<PAGE>
ANNUAL REPORT
JULY 31, 1999
DAVIS NEW YORK
VENTURE FUND
[DAVIS FUNDS LOGO]
<PAGE>
DAVIS NEW YORK VENTURE FUND
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
Dear Fellow Shareholder,
As investors of your money and ours, we constantly have to strike an emotional
balance between greed and fear. On days when the market is advancing, we
inevitably wish we had more money in the stocks that are going up the fastest.
And on days when the market is declining, we become fearful about the stocks we
own that are going down.
To help us control these powerful emotions, we have developed a discipline over
the years that focuses on buying growth companies at a value price and holding
them for the long haul. Normally, we do not buy the fastest growing companies,
in spite of our greed, because of our fear that when markets turn down these
stocks potentially have the farthest to fall. Similarly, we do not buy
"non-growth" value companies just because they are cheap since we always want to
aim for growth in our portfolios.
In effect, we think growth and value are joined at the hip. No one would really
ever want to own a no-growth stock, but everyone wants to buy growth. Our
strategy is a compromise in that we try to buy decent growth at a value price.
In a sense, the world of investing is a world of making choices, and the stock
market is not unlike the supermarket. We know when we go into the supermarket
that we are going to buy something because we need to eat. Our task is to pick
from the wide variety of brands, choosing those particular food 3.4% that
will provide us with the right kind of bodily nourishment and also satisfy our
own tastes. Similarly, when the stock market opens its doors, we are likely to
buy something. Our job is to pick from the diverse array of stocks available and
buy only those that we think will enhance our financial nourishment and suit our
own investment style. In both instances, we also want to be price sensitive.
Essentially, what we are looking for as investors is "growth on sale." Our stock
choices tend to be good quality merchandise offered at a fair price. We are not
interested in buying premium-priced companies or bargain-basement specials.
As we move through the last year of this millennium with the stock market in
uncharted territory, we know that we will encounter numerous crosscurrents and
variables that could affect corporate earnings. These range from uncertainties
regarding the Presidential election in the year 2000 to the possibility of a
worldwide economic recovery that could rekindle inflation. In addition, we live
in an era of rapid technological change, which is reshaping the economic
landscape and creating both new opportunities and risks for a wide variety of
industries and companies.
In such an environment, we recognize that we will continue to be buffeted by the
conflicting emotions of greed and fear. But we are not going to turn our backs
on stocks. As long-term investors, we intend to remain true to our investment
discipline of using intensive research to buy well-managed growth companies at a
value price. We are confident that this discipline will guide us through
whatever financial storms may come our way, providing great opportunities for
compounding of wealth over time.(1)
Sincerely,
/s/ Shelby M. C. Davis
- ----------------------
Shelby M. C. Davis
Chief Investment Officer
September 3, 1999
<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 The Davis New York Venture Fund's Class A shares generated a total return
on net asset value of 9.30% for the six-month period and 16.85% for the
one-year period ended July 31, 1999.(2) By way of comparison, the Standard&
Poor's 500 Index returned 4.50% and 20.26%, respectively, for the same time
periods.(3)
o The Fund is the only fund now open to new investors that has consistently
outperformed the S&P 500 over all 10-year periods (calendar years) since
its inception on February 17, 1969.(4)
o The Fund's Class A shares have generated an average annual total return of
15.13% since inception versus a return of 12.80% for the S&P 500 over the
same time period.
o As of July 31, 1999, the Davis New York Venture Fund held Morningstar's
highest overall rating of ***** (five stars) for risk-adjusted performance
out of 3,092 funds in the domestic equity fund category.(5) According to
Morningstar, "...this is still one of the best funds around."(6)
o According to The Value Line Mutual Fund Survey, the Fund "has rewarded
shareholders with an outstanding long-term record. Adding to its appeal,
the fund exhibits tame levels of volatility and a low turnover figure. The
fund is an excellent choice for investors seeking capital growth."(7)
AN INTERVIEW WITH CHRISTOPHER C. DAVIS AND KENNETH CHARLES FEINBERG, PORTFOLIO
MANAGERS
Q. How would you describe the Fund's performance so far in 1999?
A. Ken and I are satisfied that the performance of the Davis New York Venture
Fund has gotten off to a good start so far in 1999, but we are well aware that
we have ground to make up after last year's disappointing results. Both of us
are pleased with the quality of the companies that make up the portfolio and
pleased that we were able to opportunistically add to some of our favorites
during the chaos of the fall of 1998.
Our portfolio continues to benefit from increasing valuations for all technology
companies--most notably IBM, Hewlett-Packard and Texas Instruments, which are up
40%, 60% and almost 70%, respectively, year to date.(8) Yet the prospects of
these companies have also improved dramatically with the growth of the Internet.
Although our valuation discipline prevents us from owning most of the hot new
Internet stocks we all read about, companies such as IBM, Hewlett-Packard and
Texas Instruments benefit greatly from the Internet revolution by selling the
electronic equivalent of picks and shovels to the prospectors in this new gold
rush.
We have also made mistakes this year and it is incumbent upon us to mention
these. Most notably, Philip Morris, after suffering its first adverse jury
judgments in its many years of litigation, has declined almost 30% thus far in
1999. We had been optimistic that the large settlements previously negotiated
with the states' attorneys general would help put the most dangerous litigation
behind the company. This has not been the case and, although we expect these
adverse verdicts to be reduced or reversed on appeal, we certainly did not
anticipate them in the first place.
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 - CONTINUED
AN INTERVIEW WITH CHRISTOPHER C. DAVIS AND KENNETH CHARLES FEINBERG, PORTFOLIO
MANAGERS - CONTINUED
Q. What opportunities are you finding today?
A. The greatest opportunity in investing comes from finding a great business at
a great price. Such mis-valuations abound in a bear market but are
correspondingly scarce in a bull market. In the short sell-off of last fall we
were able to find some great companies trading at cheap prices. The most notable
example is American Express, which is currently one of our largest holdings and
which we added to significantly during that period of short-term concern.
The opportunities that we are finding in 1999 do not fall into the wonderful
category of great companies selling at great prices, but instead seem to be in
two less exciting categories. The first is great companies that have come under
a minor cloud, creating perhaps a slight under-valuation, not a tremendously
cheap valuation. For example, although Gillette is undoubtedly a great company
that has declined over 30% from its high, the stock is still not outstandingly
cheap on a valuation basis.
The second category is reasonably good--but not outstanding--businesses that are
under a more severe cloud that makes them very cheap. For example, we added to
our holding of Waste Management when it fell more than 30% from its high. The
stock currently sells at about 12 times earnings--less than half the market
multiple.(8)
Q. When do you sell great companies?
A. Our estimate of fair value for many of the securities we own is very broad,
as it should be based on the uncertainties in any operating business. As a
result, there is no predetermined price at which we would sell all of our
position in any given company if the company's underlying fundamentals had not
changed.
However, if our companies were to advance to prices that we considered
irrational relative to other investment alternatives, we would increasingly have
to consider sales. Importantly, Ken and I do not think of ourselves as market
timers. Therefore, we must constantly evaluate the owner-earnings and growth
prospects of the companies we own versus both the risk-free rate and the present
value of the earnings and growth prospects of other companies in the market.
Using this criterion, both of us remain comfortable with most of our top
holdings, although we are cognizant of the very high levels of today's
valuations.
Shelby Cullom Davis once said that you make most of your money in bear markets.
You just don't realize it at the time. This is because you are able to buy great
companies at great prices. There is, however, an unspoken corollary that one can
lose a lot of money in a bull market and not realize it at the time by buying
second-rate businesses at high prices. It is this risk that we and all investors
must focus on in these golden times.
- -------------
This Annual Report is authorized for distribution only when accompanied or
preceded by a current prospectus of Davis New York Venture Fund which contains
more information about fees and expenses. Please read the prospectus carefully
before investing or sending money.
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
(1) Neither the Davis Investment Discipline nor any investment discipline can
guarantee a profit.
(2) 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. Below are the average
annual total returns for Davis New York Venture Fund's Class A shares for
periods ended July 31, 1999. Returns for other classes of shares will vary from
the following returns:
<TABLE>
<CAPTION>
* (WITHOUT a 4.75% sales charge taken into consideration)
- -----------------------------------------------------------------------------------------------------------------------------
FUND NAME 1 YEAR 5 YEAR 10 YEAR INCEPTION
- --------- ------ ------ ------- ---------
<S> <C> <C> <C> <C>
New York Venture A 16.85% 24.13% 18.60% 15.13%-02/17/69
- -----------------------------------------------------------------------------------------------------------------------------
* (WITH a 4.75% sales charge taken into consideration)
- -----------------------------------------------------------------------------------------------------------------------------
FUND NAME 1 YEAR 5 YEAR 10 YEAR INCEPTION
- --------- ------ ------ ------- ---------
New York Venture A 11.31% 22.93% 18.03% 14.94%-02/17/69
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(3) 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.
(4) Past performance is not a guarantee of future results. The Fund's 10-year
average annual total return has surpassed the S&P 500 for all rolling 10-year
time periods since its inception. This example compares the average annual total
return earned by Class A shares of Davis New York Venture Fund against the
return earned by the S&P 500 Index for rolling 10-year time periods ending
December 31st of each year. The Fund's returns assume an investment in Class A
shares on January 1st of each year with all dividends and capital gain
distributions reinvested for a 10-year period. The figures were not adjusted for
any sales charges which may be imposed. If sales charges were imposed, the
reported figures would be lower.
(5) Morningstar proprietary ratings reflect historical risk-adjusted performance
as of July 31, 1999. Morningstar ratings are subject to change every month. The
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 next 22.5% receive two stars, and the next 10%
receive one star. The Class A shares of the Davis New York Venture Fund received
5 stars among 746 domestic equity funds for the 10-year period, 4 stars among
1,923 funds for the 5-year period, and 4 stars among 3,092 funds for the 3-year
period. Star ratings for the Fund's other classes of shares may vary, and are
available only for those classes with at least three years of performance
history. Past performance is no guarantee of future results.
(6) Source: Morningstar Mutual Funds, April 22, 1999.
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
(7) Source: The Value Line Mutual Fund Survey, May 11, 1999.
(8) Portfolio holdings and portfolio manager opinions cited in this material are
current as of the date of this report, but are subject to change. See the Fund's
Schedule of Investments for a detailed list of portfolio holdings.
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.
5
<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, 1999.
- -----------------------------------------------------------------
CLASS A SHARES
(This calculation includes an initial sales charge of 4 3/4%).
One Year ........................................ 11.31%
Five Years........................................ 22.93%
Ten Years......................................... 18.03%
- -----------------------------------------------------------------
$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, 1989 and paid a 4 3/4% sales
charge. As the chart shows, by July 31, 1999 the value of your investment would
have grown to $52,501 - a 425.01% 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 $49,578 - a 395.78%
increase.
Class A S&P 500 DNYVF-A
- ------------------------------------
Jul-89 10,000.00 9,525.00
Jul-90 10,648.00 10,303.00
Jul-91 12,003.49 11,775.03
Jul-92 13,536.26 13,974.32
Jul-93 14,715.27 16,810.69
Jul-94 15,470.17 17,803.63
Jul-95 19,503.24 22,647.64
Jul-96 22,731.02 25,609.66
Jul-97 34,576.16 40,419.08
Jul-98 41,242.45 44,931.37
Jul-99 49,577.54 52,500.68
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.
6
<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, 1999.
- -----------------------------------------------------------------
CLASS B SHARES
(This calculation includes any applicable contingent deferred sales charge.)
One Year................................................ 11.84%
Life of Class (December 1, 1994 through July 31, 1999) . 26.03%
- -----------------------------------------------------------------
$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, 1999 the value of your investment (less applicable
contingent deferred sales charges) would have grown to $29,433 - a 194.33%
increase on your initial investment. For comparison, the S&P 500 is also
presented on the chart below.
Class B S&P 500 DNYVF-B
- ------------------------------------
12/1/94 10,000.00 10,000.00
Jul-95 12,736.00 13,262.87
Jul-96 14,843.81 14,833.80
Jul-97 22,578.92 23,210.48
Jul-98 26,932.13 25,581.82
Jul-99 32,375.12 29,433.31
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 C SHARES AND STANDARD AND
POOR'S 500 STOCK INDEX
===============================================================================
Average Annual Total Return For the Periods ended July 31, 1999.
- -----------------------------------------------------------------
CLASS C SHARES
(This calculation includes any applicable contingent deferred sales charge.)
One Year................................................ 14.95%
Life of Class (December 20, 1994 through July 31, 1999). 25.98%
- -----------------------------------------------------------------
$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, 1999 the value of your investment would have grown to
$29,026 - a 190.26% increase on your initial investment. For comparison, the S&P
500 is also presented on the chart below.
Class C S&P 500 DNYVF-C
- ------------------------------------
12/20/94 10,000.00 10,000.00
Jul-95 12,493.00 12,965.94
Jul-96 14,560.59 14,497.33
Jul-97 22,148.12 22,701.30
Jul-98 26,418.27 25,033.85
Jul-99 31,757.41 29,025.62
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 Y SHARES AND STANDARD AND
POOR'S 500 STOCK INDEX
===============================================================================
Average Annual Total Return For the Periods ended July 31, 1999.
- -----------------------------------------------------------------
CLASS Y SHARES
(There is no sales charge applicable to this calculation.)
One Year.............................................. 17.19%
Life of Class (October 2, 1996 through July 31, 1999). 25.26%
- -----------------------------------------------------------------
$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, 1999 the value of your investment would have grown to
$18,904 - a 89.04% increase on your initial investment. For comparison, the S&P
500 is also presented on the chart below
Class Y S&P 500 DNYVF-Y
- ------------------------------------
10/2/96 10,000.00 10,000.00
Jul-97 13,967.20 14,471.06
Jul-98 16,660.08 16,131.68
Jul-99 20,027.08 18,904.20
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
PORTFOLIO HOLDINGS AS OF JULY 31, 1999
===============================================================================
PORTFOLIO MAKEUP (% OF FUND NET ASSETS)
---------------------------------------
Preferred Stocks
0.5%
Short Term
Investments, Other
Assets & Liabilities
2.9%
Common Stocks
96.6%
SECTOR WEIGHTINGS
(% OF LONG TERM PORTFOLIO)
--------------------------
Technology
20.8%
Pharmaceuticals
4.2%
Banking
14.7%
Diversified
5.4%
Consumer
Products
3.4%
Insurance
9.6%
Food &
Restaurants
4.4%
Electronics
2.8%
Real Estate
3.0%
Financial
Services
15.9%
Other
11.0%
Building
Materials
4.8%
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % OF FUND
STOCK SECTOR NET ASSETS
- -------------------------------------------------------------------------------------
<S> <C> <C>
Hewlett-Packard Co. Technology 6.67%
American Express Co. Diversified Financial Services 6.00%
Texas Instruments Inc. Electronics 5.32%
International Business Machines Corp. Technology 4.77%
Wells Fargo Co. Banks and Savings & Loans 4.75%
McDonald's Corp. Food & Restaurant 4.24%
Berkshire Hathaway, Inc. - Class A Diversified 3.98%
Citigroup, Inc. Diversified Financial Services 3.95%
Household International, Inc. Banks and Savings & Loans 2.77%
Philip Morris Cos., Inc. Consumer Products 2.45%
</TABLE>
10
<PAGE>
DAVIS NEW YORK VENTURE FUND
PORTFOLIO ACTIVITY - AUGUST 1, 1998 THROUGH JULY 31, 1999
===============================================================================
NEW POSITIONS ADDED (8/1/98-7/31/99)
(Highlighted positions are those greater than 0.99% of 7/31/99 total net
assets.)
<TABLE>
<CAPTION>
% OF 7/31/99
DATE OF 1ST FUND
SECURITY SECTOR PURCHASE NET ASSETS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AT&T Corp. Telecommunications 2/1/99 -
Boardwalk Equities, Inc. Real Estate 9/22/98 0.02%
The CIT Group, Inc. - Class A Financial Services 11/13/98 -
Colgate-Palmolive Co. Consumer Products 2/3/99 0.36%
Dow Jones & Co., Inc. Publishing 1/6/99 0.26%
Equity Office Properties Trust Real Estate 9/22/98 -
Equity Residential Properties Trust Real Estate 9/22/98 0.15%
Gables Residential Trust Real Estate 9/22/98 0.05%
Gillette Co. Consumer Products 9/29/98 0.48%
Glaxo Wellcome PLC - ADR Pharmaceutical & Health Care 8/24/98 -
Home Properties of New York, Inc. Real Estate 9/30/98 -
Koninklijke Philips Electronics N.V. Electronics 2/8/99 0.35%
Mack-Cali Realty Corp. Real Estate 9/22/98 0.15%
Marriott International, Inc. Hotels 1/29/99 0.68%
Micron Technology, Inc. Electronics 10/9/98 -
Monsanto Co. Agricultural 5/10/99 0.30%
The New York Times Co. - Class A Publishing 8/19/98 -
Oracle Corp. Technology 4/29/99 1.17%
Providian Financial Corp. Diversified Financial Services 5/21/99 1.58%
Public Storage, Inc. Real Estate 9/23/98 0.07%
Reckson Associates Realty Corp. Real Estate 9/22/98 -
SAP AG Technology 2/26/99 0.63%
SAP AG - ADR Technology 2/25/99 0.24%
Sealed Air Corp. Industrial 8/20/98 1.32%
Tyco International Ltd. Diversified 12/23/98 1.24%
UBS AG Banks and Savings & Loans 4/13/99 1.42%
Unisys Corp. Technology 6/11/99 0.02%
UnumProvident Corp. Life Insurance 2/2/99 1.36%
WPP Group PLC Advertising Agencies 1/6/99 0.05%
</TABLE>
POSITIONS CLOSED (8/1/98-7/31/99)
(Gains and losses greater than $3 million are highlighted.)
<TABLE>
<CAPTION>
DATE OF
STOCK SECTOR FINAL SALE GAIN/(LOSS)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AirTouch Communications, Inc. Telecommunications 2/23/99 $163,171,103
AirTouch Communications, Inc.,
4.25%, Ser. C Conv. Pfd. Telecommunications 2/18/99 14,005,959
AT&T Corp. Telecommunications 3/8/99 (5,579,434)
Barrett Resources Corp. Energy 10/6/98 (3,818,384)
Boeing Co. Aerospace 11/17/98 (49,962,106)
BP Amoco PLC - ADR Energy 2/25/99 5,694,119
</TABLE>
11
<PAGE>
DAVIS NEW YORK VENTURE FUND
PORTFOLIO ACTIVITY - AUGUST 1, 1998 THROUGH JULY 31, 1999 - CONTINUED
===============================================================================
POSITIONS CLOSED (8/1/98-7/31/99) - CONTINUED
(Gains and losses greater than $3 million are highlighted.)
<TABLE>
<CAPTION>
DATE OF
STOCK SECTOR FINAL SALE GAIN/(LOSS)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. Transportation 3/2/99 $30,413,843
Canadian National Railway Co. Transportation 2/16/99 (1,462,931)
The CIT Group, Inc. - Class A Financial Services 12/17/98 411,318
Crescent Operating, Inc. Real Estate 12/15/98 (3,943,505)
Eli Lilly & Co. Pharmaceutical & Health Care 5/3/99 17,811,309
Equity Office Properties Trust Real Estate 7/15/99 629,708
FDX Corp. Transportation 11/2/98 (4,372,084)
Federal Realty Investment Trust Real Estate 6/18/99 2,356,171
Glaxo Wellcome PLC - ADR Pharmaceutical & Health Care 5/11/99 (175,272)
Hasbro, Inc. Toys 1/29/99 (7,174,649)
Home Properties of New York, Inc. Real Estate 5/18/99 167,959
J. Ray McDermott, S.A. Energy 8/4/98 (4,076,700)
Kimco Realty Corp. Real Estate 5/18/99 1,430,994
K N Energy, Inc. Energy 8/27/98 (1,633,620)
Mattel, Inc. Toys 1/14/99 (7,027,360)
Micron Technology, Inc. Electronics 1/15/99 37,464,478
Nestle S.A. (Switzerland) ADR (144A) Consumer Products 12/23/98 775,184
Nestle S.A. (Switzerland) Consumer Products 12/18/98 6,992,029
Nestle S.A. (Switzerland) (Sponsored
ADR for Reg. Shrs.) Consumer Products 12/23/98 77,480,114
The New York Times Co. - Class A Publishing 4/28/99 1,012,414
The News Corporation Limited - ADR Publishing 1/20/99 2,632,555
Noble Affiliates, Inc. Energy 3/5/99 (24,877,532)
Novartis AG - ADR Pharmaceutical & Health Care 5/14/99 7,680,169
Novellus Systems, Inc. Technology 11/4/98 5,215,855
Reckson Associates Realty Corp. Real Estate 7/15/99 (209,824)
Smith International Inc. Energy 7/22/99 (5,890,526)
SunTrust Banks, Inc. Banks and Savings & Loans 5/21/99 (5,675,248)
TCF Financial Corporation Banks and Savings & Loans 10/1/98 106,017
Tom Brown, Inc. Energy 10/13/98 (2,215,682)
20th Century Industries, Inc. Property/Casualty Insurance 4/14/99 (3,403,239)
Tyson Foods, Inc. Food & Restaurant 10/9/98 2,263,224
Union Pacific Cap Trust,
6.25%, Ser. Conv. Pfd. 144A Transportation 10/7/98 (812,500)
United Dominion Realty Trust, Inc. Real Estate 5/25/99 935,222
Vornado Operating, Inc. Real Estate 12/9/98 (130,402)
Weingarten Realty, Investors Real Estate 5/26/99 409,646
W.R. Berkley Corp. Property/Casualty Insurance 7/1/99 1,105,664
</TABLE>
12
<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, 1999, 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 Purchased Through Cost of
Initial Shares Shares Shares Shares Distributions - $206,179 Original Investment
---------- ----------- ----------- ---------- ----------- ------------------------ -------------------
<S> <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
1999 $52,124.05 $137,965.68 $541,763.34 $51,355.30 $206,178.97 $10,000.00
</TABLE>
For Illustration of the Growth of an Investment of $10,000
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.
13
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS
July 31, 1999
<TABLE>
<CAPTION>
==============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - (96.63%)
ADVERTISING AGENCIES - (0.05%)
880,000 WPP Group PLC....................................................... $ 7,901,241
--------------
AGRICULTURAL - (0.30%)
1,105,000 Monsanto Co......................................................... 43,233,125
--------------
BANKS AND SAVINGS & LOANS - (14.30%)
4,451,852 Bank of America Corp................................................ 295,491,677
3,887,925 Banc One Corp (b)................................................... 212,134,908
30,000 First Union Corp. .................................................. 1,380,000
1,095,900 Golden West Financial Corp. (b) .................................... 105,137,906
9,351,400 Household International, Inc........................................ 401,525,738
785,100 State Street Corp................................................... 55,643,963
675,000 UBS AG.............................................................. 205,607,868
3,534,700 U.S. Bancorp (b).................................................... 110,017,538
17,661,000 Wells Fargo Co. .................................................... 688,779,000
--------------
2,075,718,598
--------------
BUILDING MATERIALS - (4.62%)
4,036,700 Martin Marietta Material, Inc. (c).................................. 219,747,856
10,579,200 Masco Corp.......................................................... 314,731,200
3,111,900 Vulcan Materials Co................................................. 136,923,600
--------------
671,402,656
--------------
CHEMICALS - (0.01%)
6,000 Dow Chemical Co..................................................... 744,000
--------------
COMMERCIAL SERVICES - (0.00%)
1,666 Nielsen Media Research*............................................. 54,145
--------------
CONSULTING SERVICES - (0.00%)
1,302 Gartner Group, Inc.-Class B*........................................ 28,156
--------------
CONSUMER PRODUCTS - (3.33%)
80,200 Coca-Cola Co........................................................ 4,837,063
1,064,000 Colgate-Palmolive Co.......................................... 52,535,000
30,000 Fortune Brands, Inc................................................. 1,185,000
30,000 Gallaher Group PLC - ADR............................................ 678,750
1,580,000 Gillette Co......................................................... 69,223,750
9,543,800 Philip Morris Cos., Inc............................................. 355,506,550
--------------
483,966,113
--------------
DIVERSIFIED - (5.28%)
8,522 Berkshire Hathaway, Inc. - Class A*................................. 577,834,210
4 Berkshire Hathaway, Inc. - Class B*................................. 8,520
80,240 General Electric Co................................................. 8,746,160
1,840,000 Tyco International Ltd. ............................................ 179,745,000
--------------
766,333,890
--------------
</TABLE>
14
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1999
<TABLE>
<CAPTION>
==============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock-Continued
DIVERSIFIED FINANCIAL SERVICES - (12.40%)
6,607,000 American Express Co................................................. $ 870,472,250
12,867,162 Citigroup, Inc...................................................... 573,392,907
2,205,600 Freddie Mac ........................................................ 126,546,300
2,524,000 Providian Financial Corp............................................ 229,684,000
--------------
1,800,095,457
--------------
ELECTRONICS - (2.76%)
3,723,600 Applied Materials, Inc.*........................................... 267,750,113
508,024 Koninklijke Philips Electronics N.V................................. 51,373,927
2,313,474 Molex Inc. (b)...................................................... 80,754,702
--------------
399,878,742
--------------
ENERGY - (1.67%)
13,200 Amerada Hess Corp. ................................................. 781,275
32,200 Atlantic Richfield Co............................................... 2,900,013
5,000 Burlington Resources, Inc........................................... 220,938
52,200 Chevron Corp........................................................ 4,763,250
145,200 Cooper Cameron Corp.*............................................... 5,263,500
2,063,300 Devon Energy Corp................................................... 75,955,231
12,000 Duke Energy Corp.................................................... 635,250
160,800 Exxon Corp. (b)..................................................... 12,763,500
1,249,300 Halliburton Co...................................................... 57,623,963
16,000 Mobil Corp.......................................................... 1,636,000
1,303,200 Schlumberger Ltd. (b)............................................... 78,925,050
8,000 Sempra Energy....................................................... 177,500
16,000 Sonat, Inc.......................................................... 563,000
--------------
242,208,470
--------------
FOOD & RESTAURANT - (4.24%)
14,770,800 McDonald's Corp..................................................... 615,757,725
--------------
HOTELS - (0.68%)
2,797,300 Marriott International, Inc......................................... 98,080,331
--------------
INDUSTRIAL - (1.32%)
2,973,700 Sealed Air Corp.* (b)............................................... 191,060,225
--------------
INTERNATIONAL CLOSED-END INVESTMENT COMPANY - (0.05%)
850,465 Morgan Stanley Dean Witter Asia Pacific Fund Inc.................... 8,079,418
--------------
</TABLE>
15
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1999
<TABLE>
<CAPTION>
==============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock-Continued
INVESTMENT FIRMS - (2.94%)
2,463,000 Donaldson, Lufkin & Jenrette, Inc................................... $ 127,306,313
24,000 J.P. Morgan & Co., Inc.............................................. 3,069,000
3,294,190 Morgan Stanley Dean Witter & Co..................................... 296,888,874
--------------
427,264,187
--------------
LIFE INSURANCE - (1.50%)
442,800 ReliaStar Financial Corp............................................ 20,092,050
3,811,400 UnumProvident Corp.................................................. 197,239,950
--------------
217,332,000
--------------
MACHINERY - (1.01%)
3,712,600 Dover Corp. (b)..................................................... 146,647,700
--------------
MANUFACTURING - (0.01%)
30,000 Maytag Corp......................................................... 2,088,750
--------------
MARKETING - (0.00%)
1,666 ACNielsen Corp.*.................................................... 48,210
--------------
PAPER PRODUCTS - (0.01%)
36,208 International Paper Co.............................................. 1,851,134
--------------
PHARMACEUTICAL AND HEALTH CARE - (4.08%)
2,950,000 American Home Products Corp......................................... 150,450,000
2,313,800 Bristol-Myers Squibb Co............................................. 153,867,700
10,000 IMS Health, Inc..................................................... 278,750
40,000 Johnson & Johnson................................................... 3,685,000
889,000 Merck & Co., Inc.................................................... 60,174,188
909,600 Pfizer, Inc......................................................... 30,869,550
3,217,600 SmithKline Beecham PLC - ADR........................................ 193,257,100
--------------
592,582,288
--------------
PROPERTY/CASUALTY INSURANCE - (7.79%)
3,060,716 The Allstate Corp................................................... 108,655,418
2,761,766 American International Group, Inc................................... 320,710,077
2,794,000 Chubb Corp.......................................................... 167,116,125
2,260,900 Progressive Corp. (Ohio) (b)........................................ 288,829,975
3,309,300 Transatlantic Holdings, Inc. (c).................................... 245,508,694
--------------
1,130,820,289
--------------
</TABLE>
16
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1999
<TABLE>
<CAPTION>
==============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - CONTINUED
PUBLISHING - (2.50%)
748,500 Dow Jones & Co., Inc................................................ $ 37,331,438
5,000 Dun & Bradstreet Corp.............................................. 158,750
1,628,000 Gannett Co., Inc.................................................... 117,623,000
2,815,300 Harcourt General, Inc. (c).......................................... 130,735,494
1,000 R. H. Donnelley Corp................................................ 17,563
827,600 Tribune Co.......................................................... 72,880,525
7,200 Washington Post Co., Class B........................................ 4,068,000
--------------
362,814,770
--------------
REAL ESTATE - (2.50%)
356,600 Boardwalk Equities, Inc.*........................................... 3,361,694
387,100 CenterPoint Properties Corp......................................... 13,838,825
3,604,700 Crescent Real Estate Equities Co.................................... 79,303,400
529,300 Equity Residential Properties Trust................................. 21,866,706
270,000 Gables Residential Trust............................................ 6,547,500
2,313,100 General Growth Properties, Inc...................................... 76,476,869
784,000 Mack-Cali Realty Corp............................................... 21,952,000
382,700 Public Storage, Inc................................................. 9,830,606
2,647,000 Rouse Co............................................................ 64,355,188
1,852,200 Vornado Realty Trust................................................ 65,521,575
--------------
363,054,363
--------------
SATELLITE TELECOMMUNICATIONS - (0.72%)
5,533,400 Loral Space & Communications, Ltd.*................................. 104,442,925
--------------
TECHNOLOGY - (20.22%)
9,252,725 Hewlett-Packard Co.................................................. 968,644,648
2,925,400 Intel Corp. (b)..................................................... 201,944,019
5,508,800 International Business Machines Corp................................ 692,387,300
4,440,000 Oracle Corp.*....................................................... 169,136,250
242,800 SAP AG (b).......................................................... 91,829,953
1,101,500 SAP AG - ADR (b).................................................... 34,903,781
5,363,000 Texas Instruments Inc. ............................................. 772,272,000
80,000 Unisys Corp.*....................................................... 3,265,000
--------------
2,934,382,951
--------------
TELECOMMUNICATIONS - (1.12%)
2,912,412 Globalstar Telecommunications Ltd.* (b)............................. 75,085,622
940,000 Motorola, Inc....................................................... 85,775,000
20,000 SBC Communications, Inc............................................. 1,143,750
--------------
162,004,372
--------------
</TABLE>
17
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1999
<TABLE>
<CAPTION>
==============================================================================================================
VALUE
SHARES/PRINCIPAL SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - CONTINUED
UTILITIES - (0.01%)
10,000 Carolina Power & Light Co........................................... $ 411,250
12,000 Edison International ............................................... 303,750
6,000 New England Electric System......................................... 310,875
16,800 Southern Co......................................................... 444,150
9,000 Wisconsin Energy Corp. ............................................. 225,563
--------------
1,695,588
--------------
WASTE MANAGEMENT - (1.21%)
6,848,500 Waste Management, Inc............................................... 175,064,781
--------------
Total Common Stocks - (identified cost $9,749,653,072)......... 14,026,636,600
--------------
PREFERRED STOCK - (0.46%)
200,600 Devon Financing Trust, 6.50%, Conv. Pfd............................. 12,361,975
2,000,000 General Growth Properties, 7.25%, Cum. Conv. Pfd................... 46,250,000
131,900 Rouse Co., $3.00, Ser. B, Cum. Conv. Pfd............................ 5,284,244
60,200 Vornado Realty Trust, 6.50%, Ser. A, Cum. Conv. Pfd................. 3,002,474
--------------
Total Preferred Stocks - (identified cost $73,685,263)......... 66,898,693
--------------
SHORT TERM INVESTMENTS - (2.57%)
$ 20,000,000 Fannie Mae Discount Note, 4.98%, 08/05/99........................... 19,986,167
30,000,000 Fannie Mae Discount Note, 4.96%, 08/18/99........................... 29,925,600
30,000,000 Federal Home Loan Bank Discount Note, 4.95%, 08/11/99............... 29,954,625
25,000,000 Federal Home Loan Bank Discount Note, 4.96%, 08/13/99 .............. 24,955,222
8,487,000 Freddie Mac Discount Note, 4.96%, 08/05/99 ......................... 8,481,153
28,565,000 Freddie Mac Discount Note, 4.98%, 08/06/99 ......................... 28,541,291
21,925,000 Freddie Mac Discount Note, 4.99%, 08/09/99 ......................... 21,897,649
10,500,000 Freddie Mac Discount Note, 4.97%, 08/12/99 ......................... 10,482,605
14,500,000 Freddie Mac Discount Note, 4.96%, 08/16/99 ......................... 14,468,036
21,445,000 Freddie Mac Discount Note, 4.98%, 08/16/99 ......................... 21,397,535
25,710,000 Freddie Mac Discount Note, 4.92%, 08/17/99 ......................... 25,650,267
8,000,000 Freddie Mac Discount Note, 4.94%, 08/17/99 ......................... 7,981,338
31,495,000 Freddie Mac Discount Note, 4.95%, 08/18/99 ......................... 31,417,050
32,485,000 Freddie Mac Discount Note, 4.98%, 08/19/99 ......................... 32,399,619
25,345,000 Freddie Mac Discount Note, 4.97%, 08/24/99 ......................... 25,261,024
</TABLE>
18
<PAGE>
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - Continued
July 31, 1999
<TABLE>
<CAPTION>
==============================================================================================================
VALUE
PRINCIPAL SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT TERM INVESTMENTS - CONTINUED
$ 14,521,000 Freddie Mac Discount Note, 4.98%, 08/25/99 ........................ $ 14,470,782
24,995,000 State Street Corporation Repurchase Agreement, 5.06%, 08/02/99,
dated 07/30/99, repurchase value $25,005,540 (collateralized
by: $26,750,000 par value Freddie Mac, 6.45%, 04/29/09,
market value $25,746,875) ........................................ 24,995,000
---------------
Total Short Term Investments - (identified cost $372,264,963) . 372,264,963
---------------
Total Investments - (identified cost $10,195,603,298)(99.66%)(a) 14,465,800,256
Other Assets Less Liabilities - (0.34%) ..................... 49,357,451
---------------
Net Assets - (100%)................................... $14,515,157,707
===============
(a) Aggregate cost for Federal Income Tax purposes is $10,195,576,006. At July 31, 1999 unrealized
appreciation (depreciation) of securities for Federal Income Tax purposes was as follows:
Unrealized appreciation ........................................... $ 4,586,529,427
Unrealized depreciation ........................................... (316,305,177)
Net appreciation ............................................. $ 4,270,224,250
===============
</TABLE>
(b) Loaned security - See Note 7 of Notes to Financial Statements.
(c) Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is an affiliate, as defined in the Investment
Company Act of 1940, at or during the year ended July 31, 1999. The aggregate
fair value of the securities of affiliated companies held by the Fund as of July
31, 1999 amounts to $595,992,044. Transactions during the period in which the
issuers were affiliates are as follows:
<TABLE>
<CAPTION>
Shares Gross Gross Shares Dividend
Security July 31, 1998 Additions Reductions July 31, 1999 Income
- -------- ------------- --------- ---------- ------------- ------
<S> <C> <C> <C> <C> <C>
Harcourt General, Inc. 1,746,900 1,068,400 - 2,815,300 2,252,240
Martin Marietta
Material, Inc. 3,571,300 465,400 - 4,036,700 2,081,274
Transatlantic
Holdings, Inc. 1,983,100 1,326,200 - 3,309,300 1,409,760
</TABLE>
* Non-Income Producing Security
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
DAVIS NEW YORK VENTURE FUND
STATEMENT OF ASSETS AND LIABILITIES
At July 31, 1999
===============================================================================
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value (see accompanying Schedule of Investments)
Unaffiliated companies (identified cost of $9,686,681,873)....................... $13,869,808,212
Affiliated companies (identified cost of $508,921,425)........................... 595,992,044
Collateral for securities loaned (Note 7) ........................................... 188,764,838
Cash ................................................................................ 2,931,208
Receivables:
Investment securities sold ...................................................... 33,229,459
Capital stock sold .............................................................. 47,940,470
Dividends and interest .......................................................... 10,444,220
Prepaid expenses .................................................................... 173,770
Other assets ....................................................................... 1,191,294
---------------
Total assets ............................................................... 14,750,475,515
---------------
LIABILITIES:
Return of collateral for securities loaned (Note 7) ................................. 188,764,838
Payables:
Investment securities purchased ................................................ 11,054,628
Capital stock redeemed ......................................................... 18,586,569
Accrued expenses .................................................................... 16,719,231
Other liabilities ................................................................... 192,542
---------------
Total liabilities .......................................................... 235,317,808
---------------
NET ASSETS ............................................................................ $14,515,157,707
===============
NET ASSETS CONSIST OF:
Par value of shares of capital stock ................................................ $ 26,345,034
Additional paid-in capital .......................................................... 9,896,081,194
Undistributed net investment income ................................................. 65,944
Net unrealized appreciation on investments .......................................... 4,270,196,958
Accumulated net realized gains from investments and foreign currency transactions ... 322,468,577
---------------
Net assets ................................................................. $14,515,157,707
===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
DAVIS NEW YORK VENTURE FUND
STATEMENT OF ASSETS AND LIABILITIES
At July 31, 1999
===============================================================================
<TABLE>
<CAPTION>
<S> <C>
CLASS A SHARES
Net assets....................................................................... $ 7,443,025,143
Shares outstanding ............................................................. 268,421,257
Net asset value and redemption price per share .................................. $ 27.73
=======
Maximum offering price per share (100/95.25 of $27.73)*.......................... $ 29.11
=======
CLASS B SHARES
Net assets....................................................................... $ 4,404,511,567
Shares outstanding ............................................................. 161,636,156
Net asset value and redemption price per share ................................. $ 27.25
=======
CLASS C SHARES
Net assets....................................................................... $ 1,933,934,817
Shares outstanding ............................................................. 70,644,637
Net asset value and redemption price per share ................................. $ 27.38
=======
CLASS Y SHARES
Net assets....................................................................... $ 733,686,180
Shares outstanding ............................................................. 26,198,628
Net asset value and redemption price per share ................................. $ 28.00
=======
</TABLE>
*On purchases of $100,000 or more, the offering price is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
DAVIS NEW YORK VENTURE FUND
STATEMENT OF OPERATIONS
For the year ended July 31, 1999
===============================================================================
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends
Unaffiliated companies (Net of foreign withholding taxes of $1,384,237) .. $ 154,787,062
Affiliated companies ....................................................... 5,743,274
Interest ....................................................................... 22,335,784
Lending fees ................................................................... 511,382
--------------
Total income ............................................................ 183,377,502
Expenses:
Management fees (Note 3) ...................................... $66,033,452
Custodian fees ................................................ 1,788,442
Transfer agent fees
Class A ................................................... 6,903,455
Class B ................................................... 5,996,462
Class C ................................................... 2,216,329
Class Y ................................................... 259,144
Audit fees .................................................... 66,283
Legal fees .................................................... 165,238
Accounting fees (Note 3) ...................................... 399,996
Reports to shareholders ....................................... 1,556,759
Directors' fees and expenses .................................. 340,739
Registration and filing fees .................................. 1,728,080
Miscellaneous ................................................. 287,433
Payments under distribution plan (Note 4)
Class A ................................................... 15,106,683
Class B ................................................... 36,587,825
Class C ................................................... 15,962,857
----------
Total expenses.......................................................... 155,399,177
Expenses paid indirectly (Note 6)...................................... (14,556)
--------------
Net expenses ........................................................... 155,384,621
--------------
Net investment income............................................... 27,992,881
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investment transactions ........................................................ 538,415,594
Foreign currency transactions .................................................. (222,386)
Net increase in unrealized appreciation of investments............................... 1,349,318,618
--------------
Net realized and unrealized gain on investments ..................................... 1,887,511,826
--------------
Net increase in net assets resulting from operations.................... $1,915,504,707
==============
</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,
1999 1998
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income ............................................ $ 27,992,881 $ 46,466,636
Net realized gain from investments and
foreign currency transactions .............................. 538,193,208 103,979,812
Increase in unrealized appreciation of investments ............... 1,349,318,618 760,284,850
--------------- ---------------
Net increase in net assets resulting
from operations ......................................... 1,915,504,707 910,731,298
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income:
Class A .................................................... (28,343,424) (44,770,305)
Class B .................................................... - (3,420,374)
Class C .................................................... - (1,903,619)
Class Y .................................................... (3,078,683) (8,520,851)
Realized gains from investment transactions:
Class A .................................................... (129,418,490) (161,900,484)
Class B .................................................... (67,972,146) (58,984,889)
Class C .................................................... (29,415,244) (27,202,211)
Class Y .................................................... (7,965,994) (24,556,619)
CAPITAL SHARE TRANSACTIONS:
Net increase (decrease) in net assets
resulting from capital share
transactions (Note 5)
Class A .................................................... 75,397,977 2,066,724,690
Class B .................................................... 777,460,404 1,792,896,890
Class C .................................................... 327,436,231 756,414,498
Class Y .................................................... (22,403,667) 154,535,620
--------------- ---------------
Total increase in net assets..................................... 2,807,201,671 5,350,043,644
NET ASSETS:
Beginning of year ............................................... 11,707,956,036 6,357,912,392
--------------- ---------------
End of year (including undistributed net investment income
of $65,944 and $4,597,468, respectively)......................... $14,515,157,707 $11,707,956,036
=============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 1999
================================================================================
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, 1999, amounts have been reclassified to reflect a decrease in
undistributed net investment income of $1,102,298, an increase in additional
paid-in capital of $1,022,859 and an increase in accumulated net realized gains
from investments of $79,439.
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 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.
DAVIS NEW YORK VENTURE FUND NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1999
24
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1999
================================================================================
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) for the year ended July 31, 1999, were $4,406,118,134 and
$3,010,353,386, 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, 1999 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 these services for the year ended
July 31, 1999 amounted to $1,323,871. 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 $399,996 for the year ended July 31, 1999. 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, 1999, SCD
received $546,972 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.
During the year ended July 31, 1999, Davis Distributors, LLC, the Fund's
Underwriter (the "Underwriter" or "Distributor") received $17,227,229 from
commissions earned on sales of Class A shares of the Fund, of which $2,670,376
was retained by the Underwriter and the remaining $14,556,853 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.
25
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1999
================================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - CONTINUED
CLASS A SHARES - CONTINUED
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, 1999 was $15,106,683.
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, 1999, Class B shares of the Fund made
distribution plan payments which included distribution fees of $27,504,339 and
service fees of $9,083,486.
Commission advances by the Distributor during the year ended July 31, 1999
on the sale of Class B shares of the Fund amounted to $42,650,521, of which
$39,716,362 was reallowed to qualified selling dealers.
The Distributor intends to seek payment from Class B shares of the Fund in
the amount of $110,242,640, 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.
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,
1999 the Distributor received $7,791,331 in contingent deferred sales charges
from Class B shares of the Fund.
26
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1999
===============================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - CONTINUED
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, 1999, Class C shares of the Fund made
distribution payments of $15,962,857. During the year ended July 31, 1999, the
Distributor received $797,726 in contingent deferred sales charges from Class C
shares of the Fund.
NOTE 5 - CAPITAL STOCK
At July 31, 1999, 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, 1999 JULY 31, 1998
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>>
Shares subscribed ............................. 77,281,967 $1,922,853,812 110,409,208 $2,590,265,386
Shares issued in reinvestment of distributions 5,790,849 139,096,019 8,251,609 183,685,625
---------- -------------- ----------- --------------
83,072,816 2,061,949,831 118,660,817 2,773,951,011
Shares redeemed .............................. (80,338,658) (1,986,551,854) (29,994,547) (707,226,321)
---------- -------------- ----------- --------------
Net increase ............................. 2,734,158 $ 75,397,977 88,666,270 $2,066,724,690
========== ============== =========== ==============
</TABLE>
CLASS B
- -------
<TABLE>
YEAR ENDED YEAR ENDED
JULY 31, 1999 JULY 31, 1998
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>>
Shares subscribed ............................ 47,698,106 $1,175,661,533 80,387,670 $1,868,220,520
Shares issued in reinvestment of distributions 2,706,344 64,247,379 2,676,634 59,180,842
---------- -------------- ----------- --------------
50,404,450 1,239,908,912 83,064,304 1,927,401,362
Shares redeemed ............................. (18,931,467) (462,448,508) (5,734,058) (134,504,472)
---------- -------------- ----------- --------------
Net increase ............................. 31,472,983 $ 777,460,404 77,330,246 $1,792,896,890
========== ============== =========== ==============
</TABLE>
27
<PAGE>
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - Continued
July 31, 1999
===============================================================================
NOTE 5 - CAPITAL STOCK - CONTINUED
CLASS C
- -------
<TABLE>
YEAR ENDED YEAR ENDED
JULY 31, 1999 JULY 31, 1998
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>>
Shares subscribed ............................. 23,639,344 $ 592,450,371 35,113,179 $ 818,643,623
Shares issued in reinvestment of distributions 1,147,116 27,347,035 1,216,430 26,983,778
---------- -------------- ----------- -------------
24,786,460 619,797,406 36,329,609 845,627,401
Shares redeemed .............................. (11,903,414) (292,361,175) (3,800,574) (89,212,903)
---------- -------------- ----------- --------------
Net increase ............................. 12,883,046 $ 327,436,231 32,529,035 $ 756,414,498
========== ============== =========== ==============
</TABLE>
CLASS Y
- -------
<TABLE>
YEAR ENDED YEAR ENDED
JULY 31, 1999 JULY 31, 1998
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>>
Shares subscribed ............................. 15,338,275 $ 392,645,833 21,252,293 $ 497,339,664
Shares issued in reinvestment of distributions 354,272 8,580,467 1,277,781 28,673,414
---------- -------------- ----------- --------------
15,692,547 401,226,300 22,530,074 526,013,078
Shares redeemed .............................. (19,446,846) (423,629,967) (15,658,979) (371,477,458)
---------- -------------- ----------- --------------
Net increase (decrease).............. (3,754,299) $ (22,403,667) 6,871,095 $ 154,535,620
========== ============== =========== ===============
</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 $14,556 during the year ended July 31, 1999.
NOTE 7 - SECURITIES LOANED
Davis New York Venture Fund (the "Fund") has entered into a securities
lending arrangement with PaineWebber, Inc. Under the terms of the agreement, the
Fund receives fee income from lending transactions; in exchange for such fees,
PaineWebber, Inc. is authorized to loan securities on behalf of the Fund,
against receipt of collateral at least equal to the value of the securities
loaned. Cash collateral is invested by the Adviser in money market instruments.
As of July 31, 1999, the Fund had on loan securities valued at $176,786,377;
cash of $188,764,838 was received as collateral for the loans and has been
invested in approved instruments. The Fund bears the risk of any deficiency in
the amount of the collateral available for return to a borrower due to a loss in
an approved investment.
28
<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,
---------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 24.31 $ 22.91 $ 15.24 $ 14.56 $ 12.04
-------- -------- -------- -------- --------
Income From Investment Operations
- ---------------------------------
Net Investment Income................. .14 .20 .18 .20 .14
Net Realized and Unrealized Gains..... 3.87 2.26 8.37 1.64 2.95
-------- -------- -------- -------- --------
Total From Investment Operations.... 4.01 2.46 8.55 1.84 3.09
Dividends and Distributions
- ---------------------------
Dividends from Net Investment Income.. (.11) (.23) (.18) (.15) (.12)
Distributions from Realized Gains..... (.48) (.83) (.70) (1.01) (.45)
-------- -------- -------- -------- --------
Total Dividends and Distributions.. (.59) (1.06) (.88) (1.16) (.57)
-------- -------- -------- -------- --------
Net Asset Value, End of Period ........... $ 27.73 $ 24.31 $ 22.91 $ 15.24 $ 14.56
======== ======== ========= ======== =========
Total Return (1)........................... 16.85% 11.16% 57.83% 13.04% 27.21%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000,000 omitted).................... $ 7,443 $ 6,458 $ 4,055 $ 2,151 $ 1,595
Ratio of Expenses to Average Net
Assets............................... .90% .91% .89% .87% .90%
Ratio of Net Investment Income to
Average Net Assets................... .56% .80% .98% 1.30% 1.11%
Portfolio Turnover Rate(3).................. 25% 11% 24% 19% 15%
</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) Prior to 1996, the ratio of expenses to average net assets included the
reduction of custodian fees.
(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.
29
<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
YEAR ENDED JULY 31, (INCEPTION OF CLASS)
------------------------------------------------ THROUGH
1999 1998 1997 1996 7/31/95
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 24.00 $ 22.64 $ 15.08 $ 14.43 $ 10.88
-------- -------- -------- -------- ---------
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss).......... (.14) .01 .01 .04 (.01)
Net Realized and Unrealized Gains..... 3.87 2.23 8.29 1.62 3.56
-------- -------- -------- -------- ---------
Total From Investment Operations.... 3.73 2.24 8.30 1.66 3.55
Dividends and Distributions
- ---------------------------
Dividends from Net Investment Income.. - (.05) (.04) - -
Distributions from Realized Gains..... (.48) (.83) (.70) (1.01) -
-------- -------- -------- -------- ---------
Total Dividends and Distributions.. (.48) (.88) (.74) (1.01) -
-------- -------- -------- -------- ---------
Net Asset Value, End of Period ........... $ 27.25 $ 24.00 $ 22.64 $ 15.08 $ 14.43
======== ======== ======== ======== =========
Total Return (1)........................... 15.84% 10.22% 56.47% 11.81 32.63%
- ---------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000,000 omitted)................... $4,405 $3,123 $1,196 $289 $40
Ratio of Expenses to Average Net
Assets.............................. 1.74%(2) 1.79% 1.79%(2) 1.73% 1.78%*
Ratio of Net Investment Income (Loss)
to Average Net Assets............... (.28)% (.08)% .07% .44% .23%*
Portfolio Turnover Rate(3)............ 25% 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 the year ended July 31,
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.
30
<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 1, 1994
YEAR ENDED JULY 31, (INCEPTION OF CLASS)
------------------------------------------------ THROUGH
1999 1998 1997 1996 7/31/95
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 24.09 $ 22.72 $ 15.12 $ 14.47 $ 11.16
-------- -------- -------- -------- ---------
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss)........... (.10) .02 .02 .04 (.01)
Net Realized and Unrealized Gains...... 3.87 2.24 8.32 1.62 3.32
-------- -------- -------- -------- ---------
Total From Investment Operations..... 3.77 2.26 8.34 1.66 3.31
Dividends and Distributions
- ---------------------------
Dividends from Net Investment Income... - (.06) (.04) - -
Distributions from Realized Gains...... (.48) (.83) (.70) (1.01) -
-------- -------- -------- -------- ---------
Total Dividends and Distributions.... (.48) (.89) (.74) (1.01) -
-------- -------- -------- -------- ---------
Net Asset Value, End of Period............. $ 27.38 $ 24.09 $ 22.72 $ 15.12 $ 14.47
======== ======== ======== ======== =========
Total Return(1)............................. 15.95% 10.27% 11.78% 56.59% 29.66%
- ---------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000,000 omitted).................... $ 1,934 $ 1,391 $ 573 $ 117 $ 12
Ratio of Expenses to Average Net
Assets............................... 1.72% 1.71% 1.73% 1.73%(2) 1.78%*(2)
Ratio of Net Investment Income (Loss)
to Average Net Assets................ (.26)% .00% .13% .44% .23%*
Portfolio Turnover Rate(3)............. 25% 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) Prior to 1996, the ratio of expenses to average net assets included the
reduction of custodian fees.
(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 Y
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
OCTOBER 2, 1996
YEAR ENDED JULY 31, (INCEPTION OF CLASS)
------------------------ THROUGH
1999 1998 7/31/97
---- ---- -------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 24.55 $ 23.12 $ 16.66
-------- -------- --------
Income From Investment Operations
- ---------------------------------
Net Investment Income............................. .25 .24 .15
Net Realized and Unrealized Gains................. 3.87 2.31 7.07
-------- -------- --------
Total From Investment Operations................ 4.12 2.55 7.22
Dividends and Distributions
- ---------------------------
Dividends from Net Investment Income.............. (.19) (.29) (.06)
Distributions from Realized Gains................. (.48) (.83) (.70)
-------- -------- --------
Total Dividends and Distributions.............. (.67) (1.12) (.76)
-------- -------- --------
Net Asset Value, End of Period......................... $ 28.00 $ 24.55 $ 23.12
======== ======== ========
Total Return(1)........................................ 17.19% 11.48% 44.71%
- ---------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000,000 omitted)....... $734 $735 $534
Ratio of Expenses to Average Net Assets.......... .62% .59% .62%*
Ratio of Net Investment Income to Average Net
Assets.......................................... .84% 1.12% 1.19%*
Portfolio Turnover Rate(2)........................ 25% 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.
32
<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, 1999, and the related statement of operations for the year then ended and
the statement of changes in net assets and the financial highlights for each of
the years in the two-year period 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 audits. The financial highlights for each of
the years in the three-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 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 July
31, 1999, 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 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 New York Venture Fund as of July 31, 1999, the results of its operations
for the year then ended, and the changes in its net assets and the financial
highlights for each of the years in the two-year period then ended, in
conformity with generally accepted accounting principles.
KPMG LLP
Denver, Colorado
September 3, 1999
33
<PAGE>
DAVIS NEW YORK VENTURE FUND
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
FOR THE YEAR ENDED JULY 31, 1999
===============================================================================
In early 2000, shareholders will receive information regarding all
dividends and distributions paid to them by the Fund during calendar year 1999.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
Dividends paid by the Fund during the fiscal year ended July 31, 1999 which
are not designated as capital gain distribution should be mutliplied by 100% to
arrive at the net amount eligible for the corporate dividends-received
deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax adviser for specific guidance.
34
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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
Marsha Williams Christopher C. Davis
Vice President
Andrew A. Davis
Vice President
INVESTMENT ADVISER
Davis Selected Advisers, L.P.
124 East Marcy Street
Santa Fe, New Mexico 87501
(800) 279-2279
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
111 E. Wacker Drive, Suite 2800
Chicago, Illinois 60601-4205
AUDITORS
KPMG 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.
================================================================================
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ANNUAL REPPORT
Davis Selected Advisers, L.P.
124 East Marcy Street
Santa Fe, New Mexico 87501
1-800-279-0279
[DAVIS FUND LOGO]
