UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-04244
SOUND SHORE FUND, INC.
Three Canal Plaza, Suite 600
Portland, Maine 04101
T. Gibbs Kane, Jr., President
8 Sound Shore Drive
Greenwich, Connecticut 06830
Date of fiscal year end: December 31
Date of reporting period: January 1, 2023 – June 30, 2023
Item 1. Reports to Stockholders.
June
30,
2023
Dear
Investor:
The
Sound
Shore
Fund
Investor
Class
(SSHFX)
and
Institutional
Class
(SSHVX)
advanced
5.14%
and
5.18%,
respectively,
in
the
second
quarter
of
2023,
ahead
of
the
Russell
1000
Value
Index
(Russell
Value)
which
advanced
4.07%.
The
three
year
annualized
advances
for
SSHFX
of
15.16%
and
for
SSHVX
of
15.37%
were
also
ahead
of
the
Russell
Value’s
14.30%.
As
long-
term
investors,
we
highlight
that
Sound
Shore’s
35
year
annualized
returns
of
10.06%
and
10.36%,
for
SSHFX
and
SSHVX,
respectively,
as
of
June
30,
2023,
were
ahead
of
the
Russell
Value
at
9.85%.
We
are
required
by
FINRA
to
say
that:
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
their
original
cost.
For
the
most
recent
month-end
performance,
please
visit
the
Fund’s
website
at
www.
soundshorefund.com.
The
market
benefited
from
strong
performance
in
the
technology
sector
this
quarter
as
the
appetite
for
semiconductor
chips
is
being
fed
by
excitement
around
the
potential
of
artificial
intelligence
(AI).
Consumer
discretionary
stocks
also
performed
well
after
consumer
spending
was
more
resilient
than
the
market
had
discounted.
Meanwhile,
as
is
typical
in
a
stronger
market,
more
stable
sectors
like
utilities
and
healthcare
lagged.
All
of
this
with
a
backdrop
which
included
the
Federal
Reserve
attempting
to
rein
in
higher
inflation
by
raising
its
benchmark
borrowing
rate
10
times
since
March
2022,
the
fastest
pace
of
tightening
since
the
early
1980s.
At
its
June
policy
meeting,
the
Fed
held
interest
rates
steady
to
allow
more
time
to
assess
the
lagged
impact
from
these
increases.
Despite
the
uncertain
economic
outlook,
stocks
surged
during
the
second
quarter.
Our
portfolio
outperformed
the
Russell
Value
by
more
than
1.00%
and
reflected
a
divergence
in
performance
among
stocks
not
unlike
the
broader
market.
Performance
for
the
three-month
period
was
narrow,
with
the
equal-weight
S&P
500
Index
(S&P
500)
trailing
its
cap-weighted
cousin
by
a
full
4.75%.
Moreover,
the
weight
of
the
ten
largest
S&P
500
stocks
rose
to
31%
of
the
Index.
This
concentrated
surge
was
part
of
what
we
believe
to
be
boom/bust
mini-cycles,
where
slowdowns/recession
are
hitting
industries/geographies
at
different
times,
providing
opportunity
for
disciplined
fundamental
investors
like
Sound
Shore.
We
couldn’t
help
ourselves
but
to
include
the
cartoon
below
given
the
attention
received
lately
by
all
things
AI.
While
it
makes
light
of
the
rush
to
adopt
AI,
the
technology
is
certainly
promising
and
its
impact
will
permeate
many
parts
of
the
global
economy.
Innovation
is,
and
has
always
been,
a
critical
part
of
successful
investing
and
we
have
many
examples
within
Sound
Shore’s
portfolio
where
we
are
participating.
Importantly,
as
contrarian
investors
we
think
there
are
other
ways
to
gain
exposure
to
innovation
without
becoming
blind
to
momentum
and
valuation.
We
discuss
Oracle
and
Applied
Materials
(AMAT)
below,
but
change
is
happening
across
many
industries
right
now…healthcare,
electric
&
autonomous
vehicles,
energy
and
finance.
Our
portfolio
reflects
that
diverse
opportunity
set.
At
Sound
Shore,
our
active,
contrarian
approach
continually
challenges
us
to
know
what
we
own
and
why
we
own
it.
This
part
of
our
process
helps
to
manage
portfolio
risk.
Our
mission
is
to
find
overlooked
opportunities,
and
we
are
encouraged
by
the
recent
market
environment.
THREE
CANAL
PLAZA,
PORTLAND,
ME
04101
1-800-551-1980
The
largest
contributor
to
performance
during
the
quarter
was
software
maker
Oracle.
A
company
we
have
owned
successfully
in
the
past,
we
were
able
to
purchase
the
stock
again
in
October
of
2019
when
it
was
trading
at
just
14
times
earnings
with
a
7%
free
cash
flow
yield.
This
“legacy”
technology
franchise
is
successfully
competing
amidst
significant
industry
disruption
as
it
leverages
its
dominant
position
in
database
software.
Oracle
surged
after
demonstrating
gains
in
their
cloud,
infrastructure
and
applications
end
markets,
which
drove
a
long
awaited
increase
in
revenue
growth.
Looking
ahead,
our
research
indicates
that
the
company’s
cloud
and
AI
efforts
could
drive
sustained
growth
and
more
than
double
earnings
per
share
over
the
next
5
years.
Combined
with
management’s
commitment
to
returning
cash
to
shareholders
and
Oracle’s
unrivalled
installed
customer
base,
we
see
continued
value
creation
ahead.
Also
benefiting
from
secular
long-term
demand
was
semiconductor
capital
equipment
supplier
Applied
Materials.
AMAT
is
an
example
of
a
company
going
through
a
mini-cycle
as
wafer
fabrication
equipment
(WFE)
spend
corrected
in
2022
and
into
the
first
half
2023.
Now,
business
is
stabilizing
and
capital
is
being
deployed
to
anticipate
supply
needs
from
cloud
adoption,
artificial
intelligence,
the
internet
of
things,
electric
vehicles,
and
other
trends.
We
were
able
to
purchase
AMAT
during
the
market
selloff
in
June
of
2022
when
it
was
trading
below
normal
at
10
times
earnings.
A
technological
winner
in
its
industry,
the
company
has
70%+
share
in
many
of
its
submarkets
and
returns
100%
of
excess
cash
to
shareholders.
We
believe
management
will
continue
building
value
through
market
share
gains,
operating
excellence
and
financial
discipline.
Another
strong
performer
was
homebuilder
Lennar,
one
of
the
country’s
largest.
Like
the
chip
industry,
housing
is
going
through
a
mini-cycle
that
corrected
in
2022,
and
Lennar
was
not
immune.
However,
the
United
States
is
structurally
short
housing
and
not
all
participants
are
benefitting
from
that
supply/demand
imbalance.
It’s
critical
to
have
the
right
house,
at
the
right
price,
in
the
right
geography.
We
believe
the
company
has
scale-driven
advantages
over
small
and
mid-size
builders,
and
also
less
exposure
to
slowing
premium
housing
trends
versus
its
competitors.
Lennar
has
simplified
its
portfolio
to
focus
more
as
a
pure-play
builder,
with
less
asset
intensity,
which
has
improved
returns
on
capital
and
cash
flow.
This
increased
cash
flow
has
enabled
management
to
aggressively
reduce
debt
and
buy
back
stock.
Meanwhile,
medical
services
and
products
leader
Cardinal
Health
is
a
classic
turnaround
story.
The
company's
segments
include
pharmaceutical
that
distributes
branded
and
generic
drugs
and
medical,
which
manufactures
and
distributes
Cardinal
Health
branded
medical,
surgical
and
laboratory
products.
We
were
able
to
purchase
the
stock
at
11
times
earnings
after
the
underperforming
medical
segment
weighed
on
investor
confidence.
Our
research
focused
on
the
core
pharma
distribution
business,
which
is
growing
and
provides
stable
to
improving
earnings
and
cash
flow.
Management
has
laid
out
a
detailed
improvement
plan
for
the
medical
segment,
which
includes
growing
the
Cardinal
branded
portfolio
and
accelerating
its
at-home
solutions
business.
This
was
well
received
by
the
Street
and
the
stock
rose
on
anticipation
of
improved
cost
savings
and
higher
volumes.
Notwithstanding
Cardinal’s
strong
performance,
detractors
to
performance
for
the
period
included
a
number
of
our
healthcare
names,
which
trailed
along
with
the
sector.
Drug
maker
Pfizer
and
life
science
tools
maker
Avantor
both
suffered
from
an
inventory
correction
and
the
uncertainty
surrounding
normalizing
revenue
following
the
COVID
boom
for
some
of
their
products.
Fellow
healthcare
holding
Organon
lagged
due
to
concerns
about
long-term
revenue
drivers.
Non-operational
factors
(currency,
interest
rates
and
restructuring
charges)
have
masked
growth
and
solid
free
cash
conversion
that
have
exceeded
expectations.
Organon,
a
spinoff
from
Merck,
has
a
very
steady
pharmaceutical
business
and
is
investing
to
grow
its
women’s
health
franchise.
Trading
at
less
than
5
times
earnings
with
a
greater
than
5%
dividend
yield,
the
company
is
growing
steadily,
investing
in
its
R&D
pipeline
and
generating
ample
cash
flow
to
repay
its
debt,
almost
all
of
which
is
due
in
five
years
and
beyond.
Away
from
healthcare,
packaged
food
maker
Conagra
Brands
was
lower
as
it
too
suffers
from
uncertainty
around
normalizing
revenue
trends,
after
benefiting
from
a
bump
in
demand
during
COVID.
Inflation
is
hurting
in
the
short-term
and
supply
chain
issues
have
negatively
impacted
volumes.
However,
pricing
has
been
up
low
teens
following
an
approximate
6
month
lag.
Work
from
home
and
millennial
household
formation
are
both
expected
to
be
tailwinds
for
growth
going
forward.
Sound
Shore
is
fortunate
to
have
a
patient
investor
base,
which
allows
us
to
employ
a
long-term
investment
process,
providing
the
opportunity
to
look
through
short-term
noise
and
focus
on
the
key
signal;
where
a
company’s
earnings
power
is
going.
This
market
has
been
particularly
noisy
as
it
digests
the
Fed
pause
and
the
impact
of
higher
rates.
We
remain
disciplined
and
focused
on
earnings
and
cash
flow,
which
our
experience
shows,
will
ultimately
drive
stock
performance.
Currently,
our
portfolio
is
attractively
valued
at
an
average
twelve
month
forward
P/E
ratio
of
11.5
times
versus
the
S&P
500
of
19.1
times
and
the
Russell
Value
of
14.2
times.
We
appreciate
your
investment
alongside
ours
and
encourage
you
to
reach
out
with
any
questions
or
comments.
Thank
you
for
your
investment
alongside
ours
in
Sound
Shore.
Sincerely,
SOUND
SHORE
FUND
Harry
Burn,
III
John
P.
DeGulis
T.
Gibbs
Kane,
Jr.
Co-Portfolio
Managers
Important
Information
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
The
Fund’s
Investor
Class
1,
5,
and
10-year
average
annual
total
returns
for
the
period
ended
June
30,
2023
were
11.20%,
6.89%,
and
8.72%,
respectively.
The
Fund’s
Institutional
Class
1,
5,
and
10-year
average
annual
total
returns
for
the
same
period
were
11.39%,
7.08%,
and
8.91%,
respectively.
Fund
returns
assume
the
reinvestment
of
all
dividend
and
capital
gain
distributions.
As
stated
in
the
current
prospectus,
the
total
annual
operating
expense
ratio
(gross)
is
0.94%
for
the
Investor
Class
and
0.85%
for
the
Institutional
Class.
The
net
expense
ratio
for
the
Institutional
Class
is
0.75%
pursuant
to
an
expense
limitation
agreement
between
the
Adviser
and
the
Fund.
This
agreement
is
in
effect
until
at
least
May
1,
2024.
The
performance
for
the
Institutional
Class
prior
to
its
inception
on
12/9/13
is
based
on
the
performance
of
the
Investor
Class,
adjusted
to
reflect
the
lower
expense
ratio
of
the
Institutional
Class
(net
of
expense
reimbursements).
The
Standard
&
Poor’s
500
Index
is
an
unmanaged
index
representing
the
average
performance
of
500
widely
held,
publicly
traded,
large
capitalization
stocks.
The
Russell
1000
Value
Index
measures
the
performance
of
the
large-cap
value
segment
of
the
U.S.
equity
universe.
It
includes
those
Russell
1000
companies
with
lower
price-to-book
ratios
and
lower
expected
growth
values.
It
is
not
possible
to
invest
directly
in
an
Index.
Data
presented
reflects
that
of
the
underlying
holdings
of
the
Fund,
not
of
the
Fund
itself.
FCF
(Free
Cash
Flow)
represents
the
cash
that
a
company
is
able
to
generate
after
laying
out
the
money
required
to
maintain
or
expand
its
asset
base.
Forward
P/E
(estimated
price-to-earnings)
is
a
measure
of
the
P/E
using
forecasted
earnings
for
the
P/E
calculation.
The
Standard
&
Poor’s
500
Index
is
an
unmanaged
index
representing
the
average
performance
of
500
widely
held,
publicly
traded,
large
capitalization
stocks.
The
1,
5,
and
10-year
average
annual
total
returns
for
the
same
period
were
19.59%,
12.31%,
and
12.86%,
respectively.
The
Russell
1000
Value
Index
measures
the
performance
of
the
large-cap
value
segment
of
the
U.S.
equity
universe.
It
includes
those
Russell
1000
companies
with
lower
price-to-book
ratios
and
lower
expected
growth
values.
The
1,
5,
and
10-year
average
annual
total
returns
for
the
same
period
were
11.54%,
8.11%,
and
9.22%,
respectively.
An
investment
in
the
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal
amount
invested.
Mid
Cap
Risk:
Securities
of
medium
sized
companies
may
be
more
volatile
and
more
difficult
to
liquidate
during
market
downturns
than
securities
of
large,
more
widely
traded
companies.
Foreign
Securities
Risk:
The
Fund
may
invest
in
foreign
securities
primarily
in
the
form
of
American
Depositary
Receipts.
Investing
in
the
securities
of
foreign
issuers
also
involves
certain
special
risks,
which
are
not
typically
associated
with
investing
in
U.S.
dollar-denominated
securities
or
quoted
securities
of
U.S.
issuers
including
increased
risks
of
adverse
issuer,
political,
regulatory,
market
or
economic
developments,
changes
in
currency
rates
and
in
exchange
control
regulations.
The
Fund
is
also
subject
to
other
risks,
including,
but
not
limited
to,
risks
associated
with
value
investing.
The
views
in
this
letter
were
those
of
the
Fund
managers
as
of
6/30/23
and
may
not
necessarily
reflect
their
views
on
the
date
this
letter
is
first
published
or
anytime
thereafter.
Sound
Shore
Fund,
Inc.
SCHEDULE
OF
INVESTMENTS
(Unaudited)
June
30,
2023
See
Notes
to
Financial
Statements.
Sector
Weightings
(a)
(as
of
June
30,
2023)
as
a
percentage
of
Net
Assets
(Unaudited)
Share
Amount
Value
Common
Stock
(97.6%)
(a)
Consumer
Discretionary
(
8.1%
)
General
Motors
Co.
676,420
$
26,082,755
Lennar
Corp.,
Class A
142,015
17,795,900
PVH
Corp.
331,960
28,206,641
72,085,296
Consumer
Staples
(
3.9%
)
Conagra
Brands,
Inc.
525,980
17,736,046
The
Kraft
Heinz
Co.
474,355
16,839,602
34,575,648
Energy
(
7.4%
)
Baker
Hughes
Co.
669,520
21,163,527
Kinder
Morgan,
Inc.
1,296,885
22,332,360
TotalEnergies
SE,
ADR
385,480
22,219,067
65,714,954
Sound
Shore
Fund,
Inc.
SCHEDULE
OF
INVESTMENTS
(Unaudited)(Continued)
June
30,
2023
See
Notes
to
Financial
Statements.
Share
Amount
Value
Financials
(
12.4%
)
Berkshire
Hathaway,
Inc.,
Class B
(b)
87,090
$
29,697,690
Capital
One
Financial
Corp.
285,075
31,178,653
Fidelity
National
Information
Services,
Inc.
333,915
18,265,150
Wells
Fargo
&
Co.
743,200
31,719,776
110,861,269
Health
Care
(
24.0%
)
Avantor
,
Inc.
(b)
1,070,800
21,994,232
Cardinal
Health,
Inc.
193,120
18,263,358
Centene
Corp.
(b)
328,135
22,132,706
Elevance
Health,
Inc.
38,025
16,894,127
GE
HealthCare
Technologies,
Inc.
323,330
26,267,329
Hologic
,
Inc.
(b)
204,415
16,551,483
Merck
&
Co.,
Inc.
238,390
27,507,822
Organon
&
Co.
1,215,640
25,297,468
Pfizer,
Inc.
582,245
21,356,747
Roche
Holding
AG,
ADR
466,790
17,831,378
214,096,650
Industrials
(
12.6%
)
FedEx
Corp.
103,530
25,665,087
Huntington
Ingalls
Industries,
Inc.
119,285
27,149,266
PACCAR,
Inc.
233,792
19,556,701
Robert
Half
International,
Inc.
235,360
17,703,779
The
Boeing
Co.
(b)
106,550
22,499,098
112,573,931
Information
Technology
(
19.6%
)
Analog
Devices,
Inc.
109,320
21,296,629
Applied
Materials,
Inc.
124,820
18,041,483
Cisco
Systems,
Inc.
415,655
21,505,990
Flex,
Ltd.
(b)
1,492,105
41,241,782
Micron
Technology,
Inc.
263,220
16,611,814
NXP
Semiconductors
NV
166,255
34,029,074
Oracle
Corp.
180,480
21,493,363
174,220,135
See
Notes
to
Financial
Statements.
Sound
Shore
Fund,
Inc.
SCHEDULE
OF
INVESTMENTS
(Unaudited)(Concluded)
June
30,
2023
Share
Amount
Value
Materials
(
2.5%
)
Cleveland-Cliffs,
Inc.
(b)
1,346,110
$
22,560,804
Utilities
(
7.1%
)
Constellation
Energy
Corp.
281,500
25,771,325
Vistra
Corp.
1,410,960
37,037,700
62,809,025
Total
Common
Stock
(97.6%)
(cost
$711,044,608)
869,497,712
Short-Term
Investment
(
2.5%
)
Money
Market
Fund
(2.5%)
First
American
Government
Obligations
Fund,
Class X,
5.01%
(c)
22,362,953
22,362,953
Total
Short-Term
Investment
(2.5%)
(cost
$22,362,953)
22,362,953
Investments,
at
value
(100.1%)
(cost
$733,407,561)
$
891,860,665
Other
Liabilities
Less
Assets
(-0.1%)
(1,280,810)
Net
Assets
(100.0%)
$
890,579,855
(a)
More
narrow
industries
are
utilized
for
compliance
purposes,
whereas
broad
sectors
are
utilized
for
reporting
purposes.
(b)
Non-income
producing
security.
(c)
Percentage
disclosed
reflects
the
money
market
fund’s
institutional
class
shares
7-day
yield
as
of
June
30,
2023.
ADR
American
Depositary
Receipt
Sound
Shore
Fund,
Inc.
STATEMENT
OF
ASSETS
AND
LIABILITIES
(Unaudited)
June
30,
2023
See
Notes
to
Financial
Statements.
ASSETS
Investments,
at
value
(Cost
$733,407,561)
$
891,860,665
Receivables:
Capital
shares
sold
215,358
Dividends
813,053
Foreign
tax
reclaims
200,011
Prepaid
expenses
39,644
Total
Assets
893,128,731
LIABILITIES
Payables:
Capital
shares
redeemed
1,912,296
Accrued
liabilities:
Advisory
fees
504,076
Administrator
fees
9,843
Transfer
agent
fees
and
expenses
51,876
Custodian
fees
12,549
Compliance
and
Treasurer
Services
fees
and
expenses
16,742
Professional
fees
28,513
Other
accrued
liabilities
12,981
Total
Liabilities
2,548,876
Net
Assets
$
890,579,855
COMPONENTS
OF
NET
ASSETS
Common
stock,
at
Par
Value
$
23,786
Paid-in
Capital
703,300,402
Distributable
earnings
187,255,667
Net
Assets
$
890,579,855
NET
ASSET
VALUE
Net
Assets
-
Investor
Class
Shares
$
501,739,393
Shares
Outstanding
-
Investor
Class
(100,000,000
shares
authorized,
par
value
$0.001)
13,470,667
Net
Asset
Value
(offering
&
redemption
price
per
share)
-
Investor
Class
Shares
$
37.25
Net
Assets
-
Institutional
Class
Shares
$
388,840,462
Shares
Outstanding
-
Institutional
Class
(100,000,000
shares
authorized,
par
value
$0.001)
10,315,714
Net
Asset
Value
(offering
&
redemption
price
per
share)
-
Institutional
Class
Shares
$
37.69
Sound
Shore
Fund,
Inc.
STATEMENT
OF
OPERATIONS
(Unaudited)
SIX
MONTHS
ENDED
JUNE
30,
2023
See
Notes
to
Financial
Statements.
INVES
TMENT
INCOME
Income:
Dividend
income
(net
of
foreign
withholding
taxes
of
$182,209)
$
8,528,433
Total
Income
8,528,433
Expenses:
Advisory
fees
(Note
3
)
3,361,387
Administrator
fees
72,343
Transfer
agent
fees
and
expenses
-
Investor
Class
Shares
269,204
Transfer
agent
fees
and
expenses
-
Institutional
Class
Shares
30,442
Custodian
fees
36,949
Compliance
and
Treasurer
Services
fees
and
expenses
(Note
3
)
70,396
Directors'
fees
and
expenses
(Note
3
)
93,782
Professional
fees
49,512
Registration
fees
-
Investor
Class
Shares
11,748
Registration
fees
-
Institutional
Class
Shares
11,845
Printing
and
postage
fees
-
Investor
Class
Shares
21,704
Printing
and
postage
fees
-
Institutional
Class
Shares
14,542
Miscellaneous
48,152
Total
Expenses
4,092,006
Expense
Reimbursements
-
Institutional
Class
Shares
(Note
3
)
(216,539)
Net
Expenses
3,875,467
Net
Investment
Income
4,652,966
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
ON
INVESTMENTS
Net
realized
gain
on
investments
32,716,868
Net
change
in
unrealized
appreciation
on
investments
19,431,890
Net
realized
and
unrealized
gain
on
investments
52,148,758
Net
increase
in
net
assets
from
operations
$
56,801,724
Sound
Shore
Fund,
Inc.
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
See
Notes
to
Financial
Statements.
For
the
Six
Months
Ended
June
30,
2023
(Unaudited)
For
the
Year
Ended
December
31,
2022
Operations:
Net
investment
income
$
4,652,966
$
10,927,126
Net
realized
gain
on
investments
32,716,868
29,909,371
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
19,431,890
(168,798,515)
Increase
(decrease)
in
net
assets
from
operations
56,801,724
(127,962,018)
Distributions
to
shareholders:
Investor
Class
Shares
(2,147,452)
(24,089,369)
Institutional
Class
Shares
(1,773,782)
(18,465,211)
Total
distributions
to
shareholders
(3,921,234)
(
42
,
554
,
580
)
Net
capital
share
transactions
(Note
6
):
Investor
Class
Shares
(47,822,659)
(59,444,715)
Institutional
Class
Shares
(14,813,252)
(116,267,466)
Total
capital
share
transactions
(62,635,911)
(175,712,181)
Total
decrease
(9,755,421)
(346,228,779)
NET
ASSETS
Beginning
of
the
period
900,335,276
1,246,564,055
End
of
the
period
$
890,579,855
$
900,335,276
Sound
Shore
Fund,
Inc.
NOTES
TO
FINANCIAL
STATEMENTS
(Unaudited)
June
30,
2023
1.
Organization
Sound
Shore
Fund,
Inc.
(the
“Fund”)
was
incorporated
under
the
laws
of
the
State
of
Maryland
on
February
19,
1985
and
is
registered
as
a
diversified,
open-end
management
investment
company
under
the
Investment
Company
Act
of
1940
(the
“Act”).
The
investment
objective
of
the
Fund
is
growth
of
capital.
The
Fund
qualifies
as
an
investment
company
as
defined
in
Financial
Accounting
Standards
Codification
946
—
Financial
Services
—
Investment
Companies.
The
total
number
of
shares
of
common
stock
which
the
Fund
is
authorized
to
issue
is
200,000,000,
par
value
$0.001
per
share
of
which
100,000,000
shares
are
designated
to
the
Investor
Class
and
100,000,000
shares
are
designated
to
the
Institutional
Class.
The
Board
of
Directors
(the
“Board”)
may,
without
shareholder
approval,
classify
or
reclassify
any
unissued
shares
into
other
classes
or
series
of
shares.
Each
share
of
the
Fund
has
equal
dividend,
distribution,
liquidation
and
voting
rights
(except
as
to
matters
relating
exclusively
to
one
class
of
shares),
and
fractional
shares
have
those
rights
proportionately.
2.
Significant
Accounting
Policies
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
disclosure
of
contingent
liabilities,
if
any,
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increase
and
decrease
in
net
assets
from
operations
during
the
fiscal
period.
Actual
results
could
differ
from
those
estimates.
The
following
represents
the
significant
accounting
policies
of
the
Fund:
a.
Security
Valuation
Exchange-traded
securities
including
those
traded
on
the
National
Association
of
Securities
Dealers’
Automated
Quotation
system
(“NASDAQ”),
are
valued
at
the
last
quoted
sale
price
or
official
closing
price
as
provided
by
independent
pricing
services
as
of
the
close
of
trading
on
the
system
or
exchange
on
which
they
are
primarily
traded,
on
each
Fund
business
day.
In
the
absence
of
a
sale,
such
securities
are
valued
at
the
mean
of
the
last
bid
and
asked
prices.
Non-exchange-traded
securities
for
which
over-the-counter
market
quotations
are
readily
available
are
generally
valued
at
the
mean
between
the
current
bid
and
asked
prices
provided
by
independent
pricing
services.
Investments
in
other
open-end
regulated
investment
companies
are
valued
at
their
publicly
traded
net
asset
value
(“NAV”).
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Board
has
designated
the
Adviser,
as
defined
in
Note
3,
as
the
Fund's
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
the
Fund.
The
Adviser
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Adviser's
fair
value
determinations.
The
Adviser
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Adviser
convenes
on
a
regular
and
ad
Sound
Shore
Fund,
Inc.
NOTES
TO
FINANCIAL
STATEMENTS
(Unaudited)(Continued)
June
30,
2023
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Board
has
approved
the
Adviser’s
fair
valuation
procedures
as
a
part
of
the
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Adviser
provides
fair
valuation
inputs
pursuant
to
its
fair
valuation
procedures
if
market
quotations
are
not
readily
available
(including
a
short
and
temporary
lapse
in
the
provision
of
a
price
by
the
regular
pricing
source)
or,
if
in
the
judgment
of
the
Adviser
the
prices
or
values
available
do
not
represent
the
fair
value
of
the
instrument.
Factors
which
may
cause
the
Adviser
to
make
such
a
judgment
include,
but
are
not
limited
to,
the
following:
(i)
only
a
bid
price
or
an
asked
price
is
available,
(ii)
the
spread
between
the
bid
price
and
the
asked
price
is
substantial,
(iii)
the
frequency
of
sales,
(iv)
the
thinness
of
the
market,
(v)
the
size
of
reported
trades,
and
(vi)
actions
of
the
securities
markets,
such
as
the
suspension
or
limitation
of
trading.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
a
security
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
security
may
be
sold.
Fair
valuation
could
result
in
a
NAV
different
from
one
determined
by
using
market
quotations.
Valuation
inputs
used
to
determine
the
value
of
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
of
similar
securities,
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
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
securities.
Pursuant
to
the
valuation
procedures
noted
previously,
equity
securities
(including
exchange-traded
securities
and
other
open-end
regulated
investment
companies)
are
generally
categorized
as
Level
1
securities
in
the
fair
value
hierarchy.
Investments
for
which
there
are
no
quotations,
or
for
which
quotations
do
not
appear
reliable,
are
valued
at
fair
value
as
determined
in
good
faith
by
the
Adviser
under
the
Adviser’s
fair
valuation
procedures.
These
valuations
are
typically
categorized
as
Level
2
or
Level
3
in
the
fair
value
hierarchy.
The
following
table
summarizes
the
Fund’s
investments
categorized
in
the
fair
value
hierarchy
as
of
June
30,
2023:
Sound
Shore
Fund,
Inc.
NOTES
TO
FINANCIAL
STATEMENTS
(Unaudited)(Continued)
June
30,
2023
At
June
30,
2023
,
all
equity
securities
and
open-end
regulated
investment
companies
were
included
in
Level
1
in
the
table
above.
Please
refer
to
the
Schedule
of
Investments
to
view
equity
securities
categorized
by
sector/industry
type.
b.
Security
Transactions
Security
transactions
are
recorded
on
a
trade
date
basis.
Realized
gain
and
loss
on
investments
sold
are
recorded
on
the
basis
of
identified
cost.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Interest
income
is
recorded
on
an
accrual
basis.
Foreign
dividend
income
is
recorded
on
the
ex-dividend
date
or
as
soon
as
practicable
after
the
Fund
determines
the
existence
of
a
dividend
declaration
after
exercising
reasonable
due
diligence.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
tax,
which
is
accrued
as
applicable.
Investment
income,
realized
and
unrealized
gains
and
losses
and
certain
Fund-level
expenses
are
allocated
to
each
class
based
on
relative
average
daily
net
assets.
Certain
expenses
are
incurred
at
the
class
level
and
charged
directly
to
that
particular
class.
Class
level
expenses
are
denoted
as
such
on
the
Fund’s
Statement
of
Operations.
c.
Dividends
and
Distributions
to
Shareholders
Dividends
are
declared
separately
for
each
class.
No
class
has
preferential
dividend
rights;
differences
in
per-share
dividend
rates
are
generally
due
to
class-specific
fee
waivers
and
expenses.
Dividends
and
distributions
payable
to
shareholders
are
recorded
by
the
Fund
on
the
ex-dividend
date.
Dividends
from
net
investment
income,
if
any,
are
declared
and
paid
semiannually.
Capital
gains,
if
any,
are
distributed
to
shareholders
at
least
annually.
The
Fund
determines
its
net
investment
income
and
capital
gains
distributions
in
accordance
with
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gains
on
various
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
To
the
extent
distributions
exceed
net
investment
income
and
net
realized
capital
gains
for
tax
purposes,
they
are
reported
as
a
return
of
capital.
d.
Federal
Taxes
The
Fund
intends
to
qualify
each
year
as
a
regulated
investment
company
and
to
distribute
substantially
all
of
its
taxable
income.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income,
capital
gain
and
certain
other
amounts,
if
any,
the
Fund
will
not
be
subject
to
federal
taxation.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
For
all
open
tax
years
and
all
major
taxing
jurisdictions,
management
of
the
Fund
has
concluded
that
there
are
no
significant
uncertain
tax
positions
that
would
require
the
Fund
to
record
a
tax
liability
or
would
otherwise
require
recognition
in
the
financial
statements.
Open
tax
years
are
those
that
are
open
for
examination
by
taxing
authorities
(i.e.,
generally,
the
last
three
tax
year-ends
2020
–
2022,
and
the
interim
tax
period
since
then).
Security
Type
Level
1
Level
2
Level
3
Total
Investments
in
Securities
Common
Stock
$
869,497,712
$
–
$
–
$
869,497,712
Money
Market
Fund
22,362,953
–
–
22,362,953
Total
Investments
$
891,860,665
$
–
$
–
$
891,860,665
Sound
Shore
Fund,
Inc.
NOTES
TO
FINANCIAL
STATEMENTS
(Unaudited)(Continued)
June
30,
2023
3.
Fees
and
Expenses
Investment
Adviser
The
Fund’s
investment
adviser
is
Sound
Shore
Management,
Inc.
(the
“Adviser”).
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee,
accrued
daily
and
paid
monthly
at
an
annual
rate
of
0.75%
of
the
Fund’s
average
daily
net
assets.
Pursuant
to
an
expense
limitation
agreement
between
the
Adviser
and
the
Fund,
the
Adviser
has
agreed
to
reimburse
all
of
the
ordinary
expenses
of
the
Institutional
Class,
excluding
advisory
fees,
interest,
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
extraordinary
expenses
and
all
litigation
costs
until
at
least
May
1,
2024.
This
reimbursement
is
shown
on
the
Statement
of
Operations
as
a
reduction
of
expenses,
and
such
amounts
are
not
subject
to
future
recoupment
by
the
Adviser.
Other
Services
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”),
provides
certain
administration
and
portfolio
accounting
services
to
the
Fund.
US
Bank,
N.A.
(“US
Bank”)
serves
as
custodian
to
the
Fund.
Apex
provides
transfer
agency
services
to
the
Fund.
The
Fund
also
has
agreements
with
various
financial
intermediaries
and
“mutual
fund
supermarkets”
under
which
customers
of
these
intermediaries
may
purchase
and
hold
Fund
shares.
These
intermediaries
effectively
provide
subtransfer
agent
services
that
the
Fund’s
transfer
agent
would
have
otherwise
had
to
provide.
In
recognition
of
this,
the
transfer
agent,
the
Fund
and
the
Fund’s
Adviser
have
entered
into
an
agreement
whereby
the
transfer
agent
agrees
to
pay
financial
intermediaries
a
portion
of
the
amount
denoted
on
the
Statement
of
Operations
as
“Transfer
agent
fees
and
expenses
—
Investor
Class
Shares”
that
it
receives
from
the
Fund
for
its
services
as
transfer
agent
for
the
Investor
Class
and
the
Adviser
agrees
to
pay
the
excess,
if
any,
charged
by
a
financial
intermediary
for
that
class.
Foreside
Fund
Services,
LLC
is
the
Fund’s
distributor
(the
“Distributor”).
The
Distributor
is
not
affiliated
with
the
Adviser,
Apex,
US
Bank,
or
its
affiliated
companies.
The
Distributor
receives
no
compensation
from
the
Fund
for
its
distribution
services.
Pursuant
to
a
Compliance
Services
Agreement
with
the
Fund,
Foreside
Fund
Officer
Services,
LLC
(“FFOS”),
an
affiliate
of
the
Distributor,
provides
a
Chief
Compliance
Officer
and
Anti-Money
Laundering
Officer
to
the
Fund
as
well
as
some
additional
compliance
support
functions.
Under
a
Treasurer
Services
Agreement
with
the
Fund,
Foreside
Management
Services,
LLC
(“FMS”),
an
affiliate
of
the
Distributor,
provides
a
Treasurer
to
the
Fund.
Neither
the
Distributor,
FFOS,
FMS,
nor
their
employees
that
serve
as
officers
of
the
Fund,
have
any
role
in
determining
the
investment
policies
of
or
securities
to
be
purchased
or
sold
by
the
Fund.
The
Fund
pays
each
director
who
is
not
an
“interested
person”
of
the
Fund,
as
defined
in
Section
2(a)(19)
of
the
Act
(“Independent
Director”),
quarterly
fees
of
$5,000,
plus
$10,000
per
quarterly
meeting
attended
in-person
or
telephonically,
and
$2,000
per
special
meeting
attended
in
person
or
telephonically.
In
addition,
the
Chairman
of
the
Audit
committee
receives
a
quarterly
fee
of
$2,500.
Certain
Officers
and
Directors
of
the
Fund
are
officers,
directors,
or
employees
of
the
aforementioned
companies.
Sound
Shore
Fund,
Inc.
NOTES
TO
FINANCIAL
STATEMENTS
(Unaudited)(Continued)
June
30,
2023
4.
Purchases
and
Sales
of
Securities
The
cost
of
securities
purchased
and
proceeds
from
sales
of
securities
(excluding
short-term
investments)
for
the
period
ending
June
30,
2023,
aggregated
$348,198,442
and
$395,478,222
respectively.
5.
Federal
Income
Tax
Cost
for
federal
income
tax
purposes
is
substantially
the
same
as
for
financial
statement
purposes
and
net
unrealized
appreciation
consists
of:
Distributions
during
the
fiscal
years
ended
December
31,
2022
and
December
31,
2021
were
characterized
for
tax
purposes
as
follows:
Components
of
net
assets
on
a
federal
income
tax
basis
at
December
31,
2022,
were
as
follows:
At
December
31,
2022,
the
Fund,
for
federal
income
tax
purposes,
had
no
capital
loss
carryforwards.
Gross
Unrealized
Appreciation
$
177,535,362
Gross
Unrealized
Depreciation
(19,082,258)
Net
Unrealized
Appreciation
$
158,453,104
2022
2021
Ordinary
Income
$
9,
763
,244
$
78,798,207
Long-Term
Capital
Gain
32,791,336
195,054,864
Total
Taxable
Distributions
$
42,
554
,
580
$
273,853,071
Par
Value
+
Paid-in
Capital
$
765,960,099
Undistributed
Ordinary
Income
1,163,889
Undistributed
Long-Term
Gain
69,522
Net
Unrealized
Appreciation
133,141,766
Net
Assets
$
900,335,276
Sound
Shore
Fund,
Inc.
NOTES
TO
FINANCIAL
STATEMENTS
(Unaudited)(Concluded)
June
30,
2023
6.
Capital
Stock
Transactions
in
capital
stock
for
the
period
ended
June
30,
2023
and
year
ended
December
31,
2022,
were
as
follows:
7.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
have
been
evaluated
for
potential
impact
to
this
report
through
the
date
the
report
was
issued.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
For
the
Period
Ended
June
30,
2023
Investor
Class
Institutional
Class
Shares
Amount
Shares
Amount
Sale
of
shares
201,638
$
7,358,754
562,406
$
20,976,766
Reinvestment
of
dividends
54,747
2,021,788
46,742
1,746,758
Redemption
of
shares
(1,578,858)
(57,203,201)
(1,029,576)
(37,536,776)
Net
decrease
from
capital
transactions
(1,322,473)
$
(47,822,659)
(420,428)
$
(14,813,252)
For
the
Year
Ended
December
31,
2022
Investor
Class
Institutional
Class
Shares
Amount
Shares
Amount
Sale
of
shares
490,156
$
19,038,484
801,949
$
31,364,795
Reinvestment
of
dividends
660,766
22,866,989
508,787
17,807,256
Redemption
of
shares
(2,670,496)
(101,350,188)
(4,413,268)
(165,439,517)
Net
decrease
from
capital
transactions
(1,519,574)
$
(59,444,715)
(3,102,532)
$
(116,267,466)
Sound
Shore
Fund,
Inc.
FINANCIAL
HIGHLIGHTS
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period
.
Six
Months
Ended
June
30,
2023
(unaudited)
For
the
Year
Ended
December
31,
2022
2021
2020
2019
2018
Investor
Class
Shares
Net
Asset
Value,
Beginning
of
Period
$
35.10
$
41.16
$
42.29
$
42.41
$
37.03
$
45.89
Investment
Operations
Net
investment
income
(a)
0.17
0.36
0.41
0.30
0.40
0.50
Net
realized
and
unrealized
gain
(loss)
on
investments
2.14
(4.75)
9.66
2.90
8.20
(6.27)
Total
from
Investment
Operations
2.31
(4.39)
10.07
3.20
8.60
(5.77)
Distributions
from
Net
investment
income
(0.16)
(0.35)
(0.44)
(0.32)
(0.39)
(0.51)
Net
realized
gains
–
(1.32)
(10.76)
(3.00)
(2.83)
(2.58)
Total
Distributions
(0.16)
(1.67)
(11.20)
(3.32)
(3.22)
(3.09)
Net
Asset
Value,
End
of
Period
$
37.25
$
35.10
$
41.16
$
42.29
$
42.41
$
37.03
Total
Return
6.58%(b)
(10.59)%
23.76%
7.78%
23.26%
(12.62)%
Ratios/Supplemental
Data
Net
Assets
at
End
of
Period
(in
thousands)
$501,739
$519,227
$671,380
$641,165
$853,588
$945,244
Ratios
to
Average
Net
Assets:
Expenses
0.95%(c)
0.94%
0.93%
0.93%
0.91%
0.90%
Net
Investment
Income
0.95%(c)
0.94%
0.85%
0.80%
0.95%
1.10%
Portfolio
Turnover
Rate
(d)
40%(b)
72%
44%
77%
46%
56%
(a)
Calculated
based
on
average
shares
outstanding
during
each
period.
(b)
Not
annualized.
(c)
Annualized.
(d)
Portfolio
turnover
is
calculated
on
the
basis
of
the
Fund,
as
a
whole,
without
distinguishing
between
the
classes
of
shares
issued.
Sound
Shore
Fund,
Inc.
FINANCIAL
HIGHLIGHTS
(Concluded)
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period
.
Six
Months
Ended
June
30,
2023
(unaudited)
For
the
Year
Ended
December
31,
2022
2021
2020
2019
2018
Institutional
Class
Shares
Net
Asset
Value,
Beginning
of
Period
$
35.50
$
41.56
$
42.59
$
42.65
$
37.19
$
46.06
Investment
Operations
Net
investment
income
(a)
0.21
0.43
0.51
0.37
0.47
0.58
Net
realized
and
unrealized
gain
(loss)
on
investments
2.15
(4.78)
9.70
2.93
8.25
(6.32)
Total
from
Investment
Operations
2.36
(4.35)
10.21
3.30
8.72
(5.74)
Distributions
from
Net
investment
income
(0.17)
(0.39)
(0.48)
(0.36)
(0.43)
(0.55)
Net
realized
gains
–
(1.32)
(10.76)
(3.00)
(2.83)
(2.58)
Total
Distributions
(0.17)
(1.71)
(11.24)
(3.36)
(3.26)
(3.13)
Net
Asset
Value,
End
of
Period
$
37.69
$
35.50
$
41.56
$
42.59
$
42.65
$
37.19
Total
Return
6.66%(b)
(10.40)%
23.95%
7.98%
23.50%
(12.50)%
Ratios/Supplemental
Data
Net
Assets
at
End
of
Period
(in
thousands)
$388,840
$381,109
$575,184
$517,449
$684,295
$721,916
Ratios
to
Average
Net
Assets:
Expenses
(gross)
(c)
0.86%(d)
0.85%
0.83%
0.84%
0.82%
0.81%
Expenses
(net)
0.75%(d)
0.75%
0.75%
0.75%
0.75%
0.75%
Net
Investment
Income
1.16%(d)
1.13%
1.03%
0.98%
1.12%
1.27%
Portfolio
Turnover
Rate
(e)
40%(b)
72%
44%
77%
46%
56%
(a)
Calculated
based
on
average
shares
outstanding
during
each
period.
(b)
Not
annualized.
(c)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
(d)
Annualized.
(e)
Portfolio
turnover
is
calculated
on
the
basis
of
the
Fund,
as
a
whole,
without
distinguishing
between
the
classes
of
shares
issued.
Sound
Shore
Fund,
Inc.
ADDITIONAL
INFORMATION
(Unaudited)
June
30,
2023
Change
in
Independent
Registered
Public
Accounting
Firm
On
March
13,
2023,
BBD
LLP
(“BBD”)
ceased
to
serve
as
the
independent
registered
public
accounting
firm
of
the
Fund.
The
Audit
Committee
of
the
Board
approved
the
replacement
of
BBD
as
a
result
of
Cohen
&
Company,
Ltd.’s
(“Cohen”)
acquisition
of
BBD’s
investment
management
group.
The
reports
of
BBD
on
the
financial
statements
of
the
Fund
as
of
and
for
the
fiscal
years
ended
December
31,
2022
and
December
31,
2021
did
not
contain
an
adverse
opinion
or
a
disclaimer
of
opinion,
and
were
not
qualified
or
modified
as
to
uncertainties,
audit
scope
or
accounting
principles.
During
the
years
ended
December
31,
2022
and
December
31,
2021,
and
during
the
subsequent
interim
period
through
March
13,
2023:
(i)
there
were
no
disagreements
between
the
Fund
and
BBD
on
any
matter
of
accounting
principles
or
practices,
financial
statement
disclosure,
or
auditing
scope
or
procedure,
which
disagreements,
if
not
resolved
to
the
satisfaction
of
BBD,
would
have
caused
it
to
make
reference
to
the
subject
matter
of
the
disagreements
in
its
report
on
the
financial
statements
of
the
Fund
for
such
years
or
interim
period;
and
(ii)
there
were
no
“reportable
events,”
as
defined
in
Item
304(a)(1)(v)
of
Regulation
S-K
under
the
Securities
Exchange
Act
of
1934,
as
amended.
The
Fund
requested
that
BBD
furnish
it
with
a
letter
addressed
to
the
U.S.
Securities
and
Exchange
Commission
stating
that
it
agrees
with
the
above
statements.
A
copy
of
such
letter
is
filed
as
an
exhibit
to
Form
N-CSR.
On
April
27,
2023,
the
Audit
Committee
of
the
Board
also
recommended
and
approved
the
appointment
of
Cohen
as
the
Fund’s
independent
registered
public
accounting
firm
for
the
fiscal
year
ending
December
31,
2023.
During
the
fiscal
years
ended
December
31,
2022
and
December
31,
2021,
and
during
the
subsequent
interim
period
through
March
13,
2023,
neither
the
Fund,
nor
anyone
acting
on
its
behalf,
consulted
with
Cohen
on
behalf
of
the
Fund
regarding
the
application
of
accounting
principles
to
a
specified
transaction
(either
completed
or
proposed),
the
type
of
audit
opinion
that
might
be
rendered
on
the
Fund’s
financial
statements,
or
any
matter
that
was
either:
(i)
the
subject
of
a
“disagreement,”
as
defined
in
Item
304(a)(1)(iv)
of
Regulation
S-K
and
the
instructions
thereto;
or
(ii)
"reportable
events,"
as
defined
in
Item
304(a)
(1)(v)
of
Regulation
S-K.
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund,
you
incur
ongoing
costs,
including
management
fees
and
other
Fund
expenses.
This
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
following
example
is
based
on
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
January
1,
2023
through
June
30,
2023.
Actual
Expenses
-
The
Actual
Return
lines
of
the
table
below
provide
information
about
actual
account
values
and
actual
expenses
for
each
share
class.
You
may
use
the
information
in
these
lines,
together
with
the
amount
you
invested,
to
estimate
Sound
Shore
Fund,
Inc.
ADDITIONAL
INFORMATION
(Unaudited)(Continued)
June
30,
2023
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
in
the
Actual
Return
line
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
Hypothetical
Example
for
Comparison
Purposes
-
The
Hypothetical
Return
lines
of
the
table
below
provide
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
each
class’
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
cost
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
other
funds.
Expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only
and
do
not
reflect
any
transactional
costs.
Therefore,
the
Hypothetical
Return
lines
of
the
table
are
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
Investment
Advisory
Agreement
Approval
At
the
January
26,
2023
Board
meeting,
the
Board,
including
the
Independent
Directors,
considered
the
approval
of
the
continuance
of
the
investment
advisory
agreement
between
the
Adviser
and
the
Fund.
In
preparation
for
its
deliberations,
the
Board
requested
and
reviewed
written
responses
from
the
Adviser
to
a
due
diligence
questionnaire
circulated
on
the
Board's
behalf
concerning
the
services
provided
by
the
Adviser.
The
Board
also
discussed
the
materials
with
Fund
counsel
and
received
an
oral
presentation
from
the
Adviser.
At
the
Meeting,
the
Board
reviewed,
among
other
matters:
(1)
the
nature,
extent
and
quality
of
the
services
provided
to
the
Fund
by
the
Adviser,
including
information
on
the
investment
performance
of
the
Fund
and
the
Adviser;
(2)
the
costs
of
the
services
provided
and
profitability
to
the
Adviser
of
its
relationship
with
the
Fund;
(3)
the
advisory
fee
and
total
expense
ratio
of
the
Fund
as
compared
to
those
of
a
relevant
peer
group
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
the
Fund
grows
and
whether
the
advisory
fee
enables
the
Fund's
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
Beginning
Account
Value
January
1,
2023
Ending
Account
Value
June
30,
2023
Expenses
Paid
During
Period
*
Investor
Class
Actual
Return
$
1,000.00
$
1,0
65
.
76
$
4
.
8
7
Investor
Class
Hypothetical
Return
$
1,000.00
$
1,
020
.
08
$
4.
76
Institutional
Class
Actual
Return
$
1,000.00
$
1,066.59
$
3.
8
4
Institutional
Class
Hypothetical
Return
$
1,000.00
$
1,021.
08
$
3.
76
*
Expenses
are
equal
to
the
Investor
Class'
and
Institutional
Class'
annualized
expense
ratios
of
0.95%
and
0.75%
respectively,
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
181/365
to
reflect
the
most
recent
one-half
year
period.
Sound
Shore
Fund,
Inc.
ADDITIONAL
INFORMATION
(Unaudited)(Continued)
June
30,
2023
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Fund.
In
addition,
the
Board
recognized
that
the
evaluation
process
with
respect
to
the
Adviser
was
an
ongoing
one
and,
in
this
regard,
the
Board
considered
information
provided
by
the
Adviser
at
regularly
scheduled
meetings
during
the
past
year.
In
particular,
the
Board
considered,
among
other
things,
the
following:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Adviser.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Adviser,
particularly
the
qualifications,
capabilities
and
experience
of
the
investment,
operational,
compliance,
and
other
personnel
who
are
responsible
for
providing
services
to
the
Fund.
The
Board
also
considered
the
fact
that
the
Adviser
pays
the
costs
of
all
investment
and
management
facilities
necessary
for
the
efficient
conduct
of
its
services
as
well
as
all
distribution
costs
incurred
on
behalf
of
the
Fund
and
all
servicing
costs
to
financial
intermediaries
beyond
the
10
basis
points
borne
by
the
Fund
and
reimbursed
by
the
Fund’s
transfer
agent.
In
addition,
the
Board
considered
that
the
Adviser
manages
the
overall
investment
program
of
the
Fund
and
that
the
Adviser
keeps
the
Board
informed
of
important
developments
affecting
the
Fund,
both
in
connection
with
the
Board’s
annual
review
of
the
Advisory
Agreement
and
at
each
Board
meeting.
The
Board
evaluated
these
factors
based
on
its
direct
experience
with
the
Adviser,
and
in
consultation
with
Counsel
to
the
Fund
and
Counsel
to
the
Independent
Directors.
The
Board
also
considered
the
Adviser’s
effectiveness
in
ensuring
that
the
Fund
remains
in
compliance
with
its
investment
policies
and
restrictions
and
the
requirements
of
the
1940
Act
and
related
securities
regulations.
The
Board
further
noted
the
Adviser’s
efforts
to
oversee
the
Fund’s
other
service
providers,
including
those
providing
administrative,
accounting
and
custodial
services.
Based
on
these
factors,
as
well
as
other
factors
discussed
at
the
Meeting,
the
Board
concluded
that
the
nature,
extent
and
quality
of
services
provided
by
the
Adviser
have
been
and
continue
to
be
satisfactory.
(2)
The
performance
of
the
Fund
and
the
Adviser.
The
Board’s
analysis
of
the
Fund’s
performance
included
the
discussion
and
review
of
the
performance
data
of
the
Fund
against
securities
benchmarks
as
well
as
against
a
group
of
comparable
funds,
based
on,
in
part,
information
provided
by
an
independent,
third-party
mutual
fund
data
provider
–
Strategic
Insight,
Inc.
(“Strategic
Insight”)
–
engaged
by
the
Board
for
this
purpose.
The
Board
also
considered
the
performance
of
the
Fund
against
a
comparative
universe
of
similar
funds
as
identified
by
the
Adviser.
The
Board
reviewed
comparative
performance
over
long-,
intermediate-
and
short-term
periods.
In
reviewing
performance,
the
Board
placed
greater
emphasis
on
longer-term
performance
than
on
shorter-term
performance,
taking
into
account
that
over
short
periods
of
time
underperformance
may
be
transitory.
The
Board
further
took
into
account
that
performance
returns
over
longer
periods
can
be
impacted
dramatically
by
the
end
point
date
from
which
performance
is
measured.
In
this
regard
the
Board
observed
that
the
Fund
underperformed
the
Russell
1000
Value
Index,
the
Fund’s
primary
benchmark,
over
the
one-,
five-,
and
10-year
periods
ended
December
31,
2022,
and
outperformed
the
primary
benchmark
over
the
three-year
period
ended
December
31,
2022.
The
Board
also
observed
that
the
Fund’s
Investor
Class
Shares
narrowly
underperformed
the
primary
benchmark
index
over
the
30-year
period
ended
December
31,
2022,
and
the
Fund’s
Institutional
Sound
Shore
Fund,
Inc.
ADDITIONAL
INFORMATION
(Unaudited)(Continued)
June
30,
2023
Class
Shares
performed
in
line
with
the
primary
benchmark
index
over
the
same
30-year
period.
The
Board
also
considered
the
performance
of
the
Fund
in
the
context
of
whether
the
Fund
was
meeting
the
expectations
of
the
clients
invested
in
the
Fund.
The
Board
also
considered
the
performance
of
the
Fund
against
similarly
managed
accounts
managed
by
the
Adviser.
When
reviewing
performance
against
similarly
managed
accounts,
the
Board
considered,
among
other
things,
differences
in
the
nature
of
such
accounts
from
a
regulatory
and
tax
perspective
and
differences
in
the
investment
mandate
from
that
of
the
Fund.
The
Board
considered
the
Adviser’s
view
as
to
the
principle
drivers
of
Fund
performance.
Based
on
these
factors,
as
well
as
other
factors
discussed
at
the
Meeting,
the
Board
concluded
that
the
performance
of
the
Fund
and
the
Adviser
has
been
and
continues
to
be
satisfactory.
(3)
The
cost
of
the
advisory
services
and
the
profits
to
the
Adviser
from
the
relationship
with
the
Fund.
The
Board’s
consideration
of
the
Fund’s
advisory
fee
and
expenses
included,
among
other
factors,
a
discussion
and
review
of
data
concerning
the
current
advisory
fee
and
expense
ratio
of
the
Fund
compared
to
a
peer
group
of
funds
identified
by
Strategic
Insight
as
having
characteristics
similar
to
those
of
the
Fund.
The
Board
observed
that,
although
the
Fund’s
advisory
fee
rate
was
slightly
higher
than
the
median
of
the
Strategic
Insight
peers,
the
Fund’s
net
expense
ratio
was
lower
than
the
median
of
the
Strategic
Insight
peers.
The
Board
also
considered
that
the
Institutional
Class
shares
have
a
lower
expense
ratio
than
the
Investor
Class
shares
because
the
Adviser
has
capped
expenses
at
75
basis
points
to
compete
in
the
institutional
market.
Additionally,
the
Board
considered
advisory
fee
data
from
the
Adviser’s
similarly
managed
accounts
and
considered
the
relevance
of
differences
in
the
services
provided
to
separate
accounts
as
they
relate
to
differences
in
the
advisory
fees
charged
in
connection
with
management
of
the
Fund.
The
Board
also
considered
the
profitability
of
the
Fund
to
the
Adviser.
In
this
regard,
the
Board
noted
that
the
Fund,
with
an
advisory
fee
of
75
basis
points
and
assets
of
approximately
$900
million,
did
not
appear
to
generate
“excessive”
fees
to
the
Adviser.
Based
on
this
analysis,
the
Board
concluded
that
the
advisory
fee
for
the
Fund
was
fair
and
reasonable
in
light
of
the
quality
of
services
provided
by
the
Adviser.
(4)
The
extent
to
which
economies
of
scale
will
be
realized
as
the
Fund
grows
and
whether
fee
levels
reflect
those
economies
of
scale.
The
Board
considered
whether
the
Fund
could
benefit
from
any
economies
of
scale.
In
this
regard,
the
Board
considered
the
Fund’s
fee
structure,
asset
size,
net
expense
ratio,
and
the
fees
of
comparable
advisers,
recognizing
that
an
analysis
of
economies
of
scale
is
most
relevant
when
a
fund
has
achieved
a
substantial
size
and
has
growing
assets
and
that,
if
a
fund’s
assets
are
stable
or
decreasing,
the
significance
of
economies
of
scale
may
be
reduced.
The
Board
reviewed
relevant
materials
and
discussed
whether
the
use
of
breakpoints
would
be
appropriate
at
this
time.
Noting
the
relatively
stable,
if
not
slightly
declining,
asset
levels
in
the
Fund
over
the
past
year
and
the
existence
of
the
Adviser’s
ongoing
expense
limitation
arrangements,
the
Board
concluded
that
the
advisory
fee
remained
reasonable
in
light
of
the
current
information
provided
to
the
Board
with
respect
to
economies
of
scale.
Sound
Shore
Fund,
Inc.
ADDITIONAL
INFORMATION
(Unaudited)(Concluded)
June
30,
2023
(5)
Ancillary
benefits
and
other
factors.
In
addition
to
the
above
factors,
the
Board
also
discussed
other
benefits
received
by
the
Adviser
from
the
management
of
the
Fund,
such
as
soft-dollar
credits.
The
Board
concluded
that
the
advisory
fee
was
reasonable
in
light
of
these
fall-out
benefits.
Conclusion
The
Board,
including
all
of
the
Independent
Directors,
concluded
that
the
fees
payable
under
the
Advisory
Agreement
were
fair
and
reasonable
with
respect
to
the
services
that
the
Adviser
provides,
in
light
of
the
factors
described
above
that
the
Board
deemed
relevant.
The
Board
based
its
decision
on
an
evaluation
of
all
these
factors
as
a
whole
and
did
not
consider
any
one
factor
as
all-important
or
controlling.
The
Independent
Directors
were
also
assisted
by
the
advice
of
Counsel
to
the
Independent
Directors
in
making
this
determination.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(800)
551-1980
or
by
visiting
the
Fund’s
website
at
www.soundshorefund.com.
This
information
is
also
available
on
the
Securities
and
Exchange
Commission’s
(“SEC”)
website
at
www.sec.gov
under
the
name
of
the
Sound
Shore
Fund.
The
Fund’s
proxy
voting
record
for
the
most
recent
12-month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(800)
551-1980
or
by
visiting
the
Fund’s
website
at
www.soundshorefund.com.
This
information
is
available
on
the
SEC’s
website
at
www.sec.gov
under
the
name
of
the
Sound
Shore
Fund.
Availability
of
Quarterly
Portfolio
Schedule
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-PORT.
This
information
is
available
on
the
SEC’s
website
at
www.sec.gov
under
the
name
of
the
Sound
Shore
Fund.
Investment
Adviser
Sound
Shore
Management,
Inc.
Greenwich,
Connecticut
Administrator
Apex
Fund
Services
Portland,
Maine
Distributor
Foreside
Fund
Services,
LLC
Portland,
Maine
www.acaglobal.com
Transfer
and
Distribution
Paying
Agent
Apex
Fund
Services
Portland,
Maine
Custodian
US
Bank,
N.A.
Milwaukee,
Wisconsin
Fund
Counsel
Sullivan
and
Worcester
LLP
New
York,
New
York
Independent
Registered
Public
Accounting
Firm
Cohen
&
Company,
Ltd.
Philadelphia,
Pennsylvania
Semi-Annual
Report
to
Shareholders
(Unaudited)
207-SAR-0623
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
objectives
and
policies,
experience
of
its
management,
and
other
information.
SOUND
SHORE
FUND,
INC.
Three
Canal
Plaza
Portland,
ME
04101
www.soundshorefund.com
(800)
551-1980
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
| (a) | Included as part of the report to stockholders under Item 1. |
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 Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) were effective as of a date within 90 days of the filing date of this report (the “Evaluation Date”) based on their evaluation of the registrant’s disclosure controls and procedures as of the Evaluation Date.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
(a)(2) Certifications pursuant to Rule 30a-2(a) of the Investment Company Act of 1940 as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 (Exhibit filed herewith).
(a)(4) Change in Independent Registered Public Accounting Firm (Exhibit filed herewith).
(b) Certifications pursuant to Rule 30a-2(b) of the Investment Company Act of 1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 (Exhibit filed herewith).
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.
SOUND SHORE FUND, INC.
| By | /s/ T. Gibbs Kane, Jr. | |
| | T. Gibbs Kane, Jr., President | |
| | | |
| Date | August 21, 2023 | |
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/ T. Gibbs Kane, Jr. | |
| | T. Gibbs Kane, Jr., President | |
| | | |
| Date | August 21, 2023 | |
| By | /s/ Charles S. Todd | |
| | Charles S. Todd, Treasurer | |
| | | |
| Date | August 21, 2023 | |
