| DAVIS RESEARCH FUND | Table of Contents |
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This Semi-Annual Report is authorized for use by existing shareholders. Prospective shareholders must receive a current Davis Research Fund prospectus, which contains more information about investment strategies, risks, charges, and expenses. Please read the prospectus carefully before investing or sending money.
Shares of Davis Research Fund 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 Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1-800-279-0279 and (ii) on the SEC’s website at www.sec.gov.
In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s Form N-PX filing is available (i) without charge, upon request, by calling the Fund toll-free at 1-800-279-0279, and (ii) on the SEC’s website at www.sec.gov.
Form N-Q
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available without charge, upon request, by calling 1-800-279-0279 and on the SEC’s website at www.sec.gov. Effective March 31, 2019, Form N-PORT Exhibit F replaced Form N-Q.
| DAVIS RESEARCH FUND | Management’s Discussion of Fund Performance |
Performance Overview
Davis Research Fund underperformed the Standard & Poor’s 500® Index (“S&P 500®”) for the six-month period ended January 31, 2019 (the “period”). The Fund delivered a total return on net asset value of -7.59%, versus a -3.00% return for the S&P 500®. The sectors1 within the S&P 500® that reported the strongest performance were Real Estate (up 6%), Utilities (up 5%), and Health Care (up 3%). The sectors within the S&P 500® that reported the weakest performance were Energy (down 16%), Materials (down 10%), and Financials (down 6%).
Detractors from Performance
The Fund’s Consumer Discretionary position was the most significant detractor2 from performance relative to the S&P 500® and was also an important absolute detractor. The Fund suffered primarily from weaker performing securities (down 11%, versus down 1%) when compared with the S&P 500®. Adient3, which generated a negative return of -58%, was the top detractor for the period. JD.com and Amazon, down 31% and down 3%, respectively, also hindered performance. Amazon was the Fund’s second-largest holding at the end of the period (5.54% of net assets).
The Fund’s Financials sector position had a -7% return, which was in part due to Danske Bank (down 32%) and Julius Baer Group (down 23%). Both were new purchases during the period. Applied Materials (down 19%), DXC Technology (down 24%), and SAP (down 11%) contributed in part to the Fund’s negative return for its Information Technology holdings (-5%).
During the period, a number of holdings were recategorized into a newly created sector, Communication Services. The Fund’s Communication Services holdings underperformed those of the S&P 500® (down 20%, versus down 1%).
Additional detractors from performance included FedEx (down 27%), an Industrials holding and DowDuPont (down 21%), a Materials holding. The Fund’s 6% average weighting in repurchase agreements detracted relative to the S&P 500®.
The Fund had 26.79% of net assets in foreign holdings at the end of the period and these foreign holdings (down 14%) underperformed the domestic holdings (down 6%).
Contributors to Performance
The Fund’s Health Care holdings were one of the two sectors that had a positive absolute return during the period (up 7%). Aetna (up 13%), Express Scripts Holdings (up 16%), and Cigna (up 10%) each contributed to the Fund’s returns. During the period Aetna was acquired by CVS Health and Express Scripts Holdings was acquired by Cigna.
Consumer Staples also positively affected the Fund’s absolute performance. The Fund’s sole Consumer Staples holding, Nestle, was up 7%.
On a relative basis, the Fund benefited from its lack of any holdings in the Energy sector. This was an advantage compared to the S&P 500®’s 6% average weighting in the weakest performing sector of the period.
A number of individual securities from various sectors were among the top contributors, including (1) Information Technology: Xilinx (up 57%), the top contributor, and Oracle (up 6%), the sixth-largest holding at the end of the period, (2) Financials: Berkshire Hathaway (up 3%), American Express (up 4%), and Swiss Re AG (up 5%), and (3) Materials: Ecolab (up 10%), which was sold during the second half of the period.
Davis Research Fund’s investment objective is long-term growth of capital. There can be no assurance that the Fund will achieve its objective. Davis Research Fund’s principal risks are: common stock risk, depositary receipts risk, emerging market risk, fees and expenses risk, focused portfolio risk, foreign country risk, foreign currency risk, headline risk, large-capitalization companies risk, manager risk, mid- and small-capitalization companies risk, and stock market risk. See the prospectus for a full description of each risk.
Class A shares of Davis Research Fund have been registered with the Securities and Exchange Commission and, as of the date of this report, in selected states where eligible investors are residents. Shares of Davis Research Fund currently are not available for public sale in any other state or jurisdiction. Currently, only the directors, officers, and employees of the Fund or its investment adviser and sub-adviser (and the investment adviser itself and affiliated companies) are eligible to purchase Fund shares. The Adviser reserves the right to reject any offer to purchase shares.
Past performance does not guarantee future results, Fund prices fluctuate, and the value of an investment may be worth more or less than the purchase price. Data provided in this performance overview is for the six-month period ended January 31, 2019, unless otherwise noted. Return figures for underlying Fund positions reflect the return of the security from the beginning of the period or the date of first purchase if subsequent thereto through the end of the period or the date the position is completely liquidated. The actual contribution to the Fund will vary based on a number of factors (e.g., trading activity, weighting). Portfolio holding information is as of the end of the six-month period, January 31, 2019, unless otherwise noted.
1 | The companies included in the Standard & Poor’s 500® Index are divided into eleven sectors. One or more industry groups make up a sector. For purposes of measuring concentration, the Fund generally classifies companies at the industry group or industry level. See the SAI for additional information regarding the Fund’s concentration policy. |
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 RESEARCH FUND | Management’s Discussion of Fund Performance – (Continued) |
Comparison of a $10,000 investment in Davis Research Fund Class A versus the
Standard & Poor’s 500® Index over 10 years for an investment made on January 31, 2009
Average Annual Total Return for periods ended January 31, 2019
| Fund & Benchmark Index | 1-Year | 5-Year | 10-Year | Since Fund’s Inception (10/31/01) | Gross Expense Ratio | Net Expense Ratio |
Class A - without sales charge | (8.78)% | 9.20% | 13.31% | 7.29% | 0.70% | 0.70% |
Class A - with sales charge* | (13.11)% | 8.14% | 12.76% | 6.99% | 0.70% | 0.70% |
S&P 500® Index | (2.31)% | 10.95% | 14.99% | 7.72% | | |
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 quoted in this report represents past performance, assumes that all distributions were reinvested, and is not a guarantee of future results. 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 performance data quoted. 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 ratio may vary in future years. For most recent month-end performance information, please call Davis Funds Investor Services at 1-800-279-0279.
Average Annual Total Return for periods ended December 31, 2018
| Class A Shares | 1-Year | 5-Year | 10-Year |
With sales charge* | (15.45)% | 5.35% | 11.39% |
*Reflects 4.75% front-end sales charge.
| DAVIS RESEARCH FUND | |
| | January 31, 2019 (Unaudited) |
| Portfolio Composition | | Industry Weightings |
| (% of Fund’s 01/31/19 Net Assets) | | (% of 01/31/19 Stock Holdings) |
| | | | | | | |
| | | | | Fund | | S&P 500® |
| Common Stock (U.S.) | 65.04% | | Information Technology | 31.89% | | 19.91% |
| Common Stock (Foreign) | 26.79% | | Diversified Financials | 14.09% | | 5.22% |
| Short-Term Investments | 7.95% | | Retailing | 9.91% | | 6.58% |
| Other Assets & Liabilities | 0.22% | | Banks | 8.95% | | 5.84% |
| | 100.00% | | Capital Goods | 8.18% | | 6.70% |
| | | | Materials | 7.79% | | 2.67% |
| | | | Media & Entertainment | 7.65% | | 8.29% |
| | | | Insurance | 3.22% | | 2.38% |
| | | | Consumer Services | 3.03% | | 1.84% |
| | | | Health Care | 2.44% | | 15.12% |
| | | | Other | 1.66% | | 14.69% |
| | | | Transportation | 1.19% | | 2.11% |
| | | | Energy | – | | 5.47% |
| | | | Utilities | – | | 3.18% |
| | | | | 100.00% | | 100.00% |
Top 10 Long-Term Holdings
(% of Fund’s 01/31/19 Net Assets)
| | | |
| Intel Corp. | Semiconductors & Semiconductor Equipment | 5.60% |
| Amazon.com, Inc. | Retailing | 5.54% |
| Berkshire Hathaway Inc. * | Diversified Financial Services | 4.06% |
| Microsoft Corp. | Software & Services | 3.93% |
| Texas Instruments Inc. | Semiconductors & Semiconductor Equipment | 3.88% |
| Oracle Corp. | Software & Services | 3.77% |
| Applied Materials, Inc. | Semiconductors & Semiconductor Equipment | 3.62% |
| SAP SE, ADR | Software & Services | 3.01% |
| Julius Baer Group Ltd. | Capital Markets | 2.58% |
| Bank of New York Mellon Corp. | Capital Markets | 2.43% |
* Berkshire Hathaway Inc. holding includes Class A and Class B.
| DAVIS RESEARCH FUND | Expense Example (Unaudited) |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases; and (2) ongoing costs, including advisory and administrative fees and other Fund expenses. The Expense Example is intended to help you understand your ongoing costs (in dollars) of investing in the 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 is for the six-month period ended January 31, 2019.
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 be higher, and your ending account value would be 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 the 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 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 be higher.
| | Beginning Account Value | | Ending Account Value | | Expenses Paid During Period* |
| | (08/01/18) | | (01/31/19) | | (08/01/18-01/31/19) |
Class A | | | | | |
| Actual | $1,000.00 | | $924.10 | | $3.39 |
| Hypothetical | $1,000.00 | | $1,021.68 | | $3.57 |
| |
| Hypothetical assumes 5% annual return before expenses. |
| |
| *Expenses are equal to the Class’s annualized operating expense ratio (0.70%)**, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). |
| |
| **The expense ratio reflects the impact, if any, of certain reimbursements from the Adviser. |
| DAVIS RESEARCH FUND | |
| | January 31, 2019 (Unaudited) |
| | Shares/Units | | Value
(Note 1) |
| COMMON STOCK – (91.83%) |
| | COMMUNICATION SERVICES – (7.03%) |
| | Media & Entertainment – (7.03%) |
| | | | | | | | |
| | Baidu, Inc., Class A, ADR (China)* | | | | | | |
| | | | | | | | |
| | Facebook, Inc., Class A * | | | | | | |
| | Naspers Ltd. - N (South Africa) | | | | | | |
| | | | Total Communication Services | | | |
| | CONSUMER DISCRETIONARY – (12.49%) |
| | Automobiles & Components – (0.61%) |
| | | | | | | | |
| | Consumer Services – (2.78%) |
| | New Oriental Education & Technology Group, Inc., ADR (China)* | | | | | | |
| | The Stars Group Inc. (Canada)* | | | | | | |
| | | | 1,262,848 |
| | Retailing – (9.10%) |
| | Alibaba Group Holding Ltd., ADR (China)* | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | JD.com, Inc., Class A, ADR (China)* | | | | | | |
| | | | 4,132,656 |
| | Total Consumer Discretionary | | | |
| | CONSUMER STAPLES – (0.91%) |
| | Food, Beverage & Tobacco – (0.91%) |
| | Nestle S.A. (Switzerland) | | | | | | |
| | | | | |
| | FINANCIALS – (24.12%) |
| | Banks – (8.22%) |
| | Danske Bank A/S (Denmark) | | | | | | |
| | DBS Group Holdings Ltd. (Singapore) | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | 3,733,081 |
| | Diversified Financials – (12.94%) |
| | Capital Markets – (6.04%) |
| | Bank of New York Mellon Corp. | | | | | | |
| | Julius Baer Group Ltd. (Switzerland) | | | | | | |
| | Oaktree Capital Group LLC, Class A | | | | | | |
| | | 2,745,379 |
| | Consumer Finance – (2.84%) |
| | | | | | | | |
| | Capital One Financial Corp. | | | | | | |
| | | 1,287,698 |
| | Diversified Financial Services – (4.06%) |
| | Berkshire Hathaway Inc., Class A * | | | | | | |
| | Berkshire Hathaway Inc., Class B * | | | | | | |
| | | 1,845,149 |
| | | | 5,878,226 |
| DAVIS RESEARCH FUND | Schedule of Investments - (Continued) |
| | January 31, 2019 (Unaudited) |
| | Shares | | Value
(Note 1) |
| COMMON STOCK – (CONTINUED) |
| | FINANCIALS – (CONTINUED) |
| | Insurance – (2.96%) |
| | Multi-line Insurance – (1.92%) |
| | | | | | | | |
| | Reinsurance – (1.04%) |
| | Swiss Re AG (Switzerland) | | | | | | |
| | | | 1,343,635 |
| | | | | | | |
| | HEALTH CARE – (2.24%) |
| | Health Care Equipment & Services – (2.24%) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | |
| | INDUSTRIALS – (8.60%) |
| | Capital Goods – (7.51%) |
| | | | | | | | |
| | Ferguson PLC (United Kingdom) | | | | | | |
| | | | | | | | |
| | Johnson Controls International plc | | | | | | |
| | | | | | | | |
| | Schneider Electric SE (France) | | | | | | |
| | United Technologies Corp. | | | | | | |
| | | | 3,411,439 |
| | Commercial & Professional Services – (–%)^ |
| | Novus Holdings Ltd. (South Africa) | | | | | | |
| | Transportation – (1.09%) |
| | | | | | | | |
| | | | | |
| | INFORMATION TECHNOLOGY – (29.29%) |
| | Semiconductors & Semiconductor Equipment – (15.96%) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | 7,249,942 |
| | Software & Services – (12.32%) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | 5,593,612 |
| | Technology Hardware & Equipment – (1.01%) |
| | | | | | | | |
| | Total Information Technology | | | |
| DAVIS RESEARCH FUND | Schedule of Investments - (Continued) |
| | January 31, 2019 (Unaudited) |
| | Shares/Principal | | Value
(Note 1) |
| COMMON STOCK – (CONTINUED) |
| | MATERIALS – (7.15%) |
| | Akzo Nobel N.V. (Netherlands) | | | | | | |
| | Axalta Coating Systems Ltd. * | | | | | | |
| | | | | | | | |
| | LafargeHolcim Ltd. (Switzerland) | | | | | | |
| | | | | | | | |
| | | | | | | | | |
| | TOTAL COMMON STOCK – (Identified cost $31,417,842)
| | | |
| SHORT-TERM INVESTMENTS – (7.95%) |
| | INTL FCStone Financial Inc. Joint Repurchase Agreement, 2.58%, 02/01/19, dated 01/31/19, repurchase value of $1,282,092 (collateralized by: U.S. Government agency mortgages and obligation in a pooled cash account, 1.625%-10.00%, 02/25/19-02/01/57, total market value $1,307,640) | | | | | | |
| | Mizuho Securities USA Inc. Joint Repurchase Agreement, 2.55%, 02/01/19, dated 01/31/19, repurchase value of $534,038 (collateralized by: U.S. Government agency obligation in a pooled cash account, 0.00%, 01/02/20, total market value $544,680) | | | | | | |
| | Nomura Securities International, Inc. Joint Repurchase Agreement, 2.58%, 02/01/19, dated 01/31/19, repurchase value of $769,055 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 2.50%-7.50%, 06/01/23-08/20/67, total market value $784,380) | | | | | | |
| | SunTrust Robinson Humphrey, Inc. Joint Repurchase Agreement, 2.57%, 02/01/19, dated 01/31/19, repurchase value of $1,026,073 (collateralized by: U.S. Government agency mortgages in a pooled cash account, 3.15%-4.00%, 11/01/25-02/01/49, total market value $1,046,520) | | | | | | |
| | TOTAL SHORT-TERM INVESTMENTS – (Identified cost $3,611,000)
| | | |
| |
Total Investments – (99.78%) – (Identified cost $35,028,842) | | | 45,322,632 |
| | Other Assets Less Liabilities – (0.22%) | | | 98,741 |
| | Net Assets – (100.00%) | | $ | 45,421,373 |
| |
| | ADR: American Depositary Receipt |
| |
| | * | Non-income producing security. |
| |
| | ^ | Less than 0.005%. |
| |
| See Notes to Financial Statements |
| DAVIS RESEARCH FUND | Statement of Assets and Liabilities |
| | At January 31, 2019 (Unaudited) |
| ASSETS: | | | | | |
| Investments in securities, at value* (see accompanying Schedule of Investments): | | $ | 45,322,632 |
| Cash | | | 447 |
| Cash - foreign currencies** | | | 3 |
| Receivables: | | | |
| | Dividends and interest | | | 44,274 |
| | Investment securities sold | | | 106,968 |
| Prepaid expenses | | | 1,430 |
| | | Total assets | | | 45,475,754 |
LIABILITIES: | | | |
| Accrued audit fees | | | 9,988 |
| Accrued custodian fees | | | 11,641 |
| Accrued investment advisory fee | | | 21,127 |
| Other accrued expenses | | | 11,625 |
| | Total liabilities | | | 54,381 |
NET ASSETS | | $ | 45,421,373 |
NET ASSETS CONSIST OF: | | | |
| Par value of shares of capital stock | | $ | 108,003 |
| Additional paid-in capital | | | 33,268,193 |
| Distributable earnings | | | 12,045,177 |
| | Net Assets | | $ | 45,421,373 |
CLASS A SHARES: | | | |
| Net assets | | $ | 45,421,373 |
| Shares outstanding | | | 2,160,068 |
| Net asset value and redemption price per share (Net assets ÷ Shares outstanding) | | $ | 21.03 |
| Maximum offering price per share (100/95.25 of $21.03)† | | $ | 22.08 |
| | | | | |
| *Including: | | | | |
| Cost of investments | | $ | 35,028,842 |
| | | | |
| **Cost of cash - foreign currencies | | | 3 |
| †On purchases of $100,000 or more, the offering price is reduced. |
| See Notes to Financial Statements |
| DAVIS RESEARCH FUND | |
| | For the six months ended January 31, 2019 (Unaudited) |
| INVESTMENT INCOME: | | | | | | |
| Income: | | | |
| Dividends* | | $ | 335,021 |
| Interest | | | 28,801 |
| | | Total income | | | | 363,822 |
Expenses: | | | |
| Investment advisory fee (Note 3) | | $ | 127,522 | | | |
| Custodian fees | | | 11,894 | | | |
| Transfer agent fees | | | 527 | | | |
| Audit fees | | | 9,988 | | | |
| Legal fees | | | 122 | | | |
| Accounting fees (Note 3) | | | 1,002 | | | |
| Directors’ fees and expenses | | | 2,741 | | | |
| Registration and filing fees | | | 1,749 | | | |
| Miscellaneous | | | 5,867 | | | |
| | Total expenses | | | | 161,412 |
| Net investment income | | | 202,410 |
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: | | | | | | |
| Net realized gain from: | | | |
| | Investment transactions | | | 2,512,323 |
| | Foreign currency transactions | | | 595 |
| Net realized gain | | | 2,512,918 |
| Net decrease in unrealized appreciation | | | (6,481,830) |
| | Net realized and unrealized loss on investments and foreign currency transactions | | | | (3,968,912) |
| Net decrease in net assets resulting from operations | | $ | (3,766,502) |
| | | | | | | | | |
| *Net of foreign taxes withheld of | | $ | 817 |
| See Notes to Financial Statements |
| DAVIS RESEARCH FUND | Statements of Changes in Net Assets |
| | | Six months ended January 31, 2019 (Unaudited) | | Year ended July 31, 2018* |
| OPERATIONS: | | | | | | |
| Net investment income | | $ | 202,410 | | $ | 400,395 |
| Net realized gain from investments and foreign currency transactions | | | 2,512,918 | | | 1,539,398 |
Net increase (decrease) in unrealized appreciation on investments and foreign currency transactions | | | (6,481,830) | | | 4,465,686 |
| | | Net increase (decrease) in net assets resulting from operations | | | (3,766,502) | | | 6,405,479 |
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: | | | (1,789,407) | | | (977,647) |
CAPITAL SHARE TRANSACTIONS: | | | | | | |
| Net increase in net assets resulting from capital share transactions (Note 4): | | | 1,605,964 | | | 978,308 |
| | Total increase (decrease) in net assets | | | (3,949,945) | | | 6,406,140 |
NET ASSETS: | | | | | | |
| Beginning of period | | | 49,371,318 | | | 42,965,178 |
| End of period | | $ | 45,421,373 | | $ | 49,371,318 |
| *Includes dividends and distributions to shareholders from net investment income $(325,882) and realized gains from investment transactions $(651,765). End of year net assets includes undistributed net investment income $302,729. |
| See Notes to Financial Statements |
| DAVIS RESEARCH FUND | Notes to Financial Statements |
| | January 31, 2019 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a separate series of Davis New York Venture Fund, Inc. (a Maryland corporation). The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Fund follows the reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. The Fund’s investment objective is long-term growth of capital. The Fund commenced operations on October 31, 2001. Prior to January 19, 2011, the Fund offered shares in three classes, Class A, Class B, and Class C. The Fund ceased operations of Class B and Class C shares on January 19, 2011. Class A shares are sold with a front-end sales charge. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation - The Fund calculates the net asset value of its 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 last quoted bid price. Securities traded on foreign exchanges are valued based upon the last sales price on the principal exchange on which the security is traded prior to the time when the Fund’s assets are valued. Securities (including restricted securities) for which market quotations are not readily available or securities whose values have been materially affected by what Davis Selected Advisers, L.P. (“Davis Advisors” or “Adviser”), the Fund’s investment adviser, identifies as a significant event occurring before the Fund’s assets are valued, but after the close of their respective exchanges will be fair valued using a fair valuation methodology applicable to the security type or the significant event as previously approved by the Fund’s 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 appropriateness of security valuations, the Adviser may consider (i) comparing prior day prices and/or prices of comparable securities; (ii) comparing 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; (iii) new rounds of financing; (iv) the performance of the market or the issuer’s industry; (v) the liquidity of the security; (vi) the size of the holding in a fund; and/or (vii) any other appropriate information. The determination of a security’s fair value price often involves the consideration of a number of subjective factors and is therefore subject to the unavoidable risk that the value assigned to a security may be higher or lower than the security’s value would be if a reliable market quotation of the security was readily available. Fair value determinations are subject to review, approval, and ratification by the Fund’s Board of Directors at its next regularly scheduled meeting covering the period in which the fair valuation was determined.
Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value.
The Fund’s 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.
Fair Value Measurements - Fair value is defined as the price that the Fund 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 Fund’s 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 Fund can obtain the fair value assigned to a security if it were to sell the security.
| DAVIS RESEARCH FUND | Notes to Financial Statements – (Continued) |
| | January 31, 2019 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)
Fair Value Measurements - (Continued)
The following is a summary of the inputs used as of January 31, 2019 in valuing the Fund’s investments carried at value:
| | Investments in Securities at Value |
| | Valuation Inputs |
| | | | Level 2: | | Level 3: | | |
| | | | Other Significant | | Significant | | |
| | Level 1: | | Observable | | Unobservable | | |
| | Quoted Prices | | Inputs | | Inputs | | Total |
Common Stock: | | | | | | | | | | | |
| Communication Services | $ | 3,192,376 | | $ | – | | $ | – | | $ | 3,192,376 |
| Consumer Discretionary | | 5,672,259 | | | – | | | – | | | 5,672,259 |
| Consumer Staples | | 414,185 | | | – | | | – | | | 414,185 |
| Financials | | 10,954,942 | | | – | | | – | | | 10,954,942 |
| Health Care | | 1,018,465 | | | – | | | – | | | 1,018,465 |
| Industrials | | 3,907,249 | | | – | | | – | | | 3,907,249 |
| Information Technology | | 13,302,439 | | | – | | | – | | | 13,302,439 |
| Materials | | 3,249,717 | | | – | | | – | | | 3,249,717 |
| Short-term securities | | – | | | 3,611,000 | | | – | | | 3,611,000 |
| Total Investments | $ | 41,711,632 | | $ | 3,611,000 | | $ | – | | $ | 45,322,632 |
Master Repurchase Agreements - The Fund, 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.
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 Fund 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 Fund as an unrealized gain or loss. When the forward currency contract is closed, the Fund records 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 Fund 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. There were no forward contracts entered into by the Fund.
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 Fund’s 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 Fund includes foreign currency gains and losses realized on the sales of investments together with market gains and losses on such investments in the Statement of Operations.
| DAVIS RESEARCH FUND | Notes to Financial Statements – (Continued) |
| | January 31, 2019 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)
Federal Income Taxes - It is the 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 or excise tax is required. The Adviser analyzed the Fund’s tax positions taken on federal and state income tax returns for all open tax years and concluded that as of January 31, 2019, no provision for income tax is required in the Fund’s financial statements related to these tax positions. The Fund’s 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 2015.
At January 31, 2019, the aggregate cost of investments and unrealized appreciation (depreciation) for federal income tax purposes were as follows:
| Cost | | $ | 35,081,009 |
Unrealized appreciation | | | 12,069,088 |
| Unrealized depreciation | | | (1,827,465) |
| Net unrealized appreciation | | $ | 10,241,623 |
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. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned.
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 [collectively “Distributable earnings (losses)”] may differ for financial statement and tax purposes primarily due to differing treatments of wash sales, corporate actions, partnership income, Directors’ deferred compensation, and foreign currency transactions. 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 Fund. The Fund adjusts 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.
| DAVIS RESEARCH FUND | Notes to Financial Statements – (Continued) |
| | January 31, 2019 (Unaudited) |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)
Indemnification - Under the Fund’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, some of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined and the Fund has 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 Fund 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 January 31, 2019 were $7,558,190 and $7,441,387, respectively.
NOTE 3 - FEES AND OTHER TRANSACTIONS WITH SERVICE PROVIDERS (INCLUDING AFFILIATES)
Davis Selected Advisers-NY, Inc. (“DSA-NY”), a wholly-owned subsidiary of the Adviser, acts as sub-adviser to the Fund. DSA-NY performs research and portfolio management services for the Fund under a Sub-Advisory Agreement with the Adviser. The Fund pays no fees directly to DSA-NY.
All officers of the Fund (including Interested Directors) hold positions as executive officers with the Adviser or its affiliates.
As of January 31, 2019, one related shareholder’s investment in the Fund represents 98% of outstanding shares. Investment activities of this shareholder (the Adviser) could have a material impact on the Fund.
Investment Advisory Fees - Advisory fees are paid monthly to the Adviser. The fixed annual rate is 0.55% of the average net assets.
Transfer Agent and Accounting Fees - DST Asset Manager Solutions, Inc. is the Fund’s primary transfer agent. The Adviser is also paid for certain transfer agent services. The fee paid to the Adviser for these services during the six months ended January 31, 2019 amounted to $136. State Street Bank and Trust Company (“State Street Bank”) is the Fund’s primary accounting provider. Fees for such services are included in the custodian fees as State Street Bank also serves as the Fund’s custodian. The Adviser is also paid for certain accounting services. The fee paid to the Adviser for these services during the six months ended January 31, 2019 amounted to $1,002.
| DAVIS RESEARCH FUND | Notes to Financial Statements – (Continued) |
| | January 31, 2019 (Unaudited) |
NOTE 3 - FEES AND OTHER TRANSACTIONS WITH SERVICE PROVIDERS (INCLUDING AFFILIATES) – (CONTINUED)
Distribution and Service Plan Fees - The Fund has adopted a Distribution Plan (“12b-1 Plan”) for Class A shares. Under the 12b-1 Plan, the Fund reimburses Davis Distributors, LLC (“Distributor”), the Fund’s 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. There was no service fee for Class A shares of the Fund for the six months ended January 31, 2019.
Sales Charges - Front-end sales charges and contingent deferred sales charges (“CDSC”) do not represent expenses of the Fund. 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 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.
The Distributor received no commissions earned on sales of Class A shares of the Fund for the six months ended January 31, 2019.
NOTE 4 - CAPITAL STOCK
At January 31, 2019, there were 3.5 billion shares of capital stock ($0.05 par value per share) authorized for Davis New York Venture Fund, Inc., of which 500 million shares are classified as Davis Research Fund. Transactions in capital stock were as follows:
| | Six months ended January 31, 2019 (Unaudited) |
| | | Sold | | | Reinvestment of Distributions | | | Redeemed | | | Net Increase |
| | | | | | | | | | | | |
| Shares: Class A | | 136 | | | 88,725 | | | (9,362) | | | 79,499 |
| Value: Class A | $ | 3,048 | | | 1,785,138 | | | (182,222) | | | 1,605,964 |
| | | | | | | | | | | | |
| |
| | Year ended July 31, 2018 |
| | | Sold | | | Reinvestment of Distributions | | | Redeemed | | | Net Increase |
| | | | | | | | | | | | |
| Shares: Class A | | 130 | | | 43,675 | | | – | | | 43,805 |
| Value: Class A | $ | 3,043 | | $ | 975,265 | | $ | – | | $ | 978,308 |
| | | | | | | | | | | | |
NOTE 5 - BANK BORROWINGS
The 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. The 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 of 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 one month LIBOR Rate, plus 1.25%. The Fund had no borrowings during the six months ended January 31, 2019.
| The following financial information represents selected data for each share of capital stock outstanding throughout each period: |
| | Six months ended
January 31, 2019 | | Year ended July 31, |
| | (Unaudited) | | 2018 | | 2017 | | 2016 | | 2015 | | 2014 |
| Net Asset Value, Beginning of Period | | $ | 23.73 | | $ | 21.09 | | $ | 19.07 | | $ | 19.23 | | $ | 17.59 | | $ | 15.37 |
Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Investment Income | | 0.10 | | 0.19 | | 0.14 | | 0.12 | | 0.11 | | 0.16 |
| Net Realized and Unrealized Gains (Losses) | | (1.94) | | 2.93 | | 3.92 | | (0.16) | | 1.67 | | 2.23 |
| | Total from Investment Operations | | (1.84) | | 3.12 | | 4.06 | | (0.04) | | 1.78 | | 2.39 |
Dividends and Distributions: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividends from Net Investment Income | | (0.19) | | (0.16) | | (0.09) | | (0.12) | | (0.14) | | (0.17) |
| Distributions from Realized Gains | | (0.67) | | (0.32) | | (1.95) | | – | | – | | – |
| | Total Dividends and Distributions | | (0.86) | | (0.48) | | (2.04) | | (0.12) | | (0.14) | | (0.17) |
| Net Asset Value, End of Period | | $ | 21.03 | | $ | 23.73 | | $ | 21.09 | | $ | 19.07 | | $ | 19.23 | | $ | 17.59 |
Total Returna | | (7.59) | % | | 14.94 | % | | 22.87 | % | | (0.22) | % | | 10.17 | % | | 15.62 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (in thousands) | | $ | 45,421 | | | $ | 49,371 | | | $ | 42,965 | | | $ | 44,826 | | | $ | 55,903 | | | $ | 46,120 | |
| Ratio of Expenses to Average Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Gross | | 0.70 | %b | | 0.70 | % | | 0.71 | % | | 0.70 | % | | 0.68 | % | | 0.70 | % |
| | Netc | | 0.70 | %b | | 0.70 | % | | 0.71 | % | | 0.65 | % | | 0.68 | % | | 0.70 | % |
| Ratio of Net Investment Income to Average Net Assets | | 0.87 | %b | | 0.85 | % | | 0.61 | % | | 0.66 | % | | 0.64 | % | | 0.96 | % |
Portfolio Turnover Rated | | 17 | % | | 12 | % | | 19 | % | | 29 | % | | 27 | % | | 27 | % |
| 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 of less than one year. |
| |
| b | Annualized. |
| |
| c | The Net Ratio of Expenses to Average Net Assets reflects the impact, if any, of certain reimbursements. |
| |
| d | The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. |
| |
| See Notes to Financial Statements |
| DAVIS RESEARCH FUND | Privacy Notice and Householding |
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 Fund will mail only one copy of each prospectus, Annual, and Semi-Annual Report to shareholders having the same last name and address on the Fund’s records. The consolidation of these mailings, called householding, benefits the Fund through reduced mailing expense. If you 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 Fund receives your request to stop householding.
For the purpose 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. Subject to exceptions and exemptions, which may be granted by the Independent Directors, Directors must retire from the Board of Directors and cease being a Director at the close of business on the last day of the calendar year in which the Director attains age seventy-eight (78).
Name, Date of Birth, Position(s) Held with Fund, Length of Service | Principal Occupation(s) During Past Five Years | Number of Portfolios Overseen | Other Directorships |
Independent Directors
| | | | |
Marc P. Blum (09/09/42) 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 since 2007 | Chairman and Chief Executive Officer of PortaeCo LLC (private investment company). | 13 | Director, Miami Corp. (diversified investment company); Director, Lurie Children’s Hospital; Director, Tradelane Properties LLC (real estate company). |
| | | | |
Thomas S. Gayner (12/16/61) Director since 2004 Chairman since 2009 | Co-Chief Executive Officer and Director, 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); Director, Cable ONE Inc. (cable service provider). |
| | | | |
Samuel H. Iapalucci (07/19/52) Director since 2006 | Retired; Executive Vice President and Chief Financial Officer, CH2M-HILL Companies, Ltd. (engineering) until 2008. | 13 | None |
| | | | |
Robert P. Morgenthau (03/22/57) 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 C. Williams (03/28/51) Director since 1999 | Retired; Senior Vice President and Chief Financial Officer, Orbitz Worldwide, Inc. (travel-service provider) 2007-2010. | 13 | Lead Independent Director, Modine Manufacturing Company (heat transfer technology); Director, McDermott International, Inc. (industrial construction and engineering); Lead Independent Director, Fifth Third Bancorp (diversified financial services). |
Interested Directors*
| | | | |
Andrew A. Davis (06/25/63) Director since 1997 | President or Vice President of each Davis Fund, Selected Fund, and Clipper 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, Clipper Funds Trust (consisting of one portfolio) since 2014. |
| | | | |
Christopher C. Davis (07/13/65) Director since 1997 | President or Vice President of each Davis Fund, Selected Fund, Clipper Fund, and Davis Fundamental ETF Trust; 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. | 16 | Director, Selected Funds (consisting of two portfolios) since 1998; Trustee, Clipper Funds Trust (consisting of one portfolio) since 2014; Lead Independent Director, Graham Holdings Company (educational and media company); Director, The Coca-Cola Company (beverage 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 the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of two portfolios), and Clipper Funds Trust (consisting of one portfolio); Trustee/Chairman, Executive Vice President, and Principal Executive Officer of Davis Fundamental ETF Trust (consisting of four portfolios); 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 the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of two portfolios), Clipper Funds Trust (consisting of one portfolio), and Davis Fundamental ETF Trust (consisting of four portfolios); Vice President and Director of Fund Accounting, Davis Selected Advisers, L.P.
Randi J. Roessler (born 06/26/81, Davis Funds officer since 2018). Vice President and Chief Compliance Officer of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of two portfolios), Clipper Funds Trust (consisting of one portfolio), and Davis Fundamental ETF Trust (consisting of four portfolios); 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 the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of two portfolios), Clipper Funds Trust (consisting of one portfolio), and Davis Fundamental ETF Trust (consisting of four portfolios); 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.
| 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 |
| DST Asset Manager Solutions, Inc. |
| c/o The Davis Funds |
| P.O. Box 219197 |
| Kansas City, Missouri 64121-9197 |
| |
| Overnight Address: |
430 West 7th Street, Suite 219197 |
| Kansas City, Missouri 64105-1407 |
| |
| 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 Research Fund, including management fee, charges, and expenses, see the current prospectus, which must precede or accompany this report. The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling 1-800-279-0279.
