DAVIS SERIES, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dear Shareholder:
The Davis Financial Fund had a strong year in 1995, Class A shares rising
50.5% on net asset value. The trends which we believe will benefit
financial stocks for some time to come showed promise in 1995. The
current environment of low interest rates, low inflation, and good
earnings growth is beneficial for financial stocks. Financial services
companies will be the long-term beneficiaries of the fact that baby
boomers are increasingly saving for their retirement.
The Davis Real Estate Fund performed well in 1995. Class A shares rose
17.7% on net asset value while the average real estate fund returned
13.8%*. We believe real estate is a major asset class investors should
not ignore. Real estate continues to offer more attractive investment
possibilities. In 1995, lower interest rates benefited real estate
investment trusts (REITs) by lowering their acquisition and development
costs. Going forward we are committed to focusing on companies with
superior managements, attractive locations, and growth potential driven
by rate increases, rising occupancy, acquisitions, and ground-up
development.
Class A shares of the Davis Convertible Securities Fund rose 26.7% on net
asset value while the average convertible securities fund returned 20.7%*.
In 1995 convertible securities' good performance was driven by lower
interest rates, rising stock values, and a higher supply of convertible
issues. With the stock market currently at highs, convertible securities
are potentially an attractive investment if the market were to correct
downward. Convertible securities combine some of the upside potential of
stocks and some of the downside protection of bonds.
The Growth Opportunity Fund saw strong performance across the board
with all areas (technology, blue chips, healthcare, energy, financial, small
caps and special situations) contributing to the Fund's performance. We
have also seen healthy profit taking in a number of areas including
technology and have been successful at offsetting those declines with new
investments and strong performance in other sectors. Looking forward for
1996, we believe the stock market will be biased upward with
opportunities in undervalued growth stocks in many industries.
The Davis Government Bond Fund's return on net asset value in 1995 was
an attractive 11.8% for Class A shares. The bond market rallied last year
as interests rates fell. The yield on the 30 year treasury fell from 7.9% to
5.9% and the yield on the 2 year bond fell from 7.7% to 5.2%. When yields
change like this, the positive effect is greater on longer bonds, than on
shorter bonds. We are lengthening the maturity of the fund since we
anticipate a further rally in the bond market for 1996, though not as
intense as in 1995. The fund is being positioned as an "all-weather" fund
with a somewhat even distribution of securities over an intermediate
maturity range. This balance is designed to smooth out the performance
and provide stability in a variety of market climates.
Sincerely,
/s/ Shelby M.C. Davis
Shelby M.C. Davis
President
February 22, 1996
* Industry performance results are based on a December 31, 1995
compilation by Lipper Analytical Services, Inc. There are 42 funds in the
real estate category and 40 funds in the convertible category.
<PAGE>
DAVIS SERIES, INC.
Management's Discussion of Fund Performance
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
An Interview with Graham Y. Tanaka, Manager of the Davis Growth Opportunity Fund
- --------------------------------------------------------------------------------
Davis Growth Opportunity Fund seeks to achieve growth of capital. The
Fund invests primarily in common stocks and other equity securities, and
may invest in both domestic and foreign issuers.
Q. Why was 1995 such a good year?
A. We benefited from being in the right technology stocks and they
started the year at a comfortable 20-25% of the Fund. More importantly,
we enjoyed excellent performance from the other 75% of our holdings
(Garden Ridge +128%, Thomas Group +116%, Fannie Mae + 70%, Daka
International +65%, Seitel +64%, Pfizer +63%, Philip Morris +57%, Teva
Pharmaceutical +54% and Mercer International +50%). Fortunately, our
efforts to "keep the portfolio fresh" with new investments helped
cushion profit taking in technology in the second half of the year.
Q. Where do you see opportunities in 1996?
A. In 1995 it was important to be in financial, technology and
healthcare stocks. 1996 may require better individual stock selection as
industry trends may be less defined in this election year. Technology is
certainly cheap and we can own the best at value prices. But we expect to
benefit most from new ideas and the ongoing 15-25% per year earnings
growth of our core holdings across a variety of industries.
Q. How about small cap stocks vs. large?
A. We have always tried to have a blend of large, small and mid cap
stocks. Fortunately the Fund is small enough that we can invest in the
best opportunities of all sizes and still stick to our discipline of buying
companies whose P/E ratios are half their future growth rates. With big
Blue Chips priced at high valuations, there are currently some great values
in the small and mid cap growth stock areas.
An Interview with Carolyn Spolidoro, Manager of the Davis Government Bond Fund
- ------------------------------------------------------------------------------
Davis Government Bond Fund seeks to achieve current income. The Fund invests
primarily in debt securities which are obligations of or which are guaranteed
by the U.S. Government, its agencies or instrumentalities.
Q. How was 1995's attractive 11.8% return on net asset value of Class A shares
attained?
A. The 1995 fall in interest rates was beneficial for most bonds. As
interest rates fell, the valuation of bonds increased. This effect was
most dramatic in the long end of the yield curve. Securities with longer
maturities outperformed shorter securities. Our fund was able to return
over 11% and still be defensive, protecting the fund against interest rate
increases.
Q. How is the fund positioned?
A. Our fund has a relatively defensive posture. We are in the process of
gradually changing this stance. The average maturity is being increased
and we are purchasing a wider variety of securities. Our plan is to have
securities with a spread of maturities over the intermediate range of the
yield curve. The diversity will be in terms of types of government
securities, maturity length, call provisions, and size of coupon. The
positive impact on the fund will be to help smooth out price variability in
different market environments.
<PAGE>
DAVIS SERIES, INC.
Management's Discussion of Fund Performance - (Continued)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
An Interview with Carolyn Spolidoro, Manager of the Davis Government Bond Fund
- ------------------------------------------------------------------------------
-(Continued)
Q. What do you foresee for the bond market in 1996?
A. I believe the rally of 1995 will continue into 1996. The 1996 rally
will not be as powerful as was the 1995 rally. The year may start out
with some choppiness as the market adjusts and gains confidence that the
rally wasn't overdone. This is why the positioning of the fund is so
important; the different market sectors respond differently to the
changing environment.
An Interview with Christopher C. Davis, Manager of the Davis Financial Fund
Davis Financial Fund seeks to achieve growth of capital. The Fund invests
primarily in common stocks and other equity securities, and will
concentrate investments in companies principally engaged in the banking
and financial services industries.
Q. Why did the Davis Financial Fund outperform the S&P 500?
A. Class A shares of the Davis Financial Fund rose 50.5% on net asset
value vs. 37.6% for the S&P 500 in 1995. The trends which we believe
will benefit financial stocks for some time to come showed promise.
Financial services companies will be the long-term beneficiaries of baby
boomers saving for their retirements. As this group increasingly saves it
benefits insurance companies, banks, and brokerage firms.
Q. How did the fall in interest rates affect the performance of the
Davis Financial Fund?
A. Financial companies deal in money and the cost of money is interest.
Therefore, many financial companies benefited from the fact their cost of
doing business became less expensive as interest rates fell.
Q. What are the Davis Financial Fund's ten largest holdings?
A. Travelers Group Inc. 4.2%
Morgan Stanley Group Inc. 3.1%
Berkley (W.R.) Corp. 3.0%
Transatlantic Holdings, Inc. 3.0%
Aon Corporation 2.9%
Risk Capital Holdings, Inc. 2.9%
McDonald's Corp. 2.8%
State Street Boston Corp. 2.8%
Burlington Resources, Inc. 2.7%
SunAmerica, Inc. 2.6%
Q. Why is the Davis Financial Fund's largest non-financial holding McDonald's?
A. McDonald's is an attractive way to own a U.S. - based company which
can participate in the dramatic expansion of worldwide demand as new
markets open up. McDonald's has a first-class worldwide franchise.
<PAGE>
DAVIS SERIES, INC.
Management's Discussion of Fund Performance - (Continued)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
An Interview with Andrew Davis, Manager of the Davis Convertible
- ----------------------------------------------------------------
Securities Fund and Davis Real Estate Fund.
- ------------------------------------------
Davis Convertible Securities Fund seeks to achieve total return. The Fund
invests primarily in convertible securities, which combine fixed income
with potential for capital appreciation. The Fund may invest in high yield,
high risk securities.
Q. Why did the Davis Convertible Securities Fund perform well in 1995?
A. We see two major reasons. First, the companies whose convertible
securities we own performed quite well. We continued to over-weight the
financial services sector believing that those companies should benefit
from the aging baby-boomer demographics. Second, both the stock market
and bond markets performed well in the aggregate. These two markets are
the jet engines for convertible security performance.
Q. Do convertible securities look attractive right now?
A. The simple answer is yes. We believe that they offer investors a
lower-risk way of maintaining exposure to the stock market. Because
convertible securities combine some of the benefits of stocks (long term
growth) with some of the benefits of bonds (interest payments), an
investor gets the best of both worlds.
Davis Real Estate Fund seeks to achieve total return through a combination
of growth and income. The Fund invests primarily in securities of
companies principally engaged in or related to the real estate industry or
which own significant real estate assets or which primarily invest in real
estate financial instruments.
Q. What do you see going on in the real estate market today?
A. What we see is a nice, steady business. After the tremendous peak
and subsequent collapse that occurred in real estate in the late 1980s and
early 1990s, a more stable environment has emerged. Specifically,
talented managements with low costs of capital are acquiring or
developing properties while simultaneously raising rents in the ones they
already own. The environment is positive.
Q. Can you explain how the fall in interest rates over the last 12
months affected the Davis Real Estate Fund?
A. Falling interest rates have two benefits - one concrete and one
psychological. Regarding the former, lower interest rates mean lower
capital costs. Capital cost are significant in the capital-intensive world
of real estate. Regarding the latter, the consensus is that real estate
companies only perform well in a declining interest rate environment.
This is not exactly true. The best environment for real estate is stable
------
interest rates (low and stable interest rates is the ideal).
<PAGE>
DAVIS SERIES, INC.
DAVIS GROWTH OPPORTUNITY FUND
Comparison of Davis Series, Inc. - Davis Growth Opportunity Fund Class B
shares and Standard & Poor's 500 Stock Index
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Average Annual Total Return For the Periods ended December 31, 1995.
<TABLE>
<CAPTION>
CLASS A SHARES (This calculation includes an initial CLASS B SHARES (This calculation includes any applicable
sales charge of 4 3/4%). contingent deferred sales charge).
<S> <C> <C> <C>
One Year.................................... 39.68% One Year........................................ 42.44%
Life of Class (December 1, 1994 Five Years...................................... 15.05%
through December 31, 1995)................ 32.66% Ten Years....................................... 13.46%
</TABLE>
$10,000 invested over ten years. Let's say you invested $10,000 in Davis
Series, Inc., Class B shares of Davis Growth Opportunity Fund ("GOF") on
December 31, 1985. As the chart shows, by December 31, 1995 the value
of your investment would have grown to $35,373 - a 253.73% increase on
your initial investment. For comparison, the Standard and Poor's 500 Stock
Index is also presented on the chart below.
Graph omitted. Details of graph are as follows:
<TABLE>
<CAPTION>
Measurement Period Growth Opportunity Fund S&P 500 Index
------------------ ----------------------- -------------
<S> <C> <C>
12/31/85 $10,000 $10,000
FYE 12/31/86 11,313 11,847
FYE 12/31/87 11,834 12,467
FYE 12/31/88 13,079 14,562
FYE 12/31/89 18,318 19,148
FYE 12/31/90 17,454 18,541
FYE 12/31/91 24,598 24,190
FYE 12/31/92 23,891 26,021
FYE 12/31/93 26,556 28,629
FYE 12/31/94 24,321 28,994
FYE 12/31/95 35,373 39,878
</TABLE>
Standard & Poor's 500 Stock Index is an unmanaged index which has no
specific investment objective. Investments cannot be made directly into
the index. The index used includes net dividends reinvested, but does not
take into account any sales charge.
The performance data for Davis Growth Opportunity Fund contained in this
report represents past performance and assumes that all distributions
were reinvested, and should not be considered as an indication of future
performance from an investment of the Fund today. The investment return
and principal value will fluctuate so that shares may be worth more or
less than their original cost when redeemed.
<PAGE>
DAVIS SERIES, INC.
DAVIS GOVERNMENT BOND FUND
Comparison of Davis Series, Inc. - Davis Government Bond Fund Class B
shares and the Lehman Brothers Intermediate Term U.S. Treasury Securities Index
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Average Annual Total Return For the Periods ended December 31, 1995.
<TABLE>
<CAPTION>
CLASS A SHARES (This calculation includes an initial CLASS B SHARES (This calculation includes any applicable
sales charge of 4 3/4%). contingent deferred sales charge).
<S> <C> <C> <C>
One Year................................... 6.49% One Year....................................... 7.62%
Life of Class (December 1, 1994 Five Years..................................... 5.71%
through December 31, 1995)................. 6.14% Ten Years...................................... 6.13%
</TABLE>
$10,000 invested over ten years. Let's say you invested $10,000 in Davis
Series, Inc., Class B shares of Davis Government Bond Fund ("DGBF") on
December 31, 1985. As the chart shows, by December 31, 1995 the value
of your investment would have grown to $18,128 - an 81.28% increase on
your initial investment. For comparison, the Lehman Brothers Intermediate
Term U.S. Treasury Securities Index is also presented on the chart below.
Graph omitted. Details of graph are as follows:
<TABLE>
<CAPTION>
Lehman Brothers
Intermediate Term
U.S. Treasury
Measurement Period Government Bond Fund Securities Index
------------------ -------------------- -----------------
<S> <C> <C>
12/31/85 $10,000 $10,000
FYE 12/31/86 11,079 11,306
FYE 12/31/87 11,108 11,714
FYE 12/31/88 11,743 12,464
FYE 12/31/89 12,852 14,044
FYE 12/31/90 13,638 15,387
FYE 12/31/91 15,324 17,563
FYE 12/31/92 15,960 18,787
FYE 12/31/93 16,549 20,338
FYE 12/31/94 16,388 19,922
FYE 12/31/95 18,128 22,807
</TABLE>
The Lehman Brothers Intermediate Term U.S. Treasury Securities Index is
an unmanaged index which has no specific investment objective.
Investments cannot be made directly into the index.
The performance data for Davis Government Bond Fund contained in this
report represents past performance and assumes that all distributions
were reinvested, and should not be considered as an indication of future
performance from an investment of the Fund today. The investment return
and principal value will fluctuate so that shares may be worth more or
less than their original cost when redeemed.
<PAGE>
DAVIS SERIES, INC.
DAVIS FINANCIAL FUND
Comparison of Davis Series, Inc. - Davis Financial Fund Class A shares and
Standard & Poor's 500 Stock Index
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return For the Periods ended December 31, 1995.
<TABLE>
<CAPTION>
CLASS A SHARES (This calculation includes an initial CLASS B SHARES (This calculation includes any
sales charge of 4 3/4%). applicable contingent deferred sales charge).
<S> <C> <C> <C>
One Year................................ 43.39% One Year............................. 46.00%
Life of Class (May 1, 1991 Life of Class (December 27, 1994
through December 31, 1995)............ 22.38% through December 31, 1995)........... 44.08%
</TABLE>
$10,000 invested over the life of the Fund. Let's say you invested $10,000
in Davis Series, Inc., Class A shares of Davis Financial Fund ("FF") on May
1, 1991 (inception of Fund) and paid a 4 3/4% sales charge. As the chart
shows, by December 31, 1995 the value of your investment would have
grown to $25,723 - a 157.23% increase on your initial investment. For
comparison, the Standard and Poor's 500 Stock Index is also presented on
the chart below.
Graph omitted. Details of graph are as follows:
<TABLE>
<CAPTION>
Measurement Period Financial Fund S&P 500 Index
------------------ -------------- -------------
<S> <C> <C>
05/01/91 $ 9,525 $10,000
FYE 12/31/91 11,749 11,359
FYE 12/31/92 15,587 12,219
FYE 12/31/93 17,951 13,444
FYE 12/31/94 17,091 13,615
FYE 12/31/95 25,723 18,726
</TABLE>
Standard & Poor's 500 Stock Index is an unmanaged index which has no
specific investment objective. The index used includes net dividends
reinvested, but does not take into account any sales charge. Investments
cannot be made directly into the index.
The performance data for Davis Financial Fund contained in this report
represents past performance and assumes that all distributions were
reinvested, and should not be considered as an indication of future
performance from an investment of the Fund today. The investment return
and principal value will fluctuate so that shares may be worth more or
less than their original cost when redeemed.
<PAGE>
DAVIS SERIES, INC.
DAVIS CONVERTIBLE SECURITIES FUND
Comparison of Davis Series, Inc. - Davis Convertible Securities Fund Class
A shares and Standard & Poor's 500 Stock Index
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return For the Periods ended December 31, 1995.
<TABLE>
<CAPTION>
CLASS A SHARES (This calculation includes an initial CLASS B SHARES(This calculation includes any
sales charge of 43/4%). applicable contingent deferred sales charge).
<S> <C> <C> <C>
One Year................................... 20.64% Life of Class (February 3, 1995
Life of Class (May 1, 1992 through December 31, 1995)............. 20.39%
through December 31, 1995)............... 11.51%
</TABLE>
$10,000 invested over the life of the Fund. Let's say you invested $10,000
in Davis Series, Inc., Class A shares of Davis Convertible Securities Fund
("CSF") on May 1, 1992 (inception of Fund) and paid a 4 3/4% sales charge.
As the chart shows, by December 31, 1995 the value of your investment
would have grown to $14,914 - a 49.14% increase on your initial
investment. For comparison, the Standard and Poor's 500 Stock Index is
also presented on the chart below.
Graph omitted. Details of graph are as follows:
<TABLE>
<CAPTION>
Measurement Period Convertible Securities Fund S&P 500 Index
------------------ --------------------------- -------------
<S> <C> <C>
05/01/92 $ 9,525 $10,000
FYE 12/31/92 10,762 10,723
FYE 12/31/93 12,619 11,797
FYE 12/31/94 11,772 11,948
FYE 12/31/95 14,914 16,433
</TABLE>
Standard & Poor's 500 Stock Index is an unmanaged index which has no
specific investment objective. The index used includes net dividends
reinvested, but does not take into account any sales charge. Investments
cannot be made directly into the index.
The performance data for Davis Convertible Securities Fund contained in
this report represents past performance and assumes that all
distributions were reinvested, and should not be considered as an
indication of future performance from an investment of the Fund today.
The investment return and principal value will fluctuate so that shares
may be worth more or less than their original cost when redeemed.
<PAGE>
DAVIS SERIES, INC.
DAVIS REAL ESTATE FUND
Comparison of Davis Series, Inc. - Davis Real Estate Fund Class A shares
and Standard & Poor's 500 Stock Index
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return For the Period ended December 31, 1995.
<TABLE>
<CAPTION>
CLASS A SHARES (This calculation includes an initial CLASS B SHARES (This calculation includes any
sales charge of 43/4%). applicable contingent deferred sales charge).
<S> <C> <C> <C>
One Year.................................... 12.14% One Year............................... 13.59%
Life of Class (January 3, 1994 Life of Class (December 27, 1994
through December 31, 1995)................. 10.18% through December 31, 1995)............ 14.45%
</TABLE>
$10,000 invested over the life of the Fund. Let's say you invested $10,000
in Davis Series, Inc., Class A shares of Davis Real Estate Fund ("REF") on
January 3, 1994 (inception of Fund) and paid a 4 3/4% sales charge. As the
chart shows, by December 31, 1995 the value of your investment would
have grown to $12,733 - a 27.33% increase on your initial investment. For
comparison, the Standard and Poor's 500 Stock Index is also presented on
the chart below.
Graph omitted. Details of graph are as follows:
<TABLE>
<CAPTION>
Measurement Period Real Estate Fund S&P 500 Index
------------------ ---------------- -------------
<S> <C> <C>
01/02/94 $ 9,525 $10,000
FYE 12/31/94 10,306 10,128
FYE 12/31/95 12,733 13,929
</TABLE>
Standard & Poor's 500 Stock Index is an unmanaged index which has no
specific investment objective. The index used includes net dividends
reinvested, but does not take into account any sales charge. Investments
cannot be made directly into the index.
The performance data for Davis Real Estate Fund contained in this report
represents past performance and assumes that all distributions were
reinvested, and should not be considered as an indication of future
performance from an investment of the Fund today. The investment return
and principal value will fluctuate so that shares may be worth more or
less than their original cost when redeemed.
<PAGE>
<TABLE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS GROWTH OPPORTUNITY FUND
<CAPTION>
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - (98.62%)
BUSINESS SERVICES - (3.27%)
<S> <C> <C>
145,000 Thomas Group, Inc.<F1>...................................................................... $ 1,903,125
-----------
CAPITAL EQUIPMENT - (9.35%)
57,800 ASM Lithography Holdings N.V.<F1>........................................................... 1,936,300
38,000 Micro Component Technology Inc.<F1>......................................................... 256,500
60,100 Novellus Systems, Inc.<F1>.................................................................. 3,252,912
-----------
5,445,712
-----------
COMPUTER PRODUCTS - (0.22%)
17,000 LaserMaster Technologies, Inc.<F1>.......................................................... 96,687
20,000 NAI Technologies, Inc.<F1>.................................................................. 29,375
-----------
126,062
-----------
CONSUMER PRODUCTS - (4.50%)
17,500 Philip Morris Cos., Inc..................................................................... 1,583,750
230,000 Score Board, Inc.<F1>....................................................................... 1,035,000
-----------
2,618,750
-----------
ELECTRONICS - (17.35%)
93,500 Adaptec, Inc.<F1>........................................................................... 3,833,500
101,600 Intel Corp.................................................................................. 5,772,150
9,600 Texas Instruments, Inc...................................................................... 496,800
-----------
10,102,450
-----------
ENERGY - (9.03%)
22,700 Anadarko Petroleum Corp..................................................................... 1,228,637
113,800 Seitel, Inc.<F1>............................................................................ 4,025,675
-----------
5,254,312
-----------
FINANCIAL SERVICES - (2.94%)
13,800 Federal National Mortgage Association....................................................... 1,712,925
-----------
HEALTH - (3.27%)
104,150 Community Care of America Inc.<F1>.......................................................... 1,093,575
25,500 MediSense Inc.<F1>.......................................................................... 811,219
-----------
1,904,794
-----------
INSURANCE - (9.21%)
98,450 AFLAC Inc................................................................................... 4,270,269
14,900 Transatlantic Holdings Inc.................................................................. 1,093,288
-----------
5,363,557
-----------
PHARMACEUTICALS - (12.02%)
1,000 Johnson & Johnson........................................................................... 85,625
57,500 Pfizer, Inc................................................................................. 3,622,500
71,000 Teva Pharmaceutical Industries Ltd.......................................................... 3,288,188
-----------
6,996,313
-----------
PULP AND PAPER - (9.27%)
264,000 Mercer International Inc.<F1>............................................................... 5,395,500
-----------
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS GROWTH OPPORTUNITY FUND - Continued
VALUE
SHARES/PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
RESTAURANT - (5.53%)
65,000 DAKA International, Inc.<F1>................................................................ $ 1,779,375
56,000 IHOP Corp.<F1>.............................................................................. 1,442,000
-----------
3,221,375
-----------
RETAIL - (7.25%)
72,000 Garden Ridge Corp.<F1>...................................................................... 2,763,000
82,000 REX Stores Corp.<F1>........................................................................ 1,455,500
-----------
4,218,500
-----------
TELECOMMUNICATIONS - (1.05%)
70,000 TII Industries, Inc.<F1>.................................................................... 612,500
-----------
TRANSPORTATION - (4.36%)
103,000 ValuJet Airlines, Inc.<F1>.................................................................. 2,536,375
-----------
Total Common Stock - (identified cost $30,772,742).......................................... 57,412,250
-----------
SHORT TERM - (1.41%)
$ 820,000 Federal Home Loan Mortgage Corporation Discount Note, 5.50%, 01/02/96
(identified cost $819,624)............................................................... 819,624
-----------
TOTAL INVESTMENTS - (100.03%) - (identified cost $31,592,366) - <F2>..................... 58,231,874
LIABILITIES LESS OTHER ASSETS - (0.03%).................................................. (15,988)
-----------
NET ASSETS - (100%)................................................................. $58,215,886
===========
<FN>
<F1> Non-Income Producing Security.
<F2> Aggregate cost for Federal Income Tax purposes is $31,592,366. At
December 31, 1995 unrealized appreciation (depreciation) of securities
for Federal Income Tax purposes is as follows:
Unrealized appreciation................................................................................ $27,568,703
Unrealized depreciation................................................................................ (929,195)
-----------
Net unrealized appreciation....................................................................... $26,639,508
===========
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS GOVERNMENT BOND FUND
<CAPTION>
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - MORTGAGE POOLS - (9.57%)
<S> <C> <C>
$ 83,6121 0.00%, 12/01/00.............................................................................. $ 87,844
55,761 9.00%, 07/01/01.............................................................................. 58,078
632,152 8.50%, 08/01/01.............................................................................. 655,662
174,675 9.50%, 06/01/02.............................................................................. 182,753
124,682 9.00%, 08/01/02.............................................................................. 130,525
70,002 8.50%, 12/01/02.............................................................................. 72,911
69,671 9.00%, 06/01/03.............................................................................. 72,566
134,633 9.25%, 01/01/04.............................................................................. 140,438
14,218 9.25%, 11/01/07.............................................................................. 14,924
151,670 9.25%, 09/01/08.............................................................................. 159,206
122,641 10.00%, 07/01/09.............................................................................. 133,448
82,807 10.25%, 08/01/13.............................................................................. 90,364
334,987 10.25%, 11/01/13.............................................................................. 365,555
66,595 9.00%, 07/01/16.............................................................................. 69,529
308,275 9.00%, 08/01/16.............................................................................. 321,857
114,598 9.50%, 11/01/16.............................................................................. 121,295
299,676 9.00%, 01/01/17.............................................................................. 312,880
230,919 9.00%, 03/01/17.............................................................................. 241,960
103,030 9.00%, 08/01/17.............................................................................. 107,569
62,982 9.50%, 12/01/19.............................................................................. 66,584
169,614 9.50%, 02/01/20.............................................................................. 179,314
-----------
Total FHLMC - (identified cost $3,565,690).............................................. 3,585,262
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - MORTGAGE POOLS - (4.49%)
57,543 12.00%, 12/01/00.............................................................................. 61,661
181,386 9.75%, 02/01/04.............................................................................. 190,853
315,139 10.00%, 08/01/05.............................................................................. 331,980
221,527 10.25%, 10/01/09.............................................................................. 243,888
166,753 10.75%, 07/01/13.............................................................................. 185,095
459,327 9.25%, 10/01/16.............................................................................. 486,386
126,984 7.49%, 09/01/19<F1>.......................................................................... 130,400
50,185 7.728%, 03/01/24<F1>.......................................................................... 52,573
-----------
Total FNMA - (identified cost $1,658,682)............................................... 1,682,836
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - MORTGAGE POOLS - (35.69%)
65,443 6.00% with various maturities to 2024........................................................ 66,033
49,616 7.00% with various maturities to 2023........................................................ 50,573
1,954,671 8.50% with various maturities to 2022........................................................ 2,056,637
2,777,606 9.00% with various maturities to 2022........................................................ 2,954,856
200,181 9.25% with various maturities to 2016........................................................ 208,250
3,342,086 9.50% with various maturities to 2019........................................................ 3,609,017
650,067 10.00% with various maturities to 2020........................................................ 706,507
116,483 10.25% with various maturities to 2016........................................................ 126,385
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS GOVERNMENT BOND FUND - Continued
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - MORTGAGE POOLS - Continued
$ 514,971 10.50% with various maturities to 2016........................................................ $ 569,527
1,070,449 11.00% with various maturities to 2020........................................................ 1,197,156
417,170 11.25% with various maturities to 2011........................................................ 458,757
676,749 11.50% with various maturities to 2015........................................................ 764,517
65,771 12.00% with various maturities to 2013........................................................ 73,704
64,758 12.25% with various maturities to 2013........................................................ 72,811
154,692 12.50% with various maturities to 2015........................................................ 177,992
120,260 13.00% with various maturities to 2014........................................................ 139,276
83,307 14.25% with various maturities to 2014........................................................ 95,646
36,992 14.75% with various maturities to 2001........................................................ 39,801
-----------
Total GNMA - (identified cost $12,785,010)............................................... 13,367,445
-----------
MEDIUM TERM NOTES - (21.77%)
1,000,000 Federal Home Loan Mortgage Corporation, 6.66%, 12/05/02....................................... 1,019,760
1,215,000 Federal Home Loan Mortgage Corporation, 6.615%, 03/03/04...................................... 1,216,361
1,000,000 Federal Home Loan Mortgage Corporation, 7.225%, 05/17/05...................................... 1,041,080
1,000,000 Federal National Mortgage Association, 6.85%, 09/12/05........................................ 1,029,320
1,000,000 Federal Home Loan Mortgage Corporation, 6.63%, 01/12/09....................................... 997,330
1,000,000 Federal Home Loan Bank, 8.00%, 08/16/10...................................................... 1,012,210
1,000,000 Federal National Mortgage Association, 7.15%, 11/03/10........................................ 1,026,870
800,000 Federal Home Loan Bank, 7.24%, 11/09/10....................................................... 813,016
-----------
Total Medium Term Notes - (identified cost $7,977,946)................................... 8,155,947
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS & REAL ESTATE MORTGAGE
INVESTMENT CONDUITS - (26.18%)
405,093 Federal National Mortgage Association, 1988 CL 10B, 8.95%, 05/25/03........................... 426,575
93,920 Federal Home Loan Mortgage Corporation, 122 CL F, 8.75%, 10/15/05............................. 95,827
485,000 Federal National Mortgage Association, 1993 CL 040K, 7.00%, 04/25/08.......................... 486,106
134,198 Federal Home Loan Mortgage Corporation, 1606 CL, 7.90%, 05/15/08 <F1>......................... 138,207
429,826 Federal National Mortgage Association, 1988 CL 15B, 6.39%, 06/25/18 <F1>...................... 431,705
123,683 Federal National Mortgage Association, 1988 CL 16B, 9.50%, 06/25/18........................... 131,878
1,600,000 Federal National Mortgage Association, 1988 CL 19J, 8.50%, 07/25/18........................... 1,685,680
100,000 Federal National Mortgage Association, 1990 CL 47J, 9.40%, 08/25/18........................... 101,050
200,000 Federal National Mortgage Association, 1989 CL 59H, 7.75%, 10/25/18........................... 203,080
2,000,000 Federal National Mortgage Association, 1989 CL 96G, 8.75%, 05/25/19........................... 2,100,240
64,498 Federal National Mortgage Association, 1991 CL 115ZZ, 8.50%, 10/25/20......................... 65,413
150,000 Federal Home Loan Mortgage Corporation, CL 1109 H, 6.95%, 12/15/20............................ 152,469
300,000 Federal National Mortgage Association, 1992 CL 174, 7.25%, 09/25/21........................... 309,345
1,000,000 Federal National Mortgage Association , 1995 CL 25 A, 7.00%, 10/25/21......................... 971,250
552,898 Federal Home Loan Mortgage Corporation, 1401 CL, 6.27%, 10/15/22 <F1>......................... 551,416
149,969 Federal Home Loan Mortgage Corporation, 1454 CL N P II, 7.00%, 12/15/22....................... 150,835
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS GOVERNMENT BOND FUND - Continued
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS & REAL ESTATE MORTGAGE
INVESTMENT CONDUITS - Continued
$ 426,156 Federal Home Loan Mortgage Corporation, 1487 CL H PAC-2, 6.00%, 03/15/23...................... $ 422,065
1,183,736 Federal National Mortgage Association, 1993 CL 121 Z, 7.00%, 07/25/23......................... 1,096,620
253,961 Federal National Mortgage Association, 1993 CL 127 LA, 7.00%, 07/25/23........................ 256,978
30,329 Federal Home Loan Mortgage Corporation, G034 CL D, 7.50%, 04/25/24............................ 30,334
-----------
Total CMOs & REMICs - (identified cost $9,380,010)....................................... 9,807,073
-----------
SHORT TERM - (1.44%)
540,000 Federal Home Loan Mortgage Corporation Discount Note, 5.50%, 01/02/96
- (identified cost $539,753)................................................................ 539,753
-----------
TOTAL INVESTMENTS - (99.14%) _ (identified cost $35,907,091) <F2>............................. 37,138,316
OTHER ASSETS LESS LIABILITIES _ (0.86 %)...................................................... 322,804
-----------
NET ASSETS - (100%)...................................................................... $37,461,120
===========
<FN>
<F2> Aggregate cost for Federal Income Tax purposes is $35,907,091 . At
December 31, 1995 unrealized appreciation (depreciation) of securities
for Federal Income Tax purposes is as follows:
Unrealized appreciation................................................................................ $ 1,323,125
Unrealized depreciation................................................................................ (91,900)
-----------
Net unrealized appreciation....................................................................... $ 1,231,225
===========
<F1> The interest rates on floating rate securities, shown as of December
31, 1995, may change monthly or less frequently and are based on indices
of market interest rates.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS GOVERNMENT MONEY MARKET FUND
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
FEDERAL FARM CREDIT BANK - (5.09%)
<S> <C> <C>
$18,465,000 5.42%, 02/09/96 Discount Note - (identified cost $18,356,580)................................. $ 18,356,580
------------
FEDERAL HOME LOAN BANK - (12.21%)
2,215,000 5.60%, 01/04/96 Discount Note................................................................. 2,213,966
5,635,000 5.58%, 01/18/96 Discount Note................................................................. 5,620,152
11,475,000 5.585%, 01/24/96 Discount Note................................................................ 11,434,055
4,010,000 5.59%, 01/25/96 Discount Note................................................................. 3,995,056
5,260,000 5.58%, 01/30/96 Discount Note................................................................. 5,236,356
3,350,000 5.54%, 02/26/96 Discount Note................................................................. 3,321,130
4,355,000 5.29%, 03/22/96 Discount Note................................................................. 4,301,597
2,115,000 5.46%, 03/22/96 Discount Note................................................................. 2,089,017
5,890,000 5.32%, 05/17/96 Discount Note................................................................. 5,770,754
------------
Total Federal Home Loan Bank - (identified cost $43,982,083)............................. 43,982,083
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - (22.99%)
11,575,000 5.58%, 01/02/96 Discount Note................................................................. 11,573,206
13,405,000 5.60%, 01/05/96 Discount Note................................................................. 13,396,659
5,275,000 5.59%, 01/10/96 Discount Note................................................................. 5,267,628
9,365,000 5.67%, 01/16/96 Discount Note................................................................. 9,342,875
4,290,000 5.55%, 01/22/96 Discount Note................................................................. 4,276,111
10,000,000 5.50%, 03/01/96 Discount Note................................................................. 9,908,333
6,970,000 5.48%, 03/07/96 Discount Note................................................................. 6,899,975
6,535,000 5.48%, 03/12/96 Discount Note................................................................. 6,464,371
8,355,000 5.47%, 03/13/96 Discount Note................................................................. 8,263,596
5,405,000 5.35%, 03/18/96 Discount Note................................................................. 5,343,150
2,147,000 5.30%, 06/03/96 Discount Note................................................................. 2,098,323
------------
Total Federal Home Loan Mortgage Corporation - (identified cost $82,834,227)............ 82,834,227
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - (56.27%)
310,000 5.50%, 01/03/96 Discount Note................................................................. 309,905
7,075,000 5.585%, 01/08/96 Discount Note................................................................ 7,067,317
9,150,000 5.59%, 01/19/96 Discount Note................................................................. 9,124,426
6,020,000 5.58%, 01/25/96 Discount Note................................................................. 5,997,606
6,155,000 5.50%, 01/31/96 Discount Note................................................................. 6,126,789
2,745,000 5.57%, 02/08/96 Discount Note................................................................. 2,728,861
2,860,000 5.58%, 02/15/96 Discount Note................................................................. 2,840,051
12,155,000 5.43%, 02/16/96 Discount Note................................................................. 12,070,665
5,895,000 5.43%, 02/20/96 Discount Note................................................................. 5,850,542
6,315,000 5.52%, 02/21/96 Discount Note................................................................. 6,265,617
20,000,000 5.54%, 02/27/96 Discount Note................................................................. 19,824,567
20,290,000 5.54%, 02/28/96 Discount Note................................................................. 20,108,900
13,515,000 5.49%, 03/05/96 Discount Note................................................................. 13,383,094
5,000,000 5.44%, 03/15/96 Discount Note................................................................. 4,944,089
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS GOVERNMENT MONEY MARKET FUND - Continued
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - Continued
$ 2,805,000 5.34%, 03/19/96 Discount Note................................................................. $ 2,772,546
10,000,000 5.34%, 03/26/96 Discount Note................................................................. 9,873,917
3,670,000 5.38%, 04/04/96 Discount Note................................................................. 3,618,445
21,930,000 5.36%, 05/29/96 Discount Note................................................................. 21,443,495
16,000,000 5.29%, 05/30/96 Discount Note................................................................. 15,647,333
7,730,000 5.30%, 05/30/96 Discount Note................................................................. 7,559,296
11,470,000 5.27%, 07/19/96 Discount Note................................................................. 11,134,184
14,540,000 5.14%, 08/29/96 Discount Note................................................................. 14,039,687
------------
Total Federal National Mortgage Association
(identified cost $202,731,332)......................................................... 202,731,332
------------
TENNESSEE VALLEY AUTHORITY - (3.51%)
7,005,000 5.56%, 01/17/96 Discount Note................................................................. 6,987,690
5,660,000 5.60%, 01/26/96 Discount Note................................................................. 5,637,989
------------
Total Tennessee Valley Authority - (identified cost $12,625,679)......................... 12,625,679
------------
TOTAL INVESTMENTS - (100.07%) - (identified cost $360,529,901 - <F1>......................... 360,529,901
LIABILITIES LESS OTHER ASSETS - (0.07%)..................................................... (240,113)
------------
NET ASSETS - (100%)...................................................................... $360,289,788
============
<FN>
<F1> Aggregate cost for Federal income tax purposes is $360,529,901.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS FINANCIAL FUND
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - (97.89%)
AUTOMOBILES - (2.59%)
<S> <C> <C>
40,000 General Motors Corp......................................................................... $ 2,115,000
-----------
BANKS AND SAVINGS & LOAN ASSOCIATIONS - (22.87%)
171,111 Bank of East Asia Ltd....................................................................... 614,074
20,000 Bank of New York Co., Inc................................................................... 975,000
15,000 BankAmerica Corp............................................................................ 971,250
23,400 Barnett Banks, Inc.......................................................................... 1,380,600
40,000 First Bank System, Inc...................................................................... 1,985,000
5,000 First Interstate Bancorp.................................................................... 682,500
24,000 Golden West Financial Corp.................................................................. 1,326,000
25,000 Greenpoint Financial Corp................................................................... 665,625
295,512 Lloyds TSB Group P.L.C...................................................................... 1,521,389
29,000 Norwest Corp................................................................................ 957,000
28,000 Republic New York Corp...................................................................... 1,739,500
50,000 State Street Boston Corp.................................................................... 2,250,000
50,000 TCF Financial Corp.......................................................................... 1,656,250
9,000 Wells Fargo & Co............................................................................ 1,944,000
-----------
18,668,188
-----------
COMPUTER PRODUCTS - (4.07%)
25,000 Cirrus Logic, Inc.<F1>...................................................................... 495,312
30,000 Electronic Arts Inc.<F1>.................................................................... 785,625
36,000 Intel Corp.................................................................................. 2,045,250
-----------
3,326,187
-----------
CONSUMER PRODUCTS - (3.65%)
50,000 Duracraft Corp.<F1>......................................................................... 1,250,000
50,000 Seagram Co. Ltd. (The)...................................................................... 1,731,250
-----------
2,981,250
-----------
ENERGY - (4.69%)
30,000 Amerada Hess Corp........................................................................... 1,590,000
57,000 Burlington Resources, Inc................................................................... 2,237,250
-----------
3,827,250
-----------
FINANCIAL SERVICES - (57.26%)
2,163 Alleghany Corp.<F1>......................................................................... 428,274
44,000 American Express Co......................................................................... 1,820,500
15,375 American International Group, Inc........................................................... 1,422,187
47,000 Aon Corporation............................................................................. 2,344,125
30,000 Argonaut Group, Inc......................................................................... 982,500
47,000 Berkley (W.R.) Corp......................................................................... 2,514,500
10,000 Chubb Corp.................................................................................. 967,500
10,200 Donaldson, Lufkin Jenrette Inc.............................................................. 318,750
90,000 Equitable Cos. Inc.......................................................................... 2,160,000
30,000 Equitable of Iowa Cos....................................................................... 963,750
43,700 Jefferies Group, Inc........................................................................ 2,037,512
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS FINANCIAL FUND - Continued
VALUE
SHARES/PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
FINANCIAL SERVICES - Continued
80,000 Leucadia National Corp...................................................................... $ 2,000,000
30,000 Mercury General Corp........................................................................ 1,425,000
18,000 Morgan (J.P.) & Co., Inc................................................................... 1,444,500
31,500 Morgan Stanley Group Inc.................................................................... 2,539,688
38,000 NAC RE Corp................................................................................. 1,368,000
45,000 National Re Corp............................................................................ 1,710,000
36,000 Orion Capital Corp.......................................................................... 1,561,500
25,000 Progressive Corp. (Ohio).................................................................... 1,221,875
100,000 Risk Capital Holdings, Inc.<F1>............................................................. 2,337,500
13,333 Robert Plan Corp., Series A<F1>............................................................. 1,799,955
50,000 Schwab (Charles) Corp....................................................................... 1,006,250
21,000 State Auto Financial Corp................................................................... 543,375
45,500 SunAmerica, Inc............................................................................. 2,161,250
33,000 Transatlantic Holdings, Inc................................................................. 2,421,375
270 Transport Holdings Inc., Class A<F1>........................................................ 11,239
54,000 Travelers Group Inc......................................................................... 3,395,250
4,500 Trenwick Group Inc.......................................................................... 253,688
69,000 20th Century Industries<F1>................................................................. 1,371,375
15,000 United Asset Management Corporation......................................................... 575,625
30,000 Vesta Insurance Group, Inc.................................................................. 1,635,000
-----------
46,742,043
-----------
RESTAURANT & FOOD - (2.76%)
50,000 McDonald's Corp............................................................................. 2,256,250
-----------
Total Common Stock - (identified cost $57,711,333)..................................... 79,916,168
-----------
SHORT TERM - (1.91%)
$ 1,560,000 Federal Home Loan Mortgage Corporation Discount Note, 5.50%, 01/02/96
- (identified cost $1,559,285)............................................................ 1,559,285
-----------
TOTAL INVESTMENTS - (99.80%) - (identified cost $59,270,618) -<F2>.......................... 81,475,453
OTHER ASSETS LESS LIABILITIES - (0.20%)..................................................... 161,063
-----------
NET ASSETS - (100%).................................................................... $81,636,516
===========
<FN>
<F1> Non-Income Producing Security.
<F2> Aggregate cost for Federal Income Tax purposes is $59,270,618. At
December 31, 1995 unrealized appreciation (depreciation) of
securities for Federal Income Tax purposes is as follows:
Unrealized appreciation.......................................................................... $22,550,755
Unrealized depreciation.......................................................................... (345,920)
-----------
Net unrealized appreciation................................................................. $22,204,835
===========
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS CONVERTIBLE SECURITIES FUND
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK - (35.92%)
BANKS AND SAVINGS & LOAN ASSOCIATIONS - (14.35%)
<S> <C> <C>
17,300 Banc One Corp., $3.50, Ser. C Conv. Pfd..................................................... $ 1,143,962
6,000 Barnett Banks Inc., $4.50, Ser. A Conv. Pfd................................................. 669,000
19,000 Citicorp, $5.375, Ser. 13 Conv. Pfd......................................................... 3,488,875
38,800 First Bank System, Inc., $3.5625, Ser. '91-A Conv. Pfd...................................... 3,327,100
-----------
8,628,937
-----------
COMPUTER PRODUCTS - (1.74%)
10,400 Salomon Inc. - Hewlett-Packard Company, ELK, 5.25%, 01/01/97 Pfd............................ 1,045,200
-----------
ENERGY - (0.92%)
10,000 Unocal Corp., $3.50, Conv. Pfd.............................................................. 553,750
-----------
INSURANCE - (7.20%)
5,200 Aon Corporation, 6.25% Ser. B Conv. Exch. Pfd............................................... 330,200
34,150 SunAmerica Inc., Depository Shares, $2.78, Ser. D Conv. Pfd................................. 1,634,931
27,100 Travelers Group Inc., 5.50%, Ser. B Conv. Pfd............................................... 2,364,475
-----------
4,329,606
-----------
PUBLISHING - (1.60%)
50,000 News Corp. Ltd., Sponsored ADR Pfd.......................................................... 962,500
-----------
PULP & PAPER - (3.14%)
15,700 International Paper Capital Trust, 5.25%, Conv. Pfd......................................... 712,388
15,000 James River Corp. of Virginia, 9.00%, Ser. P Conv. Pfd...................................... 350,625
14,500 Sonoco Products Co., $2.25, Ser. A Conv. Pfd................................................ 826,500
-----------
1,889,513
-----------
REAL ESTATE - (3.81%)
20,000 Merry Land & Investment Co., Inc., $1.75, Ser. A Conv Pfd................................... 640,000
33,300 Oasis Residential, Inc., $2.25, Ser. A Cum. Conv. Pfd....................................... 857,475
15,300 Rouse Co., 6.50%, Ser. A Conv. Pfd.......................................................... 789,863
-----------
2,287,338
-----------
TRANSPORTATION - (3.16%)
32,000 Delta Air Lines, Inc., Depository Shares, $3.50, Ser. C Conv. Pfd........................... 1,900,000
-----------
Total Convertible Preferred Stock - (identified cost $17,741,207)...................... 21,596,844
-----------
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS CONVERTIBLE SECURITIES FUND - Continued
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS - (29.48%)
AEROSPACE - (0.53%)
$ 300,000 Orbital Sciences Corp., Conv. Sub. Deb., 6.75%, 03/01/03.................................... $ 321,000
-----------
BANKS - (2.90%)
700,000 Bank of New York Co., Inc., Conv. Sub. Deb., 7.50%, 08/15/01................................ 1,743,000
-----------
COMMUNICATIONS - (1.10%)
600,000 General Instrument Corp., Conv. Jr. Sub., 5.00%, 06/15/00................................... 660,000
-----------
ELECTRONICS - (4.67%)
2,100,000 Texas Instruments, Inc., Conv. Sub. Deb., 2.75%, 09/29/02................................... 2,625,000
200,000 VLSI Technology Inc., Conv. Sub. Note, 8.25%, 10/01/05...................................... 184,500
-----------
2,809,500
-----------
ENERGY - (1.25%)
750,000 Noble Affiliates, Inc., Conv. Sub. Note, 4.25%,11/01/03..................................... 751,875
-----------
ENGINEERING - (0.90%)
500,000 Thermo Electron Corp., 4.25%, 01/01/03...................................................... 538,125
-----------
FINANCIAL SERVICES - (2.40%)
500,000 Alex Brown, Inc., Conv. Sub. Deb., 5.75%, 06/12/01.......................................... 811,550
550,000 Legg Mason, Inc., Conv. Sub. Deb., 5.25%, 05/01/03.......................................... 634,563
-----------
1,446,113
-----------
INSURANCE - (7.09%)
2,503,000 Equitable Companies Inc., Conv. Sub. Deb., 6.125%, 12/15/24................................. 2,840,905
1,400,000 Leucadia National Corp., Conv. Sub. Deb., 5.25%, 02/01/03................................... 1,421,000
-----------
4,261,905
-----------
MACHINERY - (1.61%)
700,000 Raymond Corp., Conv. Sub. Deb., 6.50%, 12/15/03............................................. 969,500
-----------
METALS & MINING - (2.25%)
1,300,000 Allegheny Ludlum Corp., Conv., 5.875%, 03/15/02............................................. 1,353,625
-----------
PULP & PAPER - (1.31%)
700,000 Riverwood International Corp., Conv. Sub. Note, 6.75%, 09/15/03............................. 786,625
-----------
REAL ESTATE - (2.52%)
500,000 Camden Property Trust, Conv. Sub. Deb., 7.33%, 04/01/04..................................... 495,000
700,000 Liberty Property Trust, Conv. Sub. Deb., 8.00%, 07/01/01.................................... 721,875
350,000 Mid-Atlantic Realty Trust, Conv. Sub. Deb., 7.625%, 09/15/03................................ 301,000
-----------
1,517,875
-----------
TRANSPORTATION - (0.95%)
500,000 AMR Corp., Conv. Sub. Qrtly. Income Cap. Sec's., 6.125%, 11/01/24........................... 520,000
500,000 Florida West Airlines, Inc., 8.00%, 03/25/99<F2>............................................ 50,213
-----------
570,213
-----------
Total Convertible Bonds - (identified cost $16,980,527).................................. 17,729,356
-----------
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS CONVERTIBLE SECURITIES FUND - Continued
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - (34.16%)
BANKS AND SAVINGS & LOAN ASSOCIATIONS - (1.60%)
29,206 Norwest Corp................................................................................ $ 963,798
-----------
ENERGY - (3.02%)
14,847 Amoco Corp.................................................................................. 1,067,128
9,574 Burlington Northern Santa Fe Corp........................................................... 746,772
-----------
1,813,900
-----------
FINANCIAL SERVICES - (0.84%)
18,384 Legg Mason, Inc............................................................................. 505,560
-----------
HOTELS - (2.24%)
63,000 Host Marriott Corp<F1>...................................................................... 834,750
20,000 Patriot American Hospitality Inc............................................................ 515,000
-----------
1,349,750
-----------
INSURANCE - (3.56%)
22,500 Equitable Cos. Inc.......................................................................... 540,000
20,000 Leucadia National Corp...................................................................... 500,000
10,000 NAC Re Corp................................................................................. 360,000
111 Transport Holdings, Inc., Class A<F1>....................................................... 4,620
13,000 Trenwick Group, Inc......................................................................... 732,875
-----------
2,137,495
-----------
MULTI-FAMILY HOUSING - (4.56%)
58,400 Bay Apartment Communities, Inc.............................................................. 1,416,200
9,800 Camden Property Trust....................................................................... 233,975
18,000 Gables Residential Trust.................................................................... 411,750
30,000 Oasis Residential, Inc...................................................................... 682,500
-----------
2,744,425
-----------
REAL ESTATE - (13.66%)
33,200 Avalon Properties, Inc...................................................................... 713,800
30,000 Beacon Properties Corp...................................................................... 690,000
18,600 Cali Realty Corp............................................................................ 406,875
48,356 Centerpoint Properties Corp................................................................. 1,118,232
10,000 Chelsea GCA Realty, Inc..................................................................... 300,000
15,000 JDN Realty Corp............................................................................. 335,625
50,550 Kimco Realty Corp........................................................................... 1,377,487
72,900 Vornado Realty Trust........................................................................ 2,733,750
14,100 Weingarten Realty Investors................................................................. 535,800
-----------
8,211,569
-----------
SELF STORAGE - (4.68%)
57,400 Public Storage, Inc......................................................................... 1,090,600
30,000 Sovran Self Storage Inc..................................................................... 791,250
40,900 Storage Trust Realty........................................................................ 930,475
-----------
2,812,325
-----------
Total Common Stock - (identified cost $17,845,126)..................................... 20,538,822
-----------
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS CONVERTIBLE SECURITIES FUND - Continued
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
SHORT TERM - (1.06%)
$ 640,000 Federal Home Loan Mortgage Corporation Discount Notes, 5.50%, 01/02/96
- (identified cost $639,707).............................................................. $ 639,707
-----------
TOTAL INVESTMENTS - (100.62%) - (identified cost $53,206,567) - <F3>........................ 60,504,729
LIABILITIES LESS OTHER ASSETS - (0.62%)..................................................... (370,237)
-----------
NET ASSETS - (100%).................................................................... $60,134,492
===========
<FN>
<F1> Non-Income Producing Security.
<F2> This security is in default and is not currently paying interest.
<F3> Aggregate cost for Federal Income Tax purposes is $53,206,567. At
December 31, 1995 unrealized appreciation (depreciation) of securities
for Federal Income Tax purposes is as follows:
Unrealized appreciation................................ ..................................... $ 8,056,414
Unrealized depreciation...................................................................... (758,252)
-----------
Net unrealized appreciation............................................................. $ 7,298,162
===========
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS REAL ESTATE FUND
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - (88.97%)
APARTMENTS (REITS) - (24.77%)
<S> <C> <C>
20,000 Apartment Investment & Management Co., Class A............................................... $ 390,000
41,800 Avalon Properties, Inc....................................................................... 898,700
52,100 Bay Apartment Communities, Inc............................................................... 1,263,425
24,200 Camden Property Trust........................................................................ 577,775
20,000 Equity Residential Properties Trust.......................................................... 612,500
27,000 Gables Residential Trust..................................................................... 617,625
48,900 Irvine Apartment Communities, Inc............................................................ 941,325
21,000 Merry Land & Investment Co., Inc............................................................. 496,125
22,000 Oasis Residential, Inc....................................................................... 500,500
28,900 Security Capital Pacific Trust............................................................... 570,775
25,000 Summit Properties Inc........................................................................ 496,875
-----------
7,365,625
-----------
BANKS AND SAVINGS & LOAN ASSOCIATIONS - (1.09%)
9,000 Bancorp Hawaii, Inc.......................................................................... 322,875
-----------
HEALTHCARE (REITS) - (1.29%)
20,000 Capstone Capital Corp........................................................................ 382,500
-----------
HOTELS & LODGING - (8.22%)
15,000 Bristol Hotel Co............................................................................. 365,625
50,000 Host Marriot Corp.<F1>....................................................................... 662,500
55,000 Patriot American Hospitality Inc. (REIT)..................................................... 1,416,250
-----------
2,444,375
-----------
INDUSTRIAL (REITS) - (11.07%)
42,200 Centerpoint Properties Corp.................................................................. 975,875
13,200 Crescent Real Estate Equities, Inc........................................................... 450,450
7,500 Duke Realty Investments, Inc................................................................. 235,313
15,000 Liberty Property Trust....................................................................... 311,250
32,400 Reckson Associates Realty Corp............................................................... 951,750
20,952 Security Capital Industrial Trust............................................................ 366,660
-----------
3,291,298
-----------
INSURANCE - (1.64%)
20,350 Equitable Cos. Inc........................................................................... 488,400
-----------
MANUFACTURED HOUSING (REITS) - (1.94%)
24,000 ROC Communities, Inc......................................................................... 576,000
-----------
MORTGAGE (REITS) - (2.08%)
27,000 Capstead Mortgage Corp....................................................................... 617,625
-----------
OFFICE SPACE (REITS) - (6.23%)
45,000 Beacon Properties Corp....................................................................... 1,035,000
37,400 Cali Realty Corp............................................................................. 818,125
-----------
1,853,125
-----------
<PAGE>
DAVIS SERIES, INC.
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
DAVIS REAL ESTATE FUND - Continued
VALUE
SHARES/PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
RETAIL (REITS) - (20.51%)
36,800 Chelsea GCA Realty Inc....................................................................... $ 1,104,000
9,800 Debartolo Realty Corp........................................................................ 127,400
25,000 JDN Realty Corp.............................................................................. 559,375
39,450 Kimco Realty Corp............................................................................ 1,075,011
35,000 Macerich Co. (The)........................................................................... 700,000
40,000 United Dominion Realty Trust Inc............................................................. 600,000
33,350 Vornado Realty Trust......................................................................... 1,250,625
18,000 Weingarten Realty Investors.................................................................. 684,000
-----------
6,100,411
-----------
STORAGE (REITS) - (10.13%)
46,300 Public Storage, Inc.......................................................................... 879,700
21,500 Shurgard Storage Centers Inc., Class A....................................................... 580,500
15,000 Sovran Self Storage Inc...................................................................... 395,625
50,800 Storage Trust Realty......................................................................... 1,155,700
3,011,525
Total Common Stock - (identified cost $23,518,729)...................................... 26,453,759
CONVERTIBLE PREFERRED STOCK - (3.48%)
REAL ESTATE - (3.48%)
3,600 Merry Land & Investment Co., Inc., $1.75, Ser. A Conv. Pfd................................... 115,200
16,700 Oasis Residential, Inc., $2.25, Ser. A Cum. Conv. Pfd........................................ 430,025
20,000 Security Capital Pacific Trust, $1.75, Ser. A Conv. Pfd..................................... 490,000
Total Preferred Stock - (identified cost $ 918,366)...................................... 1,035,225
CONVERTIBLE CORPORATE BONDS - (4.73%)
REAL ESTATE - (4.73%)
$ 500,000 Camden Property Trust, Conv. Sub. Deb., 7.33%, 04/01/01...................................... 495,000
576,000 Equitable Cos. Inc., Conv. Sub. Deb., 6.125%, 12/15/24...................................... 653,760
250,000 Liberty Property Trust, Conv. Sub. Deb., 8.00%, 07/01/01..................................... 257,813
Total Convertible Corporate Bonds _ (identified cost $1,407,360)......................... 1,406,573
SHORT TERM - (1.98%)
590,000 Federal Home Loan Mortgage Corporation Discount Note, 5.50%, 01/02/96
- (identified cost $589,730)................................................................ 589,730
-----------
TOTAL INVESTMENTS - (99.16%) - (identified cost $26,434,185) - <F2>....................... 29,485,287
OTHER ASSETS LESS LIABILITIES - (0.84%)................................................... 248,505
-----------
NET ASSETS - (100%).................................................................... $29,733,792
===========
<FN>
<F1> Non-Income Producing Security.
<F2> Aggregate cost for Federal Income Tax purposes is $26,434,185. At
December 31, 1995 unrealized appreciation (depreciation) of securities
for Federal Income Tax purposes is as follows:
Unrealized appreciation...................................................................... $ 3,121,692
Unrealized depreciation...................................................................... (70,590)
-----------
Net unrealized appreciation............................................................. $ 3,051,102
===========
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
DAVIS SERIES, INC.
STATEMENT OF ASSETS AND LIABILITIES At December 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
DAVIS
DAVIS GOVERNMENT DAVIS DAVIS
DAVIS GOVERNMENT MONEY DAVIS CONVERTIBLE REAL ESTATE
GROWTH BOND MARKET FINANCIAL SECURITIES SECURITIES
FUND FUND FUND<F1> FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value(see schedules of
investments).............................. $ 58,231,874 $ 37,138,316 $ 360,529,901 $ 81,475,453 $ 60,504,729 $ 29,485,287
Cash........................................ 26,232 28,243 30,261 16,578 9,561 3,217
Receivables:
Dividends and interest.................... 19,132 350,252 2,324 114,631 476,398 285,985
Capital stock sold........................ 179,562 202,459 959,981 147,700 36,604 34,461
Deferred organization expense _ _ _ 4,092 _ _
------------ ------------ ------------- ------------ ------------ ------------
Total assets........................... 58,356,800 37,719,270 361,522,467 81,758,454 61,027,292 29,808.950
------------ ------------ ------------- ------------ ------------ ------------
LIABILITIES:
Payables:
Investment securities
purchased............................... _ _ _ _ 786,812 _
Capital stock reacquired.................. 36,172 181,852 139,284 27,460 39,728 -
Accrued expenses............................ 48,742 43,798 215,119 76,478 61,734 69,925
Commissions payable to
distributor (Note 3)...................... 56,000 32,500 _ 18,000 4,526 4,990
Distributions payable....................... _ _ 878,276 _ _ 243
------------ ------------ ------------- ------------ ------------ ------------
Total liabilities...................... 140,914 258,150 1,232,679 121,938 892,800 75,158
------------ ------------ ------------- ------------ ------------ ------------
NET ASSETS (Note 5)......................... $ 58,215,886 $ 37,461,120 $ 360,289,788 $ 81,636,516 $ 60,134,492 $ 29,733,792
============ ============ ============= ============ ============ ============
Class A Shares
Net assets................................ $ 22,890,003 $ 21,485,012 $ 357,118,021 $ 79,874,108 $ 59,756,871 $ 29,320,148
Shares outstanding........................ 1,327,236 3,582,561 357,118,021 5,509,741 3,279,200 1,783,768
Net asset value and redemption
price per share (net
assets/shares outstanding).............. $ 17.25 $ 6.00 $ 1.00 $ 14.50 $ 18.22 $ 16.44
========= ======== ======== ========= ========= =========
Maximum offering price per
share (100/95.25 of net
asset value)............................ $ 18.11 $ 6.30 $ 1.00 $ 15.22 $ 19.13 $ 17.26
========= ======== ======== ========= ========= =========
Class B Shares
Net assets................................ $ 35,325,883 $ 15,976,108 $ 2,696,579 $ 1,762,408 $ 377,621 $ 413,644
Shares outstanding........................ 2,068,131 2,669,948 2,696,579 122,303 20,818 25,209
Net asset value, offering and
redemption price per share
(net assets/shares
outstanding)(Note 3)................... $ 17.08 $ 5.98 $ 1.00 $ 14.41 $ 18.14 $ 16.41
========= ======== ======== ========= ========= =========
CLASS C SHARES
Net assets................................ $ 475,188
Shares outstanding........................ 475,188
Net asset value, offering and
redemption price per share
(net assets/shares
outstanding)........................... $ 1.00
NET ASSETS CONSIST OF:
Undistributed net investment
income.................................. $ _ $ - $ _ $ 11,287 $ 40,897 $ 21,800
Paid-in capital........................... 31,576,378 40,906,110 360,289,788 59,420,394 52,764,557 26,677,037
Accumulated net realized gain
(loss).................................. - (4,676,215) _ - 30,876 (16,147)
Unrealized appreciation
on investments.......................... 26,639,508 1,231,225 _ 22,204,835 7,298,162 3,051,102
------------ ------------ ------------- ------------ ------------ ------------
$ 58,215,886 $ 37,461,120 $ 360,289,788 $ 81,636,516 $ 60,134,492 $ 29,733,792
============ ============ ============= ============ ============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
DAVIS SERIES, INC.
STATEMENT OF OPERATIONS Year ended December 31, 1995
==========================================================================================================================
<CAPTION>
DAVIS
DAVIS GOVERNMENT DAVIS DAVIS
DAVIS GOVERNMENT MONEY DAVIS CONVERTIBLE REAL ESTATE
GROWTH BOND MARKET FINANCIAL SECURITIES SECURITIES
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
(LOSS)
Income:
Dividends (net of foreign taxes
withheld of 13,549 and 4,507
for Finanjcial Fund and
Convertible Securities Fund,
respectively.................... $ 334,341 $ _ $ _ $ 1,093,154 $ 1,838,554 $1,568,454
Interest.......................... 104,781 2,978,898 17,626,687 87,158 835,922 239,598
----------- ---------- ----------- ----------- ----------- ----------
Total income.................. 439,122 2,978,898 17,626,687 1,180,312 2,674,476 1,808,052
----------- ---------- ----------- ----------- ----------- ----------
Expenses:
Management fees (Note 2).......... 413,012 283,797 1,480,642 516,765 399,922 197,296
Custodian fees.................... 67,927 89,963 161,553 75,054 70,357 65,034
Transfer agent fees............... 127,394 96,762 194,011 44,962 20,071 18,177
Audit fees........................ 12,154 12,101 12,135 10,760 9,650 10,435
Legalfees......................... 9,275 6,908 52,534 6,680 8,569 4,313
Accounting fees (Note 2).......... 15,498 17,004 11,499 13,998 13,998 11,001
Reports to shareholders........... 16,293 12,167 15,975 14,738 4,749 4,088
Directors fees and expenses....... 15,790 11,215 59,615 12,094 13,145 9,272
Registration and filing fees...... 29,699 28,596 127,423 33,458 30,664 36,817
Organization expense.............. _ _ _ 7,000 _ _
Miscellaneous..................... 21,793 19,734 72,805 17,456 19,907 8,787
Distribution plan payments
(Note 3)
Class A......................... 35,480 43,100 _ 60,628 16,815 11,379
Class B......................... 353,327 165,811 _ 4,657 871 1,476
----------- ---------- ----------- ----------- ----------- ----------
Total expenses................ 1,117,642 787,158 2,188,192 818,250 608,718 378,075
----------- ---------- ----------- ----------- ----------- ----------
Net investment
income (loss)............. (678,520) 2,191,740 15,438,495 362,062 2,065,758 1,429,977
----------- ---------- ----------- ----------- ----------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) from
investment transactions.. 4,837,350 (32,015) _ 7,641,002 2,889,149 (16,147)
Net increase in unrealized
appreciation/depreciation of
investments during the period..... 15,832,681 1,884,744 _ 19,535,935 7,434,048 3,011,729
----------- ---------- ----------- ----------- ----------- ----------
Net realized and unrealized
gain on investments........... 20,670,031 1,852,729 _ 27,176,937 10,323,197 2,995,582
----------- ---------- ----------- ----------- ----------- ----------
Net increase in net
assets resulting from
operations.................... $19,991,511 $4,044,469 $15,438,495 $27,538,999 $12,388,955 $4,425,559
=========== ========== =========== =========== =========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
DAVIS SERIES, INC.
STATEMENT OF CHANGES IN NET ASSETS Year ended December 31, 1995
===================================================================================================================================
<CAPTION>
DAVIS
DAVIS DAVIS GOVERNMENT DAVIS DAVIS
GROWTH GOVERNMENT MONEY DAVIS CONVERTIBLE REAL ESTATE
OPPORTUNITY BOND MARKET FINANCIAL SECURITIES SECURITIES
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ (678,520) $ 2,191,740 $ 15,438,495 $ 362,062 $ 2,065,758 $ 1,429,977
Net realized gain (loss) from....
investment transactions........ 4,837,350 (32,015) _ 7,641,002 2,889,149 (16,147)
Net increase in unrealized
appreciation/depreciation
of investments................. 15,832,681 1,884,744 _ 19,535,935 7,434,048 3,011,729
Net increase in net assets ------------ ------------ ------------- ----------- ------------ ------------
resulting from operations...... 19,991,511 4,044,469 15,438,495 27,538,999 12,388,955 4,425,559
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A........................ _ (1,257,060) (15,326,497) (357,170) (2,021,859 (1,399,690)
Class B........................ _ (934,680) (106,550) _ (3,002) (8,487)
Class C........................ _ _ (5,448) _ _ _
Realized gains from
investment transactions
Class A........................ (1,889,930) - - (7,475,056) (2,423,570) -
Class B........................ (2,947,420) - - (166,551) (15,365) -
Paid-in capital
Class A........................ - (315,408) - - - -
Class B........................ - (234,519) - - - -
CAPITAL SHARE
TRANSACTIONS (NOTE 5)............ (5,479,797) (3,118,148) 119,563,068 4,397,937 4,365,522 1,231,958
------------ ------------ ------------- ----------- ------------ ------------
Total increase (decrease)
in net assets................ 9,674,364 (1,815,346) 119,563,068 23,938,159 12,290,681 4,249,340
NET ASSETS:
Beginning of period.............. 48,541,522 39,276,466 240,726,720 57,698,357 47,843,811 25,484,452
------------ ------------ ------------- ----------- ------------ ------------
End of period (including
undistributed net investment
income for the Davis
Financial, Davis Convertible
Securities and Davis Real
Estate Funds of $11,287,
$40,897, and $21,800,
respectively)................... $ 58,215,886 $ 37,461,120 $ 360,289,788 $81,636,516 $ 60,134,492 $ 29,733,792
============ ============ ============= =========== ============ ============
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
DAVIS SERIES, INC.
STATEMENT OF CHANGES IN NET ASSETS Year ended December 31, 1994
===================================================================================================================================
<CAPTION>
DAVIS
DAVIS DAVIS GOVERNMENT DAVIS DAVIS
GROWTH GOVERNMENT MONEY DAVIS CONVERTIBLE REAL
OPPORTUNITY BOND MARKET FINANCIAL SECURITIES ESTATE
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)........ $ (474,307) $ 2,366,206 $ 6,907,959 $ 361,957 $ 1,892,358 $ 643,384
Net realized gain (loss) from
investment transactions........... 2,436,228 (298,560) _ 2,041,245 (419,338) 204,966
Net increase (decrease) in
unrealized
appreciation/depreciation
of investments.................... (6,916,085) (2,505,638) _ (5,018,406) (4,739,252) 39,372
Net increase (decrease) in net ------------ ------------- ------------- ------------ ------------ -------------
assets resulting from
operations........................ (4,954,164) (437,992) 6,907,959 (2,615,204) (3,266,232) 887,722
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A........................... _ _ (6,904,574) (368,855) (1,892,358) (643,338)
Class B........................... _ (2,663,223) (3,385) (102) _ (46)
Realized gains from investment
transactions
Class A........................... (539,300) _ _ (2,040,605) (132,489) (204,692)
Class B........................... (1,716,240) _ _ (1,021) _ (274)
Paid-in capital
Class A........................... _ _ _ (94,932) _ _
Class B........................... _ (766,698) _ (46) _ _
CAPITAL SHARE
TRANSACTIONS (NOTE 5)............... 3,989,165 (6,935,142) 201,195,681 12,041,370 8,405,127 25,445,080
------------ ------------- ------------- ------------ ------------ -------------
Total increase (decrease)
in net assets................. (3,220,539) (10,803,055) 201,195,681 6,920,605 3,114,048 25,484,452
NET ASSETS:
Beginning of period................. 51,762,061 50,079,521 39,531,039 50,777,752 44,729,763 _
------------ ------------- ------------- ------------ ------------ -------------
End of period....................... $ 48,541,522 $ 39,276,466 $ 240,726,720 $ 57,698,357 $ 47,843,811 $ 25,484,452
============ ============= ============= ============ ============ =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
DAVIS SERIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
===============================================================================
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Davis Series, Inc. (formerly, Retirement Planning Funds of America, Inc.,
the "Company") is registered under the Investment Company Act of 1940
as amended, as a diversified, open-end management investment company.
The Company operates as a series fund issuing shares of common stock in
the following six series:
Davis Growth Opportunity Fund (formerly, Growth Fund) seeks to achieve
growth of capital. It invests primarily in common stocks and other equity
securities, and may invest in both domestic and foreign issuers.
Davis Government Bond Fund (formerly, Bond Fund) seeks to achieve
current income. It invests in debt securities which are obligations of, or
which are guaranteed by, the U.S. Government, its agencies or
instrumentalities.
Davis Government Money Market Fund (formerly, Government Money Market
Fund) seeks to achieve as high a level of current income as is consistent
with the principle of preservation of capital and maintenance of liquidity.
It invests in debt securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities and repurchase agreements involving
such securities. There is no assurance that the Fund will be able to
maintain a stable net asset value of $1.00 per share.
Davis Financial Fund (formerly, Financial Value Fund) seeks to achieve
growth of capital. It invests primarily in common stocks and other equity
securities, and will concentrate investments in companies principally
engaged in the banking and financial services industries.
Davis Convertible Securities Fund (formerly, Convertible Securities Fund)
seeks to achieve total return. The Fund invests primarily in convertible
securities, which combine fixed income with potential for capital
appreciation. It may invest in lower rated bonds commonly known as "junk
bonds," so long as no such investment would cause 35% or more of the
Funds net assets to be so invested.
Davis Real Estate Fund (formerly, Real Estate Securities Fund) seeks to
achieve total return through a combination of growth and income. It
invests primarily in securities of companies principally engaged in or
related to the real estate industry or which own significant real estate
assets or which primarily invest in real estate financial instruments.
Because of the risk inherent in any investment program. The Company
cannot ensure that the Investment objective of any of its series will be
achieved .
The Company accounts separately for the assets, liabilities and operations
of each series. On January 3, 1994, the Davis Real Estate Fund became a
new series of the Company. On December 1, 1994 each series commenced
the offering of shares in two classes, Class A and Class B. The Class A
shares are sold with a front-end sales charge, except for shares of Davis
Government Money Market Fund which are sold at net asset value and the
Class B shares are sold at net asset value and may be subject to a
contingent deferred sales charge upon redemption. The Davis Government
Money Market Fund offers Class C shares which are sold at net asset value.
All classes have identical rights with respect to voting (exclusive of each
Class distribution arrangement), liquidation and distributions. The
following is a summary of significant accounting policies followed by the
Company in the preparation of its financial statements.
<PAGE>
DAVIS SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1995
===============================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)
A. VALUATION OF SECURITIES. Securities listed on national
securities exchanges are valued at the last reported sales price on the day
of valuation. Securities traded in the over the counter market and listed
securities for which no sale was reported on that date are stated at the
average of closing bid and asked prices. Securities for which market
quotations are not readily available are valued at fair value as determined
by the Board of Directors. The Davis Government Money Market Fund uses
the amortized cost method of valuing investment securities which
represents fair value as determined by the Board of Directors.
B. 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.
C. FORWARD CURRENCY CONTRACTS. The Company 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
Company as an unrealized gain or loss. When the forward currency
contract is closed, the Company 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 Company to risks resulting
from unanticipated movements in foreign currency exchange rates or
failure of the counterparty to the agreement to perform in accordance
with the terms of the contract.
D. FEDERAL INCOME TAXES. It is the Company's policy to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its income to
shareholders. Therefore, no provision for federal income tax is required.
At December 31, 1995, the Davis Government Bond Fund had approximately
$4,676,200 of capital loss carryovers available to offset future capital
gains, if any, of which $2,774,300, $1,110,900, $84,300, $376,100,
$298,600 and $32,000 expire in 1997, 1998, 1999, 2001, 2002 and 2003,
respectively. At December 31, 1995, the Davis Real Estate Fund had
approximately $16,000 of capital loss carryovers available to offset
future capital gains, if any, which expire in 2003.
E. ORGANIZATION COSTS. Expenses incurred in connection with Davis
Financial Fund's organization and initial public offering are being
amortized over a sixty-month period.
F. USE OF ESTIMATES IN FINANCIAL STATEMENTS. In preparing
financial statements in conformity with generally accepted accounting
principles, management makes estimates and assumptions that affect the
reported amounts of 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.
G. OTHER. Securities transactions are accounted for on the trade date
(date the order to buy or sell is executed) with gain or loss on the sale of
securities being determined based upon identified cost. Interest income is
recorded on the accrual basis. Discounts on debt securities are amortized
in accordance with the requirements of the Internal Revenue Code.
Dividends and distributions to shareholders are recorded on the
ex-dividend date.
<PAGE>
DAVIS SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1995
===============================================================================
NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH
AFFILIATE
Advisory fees are paid monthly to Davis Selected Advisers, L.P. the
Funds' investment adviser (the "Adviser"). The fee for the Davis
Government Money Market Fund is .50 of 1% of the first $250 million of
average daily net assets, .45 of 1% of the next $250 million of average
daily net assets and .40 of 1% of average daily net assets in excess of
$500 million. The rate for the Davis Growth Opportunity Fund, Davis
Government Bond Fund, Davis Financial Fund, Davis Convertible Securities
Fund and Davis Real Estate Fund is .75 of 1% of the average daily net
assets for the first $250 million, .65 of 1% of the average net assets on
the next $250 million, and .55 of 1% of the av-erage daily net assets in
excess of $500 million. The Adviser will reimburse each Fund for any
expenses (including the fee under the agreement but excluding interest,
taxes, brokerage fees, payments made to the Distributor under any Rule
12b-1 Distribution Plan and, where permitted, extraordinary expenses) in
excess of the most restrictive applicable expense limitation prescribed by
any statute or regulatory authority of any jurisdiction in which each
Funds' shares are qualified for offer and sale. The Adviser believes that
the most restrictive expense limitations presently applicable are 2 1/2%
for the first $30 million of average net assets, 2% for the next $70
million of average net assets and 1 1/2% for any additional average net
assets.
The Adviser is paid for registering Fund shares for sale in various
states. The fee for the year ended December 31, 1995 for the Davis Growth
Opportunity Fund, Davis Government Bond Fund, Davis Government Money
Market Fund, Davis Financial Fund, Davis Convertible Securities Fund and
Davis Real Estate Fund, amounted to $8,250 for each fund.
The Advisers is paid for certain transfer agent services. The fee for the
year ended December 31, 1995 for the Davis Growth Opportunity Fund,
Davis Government Bond Fund, Davis Government Money Market Fund, Davis
Financial Fund, Davis Convertible Securities Fund and Davis Real Estate
Fund amounted to $8,713, $7,567, $11,580, $3,276, $1,284 and $1,992,
respectively. The Advisers is also paid for certain accounting services.
The fee for the year ended December 31, 1995 for the Davis Growth
Opportunity Fund, Davis Government Bond Fund, Davis Government Money
Market Fund, Davis Financial Fund, Davis Convertible Securities Fund and
Davis Real Estate Fund amounted to $15,498 $17,004, $11,499 $13,998,
$13,998 and $11,001, respectively. Three directors and the officers of
the Company are also directors and officers of the general partner of
Davis Selected Advisers, L.P. Tanaka Capital Management, Inc. (the
"Sub-Adviser"), acts as the sub-adviser of the Davis Growth Opportunity
Fund. The Sub-Adviser manages the day to day investment operations for
the Davis Growth Opportunity Fund. The Sub-Adviser also provides
investment advisory services to employee benefit plans, institutions,
trusts and individuals. Graham Y. Tanaka is the owner of the Sub-Adviser.
The Company pays no fees directly to the Sub-Adviser. The Sub-Adviser
receives from the Adviser a reallowed portion of its advisory fee equal to
.30% of the first $100 million of the Davis Growth Opportunity Fund's
annual average net assets and .25% of such Fund assets over $100 million
with a minimum annual fee of $100,000. However, the Sub-Adviser's fees
on Fund assets over $100 million may not exceed one-third of the fees
paid to the Adviser from the Davis Growth Opportunity Fund.
NOTE 3 - DISTRIBUTION AND UNDERWRITING FEES
CLASS A SHARES OF DAVIS GROWTH OPPORTUNITY FUND, DAVIS
GOVERNMENT BOND FUND, DAVIS FINANCIAL FUND, DAVIS CONVERTIBLE
SECURITIES FUND AND DAVIS REAL ESTATE FUND
Class A shares of the Funds are sold at net asset value plus a sales
charge and are redeemed at net asset value (without a contingent deferred
sales charge).
<PAGE>
DAVIS SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1995
================================================================================
NOTE 3 - DISTRIBUTION AND UNDERWRITING FEES - (Continued)
During the year ended December 31, 1995, Davis Selected Advisers,
L.P., the Company's Underwriter (the "Underwriter") received $33,104,
$11,063, $81,236, $41,669 and $16,112 from commissions earned on sales
of Class A shares of Davis Growth Opportunity Fund, Davis Government
Bond Fund, Davis Financial Fund, Davis Convertible Securities Fund and
Davis Real Estate Funds' capital stock, respectively, of which $5,305,
$1,765, $12,832, $8,887 and $2,551 was retained by the Underwriter and
the remaining $27,799, $9,298, $68,404, $32,782 and $13,561 was
reallowed to investment dealers. The Underwriter paid the costs of
prospectuses in excess of those required to be filed as part of the
Company's registration statement, sales literature and other expenses
assumed or incurred by it in connection with such sales.
The Underwriter is reimbursed for amounts paid to dealers as a
maintenance fee with respect to Class A shares sold by dealers and
remaining outstanding during the period. The maintenance fee is paid at
the annual rate of 1/4 of 1% of the average net assets maintained by the
responsible dealers. The Underwriter is not reimbursed for accounts in
which the Underwriter pays no service fees to other firms. The
maintenance fee for Class A shares of Davis Growth Opportunity Fund,
Davis Government Bond Fund, Davis Financial Fund, Davis Convertible
Securities Fund and Davis Real Estate Fund for the year ended December
31, 1995 was $35,480, $43,100, $60,628, $16,815 and $11,379,
respectively.
CLASS B SHARES OF DAVIS GROWTH OPPORTUNITY FUND, DAVIS
GOVERNMENT BOND FUND, DAVIS FINANCIAL FUND, DAVIS CONVERTIBLE
SECURITIES FUND AND DAVIS REAL ESTATE FUND
Class B shares of the Funds are sold at net asset value and are
redeemed at net asset value. A contingent deferred sales charge my be
assessed on shares redeemed within six years of purchase.
Each of the Class B shares of the Funds (other than Davis Government
Money Market Fund) have entered into a Distribution Plan with Davis
Selected Advisers, L.P. (the "Distributor") pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Distribution Plans provide that the
Funds will pay the Distributor a 4% commission on the proceeds from the
sale of each Funds' Class B shares and the Distributor reallows 4% to the
qualified dealer responsible for the sale of the shares. Pursuant to rules
implemented by the National Association of Securities Inc., (the "NASD")
distribution plan payments are limited to 1% of each Fund's annual average
net assets attributable to Class B shares, of which 0.75% may be used to
pay distribution expenses and 0.25% may be used to pay shareholder
service fees. The NASD rules also limit the aggregate amount the Funds
may pay for distribution to 6.25% of gross Funds sales since inception of
the Distribution Plans plus interest at 1% over the prime rate on unpaid
amounts. The Distributor intends to seek full payment (plus interest at
prime plus 1%) of distribution charges that exceed the 1% annual limit in
some future period or periods when the plan limits have not been reached.
During the year ended December 31, 1995, Class B shares of the
Davis Growth Opportunity Fund, Davis Government Bond Fund, Davis
Financial Fund, Davis Convertible Securities Fund and Davis Real Estate
Fund made distribution plan payments which included commissions of
$270,982, $126,585, $3,473, $660 and $1,102, respectively and
maintenance fees of $82,345, $39,226, $1,184, $211 and $374,
respectively.
<PAGE>
DAVIS SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1995
===========================================================================
NOTE 3 - DISTRIBUTION AND UNDERWRITING FEES - (Continued)
Commissions earned by the Distributor during the year ended
December 31, 1995 on the sale of Class B shares of the Davis Growth
Opportunity Fund, Davis Government Bond Fund, Davis Financial Fund,
Davis Convertible Securities Fund and Davis Real Estate Fund amounted to
$170,000, $52,068, $67,025, $13,839 and $10,264, of which $134,428,
$50,420, $65,989, $13,763 and $9,894 was reallowed to qualified selling
dealers.
The Distributor intends to seek payment from Class B shares of the
Davis Growth Opportunity Fund, Davis Government Bond Fund, Davis
Financial Fund, Davis Convertible Securities Fund and Davis Real Estate
Fund in the amounts of $295,361, $439,891, $65,749, $13,465 and
$10,271, respectively, representing the cumulative commissions earned
by the Distributor on the sale of the Funds' Class B shares reduced by
cumulative commissions paid by the Funds and cumulative contingent
deferred sales charges paid by redeeming shareholders. The Funds have no
contractual obligation to pay any such distribution charges and the
amounts, if any, timing and condition of such payments are solely within
the discretion of the Directors who are not interested persons of the
Funds or the Distributor.
CLASS B SHARES OF DAVIS GROWTH OPPORTUNITY FUND, DAVIS
GOVERNMENT BOND FUND, DAVIS FINANCIAL FUND, DAVIS CONVERTIBLE
SECURITIES FUND AND DAVIS REAL ESTATE FUND - Continued
A contingent deferred sales charge is imposed upon redemption of
certain Class B shares of the Funds within six years of the original
purchase. The charge is a declining percentage starting at 4% of the lesser
of net asset value of the shares redeemed or the total cost of such shares.
During the year ended December 31, 1995 the Distributor received
contingent deferred sales charges from Class B shares of the Davis
Growth Opportunity Fund, Davis Government Bond Fund, Davis Financial
Fund and Davis Real Estate Fund of $247,263, $35,041, $496 and $602,
respectively.
DAVIS GOVERNMENT MONEY MARKET FUND
All classes of shares of the Davis Government Money Market Fund are
sold to investors at net asset value. The shareholders of the Davis
Government Money Market Fund have adopted a Distribution expense plan in
accordance with Rule 12b-1, which does not provide for any amounts to be
paid directly to the Distributor as either compensation or reimbursement
for distributing shares of the Fund, but does authorize the use of the
advisory fee to the extent such fee may be considered to be indirectly
financing any activity or expense which is primarily intended to result in
the sale of Fund shares. The Adviser has entered into related service
agreements with various firms which provide cash management and other
services to the Fund's shareholders. The Adviser, at its sole discretion,
currently pays such firms a fee of .25 of 1% based on the average net
assets of those accounts serviced. During the year ended December 31,
1995 the Adviser made payments totaling $11,871 to qualified dealers
responsible for the maintenance of shares of the Fund.
NOTE 4 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) during the year ended December 31, 1995 for the Davis Growth
Opportunity Fund, Davis Government Bond Fund, Davis Financial Fund, Davis
Convertible Securities Fund and Real Estate Fund were as follows:
<PAGE>
<TABLE>
DAVIS SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1995
===================================================================================================
NOTE 4 - PURCHASES AND SALES OF SECURITIES - (Continued)
<CAPTION>
DAVIS DAVIS DAVIS
GROWTH GOVERNMENT DAVIS CONVERTIBLE DAVIS
OPPORTUNITY BOND FINANCIAL SECURITIES REAL ESTATE
FUND FUND FUND FUND FUND
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cost of purchases......... $ 15,732,410 $ 14,797,243 $ 28,082,572 $ 31,629,501 $ 16,942,791
Proceeds of sales......... $ 26,727,462 $ 18,483,667 $ 30,703,466 $ 28,194,202 $ 9,281,924
</TABLE>
NOTE 5 - CAPITAL STOCK
At December 31, 1995, there were 5 billion shares of capital stock
($0.01 par value per share) authorized of which 500 million shares each
are designated to the Davis Growth Opportunity Fund, Davis Government
Bond Fund, Davis Government Money Market Fund, Davis Financial Fund,
Davis Convertible Securities Fund and Davis Real Estate Fund.
Transactions in capital stock were as follows:
<TABLE>
Year Ended
December 31, 1995
-------------------------------------------------------------------------------------------
CLASS A
<CAPTION>
DAVIS
DAVIS DAVIS GOVERNMENT DAVIS
GROWTH GOVERNMENT MONEY DAVIS CONVERTIBLE DAVIS
OPPORTUNITY BOND MARKET FINANCIAL SECURITIES REAL ESTATE
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Shares sold........................... 359,034 660,268 266,441,150 396,303 233,755 266,125
Shares issued in reinvestment
of distributions.................... 105,481 179,677 11,012,683 518,751 233,400 86,954
----------- ----------- ------------- ----------- ------------ -----------
464,515 839,945 277,453,833 915,054 467,155 353,079
Shares redeemed....................... (107,883) (714,819) (160,315,534) (804,015) (260,368) (298,037)
----------- ----------- ------------- ----------- ------------ -----------
Net increase (decrease)............. 356,632 125,126 117,138,299 (111,039) (206,787) 55,042
=========== =========== ============= =========== ============ ===========
Proceeds from shares sold............. $ 5,898,293 $ 3,901,967 $ 266,441,150 $ 5,245,284 $ 4,282,025 $ 4,010,602
Proceeds from shares issued in
reinvestment of distributions....... 1,800,883 1,059,274 11,012,683 7,501,765 4,174,785 1,334,734
----------- ----------- ------------- ----------- ------------ -----------
7,699,176 4,961,241 277,453,833 12,747,049 8,456,810 5,345,336
Cost of shares redeemed............... (1,869,087) (4,226,021) (160,315,534) (10,100,288) (4,477,654) (4,466,171)
----------- ----------- ------------- ----------- ------------ -----------
Net increase (decrease)............. $ 5,830,089 $ 735,220 $ 117,138,299 $(2,646,761) $ 3,979,156 $ 879,165
=========== =========== ============= =========== ============ ===========
</TABLE>
<TABLE>
CLASS A Year ended
December 31, 1994
-----------------------------------------------------------------------------------------
<CAPTION>
DAVIS
DAVIS DAVIS GOVERNMENT DAVIS
GROWTH GOVERNMENT MONEY DAVIS CONVERTIBLE DAVIS
OPPORTUNITY BOND MARKET FINANCIAL SECURITIES REAL ESTATE
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Shares sold....................... 949,328 3,457,435 360,874,673 1,412,634 822,604 2,029,547
Shares issued in reinvestment
of distributions................ 21,276 _ 4,968,555 219,609 116,986 51,253
------------ ------------ ------------- ------------ ------------ -------------
970,604 3,457,435 365,843,228 1,632,243 939,590 2,080,800
Shares redeemed................... _ _ (165,394,545) (572,599) (431,169) (352,075)
------------ ------------ ------------- ------------ ------------ -------------
Net increase.................... 970,604 3,457,435 200,448,683 1,059,644 508,421 1,728,725
============ ============ ============= ============ ============ =============
Proceeds from shares sold......... $ 13,068,488 $ 19,987,360 $ 360,874,673 $ 16,138,462 $ 13,646,967 $ 29,948,300
Proceeds from shares issued in
reinvestment of distributions... 274,247 _ 4,968,555 2,364,506 1,880,819 765,948
------------ ------------ ------------- ------------ ------------ -------------
13,342,735 19,987,360 365,843,228 18,502,968 15,527,786 30,714,248
Cost of shares redeemed........... _ _ (165,394,545) (6,491,364) (7,122,659) (5,303,113)
------------ ------------ ------------- ------------ ------------ -------------
Net increase.................... $ 13,342,735 $ 19,987,360 $ 200,448,683 $ 12,011,604 $ 8,405,127 $ 25,411,135
============ ============ ============= ============ ============ =============
</TABLE>
<PAGE>
<TABLE>
DAVIS SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1995
==================================================================================================================================
NOTE 5 - CAPITAL STOCK - Continued
CLASS B Year ended
December 31, 1995
----------------------------------------------------------------------------------------
<CAPTION>
DAVIS
DAVIS DAVIS GOVERNMENT DAVIS
GROWTH GOVERNMENT MONEY DAVIS CONVERTIBLE DAVIS
OPPORTUNITY BOND MARKET FINANCIAL SECURITIES REAL ESTATE
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Shares sold........................... 270,466 286,256 10,318,022 126,655 25,669 24,891
Shares issued in reinvestment
of distributions................. 164,363 126,951 78,144 8,296 1,016 426
------------- ------------- ------------ ---------- ---------- --------
434,829 413,207 10,396,166 134,951 26,685 25,317
Shares redeemed....................... (1,180,563) (1,067,618) (8,446,585) (15,306) (5,867) (2,412)
------------- ------------- ------------ ---------- ---------- --------
Net increase (decrease).......... (745,734) (654,411) 1,949,581 119,645 20,818 22,905
============= ============= ============ ========== ========== ========
Proceeds from shares sold............. $ 4,609,337 $ 1,688,695 $ 10,318,022 $1,866,084 $ 477,808 $382,977
Proceeds from shares issued in
reinvestment of distributions... 2,779,819 746,462 78,144 119,292 18,368 6,693
------------- ------------- ------------ ---------- ---------- --------
7,389,156 2,435,157 10,396,166 1,985,376 496,176 389,670
Cost of shares redeemed............... (18,699,042) (6,288,525) (8,446,585) (234,200) (109,810) (36,877)
------------- ------------- ------------ ---------- ---------- --------
Net increase (decrease).......... $ (11,309,886) $ (3,853,368) $ 1,949,581 $1,751,176 $ 386,366 $352,793
============= ============= ============ ========== ========== ========
</TABLE>
<TABLE>
CLASS B Year ended
December 31, 1994
----------------------------------------------------------------------------------------
<CAPTION>
DAVIS
DAVIS DAVIS GOVERNMENT DAVIS
GROWTH GOVERNMENT MONEY DAVIS CONVERTIBLE DAVIS
OPPORTUNITY BOND MARKET FINANCIAL SECURITIES REAL ESTATE
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Shares sold........................... 1,836,358 721,331 894,895 2,553 _ 2,286
Shares issued in reinvestment
of distributions................. 137,055 361,144 _ 105 _ 19
------------- ------------- ------------- ---------- ---------- --------
1,973,413 1,082,475 894,895 2,658 _ 2,305
Shares redeemed....................... (2,688,602) (5,666,587) (147,897) _ _ _
------------- ------------- ------------- ---------- ---------- --------
Net increase (decrease).......... (715,189) (4,584,112) 746,998 2,658 _ 2,305
============= ============= ============= ========== ========== ========
Proceeds from shares sold............. $ 27,299,270 $ 4,368,235 $ 894,895 $ 28,625 $ _ $ 33,664
Proceeds from shares issued in
reinvestment of distributions.... 1,791,948 2,178,875 _ 1,141 _ 281
------------- ------------- ------------- ---------- ---------- --------
29,091,218 6,547,110 894,895 29,766 _ 33,945
Cost of shares redeemed............... (38,444,788) (33,469,612) (147,897) _ _ _
------------- ------------- ------------- ---------- ---------- --------
Net increase (decrease).......... $ (9,353,570) $ (26,922,502) $ 746,998 $ 29,766 $ _ $ 33,945
============= ============= ============= ========== ========== ========
</TABLE>
<PAGE>
<TABLE>
DAVIS SERIES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
December 31, 1995
===================================================================================================================================
NOTE 5 - CAPITAL STOCK - Continued
<CAPTION>
March 30, 1995
(commencement of operations)
through
December 31, 1995
-----------------
CLASS C - Government Money Market Fund
<S> <C>
Shares sold............................................................... 677,165
Shares issued in reinvestment
of distributions..................................................... 4,412
------------
681,577
Shares redeemed........................................................... (206,389)
------------
Net increase......................................................... 475,188
============
Proceeds from shares sold.................................................. $ 677,165
Proceeds from shares issued in
reinvestment of distributions......................................... 4,412
------------
681,577
Cost of shares redeemed.................................................... (206,389)
------------
Net increase.......................................................... $ 475,188
============
</TABLE>
<PAGE>
<TABLE>
DAVIS SERIES, INC.
FINANCIAL HIGHLIGHTS
DAVIS GROWTH OPPORTUNITY FUND
===================================================================================================================================
The following financial information represents selected data for
each share of capital stock outstanding throughout each period:
Class A ---------------------------Class B------------------------------
<CAPTION>
Year One Month
Ended ended Year ended December 31,
December 31, December 31, -----------------------------------------------------------
1995 1994 1995 1994 1993<F1> 1992<F1> 1991<F1>
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period............... $ 12.83 $ 13.70 $ 12.82 $ 14.67 $ 13.25 $ 13.73 $ 9.83
-------- -------- -------- -------- -------- -------- --------
Income (Loss) From Investment
- -----------------------------
Operations
- ----------
Net Investment
Income (Loss).......... (0.11) (0.01) (0.26) (0.12) (0.07) (0.07) (0.06)
Net Gains or Losses
on Securities
(both realized and
unrealized)............ 6.08 (0.29) 6.07 (1.11) 1.54 (0.32) 4.07
-------- -------- -------- -------- -------- -------- --------
Total From Investment
Operations........... 5.97 (0.30) 5.81 (1.23) 1.47 (0.39) 4.01
-------- -------- -------- -------- -------- -------- --------
Less Distributions
- ------------------
Dividends (from net
investment income).... _ _ _ _ (0.05) _ _
Distributions (from
capital gains) (1.55) (0.57) (1.55) (0.62) _ _ _
Distributions (from
paid-in capital)...... _ _ _ _ _ (0.09) (0.11)
-------- -------- -------- -------- -------- -------- --------
Total Distributions.... (1.55) (0.57) (1.55) (0.62) (0.05) (0.09) (0.11)
Net Asset Value, -------- -------- -------- -------- -------- -------- --------
End of Period............. $ 17.25 $ 12.83 $ 17.08 $ 12.82 $ 14.67 $ 13.25 $ 13.73
======== ======== ======== ======== ======== ======== ========
Total Return<F2> 46.65% (2.21)% 45.44% (8.45)% 11.16% (2.86)% 40.93%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)............. $22,890 $ 12,455 $ 35,326 $ 36,087 $ 51,762 $ 46,958 $ 43,419
Ratio of Expenses to
Average Net Assets...... 1.51% 1.42%<F3> 2.30% 2.15% 2.39% 2.55% 2.49%
Ratio of Net Income to
Average Net Assets...... (0.71)% (0.08)%<F3> (1.50)% (0.81)% (0.55)% (0.54)% (0.45)%
Portfolio Turnover Rate... 30.07% 37.31% 30.07% 37.31% 38.93% 39.01% 12.16%
<FN>
<F1> Per share data has been restated to give effect to a 2 for 1 stock
split to shareholders of record as of the close of business of
January 7, 1994.
<F2> Sales charges are not reflected in calculation
<F3> Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
DAVIS SERIES, INC.
FINANCIAL HIGHLIGHTS
DAVIS GOVERNMENT BOND FUND
==================================================================================================================================
The following financial information represents selected data for
each share of capital stock outstanding throughout each period:
Class A ----------------------------Class B---------------------------
<CAPTION>
Year One Month
Ended ended Year ended December 31,
December 31, December 31, --------------------------------------------------------------
1995 1994 1995 1994 1993<F1> 1992<F1> 1991<F1>
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period....... $ 5.79 $ 5.78 $ 5.79 $ 6.33 $ 6.61 $ 6.88 $ 6.64
-------- -------- -------- -------- -------- -------- --------
Income (Loss) From Investment
- -----------------------------
Operations
- ----------
Net Investment Income..... 0.39 0.02 0.34 0.31 0.36 0.37 0.43
Net Gains or Losses on
Securities (both realized
and unrealized)......... 0.27 (0.01) 0.26 (0.37) (0.12) (0.10) 0.35
-------- -------- -------- -------- -------- -------- --------
Total From Investment
Operations........... 0.66 0.01 0.60 (0.06) 0.24 0.27 0.78
-------- -------- -------- -------- -------- -------- --------
Less Distributions
- ------------------
Dividends (from net
investment income).... (0.36) _ (0.33) (0.37) (0.42) (0.27) (0.43)
Distributions (from
paid-in capital)...... (0.09) _ (0.08) (0.11) (0.10) (0.27) (0.11)
-------- -------- -------- -------- -------- -------- --------
Total Distributions... (0.45) _ (0.41) (0.48) (0.52) (0.54) (0.54)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value,
End of Period............. $ 6.00 $ 5.79 $ 5.98 $ 5.79 $ 6.33 $ 6.61 $ 6.88
======== ======== ======== ======== ======== ======== ========
Total Return<F2>............ 11.82% (0.97)% 10.62% (0.97)% 3.69% 4.14% 12.36%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)............. $ 21,485 $ 20,035 $ 15,976 $ 19,241 $ 50,080 $ 54,422 $ 62,766
Ratio of Expenses to
Average Net Assets...... 1.74% 1.64%<F3> 2.51% 2.38% 2.37% 2.51% 2.51%
Ratio of Net Income to
Average Net Assets...... 6.54% 6.22%<F3> 5.77% 5.48% 5.52% 5.83% 6.36%
Portfolio Turnover Rate... 41.04% 62.17% 41.04% 62.17% 42.82% 81.28% 28.14%
<FN>
<F1> Per share calculations other than distributions were based on
average shares outstanding during the period.
<F2> Sales charges are not reflected in calculation.
<F3> Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
DAVIS SERIES, INC.
FINANCIAL HIGHLIGHTS
DAVIS GOVERNMENT MONEY MARKET FUND
==================================================================================================================================
The following financial information for each respective fund represents
selected data for each share of capital stock outstanding throughout each
period.
----------------------CLASS A---------- -----------CLASS B------------ CLASS C
<CAPTION>
December 8, 1994 March 30, 1995
(Commencement (Commencement
Year of operations) of operations)
Year ended Ended through through
December 31, December 31, December 31, December 31,
--------------------------------------------
1995 1994 1993 1992 1991 1995 1994 1995
---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period......... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------ ------ ------
Income (Loss) From
- ------------------
Investment Operations
- ---------------------
Net Investment
Income.................... .051 .034 .020 .027 .047 .051 .033 .041
Less Distributions
- ------------------
Dividends (from net
investment income)........ (.051) (.034) (.020) (.027) (.047) (.051) (.033) (.041)
------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of
Period...................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ======
Total Return.................. 5.25% 3.48% 2.01% 2.70% 4.78% 5.25% 0.34% 4.21%
- ------------
Ratios/Supplemental Data
- -------------------------
Net Assets, End of
Period (000 omitted)...... $357,118 $239,980 $39,531 $42,410 $50,556 $2,697 $747 $475
Ratio of Expenses
to Average
Net Assets............... 0.73% 0.64% 1.15% 1.14% 1.25% 1.73% 0.64%<F1> 0.73%<F1>
Ratio of Net Income
to Average
Net Assets................ 5.13% 3.43% 1.98% 2.68% 4.72% 5.13% 3.43%<F1> 5.13%<F1>
<FN>
<F1> Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
DAVIS SERIES, INC.
FINANCIAL HIGHLIGHTS
DAVIS FINANCIAL FUND
==================================================================================================================================
The following financial information for each respective fund represents
selected data for each share of capital stock outstanding throughout each
period.
-----------------------CLASS A------------------------------- -----------CLASS B------------
<CAPTION>
May 1, 1991 December 27, 1994
(Commencement (Commencement
of operations) Year of operations)
Year Ended through Ended through
December 31, December 31, December 31, December 31,
---------------------------------------------
1995 1994 1993<F3> 1992<F3> 1991<F3> 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period........... $ 10.68 $ 11.70 $ 11.20 $ 8.76 $ 7.15 $ 10.68 $ 11.22
-------- -------- -------- ------- -------- -------- -------
Income (Loss) From
Investment Operations
---------------------
Net Investment Income......... 0.07 0.08 0.07 0.05 0.01 (0.01) 0.03
Net Gains or Losses on
Securities (both realized
and unrealized)............. 5.32 (0.61) 1.59 2.79 1.65 5.22 (0.13)
-------- -------- -------- ------- -------- -------- -------
Total From
Investment
Operations.............. 5.39 (0.53) 1.66 2.84 1.66 5.23 (0.10)
-------- -------- -------- ------- -------- -------- -------
Less Distributions
- ------------------
Dividends (from net
investment income).......... (0.07) (0.08) (0.08) (0.05) (0.02) - (0.03)
Distributions (from
capital gains).............. (1.50) (0.39) (1.08) (0.35) (0.03) (1.50) (0.39)
Distributions (from
paid-in capital)............ - (0.02) - - - - (0.02)
-------- -------- -------- ------- -------- -------- -------
Total Distributions....... (1.57) (0.49) (1.16) (0.40) (0.05) (1.50) (0.44)
-------- -------- -------- ------- -------- -------- -------
Net Asset Value, End of
Period.......................... $ 14.50 $ 10.68 $ 11.70 $ 11.20 $ 8.76 $ 14.41 $ 10.68
======== ======== ======== ======= ======== ======== =======
Total Return<F1>................ 50.51% (4.55)% 14.87% 32.67% 34.74%<F2> 49.00% (0.90)%
- ------------ <F4>
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)............... $79,874 $57,670 $50,778 $31,660 $9,221 $1,762 $28
Ratio of Expenses to
Average Net Assets.......... 1.18% 1.24% 1.32% 1.68% 2.49%<F2> 2.09% 2.04%<F4>
<F4>
Ratio of Net Income
to Average Net Assets....... 0.53% 0.67% 0.57% 0.43% 0.51%<F2> (0.38)% (0.13)%<F4>
<F4>
Portfolio Turnover Rate....... 41.89% 43.95% 70.33% 49.64% 39.75% 41.89% 43.95%
<FN>
<F1> Sales charges are not reflected in calculation.
<F2> Reflects the reimbursement of certain expenses by the Fund's investment manager.
<F3> Per share data has been restated to give effect to a 2 for 1 stock split to shareholders of record as of the close of
business on January 7, 1994.
</FN>
</TABLE>
<PAGE>
<TABLE>
DAVIS SERIES, INC.
FINANCIAL HIGHLIGHTS
DAVIS CONVERTIBLE SECURITIES FUND
===================================================================================================================================
The following financial information represents selected data for each
share of capital stock outstanding throughout the period.
----------------------CLASS A------------------------- CLASS B
<CAPTION>
February 3,1995
May 1, 1992 (Commencement
(Commencement of operations)
Year of operations) through
Ended through December 31,
December 31, December 31,1992 1995
---------------------------------- ---------------- ----
1995 1994 1993
---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $15.57 $17.45 $15.73 $14.29 $15.95
------ ------ ------ ------ ------
Income From Investment Operations
- ---------------------------------
Net Investment Income.............................. 0.67 0.67 0.67 0.40 0.54
Net Gains or Losses on Securities (both realized
and unrealized).................................. 3.42 (1.83) 2.02 1.44 2.97
------ ------ ------ ------ ------
Total From Investment Operations............... 4.09 (1.16) 2.69 1.84 3.51
------ ------ ------ ------ ------
Less Distributions
- ------------------
Dividends (from net investment income)............. (0.66) (0.67) (0.67) (0.40) (0.54)
Distributions (from capital gains)................. (0.78) (0.05) (0.30) _ (0.78)
------ ------ ------ ------ ------
Total Distributions............................ (1.44) (0.72) (0.97) (0.40) (1.32)
------ ------ ------ ------ ------
Net Asset Value, End of Period....................... $18.22 $15.57 $17.45 $15.73 $18.14
====== ====== ====== ====== ======
Total Return<F1>..................................... 26.68% (6.72)% 17.26% 19.95%<F2> 25.31%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000 omitted)........... $59,757 $47,844 $44,730 $24,323 $378
Ratio of Expenses to Average Net Assets............ 1.14% 1.20% 1.21% 1.35%<F2> 2.01%<F2>
Ratio of Net Income to Average Net Assets.......... 3.87% 4.06% 3.89% 4.94%<F2> 3.00%<F2>
Portfolio Turnover Rate............................ 53.58% 45.15% 62.17% 11.51% 53.58%
<FN>
<F1> Sales charges are not reflected in calculation.
<F2> Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
DAVIS SERIES, INC.
FINANCIAL HIGHLIGHTS
DAVIS REAL ESTATE FUND
====================================================================================================================================
The following financial information represents selected data for each
share of capital stock outstanding throughout the period.
-----------Class A----------- -----------Class B----------
<CAPTION>
January 3,1994 December 27,1994
(Commencement (Commencement
Year of operations) Year of operations)
Ended through Ended through
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................. $14.72 $14.29 $14.72 $14.73
------ ------ ------ ------
Income From Investment Operations
- ---------------------------------
Net Investment Income.......................................... 0.82 0.62 0.68 0.02
Net Gains on Securities (both realized and unrealized)......... 1.71 0.55 1.70 0.11
------ ------ ------ ------
Total From Investment Operations............................. 2.53 1.17 2.38 0.13
------ ------ ------ ------
Less Distributions
- ------------------
Dividends (from net investment income)......................... (0.81) (0.62) (0.69) (0.02)
Distributions (from capital gains)............................. _ (0.12) _ (0.12)
------ ------ ------ ------
Total Distributions.......................................... (0.81) (0.74) (0.69) (0.14)
------ ------ ------ ------
Net Asset Value, End of Period................................... $16.44 $14.72 $16.41 $14.72
====== ====== ====== ======
Total Return<F1> ................................................ 17.70% 8.25%<F2> 16.59% 8.29%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000 omitted)........................ $29,320 $25,450 $414 $34
Ratio of Expenses to Average Net Assets........................ 1.43% 1.86%<F2> 2.39% 2.64%<F2>
Ratio of Net Income to Average Net Assets...................... 5.44% 3.98%<F2> 4.48% 3.20%<F2>
Portfolio Turnover Rate........................................ 38.82% 35.80% 38.82% 35.80%
<FN>
<F1> Sales charges are not reflected in calculation.
<F2> Annualized
</FN>
</TABLE>
<PAGE>
DAVIS SERIES, INC.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
==============================================================================
To the Shareholders and Board of Directors
of Davis Series, Inc.
We have audited the accompanying statement of assets and
liabilities of Davis Series, Inc., (formerly Retirement Planning Funds of
America, Inc., comprising, respectively, the Davis Growth Opportunity
Fund, Davis Government Bond Fund, Davis Government Money Market Fund,
Davis Financial Fund, Davis Convertible Securities Fund and Davis Real
Estate Fund) including the schedules of portfolio investments as of
December 31, 1995 and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the
periods indicated thereon. These financial statements and financial
highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1995, by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Davis Series, Inc. as of December 31, 1995, the results of
operations for the year then ended, the changes in net assets for each of
the two years in the period then ended and the financial highlights for
each of the periods indicated thereon, in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 1, 1996
<PAGE>
DAVIS SERIES, INC.
124 East Marcy Street Santa Fe, New Mexico 87501
==============================================================================
Directors Officers
Jeremy B. Biggs Jeremy H. Biggs
Wesley E. Bass, Jr. Chairman
Marc P. Blum Shelby M.C. Davis
Shelby M.C. Davis President
Eugene M. Feinblatt Carl R. Luff
Jerry D. Geist Vice President, Treasurer
D. James Guzy & Assistant Secretary
G. Bernard Hamilton Raymond O. Padilla
LeRoy E. Hoffberger Vice President, Secretary
Laurence W. Levine & Assistant Treasurer
Martin H. Proyect Carolyn H. Spolidoro
Christian R. Sonne Vice President
Edwin R. Werner Christopher C. Davis
Vice President
Andrew A. Davis
Vice President
Eileen R. Street
Assistant Treasurer
& Assistant Secretary
Investment Adviser & Distributor
Davis Selected Advisers, L.P.
124 East Marcy Street
Santa Fe, New Mexico 87501
Transfer Agent & Custodian
State Street Bank and Trust Company
c/o The Davis Funds
P.O. Box 8406
Boston, MA 02266-8406
Counsel
D'Ancona & Pflaum
30 North LaSalle Street
Chicago, Illinois 60602
Auditors
Tait, Weller & Baker
Two Penn Center, Suite 700
Philadelphia, Pennsylvania 19102-1707
==============================================================================
For more information about Davis Series, Inc. including management fee,
charges and expenses, see the current prospectus which must precede or
accompany this report.
==============================================================================
9602-15 DS80
