<PAGE>
DAVIS NEW YORK
VENTURE FUND
ANNUAL REPORT
JULY 31, 1998
[PICTURE]
[DAVIS FUND LOGO]
<PAGE>
DAVIS NEW YORK VENTURE FUND
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
Dear Shareholder:
MARKET OVERVIEW
Earnings are the lifeblood of the market and the reason why, over generations,
stocks tend to do better than bonds.(1) This concept can be clearly illustrated
if you think in terms of your son's or daughter's earning power. Let's say you
have this choice: You could receive 1% of your child's first-year salary after
college, fixed at that level every year for the next 30 years. Or you could
receive 1% of whatever your child's salary turns out to be in each of the next
30 years.
In the first case, your dollar return would be the same for 30 years, which is
equivalent to the fixed-coupon return from a bond. In the second case, your
dollar return would vary with earning power, which is equivalent to the
variable return of a stock. So the level of salary or earnings going forward is
critical. If you believe your son's or daughter's income stream will expand
over 30 years, you would be better off with the second choice, just as you
would be better off investing in the stock of a company whose earnings grow
over the next three decades than in a fixed-return investment like a bond.
If you are going to invest successfully in stocks, you have to think in terms
of the future. You can't just research the past and expect that will help you
too much in understanding the future. Life is always changing, and companies
are always changing, which is why we are continually researching projected
long-term earnings trends.
Today, we are at a point where there are large crosscurrents in the earnings
picture, at least for the near term. Corporate earnings are being hurt by the
General Motors strike, the deepening Asian crisis, the fiercely competitive
business environment, a lack of pricing power, and currency translation
problems related to the strengthening U.S. dollar.
In addition to these negatives, we believe earnings sometimes are being
overstated by the use of aggressive accounting practices. These include taking
up-front write-offs for restructuring charges that may mask ongoing business
problems, as well as the extensive use of stock options, which tends to
understate the real compensation costs of a business.
Given this uncertain earnings outlook, we anticipate a choppy market
environment, where individual stocks will understandably react to strength or
weakness in earnings reports. Furthermore, it seems that more earnings reports
are coming in below earlier estimates, indicating a loss of momentum in
earnings trends. As a result, we expect there will be a loss of momentum in the
stock market.
The best case scenario, in our view, would be sort of a stealth correction or a
rotational adjustment in which prices of individual stocks or industry groups
are corrected based on disappointing earnings results. But there is always the
possibility that we will have a broader correction because valuation levels are
historically high and priced for a good economic outlook in terms of inflation,
interest rates and earnings.
Such an environment, of course, creates not only risk but opportunity if the
market overreacts and punishes stocks too harshly for short-term earnings
disappointments. As long-term investors, we don't use the latest quarterly
earnings as the only benchmark for valuing a stock. Instead, we try to develop
a normalized growth trend for earnings power that disregards short-term peaks
and valleys. Our objective is to find companies with growing normalized
earnings that are selling at reasonable prices.
<PAGE>
DAVIS NEW YORK VENTURE FUND
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
We've said before that investors should lower their expectations and that the
market is overdue for a correction. But we don't think we're at the end of the
game. The best approach is to take advantage of volatility through dollar cost
averaging(2), rather than plunging in and out of the market, and to stay aboard
for the long voyage because the earning power of companies--like the earning
power of college graduates--tends to grow over decades.
Sincerely,
/s/ Shelby M.C. Davis
Shelby M.C. Davis
Chief Investment Officer
August 31, 1998
2
<PAGE>
DAVIS NEW YORK VENTURE FUND
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS
PERFORMANCE OVERVIEW
o For the fiscal year ended July 31, 1998, the Davis New York Venture Fund's
Class A shares returned 11.16% on net asset value(3) compared to a return of
19.28% for the Standard & Poor's 500 Index.(4)
o As long-term investors, our objective to build wealth through multiyear
compounding of growth. Since the fund was founded on February 17, 1969, its
Class A shares have outperformed the S&P 500 Index in 22 out of 29 years,
generating an average annual total return since inception of 15.07%.
o According to The Value Line Mutual Fund Survey, "the fund's performance is
almost unparalleled over the long haul. Its longer-term returns rank at the
top of the Growth category, without exposing shareholders to excessive
levels of volatility. Investors seeking growth through exposure to large
companies have an excellent choice here."(5)
o Furthermore, the Davis New York Venture Fund ranked as the seventh
best-performing stock fund of the bull market in Money magazine's "Midyear
Investment Report '98." According to Money, the fund produced an annualized
gain of 21.8% since August 1, 1982, and the value of an $1,000 investment
made on that date grew to $23,085.(6)
o In addition, as of July 31, 1998, the fund's Class A shares held
Morningstar's highest overall rating of ***** (five stars) for risk-adjusted
performance out of 2,572 domestic equity funds.(7)
FEINBERG NAMED AS CO-PORTFOLIO MANAGER OF DAVIS NEW YORK VENTURE FUND
Kenneth Charles Feinberg was named Co-Portfolio Manager of Davis New York
Venture Fund in May 1998, joining Christopher C. Davis who has been the fund's
sole manager since February 1997. "I am delighted that my partner Ken Feinberg
has joined me as portfolio manager for Davis New York Venture Fund," says Chris
Davis. "Over the last five years, shareholders have already benefited from
Ken's contribution of such investment ideas as McDonald's, Allstate and
American Express(8). In an industry that often seems dominated by short-term
traders and speculators, Ken's patient and thorough analysis stands out."
AN INTERVIEW WITH CHRISTOPHER C. DAVIS AND KENNETH CHARLES FEINBERG, PORTFOLIO
MANAGERS
Q. How would you characterize the fund's performance so far this year?
A. The fund's return for the six-month period was good in absolute
terms--particularly after two exceptional years--but it was disappointing
relative to the even stronger performance of the S&P 500. Although we do not
focus on short-term performance, it's worth reflecting on both the exceptional
strengths and the weaknesses contained within the fund's results.
3
<PAGE>
DAVIS NEW YORK VENTURE FUND
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS-CONTINUED
AN INTERVIEW WITH CHRISTOPHER C. DAVIS AND KENNETH CHARLES FEINBERG, PORTFOLIO
MANAGERS-CONTINUED
As long-term shareholders, we employ a fundamental investment approach that
focuses on the recognition that stocks are not just pieces of paper, but
represent ownership interests in real businesses. As a result, our investment
process has always boiled down to two questions: What kind of businesses do we
want to own, and how much should we pay for them?
We like to buy high-quality companies with these characteristics: exceptional
management, a high return on capital, a lean expense structure, a dominant
share in a growing market, products or services that do not become obsolete, a
strong balance sheet, and successful international operations.
But we also adhere closely to a price discipline that we believe helps mitigate
risk. This discipline may prevent us from buying many high-quality companies
when we think their valuations are too high. In the first half of 1998, this
discipline hurt our relative performance as many companies that fit our quality
and growth criteria but fell well outside our price discipline surged to even
higher levels of valuation. This was particularly evident in the pharmaceutical
and consumer sectors.
At the other extreme, many companies that look cheap but do not measure up to
our quality criteria performed strongly in the first half. Because companies
such as Apple Computer and Kmart do not have the long-term competitive
advantages we look for, shareholders of Davis New York Venture Fund did not
benefit from their strong performance either.
Although we are disappointed with these short-term results, we will stick to
our principles of focusing on both quality and price in our investment process.
We think this is a sound method of building and preserving wealth over time,
and we are comfortable with the long-term results.
My grandfather once said, "If you don't admit your mistakes, you don't learn
from them." With this in mind, we must note that the fund's holdings in the
energy sector performed poorly during this period. At first, this poor
performance seemed due to the short-term impact of a warm winter and inventory
reductions in Asia. But it has become obvious that there has been a more
serious deterioration in industry fundamentals. In particular, the dramatic
slowdown of the Asian economies has created a meaningful imbalance between
supply and demand. This imbalance doesn't seem likely to improve for several
years. Although we have added slightly to our favorite holdings, particularly
Schlumberger, we have sold our holdings in some companies where we feel the
recovery has stretched out much further, and our net holdings in this area are
now significantly lower.(8)
Q. What other important developments affected portfolio performance in the
first half?
A. One unprecedented occurrence in the first half was the fact that five of our
largest holdings were involved in major mergers. Two of these companies
actually merged with one another, namely Citicorp and Travelers. Although there
was short-term elation when the merger was announced, the stocks subsequently
fell some 15% to 20% from their highs. Skeptics point out differences in
cultures within the two organizations. But we think both companies have
exceptional management and strong shareholder cultures, and we hope this merger
will
4
<PAGE>
DAVIS NEW YORK VENTURE FUND
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS-CONTINUED
AN INTERVIEW WITH CHRISTOPHER C. DAVIS AND KENNETH CHARLES FEINBERG, PORTFOLIO
MANAGERS-CONTINUED
prove out in time. Further, we are reminded that the "culture clash" argument
was levied against two of our other holdings that merged last year--namely
Morgan Stanley and Dean Witter--and yet the resulting company has performed
exceptionally well.
Two other bank mergers in our top 10 holdings included the Wells Fargo merger
with Norwest and the BankAmerica merger with NationsBank. In both cases, we
feel that strong, well-managed banking franchises are being brought
together--resulting in greater geographic diversity and perhaps more
cross-selling opportunities. These stocks have been weak since the merger
announcements as speculators who were looking for the short-term gratification
of a big takeover premium sold their shares. At today's prices, we think these
first-rate financial companies look like sound businesses selling at reasonable
prices.
Finally, one of our largest holdings, General Reinsurance, recently announced
that it will be acquired by Berkshire Hathaway, the Omaha-based company run by
legendary investor Warren Buffett. In this case, although we are somewhat
disappointed that the price was not higher, we recognize the strategic fit and
we are proud to be part of this exceptional organization.
In summary, the decent but disappointing results of this first half reflect
both pockets of exceptional strengths and weaknesses within the portfolio. In
the longer run, we remain confident that our strategy of buying first-rate
companies with a strict price discipline should continue to serve our
shareholders well.
- --------------
This Annual Report is furnished to you by Davis Distributors, LLC, which acts
as the distributor for the Davis New York Venture Fund. This Annual Report is
authorized for distribution only when accompanied or preceded by a current
prospectus of the Davis New York Venture Fund which contains more information
about fees and expenses. Please read the prospectus carefully before investing
or sending money.
5
<PAGE>
DAVIS NEW YORK VENTURE FUND
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS-CONTINUED
(1) Historically, common stocks have provided investors higher long-term
returns than bonds. Past performance is not a guarantee of future results.
(2) Neither dollar cost averaging, nor any other mechanical system can
guarantee a profit. Such a plan does not protect against loss in declining
markets.
(3) Average annual total return assumes reinvestment of dividends and capital
gain distributions. Past performance is not a guarantee of future results.
Investment return and principal value will vary so that, when redeemed, an
investor's shares may be worth more or less than when purchased.
* (Without a 4.75% sales charge taken into consideration for the period ended
July 31, 1998)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
FUND NAME 1 YEAR 5 YEAR 10 YEAR INCEPTION
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York Venture A 11.16% 21.73% 20.18% 15.07% - 02/17/69
- --------------------------------------------------------------------------------------------------
</TABLE>
** (WITH a 4.75% Sales Charge taken into consideration for the period ended
July 31, 1998)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
FUND NAME 1 YEAR 5 YEAR 10 YEAR INCEPTION
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York Venture A 5.88% 20.55% 19.59% 14.88% - 02/17/69
- --------------------------------------------------------------------------------------------------
</TABLE>
(4) The S&P 500 Index is an unmanaged index of 500 selected common stocks, most
of which are listed on the New York Stock Exchange. The index is adjusted for
dividends, weighted towards stocks with large market capitalizations and
represents approximately two-thirds of the total market value of all domestic
common stocks. Investments cannot be made directly in the S&P 500 Index.
(5) Source: The Value Line Mutual Fund Survey, July 21, 1998
(6) Source: Money Magazine, August 1998, based on Morningstar data.
(7) Morningstar proprietary ratings reflect historical risk-adjusted
performance as of July 31, 1998. The ratings are subject to change every month,
Morningstar ratings are calculated from a fund's 3, 5 and 10 year average
annual returns (based on available track records) in excess of 90-day Treasury
bill (T-bill) returns, with appropriate fee adjustments and a risk factor that
reflects fund performance below 90-day T-bill returns. Ten percent of the funds
in an investment category receive five stars, the next 22.5% receive four
stars, the next 35% receive three stars, the nest 22.5% receive two stars, and
the next 10% receive one star. The Class A shares of the Davis New York Venture
Fund received five stars (among 709 funds) for the 10-year period, four stars
(among 1,494 funds) for the five-year period, and four stars (among 2,572
funds) for the three-year period. Star ratings for the funds other classes of
shares may vary and are available only for those classes with at least three
years of performance history.
(8) Portfolio holdings are subject to change.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
6
<PAGE>
DAVIS NEW YORK VENTURE FUND
COMPARISON OF DAVIS NEW YORK VENTURE FUND, INC., CLASS A SHARES AND STANDARD
AND POOR'S 500 STOCK INDEX
===============================================================================
Average Annual Total Return For the Periods ended July 31, 1998.
<TABLE>
<CAPTION>
----------------------------------------------------------------
CLASS A SHARES
(This calculation includes an initial sales charge of 4 3/4%).
<S> <C>
One Year ........................................ 5.88%
Five Years........................................ 20.55%
Ten Years......................................... 19.59%
----------------------------------------------------------------
</TABLE>
$10,000 INVESTED OVER TEN YEARS. Let's say you invested $10,000 in Davis New
York Venture Fund, Class A Shares on July 31, 1988 and paid a 4 3/4% sales
charge. As the chart shows, by July 31, 1998 the value of your investment would
have grown to $59,928 - a 499.28% increase on your initial investment. For
comparison, look at how the S&P 500 did over the same period. With dividends
reinvested, the same $10,000 investment would have grown to $54,287 - a 442.87%
increase.
S&P 500 DNYVF-A
------- -------
Jul-88 10,000.00 9,525.00
Jul-89 13,180.00 12,710.01
Jul-90 14,017.59 13,741.80
Jul-91 15,811.14 15,705.17
Jul-92 17,828.64 18,638.48
Jul-93 19,374.21 22,421.53
Jul-94 20,379.73 23,745.89
Jul-95 25,681.51 30,206.88
Jul-96 29,921.53 34,157.34
Jul-97 45,504.66 53,909.67
Jul-98 54,287.06 59,928.02
Standard & Poor's Stock Index is an unmanaged index and 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 New York Venture 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 in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost
when redeemed.
7
<PAGE>
DAVIS NEW YORK VENTURE FUND
COMPARISON OF DAVIS NEW YORK VENTURE FUND, INC., CLASS B SHARES AND STANDARD
AND POOR'S 500 STOCK INDEX
===============================================================================
Average Annual Total Return For the Periods ended July 31, 1998.
<TABLE>
<CAPTION>
----------------------------------------------------------------
CLASS B SHARES
(This calculation includes any applicable contingent
deferred sales charge.)
<S> <C>
One Year........................................... 6.22%
Life of Class (December 1, 1994 through
July 31, 1998) .................................... 28.93%
----------------------------------------------------------------
</TABLE>
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis New York
Venture Fund, Class B Shares on December 1, 1994 (inception of class). As the
chart shows, by July 31, 1998 the value of your investment (less applicable
contingent deferred sales charges) would have grown to $25,382 - a 153.82%
increase on your initial investment. For comparison, the S&P 500 is also
presented on the chart below.
S&P 500 DNYVF-B
------- -------
Dec-94 10,000.00 10,000.00
Jul-95 12,610.00 13,262.87
Jul-96 14,691.91 14,833.80
Jul-97 22,343.46 23,210.48
Jul-98 26,655.75 25,381.82
Standard & Poor's Stock Index is an unmanaged index and 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 New York Venture 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 in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost
when redeemed.
8
<PAGE>
DAVIS NEW YORK VENTURE FUND
COMPARISON OF DAVIS NEW YORK VENTURE FUND, INC., CLASS C SHARES AND STANDARD
AND POOR'S 500 STOCK INDEX
===============================================================================
Average Annual Total Return For the Periods ended July 31, 1998.
<TABLE>
<CAPTION>
----------------------------------------------------------------
CLASS C SHARES
(There is no contingent deferred sales charge applicable to this
calculation.)
<S> <C>
One Year............................................. 9.27%
Life of Class (December 20, 1994 through
July 31, 1998) ...................................... 28.91%
----------------------------------------------------------------
</TABLE>
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis New York
Venture Fund, Class C Shares on December 20, 1994 (inception of class). As the
chart shows, by July 31, 1998 the value of your investment would have grown to
$25,034 - a 150.34% increase on your initial investment. For comparison, the
S&P 500 is also presented on the chart below.
S&P 500 DNYVF-C
------- -------
Dec-94 10,000.00 10,000.00
Jul-95 12,457.00 12,965.94
Jul-96 14,513.65 14,497.33
Jul-97 22,072.36 22,701.30
Jul-98 26,332.33 25,033.85
Standard & Poor's Stock Index is an unmanaged index and 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 New York Venture 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 in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost
when redeemed.
9
<PAGE>
DAVIS NEW YORK VENTURE FUND
COMPARISON OF DAVIS NEW YORK VENTURE FUND, INC., CLASS Y SHARES AND STANDARD
AND POOR'S 500 STOCK INDEX
===============================================================================
Average Annual Total Return For the Periods ended July 31, 1998.
<TABLE>
<CAPTION>
----------------------------------------------------------------
CLASS Y SHARES
(There is no sales charge applicable to this calculation.)
<S> <C>
One Year............................................. 11.48%
Life of Class (October 2, 1996 through
July 31, 1998) ...................................... 29.91%
----------------------------------------------------------------
</TABLE>
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis New York
Venture Fund, Class Y Shares on October 2, 1996 (inception of class). As the
chart shows, by July 31, 1998 the value of your investment would have grown to
$16,132 - a 61.32% increase on your initial investment. For comparison, the S&P
500 is also presented on the chart below. With dividends reinvested, the same
$10,000 investment would have grown to $16,827 - a 68.27% increase.
S&P 500 DNYVF-Y
------- -------
Oct-96 10,000.00 10,000.00
Jul-97 14,105.00 14,339.62
Jul-98 16,827.27 16,131.68
Standard & Poor's Stock Index is an unmanaged index and 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 New York Venture 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 in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost
when redeemed.
10
<PAGE>
DAVIS NEW YORK VENTURE FUND
PORTFOLIO HOLDINGS AS OF JULY 31, 1998
===============================================================================
PORTFOLIO MAKEUP (% OF FUND NET ASSETS) SECTOR WEIGHTINGS (% OF PORTFOLIO)
- --------------------------------------- ----------------------------------
Cash % Cash Consumer Other
Equivalents Products 7.7%
7.6% 4.7%
Banking
Common Stocks Insurance 17.6%
91.6% 14.9%
Pharmaceuticals
Preferred Electronics 5.2%
Stocks 5.0%
0.8% Technology
Real 12.9%
Estate
3.9% Food &
Restaurant
Diversifed 4.8%
Financial
Services Energy
12.5% 6.9%
Building
Materials
3.9%
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % OF FUND
STOCK SECTOR NET ASSETS
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Re Corp. Property/Casualty Insurance 4.72%
American Express Co. Diversified Financial Services 4.65
Wells Fargo & Co. Banks and Saving & Loans 4.48
McDonald's Corp. Food & Restaurant 4.10
Citicorp Banks and Saving & Loans 3.80
International Business Machines Corp. Technology 3.63
Hewlett-Packard Co. Technology 3.32
BankAmerica Corp. Banks and Saving & Loans 3.24
Texas Instruments Inc. Electronics 2.72
Chubb Corp. Property/Casualty Insurance 2.47
</TABLE>
11
<PAGE>
DAVIS NEW YORK VENTURE FUND
PORTFOLIO ACTIVITY - AUGUST 1, 1997 THROUGH JULY 31, 1998
===============================================================================
NEW POSITIONS ADDED (8/1/97-7/31/98)
(Highlighted positions are those greater than 0.99% of 7/31/98 total net
assets.)
<TABLE>
<CAPTION>
% OF 7/31/98
DATE OF 1ST FUND
SECURITY SECTOR PURCHASE NET ASSETS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Applied Materials, Inc. Electronics 12/3/97 1.38%
Barrett Resources, Inc. Energy 6/25/98 0.07%
CenterPoint Properties Corp Real Estate 6/15/98 0.06%
Corn Products International, Inc. Agriculture 1/7/98 -
Devon Energy Corp. Energy 6/30/98 0.41%
Dover Corp Machinery 6/12/98 0.63%
FDX Corp Transportation 6/4/98 0.21%
General Growth Properties Real Estate 8/4/97 0.63%
General Growth Properties, 7.25%, Conv. Pfd. Real Estate 6/5/98 0.43%
Hasbro, Inc. Toys 3/25/98 0.52%
Hewlett-Packard, Zero Cpn., Technology 10/8/97 -
10/14/17, Ser. 144A
Household International, Inc. Banks and Savings & Loans 4/27/98 0.83%
J. Ray McDermott, S.A. Energy 12/3/97 0.07%
K N Energy, Inc. Energy 3/4/98 0.15%
Mattel, Inc. Toys 6/24/98 0.10%
McDermott International, Inc. Energy 12/3/97 -
Nestle S.A. (Switzerland) Consumer Products 9/23/97 0.19%
Norwest Corp Banks and Savings & Loans 6/17/98 0.43%
Pioneer Natural Res Energy 11/21/97 -
Qwest Communications International, Inc. Telecommunications 9/17/97 -
ReliaStar Financial Corp Life Insurance 6/12/98 0.11%
Rouse Co., Ser. B Conv. Pfd Real Estate 9/12/97 0.06%
Salomon Brothers Financial Services 9/24/97 -
SunTrust Banks, Inc. Banks and Savings & Loans 7/20/98 0.44%
Texas Instruments Inc. Electronics 10/14/97 2.72%
Tom Brown, Inc. Energy 6/25/98 0.04%
Travelers Group Inc. Diversified Financial Services 9/24/97 2.24%
Union Pacific Cap Trust, 6.25%, Transportation 3/27/98 0.05%
Ser. 144A Conv. Pfd
Vulcan Materials Company Building Materials 7/9/98 0.33%
Washington Mutual Inc. Banks and Savings & Loans 4/23/98 -
</TABLE>
POSITIONS CLOSED (8/1/97-7/31/98) (Gains and losses greater than $3 million are
highlighted.)
<TABLE>
<CAPTION>
DATE OF
STOCK SECTOR FINAL SALE GAIN/(LOSS)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ALLTEL Corp. Telecommunications 7/14/98 $10,038,234
Archer-Daniels-Midland Co. Agriculture 7/27/98 241,023
Corn Products International, Inc. Agriculture 7/30/98 228,224
EVI Weatherford, Inc. Energy 7/8/98 23,579,355
Fort James Corp. Paper Products 8/14/97 6,176,184
Hewlett-Packard, Zero Cpn., 10/14/17, 144A Technology 10/29/97 -
</TABLE>
12
<PAGE>
DAVIS NEW YORK VENTURE FUND
PORTFOLIO ACTIVITY - AUGUST 1, 1997 THROUGH JULY 31, 1998 - CONTINUED
===============================================================================
POSITIONS CLOSED (8/1/97-7/31/98) - CONTINUED (Gains and losses greater than $3
million are highlighted.)
<TABLE>
<CAPTION>
DATE OF
STOCK SECTOR FINAL SALE GAIN/(LOSS)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kimberly-Clark Corp Paper Products 8/15/97 4,053,459
Komag Inc. Technology 10/15/97 (3,858,538)
McDermott International, Inc. Energy 7/28/98 (2,085,501)
Nabors Industries, Inc. Energy 6/12/98 (2,454,750)
Nike, Inc. Consumer Products 7/9/98 (22,096,159)
Pioneer Natural Res Energy 6/30/98 (10,301,273)
Qwest Communications International, Inc. Telecommunications 7/7/98 19,522,170
Saul Centers, Inc. Real Estate 12/19/97 (686,951)
Simon DeBartolo Group, Inc. Real Estate 1/7/98 69,959
Sun Microsystems, Inc. Technology 10/17/97 3,862,445
Tosco Corporation Energy 1/15/98 2,944,456
The Walt Disney Company Entertainment 8/14/97 8,267,494
Union Pacific Corp Transportation 7/24/98 (19,281,098)
Washington Mutual Inc. Banks and Savings & Loans 5/4/98 (317,913)
</TABLE>
13
<PAGE>
DAVIS NEW YORK VENTURE FUND - CLASS A SHARES
ILLUSTRATION OF THE GROWTH OF AN ASSUMED INVESTMENT OF $10,000
===============================================================================
ILLUSTRATION OF THE GROWTH OF AN ASSUMED INVESTMENT
WITH DIVIDENDS REINVESTED AND CAPITAL GAIN DISTRIBUTIONS ACCEPTED IN ADDITIONAL
SHARES
The chart below reflects an assumed investment of $10,000 covering the period
from February 17, 1969 to July 31, 1998, the life of the Company. The period
was one in which common stock prices fluctuated and was characterized by
periods of substantial market advances as well as periods of substantial market
declines. The results should not be considered as a representation of the
dividend income or capital gain or loss which may be realized from an
investment made in the Company today.
<TABLE>
<CAPTION>
Value of Value of Value of Cost of Cost of Shares Purchased Through
Initial Shares Shares Shares Distributions - $193,812 Cost of Original Investment
---------- --------- --------- --------- ---------------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1969 $9,574.11 $0.00 $0.00 $0.00 $0.00 $10,000.00
1970 $7,560.98 $0.00 $96.99 $0.00 $131.58 $10,000.00
1971 $10,206.38 $113.29 $130.93 $76.15 $131.58 $10,000.00
1972 $12,110.70 $187.61 $155.36 $143.51 $131.58 $10,000.00
1973 $10,525.33 $192.52 $364.22 $177.41 $402.76 $10,000.00
1974 $7,945.59 $247.26 $274.95 $306.32 $402.76 $10,000.00
1975 $8,371.48 $572.10 $324.30 $537.17 $402.76 $10,000.00
1976 $10,225.14 $1,007.97 $353.84 $857.06 $402.76 $10,000.00
1977 $11,106.94 $1,331.25 $384.35 $1,070.51 $402.76 $10,000.00
1978 $13,742.97 $1,985.37 $771.47 $1,331.46 $631.09 $10,000.00
1979 $14,549.72 $2,544.00 $1,390.28 $1,749.83 $1,173.85 $10,000.00
1980 $17,484.06 $3,674.55 $4,504.18 $2,220.05 $3,333.50 $10,000.00
1981 $17,767.36 $4,759.89 $9,242.87 $3,171.12 $7,660.36 $10,000.00
1982 $11,069.42 $4,060.53 $12,287.68 $4,381.36 $15,136.73 $10,000.00
1983 $17,861.17 $7,918.92 $22,564.15 $5,341.65 $16,862.76 $10,000.00
1984 $13,320.83 $6,870.98 $24,507.57 $6,362.33 $25,223.04 $10,000.00
1985 $16,341.47 $9,740.36 $35,525.07 $7,505.95 $29,646.99 $10,000.00
1986 $20,168.86 $13,630.10 $50,784.18 $8,856.01 $34,759.25 $10,000.00
1987 $20,412.76 $14,756.17 $67,395.88 $9,793.46 $48,028.73 $10,000.00
1988 $15,140.72 $13,720.06 $70,307.97 $12,274.51 $69,336.58 $10,000.00
1989 $18,236.40 $20,147.70 $93,944.91 $15,104.62 $76,277.40 $10,000.00
1990 $17,617.26 $24,832.66 $100,621.51 $20,266.71 $85,843.97 $10,000.00
1991 $18,480.30 $29,338.64 $115,693.88 $23,117.87 $94,103.41 $10,000.00
1992 $20,075.05 $35,872.34 $138,105.50 $26,753.67 $104,935.15 $10,000.00
1993 $22,682.93 $43,950.45 $166,806.37 $29,949.76 $114,584.13 $10,000.00
1994 $22,589.12 $46,958.73 $177,680.42 $33,051.02 $125,826.18 $10,000.00
1995 $27,317.08 $60,054.77 $227,122.37 $35,524.58 $135,102.02 $10,000.00
1996 $28,592.88 $66,292.19 $260,842.92 $38,777.04 $157,001.91 $10,000.00
1997 $43,063.90 $105,131.93 $413,416.38 $42,993.52 $173,399.35 $10,000.00
1998 $45,695.00 $118,212.00 $462,430.00 $48,650.02 $193,811.95 $10,000.00
</TABLE>
No adjustment has been made for any income taxes payable by shareholders on
capital gain distributions and dividends invested in shares. This illustration
reflects no sales charge.
14
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS
July 31, 1998
<TABLE>
<CAPTION>
===============================================================================
VALUE
SHARES SECURITY (NOTE 1)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - (91.54%)
AEROSPACE - (1.17%)
3,533,000 Boeing Co................................ $ 137,124,562
-----------------
BANKS AND SAVINGS & LOANS - (16.20%)
1,864,125 Banc One Corp............................ 96,351,961
4,223,400 BankAmerica Corp......................... 379,050,150
2,616,171 Citicorp................................. 444,749,070
30,000 First Union Corp......................... 1,807,500
474,400 Golden West Financial Corp. ............. 43,822,700
1,950,000 Household International, Inc............. 97,012,500
21,493 NationsBank Corp. ....................... 1,714,067
1,400,000 Norwest Corp............................. 50,312,500
1,035,100 State Street Corp........................ 71,745,369
700,000 SunTrust Banks, Inc...................... 51,100,000
582,000 TCF Financial Corporation................ 16,805,250
2,561,100 U.S. Bancorp............................. 117,810,600
1,475,100 Wells Fargo & Co......................... 524,951,213
-----------------
1,897,232,880
-----------------
BUILDING MATERIALS - (3.60%)
3,571,300 Martin Marietta Material, Inc............ 176,779,350
7,225,400 Masco Corporation........................ 206,375,488
331,800 Vulcan Materials Company................. 38,157,000
-----------------
421,311,838
-----------------
CHEMICALS - (0.00%)
6,000 Dow Chemical Co.......................... 544,500
-----------------
COMMERCIAL SERVICES - (0.00%)
5,000 Nielsen Media Research................... 20,625
-----------------
CONSUMER PRODUCTS - (4.38%)
80,200 Coca-Cola Company........................ 6,471,137
30,000 Fortune Brands, Inc...................... 1,108,125
30,000 Gallaher Group PLC - ADR................. 768,750
15,640 Nestle S.A. (Switzerland) ADR (144A) (b). 1,624,374
10,800 Nestle S.A. (Switzerland)................ 22,433,277
2,002,600 Nestle S.A. (Switzerland)
(Sponsored ADR for Reg. Shrs.)......... 207,990,437
6,218,800 Philip Morris Cos., Inc.................. 272,461,175
-----------------
512,857,275
-----------------
DIVERSIFIED - (0.06%)
80,240 General Electric Co...................... 7,166,435
-----------------
DIVERSIFIED FINANCIAL SERVICES - (7.79%)
4,937,000 American Express Co...................... 544,921,375
15
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1998
===============================================================================
VALUE
SHARES SECURITY (NOTE 1)
- -------------------------------------------------------------------------------
COMMON STOCK - CONTINUED
DIVERSIFIED FINANCIAL SERVICES - CONTINUED
2,205,600 Freddie Mac ............................. $ 104,214,600
3,917,681 Travelers Group Inc...................... 262,484,627
-----------------
911,620,602
-----------------
ELECTRONICS - (4.63%)
4,823,600 Applied Materials, Inc.*................ 161,439,862
2,213,474 Molex Incorporated....................... 62,945,667
5,363,000 Texas Instruments Inc.................... 318,092,938
-----------------
542,478,467
-----------------
ENERGY - (6.34%)
13,200 Amerada Hess Corp. ...................... 669,075
19,200 Amoco Corp. ............................. 801,600
32,200 Atlantic Richfield Co. .................. 2,181,550
238,600 Barrett Resources Corp.*................. 7,784,325
537,141 British Petroleum Company PLC - ADR...... 43,105,565
2,655,000 Burlington Resources, Inc................ 96,243,750
52,200 Chevron Corp............................. 4,313,025
1,392,300 Cooper Cameron Corp.*.................... 48,817,519
1,500,000 Devon Energy Corp........................ 48,375,000
12,000 Duke Energy Corp......................... 685,500
160,800 Exxon Corp............................... 11,276,100
3,926,700 Halliburton Co........................... 142,588,294
276,500 J. Ray McDermott, S.A.*.................. 7,811,125
350,000 K N Energy, Inc.......................... 17,303,125
16,000 Mobil Corp............................... 1,116,000
1,621,870 Noble Affiliates, Inc.................... 51,697,106
3,560,200 Schlumberger Ltd......................... 215,614,613
8,000 Sempra Energy*........................... 201,500
1,382,600 Smith International Inc.*................ 36,120,425
16,000 Sonat, Inc............................... 468,000
293,500 Tom Brown, Inc........................... 4,897,781
-----------------
742,070,978
-----------------
FOOD & RESTAURANT - (4.43%)
7,185,400 McDonald's Corp.......................... 480,074,538
1,805,000 Tyson Foods, Inc......................... 39,033,125
-----------------
519,107,663
-----------------
INTERNATIONAL CLOSED-END INVESTMENT COMPANY - (0.25%)
4,584,900 Morgan Stanley Asia Pacific Fund Inc..... 29,801,850
-----------------
16
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1998
===============================================================================
VALUE
SHARES SECURITY (NOTE 1)
- -------------------------------------------------------------------------------
COMMON STOCK - CONTINUED
INVESTMENT FIRMS - (3.65%)
1,385,000 Donaldson, Lufkin & Jenrette, Inc........ $ 73,058,750
531,300 J.P. Morgan & Co., Inc................... 66,943,800
3,294,190 Morgan Stanley, Dean Witter &
Discover Co............................ 286,800,417
-----------------
426,802,967
-----------------
LIFE INSURANCE - (1.52%)
247,800 ReliaStar Financial Corp................. 12,297,075
2,686,475 SunAmerica, Inc.......................... 165,050,308
-----------------
177,347,383
-----------------
MACHINERY - (0.63%)
2,524,600 Dover Corp............................... 73,371,187
-----------------
MANUFACTURING - (0.01%)
30,000 Maytag Corp.............................. 1,320,000
-----------------
MARKETING - (0.00%)
1,666 ACNielsen Corp.*......................... 43,420
-----------------
PAPER PRODUCTS - (0.01%)
12,000 International Paper Co................... 535,500
16,300 Union Camp Corp.......................... 691,731
-----------------
1,227,231
-----------------
PHARMACEUTICAL AND HEALTH CARE - (4.80%)
1,434,000 American Home Products Corp. ............ 73,851,000
335,000 Bristol-Myers Squibb Co.................. 38,169,062
391,200 Eli Lilly & Co........................... 26,308,200
5,000 IMS Health, Inc.......................... 314,062
364,900 Johnson & Johnson........................ 28,188,525
164,500 Merck & Co., Inc......................... 20,284,906
820,300 Novartis AG - ADR........................ 69,180,903
1,203,200 Pfizer, Inc.............................. 132,352,000
3,017,600 SmithKline Beecham PLC - ADR............. 172,757,600
-----------------
561,406,258
-----------------
PROPERTY/CASUALTY INSURANCE - (12.21%)
2,360,716 The Allstate Corp........................ 100,182,885
359,887 American International Group, Inc........ 54,275,458
3,944,800 Chubb Corp............................... 289,449,700
2,331,500 General Re Corp.......................... 552,565,500
1,400,700 Progressive Corp. (Ohio)................. 173,161,538
1,983,100 Transatlantic Holdings Inc............... 179,222,663
847,100 20th Century Industries, Inc............. 21,918,713
323,300 UNUM Corp................................ 17,033,869
17
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1998
===============================================================================
VALUE
SHARES SECURITY (NOTE 1)
- -------------------------------------------------------------------------------
COMMON STOCK - CONTINUED
PROPERTY/CASUALTY INSURANCE - CONTINUED
1,255,050 W.R. Berkley Corp........................ $ 42,122,616
-----------------
1,429,932,942
-----------------
PUBLISHING - (2.09%)
5,000 Dun & Bradstreet Corp.................... 137,187
1,224,700 Gannett Co., Inc......................... 78,304,256
1,746,900 Harcourt General, Inc.................... 98,590,669
972,400 The News Corporation Limited - ADR....... 28,321,150
5,000 R. H. Donnelley Corp..................... 13,750
581,600 Tribune Co............................... 39,112,600
1,000 Washington Post Co., Class B............. 544,500
-----------------
245,024,112
-----------------
REAL ESTATE - (3.05%)
200,000 CenterPoint Properties Corp.............. 6,650,000
293,560 Crescent Operating, Inc.*................ 3,577,762
3,428,400 Crescent Real Estate Equities, Inc....... 100,709,250
310,000 Federal Realty Investment Trust.......... 7,246,250
2,017,700 General Growth Properties................ 73,393,837
70,700 Kimco Realty Corp........................ 2,615,900
4,000,500 Rouse Company............................ 116,764,594
344,300 United Dominion Realty Trust, Inc........ 4,325,269
1,048,800 Vornado Realty Trust..................... 37,887,900
100,700 Weingarten Realty, Investors............. 3,795,131
-----------------
356,965,893
-----------------
SATELLITE TELECOMMUNICATIONS - (0.19%)
288,512 Global Star Telecommunications*.......... 6,617,744
546,000 Loral Space & Communications*............ 15,117,375
-----------------
21,735,119
-----------------
TECHNOLOGY - (9.37%)
7,013,200 Hewlett-Packard Co....................... 389,232,600
2,272,700 Intel Corp............................... 191,830,084
3,204,400 International Business Machines Corp..... 424,583,000
2,334,500 Novellus Systems, Inc.*.................. 91,337,313
-----------------
1,096,982,997
-----------------
TELECOMMUNICATIONS - (2.20%)
2,887,000 AirTouch Communications, Inc.*........... 169,791,687
1,655,300 Motorola, Inc............................ 86,489,425
20,000 SBC Communications, Inc.................. 817,500
-----------------
257,098,612
-----------------
TOYS - (0.62%)
1,680,600 Hasbro, Inc.............................. 60,816,712
18
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1998
===============================================================================
VALUE
SHARES/PRINCIPAL SECURITY (NOTE 1)
- -------------------------------------------------------------------------------
COMMON STOCK - CONTINUED
TOYS - CONTINUED
300,000 Mattel, Inc.............................. $ 11,531,250
-----------------
72,347,962
-----------------
TRANSPORTATION - (2.33%)
1,954,600 Burlington Northern Santa Fe Corp........ 201,201,637
889,016 Canadian National Railway Company........ 46,951,157
400,000 FDX Corp.*............................... 24,275,000
-----------------
272,427,794
-----------------
UTILITIES - (0.01%)
10,000 Carolina Power & Light Co. .............. 406,875
12,000 Edison International .................... 333,000
6,000 New England Electric System.............. 244,500
16,800 Southern Co. ............................ 428,400
9,000 Wisconsin Energy Corp. .................. 255,938
-----------------
1,668,713
-----------------
WASTE MANAGEMENT - (0.00%)
8,700 Waste Management Inc.*................... 479,588
-----------------
Total Common Stocks -
(identified cost $7,801,776,343).... 10,717,519,853
-----------------
PREFERRED STOCK - (0.78%)
162,856 AirTouch Communications, Inc., 4.25%,
Ser. C Conv. Pfd....................... 13,659,547
200,600 Devon Financing Trust, 6.50%,
Conv. Pfd.............................. 12,236,600
2,000,000 General Growth Properties, 7.25%,
Conv. Pfd.............................. 50,500,000
131,900 Rouse Co., Ser. B Conv. Pfd.............. 6,496,075
125,000 Union Pacific Cap Trust, 6.25%, Ser.
Conv. Pfd. 144A (b).................... 5,687,500
60,200 Vornado Realty Trust, 6.50%, Ser. A
Conv. Pfd.............................. 3,250,800
-----------------
Total Preferred Stocks -
(identified cost $86,695,692)... 91,830,522
-----------------
SHORT TERM INVESTMENTS - (7.59%)
$ 80,400,000 Fannie Mae Discount Note, 5.41%,
08/04/98............................... 80,363,753
46,310,000 Fannie Mae Discount Note, 5.459%,
08/10/98............................... 46,246,798
30,000,000 Fannie Mae Discount Note, 5.47%,
08/12/98............................... 29,949,858
34,335,000 Fannie Mae Discount Note, 5.44%,
08/14/98............................... 34,267,551
33,580,000 Fannie Mae Discount Note, 5.46%,
09/11/98............................... 33,371,188
45,000,000 Federal Home Loan Bank Discount Note,
5.435%, 08/28/98....................... 44,816,570
19
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1998
===============================================================================
VALUE
PRINCIPAL SECURITY (NOTE 1)
- -------------------------------------------------------------------------------
SHORT TERM INVESTMENTS - CONTINUED
$ 37,820,000 Freddie Mac Discount Note, 5.44%,
08/03/98............................... $ 37,808,570
42,135,000 Freddie Mac Discount Note, 5.42%,
08/05/98............................... 42,109,625
37,320,000 Freddie Mac Discount Note, 5.45%,
08/06/98............................... 37,291,751
38,225,000 Freddie Mac Discount Note, 5.42%,
08/07/98............................... 38,190,470
20,000,000 Freddie Mac Discount Note, 5.44%,
08/13/98............................... 19,963,733
19,015,000 Freddie Mac Discount Note, 5.45%,
08/17/98............................... 18,968,941
5,325,000 Freddie Mac Discount Note, 5.46%,
08/18/98............................... 5,311,270
24,300,000 Freddie Mac Discount Note, 5.49%,
08/19/98............................... 24,233,297
18,600,000 Freddie Mac Discount Note, 5.465%,
08/20/98............................... 18,546,352
43,450,000 Freddie Mac Discount Note, 5.46%,
08/21/98............................... 43,318,202
34,270,000 Freddie Mac Discount Note, 5.43%,
08/27/98............................... 34,135,604
50,000,000 Freddie Mac Discount Note, 5.46%,
08/31/98............................... 49,772,500
49,720,000 Freddie Mac Discount Note, 5.42%,
09/01/98............................... 49,487,946
20,935,000 Freddie Mac Discount Note, 5.44%,
09/03/98............................... 20,830,604
21,700,000 Freddie Mac Discount Note, 5.46%,
09/04/98............................... 21,588,100
43,325,000 Freddie Mac Discount Note, 5.415%,
09/08/98............................... 43,077,362
50,000,000 Freddie Mac Discount Note, 5.42%,
09/09/98............................... 49,706,417
40,500,000 Freddie Mac Discount Note, 5.41%,
09/25/98............................... 40,165,256
24,850,000 Freddie Mac Discount Note, 5.46%,
09/30/98............................... 24,623,865
---------------
Total Short Term Investments -
(identified cost $888,145,583)...... 888,145,583
---------------
Total Investments - (identified
cost $8,776,617,618)(99.91%)(a)..... 11,697,495,958
Other Assets Less Liabilities-
(0.09%)............................. 10,460,078
---------------
Net Assets - (100%)........... $11,707,956,036
===============
</TABLE>
(a) Aggregate cost for Federal Income Tax purposes is $8,776,590,326. At July
31, 1998 unrealized appreciation (depreciation) of securities for Federal
Income Tax purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation................ $ 3,105,893,235
Unrealized depreciation................ (184,987,603)
---------------
Net appreciation.................... $ 2,920,905,632
===============
</TABLE>
(b) These securities are subject to Rule 144A. The Board of Directors of the
Fund has determined that there is sufficient liquidity in these securities to
realize current valuations. These securities amounted to $7,311,874 and 0.06%
of the Fund's total net assets as of July 31, 1998.
* Non-Income Producing Security
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
DAVIS NEW YORK VENTURE FUND
STATEMENT OF ASSETS AND LIABILITIES
At July 31, 1998
===============================================================================
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost
$8,776,617,618) (see accompanying Schedule of
Investments)............................................ $ 11,697,495,958
Cash....................................................... 152,067
Receivables:
Investment securities sold............................. 10,498,800
Capital stock sold..................................... 59,616,929
Dividends and interest................................. 8,889,455
Note receivable (Note 7)............................... 375,000
Other assets............................................... 51,143
---------------
Total assets...................................... 11,777,079,352
---------------
LIABILITIES:
Payables:
Investment securities purchased........................ 48,660,911
Capital stock redeemed................................. 8,088,091
Accrued expenses........................................... 12,210,332
Other liabilities.......................................... 163,982
---------------
Total liabilities................................. 69,123,316
---------------
NET ASSETS ................................................ $11,707,956,036
===============
NET ASSETS CONSIST OF:
Par value of shares of capital stock....................... $ 24,178,239
Additional paid-in capital................................. 8,739,334,185
Undistributed net investment income........................ 4,597,468
Net unrealized appreciation on investments................. 2,920,878,340
Accumulated net realized gains from investments and
foreign currency transactions............................ 18,967,804
---------------
Net assets........................................ $11,707,956,036
===============
CLASS A SHARES
Net assets............................................. $ 6,457,596,157
Shares outstanding..................................... 265,687,099
Net asset value and redemption price per share......... $ 24.31
========
Maximum offering price per share (100/95.25 of $24.31). $ 25.52
========
CLASS B SHARES
Net assets............................................. $ 3,123,436,100
Shares outstanding..................................... 130,163,173
Net asset value and redemption price per share......... $ 24.00
========
CLASS C SHARES
Net assets............................................. $ 1,391,442,392
Shares outstanding..................................... 57,761,591
Net asset value and redemption price per share......... $ 24.09
========
CLASS Y SHARES
Net assets............................................. $ 735,481,387
Shares outstanding..................................... 29,952,927
Net asset value and redemption price per share......... $ 24.55
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
DAVIS NEW YORK VENTURE FUND
STATEMENT OF OPERATIONS
For the year ended July 31, 1998
===============================================================================
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................. $ 101,748,693
Interest ................................................. 48,913,331
-------------
Total income...................................... 150,662,024
Expenses:
Management fees (Note 3).................. $ 47,535,606
Custodian fees............................ 1,328,490
Transfer agent fees
Class A.............................. 4,824,307
Class B.............................. 4,285,186
Class C.............................. 1,149,448
Class Y.............................. 4,156
Audit fees................................ 48,813
Legal fees................................ 259,347
Accounting fees (Note 3).................. 416,664
Reports to shareholders................... 1,077,370
Directors' fees and expenses............. 250,531
Registration and filing fees.............. 1,046,123
Miscellaneous............................. 139,205
Payments under distribution
plan (Note 4)
Class A.............................. 11,710,409
Class B.............................. 20,695,694
Class C.............................. 9,471,710
-------------
Total expenses................................... 104,243,059
Expenses paid indirectly (Note 6)............... (47,671)
-------------
Net expenses..................................... 104,195,388
-------------
Net investment income........................ 46,466,636
-------------
REALIZED AND UNREALIZED GAIN OR LOSS ON INVESTMENTS:
Net realized gain (loss) from:
Investment transactions................................... 103,986,109
Foreign currency transactions............................ (6,297)
Net increase in unrealized appreciation of
investments............................................... 760,284,850
-------------
Net realized and unrealized gain on investments............... 864,264,662
-------------
Net increase in net assets resulting from operations.......... $ 910,731,298
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
DAVIS NEW YORK VENTURE FUND
STATEMENT OF CHANGES IN NET ASSETS
===============================================================================
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1998 1997
---- ----
OPERATIONS:
<S> <C> <C>
Net investment income............................................. $ 46,466,636 $ 31,227,796
Net realized gain from investments and
foreign currency transactions................................ 103,979,812 284,576,600
Increase in unrealized appreciation of investments................ 760,284,850 1,574,058,965
--------------- --------------
Net increase in net assets resulting
from operations.......................................... 910,731,298 1,889,863,361
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ..................................................... (44,770,305) (26,255,863)
Class B ..................................................... (3,420,374) (1,030,857)
Class C ..................................................... (1,903,619) (466,410)
Class Y ..................................................... (8,520,851) (154,449)
Realized gains from investment transactions:
Class A ..................................................... (161,900,484) (102,106,133)
Class B ..................................................... (58,984,889) (18,040,009)
Class C ..................................................... (27,202,211) (8,162,177)
Class Y ..................................................... (24,556,619) (1,801,897)
CAPITAL SHARE TRANSACTIONS (NOTE 5)............................... 4,770,571,698 2,068,532,408
--------------- --------------
Total increase in net assets.................................. 5,350,043,644 3,800,377,974
NET ASSETS:
Beginning of year................................................. 6,357,912,392 2,557,534,418
--------------- --------------
End of year (including undistributed net income of
$4,597,468 and $12,302,594, respectively)......................... $11,707,956,036 $6,357,912,392
=============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 1998
===============================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a separate series of Davis New York Venture Fund, Inc.,
which is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund's investment
objective is growth of capital. The Fund offers shares in four classes, Class
A, Class B, Class C and Class Y. The Class A shares are sold with a front-end
sales charge and the Class B and Class C shares are sold at net asset value and
may be subject to a contingent deferred sales charge upon redemption. Class Y
shares are sold at net asset value and are not subject to any contingent
deferred sales charge. Class Y shares are only available to certain qualified
investors. Income, expenses (other than those attributable to a specific class)
and gains and losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by each class. Operating expenses
directly attributable to a specific class are charged against the operations of
that class. All classes have identical rights with respect to voting (exclusive
of each Class's distribution arrangement), liquidation and distributions. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
SECURITY VALUATION - Portfolio securities traded on national securities
exchanges are valued at the published last sales prices on the exchange, or, in
the absence of recorded sales, at the average of closing bid and asked prices
on such exchange. Over-the-counter securities are valued at the average of
closing bid and asked prices. If no quotations are available, the fair value of
the investment is determined by or at the direction of the Board of Directors.
Investments in short-term securities (maturing in sixty days or less) are
valued at amortized cost unless the Board of Directors determines that such
cost is not a fair value. The valuation procedures are reviewed and subject to
approval by the Board of Directors.
FEDERAL INCOME TAXES - It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of its taxable income to shareholders.
Therefore, no provision for federal income or excise tax is required.
SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME - Securities transactions
are accounted for on the trade date (date the order to buy or sell is executed)
with realized gain or loss on the sale of securities being determined based
upon identified cost. Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to
shareholders are recorded on the ex-dividend date. The character of the
distributions made during the year from net investment income may differ from
its ultimate characterization for federal income tax purposes. Also, due to the
timing of distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which income or gain was recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended July 31, 1998, amounts have been reclassified to reflect an increase
in undistributed net investment income of $4,443,387 and a decrease in
additional paid-in capital of $7,590,471 and a decrease in net unrealized
appreciation on investments of $3,147,084.
24
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1998
===============================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
USE OF ESTIMATES IN FINANCIAL STATEMENTS - In preparing financial statements in
conformity with generally accepted accounting principals, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of income and
expenses during the reporting period. Actual results may differ from these
estimates.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) for the year ended July 31, 1998, were $4,962,204,911 and
$876,282,140, respectively.
NOTE 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Advisory fees are paid to Davis Selected Advisers, L.P. (the "Adviser")
at the annual rate of 0.75% of the average net assets for the first $250
million, 0.65% of the average net assets on the next $250 million, 0.55% of the
average net assets on the next $2.5 billion, 0.54% of the average net assets on
the next $1 billion, 0.53% of the average net assets on the next $1 billion,
0.52% of the average net assets on the next $1 billion, 0.51% of the average
net assets on the next $1 billion and 0.50% of the average net assets in excess
of $7 billion.
The Adviser is paid for registering Fund shares for sale in various
states. The fee for the year ended July 31, 1998 amounted to $14,004. Boston
Financial Data Services is the Fund's primary transfer agent. The Adviser is
also paid for certain transfer agent services. The fee for the these services
for the year ended July 31, 1998 amounted to $1,024,000. State Street Bank &
Trust Co. is the Fund's primary accounting provider, fees for such services are
included in the custodian fee. The Adviser is also paid for certain accounting
services. The fee amounted to $416,664 for the year ended July 31, 1998.
Certain directors and the officers of the Fund are also directors and officers
of the general partner of the Adviser.
Davis Selected Advisers-NY, Inc. ("DSA-NY"), a wholly-owned subsidiary
of the Adviser, acts as sub-adviser to the Fund. DSA-NY performs research and
portfolio management services for the Fund under a Sub-Advisory Agreement with
the Adviser. The Fund pays no fees directly to DSA-NY.
The Fund has adopted procedures to treat Shelby Cullom Davis & Co.
("SCD") as an affiliate of the Adviser. During the year ended July 31, 1998,
SCD received $441,042 in commission on the purchases and sales of portfolio
securities in the Fund.
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES
CLASS A SHARES
Class A shares of the Fund are sold at net asset value plus a sales
charge and are redeemed at net asset value (without a contingent deferred sales
charge).
25
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1998
===============================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - CONTINUED
CLASS A SHARES - CONTINUED
During the year ended July 31, 1998, Davis Distributors, LLC, the Fund's
Underwriter (the "Underwriter" or "Distributor") received $38,272,705 from
commissions earned on sales of Class A shares of the Fund, of which $5,781,781
was retained by the Underwriter and the remaining $32,490,924 was reallowed to
investment dealers. The Underwriter paid the costs of prospectuses in excess of
those required to be filed as part of the Fund'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 service
fee with respect to Class A shares sold by dealers which remain outstanding
during the period. The service 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 for which the Underwriter pays no service fees
to other firms. The service fee for Class A shares of the Fund for the year
ended July 31, 1998 was $11,710,409.
CLASS B SHARES
Class B shares of the Fund are sold at net asset value and are redeemed
at net asset value less a contingent deferred sales charge if redeemed within
six years of purchase.
The Fund pays a distribution fee to reimburse the Distributor for
commission advances on the sale of the Fund's Class B shares. The National
Association of Securities Dealers, Inc., ("NASD") limits the percentage of the
Fund's average annual net assets attributable to Class B shares which may be
used to reimburse the Distributor. The limit is 1%, of which 0.75% may be used
to pay distribution expenses and 0.25% may be used to pay shareholder service
fees. The NASD rule also limits the aggregate amount the Fund may pay for
distribution to 6.25% of gross Fund sales since inception of the Rule 12b-1
plan, 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 July 31, 1998, Class B shares of the Fund made
distribution plan payments which included distribution fees of $15,527,658 and
service fees of $5,168,036.
Commission advances by the Distributor during the year ended July 31,
1998 on the sale of Class B shares of the Fund amounted to $73,098,322, of
which $72,652,335 was reallowed to qualified selling dealers.
The Distributor intends to seek payment from Class B shares of the Fund
in the amount of $93,577,161, representing the cumulative commission advances
by the Distributor on the sale of the Fund's Class B shares, plus interest,
reduced by cumulative distribution fees paid by the Fund and cumulative
contingent deferred sales charges paid by redeeming shareholders. The Fund has
no contractual obligation to pay any such distribution charges and the amount,
if any, timing and condition of such payment are solely within the discretion
of the Directors who are not interested persons of the Fund or the Distributor.
26
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1998
===============================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - CONTINUED
CLASS B SHARES - CONTINUED
A contingent deferred sales charge is imposed upon redemption of
certain Class B shares of the Fund 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 July 31, 1998 the Distributor received $2,310,146 in contingent deferred
sales charges from Class B shares of the Fund.
CLASS C SHARES
Class C shares of the Fund are sold at net asset value and are
redeemed at net asset value less a contingent deferred sales charge of 1% if
redeemed within one year of purchase. The Fund pays the Distributor 1% of the
Fund's average annual net assets attributable to Class C shares, of which 0.75%
may be used to pay distribution expenses and 0.25% may be used to pay
shareholder service fees.
During the year ended July 31, 1998, Class C shares of the Fund made
distribution payments of $9,471,710. During the year ended July 31, 1998, the
Distributor received $311,622 in contingent deferred sales charges from Class C
shares of the Fund.
27
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1998
===============================================================================
NOTE 5 - CAPITAL STOCK
At July 31, 1998, there were 3,000,000,000 shares of capital stock
($0.05 par value per share) authorized, 2,000,000,000 of which shares are
classified as Davis New York Venture Fund. Transactions in capital stock were
as follows:
<TABLE>
<CAPTION>
CLASS A
YEAR ENDED YEAR ENDED
JULY 31, 1998 JULY 31, 1997
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares subscribed.............................. 110,409,208 $2,590,265,386 62,568,994 $1,170,853,844
Shares issued in reinvestment of distributions. 8,251,609 183,685,625 5,802,406 102,355,058
----------- -------------- ---------- --------------
118,660,817 2,773,951,011 68,371,400 1,273,208,902
Shares redeemed................................ (29,994,547) (707,226,321) (32,529,756) (595,232,360)
----------- -------------- ---------- --------------
Net increase.............................. 88,666,270 $2,066,724,690 35,841,644 $ 677,976,542
========== ============== ========== ==============
</TABLE>
<TABLE>
<CAPTION>
CLASS B
YEAR ENDED YEAR ENDED
JULY 31, 1998 JULY 31, 1997
---------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- -------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares subscribed.............................. 80,387,670 $1,868,220,520 35,141,408 $659,411,142
Shares issued in reinvestment of distributions. 2,676,634 59,180,842 710,105 12,448,299
---------- -------------- ---------- ------------
83,064,304 1,927,401,362 35,851,513 671,859,441
Shares redeemed................................ (5,734,058) (134,504,472) (2,169,646) (39,943,226)
---------- -------------- ---------- ------------
Net increase.............................. 77,330,246 $1,792,896,890 33,681,867 $631,916,215
========== ============== ========== ============
</TABLE>
<TABLE>
<CAPTION>
CLASS C
YEAR ENDED YEAR ENDED
JULY 31, 1998 JULY 31, 1997
---------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares subscribed.............................. 35,113,179 $818,643,623 18,485,151 $345,126,337
Shares issued in reinvestment of distributions. 1,216,430 26,983,778 275,156 4,837,597
---------- ------------ ---------- ------------
36,329,609 845,627,401 18,760,307 349,963,934
Shares redeemed................................ (3,800,574) (89,212,903) (1,280,225) (23,652,939)
---------- ------------ ---------- ------------
Net increase.............................. 32,529,035 $756,414,498 17,480,082 $326,310,995
========== ============ ========== ============
</TABLE>
28
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1998
===============================================================================
NOTE 5 - CAPITAL STOCK - CONTINUED
<TABLE>
<CAPTION>
CLASS Y
YEAR ENDED YEAR ENDED
JULY 31, 1998 JULY 31, 1997
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares subscribed.............................. 21,252,293 $497,339,664 25,413,416 $480,571,559
Shares issued in reinvestment of distributions. 1,277,781 28,673,414 38,351 681,489
---------- ------------ ---------- ------------
22,530,074 526,013,078 25,451,767 481,253,048
Shares redeemed................................ (15,658,979) (371,477,458) (2,369,935) (48,924,392)
---------- ------------ ---------- ------------
Net increase ........................ 6,871,095 $154,535,620 23,081,832 $432,328,656
========== ============ ========== ============
</TABLE>
NOTE 6 - CUSTODIAN FEES
Under an agreement with the custodian bank, custodian fees are
reduced for earnings on cash balances maintained at the custodian by the Fund.
Such reductions amounted to $47,671 during the year ended July 31, 1998.
NOTE 7 - NOTE RECEIVABLE
At July 31, 1998, Davis New York Venture Fund owned a note receivable
from the Robert Plan Corporation in the amount of $375,000. Principal plus
accrued interest at 5% over the prime rate of The Chase Manhattan Bank is
payable in eight equal installments on July 31, 1997, April 30, 1997, July 31,
1997, October 31, 1997, January 30, 1998, April 30, 1998, July 31, 1998 and
October 30, 1998.
29
<PAGE>
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
CLASS A
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------------------------
1998 1997 1996 1995 1994
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..... $ 22.91 $15.24 $14.56 $12.04 $12.08
------- ------ ------ ------ ------
Income From Investment Operations
Net Investment Income............... .20 .18 .20 .14 .16
Net Realized and Unrealized Gains... 2.26 8.37 1.64 2.95 .54
------- ------ ------ ------ ------
Total From Investment Operations.. 2.46 8.55 1.84 3.09 .70
Dividends and Distributions
Dividends from Net Investment Income (.23) (.18) (.15) (.12) (.16)
Distributions from Realized Gains... (.83) (.70) (1.01) (.45) (.58)
------- ------ ------ ------ ------
Total Dividends and Distributions (1.06) (.88) (1.16) (.57) (.74)
------- ------ ------ ------ ------
Net Asset Value, End of Period.......... $ 24.31 $22.91 $15.24 $14.56 $12.04
======= ====== ====== ====== ======
Total Return (1)......................... 11.16% 57.83% 13.04% 27.21% 5.99%
Ratios/Supplemental Data
Net Assets, End of Period (000,000
omitted).......................... $6.458 $4,055 $2,151 $1,595 $1,077
Ratio of Expenses to Average Net
Assets............................ .91% .89% .87% .90% .87%
Ratio of Net Investment Income to
Average Net Assets................ .80% .98% 1.30% 1.11% 1.19%
Portfolio Turnover Rate(2).......... 11% 24% 19% 15% 13%
</TABLE>
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
30
<PAGE>
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
CLASS B
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
DECEMBER 1, 1994
(INCEPTION OF CLASS)
YEAR ENDED JULY 31, THROUGH
------------------------------ -------
1998 1997 1996 7/31/95
------ ------ ------ -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $22.64 $15.08 $14.43 $10.88
------ ------ ------ ------
Income From Investment Operations
Net Investment Income (Loss).......... .01 .01 .04 (.01)
Net Realized and Unrealized Gains..... 2.23 8.29 1.62 3.56
------ ------ ------ ------
Total From Investment Operations.... 2.24 8.30 1.66 3.55
Dividends and Distributions
Dividends from Net Investment Income.. (.05) (.04) - -
Distributions from Realized Gains..... (.83) (.70) (1.01) -
------ ------ ------ ------
Total Dividends and Distributions.. (.88) (.74) (1.01) -
------ ------ ------ ------
Net Asset Value, End of Period............ $24.00 $22.64 $15.08 $14.43
====== ====== ====== ======
Total Return (1)........................... 10.22% 56.47% 11.81% 32.63%
Ratios/Supplemental Data
Net Assets, End of Period
(000,000 omitted)............ $3,123 $1,196 $289 $40
Ratio of Expenses to Average
Net Assets................... 1.79% 1.79%(2) 1.73% 1.78%*
Ratio of Net Investment Income to
Average Net Assets........... (.08)% .07% .44% .23%*
Portfolio Turnover Rate(3)............ 11% 24% 19% 15%
</TABLE>
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less
than one full year.
(2) Ratio of expenses to average net assets after the reduction of custodian
fees under a custodian agreement was 1.78% for 1997. Prior to 1996, such
reductions were reflected in the expense ratios.
(3) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
* Annualized.
31
<PAGE>
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
CLASS C
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
DECEMBER 20, 1994
(INCEPTION OF CLASS)
YEAR ENDED JULY 31, THROUGH
------------------------------ -------
1998 1997 1996 7/31/95
---- ---- ---- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $22.72 $15.12 $14.47 $11.16
------ ------ ------ ------
Income From Investment Operations
Net Investment Income (Loss)........... .02 .02 .04 (.01)
Net Realized and Unrealized Gains...... 2.24 8.32 1.62 3.32
------ ------ ------ ------
Total From Investment Operations..... 2.26 8.34 1.66 3.31
Dividends and Distributions
Dividends from Net Investment Income... (.06) (.04) - -
Distributions from Realized Gains...... (.83) (.70) (1.01) -
------ ------ ------ ------
Total Dividends and Distributions.... (.89) (.74) (1.01) -
------ ------ ------ ------
Net Asset Value, End of Period............. $24.09 $22.72 $15.12 $14.47
====== ====== ====== ======
Total Return (1)............................ 10.27% 56.59% 11.78% 29.66%
Ratios/Supplemental Data
Net Assets, End of Period
(000,000 omitted)............. $1,391 $573 $117 $12
Ratio of Expenses to Average
Net Assets.................... 1.71% 1.73% 1.73% 1.78%*
Ratio of Net Investment Income to
Average Net Assets............ 0.00% .13% .44% .23%*
Portfolio Turnover Rate(2)............. 11% 24% 19% 15%
</TABLE>
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less
than one full year.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
* Annualized.
32
<PAGE>
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
Class Y
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
OCTOBER 2, 1996
YEAR (INCEPTION OF CLASS)
ENDED THROUGH
7/31/98 7/31/97
------- -------
<S> <C> <C>
Net Asset Value, Beginning of Period................... $ 23.12 $ 16.66
-------- --------
Income From Investment Operations
Net Investment Income............................. .24 .15
Net Realized and Unrealized Gains................. 2.31 7.07
-------- --------
Total From Investment Operations................ 2.55 7.22
Dividends and Distributions
Dividends from Net Investment Income.............. (.29) (.06)
Distributions from Realized Gains................. (.83) (.70)
-------- --------
Total Dividends and Distributions.............. (1.12) (.76)
-------- --------
Net Asset Value, End of Period........................ $ 24.55 $ 23.12
======== ========
Total Return(1)........................................ 11.48% 44.71%
Ratios/Supplemental Data
Net Assets, End of Period (000,000 omitted)....... $735 $534
Ratio of Expenses to Average Net Assets.......... .59% .62%*
Ratio of Net Investment Income to Average
Net Assets...................................... 1.12% 1.19%*
Portfolio Turnover Rate(2)........................ 11% 24%
</TABLE>
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized
for periods of less than one full year.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
* Annualized.
33
<PAGE>
DAVIS NEW YORK VENTURE FUND
INDEPENDENT AUDITORS' REPORT
===============================================================================
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF DAVIS NEW YORK VENTURE FUND
We have audited the accompanying statement of assets and liabilities of
Davis New York Venture Fund including the schedule of investments, as of July
31, 1998, and the related statement of operations, the statement of changes in
net assets, and the financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of changes in net assets for the year ended July 31, 1997 and the financial
highlights for each of the years in the four-year period ended July 31, 1997
were audited by other auditors whose report, dated August 21, 1997, expressed
an unqualified opinion on this information.
We conducted our audit 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 July
31, 1998, by correspondence with the custodian and brokers; and where
confirmations were not received from brokers, we performed other auditing
procedures. 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 audit provides 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 New York Venture Fund as of July 31, 1998, and the results of
its operations, the changes in its net assets, and the financial highlights for
the year then ended, in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
August 28, 1998
34
<PAGE>
DAVIS NEW YORK
VENTURE FUND
124 East Marcy Street, Santa Fe, New Mexico 87501
===============================================================================
DIRECTORS OFFICERS
Wesley E. Bass, Jr. Jeremy H. Biggs
Jeremy H. Biggs Chairman
Marc P. Blum Shelby M. C. Davis
Andrew A. Davis President
Christopher C. Davis Kenneth C. Eich
Jerry D. Geist Vice President
D. James Guzy Sharra L. Reed
G. Bernard Hamilton Vice President,
LeRoy E. Hoffberger Treasurer & Assistant Secretary
Laurence W. Levine Thomas D. Tays
Christian R. Sonne Vice President& Secretary
Christopher C. Davis
Vice President
Andrew A. Davis
Vice President
Carolyn H. Spolidoro
Vice President
INVESTMENT ADVISER
Davis Selected Advisers, L.P.
124 East Marcy Street
Santa Fe, New Mexico 87501
DISTRIBUTOR
Davis Distributors, LLC
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, Massachusetts 02266-8406
COUNSEL
D'Ancona & Pflaum
30 North LaSalle Street
Chicago, Illinois 60602
AUDITORS
KPMG Peat Marwick LLP
707 Seventeenth Street
Suite 2300
Denver, Colorado 80202
===============================================================================
FOR MORE INFORMATION ABOUT DAVIS NEW YORK VENTURE FUND INCLUDING MANAGEMENT
FEES, CHARGES AND EXPENSES, SEE THE CURRENT PROSPECTUS WHICH MUST PRECEDE OR
ACCOMPANY THIS REPORT.
===============================================================================
35
