DAVIS NEW YORK VENTURE FUND INC, 485BPOS, 1999-11-30

DAVIS NEW YORK VENTURE FUND INC
485BPOS, 1999-11-30

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
REGISTRATION NO. 2-29858
POST-EFFECTIVE AMENDMENT NO. 59

AND

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
REGISTRATION NO. 811-1701
AMENDMENT NO. 34

DAVIS NEW YORK VENTURE FUND, INC.

124 East Marcy Street
Santa Fe, New Mexico 87501
(1-505-820-3000)

Agents For Service: Thomas D. Tays, Esq.
Davis Selected Advisers, L.P.
124 East Marcy Street
Santa Fe, New Mexico 87501
1-505-820-3055

-or-

Sheldon R. Stein, Esq.
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
(1-312-580-2014)

It is proposed that this filing will become effective:

[ ] Immediately upon filing pursuant to paragraph (b)
[X] On December 1, 1999 , pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On ________, pursuant to paragraph (a) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] On_______________, pursuant to paragraph (a)(2) of Rule 485

<PAGE>

Title of Securities being Registered: Common Stock of:

(1) DAVIS NEW YORK VENTURE FUND
(2) DAVIS GROWTH & INCOME FUND

FORM N-1A

DAVIS NEW YORK VENTURE FUND, INC.
CLASS A, CLASS B AND CLASS C SHARES

POST-EFFECTIVE AMENDMENT NO. 59 TO REGISTRATION
STATEMENT NO. 2-29858 UNDER THE SECURITIES ACT OF 1933
AND AMENDMENT NO. 34 UNDER THE INVESTMENT COMPANY ACT
OF 1940 TO REGISTRATION STATEMENT NO. 811-1701.

CROSS REFERENCE SHEET
---------------------
N-1A
ITEM NO. PART A CAPTION OR PLACEMENT: PROSPECTUS FOR CLASS ABC SHARES
- -------- ------------------------------------------------------------
(Both Davis New York Venture Fund and Davis
Growth & Income Fund prospectuses are organized
in the same manner.)

1 Front and Back Cover pages
2, 4 Risk Spectrum;
Overview of the Fund:
Investment Objective and Strategy
Principal Risks
Fund Performance
3 Overview of the Fund: Fees and Expenses
5 1999 Annual Report
6. Who is Responsible for Your Davis Account
7. Once You Invest in the Fund
How to Open an Account
How to Buy, Sell and Exchange Shares
8 How to Choose a Share Class
9 Overview of the Fund: Financial Highlights

N-1A
ITEM NO. PART A CAPTION OR PLACEMENT: PROSPECTUS FOR CLASS Y SHARES
- -------- ----------------------------------------------------------

(Both Davis New York Venture Fund and Davis
Growth & Income Fund prospectuses are organized
in the same manner.)

1 Front and Back Cover pages
2, 4 Risk Spectrum;
Overview of the Fund:

<PAGE>

Investment Objective and Strategy
Principal Risks
Fund Performance
3 Overview of the Fund: Fees and Expenses
5 1999 Annual Report
6 Who is Responsible for Your Davis Account
7 Once You Invest in the Fund
How to Open an Account
How to Buy, Sell and Exchange Shares
8 Not Applicable
9 Overview of the Fund: Financial Highlights

N-1A
ITEM NO. PART B CAPTION OR PLACEMENT:
- -------- ----------------------------
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
(a single SAI covers both Davis New York Venture Fund and Davis
Growth & Income Fund. The single SAI covers Class A, B, C and Y
shares)

10 Cover Page
11 Organization of the Company
12 Portfolio Securities
Other Investment Practices
Investment Restrictions
13 Directors and Officers
Directors Compensation Table
14 Certain Shareholders of the Fund
15 Investment Advisory Services
Distribution of Company Shares
Other Important Service Providers
16 Portfolio Transactions
17 Organization of the Company
18 Purchase of Shares
Telephone Privilege
Exchange of Shares
Redemption of Shares
19 Federal Income Taxes
20 Distribution of Company Shares
21 Performance Data
22 Annual Report Incorporated by Reference

<PAGE>

Draft 11.15.99

DAVIS NEW YORK VENTURE FUND

Prospectus and Application Form

Class A shares
Class B shares
Class C shares

December 1, 1999

The Securities and Exchange Commission has not approved or disapproved of these
securities. The Securities and Exchange Commission has not determined whether
this prospectus is accurate or complete. Anyone who tells you otherwise is
committing a crime.

(Davis logo)

Over 25 Years Of Reliable Investing

<PAGE>

TABLE OF CONTENTS

Overview of the Fund
Investment Objective and Strategy
Determining If This Fund Is Right for You
Principal Risks
Past Performance
Fees and Expenses of the Fund
Financial Highlights

Who Is Responsible for Your Davis Account

How We Manage the Fund

Once You Invest in the Davis Funds

How to Choose a Share Class

How to Open an Account

How to Buy, Sell and Exchange Shares

The Davis Funds: Over 25 Years of Reliable Investing

Other Fund Documents

2
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OVERVIEW OF DAVIS NEW YORK VENTURE FUND

INVESTMENT OBJECTIVE AND STRATEGY

Davis New York Venture Fund's investment objective is growth of capital.

The Fund invests primarily in common stock of U.S. companies with market
capitalizations of at least $5 billion.

Our portfolio managers use the Davis investment philosophy to select common
stock of quality overlooked growth companies at value prices and to hold them
for the long-term. We look for companies with sustainable growth rates selling
at modest price-earnings multiples that we hope will expand as other investors
recognize the company's true worth. We believe that if you combine a sustainable
growth rate with a gradually expanding multiple, these rates compound and can
generate returns that could exceed average returns earned by investing in large
capitalization domestic stocks. We consider selling a company if the company no
longer exhibits the characteristics that we believe foster sustainable long-term
growth, minimize risk and enhance the potential for superior long-term returns.

[SIDEBAR: ]
Please see the inside back cover page of this prospectus to learn about the
Davis investment philosophy.

DETERMINING IF THIS FUND IS RIGHT FOR YOU

YOU SHOULD CONSIDER INVESTING IN THIS FUND IF:
o You are seeking long-term growth of capital.
o You are more comfortable with established, well-known companies.
o You are investing for the long-term (five years or more).

YOU SHOULD NOT INVEST IN THIS FUND IF:
o You are worried about the possibility of sharp price swings and dramatic
market declines.
o You are interested in earning current income.
o You are investing for the short-term (less than five years).

PRINCIPAL RISKS

If you buy shares of Davis New York Venture Fund, you may lose some or all of
the money that you invest. This section describes what we think are the most
significant factors that can cause the Fund's performance to suffer.

o MARKET RISK. The market value of shares of common stock can change rapidly
and unpredictably as a result of political or economic events having little
or nothing to do with the performance of the companies we invest in.

3
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An investment in Davis New York Venture Fund is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

You can find more detailed information about the risks of the Fund's particular
investments in the section called HOW WE MANAGE THE FUND.

PAST PERFORMANCE

The bar chart and the table below provide an indication of the risks of
investing in Davis New York Venture Fund by showing changes in the Fund's
year-to-year performance and by showing how the Fund's average annual returns
for one, five and ten years compare to those of the S&P 500(Registered
Trademark), a widely recognized unmanaged index of stock performance. How the
Fund has performed in the past is not necessarily an indication of how the Fund
will perform in the future.

DAVIS NEW YORK VENTURE FUND
TOTAL RETURN OVER THE LAST 10-YEAR PERIOD
(As of December 31st of each year)
CLASS A SHARES

1989 34.63%
1990 (2.90%)
1991 40.55%
1992 12.18%
1993 16.09%
1994 (1.93%)
1995 40.56%
1996 26.54%
1997 33.68%
1998 14.73%

During the period shown above, the highest quarterly return was 21.36% for the
fourth quarter of 1998, and the worst quarterly return was (14.43)% for the
third quarter of 1998. Year-to-date performance as of 10/31/99 (unannualized)
was 11.12%.

The bar chart does not reflect any sales charges. Total return would have been
less if it reflected those charges. The return for the other classes of shares
offered by this prospectus will differ from the Class A returns shown in the
chart, depending on the expenses of that class.

4
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DAVIS NEW YORK VENTURE FUND
AVERAGE ANNUAL TOTAL RETURNS
(For the periods ended December 31, 1998)

- --------------------------------------------------------------------------------
PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS LIFE
OF CLASS
- --------------------------------------------------------------------------------
CLASS A sHARES* 9.30% 20.57% 19.80% 14.86%
(SINCE 2/17/69)
- --------------------------------------------------------------------------------
S&P 500 INDEX 28.58% 24.03% 19.17% 12.75%
- --------------------------------------------------------------------------------
CLASS B SHARES* 9.72% NA NA 27.13%
(SINCE 12/1/94)
- --------------------------------------------------------------------------------
S&P 500 INDEX 28.58% NA NA 30.71%
- --------------------------------------------------------------------------------
CLASS C SHARES* 12.85% NA NA 27.10%
(SINCE 12/20/94)
- --------------------------------------------------------------------------------
S&P 500 INDEX 28.58% NA NA 30.56%
- --------------------------------------------------------------------------------

* Figures reflect sales charges.

FEES AND EXPENSES OF THE FUND

FEES YOU MAY PAY AS A DAVIS NEW YORK VENTURE FUND SHAREHOLDER
(Paid Directly from Your Investment)

- --------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) 4.75% None None
Imposed on Purchases (as a
percentage of offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge 0.75% 4.00% 1.00%
(Load) Imposed on Redemptions
(as a percentage of the lesser
of the net asset value of the
shares redeemed or the total cost
o such shares)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load)
Imposed on Reinvested Dividends None None None
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES FOR FISCAL YEAR ENDING JULY 31, 1999
(Deducted from the Fund's Assets)
- --------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
- --------------------------------------------------------------------------------
Management Fees 0.53% 0.53% 0.53%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.22% 1.00% 1.00%
- --------------------------------------------------------------------------------
Other Expenses 0.15% 0.21% 0.19%
- --------------------------------------------------------------------------------
Total Annual Operating Expenses 0.90% 1.74% 1.72%
- --------------------------------------------------------------------------------

5
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EXAMPLE

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated. The example also assumes that your investment has a 5.00% return each
year and that the Fund's operating expenses remain the same. Although your
actual costs may be higher or lower, your costs--based on these
assumptions--would be:

- --------------------------------------------------------------------------------
IF YOU SELL YOUR SHARES IN... 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
CLASS A SHARES $562 $748 $950 $1,530
- --------------------------------------------------------------------------------
CLASS B SHARES $577 $848 $1,144 $1,725*
- --------------------------------------------------------------------------------
CLASS C SHARES $275 $542 $933 $2,030
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
IF YOU STILL HOLD YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
AFTER...
- --------------------------------------------------------------------------------
CLASS A SHARES $562 $748 $950 $1,530
- --------------------------------------------------------------------------------
CLASS B SHARES $177 $548 $944 $1,725*
- --------------------------------------------------------------------------------
CLASS C SHARES $175 $542 $933 $2,030
- --------------------------------------------------------------------------------

* Class B shares expenses for the 10 year period includes 2 years of Class A
shares expenses, since Class B shares automatically convert to Class A shares
after 8 years.

FINANCIAL HIGHLIGHTS

These tables are designed to show you the financial performance of Davis New
York Venture Fund for the past five years, assuming that all dividends and
capital gains have been reinvested. Some of the information reflects financial
results for a single Fund share. The total returns represent the rate that an
investor would have earned (or lost) money on an investment in the Fund.

KPMG LLP has audited the information for the fiscal years ended 1999 and 1998.
KPMG LLP's report, along with the Fund's financial statements, is included in
the annual report, which is available upon request. Another firm audited the
information for the previous fiscal years.

6
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DAVIS NEW YORK VENTURE FUND
CLASS A SHARES

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% .90% .91% .89%(2) .87%(2)
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.

7
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DAVIS NEW YORK VENTURE FUND
CLASS B SHARES

DECEMBER 1, 1994
YEAR ENDED JULY 31, (INCEPTION OF CLASS)
--------------------------------------------------- THROUGH
1999 1998 1997 1996 JULY 31, 1995
---- ---- ---- ---- -------------

<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% 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 class), 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.

* Annualized.

8
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DAVIS NEW YORK VENTURE FUND
CLASS C SHARES

DECEMBER 20, 1994
YEAR ENDED JULY 31, (INCEPTION OF CLASS)
------------------------------------------------- THROUGH
1999 1998 1997 1996 JULY 31, 1995
------------ ------------ ---------- ---------- ---------

<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% 56.59% 11.78% 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>

2 Prior to 1996, the ratio of expenses to average net assets included the
reduction of custodian fees.

* Annualized.

9
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WHO IS RESPONSIBLE FOR YOUR DAVIS ACCOUNT

A number of entities provide services to Davis New York Venture Fund. This
section shows how the Fund is organized, the entities that perform these
services, and how these entities are compensated. Additional information on the
organization of the Fund is provided in the Fund's Statement of Additional
Information. For information on how to receive this document, see the back cover
of this prospectus.

INVESTMENT ADVISER

DAVIS SELECTED ADVISERS, LP
Referred to throughout this prospectus as "Davis Selected Advisers"
124 East Marcy Street
Santa Fe, NM 87501
o Provides investment advice for Davis New York Venture Fund's portfolio.
o Manages the Fund's business affairs.
o Provides day-to-day administrative services.
o Serves as investment adviser for all of the Davis Funds, other mutual
funds, and other institutional clients.
o Annual Adviser Fee for fiscal year July 31, 1999 (based on average net
assets): 0.53%.

INVESTMENT SUB-ADVISER

DAVIS SELECTED ADVISERS-NY, INC.
Referred to throughout this prospectus as "Davis Selected Advisers-NY"
609 Fifth Avenue
New York, NY 10017
o Performs investment management and research services for Davis New York
Venture Fund and other institutional clients.
o Wholly owned subsidiary of Davis Selected Advisers.
o Annual Fee: Davis Selected Advisers pays the fee, not the Fund.

CUSTODIAN AND TRANSFER AGENT

STATE STREET BANK AND TRUST COMPANY
Referred to throughout this prospectus as "State Street Bank and Trust"
PO Box 8406
Boston, MA 02266-8406
o Prices Davis New York Venture Fund daily.
o Holds share certificates and other assets of the Fund.
o Maintains records of shareholders.
o Issues and cancels share certificates.
o Supervises the payment of dividends.

BOARD OF DIRECTORS

Davis Funds' Board of Directors has general supervisory responsibilities of the
Davis Funds. The Board monitors and supervises the performance of the investment
adviser, sub-advisers and other service providers, monitors the Davis Funds'
business and investment activities, and determines whether or not to renew
agreements with the adviser and sub-adviser.

10
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DISTRIBUTOR

DAVIS DISTRIBUTORS, LLC
Referred to throughout this prospectus as "Davis Distributors"
124 East Marcy Street
Santa Fe, NM 87501
o Oversees purchases of shares and promotional activities for Davis Funds
and other mutual funds managed by Davis Selected Advisers.
o Wholly owned subsidiary of Davis Selected Advisers.

FOUNDER AND CHIEF INVESTMENT OFFICER OF THE ADVISER

SHELBY M.C. DAVIS
Responsibilities:
o Chief Investment Officer of Davis Selected Advisers.
o President of all of the Davis Funds.

Other Experience:
o Served as Davis New York Venture Fund's Portfolio Manager from its
inception in February 1969 until February 1997.
o Served as Portfolio Manager of a growth and income fund managed by Davis
Selected Advisers from May 1993 until February 1997.

PORTFOLIO MANAGERS

CHRISTOPHER C. DAVIS
Responsibilities:
o Vice President of Davis New York Venture Fund, Inc.
o Co-Portfolio Manager of the Fund with Kenneth Charles Feinberg since May
1998.
o Also manages or co-manages other equity funds advised by Davis Selected
Advisers.

Other Experience:
o Portfolio Manager of Davis New York Venture Fund from February 1997 to April
1998.
o Co-Portfolio Manager of the Fund with Shelby M.C. Davis from October 1995 to
February 1997.
o Assistant Portfolio Manager and research analyst working with Shelby
M.C. Davis from September 1989 to September 1995.

KENNETH CHARLES FEINBERG
Responsibilities:
o Co-Portfolio Manager of Davis New York Venture Fund with Christopher C.
Davis since May 1998.
o Also co-manages other equity funds advised by Davis Selected Advisers.

Other Experience:
o Research analyst at Davis Selected Advisers since December 1994.
o Assistant Vice President of Investor Relations for Continental Corp. from
1988 to 1994.

11
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[BOXED]
OUR CODE OF ETHICS

We allow the officers and employees of Davis Funds and their affiliates to buy
and sell securities for their own personal accounts. However, in order to do so,
they must agree to a number of restrictions listed in our Code of Ethics.

HOW WE MANAGE THE FUND

WHAT WE INVEST IN AND WHY

Davis New York Venture Fund's investment objective is growth of capital. In
keeping with the Davis investment philosophy, our portfolio managers select
common stock that offer the potential for capital growth over the long-term. The
Fund invests primarily in common stock of U.S. companies with market
capitalizations of at least $5 billion, but we may also invest in foreign
companies and U.S. companies with smaller capitalizations.

For more details concerning current investments and market outlook, please see
the most recent annual or semi-annual report.

COMMON STOCK

WHAT THEY ARE. Common stock represents ownership of a company.

HOW WE PICK THEM. The Davis investment philosophy stresses a back-to-basics
approach: we use extensive research to buy growing companies at value prices and
hold on to them for the long-term. Over the years, Davis Selected Advisers has
developed a list of ten characteristics that we believe foster sustainable
long-term growth, minimize risk and enhance the potential for superior long-term
returns. While very few companies have all ten, we search for those possessing
several of the characteristics that are listed in the following chart.

[SET OFF OR BOXED]

WHAT WE LOOK FOR IN A COMPANY

1. FIRST-CLASS MANAGEMENT. We believe that great companies are created by
great managers. In visiting companies, we look for managers with a record
of doing what they say they are going to do.

2. MANAGEMENT OWNERSHIP. Just as we invest heavily in our own funds, we look
for companies where individual managers own a significant stake.

3. STRONG RETURNS ON CAPITAL. We want companies that invest their capital
wisely and reap superior returns on those investments.

4. LEAN EXPENSE STRUCTURE. Companies that can keep costs low are able to
compete better, especially in difficult times. A low cost structure sharply
reduces the risk of owning a company's shares.

12
<PAGE>

5. DOMINANT OR GROWING MARKET SHARE IN A GROWING MARKET. A company that is
increasing its share of a growing market has the best of both worlds.

6. PROVEN RECORD AS AN ACQUIRER. When an industry or market downturn occurs,
it is a good idea to own companies that can take advantage of attractive
prices to expand operations through inexpensive acquisitions.

7. STRONG BALANCE SHEET. Strong finances give a company staying power to weather
difficult economic cycles.

8. COMPETITIVE PRODUCTS OR SERVICES. We invest in companies with products that
are not vulnerable to obsolescence.

9. SUCCESSFUL INTERNATIONAL OPERATIONS. A proven ability to expand
internationally reduces the risk of being tied too closely to the U.S.
economic cycle.

10. INNOVATION. The savvy use of technology in any business, from a food
company to an investment bank, can help reduce costs and increase sales.

WHY WE BUY THEM. Davis New York Venture Fund buys common stock to take an
ownership position in companies with growth potential, and then holds that
position long enough to realize the benefits of growth.

The Fund may also invest in foreign securities, primarily as a way of providing
additional opportunities to invest in quality overlooked growth stock.
Investment in foreign securities can also offer the Fund the potential for
economic diversification.

RISKS. Factors that influence the value of a share of common stock are primarily
general market and economic conditions, and the financial condition and
performance of the issuer.

o MARKET RISK. The market value of shares of common stock can change rapidly
and unpredictably as a result of political or economic events having little
or nothing to do with the issuer. Investments in foreign securities involve
additional risk. Foreign securities are often denominated in foreign
currencies, which means their value will be affected by changes in exchange
rates. In many foreign jurisdictions, there is less publicly available
information about-and less government regulation of-securities, securities
markets and issuers.

o COMPANY RISK. The price of a common stock varies with the success and
failure of the company issuing stock. As a result, the success of the
companies in which the Fund invests largely determines the Fund's
performance. Investing in small capitalization companies carries greater
risk than investing in stock of larger companies. Small companies often
have less predictable earnings and the market for their stocks may not be
as well developed.

13
<PAGE>

OTHER SECURITIES AND INVESTMENT STRATEGIES

The Fund invests primarily in the common stock of large capitalization domestic
companies. There are other securities in which the Fund may invest, and
investment strategies which the Fund may employ, but they are not principal
investment strategies. The Statement of Additional Information discusses these
securities and investment strategies.

The Fund uses short-term investments to maintain flexibility while we evaluate
long-term opportunities. We also may use short-term investments for temporary
defensive purposes; in the event our portfolio managers anticipate a decline in
the market values of common stock of large capitalization domestic companies, we
may reduce our risk by investing in short-term securities until market
conditions improve. Unlike common stocks, these investments will not appreciate
in value when the market advances and the short-term investments will not
contribute to the Fund's investment objective.

ADDITIONAL RISKS FOR THE FUND: YEAR 2000 TRANSITION ISSUES

Like all financial service providers, the Adviser, Sub-Adviser, Distributor, and
third parties providing investment advisory, administrative, transfer agent,
custodial and other services utilize systems that may be affected by Year 2000
transition issues. Many computer software systems in use today cannot
distinguish the year 2000 from the year 1900 because of the way dates are
encoded and calculated.

Difficulties with Year 2000 transition issues could have a negative impact on
handling securities trades, payments of interest and dividends, pricing and
account services. Although at this time there can be no assurance that there
will be no adverse impact on the Funds, the Service Providers have advised the
Funds that they have been actively working on necessary changes to their
computer systems to prepare for the Year 2000, and expect that their systems,
and those of other parties they deal with, will be adapted in time for this
event. In addition, there can be no assurance that the companies in which the
Fund invests will not experience difficulties with Year 2000 transition issues
which may negatively affect the market value of those companies.

14
<PAGE>

RISK SPECTRUM

Davis Selected Advisers manages eleven mutual funds in the Davis family. Each
Fund has a distinct investment objective and strategy. The following graph shows
how these Funds compare to each other in terms of risk. Davis New York Venture
Fund has a risk level we characterize as "medium to high."

- --------------------------------------------------------------------------------
DAVIS FUNDS MED MED
LOW LOW MED HIGH HIGH
- --------------------------------------------------------------------------------
DAVIS GROWTH OPPORTUNITY FUND o
- --------------------------------------------------------------------------------
DAVIS INTERNATIONAL TOTAL RETURN FUND o
- --------------------------------------------------------------------------------
DAVIS FINANCIAL FUND o
- --------------------------------------------------------------------------------
DAVIS REAL ESTATE FUND o
- --------------------------------------------------------------------------------
*DAVIS NEW YORK VENTURE FUND o
- --------------------------------------------------------------------------------
DAVIS GROWTH & INCOME FUND o
- --------------------------------------------------------------------------------
DAVIS CONVERTIBLE SECURITIES FUND o
- --------------------------------------------------------------------------------
DAVIS INTERMEDIATE INVESTMENT GRADE BOND FUND o
- --------------------------------------------------------------------------------
DAVIS TAX-FREE HIGH INCOME FUND o
- --------------------------------------------------------------------------------
DAVIS GOVERNMENT BOND FUND o
- --------------------------------------------------------------------------------
DAVIS GOVERNMENT MONEY MARKET FUND o
- --------------------------------------------------------------------------------

[IN BLACK AREA BELOW GRAPHIC]
For more information about any of the other Davis Funds, including charges and
expenses, ask for a prospectus. Read it carefully before investing or sending
money.

HOW WE MANAGE RISK

Risks are inherent in all investments. Investing in a mutual fund, even the most
conservative, involves risk, including the risk that you may receive little or
no return on your investment or even that you may lose part or all of your
investment. Davis New York Venture Fund has five strategies to minimize the risk
assumed when we invest.

[SET OFF OR BOXED]
FIVE STRATEGIES WE USE TO MINIMIZE RISK

1. WE PURCHASE HIGH-QUALITY GROWTH COMPANIES. Our focus on high-quality growth
companies reduces the likelihood that your investment will be tied up in a
failing company. A high-quality growth company is one that has achieved a
dominant or growing market share, and is led by first-class management.

2. WE USE A CONSERVATIVE VALUATION STRATEGY. Once we find companies that meet
our business criteria, we determine how much to pay for their shares. We
follow a price discipline that tells us how much we can reasonably pay for
a stock. While no system can prevent all losses, this conservative approach
helps us avoid the calamitous losses that occur in bear markets.

3. WE HAVE A LONG-TERM VISION. We get to know the managers of the companies in
which we invest and understand their goals. We view temporary setbacks as
buying opportunities: when other managers sell stocks in response to bad
news, we evaluate the issuer's long-term prospects.

15
<PAGE>

4. WE DO NOT USE MARKET TIMING. We do not base our decisions to buy and sell
securities on whether we believe the stock market will rise or fall (known
as market timing). However, we can raise the level of cash in the Fund when
stock prices get too high and it becomes difficult to purchase quality
undervalued growth companies.

5. WE MAY MAKE TEMPORARY DEFENSIVE INVESTMENTS. From time to time, Davis New
York Venture Fund may take temporary defensive positions in response to
adverse market, economic or political conditions.

ONCE YOU INVEST IN THE DAVIS FUNDS

This section describes how your investment is valued, how you earn money on your
investment, and how the government may tax these earnings.

HOW YOUR SHARES ARE VALUED

Once you open an account in Davis New York Venture Fund, you are entitled to buy
and sell shares on any business day. A business day is any day the New York
Stock Exchange is open for trading. The share price of your investment changes
depending on the total value of the Fund's investments.

Each business day, we determine the value of fund shares by adding up the total
value of investments plus other assets (such as cash), subtracting liabilities,
and dividing the result by the total number of shares outstanding. This share
figure is known as the net asset value.

Net asset values for all the Davis Funds are determined each business day. We
calculate net asset value either at the close of the Exchange or at 4 p.m.
Eastern Time, whichever comes first.

The net asset values of all Davis Funds shares are published daily in the
business section of most major newspapers. If you have access to the Internet,
you can also check net asset value on our web site (WWW.DAVISFUNDS.COM).

HOW SECURITIES IN THE PORTFOLIO ARE VALUED

We use current market valuations to price the securities in Davis New York
Venture Fund:

o Securities that trade on an organized exchange are valued at the last
published sales price on the exchange. If no sales are recorded, the
securities are valued at the average of the closing bid and asked prices on
the exchange.

o Over-the-counter securities are valued at the average of closing bid and
asked prices.

o Debt securities purchased with a maturity of one year or less are usually
valued at amortized cost.

16
<PAGE>

o Longer-term debt securities may be valued by an independent pricing
service.

o Securities with unavailable market quotations and other assets are valued
at "fair value"--which is determined by the Board of Directors.

If any of the Fund's securities are traded in markets that close at different
times, events affecting portfolio values that occur between the time that their
prices are determined and the time the Fund's shares are priced will generally
not be reflected in the Fund's share price. The net asset value of the Fund's
shares may change on days when shareholders will not be able to purchase or
redeem the Fund's shares.

The value of securities denominated in foreign currencies and traded in foreign
markets will have their value converted into the U.S. dollar equivalents at the
prevailing market rate as computed by State Street Bank and Trust. Fluctuation
in the value of foreign currencies in relation to the U.S. dollar may affect the
net asset value of the Fund's shares even if there has not been any change in
the foreign currency price of the Fund's investments.

HOW WE PAY EARNINGS

There are two ways you can receive payments from Davis New York Venture Fund:

o DIVIDENDS. Distributions to shareholders of net investment income and
short-term capital gains on investments.

o CAPITAL GAINS. Profits received by the Fund from the sale of securities
held for the long-term, which are then distributed to shareholders.

Davis New York Venture Fund usually pays dividends once a year. Dividends are
declared in November or December and capital gains, if any, are distributed in
November or December. Unless you choose otherwise, the Fund automatically
reinvests your dividends and capital gains in additional Fund shares.

You can request to have your dividends and capital gains paid to you by check,
deposited directly into your bank account, paid to a third party, or sent to an
address other than your address of record.

We also offer a DIVIDEND DIVERSIFICATION PROGRAM, which allows you to have your
dividends and capital gains reinvested in shares of another Davis Fund.

You will receive a statement each year detailing the amount of all dividends and
capital gains paid to you during the previous year. To ensure that these
distributions are reported properly to the U.S. Treasury, you must certify on
your Davis Funds Application Form or on the IRS Form W-9 that your Tax
Identification Number is correct and you are not subject to backup withholding.
Backup withholding is required for the taxpayers that are subject to back taxes
for failure to report all interest and dividends.

If you fail to report a correct Taxpayer I.D. Number, under-reported dividend or
interest income, or are already subject to backup withholding, Davis New York
Venture Fund is required by law to withhold a portion of any distributions you
may receive--and send it to the U.S. Treasury.

17
<PAGE>

(SET OFF)
HOW TO PUT YOUR DIVIDENDS AND CAPITAL GAINS TO WORK

You can have all dividends and capital gains automatically invested in the same
share class of this or other Davis Funds. To be eligible for this DIVIDEND
DIVERSIFICATION PROGRAM, all accounts involved must be registered under the same
name, the same class of shares, and have a minimum initial value of $250. Shares
are purchased at the chosen Fund's net asset value on the dividend payment date.
You can make changes to your selection or withdraw from the program with 10
days' notice. To participate in this program, fill out the cross-reinvest
information in the appropriate section of the Application Form. Once your
account has been opened and you wish to establish this program, call for more
information.

HOW YOUR DIVIDENDS AND CAPITAL GAINS ARE TAXED

o If Davis New York Venture Fund pays dividends, they are taxable to
shareholders as ordinary income. Dividends include both net investment
income and short-term capital gains.

o If Davis New York Venture Fund pays net capital gains, they generally will
be taxed as a long-term capital gain distribution.

These payments may be taxed at different rates, depending on the length of time
the Fund holds its assets. More information is provided in the instructions that
come with your tax return.

Investment earnings (dividends and capital gains) are taxable in the year in
which they were declared, not paid--whether they are received in cash or
reinvested in shares.

Also, keep in mind that when you sell or exchange shares of the Fund, it may
result in a taxable gain or loss.

We recommend that you consult with a tax advisor about any dividends and capital
gains you may receive from Davis New York Venture Fund.

HOW TO CHOOSE A SHARE CLASS

Before you can buy any shares in Davis New York Venture Fund, you need to decide
which class of shares best suits your needs. The Fund offers three classes of
shares: A, B and C. Each class is subject to different expenses and sales
charges.

You may choose to buy one class of shares rather than another, depending on the
amount of the purchase and the expected length of time of investment. Long-term
shareholders of Class B or C shares may pay more than the maximum front-end
sales charge allowed by the National Association of Securities Dealers.

SPECIAL NOTE: Institutions buying $5 million or more may be eligible to buy
Class Y shares of Davis New York Venture Fund, offered through a separate
prospectus. With Class Y shares, you pay no sales charges or distribution fees.
To find out more about

18
<PAGE>

Class Y shares, contact your sales representative or our
distributor, Davis Distributors.

[SET OFF]
DISTRIBUTION FEES. The Fund has adopted plans under Rule 12b-1 that allow the
Fund to pay distribution and other fees for the distribution of its shares and
for services provided to shareholders. Class A shares pay up to 0.25% of average
annual net assets while Class B and C shares pay 1.00% of average annual net
assets. Because these fees are paid out of the Fund's assets on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.

CLASS A SHARES

Class A shares may be best for you if you are a long-term investor who is
willing to pay the entire sales charge at the time of purchase. In return, you
pay a lower distribution fee than the two other share classes:

o You buy Class A shares at their net asset value per share plus a sales
charge, which is 4.75% for any investment below $100,000 (see chart below).
The term "offering price" includes the front-end sales charge.
o There is no limit on how much you can invest in this share class.
o The Fund pays a distribution fee--up to 0.25% of the average daily net
asset value--each year you hold the shares. This fee is lower than the fee
you pay for the other two classes of shares. Lower expenses translate into
higher annual return on net asset value.

CLASS A SHARES SALES CHARGES

- -----------------------------------------------------------------------------------------
AMOUNT OF PURCHASE SALES CHARGE SALES CHARGE AMOUNT OF SALES
(PERCENTAGE OF (PERCENTAGE OF NET CHARGE RETAINED BY
OFFERING PRICE) AMOUNT INVESTED) THE DEALER
(PERCENTAGE OF
OFFERING PRICE)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $100,000 4.75% 5.0% 4.0%
- -----------------------------------------------------------------------------------------
$100,000 to under $250,000 3.5% 3.6% 3.0%
- -----------------------------------------------------------------------------------------
$250,000 to under $500,000 2.5% 2.6% 2.0%
- -----------------------------------------------------------------------------------------
$500,000 to under $750,000 2.0% 2.0% 1.75%
- -----------------------------------------------------------------------------------------
$750,000 to under $1 million 1.0% 1.0% 0.75%
- -----------------------------------------------------------------------------------------
$1 million or more* None None None
- -----------------------------------------------------------------------------------------

</TABLE>

* You pay no front-end sales charge on purchases of $1 million or more, but if
you sell those shares within the first year you may pay a deferred sales charge
of 0.75%. Davis Distributors may pay the dealer a commission during the first
year after purchase at the following rates:

- --------------------------------------------------------------
PURCHASE AMOUNT COMMISSION
- --------------------------------------------------------------
First $3 million 0.75%
- --------------------------------------------------------------

19
<PAGE>
- --------------------------------------------------------------
Next $2 million 0.50%
- --------------------------------------------------------------
Over $5 million 0.25%
- --------------------------------------------------------------

If a commission is paid for purchases of $1 million or more, the dealer will be
paid with distribution fees received from the Fund. If distribution fee limits
have already been reached for the year, Davis Distributors itself will pay the
commissions.

As the chart above shows, the sales charge gets smaller as your purchase amount
increases. There are several ways you may combine purchases to qualify for a
lower sales charge.

YOU CAN COMBINE PURCHASES OF CLASS A SHARES

o WITH OTHER FAMILY MEMBERS. If you buy shares for yourself, your spouse and
any children under the age of 21, all the shares you buy will be counted as
a single purchase.

o WITH CERTAIN GROUPS. If you buy shares through a group organized for a
purpose other than to buy mutual fund shares, the purchases will be treated
as a single purchase.

o THROUGH EMPLOYEE BENEFIT PLANS. If you buy shares through trusteed or
fiduciary accounts and Individual Retirement Accounts (IRAs) of a single
employer, the purchases will be treated as a single purchase.

o UNDER A STATEMENT OF INTENTION. If you enter a Statement of Intention and
agree to buy Class A shares of $100,000 or more over a 13-month period, all
of the shares you buy (except purchases into the Davis Government Money
Market Fund) during that period will be counted as a single purchase.
Before entering a Statement of Intention, please read the terms and
conditions in the Statement of Additional Information. Under a Statement of
Intention, you agree to permit our service provider, State Street Bank and
Trust, to hold Fund shares in escrow to guarantee payment of any sales
charges that may be due if you ultimately invest less than you agreed to
invest over the covered 13-month period.

o UNDER RIGHTS OF ACCUMULATION. If you notify your dealer or our distributor,
Davis Distributors, you can include the Class A, B and C shares you already
own when calculating the price for your current purchase.

o WITH CLASS A SHARES OF OTHER DAVIS FUNDS. If you buy Class A shares of this
or any other Davis Fund, all of the shares you buy will be counted as a
single purchase. This includes shares purchased under a Statement of
Intention or Rights of Accumulation.

20
<PAGE>

CLASS A SHARES FRONT-END SALES CHARGE WAIVERS

We will not charge a sales charge on purchases of Class A shares for:

o Shareholders making purchases with dividends or capital gains that are
automatically reinvested.
o Purchases by directors, officers and employees of the Davis Funds, their
investment adviser or its affiliates, and their immediate families.
o Purchases by employees and people affiliated with broker-dealer firms
offering Fund shares.
o Financial institutions acting as fiduciaries making single purchases of
$250,00oor more.
o Employee benefit plans making purchases through a single account covering
at least 25oparticipants.
o Wrap accounts offered by securities firms, fee-based investment advisers or
financial planners.
o State and local governments.
o Shareholders making purchases in certain accounts offered by securities
firms which have entered into contracts with the Fund and which charge fees
based upon assets in the account.

[SIDEBAR]
Wrap accounts are investment programs offered by broker-dealers who place a
client's funds with one or more investment advisers and charge a fee for their
services.

CLASS B SHARES

Class B shares may be best for you if you are willing to pay a higher
distribution fee than Class A shares for eight years in order to avoid paying a
front-end sales charge:

o You buy the shares at net asset value (no sales charge).
o You can invest up to $250,00oin Class B shares.
o If you sell Class B shares within six years of purchase, you must pay a
deferred sales charge. This charge decreases over time as you own the
shares (see chart below).
o After you hold Class B shares for eight years, they are automatically
converted into Class A shares without paying a front-end sales charge.
Class A shares pay a lower distribution fee.
o The Fund pays a distribution fee of 1.00% of the average daily net asset
value each year you hold the shares. Higher expenses translate into lower
annual return on net asset value.

CLASS B SHARES DEFERRED SALES CHARGES

- --------------------------------------------------------------------------------
SALES MADE AFTER PURCHASE AMOUNT OF DEFERRED SALES CHARGE
- --------------------------------------------------------------------------------
Year 1 4%
- --------------------------------------------------------------------------------
Years 2-3 3%
- --------------------------------------------------------------------------------
Years 4-5 2%
- --------------------------------------------------------------------------------
Year 6 1%
- --------------------------------------------------------------------------------
Years 7-8 None
- --------------------------------------------------------------------------------

21
<PAGE>

CLASS C SHARES

Class C shares may be best for you if you are willing to pay a higher
distribution fee than Class A shares pay in order to avoid paying a front-end
sales charge:

o You buy the shares at net asset value (no front-end sales charge).
o You cannot invest more than $1 million in Class C shares.
o If you sell the shares within one year of purchase, you must pay a deferred
sales charge of 1.00%.
o The Fund pays a distribution fee of 1.00% of the average daily net asset
value each year you hold the shares. Higher expenses translate into lower
annual return on net asset value.

DEFERRED SALES CHARGE

As an investor in the Fund, you may pay a deferred sales charge as a percentage
of the net asset value of the shares you sell or the total cost of the shares,
whichever is lower. Fund investors pay a deferred sales charge in the following
cases:

o As a Class A shareholder, only if you buy shares valued at $1 million or
more without a sales charge and sell the shares within one year of
purchase.
o As a Class B shareholder, if you sell shares within six years of purchase.
The percentage decreases over the six-year period.
o As a Class C shareholder, if you sell shares within one year of purchase.

To keep deferred sales charges as low as possible, we will first sell shares in
your account that are not subject to deferred sales charges (if any). We do not
impose a deferred sales charge on the amount of your account value represented
by an increase in net asset value over the initial purchase price, or on shares
acquired through dividend reinvestments or capital gain distributions.

To determine whether the deferred sales charge applies to a redemption, the Fund
redeems shares in the following order:

o Shares acquired by reinvestment of dividends and capital gain distributions.
o Shares which are no longer subject to the deferred sales charge.
o Shares which have increased in value beyond their original cost.
o Shares held the longest, but still subject to the deferred sales charge.

DEFERRED SALES CHARGE WAIVERS

We will waive deferred sales charges on sales of Class A, B and C shares if:

o You sell Class A shares that were not subject to a commission at the time
of purchase (the amount of purchase totaled $1 million or more and the
shares were held for more than a year).

o You (or a registered joint owner) die or have been determined to be totally
disabled after the purchase of shares.

22
<PAGE>

o You sell shares under the Automatic Withdrawal Plan amounting to, in a
12-month period, up to 12% of the value of the account when you began
participating in the Plan.

o You sell shares under a qualified retirement plan or IRA that constitute a
tax-free return of contributions to avoid a penalty.

o Your Fund sells the remaining shares in your account under an Involuntary
Redemption.

o You qualify for an exception relating to defined contribution plans. These
exceptions are described in the Statement of Additional Information.

o You are a director, officer or employee of Davis Selected Advisers or one
of its affiliates (or a family member of a director, officer or employee).

If the net asset value of the shares that you sell has increased since you
purchased them, any deferred sales charge will be based on the original cost of
the shares.

[BOXED]
If you have any additional questions about choosing a share class, please call
us toll-free at 1-800-279-0279, during business hours, 7 a.m. to 4 p.m. Mountain
Time. If you still are not sure about which class is best for you, contact your
financial advisor.

HOW TO OPEN AN ACCOUNT

You can open an account if you invest at least:

o $1,000 for a non-retirement plan account.
o $250 for a retirement plan account.

(CHART)
THREE WAYS YOU CAN OPEN AN ACCOUNT

1. BY MAIL. Fill out the Application Form included in this prospectus and mail
it to our service provider, State Street Bank and Trust. Both you and your
dealer must sign the form. Include a check made payable to the DAVIS FUNDS or,
in the case of a retirement account, the custodian or trustee. All purchases by
check should be in U.S. dollars. DAVIS NEW YORK VENTURE FUND WILL NOT ACCEPT
THIRD-PARTY CHECKS.

2. BY DEALER. You may have your dealer order and pay for the shares. In this
case, you must pay your dealer directly. Your dealer will then order the shares
from our distributor, Davis Distributors. Please note that your dealer may
charge a service fee or commission for buying these shares.

3. BY WIRE. You may wire federal funds directly to our service provider, State
Street Bank and Trust. Before you wire an initial investment, you must call
Davis Distributors and obtain an account number and Application Form. A customer
service representative will assist you with your initial investment by wire.
After the initial wire purchase is made, you will need to return the Application
Form to State

23
<PAGE>

Street Bank and Trust. To ensure that the purchase is credited properly, follow
these wire instructions:

State Street Bank and Trust Company
Boston, MA 02210
Attn: Mutual Fund Services
DAVIS NEW YORK VENTURE FUND
Shareholder Name
Shareholder Account Number
Federal Routing Number 011000028
DDA Number 9904-606-2

Generally, the Fund does not issue share certificates for purchases. You can
receive certificates for any Fund other than Davis Government Money Market Fund
if you are a Class A shareholder who is not participating in the Automatic
Withdrawal Plan. If you are eligible and wish to receive certificates, please
submit a letter of instruction with your Application Form. Once your account has
been established, the shareholder(s) may request that certificates be sent to
the address of record by calling our customer service department.

RETIREMENT PLAN ACCOUNTS

You can invest in Davis New York Venture Fund using any of these types of
retirement plan accounts:

o Deductible IRAs
o Non-deductible IRAs
o Roth IRAs
o Educational IRAs
o Simple IRAs
o Simplified Employee Pension (SEP) IRAs
o 403(b) Plans

State Street Bank and Trust acts as custodian (service provider) for the
retirement plans and charges the participant a $10 maintenance fee each year
regardless of the number of plans established per Social Security number. These
fees are automatically deducted from each account, unless you elect to pay the
fee directly. To open a retirement plan account, you must fill out a special
application form. You can request this form by calling Davis Distributors.

24
<PAGE>

HOW TO BUY, SELL AND EXCHANGE SHARES

Once you have established an account with Davis Funds, you can add to--or
withdraw from--your investment. This section provides an overview of the types
of transactions you can perform as a shareholder of Davis New York Venture Fund.
This includes how to initiate these transactions, and the charges that you may
incur (if any) when buying, selling and exchanging shares.

{SIDEBAR}
An exchange occurs when you sell shares in one Davis Fund to buy shares in
another Davis Fund in the same class of shares in response to changes in your
goals or in market conditions.

(CHART)
THREE WAYS TO BUY, SELL AND EXCHANGE SHARES

1. BY TELEPHONE. Call 1-800-279-0279. You can speak directly with a Davis Funds
representative during our business hours (7:00 a.m. to 4:00 p.m. Mountain Time)
or use our automated telephone system any time, day or night.

2. BY MAIL. Send the request to our service provider, State Street Bank and
Trust.

Regular Mail
State Street Bank and Trust Company
c/o Davis Funds
PO Box 8406
Boston, MA 02266-8406

Overnight Mail
State Street Bank and Trust Company
c/o Davis Funds
66 Brooks Drive
Braintree, MA 02184

3. BY DEALER. Contact a dealer, who will then make the transaction through our
distributor, Davis Distributors. Please note that your dealer may charge a
service fee or commission for each transaction.

Generally, the Fund does not issue share certificates for purchases. Each time
you add to or withdraw from your account, you will receive a statement showing
the details of the transaction--along with any other transactions you made
during the current year.

WHEN YOUR TRANSACTIONS ARE PROCESSED

The per-share price for purchases or sales made through our distributor, Davis
Distributors, will be processed on the same day if the order is received before
4 p.m. Eastern Time. If State Street Bank and Trust requires additional
documents to complete the purchase or sale, the transaction price will be
determined at the close of business after all required documents are received.

25
<PAGE>

For your transaction to be counted on the day you place your order with your
broker-dealer or other financial institution, they must:

o Receive your order before 4 p.m. Eastern Time.
o Promptly transmit the order to State Street Bank and Trust.

BUYING MORE SHARES

You can buy more shares at any time by mail or through a dealer. The minimum
purchase amount is $25.

When you purchase shares by mail, send a check made payable to the DAVIS FUNDS
for the amount of purchase to our service provider, State Street Bank and Trust.
If you have the purchase form from your most recent statement, include it with
the check. If you do not have a purchase form, include a letter with your check
stating the name of the Fund, the class of shares you wish to buy and your
account number.

When you buy shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

[SET OFF - SPECIAL PROGRAM]
MAKING AUTOMATIC INVESTMENTS

An easy way to increase your investments in this or other Davis Funds is to sign
up for the AUTOMATIC INVESTMENT PLAN. Under this plan, you arrange for a set
amount of money to be taken from your bank account and invested in Fund shares.
The minimum amount you can invest each month is $25. The account minimums of
$1,000 for non-retirement accounts and $250 for retirement accounts will be
waived if you meet the minimum requirement within a year.

Purchases can be processed electronically on any day of the month between the
5th and 28th if the institution that services your bank account is a member of
the Automated Clearing House system. After each automatic investment, you will
receive a transaction confirmation, and the debit should show up on your next
bank statement.

To sign up for the Automatic Investment Plan, fill out the appropriate section
of the Application Form. After your account has been opened and you wish to
establish this plan, you must submit a letter of instruction signed by the
account owner(s). You can stop automatic investments at any time by calling
Davis Distributors.

You can also use our Dividend Diversification Program to buy more shares in any
Davis Fund. See ONCE YOU INVEST IN THE DAVIS FUNDS.

[SIDEBAR]
The Automated Clearing House system is used by most banks for electronic
transfers of money into and out of your bank account - and is regulated by the
Federal Reserve.

SELLING SHARES

26
<PAGE>

You may sell back all or part of your shares to Davis New York Venture Fund
(known as a redemption) at any time, at net asset value minus any sales charges
that may be due. You can sell the shares by telephone, by mail, or through a
dealer.

When you sell shares by mail, indicate the number of shares or dollar amount you
wish to redeem and send the request to our service provider, State Street Bank
and Trust. If more than one person owns the shares you wish to sell, all owners
must sign the redemption request. You may be required to have the owners'
signatures medallion-guaranteed (see "Medallion Signature Guarantee" below).

When you sell shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

Redemption proceeds are usually paid to you in cash within seven days after
State Street Bank and Trust receives your proper sale request. If any of the
shares redeemed were recently purchased, payment to you will be delayed until
your purchase check has cleared, up to a maximum of 15 days from the date of
purchase.

WHAT YOU NEED TO KNOW BEFORE YOU SELL YOUR SHARES

o You will always receive cash for sales that total less than $250,000 or
1.00% of the Fund's net asset value during any 90-day period. Any sales
above the cash limit may be paid in securities and would mean you would
have to pay brokerage fees.

o You will need a medallion signature guarantee on a stock power or
redemption request for sales paid by check totaling more than $50,000.
However, if your address of record has changed in the last 30 days, or if
you wish to send redemption proceeds to a third party, you will need a
medallion signature guarantee for all sales.

o If a certificate was issued for the shares you wish to sell, the
certificate must be sent by certified mail to State Street Bank and Trust
and accompanied by a letter of instruction signed by the owner(s).

o A sale may produce a gain or loss. Gains may be subject to tax.

MEDALLION SIGNATURE GUARANTEE. A written endorsement from an eligible guarantor
institution that the signature(s) on the written request is(are) valid. Eligible
guarantors include federally insured financial institutions, registered
broker-dealers, or participants in a recognized medallion signature guarantee
program. Davis Funds cannot accept guarantees from institutions that do not
provide reimbursement in cases of fraud. No other form of signature verification
can be accepted.

STOCK POWER. A letter of instruction signed by the owner of the shares that
gives State Street Bank and Trust permission to transfer ownership of the shares
to another person or group. Any transfer of ownership requires that all
shareholders have their signatures medallion-guaranteed.

SPECIAL SALE SITUATIONS

27
<PAGE>

o The Securities and Exchange Commission can suspend payment of sales under
certain emergency circumstances if the New York Stock Exchange is closed
for reasons other than customary closings and holidays.

o Davis New York Venture Fund may make sales payments in securities if Davis
New York Venture Fund's Board of Directors decides that making cash
payments would harm the Fund.

SPECIAL NOTE: When you make a sale or withdrawal, a deferred sales charge may be
imposed if:

o You buy $1 million or more of Class A shares and sell them within a year of
purchase.
o You sell Class B shares within six years of purchase.
o You sell Class C shares within one year of purchase.

IF YOU DECIDE TO BUY BACK SHARES YOU SOLD

If you decide to buy back some or all of the shares you sold in this Fund within
60 days of sale and notify us in writing, you can take advantage of the
SUBSEQUENT REPURCHASE PRIVILEGE. With this privilege, which you can use only
once, you will not be charged a sales charge, and any deferred sales charge you
paid on the original sale will be returned to your account. You must send a
letter to our service provider, State Street Bank and Trust, along with a check
for the repurchased shares.

IF YOUR ACCOUNT FALLS BELOW $250

If your account balance falls below $250 as a result of a redemption or
exchange, we may sell your remaining shares in this Fund at net asset value. We
will first notify you by mail, giving you at least 60 days' notice that an
INVOLUNTARY REDEMPTION may take place. If you can increase your account balance
to above $250 during the notice period, the Involuntary Redemption will be
canceled.

[SET OFF - SPECIAL PROGRAM]
MAKING AUTOMATIC WITHDRAWALS

If your account balance is more than $10,000, you can sell a set dollar or
percentage amount each month or quarter. Because withdrawals are sales, they may
produce a gain or loss. If you purchase additional shares at the same time that
you make a withdrawal, you may have to pay taxes and a sales load. Gains may be
subject to tax. When you participate in this plan, known as the AUTOMATIC
WITHDRAWAL PLAN, shares are sold so that you will receive payment by one of
three methods:

o You may receive funds at the address of record provided that this address
has been unchanged for a period of not less than 30 days. These funds are
sent by check on or after the 25th day of the month.

o You may also choose to receive funds by Automated Clearing House (ACH), to
the banking institution of your choice. You may elect an ACH draft date
between the 5th and the 28th days of the month. You must complete the
appropriate section of
<PAGE>

the Application Form. Once your account has been established, you must
submit a letter of instruction with a medallion signature guarantee to
execute an Automatic Withdrawal Plan by ACH.

o You may have funds sent by check to a third party at an address other than
the address of record. You must complete the appropriate section of the
Application Form. Once your account has been established, you must submit a
letter of instruction with a medallion signature guarantee to designate a
third party payee.

You may stop automatic withdrawals at any time without charge or penalty by
calling Davis Distributors or by notifying the service agent in writing.

[SET OFF - SPECIAL SHAREHOLDER PROGRAM]
WIRING SALE PROCEEDS TO YOUR BANK ACCOUNT

You may be eligible to have your sale proceeds electronically transferred to a
commercial bank account. This is known as an ELECTRONIC WIRE PRIVILEGE. There is
a $5 charge by State Street Bank and Trust for wire service, and receiving banks
may also charge for this service. Payment through Automated Clearing House will
usually arrive at your bank two banking days after the sale. Payment by wire is
usually credited to your bank account on the next business day after the sale.

While State Street Bank and Trust will accept electronic wire sales by telephone
or dealer, you still need to fill out and submit the information under the
Electronic Wire Privilege section of the Application Form. Once your account has
been opened and you have not previously established the Electronic Wire
Privilege, you must submit a letter of instruction with a medallion signature
guarantee signed by all registered owners at the time of the wire sale. If you
are currently an investor with a non-retirement account and have already
established this privilege, you may call our customer service department to
execute a wire sale by telephone.

EXCHANGING SHARES

You can sell shares of Davis New York Venture Fund to buy shares in the same
class of any other Davis Fund without having to pay a sales charge. This is
known as an exchange. You can exchange shares by telephone, by mail or through a
dealer. The initial exchange must be for at least $1,000 for a non-retirement
account (unless you are participating in the Automatic Exchange Program).
Exchanges are normally performed on the same day of the request if received in
good order by 4 p.m. Eastern Time.

Shares in different Davis Funds may be exchanged at relative net asset value.
However, if any Davis Fund shares being exchanged are subject to a deferred
sales charge, Statement of Intention, or other limitation, the limitation will
continue to apply to the shares received in the exchange. When you exchange
shares in a Davis Fund for shares in Davis Government Money Market Fund, the
holding period for any deferred sales charge does not continue during the time
that you own Davis Government Money Market Fund shares. For example, Class B
shares are subject to a declining sales charge for six years. Any period that
you are invested in shares of Davis Government Money Market Fund will be added
to the six-year declining sales charge period.

29
<PAGE>

When you exchange shares by mail, you must send our service provider, State
Street Bank and Trust, a written request for the exchange. If you wish to
exchange shares for which you hold share certificates, these certificates must
be sent by certified mail to State Street Bank and Trust accompanied by a letter
of instruction signed by the owner(s). If your shares are being sold for cash,
this is known as a redemption. Please see the section WHAT YOU NEED TO KNOW
BEFORE YOU SELL YOUR SHARES for restrictions that might apply to this type of
transaction.

When you exchange shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

Before you decide to make an exchange, you must obtain the current prospectus of
the desired Fund. For federal income tax purposes, exchanges between Funds are
treated as a sale and a purchase. Therefore, there will usually be a
recognizable capital gain or loss due to an exchange.

There are limits to the number of exchanges you can make each year. Currently,
four exchanges between Funds are allowed during a 12-month period. You may make
an unlimited amount of exchanges out of the Davis Government Money Market Fund.
Automatic exchanges are excluded from this provision. Davis Distributors must
approve any exchanges above the limit in writing.

YOU CAN MAKE EXCHANGES AMONG ANY OF THE DAVIS FUNDS WITHOUT HAVING TO PAY ANY
SALES CHARGE

EQUITY FUNDS
Davis New York Venture Fund
Davis Growth Opportunity Fund
Davis Financial Fund
Davis International Total Return Fund

GROWTH & INCOME FUNDS
Davis Growth & Income Fund
Davis Real Estate Fund
Davis Convertible Securities Fund

BOND FUNDS
Davis Intermediate Investment Grade Bond Fund
Davis Tax-Free High Income Fund
Davis Government Bond Fund

GOVERNMENT MONEY MARKET FUND
Davis Government Money Market Fund

For more information about any of the other Davis Funds, including charges and
expenses, ask for a prospectus. Read it carefully before investing or sending
money.

[SET OFF - SPECIAL SHAREHOLDER PROGRAM]
MAKING AUTOMATIC EXCHANGES

30
<PAGE>

You can elect to make automatic monthly exchanges if all accounts involved are
registered under the same name and have a minimum initial value of $250. You
must exchange at least $25 to participate in this program, known as the
AUTOMATIC EXCHANGE PROGRAM. To sign up for this program, fill out the
appropriate section of the Application Form. Once your account has been
established, you may contact our customer service department to establish this
program.

TRANSACTIONS BY TELEPHONE

A benefit of investing through Davis Funds is that you can use our automated
telephone system to buy, sell or exchange shares. If you do not wish to have
this option activated for your account, complete the appropriate section of the
Application Form.

When you call Davis Distributors, you can perform a transaction with Davis Funds
in two ways:

o Speak directly with a representative during business hours (7:00 a.m. to
4:00 p.m. Mountain Time).
o If you have a TouchTone(TM) telephone, you can use the automated telephone
system, known AS DAVIS DIRect ACCESS, 24 hours a day, seven days a week.

If you wish to sell shares by telephone and receive a check in the mail:

o The maximum amount that can be issued is $25,000.
o The check can only be issued to the registered account owner.
o The check must be sent to the address on file with Davis Distributors.
o Your current address must be on file for 30 days.

When you buy, sell or exchange shares over the telephone, you agree that Davis
Funds are not liable for following telephone instructions believed to be genuine
(that is, directed by the account holder or registered representative on file).
We use certain procedures to confirm that your instructions are genuine,
including a request for personal identification and a tape recording of the
conversation. If these procedures are not used, the Fund may be liable for
unauthorized instructions.

Be aware that during unusual market conditions, Davis Funds may not be able to
accept all requests by telephone.

[SET OFF]
YOU CAN USE DAVIS DIRECT ACCESS TO:

o GET THE PRICE, TOTAL RETURN, AND FUND DESCRIPTION FOR ANY DAVIS FUND.
o CHECK YOUR ACCOUNT BALANCE AND OTHER ACCOUNT INFORMATION.
o BUY, SELL AND EXCHANGE SHARES.
o GET THE MAILING ADDRESS AND WIRE INSTRUCTIONS FOR ANY DAVIS FUND.
o REQUEST LITERATURE ABOUT ANY DAVIS FUND.

31
<PAGE>

[INSIDE BACK COVER]

THE DAVIS FUNDS:
OVER 25 YEARS OF RELIABLE INVESTING

Davis Selected Advisers, investment adviser of the Davis Funds, has a history of
investing for the long-term. Since our founding in 1969, we have been dedicated
to delivering superior investment performance and service to our clients.

WE ARE LONG-TERM INVESTORS. We analyze high-quality growth companies that have
been overlooked, buy their stock at value prices, and hold the shares for the
long-term. This strategy was first developed by legendary Wall Street investor
Shelby Cullom Davis, a leading financial adviser to governors and presidents.

Our investment approach has been refined for more than 25 years by his son,
Shelby M.C. Davis, who is now Chief Investment Officer of Davis Selected
Advisers. The Davis strategy is still followed today by the third generation of
family members: Christopher C. Davis and Andrew A. Davis serve as either
Portfolio Manager or Co-Portfolio Manager for many Davis Funds.

WE ARE FELLOW SHAREHOLDERS. The Davis family, directors and employees not only
manage the company's mutual funds but also invest in them. Together, we have
invested over $1 billion of our own money side-by-side with our shareholders.

Please take the time to read this prospectus carefully, and if you decide to
invest with us, keep it as a reference guide. If you need more information about
the Davis Funds, please call us or visit our Web site.

32
<PAGE>

ADDRESS AND TELEPHONE GUIDE

OUR TELEPHONE NUMBER: OUR SERVICE PROVIDER'S REGULAR
1-800-279-0279 MAILING ADDRESS:
State Street Bank and Trust Company
c/o Davis Funds
PO Box 8406
Boston, MA 02266-8406

OUR MAILING ADDRESS:
Davis Funds
124 East Marcy Street
Santa Fe, NM 87501

OUR INTERNET ADDRESS: OUR SERVICE PROVIDER'S OVERNIGHT
http://www.davisfunds.com MAILING ADDRESS:
State Street Bank and Trust Company
c/o Davis Funds
66 Brooks Drive
Braintree, MA 02184

<PAGE>

[BACK COVER]

OTHER FUND DOCUMENTS

For more information about Davis New York Venture Fund, request a free copy of
the Statement of Additional Information or the Annual and Semi-Annual Reports.
The STATEMENT OF ADDITIONAL INFORMATION provides more detailed information about
the Fund and its management and operations. An ANNUAL REPORT discusses the
market conditions and investment strategies that significantly affected Fund
performance during the last year. A SEMI-ANNUAL REPORT updates information
provided in the Annual Report for the next six months.

Davis New York Venture Fund's Statement of Additional Information and Annual
Report have been filed with the Securities and Exchange Commission, are
incorporated by reference, and are legally a part of this prospectus.

WHERE YOU CAN GET THESE DOCUMENTS:

o BY TELEPHONE. Call Davis Funds toll-free at 1-800-279-0279, Monday through
Friday, 7 a.m. to 4 p.m. Mountain Time. You may also call this number for
account inquiries.

o VIA THE INTERNET. Visit the SEC web site (WWW.SEC.GOV).

o FROM THE SEC. The SEC's Public Reference Room in Washington DC. For more
information call 1-800-SEC-0330. Additional copies of this information can
be obtained, for a duplicating fee, by writing the Public Reference Section
of the SEC, Washington DC 20549-6009.

o BY MAIL. Specify the document you are requesting when writing to us.

DAVIS FUNDS
124 EAST MARCY STREET
SANTA FE, NM 87501
1-800-279-0279

Investment Company Act File No. 811-1701

<PAGE>

DAVIS NEW YORK VENTURE FUND

Prospectus

Class Y shares

December 1, 1999

The Securities and Exchange Commission has not approved or disapproved these
securities. The Securities and Exchange Commission has not determined whether
this prospectus is accurate or complete. Anyone who tells you otherwise is
committing a crime.

(Davis logo)

Over 25 Years Of Reliable Investing

1
<PAGE>

TABLE OF CONTENTS

Overview of the Fund
Investment Objective and Strategy
Determining If This Fund Is Right for You
Principal Risks
Past Performance
Fees and Expenses of the Fund
Financial Highlights

Who Is Responsible for Your Davis Account

How We Manage the Fund

Once You Invest in the Davis Funds

How to Open an Account

How to Buy, Sell and Exchange Shares

The Davis Funds: Over 25 Years of Reliable Investing

Other Fund Documents

2
<PAGE>

OVERVIEW OF DAVIS NEW YORK VENTURE FUND

INVESTMENT OBJECTIVE AND STRATEGY

Davis New York Venture Fund's investment objective is growth of capital.

The Fund invests primarily in common stock of U.S. companies with market
capitalizations of at least $5 billion.

[SIDEBAR: ]
Please see the inside back cover page of this prospectus to learn about the
Davis investment philosophy.

DETERMINING IF THIS FUND IS RIGHT FOR YOU

PRINCIPAL RISKS

3
<PAGE>

An investment in Davis New York Venture Fund is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

You can find more detailed information about the risks of the Fund's particular
investments in the section called HOW WE MANAGE THE FUND.

PAST PERFORMANCE

The bar chart and the table below provide an indication of the risks of
investing in Davis New York Venture Fund by showing changes in the Fund's
year-to-year performance and by showing how the Fund's average annual returns
for one year and since inception compare to those of the S&P 500(Registered
Trademark), a widely recognized unmanaged index of stock performance. How the
Fund has performed in the past is not necessarily an indication of how the Fund
will perform in the future.

DAVIS NEW YORK VENTURE FUND
TOTAL RETURN OVER THE LAST 2-YEAR PERIOD
(As of December 31st of each year)
CLASS Y SHARES

(Bar Chart)

1997 34.04%
1998 15.12%

During the period shown above, the highest quarterly return was 21.43% for the
fourth quarter of 1998, and the worst quarterly return was (14.33)% for the
third quarter of 1998. Year-to-date performance as of 10/31/99 (unannualized)
was 11.38%.

4
<PAGE>

DAVIS NEW YORK VENTURE FUND AVERAGE ANNUAL TOTAL RETURNS
(For the periods ending December 31, 1998)

- --------------------------------------------------------------------------------
1 YEAR LIFE OF CLASS
(SINCE 10/2/96)
- --------------------------------------------------------------------------------
Class Y shares 15.12% 26.73%
- --------------------------------------------------------------------------------
S&P 500 Index 28.58% 31.07%
- --------------------------------------------------------------------------------

FEES AND EXPENSES OF THE FUND

FEES YOU MAY PAY AS A DAVIS NEW YORK VENTURE FUND SHAREHOLDER
(Paid Directly from Your Investment)

- --------------------------------------------------------------------------------
CLASS Y
SHARES
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases (as a
percentage of offering price) None
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) None
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
- --------------------------------------------------------------------------------
Exchange Fee None
- --------------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES FOR FISCAL YEAR ENDING JULY 31, 1999
(Deducted from the Fund's Assets)

- --------------------------------------------------------------------------------
CLASS Y
SHARES
- --------------------------------------------------------------------------------
Management Fees 0.53%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None
- --------------------------------------------------------------------------------
Other Expenses 0.09%
- --------------------------------------------------------------------------------
Total Annual Operating Expenses 0.62%
- --------------------------------------------------------------------------------

EXAMPLE

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

- --------------------------------------------------------------------------------
IF YOU SELL YOUR 1 YEAR 3 YEARS 5 YEARS 10 YEARS
SHARES IN...
- --------------------------------------------------------------------------------
CLASS Y SHARES $63 $199 $346 $774
- --------------------------------------------------------------------------------

5
<PAGE>

FINANCIAL HIGHLIGHTS

This table is designed to show you the financial performance of Davis New York
Venture Fund for the period from October 2, 1996 (when the Fund began selling
Class Y shares to the public) through July 31, 1999, assuming that all dividends
and capital gains have been reinvested. Some of the information reflects
financial results for a single Fund share. The total returns represent the rate
that an investor would have earned (or lost) money on an investment in the Fund.

6
<PAGE>

DAVIS NEW YORK VENTURE FUND
CLASS Y SHARES

OCTOBER 2, 1996
(INCEPTION
YEAR ENDED JULY 31, OF CLASS)
-------------------------- THROUGH
1999 1998 JULY 31, 1997
---- ---- -------------

<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).......................................... 11.48% 44.71% 17.19%

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 class), 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.

7
<PAGE>

WHO IS RESPONSIBLE FOR YOUR DAVIS ACCOUNT

INVESTMENT ADVISER

DAVIS SELECTED ADVISERS, LP
Referred to throughout this prospectus as "Davis Selected Advisers"
124 East Marcy Street
Santa Fe, NM 87501
o Provides investment advice for Davis New York Venture Fund's portfolio.
o Manages the Fund's business affairs.
o Provides day-to-day administrative services.
o Serves as investment adviser for all of the Davis Funds, other mutual funds,
and other institutional clients.
o Annual Adviser Fee for fiscal year July 31, 1999 (based on average net
assets): 0.53%.

INVESTMENT SUB-ADVISER

CUSTODIAN AND TRANSFER AGENT

BOARD OF DIRECTORS

<PAGE>

DISTRIBUTOR

FOUNDER AND CHIEF INVESTMENT OFFICER OF THE ADVISER

SHELBY M.C. DAVIS
Responsibilities:
o Chief Investment Officer of Davis Selected Advisers.
o President of all of the Davis Funds.

Other Experience:
o Served as Davis New York Venture Fund's Portfolio Manager from its inception
in February 1969 until February 1997.
o Served as Portfolio Manager of a growth and income fund managed by Davis
Selected Advisers from May 1993 until February 1997.

PORTFOLIO MANAGERS

Other Experience:
o Research analyst at Davis Selected Advisers since December 1994.
o Assistant Vice President of Investor Relations for Continental Corp. from
1988 to 1994.

9
<PAGE>

[BOXED]
OUR CODE OF ETHICS

HOW WE MANAGE THE FUND

WHAT WE INVEST IN AND WHY

For more details concerning current investments and market outlook, please see
the most recent annual or semi-annual report.

COMMON STOCK

WHAT THEY ARE. Common stock represents ownership of a company.

[SET OFF OR BOXED]

WHAT WE LOOK FOR IN A COMPANY

1. FIRST-CLASS MANAGEMENT. We believe that great companies are created by
great managers. In visiting companies, we look for managers with a record
of doing what they say they are going to do.

2. MANAGEMENT OWNERSHIP. Just as we invest heavily in our own funds, we look
for companies where individual managers own a significant stake.

3. STRONG RETURNS ON CAPITAL. We want companies that invest their capital
wisely and reap superior returns on those investments.

4. LEAN EXPENSE STRUCTURE. Companies that can keep costs low are able to
compete better, especially in difficult times. A low cost structure sharply
reduces the risk of owning a company's shares.

10
<PAGE>

5. DOMINANT OR GROWING MARKET SHARE IN A GROWING MARKET. A company that is
increasing its share of a growing market has the best of both worlds.

7. STRONG BALANCE SHEET. Strong finances give a company staying power to
weather difficult economic cycles.

8. COMPETITIVE PRODUCTS OR SERVICES. We invest in companies with products that
are not vulnerable to obsolescence.

9. SUCCESSFUL INTERNATIONAL OPERATIONS. A proven ability to expand
internationally reduces the risk of being tied too closely to the U.S.
economic cycle.

10. INNOVATION. The savvy use of technology in any business, from a food
company to an investment bank, can help reduce costs and increase sales.

RISKS. Factors that influence the value of a share of common stock are primarily
general market and economic conditions, and the financial condition and
performance of the issuer.

o COMPANY RISK. The price of a common stock varies with the success and
failure of the company issuing the stock. As a result, the success of the
companies in which the Fund invests largely determines the Fund's
performance. Investing in small capitalization companies carries greater
risk than investing in stock of larger companies. Small companies often have
less predictable earnings and the market for their stocks may not be as well
developed.

11
<PAGE>

OTHER SECURITIES AND INVESTMENT STRATEGIES

ADDITIONAL RISKS FOR THE FUND: YEAR 2000 TRANSITION ISSUES

12
<PAGE>

RISK SPECTRUM

[IN BLACK AREA BELOW GRAPHIC]
For more information about any of the other Davis Funds, including charges and
expenses, ask for a prospectus. Read it carefully before investing or sending
money.

HOW WE MANAGE RISK

[SET OFF OR BOXED]
FIVE STRATEGIES WE USE TO MINIMIZE RISK

13
<PAGE>

5. WE MAY MAKE TEMPORARY DEFENSIVE INVESTMENTS. From time to time, Davis New
York Venture Fund may take temporary defensive positions in response to
adverse market, economic or political conditions.

ONCE YOU INVEST IN THE DAVIS FUNDS

This section describes how your investment is valued, how you earn money on your
investment, and how the government may tax these earnings.

HOW YOUR SHARES ARE VALUED

Net asset values for all the Davis Funds are determined each business day. We
calculate net asset value either at the close of the Exchange or at 4 p.m.
Eastern Time, whichever comes first.

HOW SECURITIES IN THE PORTFOLIO ARE VALUED

We use current market valuations to price the securities in Davis New York
Venture Fund:

o Over-the-counter securities are valued at the average of closing bid and
asked prices.

o Debt securities purchased with a maturity of one year or less are usually
valued at amortized cost.

14
<PAGE>

o Longer-term debt securities may be valued by an independent pricing service.

o Securities with unavailable market quotations and other assets are valued at
"fair value"--which is determined by the Board of Directors.

HOW WE PAY EARNINGS

There are two ways you can receive payments from Davis New York Venture Fund:

o DIVIDENDS. Distributions to shareholders of net investment income and
short-term capital gains on investments.

o CAPITAL GAINS. Profits received by the Fund from the sale of securities held
for the long-term, which are then distributed to shareholders.

We also offer a DIVIDEND DIVERSIFICATION PROGRAM, which allows you to have your
dividends and capital gains reinvested in shares of another Davis Fund.

15
<PAGE>

(SET OFF)
HOW TO PUT YOUR DIVIDENDS AND CAPITAL GAINS TO WORK

You can have all dividends and capital gains automatically invested in the same
share class of this or other Davis Funds. To be eligible for this DIVIDEND
DIVERSIFICATION PROGRAM, all accounts involved must be registered under the same
name, and the same class of shares. Shares are purchased at the chosen Fund's
net asset value on the dividend payment date. You can make changes to your
selection or withdraw from the program with 10 days' notice. To participate in
this program, fill out the cross-reinvest information in the appropriate section
of the Application Form. Once your account has been opened and you wish to
establish this program, call our customer service department for more
information.

HOW YOUR DIVIDENDS AND CAPITAL GAINS ARE TAXED

o If Davis New York Venture Fund pays dividends, they are taxable to
shareholders as ordinary income. Dividends include both net investment
income and short-term capital gains.
o If Davis New York Venture Fund pays net capital gains, they generally will
be taxed as a long-term capital gain distribution.

These payments may be taxed at different rates, depending on the length of time
the Fund holds its assets. More information is provided in the instructions that
come with your tax return.

Investment earnings (dividends and capital gains) are taxable in the year in
which they were declared, not paid--whether they are received in cash or
reinvested in shares.

Also, keep in mind that when you sell or exchange shares of the Fund, it may
result in a taxable gain or loss.

We recommend that you consult with a tax advisor about any dividends and capital
gains you may receive from Davis New York Venture Fund.

[SIDEBAR]
Wrap accounts are investment programs offered by broker-dealers who place a
client's funds with one or more investment advisers and charge a fee for their
services.

16
<PAGE>

HOW TO OPEN AN ACCOUNT

You can open an account if:

o You invest at least $5 million for an institution (trust company, bank
trust, endowment, pension plan, foundation) acting on behalf of its own
account or one or more clients.

o You invest at least $5 million for a government entity (a state, county,
city, department, authority or similar government agency).

o You invest with an account established under a "wrap account" or other
fee-based program that is sponsored and maintained by a registered
broker-dealer approved by our distributor, Davis Distributors.

(CHART)
THREE WAYS YOU CAN OPEN AN ACCOUNT

1. BY MAIL. Fill out the Application Form included in this prospectus and mail
it to our service provider, State Street Bank and Trust. Both you and your
dealer must sign the form. Include a check made payable to the DAVIS FUNDS, or
in the case of a retirement account, the custodian or to the trustee. All
purchases by check should be in U.S. dollars. DAVIS NEW YORK VENTURE FUND WILL
NOT ACCEPT THIRD-PARTY CHECKS.

3. BY WIRE. You may wire federal funds directly to our service provider, State
Street Bank and Trust. Before you wire an initial investment, you must call
Davis Distributors and obtain an account number and Application Form. After the
initial wire purchase is made, you will need to return the Application Form to
State Street Bank and Trust. To ensure that the purchase is credited properly,
follow these wire instructions:

17
<PAGE>

[BOXED]
An exchange occurs when you sell shares in one Davis Fund to buy shares in
another Davis Fund in the same class of shares in response to changes in your
goals or in market conditions.

HOW TO BUY, SELL AND EXCHANGE SHARES

(CHART)
THREE WAYS TO BUY, SELL AND EXCHANGE SHARES

2. BY MAIL. Send the request to our service provider, State Street Bank and
Trust.

Regular Mail
State Street Bank and Trust Company
c/o Davis Funds
PO Box 8406
Boston, MA 02266-8406

Overnight Mail
State Street Bank and Trust Company
c/o Davis Funds
66 Brooks Drive
Braintree, MA 02184

WHEN YOUR TRANSACTIONS ARE PROCESSED

18
<PAGE>

For your transaction to be counted on the day you place your order with your
broker-dealer or other financial institution, they must:

o Receive your order before 4 p.m. Eastern Time.
o Promptly transmit the order to State Street Bank and Trust.

BUYING MORE SHARES

When you purchase shares by mail, send a check made payable to the DAVIS FUNDS
for the amount of purchase to our service provider, State Street Bank and Trust.
If you have the purchase form from your most recent statement, include it with
the check. If you do not have a purchase form, include a letter with your check
stating the name of the Fund, your account number and that the investment should
be made in Class Y shares.

When you buy shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

SPECIAL NOTE FOR WRAP PROGRAM INVESTORS

Be aware that both Class A and Class Y shares are available by the Fund at net
asset value to your sponsor. However, Class A shares are subject to additional
expenses, and sponsors of wrap programs who buy Class A shares are generally
entitled to commissions. If your sponsor has selected Class A shares, you should
discuss these charges and weigh the benefits of any services to be provided by
the sponsor against the higher expenses paid by Class A shareholders. For more
information on these fees and expenses, you can request the prospectus covering
Class A shares by calling Davis Distributors.

SELLING SHARES

You may sell back all or part of your shares to Davis New York Venture Fund
(known as a redemption) at any time, at net asset value. You can sell the shares
by telephone, by mail or through a dealer.

When you sell shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

19
<PAGE>

WHAT YOU NEED TO KNOW BEFORE YOU SELL YOUR SHARES

o You will need a medallion signature guarantee on a stock power or redemption
request for sales paid by check totaling more than $50,000. However, if your
address of record has changed in the last 30 days, or if you wish to send
redemption proceeds to a third party, you will need a medallion signature
guarantee for all sales.

o A sale may produce a gain or loss. Gains may be subject to tax.

STOCK POWER. A letter signed by the owner of the shares that gives State Street
Bank and Trust permission to transfer ownership of the shares to another person
or group. Any transfer of ownership requires that all shareholders have their
signatures medallion-guaranteed.

SPECIAL SALE SITUATIONS

o The Securities and Exchange Commission can suspend payment of sales under
certain emergency circumstances if the New York Stock Exchange is closed for
reasons other than customary closings and holidays.

o Davis New York Venture Fund may make sales payments in securities if Davis
New York Venture Fund's Board of Directors decides that making cash payments
would harm the Fund.

WIRING SALE PROCEEDS TO YOUR BANK ACCOUNT

20
<PAGE>

registered owners at the time of the wire sale. If you are currently an investor
with a non-retirement account and have already established this privilege, you
may call our customer service department to execute a wire sale by telephone.

EXCHANGING SHARES

You can transfer Class Y shares of Davis New York Venture Fund to Class Y shares
in any other Davis Fund. This is known as an exchange. You can exchange shares
by telephone (to accounts with identical registrations), by dealer or by mail.
The initial exchange must be for at least $5 million for institutions or
government entities or minimums set by wrap program sponsors. Class A
shareholders who are eligible to buy Class Y shares may also exchange their
shares for Class Y shares of the Fund. Exchanges are normally performed on the
same day of the request if received by 4 p.m. Eastern Time.

When you exchange shares by mail, you must send our service provider, State
Street Bank and Trust, a written request for the exchange. No medallion
signature guarantee is required unless shares are also being sold for cash,
which is known as a redemption. Please see the section WHAT YOU NEED TO KNOW
BEFORE YOU SELL YOUR SHARES for restrictions that might apply to this type of
transaction.

When you exchange shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

There are limits to the number of exchanges you can make each year. Currently,
four exchanges are allowed during a 12-month period. Davis Distributors must
approve any exchanges above the limit in writing.

YOU CAN MAKE EXCHANGES AMONG ANY OF THE DAVIS FUNDS
WITHOUT HAVING TO PAY ANY SALES CHARGE

EQUITY FUNDS
Davis New York Venture Fund
Davis Growth Opportunity Fund
Davis Financial Fund
Davis International Total Return Fund

GROWTH & INCOME FUNDS
Davis Growth & Income Fund
Davis Real Estate Fund
Davis Convertible Securities Fund

BOND FUNDS
Davis Intermediate Investment Grade Bond Fund
Davis Tax-Free High Income Fund
Davis Government Bond Fund

21
<PAGE>

GOVERNMENT MONEY MARKET FUND
Davis Government Money Market Fund

For more information about any of the other Davis Funds, including charges and
expenses, ask for a prospectus. Read it carefully before investing or sending
money.

TRANSACTIONS BY TELEPHONE

A benefit of investing through Davis Funds is that you can use our telephone
system to buy, sell or exchange shares. If you do not wish to have this option
activated for your account, you must note this on your Application Form.

When you call Davis Distributors, you can perform a transaction in two ways:

Be aware that during unusual market conditions, Davis Funds may not be able to
accept all requests by telephone.

[SET OFF]
YOU CAN USE DAVIS DIRECT ACCESS TO:

o GET THE PRICE, TOTAL RETURN AND FUND DESCRIPTION FOR ANY DAVIS FUND.
o CHECK YOUR ACCOUNT BALANCE AND OTHER ACCOUNT INFORMATION.
o BUY, SELL AND EXCHANGE SHARES.
o GET THE MAILING ADDRESS AND WIRE INSTRUCTIONS FOR ANY DAVIS FUND.
o REQUEST LITERATURE ABOUT ANY DAVIS FUND.

22
<PAGE>

[INSIDE BACK COVER]

THE DAVIS FUNDS:
OVER 25 YEARS OF RELIABLE INVESTING

WE ARE FELLOW SHAREHOLDERS. The Davis family, directors and employees not only
manage the company's mutual funds, but also invest in them. Together, we have
invested over $1 billion of our own money side-by-side with our shareholders.

23
<PAGE>

ADDRESS AND TELEPHONE GUIDE

OUR TELEPHONE NUMBER: OUR INTERNET ADDRESS:
1-800-279-0279 http://www.davisfunds.com

OUR MAILING ADDRESS:
Davis Funds
124 East Marcy Street
Santa Fe, NM 87501

OUR SERVICE PROVIDER'S REGULAR OUR SERVICE PROVIDER'S OVERNIGHT
MAILING ADDRESS: MAILING ADDRESS:
State Street Bank and Trust Company State Street Bank and Trust Company
c/o Davis Funds c/o Davis Funds
PO Box 8406 66 Brooks Drive
Boston, MA 02266-8406 Braintree, MA 02184

24
<PAGE>

[BACK COVER]

OTHER FUND DOCUMENTS

WHERE YOU CAN GET THESE DOCUMENTS:

o BY TELEPHONE. Call Davis Funds toll-free at 1-800-279-0279, Monday through
Friday, 7 a.m. to 4 p.m. Mountain Time. You may also call this number for
shareholder inquiries.

o VIA THE INTERNET. Visit the SEC web site (WWW.SEC.GOV).

o BY MAIL. Specify the document you are requesting when writing to us.

DAVIS FUNDS
124 EAST MARCY STREET
SANTA FE, NM 87501
1-800-279-0279

Investment Company Act File No. 811-1701

25
<PAGE>

Draft 11/12/99

DAVIS GROWTH & INCOME FUND

Prospectus and Application Form
Class A shares
Class B shares
Class C shares

December 1, 1999

Over 25 Years of Reliable Investing

<PAGE>

TABLE OF CONTENTS

Overview of the Fund
Investment Objectives and Strategy
Determining If This Fund Is Right for You
Principal Risks
Past Performance
Fees and Expenses of the Fund
Financial Highlights

Who Is Responsible for Your Davis Account

How We Manage the Fund

Once You Invest in the Davis Funds

How to Choose a Share Class

How to Open an Account

How to Buy, Sell and Exchange Shares

The Davis Funds: Over 25 Years of Reliable Investing

Other Fund Documents

2
<PAGE>

OVERVIEW OF DAVIS GROWTH & INCOME FUND

INVESTMENT OBJECTIVE AND STRATEGY

Davis Growth & Income Fund's investment objectives are capital growth and
income. We strive to meet these objectives by using a conservative investment
strategy. Ordinarily, most of the Fund's assets are invested in the common stock
of growing companies. However, since the stock market can decline and the value
of individual stocks can suffer in response to uncontrollable and unpredictable
events, we balance Davis Growth & Income Fund's portfolio by buying real estate
securities, convertible securities and bonds. These investments may not respond
to changes in market and general economic conditions in the same ways that
common stocks respond. As a result, they may retain their value better than
common stock, particularly during a general decline in the stock market. In
addition, real estate securities, convertible securities and bonds may earn more
income than common stock.

Our portfolio managers use the Davis investment philosophy to select common
stock of quality overlooked growth companies at value prices and to hold them
for the long-term.

[SIDEBAR:]
Please see the inside back cover page of this prospectus to learn about the
Davis investment philosophy.

Davis Growth & Income Fund's portfolio managers constantly evaluate market
conditions and the Fund's mix of assets to ensure that the Fund owns an
appropriate blend of growth-oriented and income-oriented investments.

You can find more detailed information about the types of securities that Davis
Growth & Income Fund buys in the section called HOW WE MANAGE THE FUND.

DETERMINING IF THIS FUND IS RIGHT FOR YOU

YOU SHOULD CONSIDER INVESTING IN THIS FUND IF:
o You are risk-sensitive, but would like to invest in growing companies.
o You are primarily interested in growth-oriented investments, but want
current income.
o You are looking for a diversified fund to weather varied market cycles.
o You are investing for the long-term (five years or more).

YOU SHOULD NOT INVEST IN THIS FUND IF:
o You are worried about the possibility of sharp price swings and dramatic
market declines.
o You are investing for the short-term (less than five years).
o You are primarily interested in current income with minimal risk.

3
<PAGE>

PRINCIPAL RISKS

If you buy shares of Davis Growth & Income Fund, you may lose some or all of the
money that you invest. This section describes what we think are the most
significant factors that can cause the Fund's performance to suffer.

o MARKET RISK. The price of Davis Growth & Income Fund's shares, and the value
of your investment in the Fund will vary with the value of the assets that
we hold. The values of common stock, real estate securities, convertible
securities and bonds fluctuate in response to movements in the stock market
and market interest rates.

o COMPANY RISK. The values of individual securities fluctuate in response to
market evaluations of the businesses that issue them. These evaluations may
change rapidly and unpredictably due to corporate developments (such as
disappointing earnings news or delays in new products), which may cause the
market price of securities to decline from the Fund's purchase price.

o REAL ESTATE RISK. The value of real estate securities which the Fund may
purchase is subject to risks associated with the ownership of real estate.
These risks are described in the section called HOW WE MANAGE THE FUND.

o INTEREST RATE RISK. The value of fixed-income securities which the Fund
purchases usually declines when current interest rates increase.

o CREDIT RISK. The value of fixed income securities which the Fund purchases
may decline if the issuer of the security experiences difficulty in making
timely interest and principal payments. The Fund may purchase high yield
high-risk debt securities.

An investment in Davis Growth & Income Fund is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

You can find more detailed information about the risks of the Fund's particular
investments, as well as the role of credit rating agencies, in the section
called HOW WE MANAGE THE FUND.

PAST PERFORMANCE

Davis Growth & Income Fund began selling shares to the public on May 1, 1998.
The past performance of the Fund will be included in the next annual update of
the Fund's prospectus after the Fund has a full calendar year of performance.

4
<PAGE>

FEES AND EXPENSES OF THE FUND

FEES YOU MAY PAY AS A DAVIS GROWTH & INCOME FUND SHAREHOLDER
(Paid Directly from Your Investment)
- --------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed 4.75% None None
on Purchases (as a percentage of
offering price)
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) 0.75% 4.00% 1.00%
Imposed on Redemptions (as a
percentage of the lesser of the net
asset value of the shares redeemed or
the total cost of such shares)
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed None None None
on Reinvested Dividends
- --------------------------------------------------------------------------------
Exchange Fee None None None
- --------------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES FOR FISCAL YEAR ENDING JULY 31, 1999
(Deducted from the Fund's Assets)
- --------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
- --------------------------------------------------------------------------------
Management Fees 0.75% 0.75% 0.75%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.10% 1.00% 1.00%
- --------------------------------------------------------------------------------
Other Expenses 0.31% 0.42% 0.42%
- --------------------------------------------------------------------------------
Total Annual Operating Expenses 1.16% 2.17% 2.17%
- --------------------------------------------------------------------------------

EXAMPLE

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

- --------------------------------------------------------------------------------
IF YOU SELL YOUR SHARES IN... 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
CLASS A SHARES $588 $826 $1,083 $1,817
- --------------------------------------------------------------------------------
CLASS B SHARES $620 $979 $1,364 $2,126*
- --------------------------------------------------------------------------------
CLASS C SHARES $320 $679 $1,164 $2,503
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
IF YOU STILL HOLD YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
AFTER...
- --------------------------------------------------------------------------------
CLASS A SHARES $588 $826 $1,083 $1,817
- --------------------------------------------------------------------------------
CLASS B SHARES $220 $679 $1,164 $2,126*
- --------------------------------------------------------------------------------
CLASS C SHARES $220 $679 $1,164 $2,503
- --------------------------------------------------------------------------------

* Class B shares expenses for the 10-year period includes 2 years of Class A
expenses, since Class B shares automatically convert to Class A shares after 8
years.

5
<PAGE>

FINANCIAL HIGHLIGHTS

These tables are designed to show you the financial performance of Davis Growth
& Income Fund for the period from May 1, 1998 (when the Fund began selling
shares to the public) through July 31, 1999, assuming that all dividends and
capital gains have been reinvested. Some of the information reflects financial
results for a single Fund share. The total returns represent the rate that an
investor would have earned (or lost) money on an investment in the Fund.

This information has been derived from the financial statements audited by KPMG
LLP, independent accountants, whose report - along with the Fund's financial
statements - is included in the Fund's most recent annual report to
shareholders, which is available upon request.

6
<PAGE>

DAVIS GROWTH & INCOME FUND
CLASS A AND B SHARES

<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------- -----------------------------
MAY 1, 1998 MAY 4, 1998
YEAR (COMMENCEMENT YEAR (INCEPTION
ENDED OF OPERATIONS) ENDED OF CLASS)
JULY 31, THROUGH JULY 31, THROUGH
1999 JULY 31, 1998 1999 JULY 31, 1998
---- ------------- ----- -------------

<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....... $ 9.81 $ 10.00 $ 9.79 $ 10.00
------------- ------------- ------------- -------------

Income (Loss) from Investment Operations
Net Investment Income ................. 0.16 0.03 0.05 0.01
Net Realized and Unrealized Gains
(Losses) ............................ 1.05 (0.22) 1.05 (0.22)
------------- ------------- ------------- -------------
Total from Investment Operations .... 1.21 (0.19) 1.10 (0.21)

Dividends and Distributions
Dividends from Net Investment Income ..
(0.17) -- (0.07) --
------------- ------------- ------------- -------------
Total Dividends and Distributions ... (0.17) -- (0.07) --

Net Asset Value, End of Period ............ $ 10.85 $ 9.81 $ 10.82 $ 9.79
============= ============= ============= =============

Total Return(1)............................. 12.48% (1.90)% 11.34% (2.10)%

Ratios/Supplemental Data

Net Assets, End of Period (000
omitted) ............................ $ 57,824 $ 49,715 $ 33,643 $ 19,571

Ratio of Expenses to Average Net Assets
1.16% 1.44%* 2.17% 2.32%*
Ratio of Net Investment Income to
Average Net Assets .................. 1.39% 1.87%* 0.38% 0.99%*
Portfolio Turnover Rate(2)............. 18% 0% 18% 0%

</TABLE>

1 Assumes hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of class) 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.

* Annualized.

7
<PAGE>

DAVIS GROWTH & INCOME FUND
CLASS C SHARES

CLASS C

MAY 4, 1998
YEAR (INCEPTION
ENDED OF CLASS)
JULY 31, THROUGH
1999 JULY 31, 1998
---- -------------

Net Asset Value, Beginning of Period ....... $ 9.79 $ 10.00
------------- ------------

Income (Loss) from Investment Operations
Net Investment Income ................. 0.05 0.01
Net Realized and Unrealized Gains ..... 1.05 (0.22)
------------- ------------
(Losses)
Total from Investment Operations .... 1.10 (0.21)

Dividends and Distributions
Dividends from Net Investment Income .. (0.07) --
------------- ------------
Total Dividends and Distributions ... (0.07) --

Net Asset Value, End of Period ............ $ 10.82 $ 9.79
============= ============

Total Return(1)............................. 11.32% (2.10)%

Ratios/Supplemental Data

Net Assets, End of Period (000 omitted)
$ 12,002 $ 5,512

Ratio of Expenses to Average Net
Assets .............................. 2.17% 2.32%*
Ratio of Net Investment Income to
Average Net Assets .................. 0.38% 0.99%*
Portfolio Turnover Rate(2)............. 18% 0%

* Annualized.

8
<PAGE>

WHO IS RESPONSIBLE FOR YOUR DAVIS ACCOUNT

A number of entities provide services to Davis Growth & Income Fund. This
section shows how the Fund is organized, the entities that perform these
services, and how these entities are compensated. Additional information on the
organization of the Fund is provided in the Fund's Statement of Additional
Information. For information on how to receive this document, see the back cover
of this prospectus.

INVESTMENT ADVISER

DAVIS SELECTED ADVISERS, LP
Referred to throughout this prospectus as "Davis Selected Advisers"
124 East Marcy Street
Santa Fe, NM 87501
o Provides investment advice for Davis Growth & Income Fund's portfolio.
o Manages the Fund's business affairs.
o Provides day-to-day administrative services.
o Serves as investment adviser for all of the Davis Funds, other mutual funds,
and other institutional clients.
o Annual Adviser Fee for the fiscal year ended July 31, 1999 (based on average
net assets): 0.75%.

INVESTMENT SUB-ADVISER

DAVIS SELECTED ADVISERS-NY, INC.
Referred to throughout this prospectus as "Davis Selected Advisers-NY"
609 Fifth Avenue
New York, NY 10017
o Performs investment management and research services for Davis Growth &
Income Fund and other institutional clients.
o Wholly owned subsidiary of Davis Selected Advisers.
o Annual Fee: Davis Selected Advisers pays the fee, not the Fund.

CUSTODIAN AND TRANSFER AGENT

STATE STREET BANK AND TRUST COMPANY
Referred to throughout this prospectus as "State Street Bank and Trust"
PO Box 8406
Boston, MA 02266-8406
o Prices Davis Growth & Income Fund daily.
o Holds share certificates and other assets of the Fund.
o Maintains records of shareholders.
o Issues and cancels share certificates.
o Supervises the payment of dividends.

9
<PAGE>

BOARD OF DIRECTORS

DISTRIBUTOR

FOUNDER AND CHIEF INVESTMENT OFFICER OF THE ADVISER

SHELBY M.C. DAVIS
Responsibilities:
o Chief Investment Officer of Davis Selected Advisers.
o President of all of the Davis Funds.

Other Experience:
o Served as Davis New York Venture Fund's Portfolio Manager from its inception
in February 1969 until February 1997.
o Served as Portfolio Manager of a growth and income fund managed by Davis
Selected Advisers from May 1993 until February 1997.

PORTFOLIO MANAGERS

CHRISTOPHER C. DAVIS
Responsibilities:
o Vice President and Co-Portfolio Manager of Growth & Income Fund since its
inception.
o Portfolio Manager or Co-Portfolio Manager of Davis the Fund from October
1995 to the present.
o Also manages or co-manages other equity funds advised by Davis Selected
Advisers.

Other Experience:
o Assistant portfolio manager and research analyst working with Shelby M.C.
Davis from September 1989 to September 1995.

10
<PAGE>

ANDREW A. DAVIS
Responsibilities:
o Vice President and Co-Portfolio Manager of Growth & Income Fund since its
inception.
o Portfolio Manager or Co-Portfolio Manager of Davis Convertible Securities
Fund and Davis Real Estate Fund since inception of each in 1994.

Other Experience:
o Vice President of convertible securities research at PaineWebber,
Incorporated for six years.

[BOXED]
OUR CODE OF ETHICS

HOW WE MANAGE THE FUND

WHAT WE INVEST IN AND WHY

Davis Growth & Income Fund's investment objectives are capital growth and
income. In keeping with the Fund's conservative approach to investing, our
portfolio managers balance the Fund's holdings of common stock with real estate
securities, convertible securities and bonds.

Real estate securities, convertible securities and bonds may be less susceptible
to changes in the stock market than common stocks. As a result, these securities
may retain their value better than common stock, particularly during a general
decline in the stock market. An additional benefit of the Fund's asset mix is
that the common stock in which the Fund invests offer the potential for capital
growth over the long-term, while the real estate securities, convertible
securities and bonds generate current income.

During normal market conditions, approximately 60% of Davis Growth & Income
Fund's assets are common stock. Most of the remaining 40% of the Fund's holdings
generally are real estate securities, convertible securities, bonds and cash
equivalents. The Fund may vary these percentages as market conditions dictate.

Generally, there is no restriction on how much of the Fund's assets our
portfolio managers can invest in any particular type of security. However, some
of the securities that the Fund buys are considered "high yield, high-risk"
investments because they do not have favorable credit ratings. The Fund cannot
devote more than 35% of its assets to such investments.

11
<PAGE>

COMMON STOCK

WHAT THEY ARE. Common stock represents ownership of a company.

Most of Davis Growth & Income Fund's common stock is issued by U.S. companies
with large market capitalizations (that is, the market value of all of their
outstanding stock exceeds $5 billion).

[SET OFF OR BOXED]

WHAT WE LOOK FOR IN A COMPANY

1. FIRST-CLASS MANAGEMENT. We believe that great companies are created by
great managers. In visiting companies, we look for managers with a record
of doing what they say they are going to do.

2. MANAGEMENT OWNERSHIP. Just as we invest heavily in our own funds, we look
for companies where individual managers own a significant stake.

3. STRONG RETURNS ON CAPITAL. We want companies that invest their capital
wisely and reap superior returns on those investments.

4. LEAN EXPENSE STRUCTURE. Companies that can keep costs low are able to
compete better, especially in difficult times. A low cost structure sharply
reduces the risk of owning a company's shares.

5. DOMINANT OR GROWING MARKET SHARE IN A GROWING MARKET. A company that is
increasing its share of a growing market has the best of both worlds.

6. PROVEN RECORD AS AN ACQUIRER. When an industry or market downturn occurs,
it is a good idea to own companies that can take advantage of low prices to
expand operations through inexpensive acquisitions.

7. STRONG BALANCE SHEET. Strong finances give a company staying power to
weather difficult economic cycles.

8. COMPETITIVE PRODUCTS OR SERVICES. We invest in companies with products that
are not vulnerable to obsolescence.

9. SUCCESSFUL INTERNATIONAL OPERATIONS. A proven ability to expand
internationally reduces the risk of being tied too closely to the U.S.
economic cycle.

10. INNOVATION. The savvy use of technology in any business, from a food
company to an investment bank, can help reduce costs and increase sales.

12
<PAGE>

WHY WE BUY THEM. Davis Growth & Income Fund buys common stock to take an
ownership position in companies with growth potential, and then holds that
position long enough to realize the benefits of growth.

RISKS. Factors that influence the value of a share of common stock are primarily
general market and economic conditions, and the financial condition and
performance of the issuer.

REAL ESTATE SECURITIES

WHAT THEY ARE. Real estate securities are issued by companies that are
"principally engaged" in the real estate industry. A company is "principally
engaged" in the real estate industry if it owns real estate or real
estate-related assets that constitute at least 50% of the value of all of its
assets, or if it derives at least 50% of its revenues or net profits from
owning, financing, developing, managing, or selling real estate, or from
offering products or services that are related to real estate. Issuers of real
estate securities include real estate investment trusts (known as "REITs"),
brokers, developers, lenders and companies with substantial real estate holdings
such as paper, lumber, hotel and entertainment companies.

Most of the Fund's real estate securities are, and likely will continue to be,
interests in REITs. REITs pool investors' funds to make real estate-related
investments, such as buying interests in income-producing property or making
loans to real estate developers. The Fund does not invest directly in real
estate.

HOW WE PICK THEM. Davis Growth & Income Fund focuses on REITs and other
companies with first-class management teams who view real estate as a means of
producing steady increases in income and strong returns on capital. We
concentrate heavily on valuation, looking for companies that sell at less than
the present value of their expected cash flow over the next few years.

WHY WE BUY THEM. Real estate securities contribute to both aspects of the Fund's
investment goals because they offer both growth potential and current income.
These securities also contribute to the Fund's diversification strategy. The
values of real estate securities typically do not fluctuate at the same time or
for the same reasons as values of traditional common stock, so real estate
investments may offer a cushion when the stock market is in a slump. Similarly,
the price (and market value) of a real estate security that promises regular
payments may be more stable than the price of a common stock that pays little or
no dividends.

13
<PAGE>

RISKS. Real estate securities are susceptible to the many risks associated with
the direct ownership of real estate, including:

o Declines in property values - because of changes in the economy or
the surrounding area or because a particular region has become less
appealing to tenants.

o Increases in property taxes, operating expenses, interest rates, or
competition.

o Overbuilding.

o Changes in zoning laws.

o Losses from casualty or condemnation.

In addition, since many real estate securities are common stock, they present
the risks that we discuss under the heading COMMON STOCK - RISKS.

Many real estate debt securities are assigned ratings by agencies that evaluate
the quality of publicly offered debt. Davis Growth & Income Fund may buy some
real estate securities that have low ratings. These securities are considered
"high yield, high-risk" debt, and present more risk than so-called
"investment-grade" securities. For information about high yield, high-risk debt,
please see ADDITIONAL INFORMATION ABOUT HIGH YIELD, HIGH-RISK DEBT SECURITIES.

CONVERTIBLE SECURITIES

WHAT THEY ARE. Convertible securities are securities that can be converted into
or exchanged for other securities. The most common types of convertible
securities are bonds and preferred stock that the holder can exchange for common
stock of the same issuer.

HOW WE PICK THEM. First, the Fund's portfolio managers identify attractive
issuers using the ten desired characteristics that we discuss under the heading
COMMON STOCK - HOW WE PICK THEM. Then we identify securities issued by those
companies that we believe have the potential to deliver 80% of the amount that
the issuer's common stock appreciates when market conditions are favorable, but
will not drop in value by more than 50% of the amount that the issuer's common
stock declines when market conditions are bad.

WHY WE BUY THEM. Convertible securities contribute to both aspects of the Fund's
investment goals because they offer both current income and growth potential.
These securities also contribute to the Fund's strategy of holding assets other
than common stock.

For current income, Davis Growth & Income Fund buys convertible debt instruments
like bonds, notes and debentures that entitle the Fund to receive regular
interest payments. Similarly, we buy preferred stock that entitles the Fund to
receive regular dividend payments. These interest and dividend payments
generally exceed the dividend payments that the issuers of our convertible
securities make to holders of their common stock.

14
<PAGE>

Convertible securities have growth potential because if the underlying common
stock begins to increase in value, the holder of the convertible security can
exchange it for common stock and enjoy the benefits of that growth.

RISKS. Convertible securities have characteristics of both equity and debt, so
they present the risks of common stock ownership (discussed in the section
called COMMON STOCK - RISKS) as well as the risks that traditional lenders face.
The debt component of a convertible security poses three types of risk:

o INTEREST RATE SENSITIVITY. If a security pays a fixed interest rate, and
market rates increase, the value of the fixed-rate security should decline.

o CHANGES IN DEBT RATING. If a rating agency gives a debt security a low
rating, the value of the security will decline because investors will
demand a higher rate of return. Davis Growth & Income Fund may buy some
convertible securities that are rated lower than "investment-grade."

o CREDIT RISK. Like any borrower, the issuer of a debt security may be unable
to make its payments. Securities issued by financially troubled companies
are considered "high yield, high-risk debt," and present more risk than
securities with higher ratings. For information about high yield, high-risk
debt, please see ADDITIONAL INFORMATION ABOUT HIGH YIELD, HIGH-RISK DEBT
SECURITIES.

BONDS AND OTHER DEBT SECURITIES

WHAT THEY ARE. Issuers such as corporations and federal, state and local
governments sell bonds and other debt securities to borrow money. Some debt
securities (often referred to as "coupon bonds") give the holder current income.
Like the borrower on an ordinary loan, the issuer of a coupon bond makes
periodic interest payments to the holders (i.e., the lenders), and agrees to
repay the principal amount borrowed (the price of the bond) when the security
matures. Other debt securities (referred to as "zero coupon bonds") do not
require periodic interest payments, but have the equivalent of a balloon
interest payment when the security matures. In other words, when a zero coupon
bond matures, the issuer pays the holder more money than the issuer borrowed.

HOW WE PICK THEM. Davis Growth & Income Fund searches for debt securities that
are issued by government agencies or by corporations offering maximum yield
relative to credit quality.

WHY WE BUY THEM. The Fund buys debt securities primarily for current income from
regular interest payments. An additional advantage of these securities is that
they diversify the Fund's portfolio, providing some cushion against a fall in
the value of our common stock holdings.

RISKS. The prices (and market value) of debt securities fluctuate primarily in
response to two factors:

o INTEREST RATE SENSITIVITY. In general, bond prices decline when interest
rates rise, and rise when interest rates fall. If a bond pays a fixed
interest rate, and market rates increase, the value of the bond should
decline. When interest rates are falling, the value of the bond should
increase.

15
<PAGE>

o CREDIT QUALITY. Some issuers of debt are considered a better credit risk
than others. For example, a security issued by the U.S. Government is
virtually certain to be paid in full and on time. These securities
typically offer lower interest rates to reflect their relative safety. In
contrast, bonds issued by corporate issuers usually involve increased risk
as to the payment of principal and interest.

The Fund may buy "pure debt" securities that have low ratings. By "pure debt" we
mean securities that are exclusively evidence of a loan; they are not real
estate securities or convertible securities. Securities with low ratings are
considered "high yield, high-risk debt," and present more risk than so-called
"investment-grade" securities.

ADDITIONAL INFORMATION ABOUT HIGH YIELD, HIGH-RISK DEBT SECURITIES

WHAT THEY ARE. There are several agencies that evaluate and rate debt
securities. Two of the most prominent are Standard & Poor's and Moody's
Investors Service.

When they evaluate the quality of a debt instrument, rating agencies look at
factors such as the issuer's current financial condition and business prospects,
the value of any collateral that secures the debt and the issuer's history of
paying other debt. Each agency has its own system for "grading" debt. Standard &
Poor's has eleven ratings, ranging from D for securities that are in default to
AAA for securities that are almost certain to be repaid. Moody's Investors
Service has nine ratings, with C being the lowest and Aaa being the highest.

A security is called "investment-grade" if a respected agency assigns it a
favorable credit rating. In contrast, a debt security is considered "high yield,
high-risk" if it is rated BB or lower by Standard and Poor's, or Ba or lower by
Moody's Investors Service. Securities with these low ratings are also referred
to as "junk bonds." Many institutional investors, such as pension plans and
municipal governments, are only permitted to buy investment-grade debt.

WHY WE BUY THEM. Davis Growth & Income Fund does not specifically seek out high
yield, high-risk debt. However, some of the real estate securities, convertible
securities and bonds that we identify as good investments may happen to fall
into that category.

Some of the real estate securities, convertible securities and bonds that we
identify as good investments may happen to be high yield, high-risk debt.

RISKS. There are four principal risks of owning high yield, high-risk debt
securities:

o OVERBURDENED ISSUERS. Many issuers only resort to offering junk bonds when
they cannot get financing from more traditional sources, such as banks.
These issuers are unlikely to have a cushion from which to make their
payments when their earnings are poor or when the economy in general is in
decline. The Fund will not purchase junk bonds that are in default at the
time of purchase, but there is no guarantee that issuers will always be
able to make their payments.

16
<PAGE>

before it can pay bondholders. In addition, some of the other debt may be
secured by the issuer's primary operating assets. If the issuer defaults on
those obligations, the lenders may seize their collateral - possibly
forcing the issuer out of business and into bankruptcy.

o DIFFICULT TO RESELL. Many investors simply do not want junk bonds, and
others are prohibited from buying them.

o VOLATILE PRICES. Prices of high yield, high-risk debt securities are more
volatile than prices of higher rated securities. In periods of economic
difficulty or rising interest rates, prices of junk bonds decline more than
prices of investment-grade securities.

SHORT-TERM INVESTMENTS

WHAT THEY ARE. Short-term investments are fixed-income securities (such as U.S.
government securities, repurchase agreements and commercial paper) that will
only be outstanding for one year or less after Davis Growth & Income Fund buys
them.

HOW WE PICK THEM. Most of the Fund's short-term investments are high-grade money
market instruments and repurchase agreements. The Fund also may hold cash in
interest-bearing bank deposits.

WHY WE BUY THEM. The Fund uses short-term investments to earn interest and
maintain flexibility while we evaluate long-term opportunities. We also may use
short-term investments for temporary defensive purposes; in the event our
portfolio managers anticipate a decline in the stock market, we may reduce our
risk by investing in short-term securities until market conditions improve.
Unlike common stocks, these investments will not appreciate in value when the
market advances. In such a circumstance and the short-term investments will not
contribute to the Fund's capital growth.

RISKS. Short-term investments do not present a lot of risk; issuers are
generally stable, and the time period between the security's purchase and the
payoff date is relatively short, offering little chance for conditions to
deteriorate.

OTHER SECURITIES AND INVESTMENT STRATEGIES

There are other securities in which the Fund may invest, and investment
strategies which the Fund may employ, but they are not principal investment
strategies. These securities and investment strategies are discussed in the
Statement of Additional Information.

ADDITIONAL RISKS FOR THE FUND: YEAR 2000 TRANSITION ISSUES

17
<PAGE>

RISK SPECTRUM

Davis Selected Advisers manages eleven mutual funds in the Davis family. Each
Fund has a distinct investment objective and strategy. The following graph shows
how these Funds compare to each other in terms of risk. Davis Growth & Income
Fund has a risk level we characterize as "medium."

- --------------------------------------------------------------------------------
DAVIS FUNDS MED MED
LOW LOW MED HIGH HIGH
- --------------------------------------------------------------------------------
DAVIS GROWTH OPPORTUNITY FUND o
- --------------------------------------------------------------------------------
DAVIS INTERNATIONAL TOTAL RETURN FUND o
- --------------------------------------------------------------------------------
DAVIS FINANCIAL FUND o
- --------------------------------------------------------------------------------
DAVIS REAL ESTATE FUND o
- --------------------------------------------------------------------------------
DAVIS NEW YORK VENTURE FUND o
- --------------------------------------------------------------------------------
*DAVIS GROWTH & INCOME FUND o
- --------------------------------------------------------------------------------
DAVIS CONVERTIBLE SECURITIES FUND o
- --------------------------------------------------------------------------------
DAVIS INTERMEDIATE INVESTMENT GRADE BOND FUND o
- --------------------------------------------------------------------------------
DAVIS TAX-FREE HIGH INCOME FUND o
- --------------------------------------------------------------------------------
DAVIS GOVERNMENT BOND FUND o
- --------------------------------------------------------------------------------
DAVIS GOVERNMENT MONEY MARKET FUND o
- --------------------------------------------------------------------------------

[IN BLACK AREA BELOW GRAPHIC]
For more information about any of the other Davis Funds, including charges and
expenses, ask for a prospectus. Read it carefully before investing or sending
money.

HOW WE MANAGE RISK

Risks are inherent in all investments. Investing in a mutual fund, even the most
conservative, involves risk, including the risk that you may receive little or
no return on your investment or even that you may lose part or all of your
investment. Davis Growth & Income Fund has five strategies to minimize the risk
assumed when we invest.

[SET OFF OR BOXED]
FIVE STRATEGIES WE USE TO MINIMIZE RISK

1. WE PURCHASE HIGH-QUALITY GROWTH COMPANIES. Our focus on high-quality growth
companies reduces the likelihood that your investment will be tied up in a

18
<PAGE>

failing company. A high-quality growth company is one that has achieved a
dominant or growing market share and is led by first-class management.

3. WE HAVE A LONG-TERM VISION. We get to know the managers of the companies we
invest in and understand their goals. We view temporary setbacks as buying
opportunities: when other managers sell stock in response to bad news, we
evaluate the issuer's long-term prospects.

5. WE MAY MAKE TEMPORARY DEFENSIVE INVESTMENTS. From time to time, Davis
Growth & Income Fund may take temporary defensive positions in response to
adverse market, economic or political conditions.

ONCE YOU INVEST IN THE DAVIS FUNDS

This section describes how your investment is valued, how you earn money on your
investment, and how the government may tax these earnings.

HOW YOUR SHARES ARE VALUED

Once you open an account in Davis Growth & Income Fund, you are entitled to buy
and sell shares on any business day. A business day is any day the New York
Stock Exchange is open for trading. The share price of your investment changes
depending on the total value of the Fund's investments.

Each business day, we determine the value of Fund shares by adding up the total
value of investments plus other assets (such as cash), subtracting liabilities,
and dividing the result by the total number of shares outstanding. This share
figure is known as the net asset value.

Net asset values for all the Davis Funds are determined each business day. We
calculate net asset value either at the close of the Exchange or at 4 p.m.
Eastern Time, whichever comes first.

HOW SECURITIES IN THE PORTFOLIO ARE VALUED

<PAGE>

We use current market valuations to price the securities in Davis Growth &
Income Fund:

o Over-the-counter securities are valued at the average of closing bid and
asked prices.

o Debt securities purchased with a maturity of one year or less are usually
valued at amortized cost.

o Longer-term debt securities may be valued by an independent pricing
service.

o Securities with unavailable market quotations and other assets are valued
at "fair value"--which is determined by the Board of Directors.

HOW WE PAY EARNINGS

There are two ways you can receive payments from Davis Growth & Income Fund:

o DIVIDENDS. Distributions to shareholders of net investment income and
short-term capital gains on investments.

o CAPITAL GAINS. Profits received by the Fund from the sale of securities
held for the long-term, which are then distributed to shareholders.

Davis Growth & Income Fund usually pays quarterly dividends and generally
distributes capital gains, if any, in November or December. Unless you choose
otherwise, the Fund automatically reinvests your dividends and capital gains in
additional Fund shares.

We also offer a DIVIDEND DIVERSIFICATION PROGRAM, which allows you to have your
dividends and capital gains reinvested in shares of another Davis Fund.

20
<PAGE>

If you fail to report a correct Taxpayer I.D. Number, under-reported dividend or
interest income, or are already subject to backup withholding, Davis Growth &
Income Fund is required by law to withhold a portion of any distributions you
may receive--and send it to the U.S. Treasury.

(SET OFF)
HOW TO PUT YOUR DIVIDENDS AND CAPITAL GAINS TO WORK

HOW YOUR DIVIDENDS AND CAPITAL GAINS ARE TAXED

o If Davis Growth & Income Fund pays dividends, they are taxable to
shareholders as ordinary income. Dividends include both net investment
income and short-term capital gains.
o If Davis Growth & Income Fund pays net capital gains, they generally will
be taxed as a long-term capital gain distribution.

These payments may be taxed at different rates, depending on the length of time
the Fund holds its assets. More information is provided in the instructions that
come with your tax return.

Investment earnings (dividends and capital gains) are taxable in the year in
which they were declared, not paid--whether they are received in cash or
reinvested in shares.

Also, keep in mind that when you sell or exchange shares of the Fund, it may
result in a taxable gain or loss.

We recommend that you consult with a tax advisor about any dividends and capital
gains you may receive from Davis Growth & Income Fund.

HOW TO CHOOSE A SHARE CLASS

21
<PAGE>

Before you can buy any shares in Davis Growth & Income Fund, you need to decide
which class of shares best suits your needs. The Fund offers three classes of
shares: A, B and C. Each class is subject to different expenses and sales
charges.

SPECIAL NOTE: Institutions buying $5 million or more may be eligible to buy
Class Y shares of Davis Growth & Income Fund, offered through a separate
prospectus. With Class Y shares, you pay no sales charges or distribution fees.
To find out more about Class Y shares, contact your sales representative or our
distributor, Davis Distributors.

CLASS A SHARES

CLASS A SHARES SALES CHARGES

- -------------------------------------------------------------------------------------------
AMOUNT OF PURCHASE SALES CHARGE SALES CHARGE AMOUNT OF SALES
(PERCENTAGE OF (PERCENTAGE OF NET CHARGE RETAINED BY
OFFERING PRICE) AMOUNT INVESTED) THE DEALER
(PERCENTAGE OF
OFFERING PRICE)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $100,000 4.75% 5.0% 4.0%
- -------------------------------------------------------------------------------------------
$100,000 to under $250,000 3.5% 3.6% 3.0%
- -------------------------------------------------------------------------------------------
$250,000 to under $500,000 2.5% 2.6% 2.0%
- -------------------------------------------------------------------------------------------

<PAGE>

- -------------------------------------------------------------------------------------------
$500,000 to under $750,000 2.0% 2.0% 1.75%
- -------------------------------------------------------------------------------------------
$750,000 to under $1 million 1.0% 1.0% 0.75%
- -------------------------------------------------------------------------------------------
$1 million or more* None None None
- -------------------------------------------------------------------------------------------

</TABLE>

*YOU PAY NO FRONT-END SALES CHARGE ON PURCHASES OF $1 MILLION OR MORE, BUT IF
YOU SELL THOSE SHARES WITHIN THE FIRST YEAR YOU MAY PAY A DEFERRED SALES CHARGE
OF 0.75%. DAVIS DISTRIBUTORS MAY PAY THE DEALER A COMMISSION DURING THE FIRST
YEAR AFTER PURCHASE AT THE FOLLOWING RATES:

- -------------------------------------------------------------------------
PURCHASE AMOUNT COMMISSION
- -------------------------------------------------------------------------
First $3 million 0.75%
- -------------------------------------------------------------------------
Next $2 million 0.50%
- -------------------------------------------------------------------------
Over $5 million 0.25%
- -------------------------------------------------------------------------

IF A COMMISSION IS PAID FOR PURCHASES OF $1 MILLION OR MORE, THE DEALER WILL BE
PAID WITH DISTRIBUTION FEES RECEIVED FROM THE FUND. IF DISTRIBUTION FEE LIMITS
HAVE ALREADY BEEN REACHED FOR THE YEAR, DAVIS DISTRIBUTORS ITSELF WILL PAY THE
COMMISSIONS.

As the chart above shows, the sales charge gets smaller as your purchase amount
increases. There are several ways you may combine purchases to qualify for a
lower sales charge.

YOU CAN COMBINE PURCHASES OF CLASS A SHARES

o WITH OTHER FAMILY MEMBERS. If you buy shares for yourself, your spouse and
any children under the age of 21, all the shares you buy will be counted as
a single purchase.

o WITH CERTAIN GROUPS. If you buy shares through a group organized for a
purpose other than to buy mutual fund shares, the purchases will be treated
as a single purchase.

o WITH CLASS A SHARES OF OTHER DAVIS FUNDS. If you buy Class A shares of this
or any other Davis Fund, all of the shares you buy will be counted as a
single

23
<PAGE>

purchase. This includes shares purchased under a Statement of Intention or
Rights of Accumulation.

24
<PAGE>

CLASS A SHARES FRONT-END SALES CHARGE WAIVERS

We will not charge a sales charge on purchases of Class A shares for:

o Shareholders making purchases with dividends or capital gains that are
automatically reinvested.
o Purchases by directors, officers and employees of the Davis Funds, their
investment adviser or its affiliates, and their immediate families.
o Purchases by employees and people affiliated with broker-dealer firms
offering Fund shares.
o Financial institutions acting as fiduciaries making single purchases of
$250,000 or more.
o Employee benefit plans making purchases through a single account covering
at least 250 participants.
o Wrap accounts offered by securities firms, fee-based investment advisers or
financial planners.
o State and local governments.
o Shareholders making purchases in certain accounts offered by securities
firms which have entered into contracts with the Fund and which charge fees
based upon assets in the account.

[SIDEBAR]
Wrap accounts are investment programs offered by broker-dealers who place a
client's funds with one or more investment advisers and charge a fee for their
services.

CLASS B SHARES

Class B shares may be best for you if you are willing to pay a higher
distribution fee than Class A shares for eight years in order to avoid paying a
front-end sales charge:

o You buy the shares at net asset value (no sales charge).
o You can invest up to $250,000 in Class B shares.
o If you sell Class B shares within six years of purchase, you must pay a
deferred sales charge. This charge decreases over time as you own the
shares (see chart below).
o After you hold Class B shares for eight years, they are automatically
converted into Class A shares without paying a front-end sales charge.
Class A shares pay a lower distribution fee.
o The Fund pays a distribution fee of 1.00% of the average daily net asset
value each year you hold the shares. Higher expenses translate into lower
annual return on net asset value.

CLASS B SHARES DEFERRED SALES CHARGES

- -----------------------------------------------------------------------
SALES MADE AFTER PURCHASE AMOUNT OF DEFERRED SALES CHARGE
- -----------------------------------------------------------------------
Year 1 4%
- -----------------------------------------------------------------------
Years 2-3 3%
- -----------------------------------------------------------------------
Years 4-5 2%
- -----------------------------------------------------------------------
Year 6 1%
- -----------------------------------------------------------------------
Years 7-8 None
- -----------------------------------------------------------------------

<PAGE>

Class C Shares

Class C shares may be best for you if you are willing to pay a higher
distribution fee than Class A shares pay in order to avoid paying a front-end
sales charge:

DEFERRED SALES CHARGE

To determine whether the deferred sales charge applies to a redemption, the Fund
redeems shares in the following order:

o Shares acquired by reinvestment of dividends and capital gain
distributions.
o Shares which are no longer subject to the deferred sales charge.
o Shares which have increased in value beyond their original cost.
o Shares held the longest, but still subject to the deferred sales charge.

DEFERRED SALES CHARGE WAIVERS

We will waive deferred sales charges on sales of Class A, B and C shares if:

o You sell Class A shares that were not subject to a commission at the time
of purchase (the amount of purchase totaled $1 million or more and the
shares were held for more than a year).

o You (or a registered joint owner) die or have been determined to be totally
disabled after the purchase of shares.

26
<PAGE>

o You sell shares under the Automatic Withdrawal Plan amounting to, in a
12-month period, up to 12% of the value of the account when you began
participating in the Plan.

o You sell shares under a qualified retirement plan or IRA that constitute a
tax-free return of contributions to avoid a penalty.

o Your Fund sells the remaining shares in your account under an Involuntary
Redemption.

o You qualify for an exception relating to defined contribution plans. These
exceptions are described in the Statement of Additional Information.

o You are a director, officer or employee of Davis Selected Advisers or one
of its affiliates (or a family member of a director, officer or employee).

If the net asset value of the shares that you sell has increased since you
purchased them, any deferred sales charge will be based on the original cost of
the shares.

HOW TO OPEN AN ACCOUNT

You can open an account if you invest at least:

o $1,000 for a non-retirement plan account.
o $250 for a retirement plan account.

(CHART)
THREE WAYS YOU CAN OPEN AN ACCOUNT

1. BY MAIL. Fill out the Application Form included in this prospectus and mail
it to our service provider, State Street Bank and Trust. Both you and your
dealer must sign the form. Include a check made payable to the DAVIS FUNDS or,
in the case of a retirement account, the custodian or trustee. All purchases by
check should be in U.S. dollars. DAVIS GROWTH & INCOME FUND WILL NOT ACCEPT
THIRD-PARTY CHECKS.

3. BY WIRE. You may wire federal funds directly to our service provider, State
Street Bank and Trust. Before you wire an initial investment, you must call
Davis Distributors and obtain an account number and application. A customer
service representative will assist you with your initial investment by wire.
After the initial wire purchase is made, you will need to return the Application
Form and to State

27
<PAGE>

Street Bank and Trust. To ensure that the purchase is credited
properly, follow these wire instructions:

State Street Bank and Trust Company
Boston, MA 02210
Attn: Mutual Fund Services
DAVIS GROWTH & INCOME FUND
Shareholder Name
Shareholder Account Number
Federal Routing Number 011000028
DDA Number 9904-606-2

RETIREMENT PLAN ACCOUNTS

You can invest in Davis Growth & Income Fund using any of these types of
retirement plan accounts:

o Deductible IRAs
o Non-deductible IRAs
o Roth IRAs
o Educational IRAs
o Simple IRAs
o Simplified Employee Pension (SEP) IRAs
o 403(b) Plans

28
<PAGE>

HOW TO BUY, SELL AND EXCHANGE SHARES

Once you have established an account with Davis Funds, you can add to--or
withdraw from--your investment. This section provides an overview of the types
of transactions you can perform as a shareholder of Davis Growth & Income Fund.
This includes how to initiate these transactions, and the charges that you may
incur (if any) when buying, selling and exchanging shares.

{SIDEBAR}
An exchange occurs when you sell shares in one Davis Fund to buy shares in
another Davis Fund in the same class of shares in response to changes in your
goals or in market conditions.

(CHART)
THREE WAYS TO BUY, SELL AND EXCHANGE SHARES

2. BY MAIL. Send the request to our service provider, State Street Bank and
Trust.

Regular Mail
State Street Bank and Trust Company
c/o Davis Funds
PO Box 8406
Boston, MA 02266-8406

Overnight Mail
State Street Bank and Trust Company
c/o Davis Funds
66 Brooks Drive
Braintree, MA 02184

WHEN YOUR TRANSACTIONS ARE PROCESSED

<PAGE>

For your transaction to be counted on the day you place your order with your
broker-dealer or other financial institution, they must:

o Receive your order before 4 p.m. Eastern Time.
o Promptly transmit the order to State Street Bank and Trust.

BUYING MORE SHARES

You can buy more shares at any time by mail or through a dealer. The minimum
purchase amount is $25.

When you buy shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

[SET OFF - SPECIAL PROGRAM]
MAKING AUTOMATIC INVESTMENTS

You can also use our Dividend Diversification Program to buy more shares in any
Davis Fund. See ONCE YOU INVEST IN THE DAVIS FUNDS.

[SIDEBAR]
The Automated Clearing House system is used by most banks for electronic
transfers of money into and out of your bank account - and is regulated by the
Federal Reserve.

SELLING SHARES

30
<PAGE>

You may sell back all or part of your shares to Davis Growth & Income Fund
(known as a redemption) at any time, at net asset value minus any sales charges
that may be due. You can sell the shares by telephone, by mail, or through a
dealer.

When you sell shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

WHAT YOU NEED TO KNOW BEFORE YOU SELL YOUR SHARES

o A sale may produce a gain or loss. Gains may be subject to tax.

SPECIAL SALE SITUATIONS

<PAGE>

o Davis Growth & Income Fund may make sales payments in securities if Davis
Growth & Income Fund's Board of Directors decides that making cash payments
would harm the Fund.

SPECIAL NOTE: When you make a sale or withdrawal, a deferred sales charge may be
imposed if:

o You buy $1 million or more of Class A shares and sell them within a year of
purchase.
o You sell Class B shares within six years of purchase.
o You sell Class C shares within one year of purchase.

IF YOU DECIDE TO BUY BACK SHARES YOU SOLD

IF YOUR ACCOUNT FALLS BELOW $250

If your account balance falls below $250, we may sell your remaining shares in
this Fund at net asset value. We will first notify you by mail, giving you at
least 60 days' notice that an INVOLUNTARY REDEMPTION may take place. If you can
increase your account balance to above $250 during the notice period, the
involuntary redemption will be canceled.

[SET OFF - SPECIAL PROGRAM]
MAKING AUTOMATIC WITHDRAWALS

must submit a letter of instruction with a medallion signature guarantee to
execute an Automatic Withdrawal Plan by ACH.

You may stop automatic withdrawals at any time without charge or penalty by
calling Davis Distributors or by notifying the service agent in writing.

[SET OFF - SPECIAL SHAREHOLDER PROGRAM]
WIRING SALE PROCEEDS TO YOUR BANK ACCOUNT

Although State Street Bank and Trust will accept electronic wire sales by
telephone or dealer, you still need to fill out and submit the information under
the Electronic Wire Privilege section of the Application Form. Once your account
has been opened and you have not previously established the Electronic Wire
Privilege, you must submit a letter of instruction with a medallion signature
guarantee signed by all registered owners at the time of the wire sale. If you
are currently an investor with a non-retirement account and have already
established this privilege, you may call our customer service department to
execute a wire sale by telephone.

EXCHANGING SHARES

You can sell shares of Davis Growth & Income Fund to buy shares in the same
class of any other Davis Fund without having to pay a sales charge. This is
known as an exchange. You can exchange shares by telephone, by mail or through a
dealer. The initial exchange must be for at least $1,000 for a non-retirement
account (unless you are participating in the Automatic Exchange Program).
Exchanges are normally performed on the same day of the request if received in
good order by 4 p.m. Eastern Time.

33
<PAGE>

When you exchange shares by mail, you must send our service provider, State
Street Bank and Trust, a written request for the exchange. If you wish to
exchange shares for which you hold share certificates, these certificates must
be sent by certified mail to State Street Bank and Trust accompanied by a letter
of instruction signed by the owner(s). If your shares are being sold for cash,
this is known as a redemption. Please see the section "What You Need to Know
Before You Sell Your Shares" for restrictions that might apply to this type of
transaction.

When you exchange shares through a dealer, you may be charged a service fee or
commission for performing the transaction.

There are limits to the number of exchanges you can make each year. Currently,
four exchanges between Funds are allowed during a 12-month period. You may make
an unlimited amount of exchanges out of the Davis Government Money Market Fund.
Automatic Exchanges are excluded from this provision. Davis Distributors must
approve any exchanges above the limit in writing.

YOU CAN MAKE EXCHANGES AMONG ANY OF THE DAVIS FUNDS WITHOUT HAVING TO PAY ANY
SALES CHARGE

EQUITY FUNDS
Davis New York Venture Fund
Davis Growth Opportunity Fund
Davis Financial Fund
Davis International Total Return Fund

GROWTH & INCOME FUNDS
Davis Growth & Income Fund
Davis Real Estate Fund
Davis Convertible Securities Fund

BOND FUNDS
Davis Intermediate Investment Grade Bond Fund
Davis Tax-Free High Income Fund
Davis Government Bond Fund

GOVERNMENT MONEY MARKET FUND
Davis Government Money Market Fund

For more information about any of the other Davis Funds, including charges and
expenses, ask for a prospectus. Read it carefully before investing or sending
money.

[SET OFF - SPECIAL SHAREHOLDER PROGRAM]
MAKING AUTOMATIC EXCHANGES

You can elect to make automatic monthly exchanges if all accounts involved are
registered under the same name and have a minimum initial value of $250. You

43
<PAGE>

must exchange at least $25 to participate in this program, known as the
AUTOMATIC EXCHANGE PROGRAM. To sign up for this program, fill out the
appropriate section of the Application Form. Once your account has been
established, you may contact our customer service department to establish this
program.

TRANSACTIONS BY TELEPHONE

When you call Davis Distributors, you can perform a transaction with Davis Funds
in two ways:

If you wish to sell shares by telephone and receive a check in the mail:

Be aware that during unusual market conditions, Davis Funds may not be able to
accept all requests by telephone.

[SET OFF]
YOU CAN USE DAVIS DIRECT ACCESS TO:

35
<PAGE>

[INSIDE BACK COVER]

THE DAVIS FUNDS:
OVER 25 YEARS OF RELIABLE INVESTING

36
<PAGE>

ADDRESS AND TELEPHONE GUIDE

OUR TELEPHONE NUMBER: OUR SERVICE PROVIDER'S REGULAR
1-800-279-0279 State Street Bank and Trust Company
MAILING ADDRESS:
c/o Davis Funds
PO Box 8406
Boston, MA 02266-8406

OUR MAILING ADDRESS:
Davis Funds
124 East Marcy Street
Santa Fe, NM 87501

OUR INTERNET ADDRESS: OUR SERVICE PROVIDER'S OVERNIGHT
http://www.davisfunds.com State Street Bank and Trust Company
MAILING ADDRESS:
c/o Davis Funds
66 Brooks Drive
Braintree, MA 02184

37
<PAGE>

[BACK COVER]

OTHER FUND DOCUMENTS

For more information about Davis Growth & Income Fund, request a free copy of
the Statement of Additional Information or the Annual and Semi-Annual Reports.
The STATEMENT OF ADDITIONAL INFORMATION provides more detailed information about
the Fund and its management and operations. An ANNUAL REPORT discusses the
market conditions and investment strategies that significantly affected Fund
performance during the last year. A SEMI-ANNUAL REPORT updates information
provided in the Annual Report for the next six months.

Davis Growth & Income Fund's Statement of Additional Information and Annual
Report have been filed with the Securities and Exchange Commission, are
incorporated by reference, and are legally a part of this prospectus.

WHERE YOU CAN GET THESE DOCUMENTS:

o BY TELEPHONE. Call Davis Funds toll-free at 1-800-279-0279, Monday through
Friday, 7 a.m. to 4 p.m. Mountain Time. You may also call this number for
account inquiries.

o VIA THE INTERNET. Visit the SEC web site (WWW.SEC.GOV).

o BY MAIL. Specify the document you are requesting when writing to us.

DAVIS FUNDS
124 EAST MARCY STREET
SANTA FE, NM 87501
1-800-279-0279

Investment Company Act File No. 811-1701

38
<PAGE>

DAVIS GROWTH & INCOME FUND

Prospectus

Class Y shares

December 1, 1999

Over 25 Years of Reliable Investing

<PAGE>

TABLE OF CONTENTS

Overview of the Fund
Investment Objectives and Strategy
Determining If This Fund Is Right for You
Principal Risks
Past Performance
Fees and Expenses of the Fund
Financial Highlights

Who Is Responsible for Your Davis Account

How We Manage the Fund

Once You Invest in the Davis Funds

How to Open an Account

How to Buy, Sell and Exchange Shares

The Davis Funds: Over 25 Years of Reliable Investing

Other Fund Documents

2
<PAGE>

OVERVIEW OF DAVIS GROWTH & INCOME FUND

INVESTMENT OBJECTIVES AND STRATEGY

Our portfolio managers use the Davis investment philosophy to select common
stock of quality overlooked growth companies at value prices and to hold them
for the long-term.

You can find more detailed information about the types of securities that Davis
Growth & Income Fund buys in the section called HOW WE MANAGE THE FUND.

[SIDEBAR:]
Please see the inside back cover page of this prospectus to learn about the
Davis investment philosophy.

DETERMINING IF THIS FUND IS RIGHT FOR YOU

3
<PAGE>

PRINCIPAL RISKS

o MARKET RISK. The price of Davis Growth & Income Fund's shares, and the
value of your investment in the Fund will vary with the value of the assets
that we hold. The values of common stock, real estate securities,
convertible securities and bonds fluctuate in response to movements in the
stock market and market interest rates.

o INTEREST RATE RISK. The value of fixed-income securities which the Fund
purchases usually declines when current interest rates increase.

An investment in Davis Growth & Income Fund is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

You can find more detailed information about the risks of the Fund's particular
investments, as well as the role of credit rating agencies, in the section
called HOW WE MANAGE THE FUND.

PAST PERFORMANCE

Davis Growth & Income Fund began selling shares to the public on May 4, 1998.
The past performance of the Fund will be included in the next annual update of
the Fund's prospectus after the Fund has a full calendar year of performance.

4
<PAGE>

FEES AND EXPENSES OF THE FUND

FEES YOU MAY PAY AS A DAVIS GROWTH & INCOME FUND SHAREHOLDER
(Paid Directly from Your Investment)
- --------------------------------------------------------------------------------
CLASS Y
SHARES
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases (as a
percentage of offering price) None
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) None
- --------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
- --------------------------------------------------------------------------------
Exchange Fee None
- --------------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES FOR FISCAL YEAR ENDING JULY 31, 1999
(Deducted from the Fund's Assets)

- --------------------------------------------------------------------------------
CLASS Y
SHARES
- --------------------------------------------------------------------------------
Management Fees 0.75%
- --------------------------------------------------------------------------------
Distribution (12b-1) Fees None
- --------------------------------------------------------------------------------
Other Expenses 0.26%
- --------------------------------------------------------------------------------
Total Annual Operating Expenses 1.01%
- --------------------------------------------------------------------------------

EXAMPLE

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

- --------------------------------------------------------------------------------
IF YOU SELL YOUR 1 YEAR 3 YEARS 5 YEARS 10 YEARS
SHARES IN...
- --------------------------------------------------------------------------------
CLASS Y SHARES $103 $322 $558 $1,236
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

This table is designed to show you the financial performance of Davis Growth &
Income Fund for the period from May 4, 1998 (when the Fund began selling shares
to the public) through July 31, 1999, assuming that all dividends and capital
gains have been reinvested. Some of the information reflects financial results
for a single Fund share. The total returns represent the rate that an investor
would have earned (or lost) money on an investment in the Fund.

5
<PAGE>

DAVIS GROWTH & INCOME FUND
CLASS Y SHARES

MAY 4, 1998
(INCEPTION
YEAR OF CLASS)
ENDED THROUGH
JULY 31, 1999 JULY 31, 1998
------------- -------------

Net Asset Value, Beginning of Period ....... $ 9.82 $ 10.00
---------- ---------

Income(Loss) from Investment Operations
Net Investment Income ................. 0.18 0.04
Net Realized and Unrealized Gains
(Losses) ............................ 1.05 (0.22)
---------- ---------
Total from Investment Operations ...... 1.23 (0.18)

Dividends and Distributions
Dividends from Net Investment Income ..
(0.19) --
---------- ---------
Total Dividends and Distributions ..... (0.19) --

Net Asset Value, End of Period ............ $ 10.86 $ 9.82
========== =========

Total Return (1)............................ 12.72% (1.80)%

Ratios/Supplemental Data

Net Assets, End of Period (000 omitted)
$ 7,819 $ 6
Ratio of Expenses to Average Net
Assets .............................. 1.01% 1.14%*
Ratio of Net Investment Income to
Average Net Assets .................. 1.54% 2.17%*
Portfolio Turnover Rate(2)............. 18% 0%

* Annualized.

6
<PAGE>

WHO IS RESPONSIBLE FOR YOUR DAVIS ACCOUNT

INVESTMENT ADVISER

DAVIS SELECTED ADVISERS, LP
Referred to throughout this prospectus as "Davis Selected Advisers"
124 East Marcy Street
Santa Fe, NM 87501
o Provides investment advice for Davis Growth & Income Fund's portfolio.
o Manages the Fund's business affairs.
o Provides day-to-day administrative services.
o Serves as investment adviser for all of the Davis Funds, other mutual
funds, and other institutional clients.
o Annual Adviser Fee for the fiscal year ended July 31, 1999 (based on
average net assets): 0.75%.

INVESTMENT SUB-ADVISER

DAVIS SELECTED ADVISERS-NY, INC.
Referred to throughout this prospectus as "Davis Selected Advisers-NY"
609 Fifth Avenue
New York, NY 10017
o Performs investment management and research services for Davis Growth &
Income Fund and other institutional clients.
o Wholly owned subsidiary of Davis Selected Advisers.
o Annual Fee: Davis Selected Advisers pays the fee, not the Fund.

CUSTODIAN AND TRANSFER AGENT

BOARD OF DIRECTORS

7
<PAGE>

DISTRIBUTOR

DAVIS DISTRIBUTORS, LLC
Referred to throughout this prospectus as "Davis Distributors"
124 East Marcy Street
SANTA FE, NM 87501
o Oversees purchases of shares and promotional activities for Davis Funds and
other mutual funds managed by Davis Selected Advisers.
o Wholly owned subsidiary of Davis Selected Advisers.

FOUNDER AND CHIEF INVESTMENT OFFICER OF THE ADVISER

SHELBY M.C. DAVIS
Responsibilities:
o Chief Investment Officer of Davis Selected Advisers.
o President of all of the Davis Funds.

PORTFOLIO MANAGERS

CHRISTOPHER C. DAVIS
Responsibilities:
o Vice President and Co-Portfolio Manager of Davis Growth & Income Fund since
its inception.
o Portfolio Manager or Co-Portfolio Manager of the Fund from October 1995 to
the present.
o Also manages or co-manages other equity funds advised by Davis Selected
Advisers.

Other Experience:
o Assistant portfolio manager and research analyst working with Shelby M.C.
Davis from September 1989 to September 1995.

ANDREW A. DAVIS
Responsibilities:
o Vice President and Co-Portfolio Manager of Davis Growth & Income Fund since
its inception.
o Portfolio Manager or Co-Portfolio Manager of Davis Convertible Securities
Fund and Davis Real Estate Fund since inception of each in 1994.