Form 485BPOS
|
| |
| |
|
Prospectus |
|
2024 |
| |
May 1, 2024 |
|
|
|
Stock Fund
Established 1965 | Class I (DODGX) | Class X (DOXGX)
Global Stock Fund
Established 2008 | Class I (DODWX) | Class X (DOXWX)
International Stock Fund
Established 2001 | Class I (DODFX) | Class X (DOXFX)
Emerging Markets Stock Fund
Established 2021 | DODEX
Balanced Fund
Established 1931 | Class I (DODBX) | Class X (DOXBX)
Income Fund
Established 1989 | Class I (DODIX) | Class X (DOXIX)
Global Bond Fund
Established 2014 | Class I (DODLX) | Class X (DOXLX)
The
Securities and Exchange Commission (“SEC”) has not approved or disapproved these
securities or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
05/24PR
Printed on recycled paper
Table of Contents
|
| |
| |
Fund
Summaries |
1 |
|
|
4 |
|
|
8 |
|
|
12 |
|
|
16 |
|
|
20 |
|
|
24 |
|
|
28 |
|
|
29 |
|
|
34 |
|
|
34 |
|
|
34 |
|
|
40 |
|
|
48 |
|
|
49 |
|
|
50 |
|
|
52 |
|
|
55 |
|
|
56 |
|
|
57 |
|
|
57 |
|
|
57 |
|
|
58 |
|
|
59 |
|
|
61 |
|
|
68 |
|
|
69 |
|
|
Mutual
fund shares are not deposits or obligations of, or guaranteed by, any depository
institution. Shares are not insured by the FDIC, Federal Reserve, or any other
government agency, and are subject to investment risks, including possible loss
of your investment.
Dodge & Cox Stock Fund
Investment Objectives
The Fund seeks long-term growth of
principal and income. A secondary objective is to achieve a reasonable current
income.
Fees and Expenses
This
table describes 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.
|
|
|
|
|
|
|
| |
Shareholder Fees
(fees
paid directly from your investment) |
|
Dodge & Cox Stock – Class I |
|
|
Dodge & Cox Stock – Class X |
|
Sales
charge (load) imposed on purchases |
|
|
None |
|
|
|
None |
|
Deferred
sales charge (load) |
|
|
None |
|
|
|
None |
|
Sales
charge (load) imposed on reinvested distributions |
|
|
None |
|
|
|
None |
|
Redemption
fee |
|
|
None |
|
|
|
None |
|
Exchange
fee |
|
|
None |
|
|
|
None |
|
|
|
|
|
|
|
|
| |
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of
the value of your investment) |
|
Dodge & Cox Stock – Class I |
|
|
Dodge & Cox Stock – Class X |
|
Management
fees* |
|
|
0.50 |
% |
|
|
0.45 |
% |
Distribution
and/or service (12b-1) fees |
|
|
None |
|
|
|
None |
|
Other
expenses (custody, accounting, legal, etc.) |
|
|
0.01 |
% |
|
|
0.01 |
% |
| |
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
0.51 |
% |
|
|
0.46 |
%** |
Expense
reimbursement |
|
|
None |
|
|
|
0.05 |
%** |
| |
|
|
|
|
|
|
|
Net
Expenses |
|
|
0.51 |
% |
|
|
0.41 |
%** |
* |
|
Management fees include investment
advisory fee expenses of 0.40% for each class; and administrative services
fee expenses of 0.10% for Class I shares and 0.05% for Class X
shares. |
** |
|
Dodge & Cox has contractually
agreed to reimburse the Fund for all ordinary expenses to the extent
necessary to maintain Total Annual Fund Operating Expenses of Class X
at 0.41% until April 30, 2026. This agreement cannot be terminated
prior to April 30, 2026 other
than by resolution of the Fund’s Board of Trustees. For purposes of the
foregoing, ordinary expenses shall not include nonrecurring shareholder
account fees, fees and expenses associated with Fund shareholder meetings,
fees on portfolio transactions such as exchange fees, dividends and
interest on short positions, fees and expenses of pooled investment
vehicles that are held by the Fund, interest expenses and other fees and
expenses related to any borrowings, taxes, brokerage fees and commissions
and other costs and expenses relating to the acquisition and disposition
of Fund investments, other expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
non-routine expenses or extraordinary expenses not incurred in the
ordinary course of the Fund’s business, such as litigation expenses. The
term of the agreement will automatically renew for subsequent three-year
terms unless terminated with at least 30 days’ written notice by either
party prior to the end of the then-current term. The agreement does not
permit Dodge & Cox to recoup any fees waived or payments made to
the Fund for a prior year. |
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
Class I shares and/or Class X shares of the Fund for the time
periods indicated and then redeem all of your shares of the Fund’s
Class I shares and/or the Fund’s Class X shares at the end of
those time periods; |
∎ |
|
Your investment has a 5%
return each year; |
∎ |
|
The Fund’s operating
expenses remain the same; and |
∎ |
|
The Class X expense
reimbursement agreement is effective until April 30, 2026.
|
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 |
|
Dodge &
Cox Stock – Class I |
|
$ |
52 |
|
|
$ |
164 |
|
|
$ |
285 |
|
|
$ |
640 |
|
Dodge &
Cox Stock – Class X |
|
$ |
42 |
|
|
$ |
137 |
|
|
$ |
247 |
|
|
$ |
569 |
|
Portfolio Turnover
The
Fund incurs transaction costs, such as commissions, when Dodge & Cox
buys and sells securities (or “turns over” the 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 transaction 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
The
Fund invests primarily in a diversified portfolio of equity securities. Under
normal circumstances, the Fund will invest at least 80% of its total assets in
equity securities, including common stocks, depositary receipts evidencing
ownership of common stocks, certain preferred stocks, securities convertible
into common stocks, and securities that carry the right to buy common stocks
(e.g., rights and warrants). The Fund may invest up to 20% of its total assets
in securities of non-U.S. issuers that are not in the S&P 500 Index,
provided that that no more than 5% of the Fund’s total assets may be invested in
non-U.S. dollar denominated securities. The Fund may use equity options or total
return swaps referencing single stocks or stock indices to create or hedge
equity exposure. The Fund may also use futures referencing stock indices such as
the S&P 500 Index to equitize, or create equity market exposure,
approximately equal to some or all of its cash and cash equivalents,
receivables, and similar non-equity assets, or to hedge against a general
downturn in the equity markets.
The
Fund typically invests in medium-to-large well-established companies based on
standards of the applicable market. In selecting investments, the Fund typically
invests in companies that, in Dodge & Cox’s opinion, appear to be
temporarily undervalued by the stock market but have a favorable outlook for
long-term profit growth. The Fund focuses on the underlying financial condition
and prospects of individual companies, including future earnings, cash flow, and
dividends. Various other factors, including financial strength, economic
condition, competitive advantage, quality of the business franchise, financially
material environmental, social, and governance (ESG) issues, and the reputation,
experience, and competence of a company’s management are weighed against
valuation in selecting individual securities. The Fund also considers the
economic and political stability of the country where the issuer is located and
the protections provided to shareholders.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
1 |
Principal Risks of
Investing
You could lose
money by investing in the Fund, and the Fund could underperform other
investments. You should expect the Fund’s share price and total
return to fluctuate within a wide range. The Fund’s performance could be hurt
by:
∎ |
|
Equity risk. Equity securities can be
volatile and may decline in value because of changes in the actual or
perceived financial condition of their issuers or other events affecting
their issuers. |
∎ |
|
Market risk. Investment prices may increase
or decrease, sometimes suddenly and unpredictably, due to general market
conditions. Local, regional or global events such as war, acts of
terrorism, the spread of infectious illness or other public health issue,
recessions, inflation, or other events could also have a significant
impact on the Fund and its investments and potentially increase the risks
described herein. |
∎ |
|
Manager risk. Dodge & Cox’s opinion
about the intrinsic worth or creditworthiness of a company or security may
be incorrect or the market may continue to undervalue the company or
security. Depending on market conditions, Dodge & Cox’s investing
style may perform better or worse than portfolios with a different
investment style. Dodge & Cox may not make timely purchases or
sales of securities for the Fund. The Fund may underperform the broad
market, relevant indices, or other funds with similar objectives and
investment strategies. |
∎ |
|
Liquidity risk. The Fund may not be able to
purchase or sell a security in a timely manner or at desired prices or
achieve its desired weighting in a security.
|
∎ |
|
Derivatives risk. Investing with
derivatives, such as equity index futures, equity options, and total
return swaps, and other similar investments (collectively referred to as
“derivatives”) involves risks additional to and possibly greater than
those associated with investing directly in securities. The value of a
derivative may not correlate to the value of the underlying instrument to
the extent expected. A derivative can create leverage because it can
result in exposure to an amount of a security, index, or other underlying
investment (a “notional amount”) that is substantially larger than the
derivative position’s market value. Often, the upfront payment required to
enter into a derivative is much smaller than the potential for loss, which
for certain types of derivatives, including the sale of call options, may
be unlimited. The Fund may not be able to close a derivatives position at
an advantageous time or price. As a result, the Fund may be required to
continue making required margin and settlement payments and, if the Fund
has insufficient cash on hand to meet such requirements, it may have to
sell securities from its portfolio at a time when it may be
disadvantageous to do so. For over-the-counter derivatives transactions,
the counterparty may be unable or unwilling to make required payments and
deliveries, especially during times of financial market distress.
Derivatives also can create operational and legal risk. Changes in
regulation relating to a mutual fund’s use of derivatives and related
instruments may make derivatives more costly, limit the availability of
derivatives, or otherwise adversely affect the value or performance of
derivatives and the Fund. |
An investment in the Fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
The
following bar chart and table are intended to help you understand the risks of
investing in the Fund. The bar chart shows changes in the
Fund’s Class I shares’ returns from year to year. The table shows how
the average annual total returns of the Fund’s Class I shares and
Class X shares compare to those of a primary and secondary broad-based
securities market index. The
Fund’s primary benchmark is the S&P 500 Index, which consists of large cap
equity securities and is generally considered representative of the U.S. stock
market as a whole. The Fund’s secondary benchmark is the Russell 1000 Value
Index, which measures the performance of the large capitalization value segment
of the U.S. equity universe.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Visit the Fund’s
website at dodgeandcox.com or call
800-621-3979 for current
performance figures.
Highest/Lowest
quarterly results for the Fund’s Class I shares during the time
period were:
Highest:
20.87% (quarter ended December 31, 2020)
Lowest: –29.16% (quarter ended March 31, 2020)
Average Annual Total
Returns for the Periods Ended 12/31/2023
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge &
Cox
Stock – Class I |
|
1 Year |
|
|
5 Years |
|
|
10 Years |
|
Return
before taxes |
|
|
17.49 |
% |
|
|
13.94 |
% |
|
|
10.45 |
% |
Return
after taxes on distributions |
|
|
16.39 |
|
|
|
12.28 |
|
|
|
8.83 |
|
Return
after taxes on distributions and sale of Fund shares |
|
|
11.04 |
|
|
|
10.82 |
|
|
|
8.10 |
|
Dodge &
Cox
Stock – Class X* |
|
|
|
|
|
|
|
|
|
Return
before taxes |
|
|
17.59 |
|
|
|
13.98 |
|
|
|
10.46 |
|
S&P
500 Index (reflects no deduction for expenses or taxes) |
|
|
26.29 |
|
|
|
15.69 |
|
|
|
12.03 |
|
Russell
1000 Value Index (reflects no deduction for expenses or taxes) |
|
|
11.46 |
|
|
|
10.91 |
|
|
|
8.40 |
|
* |
|
The Fund’s Class X shares launched
on May 1, 2022. In the table above, Class X returns for periods prior
to its launch are calculated using performance of the Fund’s Class I
shares. |
|
| |
PAGE 2 ∎ DODGE & COX FUNDS |
|
|
The after-tax returns shown above are for the
Fund’s Class I shares. The after-tax returns for the Fund’s Class X
shares will vary. After-tax returns are calculated using the
historical highest individual federal marginal income tax rates, but do not
reflect the impact of state or local taxes. Actual after-tax
returns may differ depending on
your
individual circumstances. After-tax return figures do not apply to you if
you hold your Fund shares through a tax-deferred arrangement such as a 401(k)
plan or an individual retirement account.
Fund Management
Dodge &
Cox serves as investment manager to the Stock Fund. The Fund is managed by
Dodge & Cox’s U.S. Equity Investment Committee (“USEIC”), which consists of the following seven
members:
|
|
|
| |
Committee Member |
|
Primary Titles with Investment Manager |
|
Years managing the
Fund/ Years with Dodge & Cox |
David C. Hoeft |
|
Senior
Vice President, Director, Chief Investment Officer, and member of Global
Equity Investment Committee (“GEIC”), Emerging Markets Equity Investment
Committee (“EMEIC”), and Balanced Fund Investment Committee (“BFIC”) |
|
22/31 |
Steven C. Voorhis |
|
Senior
Vice President, Director of Research, and member of GEIC |
|
18/28 |
Philippe Barret, Jr. |
|
Senior
Vice President and Director (since 2022), Research Analyst, and member of
BFIC |
|
11/20 |
Kathleen G. McCarthy |
|
Vice
President and Research Analyst |
|
8/17 |
Karol Marcin |
|
Vice
President, Research Analyst, and member of GEIC |
|
6/24 |
Benjamin V. Garosi |
|
Vice
President and Research Analyst, and member of BFIC |
|
5/15 |
Karim Fakhry |
|
Vice
President and Research Analyst |
|
3/19 |
Other Important
Information About Fund Shares
For
important information about purchase and sale of Fund shares, tax information,
and payments to financial intermediaries please turn to the “Summary of Other
Important Information About Fund Shares” section on page 28 of this
prospectus.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
3 |
Dodge & Cox Global Stock Fund
Investment Objective
The
Fund seeks long-term growth of principal and income.
Fees and Expenses
This
table describes 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.
|
|
|
|
|
|
|
| |
Shareholder Fees
(fees paid directly from your investment) |
|
Dodge & Cox Global Stock – Class I |
|
|
Dodge & Cox Global Stock – Class X |
|
Sales
charge (load) imposed on purchases |
|
|
None |
|
|
|
None |
|
Deferred
sales charge (load) |
|
|
None |
|
|
|
None |
|
Sales
charge (load) imposed on reinvested distributions |
|
|
None |
|
|
|
None |
|
Redemption
fee |
|
|
None |
|
|
|
None |
|
Exchange
fee |
|
|
None |
|
|
|
None |
|
|
|
|
|
|
|
|
| |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of
your investment) |
|
Dodge & Cox Global Stock – Class I |
|
|
Dodge & Cox Global Stock – Class X |
|
Management
fees* |
|
|
0.60 |
% |
|
|
0.55 |
% |
Distribution
and/or service (12b-1) fees |
|
|
None |
|
|
|
None |
|
Other
expenses (custody, accounting, legal, etc.) |
|
|
0.02 |
% |
|
|
0.02 |
% |
| |
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
0.62 |
% |
|
|
0.57 |
%** |
Expense
Reimbursement |
|
|
None |
|
|
|
0.05 |
%** |
| |
|
|
|
|
|
|
|
Net
Expenses |
|
|
0.62 |
% |
|
|
0.52 |
%** |
* |
|
Management fees include investment
advisory fee expenses of 0.50% for each class; and administrative services
fee expenses of 0.10% for the Fund’s Class I shares and 0.05% for the
Fund’s Class X shares. |
** |
|
Dodge & Cox has contractually
agreed to reimburse the Fund for all ordinary expenses to the extent
necessary to maintain Total Annual Fund Operating Expenses of the Fund’s
Class X at 0.52% until April 30, 2026. This agreement cannot be
terminated prior to April 30, 2026 other
than by resolution of the Fund’s Board of Trustees. For purposes of the
foregoing, ordinary expenses shall not include nonrecurring shareholder
account fees, fees and expenses associated with Fund shareholder meetings,
fees on portfolio transactions such as exchange fees, dividends and
interest on short positions, fees and expenses of pooled investment
vehicles that are held by the Fund, interest expenses and other fees and
expenses related to any borrowings, taxes, brokerage fees and commissions
and other costs and expenses relating to the acquisition and disposition
of Fund investments, other expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
non-routine expenses or extraordinary expenses not incurred in the
ordinary course of the Fund’s business, such as litigation expenses. The
term of the agreement will automatically renew for subsequent three-year
terms unless terminated with at least 30 days’ written notice by either
party prior to the end of the then-current term. The agreement does not
permit Dodge & Cox to recoup any fees waived or payments made to
the Fund for a prior year. |
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
Class I and/or Class X shares of the Fund for the time periods
indicated and then redeem all of your shares of the Fund’s Class I
and/or the Fund’s Class X at the end of those time periods;
|
∎ |
|
Your investment has a 5%
return each year; |
∎ |
|
The Fund’s operating
expenses remain the same; and |
∎ |
|
The Class X expense
reimbursement agreement is effective until April 30, 2026.
|
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 |
|
Dodge &
Cox Global Stock – Class I |
|
$ |
63 |
|
|
$ |
199 |
|
|
$ |
346 |
|
|
$ |
774 |
|
Dodge &
Cox Global Stock – Class X |
|
$ |
53 |
|
|
$ |
172 |
|
|
$ |
308 |
|
|
$ |
704 |
|
Portfolio Turnover
The
Fund incurs transaction costs, such as commissions, when Dodge & Cox
buys and sells securities (or “turns over” the 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 transaction 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 20% of the average value of its portfolio.
Principal Investment
Strategies
The
Fund invests primarily in a diversified portfolio of equity securities issued by
companies from at least three different countries, which may include emerging
market countries. The Fund is not required to allocate its investments in set
percentages in particular countries and may invest in emerging markets without
limit. Under normal circumstances, the Fund will invest at least 40% of its
total assets in securities of non-U.S. companies and at least 80% of its total
assets in equity securities, including common stocks, depositary receipts
evidencing ownership of common stocks, certain preferred stocks, securities
convertible into common stocks, and securities that carry the right to buy
common stocks (e.g., rights and warrants). The Fund may enter into currency
forward contracts, currency swaps, or currency futures contracts to hedge direct
and/or indirect currency exposure or currency risk. The Fund may use equity
options or total return swaps referencing single stocks or stock indices to
create or hedge equity exposure. The Fund may also use futures referencing stock
indices to equitize, or create equity market exposure, approximately equal to
some or all of its cash and cash equivalents, receivables, and similar
non-equity assets, or to hedge against a general downturn in the
equity markets.
The
Fund typically invests in medium-to-large well-established companies based on
standards of the applicable market. In selecting investments, the Fund typically
invests in companies that, in Dodge & Cox’s opinion, appear to be
temporarily undervalued by the stock market but have a favorable outlook for
long-term profit growth. The Fund also focuses on the underlying financial
condition and prospects of individual companies, including future earnings, cash
flow, and dividends. Various other factors, including financial strength,
economic condition, competitive advantage, quality of the
|
| |
PAGE 4 ∎ DODGE & COX FUNDS |
|
|
business
franchise, financially material environmental, social, and governance (ESG)
issues, and the reputation, experience, and competence of a company’s management
are weighed against valuation in selecting individual securities. The Fund also
considers the economic and political stability of the country where the issuer
is located and the protections provided to shareholders.
Principal Risks of
Investing
You could lose
money by investing in the Fund, and the Fund could underperform other
investments. You should expect the Fund’s share price and total
return to fluctuate within a wide range. The Fund’s performance could be hurt
by:
∎ |
|
Equity risk. Equity securities can be
volatile and may decline in value because of changes in the actual or
perceived financial condition of their issuers or other events affecting
their issuers. |
∎ |
|
Market risk. Investment prices may increase
or decrease, sometimes suddenly and unpredictably, due to general market
conditions. Local, regional or global events such as war, acts of
terrorism, the spread of infectious illness or other public health issue,
recessions, inflation, or other events could also have a significant
impact on the Fund and its investments and potentially increase the risks
described herein. |
∎ |
|
Manager risk. Dodge & Cox’s opinion
about the intrinsic worth or creditworthiness of a company or security may
be incorrect or the market may continue to undervalue the company or
security. Depending on market conditions, Dodge & Cox’s investing
style may perform better or worse than portfolios with a different
investment style. Dodge & Cox may not make timely purchases or
sales of securities for the Fund. The Fund may underperform the broad
market, relevant indices, or other funds with similar objectives and
investment strategies. |
∎ |
|
Non-U.S. investment risk. Securities of
non-U.S. issuers (including ADRs, ADSs, GDRs and other securities that
represent interests in a non-U.S. issuer’s securities) may be more
volatile, harder to value, and have lower overall liquidity than U.S.
securities. Non-U.S. issuers may be subject to political, economic, or
market instability, or unfavorable government action in their local
jurisdictions or economic sanctions or other restrictions imposed by U.S.
or foreign regulators. There may be less information publicly available
about non-U.S. issuers and their securities, and those issuers may be
subject to lower levels of government regulation and oversight. Non-U.S.
stock markets may decline due to conditions specific to an individual
country, including unfavorable economic conditions relative to the United
States. The Fund generally holds non-U.S. securities and cash in foreign
banks and securities depositories, which may be recently organized or new
to the foreign custody business and may be subject to only limited or no
regulatory oversight. There may be increased risk of delayed transaction
settlement. These risks may be higher when investing in emerging and
frontier markets. Certain of these elevated risks may also apply to
securities of U.S. issuers with significant non-U.S. operations.
|
∎ |
|
Emerging markets risk. Emerging market
securities may present issuer, market, currency, liquidity, volatility,
valuation, legal, political, and other risks different from, and
potentially greater than, the risks of investing in securities of issuers
in more developed markets. Emerging markets may have less established
|
|
|
legal,
accounting, and financial reporting systems than those in more developed
markets, which may reduce the scope or quality of financial information
available to investors. In addition, companies in emerging markets may be
subject to less stringent standards on disclosure, accounting and
financial reporting, and recordkeeping, which may affect the Fund’s
ability to evaluate potential and current investments. Relatedly,
securities of companies in emerging markets that are listed on exchanges
may be delisted if they do not meet relevant accounting standards and
auditor oversight requirements, which could significantly decrease the
liquidity and value of the securities. Governments in emerging market
countries may exercise greater control over their financial markets, more
frequently make significant changes to economic policy, be less stable and
be more likely to take extra-legal action with respect to companies,
industries, assets, or foreign ownership than those in more developed
markets. Moreover, investor protection regimes may be more limited in
emerging markets. For example, it may be more difficult for shareholders
to bring derivative litigation or for U.S. regulators to bring enforcement
actions against issuers in emerging markets. Emerging market securities
may also be more volatile, more difficult to value, and have lower overall
liquidity than securities economically tied to U.S. or developed non-U.S.
markets. |
∎ |
|
Non-U.S. currency risk. Non-U.S. currencies
may decline relative to the U.S. dollar, which reduces the unhedged value
of securities denominated in or otherwise exposed to those currencies.
Dodge & Cox may not hedge or may not be successful in hedging the
Fund’s currency exposure and may not be able to determine accurately the
extent to which a security or its issuer is exposed to currency risk.
|
∎ |
|
Liquidity risk. The Fund may not be able to
purchase or sell a security in a timely manner or at desired prices or
achieve its desired weighting in a security.
|
∎ |
|
Derivatives risk. Investing with
derivatives, such as currency forward contracts, currency swaps, equity
options, equity index futures and total return swaps, and other similar
investments (collectively referred to as “derivatives”) involves risks
additional to and possibly greater than those associated with investing
directly in securities. The value of a derivative may not correlate to the
value of the underlying instrument to the extent expected. A derivative
can create leverage because it can result in exposure to an amount of a
security, index, or other underlying investment (a “notional amount”) that
is substantially larger than the derivative position’s market value.
Often, the upfront payment required to enter into a derivative is much
smaller than the potential for loss, which for certain types of
derivatives may be unlimited. The Fund may not be able to close a
derivatives position at an advantageous time or price. As a result, the
Fund may be required to continue making required margin and settlement
payments and, if the Fund has insufficient cash on hand to meet such
requirements, it may have to sell securities from its portfolio at a time
when it may be disadvantageous to do so. For over-the-counter derivatives
transactions, the counterparty may be unable or unwilling to make required
payments and deliveries, especially during times of financial market
distress. Derivatives also can create operational and legal risk. Changes
in regulation relating to a mutual fund’s use of
|
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
5 |
|
|
derivatives
and related instruments may make derivatives more costly, limit the
availability of derivatives, or otherwise adversely affect the value or
performance of derivatives and the Fund.
|
∎ |
|
Geographic risk. From time to time the Fund
may invest a substantial amount of its assets in issuers located in a
single country or a limited number of countries. If the Fund focuses its
investments in this manner, risks relating to economic, political and
social conditions in those countries will have a significant impact on its
investment performance. The Fund’s investment performance may be more
volatile if it focuses its investments in certain countries, especially
emerging market or frontier market countries.
|
An
investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Performance Information
The
following bar chart and table are intended to help you understand the risks of
investing in the Fund. The bar chart shows changes in the
Fund’s Class I shares’ returns from year to year. The table shows how
the average annual total returns of the Fund’s Class I shares
and Class X shares compare to those of a broad measure of market
performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Visit the Fund’s
website at dodgeandcox.com or call
800-621-3979 for current
performance figures.
Highest/Lowest
quarterly results for the Fund’s Class I shares during the time period
were:
Highest:
24.08% (quarter ended December 31, 2020)
Lowest:
–31.00% (quarter ended March 31,
2020)
Average Annual Total
Returns for the Periods Ended 12/31/2023
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox Global
Stock – Class I |
|
1 Year |
|
|
5 Years |
|
|
10 Years |
|
Return
before taxes |
|
|
20.26 |
% |
|
|
12.43 |
% |
|
|
8.18 |
% |
Return
after taxes on distributions |
|
|
19.91 |
|
|
|
11.05 |
|
|
|
6.96 |
|
Return
after taxes on distributions and sale of Fund shares |
|
|
12.42 |
|
|
|
9.79 |
|
|
|
6.42 |
|
Dodge &
Cox
Global
Stock – Class X* |
|
|
|
|
|
|
|
|
|
Return
before taxes |
|
|
20.38 |
|
|
|
12.46 |
|
|
|
8.20 |
|
MSCI
ACWI Index (Net)** (reflects no deduction for expenses
or taxes) |
|
|
22.20 |
|
|
|
11.72 |
|
|
|
7.93 |
|
* |
|
The Fund’s Class X shares launched
on May 1, 2022. In the table above, Class X returns for periods prior
to its launch are calculated using performance of the Fund’s Class I
shares. |
** |
|
MSCI ACWI Index (Net) returns are
calculated applying dividend withholding rates applicable to non-resident
persons who do not benefit from double taxation treaties. Withholding
rates applicable to the Fund may be lower.
|
The after-tax returns shown above are for the
Fund’s Class I shares. The after-tax returns of the Fund’s Class X
shares will vary. After-tax returns are calculated using the
historical highest individual federal marginal income tax rates, but do not
reflect the impact of state or local taxes. Actual after-tax
returns may differ depending on your individual circumstances. After-tax return figures do not apply to you if
you hold your Fund shares through a tax-deferred arrangement such as a 401(k)
plan or an individual retirement account.
|
| |
PAGE 6 ∎ DODGE & COX FUNDS |
|
|
Fund Management
Dodge &
Cox serves as investment manager to the Global Stock Fund. The Fund is managed
by Dodge & Cox’s Global Equity Investment Committee (“GEIC”), which consists of the following six
members:
|
|
|
| |
Committee Member |
|
Primary Titles with Investment Manager |
|
Years managing the
Fund/ Years with Dodge & Cox |
David C. Hoeft |
|
Senior
Vice President, Director, Chief Investment Officer, and member of U.S.
Equity Investment Committee (“USEIC”), Emerging Markets Equity Investment
Committee (“EMEIC”), and Balanced Fund Investment Committee (“BFIC”) |
|
8/31 |
Steven C. Voorhis |
|
Senior
Vice President, Director of Research, and member of USEIC |
|
16/28 |
Roger G. Kuo |
|
President
(since 2022), Director, Research Analyst, and member of International
Equity Investment Committee (“IEIC”) |
|
14/26 |
Karol Marcin |
|
Vice
President, Research Analyst, and member of USEIC |
|
16/24 |
Lily S. Beischer |
|
Vice
President and Research Analyst |
|
16/23 |
Raymond J. Mertens |
|
Senior
Vice President and Director (since 2022), Research Analyst, and member of
IEIC |
|
3/21 |
Other Important
Information About Fund Shares
For
important information about purchase and sale of Fund shares, tax information,
and payments to financial intermediaries please turn to the “Summary of Other
Important Information About Fund Shares” section on page 28 of this
prospectus.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
7 |
Dodge & Cox International Stock Fund
Investment Objective
The
Fund seeks long-term growth of principal
and income.
Fees and Expenses
This
table describes 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.
|
|
|
|
|
|
|
| |
Shareholder Fees
(fees
paid directly from your investment) |
|
Dodge & Cox International Stock – Class I |
|
|
Dodge & Cox International Stock – Class X |
|
Sales
charge (load) imposed on purchases |
|
|
None |
|
|
|
None |
|
Deferred
sales charge (load) |
|
|
None |
|
|
|
None |
|
Sales
charge (load) imposed on reinvested distributions |
|
|
None |
|
|
|
None |
|
Redemption
fee |
|
|
None |
|
|
|
None |
|
Exchange
fee |
|
|
None |
|
|
|
None |
|
|
|
|
|
|
|
|
| |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
|
Dodge & Cox International Stock – Class I |
|
|
Dodge & Cox International Stock – Class X |
|
Management
fees* |
|
|
0.60 |
% |
|
|
0.55 |
% |
Distribution
and/or service (12b-1) fees |
|
|
None |
|
|
|
None |
|
Other
expenses (custody, accounting, legal, etc.) |
|
|
0.02 |
% |
|
|
0.02 |
% |
| |
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
0.62 |
% |
|
|
0.57 |
%** |
Expense
reimbursement |
|
|
None |
|
|
|
0.05 |
%** |
| |
|
|
|
|
|
|
|
Net
Expenses |
|
|
0.62 |
% |
|
|
0.52 |
%** |
* |
|
Management fees include investment
advisory fee expenses of 0.50% for each class; and administrative services
fee expenses of 0.10% for the Fund’s Class I shares and 0.05% for the
Fund’s Class X shares. |
** |
|
Dodge & Cox has contractually
agreed to reimburse the Fund for all ordinary expenses to the extent
necessary to maintain Total Annual Fund Operating Expenses of the Fund’s
Class X shares at 0.52% until April 30, 2026. This agreement
cannot be terminated prior to April 30, 2026 other
than by resolution of the Fund’s Board of Trustees. For purposes of the
foregoing, ordinary expenses shall not include nonrecurring shareholder
account fees, fees and expenses associated with Fund shareholder meetings,
fees on portfolio transactions such as exchange fees, dividends and
interest on short positions, fees and expenses of pooled investment
vehicles that are held by the Fund, interest expenses and other fees and
expenses related to any borrowings, taxes, brokerage fees and commissions
and other costs and expenses relating to the acquisition and disposition
of Fund investments, other expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
non-routine expenses or extraordinary expenses not incurred in the
ordinary course of the Fund’s business, such as litigation expenses. The
term of the agreement will automatically renew for subsequent three-year
terms unless terminated with at least 30 days’ written notice by either
party prior to the end of the then-current term. The agreement does not
permit Dodge & Cox to recoup any fees waived or payments made to
the Fund for a prior year. |
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
Class I shares and/or Class X shares of the Fund for the time
periods indicated and then redeem all of
your |
|
|
shares
the Fund’s Class I shares and/or the Fund’s Class X shares at
the end of those time
periods; |
∎ |
|
Your
investment has a 5% return each
year; |
∎ |
|
The
Fund’s operating expenses remain the same;
and |
∎ |
|
The Class X expense
reimbursement agreement is effective until April 30,
2026. |
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 |
|
Dodge &
Cox International Stock – Class I |
|
$ |
63 |
|
|
$ |
199 |
|
|
$ |
346 |
|
|
$ |
774 |
|
Dodge &
Cox International Stock – Class X |
|
$ |
53 |
|
|
$ |
172 |
|
|
$ |
308 |
|
|
$ |
704 |
|
Portfolio Turnover
The
Fund incurs transaction costs, such as commissions, when Dodge & Cox
buys and sells securities (or “turns over” the 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 transaction 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 14% of the average value of
its portfolio.
Principal Investment
Strategies
The
Fund invests primarily in a diversified portfolio of equity securities issued by
non-U.S. companies from at least three different countries, which may include
emerging market countries. The Fund is not required to allocate its investments
in set percentages in particular countries and may invest in emerging markets
without limit. Under normal circumstances, the Fund will invest at least 80% of
its total assets in equity securities of non-U.S. companies, including common
stocks, depositary receipts evidencing ownership of common stocks, certain
preferred stocks, securities convertible into common stocks, and securities that
carry the right to buy common stocks (e.g., rights and warrants). The Fund may
enter into currency forward contracts, currency swaps, or currency futures
contracts to hedge direct and/or indirect currency exposure or currency risk.
The Fund may use equity options or total return swaps referencing single stocks
or stock indices to create or hedge equity exposure. The Fund may also use
futures referencing stock indices to equitize, or create equity market exposure,
approximately equal to some or all of its cash and cash equivalents,
receivables, and similar non-equity assets, or to hedge against a general
downturn in the equity markets.
The
Fund typically invests in medium-to-large well-established companies based on
standards of the applicable market. In selecting investments, the Fund typically
invests in companies that, in Dodge & Cox’s opinion, appear to be
temporarily undervalued by the stock market but have a favorable outlook for
long-term profit growth. The Fund also focuses on the underlying financial
condition and prospects of individual companies, including future earnings, cash
flow, and dividends. Various other factors, including financial strength,
economic condition, competitive advantage, quality of the business franchise,
financially material environmental, social, and governance (ESG) issues, and the
reputation, experience, and competence of a company’s management are weighed
against valuation in selecting individual securities. The Fund also
considers
|
| |
PAGE 8 ∎ DODGE & COX FUNDS |
|
|
the
economic and political stability of the country where the issuer is located and
the protections provided to shareholders.
Principal Risks of
Investing
You could lose
money by investing in the Fund, and the Fund could underperform other
investments. You should expect the Fund’s share price and total
return to fluctuate within a wide range. The Fund’s performance could be hurt
by:
∎ |
|
Equity risk. Equity securities can be
volatile and may decline in value because of changes in the actual or
perceived financial condition of their issuers or other events affecting
their issuers. |
∎ |
|
Market risk. Investment prices may increase
or decrease, sometimes suddenly and unpredictably, due to general market
conditions. Local, regional or global events such as war, acts of
terrorism, the spread of infectious illness or other public health issue,
recessions, inflation, or other events could also have a significant
impact on the Fund and its investments and potentially increase the risks
described herein. |
∎ |
|
Manager risk. Dodge & Cox’s opinion
about the intrinsic worth or creditworthiness of a company or security may
be incorrect or the market may continue to undervalue the company or
security. Depending on market conditions, Dodge & Cox’s investing
style may perform better or worse than portfolios with a different
investment style. Dodge & Cox may not make timely purchases or
sales of securities for the Fund. The Fund may underperform the broad
market, relevant indices, or other funds with similar objectives and
investment strategies. |
∎ |
|
Non-U.S. investment risk. Securities of
non-U.S. issuers (including ADRs, ADSs, GDRs and other securities that
represent interests in a non-U.S. issuer’s securities) may be more
volatile, harder to value, and have lower overall liquidity than U.S.
securities. Non-U.S. issuers may be subject to political, economic, or
market instability, or unfavorable government action in their local
jurisdictions or economic sanctions or other restrictions imposed by U.S.
or foreign regulators. There may be less information publicly available
about non-U.S. issuers and their securities, and those issuers may be
subject to lower levels of government regulation and oversight. Non-U.S.
stock markets may decline due to conditions specific to an individual
country, including unfavorable economic conditions relative to the United
States. The Fund generally holds non-U.S. securities and cash in foreign
banks and securities depositories, which may be recently organized or new
to the foreign custody business and may be subject to only limited or no
regulatory oversight. There may be increased risk of delayed transaction
settlement. These risks may be higher when investing in emerging and
frontier markets. Certain of these elevated risks may also apply to
securities of U.S. issuers with significant non-U.S.
operations. |
∎ |
|
Emerging markets risk. Emerging market
securities may present issuer, market, currency, liquidity, volatility,
valuation, legal, political, and other risks different from, and
potentially greater than, the risks of investing in securities of issuers
in more developed markets. Emerging markets may have less established
legal, accounting, and financial reporting systems than those in more
developed markets, which may reduce the scope or quality of financial
information available to investors. In addition, companies in emerging
markets may be subject to less
stringent |
|
|
standards
on disclosure, accounting and financial reporting, and recordkeeping,
which may affect the Fund’s ability to evaluate potential and current
investments. Relatedly, securities of companies in emerging markets that
are listed on exchanges may be delisted if they do not meet relevant
accounting standards and auditor oversight requirements, which could
significantly decrease the liquidity and value of the securities.
Governments in emerging market countries may exercise greater control over
their financial markets, more frequently make significant changes to
economic policy, be less stable and be more likely to take extra-legal
action with respect to companies, industries, assets, or foreign ownership
than those in more developed markets. Moreover, investor protection
regimes may be more limited in emerging markets. For example, it may be
more difficult for shareholders to bring derivative litigation or for U.S.
regulators to bring enforcement actions against issuers in emerging
markets. Emerging market securities may also be more volatile, more
difficult to value, and have lower overall liquidity than securities
economically tied to U.S. or developed non-U.S.
markets. |
∎ |
|
Non-U.S. currency risk. Non-U.S. currencies
may decline relative to the U.S. dollar, which reduces the unhedged value
of securities denominated in or otherwise exposed to those currencies.
Dodge & Cox may not hedge or may not be successful in hedging the
Fund’s currency exposure and may not be able to determine accurately the
extent to which a security or its issuer is exposed to currency
risk. |
∎ |
|
Liquidity risk. The Fund may not be able to
purchase or sell a security in a timely manner or at desired prices or
achieve its desired weighting in a
security. |
∎ |
|
Derivatives risk. Investing with
derivatives, such as currency forward contracts, currency swaps, and
equity options, equity index futures and total return swaps, and other
similar investments (collectively referred to as “derivatives”) involves
risks additional to and possibly greater than those associated with
investing directly in securities. The value of a derivative may not
correlate to the value of the underlying instrument to the extent
expected. A derivative can create leverage because it can result in
exposure to an amount of a security, index, or other underlying investment
(a “notional amount”) that is substantially larger than the derivative
position’s market value. Often, the upfront payment required to enter into
a derivative is much smaller than the potential for loss, which for
certain types of derivatives may be unlimited. The Fund may not be able to
close a derivatives position at an advantageous time or price. As a
result, the Fund may be required to continue making required margin and
settlement payments and, if the Fund has insufficient cash on hand to meet
such requirements, it may have to sell securities from its portfolio at a
time when it may be disadvantageous to do so. For over-the-counter
derivatives transactions, the counterparty may be unable or unwilling to
make required payments and deliveries, especially during times of
financial market distress. Derivatives also can create operational and
legal risk. Changes in regulation relating to a mutual fund’s use of
derivatives and related instruments may make derivatives more costly,
limit the availability of derivatives, or otherwise adversely affect the
value or performance of derivatives and the
Fund. |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
9 |
∎ |
|
Geographic risk. From time to time the Fund
may invest a substantial amount of its assets in issuers located in a
single country or a limited number of countries. If the Fund focuses its
investments in this manner, risks relating to economic, political and
social conditions in those countries will have a significant impact on its
investment performance. The Fund’s investment performance may be more
volatile if it focuses its investments in certain countries, especially
emerging market or frontier
market countries. |
An
investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Performance Information
The
following bar chart and table are intended to help you understand the risks of
investing in the Fund. The bar chart shows changes in the
Fund’s Class I shares’ returns from year to year. The table shows how
the average annual total returns of the Fund’s Class I shares and
Class X shares compare to those of a broad measure of
market performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Visit the Fund’s
website at dodgeandcox.com or call
800-621-3979 for current
performance figures.
Highest/Lowest
quarterly results for the Fund’s Class I shares during the time period
were:
Highest:
24.69% (quarter ended December 31, 2020)
Lowest: –30.50% (quarter ended March 31,
2020)
Average Annual Total
Returns for the Periods Ended 12/31/2023
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox
International
Stock – Class I |
|
1 Year |
|
|
5 Years |
|
|
10 Years |
|
Return
before taxes |
|
|
16.70 |
% |
|
|
8.65 |
% |
|
|
3.98 |
% |
Return
after taxes on distributions |
|
|
16.32 |
|
|
|
8.14 |
|
|
|
3.50 |
|
Return
after taxes on distributions and sale of Fund shares |
|
|
10.58 |
|
|
|
6.91 |
|
|
|
3.18 |
|
Dodge & Cox
International
Stock – Class X* |
|
|
|
|
|
|
|
|
|
Return
before taxes |
|
|
16.81 |
|
|
|
8.68 |
|
|
|
4.00 |
|
MSCI
ACWI ex USA Index (Net)** (reflects no deduction for expenses
or taxes)*** |
|
|
15.62 |
|
|
|
7.08 |
|
|
|
3.83 |
|
MSCI
EAFE** (Europe, Australasia, Far East) Index (Net)** (reflects no
deduction for expenses or taxes)*** |
|
|
18.24 |
|
|
|
8.16 |
|
|
|
4.28 |
|
* |
|
The Fund’s Class X shares launched
on May 1, 2022. In the table above, Class X returns for periods prior
to its launch are calculated using performance of the Fund’s Class I
shares. |
** |
|
MSCI Index (Net) returns are calculated
applying dividend withholding rates applicable to non-resident persons who
do not benefit from double taxation treaties. Withholding rates applicable
to the Fund may be lower. |
*** |
|
Effective May 1, 2024, the Fund is
using a new benchmark index, the MSCI ACWI ex USA Index. Dodge &
Cox believes that this benchmark index better represents the overall
applicable international equity
markets. |
The after-tax returns shown above are for the
Fund’s Class I shares. The after-tax returns for the Fund’s
Class X shares will vary. After-tax returns are calculated using the
historical highest individual federal marginal income tax rates, but do not
reflect the impact of state or local taxes. Actual after-tax
returns may differ depending on your individual circumstances. After-tax return figures do not apply to you if
you hold your Fund shares through a tax-deferred arrangement such as a 401(k)
plan or an individual retirement
account.
|
| |
PAGE 10 ∎ DODGE & COX FUNDS |
|
|
Fund Management
Dodge &
Cox serves as investment manager to the International Stock Fund. The Fund is
managed by Dodge & Cox’s International Equity Investment Committee
(“IEIC”), which consists of the following
six members:
|
|
|
| |
Committee Member |
|
Primary Titles with Investment Manager |
|
Years managing the
Fund/ Years with Dodge & Cox |
Roger G. Kuo |
|
President
(since 2022), Director, Research Analyst, and member of Global Equity
Investment Committee (“GEIC”) |
|
18/26 |
Mario C. DiPrisco |
|
Vice
President, Research Analyst, and member of Emerging Markets Equity
Investment Committee (“EMEIC”) |
|
20/26 |
Englebert T. Bangayan |
|
Vice
President and Research Analyst |
|
9/22 |
Raymond J. Mertens |
|
Senior
Vice President and Director (since 2022), Research Analyst, and member of
GEIC |
|
6/21 |
Paritosh Somani |
|
Vice
President and Research Analyst |
|
3/17 |
Sophie Chen |
|
Vice
President and Research Analyst |
|
1/13 |
Other Important
Information About Fund Shares
For
important information about purchase and sale of Fund shares, tax information,
and payments to financial intermediaries please turn to the “Summary of Other
Important Information About Fund Shares” section on page 28 of this
prospectus.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
11 |
Dodge & Cox Emerging Markets Stock Fund
Investment Objectives
The
Fund seeks long-term growth of principal and income.
Fees and Expenses
This
table describes 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.
|
|
|
| |
Shareholder Fees
(fees
paid directly from your investment) |
|
|
|
Sales
charge (load) imposed on purchases |
|
|
None |
|
Deferred
sales charge (load) |
|
|
None |
|
Sales
charge (load) imposed on reinvested distributions |
|
|
None |
|
Redemption
fee |
|
|
None |
|
Exchange
fee |
|
|
None |
|
|
|
|
| |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
fees* |
|
|
0.60 |
% |
Distribution
and/or service (12b-1) fees |
|
|
None |
|
Other
expenses (custody, accounting, legal, etc.) |
|
|
0.48 |
% |
| |
|
|
|
Total
Annual Fund Operating Expenses** |
|
|
1.08 |
% |
Expense
Reimbursement** |
|
|
0.38 |
% |
| |
|
|
|
Net
Expenses** |
|
|
0.70 |
% |
* |
|
Management fees include investment
advisory fee expenses of 0.55%; and administrative services fee expenses
of 0.05%. |
** |
|
Dodge & Cox has contractually
agreed to reimburse the Fund for all ordinary expenses to the extent
necessary to maintain Total Annual Fund Operating Expenses at 0.70% until
April 30, 2026. This agreement cannot be terminated prior to
April 30, 2026 other
than by resolution of the Fund’s Board of Trustees. For purposes of the
foregoing, ordinary expenses shall not include nonrecurring shareholder
account fees, fees and expenses associated with Fund shareholder meetings,
fees on portfolio transactions such as exchange fees, dividends and
interest on short positions, fees and expenses of pooled investment
vehicles that are held by the Fund, interest expenses and other fees and
expenses related to any borrowings, taxes, brokerage fees and commissions
and other costs and expenses relating to the acquisition and disposition
of Fund investments, other expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
non-routine expenses or extraordinary expenses not incurred in the
ordinary course of the Fund’s business, such as litigation expenses. The
term of the agreement will automatically renew for subsequent three-year
terms unless terminated with at least 30 days’ written notice by either
party prior to the end of the then-current term. The agreement does not
permit Dodge & Cox to recoup any fees waived or payments made to
the Fund for a prior year. |
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 time periods;
|
∎ |
|
Your investment has a 5%
return each year; |
∎ |
|
The Fund’s operating
expenses remain the same; and |
∎ |
|
The Fund’s expense
reimbursement agreement is effective until April 30, 2026.
|
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 |
|
$ |
72 |
|
|
$ |
266 |
|
|
$ |
520 |
|
|
$ |
1,247 |
|
Portfolio Turnover
The
Fund incurs transaction costs, such as commissions, when Dodge & Cox
buys and sells securities (or “turns over” the 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 transaction 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
The
Fund invests primarily in a diversified portfolio of emerging markets equity
securities issued by companies from at least three different countries. The Fund
is not required to allocate its investments in set percentages in particular
countries. Under normal circumstances, the Fund will invest at least 80% of its
total assets in equity securities of emerging market issuers. Equity securities
may include common stocks, depositary receipts evidencing ownership of common
stocks, certain preferred stocks, and securities convertible into common stocks,
and securities that carry the right to buy common stocks (e.g., rights and
warrants). Derivative transactions that have economic characteristics similar to
such equity securities are included in the Fund’s 80% investment policy.
Emerging market issuers include those located in emerging market countries and
those determined by Dodge & Cox to have significant economic exposure
to emerging market countries. For purposes of its 80% investment policy,
Dodge & Cox will consider all countries that are not part of the MSCI
Developed Market Indexes (including both emerging markets and frontier markets
countries) to be emerging market countries. In determining whether an issuer is
located in or has significant economic exposure to an emerging market country,
Dodge & Cox will consider the issuer’s country of organization, the
location of its management, the country of its primary listing, its reporting
currency, and whether the issuer has significant assets in, or derives
significant revenues or profits from, emerging market countries. The Fund may
use derivatives, such as futures, options, and swaps either to create exposure
to equity securities or to hedge against exposure created by its other
investments. The Fund may gain exposure to emerging market issuers by investing
in exchange-traded funds (“ETFs”). The Fund may use currency forward contracts,
currency swaps, or currency futures contracts to hedge direct and/or indirect
currency exposure or currency risk.
The
Fund may invest in companies of any size, including large-, medium-, and
small-capitalization companies. In selecting investments, the Fund typically
invests in companies that, in Dodge & Cox’s opinion, appear to be
temporarily undervalued by the stock market but have a favorable outlook for
long-term profit growth. Dodge & Cox relies on fundamental research to
select investments for the Fund’s portfolio, supplemented by financial screening
models that help identify companies from within the Fund’s investment universe
for further consideration by research
|
| |
PAGE 12 ∎ DODGE & COX FUNDS |
|
|
analysts.
The Fund focuses on the underlying financial condition and prospects of
individual companies, including future earnings, cash flow, and dividends.
Various other factors, including financial strength, economic condition,
competitive advantage, quality of the business franchise, financially material
environmental, social, and governance (ESG) issues, and the reputation,
experience, and competence of a company’s management are weighed against
valuation in selecting individual securities. The Fund also considers the
economic and political stability of the country where the issuer is located and
the protections provided to shareholders.
Principal Risks of
Investing
You could lose
money by investing in the Fund, and the Fund could underperform other
investments. You should expect the Fund’s share price and total
return to fluctuate within a wide range. The Fund’s performance could be hurt
by:
∎ |
|
Equity risk. Equity securities can be
volatile and may decline in value because of changes in the actual or
perceived financial condition of their issuers or other events affecting
their issuers. |
∎ |
|
Market risk. Investment prices may increase
or decrease, sometimes suddenly and unpredictably, due to general market
conditions. Local, regional or global events such as war, acts of
terrorism, the spread of infectious illness or other public health issue,
recessions, inflation, or other events could also have a significant
impact on the Fund and its investments and potentially increase the risks
described herein. |
∎ |
|
Manager risk. Dodge & Cox’s opinion
about the intrinsic worth or creditworthiness of a company or security may
be incorrect or the market may continue to undervalue the company or
security. Depending on market conditions, Dodge & Cox’s investing
style may perform better or worse than portfolios managed with a different
investment style. Dodge & Cox may not make timely purchases or
sales of securities for the Fund. The Fund may underperform the broad
market, relevant indices, or other funds with similar objectives and
investment strategies. Financial models used by the Fund to help identify
potential investments may not adequately account for all relevant factors,
may rely on inaccurate data inputs or assumptions or may contain design
flaws which could negatively impact the Fund’s performance.
|
∎ |
|
Emerging markets risk. Emerging market
securities may present issuer, market, currency, liquidity, volatility,
valuation, legal, political, and other risks different from, and
potentially greater than, the risks of investing in securities of issuers
in more developed markets. Emerging markets may have less established
legal, accounting, and financial reporting systems than those in more
developed markets, which may reduce the scope or quality of financial
information available to investors. In addition, companies in emerging
markets may be subject to less stringent standards on disclosure,
accounting and financial reporting, and recordkeeping, which may affect
the Fund’s ability to evaluate potential and current investments.
Relatedly, securities of companies in emerging markets that are listed on
exchanges may be delisted if they do not meet relevant accounting
standards and auditor oversight requirements, which could significantly
decrease the liquidity and value of the securities. Governments in
emerging market countries may exercise greater control over their
financial markets, more frequently make significant changes to
|
|
|
economic
policy, be less stable and be more likely to take extra-legal action with
respect to companies, industries, assets, or foreign ownership than those
in more developed markets. Moreover, investor protection regimes may be
more limited in emerging markets. For example, it may be more difficult
for shareholders to bring derivative litigation or for U.S. regulators to
bring enforcement actions against issuers in emerging markets. Because the
Fund focuses its investments in emerging market securities, it may have a
limited ability to mitigate losses in an environment that is adverse to
emerging market securities in general. Emerging market securities may also
be more volatile, more difficult to value, and have lower overall
liquidity than securities economically tied to U.S. or developed non-U.S.
markets. |
∎ |
|
Frontier markets risk. Frontier markets
generally have smaller economies and less mature capital markets than
emerging markets. As a result, the risks associated with investing in
emerging market countries are magnified in frontier markets. Frontier
markets are more susceptible to abrupt changes in currency value, have
less mature settlement practices, and can have lower trading volumes that
can lead to more price volatility and lower liquidity.
|
∎ |
|
Non-U.S. investment risk. Securities of
non-U.S. issuers (including ADRs, ADSs, GDRs and other securities that
represent interests in a non-U.S. issuer’s securities) may be more
volatile, harder to value, and have lower overall liquidity than U.S.
securities. Non-U.S. issuers may be subject to political, economic, or
market instability, or unfavorable government action in their local
jurisdictions or economic sanctions or other restrictions imposed by U.S.
or foreign regulators. There may be less information publicly available
about non-U.S. issuers and their securities, and those issuers may be
subject to lower levels of government regulation and oversight. Non-U.S.
stock markets may decline due to conditions specific to an individual
country, including unfavorable economic conditions relative to the United
States. The Fund generally holds non-U.S. securities and cash in foreign
banks and securities depositories, which may be recently organized or new
to the foreign custody business and may be subject to only limited or no
regulatory oversight. There may be increased risk of delayed transaction
settlement. These risks may be higher when investing in emerging and
frontier markets. Certain of these elevated risks may also apply to
securities of U.S. issuers with significant non-U.S. operations.
|
∎ |
|
Non-U.S. currency risk. Non-U.S. currencies
may decline relative to the U.S. dollar, which reduces the unhedged value
of securities denominated in or otherwise exposed to those currencies.
Dodge & Cox may not hedge or may not be successful in hedging the
Fund’s currency exposure. Dodge & Cox may not be able to
determine accurately the extent to which a security or its issuer is
exposed to currency risk. Emerging and frontier market currencies may be
more volatile than currencies of more developed countries.
|
∎ |
|
China investment risk. Investments in
Chinese securities may be more vulnerable to political and economic risks
than investments in securities from other countries. The Chinese
government has historically exercised substantial control over China’s
economy and financial markets. Although economic reforms have recently
|
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
13 |
|
|
liberalized
trade policy and reduced government control, changes in these policies
could adversely affect Chinese companies or investments in those
companies. Changes in government policy could also substantially affect
the value of China’s currency relative to the U.S. dollar. The Chinese
economy is highly dependent on exporting products and services and could
experience a significant slowdown if there is a reduction in global demand
for Chinese exports or as the result of trade tensions with the United
States or other key trading partners. The Fund may obtain exposure to a
Chinese company by investing in legal structures known as variable
interest entities (“VIEs”) that offer economic exposure to, but not an
equity ownership in, a Chinese company. Intervention by the Chinese
government with respect to VIE structures could significantly affect the
value of a VIE investment and could negatively impact Fund performance;
and due to different legal standards in China, the Fund may be unable to
enforce its rights with respect to holdings in Chinese securities. In
addition, strained international relations, including purchasing
restrictions, sanctions, tariffs or cyberattacks on the Chinese government
or Chinese companies may impact China’s economy and Chinese issuers of
securities in which the Fund invests. Separately, information about the
Chinese securities in which the Fund invests may be less reliable or
complete; and Chinese companies with securities listed on U.S. exchanges
may be delisted if they do not meet U.S. accounting standards and auditor
oversight requirements, which could significantly decrease the liquidity
and value of the securities. |
∎ |
|
Geographic risk. From time to time the Fund
may invest a substantial amount of its assets in issuers located in a
single country or a limited number of countries. If the Fund focuses its
investments in this manner, risks relating to economic, political and
social conditions in those countries will have a significant impact on its
investment performance. The Fund’s investment performance may be more
volatile if it focuses its investments in certain countries, especially
emerging market or frontier market countries.
|
∎ |
|
Liquidity risk. The Fund may not be able to
purchase or sell a security in a timely manner or at desired prices or
achieve its desired weighting in a security. Liquidity risk may be greater
in emerging and frontier markets than in more developed markets.
|
∎ |
|
Small-capitalization Securities risk.
Small-capitalization companies may be more volatile and subject to greater
short term risk than larger, more established companies. They are likely
to be less liquid than companies with larger market capitalizations, which
could affect the overall liquidity of the Fund’s portfolio. In addition,
smaller companies may have more limited product lines or markets, be less
financially secure, and depend on a more limited management group than
larger companies. It may be difficult to evaluate the potential for
long-term growth of smaller companies.
|
∎ |
|
Derivatives risk. Investing with
derivatives, such as equity futures, options, and swaps; and currency
forwards, swaps, and futures, and other similar investments (collectively
referred to as “derivatives”) involves risks additional to and possibly
greater than those associated with investing directly in securities. The
value of a derivative may not correlate to the value of the underlying
instrument to the extent expected. A derivative can create leverage
because it can result in exposure to an amount of
|
|
|
a
security, index, or other underlying investment (a “notional amount”) that
is substantially larger than the derivative position’s market value.
Often, the upfront payment required to enter into a derivative is much
smaller than the potential for loss, which for certain types of
derivatives may be unlimited. The Fund may not be able to close a
derivatives position at an advantageous time or price. As a result, the
Fund may be required to continue making required margin and settlement
payments and, if the Fund has insufficient cash on hand to meet such
requirements, it may have to sell securities from its portfolio at a time
when it may be disadvantageous to do so. For over-the-counter derivatives
transactions, the counterparty may be unable or unwilling to make required
payments and deliveries, especially during times of financial market
distress. Derivatives also can create operational and legal risk. Changes
in regulation relating to a mutual fund’s use of derivatives and related
instruments may make derivatives more costly, limit the availability of
derivatives, or otherwise adversely affect the value or performance of
derivatives and the Fund.
|
∎ |
|
Large shareholder risk. Ownership of shares
of the Fund may be concentrated in one or a few large investors. Such
investors may redeem shares in large quantities or on a frequent basis.
Redemptions by a large investor may affect the performance of the Fund,
may increase realized capital gains, may accelerate the realization of
taxable income to shareholders and may increase transaction costs. These
transactions potentially limit the use of any capital loss carry-forwards
and certain other losses to offset future realized capital gains (if any).
Such transactions may also increase the Fund’s expenses. In addition, the
Fund may be delayed in investing new cash after a large shareholder
purchase, and under such circumstances may be required to maintain a
larger cash position than it ordinarily would.
|
An investment in the Fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
|
| |
PAGE 14 ∎ DODGE & COX FUNDS |
|
|
Performance Information
The
following bar chart and table are intended to help you understand the risks of
investing in the Fund. The bar chart shows changes in the Fund’s returns
from year to year. The table shows how the Fund’s average annual total returns
compare to those of a broad measure of market performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future.
Visit
the Fund’s website at dodgeandcox.com or call
800‑621‑3979 for current
performance figures.
Highest/Lowest
quarterly results during the time period were:
Highest:
13.92% (quarter ended December 31, 2022)
Lowest:
–11.70% (quarter ended September 30, 2022)
Average Annual Total
Returns for the Periods Ended 12/31/2023
|
|
|
|
|
|
|
| |
Dodge & Cox
Emerging
Markets Stock Fund |
|
1 Year |
|
|
Since Inception
(May 11, 2021) |
|
Return
before taxes |
|
|
13.37 |
% |
|
|
–5.15 |
% |
Return
after taxes on distributions |
|
|
12.96 |
|
|
|
–5.49 |
|
Return
after taxes on distributions and sale of Fund shares |
|
|
8.38 |
|
|
|
–3.80 |
|
MSCI
EM Index (Net)* (reflects no deduction for expenses
or taxes) |
|
|
9.83 |
|
|
|
–6.96 |
|
* |
|
MSCI EM Index (Net) returns are
calculated applying dividend withholding rates applicable to non-resident
persons who do not benefit from double taxation treaties. Withholding
rates applicable to the Fund may be
lower. |
After-tax returns are calculated using the
historical highest individual federal marginal income tax rates, but do not
reflect the impact of state or local taxes. Actual after-tax
returns may differ depending on your individual circumstances. After-tax return figures do not apply to you if
you hold your Fund shares through a tax-deferred arrangement such as a 401(k)
plan or an individual retirement account.
Fund Management
Dodge &
Cox serves as investment manager to the Emerging Markets Stock Fund. The Fund is
managed by Dodge & Cox’s Emerging Markets Equity Investment Committee
(“EMEIC”), which consists of the
following five members:
|
|
|
| |
Committee Member |
|
Primary Titles with Investment Manager |
|
Years managing the
Fund/ Years with Dodge & Cox |
David C. Hoeft |
|
Senior
Vice President, Director, Chief Investment Officer, and member of USEIC,
Global Equity Investment Committee (“GEIC”) and Balanced Fund Investment
Committee (“BFIC”) |
|
2/31 |
Mario C. DiPrisco |
|
Vice
President, Research Analyst, and member of IEIC |
|
3/26 |
Sophie Chen |
|
Vice
President and Research Analyst |
|
3/13 |
Rameez Dossa |
|
Vice
President and Research Analyst |
|
3/12 |
Robert S. Turley |
|
Vice
President and Research Analyst, and member of BFIC |
|
3/12 |
Other Important
Information About Fund Shares
For
important information about purchase and sale of Fund shares, and tax
information please turn to the “Summary of Other Important Information About
Fund Shares” section on page 28 of this prospectus.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
15 |
Dodge & Cox Balanced Fund
Investment Objectives
The
Fund seeks regular income, conservation of principal, and an opportunity for
long-term growth of principal and income.
Fees and Expenses
This
table describes 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.
|
|
|
|
|
|
|
| |
Shareholder Fees
(fees
paid directly from your investment) |
|
Dodge & Cox Balanced – Class I |
|
|
Dodge & Cox Balanced – Class X |
|
Sales
charge (load) imposed on purchases |
|
|
None |
|
|
|
None |
|
Deferred
sales charge (load) |
|
|
None |
|
|
|
None |
|
Sales
charge (load) imposed on reinvested distributions |
|
|
None |
|
|
|
None |
|
Redemption
fee |
|
|
None |
|
|
|
None |
|
Exchange
fee |
|
|
None |
|
|
|
None |
|
|
|
|
|
|
|
|
| |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of
your investment) |
|
Dodge & Cox Balanced – Class I |
|
|
Dodge & Cox Balanced – Class X |
|
Management
fees* |
|
|
0.50 |
% |
|
|
0.45 |
% |
Distribution
and/or service (12b-1) fees |
|
|
None |
|
|
|
None |
|
Other
expenses (custody, accounting, legal, etc.) |
|
|
0.02 |
% |
|
|
0.02 |
% |
| |
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
0.52 |
% |
|
|
0.47 |
%** |
Expense
reimbursement |
|
|
None |
|
|
|
0.05 |
%** |
| |
|
|
|
|
|
|
|
Net
Expenses |
|
|
0.52 |
% |
|
|
0.42 |
%** |
* |
|
Management fees include investment
advisory fee expenses of 0.40% for each class of the Fund; and
administrative services fee expenses of 0.10% for the Fund’s Class I
shares and 0.05% for the Fund’s Class X shares.
|
** |
|
Dodge & Cox has contractually
agreed to reimburse the Fund for all ordinary expenses to the extent
necessary to maintain Total Annual Fund Operating Expenses of the Fund’s
Class X shares at 0.42% until April 30, 2026. This agreement
cannot be terminated prior to April 30, 2026 other
than by resolution of the Fund’s Board of Trustees. For purposes of the
foregoing, ordinary expenses shall not include nonrecurring shareholder
account fees, fees and expenses associated with Fund shareholder meetings,
fees on portfolio transactions such as exchange fees, dividends and
interest on short positions, fees and expenses of pooled investment
vehicles that are held by the Fund, interest expenses and other fees and
expenses related to any borrowings, taxes, brokerage fees and commissions
and other costs and expenses relating to the acquisition and disposition
of Fund investments, other expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
non-routine expenses or extraordinary expenses not incurred in the
ordinary course of the Fund’s business, such as litigation expenses. The
term of the agreement will automatically renew for subsequent three-year
terms unless terminated with at least 30 days’ written notice by either
party prior to the end of the then-current term. The agreement does not
permit Dodge & Cox to recoup any fees waived or payments made to
the Fund for a prior year. |
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
Class I shares and/or Class X shares of the Fund for the time
periods indicated and then redeem all of your shares of the Fund’s
Class I shares and/or the Fund’s Class X shares at the end of
those time periods; |
∎ |
|
Your investment has a 5%
return each year; |
∎ |
|
The Fund’s operating
expenses remain the same; and |
∎ |
|
The Class X expense
reimbursement agreement is effective until April 30, 2026.
|
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 |
|
Dodge &
Cox Balanced – Class I |
|
$ |
53 |
|
|
$ |
167 |
|
|
$ |
291 |
|
|
$ |
653 |
|
Dodge &
Cox Balanced – Class X |
|
$ |
43 |
|
|
$ |
140 |
|
|
$ |
253 |
|
|
$ |
582 |
|
Portfolio Turnover
The
Fund incurs transaction costs, such as commissions, when Dodge & Cox
buys and sells securities (or “turns over” the 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 transaction 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 34% of the average value of its portfolio.
Principal Investment
Strategies
The
Fund invests in a diversified portfolio of equity securities and debt
securities. Under normal circumstances no less than 25% and no more than 75% of
the Fund’s total assets will be invested in equity securities and no less than
25% of the Fund’s total assets will be invested in fixed income investments. The
Fund may invest up to 30% of its total assets in equity or debt securities of
non-U.S. issuers that are not in the S&P 500 Index, provided that no
more than 10% of the Fund’s total assets may be invested in non-U.S.
dollar-denominated securities. Such exposure to non-U.S. issuers may include
investments in emerging market issuers. Asset allocation between equity and debt
securities is based on Dodge & Cox’s assessment of the potential risks
and returns for each asset class over a three- to five-year horizon. Factors
used to estimate the range of potential returns include: future earnings growth,
the outlook for the economy, inflation and interest rate trends, and current
valuations relative to historical ranges.
Equity
securities in which the Fund may invest include common stocks, depositary
receipts evidencing ownership of common stocks, certain preferred stocks,
securities convertible into common stocks, and securities that carry the right
to buy common stocks (e.g., rights and warrants). The Fund’s equity investments
are typically in medium-to-large well-established companies based on standards
of the applicable market. In selecting equity investments, the Fund typically
invests in companies that, in Dodge & Cox’s opinion, appear to be
temporarily undervalued by the stock market but have a favorable outlook for
long-term growth. The Fund focuses on the underlying financial condition and
prospects of individual companies, including future earnings, cash flow, and
dividends. Various other factors, including financial strength, economic
condition, competitive advantage, quality of the
|
| |
PAGE 16 ∎ DODGE & COX FUNDS |
|
|
business
franchise, financially material environmental, social, and governance (ESG)
issues, and the reputation, experience, and competence of a company’s management
are weighed against valuation in selecting individual securities. The Fund also
considers the economic and political stability of the country where the issuer
is located and the protections provided to shareholders.
Fixed
income investments in which the Fund may invest include government and
government-related obligations, mortgage- and asset-backed securities, corporate
and municipal bonds, collateralized mortgage obligations, and may include other
fixed and floating rate instruments, including certain preferred stocks, and
cash equivalents such as short-term debt securities. The proportion of Fund
assets invested in various classes of fixed income investments is determined
based on Dodge & Cox’s appraisal of the economy, the relative yields of
investments in the various market sectors, the investment prospects for issuers,
and other factors. In selecting debt securities, Dodge & Cox considers
many factors, including yield, credit quality, liquidity, covenants, call risk,
duration, structure, and capital appreciation potential, as well as financially
material ESG issues. A maximum of 10% of the Fund’s total assets may be invested
in debt securities rated below investment grade, commonly referred to as
high-yield or “junk” bonds; provided no more than 5% of the Fund’s total assets
may be invested in securities rated below B3 or B- by Moody’s, S&P, or
Fitch. “Investment-grade” means (i) securities rated Baa3 or higher by
Moody’s Investors Service (“Moody’s”), or BBB- or higher by Standard &
Poor’s Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), or equivalently
rated by any nationally recognized statistical rating organization (“NRSRO”), or
(ii) unrated securities if deemed to be of investment-grade quality by
Dodge & Cox.
The
Fund invests in hybrid securities, including preferred stock, which may be
classified as equity or debt depending on the specific structure and features of
each security.
The
Fund may use equity options or total return swaps referencing single stocks or
stock indices to create or hedge equity exposure. The Fund may also use futures
referencing stock indices to create broad equity market exposure, or to hedge
against a general downturn in the equity markets. The Fund may also invest in
interest rate derivatives, such as U.S. Treasury futures, for a variety of
purposes, including, but not limited to, managing the Fund’s duration or
adjusting the Fund’s exposure to debt securities with different maturities. The
Fund may enter into currency forward contracts, currency swaps, or currency
futures contracts to hedge direct and/or indirect currency exposure or currency
risk.
Principal Risks of
Investing
You could lose
money by investing in the Fund, and the Fund could underperform other
investments. You should expect the Fund’s share price and total
return to fluctuate within a wide range. The Fund’s performance could be hurt
by:
∎ |
|
Equity risk. Equity securities can be
volatile and may decline in value because of changes in the actual or
perceived financial condition of their issuers or other events affecting
their issuers. |
∎ |
|
Market risk. Investment prices may increase
or decrease, sometimes suddenly and unpredictably, due to general market
conditions. Local, regional or global events such as war, acts of
terrorism, the spread of infectious illness or other public health
|
|
|
issue,
recessions, inflation, or other events could also have a significant
impact on the Fund and its investments and potentially increase the risks
described herein.
|
∎ |
|
Asset allocation risk. The assumptions and
theses on which Dodge & Cox bases its allocation of assets may be
wrong. The Fund’s balance between equity and debt securities limits its
potential for capital appreciation relative to an all-stock fund and
contributes to greater volatility relative to an all-bond fund.
|
∎ |
|
Manager risk. Dodge & Cox’s opinion
about the intrinsic worth or creditworthiness of a company or security may
be incorrect or the market may continue to undervalue the company or
security. Depending on market conditions, Dodge & Cox’s investing
style may perform better or worse than portfolios with a different
investment style. Dodge & Cox may not make timely purchases or
sales of securities for the Fund. The Fund may underperform the broad
market, relevant indices, or other funds with similar objectives and
investment strategies. |
∎ |
|
Interest rate risk. Debt security prices may
decline due to rising interest rates. The price of debt securities with
longer maturities is typically affected more by rising interest rates than
the price of debt securities with shorter maturities.
|
∎ |
|
Credit risk. An issuer or guarantor of a
debt security may be unable or unwilling to make scheduled payments of
interest and principal. Actual or perceived deterioration in an issuer’s
or guarantor’s financial condition may affect a security’s value.
|
∎ |
|
Below investment-grade securities risk. Debt
securities rated below investment-grade, also known as high-yield or
“junk” bonds generally have greater credit risk, more price volatility,
and less liquidity than investment-grade securities.
|
∎ |
|
Mortgage- and asset-backed securities risk.
Mortgage- and certain asset-backed securities permit early repayment of
principal based on prepayment of the underlying assets; changes in the
rate of repayment affect the price and volatility of an investment. If
prepayments occur more quickly than expected, the Fund receives lower
interest payments than it expects. If prepayments occur more slowly than
expected, it delays the return of principal to the Fund. Securities issued
by certain U.S. government sponsored entities (“GSEs”) are not issued or
guaranteed by the U.S. Treasury; there is no assurance the U.S. government
will provide support in the event a GSE issuer cannot meet its
obligations. |
∎ |
|
Liquidity risk. The Fund may not be able to
purchase or sell a security in a timely manner or at desired prices or
achieve its desired weighting in a security. Liquidity risk may result
from the lack of an active market or a reduced number and capacity of
traditional market participants to make a market in fixed income
securities, and may be magnified during times of market stress or under
circumstances that cause increased supply in the market due to unusually
high selling activity. |
∎ |
|
Derivatives risk. Investing with
derivatives, such as currency forward contracts, equity options, total
return swaps and equity index futures and Treasury futures, and other
similar investments (collectively referred to as “derivatives”) involves
risks additional to and possibly greater than those associated with
investing directly in securities. The value of a derivative may not
correlate to the value of the underlying instrument to the extent
expected. A derivative can create leverage because it can result in
exposure |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
17 |
|
|
to
an amount of a security, index, or other underlying investment (a
“notional amount”) that is substantially larger than the derivative
position’s market value. Often, the upfront payment required to enter into
a derivative is much smaller than the potential for loss, which for
certain types of derivatives may be unlimited. The Fund may not be able to
close a derivatives position at an advantageous time or price. As a
result, the Fund may be required to continue making required margin and
settlement payments and, if the Fund has insufficient cash on hand to meet
such requirements, it may have to sell securities from its portfolio at a
time when it may be disadvantageous to do so. For over-the-counter
derivatives transactions, the counterparty may be unable or unwilling to
make required payments and deliveries, especially during times of
financial market distress. Derivatives also can create operational and
legal risk. Changes in regulation relating to a mutual fund’s use of
derivatives and related instruments may make derivatives more costly,
limit the availability of derivatives, or otherwise adversely affect the
value or performance of derivatives and the Fund.
|
∎ |
|
Non-U.S. investment risk. Securities of
non-U.S. issuers (including ADRs and other securities that represent
interests in a non-U.S. issuer’s securities) may be more volatile, harder
to value, and have lower overall liquidity than U.S. securities. Non-U.S.
issuers may be subject to political, economic, or market instability or
unfavorable government action in their local jurisdictions or economic
sanctions or other restrictions imposed by U.S. or foreign regulators.
There may be less information publicly available about non-U.S. issuers
and their securities, and those issuers may be subject to lower levels of
government regulation and oversight. These risks may be higher when
investing in emerging market issuers. Certain of these elevated risks may
also apply to securities of U.S. issuers with significant non-U.S.
operations. |
∎ |
|
Non-U.S. currency risk. Non-U.S. currencies
may decline relative to the U.S. dollar, which reduces the unhedged value
of securities denominated in or otherwise exposed to those currencies.
Dodge & Cox may not hedge or may not be successful in hedging the
Fund’s currency exposure. Dodge & Cox may not be able to
determine accurately the extent to which a security or its issuer is
exposed to currency risk. Emerging and frontier market currencies may be
more volatile than currencies of more developed countries.
|
∎ |
|
Call risk. If interest rates fall, issuers
of callable bonds may repay securities with higher interest rates before
maturity. This could cause the Fund to lose potential price appreciation
or anticipated income and reinvest the proceeds in securities with lower
interest rates. |
∎ |
|
Sovereign and government-related debt risk.
An issuer of sovereign debt or the governmental authorities that control
the repayment of the debt may be unable or unwilling to repay principal or
interest when due. In the event of a default by a governmental entity on a
sovereign debt obligation, there may be few or no effective legal remedies
for collecting on such debt.
|
∎ |
|
Hybrid securities risk. Hybrid securities
are typically subordinated to an issuer’s senior debt instruments;
therefore, they are subject to greater credit risk than those senior debt
instruments. Many hybrid securities are subject to provisions permitting
their issuers |
|
|
to
skip or defer distributions under specified circumstances. Hybrid
securities may have limited or no voting rights and may have substantially
lower overall liquidity than other securities. Certain types of hybrid
securities, such as non-cumulative perpetual preferred stock, are issued
predominantly by companies in the financial services industry and thus may
present increased risk during times of financial upheaval, which may
affect financial services companies more than other types of issuers.
|
An
investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Performance Information
The
following bar chart and table are intended to help you understand the risks of
investing in the Fund. The bar chart shows changes in the Fund’s
Class I shares’ returns from year to year. The table shows how the average
annual total returns of the Fund’s Class I shares and Class X shares
compare with different broad measures of market performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Visit the Fund’s
website at dodgeandcox.com or call
800-621-3979 for current
performance figures.
Highest/Lowest
quarterly results for the Fund’s Class I shares during the time
period were:
Highest:
15.53% (quarter ended June 30, 2020)
Lowest:
–21.01% (quarter ended March 31, 2020)
|
| |
PAGE 18 ∎ DODGE & COX FUNDS |
|
|
Average Annual Total
Returns for the Periods Ended 12/31/2023
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge &
Cox
Balanced – Class I |
|
1 Year |
|
|
5 Years |
|
|
10 Years |
|
Return
before taxes |
|
|
13.76 |
% |
|
|
10.18 |
% |
|
|
7.95 |
% |
Return
after taxes on distributions |
|
|
12.24 |
|
|
|
7.98 |
|
|
|
5.95 |
|
Return
after taxes on distributions and sale of Fund shares |
|
|
8.74 |
|
|
|
7.65 |
|
|
|
5.89 |
|
Dodge &
Cox
Balanced
– Class X* |
|
|
|
|
|
|
|
|
|
Return
before taxes |
|
|
13.88 |
|
|
|
10.22 |
|
|
|
7.97 |
|
S&P
500 Index (reflects no deduction for expenses or taxes) |
|
|
26.29 |
|
|
|
15.69 |
|
|
|
12.03 |
|
Bloomberg
U.S. Aggregate Bond Index (reflects no deduction for expenses
or taxes) |
|
|
5.53 |
|
|
|
1.10 |
|
|
|
1.81 |
|
Combined
Index** (60% S&P 500 & 40% Bloomberg U.S. Aggregate Bond
Index) (reflects no deduction for expenses or taxes) |
|
|
17.67 |
|
|
|
9.98 |
|
|
|
8.10 |
|
* |
|
The Fund’s Class X shares launched
on May 1, 2022. In the table above, Class X returns for periods prior
to its launch are calculated using performance of the Fund’s Class I
shares. |
** |
|
The Combined Index is a composite blend
of 60% of the S&P 500 Index and 40% of the Bloomberg U.S. Aggregate
Bond Index and represents a broad measure of the U.S. stock and bond
markets, including market sectors in which the Fund may invest.
|
The after-tax returns shown above are for the
Fund’s Class I shares. The after-tax returns of the
Fund’s Class X shares will vary. After-tax returns are calculated using the
historical highest individual federal marginal income tax rates, but do not
reflect the impact of state or local taxes. Actual after-tax
returns may differ depending on your individual circumstances. After-tax return figures do not apply to you if
you hold your Fund shares through a tax-deferred arrangement such as a 401(k)
plan or an individual retirement account.
Fund Management
Dodge &
Cox serves as investment manager to the Balanced Fund. The Fund is managed by
Dodge & Cox’s Balanced Fund Investment Committee (“BFIC”), which consists of the following seven
members:
|
|
|
| |
Committee Member |
|
Primary Titles with Investment Manager |
|
Years managing the
Fund/ Years with Dodge & Cox* |
David C. Hoeft |
|
Senior
Vice President, Director, Chief Investment Officer, and member of U.S.
Equity Investment Committee (“USEIC”), Global Equity Investment Committee
(“GEIC”), and Emerging Markets Equity Investment Committee (“EMEIC”) |
|
22/31 |
Lucinda I. Johns |
|
Senior
Vice President and Director (since 2022), Director of Fixed Income (since
2024), Research Analyst, and member of U.S. Fixed Income Investment
Committee (“USFIIC”) and Global Fixed Income Investment Committee
(“GFIIC”) |
|
12/22 |
Philippe Barret, Jr. |
|
Senior
Vice President and Director (since 2022), Research Analyst, and member of
USEIC |
|
11/21 |
Benjamin V. Garosi |
|
Vice
President, Research Analyst, and member of USEIC |
|
5/15 |
Matthew B. Schefer |
|
Vice
President, Research Analyst, and member of GFIIC |
|
2/16 |
Robert S. Turley |
|
Vice
President, Research Analyst, and member of EMEIC |
|
2/12 |
Thomas Y. Powers |
|
Vice
President and Research Analyst |
|
2/8 |
* |
|
Prior to May 1,
2022, the Fund was jointly managed by Dodge & Cox’s U.S. Equity
Investment Committee (“USEIC”) and U.S. Fixed Income Investment Committee
(“USFIIC”). Mr. Hoeft, Mr. Barret, and Mr. Garosi have been
members of the USEIC for 22, 11, and 5 years, respectively. Ms. Johns
has been a member of the USFIIC for 12 years. |
Other Important
Information About Fund Shares
For
important information about purchase and sale of Fund shares, tax information,
and payments to financial intermediaries please turn to the “Summary of Other
Important Information About Fund Shares” section on page 28 of this
prospectus.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
19 |
Dodge & Cox Income Fund
Investment Objectives
The Fund seeks a high and stable rate of current income,
consistent with long-term preservation of capital.
A secondary objective is to take advantage of opportunities to
realize capital appreciation.
Fees and Expenses
This
table describes 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.
|
|
|
|
|
|
|
| |
Shareholder Fees
(fees
paid directly from your investment) |
|
Dodge & Cox Income – Class I |
|
|
Dodge & Cox Income – Class X |
|
Sales
charge (load) imposed on purchases |
|
|
None |
|
|
|
None |
|
Deferred
sales charge (load) |
|
|
None |
|
|
|
None |
|
Sales
charge (load) imposed on reinvested distributions |
|
|
None |
|
|
|
None |
|
Redemption
fee |
|
|
None |
|
|
|
None |
|
Exchange
fee |
|
|
None |
|
|
|
None |
|
|
|
|
|
|
|
|
| |
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage Of the value of your
investment) |
|
Dodge &
Cox Income – Class I |
|
|
Dodge & Cox Income – Class X |
|
Management
fees* |
|
|
0.40 |
% |
|
|
0.35 |
% |
Distribution
and/or service (12b-1) fees |
|
|
None |
|
|
|
None |
|
Other
expenses (custody, accounting, legal, etc.) |
|
|
0.01 |
% |
|
|
0.01 |
% |
| |
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
0.41 |
% |
|
|
0.36 |
%** |
Expense
Reimbursement |
|
|
None |
|
|
|
0.03 |
%** |
| |
|
|
|
|
|
|
|
Net
Expenses |
|
|
0.41 |
% |
|
|
0.33 |
%** |
* |
|
Management fees include investment
advisory fee expenses of 0.30% for each class of the Fund; and
administrative services fee expenses of 0.10% for the Fund’s Class I
shares and 0.05% for the Fund’s Class X shares.
|
** |
|
Dodge & Cox has contractually
agreed to reimburse the Fund for all ordinary expenses to the extent
necessary to maintain Total Annual Fund Operating Expenses of the Fund’s
Class X shares at 0.33% until April 30, 2026. This agreement
cannot be terminated prior to April 30, 2026 other
than by resolution of the Fund’s Board of Trustees. For purposes of the
foregoing, ordinary expenses shall not include nonrecurring shareholder
account fees, fees and expenses associated with Fund shareholder meetings,
fees on portfolio transactions such as exchange fees, dividends and
interest on short positions, fees and expenses of pooled investment
vehicles that are held by the Fund, interest expenses and other fees and
expenses related to any borrowings, taxes, brokerage fees and commissions
and other costs and expenses relating to the acquisition and disposition
of Fund investments, other expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
non-routine expenses or extraordinary expenses not incurred in the
ordinary course of the Fund’s business, such as litigation expenses. The
term of the agreement will automatically renew for subsequent three-year
terms unless terminated with at least 30 days’ written notice by either
party prior to the end of the then-current term. The agreement does not
permit Dodge & Cox to recoup any fees waived or payments made to
the Fund for a prior year. |
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
Class I shares and/or Class X shares of the Fund for the time
periods indicated and then redeem all of your shares of the Fund’s
Class I and/or the Fund’s Class X shares at the end of those
time periods; |
∎ |
|
Your investment has a 5%
return each year; |
∎ |
|
The Fund’s operating
expenses remain the same; and |
∎ |
|
The Class X expense
reimbursement agreement is effective until April 30, 2026.
|
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 |
|
Dodge & Cox
Income – Class I |
|
$ |
42 |
|
|
$ |
132 |
|
|
$ |
230 |
|
|
$ |
518 |
|
Dodge &
Cox Income – Class X |
|
$ |
34 |
|
|
$ |
109 |
|
|
$ |
196 |
|
|
$ |
450 |
|
Portfolio Turnover
The
Fund incurs transaction costs when Dodge & Cox buys and sells
securities (or “turns over” the 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 transaction 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 55% of the average value of
its portfolio.
Principal Investment
Strategies
The
Fund invests in a diversified portfolio of bonds and other debt securities.
Under normal circumstances, the Fund will invest at least 80% of its total
assets in (1) investment-grade debt securities and (2) cash
equivalents. “Investment grade” means (i) securities rated Baa3 or higher
by Moody’s Investors Service (“Moody’s”), or BBB- or higher by
Standard & Poor’s Global Ratings (“S&P”) or Fitch Ratings
(“Fitch”), or equivalently rated by any nationally recognized statistical rating
organization (“NRSRO”), or, (ii) if unrated, deemed to be of similar
quality by Dodge & Cox. The Fund may invest up to 30% of its total
assets in U.S. dollar-denominated securities of non-U.S. issuers, including
emerging market issuers.
Debt
securities in which the Fund invests include obligations issued or guaranteed by
the U.S. government, its agencies or government sponsored entities (“GSEs”),
mortgage- and asset-backed securities, corporate and municipal bonds,
collateralized mortgage obligations, and may include other fixed and floating
rate instruments including certain preferred securities. The Fund may invest up
to 20% of its total assets in debt securities rated below investment grade,
commonly referred to as high-yield or “junk” bonds; provided no more than 5% of
the Fund’s total assets may be invested in securities rated below B3 or B- by
Moody’s, S&P, or Fitch. The Fund may also invest in interest
rate derivatives, such as U.S. Treasury futures, for a variety of purposes,
including, but not limited to, managing the Fund’s duration or adjusting the
Fund’s exposure to debt securities with different maturities.
The
proportions of Fund assets invested in various classes of debt securities will
be revised in light of Dodge & Cox’s appraisal of the economy, the
relative yields of securities in the various market sectors, the investment
prospects for issuers, and other factors. In selecting securities,
Dodge & Cox considers many factors,
|
| |
PAGE 20 ∎ DODGE & COX FUNDS |
|
|
including
yield, credit quality, liquidity, covenants, call risk,
duration, structure, and capital appreciation potential, as well
as financially material environmental, social, and governance
(ESG) issues.
Principal Risks of
Investing
You could lose
money by investing in the Fund, and the Fund could underperform other
investments. You should expect the Fund’s share price and total
return to fluctuate. The Fund’s performance could be hurt by:
∎ |
|
Interest rate risk. Debt security prices may
decline due to rising interest rates. The price of debt securities with
longer maturities is typically affected more by rising interest rates than
the price of debt securities with shorter maturities.
|
∎ |
|
Credit risk. An issuer or guarantor of a
debt security may be unable or unwilling to make scheduled payments of
interest and principal. Actual or perceived deterioration in an issuer’s
or guarantor’s financial condition may affect a security’s value.
|
∎ |
|
Below investment-grade securities risk. Debt
securities rated below investment grade, also known as high-yield or
“junk” bonds, generally have greater credit risk, more price volatility,
and less liquidity than investment-grade securities.
|
∎ |
|
Mortgage- and asset-backed securities risk.
Mortgage- and certain asset-backed securities permit early repayment of
principal based on prepayment of the underlying assets; changes in the
rate of repayment affect the price and volatility of an investment. If
prepayments occur more quickly than expected, the Fund receives lower
interest payments than it expects. If prepayments occur more slowly than
expected, it delays the return of principal to the Fund. Securities issued
by certain GSEs are not issued or guaranteed by the U.S. Treasury; there
is no assurance the U.S. government will provide support in the event a
GSE issuer cannot meet its obligations.
|
∎ |
|
To-Be-Announced transaction risk. TBA
mortgage-backed securities transactions involve an agreement under which
the buyer agrees to purchase a pool of mortgage-backed securities for a
fixed price with payment and delivery at a scheduled future date,
typically between 30 and 60 days in the future. During the settlement
period of a TBA transaction, the buyer is at risk for any decline in the
value of the securities to be delivered, while the seller is at risk that
the value of the securities may increase. In order to maintain TBA
exposure past the scheduled settlement date, a buyer must “roll” the
transaction by selling its original position and simultaneously purchasing
a similar new one with a settlement date further in the future. Each time
the Fund rolls a TBA position (typically every 30-60 days), it incurs
transaction costs, which are borne by the Fund and its shareholders, and
reduces the total return of the Fund. Maintaining TBA exposure will
increase a fund’s portfolio turnover rate.
|
∎ |
|
Non-U.S. investment risk. Securities of
non-U.S. issuers may be more volatile, harder to value, and have lower
overall liquidity than U.S. securities. Non-U.S. issuers may be subject to
political, economic, or market instability, or unfavorable government
action in their local jurisdictions or economic sanctions or other
restrictions imposed by U.S. or foreign regulators. There may be less
information publicly available about non-U.S. issuers and their
securities, and those issuers may be subject to lower levels
|
|
|
of
government regulation and oversight. Non-U.S. securities may decline in
value due to conditions specific to an individual country, including
unfavorable economic conditions relative to the United States. There may
be increased risk of delayed transaction settlement. These risks may be
higher when investing in emerging market issuers. Certain of these
elevated risks may also apply to securities of U.S. issuers with
significant non-U.S. operations.
|
∎ |
|
Liquidity risk. The Fund may not be able to
purchase or sell a security in a timely manner or at desired prices or
achieve its desired weighting in a security. Liquidity risk may result
from the lack of an active market or a reduced number and capacity of
traditional market participants to make a market in fixed income
securities, and may be magnified during times of market stress or under
circumstances that cause increased supply in the market due to unusually
high selling activity. |
∎ |
|
Derivatives risk. Investing with
derivatives, such as interest rate swaps and futures, and other similar
investments (collectively referred to as “derivatives”) involves risks
additional to and possibly greater than those associated with investing
directly in securities. The value of a derivative may not correlate to the
value of the underlying instrument to the extent expected. A derivative
can create leverage because it can result in exposure to an amount of a
security, index, or other underlying investment (a “notional amount”) that
is substantially larger than the derivative position’s market value.
Often, the upfront payment required to enter into a derivative is much
smaller than the potential for loss, which for certain types of
derivatives may be unlimited. The Fund may not be able to close a
derivatives position at an advantageous time or price. As a result, the
Fund may be required to continue making required margin and settlement
payments and, if the Fund has insufficient cash on hand to meet such
requirements, it may have to sell securities from its portfolio at a time
when it may be disadvantageous to do so. For over-the-counter derivatives
transactions, the counterparty may be unable or unwilling to make required
payments and deliveries, especially during times of financial market
distress. Derivatives also can create operational and legal risk. Changes
in regulation relating to a mutual fund’s use of derivatives and related
instruments may make derivatives more costly, limit the availability of
derivatives, or otherwise adversely affect the value or performance of
derivatives and the Fund.
|
∎ |
|
Call risk. If interest rates fall, issuers
of callable bonds may repay securities with higher interest rates before
maturity. This could cause the Fund to lose potential price appreciation
or anticipated income and reinvest the proceeds in securities with lower
interest rates. |
∎ |
|
Sovereign and government-related debt risk.
An issuer of sovereign debt or the governmental authorities that control
the repayment of the debt may be unable or unwilling to repay principal or
interest when due. In the event of a default by a governmental entity on a
sovereign debt obligation, there may be few or no effective legal remedies
for collecting on such debt.
|
∎ |
|
Manager risk. Dodge & Cox’s opinion
about the intrinsic worth or creditworthiness of a company or security may
be incorrect or the market may continue to undervalue a company or
security. Depending on the market conditions, Dodge & Cox’s
investing style may perform better or worse than portfolios with a
different investment style. Dodge & Cox may not make timely
purchases or |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
21 |
|
|
sales
of securities for the Fund. The Fund may underperform the broad market,
relevant indices, or other funds with similar objectives and investment
strategies. |
∎ |
|
Market risk. Investment prices may increase
or decrease, sometimes suddenly and unpredictably, due to general market
conditions. Local, regional or global events such as war, acts of
terrorism, the spread of infectious illness or other public health issue,
recessions, inflation, or other events could also have a significant
impact on the Fund and its investments and potentially increase the risks
described above. |
∎ |
|
Hybrid securities risk. Hybrid securities
are typically subordinated to an issuer’s senior debt instruments;
therefore, they are subject to greater credit risk than those senior debt
instruments. Many hybrid securities are subject to provisions permitting
their issuers to skip or defer distributions under specified
circumstances. Hybrid securities may have limited or no voting rights and
may have substantially lower overall liquidity than other securities.
Certain types of hybrid securities, such as non-cumulative perpetual
preferred stock, are issued predominantly by companies in the financial
services industry and thus may present increased risk during times of
financial upheaval, which may affect financial services companies more
than other types of issuers.
|
An
investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Performance Information
The
following bar chart and table are intended to help you understand the risks of
investing in the Fund. The bar chart shows changes in the
Fund’s Class I shares’ returns from year to year. The table shows how
the average annual total returns of the Fund’s Class I shares
and Class X shares compare to those of a broad measure of market
performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Visit the Fund’s
website at dodgeandcox.com or call
800-621-3979 for current
performance figures.
Highest/Lowest
quarterly results for the Fund’s Class I shares during the time period
were:
Highest:
5.98% (quarter ended June 30, 2020)
Lowest:
–5.20% (quarter ended March 31,
2022)
Average Annual Total
Returns for the Periods Ended 12/31/2023
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge &
Cox
Income
– Class I |
|
1 Year |
|
|
5 Years |
|
|
10 Years |
|
Return
before taxes |
|
|
7.69 |
% |
|
|
2.70 |
% |
|
|
2.79 |
% |
Return
after taxes on distributions |
|
|
5.98 |
|
|
|
1.26 |
|
|
|
1.39 |
|
Return
after taxes on distributions and sale of Fund shares |
|
|
4.51 |
|
|
|
1.51 |
|
|
|
1.56 |
|
Dodge &
Cox
Income
– Class X* |
|
|
|
|
|
|
|
|
|
Return
before taxes |
|
|
7.76 |
|
|
|
2.73 |
|
|
|
2.80 |
|
Bloomberg
U.S. Aggregate Bond Index (reflects no deduction for expenses
or taxes) |
|
|
5.53 |
|
|
|
1.10 |
|
|
|
1.81 |
|
* |
|
The Fund’s Class X shares launched
on May 1, 2022. In the table above, Class X returns for periods prior
to its launch are calculated using performance of the Fund’s Class I
shares. |
The after-tax returns shown above are for the
Fund’s Class I shares. The after-tax returns the Fund’s Class X shares
will vary. After-tax returns are calculated using the
historical highest individual federal marginal income tax rates, but do not
reflect the impact of state or local taxes. Actual after-tax
returns may differ depending on your individual circumstances. After-tax return figures do not apply to you if
you hold your Fund shares through a tax-deferred arrangement such as a 401(k)
plan or an individual retirement account.
|
| |
PAGE 22 ∎ DODGE & COX FUNDS |
|
|
Fund Management
Dodge &
Cox serves as investment manager to the Income Fund. The Fund is managed by
Dodge & Cox’s U.S. Fixed Income Investment Committee (“USFIIC”), which consists of the following seven
members:
|
|
|
| |
Committee Member |
|
Primary Title with Investment Manager |
|
Years managing the
Fund/ Years with Dodge & Cox |
Dana M. Emery |
|
Chief
Executive Officer, Chair, Director, and member of Global Fixed Income
Investment Committee (“GFIIC”) |
|
35/41 |
James H. Dignan |
|
Vice
President, Research Analyst, and member of GFIIC |
|
22/25 |
Anthony J. Brekke |
|
Vice
President, and Research Analyst |
|
16/21 |
Adam S. Rubinson |
|
Vice
President, Research Analyst, and member of GFIIC |
|
14/22 |
Lucinda I. Johns |
|
Senior
Vice President and Director (since 2022), Director of Fixed Income (since
2024), Research Analyst, and member of Balanced Fund Investment Committee
(“BFIC”) and GFIIC |
|
12/22 |
Nils M. Reuter |
|
Vice
President, Research Analyst, and Trader |
|
6/21 |
Michael Kiedel |
|
Vice
President and Research Analyst |
|
6/16 |
Other Important
Information About Fund Shares
For
important information about purchase and sale of Fund shares, tax information,
and payments to financial intermediaries please turn to the “Summary of Other
Important Information About Fund Shares” section on page 28 of this
prospectus.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
23 |
Dodge & Cox Global Bond Fund
Investment Objectives
The
Fund seeks a high rate of total return consistent with long-term preservation of
capital.
Fees and Expenses
This
table describes 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.
|
|
|
|
|
|
|
| |
Shareholder Fees
(fees
paid directly from your investment) |
|
Dodge & Cox Global Bond – Class I |
|
|
Dodge & Cox Global Bond – Class X |
|
Sales
charge (load) imposed on purchases |
|
|
None |
|
|
|
None |
|
Deferred
sales charge (load) |
|
|
None |
|
|
|
None |
|
Sales
charge (load) imposed on reinvested distributions |
|
|
None |
|
|
|
None |
|
Redemption
fee |
|
|
None |
|
|
|
None |
|
Exchange
fee |
|
|
None |
|
|
|
None |
|
|
|
|
|
|
|
|
| |
Annual Fund Operating Expenses
(expenses that you pay each
year as a percentage of the value of
your investment |
|
Dodge & Cox Global Bond – Class I |
|
|
Dodge & Cox Global Bond – Class X |
|
Management
fees* |
|
|
0.45 |
% |
|
|
0.40 |
% |
Distribution
and/or service (12b‑1) fees |
|
|
None |
|
|
|
None |
|
Other
expenses (custody, accounting, legal, etc.) |
|
|
0.07 |
% |
|
|
0.07 |
% |
| |
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses** |
|
|
0.52 |
% |
|
|
0.47 |
% |
Expense
Reimbursement** |
|
|
0.07 |
% |
|
|
0.10 |
% |
| |
|
|
|
|
|
|
|
Net
Expenses** |
|
|
0.45 |
% |
|
|
0.37 |
% |
* |
|
Management fees include investment
advisory fee expenses of 0.35% for each class; and administrative services
fee expenses of 0.10% for the Fund’s Class I shares and 0.05% for the
Fund’s Class X shares. |
** |
|
Dodge & Cox has contractually
agreed to reimburse the Fund for all ordinary expenses to the extent
necessary to maintain Total Annual Fund Operating Expenses of (i) the
Class I shares at 0.45% and (ii) the Class X shares at
0.37% until April 30, 2026. These agreements cannot be terminated
prior to April 30, 2026 other
than by resolution of the Fund’s Board of Trustees. For purposes of the
foregoing, ordinary expenses shall not include nonrecurring shareholder
account fees, fees and expenses associated with Fund shareholder meetings,
fees on portfolio transactions such as exchange fees, dividends and
interest on short positions, fees and expenses of pooled investment
vehicles that are held by the Fund, interest expenses and other fees and
expenses related to any borrowings, taxes, brokerage fees and commissions
and other costs and expenses relating to the acquisition and disposition
of Fund investments, other expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
non-routine expenses or extraordinary expenses not incurred in the
ordinary course of the Fund’s business, such as litigation expenses. The
term of the agreement will automatically renew for subsequent three-year
terms unless terminated with at least 30 days’ written notice by either
party prior to the end of the then-current term. The agreement does not
permit Dodge & Cox to recoup any fees waived or payments made to
the Fund for a prior year. |
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
Class I shares and/or Class X shares of the Fund for the time
periods indicated and then redeem all of your shares of the Fund’s
Class I shares and/or the Fund’s Class X shares at the end of
those time periods; |
∎ |
|
Your investment has a 5%
return each year; |
∎ |
|
The Fund’s operating
expenses remain the same; and |
∎ |
|
The Fund’s expense
reimbursement agreement is effective until April 30, 2026.
|
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 |
|
Dodge & Cox
Global Bond – Class I |
|
$ |
46 |
|
|
$ |
152 |
|
|
$ |
276 |
|
|
$ |
639 |
|
Dodge &
Cox Global Bond – Class X |
|
$ |
38 |
|
|
$ |
130 |
|
|
$ |
243 |
|
|
$ |
572 |
|
Portfolio Turnover
The
Fund incurs transaction costs when Dodge & Cox buys and sells
securities (or “turns over” the 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 transaction 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 52% of the average value of
its portfolio.
Principal Investment
Strategies
The
Fund invests in a diversified portfolio of bonds and other debt instruments of
issuers from at least three different countries, which may include emerging
market countries. The Fund is not required to allocate its investments in set
percentages to particular countries and may invest in emerging markets without
limit. Under normal circumstances, the Fund invests at least 40% of its total
assets in securities of non-U.S. issuers and at least 80% of its total assets in
debt instruments, which may, in each case, be represented by derivatives such as
forward contracts, futures contracts, or swap agreements. Debt instruments in
which the Fund may invest include, but are not limited to, government and
government-related obligations, mortgage- and asset-backed securities, corporate
and municipal bonds, collateralized mortgage obligations, inflation-linked
securities and other fixed and floating rate instruments, including certain
preferred securities. The Fund invests in both U.S. dollar-denominated and
non-U.S. dollar-denominated debt instruments across all sectors.
A
majority of the Fund is invested in investment-grade debt instruments
(instruments rated Baa3 or higher by Moody’s Investors Service (“Moody’s”), BBB-
or higher by Standard & Poor’s Global Ratings (“S&P”) or Fitch
Ratings (“Fitch”), or equivalently rated by any nationally recognized
statistical rating organization (“NRSRO”), or, if unrated, deemed to be of
investment-grade quality by Dodge & Cox). Up to 35% of the Fund’s total
assets may be invested in debt securities rated below investment grade, commonly
referred to as high-yield or “junk” bonds.
|
| |
PAGE 24 ∎ DODGE & COX FUNDS |
|
|
The
Fund may buy or sell non-U.S. currencies and may enter into various currency or
interest rate-related transactions involving derivative instruments, including
forward contracts, futures contracts, and swap agreements. The Fund may use
derivatives to seek to minimize the impact of losses to one or more of its
investments (as a “hedging technique”) or to implement its investment strategy.
For example, the Fund may invest in derivative instruments that create exposure
to a specific security or market sector as a substitute for a direct investment
in the security or sector itself or to benefit from changes in the relative
values of selected currencies. The Fund may use interest rate derivatives for a
variety of purposes, including, but not limited to, managing the Fund’s duration
or adjusting the Fund’s exposure to debt securities with different maturities.
In
selecting securities, Dodge & Cox considers many factors,
including, without limitation, yield, credit quality, liquidity, covenants, call
risk, duration, structure, and capital appreciation potential, as well as
financially material environmental, social, and governance (ESG) issues. For all
securities that are denominated in a foreign currency, Dodge & Cox
analyzes whether to accept or hedge the associated interest rate and currency
risks. Dodge & Cox considers, among other things, a country’s
economic outlook and political stability, the protections provided to foreign
investors, relative interest rates, exchange rates, a country’s monetary and
fiscal policies, its debt stock, and its ability to meet its funding needs.
The
Fund may purchase or sell holdings for a variety of reasons such as to alter
sector, geographic, or currency exposure or to shift the overall portfolio’s
risk profile. The proportions of the Fund’s assets held in various debt
instruments will be revised in light of Dodge & Cox’s appraisal of
the global economy, the relative yields of securities in the various market
sectors and countries, the potential for a currency’s appreciation, the
investment prospects for issuers, the countries’ domestic and political
conditions, and other factors.
Principal Risks of
Investing
You could lose
money by investing in the Fund, and the Fund could underperform other
investments. You should expect the Fund’s share price and total
return to fluctuate within a wide range. The Fund’s performance could be hurt
by:
∎ |
|
Interest rate risk. Debt security prices may
decline due to rising interest rates. The price of debt securities with
longer maturities is typically affected more by rising interest rates than
the price of debt securities with shorter maturities.
|
∎ |
|
Credit risk. An issuer or guarantor of a
debt security may be unable or unwilling to make scheduled payments of
interest and principal. Actual or perceived deterioration in an issuer’s
or guarantor’s financial condition may affect a security’s value.
|
∎ |
|
Below investment-grade securities risk. Debt
securities rated below investment grade, also known as high-yield or
“junk” bonds generally have greater credit risk, more price volatility,
and less liquidity than investment-grade securities.
|
∎ |
|
Non-U.S. investment risk. Securities of
non-U.S. issuers may be more volatile, harder to value, and have lower
overall liquidity than U.S. securities. Non-U.S. issuers may be subject to
political, economic, or market instability, or unfavorable government
action |
|
|
in
their local jurisdictions or economic sanctions or other restrictions
imposed by U.S. or foreign regulators. There may be less information
publicly available about non-U.S. issuers and their securities and those
issuers may be subject to lower levels of government regulation and
oversight. Non-U.S. securities may decline in value due to conditions
specific to an individual country, including unfavorable economic
conditions relative to the United States. There may be increased risk of
delayed transaction settlement. These risks may be higher when investing
in emerging market issuers. Certain of these elevated risks may also apply
to securities of U.S. issuers with significant non-U.S. operations.
|
∎ |
|
Emerging markets risk. Emerging market
securities may present issuer, market, currency, liquidity, volatility,
valuation, legal, political, and other risks different from, and
potentially greater than, the risks of investing in securities of issuers
in more developed markets.
|
∎ |
|
Non-U.S. currency risk. Non-U.S. currencies
may decline relative to the U.S. dollar, which reduces the unhedged value
of investments denominated in or otherwise exposed to those currencies.
Dodge & Cox may not hedge or may not be successful in hedging the
Fund’s currency exposure and may not be able to determine accurately the
extent to which a security or its issuer is exposed to currency risk.
|
∎ |
|
Sovereign and government-related debt risk.
An issuer of sovereign debt or the governmental authorities that control
the repayment of the debt may be unable or unwilling to repay principal or
interest when due. In the event of a default by a governmental entity on a
sovereign debt obligation, there may be few or no effective legal remedies
for collecting on such debt. |
∎ |
|
Derivatives risk. Investing with
derivatives, such as currency forward contracts, interest rate swaps, and
futures contracts and other similar investments (collectively referred to
as “derivatives”) involves risks additional to and possibly greater than
those associated with investing directly in securities. The value of a
derivative may not correlate to the value of the underlying instrument to
the extent expected. A derivative can create leverage because it can
result in exposure to an amount of a security, index, or other underlying
investment (a “notional amount”) that is substantially larger than the
derivative position’s market value. Often, the upfront payment required to
enter into a derivative is much smaller than the potential for loss, which
for certain types of derivatives may be unlimited. The Fund may not be
able to close a derivatives position at an advantageous time or price. As
a result, the Fund may be required to continue making required margin and
settlement payments and, if the Fund has insufficient cash on hand to meet
such requirements, it may have to sell securities from its portfolio at a
time when it may be disadvantageous to do so. For over-the-counter
derivatives transactions, the counterparty may be unable or unwilling to
make required payments and deliveries, especially during times of
financial market distress. Derivatives also can create operational and
legal risk. Changes in regulation relating to a mutual fund’s use of
derivatives and related instruments may make derivatives more costly,
limit the availability of derivatives, or otherwise adversely affect the
value or performance of derivatives and the Fund.
|
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
25 |
∎ |
|
Liquidity risk. The Fund may not be able to
purchase or sell a security in a timely manner or at desired prices or
achieve its desired weighting in a security. Liquidity risk may result
from the lack of an active market or a reduced number and capacity of
traditional market participants to make a market in fixed income
securities and may be magnified during times of market stress or under
circumstances that cause increased supply in the market due to unusually
high selling activity. |
∎ |
|
Mortgage- and asset-backed securities risk.
Mortgage- and certain asset-backed securities permit early repayment of
principal based on prepayment of the underlying assets; changes in the
rate of repayment affect the price and volatility of an investment. If
prepayments occur more quickly than expected, the Fund receives lower
interest payments than it expects. If prepayments occur more slowly than
expected, it delays the return of principal to the Fund. Securities issued
by certain U.S. government-sponsored entities (“GSEs”) are not issued or
guaranteed by the U.S. Treasury; there is no assurance the U.S. government
will provide support in the event a GSE issuer cannot meet its
obligations. |
∎ |
|
To-Be-Announced transaction risk. TBA
mortgage-backed securities transactions involve an agreement under which
the buyer agrees to purchase a pool of mortgage-backed securities for a
fixed price with payment and delivery at a scheduled future date,
typically between 30 and 60 days in the future. During the settlement
period of a TBA transaction, the buyer is at risk for any decline in the
value of the securities to be delivered, while the seller is at risk that
the value of the securities may increase. In order to maintain TBA
exposure past the scheduled settlement date, a buyer must “roll” the
transaction by selling its original position and simultaneously purchasing
a similar new one with a settlement date further in the future. Each time
the Fund rolls a TBA position (typically every 30-60 days), it incurs
transaction costs, which are borne by the Fund and its shareholders, and
reduces the total return of the Fund. Maintaining TBA exposure will
increase a Fund’s portfolio turnover rate.
|
∎ |
|
Call risk. If interest rates fall, issuers
of callable bonds may repay securities with higher interest rates before
maturity. This could cause the Fund to lose potential price appreciation
or anticipated income and reinvest the proceeds in securities with lower
interest rates. |
∎ |
|
Manager risk. Dodge & Cox’s opinion
about the intrinsic worth or creditworthiness of a company or security may
be incorrect or the market may continue to undervalue the company or
security. Depending on the market conditions, Dodge & Cox’s
investing style may perform better or worse than portfolios with a
different investment style. Dodge & Cox may not make timely
purchases or sales of securities for the Fund. The Fund may underperform
the broad market, relevant indices, or other funds with similar objectives
and investment strategies.
|
∎ |
|
Market risk. Investment prices may increase
or decrease, sometimes suddenly and unpredictably, due to general market
conditions. Local, regional or global events such as war, acts of
terrorism, the spread of infectious illness or other public health issue,
recessions, inflation, or other events could also have a significant
impact on the Fund and its investments and potentially increase the risks
described above. |
∎ |
|
Geographic risk. From time to time the Fund
may invest a substantial amount of its assets in issuers located in a
single country or a limited number of countries. If the Fund focuses its
investments in this manner, risks relating to economic, political and
social conditions in those countries will have a significant impact on its
investment performance. The Fund’s investment performance may be more
volatile if it focuses its investments in certain countries, especially
emerging market or frontier market countries.
|
∎ |
|
Hybrid securities risk. Hybrid securities
are typically subordinated to an issuer’s senior debt instruments;
therefore, they are subject to greater credit risk than those senior debt
instruments. Many hybrid securities are subject to provisions permitting
their issuers to skip or defer distributions under specified
circumstances. Hybrid securities may have limited or no voting rights and
may have substantially lower overall liquidity than other securities.
Certain types of hybrid securities, such as non-cumulative perpetual
preferred stock, are issued predominantly by companies in the financial
services industry and thus may present increased risk during times of
financial upheaval, which may affect financial services companies more
than other types of issuers.
|
An
investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Performance Information
The
following bar chart and table are intended to help you understand the risks of
investing in the Fund. The bar chart shows changes in the Fund’s
Class I shares’ returns from year to year. The table shows how the average
annual total returns of the Fund’s Class I shares and the Fund’s
Class X shares compare to those of a broad measure of
market performance. The Fund’s shares have benefited
since inception from an expense reimbursement agreement. Without the expense
reimbursement, the Fund’s shares returns would have been lower.
Dodge & Cox
Global Bond Fund, L.L.C., a private fund managed and funded by
Dodge & Cox (the “Private Fund”), was reorganized into the Fund
and the Fund commenced operations on May 1, 2014. The Private Fund was
organized as Delaware limited liability company and was treated as a disregarded
entity under the Internal Revenue Code of 1986, as amended (the “Code”). The
Private Fund commenced operations on December 5, 2012, and had an
investment objective, policies, and strategies that were, in all material
respects, the same as those of the Fund, and was managed in a manner that, in
all material respects, complied with the investment guidelines and restrictions
of the Fund. However, the Private Fund was not registered as an investment
company under the Investment Company Act of 1940 (the “1940 Act”), and therefore
was not subject to certain investment limitations, diversification requirements,
liquidity requirements, and other restrictions imposed by the 1940 Act and the
Code, which, if applicable, may have adversely affected its performance. The
Fund’s performance for periods prior to the commencement of operations on
May 1, 2014, is that of the Private Fund. The performance of the Private
Fund has not been restated because the net total operating expense ratio of the
Private Fund and the Fund
|
| |
PAGE 26 ∎ DODGE & COX FUNDS |
|
|
(after
the application of the expense reimbursement agreement) are the same.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Visit the Fund’s
website at dodgeandcox.com or call
800-621-3979 for current
performance figures.
Highest/Lowest
quarterly results for the Fund’s Class I shares during the time
period were:
Highest:
11.42% (quarter ended June 30, 2020)
Lowest:
–7.66% (quarter ended March 31, 2020)
Average Annual Total
Returns for the Periods Ended 12/31/2023
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge &
Cox
Global
Bond – Class I |
|
1 Year |
|
|
5 Years |
|
|
10 Years |
|
Return
before taxes |
|
|
12.31 |
% |
|
|
5.12 |
% |
|
|
3.56 |
% |
Return
after taxes on distributions |
|
|
10.76 |
|
|
|
3.60 |
|
|
|
2.37 |
|
Return
after taxes on distributions and sale of Fund shares |
|
|
7.24 |
|
|
|
3.30 |
|
|
|
2.24 |
|
Dodge &
Cox
Global
Bond – Class X* |
|
|
|
|
|
|
|
|
|
Return
before taxes |
|
|
12.48 |
|
|
|
5.15 |
|
|
|
3.58 |
|
Bloomberg
Global Aggregate Bond Index (USD hedged) (reflects no deduction for
expenses or taxes) |
|
|
7.15 |
|
|
|
1.40 |
|
|
|
2.41 |
|
* |
|
The Fund’s Class X shares launched
on May 1, 2022. In the table above, Class X returns for periods prior
to its launch are calculated using performance of the Fund’s Class I
shares. |
The after-tax returns shown above are for the
Fund’s Class I shares. The after-tax returns of the
Fund’s Class X shares will vary. After-tax returns are calculated using the
historical highest individual federal marginal income tax rates, but do not
reflect the impact of state or local taxes. Actual after-tax
returns may differ depending on your individual circumstances. After-tax return figures do not apply to you if
you hold your Fund shares through a tax-deferred arrangement such as a 401(k)
plan or an individual retirement account.
Fund Management
Dodge &
Cox serves as investment manager to the Global Bond Fund. The Fund is managed by
Dodge & Cox’s Global Fixed Income Investment Committee (“GFIIC”), which consists of the following seven
members:
|
|
|
| |
Committee Member |
|
Primary Titles with Investment Manager |
|
Years managing the
Fund/ Years with Dodge & Cox |
Dana M. Emery |
|
Chief
Executive Officer, Chair, Director, and member of U.S. Fixed Income
Investment Committee (“USFIIC”) |
|
10/41 |
James H. Dignan |
|
Vice
President, Research Analyst, and member of USFIIC |
|
10/25 |
Adam S. Rubinson |
|
Vice
President, Research Analyst, and member of USFIIC |
|
10/22 |
Lucinda I. Johns |
|
Senior
Vice President and Director (since 2022), Director of Fixed Income (since
2024), Research Analyst, and member of Balanced Fund Investment Committee
(“BFIC”) and USFIIC |
|
10/22 |
Matthew B. Schefer |
|
Vice
President, Research Analyst, and member of BFIC |
|
6/16 |
Jose F. Ursua |
|
Vice
President and Macro Research Analyst |
|
4/9 |
Mimi Yang |
|
Vice
President and Macro Research Analyst |
|
1/10 |
Other Important
Information About Fund Shares
For
important information about purchase and sale of Fund shares, tax information,
and payments to financial intermediaries please turn to the “Summary of Other
Important Information About Fund Shares” section on page 28 of this
prospectus.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
27 |
Summary of Other Important Information About Fund Shares
Purchase and Sale of Fund
Shares
The
minimum initial investment for each class of shares of a Fund is $2,500 ($1,000
for Individual Retirement Accounts (“IRAs”)) and the minimum subsequent investment
is $100. The Funds, in their sole discretion, reserve the right to modify or
waive minimum investment amounts for certain financial intermediaries that
submit orders on behalf of their customers under certain circumstances. For
example, the Funds may waive or lower the minimum investment amount for certain
financial intermediaries that use the Funds as part of an asset allocation
program, certain retirement plans, and accounts that hold the Funds in omnibus
name. Financial intermediaries may impose their own minimum investment
amounts.
You
may withdraw (redeem) any part of your account by selling shares. The sale price
of your shares will be the Fund’s next-determined net asset value after SS&C
GIDS (the “Transfer Agent”) or an authorized agent or sub-agent receives all
required documents in good order. You may sell shares as described below:
∎ |
|
Online:
Visit the Dodge & Cox Funds’ website at dodgeandcox.com, click on
“Log In” log into your account and submit your request
online. |
∎ |
|
Mail:
Visit Dodge & Cox Funds’ website at dodgeandcox.com and click on
“Resources” then “Forms & Guides.” Download and complete the
Redemption Request Form for a non-IRA and/or the IRA Distribution Request
Form for an IRA. Mail the completed form(s) to “Dodge & Cox
Funds, P.O. Box 219502, Kansas City, MO 64121-9502” to process your
request(s). |
∎ |
|
Phone:
You may call Client Services at 800-621-3979 during business hours to
place redemption or distribution requests for either a non-IRA or an
IRA. |
Available Share Classes
Each
class of a Fund’s shares represent an interest in the same Fund with the same
investment objectives and investment policies. No class has sales charges or
makes distribution payments. However, different classes are designed for
different types of investors and have different eligibility requirements and
expense structures due to differing shareholder servicing arrangements.
Investments in Class X shares that are determined to be ineligible may be either
denied, cancelled, invested in Class I shares, or converted to Class I shares,
at the sole discretion of the Funds. Please refer to the “Share Classes and
Distribution” section of this Prospectus for additional information.
Class I. Class I shares are available to all types of
investors, including individuals and institutions. Class I shares may be
purchased directly from Dodge & Cox or through a financial
intermediary.
Class X. Class X shares are available only to certain
defined contribution employee retirement benefit plans, such as 401(k), 403(b),
employee stock ownership, money purchase pension, profit
sharing,
stock bonus, target benefit, and thrift or savings plans and other defined
contribution plans approved by the Funds. Class X shares are not available
to retail investors, defined benefit plans, traditional and Roth IRAs, Coverdell
Education Savings Accounts, HSA plans, 529 plans, SEPs, SAR-SEPs, SIMPLE IRAs or
individual 403(b) plans. Class X shares may be purchased and sold only
through the administrator or recordkeeper of an eligible defined contribution
employee retirement benefit plan.
Investing Through a
Financial Intermediary
If
you purchase shares of a Fund through a financial intermediary, such as a
broker/dealer, financial institution, investment adviser, or employee benefit
plan, rather than directly from the Transfer Agent, your intermediary may impose
different or additional conditions than the Funds on purchases, sales, and
exchanges of Fund shares. These differences could include initial and subsequent
investment minimums, exchange policies, differences in available Funds or share
classes, cut-off times for investments, and trading restrictions. Your
intermediary could impose additional account and/or transaction fees. You should
consult your intermediary directly for information regarding any such conditions
or fees. If you purchase shares of a Fund through an intermediary, you must
place subsequent orders to sell or exchange those shares through the same
intermediary.
Tax Information
Each
Fund will distribute substantially all of its income and capital gains to its
shareholders every year. You will be taxed on dividends you receive from a Fund
as ordinary income and/or capital gains unless you hold your Fund shares in a
tax-deferred retirement account, such as an IRA, in which case you will
generally be taxed only upon withdrawal of monies from the retirement account or
are otherwise tax exempt.
Payments to Financial
Intermediaries
With
respect to Class I shares of a Fund purchased through an employee
retirement benefit plan, Dodge & Cox may make payments to the
recordkeeper, broker/dealer, bank, or other financial institution or
organization (each a “Financial Intermediary”) that provides shareholder
recordkeeping or other administrative services to the plan as compensation for
those services. No such payments are made with respect to the Emerging Markets
Stock Fund or the Class X shares of any Fund. These payments may create a
conflict of interest by influencing your Financial Intermediary to make
available a Fund over other mutual funds or investments. You should ask your
Financial Intermediary about differing and divergent interests and how it is
compensated for administering your Fund investment.
|
| |
PAGE 28 ∎ DODGE & COX FUNDS |
|
|
Investment Objectives, Principal Investment Strategies,
Related Risks, and Disclosure of Portfolio Holdings
This
section takes a closer look at the investment objectives and certain risks of
investing in the Dodge & Cox Funds (each a “Fund” and, collectively,
the “Funds”). This section also provides information regarding the Funds’
disclosure of portfolio holdings.
Dodge & Cox
Investment Management Approach
Fundamental
bottom-up research, a long-term investment horizon, and rigorous valuation
discipline are central to Dodge & Cox’s investment philosophy.
Investment decisions are made by a team of seasoned investment professionals
based on key fundamental factors that we believe determine investment value over
the long term. Our investment analysts operate within a team-based structure
intended to foster communication and collaboration, and each investment idea is
subject to committee review for both its merits as a specific investment and its
role in the overall portfolio. Our approach stresses an evaluation of risk
relative to opportunity and we seek investments that we believe are undervalued
by the market.
Equity Investing
Dodge &
Cox’s equity investment strategy is to build a portfolio of individual
securities that we believe are undervalued given their long-term prospects.
Individual company research drives the selection of equity securities for the
Funds’ portfolios. Our team of global research analysts, organized by industry,
conducts detailed research, which provides us the necessary perspective about
industry dynamics to assess company fundamentals and compare valuations. We
identify investment opportunities by analyzing the long-term fundamentals of a
business, including prospective earnings, cash flow, and dividends over a
three-to-five year period. We focus our research efforts on factors — such as
franchise strength, competitive dynamics, growth opportunities, and management
quality — that we believe ultimately determine business success. When evaluating
investment opportunities, Dodge & Cox also considers
environmental, social, and/or corporate governance (ESG) factors, such as
pollution and climate change risk, labor relations, and shareholder rights, that
we believe are likely to have a financially material impact on an issuer’s
current or future valuation (though ESG considerations are not necessarily
determinative with respect to any particular investment decision). The Funds
typically invest in medium-to-large well-established companies (except for the
Emerging Markets Stock Fund, which may invest in large-, medium-, or
small-capitalization companies). It is the general practice of the Funds to
invest in equity securities that have liquid secondary markets. Particularly
when investing in securities of non-U.S. issuers, Dodge & Cox considers
the economic and political stability of the country where the issuer is located
and the protections provided to shareholders. We consider the sale of a holding
when we believe the price of a company’s equity securities reflects more
optimistic expectations about the company’s prospects than our own expectations,
when our assessment of a company’s long-term fundamentals grows negative, or
when we identify more attractive opportunities elsewhere.
Fixed Income Investing
Dodge &
Cox’s fixed income investment strategy is to construct and manage a portfolio of
securities selected through bottom-up fundamental analysis and with an emphasis
on valuation. By combining fundamental research with a long-term investment
horizon, we seek to uncover and act upon inefficiencies in the relative
valuations of individual securities. Our credit research focuses on the factors
that can influence an individual issuer’s creditworthiness and any downside
protection that exists. At the security level, our analysis emphasizes the terms
and conditions and structural characteristics of each instrument. We also
consider economic trends and special circumstances that may affect an industry
or a specific issuer or issue, as well as environmental, social, and governance
(ESG) issues, such as pollution and climate change risk, labor relations, and
bondholder rights, that we believe are likely to have a financially material
impact on the current or future valuation of an issuer’s securities or on its
ability to satisfy its debt obligations (though ESG considerations are not
necessarily determinative with respect to any particular investment decision).
While considering factors such as yield, credit quality, liquidity, call risk,
duration, structure, covenants, and capital appreciation potential, we seek to
construct a fixed income portfolio that will generate a relatively high,
sustainable income stream without assuming undue levels of risk.
Particularly
when investing outside the United States, Dodge & Cox considers a
country’s financial strength and the rights of foreign creditors. In particular,
we evaluate a country’s economic outlook and political stability, its monetary
and fiscal policies, its debt stock, its regulatory framework, including its
insolvency regime, and its ability to meet its funding needs. For securities
denominated in or otherwise exposed to foreign currency, we consider relative
interest rates and exchange rates in deciding whether to accept or hedge those
risks.
Dodge &
Cox normally invests in an array of debt securities with short, intermediate,
and long maturities in varying proportions. The average maturity at any given
time of the debt securities in the Funds depends, in part, on
Dodge & Cox’s assessment of the factors described above and
Dodge & Cox’s expectation regarding the future level of inflation
and interest rates.
Yields
on a debt security depend on a variety of factors, including the general
conditions of the money and debt securities markets, the size of a particular
offering, the terms and conditions of the obligation (e.g., maturity, coupon,
and call features), and the credit rating of the issue. Debt securities with
longer maturities or lower credit ratings tend to have higher yields and are
generally subject to greater price volatility due to their higher interest rate
and credit risks. No specific yield on shares of a Fund can
be guaranteed.
Dodge & Cox
Stock Fund (“SF”)
Investment
Objective: The Fund seeks long-term
growth of principal and income. A secondary objective is to achieve a reasonable
current income. The Fund’s investment objective may not be changed without
shareholder approval.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
29 |
The
Fund seeks to achieve its objective by investing primarily in a diversified
portfolio of equity securities. Under normal circumstances, the Fund will invest
at least 80% of its total assets in equity securities, including common stocks,
depositary receipts evidencing ownership of common stocks, certain preferred
stocks, and securities convertible into common stocks, and securities that carry
the right to buy common stocks (e.g., rights and warrants). The investment
policies of the Fund as described above may be changed without shareholder
approval; however, these investment policies will not be changed without 60
days’ prior notice to shareholders. The Fund may invest up to 20% of its total
assets in securities of non-U.S. issuers that are not in the S&P 500 Index,
provided that no more than 5% of the Fund’s total assets may be invested in
non-U.S. dollar denominated securities.
The
Fund may enter into currency forward contracts, currency swaps, or currency
futures contracts to hedge direct and/or indirect currency exposure or currency
risk. The Fund may use options or total return swaps referencing single stocks
or stock indices, such as the S&P 500 Index, to create or hedge equity
exposure. The Fund may use futures referencing stock indices to equitize, or
create equity market exposure, approximately equal to some or all of its cash
and cash equivalents, receivables, and similar non-equity assets, or to hedge
against a general downturn in the equity markets.
While
the Fund’s long-term intent is to maintain a fully invested equity fund, the
Fund may hold moderate reserves in cash and/or short-term debt securities as
Dodge & Cox deems advisable. For temporary, defensive purposes, the
Fund may invest, without limitation, in cash and cash equivalents, such as
short-term debt instruments. As a result of taking such a defensive position,
the Fund may not achieve its investment objectives.
In
an attempt to minimize unforeseen risks in holding the securities of any single
issuer, the Fund seeks to provide investment diversification. Although there is
no restriction on the number of changes in the Fund’s security holdings,
purchases generally are made with a view to holding for the long term and not
for short-term trading purposes. (The Fund’s portfolio turnover rates for the
fiscal years ended December 31, 2023, 2022, and 2021 were 12%, 16%, and
10%, respectively.) However, during rapidly changing economic, market, and
political conditions, portfolio turnover may be higher than in a more stable
period. A higher turnover rate might result in increased transaction expenses
and the realization of capital gains and losses, some of which may be short-term
capital gains taxed as ordinary income (see Federal Income Taxes).
Further
information about specific investments is provided under Additional Information on Investments.
Dodge & Cox
Global Stock Fund (“GSF”)
Investment
Objective: The Fund seeks long-term
growth of principal and income. The Fund’s investment objective may not be
changed without shareholder approval.
The
Fund seeks to achieve its objective by investing primarily in a diversified
portfolio of equity securities from at least three different countries, which
may include emerging market countries. The Fund is not required to allocate its
investments in set percentages in particular countries and may invest in
emerging markets without limit. Under normal circumstances, the Fund
will
invest
at least 40% of its total assets in securities of non-U.S. companies and at
least 80% of its total assets in equity securities, including common stocks,
depositary receipts evidencing ownership of common stocks, certain preferred
stocks, securities convertible into common stocks, and securities that carry the
right to buy common stocks (e.g., rights and warrants). The investment policies
of the Fund as described above may be changed without shareholder approval;
however, these investment policies will not be changed without 60 days’ prior
notice to shareholders.
The
Fund may enter into currency forward contracts, currency swaps, or currency
futures contracts to hedge direct and/or indirect currency exposure or currency
risk. The Fund may hedge currency risk using “proxy” currencies (i.e.,
currencies that are correlated with, but not the same as the currency of the
instrument being hedged). The Fund may use options or total return swaps
referencing single stocks or stock indices to create or hedge equity exposure.
The Fund may use futures referencing stock indices to equitize, or create equity
market exposure, approximately equal to some or all of its cash and cash
equivalents, receivables, and similar non-equity assets, or to hedge against a
general downturn in the equity markets.
While
the Fund’s long-term intent is to maintain a fully invested equity fund, the
Fund may hold moderate reserves in cash or short-term debt securities as
Dodge & Cox deems advisable. For temporary, defensive purposes, the
Fund may invest, without limitation, in cash and cash equivalents, such as
short-term debt instruments. As a result of taking such a defensive position,
the Fund may not achieve its investment objectives.
In
an attempt to minimize unforeseen risks in holding the securities of any single
issuer, the Fund seeks to provide investment diversification. Although there is
no restriction on the number of changes in the Fund’s security holdings,
purchases generally are made with a view to holding for the long term and not
for short-term trading purposes. (The Fund’s portfolio turnover rates for the
fiscal years ended December 31, 2023, 2022, and 2021 were 20%, 25%, and
24%, respectively.) However, during rapidly changing economic, market, and
political conditions, portfolio turnover may be higher than in a more stable
period. A higher turnover rate might result in increased transaction expenses
and the realization of capital gains and losses, some of which may be short-term
capital gains taxed as ordinary income (see Federal Income Taxes).
Further
information about specific investments is provided under Additional Information on Investments.
Dodge & Cox
International Stock Fund (“ISF”)
Investment
Objective: The Fund seeks long-term
growth of principal and income. The Fund’s investment objective may not be
changed without shareholder approval.
The
Fund seeks to achieve its objective by investing primarily in a diversified
portfolio of equity securities issued by non-U.S. companies from at least three
different countries, which may include emerging market countries. The Fund is
not required to allocate its investments in set percentages in particular
countries and may invest in emerging markets without limit. Under normal
circumstances, the Fund will invest at least 80% of its total assets in equity
securities of non-U.S. companies, including common stocks, depositary receipts
evidencing ownership of common
|
| |
PAGE 30 ∎ DODGE & COX FUNDS |
|
|
stocks,
certain preferred stocks, securities convertible into common stocks, and
securities that carry the right to buy common stocks (e.g., rights and
warrants). The investment policies of the Fund as described above may be changed
without shareholder approval; however, these investment policies will not be
changed without 60 days’ prior notice to shareholders.
The
Fund may enter into currency forward contracts, currency swaps, or currency
futures contracts to hedge direct and/or indirect currency exposure or currency
risk. The Fund may hedge currency risk using “proxy” currencies (i.e.,
currencies that are correlated with, but not the same as the currency of the
instrument being hedged). The Fund may use options or total return swaps
referencing single stocks or stock indices to create or hedge equity exposure.
The Fund may use futures referencing stock indices to equitize, or create equity
market exposure, approximately equal to some or all of its cash and cash
equivalents, receivables, and similar non-equity assets, or to hedge against a
general downturn in the equity markets.
While
the Fund’s long-term intent is to maintain a fully invested equity fund, the
Fund may hold moderate reserves in cash or short-term debt securities as
Dodge & Cox deems advisable. For temporary, defensive purposes, the
Fund may invest, without limitation, in cash and cash equivalents, such as
short-term debt instruments. As a result of taking such a defensive position,
the Fund may not achieve its investment objectives.
In
an attempt to minimize unforeseen risks in holding the securities of any single
issuer, the Fund seeks to provide investment diversification. Although there is
no restriction on the number of changes in security holdings, purchases
generally are made with a view to holding for the long term and not for
short-term trading purposes. (The Fund’s portfolio turnover rates for the fiscal
years ended December 31, 2023, 2022, and 2021 were 14%, 12%, and 18%,
respectively.) However, during rapidly changing economic, market, and political
conditions, portfolio turnover may be higher than in a more stable
period.
A
higher turnover rate might result in increased transaction expenses and the
realization of capital gains and losses, some of which may be short-term capital
gains taxed as ordinary income (see Federal
Income Taxes).
Further
information about specific investments is provided under Additional Information on Investments.
Dodge & Cox
Emerging Markets Stock Fund (“EMSF”)
Investment
Objective: The Fund seeks long-term
growth of principal and income. The Fund’s investment objective may not be
changed without shareholder approval.
The
Fund invests primarily in a diversified portfolio of emerging markets equity
securities issued by companies from at least three different countries. The Fund
is not required to allocate its investments in set percentages in particular
countries. Under normal circumstances, the Fund will invest at least 80% of its
total assets in equity securities of emerging market issuers. This investment
policy of the Fund may be changed without shareholder approval; however, this
investment policy will not be changed without 60 days’ prior notice to
shareholders. Equity securities may include common stocks, depositary receipts
evidencing ownership of common stocks, certain preferred stocks and securities
convertible into common stocks, and securities that carry the right
to
buy common stocks (e.g., rights and warrants). Derivative transactions that have
economic characteristics similar to such equity securities are included in the
Fund’s 80% investment policy. The Fund may gain exposure to emerging market
issuers by investing in exchange-traded funds (“ETFs”).
Emerging
market issuers include those located in emerging market countries and those
determined by Dodge & Cox to have significant economic exposure to
emerging market countries. For purposes of its 80% investment policy,
Dodge & Cox will consider all countries that are not part of the MSCI
Developed Market Indexes (including both emerging markets and frontier markets
countries) to be emerging market countries. The term “frontier markets
countries” encompasses those countries that are at an earlier stage of economic,
political, or financial development, even by emerging market standards. In
determining whether an issuer is located in or has significant economic exposure
to an emerging market country, Dodge & Cox will consider the issuer’s
country of organization, the location of its management, the country of its
primary listing, its reporting currency, and whether the issuer has significant
assets in, or derives significant revenues or profits from, emerging market
countries. The Fund may use derivatives, such as futures, options, and swaps
either to create exposure to equity securities or to hedge against exposure
created by its other investments. The Fund may use currency forward contracts,
currency swaps, or currency futures contracts to hedge direct and/or indirect
currency exposure or currency risk. The Fund may hedge currency risk using
“proxy” currencies (i.e., currencies that are correlated with, but not the same
as the currency of the instrument being hedged).
While
the Fund’s long-term intent is to maintain a fully invested equity fund, the
Fund may hold moderate reserves in cash or short-term debt securities as
Dodge & Cox deems advisable. The Fund may purchase equity index futures
contracts, referencing U.S. and/or non-U.S. stock indices, to equitize, or
create equity market exposure approximately equal to, some or all of its cash
and cash equivalents, receivables, and similar non-equity assets, such as cash,
cash equivalents, unrealized gains on derivatives, and receivables. For
temporary, defensive purposes, the Fund may invest, without limitation, in cash
and cash equivalents, such as short-term debt instruments. As a result of taking
such a defensive position, the Fund may not achieve its investment
objectives.
In
an attempt to minimize unforeseen risks in holding the securities of any single
issuer, the Fund seeks to provide investment diversification. Although there is
no restriction on the number of changes in security holdings, purchases
generally are made with a view to holding for the long term and not for
short-term trading purposes. (The Fund’s portfolio turnover rates for the fiscal
years ended December 31, 2023, 2022 and for the period from May 11,
2021 (commencement of operations) to December 31, 2021 were 22%, 33% and
7%, respectively). However, during rapidly changing economic, market, and
political conditions, portfolio turnover may be higher than in a more stable
period.
A
higher turnover rate might result in increased transaction expenses and the
realization of capital gains and losses, some of which may be short-term capital
gains taxed as ordinary income. Further information about specific investments
is provided under Additional Information on
Investments.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
31 |
Dodge & Cox
Balanced Fund (“BF”)
Investment
Objective: The Fund seeks regular
income, conservation of principal, and an opportunity for long-term growth of
principal and income. The Fund’s investment objective may not be changed without
shareholder approval.
The
Fund invests in a diversified portfolio of equity securities and debt
securities. Under normal circumstances, the Fund will invest no less than 25%
and no more than 75% of its total assets in equity securities and no less than
25% of the Fund’s total assets will be invested in fixed income investments. The
investment policies of the Fund as described above may be changed without
shareholder approval; however, these investment policies will not be changed
without 60 days’ prior notice to shareholders. Asset allocation between equity
and debt securities is based on the Fund’s assessment of the potential risks and
returns for each asset class over a three- to five-year horizon. Factors used to
estimate the range of potential returns include: future earnings growth, the
outlook for the economy, inflation and interest rate trends, and current
valuations relative to historical ranges. The Fund may invest up to 30% of its
total assets in equity or debt securities of non-U.S. issuers that are not in
the S&P 500 Index, provided that no more than 10% of the Fund’s total assets
may be invested in non-U.S. dollar-denominated securities. Such exposure to
non-U.S. issuers may include investments in emerging market issuers.
Equity
securities in which the Fund may invest include common stocks, depositary
receipts evidencing ownership of common stocks, certain preferred stocks,
securities convertible into common stocks, and securities that carry the right
to buy common stocks (e.g., rights and warrants). The Fund may use options or
total return swaps referencing single stocks or stock indices, such as the
S&P 500 Index, to create or hedge equity exposure. The Fund may also use
futures referencing stock indices to create equity market exposure, or to hedge
against a general downturn in the equity markets.
Fixed
income investments in which the Fund may invest include, but are not limited to,
obligations issued or guaranteed by the U.S. government, its agencies, or GSEs,
mortgage- and asset-backed securities, corporate and municipal bonds,
collateralized mortgage obligations, inflation-linked securities, other fixed
and floating rate instruments, including certain preferred securities, and cash
equivalents such as short-term debt securities. The Fund invests the debt
portion of its assets primarily in debt securities issued or guaranteed by the
U.S. government, its agencies or GSEs, and other investment-grade debt
securities (securities rated Baa3 or higher by Moody’s, BBB- or higher by
S&P or Fitch, or equivalently rated by any NRSRO or, if unrated, are deemed
to be of investment-grade quality by Dodge & Cox). A maximum of 10% of
the Fund’s total assets may be invested in debt securities rated below
investment grade, commonly referred to as high-yield or “junk” bonds; provided
no more than 5% of the Fund’s total assets may be invested in securities rated
below B3 or B- by Moody’s, S&P, or Fitch. The Fund may invest in
exchange-traded funds as a means to temporarily gain exposure to a portion of
the bond market while awaiting the purchase of securities or to more efficiently
gain exposure to a particular asset class. Such investment will be considered an
investment in debt securities by the Fund.
The
Fund invests in hybrid securities, including preferred securities and capital
securities such as contingent convertible
bonds.
These securities may be classified as equity or fixed income depending on the
specific structure and features of each security.
The
Fund may enter into currency forward contracts, currency swaps, or currency
futures contracts to hedge direct and/or indirect currency exposure or currency
risk. The Fund may hedge currency risk using “proxy” currencies (i.e.,
currencies that are correlated with, but not the same as the currency of the
instrument being hedged). The Fund may invest in interest rate derivatives such
as U.S. Treasury futures and swap agreements for a variety of purposes,
including, but not limited to, managing the Fund’s duration or adjusting the
Fund’s exposure to debt securities with different maturities. In addition, the
Fund may invest in credit default swaps to increase or decrease credit exposure
to a particular issuer, group of issuers, or index.
In
seeking to achieve the objectives of the Fund, Dodge & Cox may
purchase securities on a when-issued basis and purchase or sell securities for
delayed delivery. The Fund may hold moderate reserves in cash or short-term debt
securities and for temporary, defensive purposes, may invest without limitation
in cash and cash equivalents such as short-term debt instruments. As a result of
taking such a defensive position, the Fund may not achieve its investment
objectives.
In
an attempt to minimize unforeseen risks in holding the securities of any single
issuer, the Fund seeks to provide investment diversification. Although there is
no restriction on the number of changes in the Fund’s security holdings,
purchases generally are made with a view to holding for the long term and not
for short-term trading purposes. (The Fund’s portfolio turnover rates for the
fiscal years ended December 31, 2023, 2022, and 2021 were 34%, 59%, and
49%, respectively.) However, during rapidly changing economic, market, and
political conditions, portfolio turnover may be higher than in a more stable
period. A higher turnover rate might result in increased transaction expenses
and the realization of capital gains and losses, some of which may be short-term
capital gains taxed as ordinary income (see Federal Income Taxes).
Further
information about specific investments is provided under Additional Information on Investments.
Dodge & Cox
Income Fund (“IF”)
Investment
Objective: The Fund seeks a high and
stable rate of current income, consistent with long-term preservation of
capital. A secondary objective is to take advantage of opportunities to realize
capital appreciation. The Fund’s investment objective may not be changed without
shareholder approval.
The
Fund seeks to achieve its objectives by investing in a diversified portfolio of
debt securities. Under normal circumstances, the Fund will invest at least 80%
of its total assets in (1) investment-grade debt securities and
(2) cash equivalents. “Investment grade” means (i) securities rated
Baa3 or higher by Moody’s, or BBB- or higher by S&P or Fitch, or
equivalently rated by any NRSRO, or, (ii) if unrated, deemed to be of
similar quality by Dodge & Cox. The investment policies of the Fund as
described above may be changed without shareholder approval; however, these
investment policies will not be changed without 60 days’ prior notice to
shareholders. Debt securities in which the Fund may invest include, but are not
limited to, obligations issued or guaranteed by the U.S. government, its
agencies, or GSEs, mortgage- and asset-backed
|
| |
PAGE 32 ∎ DODGE & COX FUNDS |
|
|
securities,
corporate and municipal bonds, collateralized mortgage obligations,
inflation-linked securities, and other fixed and floating rate instruments,
including certain preferred securities. The Fund may invest up to 30% of its
total assets in U.S. dollar-denominated securities of non-U.S. issuers,
including emerging market issuers.
The
Fund may also invest in securities not mentioned above, including hybrid
securities such as convertible securities. Up to 20% of the Fund’s total assets
may be invested in debt securities rated below investment grade, commonly
referred to as high-yield or “junk” bonds; provided no more than 5% of the
Fund’s total assets may be invested in securities rated below B3 or B- by
Moody’s, S&P, or Fitch. In addition, up to 5% of the Fund’s total assets may
be invested in non-U.S. dollar-denominated securities. The Fund may invest in
exchange-traded funds as a means to temporarily gain exposure to a portion of
the bond market while awaiting the purchase of securities or to more efficiently
gain exposure to a particular asset class. Such investment will be considered an
investment in debt securities by the Fund.
The
Fund seeks relative price appreciation by selecting securities Dodge &
Cox believes to be undervalued based on research and fundamental analysis and by
making gradual adjustments in the average duration of the
Fund’s portfolio.
The
Fund may invest in interest rate derivatives, such as U.S. Treasury futures
contracts and swap agreements, for a variety of purposes, including, but not
limited to, managing the Fund’s duration or adjusting the Fund’s exposure to
debt securities with different maturities. The Fund may enter into currency
forward contracts, currency swaps, or currency futures contracts to hedge direct
and/or indirect currency exposure or currency risk. Under normal circumstances,
the Fund intends to hedge the direct currency exposure of its non-U.S.
dollar-denominated investments with currency derivatives, such as forward
contracts, futures contracts, and swap contracts. The Fund may invest in credit
default swaps to increase or decrease credit exposure to a particular issuer,
group of issuers, or index.
In
seeking to achieve the objectives of the Fund, Dodge & Cox may
purchase securities on a when-issued basis and purchase or sell securities for
delayed delivery. The Fund may hold moderate reserves in cash or short-term debt
securities and, for temporary, defensive purposes, may invest without limitation
in cash and cash equivalents, such as short-term debt instruments. As a result
of taking such a defensive position, the Fund may not achieve its investment
objectives.
Although
there is no restriction on the number of changes in the Fund’s security
holdings, purchases generally are made with a view to holding for the long term
and not for short-term trading purposes. (The Fund’s portfolio turnover rates
for the fiscal years ended December 31, 2023, 2022, and 2021 were 55%,
118%, and 91%, respectively.) However, during rapidly changing economic, market,
and political conditions, portfolio turnover may be higher than in a more stable
period. A higher turnover rate might result in increased transaction expenses
and the realization of capital gains and losses, some of which may be short-term
capital gains taxed as ordinary income (see Federal Income Taxes).
Further
information about specific investments is provided under Additional Information on
Investments.
Dodge & Cox
Global Bond Fund (“GBF”)
Investment
Objective: The Fund seeks a high rate of
total return consistent with long-term preservation of capital.
The
Fund seeks to achieve its investment objective by investing in a diversified
portfolio of bonds and other debt instruments of issuers from at least three
different countries, which may include emerging market countries. The Fund is
not required to allocate its investments in set percentages to particular
countries and may invest in emerging markets without limit. Under normal
circumstances, the Fund invests at least 40% of its total assets in securities
of non-U.S. issuers and at least 80% of its total assets in debt instruments,
which may, in each case, be represented by derivatives such as forwards
contracts, futures contracts, or swap agreements. The investment policies of the
Fund as described above may be changed without shareholder approval; however,
these investment policies will not be changed without 60 days’ prior notice
to shareholders.
Debt
instruments in which the Fund may invest include, but are not limited to,
government and government-related obligations, mortgage- and asset-backed
securities, corporate and municipal bonds, collateralized mortgage obligations,
inflation-linked securities, and other fixed and floating rate instruments,
including certain preferred securities. The Fund invests in both U.S.
dollar-denominated and non-U.S. dollar-denominated debt instruments across all
sectors. The majority of the Fund is invested in investment-grade debt
instruments (instruments rated Baa3 or higher by Moody’s, BBB- or higher by
S&P or Fitch, or equivalently rated by any NRSRO, or, if unrated, deemed to
be of investment-grade quality by Dodge & Cox). Up to 35% of the Fund’s
total assets may be invested in below investment-grade debt securities, commonly
referred to as high-yield or “junk” bonds. The Fund may also invest in
securities not mentioned above, including hybrid securities such as convertible
securities. The Fund may invest in exchange-traded funds as a means to
temporarily gain exposure to a portion of the bond market while awaiting the
purchase of securities or to more efficiently gain exposure to a particular
asset class. Such investment will be considered an investment in debt securities
by the Fund.
The
Fund may purchase or sell holdings for a variety of reasons, such as to alter
sector, geographic, or currency exposure or to shift the overall portfolio’s
risk profile. In seeking to achieve the objective of the Fund, Dodge &
Cox may purchase securities on a when-issued basis and purchase or sell
securities for delayed delivery. The Fund may hold moderate reserves in cash or
short-term debt securities and for temporary, defensive purposes, may invest
without limitation in cash and cash equivalents, such as short-term debt
instruments. As a result of taking such a defensive position, the Fund may not
achieve its investment objectives.
The
Fund may buy or sell foreign currencies and enter into various currency- or
interest rate-related transactions involving derivative instruments, including
forwards, futures, swaps, and options. The Fund may hedge currency risk using
“proxy” currencies (i.e., currencies that are correlated with, but not the same
as the currency of the instrument being hedged). The Fund may use derivatives
either to hedge or seek to reduce risks relating to other investments or to
create exposure to interest rates, securities, or currencies as a
substitute for direct investment. The Fund may
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
33 |
use
interest rate derivatives for a variety of purposes, including, but not
limited to, managing the Fund’s duration or adjusting the Fund’s exposure to
debt securities with different maturities. In addition, the Fund may invest in
credit default swaps to increase or decrease credit exposure to an issuer, group
of issuers, or index. The Fund’s use of derivatives is related to the
implementation of its overall primary investment strategy. The Fund does
not invest primarily in derivatives and is not intended to be a vehicle
through which shareholders can invest in, or otherwise seek exposure
to, derivatives.
Although
there is no restriction on the number of changes in the Fund’s security
holdings, purchases generally are made with a view to holding for the long term
and not for short-term trading purposes. (The Fund’s portfolio turnover rates
for the fiscal years ended December 31, 2023, 2022, and 2021 were 52%, 92%,
and 136%, respectively.) However, during rapidly changing economic, market, and
political conditions, portfolio turnover may be higher than in a more stable
period. A higher turnover rate might result in increased transaction expenses
and the realization of capital gains and losses, some of which may be short-term
capital gains taxed as ordinary income (see Federal Income Taxes).
Further
information about specific investments is provided under Additional Information on Investments.
Investment Restrictions
The
Funds are subject to additional investment restrictions which are described in
the Statement of Additional Information (“SAI”).
The
percentage limitations included in this prospectus and SAI apply at the time of
purchase of a security. So, for example, if a Fund exceeds a limit as a result
of market fluctuations or the sale of other securities, it will not be required
to dispose of any securities.
Disclosure of Portfolio
Holdings
A
complete description of the Funds’ policies and procedures with respect to the
disclosure of the Funds’ portfolio securities is available in the SAI).
The
Funds provide portfolio holdings information on a quarterly basis by filing with
the SEC on Form N-CSR (as of the end of the second and fourth quarters) and on
Part F of Form N‑PORT (as of the end of the first and third quarters).
Shareholders may view the Funds’ Form N-CSR and Part F of Form N-PORT on
the SEC’s website at sec.gov. Quarter-end portfolio holdings information for
each Fund is also available at dodgeandcox.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.
Additional Information
on Investments
The
following table identifies investments and investment practices that are likely
to be used by the Funds in seeking to achieve their objectives. The table
highlights the differences and similarities among the Funds in their use of
these techniques and other investment practices and investment instruments.
Principal investments for each Fund are indicated with a solid bullet (•), while
additional investments are marked with a hollow bullet (¡). This is not a complete
list of every investment type that a Fund may use and a Fund may use an
investment type even if it is not marked below. Information about these
investments is provided below; more information about these and other
investments and investment practices that the Funds may use is provided in the
SAI.
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Investment or Practice |
|
SF |
|
GSF |
|
ISF |
|
EMSF |
|
BF |
|
IF |
|
GBF |
Asset-Backed
Securities |
|
|
|
|
|
|
|
|
|
● |
|
● |
|
● |
Cash
Equivalents |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
Corporate
Bonds |
|
|
|
|
|
|
|
|
|
● |
|
● |
|
● |
Depositary
Receipts |
|
¡ |
|
● |
|
● |
|
● |
|
¡ |
|
¡ |
|
¡ |
Derivatives |
|
● |
|
● |
|
● |
|
● |
|
● |
|
● |
|
● |
Credit
Derivatives |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
Credit
Default Swaps |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
Bond
Total Return Swaps |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
Currency
Derivatives |
|
¡ |
|
● |
|
● |
|
● |
|
● |
|
¡ |
|
● |
Currency
Forwards, Swaps, and Futures |
|
¡ |
|
● |
|
● |
|
● |
|
● |
|
¡ |
|
● |
Cross-Currency
Swaps |
|
|
|
|
|
|
|
¡ |
|
|
|
|
|
¡ |
Currency
Options |
|
|
|
|
|
|
|
¡ |
|
|
|
|
|
¡ |
Equity
Derivatives |
|
● |
|
● |
|
● |
|
● |
|
● |
|
|
|
|
Equity
Index Futures |
|
● |
|
● |
|
● |
|
● |
|
● |
|
|
|
|
Equity
Options |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
|
|
|
Equity
Total Return Swaps |
|
¡ |
|
● |
|
● |
|
● |
|
¡ |
|
|
|
|
Interest
Rate Derivatives |
|
|
|
|
|
|
|
|
|
● |
|
● |
|
● |
|
| |
PAGE 34 ∎ DODGE & COX FUNDS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Investment or Practice |
|
SF |
|
GSF |
|
ISF |
|
EMSF |
|
BF |
|
IF |
|
GBF |
Equity
Securities |
|
● |
|
● |
|
● |
|
● |
|
● |
|
|
|
|
Common
Stocks |
|
● |
|
● |
|
● |
|
● |
|
● |
|
|
|
|
Standby
Commitment Agreements |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
|
|
|
Exchange-Traded
Funds |
|
|
|
|
|
|
|
● |
|
¡ |
|
¡ |
|
¡ |
Hybrid
Securities |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
● |
|
● |
|
● |
Preferred
Stock |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
● |
|
● |
|
● |
Warrants |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
|
|
|
Capital
Securities |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
Convertible
Securities |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
Contingent
Convertible Bonds |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
Mortgage-Backed
Securities |
|
|
|
|
|
|
|
|
|
● |
|
● |
|
● |
Collateralized
Mortgage Obligations |
|
|
|
|
|
|
|
|
|
● |
|
● |
|
● |
Mortgage
Pass-Through Securities |
|
|
|
|
|
|
|
|
|
● |
|
● |
|
● |
To-Be-Announced
Securities |
|
|
|
|
|
|
|
|
|
¡ |
|
● |
|
● |
Municipal
Bonds |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
Non-U.S.
Securities |
|
¡ |
|
● |
|
● |
|
● |
|
● |
|
● |
|
● |
Private
Placement Securities |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
● |
|
● |
|
● |
Securities
Lending |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
|
|
|
|
|
Sovereign
and Government-Related Debt |
|
¡ |
|
|
|
|
|
|
|
● |
|
● |
|
● |
Structured
Securities |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
U.S.
Government Obligations |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
● |
|
● |
|
● |
When-Issued
Securities |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
Asset-Backed Securities. Asset-backed
securities (“ABS”) are bonds issued through special purpose vehicles and backed
by pools of loans or other receivables. ABS are created from many types of
assets, including home equity loans, auto loans, student loans, and credit card
receivables. The credit quality of an ABS security depends on the quality and
performance of its underlying assets and/or the level of any credit support
provided to its structure.
Cash Equivalents. Cash equivalents are
short-dated instruments that are readily convertible into cash. They may include
bank obligations, commercial paper, money market funds, and repurchase
agreements. Bank obligations include certificates of deposit and bankers’
acceptances. Commercial paper is a short-term promissory note issued by a
corporation, which may have a floating or variable rate. Repurchase agreements
are transactions under which a Fund purchases a security from a bank or
securities dealer and agrees to resell the security to that bank or securities
dealer on a specified future date at the same price, plus a specified interest
rate.
Corporate Bonds. Corporate bonds are debt
securities issued by corporations and similar entities, including real estate
investment trusts or limited partnerships. Corporate bonds pay a specified
amount of interest, usually at regular intervals, and repay the amount of their
principal investment, usually at maturity.
Depositary Receipts. Depositary receipts,
including American Depositary Receipts, Global Depositary Receipts,
European
Depositary
Receipts, Global Depositary Notes, and similar instruments are certificates
evidencing ownership of securities of a foreign issuer. The certificates are
issued by depositary banks and the underlying securities are held in trust by a
custodian bank or similar institution. Depositary receipts may be purchased on
securities exchanges or directly from dealers.
Credit Default Swaps. Credit default swaps can
be used to manage the credit risk associated with an investment or to increase
credit exposure without investing directly in the underlying security or
securities. Credit derivatives are swap agreements based on the credit risk of
one or more referenced issuers of debt. In a single-name credit default swap,
one party (the “buyer” of credit protection) pays the other party (the “seller”
of credit protection) an upfront amount and/or a periodic stream of payments
over the term of the contract or until the occurrence of a “credit event,” such
as the bankruptcy of an issuer referenced in the contract. If a credit event
occurs, the seller pays the buyer the “par value” (full notional value) of the
credit default swap in exchange for an equal face amount of the referenced
issuer’s debt securities. If the credit default swap is cash settled, the seller
is required to make a payment equal to the difference between the par value and
the market value of such securities. An index credit default swap refers to a
published list of issuers, each representing a pro-rata portion of the total
notional amount. If a credit event occurs with respect to any issuer, the
parties settle only the portion of the trade related to that issuer, and the
trade continues with respect to the remaining names.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
35 |
Bond Total Return Swaps. A total return swap is
a contract that can create long or short economic exposure to an underlying
security, or to a basket or index of securities. Under such a contract, one
party agrees to make payments to another based on the total return of a notional
amount of the security or securities underlying such contract (including income
and capital gains) during a specified period, in return for periodic payments
based on the application of a fixed or variable interest rate to the same
notional amount. The purchaser of a long total return swap is paid the amount of
any increase in value and pays the amount of any decrease in value, while the
purchaser of a short total return swap is paid the amount of any decrease and
pays the amount of any increase. Total return swaps may be written on many
different kinds of underlying reference assets, and may include different
indices for various kinds of fixed income securities (e.g., U.S. investment
grade bonds, high-yield bonds, or emerging market bonds).
Currency Derivatives. Currency derivatives can
be used to manage non-U.S. currency exposure, to hedge non-U.S. interest rate
risk, or to take long or short positions with respect to currencies or non-U.S.
interest rates. A Fund may use currency derivatives to lock in the U.S. dollar
purchase price of a non-U.S. dollar-denominated security or to hedge other types
of exposure to non-U.S. currencies. A Fund may hedge a currency by entering into
a transaction in an instrument that is denominated in a currency other than the
currency being hedged (a “cross-hedge”) if Dodge & Cox believes that
there is a correlation between the currency in which the cross-hedge is
denominated and the currency being hedged. Currency derivatives may be used in
anticipation of an increase or decrease of the value of one currency relative to
another. The Funds may also exchange currencies on a “spot” basis. The Global
Bond Fund may take long or short positions in currencies regardless of whether
those positions are intended to hedge exposure created by other
investments.
Currency Forwards, Swaps and Futures. Currency
forward contracts (a “proxy” or “cross-hedge”) are agreements under which one
party agrees to make, and the other party agrees to accept, delivery of a
specified currency amount at a specified future time and price. FX forwards are
individually negotiated and privately traded. Although some FX forwards by their
terms call for actual delivery or acceptance of currency, in many cases the
contracts are settled with a cash payment representing the difference in value
between two amounts of different currencies. A currency swap (or “FX swap”) is a
transaction under which the parties agree to buy and sell identical amounts of
two currencies on two different dates. This is typically arranged as a spot
currency transaction (or short-dated currency forward contract) that will be
reversed at a set future date through an offsetting currency forward
transaction.
Currency
futures contracts are agreements that are economically similar to currency
forward contracts, but are standardized, traded through a national (or foreign)
exchange, and cleared through an affiliate of the exchange.
Cross-Currency Swaps. A cross-currency swap is
an interest rate swap in which each party makes payments in a different
currency. Typically, upon initiation of a cross-currency swap, the two parties
exchange principal amounts of the specified currencies. During the life of the
swap, each party makes payments to the other in a specified currency based on
applying a specified rate to the
principal
amount. At the maturity of the swap, the parties reverse the initial exchange of
the principal amounts in the two currencies.
Currency Options. Currency options provide the
holder the right to buy or sell a currency at a fixed price on a future date.
The buyer of a put option on a currency has the right to sell the currency at
the exercise price, while the buyer of a call option on a currency has the right
to purchase the currency at the exercise price. Currency options may be traded
over-the-counter, with negotiated strike prices, expiration dates, and other
terms, or on exchanges, subject to standardized terms. Currency options are
influenced by all of the risk factors inherent in currency and foreign exchange
investments generally, and may be more volatile than their underlying
currencies.
Equity Derivatives. Equity derivatives can be
used to create or hedge exposure to individual equity securities or baskets or
indices of equity securities. The Fund may use equity derivatives to gain
exposure to a security or index that it cannot or does not wish to purchase
directly or hedge against the risk of a security or index declining in value.
The Fund may hedge such risks with respect to securities that it owns directly
or those to which it is exposed indirectly through its ownership of other
securities. The Fund may use equity derivatives to express a view with respect
to a security’s current and potential future valuation.
Equity Index Futures. Equity index futures
contracts can be used to create or hedge exposure to a broad equity market by
referencing a stock index such as the S&P 500. The purchaser of an equity
index future buys the right to receive a payment corresponding to any increase
in the value of referenced index as of a specified future date and incurs the
obligation to make a payment corresponding to any decrease in the value of
referenced index as of such date. A Fund may use long equity index futures to
create exposure to equity securities, including to equitize cash and cash
equivalents, receivables, and similar non-equity assets (e.g., cash and
receivables) in an equity portfolio. A Fund may use short equity index futures
to seek to protect the value of its portfolio against an overall decline in the
market. Futures contracts are standardized, traded through an exchange, and
cleared through an affiliate of the exchange.
Equity Options. Equity options may include call
options or put options that reference single securities or security indices
(each an “underlier”). The buyer of a put option purchases the right (but not
the obligation) to sell the referenced security at the strike price or to
receive a payment equal to the profit from buying at the market price and
selling at the strike price. The buyer of a call option purchases the right (but
not the obligation) to buy the referenced security at the strike price or to
receive a payment equal to the profit from buying at the strike price and
selling at the market price. Option buyers are not at risk for loss beyond the
amount of the option purchase price. If a Fund sells a put option, it risks the
entire value of the underlier (if its value drops to zero). If a Fund sells a
call option, it has theoretically unlimited liability (for any increase to the
value of the underlier). An equity option may be used to hedge the risk that a
security or equity index declines in value, or to create long or short exposure
to its underlier. Options with “caps” and/or “floors” can also be used to limit
potential gains or losses.
Equity Total Return Swaps. An equity total
return swap is a contract that can create long or short economic exposure to
an
|
| |
PAGE 36 ∎ DODGE & COX FUNDS |
|
|
underlying
equity security, or to a basket or index of securities. Under such a contract,
one party agrees to make payments to another based on the total return of a
notional amount of the security or securities underlying such contract
(including dividends and changes in market value) during a specified period, in
return for an upfront or periodic payments based on the application of a fixed
or variable interest rate to the same notional amount. The purchaser of a long
total return swap is paid the amount of any increase in value and pays the
amount of any decrease in value, while the purchaser of a short total return
swap is paid the amount of any decrease and pays the amount of any
increase.
Interest Rate Derivatives: Interest Rate Futures and
Interest Rate Swaps. Interest rate futures contracts include agreements
under which one party agrees to make, and the other party agrees to accept,
delivery of a specified interest-bearing security, at a specified future time
and price. Interest rate derivatives also include futures contracts that relate
to a particular referenced interest rate (e.g., SOFR) and futures contracts on
U.S. or non-U.S. government debt (e.g., Treasury or Bund futures contracts).
Interest rate futures are standardized, traded through a national (or foreign)
exchange and cleared through an affiliate of the exchange. Interest rate swaps
are transactions under which each party agrees to make payments to the other
based on applying a different interest rate to the same notional amount. One of
the rates may be fixed and the other floating, or both rates may be floating.
Some interest rate swaps are traded on swap execution facilities, while others
are traded directly with dealer counterparties. Some interest rate swaps are
cleared through central counterparties. A Fund may enter into interest rate
futures or swaps for a variety of purposes in connection with the management of
the interest rate exposure of its portfolio, including adjusting portfolio
duration, hedging against possible increases or decreases in rates, or
increasing or decreasing exposure to interest rates.
Equity Securities. Equity securities represent
ownership shares in a company, and include securities that convey an interest
in, may be converted into or give holders a right to purchase or otherwise
acquire such ownership shares in a company.
Common Stocks. Common stocks represent shares
of ownership in a company. After other company obligations are satisfied, common
stock holders participate in company profits on a pro-rata basis; profits may be
paid out in dividends or reinvested in the company to help it grow. Increases
and decreases in earnings are usually reflected in a company’s stock price, so
common stocks generally have the greatest appreciation and depreciation
potential of all corporate securities. Ownership of common stock of a non-U.S.
company may be represented by depositary receipts (which represent an interest
in non-U.S. securities held by a custodian bank).
Standby Commitment Agreements. A standby
commitment agreement obligates one party, for a set period of time, to purchase
a certain amount of a security that may be issued and sold to that party at a
predetermined price at the option of the issuer or its underwriter. The
purchasing party receives a commitment fee in exchange for its promise to
purchase the security, whether or not it is eventually required to purchase the
security. The value of the securities when they are issued may be more or
less than the predetermined price.
Exchange-Traded Funds. An exchange-traded fund
(“ETF”) is a fund that is comprised of a basket of securities that is traded on
an exchange. Investing in an ETF is subject to the same primary risks as
investing directly in the underlying securities in the basket. In addition, ETFs
are subject to certain unique risks including, but not limited to, the risk
that: (i) the market price of the ETF’s shares may trade at a discount or
premium to their net asset value; (ii) an active trading market for an
ETF’s shares may not develop or be maintained; and (iii) trading of an
ETF’s shares may be halted by the listing exchange. Shareholders of a Fund that
invests in ETFs will bear indirectly expenses of the ETF because such expenses
impact the net asset value of the shares of the ETFs, which impacts the net
asset value of the Fund.
Hybrid Securities. Hybrid securities have
characteristics that differ from both common stocks and senior debt securities,
typically ranking senior to common stock and subordinate to senior debt in an
issuer’s capital structure. Hybrid securities may have features such as
deferrable and/or non-cumulative interest payments, long-dated maturity or no
maturity, reduced or no acceleration rights, and may be subject to principal
reduction without default under certain circumstances. Types of hybrid
securities include, without limitation, preferred stocks, warrants, capital
securities, convertible securities, and contingent convertible bonds. Hybrid
securities may be classified as equity or debt based on their specific
structures and features.
Preferred Stock. Preferred stocks are
securities that are typically subordinated to an issuer’s senior debt, but
senior to the issuer’s common stock. There are a variety of different types of
preferred stock with different features, and we may classify preferred stocks as
equity or debt based on their specific structures. Preferred stock may be
structured as a long-dated or perpetual bond that distributes income on a
regular basis. Issuers may be permitted to skip (“non-cumulative” preferred
stock) or defer (“cumulative” preferred stock) distributions. Preferred stock
may be convertible into common stock and may contain call or maturity
extension features.
Warrants. Warrants permit a holder to buy a
stated number of shares of common stock at a specified price anytime during the
life of the warrants (generally two or more years). They can be highly volatile
and may have no voting rights, pay no dividends, and have no rights with respect
to the assets of the entity issuing them.
Capital Securities. Capital securities may be
issued in the form of preferred securities or subordinated debt securities.
Capital securities may be long-dated or perpetual (i.e., have no maturity) and
typically distribute income on a monthly, quarterly or semi-annual basis.
Issuers are permitted to defer income payments (which may or may not accumulate
for future payment). Capital securities may contain call or maturity extension
features.
Convertible Securities. Convertible securities
are preferred stock or debt securities that are convertible into common stock at
a specified price during a specified period of time or upon the occurrence of a
specified event. Traditionally, convertible securities have paid dividends or
interest at rates higher than common stock dividend rates but lower than
nonconvertible securities. They generally participate in the appreciation or
depreciation of the underlying stock into which they are convertible, but to a
lesser degree.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
37 |
Contingent Convertible Bonds. Contingent
convertible bonds are deeply subordinated debt securities issued by non-U.S.
financial institutions for the purpose of meeting regulatory capital
requirements. These bonds are typically perpetual and have discretionary,
non-cumulative interest payments. Interest payments may be suspended at the
discretion of management, at the direction of the issuer’s regulator or as a
result of falling below certain capital thresholds. In addition, contingent
convertible bonds may be converted to equity securities or be written down in
principal value if the issuer falls below prescribed capital levels.
Mortgage-Backed Securities. Mortgage-backed
securities (“MBS”) are a type of ABS secured by mortgage loans.
Collateralized Mortgage Obligations.
Collateralized mortgage obligations (“CMOs”) are a type of MBS backed by U.S.
government agency- or GSE-guaranteed mortgage pass-through securities. They may
be issued by U.S. government agencies, GSEs, or private issuers. CMOs are
typically issued in multiple classes, or “tranches,” of bonds, each with a
different level of seniority and credit risk. Each tranche is traded and valued
separately. Payments of interest and principal rely on payments made in respect
of the underlying mortgage pass-through securities. Typically, all payments
received are applied first to pay interest on the various tranches, starting
with the most senior, and then to pay down principal on the various tranches,
again starting with the most senior. No principal payments are made on a tranche
until the entire principal of the more senior tranches has been repaid.
Mortgage Pass-Through Securities. Mortgage
pass-through securities represent ownership in “pools” of mortgage loans and are
called “pass-throughs” because principal and interest payments are passed
through to security holders monthly. These securities may be issued and
guaranteed by an agency of the U.S. government or GSE, or by a private entity.
Security holders receive payments based on scheduled payments of interest and
principal and unscheduled prepayments of principal on the underlying mortgage
loans. The market value of these securities depends, in part, on expectations
about the rate at which the underlying loans will be prepaid or default.
To-Be-Announced (“TBA”) Securities. TBA
mortgage-backed securities are purchased on a delayed delivery basis, under
which the buyer commits to purchase a pool of mortgage-backed securities for a
fixed price with payment and delivery at a scheduled future date beyond the
customary settlement period. At the time of the transaction, the seller does not
identify the securities to be delivered, but rather agrees to deliver securities
meeting certain specifications for term, program, and coupon. During the
settlement period of a TBA transaction, the buyer is at risk for any decline in
the value of the securities to be delivered, while the seller is at risk that
the value of the securities may increase. TBA positions may be extended through
“dollar-roll” transactions in which the original buyer sells its original
position and simultaneously commits to purchase substantially similar securities
at a settlement date further in the future.
Municipal Bonds. Municipal bonds are debt
obligations issued by states, municipalities, and other political subdivisions,
agencies, authorities, and instrumentalities of states and multi-state agencies
or authorities, the interest on which may be exempt from federal
and/or
state income tax. Municipal bonds include securities from a variety of
sectors.
Non-U.S. Securities. The Funds may invest in
U.S. dollar-denominated or foreign currency-denominated securities of non‑U.S.
issuers. For purposes of this prospectus, non-U.S. (or foreign) issuers are
generally determined by reference to a particular issuer’s country of risk, but
the Funds may make a different designation in
certain circumstances.
Private Placement Securities. The Funds may
invest in securities issued in private placements, including 144A securities.
Such securities are subject to legal or contractual restrictions on resale and
may include equity or debt securities of U.S. and non-U.S. issuers that are
issued without registration with the SEC, including offerings outside the United
States. Private placement or restricted securities often have lower overall
liquidity than registered securities traded on established secondary markets and
may be considered illiquid.
Securities Lending. To generate additional
income, the Funds may lend their portfolio securities to certain counterparties,
including brokers, dealers, and other financial institutions provided that a
number of conditions are satisfied, including that each loan is fully
collateralized. When a Fund lends portfolio securities, its investment
performance will continue to reflect changes in the value of the securities
loaned, and the Fund will also receive a fee or interest on the collateral.
Securities lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to return the security
loaned or becomes insolvent. These risks could be greater for loans of non-U.S.
securities. A Fund may pay lending fees to a party arranging the loan. Cash
collateral received by a Fund in securities lending transactions may be invested
in short-term liquid fixed income instruments or in money market or short-term
mutual funds, or similar investment vehicles. A Fund bears the risk of such
investments.
Sovereign and Government-Related Debt.
Sovereign debt includes securities issued or guaranteed by a foreign sovereign
government or its agencies, authorities, or political subdivisions.
Government-related debt includes securities issued by non-U.S. regional or local
governmental entities or government-controlled entities. In the event an issuer
of sovereign debt or government-related debt is unable or unwilling to make
scheduled payments of interest or principal, holders may be asked to participate
in a restructuring of the debt and to extend further credit to the issuer.
Sovereign
and Government-Related Debt includes inflation-linked bonds. Inflation-linked
bonds are debt securities, the principal value of which is periodically adjusted
according to the rate of inflation. The actual (inflation-adjusted) interest
rate on these bonds is fixed at issuance at a rate generally lower than typical
bonds. Over the life of an inflation-linked bond, however, interest will be paid
based on a principal value which is adjusted for inflation as measured by
changes in a reference index. Inflation-linked bonds issued by a foreign
government are generally adjusted to reflect an inflation index calculated by
that government. If the value of the inflation index falls, the principal value
of inflation-linked bonds that are related to that index will be adjusted
downward, and consequently the interest payable on such bonds (calculated with
respect to a smaller principal amount) will be reduced. Repayment
|
| |
PAGE 38 ∎ DODGE & COX FUNDS |
|
|
of
the originally issued principal amount of certain inflation-linked bonds upon
maturity is guaranteed by the issuer; however, the current market value of the
bonds is not guaranteed and will fluctuate. To the extent a Fund invests in
other inflation-linked securities that do not provide a similar guarantee, the
bond repaid at maturity may be less than the original principal. While
inflation-linked securities are expected to be protected from long-term
inflationary trends, short-term increases in inflation may have an adverse
effect on the value of those securities.
Structured Securities. Structured securities
are securities whose value is determined by reference to changes in the value of
specific currencies, securities, interest rates, commodities, indices or other
financial indicators (the “Reference”). Investments in structured securities may
provide exposure to certain securities or markets in situations where regulatory
or other restrictions prevent direct investments in such issuers or markets.
Structured securities may be positively or negatively indexed, so that
appreciation of the Reference may produce an increase or decrease in the
interest rate or value of the security at maturity. In addition, changes in the
value of the security at maturity may be a multiple of changes in the value of
the Reference, effectively leveraging the Fund’s investments so that small
changes in the value of the Reference may result in disproportionate gains or
losses to the Fund. Consequently, structured securities may present a greater
degree of market risk than many types of securities and may be more volatile,
less liquid and more difficult to price accurately than less complex securities.
Structured securities are also subject to the risk that the issuer of the
structured securities may fail to perform its contractual obligations.
Structured securities may include equity- or credit-linked notes.
U.S. Government Obligations. A portion of each
Fund may be invested in obligations issued or guaranteed by the
U.S. government, its agencies, or GSEs. Some obligations purchased by the
Funds are backed by the full faith and credit of the U.S. government and are
guaranteed as to both principal and interest by the U.S. Treasury. Examples
of these include direct obligations of the U.S. Treasury, such as U.S. Treasury
bills, notes, and bonds, and indirect obligations of the U.S. Treasury, such as
obligations of Government National Mortgage Association, the Small Business
Administration, the Maritime Administration, the Farmers Home Administration,
and the Department of Veterans Affairs.
While
the obligations of many of the agencies of the U.S. government are not direct
obligations of the U.S. Treasury, they are generally backed indirectly by the
U.S. government. Some of the agencies are indirectly backed by their right to
borrow from the U.S. government, such as the Federal Financing Bank and the
U.S. Postal Service. Other agencies and GSEs have historically been
supported solely by the credit of the agency or GSE itself, but are given
additional support due to the U.S. Treasury’s authority to purchase their
outstanding debt obligations. GSEs include, among others, the Federal National
Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation
(“Freddie Mac”), the Federal Home Loan Banks, and the Federal Farm Credit
Banks.
In
September 2008, the U.S. Treasury placed Fannie Mae and Freddie Mac into
conservatorship and has since increased its support of these two GSEs through
substantial capital commitments and enhanced liquidity measures, which include a
line of credit. The U.S. Treasury also extended a line of credit to the Federal
Home Loan Banks. No assurance can be given that the U.S. government will provide
continued support to GSEs, and these entities’ securities are neither issued nor
guaranteed by the U.S. Treasury. The Federal Housing Finance Agency (“FHFA”) and
the previous U.S. presidential administration made public statements regarding
plans to consider ending the conservatorships of Fannie Mae and Freddie Mac. In
the event that Fannie Mae and Freddie Mac are taken out of conservatorship, it
is unclear how the capital structure of Fannie Mae and Freddie Mac would be
constructed and what effects, if any, there may be on their creditworthiness and
guarantees of certain mortgage-backed securities. Should Fannie Mae’s or Freddie
Mac’s conservatorship end, there could be an adverse impact on the value of
their securities, which could have an adverse impact on a Fund’s
performance.
When-Issued Securities. When-issued securities
are securities that have been authorized, but not yet issued. When-issued
securities are purchased at a specific price for settlement on a future date in
order to secure what is considered an advantageous price or yield at the time of
entering into the transaction. A fund that purchases a when-issued security
assumes all the rights and risks of ownership, including the risks of price and
yield fluctuations and the risk that the security will not be issued
as anticipated.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
39 |
Investment Risks
Investors
should recognize that investing in securities presents certain risks that cannot
be avoided. There is no assurance that the investment objectives of any Fund
will be achieved. The following table summarizes some of the risks involved in
investing in each of the Funds and highlights certain differences and
similarities among the Funds in their exposure to various types of risks.
Principal risks of each Fund are indicated with a solid bullet (•), while
additional risks are marked with a hollow bullet (¡).
The
table below is not a complete list of every risk involved in investing in the
Funds and a Fund may have exposure to a risk factor even if it is not marked
below. Investing in securities creates indirect exposure to the various business
risks to which their issuers are subject, which may include sector-, industry-,
or region-specific risks. Investments in equity securities may create indirect
exposure to interest rate, credit, and currency risk. Securities of non-U.S.
issuers are exposed to currency risk, even if they are denominated in U.S.
dollars. Debt and equity investments in commodity-related issuers create
exposure to commodity risks, which may include unpredictable changes in value,
supply and demand, and government regulation. There is more information about
these and other risks in the SAI.
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Risk |
|
SF |
|
GSF |
|
ISF |
|
EMSF |
|
BF |
|
IF |
|
GBF |
Asset
Allocation Risk |
|
|
|
|
|
|
|
|
|
• |
|
|
|
|
Below
Investment-Grade Securities Risk |
|
|
|
|
|
|
|
|
|
• |
|
• |
|
• |
Call
Risk |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
China
Investment Risk |
|
|
|
¡ |
|
¡ |
|
• |
|
¡ |
|
¡ |
|
¡ |
Counterparty
Risk |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
Credit
Risk |
|
|
|
|
|
|
|
|
|
• |
|
• |
|
• |
Derivatives
Risk |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
Emerging
Markets Risk |
|
¡ |
|
• |
|
• |
|
• |
|
¡ |
|
• |
|
• |
Equity
Risk |
|
• |
|
• |
|
• |
|
• |
|
• |
|
|
|
|
Frontier
Market Risk |
|
|
|
¡ |
|
¡ |
|
• |
|
¡ |
|
|
|
¡ |
Geographic
Risk |
|
|
|
• |
|
• |
|
• |
|
|
|
|
|
• |
Hybrid
Securities Risk |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
• |
|
• |
|
• |
Interest
Rate Risk |
|
|
|
|
|
|
|
|
|
• |
|
• |
|
• |
Large
Shareholder Risk |
|
¡ |
|
¡ |
|
¡ |
|
• |
|
¡ |
|
¡ |
|
¡ |
Leverage
Risk |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
Liquidity
Risk |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
Manager
Risk |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
Market
Risk |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
Mortgage-
and Asset-Backed Securities Risk |
|
|
|
|
|
|
|
|
|
• |
|
• |
|
• |
Non-U.S.
Currency Risk |
|
¡ |
|
• |
|
• |
|
• |
|
• |
|
¡ |
|
• |
Non-U.S.
Investment Risk |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
Regulatory
Risk |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
Securities
Lending Risk |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
¡ |
|
|
|
|
Small-capitalization
Security Risk |
|
|
|
|
|
|
|
• |
|
|
|
|
|
|
Sovereign
and Government-Related Debt Risk |
|
|
|
|
|
|
|
|
|
• |
|
• |
|
• |
TBA
Transactions Risk |
|
|
|
|
|
|
|
|
|
¡ |
|
• |
|
• |
U.S.
Municipal Bond Risk |
|
|
|
|
|
|
|
|
|
¡ |
|
¡ |
|
¡ |
Asset Allocation Risk. Dodge & Cox’s
determination of a Fund’s broad asset allocation mix will affect that Fund’s
performance. Dodge & Cox’s evaluations and assumptions regarding asset
classes may not successfully achieve the Fund’s investment objective in
view of actual market movements. A Fund’s balance between equity and debt
securities could limit its potential for capital appreciation relative to an
all-stock fund and contributes to greater volatility relative to an all-bond
fund.
Below Investment-Grade Securities Risk. Debt
securities rated below investment grade, also known as “high-yield” or “junk”
bonds, have speculative characteristics and may be more volatile than
investment-grade debt securities. Below investment-grade securities are often
issued by smaller, less creditworthy companies or by highly levered (indebted)
companies, which are generally less able than more financially stable companies
to make scheduled payments of interest and principal. These securities typically
yield a
|
| |
PAGE 40 ∎ DODGE & COX FUNDS |
|
|
higher
level of current income than higher-rated securities, but generally have greater
credit and call risk, more price volatility, and less liquidity. An economic
downturn, rising interest rates, or negative developments with respect to an
issuer may affect the price and/or liquidity of a below investment-grade
security more than an investment-grade security, and may reduce a Fund’s ability
to sell these securities at an advantageous time or price. A security downgraded
below investment-grade may lose significant market value even if no default
occurs.
A
Fund’s high yield bonds may include distressed bonds, which may present a high
risk of default or be in default at the time they are purchased. Distressed
securities are speculative and involve even greater risks than other high-yield
bonds, including the risk that interest payments may not be made on a current
basis, or that principal will not be repaid in full. A Fund could incur
significant expenses to the extent it is required to negotiate new terms with
the issuer of a distressed bond or seek recovery upon a default in respect of a
distressed bond. In any reorganization or liquidation proceeding related to a
defaulted security, a Fund could lose its entire investment or could be required
to accept cash or securities with a value substantially less than its original
investment.
The
below investment-grade securities in which a Fund invests are not typically
listed on any exchange and the secondary market (if any) for such securities may
have lower overall liquidity than other securities, which may cause transactions
in below investment-grade securities to be more costly. A lack of publicly
available information, irregular trading activity, and wide bid-ask spreads,
among other factors, may make these securities more difficult to sell at an
advantageous time or price than other types of investments. These factors may
affect the value a Fund may realize in selling below investment-grade
securities, which could result in losses to a Fund.
An
explanation of Moody’s, Fitch’s, and S&P’s rating categories is included in
Appendix A to the SAI.
Call Risk. Issuers of callable bonds are
permitted to redeem them before their full maturities. Buying a callable bond
exposes a Fund to economic risks similar to selling call options. Issuers may
call outstanding securities before their maturity for a number of reasons,
including decreases in prevailing interest rates or improvements to the issuer’s
credit profile. If an issuer calls a security in which a Fund is invested, that
Fund could lose potential price appreciation or anticipated income and be forced
to reinvest the proceeds in securities that bear a lower interest
rates.
China Investment Risk. Investments in Chinese
securities may be more vulnerable to political and economic risks than
investments in securities from other countries. The Chinese government has
historically exercised substantial control over China’s economy and financial
markets. Although economic reforms have recently liberalized trade policy and
reduced government control, changes in these policies could adversely affect
Chinese companies or investments in those companies. Changes in government
policy could also substantially affect the value of China’s currency relative to
the U.S. dollar. Investments in Chinese companies may become subject to
additional restrictions as the result of changes in U.S. or Chinese government
policies. A Fund may obtain exposure to a Chinese company by investing in legal
structures known as variable interest entities (“VIEs”) that offer
economic
exposure to, but not an equity ownership in a Chinese company. Intervention by
the Chinese government with respect to VIE structures could significantly affect
the value of a VIE investment and could negatively impact Fund performance. The
Chinese economy is highly dependent on exporting products and services and could
experience a significant slowdown if there is a reduction in global demand for
Chinese exports or as the result of trade tensions with the United States or
other key trading partners. In addition, China is alleged to have participated
in state-sponsored cyber attacks against foreign companies and foreign
governments. Actual and threatened responses to such activity and strained
international relation, including purchasing restrictions, sanctions, tariffs or
cyberattacks on the Chinese government or Chinese companies may impact China’s
economy and Chinese issuers of securities in which the Fund invests. As a result
of different legal standards, the Fund faces the risk of being unable to enforce
its rights with respect to holdings in Chinese securities and the information
about the Chinese securities in which the Fund invests may be less reliable or
complete. Chinese companies with securities listed on U.S. exchanges may be
delisted if they do not meet U.S. accounting standards and auditor oversight
requirements, which could significantly decrease the liquidity and value of the
securities.
Counterparty Risk. Non-cleared derivatives,
such as currency forward contracts and currency swaps, and other principal
(i.e., non-exchange traded) transactions are subject to the risk that a
counterparty may not make payments or deliveries when required to do so.
Deterioration in the actual or perceived creditworthiness of a counterparty may
affect the value of a derivative or other transaction with that counterparty. A
number of broker-dealers and other financial institutions have experienced
extreme financial difficulty in the past, sometimes resulting in bankruptcy.
Counterparties may become subject to special resolution regimes in the United
States and other jurisdictions, which may affect a fund’s ability to terminate
and exercise remedies in respect of derivative positions. Although we monitor
the creditworthiness of our counterparties, there can be no assurance that a
Fund’s derivative counterparties will not experience financial difficulties,
possibly resulting in losses to that Fund. Cleared derivatives are subject
to the risk that the central clearing counterparty does not perform, which
could occur in the event of large or widespread member defaults.
Credit Risk. The value of a debt security may
decline if the market believes it is less likely that the issuer will make all
payments of interest and principal as required. This could occur because of
actual or perceived deterioration (whether by market participants, rating
agencies, pricing services, or otherwise) in the issuer’s or a guarantor’s
financial condition, or in the case of asset-backed securities, the likelihood
that the loans backing a security will be repaid in full. A Fund could lose
money if the issuer or guarantor of a debt security becomes bankrupt or subject
to a special resolution regime, or is otherwise unable or unwilling to make
timely interest and/or principal payments, or honor its obligations. Securities
are subject to varying degrees of credit risk, which may be reflected by their
ratings; however, such ratings may overestimate or underestimate the likelihood
of default and may not accurately reflect the true credit risk of a security.
The credit risk associated
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
41 |
with
corporate debt securities may change as the result of an event such as a large
dividend payment, leveraged buyout, debt restructuring, merger, or
recapitalization; such events are unpredictable and may benefit shareholders or
new creditors at the expense of existing debt holders. Credit risk is likely to
increase during periods of economic uncertainty or downturns. Credit risk
associated with non-U.S. dollar denominated securities may increase if the value
of an issuer’s home currency declines relative to the U.S. dollar. If a debt
security owned by a Fund ceases to be rated or is downgraded below a permitted
threshold, the Fund may (but is not required to) sell the security.
Derivatives Risk. Derivatives are financial
instruments, including futures contracts, forward contracts, options, and swaps
and other similar investments (collectively referred to as “derivatives”), the
values of which are based on the value of one or more underlying assets, such as
stocks, market indices, and currencies. Derivatives involve risks different
from, and possibly greater than, the risks associated with investing directly in
the underlying assets and other more traditional investments. The market value
of derivatives may be more volatile than that of other investments and can be
affected by changes in interest rates or other market developments. The use of
derivatives may accelerate the velocity of possible losses. Each type of
derivative instrument may have its own special risks, including the risk of
mispricing or improper valuation and the possibility that a derivative may not
correlate perfectly or as expected with its underlying security, index, or
currency. For example, the return on a total return swap may not be identical to
the return on its referenced security. As another example, a hedging trade
taking a short position on an index may be more or less correlated to a Fund’s
holdings than expected. Derivatives often create leverage because they create
exposure to an amount of a security, index, or currency (a “notional amount”)
that is substantially larger than the market value of the derivative. Often, the
upfront payment required to enter into a derivative is much smaller than the
potential for loss (which, for certain types of derivatives, may be unlimited).
A derivative may be subject to liquidity risk, especially during times of
financial market distress; and certain types of derivatives may be terminated or
modified only with the consent of the derivative counterparty. Derivatives
typically require a Fund to post margin to secure outstanding exposure, which
may cause the Fund to forego other investment opportunities. If a Fund has
insufficient cash to meet daily variation margin or payment requirements, it may
have to sell securities from its portfolio at a time when it may be
disadvantageous to do so. Derivatives are subject to Counterparty Risk, as
described above. Derivatives also can create operational and legal risk. The use
of derivatives may cause a Fund’s investment returns to be impacted by the
performance of securities the Fund does not own.
Derivatives
are specialized instruments that may require investment techniques and risk
analyses different from those associated with securities. The successful use of
derivatives will often depend on the ability to accurately forecast movements in
the market relating to the underlying instrument, Although the use of
derivatives is intended to enhance the Fund’s performance, it may instead reduce
returns and increase volatility, or have a different effect than
Dodge & Cox anticipates, especially in unusual or extreme market
conditions. Suitable derivatives transactions may
not
be available in all circumstances and there can be no assurance that a
particular derivative position will be available or used by
Dodge & Cox or that, if used, such strategies will be successful.
Use of derivatives may increase the amount and change the timing of taxes
payable by shareholders.
When
a derivative is used for hedging purposes, any gains generated by the derivative
will generally be substantially offset by losses on the hedged investment and
vice versa. Furthermore, while hedging is intended to mitigate possible losses
due to specific risks, if a derivative used for hedging purposes does not
correlate as expected with the risk(s) and/or asset(s) it is hedging or
otherwise does not perform as expected, a Fund could experience no benefit from
the hedge or lose more than it would have without seeking to hedge, especially
under extreme market conditions. A Fund must also pay transaction costs
associated with investing in derivatives which may further reduce potential
gains or increase potential losses.
Future
regulation of derivatives and related instruments by the U.S. and non-U.S.
governments may make derivatives more costly, limit availability, or otherwise
adversely affect the value or performance of derivatives and the Fund. Such
future regulation may limit a Fund’s ability to employ certain strategies using
derivatives and certain other instruments and/or adversely affect its
performance, efficiency in implementing its strategy, liquidity, and/or ability
to pursue its investment objectives. It may increase a Fund’s costs of doing
business, which could adversely affect the Fund’s performance.
Emerging Markets Risk. Non-U.S. Investment Risk
(described below) may be particularly high to the extent a Fund invests in
emerging market securities. Emerging market securities may present issuer,
market, currency, liquidity, legal, political, and other risks different from,
and potentially greater than, the risks of investing in securities and
instruments tied to U.S. or developed non-U.S. issuers. Emerging markets may
have less established legal, accounting and financial reporting systems than
those in more developed markets, which may reduce the scope or quality of
financial information available to investors. Companies in emerging markets are
not subject to uniform standards with respect to disclosure, accounting and
financial reporting, and recordkeeping. These differences may affect the Fund’s
ability to evaluate potential and current investments. Relatedly, securities of
companies in emerging markets that are listed on exchanges may be delisted if
they do not meet relevant accounting standards and auditor oversight
requirements, which could significantly decrease the liquidity and value of the
securities. Governments in emerging market countries may exercise greater
control over their financial markets, more frequently make significant changes
to economic policy, be less stable and be more likely to take extra-legal action
with respect to companies, industries, assets, or foreign ownership than those
in more developed markets. Moreover, investor protection regimes may be more
limited in emerging markets. For example, it may be more difficult for
shareholders to bring derivative litigation or for U.S. regulators to bring
enforcement actions against issuers in emerging markets.
The
economies of emerging markets may be dependent on relatively few industries and
thus affected more severely by local or global changes. To the extent a Fund
invests in emerging market
|
| |
PAGE 42 ∎ DODGE & COX FUNDS |
|
|
securities
that are economically tied to a particular region, country or group of
countries, that Fund may be more sensitive to adverse political or social events
affecting that region, country or group of countries. Economic, business,
political, or social instability may affect emerging market securities
differently, and often more severely, than developed market securities. If a
Fund focuses its investments in emerging market securities, it may have a
limited ability to mitigate losses in an environment that is adverse to emerging
market securities in general. Emerging market securities may also be more
volatile, more difficult to value, and have lower overall liquidity than
securities economically tied to U.S. or developed non-U.S. issuers.
Equity Risk. Equity securities represent an
ownership interest in an issuer rather than a right to receive a specified
future payment. This makes equity securities more sensitive than debt securities
to changes in an issuer’s earnings and overall financial condition; as a result,
equity securities are generally more volatile than debt securities. Equity
securities may lose value as a result of changes relating to the issuers of
those securities, such as management performance, financial leverage, or changes
in the actual or anticipated earnings of a company, or as a result of actual or
perceived market conditions that are not specific to an issuer. Even when the
securities markets are generally performing strongly, there can be no assurance
that equity securities held by a Fund will increase in value. Because the rights
of all of a company’s creditors are senior to those of holders of equity
securities, shareholders are least likely to receive any value if an issuer
files for bankruptcy.
Frontier Markets Risk. Frontier markets are at
an even earlier stage of development than those considered “emerging”, and
generally have smaller economies and less mature capital markets than emerging
markets. As a result, the risks associated with investing in emerging market
countries are magnified in frontier markets. Frontier markets are more
susceptible to abrupt changes in currency value, have less mature settlement
practices, and can have lower trading volumes that can lead to more price
volatility and lower liquidity
Geographic Risk. From time to time a Fund may
invest a substantial amount of its assets in issuers located in a single
non-U.S. country or a limited number of countries. If a Fund focuses its
investments in this manner, risks relating to economic, political and social
conditions in those countries will have a significant impact on its investment
performance. A Fund’s investment performance may be more volatile if it focuses
its investments in certain countries, especially emerging market and frontier
market countries.
Hybrid Securities Risk. Hybrid securities are
typically subordinated to an issuer’s senior debt instruments; therefore, they
are subject to greater credit risk than those senior debt instruments. Many
hybrid securities are subject to provisions permitting their issuers to skip or
defer distributions under specified circumstances. Hybrid securities may have
limited or no voting rights and may have substantially lower overall liquidity
than other securities. Certain types of hybrid securities, such as
non-cumulative perpetual preferred stock, are issued predominantly by companies
in the financial services industry and thus may present increased risk during
times of financial upheaval, which may affect financial services companies more
than other types of issuers.
Interest Rate Risk. Debt securities that pay
interest based on a fixed rate are subject to the risk that they will decline in
value if interest rates rise. Changes in interest rates or yields may occur
suddenly and unexpectedly, and may be caused by a wide variety of factors,
including central bank monetary policies, changing inflation or real growth
rates, general economic conditions, increased bond issuances, and reduced market
demand for low yielding investments. A Fund may lose money as a result of such
movements. The longer the remaining maturity of a debt security, the more its
value is likely to be affected by changes in interest rates. Debt securities
with longer durations tend to be more sensitive to changes in interest rates,
usually making them more volatile than securities with shorter durations. The
values of equity and other non-debt securities may also decline due to
fluctuations in interest rates. A Fund may choose not to or be unable to hedge
itself fully against changes in interest rates. If a Fund uses derivatives to
hedge against changes in interest rates, those hedges may not work as intended
and may decrease in value if interest rates move differently than anticipated.
In the United States, the Federal Reserve has significantly increased interest
rates during recent periods.
Non-fixed
rate instruments (i.e., variable and floating rate securities) generally are
less sensitive to interest rate changes but may decline in value if their
interest rates do not rise as much or as quickly as interest rates in general.
Conversely, non-fixed-rate instruments will not generally increase in value if
interest rates decline. If a Fund holds variable or floating rate securities, a
decrease in market interest rates may adversely affect the income received from
such securities.
Large Shareholder Risk. A Fund may experience
adverse effects to the extent certain large shareholders purchase or redeem
large amounts of shares of the Fund. Large shareholder redemptions, which may
occur rapidly or unexpectedly, may cause a Fund to sell portfolio securities at
times when it would not otherwise do so, which may negatively impact the Fund’s
net asset value and liquidity. Similarly, large Fund share purchases may
adversely affect a Fund’s performance to the extent that the Fund is not able to
promptly invest new cash or otherwise maintains a larger cash position than it
ordinarily would. These transactions may also accelerate the realization of
taxable income to shareholders if such sales of investments resulted in gains,
and may also increase transaction costs. In addition, a large redemption could
result in a Fund’s current expenses being allocated over a smaller asset base,
leading to an increase in the Fund’s expense ratio.
Leverage Risk. Each Fund could be exposed to
leverage risk through its investments in leverage-creating derivatives, such as
currency forwards, options, total return swaps, or futures. Adverse changes in
the value or level of the underlying currency, security, reference rate or index
could result in a loss substantially greater than the amount invested in the
derivative itself. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment. When a Fund uses derivatives
that create leverage, investments in the Fund will tend to be more volatile,
resulting in larger gains or losses in response to market changes. Under
relevant SEC rules regarding derivatives risk management by investment
companies, the Funds manage leverage risk by using value-at-risk-based limits or
by limiting derivatives exposure.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
43 |
Liquidity Risk. Liquidity risk exists when
particular investments are difficult to purchase or sell, which could result in
a Fund being unable to buy or sell an investment at an advantageous time or
price. As a result, a Fund could be forced to hold a security that is declining
in value or forego other investment opportunities. An illiquid instrument is
harder to value because there may be little or no market data available based on
purchases or sales of the instrument.
Liquidity
risk may result from the lack of an active market or a reduced number and
capacity of traditional market participants to make a market in a particular
investment. A Fund may also experience liquidity risk to the extent it invests
in private placement securities, securities of issuers with smaller market
capitalizations, or securities with substantial market and/or credit risk. The
liquidity of an issuer’s securities may decrease if its credit rating falls, it
experiences sudden unexpected cash outflows, or some other event causes
counterparties to avoid trading with or lending to the issuer. Liquidity risk is
greater for below investment-grade securities and restricted securities,
especially in difficult market conditions. Over the past three decades, bond
markets have grown more quickly than dealer capacity to engage in fixed income
trading. In addition, recent regulatory changes applicable to financial
intermediaries that make markets in debt securities have restricted or made it
less desirable for those financial intermediaries to hold large inventories of
debt securities with lower overall liquidity. Because market makers provide
stability to a market through their intermediary services, a reduction in dealer
inventory may lead to decreased liquidity and increased volatility in the fixed
income markets. Additional legislative or regulatory actions to address
perceived liquidity or other issues in the debt securities markets could alter
or impair a Fund’s ability to pursue its investment objectives or use certain
investment strategies and techniques. Liquidity risk may intensify during
periods of economic uncertainty. Debt securities with longer durations may face
heightened liquidity risk.
Unusually
high redemption requests or other unusual market conditions may make it
difficult for a Fund to honor redemption requests within the permitted period.
Meeting such requests could require a Fund to sell securities at reduced prices
or under unfavorable conditions which could result in significant dilution of
remaining shareholders’ interests in the Fund. Other market participants may be
attempting to liquidate holdings at the same time as a Fund, which could
increase supply in the market and contribute to liquidity risk.
Manager Risk. Dodge & Cox’s opinion
about the intrinsic worth or creditworthiness of a company, security, or other
investment may be incorrect or the market may continue to undervalue the
company, security, or other investment. Dodge & Cox may not make timely
purchases or sales of securities for a Fund; and each Fund’s investment
objective may not be achieved. Each Fund’s performance could differ
significantly from its comparative index, or other funds with similar objectives
and investment strategies. Depending on market conditions, Dodge &
Cox’s investing style may perform better or worse than portfolios with a
different investment style.
Dodge &
Cox uses financial and other models as part of its investment research,
portfolio management, and trading processes.
Such
models may not adequately account for all relevant factors, may rely on
inaccurate data inputs or assumptions or may contain design flaws. The models
depend on accurate market data inputs. If inaccurate market data is entered into
a model, the resulting information will be incorrect. Any such issues could have
a negative effect on Dodge & Cox’s investment selection process, or
could prevent Dodge & Cox from considering the full range of potential
investments, which could negatively impact a Fund’s performance.
Dodge & Cox
applies investment ideas, including target allocations, to all eligible client
portfolios within a particular strategy, including funds and separately managed
account clients. This means Dodge & Cox may seek to buy or sell very
large amounts of particular securities. As a result, certain investment
opportunities that might be available to a smaller fund may not be available to
the Funds. A Fund may not be able to take significant positions in limited
investment opportunities or add significantly to existing positions. In
addition, a Fund may not be able to quickly dispose of certain securities
holdings.
The
Funds are subject to various operational risks, including risks associated with
the calculation of net asset value. In particular, errors or systems failures
and other technological issues may adversely impact a Fund’s calculation of its
net asset value, and such net asset value calculation issues could result in
inaccurately calculated net asset values, delays in net asset value calculation
and/or the inability to calculate net asset value for some period. The Funds may
be unable to recover any losses associated with such failures.
Market Risk. The market price of a security or
other investment may increase or decrease, sometimes suddenly and unpredictably.
Investments may decline in value because of factors affecting markets generally,
such as real or perceived challenges to the economy, national or international
political events, public health emergencies, such as the spread of infectious
illness or disease, natural disasters, changes in interest or currency rates,
adverse changes to credit markets, or general adverse investment sentiment. In
recent years, governmental authorities and regulators have enacted significant
fiscal and monetary policy initiatives designed to support economies and
financial markets, which may present heightened risks to markets and the Funds’
investments, including risks presented by high inflation, changes in interest
rates, and in some cases, negative yields on certain financial instruments.
Risks may currently be heightened as certain of these policies are discontinued
or reversed.
The
U.S. government’s inability at times to agree on a long-term budget and deficit
reduction plan, has in the past resulted, and may in the future result, in a
government shutdown, which could have an adverse effect on a Fund’s investments
and operations. Additional and/or prolonged government shutdowns may affect
investor and consumer confidence and may adversely impact financial markets and
the broader economy, perhaps suddenly and to a significant degree.
The
prices of investments may reflect factors affecting one or more industries, such
as the price of specific commodities or consumer trends, or factors affecting
particular issuers. During a general downturn in the markets, multiple asset
classes may decline in value simultaneously. Market disruptions may prevent a
Fund from implementing investment decisions in a timely manner.
|
| |
PAGE 44 ∎ DODGE & COX FUNDS |
|
|
Fluctuations
in the value of the Fund’s investments will cause that Fund’s share price to
fluctuate. An investment in a Fund, therefore, may be more suitable for
long-term investors who can bear the risk of short- and long-term fluctuations
in a Fund’s share price.
Although
it is not a principal investment strategy of any Fund to focus on a specific
sector, Dodge & Cox’s research-oriented, bottom-up approach towards
security selection may at times result in significant exposure to one or more
sectors, such as financials or health care, potentially in excess of 25% of the
Fund’s total assets. To the extent that a Fund has significant exposure to a
particular sector, its share value may fluctuate in response to events
disproportionately affecting that sector. Examples of such events include, but
are not limited to, changes in economic or business conditions, new government
regulations, and the availability of basic resources or supplies.
Many
countries have experienced outbreaks of infectious illnesses in recent decades,
including swine flu, avian influenza, SARS and, more recently, COVID-19. The
effects of infectious illnesses have in the past and, may in the future,
adversely affect the global economy, financial markets and the economies of
certain nations and individual issuers, any of which may negatively impact a
Fund and its holdings.
Mortgage- and Asset-Backed Securities Risk.
Mortgage- and other asset-backed securities are subject to various risks,
including prepayment risk, extension risk, interest rate risk, and credit risk.
Prepayment risk is the risk that principal will be repaid earlier than expected,
which means the security will pay less interest over its life. A Fund may have
to reinvest early repayments of principal in securities that bear a lower rate
of interest or more credit risk. Prepayments are more likely at times when
interest rates decline. Extension risk is the risk that principal will be repaid
later than expected, which delays the return of principal to a Fund and may
prevent a Fund from investing in securities that bear a higher rate of interest
or less credit risk. Delayed repayment of principal may increase the duration
and volatility of a security. Extension risk is more likely at times when
interest rates rise. Mortgage- and other asset-backed securities can be highly
sensitive to rising interest rates, such that even small movements can cause a
Fund to lose value. Mortgage- and other asset-backed securities are subject to
credit risk (as described above). Credit risk is greater for mortgage- and other
asset-backed securities that are not directly or indirectly guaranteed by a U.S.
government-sponsored enterprise (“GSE”) (such as Fannie Mae, Freddie Mac, the
Federal Home Loan Banks, and the Federal Farm Credit Banks). However, GSEs are
not guaranteed by the U.S. Treasury and in the event that a GSE cannot meet its
obligations, there can be no assurance that the U.S. government will provide
support. Certain purchases of agency or GSE-guaranteed mortgage-backed
securities are forward transactions (called “to-be-announced” or “TBA”
transactions) that can settle a month or more after the trade date. If the
counterparty to a TBA transaction does not perform its obligation to deliver the
specified mortgage-backed securities, a Fund could be required to replace those
securities at a higher price.
The
values of, and income generated by, commercial mortgage-backed securities
(“CMBS”) may be adversely affected by changing interest rates and other
developments impacting the commercial real estate market, such as population
shifts and other
demographic
changes, increasing vacancies (potentially for extended periods) and reduced
demand for commercial and office space as well as maintenance or tenant
improvement costs and costs to convert properties for other uses. These
developments could result from, among other things, changing tastes and
preferences (such as for remote work arrangements) as well as cultural,
technological, global or local economic and market developments. In addition,
changing interest rate environments and associated changes in lending standards
and higher refinancing rates may adversely affect the commercial real estate and
CMBS markets. The occurrence of any of the foregoing developments would likely
increase default risk for the properties and loans underlying these investments
as well as impact the value of, and income generated by, these investments.
These developments could also result in reduced liquidity for CMBS and other
real estate-related investments.
To
the extent a Fund invests in asset-backed securities that use the London
Interbank Offer Rate (“LIBOR”) as the reference rate or benchmark, the full
impact of the expected transition away from LIBOR is not certain. Publication of
most LIBOR settings has ceased. Some LIBOR settings continue to be published but
only on a temporary, synthetic and non-representative basis and are expected to
cease being published in September 2024. Various financial industry groups have
been planning for the LIBOR transition and certain regulators and industry
groups have taken actions to establish alternative reference rates (e.g., the
Secured Overnight Financing Rate (“SOFR”), which measures the cost of overnight
borrowings through repurchase agreement transactions collateralized with U.S.
Treasury securities and is intended to replace U.S. dollar LIBORs with certain
adjustments, or other reference rates based on SOFR). There is no assurance that
the composition or characteristics of any such alternative reference rate will
be similar to or produce the same value or economic equivalence as LIBOR or that
contracts based on such new and developing alternative reference rates will have
the same volume or liquidity as did LIBOR-based contracts.
Non-U.S. Currency Risk. Non-U.S. currencies may
decline relative to the U.S. dollar and affect a Fund’s investments in non-U.S.
currencies, in securities that are denominated in non-U.S. currencies, in
securities of issuers that are exposed to non-U.S. currencies, or in derivatives
that provide exposure to non-U.S. currencies. When a given currency depreciates
against the U.S. dollar, the value of securities denominated in that currency
typically declines. A U.S. dollar-denominated depositary receipt is exposed to
currency risk if the security underlying it is denominated in a non-U.S.
currency. Currency depreciation may affect the value of U.S. securities if their
issuers have exposure to non-U.S. currencies and non-U.S. issuers may similarly
be exposed to currencies other than those in which their securities are
denominated and the country in which they are subject to risk or domiciled.
Dodge & Cox may not be able to accurately estimate an issuer’s non-U.S.
currency exposure and may not hedge or may not be successful in hedging a Fund’s
currency exposure. A Fund bears transaction charges for currency exchange and
currency hedging activities.
Non-U.S. Investment Risk. Non-U.S. securities
(including ADRs and other securities that represent interests in non-U.S.
issuer’s securities) involve some special risks such as exposure to
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
45 |
potentially
adverse foreign political and economic developments; market instability;
nationalization and exchange controls; potentially lower liquidity and higher
volatility; possible problems arising from accounting, disclosure, settlement,
and regulatory practices that differ from U.S. standards; foreign taxes that
could reduce returns; higher transaction costs and foreign brokerage and
custodian fees; inability to vote proxies, exercise shareholder or bondholder
rights, pursue legal remedies, and obtain judgments with respect to foreign
investments in foreign courts; possible insolvency of a sub-custodian or
securities depository; and fluctuations in foreign exchange rates that decrease
the investment’s value (although favorable changes can increase its value).
Issuers of depositary receipts may discontinue issuing new depositary receipts
and withdraw existing depositary receipts at any time, which may result in costs
and delays in the distribution of the underlying assets to the Fund and may
negatively impact the Fund’s performance. Non-U.S. stock markets may decline due
to conditions unique to an individual country or within a region, including
unfavorable economic conditions relative to the United States or political and
social instability or unrest. Non-U.S. investments may become subject to
economic sanctions or other government restrictions by domestic or foreign
regulators, which could negatively impact the value or liquidity of those
investments. There may be increased risk of delayed settlement of portfolio
transactions or loss of certificates of portfolio securities. A Fund’s non-U.S.
securities and cash will generally be held in foreign banks and securities
depositories, which may be recently organized or new to the foreign custody
business and may be subject to only limited or no regulatory oversight.
Governments
in certain foreign countries participate to a significant degree, through
ownership or regulation, in their respective economies. Action by such a
government could have a significant effect on the market price of securities
issued in its country. These risks may be higher when investing in emerging
market issuers. Certain of these risks also apply to securities of U.S. issuers
with significant non-U.S. operations. Global economies and financial markets are
becoming increasingly interconnected, which increases the possibilities that
conditions in one country or region may adversely affect issuers in a different
country or region.
Regulatory Risk. New laws and regulations
promulgated by governments and regulatory authorities may affect the value of
securities issued by specific companies, in specific industries or sectors, or
in all securities issued in the affected country. In times of political or
economic stress or market turmoil, governments and regulators may intervene
directly in markets and take actions that may adversely affect certain
industries, securities, or specific companies. Government and/or regulatory
intervention may reduce the value of debt and equity securities issued by
affected companies and may also severely limit a Fund’s ability to trade those
securities.
Securities Lending Risk. Securities lending
activities create the risk that loaned securities may not be returned in a
timely manner or at all and/or the risk of a loss of rights in collateral held
against a securities loan in the event of a borrower or lending agent default.
These risks may be greater for loans of non-U.S. securities. Additionally,
losses could result if a Fund reinvests cash collateral received in connection
with loaned securities in investments that decline in value, default, or do not
perform as well as expected.
Small-capitalization Security Risk.
Small-capitalization investment cap companies may be more volatile and subject
to greater short term risk than larger, more established companies. They are
likely to be less liquid than companies with larger market capitalizations,
which could affect the overall liquidity of the Fund’s portfolio. In addition,
smaller companies may have more limited product lines or markets, be less
financially secure, and depend on a more limited management group than larger
companies. It may be difficult to evaluate the potential for long-term growth of
smaller companies.
Sovereign and Government-Related Debt Risk. An
investment in sovereign or other government-related debt involves risk,
including special risks not present in other types of debt obligations. The
issuer of the sovereign debt or the governmental authorities that control the
repayment of the debt may be unable or unwilling to repay principal or interest
when due. This may result from political or social factors, the general economic
environment of a country, levels of foreign debt, or foreign currency exchange
rates. Holders of sovereign or other government-related debt may be asked to
participate in the rescheduling of such debt and to extend further loans to
governmental or government-related entities. To the extent a Fund invests in
sovereign or other government-related debt, that Fund may be exposed to the
direct or indirect consequences of political, social, and economic changes in
various countries, as well as to changes in local tax, insolvency, or other
regulatory regimes. A Fund may have limited legal recourse in the event of a
default with respect to certain sovereign debt obligations. For example,
bankruptcy, moratorium, and other similar laws applicable to issuers of
sovereign debt may be substantially different from those applicable to corporate
debt issuers.
With
respect to inflation-linked debt securities, there can be no assurance that an
inflation index will accurately measure the real rate of inflation in the prices
of goods and services. In addition, there can be no assurance that the rate of
inflation in a non-U.S. country will be correlated with the rate of inflation in
the United States. While inflation-linked bonds are expected to be protected
from long-term inflationary trends, short-term increases in inflation may have
an adverse effect on the value of those securities. If interest rates rise due
to reasons other than inflation (i.e., due to changes in currency exchange
rates), investors in inflation-linked bonds may not be protected to the extent
that the increase is not reflected in the applicable inflation measure.
Repayment of the originally issued principal amount of certain inflation-linked
bonds upon maturity is guaranteed by the issuer; however, the current market
value of the bonds is not guaranteed and will fluctuate. To the extent a Fund
invests in other inflation-linked debt securities that do not provide a similar
guarantee, the bond repaid at maturity may be less than the original
principal.
To-Be-Announced Transaction Risk. TBA
mortgage-backed securities transactions involve an agreement under which the
buyer agrees to purchase a pool of mortgage-backed securities for a fixed price
with payment and delivery at a scheduled future date, typically between 30 and
60 days in the future. During the settlement period of a TBA transaction, the
buyer is at risk for any decline in the value of the securities to be delivered,
while the seller is at risk that the value of the securities may increase. In
order to maintain TBA exposure past the scheduled settlement date, a buyer must
“roll” the transaction by selling its original position and
simultaneously
|
| |
PAGE 46 ∎ DODGE & COX FUNDS |
|
|
purchasing
a similar new one with a settlement date further in the future. Each time a Fund
rolls a TBA position (typically every 30-60 days), it incurs transaction costs,
which are borne by the Fund and its shareholders, and reduces the total return
of the Fund. Maintaining TBA exposure will increase a fund’s portfolio
turnover rate.
U.S. Municipal Bond Risk. Like other bonds,
U.S. municipal bonds are subject to credit risk, interest rate risk, liquidity
risk, and call risk. However, the obligations of some municipal issuers may not
be enforceable through the exercise of traditional creditors’ rights. The
reorganization under federal bankruptcy laws of a municipal bond issuer may
result in the bonds being cancelled without payment or repaid only in part, or
in delays in collecting principal and interest. In the event of a default in the
payment of interest and/or repayment of principal, a Fund may enforce its rights
by taking possession of, and managing, the assets securing the issuer’s
obligations on such securities. These actions may increase a Fund’s operating
expenses. In addition, lawmakers may seek to extend the time for payment of
principal or interest, or both, or to impose other constraints upon enforcement
of such obligations. State or federal regulation with respect to a specific
sector could impact the revenue stream for a given subset of the market.
U.S.
municipal
bonds may have lower overall liquidity than other types of bonds, and there may
be less publicly available and timely information about the financial condition
of municipal issuers than for issuers of other securities. Therefore, the
investment performance of a Fund investing in U.S. municipal bonds may be more
dependent on the analytical abilities of Dodge & Cox than if the Fund
held other types of investments, such as stocks or other types of
bonds. The market for U.S. municipal bonds also tends to be less
well-developed or liquid than many other securities markets, which may adversely
affect a Fund’s ability to value U.S. municipal bonds or sell such bonds at
attractive prices.
Some
U.S. municipal bonds are tax-exempt, which means that income from those bonds is
non-taxable. A significant restructuring of U.S. federal income tax rates or
even serious discussion on the topic in Congress could cause municipal bond
prices to fall. The demand for tax-exempt municipal bonds is strongly influenced
by the value of tax-exempt income to investors. Lower income tax rates could
reduce the advantage of owning tax-exempt municipal bonds. In the case of a
default enforcement action where a Fund gains ownership of an income-producing
asset, any income derived from the Fund’s ownership or operation of such an
asset may not be tax-exempt.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
47 |
Share Classes and Distribution
Available Share Classes
Each
of the Dodge & Cox Stock Fund, Dodge & Cox Global Stock Fund,
Dodge & Cox International Stock Fund, Dodge & Cox Balanced
Fund, Dodge & Cox Income Fund, and Dodge & Cox Global Bond
Fund offers two classes of shares: Class I shares and Class X shares.
The Dodge & Cox Emerging Markets Stock Fund offers a single share
class. All of the Funds and each of their share classes are offered on a no-load
basis and have no sales charges or 12b-1 distribution fees. Each class of a
Fund’s shares represent an interest in the same Fund with the same investment
objectives and investment policies. However, different classes are designed for
different types of investors and have different eligibility requirements and
expense structures due to differing shareholder servicing arrangements.
Class I. Class I shares are available to all types of
investors, including individuals and institutions. Class I shares may be
purchased directly from Dodge & Cox or through a financial
intermediary. You may incur brokerage commissions and other charges when buying
or selling Class I shares through financial intermediaries.
Class X. Class X shares are available only to certain
defined contribution employee retirement benefit plans, such as 401(k),
403(b),
employee stock ownership, money purchase pension, profit sharing, stock bonus,
target benefit, and thrift or savings plans and other defined contribution plans
approved by the Funds. Class X shares are not available to retail
investors, defined benefit plans, traditional and Roth IRAs, Coverdell Education
Savings Accounts, HSA plans, 529 plans, SEPs, SAR-SEPs, SIMPLE IRAs or
individual 403(b) plans. Class X shares may be purchased and sold only
through the administrator or recordkeeper of an eligible defined contribution
employee retirement benefit plan. Plan administrators may purchase Class X
shares directly from the Fund’s Transfer Agent or through a financial
intermediary.
Distribution of Fund Shares. Foreside Fund
Services, LLC, a wholly owned subsidiary of Foreside Financial Group, LLC (d/b/a
ACA Group) (“Foreside”) a member of the Financial Industry Regulatory Authority
(“FINRA”), is the Trust’s principal underwriter and acts as the Trust’s
distributor in connection with the offering of Fund shares. Foreside may enter
into agreements with banks, broker-dealers, or other financial intermediaries
through which investors may purchase or redeem shares. The Statement of
Additional Information provides additional information about Foreside and its
distribution agreement with the Trust.
|
| |
PAGE 48 ∎ DODGE & COX FUNDS |
|
|
Pricing of Fund Shares
The
share price (net asset value per share or NAV) for a Fund, or each of its share
classes, as applicable, is calculated each day by dividing the net assets
attributable to a Fund or class (i.e., total assets minus total liabilities) by
the number of shares outstanding of that Fund or class. The NAV is normally
calculated as of the scheduled close of trading on the New York Stock Exchange
(“NYSE”), generally 4 p.m. ET, each day that the NYSE is open for business.
When you purchase or sell shares of a Fund, your transactions will be priced at
the NAV that is next calculated after a Fund or its authorized agent receives
your request in good order. If a purchase or sale request is received on any day
after NAV has been calculated (or on a day when NAV is not calculated), it will
be priced at the next business day’s NAV. The Funds cannot accept orders that
request a particular day or price for a transaction or any other special
conditions.
If
the NYSE is unexpectedly closed due to weather or other extenuating
circumstances on a day it would normally be open for business, or if the NYSE
has an unscheduled early closing, the Funds reserve the right to either
(i) advance the time as of which the NAV is calculated and, therefore, also
the time by which purchase and redemption orders must be received in order to
receive that day’s NAV or (ii) accept purchase and redemption orders until,
and calculate NAV as of, the normally scheduled close of regular trading on the
NYSE for that day. The days and times at which transactions and shares are
priced, and until which orders are accepted, may also be changed in the event of
an emergency or otherwise as permitted by applicable regulations.
For
purposes of determining the NAV, security transactions and the price of shares
are normally recorded one business day after the trade date. For purposes
of calculating the NAV, portfolio holdings for which market quotations are
readily available are valued at market value. Listed securities, for example,
are generally valued using the official quoted close price or the last sale on
the exchange that is determined to be the primary market for the security. Other
portfolio holdings, such as debt securities, certain preferred stocks,
structured investments, and derivatives traded over-the-counter, are valued
using prices received from independent pricing services which utilize recent
transaction data, dealer quotes, pricing models, and other inputs to arrive at
market-based valuations. Pricing models may consider quoted prices for similar
investments, interest rates, cash flows (including prepayment speeds), and
credit risk. Exchange-traded derivatives are generally valued at the settlement
price determined by the relevant exchange and centrally cleared derivatives are
generally valued at the price determined by the relevant clearing house.
Short-term securities with less than 60 days to maturity may be valued at
amortized cost if amortized cost approximates current value. Mutual funds are
valued at their respective net asset values, which are calculated using
procedures described in their prospectuses. Security values are not discounted
based on the size of the Fund’s position and may differ from the value a Fund
receives upon the sale of the securities.
If
market quotations are not readily available or if normal valuation procedures
produce valuations that are deemed unreliable or inappropriate under the
circumstances existing at the time, the investment will be valued at fair value
as determined in good faith by the Funds‘ valuation designee. The Board of
Trustees has appointed Dodge & Cox, the Funds’ investment manager, as
valuation designee to make fair value determinations in accordance with the
Dodge & Cox Funds Valuation Policies (“Valuation Policies”), subject to
Board oversight. Dodge & Cox has established a Pricing Committee that
is comprised of representatives from Treasury, Legal, Compliance, and
Operations. Dodge & Cox, acting through its Pricing Committee, is
responsible for implementing the Valuation Policies, including determining the
fair value of securities and other investments when necessary. The Pricing
Committee considers relevant indications of value that are reasonably available
to it in determining the fair value assigned to a particular security, such as
the value of similar financial instruments, trading volumes, contractual
restrictions on disposition, related corporate actions, and changes in economic
conditions. In doing so, the Pricing Committee employs various methods for
calibrating fair valuation approaches, including a regular review of key inputs
and assumptions, back-testing, and review of any related
market activity.
As
trading in securities on most foreign exchanges is normally completed before the
close of the NYSE, the value of non-U.S. securities can change by the time the
Fund calculates its NAV. To address these changes, the valuation designee may
utilize adjustment factors provided by an independent pricing service to
systematically value non-U.S. securities at fair value. These adjustment factors
are based on statistical analyses of subsequent movements and changes in U.S.
markets and financial instruments trading in U.S. markets that represent foreign
securities or baskets of securities. Some securities are listed on foreign
exchanges that are open on days (such as U.S. holidays) when the Funds do not
calculate their NAVs. This could affect the value of a Fund’s portfolio
investments on days when you cannot buy or sell shares.
Valuing
securities through a fair value determination involves greater reliance on
judgment than valuation of securities based on readily available market
quotations. In some instances, lack of information and uncertainty as to the
significance of information may lead to a conclusion that a prior valuation is
the best indication of a security’s value. When fair value pricing is employed,
the prices of securities used by the valuation designee to calculate a Fund’s
NAV may differ from quoted or published prices for the
same securities.
The
per share NAV of one class of a Fund’s shares may be different from the per
share NAV of another class of shares of the same Fund as a result of the
different daily expense accruals applicable to each class of shares.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
49 |
How to Purchase Shares
Shares
of the Funds may be purchased directly from the Funds’ Transfer Agent or through
a financial intermediary. Certain privileges or services described below are
only available if you purchase shares from the Transfer Agent and may not be
available for Class X shares. If you buy Fund shares through a financial
intermediary, you may be charged a service fee by the financial intermediary.
Please refer to the materials provided by your intermediary for more
information.
|
|
|
|
|
| |
| |
| |
To Open and Maintain
an Account |
|
To Add to an Account |
|
|
| |
Minimum
Investment*
$2,500
(regular account)
$1,000
(IRA) |
|
Minimum
Investment*
$100 |
By Web
dodgeandcox.com |
|
| |
Current
shareholders can visit the Funds’ website at dodgeandcox.com and log in to
open additional accounts or to exchange shares from an existing
Dodge & Cox Fund account to a new account with the same
registration. You can also roll assets over or transfer a lump sum from a
non-Dodge & Cox Funds traditional or Roth IRA, or a qualified
pension or profit-sharing plan.
New
shareholders may click Investing and visit the “Open an Account With Us”
section of the Funds’ website to open an account. |
|
Current
shareholders can visit the Funds’ website and log in to make subsequent
investments directly from your pre-established bank account or exchange
from another Dodge & Cox Fund account with the same
registration. |
Mobile App
|
|
| |
Current
shareholders can utilize the Funds’ mobile application and log in to open
additional accounts or to exchange shares from an existing Dodge & Cox
Fund account to a new account with the same registration. You can also
roll assets over or transfer a lump sum from a non-Dodge & Cox Funds
traditional or Roth IRA, or a qualified pension or profit-sharing
plan.
New
shareholders may download and open the mobile application from your mobile
phone’s app store. Select “Open New Account” to open an account. |
|
Current
shareholders can utilize the Funds’ mobile application and log in to make
subsequent investments directly from your pre-established bank account or
exchange from another Dodge & Cox Fund account with the same
registration. |
By Phone
800-621-3979
Client
Services:
Monday–Friday
8 a.m.–7:30 p.m. ET
Automated System:
7
days a week
24
hours a day |
|
| |
Current
shareholders may call Client Services or use the automated phone system to
open an additional account from a pre-established bank account or by
exchanging shares from an existing Dodge & Cox Fund account into
a new account with the same registration.
New
shareholders may not open an account by telephone. |
|
Current
shareholders may call Client Services or use the automated phone system to
make subsequent investments directly from a pre-established bank account
or to exchange from another Dodge & Cox Fund account with the
same registration. |
|
| |
PAGE 50 ∎ DODGE & COX FUNDS |
|
|
How to Purchase Shares (Continued)
|
|
|
|
|
| |
| |
| |
To Open and Maintain
an Account |
|
To Add to an Account |
By Wire
Wire
to:
State Street Bank
and Trust Company
Boston,
MA
ABA
0110 0002 8
Deposit DDA 9905-351-4
FFC
Dodge & Cox
(Fund
Name) Fund
Fund
# / Account #
Account
Registration |
|
| |
Prior
to making an initial investment by wire, a completed Account Application
or IRA Application must have been received by the Fund. Once an account
number has been assigned, call 800-621-3979 to notify the Fund of your
incoming wire transaction. |
|
Call
Client Services at 800-621-3979 during business hours to notify the Funds
of your incoming wire transaction. |
* |
The
Funds reserve the right to waive minimum investment amounts for certain
financial intermediaries. Financial intermediaries may impose their own
minimum investment amounts. |
|
|
|
|
|
| |
| |
| |
To Open and Maintain
an Account |
|
To Add to an Account |
By Mail
Regular
Mail:
Dodge &
Cox Funds
P.O.
Box 219502
Kansas
City, MO 64121-9502
Express,
Certified or
Registered
Mail:
Dodge &
Cox Funds
430
W 7th Street Suite
219502
Kansas
City, MO 64105-1407 |
|
| |
You
may open an account by sending the Transfer Agent a completed and signed
Account Application or IRA Application along with a check for investment.
To transfer or rollover from another eligible retirement plan, complete
and send the Transfer Agent an IRA Transfer of Assets Form.
Call
800-621-3979 or visit the Funds’ website at dodgeandcox.com to obtain the
appropriate forms. |
|
Mail
your check to the Transfer Agent along with an Invest-By-Mail form
detached from your quarterly statement. |
|
| |
Make
all checks payable to Dodge & Cox
Funds. All checks must be made in U.S. dollars and drawn on U.S.
banks.
Important
note: The Funds will not accept third party checks (checks not made
payable to Dodge & Cox Funds), traveler’s checks, starter checks,
or money orders. |
Automatically
|
|
| |
The Funds offer ways to invest automatically or to periodically
rebalance investments. Call Client Services at 800-621-3979 or visit the
Funds’ website at dodgeandcox.com to initiate automatic trading. You may
also download the Account Options Form or IRA Options Form to establish
this service. See Automatic Investment
Plan and Automatic Periodic
Rebalancing. |
Please
note that even if a purchase request was delivered to a post office box or
reported as delivered by an expedited shipping service, it is not deemed
received until it is scanned by the processing team at the Transfer Agent’s
office. Only bank accounts held at domestic financial institutions that are
Automated Clearing House (“ACH”) members may be used for telephone or internet
transactions. The option to purchase shares by telephone or through the Funds’
website will become effective approximately 15 business days after the Account
Application or Account Options form is received by the Transfer Agent. Telephone
conversations may be recorded or monitored for verification, recordkeeping, and
quality-assurance purposes.
Purchase of Class X Shares. Class X
shares may be purchased and sold only through the administrator or recordkeeper
of an eligible defined contribution employee retirement benefit plan. The plan
administrator or recordkeeper will be responsible for relaying purchase
instructions and forwarding any necessary documentation to the Funds’ Transfer
Agent. If you attempt to purchase Class X shares of a Fund, but are not an
eligible investor (but your request is otherwise in good order), your funds may
be invested in Class I shares of the same Fund. Eligible defined contribution
employee
retirement
benefit plans should contact their plan administrator or recordkeeper for more
information about purchasing Class X shares.
Important Information About Purchases. Federal
anti-terrorism and anti-money laundering law requires all financial
institutions, including the Funds, to obtain, verify, and record information
that identifies each person who opens an account, and to determine whether such
person’s name appears on government lists of known or suspected terrorists and
terrorist organizations.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
51 |
The
Funds must obtain personal information, including name, date of birth (for
individuals), address, and social security or tax identification number, and
must verify your identity. You may be required to provide supporting
documentation, such as a copy of a drivers’ license, passport or birth
certificate. Additional information regarding beneficial ownership and control
persons must be provided for certain types of legal entities. If the Funds
cannot verify your identity, the USA PATRIOT Act prohibits opening your
account.
If
you fail to furnish your correct and certified Social Security or Taxpayer
Identification Number, a Fund may be required to withhold federal income tax
(backup withholding) from dividends, capital gain distributions, and
redemptions.
All
purchase requests are subject to acceptance by a Fund. All purchases will be
invested in full and fractional shares, and you will receive a confirmation
statement. If your payment is not received by the third business day after an
order is placed or you pay with a check or ACH transfer that does not clear,
your purchase may be canceled. You will be responsible for any losses or
expenses (including a $20 fee) incurred by a Fund or the Transfer Agent, and
a
Fund
can redeem shares you own in this or another identically registered
Dodge & Cox Fund account as reimbursement. The Funds and their
agents have the right to reject or cancel any purchase, exchange, or redemption
due to nonpayment.
The
Funds and their agents reserve the right to cancel or rescind any pending
purchase or exchange (for example, if an account has been restricted due to
excessive trading or fraud); to freeze any account, temporarily suspend services
on the account, and/or stop payment upon notice of the death of an account
owner, when notice has been received of a dispute between the registered or
beneficial account owners, or when there is reason to believe a fraudulent
transaction may have occurred; to otherwise modify the conditions of purchase
and any services at any time; or to act on instructions believed to
be genuine.
Notice to Non-U.S. Individual Shareholders: The
Funds and their shares are only registered in the United States and do not offer
their shares for sale outside of the United States. Any current shareholder that
has a resident address outside of the United States will be restricted from
purchasing additional Fund shares.
How to Redeem or Exchange Shares
You
may withdraw any part of your account by selling shares. The sale price of your
shares will be the Fund’s NAV next determined after the Transfer Agent or an
authorized agent receives all required documents in good order. Good order means
that the request includes:
∎ |
|
Fund
name and account number; |
∎ |
|
Amount
of the transaction in dollars or shares; (if redemption is requested by
internet or mail, the amount of the transaction may be stated in
percentage terms); |
∎ |
|
Signatures
of all owners exactly as registered on the account (for written
requests); |
∎ |
|
Medallion
Signature Guarantee, if required (see Medallion Signature
Guarantees); |
∎ |
|
Any
certificates you are holding for the account;
and |
∎ |
|
Any
supporting legal documentation that may be
required. |
∎ |
|
Note:
for corporate/institutional accounts only, the required signature(s) must
be either (1) Medallion-guaranteed and clearly indicate the capacity
of the signer to act for the corporation or institution or (2) that
of an authorized signatory named on a certified corporate resolution dated
within the last six months (or a certified corporate resolution and letter
of indemnity) that accompanies the request or is on file with the Transfer
Agent. |
Shares
of the Funds purchased through the Transfer Agent may be sold as described
below. If you purchased shares through a financial intermediary, you generally
must sell or exchange shares through the same intermediary. Please refer to the
materials provided by your intermediary for more information.
|
|
|
|
|
| |
| |
| |
Account
Type |
By Web
dodgeandcox.com |
|
| |
All
Accounts (Except employee retirement benefit plans, corporate, and certain
institutional accounts)
Visit
the Funds’ website at dodgeandcox.com and log in to place a sell order.
You may exchange shares from a Fund to open an account in another Fund or
to add to an existing account with an identical registration. |
Mobile App
|
|
| |
All
Accounts (Except employee retirement benefit plans, corporate, and certain
institutional accounts)
Download
the app from your mobile phone’s app store and log in to place a sell
order. You may exchange shares from a Fund to open an account in another
Fund or to add to an existing account with an identical
registration. |
|
| |
PAGE 52 ∎ DODGE & COX FUNDS |
|
|
|
|
|
|
|
| |
By Mail
Regular
Mail:
Dodge &
Cox Funds
P.O.
Box 219502
Kansas
City, MO 64121-9502
Express,
Certified or Registered Mail:
Dodge &
Cox Funds
430
W 7th Street Suite
219502
Kansas
City, MO 64105-1407 |
|
| |
All
Accounts
Complete
and mail in the Redemption Request Form for a taxable account or an IRA
Distribution Request Form for an IRA, to sell shares. These forms can be
obtained on the Funds’ website or by calling Client Services at
800-621-3979.
Current
shareholders may exchange shares into a new account with the same
registration by providing written instructions. To exchange shares into an
account with a different registration (including a different name,
address, or taxpayer identification number, you must provide the Transfer
Agent with written instructions that include the Medallion guaranteed
signature of all current account owners. See Medallion Signature Guarantees and Change in
Account Registration and Transfer of Shares. |
By Phone
800-621-3979
Client
Services
Monday–Friday
8
a.m.–7:30 p.m. ET
Automated
System
7
days a week
24
hours a day |
|
|
|
Client
Services:
You
may call Client Services during business hours to speak with a
representative to sell or exchange shares. You can exchange shares from a
Fund to open an account in another Fund or to add to an existing account
with an identical registration. This includes exchanges from retirement to
taxable accounts.
Automated
Phone System:
All
accounts (except IRAs, retirement plans, corporate, and certain
institutional accounts) may utilize the automated phone system at any time
to sell shares using the
self-service options.
All
accounts including IRAs (except certain retirement plans, corporate, and
certain institutional accounts) may utilize the automated phone system at
any time to exchange shares from a
Fund to open an account in another Fund or to add to an existing account
with identical registration. |
Telephone
conversations may be recorded or monitored for verification, recordkeeping, and
quality-assurance purposes.
|
|
|
|
|
| |
Automatically
|
|
| |
The Funds offer ways to sell shares automatically or to
periodically rebalance investments. Call Client Services at 800-621-3979
or visit the Funds’ website at dodgeandcox.com to initiate automatic
trading. You may also request or download the Account Options Form or IRA
Distribution Request Form to establish this service. See Automatic Redemption Plan and Automatic Periodic
Rebalancing. |
Redemption Payments May
Be Made By Check, Wire, or ACH
By Check Checks will be made payable to you and
will be sent to your address of record. If the proceeds of a redemption are
requested to be sent to an address other than the address of record or if the
address of record has been changed within 15 days of the redemption request, the
request must be in writing with your signature(s) Medallion guaranteed. No
interest will accrue on amounts represented by uncashed checks.
By Wire The Fund will wire redemption proceeds
only to the bank account designated on the Account Application or in written
instructions—with Medallion signature guarantee — received with the
redemption order.
By ACH Redemption proceeds can be sent to your
bank account by ACH transfer. You can elect this option by completing the
appropriate section of the Account Application. There is a $100 minimum per ACH
transfer.
Medallion Signature Guarantees You will need to
have your signature Medallion guaranteed to perform certain transactions,
such as:
∎ |
|
Sending
redemption proceeds to any person, address, or bank account not on record;
or |
∎ |
|
Transferring
redemption proceeds to a Dodge & Cox Fund account with a
different registration (name/ownership) from yours. |
A Medallion Signature Guarantee may be obtained from a
domestic bank or trust company, broker, dealer, clearing agency, savings
association, or other financial institution which participates in a Medallion
program recognized by the Securities Transfer Association. Signature
guarantees from financial institutions which do not participate in a Medallion
program will not be accepted. A notary public cannot provide Medallion
Signature Guarantees.
IRAs Redemption requests for Traditional IRAs
must include instructions regarding federal income tax withholding. Unless you
have elected otherwise, your redemptions will be subject to income tax
withholding. State withholding may also apply.
Important Information About Redemptions Under
certain circumstances, the Transfer Agent may require additional documents,
including stock powers with signatures Medallion guaranteed, trust instruments,
death certificates, appointments as executor, and certificates of corporate
authority. If certificates have been issued for any of the shares to be
redeemed, such certificates must be delivered to the Transfer Agent. For any
questions regarding
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
53 |
documentation
or signature requirements for trusts, estates, corporations, etc., please call
Client Services (800‑621‑3979).
If,
subsequent to placing a redemption order, market fluctuations cause the value of
your account to fall below the requested redemption amount, your entire account
may be redeemed. The Funds reserve the right to redeem shares in any
account, including those in the name of an intermediary, and send the proceeds
to the registered owner if the account value falls below the minimum initial
investment amount. The Fund or its agent may, but is not required to, make
reasonable efforts to notify the registered owner if the account falls below the
minimum to provide the owner the option to contribute additional funds to meet
the required minimum. In addition, the Fund reserves the right to:
(1) redeem all or a portion of the shares in an account to meet a legal
obligation, including tax withholding, tax lien, garnishment order, or other
obligation imposed on your account by a court or government agency,
(2) redeem shares, close an account, or suspend account privileges,
features, or services in the case of threatening conduct or harassment, and
(3) redeem shares, close an account, freeze an account, or suspend account
privileges or features if we believe that doing so may prevent fraud, financial
exploitation, or abuse.
Redemption
payments are made as soon as practicable, generally within two business days,
but under normal circumstances no later than the seventh day after the effective
date for redemption, or within such shorter period as may legally be required.
If shares are redeemed within two weeks of purchase, a Fund may delay payment of
the redemption proceeds until your purchase check or ACH purchase has cleared,
which may take up to 15 days. Any redemption where payment has not cleared by
the 15th day may be
cancelled. There is no such delay when shares being redeemed were purchased by
wiring Federal funds.
Under
normal conditions, the Funds expect to meet shareholder redemptions by
monitoring each Fund’s portfolio and redemption activities and by holding a
reserve of highly liquid assets, such as cash or cash equivalents. In periods of
unusually high redemptions, during stressed market conditions, or for other
temporary or emergency purposes, a Fund may use additional methods to meet
shareholder redemptions. These methods include, but are not limited to, selling
securities or otherwise liquidating investments, drawing on a credit facility,
participating in an interfund lending facility, and making payment with Fund
securities or other Fund assets rather than in cash (as discussed under
“Redemptions-in-kind” below).
The
Funds may suspend your redemption right or postpone payment at times when the
NYSE is closed, trading on the NYSE is restricted, or under any emergency or
other circumstances as determined by the SEC.
The
Transfer Agent may place a temporary hold on a pending transaction if it
believes the transaction is fraudulent or that a senior citizen or shareholder
with mental or physical impairment is being financially exploited.
Exchanging Shares of One Dodge & Cox Fund for
Another. An exchange of shares of one class of a Dodge & Cox
Fund for shares of the same class of another Dodge & Cox Fund is
treated as a redemption and a purchase; therefore, you may realize a taxable
gain or loss.
There
is a $100 minimum for all exchanges. If a new account is being opened by
exchange, the minimum investment requirements must be met. After the exchange,
the account from which the exchange is made must have a remaining balance of at
least $2,500 ($1,000 for an IRA) in order to remain open. The Funds reserve the
right to terminate or materially modify the exchange privilege upon 60 days’
advance notice to shareholders.
Exchanging Share of One Class for Another
Class in the Same Dodge & Cox Fund. Eligible defined
contribution employee benefit plans, subject to the discretion of the Fund, may
exchange existing Class I shares for Class X shares of the same Fund
at each class’s net asset value by contacting the Funds’ Transfer Agent or the
financial intermediary through which shares were purchased. Such an exchange is
not treated as a sale and purchase and is generally expected to be a nontaxable
event. If you exchange an investment in Class I shares for Class X
shares, the transaction will be based on the respective net asset values of each
class. Consequently, an exchange may provide you with more shares or fewer
shares than you originally owned, depending on the net asset value of each class
on that day, although the total dollar value will be the same.
Investments
in Class X shares that are determined to be ineligible may be either denied,
cancelled, invested in Class I shares, or converted to Class I shares, at the
sole discretion of the Funds.
Telephone and Internet Transactions. By using
telephone or internet purchase, redemption, and/or exchange options, you agree
to hold the Funds, Dodge & Cox, the Transfer Agent, and each of
their respective directors, trustees, officers, employees, and agents harmless
from any losses, expenses, costs, or liability (including attorney fees) which
may be incurred in connection with the exercise of these privileges. Generally,
all shareholders are automatically eligible to use these options. However, you
may elect to decline these options. Although the Funds have adopted reasonable
procedures to confirm that the instructions received are genuine, permitting
telephone and internet redemptions in your account may increase the risk of
losses due to unauthorized or fraudulent instructions. In addition,
interruptions in service may mean that you will be unable to effect a redemption
by telephone or internet when desired. For any questions regarding telephone
or internet transactions please call Client Services (800-621-3979).
If
you are unable to reach a Fund by telephone or via the internet because of
technical difficulties, market conditions, or a natural disaster, you have the
option to make purchase, redemption, and exchange requests by regular or express
mail. You may experience delays in exercising telephone redemption privileges,
including during periods of abnormal market activity or high call volume. During
periods of volatile economic or market conditions, you may want to consider
transmitting redemption orders by internet or overnight courier.
If
an account has multiple owners, a Fund may rely on the instructions of any one
account owner. You should note that purchase and sales orders will not be
canceled or modified once received in good order.
|
| |
PAGE 54 ∎ DODGE & COX FUNDS |
|
|
In-Kind Transactions
The
Funds reserve the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption by making payment in whole or
in part in readily marketable securities chosen by a Fund and valued as they are
for purposes of computing a Fund’s net asset value or NAV (a “redemption in
kind”). Such conditions may include, but are not limited to, circumstances under
which raising cash to meet a redemption request could dilute the interests of
the Fund’s remaining shareholders or compromise the Fund’s ability to raise
enough cash to meet foreseeable redemption requests by other shareholders. If
payment is made in securities, a shareholder may incur transaction expenses in
converting these securities to cash. In addition, if a Fund effects a redemption
in kind, the redeeming shareholder will bear market, liquidity, and other risks
associated with such securities. Each of the Stock Fund, the Global Stock Fund,
the International Stock Fund, the Emerging Markets Stock Fund, and the Balanced
Fund may also effect redemptions in kind in an effort to manage cash and
portfolio positions and/or to offset certain of the liquidity-related risks that
arise from significant redemption activity. This practice may reduce the need
for those Funds to maintain significant cash reserves or to sell portfolio
holdings to meet redemption requests and thus may enable such Funds to reduce
cash drag, transaction costs and capital gains. Dodge & Cox believes
that this practice may benefit the applicable Funds and their shareholders,
including by reducing capital gain distributions to their shareholders.
Shareholders who redeem their shares in kind may sell some or all of the
securities they receive from the applicable Funds. There is a risk that this
activity could negatively impact the market value of those securities and, in
turn, the NAV of such Funds. Dodge & Cox believes that the benefits
described above outweigh the risk of potential negative NAV impact.
Some
shareholders may be paid in whole or in part in securities (which may differ
among shareholders), while other shareholders may be paid entirely in cash, even
with respect to redemptions on the same date. Shareholders paid in whole or in
part in securities will receive a basket of securities that corresponds
generally pro rata to the Fund’s portfolio holdings. With respect to the Stock
Fund, the Global Stock Fund, the International Stock Fund, the Emerging Markets
Stock Fund, and the Balanced Fund, shareholders will receive either a pro rata
basket or a “Redemption Basket” valued as they are for purposes of computing a
Fund’s NAV. A list of the designated securities and approximate weightings of
the securities comprising the Redemption Basket will be made available at
dodgeandcox.com periodically and upon request. The Redemption Basket includes
only securities that have been disclosed in the Fund’s latest quarter-end
holdings disclosure. Dodge & Cox may in its discretion omit a security
or adjust the weighting of a security included in the published Redemption
Basket when processing a redemption in kind due to circumstances such as, but
not limited to, changes in the applicable Fund’s investment strategy and
portfolio holdings, the existence of material non-public information about the
security, corporate actions, the fact that a security is using fair value
pricing, or other circumstances, as may be determined by Dodge & Cox.
There may be practical limitations on a Fund’s ability to effectuate
redemptions
in
kind, and it may not be possible for a Fund to exercise its right to redeem
shares in kind under certain circumstances. The Funds are not obligated to honor
requests for a redemption in kind.
Dodge &
Cox may, at its discretion and subject to certain conditions, permit purchases
of shares of a Fund through the exchange of other securities that are eligible
for purchase by the Fund. Any securities exchanged must (i) meet the
investment objective, policies and limitations of the Fund; (ii) have a
readily ascertainable market value; (iii) be liquid; (iv) not be
subject to restrictions on resale; and (v) have a market value that meets
certain minimum thresholds. Securities accepted by a Fund will be valued in the
same manner as the Fund values its assets. Certain clients of Dodge &
Cox, including the Funds, whose assets would be eligible for purchase by one or
more of the Funds may purchase shares of a Fund with such assets.
The
Funds have elected to be governed by Rule 18f-1 under the Investment Company
Act, as a result of which a Fund is obligated to redeem shares, with respect to
any one shareholder of record during any 90-day period, solely in cash up to the
lesser of $250,000 or 1% of the net asset value of the Fund at the beginning of
the period.
Transactions Through Financial Intermediaries
You
may purchase or sell Fund shares through a financial intermediary, who may
charge you a fee for this service and may require different minimum initial and
subsequent investments than the Funds. Your intermediary may impose different or
additional conditions than the Funds on purchases, redemptions, and exchanges of
Fund shares. Class X shares may only be purchased through eligible defined
contribution employee benefit plan administrators or recordkeepers. Financial
intermediaries may impose other charges or restrictions different from those
applicable to shareholders who invest in the Funds directly. In addition, a
broker may charge a commission to its customers on transactions in Fund shares,
provided the broker acts solely on an agency basis for its customer and does not
receive any distribution-related payment in connection with the transaction.
Shareholders who are customers of financial intermediaries or participants in
programs serviced by them should contact the financial intermediaries for
additional information. A financial intermediary may be the shareholder of
record of your shares. The Funds, Dodge & Cox, the Transfer Agent,
and each of their respective directors, trustees, officers, employees, and
agents are not responsible for the failure of any Financial Intermediary to
carry out its obligations to its customers.
Payments to Certain Employee Benefit Plan Financial
Intermediaries. Dodge & Cox, at its expense without additional
cost to the Funds or their shareholders, may provide additional compensation to
certain employee benefit plan financial intermediaries with respect to
Class I shares of the Dodge & Cox Stock Fund, Dodge & Cox
Global Stock Fund, Dodge & Cox International Stock Fund,
Dodge & Cox Balanced Fund, Dodge & Cox Income Fund, and
Dodge & Cox Global Bond Fund. Dodge & Cox does not make such
payments with respect to the Dodge & Cox Emerging Markets Stock Fund or
the Class X shares of any
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
55 |
other
Fund. These payments may be made, at the discretion of Dodge & Cox, for
shareholder recordkeeping or other administrative services provided to eligible
defined contribution employee benefit plans holding the Funds, either directly
or indirectly. The level of payments made to such a qualifying employee benefit
plan financial intermediary in any given year may be up to 0.10% of the market
value of the Class I shares of the Stock, Global Stock, International
Stock, and Balanced Fund accounts and up to 0.08% of the market value of the
Class I shares of the Income and Global Bond Fund accounts serviced by the
financial intermediary. A number of factors will be considered in determining
whether compensation should be paid to a financial intermediary, including the
qualifying financial intermediary’s willingness to enter into an administrative
service agreement (or equivalent), the recordkeeping, reporting, or other
services to be provided, and the quality of the relationship with such Funds.
Dodge & Cox makes these payments with respect to eligible Funds
and share classes to help defray the costs incurred by qualifying financial
intermediaries in connection with efforts to maintain employee benefit plan
accounts for participants in a cost-efficient manner; however,
Dodge & Cox does not audit the financial intermediaries to verify
the extent or nature of services provided. Dodge & Cox will, on a
periodic basis, determine the advisability of continuing these payments. These
payments may be more or less than the payments received by financial
intermediaries with respect to other mutual funds and may influence your
financial intermediary to make available a Fund over other mutual funds. You
should ask your financial intermediary about these differing and divergent
interests and how it is compensated for administering your
Fund investment.
In
addition to the payments described above, Dodge & Cox may also make
payments to third parties for, among other things, data and other information,
such as underlying customer information with respect to omnibus accounts or
other industry information.
Excessive Trading Limitations
The
Funds are intended for long-term investment purposes and not for market timing
or excessive short-term trading (“excessive
trading”). The Funds’ Board of Trustees has approved policies and
procedures designed to detect and deter excessive trading in
the Funds.
Although
there is no generally applied standard in the marketplace as to what level of
trading activity is excessive, a Fund may consider that you have violated the
excessive trading policy if it determines that you have entered into a series of
transactions indicative of an excessive trading pattern or strategy. Certain
types of transactions, such as the reinvestment of dividends, shares purchased
or sold pursuant to an automatic investment plan or automatic rebalancing
program, or scheduled retirement plan contributions or distributions, are exempt
from the excessive trading policy. A Fund may waive the application of excessive
trading policies and procedures in other circumstances if it determines that
their application is not necessary to protect the Fund from the effects of
short-term trading.
Excessive
trading may present risks to you and to a Fund in which you are a shareholder,
including negative impact on the
Fund’s
performance, dilution in the value of its shares, interference with the
efficient management of the Fund’s portfolio, losses on the sale of investments
if securities are sold at unfavorable prices, increased taxable gains to
remaining shareholders resulting from the need to sell securities to meet
redemption requests, and increased brokerage and administrative costs. These
risks may be greater to the extent a Fund invests in non-U.S. securities, which
are believed to be more susceptible to pricing inefficiencies and time zone
arbitrage. Time zone arbitrage may occur because of time zone differences
between the foreign markets on which the Funds’ non-U.S. portfolio securities
trade and the time as of which the Funds’ NAV is calculated. Arbitrageurs who
are successful may dilute the interests of other shareholders by trading shares
at prices that do not fully reflect their fair value. The Funds have pricing and
valuation procedures that are intended to reduce the potential for dilution and
other adverse effects that can result from pricing inefficiencies. Although the
Funds’ excessive trading policy and pricing and valuation procedures are
designed to prevent time zone arbitrage, there can be no assurances that such
policies and procedures will be completely effective. See Pricing of Fund Shares.
Trade Activity Monitoring The Funds monitor
selected trades on a daily basis. Trade activity monitoring may include:
reviewing accounts where a purchase and sale occurs within a short period of
time; reviewing transaction amount thresholds; and making comparisons against
the Funds’ “known offenders” database, which contains information about
investors who have violated the excessive trading policy in the past. If
the Funds determine that an investor has engaged in excessive trading, the Funds
may temporarily or permanently restrict the account from subsequent purchases
(including purchases by exchange). In determining whether to take such actions,
the Funds seek to act in a manner that is consistent with the best interests of
Fund shareholders. The Funds may consider the trading history of accounts under
common ownership or control for the purpose of enforcing the excessive trading
policy. If a Fund believes that trading activity that appears excessive may be
for legitimate purposes, the Fund may permit the investor to justify the
activity. Transactions placed through the same financial intermediary on an
omnibus basis may be deemed part of a group for the purpose of this policy and
may be rejected in whole or in part by a Fund.
The
Funds or an authorized agent or sub-agent may reject any purchase order
(including exchange purchases) by any investor or group of investors
indefinitely, with or without prior notice to the investor, for any reason,
including, in particular, purchases that they believe are attributable to
excessive traders or are otherwise excessive or potentially disruptive to a
Fund. Such purchase orders may be revoked or cancelled by a Fund on the next
business day after receipt of the order.
The
application of the Funds’ excessive trading policy involves judgments that are
inherently subjective and involve some selectivity in their application. Other
purchases and sales of Fund shares may have adverse effects on the management of
a Fund’s portfolio and its performance. Due to the complexity and subjectivity
involved in identifying excessive trading and the volume of Fund shareholder
transactions, there can be no guarantee that the Funds will be able to identify
violations of the excessive trading
|
| |
PAGE 56 ∎ DODGE & COX FUNDS |
|
|
policy
or to reduce or eliminate all detrimental effects of
excessive trading.
Financial Intermediaries The Funds expect that
each financial intermediary will enforce either the Funds’ or its own excessive
trading policy. As a general matter, the Funds do not directly monitor the
trading activity of beneficial owners of the Funds’ shares who hold those shares
through third-party 401(k) and other group retirement plans and other omnibus
arrangements maintained by financial intermediaries. Although the Funds have
entered into information sharing agreements with financial intermediaries, which
give the Funds the ability to request information regarding the trading activity
of beneficial owners and to prohibit further purchases by beneficial owners who
violate the Funds’ excessive trading policy, the ability of the Funds to
monitor, detect, and curtail excessive trading through financial intermediaries’
accounts may be limited, and there is no guarantee that the Funds will be able
to identify shareholders who may have violated the Funds’ excessive trading
policy. Depending on the portion of Fund shares held through such financial
intermediaries, excessive trading through financial intermediaries could
adversely affect Fund shareholders. Fund shareholders who invest through
Financial Intermediaries should contact the financial intermediary regarding its
excessive trading policies, which may impose different standards and
consequences for excessive trading.
Other Transaction Information
Change in Account Registration and Transfer of
Shares Changes in account registrations, such as changing the name(s) on
your account or transferring shares to another person or legal entity, must be
submitted in writing, or online in the case of a gift of shares, and may require
a Medallion signature guarantee. To transfer shares using the online Gifting
Center, visit the Funds’ website at dodgeandcox.com and log in to your account.
If, subsequent to making a transfer request, market fluctuations cause the value
of your account to fall below the requested transfer amount, your entire account
will be transferred. Please call Client Services at 800-621-3979 or visit the
Funds’ website at dodgeandcox.com and request or download the Change of
Ownership Form, the Gift of Shares Form, or the Inheritance Form to effect this
change.
Escheatment of Abandoned Property
A
Fund may be required to escheat (transfer to the state) your assets if they are
deemed abandoned under a state’s unclaimed or abandoned property law. The
following section provides a general summary of U.S. states’ unclaimed or
abandoned property information.
Abandoned Property State unclaimed or abandoned
property laws generally apply to both:
∎ |
|
Unclaimed
securities, including shares of the Fund; and |
∎ |
|
Uncashed
dividends or other distributions from the Fund. |
In
the event that uncashed dividends or other distributions are deemed abandoned,
the amounts of such dividends or distributions will be required to be reported
and remitted to the applicable state.
The
state is typically permitted to sell or liquidate the shares at the prevailing
market price, but is required to reimburse the amount of the proceeds to the
shareholder if they later reclaim the property. In the event that you seek to
reclaim escheated shares after they have been liquidated by the state, you may
only be able to recover the value of the shares at the time of escheatment,
foregoing any appreciation that may have been realized in the interim. The
escheatment of shares to the state may also result in automatic withholding and
tax penalties to you if the shares were held in a tax-deferred account such as
an IRA. You should consult your tax adviser for advice about the particular tax
consequences associated with the escheatment of your shares.
The
rules for determining when a security or security distribution is required to be
reported and delivered to the state vary by state and may depend on the type of
account in which the security is held. Some states require escheatment if you
have had no contact with the Fund within a specified time period (generally,
three or five years). Other states require escheatment only if mailings sent to
you are returned as undeliverable by the United States Postal Service. Other
states may apply different rules. States may change their rules or their
interpretation of such rules from time to time.
Please
check your state’s unclaimed or abandoned property department website for
specific information.
Escheatment Prevention. In order to prevent
your assets from being deemed abandoned and escheated to a state, we recommend
that you promptly cash any checks you receive from the Funds and make regular
contact with the Funds at least annually. Additionally, please notify us of any
name or address changes immediately. It is also important to keep your
beneficiary designations current. You may make contact in writing, by accessing
your account through the Funds’ secure website at dodgeandcox.com, by calling
into Client Services at 800-621-3979 and completing the automated security
verification process, or by speaking to a Client Service representative and
passing the security verification process. Please note that certain states do
not deem automatic transactions to be evidence of contact under their
escheatment laws. The Funds may attempt to notify you by mail if you are at
risk of escheatment due to inactivity. Please open all correspondence from the
Funds and respond, if requested.
Income Dividends and Capital Gain Distributions
Income
dividends and capital gain distributions are reinvested in additional Fund
shares in your account unless you elect another option. The advantage of
reinvesting arises from compounding; that is, you receive income dividends
and capital gain distributions on an increasing number of shares.
Income dividends and capital gains distributions not reinvested are paid by
check or transmitted to your bank account electronically using the ACH
network.
Important
tax note: A Fund’s income dividends and capital gains distributions, whether
received in cash or reinvested in additional shares of the Fund, may be subject
to federal and state income tax.
Income Dividends. Each of the Dodge &
Cox Stock, Balanced, Income, and Global Bond Funds normally pays dividends
of
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
57 |
substantially
all of its income (if any) quarterly in March, June, September, and
December, but may pay less frequently. Each of the Dodge & Cox Global
Stock Fund, International Stock Fund, and Emerging Markets Stock Fund normally
pays dividends (if any) annually in December.
Capital Gain Distributions If a Fund has net
capital gains for the period January through October, those gains are generally
paid in December. If a Fund has additional net capital gains for the period
November through December, those additional gains are generally paid in March
(for the Stock, Balanced, Income, and Global Bond Funds) or December (for the
Global Stock, International Stock, and Emerging Markets Stock Funds) of the
following year. A Fund may make more frequent distributions, if necessary,
to comply with provisions of the Code.
Buying
a Distribution: Unless you are investing through a tax-deferred retirement
account (such as an IRA or 401(k) plan), it may not be to your advantage to buy
shares of a Fund shortly before the Fund makes a distribution. This is known as
“buying a distribution.” Buying a distribution can cost you money in taxes as
you will receive, in the form of a taxable distribution, a portion of the money
you just invested. To avoid buying a distribution, check the Fund’s distribution
schedule (which can be found at dodgeandcox.com or by calling 800-621-3979)
before you invest.
Federal Income Taxes
The
following information is meant as a general summary for U.S. taxpayers. Please
see the SAI for additional information. You should consult your own tax adviser
for advice about the particular federal, state, and local or foreign tax
consequences to you of investing in a Fund.
Taxes and Income Dividends and Capital Gains
Distributions Each Fund will distribute substantially all of its income
and capital gains to its shareholders every year.
In
general, if your Fund shares are held in a taxable account, you will be taxed on
dividends you receive from a Fund, regardless of whether they are paid to you in
cash or reinvested in additional Fund shares. If a Fund declares a dividend in
October, November, or December but pays it in January, you may be taxed on the
dividend as if you received it in the previous year.
Under
current law, a portion of the income dividends paid to you by a Fund may be
qualified dividends subject to a maximum tax rate of either 15% or 20%,
depending on whether your income exceeds certain threshold amounts. In general,
income dividends from domestic corporations and qualified foreign corporations
will be permitted this favored federal tax treatment. Income dividends from
interest earned by a Fund on debt securities and dividends received from
unqualified foreign corporations will continue to be taxed at the higher
ordinary income tax rates. Distributions of qualified dividends will be eligible
for these reduced rates of taxation only if you own your shares for at least 61
days during the 121-day period beginning 60 days before the ex-dividend date of
any dividend.
Fund
distributions of short-term capital gains are taxable to you as ordinary income.
Fund distributions of long-term capital
gains
are taxable as long-term capital gains no matter how long you have owned your
shares. Long-term capital gain distributions are currently generally taxed at a
maximum rate of either 15% or 20%, depending on whether your income exceeds
certain threshold amounts.
An
additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Fund
shares) of U.S. individuals, estates, and trusts to the extent that such
person’s “modified adjusted gross income” (in the case of an individual) or
“adjusted gross income” (in the case of an estate or trust) exceeds certain
threshold amounts.
If
you hold your Fund shares in a tax-deferred retirement account, such as an IRA,
you generally will not have to pay tax on dividends until they are distributed
from the account. These accounts are subject to complex tax rules, and you
should consult your tax adviser about investment through a tax-deferred
account.
Each
Fund you invest in will send you a tax report each year. The report will tell
you which dividends must be treated as taxable ordinary income, qualified
dividends, or long-term capital gains.
Part
of Dodge & Cox Stock, Global Stock, International Stock, Balanced,
and Emerging Markets Stock Funds’ income dividends may be eligible for the 50%
deduction for dividends received by corporations. Foreign taxes paid by
Dodge & Cox Global Stock Fund, International Stock Fund, and Emerging
Markets Stock Fund, on its investments may, subject to certain limitations, be
passed through to you as a foreign tax credit, assuming the Fund satisfies
certain requirements. State taxation of distributions to shareholders varies
from state to state.
As
with all mutual funds, a Fund may be required to withhold U.S. federal income
tax (currently at a rate of 24%) on all taxable distributions payable to you if
you fail to provide a Fund with your correct taxpayer identification number or
to make required certifications, or if you or a Fund have been notified by the
IRS that you are subject to backup withholding. Backup withholding is not an
additional tax, but is a method by which the IRS ensures that it will collect
taxes otherwise due. Any amounts withheld may be credited against your U.S.
federal income tax liability.
Cost Basis and Taxes on Sales (Redemptions) and
Exchanges If your shares are held in a taxable account, you will
generally have a taxable capital gain or loss if you sell your Fund shares or
exchange them for shares of a different Fund. The amount of the gain or loss and
the rate of tax will depend primarily upon how much you paid for the shares
(your “cost basis”), how much you sold them for, and how long you held
them.
Your
total cost basis is generally the original amount paid for Fund shares, plus the
value of reinvested dividends and capital gains distributions. If you acquired
Fund shares on or after January 1, 2012, generally referred to as
“covered shares,” and subsequently sell or exchange those shares, the Fund is
required to report cost basis information to you and to the IRS. Unless you
specify an alternate cost basis method, the Funds will default to the average
cost method when calculating cost basis. If you hold Fund shares in an account
held by a broker/dealer, financial institution, or investment adviser, that firm
may select a different default method. In those cases, please contact the firm
holding your account to
|
| |
PAGE 58 ∎ DODGE & COX FUNDS |
|
|
obtain
information with respect to the cost basis calculation methods available for
your account.
Additional
information about cost basis reporting is available at
dodgeandcox.com/taxcenter.
Foreign Shareholders Shareholders other than
U.S. persons may be subject to a different U.S. federal income tax treatment,
including withholding tax at the rate of 30% on amounts treated as ordinary
dividends from a Fund, as discussed in more detail in the SAI.
Fund Organization and Management
Fund Organization Dodge & Cox Funds, a
Delaware statutory trust (the “Trust”), is a family of seven no-load mutual
funds. Dodge & Cox Balanced Fund was established in 1931;
Dodge & Cox Stock Fund in 1965; Dodge & Cox Income Fund
in 1989; Dodge & Cox International Stock Fund in 2001;
Dodge & Cox Global Stock Fund in 2008; Dodge & Cox
Global Bond Fund in 2014; and Dodge & Cox Emerging Markets Stock Fund
in 2021. On May 1, 2022, the then-outstanding shares of the
Dodge & Cox Balanced Fund, Dodge & Cox Stock Fund,
Dodge & Cox Income Fund, Dodge & Cox International Stock Fund,
Dodge & Cox Global Stock Fund, and Dodge & Cox Global Bond
Fund were redesignated as Class I shares, and Class X shares of those
Funds were concurrently designated and established. The Dodge & Cox
Emerging Markets Stock Fund has not designated any classes for its
shares.
Investment Manager Dodge & Cox, a
California corporation, has served as investment manager to the Funds and their
predecessors since inception. Dodge & Cox acts as the Funds’ investment
advisor and also provides the Funds with administrative and shareholder
services. Dodge & Cox is one of the oldest professional investment
management firms in the United States, having acted continuously as investment
managers since 1930. Dodge & Cox is located at 555 California
Street, 40th Floor, San Francisco, California 94104.
Dodge &
Cox’s activities are devoted to investment research and the supervision of
investment accounts for individuals and institutions. Dodge & Cox Stock
Fund and Dodge & Cox Balanced Fund each pay Dodge & Cox
an investment advisory fee which is payable monthly at the annual rate of 0.40%
of the average daily net asset value of the Fund. Dodge & Cox
Global Stock Fund and Dodge & Cox International Stock Fund each
pay Dodge & Cox an investment advisory fee which is payable
monthly at the annual rate of 0.50% of the average daily net asset value of the
Fund. Dodge & Cox Emerging Markets Stock Fund pays Dodge & Cox
an investment advisory fee which is payable monthly at the annual rate of 0.55%
of the average daily net asset value of the Fund. Dodge & Cox
Income Fund pays Dodge & Cox an investment advisory fee which is
payable monthly at the annual rate of 0.30% of the average daily net asset value
of the Fund. Dodge & Cox Global Bond Fund pays Dodge & Cox an
investment advisory fee which is payable monthly at the annual rate of 0.35% of
the average daily net asset value of the Fund.
Dodge &
Cox Stock Fund, Dodge & Cox Global Stock Fund, Dodge & Cox
International Stock Fund, Dodge & Cox Balanced
Fund,
Dodge & Cox Income Fund, and Dodge & Cox Global Bond Fund each
pay Dodge & Cox a fee for administrative and shareholder services which
is payable monthly at the annual rate of 0.10% of the average daily net asset
value of the Class I shares and 0.05% of the average daily net asset value
of the Class X shares. Dodge & Cox Emerging Markets Stock Fund
pays Dodge & Cox a fee for administrative and shareholder services
which is payable monthly at the annual rate of 0.05% of the average daily net
asset value of the Fund.
Until
April 30, 2026, Dodge & Cox has contractually agreed to reimburse
the Dodge & Cox Stock Fund for all ordinary expenses of the
Class X Shares to the extent necessary to maintain the ratio of total
annual operating expenses of the Class X shares to average net assets of
the Class X shares at 0.41%. Until April 30, 2026, Dodge &
Cox has contractually agreed to reimburse the Dodge & Cox Global Stock
Fund for all ordinary expenses of the Class X Shares to the extent
necessary to maintain the ratio of total annual operating expenses of the
Class X shares to average net assets of the Class X shares at 0.52%.
Until April 30, 2026, Dodge & Cox has contractually agreed to
reimburse the Dodge & Cox International Stock Fund for all ordinary
expenses of the Class X Shares to the extent necessary to maintain the
ratio of total annual operating expenses of the Class X shares to average
net assets of the Class X shares at 0.52%. Until April 30, 2026,
Dodge & Cox has contractually agreed to reimburse the Dodge &
Cox Balanced Fund for all ordinary expenses of the Class X Shares to the
extent necessary to maintain the ratio of total annual operating expenses of the
Class X shares to average net assets of the Class X shares at 0.42%.
Until April 30, 2026, Dodge & Cox has contractually agreed to
reimburse the Dodge & Cox Income Fund for all ordinary expenses of the
Class X Shares to the extent necessary to maintain the ratio of total
annual operating expenses of the Class X shares to average net assets of
the Class X shares at 0.33%. Until April 30, 2026, Dodge &
Cox has contractually agreed to reimburse the Dodge & Cox Global Bond
Fund for all ordinary expenses of the Class I Shares to the extent
necessary to maintain the ratio of total annual operating expenses of the
Class I shares to average net assets of the Class I shares at 0.45%
and all ordinary expenses of the Class X shares to the extent necessary to
maintain the ratio of total annual operating expenses of the Class X shares
to average net assets of the Class X shares at 0.37%. An expense
reimbursement agreement has been in effect since the Global Bond Fund’s
inception, without which returns for the Fund would have been lower. Until
April 30, 2026, Dodge & Cox has contractually agreed to reimburse
the Dodge & Cox Emerging Markets Stock Fund for all ordinary expenses
to the extent necessary to maintain the ratio of total operating expenses to
average net assets at 0.70%. An expense reimbursement agreement has been in
effect since the Emerging Markets Stock Fund’s inception, without which returns
for the Fund would have been lower. Each reimbursement agreement will
automatically renew for subsequent three-year terms unless terminated with at
least 30 days’ written notice by either party prior to the end of the
then-current term.
For
purposes of the foregoing expense reimbursement arrangements, ordinary expenses
shall not include nonrecurring shareholder account fees, fees and expenses
associated with Fund shareholder meetings, fees on portfolio transactions such
as
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
59 |
exchange
fees, dividends and interest on short positions, fees and expenses of pooled
investment vehicles that are held by the Fund, interest, taxes, brokerage fees
and commissions, other expenditures which are capitalized in accordance with
generally accepted accounting principles, and other non-routine expenses or
extraordinary expenses not incurred in the ordinary course of the Fund’s
business, such as litigation expenses.
A
discussion regarding the basis for the Board of Trustees approving the Funds’
Investment Management Agreements is available in each Fund’s Annual Report,
which covers the 12‑month period ending December 31 each year.
The
Board of Trustees’ primary responsibility is oversight of the management of each
Fund for the benefit of its shareholders, not day-to-day management. The Board
authorizes the Trust to enter into service agreements with Dodge & Cox
and other service providers in order to provide necessary or desirable services
on behalf of the Trust and the Funds. Shareholders are not parties to or
third-party beneficiaries of such service agreements. Neither this
prospectus nor a Fund’s summary prospectus, the SAI, any documents filed as
exhibits to the Trust’s registration statement, nor any other communications,
disclosure documents or regulatory filings from or on behalf of the Trust or a
Fund creates a contract between or among any shareholder of a Fund, on the one
hand, and the Trust, a Fund, a service provider to the Trust or a Fund, and/or
the Trustees or officers of the Trust, on the other hand. The Board of
Trustees (or the Trust and its officers, service providers or other delegates
acting under authority of the Board) may amend or use a new prospectus, summary
prospectus, or SAI with respect to a Fund or the Trust, and/or amend, file
and/or issue any other communications, disclosure documents, or regulatory
filings, and may amend or enter into any contracts to which the Trust or a Fund
is a party, and interpret or amend the investment objective(s), policies,
restrictions, and contractual provisions applicable to any Fund, without
shareholder input or approval, except in circumstances in which shareholder
approval is specifically required by law (such as changes to fundamental
investment restrictions) or where a shareholder approval requirement is
specifically disclosed in the Trust’s then-current prospectus or
SAI.
Wholly-Owned Subsidiaries The
Dodge & Cox Global Stock Fund, Dodge & Cox
International Stock Fund, and Dodge & Cox Global Bond Fund may invest
in the Dodge & Cox Global Stock Fund Cayman, Ltd.,
Dodge & Cox International Stock Fund Cayman, Ltd., and
Dodge & Cox Global Bond Fund Cayman, Ltd., respectively, each of which
is a wholly owned subsidiary of the respective Fund organized under the laws of
the Cayman Islands (each a “Cayman Subsidiary”). Each Fund may invest in its
Cayman Subsidiary to gain exposure to non-U.S. registered securities. Each
Cayman Subsidiary has entered into a separate Investment Management Agreement
with Dodge & Cox for the management and administration of the
Cayman Subsidiary’s portfolio. Dodge & Cox is not compensated by a
Cayman Subsidiary for the services it provides to the Cayman Subsidiary. As
described above, Dodge & Cox receives a management fee from each
Fund based on the average daily net assets of the Fund, which includes any
amounts invested in a Cayman Subsidiary. The Dodge & Cox Global
Stock Fund, Dodge & Cox International Stock Fund, and
Dodge & Cox
Global Bond Fund each bear the operating expenses of the relevant Cayman
Subsidiary.
Principal Underwriter. Foreside Fund Services,
LLC, a wholly owned subsidiary of Foreside Financial Group, LLC (d/b/a ACA
Group) (“Foreside”) a member of the Financial Industry Regulatory Authority
(“FINRA”), is the Trust’s principal underwriter and acts as the Trust’s
distributor in connection with the offering of Fund shares. Foreside may enter
into agreements with banks, broker-dealers, or other financial intermediaries
through which investors may purchase or redeem shares. The SAI provides
additional information about Foreside and its distribution agreement with the
Trust.
|
| |
PAGE 60 ∎ DODGE & COX FUNDS |
|
|
Investment Committees
U.S. Equity Investment Committee
The
Dodge & Cox Stock Fund’s investments are managed by Dodge &
Cox’s U.S. Equity Investment Committee (“USEIC”), and in general no single USEIC member
is primarily responsible for making investment recommendations for the Stock
Fund. USEIC consists of the following seven members:
|
|
|
|
|
| |
Committee Member |
|
Position(s) with Funds |
|
Business Experience During the Past Five
Years |
|
Years with Dodge & Cox |
David C. Hoeft |
|
Vice
President |
|
Senior
Vice President and Director of Dodge & Cox; Chief Investment
Officer (since 2021), Associate Director of Research (until 2019), and
member of U.S. Equity Investment Committee (“USEIC”), GEIC, and EMEIC
(since January 2022) |
|
31 |
Steven C. Voorhis |
|
Vice
President |
|
Senior
Vice President of Dodge & Cox; Director of Research (since April
2021); Associate Director of Research (2019-2021), Research Analyst, and
member of USEIC and GEIC |
|
28 |
Philippe Barret, Jr. |
|
Vice
President |
|
Senior
Vice President and Director of Dodge & Cox (since 2022); Research
Analyst and member of USEIC and BFIC (since May 2022) |
|
20 |
Kathleen G. McCarthy |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of USEIC |
|
17 |
Karol Marcin |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of USEIC
(since 2018) and GEIC |
|
24 |
Benjamin V. Garosi |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of USEIC
(since 2019) and BFIC (since May 2022) |
|
15 |
Karim Fakhry |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of USEIC
(since 2021) |
|
19 |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
61 |
Global Equity Investment Committee
The
Dodge & Cox Global Stock Fund’s investments are managed by
Dodge & Cox’s Global Equity Investment Committee (“GEIC”), and in general no single GEIC member is
primarily responsible for making investment recommendations for the Fund. GEIC
consists of the following six members:
|
|
|
|
|
| |
Committee Member |
|
Position(s) with Funds |
|
Business Experience During the Past Five
Years |
|
Years with Dodge & Cox |
David C. Hoeft |
|
Vice
President |
|
Senior
Vice President and Director of Dodge & Cox; Chief Investment
Officer (since 2022), Associate Director of Research (until 2019), and
member of USEIC, GEIC, and EMEIC (since 2022) |
|
31 |
Roger G. Kuo |
|
Senior
Vice President |
|
President
(since 2022) and Director (since 2016) of Dodge & Cox; Research
Analyst and member of GEIC and IEIC |
|
26 |
Steven C. Voorhis |
|
Vice
President |
|
Senior
Vice President of Dodge & Cox; Director of Research (since April
2021); Associate Director of Research (2019-2021), Research Analyst, and
member of USEIC and GEIC |
|
28 |
Karol Marcin |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of USEIC
(since 2018) and GEIC |
|
24 |
Lily S. Beischer |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of GEIC |
|
23 |
Raymond J. Mertens |
|
Vice
President |
|
Senior
Vice President and Director (since 2022) of Dodge & Cox; Research
Analyst and member of GEIC and IEIC |
|
21 |
|
| |
PAGE 62 ∎ DODGE & COX FUNDS |
|
|
International Equity Investment Committee
The
Dodge & Cox International Stock Fund’s investments are managed by
Dodge & Cox’s International Equity Investment Committee (“IEIC”), and in general no single IEIC member is
primarily responsible for making investment recommendations for the Fund. IEIC
consists of the following six members:
|
|
|
|
|
| |
Committee Member |
|
Position(s) with Funds |
|
Business Experience During the Past Five
Years |
|
Years with Dodge & Cox |
Roger G. Kuo |
|
Senior
Vice President |
|
President
(since 2022) and Director of Dodge & Cox; Research Analyst and
member of GEIC and IEIC |
|
26 |
Mario C. DiPrisco |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of IEIC and
EMEIC |
|
26 |
Englebert T. Bangayan |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of IEIC |
|
22 |
Raymond J. Mertens |
|
Vice
President |
|
Senior
Vice President and Director (since 2022) of Dodge & Cox; Research
Analyst and member of IEIC (since 2018) and GEIC (since 2021) |
|
21 |
Paritosh Somani |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of IEIC
(since 2021) |
|
17 |
Sophie Chen |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of EMEIC (since
2021) |
|
13 |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
63 |
Emerging Markets Equity Investment Committee
The
Dodge & Cox Emerging Markets Stock Fund’s investments are managed by
Dodge & Cox’s Emerging Markets Equity Investment Committee (“EMEIC”), and in general no single EMEIC member
is primarily responsible for making investment recommendations for the Fund.
EMEIC consists of the following five members:
|
|
|
|
|
| |
Committee Member |
|
Position(s) with Funds |
|
Business Experience During the Past Five
Years |
|
Years with Dodge & Cox |
David C. Hoeft |
|
Vice
President |
|
Senior
Vice President and Director of Dodge & Cox; Chief Investment
Officer (since 2022), Associate Director of Research (until 2019), and
member of USEIC, GEIC, and BFIC (since May 2022) |
|
31 |
Mario C. DiPrisco |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of
International Equity Investment Committee (“IEIC”) |
|
26 |
Sophie Chen |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst |
|
13 |
Rameez Dossa |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst |
|
12 |
Robert S. Turley |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of BFIC
(since May 2022) |
|
12 |
|
| |
PAGE 64 ∎ DODGE & COX FUNDS |
|
|
Balanced Fund Investment Committee
The
Dodge & Cox Balanced Fund’s investments are managed by Dodge &
Cox’s Balanced Fund Investment Committee (“BFIC”), and in general no single BFIC member is
primarily responsible for making investment recommendations for the Fund. BFIC
consists of the following seven members:
|
|
|
|
|
| |
Committee Member |
|
Position(s) with Funds |
|
Business Experience During the Past Five
Years |
|
Years with Dodge & Cox |
David C. Hoeft |
|
Vice
President |
|
Senior
Vice President and Director of Dodge & Cox; Chief Investment
Officer (since 2022), Associate Director of Research (until 2019), and
member of USEIC, and GEIC |
|
31 |
Lucinda I. Johns |
|
Vice
President |
|
Senior
Vice President and Director (since 2022) of Dodge & Cox; Director
of Fixed Income (since 2024), Research Analyst, and member of USFIIC and
GFIIC |
|
22 |
Phillipe Barret, Jr. |
|
Vice
President |
|
Senior
Vice President and Director (since 2022) of Dodge & Cox; Research
Analyst, and member of and BFIC (since May 2022) |
|
21 |
Benjamin V. Garosi |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, and member of
USEIC |
|
15 |
Matthew B. Schefer |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, and member of GFIIC
(since 2018) |
|
16 |
Robert S. Turley |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst |
|
12 |
Thomas Y. Powers |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst |
|
8 |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
65 |
U.S. Fixed Income Investment Committee
The
Dodge & Cox Income Fund’s investments are managed by Dodge &
Cox’s U.S. Fixed Income Investment Committee (“USFIIC”), and in general no single USFIIC
member is primarily responsible for making investment recommendations for the
Income Fund. USFIIC consists of the following eight members:
|
|
|
|
|
| |
Committee Member |
|
Position(s) with Funds |
|
Business Experience During the Past Five
Years |
|
Years with Dodge & Cox |
Dana M. Emery |
|
Chair,
President and Trustee |
|
Chair
(since 2022), Chief Executive Officer, and Director of
Dodge & Cox; Co-Director of Fixed Income (until 2020), and
member of USFIIC and GFIIC |
|
41 |
James H. Dignan |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, and member of USFIIC
and GFIIC |
|
24 |
Anthony J. Brekke |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, and member of
USFIIC |
|
21 |
Adam S. Rubinson |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, and member of USFIIC
and GFIIC |
|
22 |
Lucinda I. Johns |
|
Vice
President |
|
Senior
Vice President and Director (since 2022) of Dodge & Cox; Director
of Fixed Income (since 2024), Research Analyst, and member of BFIC (since
May 2022), USFIIC, and GFIIC |
|
22 |
Nils M. Reuter |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, Trader, and member of
USFIIC (since 2018) |
|
21 |
Michael Kiedel |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst and member of USFIIC
(since 2018) |
|
16 |
|
| |
PAGE 66 ∎ DODGE & COX FUNDS |
|
|
Global Fixed Income Investment Committee
The
Dodge & Cox Global Bond Fund’s investments are managed by
Dodge & Cox’s Global Fixed Income Investment Committee (“GFIIC”), and in general no single GFIIC member
is primarily responsible for making investment recommendations for the Fund. The
GFIIC consists of the following seven members:
|
|
|
|
|
| |
Committee Member |
|
Position(s) with Funds |
|
Business Experience During the Past Five
Years |
|
Years
with Dodge & Cox |
Dana M. Emery |
|
Chair,
President and Trustee |
|
Chair
(since 2022), Chief Executive Officer, and Director of
Dodge & Cox; Co-Director of Fixed Income (until 2020), and
member of USFIIC and GFIIC |
|
41 |
James H. Dignan |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, and member of USFIIC
and GFIIC |
|
25 |
Adam S. Rubinson |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, and member of USFIIC
and GFIIC |
|
22 |
Lucinda I. Johns |
|
Vice
President |
|
Senior
Vice President and Director (since 2022) of Dodge & Cox; Director
of Fixed Income (since 2024), Research Analyst, and member of BFIC (since
May 2022), USFIIC, and GFIIC |
|
22 |
Matthew B. Schefer |
|
Vice
President |
|
Vice
President of Dodge & Cox; Research Analyst, and member of BFIC
(since May 2022) and GFIIC (since 2018) |
|
16 |
Jose F. Ursua |
|
Vice
President |
|
Vice
President of Dodge & Cox; Macro Research Analyst, and member of
GFIIC (since 2020) |
|
9 |
Mimi Yang |
|
Vice
President |
|
Vice
President and Macro Research Analyst and member of GFIIC (since May
2023) |
|
10 |
The
SAI provides additional information about the Dodge & Cox investment
committee members’ compensation, other accounts managed by the members, and the
members’ ownership of the Funds.
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
67 |
Investment Information and Shareholder Services
|
| |
Statements and Reports |
|
As a shareholder of the Fund, you will receive
the following statements and reports: |
Confirmation Statement |
|
Sent
each time you buy, sell, or exchange shares; confirms the trade date and
the amount of your transaction, except purchases through the Automatic
Investment Plan and dividend and capital gain distributions, which will be
confirmed only on your account statement. |
Account Statement |
|
Provided
quarterly; shows the market value of your account at the close of the
statement period, as well as distributions, purchases, sales, and
exchanges for the current calendar year. You should contact Client
Services immediately regarding any errors or discrepancies on the
statement confirming your transaction(s). The statement will be deemed
correct if we do not hear from you within 90 days. |
Fund Financial Reports |
|
Published
in February and August. If you have not previously opted for electronic
delivery, paper copies will be mailed to you beginning with the 2024
Semi-Annual reports. The reports will be available to you on the
Dodge & Cox website (dodgeandcox.com).
If
you wish to receive electronic copies of all future shareholder reports,
please contact us at 800‑621‑3979. Reports will be provided to you free of
charge. |
Tax Statements |
|
Generally
mailed annually by January 31st; reports previous year’s dividend
distributions, proceeds from the sale of shares, and distributions from
IRAs. |
The
Funds offer you the following services: (call Client Services at 800-621-3979,
write, or visit the Funds’ website at dodgeandcox.com for forms and additional
information.)
Electronic Delivery
of Reports and Prospectus Your Fund
reports and the Funds’ prospectus can be delivered to you electronically, if you
prefer. If you are a registered user of dodgeandcox.com, you can consent to the
electronic delivery of Fund reports by logging on and changing your preferences.
You can revoke your electronic consent at any time.
Web
Access Information on the Funds is
available at dodgeandcox.com. On the site you can:
∎ |
|
View
your account balances and recent transactions; |
∎ |
|
View
or download your account statements, confirmation statements, and tax
forms; |
∎ |
|
Purchase,
redeem, and exchange Fund shares; |
∎ |
|
Learn
more about Dodge & Cox’s approach to
investing; |
∎ |
|
Review
the objectives, strategies, characteristics, and risks of the
Funds; |
∎ |
|
View
the Funds’ daily NAVs and performance; |
∎ |
|
Download
or order the Funds’ prospectus and Account Applications, shareholder
reports, IRA information, and other forms; and |
∎ |
|
Sign
up for electronic delivery of the Funds’ prospectus, shareholder reports,
proxy materials, account statements, and tax
forms. |
Telephone
Services The Funds provide toll-free
access (800‑621‑3979) to Fund and account information 24 hours a day,
7 days a week. The system provides total returns, share prices, and price
changes for the Funds and gives your account balances and history (e.g., last
transaction, latest dividend distribution). For certain account types, you can
purchase, redeem, and exchange Fund shares.
Automatic
Investment Plan You may make regular
monthly, quarterly, semi-annual, or annual investments of $100 or more through
automatic deductions from your bank account.
Automatic
Redemption Plan If you own $10,000 or
more of a Fund’s shares, you may receive regular monthly, quarterly,
semi-annual, or annual payments of $50 or more. Shares will be redeemed
automatically at NAV to make the withdrawal payments.
Automatic Periodic
Rebalancing You may set a preferred Fund
allocation online indicating the percent of your account to invest in each
available Fund and the frequency with which to rebalance the account. Select a
periodic schedule of quarterly, semi-annual, or annual rebalancing.
Individual
Retirement Account (IRA) If you have
earned income or are entitled to certain distributions from eligible retirement
plans, you may make or authorize contributions to your own Individual Retirement
Account. The Funds have traditional IRA and Roth IRA Plans available for
shareholders of the Funds.
Important
Note: The services described above may not be available for accounts
held by financial intermediaries or through certain retirement plans. If
you are investing in such a manner, you should contact your plan
administrator/trustee or financial intermediary about what services they offer
and with questions about your account.
|
| |
PAGE 68 ∎ DODGE & COX FUNDS |
|
|
Financial Highlights
The
financial highlights table is intended to help you understand each Fund’s
financial performance for the past five years (or, if shorter, the period of the
Fund’s operations). The then-outstanding shares of each Fund (except the
Dodge & Cox Emerging Markets Stock Fund) were redesignated as
Class I shares as of May 1, 2022. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (before taxes, and assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with each Fund’s financial statements, are included in the
Annual Report, which is available upon request and on the Funds’ website at
dodgeandcox.com.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox Stock Fund |
|
Year Ended December
31, |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Class
I |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$215.71 |
|
|
|
$245.26 |
|
|
|
$192.56 |
|
|
|
$193.76 |
|
|
|
$172.81 |
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
3.61 |
|
|
|
3.24 |
|
|
|
2.90 |
|
|
|
3.41 |
(a) |
|
|
3.65 |
|
Net
realized and unrealized gain (loss) |
|
|
33.39 |
|
|
|
(20.99 |
) |
|
|
57.69 |
|
|
|
8.60 |
|
|
|
37.98 |
|
| |
|
|
|
Total
from investment operations |
|
|
37.00 |
|
|
|
(17.75 |
) |
|
|
60.59 |
|
|
|
12.01 |
|
|
|
41.63 |
|
| |
|
|
|
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(3.54 |
) |
|
|
(3.08 |
) |
|
|
(3.07 |
) |
|
|
(3.36 |
) |
|
|
(3.65 |
) |
Net
realized gain |
|
|
(5.62 |
) |
|
|
(8.72 |
) |
|
|
(4.82 |
) |
|
|
(9.85 |
) |
|
|
(17.03 |
) |
| |
|
|
|
Total
distributions |
|
|
(9.16 |
) |
|
|
(11.80 |
) |
|
|
(7.89 |
) |
|
|
(13.21 |
) |
|
|
(20.68 |
) |
| |
|
|
|
Net
asset value, end of year |
|
|
$243.55 |
|
|
|
$215.71 |
|
|
|
$245.26 |
|
|
|
$192.56 |
|
|
|
$193.76 |
|
| |
|
|
|
Total
return |
|
|
17.49 |
% |
|
|
(7.22 |
)% |
|
|
31.68 |
% |
|
|
7.16 |
% |
|
|
24.80 |
% |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (millions) |
|
|
$63,656 |
|
|
|
$67,386 |
|
|
|
$96,695 |
|
|
|
$70,674 |
|
|
|
$74,585 |
|
Ratio
of expenses to average net assets |
|
|
0.51 |
% |
|
|
0.51 |
% |
|
|
0.52 |
% |
|
|
0.52 |
% |
|
|
0.52 |
% |
Ratio
of net investment income to average net assets |
|
|
1.57 |
% |
|
|
1.43 |
% |
|
|
1.25 |
% |
|
|
1.98 |
%(a) |
|
|
1.93 |
% |
Portfolio
turnover rate |
|
|
12 |
% |
|
|
16 |
% |
|
|
10 |
% |
|
|
21 |
% |
|
|
17 |
% |
|
|
|
|
| |
Class X(b) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$215.73 |
|
|
|
$227.09 |
|
|
|
|
| |
|
|
| |
|
| |
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
3.63 |
|
|
|
2.15 |
|
|
|
|
| |
|
|
| |
|
| |
Net
realized and unrealized gain (loss) |
|
|
33.60 |
|
|
|
(3.81 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
from investment operations |
|
|
37.23 |
|
|
|
(1.66 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(3.78 |
) |
|
|
(2.45 |
) |
|
|
|
| |
|
|
| |
|
| |
Net
realized gain |
|
|
(5.62 |
) |
|
|
(7.25 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
distributions |
|
|
(9.40 |
) |
|
|
(9.70 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Net
asset value, end of year |
|
|
$243.56 |
|
|
|
$215.73 |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
return |
|
|
17.59 |
% |
|
|
(0.61 |
)% |
|
|
|
| |
|
|
| |
|
| |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (millions) |
|
|
$37,377 |
|
|
|
$20,998 |
|
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets |
|
|
0.41 |
% |
|
|
0.41 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets, before reimbursement by investment
manager |
|
|
0.46 |
% |
|
|
0.46 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of net investment income to average net assets |
|
|
1.68 |
% |
|
|
1.45 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate |
|
|
12 |
% |
|
|
16 |
% |
|
|
|
| |
|
|
| |
|
| |
(a) |
|
Net
investment income per share includes significant amounts received for EU
reclaims related to prior years, which amounted to approximately $0.20 per
share. Excluding such amounts, the ratio of net investment income to
average net assets would have been 1.87%. |
(b) |
|
For
2022, the period covers 5/2/2022 (commencement of operations) to
12/31/2022 |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox Global Stock Fund
|
|
Year Ended December
31, |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Class
I |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$12.61 |
|
|
|
$14.44 |
|
|
|
$13.30 |
|
|
|
$12.71 |
|
|
|
$11.03 |
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.25 |
|
|
|
0.24 |
|
|
|
0.23 |
|
|
|
0.17 |
(a) |
|
|
0.27 |
|
Net
realized and unrealized gain (loss) |
|
|
2.30 |
|
|
|
(1.10 |
) |
|
|
2.46 |
|
|
|
0.59 |
|
|
|
2.35 |
|
| |
|
|
|
Total
from investment operations |
|
|
2.55 |
|
|
|
(0.86 |
) |
|
|
2.69 |
|
|
|
0.76 |
|
|
|
2.62 |
|
| |
|
|
|
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.24 |
) |
|
|
(0.21 |
) |
|
|
(0.27 |
) |
|
|
(0.17 |
) |
|
|
(0.34 |
) |
Net
realized gain |
|
|
— |
|
|
|
(0.76 |
) |
|
|
(1.28 |
) |
|
|
— |
|
|
|
(0.60 |
) |
| |
|
|
|
Total
distributions |
|
|
(0.24 |
) |
|
|
(0.97 |
) |
|
|
(1.55 |
) |
|
|
(0.17 |
) |
|
|
(0.94 |
) |
| |
|
|
|
Net
asset value, end of year |
|
|
$14.92 |
|
|
|
$12.61 |
|
|
|
$14.44 |
|
|
|
$13.30 |
|
|
|
$12.71 |
|
| |
|
|
|
Total
return |
|
|
20.26 |
% |
|
|
(5.80 |
)% |
|
|
20.75 |
% |
|
|
6.02 |
% |
|
|
23.85 |
% |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (millions) |
|
|
$10,217 |
|
|
|
$9,681 |
|
|
|
$10,487 |
|
|
|
$10,384 |
|
|
|
$10,296 |
|
Ratio
of expenses to average net assets |
|
|
0.62 |
% |
|
|
0.62 |
% |
|
|
0.62 |
% |
|
|
0.62 |
% |
|
|
0.62 |
% |
Ratio
of net investment income to average net assets |
|
|
1.79 |
% |
|
|
1.72 |
% |
|
|
1.34 |
% |
|
|
1.57 |
%(a) |
|
|
2.13 |
% |
Portfolio
turnover rate |
|
|
20 |
% |
|
|
25 |
% |
|
|
24 |
% |
|
|
34 |
% |
|
|
22 |
% |
|
|
|
|
| |
Class X(b) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$12.61 |
|
|
|
$13.83 |
|
|
|
|
| |
|
|
| |
|
| |
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.26 |
|
|
|
0.08 |
|
|
|
|
| |
|
|
| |
|
| |
Net
realized and unrealized gain (loss) |
|
|
2.31 |
|
|
|
(0.32 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
from investment operations |
|
|
2.57 |
|
|
|
(0.24 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.26 |
) |
|
|
(0.22 |
) |
|
|
|
| |
|
|
| |
|
| |
Net
realized gain |
|
|
— |
|
|
|
(0.76 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
distributions |
|
|
(0.26 |
) |
|
|
(0.98 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Net
asset value, end of year |
|
|
$14.92 |
|
|
|
$12.61 |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
return |
|
|
20.38 |
% |
|
|
(1.58 |
)% |
|
|
|
| |
|
|
| |
|
| |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (millions) |
|
|
$669 |
|
|
|
$390 |
|
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets |
|
|
0.52 |
% |
|
|
0.52 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets, before reimbursement by investment
manager |
|
|
0.57 |
% |
|
|
0.57 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of net investment income to average net assets |
|
|
1.86 |
% |
|
|
1.02 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate |
|
|
20 |
% |
|
|
25 |
% |
|
|
|
| |
|
|
| |
|
| |
(a) |
|
Net
investment income per share includes significant amounts received for EU
reclaims related to prior years, which amounted to approximately $0.01 per
share. Excluding such amounts, the ratio of net investment income to
average net assets would have been 1.47%. |
(b) |
|
For
2022, the period covers 5/2/2022 (commencement of operations) to
12/31/2022 |
|
| |
PAGE 70 ∎ DODGE & COX FUNDS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox International Stock Fund
|
|
Year Ended December
31, |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Class
I |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$43.11 |
|
|
|
$47.29 |
|
|
|
$43.70 |
|
|
|
$43.60 |
|
|
|
$36.91 |
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
1.18 |
|
|
|
1.16 |
|
|
|
1.04 |
(a) |
|
|
0.95 |
(b) |
|
|
1.25 |
|
Net
realized and unrealized gain (loss) |
|
|
6.00 |
|
|
|
(4.38 |
) |
|
|
3.73 |
|
|
|
(0.04 |
) |
|
|
7.15 |
|
| |
|
|
|
Total
from investment operations |
|
|
7.18 |
|
|
|
(3.22 |
) |
|
|
4.77 |
|
|
|
0.91 |
|
|
|
8.40 |
|
| |
|
|
|
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(1.13 |
) |
|
|
(0.96 |
) |
|
|
(1.18 |
) |
|
|
(0.81 |
) |
|
|
(1.71 |
) |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
Total
distributions |
|
|
(1.13 |
) |
|
|
(0.96 |
) |
|
|
(1.18 |
) |
|
|
(0.81 |
) |
|
|
(1.71 |
) |
| |
|
|
|
Net
asset value, end of year |
|
|
$49.16 |
|
|
|
$43.11 |
|
|
|
$47.29 |
|
|
|
$43.70 |
|
|
|
$43.60 |
|
| |
|
|
|
Total
return |
|
|
16.70 |
% |
|
|
(6.78 |
)% |
|
|
11.02 |
% |
|
|
2.10 |
%(b) |
|
|
22.78 |
% |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (millions) |
|
|
$40,204 |
|
|
|
$37,508 |
|
|
|
$44,085 |
|
|
|
$40,789 |
|
|
|
$50,228 |
|
Ratio
of expenses to average net assets |
|
|
0.62 |
% |
|
|
0.62 |
% |
|
|
0.62 |
% |
|
|
0.63 |
% |
|
|
0.63 |
% |
Ratio
of net investment income to average net assets |
|
|
2.61 |
% |
|
|
2.68 |
% |
|
|
2.15 |
%(a) |
|
|
2.39 |
%(b) |
|
|
2.85 |
% |
Portfolio
turnover rate |
|
|
14 |
% |
|
|
12 |
% |
|
|
18 |
% |
|
|
20 |
% |
|
|
15 |
% |
|
|
|
|
| |
Class X(c) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$43.11 |
|
|
|
$44.59 |
|
|
|
|
| |
|
|
| |
|
| |
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
1.25 |
|
|
|
0.23 |
|
|
|
|
| |
|
|
| |
|
| |
Net
realized and unrealized gain (loss) |
|
|
5.97 |
|
|
|
(0.72 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
from investment operations |
|
|
7.22 |
|
|
|
(0.49 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(1.17 |
) |
|
|
(0.99 |
) |
|
|
|
| |
|
|
| |
|
| |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
distributions |
|
|
(1.17 |
) |
|
|
(0.99 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Net
asset value, end of year |
|
|
$49.16 |
|
|
|
$43.11 |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
return |
|
|
16.81 |
% |
|
|
(1.07 |
)% |
|
|
|
| |
|
|
| |
|
| |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (millions) |
|
|
$7,151 |
|
|
|
$3,769 |
|
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets |
|
|
0.52 |
% |
|
|
0.52 |
%(d) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets, before reimbursement by investment
manager |
|
|
0.57 |
% |
|
|
0.57 |
%(d) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of net investment income to average net assets |
|
|
2.66 |
% |
|
|
1.66 |
%(d) |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate |
|
|
14 |
% |
|
|
12 |
% |
|
|
|
| |
|
|
| |
|
| |
(a) |
|
Net
investment income per share includes significant amounts received for EU
reclaims related to prior years, which amounted to approximately $0.13 per
share. Excluding such amounts, the ratio of net investment income to
average net assets would have been 1.87%. |
(b) |
|
Net
investment income per share includes significant amounts received for EU
reclaims related to prior years, which amounted to approximately $0.28 per
share. Excluding such amounts, the ratio of net investment income to
average net assets would have been 1.73% and total return would have been
approximately 1.55%. |
(c) |
|
For
2022, the period covers 5/2/2022 (commencement of operations) to
12/31/2022 |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
71 |
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox Emerging Markets Stock Fund
|
|
Year Ended December 31, |
|
|
Period from May 11, 2021 (Inception) to
December 31, 2021 |
|
|
2023 |
|
|
2022 |
|
Net
asset value, beginning of year |
|
|
$7.42 |
|
|
|
$8.89 |
|
|
|
$10.00 |
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.14 |
|
|
|
0.14 |
|
|
|
0.07 |
|
Net
realized and unrealized gain (loss) |
|
|
0.85 |
|
|
|
(1.47 |
) |
|
|
(1.06 |
) |
| |
|
|
|
Total
from investment operations |
|
|
0.99 |
|
|
|
(1.33 |
) |
|
|
(0.99 |
) |
| |
|
|
|
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.16 |
) |
|
|
(0.14 |
) |
|
|
(0.12 |
) |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
Total
distributions |
|
|
(0.16 |
) |
|
|
(0.14 |
) |
|
|
(0.12 |
) |
| |
|
|
|
Net
asset value, end of year |
|
|
$8.25 |
|
|
|
$7.42 |
|
|
|
$8.89 |
|
| |
|
|
|
Total
return |
|
|
13.37 |
% |
|
|
(14.91 |
)% |
|
|
(9.82 |
)% |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (millions) |
|
|
$296 |
|
|
|
$173 |
|
|
|
$161 |
|
Ratio
of expenses to average net assets |
|
|
0.70 |
% |
|
|
0.70 |
% |
|
|
0.70 |
%(a) |
Ratio
of expenses to average net assets, before reimbursement by investment
manager |
|
|
1.08 |
% |
|
|
1.25 |
% |
|
|
1.52 |
%(a) |
Ratio
of net investment income to average net assets |
|
|
2.13 |
% |
|
|
2.22 |
% |
|
|
1.61 |
%(a) |
Portfolio
turnover rate |
|
|
22 |
% |
|
|
33 |
% |
|
|
7 |
% |
|
| |
PAGE 72 ∎ DODGE & COX FUNDS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox Balanced Fund |
|
Year Ended December
31, |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Class
I |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$93.35 |
|
|
|
$109.41 |
|
|
|
$101.78 |
|
|
|
$101.60 |
|
|
|
$93.27 |
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
2.68 |
|
|
|
1.90 |
|
|
|
1.74 |
|
|
|
2.19 |
(a) |
|
|
2.48 |
|
Net
realized and unrealized gain (loss) |
|
|
9.90 |
|
|
|
(9.86 |
) |
|
|
17.51 |
|
|
|
5.03 |
|
|
|
15.35 |
|
| |
|
|
|
Total
from investment operations |
|
|
12.58 |
|
|
|
(7.96 |
) |
|
|
19.25 |
|
|
|
7.22 |
|
|
|
17.83 |
|
| |
|
|
|
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(2.66 |
) |
|
|
(1.91 |
) |
|
|
(1.75 |
) |
|
|
(2.22 |
) |
|
|
(2.46 |
) |
Net
realized gain |
|
|
(2.04 |
) |
|
|
(6.19 |
) |
|
|
(9.87 |
) |
|
|
(4.82 |
) |
|
|
(7.04 |
) |
| |
|
|
|
Total
distributions |
|
|
(4.70 |
) |
|
|
(8.10 |
) |
|
|
(11.62 |
) |
|
|
(7.04 |
) |
|
|
(9.50 |
) |
| |
|
|
|
Net
asset value, end of year |
|
|
$101.23 |
|
|
|
$93.35 |
|
|
|
$109.41 |
|
|
|
$101.78 |
|
|
|
$101.60 |
|
| |
|
|
|
Total
return |
|
|
13.76 |
% |
|
|
(7.28 |
)% |
|
|
19.28 |
% |
|
|
7.85 |
% |
|
|
19.62 |
% |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (millions) |
|
|
$12,548 |
|
|
|
$12,810 |
|
|
|
$15,320 |
|
|
|
$14,110 |
|
|
|
$15,747 |
|
Ratio
of expenses to average net assets |
|
|
0.52 |
% |
|
|
0.52 |
% |
|
|
0.52 |
% |
|
|
0.53 |
% |
|
|
0.53 |
% |
Ratio
of net investment income to average net assets |
|
|
2.80 |
% |
|
|
2.03 |
% |
|
|
1.51 |
% |
|
|
2.29 |
%(a) |
|
|
2.46 |
% |
Portfolio
turnover rate |
|
|
34 |
% |
|
|
59 |
% |
|
|
49 |
% |
|
|
54 |
% |
|
|
35 |
% |
Portfolio
turnover rate excluding TBA rolls(b) |
|
|
34 |
% |
|
|
41 |
% |
|
|
31 |
% |
|
|
50 |
% |
|
|
32 |
% |
|
|
|
|
| |
Class X(c) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$93.37 |
|
|
|
$101.25 |
|
|
|
|
| |
|
|
| |
|
| |
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
2.58 |
|
|
|
1.43 |
|
|
|
|
| |
|
|
| |
|
| |
Net
realized and unrealized gain (loss) |
|
|
10.10 |
|
|
|
(2.32 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
from investment operations |
|
|
12.68 |
|
|
|
(0.89 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(2.77 |
) |
|
|
(1.54 |
) |
|
|
|
| |
|
|
| |
|
| |
Net
realized gain |
|
|
(2.04 |
) |
|
|
(5.45 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
distributions |
|
|
(4.81 |
) |
|
|
(6.99 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Net
asset value, end of year |
|
|
$101.24 |
|
|
|
$93.37 |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
return |
|
|
13.88 |
% |
|
|
(0.78 |
)% |
|
|
|
| |
|
|
| |
|
| |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (millions) |
|
|
$1,571 |
|
|
|
$700 |
|
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets |
|
|
0.42 |
% |
|
|
0.41 |
%(d) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets, before reimbursement by investment
manager |
|
|
0.47 |
% |
|
|
0.47 |
%(d) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of net investment income to average net assets |
|
|
2.94 |
% |
|
|
2.42 |
%(d) |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate |
|
|
34 |
% |
|
|
59 |
% |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate excluding TBA rolls(b) |
|
|
34 |
% |
|
|
41 |
% |
|
|
|
| |
|
|
| |
|
| |
(a) |
|
Net
investment income per share includes significant amounts received for EU
reclaims related to prior years, which amounted to approximately $0.11 per
share. Excluding such amounts, the ratio of net investment income to
average net assets would have been 2.17%. |
(b) |
|
See
Note 1 regarding To-Be-Announced securities |
(c) |
|
For
2022, the period covers 5/2/2022 (commencement of operations) to
12/31/2022 |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox Income Fund |
|
Year Ended December
31, |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Class
I |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$12.19 |
|
|
|
$14.06 |
|
|
|
$14.65 |
|
|
|
$14.03 |
|
|
|
$13.26 |
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.50 |
|
|
|
0.34 |
|
|
|
0.27 |
|
|
|
0.35 |
|
|
|
0.44 |
|
Net
realized and unrealized gain (loss) |
|
|
0.42 |
|
|
|
(1.87 |
) |
|
|
(0.40 |
) |
|
|
0.96 |
|
|
|
0.84 |
|
| |
|
|
|
Total
from investment operations |
|
|
0.92 |
|
|
|
(1.53 |
) |
|
|
(0.13 |
) |
|
|
1.31 |
|
|
|
1.28 |
|
| |
|
|
|
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.49 |
) |
|
|
(0.34 |
) |
|
|
(0.27 |
) |
|
|
(0.36 |
) |
|
|
(0.43 |
) |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
(0.19 |
) |
|
|
(0.33 |
) |
|
|
(0.08 |
) |
| |
|
|
|
Total
distributions |
|
|
(0.49 |
) |
|
|
(0.34 |
) |
|
|
(0.46 |
) |
|
|
(0.69 |
) |
|
|
(0.51 |
) |
| |
|
|
|
Net
asset value, end of year |
|
|
$12.62 |
|
|
|
$12.19 |
|
|
|
$14.06 |
|
|
|
$14.65 |
|
|
|
$14.03 |
|
| |
|
|
|
Total
return |
|
|
7.69 |
% |
|
|
(10.87 |
)% |
|
|
(0.91 |
)% |
|
|
9.45 |
% |
|
|
9.73 |
% |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (millions) |
|
|
$60,604 |
|
|
|
$53,542 |
|
|
|
$71,838 |
|
|
|
$69,127 |
|
|
|
$63,546 |
|
Ratio
of expenses to average net assets |
|
|
0.41 |
% |
|
|
0.41 |
% |
|
|
0.42 |
% |
|
|
0.42 |
% |
|
|
0.42 |
% |
Ratio
of net investment income to average net assets |
|
|
4.04 |
% |
|
|
2.70 |
% |
|
|
1.87 |
% |
|
|
2.43 |
% |
|
|
3.12 |
% |
Portfolio
turnover rate |
|
|
55 |
% |
|
|
118 |
% |
|
|
91 |
% |
|
|
94 |
% |
|
|
49 |
% |
Portfolio
turnover rate excluding TBA rolls(a) |
|
|
30 |
% |
|
|
34 |
% |
|
|
28 |
% |
|
|
77 |
% |
|
|
46 |
% |
|
|
|
|
| |
Class X(b) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$12.20 |
|
|
|
$12.83 |
|
|
|
|
| |
|
|
| |
|
| |
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.50 |
|
|
|
0.25 |
|
|
|
|
| |
|
|
| |
|
| |
Net
realized and unrealized gain (loss) |
|
|
0.43 |
|
|
|
(0.60 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
from investment operations |
|
|
0.93 |
|
|
|
(0.35 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.50 |
) |
|
|
(0.28 |
) |
|
|
|
| |
|
|
| |
|
| |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
distributions |
|
|
(0.50 |
) |
|
|
(0.28 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Net
asset value, end of year |
|
|
$12.63 |
|
|
|
$12.20 |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
return |
|
|
7.76 |
% |
|
|
(2.72 |
)% |
|
|
|
| |
|
|
| |
|
| |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (millions) |
|
|
$9,552 |
|
|
|
$4,523 |
|
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets |
|
|
0.33 |
% |
|
|
0.33 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets, before reimbursement by investment
manager |
|
|
0.36 |
% |
|
|
0.36 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of net investment income to average net assets |
|
|
4.16 |
% |
|
|
3.53 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate |
|
|
55 |
% |
|
|
118 |
% |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate excluding TBA rolls(a) |
|
|
30 |
% |
|
|
34 |
% |
|
|
|
| |
|
|
| |
|
| |
(a) |
|
See
Note 1 regarding To-Be-Announced securities |
(b) |
|
For
2022, the period covers 5/2/2022 (commencement of operations) to
12/31/2022 |
|
| |
PAGE 74 ∎ DODGE & COX FUNDS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Dodge & Cox Global Bond
Fund |
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Class
I |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$10.08 |
|
|
|
$11.54 |
|
|
|
$12.09 |
|
|
|
$11.10 |
|
|
|
$10.23 |
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.55 |
|
|
|
0.40 |
|
|
|
0.28 |
|
|
|
0.29 |
|
|
|
0.38 |
|
Net
realized and unrealized gain (loss) |
|
|
0.67 |
|
|
|
(1.35 |
) |
|
|
(0.38 |
) |
|
|
1.02 |
|
|
|
0.87 |
|
| |
|
|
|
Total
from investment operations |
|
|
1.22 |
|
|
|
(0.95 |
) |
|
|
(0.10 |
) |
|
|
1.31 |
|
|
|
1.25 |
|
| |
|
|
|
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.36 |
) |
|
|
(0.51 |
) |
|
|
(0.29 |
) |
|
|
(0.27 |
) |
|
|
(0.38 |
) |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
(0.16 |
) |
|
|
(0.05 |
) |
|
|
— |
|
| |
|
|
|
Total
distributions |
|
|
(0.36 |
) |
|
|
(0.51 |
) |
|
|
(0.45 |
) |
|
|
(0.32 |
) |
|
|
(0.38 |
) |
| |
|
|
|
Net
asset value, end of year |
|
|
$10.94 |
|
|
|
$10.08 |
|
|
|
$11.54 |
|
|
|
$12.09 |
|
|
|
$11.10 |
|
| |
|
|
|
Total
return |
|
|
12.31 |
% |
|
|
(8.19 |
)% |
|
|
(0.85 |
)% |
|
|
11.87 |
% |
|
|
12.23 |
% |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (millions) |
|
|
$2,419 |
|
|
|
$1,509 |
|
|
|
$1,991 |
|
|
|
$981 |
|
|
|
$435 |
|
Ratio
of expenses to average net assets |
|
|
0.45 |
% |
|
|
0.45 |
% |
|
|
0.45 |
% |
|
|
0.45 |
% |
|
|
0.45 |
% |
Ratio
of expenses to average net assets, before reimbursement by investment
manager |
|
|
0.52 |
% |
|
|
0.55 |
% |
|
|
0.60 |
% |
|
|
0.69 |
% |
|
|
0.83 |
% |
Ratio
of net investment income to average net assets |
|
|
4.86 |
% |
|
|
3.97 |
% |
|
|
2.82 |
% |
|
|
3.23 |
% |
|
|
4.21 |
% |
Portfolio
turnover rate |
|
|
52 |
% |
|
|
92 |
% |
|
|
136 |
% |
|
|
112 |
% |
|
|
60 |
% |
Portfolio
turnover rate excluding TBA rolls(a) |
|
|
41 |
% |
|
|
40 |
% |
|
|
40 |
% |
|
|
90 |
% |
|
|
59 |
% |
|
|
|
|
| |
Class X(b) |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
asset value, beginning of year |
|
|
$10.07 |
|
|
|
$10.52 |
|
|
|
|
| |
|
|
| |
|
| |
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.59 |
|
|
|
0.26 |
|
|
|
|
| |
|
|
| |
|
| |
Net
realized and unrealized gain (loss) |
|
|
0.65 |
|
|
|
(0.24 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
from investment operations |
|
|
1.24 |
|
|
|
0.02 |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Distributions
to shareholders from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.37 |
) |
|
|
(0.47 |
) |
|
|
|
| |
|
|
| |
|
| |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
distributions |
|
|
(0.37 |
) |
|
|
(0.47 |
) |
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Net
asset value, end of year |
|
|
$10.94 |
|
|
|
$10.07 |
|
|
|
|
| |
|
|
| |
|
| |
| |
|
|
|
|
|
|
| |
|
|
| |
|
| |
Total
return |
|
|
12.48 |
% |
|
|
0.21 |
% |
|
|
|
| |
|
|
| |
|
| |
Ratios/supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (millions) |
|
|
$158 |
|
|
|
$51 |
|
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets |
|
|
0.37 |
% |
|
|
0.37 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of expenses to average net assets, before reimbursement by investment
manager |
|
|
0.47 |
% |
|
|
0.47 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Ratio
of net investment income to average net assets |
|
|
4.95 |
% |
|
|
4.75 |
%(c) |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate |
|
|
52 |
% |
|
|
92 |
% |
|
|
|
| |
|
|
| |
|
| |
Portfolio
turnover rate excluding TBA rolls(a) |
|
|
41 |
% |
|
|
40 |
% |
|
|
|
| |
|
|
| |
|
| |
(a) |
|
See
Note 1 regarding To-Be-Announced securities |
(b) |
|
For
2022, the period covers 5/2/2022 (commencement of operations) to
12/31/2022 |
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
75 |
Notes
|
| |
PAGE 76 ∎ DODGE & COX FUNDS |
|
|
Notes
|
| |
| |
DODGE & COX
FUNDS ∎ PAGE
77 |
For More Information
For
investors who want more information about the Funds, the
following documents are available free upon request:
Annual/Semi-Annual Reports
Additional
information about the Funds’ investments is available in the Funds’ annual and
semi-annual reports to shareholders. In each Fund’s annual report, you will find
a discussion of the market conditions and investment strategies that
significantly affected the Fund’s performance during its last fiscal year.
Statement of Additional Information (SAI)
The
SAI provides more detailed information about the Funds and is incorporated by
reference into (and thus is legally a part of) this prospectus.
You
can get free copies of a Fund’s annual and semi-annual reports and the SAI,
request other information, and discuss your questions about the Funds by
contacting the Funds at:
Dodge &
Cox Funds
P.O.
Box 219502
Kansas
City, MO 64121-9502
Telephone:
800-621-3979
Internet:
dodgeandcox.com
Reports
and other information about the Funds (including the SAI) are available in the
EDGAR database on the SEC’s website at www.sec.gov. You can also receive copies
of this information, for a duplicating fee, by electronic request at the
following e-mail address:
[email protected].
Funds’
Investment Company Act file no. 811-173