, if any Davis Fund
shares being exchanged are subject to a deferred sales charge, Statement of
Intention or other limitation, the limitation will continue to apply to the
shares received in the exchange. When you exchange shares in a Davis Fund for
shares in Davis Government Money Market Fund, the holding period for any
deferred sales charge does not continue during the time that you own Davis
Government Money Market Fund shares. For example, Class C shares are subject to
a contingent deferred sales charge for one year. Any period that you are
invested in shares of Davis Government Money Market Fund will be added to the
contingent deferred sales charge period.
You may exchange shares in
any of the following ways:
Mail. To exchange shares by mail, send the
request to one of the addresses below. All registered shareholders must sign the
request.
Regular mail:
Davis Funds P.O.
Box 219197 Kansas City, MO 64121-9197 |
Express
shipping:
Davis Funds 430 W
7th
Street Suite 219197 Kansas City, MO
64105-1407 |
Dealer. When you exchange
shares through a dealer, you may be charged service fees or commissions for
these transactions.
Telephone. Call 1‑800‑279‑0279 to use the Funds’ automated
phone system 24 hours a day or speak to an Investor Services Professional,
Monday through Friday, from 9 a.m. to 6 p.m. Eastern time.
Online Account Access. See
“Internet Transactions” in this
prospectus for details on how to access your account through the internet.
In the past, Davis Funds
issued certificates. If you wish to exchange shares for which you hold share
certificates, these certificates must be sent by certified mail to Davis Funds,
accompanied by a letter of instruction signed by the owner(s). If your shares
are being sold for cash, this is known as a redemption. Please see “What You Need to Know Before You Sell Your
Shares” in this prospectus for restrictions that might apply to this type
of transaction.
Before you decide to make
an exchange, you must obtain the current prospectus of the desired Davis Fund.
For federal income tax purposes, exchanges between Davis Funds are treated as a
sale and a purchase. Therefore, there will usually be a recognizable capital
gain or loss due to an exchange.
Making
Automatic Exchanges
You can elect to make
automatic monthly exchanges if all accounts involved are registered under the
same name and have a minimum initial value of at least the minimum for your
share class. For Class A and C shares, this is typically $1,000. Class Y share
minimums vary. Please see “How to Open an
Account” for details. You must exchange at least $25 to participate in
this program, known as the Automatic Exchange
Program. To sign up for this program you may contact Investor
Services.
Davis Funds discourage
short-term or excessive trading, do not accommodate short-term or excessive
trading and, if detected, intend to restrict or reject such trading or take
other action if in the judgment of Davis Advisors such trading may be
detrimental to the interest of a Fund. Such strategies may dilute the value of
fund shares held by long-term shareholders, interfere with the efficient
management of the Fund’s portfolio, and increase brokerage and administrative
costs.
The Davis Funds’ Board of
Directors has adopted a 30-day restriction policy with respect to the frequent
purchase and redemption of Fund shares. Under the 30-day restriction, any
shareholder redeeming shares from an equity fund will be precluded from
investing in the same equity fund for 30 calendar days after the redemption
transaction. This policy also applies to redemptions and purchases that are part
of an exchange transaction. Check writing redemptions from the Davis Government
Money Market Fund are excluded from this restriction, as are transactions that
are part of a systematic plan. Certain financial intermediaries, such as 401(k)
plan administrators, may apply purchase and exchange limitations that are
different than the limitations discussed above. These limitations may be more or
less restrictive than the limitations imposed by Davis Funds, but are designed
to detect and prevent excessive trading. Shareholders should consult their
financial intermediaries to determine what purchase and exchange limitations may
be applicable to their transactions in Davis Funds through those financial
intermediaries. To the extent reasonably feasible, the Funds’ market timing
procedures apply to all shareholder accounts and neither Davis Funds nor Davis
Advisors have entered into agreements to exempt any shareholder from application
of either Davis Funds’ or a financial intermediary’s market-timing procedures,
as applicable.
Davis Funds receive
purchase, exchange and redemption orders from many financial intermediaries that
maintain omnibus accounts with the Funds. Omnibus account arrangements permit
financial intermediaries to aggregate their clients’ transactions and ownership
positions. If Davis Funds, or the Distributor, discovers evidence of material
excessive trading in an omnibus account they may seek the assistance of the
financial intermediary to prevent further excessive trading in the omnibus
account. Shareholders seeking to engage in excessive trading practices may
employ a variety of strategies to avoid detection and there can be no assurance
that Davis Funds will successfully prevent all instances of market timing.
If Davis Funds, at its
discretion, identifies any activity that may constitute frequent trading, it
reserves the right to restrict further trading activity regardless of whether
the activity exceeds the Funds’ written guidelines. In applying this policy,
Davis Funds reserves the right to consider the trading of multiple accounts
under common ownership, control or influence to be trading out of a single
account.
A benefit of investing
through Davis Funds is that you can use the Funds’ automated telephone system to
buy, sell or exchange shares. IRA shares cannot be sold through the automated
telephone system. If you do not wish to have this option activated for your
account, complete the appropriate section of the Application Form or contact
Investor Services.
When you call Davis Funds,
you can perform a transaction in one of two ways:
◾ |
Speak directly with
an Investor Services Professional during business hours (9 a.m. to 6 p.m.
Eastern time). |
◾ |
You can use Davis
Funds’ automated telephone system, 24 hours a day, seven days a week.
Class Y share accounts do not have access to the automated telephone
system. |
When you buy, sell or
exchange shares by telephone instruction, you agree that Davis Funds are not
liable for following telephone instructions believed to be genuine (that is
believed to be directed by the account holder, registered representative or
authorized trader whose name is on file). The Funds use certain procedures to
confirm that your instructions are genuine, including a request for personal
identification and a tape recording of the conversation. If these procedures are
not used, the Fund may be liable for any loss from unauthorized
instructions.
Be aware that during
unusual market conditions Davis Funds may not be able to accept all requests by
telephone.
You can use the Funds’
website (www.davisfunds.com) to review
your account balance and recent transactions. Your account may qualify for the
privilege to purchase, sell or exchange shares online. You may also elect to
receive the summary prospectus, account statements and annual and semi-annual
reports electronically, in lieu of paper form, by enrolling in eConsent on the
Funds’ website. Please review the Funds’ website for more complete information.
Class Y share accounts cannot be accessed through the Funds’ website.
To access your accounts,
you must establish a unique and confidential User ID and Password. To create
your User ID and Password, you will need: (i) the name of the Fund(s) in which
you are invested, (ii) your account number, (iii) the last four digits of your
Social Security Number, and (iv) either a cell phone or email for satisfying the
two-factor authentication. Your User ID and Password will be required each time
you access your Davis account online.
When you buy, sell or
exchange shares over the Internet, you agree that Davis Funds are not liable for
following instructions believed to be genuine (that is, believed to be, directed
by the account holder or registered representative on file). The Funds use
certain procedures to confirm that your instructions are genuine. If these
procedures are not used, the Funds may be liable for any loss from unauthorized
instructions.
The Fund may, on occasion, mail notices, reports,
prospectuses, or proxy material to shareholders. To avoid sending duplicate
copies of materials to households, the Fund will mail only one copy of these
items to shareholders having the same last name and address on the Fund’s
records. The consolidation of these mailings, called householding, benefits the
Fund through reduced mailing expense. If you have a direct account with the Fund
and you do not want the mailing of these documents to be combined with those to
other members of your household, please contact Davis Funds by phone at
1-800-279-0279. Your instructions will become effective within 30 days of your
notice to the Fund.
These tables are designed
to show you the financial performance of the Funds in this prospectus for the
past five years ended December 31, 2022. Some of the information reflects
financial results for a single fund share. The total returns represent the rate
at which an investor would have earned (or lost) money on an investment in the
Fund, assuming that all dividends and capital gains have been reinvested.
This information has been
audited by KPMG LLP, whose report, along with the Funds’ financial statements,
are included in the annual report, which is available upon request.
DAVIS SERIES, INC.
The following financial information represents selected data for each share
of capital stock outstanding throughout each period:
|
|
|
|
|
Income (Loss) from
Investment Operations |
|
|
|
|
|
Net Asset Value, Beginning
of Period |
Net
Investment Income (Loss)a |
Net Realized and
Unrealized Gains (Losses) |
Total from Investment
Operations |
|
|
|
|
Davis Opportunity Fund
Class A: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$41.91 |
$0.28 |
$(6.14) |
$(5.86) |
|
|
|
|
Year ended December 31,
2021 |
$36.67 |
$0.11 |
$9.00 |
$9.11 |
|
|
|
|
Year ended December 31,
2020 |
$33.47 |
$0.08 |
$4.18 |
$4.26 |
|
|
|
|
Year ended December 31,
2019 |
$28.10 |
$0.12 |
$7.01 |
$7.13 |
|
|
|
|
Year ended December 31,
2018 |
$37.01 |
$0.11 |
$(4.91) |
$(4.80) |
|
|
|
|
Davis Opportunity Fund
Class C: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$30.92 |
$(0.01) |
$(4.52) |
$(4.53) |
|
|
|
|
Year ended December 31,
2021 |
$28.06 |
$(0.18) |
$6.85 |
$6.67 |
|
|
|
|
Year ended December 31,
2020 |
$25.90 |
$(0.14) |
$3.20 |
$3.06 |
|
|
|
|
Year ended December 31,
2019 |
$22.14 |
$(0.10) |
$5.49 |
$5.39 |
|
|
|
|
Year ended December 31,
2018 |
$30.36 |
$(0.14) |
$(3.97) |
$(4.11) |
|
|
|
|
Davis Opportunity Fund
Class Y: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$44.73 |
$0.40 |
$(6.56) |
$(6.16) |
|
|
|
|
Year ended December 31,
2021 |
$38.93 |
$0.24 |
$9.54 |
$9.78 |
|
|
|
|
Year ended December 31,
2020 |
$35.47 |
$0.17 |
$4.44 |
$4.61 |
|
|
|
|
Year ended December 31,
2019 |
$29.70 |
$0.21 |
$7.40 |
$7.61 |
|
|
|
|
Year ended December 31,
2018 |
$38.77 |
$0.21 |
$(5.17) |
$(4.96) |
|
|
|
|
Davis Government Bond Fund
Class A: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$5.30 |
$0.02 |
$(0.30) |
$(0.28) |
|
|
|
|
Year ended December 31,
2021 |
$5.41 |
$–e |
$(0.08) |
$(0.08) |
|
|
|
|
Year ended December 31,
2020 |
$5.37 |
$0.04 |
$0.05 |
$0.09 |
|
|
|
|
Year ended December 31,
2019 |
$5.29 |
$0.08 |
$0.09 |
$0.17 |
|
|
|
|
Year ended December 31,
2018 |
$5.33 |
$0.05 |
$(0.03) |
$0.02 |
|
|
|
|
Davis Government Bond Fund
Class C: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$5.27 |
$(0.02) |
$(0.29) |
$(0.31) |
|
|
|
|
Year ended December 31,
2021 |
$5.39 |
$(0.03) |
$(0.09) |
$(0.12) |
|
|
|
|
Year ended December 31,
2020 |
$5.36 |
$(0.01) |
$0.05 |
$0.04 |
|
|
|
|
Year ended December 31,
2019 |
$5.28 |
$0.04 |
$0.09 |
$0.13 |
|
|
|
|
Year ended December 31,
2018 |
$5.31 |
$–e |
$(0.02) |
$(0.02) |
|
|
|
|
Davis Government Bond Fund
Class Y: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$5.34 |
$0.04 |
$(0.31) |
$(0.27) |
|
|
|
|
Year ended December 31,
2021 |
$5.45 |
$0.02 |
$(0.09) |
$(0.07) |
|
|
|
|
Year ended December 31,
2020 |
$5.41 |
$0.05 |
$0.05 |
$0.10 |
|
|
|
|
Year ended December 31,
2019 |
$5.34 |
$0.10 |
$0.07 |
$0.17 |
|
|
|
|
Year ended December 31,
2018 |
$5.37 |
$0.06 |
$(0.02) |
$0.04 |
|
|
|
|
Financial Highlights
Dividends and
Distributions
Ratios to
Average Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from Net
Investment Income |
Distributions from
Realized Gains |
Return of Capital |
Total
Distributions |
Net Asset Value, End of
Period |
Total
Returnb |
Net Assets, End of Period
(in thousands) |
Gross Expense
Ratio |
Net Expense
Ratioc |
Net Investment Income
(Loss) Ratio |
Portfolio
Turnoverd |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.15) |
$(2.67) |
$– |
$(2.82) |
$33.23 |
(14.08)% |
$265,763 |
0.94% |
0.94% |
0.78% |
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.06) |
$(3.81) |
$– |
$(3.87) |
$41.91 |
24.96% |
$338,626 |
0.93% |
0.93% |
0.27% |
24% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.16) |
$(0.90) |
$– |
$(1.06) |
$36.67 |
12.79% |
$288,208 |
0.94% |
0.94% |
0.24% |
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.13) |
$(1.63) |
$– |
$(1.76) |
$33.47 |
25.49% |
$310,954 |
0.93% |
0.93% |
0.38% |
15% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$(4.11) |
$– |
$(4.11) |
$28.10 |
(13.50)% |
$290,970 |
0.94% |
0.94% |
0.28% |
44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$(2.67) |
$– |
$(2.67) |
$23.72 |
(14.76)% |
$12,419 |
1.76% |
1.75% |
(0.03)% |
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$(3.81) |
$– |
$(3.81) |
$30.92 |
23.92% |
$19,048 |
1.75% |
1.75% |
(0.55)% |
24% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$(0.90) |
$– |
$(0.90) |
$28.06 |
11.88% |
$18,861 |
1.76% |
1.76% |
(0.58)% |
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$(1.63) |
$– |
$(1.63) |
$25.90 |
24.49% |
$26,309 |
1.74% |
1.74% |
(0.43)% |
15% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$(4.11) |
$– |
$(4.11) |
$22.14 |
(14.19)% |
$33,186 |
1.71% |
1.71% |
(0.49)% |
44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.25) |
$(2.67) |
$– |
$(2.92) |
$35.65 |
(13.85)% |
$193,559 |
0.69% |
0.69% |
1.03% |
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.17) |
$(3.81) |
$– |
$(3.98) |
$44.73 |
25.23% |
$245,602 |
0.70% |
0.70% |
0.50% |
24% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.25) |
$(0.90) |
$– |
$(1.15) |
$38.93 |
13.06% |
$197,698 |
0.69% |
0.69% |
0.49% |
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.21) |
$(1.63) |
$– |
$(1.84) |
$35.47 |
25.76% |
$184,781 |
0.70% |
0.70% |
0.61% |
15% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$(4.11) |
$– |
$(4.11) |
$29.70 |
(13.30)% |
$197,887 |
0.69% |
0.69% |
0.53% |
44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.04) |
$– |
$– |
$(0.04) |
$4.98 |
(5.29)% |
$17,818 |
1.26% |
1.00% |
0.43% |
3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.03) |
$– |
$– |
$(0.03) |
$5.30 |
(1.48)% |
$21,719 |
1.17% |
1.00% |
0.08% |
26% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.05) |
$– |
$– |
$(0.05) |
$5.41 |
1.69% |
$27,045 |
1.10% |
1.04% |
0.67% |
–%f |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.09) |
$– |
$– |
$(0.09) |
$5.37 |
3.23% |
$24,216 |
1.09% |
1.05% |
1.59% |
13% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.06) |
$– |
$– |
$(0.06) |
$5.29 |
0.42% |
$25,297 |
1.13% |
1.12% |
0.91% |
28% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$– |
$– |
$– |
$4.96 |
(5.88)% |
$542 |
2.84% |
1.75% |
(0.32)% |
3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$– |
$– |
$– |
$5.27 |
(2.23)% |
$594 |
2.35% |
1.75% |
(0.67)% |
26% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.01) |
$– |
$– |
$(0.01) |
$5.39 |
0.81% |
$1,804 |
2.25% |
1.78% |
(0.07)% |
–%f |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.05) |
$– |
$– |
$(0.05) |
$5.36 |
2.47% |
$811 |
2.31% |
1.80% |
0.84% |
13% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.01) |
$– |
$– |
$(0.01) |
$5.28 |
(0.32)% |
$2,026 |
1.98% |
1.97% |
0.06% |
28% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.05) |
$– |
$– |
$(0.05) |
$5.02 |
(5.01)% |
$3,100 |
0.95% |
0.75% |
0.68% |
3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.04) |
$– |
$– |
$(0.04) |
$5.34 |
(1.22)% |
$2,096 |
0.97% |
0.75% |
0.33% |
26% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.06) |
$– |
$– |
$(0.06) |
$5.45 |
1.94% |
$1,965 |
0.95% |
0.79% |
0.92% |
–%f |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.10) |
$– |
$– |
$(0.10) |
$5.41 |
3.29% |
$2,175 |
0.93% |
0.80% |
1.84% |
13% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.07) |
$– |
$– |
$(0.07) |
$5.34 |
0.83% |
$1,980 |
0.94% |
0.91% |
1.12% |
28% |
|
|
|
|
|
|
|
|
|
|
|
|
DAVIS SERIES, INC.
The following financial information represents selected data for each share
of capital stock outstanding throughout each period:
|
|
|
|
|
Income (Loss) from
Investment Operations |
|
|
|
|
|
Net Asset Value, Beginning
of Period |
Net
Investment Income (Loss)a |
Net Realized and
Unrealized Gains (Losses) |
Total from Investment
Operations |
|
|
|
|
Davis Government Money
Market Fund Class A, C, and Y: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$1.000 |
$0.011 |
$– |
$0.011 |
|
|
|
|
Year ended December 31,
2021 |
$1.000 |
$–h |
$– |
$–h |
|
|
|
|
Year ended December 31,
2020 |
$1.000 |
$0.002 |
$– |
$0.002 |
|
|
|
|
Year ended December 31,
2019 |
$1.000 |
$0.017 |
$– |
$0.017 |
|
|
|
|
Year ended December 31,
2018 |
$1.000 |
$0.013 |
$– |
$0.013 |
|
|
|
|
Davis Financial Fund Class
A: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$54.17 |
$0.78 |
$(5.61) |
$(4.83) |
|
|
|
|
Year ended December 31,
2021 |
$43.93 |
$0.55 |
$13.27 |
$13.82 |
|
|
|
|
Year ended December 31,
2020 |
$49.35 |
$0.54 |
$(3.50) |
$(2.96) |
|
|
|
|
Year ended December 31,
2019 |
$42.20 |
$0.64 |
$10.44 |
$11.08 |
|
|
|
|
Year ended December 31,
2018 |
$51.94 |
$0.54 |
$(6.51) |
$(5.97) |
|
|
|
|
Davis Financial Fund Class
C: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$42.70 |
$0.31 |
$(4.42) |
$(4.11) |
|
|
|
|
Year ended December 31,
2021 |
$35.12 |
$0.10 |
$10.59 |
$10.69 |
|
|
|
|
Year ended December 31,
2020 |
$39.91 |
$0.19 |
$(2.88) |
$(2.69) |
|
|
|
|
Year ended December 31,
2019 |
$34.67 |
$0.23 |
$8.51 |
$8.74 |
|
|
|
|
Year ended December 31,
2018 |
$43.27 |
$0.12 |
$(5.37) |
$(5.25) |
|
|
|
|
Davis Financial Fund Class
Y: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$56.24 |
$0.94 |
$(5.84) |
$(4.90) |
|
|
|
|
Year ended December 31,
2021 |
$45.52 |
$0.70 |
$13.75 |
$14.45 |
|
|
|
|
Year ended December 31,
2020 |
$51.04 |
$0.65 |
$(3.60) |
$(2.95) |
|
|
|
|
Year ended December 31,
2019 |
$43.56 |
$0.78 |
$10.76 |
$11.54 |
|
|
|
|
Year ended December 31,
2018 |
$53.50 |
$0.68 |
$(6.71) |
$(6.03) |
|
|
|
|
Davis Appreciation &
Income Fund Class A: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$55.56 |
$0.43 |
$(9.14) |
$(8.71) |
|
|
|
|
Year ended December 31,
2021 |
$44.32 |
$0.22 |
$11.18 |
$11.40 |
|
|
|
|
Year ended December 31,
2020 |
$42.70 |
$0.32 |
$1.64 |
$1.96 |
|
|
|
|
Year ended December 31,
2019 |
$36.23 |
$0.56 |
$6.78 |
$7.34 |
|
|
|
|
Year ended December 31,
2018 |
$39.80 |
$0.42 |
$(3.59) |
$(3.17) |
|
|
|
|
Davis Appreciation &
Income Fund Class C: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$55.46 |
$0.06 |
$(9.10) |
$(9.04) |
|
|
|
|
Year ended December 31,
2021 |
$44.45 |
$(0.17) |
$11.18 |
$11.01 |
|
|
|
|
Year ended December 31,
2020 |
$42.82 |
$0.03 |
$1.64 |
$1.67 |
|
|
|
|
Year ended December 31,
2019 |
$36.34 |
$0.25 |
$6.78 |
$7.03 |
|
|
|
|
Year ended December 31,
2018 |
$39.94 |
$0.15 |
$(3.63) |
$(3.48) |
|
|
|
|
Davis Appreciation &
Income Fund Class Y: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$55.80 |
$0.59 |
$(9.18) |
$(8.59) |
|
|
|
|
Year ended December 31,
2021 |
$44.51 |
$0.38 |
$11.23 |
$11.61 |
|
|
|
|
Year ended December 31,
2020 |
$42.89 |
$0.45 |
$1.64 |
$2.09 |
|
|
|
|
Year ended December 31,
2019 |
$36.39 |
$0.69 |
$6.81 |
$7.50 |
|
|
|
|
Year ended December 31,
2018 |
$39.98 |
$0.56 |
$(3.62) |
$(3.06) |
|
|
|
|
Financial Highlights -
(Continued)
Dividends and
Distributions
Ratios to
Average Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from Net
Investment Income |
Distributions from
Realized Gains |
Return of Capital |
Total
Distributions |
Net Asset Value, End of
Period |
Total
Returnb |
Net Assets, End of Period
(in thousands) |
Gross Expense
Ratio |
Net Expense
Ratioc |
Net Investment Income
(Loss) Ratio |
Portfolio
Turnoverd |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.011) |
$– |
$– |
$(0.011) |
$1.000 |
1.12% |
$123,436 |
0.60%g |
0.45%g |
1.04% |
NA |
|
|
|
|
|
|
|
|
|
|
|
|
|
$–h |
$– |
$– |
$–h |
$1.000 |
0.04% |
$146,416 |
0.52% |
0.03% |
0.04% |
NA |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.002) |
$– |
$– |
$(0.002) |
$1.000 |
0.23% |
$145,903 |
0.54% |
0.35% |
0.23% |
NA |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.017) |
$– |
$– |
$(0.017) |
$1.000 |
1.74% |
$148,805 |
0.53% |
0.53% |
1.74% |
NA |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.013) |
$– |
$– |
$(0.013) |
$1.000 |
1.30% |
$183,689 |
0.58%g |
0.58%g |
1.27% |
NA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.81) |
$(0.82) |
$– |
$(1.63) |
$47.71 |
(8.91)% |
$378,784 |
0.95% |
0.95% |
1.57% |
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.64) |
$(2.94) |
$– |
$(3.58) |
$54.17 |
31.46% |
$450,121 |
0.94% |
0.94% |
1.00% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.58) |
$(1.88) |
$– |
$(2.46) |
$43.93 |
(5.88)% |
$352,567 |
0.96% |
0.96% |
1.37% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.68) |
$(3.25) |
$– |
$(3.93) |
$49.35 |
26.31% |
$463,892 |
0.94% |
0.94% |
1.37% |
6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.51) |
$(3.26) |
$– |
$(3.77) |
$42.20 |
(11.78)% |
$463,024 |
0.94% |
0.94% |
1.04% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.33) |
$(0.82) |
$– |
$(1.15) |
$37.44 |
(9.61)% |
$60,375 |
1.73% |
1.73% |
0.79% |
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.17) |
$(2.94) |
$– |
$(3.11) |
$42.70 |
30.44% |
$79,368 |
1.71% |
1.71% |
0.23% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.22) |
$(1.88) |
$– |
$(2.10) |
$35.12 |
(6.61)% |
$66,095 |
1.75% |
1.75% |
0.58% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.25) |
$(3.25) |
$– |
$(3.50) |
$39.91 |
25.27% |
$114,489 |
1.72% |
1.72% |
0.59% |
6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.09) |
$(3.26) |
$– |
$(3.35) |
$34.67 |
(12.43)% |
$122,240 |
1.70% |
1.70% |
0.28% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.96) |
$(0.82) |
$– |
$(1.78) |
$49.56 |
(8.70)% |
$404,375 |
0.72% |
0.72% |
1.80% |
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.79) |
$(2.94) |
$– |
$(3.73) |
$56.24 |
31.76% |
$496,530 |
0.70% |
0.70% |
1.24% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.69) |
$(1.88) |
$– |
$(2.57) |
$45.52 |
(5.67)% |
$347,683 |
0.74% |
0.74% |
1.59% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.81) |
$(3.25) |
$– |
$(4.06) |
$51.04 |
26.54% |
$497,906 |
0.72% |
0.72% |
1.59% |
6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.65) |
$(3.26) |
$– |
$(3.91) |
$43.56 |
(11.55)% |
$496,436 |
0.70% |
0.70% |
1.28% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.50) |
$(0.70) |
$– |
$(1.20) |
$45.65 |
(15.64)% |
$104,140 |
1.00% |
1.00% |
0.88% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.16) |
$– |
$– |
$(0.16) |
$55.56 |
25.73% |
$128,558 |
0.98% |
0.98% |
0.41% |
19% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.34) |
$– |
$– |
$(0.34) |
$44.32 |
4.75% |
$105,201 |
1.02% |
1.02% |
0.82% |
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.78) |
$(0.09) |
$– |
$(0.87) |
$42.70 |
20.33% |
$116,911 |
1.01% |
1.01% |
1.41% |
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.40) |
$– |
$– |
$(0.40) |
$36.23 |
(8.02)% |
$108,613 |
1.01% |
1.01% |
1.07% |
54% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.21) |
$(0.70) |
$– |
$(0.91) |
$45.51 |
(16.28)% |
$2,179 |
1.97% |
1.75% |
0.13% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$– |
$– |
$– |
$– |
$55.46 |
24.77% |
$3,538 |
1.89% |
1.75% |
(0.36)% |
19% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.04) |
$– |
$– |
$(0.04) |
$44.45 |
3.93% |
$4,620 |
1.87% |
1.79% |
0.05% |
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.46) |
$(0.09) |
$– |
$(0.55) |
$42.82 |
19.38% |
$8,349 |
1.81% |
1.80% |
0.62% |
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.12) |
$– |
$– |
$(0.12) |
$36.34 |
(8.72)% |
$11,172 |
1.76% |
1.76% |
0.32% |
54% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.66) |
$(0.70) |
$– |
$(1.36) |
$45.85 |
(15.37)% |
$78,348 |
0.68% |
0.68% |
1.20% |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.32) |
$– |
$– |
$(0.32) |
$55.80 |
26.13% |
$96,889 |
0.66% |
0.66% |
0.73% |
19% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.47) |
$– |
$– |
$(0.47) |
$44.51 |
5.08% |
$73,018 |
0.69% |
0.69% |
1.15% |
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.91) |
$(0.09) |
$– |
$(1.00) |
$42.89 |
20.72% |
$72,470 |
0.69% |
0.69% |
1.73% |
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.53) |
$– |
$– |
$(0.53) |
$36.39 |
(7.72)% |
$60,702 |
0.68% |
0.68% |
1.40% |
54% |
|
|
|
|
|
|
|
|
|
|
|
|
DAVIS SERIES, INC.
The following financial information represents selected data for each share
of capital stock outstanding throughout each period:
|
|
|
|
|
Income (Loss) from
Investment Operations |
|
|
|
|
|
Net Asset Value, Beginning
of Period |
Net
Investment Income (Loss)a |
Net Realized and
Unrealized Gains (Losses) |
Total from Investment
Operations |
|
|
|
|
Davis Real Estate Fund
Class A: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$55.53 |
$0.77 |
$(15.60) |
$(14.83) |
|
|
|
|
Year ended December 31,
2021 |
$39.23 |
$0.42 |
$16.46 |
$16.88 |
|
|
|
|
Year ended December 31,
2020 |
$43.59 |
$0.49 |
$(4.15) |
$(3.66) |
|
|
|
|
Year ended December 31,
2019 |
$35.75 |
$0.78 |
$8.27 |
$9.05 |
|
|
|
|
Year ended December 31,
2018 |
$39.70 |
$0.81 |
$(2.60) |
$(1.79) |
|
|
|
|
Davis Real Estate Fund
Class C: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$55.51 |
$0.40 |
$(15.58) |
$(15.18) |
|
|
|
|
Year ended December 31,
2021 |
$39.23 |
$0.05 |
$16.43 |
$16.48 |
|
|
|
|
Year ended December 31,
2020 |
$43.57 |
$0.24 |
$(4.18) |
$(3.94) |
|
|
|
|
Year ended December 31,
2019 |
$35.75 |
$0.45 |
$8.24 |
$8.69 |
|
|
|
|
Year ended December 31,
2018 |
$39.69 |
$0.48 |
$(2.59) |
$(2.11) |
|
|
|
|
Davis Real Estate Fund
Class Y: |
|
|
|
|
|
|
|
|
Year ended December 31,
2022 |
$56.31 |
$0.88 |
$(15.81) |
$(14.93) |
|
|
|
|
Year ended December 31,
2021 |
$39.78 |
$0.52 |
$16.71 |
$17.23 |
|
|
|
|
Year ended December 31,
2020 |
$44.21 |
$0.59 |
$(4.24) |
$(3.65) |
|
|
|
|
Year ended December 31,
2019 |
$36.27 |
$0.88 |
$8.39 |
$9.27 |
|
|
|
|
Year ended December 31,
2018 |
$40.25 |
$0.91 |
$(2.63) |
$(1.72) |
|
|
|
|
|
|
|
|
|
|
|
|
|
a |
Per share calculations
were based on average shares outstanding for the period (other than Davis
Government Money Market Fund). |
|
|
|
|
b |
Assumes hypothetical
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. |
|
|
|
|
c |
The ratios in this column
reflect the impact, if any, of certain reimbursements and/or
waivers. |
|
|
|
|
d |
The lesser of purchases
or sales of portfolio securities for a period, divided by the monthly
average of the market value of portfolio securities owned during the
period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the
calculation. |
|
|
|
|
e |
Less than $0.005 per
share. |
|
|
|
|
Financial Highlights -
(Continued)
Dividends and
Distributions
Ratios to Average Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from Net
Investment Income |
Distributions from
Realized Gains |
Return of Capital |
Total
Distributions |
Net Asset Value, End of
Period |
Total
Returnb |
Net Assets, End of Period
(in thousands) |
Gross Expense
Ratio |
Net Expense
Ratioc |
Net Investment Income
(Loss) Ratio |
Portfolio
Turnoverd |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.74) |
$(1.32) |
$– |
$(2.06) |
$38.64 |
(26.74)% |
$99,332 |
0.95% |
0.95% |
1.65% |
22% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.58) |
$– |
$– |
$(0.58) |
$55.53 |
43.24% |
$152,743 |
0.95% |
0.95% |
0.88% |
25% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.57) |
$(0.13) |
$– |
$(0.70) |
$39.23 |
(8.23)% |
$118,502 |
0.97% |
0.97% |
1.34% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.52) |
$(0.69) |
$– |
$(1.21) |
$43.59 |
25.39% |
$157,718 |
0.98% |
0.98% |
1.84% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.86) |
$(1.30) |
$– |
$(2.16) |
$35.75 |
(4.52)% |
$124,763 |
0.97% |
0.97% |
2.09% |
44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.37) |
$(1.32) |
$– |
$(1.69) |
$38.64 |
(27.32)% |
$2,277 |
1.93% |
1.75% |
0.85% |
22% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.20) |
$– |
$– |
$(0.20) |
$55.51 |
42.10% |
$4,000 |
1.87% |
1.75% |
0.08% |
25% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.27) |
$(0.13) |
$– |
$(0.40) |
$39.23 |
(8.99)% |
$3,578 |
1.89% |
1.79% |
0.52% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.18) |
$(0.69) |
$– |
$(0.87) |
$43.57 |
24.33% |
$6,422 |
1.82% |
1.80% |
1.02% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.53) |
$(1.30) |
$– |
$(1.83) |
$35.75 |
(5.30)% |
$6,268 |
1.83% |
1.83% |
1.23% |
44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.86) |
$(1.32) |
$– |
$(2.18) |
$39.20 |
(26.56)% |
$79,048 |
0.72% |
0.72% |
1.88% |
22% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.70) |
$– |
$– |
$(0.70) |
$56.31 |
43.56% |
$103,411 |
0.72% |
0.72% |
1.11% |
25% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.65) |
$(0.13) |
$– |
$(0.78) |
$39.78 |
(8.11)% |
$69,166 |
0.79% |
0.79% |
1.52% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.64) |
$(0.69) |
$– |
$(1.33) |
$44.21 |
25.69% |
$103,800 |
0.77% |
0.77% |
2.05% |
18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$(0.96) |
$(1.30) |
$– |
$(2.26) |
$36.27 |
(4.27)% |
$62,874 |
0.74% |
0.74% |
2.32% |
44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
f |
Less than 0.50%. |
|
|
|
|
|
|
|
|
|
|
|
|
g |
Includes the recapture of
expenses reimbursed from prior fiscal years. Excluding the recapture of
prior reimbursed expenses, the gross and net expense ratios for the year
ended December 31, 2022 would have been 0.55% and 0.40%, respectively, and
for the year ended December 31, 2018 would have both been 0.49%. |
|
|
|
|
|
|
|
|
|
|
|
|
h |
Less than $0.0005 per
share. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix
A:
Intermediary-Specific Sales Charge Waivers and Discounts
The
availability of certain initial and contingent deferred sales charge waivers and
discounts may depend on the particular financial intermediary or type of account
through which you purchase or hold Fund shares. Financial intermediaries may
have different policies and procedures regarding the availability of these
waivers and discounts. As one example, group retirement plan recordkeeping
platforms of certain broker-dealer intermediaries that hold Class C shares of a
fund in an omnibus account may not track participant level share lot aging and,
for this reason, those Class C shares would not satisfy the conditions for the
conversion discussed elsewhere in this prospectus. For waivers or discounts not
available through a particular intermediary, investors will have to purchase
shares directly from the Distributor or through another intermediary to receive
such waivers or discounts to the extent such a waiver or discount is available.
The following descriptions of sales charge waivers and discounts for a
particular financial intermediary and class(es) of shares are reproduced based
on information provided by the financial intermediary that the intermediary has
represented is current with respect to sales charge waivers or discounts in
effect. These waivers or discounts, which may vary from those disclosed
elsewhere in the prospectus or SAI, are subject to change and this Appendix will
be updated based on information provided by the financial intermediaries.
Neither the Fund, Davis Selected Advisers, L.P., nor Davis Distributors, LLC
supervises the implementation of these waivers or discounts or verifies the
intermediaries’ administration of these waivers or discounts. An investor should
speak with their applicable intermediary to ensure that they understand the
steps that must be taken in order to qualify for any available waiver or
discount.
The
following financial intermediaries (or their affiliates) have entered into an
agreement with the Distributor and have been approved by the Distributor to
offer Class A Shares without a sales charge to self-directed brokerage accounts
that may or may not charge a transaction fee. These financial intermediaries are
Charles Schwab & Co., Fidelity Investments, JP Morgan Securities LLC, Morgan
Stanley Smith Barney, LLC, Vanguard Marketing Corporation, and TD Ameritrade,
Inc.
In all
instances, it is the purchaser’s responsibility to notify the financial
intermediary of any facts that may qualify the purchaser for sales charge
waivers or discounts. Please contact your financial intermediary for more
information.
Shareholders
purchasing Fund shares through a Merrill Lynch platform or account will be
eligible only for the following load waivers (front-end sales charge waivers and
contingent deferred, or back-end sales charge waivers) and discounts, which may
differ from those disclosed elsewhere in this Fund’s Prospectus or SAI.
Front-end Sales Load Waivers on Class A
Shares available at Merrill Lynch
◾ |
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including
health savings accounts) and trusts used to fund those plans, provided
that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the
plan |
◾ |
Shares purchased by a
529 Plan (does not include 529 Plan units or 529-specific share classes or
equivalents) |
◾ |
Shares purchased
through a Merrill Lynch affiliated investment advisory
program |
◾ |
Shares exchanged due
to the holdings moving from a Merrill Lynch affiliated investment advisory
program to a Merrill Lynch brokerage (non-advisory) account pursuant to
Merrill Lynch’s policies relating to sales load discounts and
waivers |
◾ |
Shares purchased by
third party investment advisors on behalf of their advisory clients
through Merrill Lynch’s platform |
◾ |
Shares purchased
through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
◾ |
Shares exchanged from
Class C (i.e., level-load) shares of the same fund pursuant to Merrill
Lynch’s policies relating to sales load discounts and
waivers |
◾ |
Employees and
registered representatives of Merrill Lynch or its affiliates and their
family members |
◾ |
Directors or Trustees
of the Fund, and employees of the Fund’s investment adviser or any of its
affiliates, as described in this
prospectus |
◾ |
Eligible shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front-end or
deferred sales load (known as Rights of Reinstatement). Automated
transactions (i.e., systematic purchases and withdrawals) and purchases
made after shares are automatically sold to pay Merrill Lynch’s account
maintenance fees are not eligible for
reinstatement |
CDSC Waivers on Class A and C Shares
available at Merrill Lynch
◾ |
Death or disability
of the shareholder |
◾ |
Shares sold as part
of a systematic withdrawal plan as described in the Fund’s
prospectus |
◾ |
Return of excess
contributions from an IRA Account |
◾ |
Shares sold as part
of a required minimum distribution for IRA and retirement accounts due to
the shareholder reaching the qualified age based on applicable IRS
regulations |
◾ |
Shares sold to pay
Merrill Lynch fees but only if the transaction is initiated by Merrill
Lynch |
◾ |
Shares acquired
through a right of reinstatement |
◾ |
Shares held in
retirement brokerage accounts, that are exchanged for a lower cost share
class due to transfer to certain fee based accounts or platforms
(applicable to A and C shares only) |
◾ |
Shares received
through an exchange due to the holdings moving from a Merrill Lynch
affiliated investment advisory program to a Merrill Lynch brokerage
(non-advisory) account pursuant to Merrill Lynch’s policies relating to
sales load discounts and waivers |
Front-end load Discounts Available at Merrill
Lynch: Breakpoints, Rights of Accumulation and Letters of Intent
◾ |
Breakpoints as
described in the prospectus |
◾ |
Rights of
Accumulation (ROA) which entitle shareholders to breakpoint discounts as
described in the Fund’s prospectus will be automatically calculated based
on the aggregated holding of fund family assets held by accounts
(including 529 program holdings, where applicable) within the purchaser’s
household at Merrill Lynch. Eligible fund family assets not held at
Merrill Lynch may be included in the ROA calculation only if the
shareholder notifies his or her financial advisor about such
assets |
◾ |
Letters of Intent
(LOI) which allow for breakpoint discounts based on anticipated purchases
within a fund family, through Merrill Lynch, over a 13-month period of
time |
Morgan Stanley Wealth Management
Effective
July 1, 2018, shareholders purchasing Fund shares through a Morgan Stanley
Wealth Management transactional brokerage account will be eligible only for the
following front-end sales charge waivers with respect to Class A shares, which
may differ from and may be more limited than those disclosed elsewhere in this
Fund’s Prospectus or SAI.
◾ |
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, SIMPLE IRAs, SAR-SEPs or Keogh
plans |
◾ |
Morgan Stanley
employee and employee-related accounts according to Morgan Stanley’s
account linking rules |
◾ |
Shares purchased
through reinvestment of dividends and capital gains distributions when
purchasing shares of the same fund |
◾ |
Shares purchased
through a Morgan Stanley self-directed brokerage
account |
◾ |
Class C (i.e.,
level-load) shares that are no longer subject to a contingent deferred
sales charge and are converted to Class A shares of the same fund pursuant
to Morgan Stanley Wealth Management’s share class conversion
program |
◾ |
Shares purchased from
the proceeds of redemptions within the same fund family, provided
(i) the repurchase occurs within 90 days following the redemption,
(ii) the redemption and purchase occur in the same account, and
(iii) redeemed shares were subject to a front-end or deferred sales
charge. |
Class A Shares Front-End Sales Charge Waivers
Available at Ameriprise Financial:
The
following information applies to Class A shares purchases if you have an account
with or otherwise purchase Fund shares through Ameriprise Financial:
Shareholders
purchasing Fund shares through an Ameriprise Financial brokerage account are
eligible for the following front-end sales charge waivers, which may differ from
those disclosed elsewhere in this Fund’s prospectus or SAI:
◾ |
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, SIMPLE IRAs or
SAR-SEPs. |
◾ |
Shares purchased
through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same Fund (but not any other
fund within the same fund family). |
◾ |
Shares exchanged from
Class C shares of the same fund in the month of or following the 7-year
anniversary of the purchase date. To the extent that this prospectus
elsewhere provides for a waiver with respect to exchanges of Class C
shares or conversion of Class C shares following a shorter holding period,
that waiver will apply. |
◾ |
Employees and
registered representatives of Ameriprise Financial or its affiliates and
their immediate family members. |
◾ |
Shares purchased by
or through qualified accounts (including IRAs, Coverdell Education Savings
Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit
plans) that are held by a covered family member, defined as an Ameriprise
financial advisor and/or the advisor’s spouse, advisor’s lineal ascendant
(mother, father, grandmother, grandfather, great grandmother, great
grandfather), advisor’s lineal descendant (son, step-son, daughter,
step-daughter, grandson, granddaughter, great grandson, great
granddaughter) or any spouse of a covered family member who is a lineal
descendant. |
◾ |
Shares purchased from
the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption,
(2) the redemption and purchase occur in the same account, and
(3) redeemed shares were subject to a front-end or deferred sales
load (i.e. Rights of Reinstatement). |
Intermediary-Defined Sales Charge Waiver
Policies
The
availability of certain initial or deferred sales charge waivers and discounts
may depend on the particular financial intermediary or type of account through
which you purchase or hold Fund shares.
Intermediaries
may have different policies and procedures regarding the availability of
front-end sales load waivers or contingent deferred (back-end) sales load
(“CDSC”) waivers, which are discussed below. In all instances, it is the
purchaser’s responsibility to notify the fund or the purchaser’s financial
intermediary at the time of purchase of any relationship or other facts
qualifying the purchaser for sales charge waivers or discounts. For waivers and
discounts not available through a particular intermediary, shareholders will
have to purchase fund shares directly from the fund or through another
intermediary to receive these waivers or discounts.
Raymond James & Associates, Inc., Raymond
James Financial Services, Inc. and each entity’s affiliates (“Raymond
James”)
Effective
March 1, 2019, shareholders purchasing fund shares through a Raymond James
platform or account, or through an introducing broker-dealer or independent
registered investment adviser for which Raymond James provides trade execution,
clearance, and/or custody services, will be eligible only for the following load
waivers (front-end sales charge waivers and contingent deferred, or back-end,
sales charge waivers) and discounts, which may differ from those disclosed
elsewhere in this fund’s prospectus or SAI.
Front-end sales load waivers on Class A
shares available at Raymond James
◾ |
Shares purchased in
an investment advisory program. |
◾ |
Shares purchased
within the same fund family through a systematic reinvestment of capital
gains and dividend distributions. |
◾ |
Employees and
registered representatives of Raymond James or its affiliates and their
family members as designated by Raymond
James. |
◾ |
Shares purchased from
the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption,
(2) the redemption and purchase occur in the same account, and
(3) redeemed shares were subject to a front-end or deferred sales
load (known as Rights of Reinstatement). |
◾ |
A shareholder in the
Fund’s Class C shares will have their shares converted at net asset value
to Class A shares (or the appropriate share class) of the Fund if the
shares are no longer subject to a CDSC and the conversion is in line with
the policies and procedures of Raymond
James. |
CDSC Waivers on Classes A and C shares
available at Raymond James
◾ |
Death or disability
of the shareholder. |
◾ |
Shares sold as part
of a systematic withdrawal plan as described in the fund’s
prospectus. |
◾ |
Return of excess
contributions from an IRA Account. |
◾ |
Shares sold as part
of a required minimum distribution for IRA and retirement accounts due to
the shareholder reaching the qualified age based on applicable IRS
regulations. |
◾ |
Shares sold to pay
Raymond James fees but only if the transaction is initiated by Raymond
James. |
◾ |
Shares acquired
through a right of reinstatement. |
Front-end load discounts available at Raymond
James: breakpoints, rights of accumulation, and/or letter of intent
◾ |
Breakpoints as
described in this prospectus. |
◾ |
Rights of
accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at Raymond James.
Eligible fund family assets not held at Raymond James may be included in
the calculation of rights of accumulation only if the shareholder notifies
his or her financial advisor about such
assets. |
◾ |
Letters of intent
which allow for breakpoint discounts based on anticipated purchases within
a fund family, over a 13-month time period. Eligible fund family assets
not held at Raymond James may be included in the calculation of letters of
intent only if the shareholder notifies his or her financial advisor about
such assets. |
UBS Financial Services Inc.
UBS may
sell Class Y shares to its retail brokerage clients without a sales charge,
load, or 12b-1 distribution/service fee. UBS may charge commissions to its
clients with respect to brokerage transactions in Class Y shares. Minimum
purchase amounts are waived in such accounts.
Janney Montgomery Scott LLC
Effective
May 1, 2020, if you purchase fund shares through a Janney Montgomery Scott LLC
(“Janney”) brokerage account, you will be eligible for the following load
waivers (front-end sales charge waivers and contingent deferred sales charge
(“CDSC”), or back-end sales charge, waivers) and discounts, which may differ
from those disclosed elsewhere in this fund’s Prospectus or SAI.
Front-end sales charge* waivers on Class A
shares available at Janney
◾ |
Shares purchased
through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family). |
◾ |
Shares purchased by
employees and registered representatives of Janney or its affiliates and
their family members as designated by
Janney. |
◾ |
Shares purchased from
the proceeds of redemptions within the same fund family, provided (1) the
repurchase occurs within ninety (90) days following the redemption, (2)
the redemption and purchase occur in the same account, and (3) redeemed
shares were subject to a front-end or deferred sales load (i.e., right of
reinstatement). |
◾ |
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, SIMPLE IRAs, SAR-SEPs or Keogh
plans. |
◾ |
Shares acquired
through a right of reinstatement. |
◾ |
Class C shares that
are no longer subject to a contingent deferred sales charge and are
converted to Class A shares of the same fund pursuant to Janney’s policies
and procedures. |
CDSC waivers on Class A and C shares
available at Janney
◾ |
Shares sold upon the
death or disability of the shareholder. |
◾ |
Shares sold as part
of a systematic withdrawal plan as described in the fund’s
Prospectus. |
◾ |
Shares purchased in
connection with a return of excess contributions from an IRA
account. |
◾ |
Shares sold as part
of a required minimum distribution for IRA and retirement accounts due to
the shareholder reaching the qualified age based on applicable IRS
regulations. |
◾ |
Shares sold to pay
Janney fees but only if the transaction is initiated by
Janney. |
◾ |
Shares acquired
through a right of reinstatement. |
◾ |
Shares exchanged into
the same share class of a different fund. |
Front-end sales charge* discounts available
at Janney: breakpoints, rights of accumulation, and/or letters of
intent
◾ |
Breakpoints as
described in the fund’s Prospectus. |
◾ |
Rights of
accumulation (“ROA”), which entitle shareholders to breakpoint discounts,
will be automatically calculated based on the aggregated holding of fund
family assets held by accounts within the purchaser’s household at Janney.
Eligible fund family assets not held at Janney may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor
about such assets. |
◾ |
Letters of intent
which allow for breakpoint discounts based on anticipated purchases within
a fund family, over a 13-month time period. Eligible fund family assets
not held at Janney Montgomery Scott may be included in the calculation of
letters of intent only if the shareholder notifies his or her financial
advisor about such assets. |
*Also
referred to as an “initial sales charge.”
Edward D. Jones & Co., L.P. (“Edward
Jones”)
Policies Regarding Transactions Through
Edward Jones
The
following information has been provided by Edward Jones:
Effective
on or after March 1, 2021, the following information supersedes prior
information with respect to transactions and positions held in fund shares
through an Edward Jones system. Clients of Edward Jones (also referred to as
“shareholders”) purchasing fund shares on the Edward Jones commission and
fee-based platforms are eligible only for the following sales charge discounts
(also referred to as “breakpoints”) and waivers, which can differ from discounts
and waivers described elsewhere in the mutual fund prospectus or SAI or through
another broker-dealer. In all instances, it is the shareholder’s responsibility
to inform Edward Jones at the time of purchase of any relationship, holdings of
Davis Funds, or other facts qualifying the purchaser for discounts or waivers.
Edward Jones can ask for documentation of such circumstance. Shareholders should
contact Edward Jones if they have questions regarding their eligibility for
these discounts and waivers.
Breakpoints
◾ |
Breakpoint pricing,
otherwise known as volume pricing, at dollar thresholds as described in
the prospectus. |
Rights of Accumulation (“ROA”)
◾ |
The applicable sales
charge on a purchase of Class A shares is determined by taking into
account all share classes (except certain money market funds and any
assets held in group retirement plans) of the Davis Funds held by the
shareholder or in an account grouped by Edward Jones with other accounts
for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share
classes held on the Edward Jones platform and/or held on another platform.
The inclusion of eligible fund family assets in the ROA calculation is
dependent on the shareholder notifying Edward Jones of such assets at the
time of calculation. Money market funds are included only if such shares
were sold with a sales charge at the time of purchase or acquired in
exchange for shares purchased with a sales
charge. |
◾ |
The employer
maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish
or change ROA for the IRA accounts associated with the plan to a
plan-level grouping as opposed to including all share classes at a
shareholder or pricing group level. |
◾ |
ROA is determined by
calculating the higher of cost minus redemptions or market value (current
shares x NAV). |
Letter of Intent (“LOI”)
◾ |
Through an LOI,
shareholders can receive the sales charge and breakpoint discounts for
purchases shareholders intend to make over a 13-month period from the date
Edward Jones receives the LOI. The LOI is determined by calculating the
higher of cost or market value of qualifying holdings at LOI initiation in
combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint
discounts. Each purchase the shareholder makes during that 13-month period
will receive the sales charge and breakpoint discount that applies to the
total amount. The inclusion of eligible fund family assets in the LOI
calculation is dependent on the shareholder notifying Edward Jones of such
assets at the time of calculation. Purchases made before the LOI is
received by Edward Jones are not adjusted under the LOI and will not
reduce the sales charge previously paid. Sales charges will be adjusted if
the LOI is not met. |
◾ |
If the employer
maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish
or change ROA for the IRA accounts associated with the plan to a
plan-level grouping, LOIs will also be at the plan-level and may only be
established by the employer. |
Sales Charge Waivers
Sales
charges are waived for the following shareholders and in the following
situations:
◾ |
Associates of Edward
Jones and its affiliates and their family members who are in the same
pricing group (as determined by Edward Jones under its policies and
procedures) as the associate. This waiver will continue for the remainder
of the associate’s life if the associate retires from Edward Jones in
good-standing and remains in good standing pursuant to Edward Jones’
policies and procedures. |
◾ |
Shares purchased in
an Edward Jones fee-based program. |
◾ |
Shares purchased
through reinvestment of capital gains distributions and dividend
reinvestment. |
◾ |
Shares purchased from
the proceeds of redeemed shares of the same fund family so long as the
following conditions are met: 1) the proceeds are from the sale of shares
within 60 days of the purchase, and 2) the sale and purchase are made in
the same share class and the same account or the purchase is made in an
individual retirement account with proceeds from liquidations in a
non-retirement account. |
◾ |
Shares exchanged into
Class A shares from another share class so long as the exchange is into
the same fund and was initiated at the discretion of Edward Jones. Edward
Jones will be responsible for any remaining CDSC due to the fund company,
if applicable. |
◾ |
Exchanges from Class
C shares to Class A shares of the same fund, generally, in the 84th
month following the anniversary of the purchase date or earlier at the
discretion of Edward Jones. |
Contingent Deferred Sales Charge (“CDSC”)
Waivers
If the
shareholder purchases shares that are subject to a CDSC and those shares are
redeemed before the CDSC is expired, the shareholder will be responsible to pay
the CDSC except in the following conditions:
◾ |
The death or
disability of the shareholder. |
◾ |
Systematic
withdrawals with up to 10% per year of the account
value. |
◾ |
Return of excess
contributions from an Individual Retirement Account
(IRA). |
◾ |
Shares sold as part
of a required minimum distribution for IRA and retirement accounts due to
the shareholder reaching the qualified age based on applicable IRS
regulations. |
◾ |
Shares sold to pay
Edward Jones fees or costs in such cases where the transaction is
initiated by Edward Jones. |
◾ |
Shares exchanged in
an Edward Jones fee-based program. |
◾ |
Shares acquired
through NAV reinstatement. |
◾ |
Shares redeemed at
the discretion of Edward Jones for Minimums Balances, as described
below. |
Other Important Information Regarding
Transactions Through Edward Jones
Minimum Purchase Amounts
◾ |
Initial purchase
minimum: $250 |
◾ |
Subsequent purchase
minimum: none |
Minimum Balances
◾ |
Edward Jones has the
right to redeem at its discretion fund holdings with a balance of $250 or
less. The following are examples of accounts that are not included in this
policy: |
o |
A fee-based account
held on an Edward Jones platform |
o |
A 529 account held on
an Edward Jones platform |
o |
An account with an
active systematic investment plan or LOI |
Exchanging Share Classes
◾ |
At any time it deems
necessary, Edward Jones has the authority to exchange at NAV a
shareholder’s holdings in a fund to Class A shares of the same
fund. |
Effective
February 26, 2020, shareholders purchasing Fund shares through an OPCO platform
or account are eligible only for the following load waivers (front-end sales
charge waivers and contingent deferred, or back-end, sales charge waivers) and
discounts, which may differ from those disclosed elsewhere in this Fund’s
prospectus or SAI.
Front-end Sales Load Waivers on Class A
Shares available at OPCO
◾ |
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including
health savings accounts) and trusts used to fund those plans, provided
that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the
plan |
◾ |
Shares purchased by
or through a 529 Plan |
◾ |
Shares purchased
through a OPCO affiliated investment advisory
program |
◾ |
Shares purchased
through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
◾ |
Shares purchased form
the proceeds of redemptions within the same fund family, provided (1) the
repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same amount, and (3) redeemed shares
were subject to a front-end or deferred sales load (known as Rights of
Restatement). |
◾ |
A shareholder in the
Fund’s Class C shares will have their shares converted at net asset value
to Class A shares (or the appropriate share class) of the Fund if the
shares are no longer subject to a CDSC and the conversion is in line with
the policies and procedures of OPCO |
◾ |
Employees and
registered representatives of OPCO or its affiliates and their family
members |
◾ |
Directors or Trustees
of the Fund, and employees of the Fund’s investment adviser or any of its
affiliates, as described in this
prospectus |
CDSC Waivers on A and C Shares available at
OPCO
◾ |
Death or disability
of the shareholder |
◾ |
Shares sold as part
of a systematic withdrawal plan as described in the Fund’s
prospectus |
◾ |
Return of excess
contributions from an IRA Account |
◾ |
Shares sold as part
of a required minimum distribution for IRA and retirement accounts due to
the shareholder reaching the qualified age based on applicable IRS
regulations |
◾ |
Shares sold to pay
OPCO fees but only if the transaction is initiated by
OPCO |
◾ |
Shares acquired
through a right of reinstatement |
Front-end load Discounts Available at OPCO:
Breakpoints, Rights of Accumulation &
Letters of Intent
◾ |
Breakpoints as
described in this prospectus. |
◾ |
Rights of
Accumulation (ROA) which entitle shareholders to breakpoint discounts will
be automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at OPCO. Eligible
fund family assets not held at OPCO may be included in the ROA calculation
only if the shareholder notifies his or her financial advisor about such
assets |
Effective
June 15, 2020, shareholders purchasing Fund shares through a Baird platform or
account will only be eligible for the following sales charge waivers (front-end
sales charge waivers and CDSC waivers) and discounts, which may differ from
those disclosed elsewhere in this prospectus or the SAI.
Front-End Sales Charge Waivers on Class A
Shares Available at Baird
◾ |
Shares purchased
through reinvestment of capital gain distributions and dividend
reinvestments when purchasing shares of the same
Fund |
◾ |
Shares purchased by
employees and registered representatives of Baird or its affiliates and
their family members as designated by
Baird |
◾ |
Shares purchase from
the proceeds of redemptions from another Davis Fund, provided (1) the
repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed
shares were subject to a front-end or deferred sales charge (known as
rights of reinstatement) |
◾ |
A shareholder in the
Funds’ Class C shares will have their shares converted at net asset value
to Class A shares of the Fund if the shares are no longer subject to CDSC
and the conversion is in line with the policies and procedures of
Baird |
◾ |
Employer-sponsored
retirement plans or charitable accounts in a transactional brokerage
account at Baird, including 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit sharing and money purchase pension plans and defined
benefit plans. For purposes of this provision, employer-sponsored
retirement plans do not include SEP IRAs, SIMPLE IRAs or
SAR-SEPs |
CDSC Waivers on Class A and C shares
Available at Baird
◾ |
Shares sold due to
death or disability of the shareholder |
◾ |
Shares sold as part
of a systematic withdrawal plan as described in the Fund’s
Prospectus |
◾ |
Shares sold due to
returns of excess contributions from an IRA
Account |
◾ |
Shares sold as part
of a required minimum distribution for IRA and retirement accounts due to
the shareholder reaching the qualified age based on applicable IRS
regulations |
◾ |
Shares sold to pay
Baird fees but only if the transaction is initiated by
Baird |
◾ |
Shares acquired
through a right of reinstatement |
Front-End Sales Charge Discounts Available at
Baird: Breakpoints and/or Rights of Accumulation
◾ |
Breakpoints as
described in this prospectus |
◾ |
Rights of
accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holdings of Davis Fund
assets held by accounts within the purchaser’s household at Baird.
Eligible Davis Fund assets not held at Baird may be included in the rights
of accumulation calculations only if the shareholder notifies his or her
financial advisor about such assets |
◾ |
Letters of Intent
(LOI) allow for breakpoint discounts based on anticipated purchases of
Davis Fund shares through Baird over a 13-month period of
time |
Obtaining
Additional Information
Additional information
about the Funds’ investments is available in the Funds’ annual and semi-annual
reports to shareholders. In the Funds’ annual report, you will find a discussion
of the market conditions and investment strategies that significantly affected
the Funds’ performance during their last fiscal year. The SAI provides more
detailed information about Davis Funds and their management and operations. The
SAI and the Funds’ annual and semi-annual reports are available, without charge,
upon request.
The Funds’ SAI has been
filed with the Securities and Exchange Commission, is incorporated into this
prospectus by reference, and is legally a part of this prospectus.
Additional information can be requested:
By Telephone. Call
Davis Funds toll-free at 1‑800‑279‑0279,
Monday through Friday, from 9 a.m. to 6 p.m. Eastern time. You may also call
this number for account inquiries.
By Mail. Write
to: Davis Funds
P.O.
Box 219197
Kansas
City, MO 64121-9197
On the
Internet. www.davisfunds.com
From the SEC. Additional copies of the registration
statement can be obtained, for a duplicating fee, by sending an electronic
request to
[email protected]. Reports
and other information about the Funds are also available on the EDGAR database
on the SEC website
(www.sec.gov). The
current SAI and shareholder reports are also available, free of charge, on our
website, davisfunds.com.
Over 50
years of Reliable InvestingSM Investment
Company Act File No. 811-2679