UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-02679
DAVIS SERIES, INC.
(Exact name of registrant as specified in charter)
2949 East Elvira Road, Suite 101
Tucson, AZ 85756
(Address of principal executive offices)
Ryan M. Charles
Davis Selected Advisers, L.P.
2949 East Elvira Road, Suite 101
Tucson, AZ 85756
(Name and address of agent for service)
Registrant's telephone number, including area code: 520-806-7600
Date of fiscal year end: December 31, 2015
Date of reporting period: June 30, 2015
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ITEM 1. REPORT TO STOCKHOLDERS
DAVIS SERIES, INC. |
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Management's Discussion of Fund Performance: | |
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Fund Overview: | |
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Schedule of Investments: | |
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This Semi-Annual Report is authorized for use by existing shareholders. Prospective shareholders must receive a current Davis Series, Inc. prospectus, which contains more information about investment strategies, risks, charges, and expenses. Please read the prospectus carefully before investing or sending money.
Shares of the Davis Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested.
Portfolio Proxy Voting Policies and Procedures
The Funds have adopted Portfolio Proxy Voting Policies and Procedures under which the Funds vote proxies relating to securities held by the Funds. A description of the Funds' Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Funds toll-free at 1-800-279-0279, (ii) on the Funds' website at www.davisfunds.com, and (iii) on the SEC's website at www.sec.gov.
In addition, the Funds are required to file Form N-PX, with their complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Funds' Form N-PX filing is available (i) without charge, upon request, by calling the Funds toll-free at 1-800-279-0279, (ii) on the Funds' website at www.davisfunds.com, and (iii) on the SEC's website at www.sec.gov.
Form N-Q and Form N-MFP
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. In addition, Davis Government Money Market Fund files its complete schedule of portfolio holdings with the SEC for each month end on Form N-MFP. The Funds' Form N-Q and Davis Government Money Market Fund's Form N-MFP are available without charge, upon request, by calling 1-800-279-0279, on the Funds' website at www.davisfunds.com, and on the SEC's website at www.sec.gov. The Funds' Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
DAVIS SERIES, INC. |
Dear Fellow Shareholder,
As stewards of our customers' savings, the management team and Directors of Davis Funds recognize the importance of candid, thorough, and regular communication with our shareholders. In our Annual and Semi-Annual Reports we include all of the required quantitative information such as financial statements, detailed footnotes, performance reports, fund holdings, and performance attribution.
In addition, we produce a Manager Commentary for certain funds, which is published semi-annually. In this commentary, we give a more qualitative perspective on fund performance, discuss our thoughts on individual holdings, and share our investment outlook. You may obtain a copy of the current Manager Commentary either on our website, www.davisfunds.com, or by calling 1-800-279-0279.
We thank you for your continued trust. We will do our best to earn it in the years ahead.
Sincerely,
Christopher C. Davis | |
President | |
August 3, 2015 |
DAVIS SERIES, INC. | |
DAVIS OPPORTUNITY FUND |
Performance Overview
Davis Opportunity Fund's Class A shares delivered a total return on net asset value of 5.04% for the six-month period ended June 30, 2015 ("Period"). Over the same Period, the Russell 3000® Index ("Index") returned 1.94%. The sectors1 within the Index that reported the strongest performance over the Period were Health Care, Consumer Discretionary, and Telecommunication Services. The sectors within the Index that reported the weakest performance were Utilities, Energy, and Industrials.
The Fund's Absolute Performance
Consumer Discretionary companies were the most important contributor2 to the Fund's absolute performance over the Period. Amazon.com3 (the Fund's largest holding, as of June 30, 2015) and JD.com, a Chinese online electronics retailer, were the most important contributors to Fund performance. Las Vegas Sands and Twenty-First Century Fox were among the most important detractors from performance.
Health Care companies were the second most important contributor to the Fund's absolute performance. Valeant Pharmaceuticals, which the Fund no longer owns, and UnitedHealth Group were among the most important contributors to performance. IDEXX Laboratories was among the top detractors from performance.
Industrial companies were another important contributor to the Fund's absolute performance. CAR, China's largest auto rental company, was among the top contributors to Fund performance. PACCAR, which provides design, manufacture and customer support of high-quality premium trucks, was among the leading detractors from the Fund's absolute performance. The Fund no longer owns PACCAR.
Financial companies also contributed to the Fund's absolute performance. Markel, a financial holding company specializing in insurance, was among the most important contributors to Fund performance. LendingClub, a peer-to-peer online credit marketplace, was among the top detractors from performance.
Information Technology companies also contributed to the Fund's absolute performance. Youku Tudou (an Internet television company in China), SouFun Holdings (a real estate Internet portal in China), ASAC (an investment vehicle for Activision Blizzard, the video game publisher), and Qihoo 360 Technology (a provider of Internet and mobile security products and services in China) were all among the most important contributors to Fund performance over the Period. Coupons.com (the Fund's fourth largest holding, as of June 30, 2015), DianPing Holdings (an online restaurant-review and group-buying services site in China), and Hewlett-Packard were among the top detractors from performance.
Energy companies were the most important detractor from the Fund's absolute performance. Encana and Ultra Petroleum were among the leading detractors from Fund performance during the Period.
The Fund had approximately 21% of its net assets invested in foreign companies at June 30, 2015. As a whole, those companies outperformed the domestic companies held by the Fund.
The Fund's Relative Performance
Consumer Discretionary companies were the most important contributor to the Fund's performance relative to the Index over the Period. The Fund's Consumer Discretionary companies outperformed the corresponding sector within the Index. The Fund also benefited from having a significantly higher average weighting than the Index.
Industrial companies were another important contributor to the Fund's relative performance. The Fund's Industrial companies outperformed the corresponding sector within the Index, however the Fund did suffer slightly from a higher average weighting than the Index in this weak performing sector.
Health Care companies were the most important detractor from the Fund's relative performance. The Fund's Health Care companies underperformed the corresponding sector within the Index and the Fund suffered from a lower average weighting than the Index in this strong performing sector.
Information Technology companies were the second most important detractor from the Fund's relative performance. The Fund's Information Technology companies underperformed the corresponding sector within the Index.
Davis Opportunity Fund's investment objective is long-term growth of capital. There can be no assurance that the Fund will achieve its objective. Davis Opportunity Fund's principal risks are: stock market risk, manager risk, common stock risk, large-capitalization companies risk, mid- and small-capitalization companies risk, headline risk, foreign country risk, emerging market risk, foreign currency risk, depositary receipts risk, and fees and expenses risk. See the prospectus for a full description of each risk.
Davis Opportunity Fund's investment objective is long-term growth of capital. There can be no assurance that the Fund will achieve its objective. Davis Opportunity Fund's principal risks are: stock market risk, manager risk, common stock risk, large-capitalization companies risk, mid- and small-capitalization companies risk, headline risk, foreign country risk, emerging market risk, foreign currency risk, depositary receipts risk, and fees and expenses risk. See the prospectus for a full description of each risk.
1 The companies included in the Russell 3000® Index are divided into ten sectors. One or more industry groups make up a sector.
2 A company's or sector's contribution to or detraction from the Fund's performance is a product both of its appreciation or depreciation and its weighting within the Fund. For example, a 5% holding that rises 20% has twice as much impact as a 1% holding that rises 50%.
3 This Management Discussion of Fund Performance discusses a number of individual companies. The information provided in this report does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase, sell, or hold any particular security. The Schedule of Investments lists the Fund's holdings of each company discussed.
DAVIS SERIES, INC. | Management's Discussion of Fund Performance |
DAVIS OPPORTUNITY FUND - (CONTINUED) |
Comparison of a $10,000 investment in Davis Opportunity Fund Class A versus the Russell 3000® Index
over 10 years for an investment made on June 30, 2005
Average Annual Total Return for periods ended June 30, 2015
Fund & Benchmark Index | 1-Year | 5-Year | 10-Year | Since Inception | Inception Date | Gross Expense Ratio | Net Expense Ratio |
Class A - without sales charge | 3.29% | 16.84% | 6.91% | 10.73% | 12/01/94 | 0.95% | 0.95% |
Class A - with sales charge | (1.61)% | 15.71% | 6.39% | 10.47% | 12/01/94 | 0.95% | 0.95% |
Class B†, ** | (1.28)% | 15.48% | 6.26% | 11.40% | 05/01/84 | 1.95% | 1.95% |
Class C** | 1.58% | 15.91% | 6.08% | 6.51% | 08/15/97 | 1.75% | 1.75% |
Class Y | 3.52% | 17.13% | 7.21% | 7.35% | 09/18/97 | 0.73% | 0.73% |
Russell 3000® Index*** | 7.29% | 17.54% | 8.15% | 9.90% |
The Russell 3000® Index measures the performance of the 3,000 largest companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. Investments cannot be made directly in the Index.
The performance data for Davis Opportunity Fund contained in this report represents past performance, assumes that all distributions were reinvested, and should not be considered as an indication of future performance from an investment in the Fund today. The investment return and principal value will fluctuate so that shares may be worth more or less than their original cost when redeemed. Fund performance changes over time and current performance may be higher or lower than stated. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The operating expense ratios may vary in future years. For more current information please call Davis Funds Investor Services at 1-800-279-0279.
Davis Opportunity Fund's performance benefited from IPO purchases in 2013 and 2014. After purchase, the IPOs rapidly increased in value. The Adviser purchases shares intending to benefit from long-term growth of the underlying company; the rapid appreciation of the IPOs were unusual occurrences.
*Reflects 4.75% front-end sales charge.
†Because Class B shares automatically convert to Class A shares after 7 years, the "10-Year" and "Since Inception" returns for Class B reflect Class A performance for the period after conversion.
**Includes any applicable contingent deferred sales charge. As of May 1, 2013, Class B shares are no longer offered for new purchases.
***Inception return is from 12/01/94.
DAVIS SERIES, INC. | |
DAVIS GOVERNMENT BOND FUND |
Performance Overview
Davis Government Bond Fund's Class A shares delivered a return of 0.59% on net asset value for the six-month period ended June 30, 2015 ("Period"). The Citigroup U.S. Treasury/Agency 1-3 Year Index ("Index") returned 0.66% over the same Period.
The Fund's investment strategy, under normal circumstances, is to invest exclusively in U.S. Government securities and repurchase agreements, collateralized by U.S. Government securities, with a weighted average maturity of three years or less.
Factors Impacting the Fund's Performance
The Fund was invested almost entirely in mortgage backed securities. The Fund's gross performance was enhanced1 by owning mortgage backed securities, which performed better than the Index.
Davis Government Bond Fund's investment objective is current income. There can be no assurance that the Fund will achieve its objective. Davis Government Bond Fund's principal risks are: U.S. Government securities risk, repurchase agreement risk, variable current income risk, interest rate risk, inflation risk, extension and prepayment risk, credit risk, changes in debt rating risk, and fees and expenses risk. See the prospectus for a full description of each risk.
1 A contribution to or detraction from the Fund's performance is a product both of appreciation or depreciation and weighting within the Fund. For example, a 5% holding that rises 20% has twice as much impact as a 1% holding that rises 50%.
DAVIS SERIES, INC. | Management's Discussion of Fund Performance |
DAVIS GOVERNMENT BOND FUND - (CONTINUED) |
Comparison of a $10,000 investment in Davis Government Bond Fund Class A versus the Citigroup U.S.
Treasury/Agency 1-3 Year Index over 10 years for an investment made on June 30, 2005
Average Annual Total Return for periods ended June 30, 2015
Fund & Benchmark Index | 1-Year | 5-Year | 10-Year | Since Inception | Inception Date | Gross Expense Ratio | Net Expense Ratio |
Class A - without sales charge | 0.76% | 0.61% | 2.19% | 3.52% | 12/01/94 | 1.07% | 1.07% |
Class A - with sales charge | (4.03)% | (0.37)% | 1.69% | 3.28% | 12/01/94 | 1.07% | 1.07% |
Class B†, ** | (4.26)% | (0.74)% | 1.60% | 4.77% | 05/01/84 | 1.86% | 1.86% |
Class C** | (0.99)% | (0.24)% | 1.38% | 2.16% | 08/19/97 | 1.74% | 1.74% |
Class Y | 1.03% | 0.91% | 2.39% | 2.93% | 09/01/98 | 0.56% | 0.56% |
Citigroup U.S. Treasury/Agency 1-3 Year Index*** | 0.87% | 0.83% | 2.57% | 4.10% |
The Citigroup U.S. Treasury/Agency 1-3 Year Index is a recognized unmanaged index of short-term U.S. Government securities' performance. Investments cannot be made directly in the Index.
The performance data for Davis Government Bond Fund contained in this report represents past performance, assumes that all distributions were reinvested, and should not be considered as an indication of future performance from an investment in the Fund today. The investment return and principal value will fluctuate so that shares may be worth more or less than their original cost when redeemed. Fund performance changes over time and current performance may be higher or lower than stated. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The operating expense ratios may vary in future years. For more current information please call Davis Funds Investor Services at 1-800-279-0279.
*Reflects 4.75% front-end sales charge.
†Because Class B shares automatically convert to Class A shares after 7 years, the "10-Year" and "Since Inception" returns for Class B reflect Class A performance for the period after conversion.
**Includes any applicable contingent deferred sales charge. As of May 1, 2013, Class B shares are no longer offered for new purchases.
***Inception return is from 12/01/94.
DAVIS SERIES, INC. | |
DAVIS FINANCIAL FUND |
Performance Overview
Davis Financial Fund's Class A shares delivered a total return on net asset value of 3.31% for the six-month period ended June 30, 2015 ("Period"). Over the same Period, the Standard & Poor's 500® Index ("Index") returned 1.23%.
The industry groups within the Index's Financial sector1 holdings that reported positive performance returns were Banking and Insurance; the Diversified Financial industry group within the Index reported negative returns.
The Fund's Absolute Performance
Diversified Financial companies represented a significant percentage of the Fund and were the most important contributor2 to the Fund's absolute performance during the Period at the industry group level. Julius Baer Group3, Moody's, Bank of New York Mellon, and Goldman Sachs were among the most important contributors to Fund performance from the Diversified Financial group. American Express (the Fund's third largest holding, as of June 30, 2015) and Berkshire Hathaway were among the most important detractors from performance for the Period.
Banking companies were the second most important contributor to the Fund's absolute performance. Citizens Financial Group, JPMorgan Chase, and Wells Fargo (the Fund's largest holding, as of June 30, 2015) were among the leading contributors to absolute performance during the Period. ICICI Bank, Standard Chartered, and U.S. Bancorp were among the most important detractors from performance.
Insurance companies were another important contributor to the Fund's absolute performance. Markel (the Fund's second largest holding, as of June 30, 2015) was the most important contributor to Fund performance. Everest Re Group and American International Group were also among the top contributors to performance. ACE, Loews, and Chubb were among the leading detractors from performance over the Period.
The Fund had approximately 11% of its net assets invested in foreign companies at June 30, 2015. As a whole, those companies outperformed the domestic companies held by the Fund.
The Fund's Relative Performance
The largest contributor to the Fund's performance relative to the Index was the Financial sector. The Fund's Financial holdings outperformed the corresponding sector within the Index over the Period.
The Fund's holdings outperformed the Index and every corresponding industry group within the Index except for the Software & Services group. The Fund's Software & Services industry group still delivered positive performance, but slightly underperformed the Index.
Davis Financial Fund's investment objective is long-term growth of capital. There can be no assurance that the Fund will achieve its objective. Davis Financial Fund's principal risks are: stock market risk, manager risk, common stock risk, large-capitalization companies risk, mid- and small-capitalization companies risk, headline risk, financial services risk, foreign country risk, emerging market risk, foreign currency risk, depositary receipts risk, focused portfolio risk, credit risk, and fees and expenses risk. See the prospectus for a full description of each risk.
Davis Financial Fund concentrates its investments in the financial sector, and it may be subject to greater risks than a fund that does not concentrate its investments in a particular sector. The Fund's investment performance, both good and bad, is expected to reflect the economic performance of the financial sector more than a fund that does not concentrate its portfolio.
1 The companies included in the Standard & Poor's 500® Index are divided into ten sectors. One or more industry groups make up a sector.
2 A company's or sector's contribution to or detraction from the Fund's performance is a product both of its appreciation or depreciation and its weighting within the Fund. For example, a 5% holding that rises 20% has twice as much impact as a 1% holding that rises 50%.
3 This Management Discussion of Fund Performance discusses a number of individual companies. The information provided in this report does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase, sell, or hold any particular security. The Schedule of Investments lists the Fund's holdings of each company discussed.
DAVIS SERIES, INC. | Management's Discussion of Fund Performance |
DAVIS FINANCIAL FUND - (CONTINUED) |
Comparison of a $10,000 investment in Davis Financial Fund Class A versus the Standard & Poor's 500®
Index over 10 years for an investment made on June 30, 2005
Average Annual Total Return for periods ended June 30, 2015
Fund & Benchmark Index | 1-Year | 5-Year | 10-Year | Since Inception | Inception Date | Gross Expense Ratio | Net Expense Ratio |
Class A - without sales charge | 10.22% | 14.62% | 6.22% | 11.96% | 05/01/91 | 0.86% | 0.86% |
Class A - with sales charge | 4.99% | 13.51% | 5.70% | 11.74% | 05/01/91 | 0.86% | 0.86% |
Class B†, ** | 5.20% | 13.11% | 5.46% | 10.65% | 12/27/94 | 1.93% | 1.93% |
Class C** | 8.28% | 13.58% | 5.27% | 5.95% | 08/12/97 | 1.75% | 1.75% |
Class Y | 10.37% | 14.80% | 6.36% | 7.81% | 03/10/97 | 0.71% | 0.71% |
S&P 500® Index*** | 7.42% | 17.34% | 7.89% | 9.48% |
The Standard & Poor's 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends, weighted towards stocks with large market capitalizations, and represents approximately two-thirds of the total market value of all domestic common stocks. Investments cannot be made directly in the Index.
The performance data for Davis Financial Fund contained in this report represents past performance, assumes that all distributions were reinvested, and should not be considered as an indication of future performance from an investment in the Fund today. The investment return and principal value will fluctuate so that shares may be worth more or less than their original cost when redeemed. Fund performance changes over time and current performance may be higher or lower than stated. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The operating expense ratios may vary in future years. For more current information please call Davis Funds Investor Services at 1-800-279-0279.
*Reflects 4.75% front-end sales charge.
†Because Class B shares automatically convert to Class A shares after 7 years, the "10-Year" and "Since Inception" returns for Class B reflect Class A performance for the period after conversion.
**Includes any applicable contingent deferred sales charge. As of May 1, 2013, Class B shares are no longer offered for new purchases.
***Inception return is from 05/01/91.
DAVIS SERIES, INC. | |
DAVIS APPRECIATION & INCOME FUND |
Performance Overview
Davis Appreciation & Income Fund's Class A shares delivered a total return on net asset value of 1.06% for the six-month period ended June 30, 2015 ("Period"). Over the same Period, the Standard & Poor's 500® Index ("Index") returned 1.23%.
The Fund's common and preferred stocks outperformed the Index. The sectors1 within the Index that reported the strongest performance were Health Care, Consumer Discretionary, and Telecommunication Services. The sectors within the Index that reported the weakest performance over the Period were Utilities, Energy, and Industrials.
Factors Impacting the Fund's Performance
The Fund's common and preferred stock holdings ("Equity holdings") were the most important contributor2 to the Fund's absolute performance over the Period, as compared to the Fund's convertible and corporate bond holdings ("Fixed-Income holdings"). At the end of the Period, the Fund was invested in approximately 77.3% Equity holdings and 22.7% in Fixed-Income holdings.
Material Equity holdings were the most important detractor from the Fund's absolute performance over the Period. Allegheny Technologies3 and Freeport-McMoRan were among the leading detractors from the Fund's performance.
Financial Equity holdings were another important detractor from the Fund's absolute performance. American Express, Forest City Enterprises (the common stock was a detractor while the convertible bond was a contributor), and Bank of America were leading detractors. The Fund no longer owns Forest City Enterprises.
The Fund's Material and Financial companies both underperformed the corresponding sectors within the Index over the Period largely as a result of stock selection.
The Fund's Fixed-Income holdings detracted from the Fund's performance compared to the Index. RTI International Metals, Forest City Enterprises, and salesforce.com were convertible bonds that were among the top contributors to absolute performance. Intel (the Fund's second largest holding, as of June 30, 2015) and United States Steel were convertible bonds that were leading detractors from performance over the Period. The Fund no longer owns Forest City Enterprises.
Among the Fund's Equity holdings, Health Care companies were the most important contributor to absolute performance. The Fund's only two Health Care holdings, Universal Health Services (the Fund's third largest holding, as of June 30, 2015) and Valeant Pharmaceuticals, were among the Fund's top contributors to performance.
Industrial companies were another important contributor to the Fund's absolute performance. Waste Connections, Masco, and General Electric were among the Fund's top contributors to performance. United Rentals was among the top detractors from performance.
The Fund's Health Care and Industrial companies both outperformed the corresponding sectors within the Index. The Fund did suffer however by having a higher average weighting in the weak performing sector, Industrials, and a lower average weighting in the strong performing sector, Health Care.
Other important contributors to the Fund's performance included the following Equity holdings: Amazon.com, Nabors Industries, and Kohl's. Other important Equity holdings detracting from performance were: Whole Foods Market, Twenty-First Century Fox, and School Specialty.
The Fund had approximately 10% of its net assets invested in foreign companies at June 30, 2015. As a whole, those companies outperformed the domestic companies held by the Fund.
Davis Appreciation & Income Fund's investment objective is total return through a combination of growth and income. There can be no assurance that the Fund will achieve its objective. Davis Appreciation & Income Fund's principal risks are: stock market risk, manager risk, common stock risk, large-capitalization companies risk, mid- and small-capitalization companies risk, headline risk, foreign country risk, depositary receipts risk, convertible securities risk, preferred stock risk, bonds and other debt securities risk, interest rate risk, extension and prepayment risk, credit risk, changes in debt rating risk, variable current income risk, high-yield, high-risk debt securities risk, and fees and expenses risk. See the prospectus for a full description of each risk.
1 The companies included in the Standard & Poor's 500® Index are divided into ten sectors. One or more industry groups make up a sector.
2 A company's or sector's contribution to or detraction from the Fund's performance is a product both of its appreciation or depreciation and its weighting within the Fund. For example, a 5% holding that rises 20% has twice as much impact as a 1% holding that rises 50%.
3 This Management Discussion of Fund Performance discusses a number of individual companies. The information provided in this report does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase, sell, or hold any particular security. The Schedule of Investments lists the Fund's holdings of each company discussed.
DAVIS SERIES, INC. | Management's Discussion of Fund Performance |
DAVIS APPRECIATION & INCOME FUND - (CONTINUED) |
Comparison of a $10,000 investment in Davis Appreciation & Income Fund Class A versus the Standard &
Poor's 500® Index over 10 years for an investment made on June 30, 2005
Average Annual Total Return for periods ended June 30, 2015
Fund & Benchmark Index | 1-Year | 5-Year | 10-Year | Since Inception | Inception Date | Gross Expense Ratio | Net Expense Ratio |
Class A - without sales charge | (0.89)% | 10.70% | 5.80% | 8.59% | 05/01/92 | 0.87% | 0.87% |
Class A - with sales charge | (5.60)% | 9.63% | 5.28% | 8.37% | 05/01/92 | 0.87% | 0.87% |
Class B†, ** | (5.79)% | 9.37% | 5.15% | 8.19% | 02/03/95 | 1.88% | 1.88% |
Class C** | (2.70)% | 9.80% | 4.94% | 5.00% | 08/12/97 | 1.72% | 1.72% |
Class Y | (0.71)% | 10.90% | 6.04% | 7.29% | 11/13/96 | 0.68% | 0.68% |
S&P 500® Index*** | 7.42% | 17.34% | 7.89% | 9.38% |
The Standard & Poor's 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends, weighted towards stocks with large market capitalization, and represents approximately two-thirds of the total market value of all domestic common stocks. Investments cannot be made directly in the Index.
The performance data for Davis Appreciation & Income Fund contained in this report represents past performance, assumes that all distributions were reinvested, and should not be considered as an indication of future performance from an investment in the Fund today. The investment return and principal value will fluctuate so that shares may be worth more or less than their original cost when redeemed. Fund performance changes over time and current performance may be higher or lower than stated. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The operating expense ratios may vary in future years. For more current information please call Davis Funds Investor Services at 1-800-279-0279.
*Reflects 4.75% front-end sales charge.
†Because Class B shares automatically convert to Class A shares after 7 years, the "10-Year" and "Since Inception" returns for Class B reflect Class A performance for the period after conversion.
**Includes any applicable contingent deferred sales charge. As of May 1, 2013, Class B shares are no longer offered for new purchases.
***Inception return is from 05/01/92.
DAVIS SERIES, INC. | |
DAVIS REAL ESTATE FUND |
Performance Overview
Davis Real Estate Fund's Class A shares delivered a negative return of 5.32% on net asset value for the six-month period ended June 30, 2015 ("Period"). Over the same Period, the Wilshire U.S. Real Estate Securities Index ("Index") declined 5.33%. The sub-industries1 within the Index that reported the strongest performance were Specialized REITs, Real Estate Operating Companies, and Residential REITs. The three strongest performing sub-industries were the only sub-industries that produced positive returns for the Period. The weakest performing sub-industries within the Index were Health Care REITs, Industrial REITs, and Hotel & Resort REITs.
The Fund's Absolute Performance
Specialized REITs were the most important contributor2 to the Fund's absolute performance over the Period. Public Storage3 and CyrusOne were top contributors to Fund performance over the Period. The Fund no longer owns Public Storage.
Real Estate Operating Companies were the second most important contributor to the Fund's absolute performance. Forest City Enterprises was the most important contributor to performance for the Period.
Retail REITs were the most important detractor from the Fund's absolute performance. DDR, Kite Realty Group Trust, Acadia Realty Trust, and Cedar Realty Trust were among the leading detractors from Fund performance.
Industrial REITs were the second most important detractor from the Fund's absolute performance. Prologis (the Fund's third largest holding, as of June 30, 2015) and DCT Industrial Trust (the Fund's fourth largest holding, as of June 30, 2015) were among the top detractors from performance.
The Office REITs sub-industry returned negative performance figures and detracted from performance; however, several Office REITs holdings were still among the top contributors to the Fund's absolute performance. Equinix, SL Green Realty, BioMed Realty Trust, and CoreSite Realty were leading contributors to Fund performance. Vornado Realty Trust was among the top detractors from performance. The Fund no longer owns Equinix, SL Green Realty, BioMed Realty Trust or CoreSite Realty.
Ventas, a holding from the Health Care REITs sub-industry, and Alexander & Baldwin, a holding from the Diversified Real Estate Activities sub-industry, were also among the top contributors to Fund performance for the Period.
The Fund's Relative Performance
Health Care REITs were the most important contributor to the Fund's performance relative to the Index. The Fund's Health Care REITs and the Index both returned negative performance figures for the Period; however, the Fund benefited from a much lower average weighting in this weak performing sub-industry.
Real Estate Operating Companies were the second most important contributor to the Fund's relative performance. The Fund's Real Estate Operating Companies underperformed the corresponding sub-industry within the Index, but the Fund benefited from a higher average weighting in this strong sub-industry.
Office REITs were the most important detractor from the Fund's relative performance. The Fund's Office REITs underperformed the corresponding sub-industry within the Index.
Retail REITs were also an important detractor from the Fund's relative performance. The Fund's Retail REITs underperformed the corresponding sub-industry within the Index.
Davis Real Estate Fund's investment objective is total return through a combination of growth and income. There can be no assurance that the Fund will achieve its objective. Davis Real Estate Fund's principal risks are: stock market risk, manager risk, common stock risk, large-capitalization companies risk, mid- and small-capitalization companies risk, headline risk, real estate risk, focused portfolio risk, variable current income risk, and fees and expenses risk. See the prospectus for a full description of each risk.
Davis Real Estate Fund concentrates its investments in the real estate sector, and it may be subject to greater risks than a fund that does not concentrate its investments in a particular sector. The Fund's investment performance, both good and bad, is expected to reflect the economic performance of the real estate sector much more than a fund that does not concentrate its portfolio.
Davis Real Estate Fund is allowed to focus its investments in fewer companies, and it may be subject to greater risks than a more diversified fund that is not allowed to focus its investments in a few companies. Should the portfolio manager determine that it is prudent to focus the Fund's portfolio in a few companies, the Fund's investment performance, both good and bad, is expected to reflect the economic performance of its more focused portfolio.
1 The companies included in the Wilshire U.S. Real Estate Securities Index are divided into ten sub-industries.
2 A company's or sector's contribution to or detraction from the Fund's performance is a product both of its appreciation or depreciation and its weighting within the Fund. For example, a 5% holding that rises 20% has twice as much impact as a 1% holding that rises 50%.
3 This Management Discussion of Fund Performance discusses a number of individual companies. The information provided in this report does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase, sell, or hold any particular security. The Schedule of Investments lists the Fund's holdings of each company discussed.
DAVIS SERIES, INC. | Management's Discussion of Fund Performance |
DAVIS REAL ESTATE FUND - (CONTINUED) |
Comparison of a $10,000 investment in Davis Real Estate Fund Class A versus the
Standard & Poor's 500® Index and the Wilshire U.S. Real Estate Securities Index
over 10 years for an investment made on June 30, 2005
Average Annual Total Return for periods ended June 30, 2015
Fund & Benchmark Indices | 1-Year | 5-Year | 10-Year | Since Inception | Inception Date | Gross Expense Ratio | Net Expense Ratio |
Class A - without sales charge | 4.65% | 11.93% | 4.77% | 9.67% | 01/03/94 | 0.93% | 0.93% |
Class A - with sales charge | (0.32)% | 10.85% | 4.26% | 9.42% | 01/03/94 | 0.93% | 0.93% |
Class B†, ** | (0.50)% | 10.45% | 4.06% | 9.45% | 12/27/94 | 1.98% | 1.98% |
Class C** | 2.75% | 10.99% | 3.92% | 6.76% | 08/13/97 | 1.81% | 1.81% |
Class Y | 4.86% | 12.20% | 5.08% | 9.01% | 11/08/96 | 0.75% | 0.75% |
S&P 500® Index*** | 7.42% | 17.34% | 7.89% | 9.28% | |||
Wilshire U.S. Real Estate Securities Index*** | 5.59% | 14.74% | 6.87% | 10.53% |
The Standard & Poor's 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends, weighted towards stocks with large market capitalization, and represents approximately two-thirds of the total market value of all domestic common stocks. Investments cannot be made directly in the Index.
The Wilshire U.S. Real Estate Securities Index is a broad measure of the performance of publicly traded real estate securities. It reflects no deduction for fees or expenses. Investments cannot be made directly in the Index.
The performance data for Davis Real Estate Fund contained in this report represents past performance, assumes that all distributions were reinvested, and should not be considered as an indication of future performance from an investment in the Fund today. The investment return and principal value will fluctuate so that shares may be worth more or less than their original cost when redeemed. Fund performance changes over time and current performance may be higher or lower than stated. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The operating expense ratios may vary in future years. For more current information please call Davis Funds Investor Services at 1-800-279-0279.
*Reflects 4.75% front-end sales charge.
†Because Class B shares automatically convert to Class A shares after 7 years, the "10-Year" and "Since Inception" returns for Class B reflect Class A performance for the period after conversion.
**Includes any applicable contingent deferred sales charge. As of May 1, 2013, Class B shares are no longer offered for new purchases.
***Inception return is from 01/03/94.
DAVIS SERIES, INC. | |
DAVIS OPPORTUNITY FUND | June 30, 2015 (Unaudited) |
Portfolio Composition | Industry Weightings | |||||
(% of Fund's 06/30/15 Net Assets) | (% of 06/30/15 Stock Holdings) | |||||
Fund | Russell 3000® | |||||
Common Stock (U.S.) | 76.05% | Information Technology | 28.40% | 18.93% | ||
Common Stock (Foreign) | 19.09% | Retailing | 17.62% | 4.72% | ||
Preferred Stock (Foreign) | 1.50% | Capital Goods | 8.74% | 7.60% | ||
Stock Warrants | 0.86% | Health Care | 7.16% | 15.18% | ||
Short-Term Investments | 2.64% | Media | 6.99% | 3.56% | ||
Other Assets & Liabilities | (0.14)% | Energy | 6.14% | 7.20% | ||
100.00% | Transportation | 5.38% | 2.16% | |||
Banks | 4.93% | 6.25% | ||||
Diversified Financials | 3.98% | 4.79% | ||||
Insurance | 3.51% | 2.95% | ||||
Consumer Services | 2.69% | 2.25% | ||||
Consumer Durables & Apparel | 2.22% | 1.68% | ||||
Materials | 1.35% | 3.51% | ||||
Other | 0.89% | 19.22% | ||||
100.00% | 100.00% |
Top 10 Long-Term Holdings | ||
(% of Fund's 06/30/15 Net Assets) | ||
Amazon.com, Inc. | Retailing | 6.48% |
Google Inc.* | Software & Services | 5.64% |
Liberty Global PLC, Series C | Media | 4.12% |
Coupons.com Inc. | Software & Services | 3.45% |
Wesco Aircraft Holdings, Inc. | Transportation | 2.90% |
Las Vegas Sands Corp. | Consumer Services | 2.62% |
JP Morgan Chase & Co. | Banks | 2.51% |
Priceline Group Inc. | Retailing | 2.39% |
Markel Corp. | Property & Casualty Insurance | 2.29% |
SouFun Holdings Ltd., Class A, ADR | Software & Services | 2.24% |
*Google Inc. holding includes Class A and Class C.
DAVIS SERIES, INC. | |
DAVIS GOVERNMENT BOND FUND | June 30, 2015 (Unaudited) |
Portfolio Composition | Industry Weightings | |||
(% of Fund's 06/30/15 Net Assets) | (% of 06/30/15 Fixed Income) | |||
Fixed Income | 94.73% | Collateralized Mortgage Obligations | 58.66% | |
Short-Term Investments | 5.20% | Fannie Mae Mortgage Pools | 25.50% | |
Other Assets & Liabilities | 0.07% | Freddie Mac Mortgage Pools | 10.23% | |
100.00% | Ginnie Mae Mortgage Pools | 5.29% | ||
Other Agencies | 0.32% | |||
100.00% |
Top 10 Fixed Income Holdings | ||
(% of Fund's 06/30/15 Net Assets) | ||
NCUA Guaranteed Notes, 0.7465%, 12/08/20 | Collateralized Mortgage Obligations | 8.20% |
Fannie Mae, 3.00%, 08/25/42 | Collateralized Mortgage Obligations | 6.42% |
Fannie Mae, 3.00%, 02/25/43 | Collateralized Mortgage Obligations | 6.19% |
Fannie Mae, 3.50%, 11/01/24, Pool No. MA2101 | Fannie Mae Mortgage Pools | 5.77% |
Fannie Mae, 3.65%, 01/01/18, Pool No. 467153 | Fannie Mae Mortgage Pools | 5.73% |
Fannie Mae, 2.50%, 11/01/22, Pool No. AQ4765 | Fannie Mae Mortgage Pools | 5.40% |
Ginnie Mae, 3.00%, 05/20/30, Pool No. 784008 | Ginnie Mae Mortgage Pools | 5.01% |
Freddie Mac, 3.00%, 10/01/24, Pool No. J29659 | Freddie Mac Mortgage Pools | 4.58% |
Freddie Mac, 4.00%, 12/15/39 | Collateralized Mortgage Obligations | 4.25% |
Fannie Mae, 3.00%, 10/25/42 | Collateralized Mortgage Obligations | 3.71% |
DAVIS SERIES, INC. | |
DAVIS GOVERNMENT MONEY MARKET FUND | June 30, 2015 (Unaudited) |
Portfolio Composition | Maturity Diversification | |||
(% of Fund's 06/30/15 Net Assets) | (% of 06/30/15 Portfolio Holdings) | |||
Repurchase Agreements | 50.49% | 0-30 Days | 83.42% | |
Federal Farm Credit Bank | 21.35% | 31-90 Days | 2.91% | |
Federal Home Loan Bank | 8.79% | 91-180 Days | 10.21% | |
Fannie Mae | 8.69% | 181-397 Days | 3.46% | |
Freddie Mac | 2.13% | 100.00% | ||
Other Agencies | 0.17% | |||
Other Assets & Liabilities | 8.38% | |||
100.00% |
The maturity dates of floating rate securities used in the Maturity Diversification table are considered to be the effective maturities, based on the reset dates of the securities' variable rates. See the Fund's Schedule of Investments for a listing of the floating rate securities.
DAVIS SERIES, INC. | |
DAVIS FINANCIAL FUND | June 30, 2015 (Unaudited) |
Portfolio Composition | Industry Weightings | |||||
(% of Fund's 06/30/15 Net Assets) | (% of 06/30/15 Stock Holdings) | |||||
Fund | S&P 500® | |||||
Common Stock (U.S.) | 82.44% | Diversified Financials | 43.74% | 5.13% | ||
Common Stock (Foreign) | 10.70% | Banks | 26.93% | 6.22% | ||
Short-Term Investments | 6.52% | Insurance | 26.81% | 2.73% | ||
Other Assets & Liabilities | 0.34% | Information Technology | 2.52% | 19.66% | ||
100.00% | Health Care | – | 15.51% | |||
Energy | – | 7.84% | ||||
Capital Goods | – | 7.41% | ||||
Food, Beverage & Tobacco | – | 5.13% | ||||
Retailing | – | 4.78% | ||||
Media | – | 3.66% | ||||
Other | – | 21.93% | ||||
100.00% | 100.00% |
Top 10 Long-Term Holdings | ||
(% of Fund's 06/30/15 Net Assets) | ||
Wells Fargo & Co. | Banks | 8.87% |
Markel Corp. | Property & Casualty Insurance | 6.92% |
American Express Co. | Consumer Finance | 6.59% |
Bank of New York Mellon Corp. | Capital Markets | 6.44% |
Visa Inc., Class A | Diversified Financial Services | 5.24% |
JPMorgan Chase & Co. | Banks | 4.56% |
Everest Re Group, Ltd. | Reinsurance | 4.34% |
Citizens Financial Group Inc. | Banks | 4.12% |
ACE Ltd. | Property & Casualty Insurance | 3.87% |
Julius Baer Group Ltd. | Capital Markets | 3.52% |
DAVIS SERIES, INC. | |
DAVIS APPRECIATION & INCOME FUND | June 30, 2015 (Unaudited) |
Portfolio Composition | Industry Weightings | |||||
(% of Fund's 06/30/15 Net Assets) | (% of 06/30/15 Long-Term Portfolio) | |||||
Fund | S&P 500® | |||||
Common Stock (U.S.) | 63.58% | Capital Goods | 13.23% | 7.41% | ||
Common Stock (Foreign) | 6.13% | Information Technology | 12.54% | 19.66% | ||
Convertible Bonds (U.S.) | 13.90% | Energy | 11.97% | 7.84% | ||
Convertible Bonds (Foreign) | 2.49% | Materials | 11.61% | 3.17% | ||
Convertible Preferred Stock | 7.56% | Banks | 9.71% | 6.22% | ||
Corporate Bonds (U.S.) | 4.87% | Health Care | 8.09% | 15.51% | ||
Corporate Bonds (Foreign) | 1.45% | Retailing | 7.91% | 4.78% | ||
Other Assets & Liabilities | 0.02% | Food, Beverage & Tobacco | 5.81% | 5.13% | ||
100.00% | Diversified Financials | 3.88% | 5.13% | |||
Utilities | 3.68% | 2.83% | ||||
Commercial & Professional Services | 3.50% | 0.63% | ||||
Media | 2.81% | 3.66% | ||||
Food & Staples Retailing | 2.63% | 2.38% | ||||
Consumer Services | 2.05% | 1.80% | ||||
Other | 0.58% | 13.85% | ||||
100.00% | 100.00% |
Top 10 Long-Term Holdings | ||
(% of Fund's 06/30/15 Net Assets) | ||
Tyson Foods, Inc., 4.75%, Conv. Pfd. | Food, Beverage & Tobacco | 5.46% |
Intel Corp., Conv. Jr. Sub. Deb., 3.25%, 08/01/39 | Semiconductors & Semiconductor Equipment | 4.95% |
Universal Health Services, Inc., Class B | Health Care Equipment & Services | 4.60% |
Kohl's Corp. | Retailing | 4.60% |
United States Steel Corp., Conv. Sr. Notes, 2.75%, 04/01/19 | Materials | 4.45% |
Citigroup Inc. | Banks | 3.83% |
Bank of America Corp. | Banks | 3.71% |
Devon Energy Corp. | Energy | 3.51% |
Waste Connections, Inc. | Commercial & Professional Services | 3.50% |
Allegheny Technologies, Inc. | Materials | 3.43% |
DAVIS SERIES, INC. | |
DAVIS REAL ESTATE FUND | June 30, 2015 (Unaudited) |
Portfolio Composition | Industry Weightings | |||||
(% of Fund's 06/30/15 Net Assets) | (% of 06/30/15 Long-Term Portfolio) | |||||
Wilshire U.S. | ||||||
Real Estate | ||||||
Fund | Securities Index | |||||
Common Stock (U.S.) | 96.93% | Retail REITs | 25.71% | 23.69% | ||
Common Stock (Foreign) | 1.00% | Residential REITs | 22.84% | 19.06% | ||
Convertible Bonds | 0.73% | Office REITs | 12.47% | 18.67% | ||
Preferred Stock | 0.08% | Industrial REITs | 11.47% | 4.53% | ||
Short-Term Investments | 0.51% | Specialized REITs | 8.36% | 9.05% | ||
Other Assets & Liabilities | 0.75% | Health Care REITs | 5.08% | 12.26% | ||
100.00% | Real Estate Operating Companies | 4.82% | 0.70% | |||
Diversified REITs | 2.78% | 3.49% | ||||
Diversified Real Estate Activities | 2.26% | – | ||||
Consumer Services | 2.17% | 0.28% | ||||
Hotel & Resort REITs | 1.02% | 8.27% | ||||
Information Technology | 1.02% | – | ||||
100.00% | 100.00% |
Top 10 Long-Term Holdings | ||
(% of Fund's 06/30/15 Net Assets) | ||
Simon Property Group, Inc. | Retail REITs | 6.83% |
AvalonBay Communities, Inc. | Residential REITs | 4.98% |
Prologis, Inc. | Industrial REITs | 3.57% |
DCT Industrial Trust Inc. | Industrial REITs | 3.22% |
Vornado Realty Trust | Office REITs | 2.80% |
Boston Properties, Inc. | Office REITs | 2.80% |
Acadia Realty Trust | Retail REITs | 2.72% |
CyrusOne Inc. | Specialized REITs | 2.54% |
Kite Realty Group Trust | Retail REITs | 2.52% |
Equity Residential | Residential REITs | 2.42% |
DAVIS SERIES, INC. |
As a shareholder of each Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and contingent deferred sales charges on redemptions; and (2) ongoing costs, including advisory and administrative fees, distribution and/or service (12b-1) fees, and other Fund expenses. The Expense Example is intended to help you understand your ongoing costs (in dollars) of investing in each Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for each class is for the six-month period ended June 30, 2015.
Actual Expenses
The information represented in the row entitled "Actual" provides information about actual account values and actual expenses. You may use the information in this row, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. An annual maintenance fee of $15, charged on retirement plan accounts per Social Security Number, is not included in the Expense Example. This fee will be waived for accounts sharing the same Social Security Number if the accounts total at least $50,000 at Davis Funds. If this fee was included, the estimate of expenses you paid during the period would have been higher, and your ending account value would have been lower, by this amount.
Hypothetical Example for Comparison Purposes
The information represented in the row entitled "Hypothetical" provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. An annual maintenance fee of $15, charged on retirement plan accounts per Social Security Number, is not included in the Expense Example. This fee will be waived for accounts sharing the same Social Security Number if the accounts total at least $50,000 at Davis Funds. If this fee was included, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads). Therefore, the information in the row entitled "Hypothetical" is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
DAVIS SERIES, INC. | Expense Example (Unaudited) – (Continued) |
Beginning Account Value | Ending Account Value | Expenses Paid During Period* | |||
(01/01/15) | (06/30/15) | (01/01/15-06/30/15) | |||
Davis Opportunity Fund | |||||
Class A (annualized expense ratio 0.95%**) | |||||
Actual | $1,000.00 | $1,050.43 | $4.83 | ||
Hypothetical | $1,000.00 | $1,020.08 | $4.76 | ||
Class B (annualized expense ratio 1.95%**) | |||||
Actual | $1,000.00 | $1,045.19 | $9.89 | ||
Hypothetical | $1,000.00 | $1,015.12 | $9.74 | ||
Class C (annualized expense ratio 1.75%**) | |||||
Actual | $1,000.00 | $1,046.06 | $8.88 | ||
Hypothetical | $1,000.00 | $1,016.12 | $8.75 | ||
Class Y (annualized expense ratio 0.73%**) | |||||
Actual | $1,000.00 | $1,051.27 | $3.71 | ||
Hypothetical | $1,000.00 | $1,021.17 | $3.66 | ||
Davis Government Bond Fund | |||||
Class A (annualized expense ratio 1.07%**) | |||||
Actual | $1,000.00 | $1,005.95 | $5.32 | ||
Hypothetical | $1,000.00 | $1,019.49 | $5.36 | ||
Class B (annualized expense ratio 1.86%**) | |||||
Actual | $1,000.00 | $1,000.39 | $9.23 | ||
Hypothetical | $1,000.00 | $1,015.57 | $9.30 | ||
Class C (annualized expense ratio 1.74%**) | |||||
Actual | $1,000.00 | $1,002.64 | $8.64 | ||
Hypothetical | $1,000.00 | $1,016.17 | $8.70 | ||
Class Y (annualized expense ratio 0.56%**) | |||||
Actual | $1,000.00 | $1,006.69 | $2.79 | ||
Hypothetical | $1,000.00 | $1,022.02 | $2.81 | ||
Davis Government Money Market Fund | |||||
Class A, B, C, and Y (annualized expense ratio 0.02%**) | |||||
Actual | $1,000.00 | $1,000.55 | $0.10 | ||
Hypothetical | $1,000.00 | $1,024.70 | $0.10 | ||
Davis Financial Fund | |||||
Class A (annualized expense ratio 0.86%**) | |||||
Actual | $1,000.00 | $1,033.09 | $4.34 | ||
Hypothetical | $1,000.00 | $1,020.53 | $4.31 | ||
Class B (annualized expense ratio 1.93%**) | |||||
Actual | $1,000.00 | $1,027.57 | $9.70 | ||
Hypothetical | $1,000.00 | $1,015.22 | $9.64 | ||
Class C (annualized expense ratio 1.75%**) | |||||
Actual | $1,000.00 | $1,028.55 | $8.80 | ||
Hypothetical | $1,000.00 | $1,016.12 | $8.75 | ||
Class Y (annualized expense ratio 0.71%**) | |||||
Actual | $1,000.00 | $1,033.66 | $3.58 | ||
Hypothetical | $1,000.00 | $1,021.27 | $3.56 |
DAVIS SERIES, INC. | Expense Example (Unaudited) – (Continued) |
Beginning Account Value | Ending Account Value | Expenses Paid During Period* | |||
(01/01/15) | (06/30/15) | (01/01/15-06/30/15) | |||
Davis Appreciation & Income Fund | |||||
Class A (annualized expense ratio 0.87%**) | |||||
Actual | $1,000.00 | $1,010.62 | $4.34 | ||
Hypothetical | $1,000.00 | $1,020.48 | $4.36 | ||
Class B (annualized expense ratio 1.88%**) | |||||
Actual | $1,000.00 | $1,005.65 | $9.35 | ||
Hypothetical | $1,000.00 | $1,015.47 | $9.39 | ||
Class C (annualized expense ratio 1.72%**) | |||||
Actual | $1,000.00 | $1,006.47 | $8.56 | ||
Hypothetical | $1,000.00 | $1,016.27 | $8.60 | ||
Class Y (annualized expense ratio 0.68%**) | |||||
Actual | $1,000.00 | $1,011.67 | $3.39 | ||
Hypothetical | $1,000.00 | $1,021.42 | $3.41 | ||
Davis Real Estate Fund | |||||
Class A (annualized expense ratio 0.93%**) | |||||
Actual | $1,000.00 | $946.77 | $4.49 | ||
Hypothetical | $1,000.00 | $1,020.18 | $4.66 | ||
Class B (annualized expense ratio 1.98%**) | |||||
Actual | $1,000.00 | $941.78 | $9.53 | ||
Hypothetical | $1,000.00 | $1,014.98 | $9.89 | ||
Class C (annualized expense ratio 1.81%**) | |||||
Actual | $1,000.00 | $942.74 | $8.72 | ||
Hypothetical | $1,000.00 | $1,015.82 | $9.05 | ||
Class Y (annualized expense ratio 0.75%**) | |||||
Actual | $1,000.00 | $947.73 | $3.62 | ||
Hypothetical | $1,000.00 | $1,021.08 | $3.76 |
Hypothetical assumes 5% annual return before expenses. |
*Expenses are equal to each Class's annualized operating expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
**The expense ratios reflect the impact, if any, of certain reimbursements and/or waivers from the Adviser. |
DAVIS SERIES, INC. | |
DAVIS OPPORTUNITY FUND | June 30, 2015 (Unaudited) |
Shares | Value (Note 1) | |||||||||||
COMMON STOCK – (95.14%) | ||||||||||||
CONSUMER DISCRETIONARY – (28.78%) | ||||||||||||
Consumer Durables & Apparel – (2.17%) | ||||||||||||
Compagnie Financiere Richemont S.A., Unit A (Switzerland) | 42,680 | $ | 3,471,645 | |||||||||
Hunter Douglas N.V. (Netherlands) | 72,060 | 3,213,041 | ||||||||||
NIKE, Inc., Class B | 50,520 | 5,457,170 | ||||||||||
12,141,856 | ||||||||||||
Consumer Services – (2.62%) | ||||||||||||
Las Vegas Sands Corp. | 279,185 | 14,676,755 | ||||||||||
Media – (6.82%) | ||||||||||||
Liberty Global PLC, Series C * | 456,400 | 23,107,532 | ||||||||||
Time Warner Cable Inc. | 57,740 | 10,287,536 | ||||||||||
Twenty-First Century Fox, Inc., Class B | 149,270 | 4,809,479 | ||||||||||
38,204,547 | ||||||||||||
Retailing – (17.17%) | ||||||||||||
Advance Auto Parts, Inc. | 26,620 | 4,240,300 | ||||||||||
Amazon.com, Inc. * | 83,620 | 36,298,606 | ||||||||||
Baoxin Auto Group Ltd. (China) | 9,500,000 | 6,066,528 | ||||||||||
JD.com Inc., Class A, ADR (China)* | 331,100 | 11,290,510 | ||||||||||
Jumei International Holding Ltd., Class A, ADR (China)* | 51,100 | 1,167,124 | ||||||||||
Liberty Interactive Corp., Liberty Ventures, Series A * | 132,100 | 5,187,567 | ||||||||||
Lowe's Cos, Inc. | 83,040 | 5,561,189 | ||||||||||
Party City Holdco Inc. * | 230,880 | 4,679,937 | ||||||||||
Priceline Group Inc. * | 11,610 | 13,367,406 | ||||||||||
TJX Cos, Inc. | 41,040 | 2,715,617 | ||||||||||
Vipshop Holdings Ltd., Class A, ADR (China)* | 253,500 | 5,640,375 | ||||||||||
96,215,159 | ||||||||||||
Total Consumer Discretionary | 161,238,317 | |||||||||||
CONSUMER STAPLES – (0.87%) | ||||||||||||
Food & Staples Retailing – (0.03%) | ||||||||||||
Brasil Pharma S.A. (Brazil)* | 553,100 | 144,097 | ||||||||||
Household & Personal Products – (0.84%) | ||||||||||||
Colgate-Palmolive Co. | 71,960 | 4,706,903 | ||||||||||
Total Consumer Staples | 4,851,000 | |||||||||||
ENERGY – (5.99%) | ||||||||||||
Cabot Oil & Gas Corp. | 311,200 | 9,815,248 | ||||||||||
Encana Corp. (Canada) | 1,026,690 | 11,314,124 | ||||||||||
Ultra Petroleum Corp. * | 992,560 | 12,426,851 | ||||||||||
Total Energy | 33,556,223 | |||||||||||
FINANCIALS – (11.24%) | ||||||||||||
Banks – (3.95%) | ||||||||||||
JPMorgan Chase & Co. | 207,200 | 14,039,872 | ||||||||||
Standard Chartered PLC (United Kingdom) | 130,150 | 2,083,836 | ||||||||||
Wells Fargo & Co. | 106,620 | 5,996,309 | ||||||||||
22,120,017 | ||||||||||||
Diversified Financials – (3.88%) | ||||||||||||
Capital Markets – (0.71%) | ||||||||||||
Charles Schwab Corp. | 121,870 | 3,979,055 | ||||||||||
Diversified Financial Services – (3.17%) | ||||||||||||
BM&FBOVESPA S.A. (Brazil) | 1,161,400 | 4,377,990 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS OPPORTUNITY FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Shares/Units | Value (Note 1) | |||||||||||
COMMON STOCK – (CONTINUED) | ||||||||||||
FINANCIALS – (CONTINUED) | ||||||||||||
Diversified Financials – (Continued) | ||||||||||||
Diversified Financial Services – (Continued) | ||||||||||||
LendingClub Corp. * | 222,000 | $ | 3,274,500 | |||||||||
Visa Inc., Class A | 150,320 | 10,093,988 | ||||||||||
17,746,478 | ||||||||||||
21,725,533 | ||||||||||||
Insurance – (3.41%) | ||||||||||||
Multi-line Insurance – (1.12%) | ||||||||||||
Sul America S.A. (Brazil) | 1,293,000 | 6,308,839 | ||||||||||
Property & Casualty Insurance – (2.29%) | ||||||||||||
Markel Corp. * | 16,035 | 12,838,904 | ||||||||||
19,147,743 | ||||||||||||
Total Financials | 62,993,293 | |||||||||||
HEALTH CARE – (6.98%) | ||||||||||||
Health Care Equipment & Services – (6.79%) | ||||||||||||
Diagnosticos da America S.A. (Brazil) | 149,770 | 488,941 | ||||||||||
Express Scripts Holding Co. * | 127,520 | 11,341,629 | ||||||||||
IDEXX Laboratories, Inc. * | 187,660 | 12,036,512 | ||||||||||
Laboratory Corp. of America Holdings * | 35,000 | 4,242,700 | ||||||||||
Quest Diagnostics Inc. | 62,180 | 4,509,293 | ||||||||||
UnitedHealth Group Inc. | 44,390 | 5,415,580 | ||||||||||
38,034,655 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences – (0.19%) | ||||||||||||
Agilent Technologies, Inc. | 28,234 | 1,089,268 | ||||||||||
Total Health Care | 39,123,923 | |||||||||||
INDUSTRIALS – (13.77%) | ||||||||||||
Capital Goods – (8.52%) | ||||||||||||
Assa Abloy AB, Class B (Sweden) | 321,600 | 6,055,811 | ||||||||||
KBR, Inc. | 105,300 | 2,051,244 | ||||||||||
Precision Castparts Corp. | 41,060 | 8,206,662 | ||||||||||
Rockwell Automation, Inc. | 75,660 | 9,430,262 | ||||||||||
Textron Inc. | 92,260 | 4,117,564 | ||||||||||
TransDigm Group, Inc. | 26,030 | 5,848,160 | ||||||||||
United Technologies Corp. | 17,950 | 1,991,194 | ||||||||||
Univar Inc. * | 161,140 | 4,194,474 | ||||||||||
WESCO International, Inc. * | 85,000 | 5,834,400 | ||||||||||
47,729,771 | ||||||||||||
Transportation – (5.25%) | ||||||||||||
CAR Inc. (China)* | 2,500,000 | 5,308,616 | ||||||||||
Kuehne & Nagel International AG (Switzerland) | 59,286 | 7,869,290 | ||||||||||
Wesco Aircraft Holdings, Inc. * | 1,070,850 | 16,223,377 | ||||||||||
29,401,283 | ||||||||||||
Total Industrials | 77,131,054 | |||||||||||
INFORMATION TECHNOLOGY – (26.19%) | ||||||||||||
Semiconductors & Semiconductor Equipment – (3.01%) | ||||||||||||
Altera Corp. | 38,800 | 1,986,560 | ||||||||||
Applied Materials, Inc. | 116,400 | 2,237,208 | ||||||||||
Intel Corp. | 70,700 | 2,150,341 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS OPPORTUNITY FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Shares/Units | Value (Note 1) | |||||||||||
COMMON STOCK – (CONTINUED) | ||||||||||||
INFORMATION TECHNOLOGY – (CONTINUED) | ||||||||||||
Semiconductors & Semiconductor Equipment – (Continued) | ||||||||||||
Texas Instruments Inc. | 202,950 | $ | 10,453,954 | |||||||||
16,828,063 | ||||||||||||
Software & Services – (22.47%) | ||||||||||||
Angie's List Inc. * | 1,262,145 | 7,774,813 | ||||||||||
ASAC II L.P., Private Placement *(a) | 6,900,000 | 11,304,270 | ||||||||||
Coupons.com Inc. * | 1,791,860 | 19,334,169 | ||||||||||
Google Inc., Class A * | 29,753 | 16,067,810 | ||||||||||
Google Inc., Class C * | 29,783 | 15,502,349 | ||||||||||
GrubHub, Inc. * | 146,220 | 4,981,715 | ||||||||||
International Business Machines Corp. | 5,344 | 869,255 | ||||||||||
Microsoft Corp. | 192,870 | 8,515,211 | ||||||||||
Oracle Corp. | 147,280 | 5,935,384 | ||||||||||
Qihoo 360 Technology Co. Ltd., Class A, ADR (China)* | 145,320 | 9,836,711 | ||||||||||
salesforce.com, inc. * | 49,590 | 3,452,952 | ||||||||||
SAP SE, ADR (Germany) | 30,391 | 2,134,360 | ||||||||||
SouFun Holdings Ltd., Class A, ADR (China) | 1,495,410 | 12,576,398 | ||||||||||
Youku Tudou Inc., Class A, ADR (China)* | 98,660 | 2,420,130 | ||||||||||
YY Inc., Class A, ADR (China)* | 74,700 | 5,193,144 | ||||||||||
125,898,671 | ||||||||||||
Technology Hardware & Equipment – (0.71%) | ||||||||||||
Hewlett-Packard Co. | 118,184 | 3,546,702 | ||||||||||
Keysight Technologies, Inc. * | 14,117 | 440,309 | ||||||||||
3,987,011 | ||||||||||||
Total Information Technology | 146,713,745 | |||||||||||
MATERIALS – (1.32%) | ||||||||||||
Praxair, Inc. | 32,240 | 3,854,292 | ||||||||||
Sherwin-Williams Co. | 12,790 | 3,517,506 | ||||||||||
Total Materials | 7,371,798 | |||||||||||
TOTAL COMMON STOCK – (Identified cost $463,628,145) | 532,979,353 | |||||||||||
PREFERRED STOCK – (1.50%) | ||||||||||||
INFORMATION TECHNOLOGY – (1.50%) | ||||||||||||
Software & Services– (1.50%) | ||||||||||||
DianPing Holdings Ltd., Series F, Private Placement (China)*(a) | 4,371,772 | 8,424,842 | ||||||||||
TOTAL PREFERRED STOCK – (Identified cost $11,580,824) | 8,424,842 | |||||||||||
STOCK WARRANTS – (0.86%) | ||||||||||||
FINANCIALS – (0.86%) | ||||||||||||
Banks – (0.86%) | ||||||||||||
Wells Fargo & Co., strike price $34.01, expires 10/28/18 * | 214,620 | 4,826,804 | ||||||||||
TOTAL STOCK WARRANTS – (Identified cost $1,717,698) | 4,826,804 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS OPPORTUNITY FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Principal | Value (Note 1) | |||||||||||
SHORT-TERM INVESTMENTS – (2.64%) | ||||||||||||
Mizuho Securities USA Inc. Joint Repurchase Agreement, 0.14%, 07/01/15, dated 06/30/15, repurchase value of $6,302,025 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.4109%-4.00%, 02/20/30-06/01/45, total market value $6,428,040) | $ | 6,302,000 | $ | 6,302,000 | ||||||||
Nomura Securities International, Inc. Joint Repurchase Agreement, 0.13%, 07/01/15, dated 06/30/15, repurchase value of $5,398,019 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.70%-7.50%, 04/15/28-06/15/45, total market value $5,505,960) | 5,398,000 | 5,398,000 | ||||||||||
SunTrust Robinson Humphrey, Inc. Joint Repurchase Agreement, 0.30%, 07/01/15, dated 06/30/15, repurchase value of $3,085,026 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 1.959%-3.50%, 11/01/29-06/01/45, total market value $3,146,700) | 3,085,000 | 3,085,000 | ||||||||||
TOTAL SHORT-TERM INVESTMENTS – (Identified cost $14,785,000) | 14,785,000 | |||||||||||
Total Investments – (100.14%) – (Identified cost $491,711,667) – (b) | 561,015,999 | |||||||||||
Liabilities Less Other Assets – (0.14%) | (779,149) | |||||||||||
Net Assets – (100.00%) | $ | 560,236,850 | ||||||||||
ADR: American Depositary Receipt | ||||||||||||
* | Non-Income producing security. | |||||||||||
(a) | Restricted Security – See Note 7 of the Notes to Financial Statements. | |||||||||||
(b) | Aggregate cost for federal income tax purposes is $495,940,454. At June 30, 2015 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows: | |||||||||||
Unrealized appreciation | $ | 119,684,901 | ||||||||||
Unrealized depreciation | (54,609,356) | |||||||||||
Net unrealized appreciation | $ | 65,075,545 | ||||||||||
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
DAVIS GOVERNMENT BOND FUND | June 30, 2015 (Unaudited) |
Principal | Value (Note 1) | ||||||||
MORTGAGES – (94.42%) | |||||||||
COLLATERALIZED MORTGAGE OBLIGATIONS – (55.56%) | |||||||||
Fannie Mae, 4.00%, 02/25/19 | $ | 403,081 | $ | 421,016 | |||||
Fannie Mae, 0.387%, 02/25/37 (a) | 6,409 | 6,390 | |||||||
Fannie Mae, 0.537%, 07/25/37 (a) | 244,001 | 243,526 | |||||||
Fannie Mae, 5.50%, 04/25/42 | 500,275 | 562,539 | |||||||
Fannie Mae, 3.00%, 08/25/42 | 3,935,007 | 4,025,085 | |||||||
Fannie Mae, 3.00%, 10/25/42 | 2,242,461 | 2,323,345 | |||||||
Fannie Mae, 3.00%, 02/25/43 | 3,729,531 | 3,878,090 | |||||||
Freddie Mac, 4.50%, 07/15/18 | 242,602 | 254,281 | |||||||
Freddie Mac, 3.50%, 07/15/24 | 151,815 | 153,529 | |||||||
Freddie Mac, 5.00%, 01/15/25 | 2,000,000 | 2,084,650 | |||||||
Freddie Mac, 4.00%, 01/15/26 | 988,574 | 1,054,894 | |||||||
Freddie Mac, 3.00%, 10/15/26 | 2,134,656 | 2,183,572 | |||||||
Freddie Mac, 4.00%, 01/15/28 | 446,032 | 457,877 | |||||||
Freddie Mac, 4.00%, 04/15/29 | 1,899,318 | 2,004,557 | |||||||
Freddie Mac, 4.50%, 04/15/32 | 6,810 | 6,809 | |||||||
Freddie Mac, 4.00%, 03/15/37 | 1,013,835 | 1,070,265 | |||||||
Freddie Mac, 2.50%, 10/15/39 | 2,059,775 | 2,061,845 | |||||||
Freddie Mac, 4.00%, 12/15/39 | 2,487,325 | 2,663,198 | |||||||
Ginnie Mae, 4.00%, 05/20/33 | 792,360 | 802,130 | |||||||
Ginnie Mae, 3.00%, 09/16/34 | 1,500,000 | 1,533,540 | |||||||
Ginnie Mae, 3.50%, 07/20/36 | 494,575 | 515,828 | |||||||
Ginnie Mae, 5.3664%, 12/16/36 (a) | 14,145 | 14,213 | |||||||
Ginnie Mae, 3.00%, 12/20/37 | 472,427 | 486,192 | |||||||
Ginnie Mae, 4.00%, 11/20/38 | 587,401 | 618,836 | |||||||
Ginnie Mae, 4.00%, 09/20/39 | 238,785 | 252,683 | |||||||
NCUA Guaranteed Notes, 0.7465%, 12/08/20 (b) | 5,137,958 | 5,137,265 | |||||||
Total Collateralized Mortgage Obligations | 34,816,155 | ||||||||
FANNIE MAE POOLS – (24.16%) | |||||||||
6.00%, 09/01/17, Pool No. 665776 | 251,122 | 263,633 | |||||||
3.65%, 01/01/18, Pool No. 467153 | 3,415,288 | 3,587,952 | |||||||
4.50%, 03/01/18, Pool No. AJ0354 | 342,332 | 349,224 | |||||||
3.00%, 10/01/21, Pool No. MA0865 | 1,680,062 | 1,753,413 | |||||||
2.50%, 11/01/22, Pool No. AQ4765 | 3,288,474 | 3,380,745 | |||||||
3.00%, 12/01/23, Pool No. MA1691 | 1,839,717 | 1,923,489 | |||||||
3.50%, 11/01/24, Pool No. MA2101 | 3,411,265 | 3,618,153 | |||||||
6.50%, 07/01/32, Pool No. 635069 | 34,515 | 36,901 | |||||||
6.00%, 09/01/37, Pool No. 888796 | 198,299 | 225,542 | |||||||
Total Fannie Mae Pools | 15,139,052 | ||||||||
FREDDIE MAC POOLS – (9.69%) | |||||||||
2.50%, 05/01/23, Pool No. G14738 | 2,074,113 | 2,133,749 | |||||||
4.00%, 05/01/24, Pool No. J09596 | 671,037 | 711,329 | |||||||
3.00%, 10/01/24, Pool No. J29659 | 2,737,961 | 2,868,525 | |||||||
3.50%, 01/01/26, Pool No. G18373 | 336,154 | 356,082 | |||||||
Total Freddie Mac Pools | 6,069,685 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS GOVERNMENT BOND FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Principal | Value (Note 1) | ||||||||||||
MORTGAGES – (CONTINUED) | |||||||||||||
GINNIE MAE POOLS – (5.01%) | |||||||||||||
3.00%, 05/20/30, Pool No. 784008 | $ | 3,000,000 | $ | 3,138,184 | |||||||||
Total Ginnie Mae Pools | 3,138,184 | ||||||||||||
TOTAL MORTGAGES – (Identified cost $58,706,828) | 59,163,076 | ||||||||||||
OTHER AGENCIES – (0.31%) | |||||||||||||
Housing Urban Development, 6.00%, 08/01/20 | 190,000 | 193,289 | |||||||||||
TOTAL OTHER AGENCIES – (Identified cost $190,000) | 193,289 | ||||||||||||
SHORT-TERM INVESTMENTS – (5.20%) | |||||||||||||
Mizuho Securities USA Inc. Joint Repurchase Agreement, 0.14%, 07/01/15, dated 06/30/15, repurchase value of $1,388,005 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.4109%-4.00%, 02/20/30-06/01/45, total market value $1,415,760) | 1,388,000 | 1,388,000 | |||||||||||
Nomura Securities International, Inc. Joint Repurchase Agreement, 0.13%, 07/01/15, dated 06/30/15, repurchase value of $1,189,004 (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-8.00%, 11/15/17-05/20/65, total market value $1,212,780) | 1,189,000 | 1,189,000 | |||||||||||
SunTrust Robinson Humphrey, Inc. Joint Repurchase Agreement, 0.30%, 07/01/15, dated 06/30/15, repurchase value of $679,006 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.312%-3.50%, 10/01/29-06/01/45, total market value $692,580) | 679,000 | 679,000 | |||||||||||
TOTAL SHORT-TERM INVESTMENTS – (Identified cost $3,256,000) | 3,256,000 | ||||||||||||
Total Investments – (99.93%) – (Identified cost $62,152,828) – (c) | 62,612,365 | ||||||||||||
Other Assets Less Liabilities – (0.07%) | 44,788 | ||||||||||||
Net Assets – (100.00%) | $ | 62,657,153 | |||||||||||
(a) | The interest rates on floating rate securities, shown as of June 30, 2015, may change daily or less frequently and are based on indices of market interest rates. For purposes of amortized cost valuation, the maturity dates of these securities are considered to be the effective maturities, based on the reset dates of the securities' variable rates. | ||||||||||||
(b) | The interest rates on adjustable rate securities, shown as of June 30, 2015, may change daily or less frequently and are based on indices of market interest rates. | ||||||||||||
(c) | Aggregate cost for federal income tax purposes is $62,152,828. At June 30, 2015 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows: | ||||||||||||
Unrealized appreciation | $ | 565,252 | |||||||||||
Unrealized depreciation | (105,715) | ||||||||||||
Net unrealized appreciation | $ | 459,537 | |||||||||||
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
DAVIS GOVERNMENT MONEY MARKET FUND | June 30, 2015 (Unaudited) |
Principal | Value (Note 1) | ||||||||
FANNIE MAE – (8.69%) | |||||||||
0.50%, 09/28/15 | $ | 5,000,000 | $ | 5,004,242 | |||||
1.875%, 10/15/15 | 250,000 | 251,239 | |||||||
0.1768%, 10/21/15 (a) | 4,000,000 | 4,000,435 | |||||||
2.125%, 10/21/15 | 270,000 | 271,622 | |||||||
1.625%, 10/26/15 | 1,084,000 | 1,089,073 | |||||||
0.375%, 12/21/15 | 4,487,000 | 4,490,507 | |||||||
5.00%, 03/15/16 | 1,145,000 | 1,182,691 | |||||||
TOTAL FANNIE MAE – (Identified cost $16,289,809) | 16,289,809 | ||||||||
FEDERAL FARM CREDIT BANK – (21.35%) | |||||||||
0.2168%, 07/20/15 (a) | 4,450,000 | 4,450,168 | |||||||
0.183%, 08/03/15 (a) | 4,000,000 | 4,000,096 | |||||||
0.34%, 08/03/15 (a) | 4,000,000 | 4,000,697 | |||||||
0.1855%, 09/14/15 (a) | 500,000 | 500,032 | |||||||
0.175%, 09/18/15 (a) | 4,000,000 | 4,000,692 | |||||||
0.2118%, 09/22/15 (a) | 2,400,000 | 2,400,394 | |||||||
0.2165%, 10/26/15 (a) | 5,500,000 | 5,501,699 | |||||||
1.50%, 11/16/15 | 1,625,000 | 1,633,172 | |||||||
0.1875%, 11/19/15 (a) | 4,100,000 | 4,100,644 | |||||||
4.875%, 12/16/15 | 255,000 | 260,465 | |||||||
2.35%, 12/22/15 | 1,000,000 | 1,010,201 | |||||||
0.237%, 02/24/16 (a) | 3,000,000 | 3,001,685 | |||||||
0.2568%, 04/20/16 (a) | 5,150,000 | 5,155,014 | |||||||
TOTAL FEDERAL FARM CREDIT BANK – (Identified cost $40,014,959) | 40,014,959 | ||||||||
FEDERAL HOME LOAN BANK – (8.79%) | |||||||||
Discount Note, 0.13%, 10/28/15 (b) | 5,000,000 | 4,997,851 | |||||||
0.125%, 07/17/15 | 2,500,000 | 2,499,940 | |||||||
0.15%, 08/10/15 (a) | 4,000,000 | 4,000,047 | |||||||
2.375%, 12/11/15 | 220,000 | 222,126 | |||||||
0.375%, 12/30/15 | 4,750,000 | 4,753,369 | |||||||
TOTAL FEDERAL HOME LOAN BANK – (Identified cost $16,473,333) | 16,473,333 | ||||||||
FREDDIE MAC – (2.13%) | |||||||||
0.1648%, 10/16/15 (a) | 1,000,000 | 1,000,060 | |||||||
0.45%, 11/24/15 | 2,990,000 | 2,992,869 | |||||||
TOTAL FREDDIE MAC – (Identified cost $3,992,929) | 3,992,929 | ||||||||
OTHER AGENCIES – (0.17%) | |||||||||
Private Export Funding Corp., 4.95%, 11/15/15 | 300,000 | 304,914 | |||||||
TOTAL OTHER AGENCIES – (Identified cost $304,914) | 304,914 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS GOVERNMENT MONEY MARKET FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Principal | Value (Note 1) | |||||||||||
REPURCHASE AGREEMENTS – (50.49%) | ||||||||||||
Mizuho Securities USA Inc. Joint Repurchase Agreement, 0.14%, 07/01/15, dated 06/30/15, repurchase value of $40,337,157 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.4109%-4.00%, 02/20/30-06/01/45, total market value $41,143,740) | $ | 40,337,000 | $ | 40,337,000 | ||||||||
Nomura Securities International, Inc. Joint Repurchase Agreement, 0.13%, 07/01/15, dated 06/30/15, repurchase value of $34,551,125 (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-8.00%, 03/15/21-06/20/45, total market value $35,242,020) | 34,551,000 | 34,551,000 | ||||||||||
SunTrust Robinson Humphrey, Inc. Joint Repurchase Agreement, 0.30%, 07/01/15, dated 06/30/15, repurchase value of $19,743,165 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 1.848%-5.00%, 01/01/24-10/01/44, total market value $20,137,860) | 19,743,000 | 19,743,000 | ||||||||||
TOTAL REPURCHASE AGREEMENTS – (Identified cost $94,631,000) | 94,631,000 | |||||||||||
Total Investments – (91.62%) – (Identified cost $171,706,944) – (c) | 171,706,944 | |||||||||||
Other Assets Less Liabilities – (8.38%) | 15,700,591 | |||||||||||
Net Assets – (100.00%) | $ | 187,407,535 | ||||||||||
(a) | The interest rates on floating rate securities, shown as of June 30, 2015, may change daily or less frequently and are based on indices of market interest rates. For purposes of amortized cost valuation, the maturity dates of these securities are considered to be the effective maturities, based on the reset dates of the securities' variable rates. | |||||||||||
(b) | Zero coupon bonds reflect the effective yield on the date of purchase. | |||||||||||
(c) | Aggregate cost for federal income tax purposes is $171,706,944. | |||||||||||
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
DAVIS FINANCIAL FUND | June 30, 2015 (Unaudited) |
Shares/Units | Value (Note 1) | |||||||||||
COMMON STOCK – (93.14%) | ||||||||||||
FINANCIALS – (90.79%) | ||||||||||||
Banks – (25.08%) | ||||||||||||
Citizens Financial Group Inc. | 1,174,640 | $ | 32,079,418 | |||||||||
ICICI Bank Ltd., ADR (India) | 608,485 | 6,340,414 | ||||||||||
JPMorgan Chase & Co. | 523,980 | 35,504,885 | ||||||||||
SKBHC Holdings LLC *(a) | 1,916 | 13,207,656 | ||||||||||
Standard Chartered PLC (United Kingdom) | 1,140,800 | 18,265,390 | ||||||||||
U.S. Bancorp | 476,671 | 20,687,521 | ||||||||||
Wells Fargo & Co. | 1,227,309 | 69,023,858 | ||||||||||
195,109,142 | ||||||||||||
Diversified Financials – (40.73%) | ||||||||||||
Capital Markets – (19.32%) | ||||||||||||
Bank of New York Mellon Corp. | 1,193,374 | 50,085,907 | ||||||||||
Brookfield Asset Management Inc., Class A (Canada) | 620,995 | 21,691,355 | ||||||||||
Charles Schwab Corp. | 755,198 | 24,657,215 | ||||||||||
Goldman Sachs Group, Inc. | 126,992 | 26,514,659 | ||||||||||
Julius Baer Group Ltd. (Switzerland) | 487,612 | 27,354,671 | ||||||||||
150,303,807 | ||||||||||||
Consumer Finance – (8.48%) | ||||||||||||
American Express Co. | 659,712 | 51,272,817 | ||||||||||
Capital One Financial Corp. | 167,500 | 14,734,975 | ||||||||||
66,007,792 | ||||||||||||
Diversified Financial Services – (12.93%) | ||||||||||||
Berkshire Hathaway Inc., Class A * | 74 | 15,158,900 | ||||||||||
Cielo S.A. (Brazil) | 680,553 | 9,591,790 | ||||||||||
McGraw Hill Financial Inc. | 164,200 | 16,493,890 | ||||||||||
Moody's Corp. | 172,100 | 18,579,916 | ||||||||||
Visa Inc., Class A | 606,948 | 40,756,558 | ||||||||||
100,581,054 | ||||||||||||
316,892,653 | ||||||||||||
Insurance – (24.98%) | ||||||||||||
Insurance Brokers – (3.44%) | ||||||||||||
Marsh & McLennan Cos, Inc. | 471,330 | 26,724,411 | ||||||||||
Multi-line Insurance – (4.68%) | ||||||||||||
American International Group, Inc. | 389,020 | 24,049,216 | ||||||||||
Loews Corp. | 321,945 | 12,398,102 | ||||||||||
36,447,318 | ||||||||||||
Property & Casualty Insurance – (12.52%) | ||||||||||||
ACE Ltd. | 296,440 | 30,142,019 | ||||||||||
Chubb Corp. | 141,100 | 13,424,254 | ||||||||||
Markel Corp. * | 67,186 | 53,794,487 | ||||||||||
97,360,760 | ||||||||||||
Reinsurance – (4.34%) | ||||||||||||
Everest Re Group, Ltd. | 185,502 | 33,763,219 | ||||||||||
194,295,708 | ||||||||||||
Total Financials | 706,297,503 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS FINANCIAL FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Shares/Principal | Value (Note 1) | ||||||||||||||
COMMON STOCK – (CONTINUED) | |||||||||||||||
INFORMATION TECHNOLOGY – (2.35%) | |||||||||||||||
Software & Services – (2.35%) | |||||||||||||||
Google Inc., Class A * | 17,200 | $ | 9,288,688 | ||||||||||||
Google Inc., Class C * | 17,247 | 8,977,236 | |||||||||||||
Total Information Technology | 18,265,924 | ||||||||||||||
TOTAL COMMON STOCK – (Identified cost $403,413,172) | 724,563,427 | ||||||||||||||
SHORT-TERM INVESTMENTS – (6.52%) | |||||||||||||||
Mizuho Securities USA Inc. Joint Repurchase Agreement, 0.14%, 07/01/15, dated 06/30/15, repurchase value of $21,614,084 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.4109%-4.00%, 02/20/30-06/01/45, total market value $22,046,280) | $ | 21,614,000 | 21,614,000 | ||||||||||||
Nomura Securities International, Inc. Joint Repurchase Agreement, 0.13%, 07/01/15, dated 06/30/15, repurchase value of $18,514,067 (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-8.00%, 01/15/23-06/20/45, total market value $18,884,280) | 18,514,000 | 18,514,000 | |||||||||||||
SunTrust Robinson Humphrey, Inc. Joint Repurchase Agreement, 0.30%, 07/01/15, dated 06/30/15, repurchase value of $10,579,088 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 1.73%-5.022%, 12/01/18-06/01/45, total market value $10,790,580) | 10,579,000 | 10,579,000 | |||||||||||||
TOTAL SHORT-TERM INVESTMENTS – (Identified cost $50,707,000) | 50,707,000 | ||||||||||||||
Total Investments – (99.66%) – (Identified cost $454,120,172) – (b) | 775,270,427 | ||||||||||||||
Other Assets Less Liabilities – (0.34%) | 2,666,813 | ||||||||||||||
Net Assets – (100.00%) | $ | 777,937,240 | |||||||||||||
ADR: American Depositary Receipt | |||||||||||||||
* | Non-Income producing security. | ||||||||||||||
(a) | Restricted Security – See Note 7 of the Notes to Financial Statements. | ||||||||||||||
(b) | Aggregate cost for federal income tax purposes is $454,052,404. At June 30, 2015 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows: | ||||||||||||||
Unrealized appreciation | $ | 321,853,543 | |||||||||||||
Unrealized depreciation | (635,520) | ||||||||||||||
Net unrealized appreciation | $ | 321,218,023 | |||||||||||||
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
DAVIS APPRECIATION & INCOME FUND | June 30, 2015 (Unaudited) |
Shares | Value (Note 1) | |||||||||||
COMMON STOCK – (69.71%) | ||||||||||||
CONSUMER DISCRETIONARY – (12.48%) | ||||||||||||
Consumer Services – (2.05%) | ||||||||||||
School Specialty, Inc. *(a) | 69,205 | $ | 7,065,830 | |||||||||
Media – (2.81%) | ||||||||||||
Twenty-First Century Fox, Inc., Class A | 298,656 | 9,719,760 | ||||||||||
Retailing – (7.62%) | ||||||||||||
Amazon.com, Inc. * | 24,001 | 10,418,594 | ||||||||||
Kohl's Corp. | 254,200 | 15,915,462 | ||||||||||
26,334,056 | ||||||||||||
Total Consumer Discretionary | 43,119,646 | |||||||||||
CONSUMER STAPLES – (2.98%) | ||||||||||||
Food & Staples Retailing – (2.63%) | ||||||||||||
Whole Foods Market, Inc. | 230,484 | 9,090,289 | ||||||||||
Food, Beverage & Tobacco – (0.35%) | ||||||||||||
Tyson Foods, Inc., Class A | 28,320 | 1,207,282 | ||||||||||
Total Consumer Staples | 10,297,571 | |||||||||||
ENERGY – (9.65%) | ||||||||||||
Devon Energy Corp. | 204,020 | 12,137,150 | ||||||||||
Encana Corp. (Canada) | 330,000 | 3,636,600 | ||||||||||
Nabors Industries Ltd. | 764,492 | 11,031,619 | ||||||||||
Transocean Ltd. (Switzerland) | 406,131 | 6,546,832 | ||||||||||
Total Energy | 33,352,201 | |||||||||||
FINANCIALS – (11.02%) | ||||||||||||
Banks – (7.70%) | ||||||||||||
Banks – (7.54%) | ||||||||||||
Bank of America Corp. | 752,866 | 12,813,779 | ||||||||||
Citigroup Inc. | 239,852 | 13,249,425 | ||||||||||
26,063,204 | ||||||||||||
Thrifts & Mortgage Finance – (0.16%) | ||||||||||||
ADFITECH, Inc. * | 266,000 | 541,310 | ||||||||||
26,604,514 | ||||||||||||
Diversified Financials – (3.32%) | ||||||||||||
Consumer Finance – (3.32%) | ||||||||||||
American Express Co. | 147,640 | 11,474,581 | ||||||||||
Total Financials | 38,079,095 | |||||||||||
HEALTH CARE – (7.78%) | ||||||||||||
Health Care Equipment & Services – (4.60%) | ||||||||||||
Universal Health Services, Inc., Class B | 112,060 | 15,923,726 | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences – (3.18%) | ||||||||||||
Valeant Pharmaceuticals International, Inc. (Canada)* | 49,446 | 10,984,429 | ||||||||||
Total Health Care | 26,908,155 | |||||||||||
INDUSTRIALS – (16.46%) | ||||||||||||
Capital Goods – (12.96%) | ||||||||||||
General Electric Co. | 415,200 | 11,031,864 | ||||||||||
Masco Corp. | 433,880 | 11,571,580 | ||||||||||
Quanta Services, Inc. * | 399,490 | 11,513,302 | ||||||||||
United Rentals, Inc. * | 122,088 | 10,697,350 | ||||||||||
44,814,096 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS APPRECIATION & INCOME FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Shares/Principal | Value (Note 1) | |||||||||||
COMMON STOCK – (CONTINUED) | ||||||||||||
INDUSTRIALS – (CONTINUED) | ||||||||||||
Commercial & Professional Services – (3.50%) | ||||||||||||
Waste Connections, Inc. | 256,670 | $ | 12,094,290 | |||||||||
Total Industrials | 56,908,386 | |||||||||||
INFORMATION TECHNOLOGY – (2.36%) | ||||||||||||
Semiconductors & Semiconductor Equipment – (2.36%) | ||||||||||||
Fairchild Semiconductor International, Inc. * | 468,897 | 8,149,430 | ||||||||||
Total Information Technology | 8,149,430 | |||||||||||
MATERIALS – (5.40%) | ||||||||||||
Allegheny Technologies, Inc. | 392,168 | 11,843,473 | ||||||||||
Freeport-McMoRan Inc. | 366,232 | 6,819,240 | ||||||||||
Total Materials | 18,662,713 | |||||||||||
UTILITIES – (1.58%) | ||||||||||||
AES Corp. | 411,466 | 5,456,039 | ||||||||||
Total Utilities | 5,456,039 | |||||||||||
TOTAL COMMON STOCK – (Identified cost $219,408,154) | 240,933,236 | |||||||||||
CONVERTIBLE PREFERRED STOCK – (7.56%) | ||||||||||||
CONSUMER STAPLES – (5.46%) | ||||||||||||
Food, Beverage & Tobacco – (5.46%) | ||||||||||||
Tyson Foods, Inc., 4.75%, Conv. Pfd. | 366,400 | 18,873,264 | ||||||||||
Total Consumer Staples | 18,873,264 | |||||||||||
UTILITIES – (2.10%) | ||||||||||||
AES Trust III, 6.75%, Conv. Pfd. | 141,417 | 7,243,209 | ||||||||||
Total Utilities | 7,243,209 | |||||||||||
TOTAL CONVERTIBLE PREFERRED STOCK – (Identified cost $25,388,135) | 26,116,473 | |||||||||||
CONVERTIBLE BONDS – (16.39%) | ||||||||||||
INFORMATION TECHNOLOGY – (10.18%) | ||||||||||||
Semiconductors & Semiconductor Equipment – (4.95%) | ||||||||||||
Intel Corp., Conv. Jr. Sub. Deb., 3.25%, 08/01/39 | $ | 11,235,000 | 17,112,365 | |||||||||
Software & Services – (5.23%) | ||||||||||||
Qihoo 360 Technology Co. Ltd., Conv. Sr. Notes, 2.50%, 09/15/18 (China) | 8,775,000 | 8,610,469 | ||||||||||
salesforce.com, inc., Conv. Sr. Notes, 0.25%, 04/01/18 | 7,775,000 | 9,470,922 | ||||||||||
18,081,391 | ||||||||||||
Total Information Technology | 35,193,756 | |||||||||||
MATERIALS – (6.21%) | ||||||||||||
RTI International Metals, Inc., Conv. Sr. Notes, 1.625%, 10/15/19 | 5,600,000 | 6,100,500 | ||||||||||
United States Steel Corp., Conv. Sr. Notes, 2.75%, 04/01/19 | 13,880,000 | 15,363,425 | ||||||||||
Total Materials | 21,463,925 | |||||||||||
TOTAL CONVERTIBLE BONDS – (Identified cost $50,641,120) | 56,657,681 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS APPRECIATION & INCOME FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Principal | Value (Note 1) | |||||||||||||||||||||||||
CORPORATE BONDS – (6.32%) | ||||||||||||||||||||||||||
CONSUMER DISCRETIONARY – (0.29%) | ||||||||||||||||||||||||||
Retailing – (0.29%) | ||||||||||||||||||||||||||
Kohl's Corp., Sr. Notes, 6.25%, 12/15/17 | $ | 882,000 | $ | 979,372 | ||||||||||||||||||||||
Total Consumer Discretionary | 979,372 | |||||||||||||||||||||||||
ENERGY – (2.32%) | ||||||||||||||||||||||||||
Nabors Industries Ltd., Sr. Notes, 5.00%, 09/15/20 | 3,900,000 | 4,064,955 | ||||||||||||||||||||||||
Transocean Inc., Sr. Notes, 6.00%, 03/15/18 (Switzerland) | 3,900,000 | 3,958,500 | ||||||||||||||||||||||||
Total Energy | 8,023,455 | |||||||||||||||||||||||||
FINANCIALS – (3.15%) | ||||||||||||||||||||||||||
Banks – (2.01%) | ||||||||||||||||||||||||||
Bank of America Corp., Series Z, Jr. Sub. Deb., 6.50% (b)(c) | 2,925,000 | 3,031,031 | ||||||||||||||||||||||||
Citigroup Inc., Series N, Jr. Sub. Deb., 5.80% (b)(c) | 1,950,000 | 1,957,312 | ||||||||||||||||||||||||
Citigroup Inc., Series O, Jr. Sub. Deb., 5.875% (b)(c) | 1,950,000 | 1,956,728 | ||||||||||||||||||||||||
6,945,071 | ||||||||||||||||||||||||||
Diversified Financials – (0.56%) | ||||||||||||||||||||||||||
Consumer Finance – (0.56%) | ||||||||||||||||||||||||||
American Express Co., Jr. Sub. Deb., 5.20% (b)(c) | 1,950,000 | 1,938,008 | ||||||||||||||||||||||||
Real Estate – (0.58%) | ||||||||||||||||||||||||||
Thornburg Mortgage, Inc., Sr. Notes, 8.00%, 05/15/13 (d) | 13,300,000 | 2,011,625 | ||||||||||||||||||||||||
Total Financials | 10,894,704 | |||||||||||||||||||||||||
Health Care – (0.30%) | ||||||||||||||||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences – (0.30%) | ||||||||||||||||||||||||||
Valeant Pharmaceuticals International, Inc., 144A Sr. Notes, 6.75%, 08/15/21 (Canada)(e) | 1,000,000 | 1,045,000 | ||||||||||||||||||||||||
Total Health Care | 1,045,000 | |||||||||||||||||||||||||
INDUSTRIALS – (0.26%) | ||||||||||||||||||||||||||
Capital Goods – (0.26%) | ||||||||||||||||||||||||||
Masco Corp., Sr. Notes, 6.125%, 10/03/16 | 859,500 | 908,921 | ||||||||||||||||||||||||
Total Industrials | 908,921 | |||||||||||||||||||||||||
TOTAL CORPORATE BONDS – (Identified cost $29,529,313) | 21,851,452 | |||||||||||||||||||||||||
Total Investments – (99.98%) – (Identified cost $324,966,722) – (f) | 345,558,842 | |||||||||||||||||||||||||
Other Assets Less Liabilities – (0.02%) | 55,695 | |||||||||||||||||||||||||
Net Assets – (100.00%) | $ | 345,614,537 | ||||||||||||||||||||||||
* | Non-Income producing security. | |||||||||||||||||||||||||
(a) | Affiliated Company. Represents ownership of at least 5% of the voting securities of the issuer and is an affiliate, as defined in the Investment Company Act of 1940, at or during the six months ended June 30, 2015. The aggregate fair value of the securities of affiliated companies held by the Fund as of June 30, 2015, amounted to $7,065,830. Transactions during the period in which the issuers were affiliates are as follows: | |||||||||||||||||||||||||
Security | Shares December 31, 2014 | Gross Additions | Gross Reductions | Shares June 30, 2015 | Dividend Income | |||||||||||||||||||||
School Specialty, Inc. | 69,205 | – | – | 69,205 | $ | – | ||||||||||||||||||||
(b) | Security is perpetual in nature with no stated maturity date. | |||||||||||||||||||||||||
(c) | The interest rates on variable rate securities represent the current rate as of June 30, 2015. |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS APPRECIATION & INCOME FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
(d) | This security is in default and is not accruing income. The interest rate shown is the original, contractual interest rate. See Note 1 of the Notes to Financial Statements. | ||||||
(e) | This security is subject to Rule 144A. The Board of Directors of the Fund has determined that there is sufficient liquidity in this security to realize current valuations. This security amounted to $1,045,000 or 0.30% of the Fund's net assets as of June 30, 2015. | ||||||
(f) | Aggregate cost for federal income tax purposes is $324,966,722. At June 30, 2015 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows: | ||||||
Unrealized appreciation | $ | 66,118,764 | |||||
Unrealized depreciation | (45,526,644) | ||||||
Net unrealized appreciation | $ | 20,592,120 | |||||
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
DAVIS REAL ESTATE FUND | June 30, 2015 (Unaudited) |
Shares | Value (Note 1) | ||||||||||
COMMON STOCK – (97.93%) | |||||||||||
CONSUMER DISCRETIONARY – (2.15%) | |||||||||||
Consumer Services – (2.15%) | |||||||||||
Extended Stay America, Inc. | 128,489 | $ | 2,411,739 | ||||||||
Hyatt Hotels Corp., Class A * | 50,410 | 2,857,743 | |||||||||
Total Consumer Discretionary | 5,269,482 | ||||||||||
FINANCIALS – (94.78%) | |||||||||||
Real Estate – (94.78%) | |||||||||||
Real Estate Investment Trusts (REITs) – (88.52%) | |||||||||||
Diversified REITs – (2.75%) | |||||||||||
Cousins Properties, Inc. | 238,720 | 2,477,914 | |||||||||
Liberty Property Trust | 132,480 | 4,268,505 | |||||||||
6,746,419 | |||||||||||
Health Care REITs – (5.01%) | |||||||||||
Health Care REIT, Inc. | 73,200 | 4,804,116 | |||||||||
National Health Investors, Inc. | 43,550 | 2,713,165 | |||||||||
Ventas, Inc. | 77,200 | 4,793,348 | |||||||||
12,310,629 | |||||||||||
Hotel & Resort REITs – (1.01%) | |||||||||||
DiamondRock Hospitality Co. | 193,110 | 2,473,739 | |||||||||
Industrial REITs – (11.33%) | |||||||||||
DCT Industrial Trust Inc. | 251,287 | 7,900,463 | |||||||||
EastGroup Properties, Inc. | 34,950 | 1,965,238 | |||||||||
First Industrial Realty Trust, Inc. | 222,290 | 4,163,492 | |||||||||
Prologis, Inc. | 236,620 | 8,778,602 | |||||||||
Terreno Realty Corp. | 254,370 | 5,011,089 | |||||||||
27,818,884 | |||||||||||
Office REITs – (12.31%) | |||||||||||
Alexandria Real Estate Equities, Inc. | 66,113 | 5,782,243 | |||||||||
Boston Properties, Inc. | 56,870 | 6,883,545 | |||||||||
Brandywine Realty Trust | 200,320 | 2,660,250 | |||||||||
Corporate Office Properties Trust | 201,138 | 4,734,788 | |||||||||
Highwoods Properties, Inc. | 82,510 | 3,296,274 | |||||||||
Vornado Realty Trust | 72,544 | 6,886,602 | |||||||||
30,243,702 | |||||||||||
Residential REITs – (22.47%) | |||||||||||
American Campus Communities, Inc. | 134,340 | 5,063,275 | |||||||||
American Homes 4 Rent, Class A | 179,430 | 2,878,057 | |||||||||
American Residential Properties, Inc. | 315,400 | 5,834,900 | |||||||||
Apartment Investment & Management Co., Class A | 75,970 | 2,805,572 | |||||||||
AvalonBay Communities, Inc. | 76,520 | 12,233,252 | |||||||||
Camden Property Trust | 40,000 | 2,971,200 | |||||||||
Education Realty Trust, Inc. | 121,536 | 3,811,369 | |||||||||
Equity Residential | 84,570 | 5,934,277 | |||||||||
Essex Property Trust, Inc. | 24,310 | 5,165,875 | |||||||||
Post Properties, Inc. | 99,530 | 5,411,446 | |||||||||
UDR, Inc. | 95,550 | 3,060,467 | |||||||||
55,169,690 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS REAL ESTATE FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Shares | Value (Note 1) | |||||||||||
COMMON STOCK – (CONTINUED) | ||||||||||||
FINANCIALS – (CONTINUED) | ||||||||||||
Real Estate – (Continued) | ||||||||||||
Real Estate Investment Trusts (REITs) – (Continued) | ||||||||||||
Retail REITs – (25.38%) | ||||||||||||
Acadia Realty Trust | 229,400 | $ | 6,677,834 | |||||||||
Brixmor Property Group, Inc. | 146,640 | 3,391,783 | ||||||||||
Cedar Realty Trust Inc. | 596,760 | 3,819,264 | ||||||||||
DDR Corp. | 247,790 | 3,830,833 | ||||||||||
Federal Realty Investment Trust | 44,550 | 5,706,410 | ||||||||||
General Growth Properties, Inc. | 219,460 | 5,631,344 | ||||||||||
Kite Realty Group Trust | 252,442 | 6,177,256 | ||||||||||
Macerich Co. | 52,240 | 3,897,104 | ||||||||||
Ramco-Gershenson Properties Trust | 201,760 | 3,292,723 | ||||||||||
Retail Opportunity Investments Corp. | 200,620 | 3,133,684 | ||||||||||
Simon Property Group, Inc. | 96,990 | 16,781,210 | ||||||||||
62,339,445 | ||||||||||||
Specialized REITs – (8.26%) | ||||||||||||
American Tower Corp. | 56,500 | 5,270,885 | ||||||||||
CatchMark Timber Trust Inc., Class A | 381,530 | 4,414,302 | ||||||||||
Crown Castle International Corp. | 42,220 | 3,390,266 | ||||||||||
CyrusOne Inc. | 211,460 | 6,227,497 | ||||||||||
QTS Realty Trust Inc., Class A | 26,750 | 975,038 | ||||||||||
20,277,988 | ||||||||||||
217,380,496 | ||||||||||||
Real Estate Management & Development – (6.26%) | ||||||||||||
Diversified Real Estate Activities – (2.23%) | ||||||||||||
Alexander & Baldwin Inc. | 138,950 | 5,474,630 | ||||||||||
Real Estate Operating Companies – (4.03%) | ||||||||||||
Brookdale Senior Living Inc. * | 152,930 | 5,306,671 | ||||||||||
Forest City Enterprises, Inc., Class A * | 207,960 | 4,595,916 | ||||||||||
9,902,587 | ||||||||||||
15,377,217 | ||||||||||||
Total Financials | 232,757,713 | |||||||||||
INFORMATION TECHNOLOGY – (1.00%) | ||||||||||||
Software & Services – (1.00%) | ||||||||||||
InterXion Holding N.V. (Netherlands)* | 89,000 | 2,460,850 | ||||||||||
Total Information Technology | 2,460,850 | |||||||||||
TOTAL COMMON STOCK – (Identified cost $248,300,998) | 240,488,045 | |||||||||||
PREFERRED STOCK – (0.08%) | ||||||||||||
FINANCIALS – (0.08%) | ||||||||||||
Real Estate – (0.08%) | ||||||||||||
Real Estate Investment Trusts (REITs) – (0.08%) | ||||||||||||
Residential REITs – (0.08%) | ||||||||||||
Campus Crest Communities Inc., 8.00%, Series A, Cum. Pfd. | 8,020 | 198,495 | ||||||||||
TOTAL PREFERRED STOCK – (Identified cost $173,022) | 198,495 |
DAVIS SERIES, INC. | Schedule of Investments |
DAVIS REAL ESTATE FUND - (CONTINUED) | June 30, 2015 (Unaudited) |
Principal | Value (Note 1) | |||||||||||||
CONVERTIBLE BONDS – (0.73%) | ||||||||||||||
FINANCIALS – (0.73%) | ||||||||||||||
Real Estate – (0.73%) | ||||||||||||||
Real Estate Management & Development – (0.73%) | ||||||||||||||
Real Estate Operating Companies – (0.73%) | ||||||||||||||
Forest City Enterprises, Inc., Conv. Sr. Notes, 5.00%, 10/15/16 | $ | 1,040,000 | $ | 1,792,700 | ||||||||||
TOTAL CONVERTIBLE BONDS – (Identified cost $1,040,000) | 1,792,700 | |||||||||||||
SHORT-TERM INVESTMENTS – (0.51%) | ||||||||||||||
Mizuho Securities USA Inc. Joint Repurchase Agreement, 0.14%, 07/01/15, dated 06/30/15, repurchase value of $532,002 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.4109%-4.00%, 02/20/30-06/01/45, total market value $542,640) | 532,000 | 532,000 | ||||||||||||
Nomura Securities International, Inc. Joint Repurchase Agreement, 0.13%, 07/01/15, dated 06/30/15, repurchase value of $455,002 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.50%-8.00%, 08/20/25-05/15/45, total market value $464,100) | 455,000 | 455,000 | ||||||||||||
SunTrust Robinson Humphrey, Inc. Joint Repurchase Agreement, 0.30%, 07/01/15, dated 06/30/15, repurchase value of $260,002 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 1.959%-3.877%, 12/01/18-06/01/45, total market value $265,200) | 260,000 | 260,000 | ||||||||||||
TOTAL SHORT-TERM INVESTMENTS – (Identified cost $1,247,000) | 1,247,000 | |||||||||||||
Total Investments – (99.25%) – (Identified cost $250,761,020) – (a) | 243,726,240 | |||||||||||||
Other Assets Less Liabilities – (0.75%) | 1,848,223 | |||||||||||||
Net Assets – (100.00%) | $ | 245,574,463 | ||||||||||||
* | Non-Income producing security. | |||||||||||||
(a) | Aggregate cost for federal income tax purposes is $250,885,883. At June 30, 2015 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows: | |||||||||||||
Unrealized appreciation | $ | 6,471,033 | ||||||||||||
Unrealized depreciation | (13,630,676) | |||||||||||||
Net unrealized depreciation | $ | (7,159,643) | ||||||||||||
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
At June 30, 2015 (Unaudited) |
Davis Opportunity Fund | Davis Government Bond Fund | Davis Government Money Market Fund | Davis Financial Fund | Davis Appreciation & Income Fund | Davis Real Estate Fund | ||||||||||||||||
ASSETS: | |||||||||||||||||||||
Investments in securities at value* (see accompanying Schedules of Investments): | |||||||||||||||||||||
Unaffiliated companies | $ | 561,015,999 | $ | 62,612,365 | $ | 171,706,944 | $ | 775,270,427 | $ | 338,493,012 | $ | 243,726,240 | |||||||||
Affiliated companies | – | – | – | – | 7,065,830 | – | |||||||||||||||
Cash | 56,503 | 3,164 | 1,647 | 65,092 | – | 1,119 | |||||||||||||||
Receivables: | |||||||||||||||||||||
Capital stock sold | 696,717 | 78,665 | 16,136,643 | 3,367,118 | 192,401 | 82,962 | |||||||||||||||
Dividends and interest | 323,134 | 151,496 | 43,673 | 688,180 | 766,842 | 943,389 | |||||||||||||||
Investment securities sold | – | – | – | – | 870,148 | 7,258,798 | |||||||||||||||
Prepaid expenses | 3,259 | 451 | 2,061 | 4,002 | 1,808 | 2,261 | |||||||||||||||
Due from Adviser | – | – | 59,500 | – | – | – | |||||||||||||||
Total assets | 562,095,612 | 62,846,141 | 187,950,468 | 779,394,819 | 347,390,041 | 252,014,769 | |||||||||||||||
LIABILITIES: | |||||||||||||||||||||
Cash overdraft | – | – | – | – | 99,626 | – | |||||||||||||||
Payables: | |||||||||||||||||||||
Capital stock redeemed | 1,198,340 | 98,879 | 422,365 | 683,887 | 603,166 | 163,841 | |||||||||||||||
Distributions payable | – | 15,033 | – | – | – | – | |||||||||||||||
Investment securities purchased | – | – | – | – | 713,508 | 5,987,472 | |||||||||||||||
Accrued distribution and service plan fees | 204,400 | 20,244 | – | 224,827 | 118,016 | 89,410 | |||||||||||||||
Accrued investment advisory fees | 287,951 | 17,215 | 83,343 | 385,221 | 175,031 | 127,150 | |||||||||||||||
Accrued transfer agent fees | 114,976 | 31,971 | 30,451 | 142,088 | 54,830 | 61,046 | |||||||||||||||
Other accrued expenses | 53,095 | 5,646 | 6,774 | 21,556 | 11,327 | 11,387 | |||||||||||||||
Total liabilities | 1,858,762 | 188,988 | 542,933 | 1,457,579 | 1,775,504 | 6,440,306 | |||||||||||||||
NET ASSETS | $ | 560,236,850 | $ | 62,657,153 | $ | 187,407,535 | $ | 777,937,240 | $ | 345,614,537 | $ | 245,574,463 | |||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||
Par value of shares of capital stock | $ | 171,159 | $ | 115,225 | $ | 1,874,075 | $ | 193,350 | $ | 95,062 | $ | 72,551 | |||||||||
Additional paid-in capital | 424,046,380 | 67,432,417 | 185,533,460 | 438,675,904 | 349,855,390 | 259,367,163 | |||||||||||||||
Undistributed net investment income (loss) | (1,029,025) | (372) | – | 3,035,907 | 775,856 | 4,014,600 | |||||||||||||||
Accumulated net realized gains (losses) from investments and foreign currency transactions | 67,750,735 | (5,349,654) | – | 14,881,824 | (25,703,891) | (10,843,398) | |||||||||||||||
Net unrealized appreciation (depreciation) on investments and foreign currency transactions | 69,297,601 | 459,537 | – | 321,150,255 | 20,592,120 | (7,036,453) | |||||||||||||||
Net Assets | $ | 560,236,850 | $ | 62,657,153 | $ | 187,407,535 | $ | 777,937,240 | $ | 345,614,537 | $ | 245,574,463 | |||||||||
*Including: | |||||||||||||||||||||
Cost of unaffiliated companies | $ | 491,711,667 | $ | 62,152,828 | $ | 171,706,944 | $ | 454,120,172 | $ | 310,228,538 | $ | 250,761,020 | |||||||||
Cost of affiliated companies | – | – | – | – | 14,738,184 | – | |||||||||||||||
Cost and market value of repurchase agreements (if greater than 10% of net assets) | – | – | 94,631,000 | – | – | – |
DAVIS SERIES, INC. | Statements of Assets and Liabilities – (Continued) |
At June 30, 2015 (Unaudited) |
Davis Opportunity Fund | Davis Government Bond Fund | Davis Government Money Market Fund | Davis Financial Fund | Davis Appreciation & Income Fund | Davis Real Estate Fund | ||||||||||||||
CLASS A SHARES: | |||||||||||||||||||
Net assets | $ | 299,256,272 | $ | 36,625,854 | $ | 172,121,198 | $ | 579,560,394 | $ | 210,833,434 | $ | 182,417,139 | |||||||
Shares outstanding | 8,978,878 | 6,748,101 | 172,121,198 | 14,171,690 | 5,805,723 | 5,398,382 | |||||||||||||
Net asset value and redemption price per share (Net assets ÷ Shares outstanding) | $ | 33.33 | $ | 5.43 | $ | 1.00 | $ | 40.90 | $ | 36.31 | $ | 33.79 | |||||||
Maximum offering price per share (100/95.25 of net asset value)† | $ | 34.99 | $ | 5.70 | $ | NA | $ | 42.94 | $ | 38.12 | $ | 35.48 | |||||||
CLASS B SHARES: | |||||||||||||||||||
Net assets | $ | 3,330,032 | $ | 1,764,254 | $ | 5,807,907 | $ | 3,214,318 | $ | 3,226,010 | $ | 1,942,853 | |||||||
Shares outstanding | 122,012 | 326,500 | 5,807,907 | 96,910 | 90,186 | 58,407 | |||||||||||||
Net asset value and redemption price per share (Net assets ÷ Shares outstanding) | $ | 27.29 | $ | 5.40 | $ | 1.00 | $ | 33.17 | $ | 35.77 | $ | 33.26 | |||||||
CLASS C SHARES: | |||||||||||||||||||
Net assets | $ | 99,978,237 | $ | 9,096,328 | $ | 5,904,203 | $ | 83,157,197 | $ | 63,202,173 | $ | 23,938,266 | |||||||
Shares outstanding | 3,438,790 | 1,675,041 | 5,904,203 | 2,404,340 | 1,737,595 | 709,917 | |||||||||||||
Net asset value, offering, and redemption price per share (Net assets ÷ Shares outstanding) | $ | 29.07 | $ | 5.43 | $ | 1.00 | $ | 34.59 | $ | 36.37 | $ | 33.72 | |||||||
CLASS Y SHARES: | |||||||||||||||||||
Net assets | $ | 157,672,309 | $ | 15,170,717 | $ | 3,574,227 | $ | 112,005,331 | $ | 68,352,920 | $ | 37,276,205 | |||||||
Shares outstanding | 4,576,261 | 2,772,861 | 3,574,227 | 2,662,088 | 1,872,729 | 1,088,358 | |||||||||||||
Net asset value, offering, and redemption price per share (Net assets ÷ Shares outstanding) | $ | 34.45 | $ | 5.47 | $ | 1.00 | $ | 42.07 | $ | 36.50 | $ | 34.25 | |||||||
†On purchases of $100,000 or more, the offering price is reduced. |
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
For the six months ended June 30, 2015 (Unaudited) |
Davis Opportunity Fund | Davis Government Bond Fund | Davis Government Money Market Fund | Davis Financial Fund | Davis Appreciation & Income Fund | Davis Real Estate Fund | ||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||
Income: | |||||||||||||||||||||
Dividends* | $ | 3,054,790 | $ | – | $ | – | $ | 5,765,755 | $ | 2,287,704 | $ | 3,661,860 | |||||||||
Interest | 6,027 | 701,574 | 112,839 | 11,773 | 921,478 | 32,695 | |||||||||||||||
Net securities lending fees | 11,649 | – | – | 5,519 | – | – | |||||||||||||||
Total income | 3,072,466 | 701,574 | 112,839 | 5,783,047 | 3,209,182 | 3,694,555 | |||||||||||||||
Expenses: | |||||||||||||||||||||
Investment advisory fees (Note 3) | 1,565,672 | 110,582 | 433,108 | 2,008,537 | 943,023 | 733,692 | |||||||||||||||
Custodian fees | 87,923 | 20,242 | 18,490 | 64,999 | 32,724 | 30,508 | |||||||||||||||
Transfer agent fees: | |||||||||||||||||||||
Class A | 161,314 | 64,195 | 64,463 | 258,868 | 94,600 | 106,139 | |||||||||||||||
Class B | 6,312 | 3,542 | 2,494 | 6,624 | 4,979 | 3,902 | |||||||||||||||
Class C | 61,840 | 10,707 | 2,317 | 53,872 | 30,711 | 22,076 | |||||||||||||||
Class Y | 80,379 | 4,502 | 1,287 | 47,038 | 16,425 | 20,366 | |||||||||||||||
Audit fees | 11,700 | 9,660 | 11,700 | 18,120 | 12,300 | 16,020 | |||||||||||||||
Legal fees | 5,890 | 777 | 1,743 | 7,433 | 3,544 | 2,727 | |||||||||||||||
Accounting fees (Note 3) | 5,502 | 1,002 | 2,496 | 7,002 | 3,498 | 2,502 | |||||||||||||||
Reports to shareholders | 35,000 | 6,000 | 6,750 | 32,500 | 16,000 | 15,500 | |||||||||||||||
Directors' fees and expenses | 31,914 | 7,077 | 10,790 | 39,533 | 20,730 | 16,575 | |||||||||||||||
Registration and filing fees | 38,800 | 28,500 | 31,501 | 38,000 | 26,750 | 31,750 | |||||||||||||||
Excise tax expense (Note 1) | – | – | 4,077 | – | – | – | |||||||||||||||
Miscellaneous | 14,449 | 7,858 | 9,228 | 15,886 | 10,622 | 9,386 | |||||||||||||||
Payments under distribution plan (Note 3): | |||||||||||||||||||||
Class A | 318,119 | 38,862 | – | 419,797 | 167,228 | 178,912 | |||||||||||||||
Class B | 19,204 | 9,988 | – | 20,569 | 19,170 | 11,415 | |||||||||||||||
Class C | 512,566 | 47,901 | – | 393,798 | 323,359 | 135,815 | |||||||||||||||
Total expenses | 2,956,584 | 371,395 | 600,444 | 3,432,576 | 1,725,663 | 1,337,285 | |||||||||||||||
Reimbursement/waiver of expenses by Adviser (Note 3) | – | – | (582,344) | – | – | – | |||||||||||||||
Net expenses | 2,956,584 | 371,395 | 18,100 | 3,432,576 | 1,725,663 | 1,337,285 | |||||||||||||||
Net investment income | 115,882 | 330,179 | 94,739 | 2,350,471 | 1,483,519 | 2,357,270 | |||||||||||||||
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: | |||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||
Investment transactions | 42,372,784 | (306) | – | 13,013,342 | 10,329,956 | 19,715,889 | |||||||||||||||
Foreign currency transactions | 1,845 | – | – | (27,570) | – | – | |||||||||||||||
Net realized gain (loss) | 42,374,629 | (306) | – | 12,985,772 | 10,329,956 | 19,715,889 | |||||||||||||||
Net change in unrealized appreciation (depreciation) | (14,686,934) | 139,565 | – | 7,299,120 | (8,355,711) | (36,078,991) | |||||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency transactions | 27,687,695 | 139,259 | – | 20,284,892 | 1,974,245 | (16,363,102) | |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 27,803,577 | $ | 469,438 | $ | 94,739 | $ | 22,635,363 | $ | 3,457,764 | $ | (14,005,832) | |||||||||
*Net of foreign taxes withheld as follows | $ | 146,227 | $ | – | $ | – | $ | 25,893 | $ | 3,150 | $ | – |
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
For the six months ended June 30, 2015 (Unaudited) |
Davis Opportunity Fund | Davis Government Bond Fund | Davis Government Money Market Fund | Davis Financial Fund | Davis Appreciation & Income Fund | Davis Real Estate Fund | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||||
Net investment income | $ | 115,882 | $ | 330,179 | $ | 94,739 | $ | 2,350,471 | $ | 1,483,519 | $ | 2,357,270 | |||||||||
Net realized gain (loss) from investments and foreign currency transactions | 42,374,629 | (306) | – | 12,985,772 | 10,329,956 | 19,715,889 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions | (14,686,934) | 139,565 | – | 7,299,120 | (8,355,711) | (36,078,991) | |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 27,803,577 | 469,438 | 94,739 | 22,635,363 | 3,457,764 | (14,005,832) | |||||||||||||||
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||
Net investment income: | |||||||||||||||||||||
Class A | – | (157,319) | (86,490) | – | (540,941) | (575,742) | |||||||||||||||
Class B | – | (846) | (3,365) | – | (84) | (257) | |||||||||||||||
Class C | – | (7,827) | (3,110) | – | (24,898) | (17,380) | |||||||||||||||
Class Y | – | (164,559) | (1,774) | – | (171,221) | (133,042) | |||||||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions (Note 4): | |||||||||||||||||||||
Class A | (21,290,415) | (6,672,526) | (45,476,406) | 1,559,585 | (8,555,896) | (4,850,110) | |||||||||||||||
Class B | (1,005,299) | (445,873) | (922,732) | (1,678,084) | (1,088,652) | (335,166) | |||||||||||||||
Class C | (8,372,099) | (1,030,976) | (689,068) | 1,858,552 | (3,420,777) | (2,466,624) | |||||||||||||||
Class Y | (19,837,846) | (11,810,067) | 159,222 | 19,273,056 | 29,184,335 | 6,136,228 | |||||||||||||||
Total increase (decrease) in net assets | (22,702,082) | (19,820,555) | (46,928,984) | 43,648,472 | 18,839,630 | (16,247,925) | |||||||||||||||
NET ASSETS: | |||||||||||||||||||||
Beginning of period | 582,938,932 | 82,477,708 | 234,336,519 | 734,288,768 | 326,774,907 | 261,822,388 | |||||||||||||||
End of period* | $ | 560,236,850 | $ | 62,657,153 | $ | 187,407,535 | $ | 777,937,240 | $ | 345,614,537 | $ | 245,574,463 | |||||||||
*Including undistributed net investment income (loss) of | $ | (1,029,025) | $ | (372) | $ | – | $ | 3,035,907 | $ | 775,856 | $ | 4,014,600 |
See Notes to Financial Statements |
DAVIS SERIES, INC. | Statements of Changes in Net Assets |
For the year ended December 31, 2014 |
Davis Opportunity Fund | Davis Government Bond Fund | Davis Government Money Market Fund | Davis Financial Fund | Davis Appreciation & Income Fund | Davis Real Estate Fund | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||||
Net investment income (loss) | $ | (461,203) | $ | 586,497 | $ | 103,512 | $ | 4,244,716 | $ | 2,763,524 | $ | 2,691,294 | |||||||||
Net realized gain from investments and foreign currency transactions | 106,092,846 | 160,468 | – | 80,831,187 | 18,570,303 | 21,380,437 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions | (67,197,503) | 414,485 | – | (1,998,969) | (6,175,169) | 33,605,304 | |||||||||||||||
Net increase in net assets resulting from operations | 38,434,140 | 1,161,450 | 103,512 | 83,076,934 | 15,158,658 | 57,677,035 | |||||||||||||||
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||
Net investment income: | |||||||||||||||||||||
Class A | (181,288) | (602,744) | (96,905) | (3,599,717) | (2,287,922) | (2,497,738) | |||||||||||||||
Class B | – | (4,123) | (2,808) | – | (9,238) | (6,634) | |||||||||||||||
Class C | – | (36,228) | (2,530) | – | (176,735) | (122,971) | |||||||||||||||
Class Y | (522,854) | (394,866) | (1,269) | (701,113) | (284,053) | (401,123) | |||||||||||||||
Realized gains from investment transactions: | |||||||||||||||||||||
Class A | (33,109,548) | – | – | (56,557,839) | – | – | |||||||||||||||
Class B | (561,674) | – | – | (596,988) | – | – | |||||||||||||||
Class C | (12,529,592) | – | – | (9,050,254) | – | – | |||||||||||||||
Class Y | (17,805,030) | – | – | (8,694,979) | – | – | |||||||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions (Note 4): | |||||||||||||||||||||
Class A | 5,238,847 | (15,120,334) | (96,869,674) | 17,922,263 | (2,859,995) | (17,071,655) | |||||||||||||||
Class B | (2,920,207) | (1,208,661) | (1,840,883) | (914,066) | (3,966,113) | (1,261,053) | |||||||||||||||
Class C | 9,773,187 | (3,880,683) | (1,233,675) | 9,696,670 | (1,067,481) | (2,305,416) | |||||||||||||||
Class Y | 74,322,891 | 1,492,997 | (124,558) | 30,137,032 | 17,260,842 | 8,540,625 | |||||||||||||||
Total increase (decrease) in net assets | 60,138,872 | (18,593,192) | (100,068,790) | 60,717,943 | 21,767,963 | 42,551,070 | |||||||||||||||
NET ASSETS: | |||||||||||||||||||||
Beginning of year | 522,800,060 | 101,070,900 | 334,405,309 | 673,570,825 | 305,006,944 | 219,271,318 | |||||||||||||||
End of year* | $ | 582,938,932 | $ | 82,477,708 | $ | 234,336,519 | $ | 734,288,768 | $ | 326,774,907 | $ | 261,822,388 | |||||||||
*Including undistributed (overdistributed) net investment income of | $ | (1,144,907) | $ | – | $ | – | $ | 685,436 | $ | 29,481 | $ | 2,383,751 |
See Notes to Financial Statements |
DAVIS SERIES, INC. | |
June 30, 2015 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Davis Series, Inc. (a Maryland corporation) ("Company"), is registered under the Investment Company Act of 1940 ("40 Act") as amended, as an open-end management investment company. Davis Opportunity Fund, Davis Government Bond Fund, Davis Government Money Market Fund, Davis Financial Fund, and Davis Appreciation & Income Fund are diversified under the 40 Act. Davis Real Estate Fund is non-diversified under the 40 Act. The Company operates as a series issuing shares of common stock in the following six funds (collectively "Funds"):
Davis Opportunity Fund seeks to achieve long-term growth of capital. It invests primarily in common stocks and other equity securities, and may invest in both domestic and foreign issuers.
Davis Government Bond Fund seeks to achieve current income. It invests in debt securities which are obligations of, or which are guaranteed by, the U.S. Government, its agencies or instrumentalities.
Davis Government Money Market Fund seeks to achieve as high a level of current income as is consistent with the principle of preservation of capital and maintenance of liquidity.
The Fund is a money market fund that seeks to preserve the value of your investment at $1.00 per share. There can be no guarantee that the Fund will be successful in maintaining a $1.00 share price.
It invests exclusively in U.S. Treasury securities, U.S. Government agency securities, U.S. Government agency mortgage securities (collectively "U.S. Government Securities"), and repurchase agreements collateralized by U.S. Government Securities. The Fund seeks to maintain liquidity and preserve capital by carefully monitoring the maturity of its investments. The Fund's portfolio maintains a dollar-weighted average maturity of sixty days or less.
Davis Financial Fund seeks to achieve long-term growth of capital. It invests primarily in common stocks and other equity securities and will concentrate investments in companies principally engaged in the banking, insurance, and financial service industries.
Davis Appreciation & Income Fund seeks to achieve total return through a combination of growth and income. Under normal circumstances, the Fund invests in a diversified portfolio of convertible securities, common and preferred stock, and fixed income securities. It may invest in lower rated bonds commonly known as "junk bonds". The Fund may hold securities in default, and is not obligated to dispose of securities whose issuers or underlying obligors subsequently default. As of June 30, 2015, the value of defaulted securities amounted to $2,011,625 (cost: $9,921,191) or 0.58% of the Fund's net assets.
Davis Real Estate Fund seeks to achieve total return through a combination of growth and income. It invests primarily in securities of companies principally engaged in or related to the real estate industry or which own significant real estate assets or which primarily invest in real estate financial instruments.
Because of the risk inherent in any investment program, the Company cannot ensure that the investment objective of any of its series will be achieved.
The Company accounts separately for the assets, liabilities, and operations of each Fund. Each Fund offers Class A, Class C, and Class Y shares, and previously offered Class B shares for new purchases through April 30, 2013. Investors may continue to exchange Class B shares of the Funds with other Davis Funds. Class B shares automatically convert to Class A shares after 7 years. Class A shares are sold with a front-end sales charge, except for shares of Davis Government Money Market Fund, which are sold at net asset value. Class C shares are sold at net asset value and may be subject to a contingent deferred sales charge upon redemption. Class Y shares are sold at net asset value and are not subject to any contingent deferred sales charge upon redemption. Class Y shares are only available to certain qualified investors. Income, expenses (other than those attributable to a specific class), and gains and losses are allocated daily to each class based upon the relative proportion of net assets represented by each class. Operating expenses directly attributable to a specific class, such as distribution and transfer agent fees, are charged against the operations of that class. All expenses for Davis Government Money Market Fund are allocated evenly across all classes of shares based upon the relative portion of net assets represented by each class. All classes have identical rights with respect to voting (exclusive of each class' distribution arrangement), liquidation, and distributions. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements.
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)
Security Valuation - The Funds calculate the net asset value of their shares as of the close of the New York Stock Exchange ("Exchange"), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities listed on the Exchange (and other national exchanges including NASDAQ) are valued at the last reported sales price on the day of valuation. Listed securities for which no sale was reported on that date are valued at the average of closing bid and asked prices. Securities traded on foreign exchanges are valued based upon the last sales price on the principal exchange on which the security is traded prior to the time when the Funds' assets are valued. Fixed income securities with more than 60 days to maturity are generally valued using evaluated prices or matrix pricing methods determined by an independent pricing service which takes into consideration factors such as yield, maturity, liquidity, ratings, and traded prices in identical or similar securities. Securities (including restricted securities) for which market quotations are not readily available or securities whose values have been materially affected by what Davis Selected Advisers, L.P. ("Davis Advisors" or "Adviser"), the Funds' investment adviser, identifies as a significant event occurring before the Funds' assets are valued, but after the close of their respective exchanges will be fair valued using a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Funds' Pricing Committee and Board of Directors. The Pricing Committee considers all facts it deems relevant that are reasonably available, through either public information or information available to the Adviser's portfolio management team, when determining the fair value of a security. To assess the continuing appropriateness of security valuations, the Adviser may compare prior day prices, prices of comparable securities, and sale prices to the prior or current day prices and challenge those prices exceeding certain tolerance levels with the third-party pricing service or broker source. Fair value determinations are subject to review, approval, and ratification by the Funds' Board of Directors at its next regularly scheduled meeting covering the period in which the fair valuation was determined. Fair valuation methods used by the Funds for restricted securities include pricing securities by adjusting the value daily based on changes in the closing price of an underlying stock to be received in a proposed merger or by incorporating valuation multiples that integrate growth rates, long-term net margin assumptions to normalize earnings, and liquidity discounts, where applicable. Appropriate securities indexes may be used to adjust values daily. The Funds may also price partnerships by calculating the liquidation value of the investment on a daily basis using the closing price of the underlying stock and a waterfall schedule, which apportions the value of the partnership's interests based on the value of the net assets of the investment. A liquidity discount is then applied to the liquidation value.
Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. For Davis Government Money Market Fund, in compliance with Rule 2a-7 of the 40 Act, securities are valued at amortized cost, which approximates market value.
The Funds' valuation procedures are reviewed and subject to approval by the Board of Directors. There have been no significant changes to the fair valuation procedures during the period.
Value Measurements - Fair value is defined as the price that the Funds would receive upon selling an investment in an orderly transaction to an independent buyer in the principal market for the investment. Various inputs are used to determine the fair value of the Funds' investments. These inputs are summarized in the three broad levels listed below.
Level 1 – quoted prices in active markets for identical securities
Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities nor can it be assured that the Funds can obtain the fair value assigned to a security if they were to sell the security. Money market securities are valued using amortized cost, in accordance with rules under the 40 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)
Value Measurements - (Continued)
The following is a summary of the inputs used as of June 30, 2015 in valuing each Fund's investments carried at value:
Investments in Securities at Value | |||||||||||||||||
Davis | Davis | ||||||||||||||||
Davis | Davis | Government | Davis | Appreciation | Davis | ||||||||||||
Opportunity | Government | Money Market | Financial | & Income | Real Estate | ||||||||||||
Fund | Bond Fund | Fund | Fund | Fund | Fund | ||||||||||||
Valuation inputs | |||||||||||||||||
Level 1 – Quoted Prices: | |||||||||||||||||
Equity securities: | |||||||||||||||||
Consumer Discretionary | $ | 161,238,317 | $ | – | $ | – | $ | – | $ | 36,053,816 | $ | 5,269,482 | |||||
Consumer Staples | 4,851,000 | – | – | – | 29,170,835 | – | |||||||||||
Energy | 33,556,223 | – | – | – | 33,352,201 | – | |||||||||||
Financials | 67,820,097 | – | – | 693,089,847 | 37,537,785 | 232,956,208 | |||||||||||
Health Care | 39,123,923 | – | – | – | 26,908,155 | – | |||||||||||
Industrials | 77,131,054 | – | – | – | 56,908,386 | – | |||||||||||
Information Technology | 135,409,475 | – | – | 18,265,924 | 8,149,430 | 2,460,850 | |||||||||||
Materials | 7,371,798 | – | – | – | 18,662,713 | – | |||||||||||
Utilities | – | – | – | – | 12,699,248 | – | |||||||||||
Total Level 1 | 526,501,887 | – | – | 711,355,771 | 259,442,569 | 240,686,540 | |||||||||||
Level 2 – Other Significant | |||||||||||||||||
Observable Inputs: | |||||||||||||||||
Equity securities: | |||||||||||||||||
Consumer Discretionary | – | – | – | – | 7,065,830 | – | |||||||||||
Financials | – | – | – | – | 541,310 | – | |||||||||||
Debt securities issued by U.S. Treasuries and U.S. Government corporations and agencies: | |||||||||||||||||
Long-term | – | 59,356,365 | – | – | – | – | |||||||||||
Short-term | – | – | 77,075,944 | – | – | – | |||||||||||
Convertible debt securities | – | – | – | – | 56,657,681 | 1,792,700 | |||||||||||
Corporate debt securities | – | – | – | – | 21,851,452 | – | |||||||||||
Short-term securities | 14,785,000 | 3,256,000 | 94,631,000 | 50,707,000 | – | 1,247,000 | |||||||||||
Total Level 2 | 14,785,000 | 62,612,365 | 171,706,944 | 50,707,000 | 86,116,273 | 3,039,700 | |||||||||||
Level 3 – Significant Unobservable | |||||||||||||||||
Inputs: | |||||||||||||||||
Equity securities: | |||||||||||||||||
Financials | – | – | – | 13,207,656 | – | – | |||||||||||
Information Technology | 19,729,112 | – | – | – | – | – | |||||||||||
Total Level 3 | 19,729,112 | – | – | 13,207,656 | – | – | |||||||||||
Total Investments | $ | 561,015,999 | $ | 62,612,365 | $ | 171,706,944 | $ | 775,270,427 | $ | 345,558,842 | $ | 243,726,240 |
Level 2 to Level 1 Transfers*: | |||||||||||||||||
Consumer Discretionary | $ | 6,684,686 | $ | – | $ | – | $ | – | $ | – | $ | – | |||||
Consumer Staples | 144,097 | – | – | – | – | – | |||||||||||
Financials | 4,377,990 | – | – | 36,946,461 | – | – | |||||||||||
Health Care | 488,941 | – | – | – | – | – | |||||||||||
Industrials | 13,177,906 | – | – | – | – | – | |||||||||||
Total | $ | 24,873,620 | $ | – | $ | – | $ | 36,946,461 | $ | – | $ | – |
*Application of fair value procedures for securities traded on foreign exchanges triggered the majority of transfers of investments between Level 1 and Level 2 of the fair value hierarchy during the six months ended June 30, 2015.
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)
Value Measurements - (Continued)
The following table reconciles the valuation of assets in which significant unobservable inputs (Level 3) were used in determining fair value during the six months ended June 30, 2015:
Davis Opportunity Fund | Davis Financial Fund | |||||
Investment Securities: | ||||||
Beginning balance | $ | 8,974,140 | $ | 11,632,320 | ||
Cost purchases | 11,580,824 | – | ||||
Net change in unrealized appreciation (depreciation) | (825,852) | 1,575,336 | ||||
Ending balance | $ | 19,729,112 | $ | 13,207,656 | ||
Net change in unrealized appreciation (depreciation) during the period on Level 3 securities still held at June 30, 2015 and included in the change in net assets for the period | $ | (825,852) | $ | 1,575,336 |
There were no transfers of investments into or out of Level 3 of the fair value hierarchy during the period. The cost of purchases and the proceeds from sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) are included in the related amounts on investments in the Statements of Operations.
The following table is a summary of those assets in which significant unobservable inputs (Level 3) were used by the Adviser in determining fair value. Note that these amounts exclude any valuations provided by a pricing service or broker.
Assets Table | |||||||||||
Investments | Fair Value at | Valuation | Unobservable | ||||||||
Fund | at Value | June 30, 2015 | Technique | Input | Amount | ||||||
Davis Opportunity Fund | Equity securities | $ | 11,304,270 | Liquidation proceeds/Waterfall methodology based on underlying investment value, then applying liquidity discount | Discount rate | 9.30% | |||||
Davis Opportunity Fund | Equity securities | 8,424,842 | Valuation multiple/Index-based daily value adjustment with liquidity discount | Growth-adjusted P/E multiple Long-term net margin assumption Discount rate | 64x 30.00% 20.00% | ||||||
Davis Financial Fund | Equity securities | 13,207,656 | Anticipated merger transaction price, then applying liquidity discount | Discount rate | 12.50% |
The significant unobservable inputs listed in above table are used in the fair value measurement of equity securities, and if changed, would affect the fair value of the Fund's investment. An increase or decrease in these inputs would result in higher or lower fair value measurements.
Master Repurchase Agreements - The Funds, along with other affiliated funds, may transfer uninvested cash balances into one or more master repurchase agreement accounts. These balances are invested in one or more repurchase agreements, secured by U.S. Government securities. A custodian bank holds securities pledged as collateral for repurchase agreements until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings.
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)
Currency Translation - The market values of all assets and liabilities denominated in foreign currencies are recorded in the financial statements after translation to the U.S. Dollar based upon the mean between the bid and offered quotations of the currencies against U.S. Dollars on the date of valuation. The cost basis of such assets and liabilities is determined based upon historical exchange rates. Income and expenses are translated at average exchange rates in effect as accrued or incurred.
Foreign Currency - The Funds may enter into forward purchases or sales of foreign currencies to hedge certain foreign currency denominated assets and liabilities against declines in market value relative to the U.S. Dollar. Forward currency contracts are marked-to-market daily and the change in market value is recorded by the Funds as an unrealized gain or loss. When the forward currency contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the forward currency contract at the time it was opened and value at the time it was closed. Investments in forward currency contracts may expose the Funds to risks resulting from unanticipated movements in foreign currency exchange rates or failure of the counter-party to the agreement to perform in accordance with the terms of the contract.
Reported net realized foreign exchange gains or losses arise from the sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds' books, and the U.S. Dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate. The Funds include foreign currency gains and losses realized on the sales of investments together with market gains and losses on such investments in the Statements of Operations.
Federal Income Taxes - It is each Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies, and to distribute substantially all of its taxable income, including any net realized gains on investments not offset by loss carryovers, to shareholders. Therefore, no provision for federal income tax is required. Davis Government Money Market Fund incurred a 2014 excise tax liability of $4,077 during the six months ended June 30, 2015. The Adviser has analyzed the Funds' tax positions taken on federal and state income tax returns for all open tax years and has concluded that as of June 30, 2015, no provision for income tax is required in the Funds' financial statements related to these tax positions. The Funds' federal and state (Arizona) income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state department of revenue. The earliest tax year that remains subject to examination by these jurisdictions is 2011.
Capital loss carryforwards with no expiration, if any, are required to be utilized before capital loss carryforwards with expiration dates. Capital losses with no expiration date will be carried forward to future years if not offset by gains. At December 31, 2014, the Funds had available for federal income tax purposes unused capital loss carryforwards as follows:
Capital Loss Carryforwards | ||||||||
Davis | ||||||||
Davis | Appreciation | Davis | ||||||
Government | & Income | Real Estate | ||||||
Bond Fund | Fund | Fund | ||||||
Expiring | ||||||||
12/31/2015 | $ | 136,000 | $ | – | $ | – | ||
12/31/2016 | – | – | – | |||||
12/31/2017 | 355,000 | 4,699,000 | 30,396,000 | |||||
12/31/2018 | 625,000 | 31,335,000 | – | |||||
No Expiration | ||||||||
Short-term | 2,472,000 | – | – | |||||
Long-term | 1,761,000 | – | – | |||||
Total | $ | 5,349,000 | $ | 36,034,000 | $ | 30,396,000 |
Securities Transactions and Related Investment Income - Securities transactions are accounted for on the trade date (date the order to buy or sell is executed) with realized gain or loss on the sale of securities being determined based upon identified cost. Dividend income is recorded on the ex-dividend date. Dividend income from REIT securities may include return of capital. Upon notification from the issuer, the amount of the return of capital is reclassified to adjust dividend income, reduce the cost basis, and/or adjust realized gain/loss. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned.
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)
Dividends and Distributions to Shareholders - Dividends and distributions to shareholders are recorded on the ex-dividend date. Net investment income (loss), net realized gains (losses), and net unrealized appreciation (depreciation) on investments may differ for financial statement and tax purposes primarily due to differing treatments of wash sales, paydowns on fixed income securities, foreign currency transactions, net operating losses, passive foreign investment company shares, partnership income, and distributions from real estate investment trusts. The character of dividends and distributions made during the fiscal year from net investment income and net realized securities gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which income or realized gain was recorded by the Funds. The Funds adjust certain components of capital to reflect permanent differences between financial statement amounts and net income and realized gains/losses determined in accordance with income tax rules.
Indemnification - Under the Funds' organizational documents, their officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, some of the Funds' contracts with their service providers contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Funds cannot be determined and the Funds have no historical basis for predicting the likelihood of any such claims.
Use of Estimates in Financial Statements - In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.
Directors Fees and Expenses - The Funds set up a Rabbi Trust to provide for the deferred compensation plan for Independent Directors that enables them to elect to defer receipt of all or a portion of annual fees they are entitled to receive. The value of an eligible Director's account is based upon years of service and fees paid to each Director during the years of service. The amount paid to the Director by the Trust under the plan will be determined based upon the performance of the Davis Funds in which the amounts are invested.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of investment securities (excluding short-term securities) during the six months ended June 30, 2015 were as follows:
Davis | ||||||||||||||
Davis | Davis | Davis | Appreciation | Davis | ||||||||||
Opportunity | Government | Financial | & Income | Real Estate | ||||||||||
Fund | Bond Fund | Fund | Fund | Fund | ||||||||||
Cost of purchases | $ | 119,197,226 | $ | 6,623,135 | $ | 22,523,675 | $ | 72,810,384 | $ | 162,458,386 | ||||
Proceeds from sales | 161,128,968 | 19,433,247 | 25,625,302 | 50,053,799 | 137,197,820 |
NOTE 3 - FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Davis Selected Advisers-NY, Inc. ("DSA-NY"), a wholly-owned subsidiary of the Adviser, acts as sub-adviser to the Funds. DSA-NY performs research and portfolio management services for the Funds under a Sub-Advisory Agreement with the Adviser. The Funds pay no fees directly to DSA-NY.
Certain directors and officers of the Funds are also directors and officers of the general partner of the Adviser.
As of June 30, 2015, a related shareholder's investment in Davis Government Money Market Fund, Davis Financial Fund, and Davis Appreciation & Income Fund represents 37%, 22%, and 21% of outstanding shares, respectively. Investment activities of these shareholders could have a material impact on the Funds.
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 3 - FEES AND OTHER TRANSACTIONS WITH AFFILIATES – (CONTINUED)
Investment Advisory Fees - Advisory fees are paid monthly to the Adviser. The annual rate for Davis Opportunity Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund is 0.55% of the average net assets for each Fund. The annual rate for Davis Government Bond Fund is 0.30% of the average net assets. The annual rate for Davis Government Money Market Fund is 0.50% of the first $250 million of average net assets, 0.45% of the next $250 million, and 0.40% of average net assets in excess of $500 million.
Waivers and Reimbursement of Expenses - The Adviser is contractually committed to waive fees and/or reimburse Davis Government Money Market Fund's expenses such that investment income will not be less than zero until May 1, 2016. During the six months ended June 30, 2015, such waivers and reimbursements amounted to $582,344.
The Adviser may recapture from the assets of Davis Government Money Market Fund any of the operating expenses it has reimbursed (but not any of the advisory fees which it has waived) until the end of the third calendar year after the end of the calendar year in which such reimbursement occurs. Any potential recovery is limited to an amount such that (i) the Fund's net investment income will not be less than zero for any class of shares; and (ii) may not exceed 0.10% of net assets (ten basis points) in any calendar year. This recapture could negatively affect the Fund's future yield. As of June 30, 2015, reimbursed amounts eligible for recapture were as follows:
Expiring | Expiring | Expiring | ||||||
12/31/2016 | 12/31/2017 | 12/31/2018 | ||||||
Amount eligible for recapture | $ | 123,429 | $ | 167,962 | $ | 149,236 |
The Adviser has not recaptured any previously reimbursed expenses during the six months ended June 30, 2015.
Transfer Agent and Accounting Fees - Boston Financial Data Services, Inc. is the Funds' primary transfer agent. State Street Bank and Trust Company ("State Street Bank") is the Funds' primary accounting provider. Fees for such services are included in the custodian fees as State Street Bank also serves as the Funds' custodian. The Adviser is also paid for certain transfer agent and accounting services.
Six months ended June 30, 2015 (Unaudited) | |||||||||||||||||
Davis | Davis | ||||||||||||||||
Davis | Davis | Government | Davis | Appreciation | Davis | ||||||||||||
Opportunity | Government | Money | Financial | & Income | Real Estate | ||||||||||||
Fund | Bond Fund | Market Fund | Fund | Fund | Fund | ||||||||||||
Transfer agent fees paid to Adviser | $ | 19,445 | $ | 4,698 | $ | 8,324 | $ | 39,039 | $ | 12,891 | $ | 16,707 | |||||
Accounting fees paid to Adviser | 5,502 | 1,002 | 2,496 | 7,002 | 3,498 | 2,502 |
Distribution Plan Fees - The Funds have adopted separate Distribution Plans ("12b-1 Plans") for Class A, Class B, and Class C shares. Under the 12b-1 Plans, the Funds (other than Davis Government Money Market Fund) reimburse Davis Distributors, LLC ("Distributor"), the Funds' Underwriter, for amounts paid to dealers as a service fee or commissions with respect to Class A shares sold by dealers, which remain outstanding during the period. The service fee is paid at an annual rate up to 0.25% of the average net assets maintained by the responsible dealers. Each of the Funds (other than Davis Government Money Market Fund) pays the Distributor a 12b-1 fee on Class B and Class C shares at an annual rate equal to the lesser of 1.25% of the average daily net asset value of Class B or Class C shares or the maximum amount provided by applicable rule or regulation of the Financial Industry Regulatory Authority, Inc., which currently is 1.00%. The Funds pay the 12b-1 fee on Class B and Class C shares in order: (i) to pay the Distributor distribution fees or commissions on Class B and Class C shares which have been sold and (ii) to enable the Distributor to pay service fees on Class B and Class C shares which have been sold.
Six months ended June 30, 2015 (Unaudited) | ||||||||||||||
Davis | Davis Government | Davis | Davis Appreciation | Davis Real | ||||||||||
Opportunity Fund | Bond Fund | Financial Fund | & Income Fund | Estate Fund | ||||||||||
Distribution fees: | ||||||||||||||
Class B | $ | 14,510 | $ | 7,554 | $ | 15,499 | $ | 14,374 | $ | 8,610 | ||||
Class C | 384,424 | 35,926 | 295,349 | 242,519 | 101,861 | |||||||||
Service fees: | ||||||||||||||
Class A | 318,119 | 38,862 | 419,797 | 167,228 | 178,912 | |||||||||
Class B | 4,694 | 2,434 | 5,070 | 4,796 | 2,805 | |||||||||
Class C | 128,142 | 11,975 | 98,449 | 80,840 | 33,954 |
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 3 - FEES AND OTHER TRANSACTIONS WITH AFFILIATES – (CONTINUED)
Distribution Plan Fees - (Continued)
The shareholders of Davis Government Money Market Fund have adopted a Distribution Plan in accordance with Rule 12b-1, which does not provide for any amounts to be paid directly to the Distributor as either compensation or reimbursement for distributing shares of the Fund, but does authorize the use of the advisory fee to the extent such fee may be considered to be indirectly financing any activity or expense which is primarily intended to result in the sale of Fund shares.
Sales Charges - Front-end sales charges and contingent deferred sales charges ("CDSC") do not represent expenses of the Funds. They are deducted from the proceeds from sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable.
Class A shares of the Funds (other than Davis Government Money Market Fund) are sold at net asset value plus a sales charge and are redeemed at net asset value. On purchases of $1 million or more, the sales charge will not be applied; however a CDSC of 0.50% may be imposed upon redemption if those shares are redeemed within the first year of purchase.
As of May 1, 2013, Class B shares are no longer offered for new purchases. Class B shares of the Funds are redeemed at net asset value. A CDSC is imposed upon redemption of certain Class B shares (other than Davis Government Money Market Fund) within six years of the original purchase. The charge is a declining percentage starting at 4.00% of the lesser of net asset value of the shares redeemed or the total cost of such shares.
Class C shares of the Funds are sold and redeemed at net asset value. A CDSC of 1.00% is imposed upon redemption of certain Class C shares (other than Davis Government Money Market Fund) within the first year of the original purchase.
The Distributor received commissions earned on sales of Class A shares of the Funds (other than Davis Government Money Market Fund) of which a portion was retained by the Distributor and the remaining was re-allowed to investment dealers. Commission advances by the Distributor on the sales of Class C shares of the Funds (other than Davis Government Money Market Fund) are re-allowed to qualified selling dealers.
Six months ended June 30, 2015 (Unaudited) | ||||||||||||||
Davis | ||||||||||||||
Davis | Davis | Davis | Appreciation | Davis | ||||||||||
Opportunity | Government | Financial | & Income | Real Estate | ||||||||||
Fund | Bond Fund | Fund | Fund | Fund | ||||||||||
Class A commissions retained by Distributor | $ | 7,840 | $ | 245 | $ | 50,240 | $ | 6,623 | $ | 7,471 | ||||
Class A commissions re-allowed to investment dealers | 50,881 | 1,336 | 276,073 | 36,257 | 40,353 | |||||||||
Total commissions earned on sales of Class A | $ | 58,721 | $ | 1,581 | $ | 326,313 | $ | 42,880 | $ | 47,824 | ||||
Commission advances by the Distributor on the sale of: | ||||||||||||||
Class C | $ | 17,054 | $ | 616 | $ | 110,233 | $ | 10,674 | $ | 5,010 | ||||
CDSCs received by the Distributor from: | ||||||||||||||
Class B | 617 | 1,530 | 402 | 2,009 | 529 | |||||||||
Class C | 2,304 | 29 | 2,578 | 528 | 526 |
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 4 - CAPITAL STOCK
At June 30, 2015, there were 10 billion shares of capital stock ($0.01 par value per share) authorized, of which 550 million shares each are designated to Davis Opportunity Fund, Davis Government Bond Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund, and 4.2 billion shares are designated to Davis Government Money Market Fund. As of May 1, 2013, Class B shares are no longer offered for new purchases. Transactions in capital stock were as follows:
Six months ended June 30, 2015 (Unaudited) | |||||||||||
Sold | Reinvestment of Distributions | Redeemed | Net Increase (Decrease) | ||||||||
Davis Opportunity Fund | |||||||||||
Shares: Class A | 427,650 | – | (1,084,639) | (656,989) | |||||||
Class B | 5,203 | – | (42,430) | (37,227) | |||||||
Class C | 77,457 | – | (368,017) | (290,560) | |||||||
Class Y | 595,386 | – | (1,188,904) | (593,518) | |||||||
Value: Class A | $ | 14,179,923 | $ | – | $ | (35,470,338) | $ | (21,290,415) | |||
Class B | 144,628 | – | (1,149,927) | (1,005,299) | |||||||
Class C | 2,241,322 | – | (10,613,421) | (8,372,099) | |||||||
Class Y | 20,174,557 | – | (40,012,403) | (19,837,846) | |||||||
Davis Government Bond Fund | |||||||||||
Shares: Class A | 1,130,245 | 27,304 | (2,385,654) | (1,228,105) | |||||||
Class B | 16,737 | 137 | (99,134) | (82,260) | |||||||
Class C | 72,131 | 1,207 | (262,903) | (189,565) | |||||||
Class Y | 54,113 | 29,734 | (2,235,134) | (2,151,287) | |||||||
Value: Class A | $ | 6,155,363 | $ | 148,702 | $ | (12,976,591) | $ | (6,672,526) | |||
Class B | 90,487 | 746 | (537,106) | (445,873) | |||||||
Class C | 392,645 | 6,580 | (1,430,201) | (1,030,976) | |||||||
Class Y | 296,556 | 163,275 | (12,269,898) | (11,810,067) | |||||||
Davis Government Money Market Fund | |||||||||||
Shares: Class A | 158,431,124 | 85,782 | (203,993,312) | (45,476,406) | |||||||
Class B | 75,942 | 2,993 | (1,001,667) | (922,732) | |||||||
Class C | 1,172,837 | 2,943 | (1,864,848) | (689,068) | |||||||
Class Y | 1,216,628 | 1,774 | (1,059,180) | 159,222 | |||||||
Value: Class A | $ | 158,431,124 | $ | 85,782 | $ | (203,993,312) | $ | (45,476,406) | |||
Class B | 75,942 | 2,993 | (1,001,667) | (922,732) | |||||||
Class C | 1,172,837 | 2,943 | (1,864,848) | (689,068) | |||||||
Class Y | 1,216,628 | 1,774 | (1,059,180) | 159,222 | |||||||
Davis Financial Fund | |||||||||||
Shares: Class A | 1,268,635 | – | (1,265,070) | 3,565 | |||||||
Class B | 3,240 | – | (55,032) | (51,792) | |||||||
Class C | 364,544 | – | (313,492) | 51,052 | |||||||
Class Y | 839,029 | – | (374,604) | 464,425 | |||||||
Value: Class A | $ | 51,096,648 | $ | – | $ | (49,537,063) | $ | 1,559,585 | |||
Class B | 107,785 | – | (1,785,869) | (1,678,084) | |||||||
Class C | 12,435,275 | – | (10,576,723) | 1,858,552 | |||||||
Class Y | 34,385,434 | – | (15,112,378) | 19,273,056 | |||||||
Davis Appreciation & Income Fund | |||||||||||
Shares: Class A | 257,212 | 14,001 | (509,594) | (238,381) | |||||||
Class B | 797 | 2 | (31,188) | (30,389) | |||||||
Class C | 32,630 | 621 | (126,991) | (93,740) | |||||||
Class Y | 891,645 | 4,537 | (88,922) | 807,260 | |||||||
Value: Class A | $ | 9,433,137 | $ | 507,394 | $ | (18,496,427) | $ | (8,555,896) | |||
Class B | 28,985 | 74 | (1,117,711) | (1,088,652) | |||||||
Class C | 1,189,399 | 22,583 | (4,632,759) | (3,420,777) | |||||||
Class Y | 32,290,005 | 165,136 | (3,270,806) | 29,184,335 | |||||||
Davis Real Estate Fund | |||||||||||
Shares: Class A | 184,914 | 14,112 | (333,891) | (134,865) | |||||||
Class B | 1,912 | 6 | (11,305) | (9,387) | |||||||
Class C | 29,739 | 445 | (98,425) | (68,241) | |||||||
Class Y | 256,902 | 3,429 | (97,141) | 163,190 | |||||||
Value: Class A | $ | 6,791,125 | $ | 527,789 | $ | (12,169,024) | $ | (4,850,110) | |||
Class B | 70,216 | 234 | (405,616) | (335,166) | |||||||
Class C | 1,105,523 | 16,665 | (3,588,812) | (2,466,624) | |||||||
Class Y | 9,592,280 | 129,926 | (3,585,978) | 6,136,228 | |||||||
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 4 - CAPITAL STOCK – (CONTINUED)
Year ended December 31, 2014 | |||||||||||
Sold | Reinvestment of Distributions | Redeemed | Net Increase (Decrease) | ||||||||
Davis Opportunity Fund | |||||||||||
Shares: Class A | 2,222,468 | 990,299 | (2,950,291) | 262,476 | |||||||
Class B | 17,348 | 21,525 | (135,806) | (96,933) | |||||||
Class C | 358,213 | 439,684 | (432,214) | 365,683 | |||||||
Class Y | 3,113,592 | 561,139 | (1,557,218) | 2,117,513 | |||||||
Value: Class A | $ | 77,522,952 | $ | 30,927,048 | $ | (103,211,153) | $ | 5,238,847 | |||
Class B | 506,279 | 553,400 | (3,979,886) | (2,920,207) | |||||||
Class C | 10,980,901 | 12,029,754 | (13,237,468) | 9,773,187 | |||||||
Class Y | 112,397,932 | 18,091,125 | (56,166,166) | 74,322,891 | |||||||
Davis Government Bond Fund | |||||||||||
Shares: Class A | 688,481 | 106,485 | (3,580,964) | (2,785,998) | |||||||
Class B | 47,372 | 627 | (271,483) | (223,484) | |||||||
Class C | 262,182 | 5,684 | (982,709) | (714,843) | |||||||
Class Y | 475,477 | 71,750 | (274,555) | 272,672 | |||||||
Value: Class A | $ | 3,735,830 | $ | 578,064 | $ | (19,434,228) | $ | (15,120,334) | |||
Class B | 256,050 | 3,389 | (1,468,100) | (1,208,661) | |||||||
Class C | 1,423,748 | 30,884 | (5,335,315) | (3,880,683) | |||||||
Class Y | 2,602,596 | 392,972 | (1,502,571) | 1,492,997 | |||||||
Davis Government Money Market Fund | |||||||||||
Shares: Class A | 324,880,690 | 92,696 | (421,843,060) | (96,869,674) | |||||||
Class B | 633,537 | 2,549 | (2,476,969) | (1,840,883) | |||||||
Class C | 3,726,278 | 2,373 | (4,962,326) | (1,233,675) | |||||||
Class Y | 1,522,097 | 1,269 | (1,647,924) | (124,558) | |||||||
Value: Class A | $ | 324,880,690 | $ | 92,696 | $ | (421,843,060) | $ | (96,869,674) | |||
Class B | 633,537 | 2,549 | (2,476,969) | (1,840,883) | |||||||
Class C | 3,726,278 | 2,373 | (4,962,326) | (1,233,675) | |||||||
Class Y | 1,522,097 | 1,269 | (1,647,924) | (124,558) | |||||||
Davis Financial Fund | |||||||||||
Shares: Class A | 1,795,351 | 1,434,817 | (2,798,714) | 431,454 | |||||||
Class B | 3,805 | 17,568 | (47,871) | (26,498) | |||||||
Class C | 359,358 | 261,464 | (333,019) | 287,803 | |||||||
Class Y | 842,681 | 224,470 | (343,796) | 723,355 | |||||||
Value: Class A | $ | 73,741,860 | $ | 56,646,574 | $ | (112,466,171) | $ | 17,922,263 | |||
Class B | 128,518 | 565,867 | (1,608,451) | (914,066) | |||||||
Class C | 12,438,786 | 8,772,120 | (11,514,236) | 9,696,670 | |||||||
Class Y | 35,217,153 | 9,109,010 | (14,189,131) | 30,137,032 | |||||||
Davis Appreciation & Income Fund | |||||||||||
Shares: Class A | 944,169 | 40,921 | (1,074,431) | (89,341) | |||||||
Class B | 8,074 | 226 | (120,224) | (111,924) | |||||||
Class C | 190,020 | 4,377 | (225,699) | (31,302) | |||||||
Class Y | 604,925 | 7,172 | (142,926) | 469,171 | |||||||
Value: Class A | $ | 34,310,556 | $ | 1,495,919 | $ | (38,666,470) | $ | (2,859,995) | |||
Class B | 289,329 | 8,146 | (4,263,588) | (3,966,113) | |||||||
Class C | 6,853,142 | 160,700 | (8,081,323) | (1,067,481) | |||||||
Class Y | 22,128,806 | 263,229 | (5,131,193) | 17,260,842 | |||||||
Davis Real Estate Fund | |||||||||||
Shares: Class A | 337,098 | 64,687 | (942,047) | (540,262) | |||||||
Class B | 192 | 194 | (41,036) | (40,650) | |||||||
Class C | 61,286 | 3,617 | (139,995) | (75,092) | |||||||
Class Y | 324,294 | 11,679 | (86,828) | 249,145 | |||||||
Value: Class A | $ | 11,011,503 | $ | 2,123,676 | $ | (30,206,834) | $ | (17,071,655) | |||
Class B | 6,149 | 6,162 | (1,273,364) | (1,261,053) | |||||||
Class C | 2,014,569 | 118,077 | (4,438,062) | (2,305,416) | |||||||
Class Y | 10,998,408 | 390,619 | (2,848,402) | 8,540,625 | |||||||
DAVIS SERIES, INC. | Notes to Financial Statements – (Continued) |
June 30, 2015 (Unaudited) |
NOTE 5 - BANK BORROWINGS
Each Fund may borrow up to 5% of its assets from a bank to purchase portfolio securities, or for temporary and emergency purposes. The purchase of securities with borrowed funds creates leverage in the Fund. Each Fund has entered into an agreement, which enables it to participate with certain other funds managed by the Adviser in an unsecured line of credit with a bank, which permits borrowings up to $50 million, collectively. Interest is charged based on its borrowings, at a rate equal to the higher of the Federal Funds Rate or the Overnight Libor Rate, plus 1.25%. Davis Opportunity Fund, Davis Government Bond Fund, Davis Government Money Market Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund had no borrowings during the six months ended June 30, 2015.
NOTE 6 - SECURITIES LOANED
Davis Opportunity Fund and Davis Financial Fund have entered into a securities lending arrangement with State Street Bank. Under the terms of the agreement, the Funds receive fee income from lending transactions; in exchange for such fees, State Street Bank is authorized to loan securities on behalf of the Funds, against receipt of collateral at least equal to the value of the securities loaned. As of June 30, 2015, the Funds did not have any securities on loan. The Funds bear the risk of any deficiency in the amount of the collateral available for return to a borrower due to a loss in an approved investment.
NOTE 7 - RESTRICTED SECURITIES
Restricted securities are not registered under the Securities Act of 1933 and may have contractual restrictions on resale. They are fair valued under methods approved by the Board of Directors. The aggregate value of restricted securities in Davis Opportunity Fund amounted to $19,729,112 or 3.52% of the Fund's net assets as of June 30, 2015. The aggregate value of restricted securities in Davis Financial Fund amounted to $13,207,656 or 1.70% of the Fund's net assets as of June 30, 2015. Information regarding restricted securities is as follows:
Fund | Security | Acquisition Date | Units/Shares | Cost per Unit/Share | Valuation per Unit/Share as of June 30, 2015 | ||||||
Davis Opportunity | |||||||||||
Fund | ASAC II L.P., Private Placement | 10/10/13 | 6,900,000 | $ | 1.00 | $ | 1.6383 | ||||
Davis Opportunity Fund | DianPing Holdings Ltd., Series F, Private Placement | 01/29/15 | 4,371,772 | $ | 2.649 | $ | 1.9271 | ||||
Davis Financial | |||||||||||
Fund | SKBHC Holdings LLC | 11/08/10 | 1,916 | $ | 4,888.79 | $ | 6,892.78 |
The following financial information represents selected data for each share of capital stock outstanding throughout each period: |
Income (Loss) from Investment Operations | ||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) | Total from Investment Operations | |
Davis Opportunity Fund Class A: | ||||
Six months ended June 30, 2015d | $31.73 | $0.02e | $1.58 | $1.60 |
Year ended December 31, 2014 | $33.20 | $–e,g | $2.36 | $2.36 |
Year ended December 31, 2013 | $23.42 | $0.10e | $9.74 | $9.84 |
Year ended December 31, 2012 | $21.16 | $0.19e | $2.39 | $2.58 |
Year ended December 31, 2011 | $22.57 | $0.20e | $(1.02) | $(0.82) |
Year ended December 31, 2010 | $20.08 | $0.24e | $2.54 | $2.78 |
Davis Opportunity Fund Class B: | ||||
Six months ended June 30, 2015d | $26.11 | $(0.12)e | $1.30 | $1.18 |
Year ended December 31, 2014 | $28.22 | $(0.28)e | $1.98 | $1.70 |
Year ended December 31, 2013 | $20.05 | $(0.14)e | $8.31 | $8.17 |
Year ended December 31, 2012 | $18.13 | $(0.03)e | $2.03 | $2.00 |
Year ended December 31, 2011 | $19.34 | $(0.01)e | $(0.88) | $(0.89) |
Year ended December 31, 2010 | $17.21 | $0.05e | $2.17 | $2.22 |
Davis Opportunity Fund Class C: | ||||
Six months ended June 30, 2015d | $27.79 | $(0.10)e | $1.38 | $1.28 |
Year ended December 31, 2014 | $29.74 | $(0.24)e | $2.10 | $1.86 |
Year ended December 31, 2013 | $21.10 | $(0.11)e | $8.75 | $8.64 |
Year ended December 31, 2012 | $19.08 | $0.01e | $2.14 | $2.15 |
Year ended December 31, 2011 | $20.34 | $0.02e | $(0.92) | $(0.90) |
Year ended December 31, 2010 | $18.10 | $0.07e | $2.29 | $2.36 |
Davis Opportunity Fund Class Y: | ||||
Six months ended June 30, 2015d | $32.77 | $0.06e | $1.62 | $1.68 |
Year ended December 31, 2014 | $34.17 | $0.09e | $2.43 | $2.52 |
Year ended December 31, 2013 | $24.09 | $0.17e | $10.04 | $10.21 |
Year ended December 31, 2012 | $21.77 | $0.24e | $2.47 | $2.71 |
Year ended December 31, 2011 | $23.22 | $0.27e | $(1.06) | $(0.79) |
Year ended December 31, 2010 | $20.65 | $0.30e | $2.63 | $2.93 |
Davis Government Bond Fund Class A: | ||||
Six months ended June 30, 2015d | $5.42 | $0.02e | $0.01 | $0.03 |
Year ended December 31, 2014 | $5.42 | $0.04e | $0.02 | $0.06 |
Year ended December 31, 2013 | $5.55 | $(0.02)e | $(0.06) | $(0.08) |
Year ended December 31, 2012 | $5.60 | $0.02e | $0.02 | $0.04 |
Year ended December 31, 2011 | $5.62 | $0.13 | $(0.02) | $0.11 |
Year ended December 31, 2010 | $5.66 | $0.15 | $(0.04) | $0.11 |
Davis Government Bond Fund Class B: | ||||
Six months ended June 30, 2015d | $5.40 | $–e,g | $– | $–g |
Year ended December 31, 2014 | $5.39 | $(0.01)e | $0.03 | $0.02 |
Year ended December 31, 2013 | $5.53 | $(0.07)e | $(0.07) | $(0.14) |
Year ended December 31, 2012 | $5.58 | $(0.03)e | $0.02 | $(0.01) |
Year ended December 31, 2011 | $5.60 | $0.08 | $(0.02) | $0.06 |
Year ended December 31, 2010 | $5.65 | $0.10 | $(0.05) | $0.05 |
Financial Highlights |
Dividends and Distributions | Ratios to Average Net Assets | |||||||||
Dividends from Net Investment Income | Distributions from Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End of Period | Total Returna | Net Assets, End of Period (in thousands) | Gross Expense Ratio | Net Expense Ratiob | Net Investment Income (Loss) Ratio | Portfolio Turnoverc |
$– | $– | $– | $– | $33.33 | 5.04% | $299,256 | 0.95%f | 0.95%f | 0.13%f | 21% |
$(0.02) | $(3.81) | $– | $(3.83) | $31.73 | 7.31%h | $305,755 | 0.97% | 0.97% | 0.01% | 40% |
$(0.06) | $– | $– | $(0.06) | $33.20 | 42.03%h | $311,241 | 0.98% | 0.98% | 0.34% | 47% |
$(0.32) | $– | $– | $(0.32) | $23.42 | 12.18% | $220,539 | 1.02% | 1.02% | 0.83% | 19% |
$(0.59) | $– | $– | $(0.59) | $21.16 | (3.63)% | $235,743 | 1.02% | 1.02% | 0.90% | 53% |
$(0.29) | $– | $– | $(0.29) | $22.57 | 13.92%h | $296,880 | 1.05% | 1.05% | 1.18% | 24% |
$– | $– | $– | $– | $27.29 | 4.52% | $3,330 | 1.95%f | 1.95%f | (0.87)%f | 21% |
$– | $(3.81) | $– | $(3.81) | $26.11 | 6.25%h | $4,158 | 1.92% | 1.92% | (0.94)% | 40% |
$– | $– | $– | $– | $28.22 | 40.75%h | $7,228 | 1.95% | 1.95% | (0.63)% | 47% |
$(0.08) | $– | $– | $(0.08) | $20.05 | 11.03% | $8,546 | 2.01% | 2.01% | (0.16)% | 19% |
$(0.32) | $– | $– | $(0.32) | $18.13 | (4.61)% | $12,228 | 1.98% | 1.98% | (0.06)% | 53% |
$(0.09) | $– | $– | $(0.09) | $19.34 | 12.91%h | $19,593 | 1.99% | 1.99% | 0.24% | 24% |
$– | $– | $– | $– | $29.07 | 4.61% | $99,978 | 1.75%f | 1.75%f | (0.67)%f | 21% |
$– | $(3.81) | $– | $(3.81) | $27.79 | 6.47%h | $103,635 | 1.75% | 1.75% | (0.77)% | 40% |
$– | $– | $– | $– | $29.74 | 40.95%h | $100,034 | 1.78% | 1.78% | (0.46)% | 47% |
$(0.13) | $– | $– | $(0.13) | $21.10 | 11.23% | $76,682 | 1.82% | 1.82% | 0.03% | 19% |
$(0.36) | $– | $– | $(0.36) | $19.08 | (4.40)% | $87,674 | 1.82% | 1.82% | 0.10% | 53% |
$(0.12) | $– | $– | $(0.12) | $20.34 | 13.06%h | $116,235 | 1.84% | 1.84% | 0.39% | 24% |
$– | $– | $– | $– | $34.45 | 5.13% | $157,672 | 0.73%f | 0.73%f | 0.35%f | 21% |
$(0.11) | $(3.81) | $– | $(3.92) | $32.77 | 7.58%h | $169,390 | 0.72% | 0.72% | 0.26% | 40% |
$(0.13) | $– | $– | $(0.13) | $34.17 | 42.40%h | $104,297 | 0.74% | 0.74% | 0.58% | 47% |
$(0.39) | $– | $– | $(0.39) | $24.09 | 12.40% | $61,172 | 0.77% | 0.77% | 1.08% | 19% |
$(0.66) | $– | $– | $(0.66) | $21.77 | (3.38)% | $171,853 | 0.77% | 0.77% | 1.15% | 53% |
$(0.36) | $– | $– | $(0.36) | $23.22 | 14.31%h | $183,554 | 0.75% | 0.75% | 1.48% | 24% |
$(0.02) | $– | $– | $(0.02) | $5.43 | 0.59% | $36,626 | 1.07%f | 1.07%f | 0.83%f | 9% |
$(0.06) | $– | $– | $(0.06) | $5.42 | 1.14% | $43,232 | 0.90% | 0.90% | 0.64% | 53% |
$(0.05) | $– | $– | $(0.05) | $5.42 | (1.52)% | $58,280 | 0.81% | 0.81% | (0.41)% | 26% |
$(0.09) | $– | $– | $(0.09) | $5.55 | 0.67% | $95,888 | 0.70% | 0.70% | 0.27% | 28% |
$(0.13) | $– | $– | $(0.13) | $5.60 | 2.01% | $108,955 | 0.74% | 0.74% | 1.49% | 27% |
$(0.15) | $– | $– | $(0.15) | $5.62 | 1.95% | $112,118 | 0.75% | 0.75% | 2.00% | 33% |
$–g | $– | $– | $–g | $5.40 | 0.04% | $1,764 | 1.86%f | 1.86%f | 0.04%f | 9% |
$(0.01) | $– | $– | $(0.01) | $5.40 | 0.33% | $2,207 | 1.80% | 1.80% | (0.26)% | 53% |
$– | $– | $– | $– | $5.39 | (2.53)% | $3,409 | 1.72% | 1.72% | (1.32)% | 26% |
$(0.04) | $– | $– | $(0.04) | $5.53 | (0.20)% | $7,707 | 1.63% | 1.63% | (0.66)% | 28% |
$(0.08) | $– | $– | $(0.08) | $5.58 | 1.09% | $10,970 | 1.66% | 1.66% | 0.57% | 27% |
$(0.10) | $– | $– | $(0.10) | $5.60 | 0.84% | $14,021 | 1.65% | 1.65% | 1.10% | 33% |
DAVIS SERIES, INC. |
The following financial information represents selected data for each share of capital stock outstanding throughout each period: |
Income (Loss) from Investment Operations | ||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) | Total from Investment Operations | |
Davis Government Bond Fund Class C: | ||||
Six months ended June 30, 2015d | $5.42 | $–e,g | $0.01 | $0.01 |
Year ended December 31, 2014 | $5.42 | $(0.01)e | $0.03 | $0.02 |
Year ended December 31, 2013 | $5.55 | $(0.07)e | $(0.06) | $(0.13) |
Year ended December 31, 2012 | $5.60 | $(0.03)e | $0.02 | $(0.01) |
Year ended December 31, 2011 | $5.62 | $0.08 | $(0.02) | $0.06 |
Year ended December 31, 2010 | $5.66 | $0.10 | $(0.04) | $0.06 |
Davis Government Bond Fund Class Y: | ||||
Six months ended June 30, 2015d | $5.47 | $0.04e | $– | $0.04 |
Year ended December 31, 2014 | $5.46 | $0.06e | $0.03 | $0.09 |
Year ended December 31, 2013 | $5.60 | $–e,g | $(0.07) | $(0.07) |
Year ended December 31, 2012 | $5.64 | $0.03e | $0.03 | $0.06 |
Year ended December 31, 2011 | $5.66 | $0.14 | $(0.02) | $0.12 |
Year ended December 31, 2010 | $5.70 | $0.16 | $(0.04) | $0.12 |
Davis Government Money Market Fund Class A, B, C, and Y: | ||||
Six months ended June 30, 2015d | $1.000 | $0.001 | $– | $0.001 |
Year ended December 31, 2014 | $1.000 | $–i | $– | $–i |
Year ended December 31, 2013 | $1.000 | $–i | $– | $–i |
Year ended December 31, 2012 | $1.000 | $–i | $– | $–i |
Year ended December 31, 2011 | $1.000 | $–i | $– | $–i |
Year ended December 31, 2010 | $1.000 | $–i | $– | $–i |
Davis Financial Fund Class A: | ||||
Six months ended June 30, 2015d | $39.59 | $0.14e | $1.17 | $1.31 |
Year ended December 31, 2014 | $39.20 | $0.29e | $4.80 | $5.09 |
Year ended December 31, 2013 | $30.41 | $0.29e | $9.26 | $9.55 |
Year ended December 31, 2012 | $26.36 | $0.28e | $4.51 | $4.79 |
Year ended December 31, 2011 | $31.76 | $0.27e | $(3.17) | $(2.90) |
Year ended December 31, 2010 | $28.76 | $0.23e | $3.00 | $3.23 |
Davis Financial Fund Class B: | ||||
Six months ended June 30, 2015d | $32.28 | $(0.06)e | $0.95 | $0.89 |
Year ended December 31, 2014 | $32.82 | $(0.11)e | $3.99 | $3.88 |
Year ended December 31, 2013 | $25.70 | $(0.08)e | $7.77 | $7.69 |
Year ended December 31, 2012 | $22.35 | $(0.05)e | $3.81 | $3.76 |
Year ended December 31, 2011 | $27.27 | $(0.06)e | $(2.72) | $(2.78) |
Year ended December 31, 2010 | $24.79 | $(0.08)e | $2.56 | $2.48 |
Davis Financial Fund Class C: | ||||
Six months ended June 30, 2015d | $33.63 | $(0.03)e | $0.99 | $0.96 |
Year ended December 31, 2014 | $33.97 | $(0.06)e | $4.14 | $4.08 |
Year ended December 31, 2013 | $26.53 | $(0.04)e | $8.05 | $8.01 |
Year ended December 31, 2012 | $23.06 | $0.01e | $3.92 | $3.93 |
Year ended December 31, 2011 | $28.05 | $(0.01)e | $(2.78) | $(2.79) |
Year ended December 31, 2010 | $25.44 | $(0.03)e | $2.64 | $2.61 |
Financial Highlights – (Continued) |
Dividends and Distributions | Ratios to Average Net Assets | |||||||||
Dividends from Net Investment Income | Distributions from Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End of Period | Total Returna | Net Assets, End of Period (in thousands) | Gross Expense Ratio | Net Expense Ratiob | Net Investment Income (Loss) Ratio | Portfolio Turnoverc |
$–g | $– | $– | $–g | $5.43 | 0.26% | $9,096 | 1.74%f | 1.74%f | 0.16%f | 9% |
$(0.02) | $– | $– | $(0.02) | $5.42 | 0.31% | $10,113 | 1.69% | 1.69% | (0.15)% | 53% |
$– g | $– | $– | $– g | $5.42 | (2.34)% | $13,973 | 1.63% | 1.63% | (1.23)% | 26% |
$(0.04) | $– | $– | $(0.04) | $5.55 | (0.15)% | $23,673 | 1.57% | 1.57% | (0.60)% | 28% |
$(0.08) | $– | $– | $(0.08) | $5.60 | 1.16% | $28,729 | 1.59% | 1.59% | 0.64% | 27% |
$(0.10) | $– | $– | $(0.10) | $5.62 | 1.10% | $34,572 | 1.56% | 1.56% | 1.19% | 33% |
$(0.04) | $– | $– | $(0.04) | $5.47 | 0.67% | $15,171 | 0.56%f | 0.56%f | 1.34%f | 9% |
$(0.08) | $– | $– | $(0.08) | $5.47 | 1.73% | $26,925 | 0.50% | 0.50% | 1.04% | 53% |
$(0.07) | $– | $– | $(0.07) | $5.46 | (1.34)% | $25,409 | 0.47% | 0.47% | (0.07)% | 26% |
$(0.10) | $– | $– | $(0.10) | $5.60 | 1.11% | $23,999 | 0.44% | 0.44% | 0.53% | 28% |
$(0.14) | $– | $– | $(0.14) | $5.64 | 2.16% | $3,821 | 0.60% | 0.60% | 1.63% | 27% |
$(0.16) | $– | $– | $(0.16) | $5.66 | 2.11% | $3,416 | 0.58% | 0.58% | 2.17% | 33% |
$(0.001) | $– | $– | $(0.001) | $1.000 | 0.05% | $187,408 | 0.69%f | 0.02%f | 0.11%f | NA |
$–i | $– | $– | $–i | $1.000 | 0.03% | $234,337 | 0.62% | 0.07% | 0.04% | NA |
$–i | $– | $– | $–i | $1.000 | 0.04% | $334,405 | 0.64% | 0.09% | 0.04% | NA |
$–i | $– | $– | $–i | $1.000 | 0.04% | $261,244 | 0.63% | 0.16% | 0.04% | NA |
$–i | $– | $– | $–i | $1.000 | 0.03% | $240,424 | 0.63% | 0.12% | 0.03% | NA |
$–i | $– | $– | $–i | $1.000 | 0.02% | $320,687 | 0.61% | 0.21% | 0.02% | NA |
$– | $– | $– | $– | $40.90 | 3.31% | $579,560 | 0.86%f | 0.86%f | 0.72%f | 3% |
$(0.28) | $(4.42) | $– | $(4.70) | $39.59 | 13.01% | $560,905 | 0.86% | 0.86% | 0.72% | 32% |
$(0.19) | $(0.57) | $– | $(0.76) | $39.20 | 31.45% | $538,410 | 0.88% | 0.88% | 0.83% | 0%j |
$(0.33) | $(0.41) | $– | $(0.74) | $30.41 | 18.15% | $426,149 | 0.91% | 0.91% | 0.96% | 10% |
$(0.47) | $(2.03) | $– | $(2.50) | $26.36 | (9.02)% | $377,885 | 0.91% | 0.91% | 0.87% | 12% |
$(0.23) | $– | $– | $(0.23) | $31.76 | 11.25% | $487,948 | 0.95% | 0.95% | 0.79% | 2% |
$– | $– | $– | $– | $33.17 | 2.76% | $3,214 | 1.93%f | 1.93%f | (0.35)%f | 3% |
$– | $(4.42) | $– | $(4.42) | $32.28 | 11.84% | $4,800 | 1.92% | 1.92% | (0.34)% | 32% |
$– | $(0.57) | $– | $(0.57) | $32.82 | 29.97% | $5,751 | 1.99% | 1.99% | (0.28)% | 0%j |
$– | $(0.41) | $– | $(0.41) | $25.70 | 16.81% | $5,504 | 2.09% | 2.09% | (0.22)% | 10% |
$(0.11) | $(2.03) | $– | $(2.14) | $22.35 | (10.09)% | $6,483 | 2.02% | 2.02% | (0.24)% | 12% |
$– | $– | $– | $– | $27.27 | 10.00% | $11,103 | 2.07% | 2.07% | (0.33)% | 2% |
$– | $– | $– | $– | $34.59 | 2.85% | $83,157 | 1.75%f | 1.75%f | (0.17)%f | 3% |
$– | $(4.42) | $– | $(4.42) | $33.63 | 12.03% | $79,140 | 1.76% | 1.76% | (0.18)% | 32% |
$– | $(0.57) | $– | $(0.57) | $33.97 | 30.24% | $70,174 | 1.79% | 1.79% | (0.08)% | 0%j |
$(0.05) | $(0.41) | $– | $(0.46) | $26.53 | 17.04% | $50,844 | 1.84% | 1.84% | 0.03% | 10% |
$(0.17) | $(2.03) | $– | $(2.20) | $23.06 | (9.85)% | $52,859 | 1.81% | 1.81% | (0.03)% | 12% |
$– | $– | $– | $– | $28.05 | 10.26% | $70,964 | 1.86% | 1.86% | (0.12)% | 2% |
DAVIS SERIES, INC. |
The following financial information represents selected data for each share of capital stock outstanding throughout each period: |
Income (Loss) from Investment Operations | ||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) | Total from Investment Operations | |
Davis Financial Fund Class Y: | ||||
Six months ended June 30, 2015d | $40.70 | $0.18e | $1.19 | $1.37 |
Year ended December 31, 2014 | $40.18 | $0.35e | $4.95 | $5.30 |
Year ended December 31, 2013 | $31.15 | $0.35e | $9.51 | $9.86 |
Year ended December 31, 2012 | $27.00 | $0.34e | $4.62 | $4.96 |
Year ended December 31, 2011 | $32.48 | $0.30e | $(3.22) | $(2.92) |
Year ended December 31, 2010 | $29.40 | $0.25e | $3.09 | $3.34 |
Davis Appreciation & Income Fund Class A: | ||||
Six months ended June 30, 2015d | $36.02 | $0.18e | $0.20 | $0.38 |
Year ended December 31, 2014 | $34.53 | $0.38e | $1.48 | $1.86 |
Year ended December 31, 2013 | $27.23 | $0.40e | $7.30 | $7.70 |
Year ended December 31, 2012 | $25.54 | $0.44e | $1.71 | $2.15 |
Year ended December 31, 2011 | $28.08 | $0.45e | $(2.53) | $(2.08) |
Year ended December 31, 2010 | $23.70 | $0.40e | $4.38 | $4.78 |
Davis Appreciation & Income Fund Class B: | ||||
Six months ended June 30, 2015d | $35.57 | $–e,g | $0.20 | $0.20 |
Year ended December 31, 2014 | $34.15 | $0.02e | $1.46 | $1.48 |
Year ended December 31, 2013 | $26.93 | $0.11e | $7.22 | $7.33 |
Year ended December 31, 2012 | $25.27 | $0.19e | $1.68 | $1.87 |
Year ended December 31, 2011 | $27.78 | $0.19e | $(2.49) | $(2.30) |
Year ended December 31, 2010 | $23.44 | $0.16e | $4.35 | $4.51 |
Davis Appreciation & Income Fund Class C: | ||||
Six months ended June 30, 2015d | $36.15 | $0.03e | $0.20 | $0.23 |
Year ended December 31, 2014 | $34.69 | $0.07e | $1.49 | $1.56 |
Year ended December 31, 2013 | $27.36 | $0.15e | $7.33 | $7.48 |
Year ended December 31, 2012 | $25.67 | $0.23e | $1.70 | $1.93 |
Year ended December 31, 2011 | $28.22 | $0.22e | $(2.53) | $(2.31) |
Year ended December 31, 2010 | $23.81 | $0.19e | $4.42 | $4.61 |
Davis Appreciation & Income Fund Class Y: | ||||
Six months ended June 30, 2015d | $36.18 | $0.23e | $0.19 | $0.42 |
Year ended December 31, 2014 | $34.68 | $0.42e | $1.50 | $1.92 |
Year ended December 31, 2013 | $27.34 | $0.45e | $7.35 | $7.80 |
Year ended December 31, 2012 | $25.65 | $0.50e | $1.71 | $2.21 |
Year ended December 31, 2011 | $28.21 | $0.51e | $(2.55) | $(2.04) |
Year ended December 31, 2010 | $23.80 | $0.44e | $4.43 | $4.87 |
Davis Real Estate Fund Class A: | ||||
Six months ended June 30, 2015d | $35.79 | $0.33e | $(2.22) | $(1.89) |
Year ended December 31, 2014 | $28.41 | $0.40e | $7.42 | $7.82 |
Year ended December 31, 2013 | $29.25 | $0.42e | $(0.90) | $(0.48) |
Year ended December 31, 2012 | $25.31 | $0.39e | $3.87 | $4.26 |
Year ended December 31, 2011 | $23.38 | $0.31e | $1.94 | $2.25 |
Year ended December 31, 2010 | $19.79 | $0.30e | $3.65 | $3.95 |
Financial Highlights – (Continued) |
Dividends and Distributions | Ratios to Average Net Assets | |||||||||
Dividends from Net Investment Income | Distributions from Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End of Period | Total Returna | Net Assets, End of Period (in thousands) | Gross Expense Ratio | Net Expense Ratiob | Net Investment Income (Loss) Ratio | Portfolio Turnoverc |
$– | $– | $– | $– | $42.07 | 3.37% | $112,005 | 0.71%f | 0.71%f | 0.87%f | 3% |
$(0.36) | $(4.42) | $– | $(4.78) | $40.70 | 13.20% | $89,443 | 0.70% | 0.70% | 0.88% | 32% |
$(0.26) | $(0.57) | $– | $(0.83) | $40.18 | 31.71% | $59,236 | 0.71% | 0.71% | 1.00% | 0%j |
$(0.40) | $(0.41) | $– | $(0.81) | $31.15 | 18.33% | $31,623 | 0.72% | 0.72% | 1.15% | 10% |
$(0.53) | $(2.03) | $– | $(2.56) | $27.00 | (8.90)% | $26,607 | 0.75% | 0.75% | 1.03% | 12% |
$(0.26) | $– | $– | $(0.26) | $32.48 | 11.37% | $20,989 | 0.86% | 0.86% | 0.88% | 2% |
$(0.09) | $– | $– | $(0.09) | $36.31 | 1.06% | $210,833 | 0.87%f | 0.87%f | 1.00%f | 15% |
$(0.37) | $– | $– | $(0.37) | $36.02 | 5.37% | $217,723 | 0.87% | 0.87% | 1.05% | 20% |
$(0.40) | $– | $– | $(0.40) | $34.53 | 28.44% | $211,772 | 0.93% | 0.93% | 1.31% | 18% |
$(0.46) | $– | $– | $(0.46) | $27.23 | 8.44% | $244,543 | 0.95% | 0.95% | 1.64% | 11% |
$(0.46) | $– | $– | $(0.46) | $25.54 | (7.45)% | $269,626 | 0.93% | 0.93% | 1.61% | 20% |
$(0.40) | $– | $– | $(0.40) | $28.08 | 20.34% | $317,324 | 0.94% | 0.94% | 1.58% | 20% |
$–g | $– | $– | $–g | $35.77 | 0.56% | $3,226 | 1.88%f | 1.88%f | (0.01)%f | 15% |
$(0.06) | $– | $– | $(0.06) | $35.57 | 4.32% | $4,289 | 1.87% | 1.87% | 0.05% | 20% |
$(0.11) | $– | $– | $(0.11) | $34.15 | 27.26% | $7,940 | 1.88% | 1.88% | 0.36% | 18% |
$(0.21) | $– | $– | $(0.21) | $26.93 | 7.39% | $9,710 | 1.89% | 1.89% | 0.70% | 11% |
$(0.21) | $– | $– | $(0.21) | $25.27 | (8.31)% | $13,604 | 1.84% | 1.84% | 0.70% | 20% |
$(0.17) | $– | $– | $(0.17) | $27.78 | 19.31% | $18,850 | 1.85% | 1.85% | 0.67% | 20% |
$(0.01) | $– | $– | $(0.01) | $36.37 | 0.65% | $63,202 | 1.72%f | 1.72%f | 0.15%f | 15% |
$(0.10) | $– | $– | $(0.10) | $36.15 | 4.48% | $66,212 | 1.72% | 1.72% | 0.20% | 20% |
$(0.15) | $– | $– | $(0.15) | $34.69 | 27.40% | $64,616 | 1.74% | 1.74% | 0.50% | 18% |
$(0.24) | $– | $– | $(0.24) | $27.36 | 7.54% | $60,770 | 1.75% | 1.75% | 0.84% | 11% |
$(0.24) | $– | $– | $(0.24) | $25.67 | (8.21)% | $68,768 | 1.74% | 1.74% | 0.80% | 20% |
$(0.20) | $– | $– | $(0.20) | $28.22 | 19.43% | $85,427 | 1.76% | 1.76% | 0.76% | 20% |
$(0.10) | $– | $– | $(0.10) | $36.50 | 1.17% | $68,353 | 0.68%f | 0.68%f | 1.19%f | 15% |
$(0.42) | $– | $– | $(0.42) | $36.18 | 5.52% | $38,551 | 0.72% | 0.72% | 1.20% | 20% |
$(0.46) | $– | $– | $(0.46) | $34.68 | 28.70% | $20,679 | 0.75% | 0.75% | 1.49% | 18% |
$(0.52) | $– | $– | $(0.52) | $27.34 | 8.62% | $21,765 | 0.75% | 0.75% | 1.84% | 11% |
$(0.52) | $– | $– | $(0.52) | $25.65 | (7.30)% | $25,514 | 0.74% | 0.74% | 1.80% | 20% |
$(0.46) | $– | $– | $(0.46) | $28.21 | 20.66% | $30,878 | 0.73% | 0.73% | 1.79% | 20% |
$(0.11) | $– | $– | $(0.11) | $33.79 | (5.32)% | $182,417 | 0.93%f | 0.93%f | 1.84%f | 55% |
$(0.44) | $– | $– | $(0.44) | $35.79 | 27.68% | $198,029 | 0.96% | 0.96% | 1.21% | 53% |
$(0.36) | $– | $– | $(0.36) | $28.41 | (1.67)% | $172,531 | 0.98% | 0.98% | 1.40% | 75% |
$(0.32) | $– | $– | $(0.32) | $29.25 | 16.86% | $206,497 | 1.01% | 1.01% | 1.38% | 50% |
$(0.32) | $– | $– | $(0.32) | $25.31 | 9.69% | $180,770 | 1.08% | 1.08% | 1.26% | 68% |
$(0.36) | $– | $– | $(0.36) | $23.38 | 20.09% | $246,372 | 1.11% | 1.11% | 1.36% | 43% |
DAVIS SERIES, INC. |
The following financial information represents selected data for each share of capital stock outstanding throughout each period: |
Income (Loss) from Investment Operations | |||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) | Total from Investment Operations | ||
Davis Real Estate Fund Class B: | |||||
Six months ended June 30, 2015d | $35.32 | $0.13e | $(2.19) | $(2.06) | |
Year ended December 31, 2014 | $28.04 | $0.05e | $7.31 | $7.36 | |
Year ended December 31, 2013 | $28.86 | $0.10e | $(0.88) | $(0.78) | |
Year ended December 31, 2012 | $24.98 | $0.07e | $3.83 | $3.90 | |
Year ended December 31, 2011 | $23.08 | $0.03e | $1.91 | $1.94 | |
Year ended December 31, 2010 | $19.55 | $0.08e | $3.57 | $3.65 | |
Davis Real Estate Fund Class C: | |||||
Six months ended June 30, 2015d | $35.79 | $0.17e | $(2.22) | $(2.05) | |
Year ended December 31, 2014 | $28.41 | $0.11e | $7.43 | $7.54 | |
Year ended December 31, 2013 | $29.25 | $0.16e | $(0.90) | $(0.74) | |
Year ended December 31, 2012 | $25.31 | $0.16e | $3.86 | $4.02 | |
Year ended December 31, 2011 | $23.38 | $0.10e | $1.95 | $2.05 | |
Year ended December 31, 2010 | $19.80 | $0.12e | $3.64 | $3.76 | |
Davis Real Estate Fund Class Y: | |||||
Six months ended June 30, 2015d | $36.26 | $0.38e | $(2.26) | $(1.88) | |
Year ended December 31, 2014 | $28.78 | $0.44e | $7.56 | $8.00 | |
Year ended December 31, 2013 | $29.63 | $0.49e | $(0.91) | $(0.42) | |
Year ended December 31, 2012 | $25.64 | $0.46e | $3.93 | $4.39 | |
Year ended December 31, 2011 | $23.69 | $0.36e | $1.98 | $2.34 | |
Year ended December 31, 2010 | $20.05 | $0.33e | $3.75 | $4.08 | |
a | Assumes hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one year. | ||||
b | The ratios in this column reflect the impact, if any, of the reduction of expenses paid indirectly and of certain reimbursements and/or waivers from the Adviser. | ||||
c | The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. | ||||
d | Unaudited. | ||||
e | Per share calculations were based on average shares outstanding for the period. | ||||
f | Annualized. |
Financial Highlights – (Continued) |
Dividends and Distributions | Ratios to Average Net Assets | ||||||||||
Dividends from Net Investment Income | Distributions from Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End of Period | Total Returna | Net Assets, End of Period (in thousands) | Gross Expense Ratio | Net Expense Ratiob | Net Investment Income (Loss) Ratio | Portfolio Turnoverc | |
$–g | $– | $– | $–g | $33.26 | (5.82)% | $1,943 | 1.98%f | 1.98%f | 0.79%f | 55% | |
$(0.08) | $– | $– | $(0.08) | $35.32 | 26.30% | $2,394 | 2.05% | 2.05% | 0.12% | 53% | |
$(0.04) | $– | $– | $(0.04) | $28.04 | (2.71)% | $3,041 | 2.06% | 2.06% | 0.32% | 75% | |
$(0.02) | $– | $– | $(0.02) | $28.86 | 15.60% | $4,250 | 2.11% | 2.11% | 0.28% | 50% | |
$(0.04) | $– | $– | $(0.04) | $24.98 | 8.42% | $4,252 | 2.19% | 2.19% | 0.15% | 68% | |
$(0.12) | $– | $– | $(0.12) | $23.08 | 18.73% | $5,645 | 2.20% | 2.20% | 0.27% | 43% | |
$(0.02) | $– | $– | $(0.02) | $33.72 | (5.73)% | $23,938 | 1.81%f | 1.81%f | 0.96%f | 55% | |
$(0.16) | $– | $– | $(0.16) | $35.79 | 26.58% | $27,851 | 1.84% | 1.84% | 0.33% | 53% | |
$(0.10) | $– | $– | $(0.10) | $28.41 | (2.54)% | $24,243 | 1.85% | 1.85% | 0.53% | 75% | |
$(0.08) | $– | $– | $(0.08) | $29.25 | 15.90% | $29,102 | 1.86% | 1.86% | 0.53% | 50% | |
$(0.12) | $– | $– | $(0.12) | $25.31 | 8.80% | $26,408 | 1.89% | 1.89% | 0.45% | 68% | |
$(0.18) | $– | $– | $(0.18) | $23.38 | 19.07% | $30,034 | 1.92% | 1.92% | 0.55% | 43% | |
$(0.13) | $– | $– | $(0.13) | $34.25 | (5.23)% | $37,276 | 0.75%f | 0.75%f | 2.02%f | 55% | |
$(0.52) | $– | $– | $(0.52) | $36.26 | 27.96% | $33,548 | 0.74% | 0.74% | 1.43% | 53% | |
$(0.43) | $– | $– | $(0.43) | $28.78 | (1.45)% | $19,456 | 0.76% | 0.76% | 1.62% | 75% | |
$(0.40) | $– | $– | $(0.40) | $29.63 | 17.14% | $21,868 | 0.76% | 0.76% | 1.63% | 50% | |
$(0.39) | $– | $– | $(0.39) | $25.64 | 9.97% | $18,605 | 0.79% | 0.79% | 1.55% | 68% | |
$(0.44) | $– | $– | $(0.44) | $23.69 | 20.52% | $18,498 | 0.77% | 0.77% | 1.70% | 43% | |
g | Less than $0.005 per share. | ||||||||||
h | Davis Opportunity Fund's performance benefited from IPO purchases, adding approximately 1% to the Fund's total return in 2014, approximately 3% to the Fund's total return in 2013, and approximately 2% to the Fund's total return in 2010. After purchase, the IPOs rapidly increased in value. The Adviser purchases shares intending to benefit from long-term growth of the underlying company; the rapid appreciation of the IPOs were unusual occurrences. Such performance may not continue in the future. | ||||||||||
i | Less than $0.0005 per share. | ||||||||||
j | Less than 0.50%. | ||||||||||
See Notes to Financial Statements |
DAVIS SERIES, INC. |
Process of Annual Review
The Board of Directors of the Davis Funds oversees the management of each Davis Fund and, as required by law, annually determines whether to approve the continuance of each Davis Fund's Advisory Agreement with Davis Selected Advisers, L.P. and Sub-Advisory Agreement with Davis Selected Advisers-NY, Inc. (jointly "Davis Advisors" and "Advisory Agreements").
With the assistance of counsel to the Independent Directors, the Independent Directors undertook a comprehensive review process in anticipation of their annual contract review meeting, held in March 2015. As part of this process, Davis Advisors provided the Independent Directors with material, including recent investment performance data, that was responsive to questions submitted to Davis Advisors by the Independent Directors. At this meeting, the Independent Directors reviewed and evaluated all information they deemed reasonably necessary under the circumstances and were provided guidance by their independent counsel. In reaching their decision, the Independent Directors also took into account information furnished to them throughout the year and otherwise provided to them during their quarterly meetings or through other prior communications. Upon completion of this review, the Independent Directors found that the terms of the Advisory Agreements were fair and reasonable and that continuation of the Advisory Agreements was in the best interest of Davis Financial Fund, Davis Opportunity Fund, Davis Real Estate Fund, Davis Appreciation & Income Fund, Davis Government Bond Fund, Davis Government Money Market Fund, and their shareholders.
Reasons the Independent Directors Approved Continuation of the Advisory Agreements
The Independent Directors' determinations were based upon a comprehensive consideration of all information provided to them, and they did not identify any single item or piece of information as the controlling factor. Each Independent Director did not necessarily attribute the same weight to each factor. The following facts and conclusions were important, but not exclusive, in the Independent Directors' recommendation to renew the Advisory Agreements.
The Independent Directors considered the performance of each Fund on an absolute basis as well as relative to its benchmark and other comparable funds. The Independent Directors not only considered the investment performance of each Fund, but also the full range and quality of services provided by Davis Advisors to each Fund and its shareholders, including whether a Fund:
1. | Achieves satisfactory investment results over the long-term, after all costs; |
2. | Efficiently and effectively handles shareholder transactions, inquiries, requests, and records, provides quality accounting, legal, and compliance services, and oversees third-party service providers; and |
3. | Fosters healthy investor behavior. |
Davis Advisors is reimbursed a portion of its costs in providing some, but not all, of these services.
A shareholder's ultimate return is the product of a fund's results as well as the shareholder's behavior, specifically in selecting when to invest or redeem. The Independent Directors concluded that through its actions and communications, Davis Advisors has attempted to have a meaningful, positive impact on investor behavior.
Davis Advisors, its affiliates, and members of the Davis family are some of the largest shareholders in the Davis Funds. The Independent Directors concluded that this investment tends to align Davis Advisors' and the Davis family's interests with other shareholders, as they face the same risks, pay the same fees, and are motivated to achieve satisfactory long-term returns. In addition, the Independent Directors concluded that significant investments by Davis Advisors and the Davis family have contributed to the economies of scale that have lowered fees and expenses for Davis Funds' shareholders over time.
The Independent Directors noted the importance of reviewing quantitative measures, but recognized that qualitative factors are also important in assessing whether Davis Funds' shareholders are likely to be well served by the renewal of the Advisory Agreements. They noted both the value and shortcomings of purely quantitative measures, including the data provided by independent service providers, and concluded that, while such measures and data may be informative, the judgment of the Independent Directors must take many factors into consideration in representing the shareholders of the Davis Funds, including those listed below. In connection with reviewing comparative performance information, the Independent Directors generally give greater weight to longer-term measurements.
DAVIS SERIES, INC. | Director Approval of Advisory Agreements (Unaudited) – (Continued) |
Reasons the Independent Directors Approved Continuation of the Advisory Agreements – (Continued)
The Independent Directors noted that Davis Advisors employs a disciplined, company-specific, research-driven, businesslike, long-term investment philosophy. The Independent Directors considered the quality of Davis Advisors' investment process, as well as the experience, capability, and integrity of its senior management and other personnel.
The Independent Directors recognized Davis Advisors' (i) efforts to minimize transaction costs by generally having a long-term time horizon and low portfolio turnover; (ii) focus on tax efficiency; (iii) record of generally producing satisfactory after-tax results over longer-term periods; (iv) efforts towards fostering healthy investor behavior by, among other things, providing informative and substantial educational material; and (v) efforts to promote shareholder interests by actively speaking out on corporate governance issues.
The Independent Directors assessed (i) comparative fee and expense information for other funds, as selected and analyzed by a nationally recognized independent service provider; (ii) information regarding fees charged by Davis Advisors to other advisory clients, including funds that it sub-advises and private accounts, as well as the differences in the services provided to such other clients; and (iii) the fee schedules and breakpoints of each Fund, including an assessment of competitive fee schedules and breakpoints, if applicable.
The Independent Directors reviewed (i) the management fee schedule for each Fund; (ii) profitability of each Fund to Davis Advisors; (iii) the extent to which economies of scale might be realized if the Fund's net assets increase; and (iv) whether the fee schedules should reflect those potential economies of scale, at this time. The Independent Directors considered the nature, quality, and extent of the services being provided to each Fund and the costs incurred by Davis Advisors in providing such services. The Independent Directors considered various potential benefits that Davis Advisors may receive in connection with the services it provides under the Advisory Agreements with the Funds, including a review of portfolio brokerage practices. The Independent Directors noted that Davis Advisors does not use client commissions to pay for publications that are available to the general public or for third-party research services.
The Independent Directors compared the fees paid to Davis Advisors by the Davis Funds with those paid by Davis Advisors' sub-advised clients, private account clients, and managed money/wrap clients. To the extent sub-advised or private account fees were lower than fees paid by the Funds, the Independent Directors noted that the range of services provided to the Funds were more extensive, with greater risks associated with operating SEC registered, publicly traded mutual funds. Serving as the primary adviser for mutual funds is more work because of the complex overlay of regulatory, tax, and accounting issues, which are unique to mutual funds. In addition, the operational work required to service shareholders is more extensive because of the significantly larger number of shareholders, and managing trading is more complex because of the greater frequency of fund flows. With respect to risk, not only has regulation become more complex and burdensome, but the scrutiny of regulators and shareholders has become more intense. The Independent Directors concluded that reasonable justifications existed for the differences between the fee rates for the Davis Funds and Davis Advisors' other lines of business.
Davis Financial Fund
The Independent Directors noted that Davis Financial Fund Class A shares underperformed its benchmark, the Standard & Poor's 500® Index ("S&P 500®"), over the one-, three-, five-, and ten-year time periods, but had outperformed the S&P 500® since its inception on May 1, 1991, all periods ended February 28, 2015.
Lipper, an independent service provider, presented a report to the Independent Directors that compared the Fund to all retail and institutional financial services funds (the "Performance Universe"), as well as the relevant Lipper Index. The report indicated that the Fund outperformed the Performance Universe and Lipper Index over the one-, two-, four-, and ten-year time periods, and underperformed over the three-year time period, all periods ended December 31, 2014. During the five-year time period ended December 31, 2014 the Fund outperformed the Performance Universe, but underperformed the Lipper Index.
DAVIS SERIES, INC. | Director Approval of Advisory Agreements (Unaudited) – (Continued) |
Davis Financial Fund – (Continued)
The Independent Directors also reviewed the Fund's performance versus both the S&P 500® and the Lipper Financial Services category when measured over rolling five- and ten-year time periods. The Fund outperformed the S&P 500® and the Lipper Financial Services category in 12 out of 19 rolling five-year time periods, all periods ended December 31 for each year from 1996 through 2014. The Fund outperformed the S&P 500® in 10 out of 14 rolling ten-year time periods and outperformed the Lipper Financial Services category in 8 out of 14 rolling ten-year time periods, all periods ended December 31 for each year from 2001 through 2014.
The Independent Directors considered Davis Financial Fund's management fee and total expense ratio. They observed that both were reasonable and below the average and median of its peer group, as determined by Lipper.
Davis Opportunity Fund
The Independent Directors noted that Davis Opportunity Fund Class A shares underperformed its benchmark, the Russell 3000® Index ("Russell 3000®"), over the one-, three-, five-, and ten-year time periods, but had outperformed the benchmark since the inception of Class A shares on December 1, 1994, all periods ended February 28, 2015. Davis Advisors oversaw a sub-adviser for the period from May 1, 1984 until December 31, 1998. After this date Davis Advisors became sole investment manager for the Fund.
Lipper, an independent service provider, presented a report to the Independent Directors that compared the Fund to all retail and institutional multi-cap growth funds (the "Performance Universe"), as well as the relevant Lipper Index. The report indicated that the Fund underperformed the Performance Universe and Lipper Index over the one-, four-, five-, and ten-year time periods, and outperformed over the two-year time period, all periods ended December 31, 2014. During the three-year time period, the Fund outperformed the Performance Universe, but underperformed the Lipper Index, period ended December 31, 2014.
The Independent Directors also reviewed the Fund's performance versus both the Russell 3000® and the Lipper Multi-Cap Growth category when measured over rolling five- and ten-year time frames. The Fund outperformed the Russell 3000® in 5 out of 11 rolling five-year time periods and outperformed the Lipper Multi-Cap Growth category in 4 out of 11 rolling five-year time periods, all periods ended December 31 for each year from 2004 through 2014. The Fund outperformed the Russell 3000® and the Lipper Multi-Cap Growth category in 3 out of 6 rolling ten-year time periods, all periods ended December 31 for each year from 2009 through 2014.
The Independent Directors considered Davis Opportunity Fund's management fee and total expense ratio. They observed that both were reasonable and below the average and median of its peer group, as determined by Lipper.
Davis Real Estate Fund
The Independent Directors noted that Davis Real Estate Fund Class A shares had underperformed its benchmark, the Wilshire U.S. Real Estate Securities Index ("Wilshire Index"), over all time periods, which include the one-, three-, five-, and ten-year time periods, as well as since its inception on January 3, 1994, all periods ended February 28, 2015. Lipper, an independent service provider, presented a report to the Independent Directors that compared the Fund to all retail and institutional real estate funds (the "Performance Universe"), as well as the relevant Lipper Index. The report indicated that the Fund underperformed the Performance Universe and Lipper Index over the two-, three-, four-, five-, and ten-year time periods, all periods ended December 31, 2014. During the one-year time period, the Fund outperformed the Performance Universe, but underperformed the Lipper Index, for the period ended December 31, 2014.
The Independent Directors also reviewed the Fund's performance versus both the Wilshire Index and the Lipper Real Estate category when measured over rolling five- and ten-year time frames. The Fund outperformed the Wilshire Index and the Lipper Real Estate category in 3 out of 16 rolling five-year time periods, all periods ended December 31 for each year from 1999 through 2014. The Fund underperformed both in all 11 rolling ten-year time periods, ended December 31 for each year from 2004 through 2014. In reviewing the performance the Directors considered that the Fund is able to invest a limited amount of assets outside of REITs while the Wilshire U.S. Real Estate Securities Index as well as other funds provided in the report are primarily REIT only funds.
DAVIS SERIES, INC. | Director Approval of Advisory Agreements (Unaudited) – (Continued) |
Davis Real Estate Fund – (Continued)
The Independent Directors considered Davis Real Estate Fund's management fee and total expense ratio. They observed that both were reasonable and below the average and median of its peer group, as determined by Lipper.
Davis Appreciation & Income Fund
The Independent Directors noted that Davis Appreciation & Income Fund Class A shares had underperformed its benchmark, the Standard & Poor's 500® Index ("S&P 500®") over all time periods, which includes the one-, three-, five-, and ten-year time periods, as well as since its inception on May 1, 1992, all periods ended February 28, 2015.
Lipper, an independent service provider, presented a report to the Independent Directors that compared the Fund to all retail and institutional mixed-asset target allocation growth funds (the "Performance Universe"), as well as the relevant Lipper Index. The report indicated that the Fund outperformed the Performance Universe and Lipper Index over the two- and three-year time periods and underperformed over the one-, four-, and ten-year time periods, all periods ended December 31, 2014. During the five-year time period, the Fund outperformed the Performance Universe but underperformed the Lipper Index, for the period ended December 31, 2014.
The Independent Directors also reviewed the Fund's performance versus both the S&P 500® and the Lipper Mixed-Asset Target Allocation Growth category ("MATG") when measured over rolling five- and ten-year time frames. The Fund outperformed the S&P 500® in 9 out of 18 rolling five-year time periods and outperformed the Lipper MATG category in 11 out of 18 rolling five-year time periods, all periods ended December 31 for each year from 1997 through 2014. The Fund outperformed the S&P 500® in 7 out of 13 rolling ten-year time periods and in 9 out of 13 time periods versus the Lipper MATG category, all periods ended December 31 for each year from 2002 through 2014.
The Independent Directors considered Davis Appreciation & Income Fund's management fee and total expense ratio. They observed that both were reasonable and below the average and median of its peer group, as determined by Lipper.
Davis Government Bond Fund
The Independent Directors noted that Davis Government Bond Fund Class A shares outperformed its benchmark, the Citigroup U.S. Treasury/Agency 1-3 Year Index, over the one-year time period, but underperformed the benchmark over the three-, five-, and ten-year time periods, as well as since its inception on December 1, 1994, all periods ended February 28, 2015.
Lipper, an independent service provider, presented a report to the Independent Directors that compared the Fund to all other institutional short U.S. Government funds (the "Performance Universe"), as well as the relevant Lipper Index. The report indicated that the Fund outperformed the Performance Universe and Lipper Index over the one-year time period and underperformed over the two-, three-, four-, five-, and ten-year time periods, all periods ended December 31, 2014.
The Independent Directors also reviewed the Fund's performance versus both the Citigroup U.S. Treasury/Agency 1-3 Year Index ("Citigroup Index") and the Lipper Short U.S. Government category when measured over rolling five- and ten-year time frames. The Fund outperformed the Citigroup Index in 2 out of 16 rolling five-year time periods and outperformed the Lipper category in 6 out of 16 rolling five-year time periods, all periods ended December 31 for each year from 1999 through 2014. The Fund underperformed the Citigroup Index in all 11 rolling ten-year time periods and outperformed the Lipper category in 2 out of 11 rolling ten-year time periods, all periods ended December 31 for each year from 2004 through 2014.
The Independent Directors considered Davis Government Bond Fund's management fee and total expense ratio. They observed that both were reasonable and the management fee was below the average and median of its peer group, as determined by Lipper.
DAVIS SERIES, INC. | Director Approval of Advisory Agreements (Unaudited) – (Continued) |
Davis Government Money Market Fund
The Independent Directors noted that Davis Government Money Market Fund Class A shares outperformed the Lipper Sector Average of U.S. Government Money Market Funds over the ten-year time period, performed in-line with the sector over the one-, three-, five-, and ten-year time periods, but underperformed since its inception on October 26, 1989, all periods ended February 28, 2015.
Lipper, an independent service provider, presented a report to the Independent Directors that compared the Fund to all retail U.S. Government Money Market Funds (the "Performance Universe"), as well as the relevant Lipper Index. The report indicated that the Fund outperformed the Performance Universe and the Lipper Index over all periods, which includes the one-, two-, three-, four-, five-, and ten-year time periods, all periods ended December 31, 2014.
The Independent Directors also reviewed the Fund's performance versus both the Lipper U.S. Government Money Market Funds category and the Morningstar U.S. Money Market Taxable Funds category when measured over rolling five- and ten-year time frames. The Fund outperformed the Lipper category in 16 out of 21 rolling five-year time periods and outperformed the Morningstar category in 15 out of 21 rolling five-year time periods, all periods ended December 31 for each year from 1994 through 2014. The Fund has outperformed the Lipper category for 16 consecutive years since 1999 and has outperformed the Morningstar category for 15 consecutive years since 2000. The Independent Directors also noted that the Fund outperformed both the Lipper and Morningstar categories in 12 out of 16 rolling ten-year time periods, all periods ended December 31 for each year from 1999 through 2014. The Fund has outperformed both categories for 12 consecutive years since 2003.
The Independent Directors considered the contractual advisory fee, noting that it was in-line with the median of funds with similar investment objectives as determined by an independent service provider. The Independent Directors also considered the total expense ratio for Davis Government Money Market Fund Class A shares. The Adviser is contractually committed to waive fees and/or reimburse the Fund's expenses such that net investment income will not be less than zero until May 1, 2016. The Adviser may recapture from the assets of Davis Government Money Market Fund any of the operating expenses it has reimbursed (but not any of the advisory fees which it has waived) until the end of the third calendar year after the end of the calendar year in which such reimbursement occurs, subject to certain limitations. This recapture could negatively affect the Fund's future yield. The Independent Directors noted that the Adviser continued to subsidize the Fund's expenses and concluded that the management fee and expenses were reasonable.
Approval of Advisory Agreements
The Independent Directors concluded that Davis Advisors had provided Davis Financial Fund, Davis Opportunity Fund, Davis Real Estate Fund, Davis Appreciation & Income Fund, Davis Government Bond Fund, Davis Government Money Market Fund, and their shareholders a reasonable level of both investment and non-investment services. The Independent Directors further concluded that shareholders have received a significant benefit from Davis Advisors' shareholder-oriented approach, as well as the execution of its investment discipline.
The Independent Directors determined that the advisory fees for Davis Financial Fund, Davis Opportunity Fund, Davis Real Estate Fund, Davis Appreciation & Income Fund, Davis Government Bond Fund, and Davis Government Money Market Fund were reasonable in light of the nature, quality, and extent of the services being provided to the Funds, the costs incurred by Davis Advisors in providing such service, and in comparison to the range of the average advisory fees of their peer groups, as determined by an independent service provider. The Independent Directors found that the terms of the Advisory Agreements were fair and reasonable and that continuation of the Advisory Agreements was in the best interest of each Fund and its shareholders. The Independent Directors and the full Board of Directors therefore voted to continue the Advisory Agreements.
DAVIS SERIES, INC. |
Privacy Notice
While you generally will be dealing with a broker-dealer or other financial adviser, we may collect information about you from your account application and other forms that you may deliver to us. We use this information to process your requests and transactions; for example, to provide you with additional information about our Funds, to open an account for you, or to process a transaction. In order to service your account and execute your transactions, we may provide your personal information to firms that assist us in servicing your account, such as our transfer agent. We may also provide your name and address to one of our agents for the purpose of mailing to you your account statement and other information about our products and services. We may also gather information through the use of "cookies" when you visit our website. These files help us to recognize repeat visitors and allow easy access to and use of the website. We require these outside firms and agents to protect the confidentiality of your information and to use the information only for the purpose for which the disclosure is made. We do not provide customer names and addresses to outside firms, organizations, or individuals except in furtherance of our business relationship with you or as otherwise allowed by law.
We restrict access to nonpublic personal information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your personal information.
Householding
To avoid sending duplicate copies of materials to households, the Funds will mail only one copy of each prospectus, Annual, and Semi-Annual Report to shareholders having the same last name and address on the Funds' records. The consolidation of these mailings, called householding, benefits the Funds through reduced mailing expense. If you do not want the mailing of these documents to be combined with those to other members of your household, please contact the Davis Funds by phone at 1-800-279-0279. Individual copies of current prospectuses and reports will be sent to you within 30 days after the Funds receive your request to stop householding.
DAVIS SERIES, INC. |
For the purposes of their service as directors to the Davis Funds, the business address for each of the directors is 2949 E. Elvira Road, Suite 101, Tucson, AZ 85756. Each Director serves until their retirement, resignation, death, or removal. Subject to exceptions and exemptions, which may be granted by the Independent Directors, Directors must retire at the close of business on the last day of the calendar year in which the Director attains age seventy-four (74).
Name (birthdate) | Position(s) Held With Fund | Term of Office and Length of Time Served | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Director | Other Directorships Held by Director |
Independent Directors
Marc P. Blum (09/09/42) | Director | Director since 1986 | Chief Executive Officer, World Total Return Fund, LLLP; of Counsel to Gordon Feinblatt LLC (law firm). | 13 | Director, Rodney Trust Company (trust and asset management company). |
John S. Gates, Jr. (08/02/53) | Director | Director since 2007 | Chairman and Chief Executive Officer of PortaeCo LLC (private investment company). | 13 | Director, DCT Industrial Trust (REIT). |
Thomas S. Gayner (12/16/61) | Director/ Chairman | Director since 2004 | President and Chief Investment Officer, Markel Corp. (diversified financial holding company). | 13 | Director, Graham Holdings Company (educational and media company); Director, Colfax Corp. (engineering and manufacturer of pumps and fluid handling equipment). |
Samuel H. Iapalucci (07/19/52) | Director | Director since 2006 | Retired; Executive Vice President and Chief Financial Officer, CH2M- HILL Companies, Ltd. (engineering) until 2008. | 13 | Director, exp Global Inc. (engineering). |
Robert P. Morgenthau (03/22/57) | Director | Director since 2002 | Principal, Spears Abacus Advisors, LLC (investment management firm) since 2011; Chairman, NorthRoad Capital Management, LLC (investment management firm) 2002-2011. | 13 | none |
Marsha Williams (03/28/51) | Director | Director since 1999 | Retired; Senior Vice President and Chief Financial Officer, Orbitz Worldwide, Inc. (travel-services provider) 2007-2010. | 13 | Director, Modine Manufacturing Company (heat transfer technology); Director, Chicago Bridge & Iron Company, N.V. (industrial construction and engineering); Director, Fifth Third Bancorp (diversified financial services). |
DAVIS SERIES, INC. | Directors and Officers – (Continued) |
Name (birthdate) | Position(s) Held With Fund | Term of Office and Length of Time Served | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Director | Other Directorships Held by Director |
Interested Directors*
Andrew A. Davis (06/25/63) | Director | Director since 1997 | President or Vice President of each Davis Fund and Selected Fund; President, Davis Selected Advisers, L.P., and also serves as an executive officer of certain companies affiliated with the Adviser. | 16 | Director, Selected Funds (consisting of two portfolios) since 1998; Trustee of Clipper Funds Trust (consisting of one portfolio) since 2014. |
Christopher C. Davis (07/13/65) | Director | Director since 1997 | President or Vice President of each Davis Fund, Selected Fund, and Clipper Fund; Chairman, Davis Selected Advisers, L.P., and also serves as an executive officer of certain companies affiliated with the Adviser, including sole member of the Adviser's general partner, Davis Investments, LLC; Employee of Shelby Cullom Davis & Co. (registered broker/dealer). | 16 | Director, Selected Funds (consisting of two portfolios) since 1998; Trustee of Clipper Funds Trust (consisting of one portfolio) since 2014; Director, Graham Holdings Company (educational and media company). |
*Andrew A. Davis and Christopher C. Davis own partnership units (directly, indirectly, or both) of the Adviser and are considered to be "interested persons" of the Funds as defined in the Investment Company Act of 1940. Andrew A. Davis and Christopher C. Davis are brothers.
Officers
Andrew A. Davis (born 06/25/63, Davis Funds officer since 1997). See description in the section on Interested Directors.
Christopher C. Davis (born 07/13/65, Davis Funds officer since 1997). See description in the section on Interested Directors.
Kenneth C. Eich (born 08/14/53, Davis Funds officer since 1997). Executive Vice President and Principal Executive Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of two portfolios), and Clipper Funds Trust (consisting of one portfolio); Chief Operating Officer, Davis Selected Advisers, L.P., and also serves as an executive officer of certain companies affiliated with the Adviser.
Douglas A. Haines (born 03/04/71, Davis Funds officer since 2004). Vice President, Treasurer, Chief Financial Officer, Principal Financial Officer, and Principal Accounting Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of two portfolios), and Clipper Funds Trust (consisting of one portfolio); Vice President and Director of Fund Accounting, Davis Selected Advisers, L.P.
Sharra L. Haynes (born 09/25/66, Davis Funds officer since 1997). Vice President and Chief Compliance Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of two portfolios), and Clipper Funds Trust (consisting of one portfolio); Vice President and Chief Compliance Officer, Davis Selected Advisers, L.P., and also serves as an executive officer of certain companies affiliated with the Adviser.
Ryan M. Charles (born 07/25/78, Davis Funds officer since 2014). Vice President and Secretary of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of two portfolios), and Clipper Funds Trust (consisting of one portfolio); Vice President, Chief Legal Officer, and Secretary, Davis Selected Advisers, L.P., and also serves as an executive officer of certain companies affiliated with the Adviser.
DAVIS SERIES, INC. |
Investment Adviser |
Davis Selected Advisers, L.P. (Doing business as "Davis Advisors") |
2949 East Elvira Road, Suite 101 |
Tucson, Arizona 85756 |
(800) 279-0279 |
Distributor |
Davis Distributors, LLC |
2949 East Elvira Road, Suite 101 |
Tucson, Arizona 85756 |
Transfer Agent |
Boston Financial Data Services, Inc. |
c/o The Davis Funds |
P.O. Box 8406 |
Boston, Massachusetts 02266-8406 |
Overnight Address: |
30 Dan Road |
Canton, Massachusetts 02021-2809 |
Custodian |
State Street Bank and Trust Co. |
One Lincoln Street |
Boston, Massachusetts 02111 |
Counsel |
Greenberg Traurig, LLP |
77 West Wacker Drive, Suite 3100 |
Chicago, Illinois 60601 |
Independent Registered Public Accounting Firm |
KPMG LLP |
1225 Seventeenth Street, Suite 800 |
Denver, Colorado 80202 |
For more information about Davis Series, Inc., including management fee, charges, and expenses, see the current prospectus, which must precede or accompany this report. The Funds' Statement of Additional Information contains additional information about the Funds' Directors and is available without charge, upon request, by calling 1-800-279-0279 and on the Funds' website at www.davisfunds.com. Quarterly Fact Sheets are available on the Funds' website at www.davisfunds.com.
ITEM 2. CODE OF ETHICS
Not Applicable
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's board of directors has determined that independent trustee Marsha Williams qualifies as the "audit committee financial expert", as defined in Item 3 of form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not Applicable
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not Applicable
ITEM 6. SCHEDULE OF INVESTMENTS
Not Applicable. The complete Schedule of Investments is included in Item 1 of this for N-CSR
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not Applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not Applicable
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES AND AFFILIATED PURCHASERS
Not Applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no changes to the procedure by which shareholders may recommend nominees to the registrant's Board of Trustees.
ITEM 11. CONTROLS AND PROCUDURES
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2 (c) under the Investment Company Act of 1940, as amended) are effective as of a date within 90 days of the filing date of this report. |
(b) | There have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls. |
ITEM 12. EXHIBITS
(a)(1) Not Applicable
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached.
(a)(3) Not Applicable
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DAVIS SERIES, INC.
By | /s/ Kenneth C. Eich |
Kenneth C. Eich | |
Principal Executive Officer |
Date: September 4, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By | /s/ Kenneth C. Eich |
Kenneth C. Eich | |
Principal Executive Officer |
Date: September 4, 2015
By | /s/ Douglas A. Haines |
Douglas A. Haines | |
Principal Financial Officer |
Date: September 4, 2015