SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
REGISTRATION NO. 33-15807
Post-Effective Amendment No. 18
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
REGISTRATION NO. 811-5240
Amendment No. 20
SELECTED CAPITAL PRESERVATION TRUST
___________________________________
124 East Marcy Street
Santa Fe, New Mexico 87501
Registrant's Telephone Number, Including Area Code
1-800-243-1575
Agent for Service:
Sheldon R. Stein
D'Ancona & Pflaum
30 North LaSalle Street
Chicago, Illinois 60602
(312) 580-2014
It is proposed that this filing will become effective:
____ Immediately upon filing pursuant to paragraph (b)
____ on ______________, pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)
X on October 1, 1995 , pursuant to paragraph (a) of Rule 485
____
Registrant has registered an indefinite number of shares of its
beneficial interest pursuant to Rule 24f-2, and filed its Rule 24f-2 Notice
for Registrant's most recent fiscal year on or about February 23, 1995.
<PAGE>
FORM N-1A
SELECTED CAPITAL PRESERVATION TRUST
___________________________________
POST-EFFECTIVE AMENDMENT NO. 18 TO REGISTRATION STATEMENT NO.
33-15807 UNDER THE SECURITIES ACT OF 1933 AND AMENDMENT NO. 20
UNDER THE INVESTMENT COMPANY ACT OF 1940 TO REGISTRATION
STATEMENT NO. 811-5240.
CROSS REFERENCE
_______________
N-1A
Item No. Prospectus Caption or Placement
_______ _______________________________
1 Front Cover
2 Fund Expenses
3 Financial Highlights; Fund Performance
4 Selected Funds - Summary; Investment Objectives
5 Manager, Sub-Adviser and Distributor
6 Organization of the Funds; Selected Funds -
Summary; Dividends; Taxes; Manager and Distributor
7 Buying Shares; Determining the Price of
Shares - Net Asset Value; Exchanging Shares;
Manager and Distributor
8 Selling Shares; Exchanging Shares
9 (Not Applicable)
Part B Caption or Placement
___________________________
10 Cover Page
11 Table of Contents
12 (Not Applicable)
13 Investments; Investment Restrictions; Portfolio
Transactions
14 Trustees and Officers
15 (Not Applicable)
16 Manager; Custodian and Transfer Agent; Independent
Auditors; Distribution Plans
17 Portfolio Transactions
18 *
19 Net Asset Value
20 Taxes
21 Distribution Plans
22 Performance Data
23 **
________________________
* Included in Prospectus
** Financial Statements appearing in the December 31, 1994 Annual
Report are incorporated by reference.
<PAGE>
PROSPECTUS May 1, 1995
As Revised October 1, 1995
THE SELECTED FUNDS
124 East Marcy Street
Santa Fe, New Mexico 87501
1-800-243-1575
Welcome to the Selected Funds, a family of diversified no-load
mutual funds offering a variety of investment opportunities. The Funds
pay distribution fees pursuant to distribution plans adopted in accordance
with Rule 12b-1.
Stock-Oriented Funds
Selected American Shares, Inc. - a Growth and Income Fund.
Selected Special Shares, Inc. - a Growth Fund.
Bond-Oriented Fund
Selected U.S. Government Income Fund - an Income Fund.
Money Market Fund
Selected Daily Government Fund - a U.S. Government Money Market Fund.
Selected Daily Government Fund and Selected U.S. Government Income Fund
are part of Selected Capital Preservation Trust.
This Prospectus sets forth concisely information about the Selected
Funds that you should know before investing. Please keep it handy for
future reference. Additional information is included in the Statements of
Additional Information of the Selected Funds dated May 1, 1995, as
revised October 1, 1995, and filed with the Securities and Exchange
Commission. The Statements of Additional Information are incorporated
herein by reference. You may obtain copies of the Statements of
Additional Information without charge by writing or calling us at the
above address or phone number.
An investment in the Selected U.S. Government Income Fund or
Selected Daily Government Fund is neither insured nor guaranteed by the
U.S. Government. There can be no assurance that Selected Daily
Government Fund will be able to maintain a stable net asset value of $1.00
per share. Shares in the Funds are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
SUMMARY
Stock-Oriented Funds
Selected American Shares, Inc. ("Selected American") and Selected
Special Shares, Inc. ("Selected Special") are diversified, professionally
managed stock-oriented funds. Selected American seeks a combination of
capital growth and income and invests primarily in common stocks and
other equity securities. Selected Special seeks capital growth and
invests primarily in common stocks and securities convertible into
common stocks. See "Investment Objectives."
Bond-Oriented Fund
Selected U.S. Government Income Fund ("Selected Government
Income") seeks to obtain current income consistent with preservation
of capital by investing primarily in debt obligations of the U.S.
Government, its agencies or instrumentalities ("U. S. Government Securities").
Money Market Fund
Selected Daily Government Fund ("Selected Daily Government") seeks
to provide a high level of current income from short-term money market
securities consistent with prudent investment management, preservation
of capital and maintenance of liquidity and invests in U.S. Treasury bills,
notes, bonds and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and related repurchase
agreements.
Manager, Sub-Adviser and Distributor
Davis Selected Advisers, L.P., (formerly, Selected/Venture Advisers
L.P.), (the "Manager") serves as the investment manager and distributor for
Selected American, Selected Special, Selected Government Income and
Selected Daily Government (individually a "Fund" or together the "Funds" or
the "Selected Funds"). The Manager has hired Bramwell Capital
Management, Inc. to act as the Sub-Adviser for Selected Special Shares,
Inc. There are management and Rule 12b-1 distribution fees payable by
each Fund. See "Fund Expenses" and "Manager, Sub-Adviser and
Distributor."
Purchases and Redemptions
Shares of the Funds are sold and redeemed at net asset value
without any sales or redemption charge. The minimum initial investment
in any of the Selected Funds is $1,000 and subsequent investments are
$100 or more. Please see "Buying Shares" for more information on how
easy it is to invest. Please see "Selling Shares" for details on how to
redeem shares.
Factors to Consider
An investment in any of our Funds, as with any mutual fund, includes
risks that vary depending upon the Fund's investment objectives and
policies. There is no assurance that the investment objective of any Fund
will be achieved. A Fund's return and net asset value will fluctuate,
although Selected Daily Government seeks to maintain a net asset value of
$1.00 per share.
<PAGE>
<TABLE>
<CAPTION>
FUND EXPENSES
<S> <C>
Shareholder transaction expenses:
Sales Load on Purchases.......................................... None
Redemption Fee................................................... None<F1>
Sales Load on Reinvested Dividends............................... None
Exchange Fee..................................................... None
Deferred Sales Load.............................................. None
<FN>
<F1> A service fee of $5 is charged for each wire redemption.
</FN>
</TABLE>
Annual fund operating expenses after an expense reimbursements, as a
percentage of average net assets:
<TABLE>
<CAPTION>
Selected Selected Selected Gov't Selected Daily
American Special Income<F2> Gov't<F2>
________ ________ ______________ ______________
<S> <C> <C> <C> <C>
Management Fees........ 0.65% 0.70% 0.50% 0.30%
12b-1 Fees<F1>......... 0.25% 0.25% 0.25% 0.25%
Other Expenses......... 0.36% 0.67% 0.75% 0.20%
_____ _____ _____ _____
Total Operating Expenses 1.26% 1.62% 1.50% 0.75%
_____ _____ _____ _____
_____ _____ _____ _____
<FN>
<F1> The effect of a 12b-1 plan is that long-term shareholders may pay more
than the economic equivalent of the maximum front-end sales charge
permitted under applicable rules of the National Association of Securities
Dealers, Inc.
<F2> After voluntary expense reimbursements which, will continue through
December 31, 1995.
[/FN]
</TABLE>
The Manager agreed to absorb certain expenses during 1994 for Selected
Government Income and Selected Daily Government as is reflected above.
If the Manager had not done so, "Other Expenses" for Selected Government
Income and Selected Daily Government in the table above would be 0.94%
and 0.52%, respectively, and "Total Operating Expenses" for those Funds
would be 1.69% and 1.07%, respectively. Please see "Manager, Sub-Adviser
and Distributor" and the Statements of Additional Information for more
information on fees.
We can illustrate these expenses with the examples below. You would pay
the following expenses on a $1,000 investment (assuming a
5% annual
return and redemption at the end of each period):
<TABLE>
<CAPTION>
Selected Selected Selected Gov't Selected Daily
American Special Income Gov't
________ ________ ______________ ______________
<S> <C> <C> <C> <C>
One Year........ $ 13 $ 16 $ 15 $ 8
Three Years..... $ 40 $ 51 $ 47 $ 24
Five Years...... $ 69 $ 88 $ 82 $ 42
Ten Years....... $ 152 $ 192 $ 179 $ 93
</TABLE>
The tables are here to help you understand the various expenses that
you as an investor in a Fund will bear and are based on the Funds' expenses
for the year ended December 31, 1994, which reflects expense
reimbursements in respect to Selected Government Income and Selected
Daily Government as described above. There can be no assurance that
reimbursements for Selected Government Income and Selected Daily
Government will continue beyond December 31, 1995. Expense information
for Selected Special and Selected Government Income has been restated
to reflect current fees. The 5% rate used in the example is only for
illustration and is not intended to be indicative of the future performance
of the Funds, which may be more or less than the assumed rate. Actual
expenses may be greater or lesser than those shown.
FINANCIAL HIGHLIGHTS
The following tables provide you with information about the history
of the Funds' shares, including periods prior to May 1, 1993 when Davis
Selected Advisers, L.P. became the Funds' Manager. The tables
<PAGE>
present the financial highlights for a share outstanding throughout each
respective period. Such tables are included as supplementary information to
the Funds' financial statements which are included in the December 31, 1994
Annual Report and June 30, 1995 Semi-Annual Report to Shareholders
which may be obtained by writing or calling the Fund. The Funds' 1994
financial statements including the financial highlights for each of the
five years in the period ended December 31, 1994, have been audited by the
Funds' independent certified public accountants, whose unqualified opinion
thereon is contained in the Annual Report.
<TABLE>
SELECTED AMERICAN SHARES, INC.
<CAPTION>
Six Months
ended
June 30, Year ended December 31,
________________________________________________________________________________________
1995 1994 1993<F2> 1992 1991 1990 1989 1988 1987 1986 1985
____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period...... $13.09 $14.59 $17.13 $18.43 $12.79 $13.81 $13.67 $11.43 $12.65 $13.35 $10.54
Income From Investment
_____________________
Operations
__________
Net Investment Income.. 0.11 0.20 0.24 0.19 0.23 0.26 0.48 0.26 0.34 0.42 0.48
Net Gains or Losses on
Securities (both
realized and
unrealized).......... 2.77 (0.66) .70 0.89 5.65 (0.81) 2.21 2.24 (0.22) 1.65 2.90
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total From
Investment
Operations......... 2.88 (0.46) .94 1.08 5.88 (0.55) 2.69 2.50 0.12 2.07 3.38
Less Distributions
__________________
Dividends (from net
investment income)... (0.12) (0.20) (.24) (0.19) (0.23) (0.35) (0.45) (0.26) (0.42) (0.48) (0.40)
Distributions (from
capital gains)....... - (0.83) (3.24) (2.19) - (0.04) (2.10) _ (0.92) (2.29) (0.17)
Distributions in
Excess of
Net Investment
Income............... - (0.01) - - (0.01) (0.08) - - - - -
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total Distributions.. (0.12) (1.04) (3.48) (2.38) (0.24) (0.47) (2.55) (0.26) (1.34) (2.77) (0.57)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Net Asset Value, End of
Period................. $15.85 $13.09 $14.59 $17.13 $18.43 $12.79 $13.81 $13.67 $11.43 $12.65 $13.35
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total Return............. 22.05% (3.20)% 5.42% 5.78% 46.37% (3.90%) 20.08% 21.95% 0.23% 17.15% 33.34%
____________
Ratios/Supplemental Data
________________________
Net Assets, End of
Period (000 omitted).. 747,340 529,404 451,392 580,889 711,905 400,597 360,366 284,719 263,141 160,445 122,564
Ratio of Expenses to
Average Net Assets.... 1.16%<F3> 1.26% 1.01%<F1> 1.17% 1.19% 1.35% 1.08% 1.11% 1.11% 0.85% 0.87%
Ratio of Net Income to
Average Net Assets.... 1.59%<F3> 1.42% 1.37% 0.95% 1.41% 2.04% 3.06% 2.07% 2.38% 3.07% 4.42%
Portfolio Turnover
Rate.................. 14% 23% 79% 50% 21% 48% 46% 35% 45% 40% 33%
<FN>
<F1> Had the former manager not absorbed certain expenses, the ratio of
expenses for the year ended December 31, 1993 would have been 1.22%.
<F2> Effective May 1, 1993, Davis Selected Advisers, L.P. became the
investment adviser. Until May 1 1993, Selected Financial Services, Inc.
was the investment adviser.
<F3> Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
SELECTED SPECIAL SHARES, INC.
<CAPTION>
Six Months
ended
June 30, Year ended December 31,
______________________________________________________________________________________
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<F2><F3> <F3> <F3> <F3> <F3> <F3> <F3> <F3> <F3>
____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period...... $ 9.02 $10.20 $10.40 $10.16 $ 9.04 $ 9.95 $ 8.52 $ 7.96 $ 8.92 $10.28 $ 8.85
Income From Investment
______________________
Operations
__________
Net Investment Income.. (0.02) (0.03) - 0.07 0.12 0.17 0.21 0.10 0.09 O.25 0.34
Net Gains or Losses on
Securities (both
realized and
unrealized).......... 1.74 (0.22) 1.10 0.78 2.11 (0.85) 2.23 1.44 (0.03) 0.44 1.66
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total From
Investment
Operations......... 1.72 (0.25) 1.10 0.85 2.23 (0.68) 2.44 1.54 0.06 0.69 2.00
Less Distributions
_________________
Dividends (from net
investment income).... - - - (0.07) (0.13) (0.20) (0.18) (0.10) (0.32) (0.32) (0.25)
Distributions (from
capital gains)........ (0.14) (0.93) (1.30) (0.54) (0.98) (0.03) (0.83) (0.88) (0.70) (1.73) (0.32)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total Distributions... (0.14) (0.93) (1.30) (0.61) (1.11) (0.23) (1.01) (0.98) (1.02) (2.05) (0.57)
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Net Asset Value, End of
Period................. $10.60 $ 9.02 $10.20 $10.40 $10.16 $ 9.04 $ 9.95 $ 8.52 $ 7.96 $ 8.92 $10.28
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
Total Return............. 19.25% (2.56)% 10.81% 8.43% 25.53% (6.87%) 28.91% 19.51% 0.50% 7.34% 23.93%
____________
Ratios/Supplemental Data
________________________
Net Assets, End of
Period (000 omitted).. 54,204 47,275 53,257 57,605 60,216 50,474 49,887 34,903 36,073 32,818 35,867
Ratio of Expenses to
Average Net Assets.... 1.56%<F1><F4> 1.41%<F1> 1.24%<F1> 1.41%<F1> 1.39% 1.41% 1.22% 1.24% 1.10% 1.08% 1.23%
Ratio of Net Income to
Average Net Assets.... (0.45)%<F4> (0.27)% (0.07)% 0.56% 1.11% 1.81% 2.11% 1.09% 0.85% 2.47% 3.23%
Portfolio Turnover
Rate.................. 60% 99% 100% 41% 74% 87% 45% 71% 89% 133% 73%
<FN>
<F1> Had the Adviser not absorbed certain expenses, the ratio of expenses
for the years ended December 31, 1994 and 1993 would have been 1.62%
and 1.51%, respectively. Had the former manager not absorbed certain
expenses, the ratio of expenses for the year ended December 31, 1992
would have been 1.47%.
<F2> Effective May 1, 1993, Davis Selected Advisers, L.P. became the
investment adviser. Until May 1 1993, Selected Financial Services, Inc.
was the investment adviser.
<F3> Per share data has been restated to give effect to a 2 for 1 stock
split to shareholders of record as of the close of January 4, 1994.
<F4> Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
SELECTED U.S. GOVERNMENT INCOME FUND
<CAPTION>
November 24, 1987
(Commencement
Six Months of operations)
ended through
June 30, Year ended December 31, December 31,
______________________________________________________________________
1995 1994 1993<F2> 1992 1991 1990 1989 1988 1987
____ ____ ____ ____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period......... $ 8.45 $ 9.20 $ 9.31 $ 9.70 $ 9.22 $ 9.20 $ 9.34 $10.01 $10.00
Income From Investment
______________________
Operations
__________
Net Investment Income..... 0.27 0.50 0.56 0.61 0.60 0.63 0.64 0.63 0.06
Net Gains or Losses on
Securities (both realized
and unrealized)......... 0.58 (0.75) 0.21 (0.13) 0.58 0.11 0.21 (0.32) 0.02
______ ______ ______ ______ ______ ______ ______ ______ ______
Total From Investment
Operations............ 0.85 (0.25) 0.77 0.48 1.18 0.74 0.85 0.31 0.08
Less Distributions
__________________
Dividends (from net
investment income....... (0.27) (0.50) (0.56) (0.61) (0.60) (0.63) (0.64) (0.63) (0.06)
Distributions (from
capital gains).......... (0.03) - (0.32) (0.26) - - - - (0.01)
Distributions in Excess of
Net Investment Income... - - - - (0.10) (0.09) (0.35) (0.35) -
______ ______ ______ ______ ______ ______ ______ ______ ______
Total Distributions..... (0.30) (0.50) (0.88) (0.87) (0.70) (0.72) (0.99) (0.98) (0.07)
______ ______ ______ ______ ______ ______ ______ ______ ______
Net Asset Value,
End of Period............... $ 9.00 $ 8.45 $ 9.20 $ 9.31 $ 9.70 $ 9.22 $ 9.20 $ 9.34 $10.01
______ ______ ______ ______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______ ______ ______ ______
Total Return.............. 10.12% (2.71)% 7.99% 5.11% 13.46% 8.53% 8.47% 2.94% 6.57%<F3>
____________
Ratios/Supplemental Data
________________________
Net Assets, End of Period
(000 omitted)......... 7,781 10,263 10,336 13,945 22,019 21,153 27,594 14,611 8,737
Ratio of Expenses to
Average Net Assets.... 1.44%<F1><F3> 1.42%<F1> 1.34%<F1> 1.44%<F1> 1.41% 1.44% 1.50%<F1> 1.50%<F1> 1.26%<F3>
Ratio of Net Income to
Average Net Assets.... 6.27%<F3> 5.70% 5.85% 6.26% 6.51% 6.95% 6.70% 6.30% 4.42%<F3>
Portfolio Turnover Rate... 60% 65% 29% 53% 36% 29% 75% 76% -
<FN>
<F1> Had the Adviser not absorbed certain expenses, the ratio of expenses
for the six months ended June 30, 1995 and the years ended December 31,
1994 and 1993 would have been 1.66%, 1.69% and 1.88%, respectively. Had
the former manager not absorbed certain expenses, the ratio of expenses
for the years ended December 31, 1992, 1989 and 1988 would have been
1.72%, 1.59% and 1.63%, respectively.
<F2> Effective May 1, 1993, Davis Selected Advisers, L.P. became the
investment adviser. Until May 1 1993, Selected Financial Services, Inc.
was the investment adviser.
<F3> Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
SELECTED DAILY GOVERNMENT FUND
<CAPTION>
May 9, 1988
(Commencement
Six Months of operations)
ended through
June 30, Year ended December 31, December 31,
______________________________________________________________________
1995 1994 1993<F2> 1992 1991 1990 1989 1988
____ ____ ____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Income From Investment
______________________
Operations
__________
Net Investment Income....... 0.026 0.034 0.023 0.030 0.054 0.074 0.083 0.051
______ ______ ______ ______ ______ ______ ______ ______
Total From Investment
Operations.............. 0.026 0.034 0.023 0.030 0.054 0.074 0.083 0.051
Less Distributions
Dividends (from net
investment income)........ (0.026) (0.034) (0.023) (0.030) (0.054) (0.074) (0.083) (0.051)
______ _______ ______ _______ ______ ______ ______ ______
Total Distributions........... (.026) (0.034) (0.023) (0.030) (0.054) (0.074) (0.083) (0.051)
______ _______ ______ ______ ______ ______ ______ ______
Net Asset Value, End of Period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
______ ______ ______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______ ______ ______
Total Return.................. 5.46% 3.51% 2.34% 3.07% 5.51% 7.66% 8.63% 8.17%<F3>
____________
Ratios/Supplemental Data
________________________
Net Assets, End of Period
(000 omitted)............. 132,339 121,886 8,732 6,626 30,706 174,914 100,517 53,173
Ratio of Expenses to
Average Net Assets........ 0.75%<F1><F3> 0.75%<F1> 0.75%<F1> 0.75%<F1> 0.68% 0.63% 0.74% 0.70%<F1><F3>
Ratio of Net Income to
Average Net Assets........ 5.32%<F3> 3.44% 2.31% 3.02% 5.37% 7.39% 8.28% 7.86%<F3>
<FN>
<F1> Had the Adviser not absorbed certain expenses, the ratio of expenses
for the six months ended June 30, 1995 and the years ended December
31, 1994 and 1993 would have been 0.85%, 1.07% and 2.29%, respectively.
Had the former manager not absorbed certain expenses, the ratio of
expenses for the year ended December 31, 1992 would have been 1.23% and
for the period May 9, 1988 through December 31, 1988 would have been
0.78%(annualized).
<F2> Effective May 1, 1993, Davis Selected Advisers, L.P. became the
investment adviser. Until May 1, 1993, Selected Financial Services, Inc.
was the investment adviser
<F3> Annualized.
</FN>
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES
You probably have a variety of goals you want to reach, and these
goals will likely change over time. That's why we offer a variety of Funds
with different objectives, so you can balance your mix of investments
within one family of Funds. Of course, no mutual fund offered by us or
anyone else can guarantee that its objective will be met or that you will
reach all of your goals.
Stock-Oriented Funds
Selected American - a Growth and Income Fund
Selected American seeks to provide its shareholders with both
capital growth and income. It invests primarily in common stocks and
other equity securities (including securities convertible into equity
securities). The Fund will normally invest at least 65% of its total assets
in securities of U.S. companies. The Fund diversifies its holdings among
many companies and industries, and although not required to do so, usually
emphasizes "blue chip" firms (companies that have market
capitalizations of more than $1 billion and long records of earnings
growth and dividends). The Fund may also invest in fixed income
securities for income or as a defensive strategy when the Manager
believes that economic or market conditions exist dictates such
strategies.
Increases in interest rates tend to reduce the market value of fixed
income securities and declines in interest rates tend to increase their
value. The Fund may invest in high yield, high risk debt securities
(including convertible securities) rated BBB or lower by Standard & Poor's
Corporation ("S&P") or Baa or lower by Moody's Investor Services
("Moody's") or unrated securities deemed by management to be of an
equivalent rating. Securities rated BBB by S&P or Baa by Moody's have
speculative characteristics; changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make
principal and interest payments. Securities rated BB or lower by S&P and
Ba or lower by Moody's are referred to in the financial community as "junk
bonds" and are considered speculative. The Fund intends not to purchase
securities rated BB or Ba or lower if after such purchase more than 30% of
the Fund's net assets would be invested in such securities (including
downgraded securities). See "Quality Ratings of Bonds" and "High Yield,
High Risk Debt Securities." There is no other limitation on the percentage
of assets that may be invested in any particular type of security. Since
Selected American invests in common stocks and other securities that
fluctuate in value, the price of its shares will fluctuate.
Selected Special - a Growth Fund
Selected Special seeks to provide capital growth. The Fund invests
in companies which the Sub-Adviser believes have capital growth
potential because of factors such as rapid growth of demand within their
existing markets, expansion into new markets, new products, reduced
competition and cost reduction.
The Fund invests primarily in common stocks and other equity
securities (including securities convertible into equity securities).
Normally at least 65% of its total assets are invested in equity
securities. Investment income is only incidental. The Fund invests primarily in
securities of domestic companies. However, the Fund may invest in the
securities of foreign companies directly or through registered closed-end
investment companies that invest primarily in foreign securities. An
investment company invests primarily in foreign securities if normally
more than 50% of such company's assets are invested in foreign
securities. No such investment in other investment companies may be
made if it would
<PAGE>
cause more than 10% of Selected Special's total assets
to be invested in such companies. Such other investment companies
usually have their own expenses including management costs or fees and
the Fund's Manager earns its regular fee on such assets.
Generally, the Fund's holdings in equity securities are diversified in
a variety of industries and with companies of varying sizes, although the
investment emphasis is on companies with small and medium market
capitalizations (less than $1 billion). The Fund may also invest in the
same types of high yield, high risk convertible securities as Selected
American, however, Selected Special will not invest in securities rated
below investment grade if such investment would cause more than 5% of
net assets to be so invested. In the event of a down grade of a convertible
security held by the Fund to below investment grade, the Fund is not
usually required to sell the issue, but the Sub-Adviser will consider this
in determining whether to hold the security. However, if such a down
grade would cause more than 5% of net assets to be invested in securities
below investment grade, sales will be made as soon as practicable to
reduce the proportion of debt below investment grade to 5% of net assets
or less. As of the date of this prospectus, the Fund holds no convertible
securities. See "High Yield, High Risk Debt Securities."
The price of the Fund's shares fluctuates because the value of the
securities in which the Fund invests fluctuates. When the Sub-Adviser
believes that economic or investment conditions indicate the need for a
defensive strategy, the Fund may, to protect the interests of its
shareholders, temporarily and without limitation, hold substantial
amounts of assets other than equity securities, including cash, U.S.
Government Securities and other liquid high grade debt securities.
Both Funds
Both Selected American and Selected Special may invest in foreign
securities. Selected American will not make such an investment if it
would cause more than 35% of its total assets to be invested in foreign
securities. As of December 31, 1994, Selected American had no
investments in such securities. Selected Special does not currently have
any investment restriction relative to foreign securities. However,
Selected Special's Sub-Adviser intends to make investments in foreign
securities as long as such an investment does not cause more than 25% of
the Fund's total assets to be invested in foreign securities. As of
December 31, 1994, Selected Special had no investments in foreign
securities.
The Funds will generally invest in securities of foreign companies
directly through trades of individual securities on recognized exchanges
and developed over-the-counter markets and through American Depository
Receipts ("ADRs") covering such securities. In addition, Selected Special
may invest in foreign securities indirectly through registered
closed-end investment companies primarily investing in foreign securities.
Investments in foreign securities may involve a higher degree of
risk than investments in domestic issuers. Foreign securities are often
denominated in foreign currencies, which means that their value will be
affected by changes in exchange rates, as well as other factors that
affect securities prices. There generally is less publicly available
information about foreign securities and securities markets, and there
may be less governmental regulation and supervision of foreign issuers
and securities markets. Foreign securities and markets are also affected
by political and economic instabilities in such countries, and may be more
volatile and less liquid than domestic securities and markets. The risks
of investment may include expropriation or nationalization of assets,
confiscatory taxation, exchange controls and limitations on the use or
transfer of assets, and significant withholding taxes. Foreign economies
may differ from the United
<PAGE>
States favorably or unfavorably with respect
to inflation rates, balance of payments, capital reinvestment, gross
national product expansion, and other relevant economic issues. The
operating expense ratio of the Funds may be higher than that of
investment companies investing exclusively in U.S. securities, since the
management, custodial and certain other expenses are expected to be
higher.
For income purposes (which is only incidental with respect to
Selected Special) the Funds may lend portfolio securities and may write
covered call options on portfolio securities. A Fund will not engage in
such a transaction if more than 5% of its net assets would be subject to
loans or if more than 5% of its net assets would be subject to covered call
options.
The Funds may not invest in commodities or futures contracts. Until
this restriction is changed by shareholder vote, the Funds will not enter
into currency exchange contracts (agreements to buy or sell foreign
currency transactions at a future date) or other hedging transactions
designed to reduce overall investment risks, including the risks of
currency fluctuation with respect to foreign investments. Such techniques
depend upon a portfolio manager's ability to predict future foreign
currency values, interest rates and other relevant investment measures.
The Manager and the Sub-Adviser believe that the use of such techniques,
which are not assured to work, involves certain risks and costs. Not using
such hedging procedures, however, may result in greater volatility,
particularly with respect to foreign currency fluctuations, than if such
procedures were successfully employed. However, to the extent that the
Funds' foreign investments are globally diversified, fluctuations in one
particular currency may be offset by fluctuations in other currencies in
which the Funds' investments are denominated.
Selected American and Selected Special do not trade actively for
short-term profits. However, when the investment manager believes that
it would benefit the Funds, short-term profits may be taken.
SELECTED GOVERNMENT INCOME
The investment objective of Selected Government Income is to
obtain current income consistent with preservation of capital by
investing primarily in U.S. Government Securities. A shareholder's
investment in the Fund is not insured or guaranteed by the U.S. Government, its
agencies or instrumentalities. The net asset value of the Fund will fluctuate
as interest rates change and as any distributions of realized gains are
declared and paid. Increases in interest rates tend to reduce the market
value of U.S. Government Securities and declines in interest rates tend to
increase their value.
INVESTMENTS
The Fund invests primarily in U.S. Treasury bills, notes, bonds and
other U.S. Government Securities, without limitation on their maturities,
and repurchase agreements secured by U.S. Government Securities. Under
normal market circumstances, at least 65% of the Fund's total assets will
be invested in U.S. Government Securities.
Some U.S. Government Securities are supported by the full faith and
credit of the United States, such as Government National Mortgage
Association ("GNMA") Certificates and obligations of the Farmers Home
Administration and the Export-Import Bank. Others are supported solely
by the credit of the issuing agency or instrumentality with limited rights
to borrow from the U.S. Treasury, such as obligations of the Federal
National Mortgage Association ("FNMA") and Federal Home Loan Mortgage
Corporation ("FHLMC"). With respect to securities supported only by the
credit of the issuing agency or instrumentality or by an additional line of
credit with the U.S. Treasury, there is no guarantee that the
<PAGE>
U.S. Government will provide financial support to such agencies or
instrumentalities. The government guarantee of the securities owned by
the Fund does not guarantee the yield to the Fund, the market value of
the securities owned by the Fund or the net asset value of the Fund's
shares.
The Fund may purchase collateralized mortgage obligations ("CMOs"),
including residual interests. A CMO is a debt security issued by a trust,
corporation or a U.S. Government instrumentality that is backed
("collateralized") by a portfolio of mortgages, mortgage-backed securities
or U.S. Government Securities. The issuer's obligation to make interest and
principal payments is secured by the underlying portfolio of securities
or mortgages. The Fund may invest only in CMOs issued by FHLMC, FNMA, or
GNMA and privately-issued CMOs that are fully collateralized by
mortgage-backed securities issued by GNMA, FNMA or FHLMC, that are
rated AAA by S&P or Aaa by Moody's or are unrated but in the opinion of
the Manager, are of comparable quality. "Fully collateralized" means that
the collateral will generate cash flows sufficient to meet obligations to
holders of the collateralized obligations under even the most conservative
prepayment and interest rate scenario. CMOs issued by FHLMC, FNMA and
GNMA are considered U.S. Government Securities for purposes of the above
described 65% test; privately issued CMOs are not.
In the case of CMOs, payments of principal and interest on the
underlying collateral securities are not passed through directly and
equally to all the holders of the collateralized obligations. Collateralized
obligations are often issued in two or more classes with varying
maturities and stated rates of interest. The payments are directed to
different classes of the CMO at unequal rates. This results in varying
maturities among the classes. This also may in effect "strip" the interest
payments from principal payments of the underlying securities and allow
for the separate purchase of either the interest or the principal payments
(sometimes called "interest only" and "principal only" securities). Such
"stripped" CMOs are considered by the staff of the Securities and Exchange
Commission to constitute illiquid securities and as such are to be
included in the calculation of the Fund's 10% limitation on illiquid
securities. See "All Funds - Restricted or Illiquid Securities." The Fund
will comply with the SEC policy regarding stripped CMOs, but this policy
is not fundamental.
Mortgage prepayments at rates which are more rapid than those
projected at the time mortgage related U.S. Government Securities are
purchased at a premium can be expected to result in a decline in the value
of mortgage related securities because prepayments reduce the yield to
maturity on such securities. Conversely, the value of mortgage related
securities purchased at a discount can be expected to increase under the
same circumstances. Prepayments typically increase during periods of
rapidly declining interest rates.
Since the collateralized obligations may be issued in classes with
varying maturities and interest rates, the investor may obtain greater
predictability of maturity than with direct investments in
mortgage-backed securities. This provides the investor with greater
control over the characteristics of the investment in a changing interest
rate environment. With respect to the interest only and principal only
securities, an investor has the option to select from the pool of underlying
collateral the portion of the cash flows that most closely corresponds to
the investor's forecast of interest rate movements. These instruments
tend to be highly sensitive to prepayment rates on the underlying
collateral and thus place a premium on accurate prepayment projections
by the investor.
The Fund may invest in FHLMC, FNMA and GNMA certificates, which
are mortgage-backed securities representing part ownership in a pool of
mortgage loans. These mortgages are assembled by
<PAGE>
financial institutions and, after being approved by the government agency,
are guaranteed by that agency and some are backed by the full faith and credit
of the U.S. Government. These certificates are called "pass-through"
securities, because both interest and principal payments are passed through to
the holder. As with CMOs, the Fund's ability to maintain a portfolio of
high-yielding securities will be adversely affected to the extent that
prepayments of mortgages must be reinvested in securities which have
lower yields than the mortgages.
INVESTMENT POLICIES
Selected Government Income is managed with a view to obtaining
current income while seeking to preserve capital. Consistent with its
investment objective and policies, the Fund may invest in the full range of
maturities of U.S. Government Securities. The Manager may adjust the
average maturity of the Fund's portfolio from time to time, depending on
its assessment of the relative yields available on securities of different
maturities and its assessment of future interest rate patterns and market
risk. Thus, at various times the average maturity of the portfolio may be
relatively short (from one year to five years, for example) and at other
times may be relatively long (over 10 years, for example). Fluctuations in
portfolio values and therefore fluctuations in the net asset value of the
Fund's shares are more likely to be greater when the portfolio average
maturity is longer. At times, for defensive purposes, the portfolio may
be comprised substantially of securities maturing in one year or less.
The Fund may sell portfolio securities without regard to the length
of time they have been held in order to take advantage of new investment
opportunities or yield differentials or to preserve gains or limit losses
due to changing economic conditions. This may cause the Fund to incur a
relatively high annual rate of portfolio turnover in some years. However,
this should not adversely affect the Fund, since there are usually no
brokerage commissions paid in connection with transactions in U.S.
Government Securities. Nevertheless, purchases or sales from or to
dealers will normally reflect the spread between bid and ask prices.
Subject to an overall policy to seek to place portfolio transactions as
efficiently as possible and at favorable prices, research services and
sales of Fund shares may be considered as factors in placing portfolio
transactions for the Fund.
The Fund may from time to time make commitments to purchase
securities on a "when-issued" or delayed delivery basis; that is, delivery
and payment for the securities normally takes place in the future. The
Fund will not invest in excess of 50% of its assets, determined at the
time of investment, in "when-issued" securities. Sometimes the purchase
price on the securities is not fixed until the date such securities are
issued. The securities so purchased are subject to market fluctuation
and no interest accrues to the Fund until delivery and payment take place.
The Fund intends to make commitments to purchase securities with the
intention of actually acquiring such securities, but it may sell the
securities before the settlement date if it is advisable or necessary as a
matter of investment strategy. At the time the Fund first makes a
commitment to purchase a security, it will record the transaction and
reflect the value of the obligation in determining its net asset value. The
Custodian will maintain on a daily basis a separate Fund account
consisting of cash, U.S. Government Securities or other high grade debt
securities with a value at least equal to the amount of the commitments
to purchase "when-issued" securities. When payment is made for
"when-issued" securities, the Fund will meet its obligations from then
available cash flow, sale of securities held in the separate account, sale
of other securities or, although it would normally not expect to do so, sale
of the "when-issued" securities themselves (which may have a market
value greater or lesser than the Fund's obligation). If the Fund chooses to
dispose of the right to acquire a "when-issued" security
<PAGE>
prior to its acquisition, it could, as with the disposition of any other
portfolio obligation, incur a gain or loss due to market fluctuation.
SELECTED DAILY GOVERNMENT - a U.S. GOVERNMENT MONEY MARKET FUND
Selected Daily Government seeks to provide as high a level of
current income as is obtainable from the type of short-term investments
(i.e., with maturities of one year or less) in which it invests, consistent
with prudent investment management, stability of principal and
maintenance of liquidity. Although there can be no guarantee, Selected
Daily Government seeks to maintain a share price of $1.00 per share and
has done so since inception.
Selected Daily Government may invest in U.S. Treasury bills, notes,
bonds and other U.S. Government Securities and repurchase agreements
fully collateralized by such securities. See "Selected Government
Income Investments" for a more detailed description of U.S. Government
Securities.
Selected Daily Government may invest in securities that have
interest rates that are adjusted periodically or that float continuously in
relation to an index such as the prime rate ("variable or floating rate
securities"), and in participation interests of such securities. The
value of such securities may change when interest rates change, although the
variable or floating rate nature of these securities should reduce the
degree of fluctuation in the value of portfolio investments.
Selected Daily Government limits its investments to securities that
meet the quality and diversification requirements of Rule 2a-7 under the
Investment Company Act of 1940. See "Determining the Price of Shares -
Net Asset Value" for more information. For more information on the
Selected Daily Government's investments, please see "Permissible
Investments" and "Investment Restrictions" in the Statement of Additional
Information.
ALL FUNDS
BORROWING. The Funds may borrow money from banks for temporary
or emergency purposes in an amount not exceeding 10% of the value of a
Fund's total assets, and may pledge an amount not exceeding 15% of total
assets to secure such borrowing. No Fund will purchase portfolio
securities while any outstanding borrowing exceeds 5% of such Fund's
total assets.
INDUSTRY CONCENTRATION. No Fund will make any investment (other
than U.S. Government Securities) which would cause 25% or more of its
total assets to be invested in any one industry.
REPURCHASE AGREEMENTS. The Funds may enter into repurchase
agreements, but normally do not enter into repurchase agreements
maturing in more than seven days, and may make repurchase agreement
transactions through a joint account with other funds managed by the
Manager. A repurchase agreement involves a sale of securities to the
Funds, with the concurrent agreement of the seller (a member bank of the
Federal Reserve System or securities dealer which the Manager or
Sub-Adviser determines to be financially sound at the time of the
transaction) to repurchase the securities at the same price plus an amount
equal to accrued interest at an agreed-upon interest rate, within a
specified time, usually less than one week, but, on occasion, at a later
time. The repurchase obligation of the seller is, in effect, secured by the
underlying securities. In the event of a bankruptcy or other default of a
seller of a repurchase agreement, the Funds could experience both delays
in liquidating the underlying securities and losses, including
<PAGE>
possible decline in the value of the collateral during the period while the
Funds seek to enforce their rights, possible loss of all or a part of the income
during such period and expenses of enforcing their rights.
RESTRICTED OR ILLIQUID SECURITIES. The Funds may invest in restricted
securities, i.e. securities which, if sold, would cause the Funds to be
deemed "underwriters" under the Securities Act of 1933 (the "1933 Act")
or which are subject to contractual restrictions on resale. No investment
will be made in illiquid securities (which may include restricted
securities that are illiquid) if such investment would cause more than
15% of the net assets of Selected American or Selected Special or more
than 10% of the net assets of Selected Government Income or Selected
Daily Government, to be so invested.
The restricted securities which the Funds may purchase include
securities which have not been registered under the 1933 Act but are
eligible for purchase and sale pursuant to Rule 144A ("Rule 144A
Securities"). This Rule permits certain qualified institutional buyers,
such as the Funds, to trade in privately placed securities even though such
securities are not registered under the 1933 Act. The Manager or
Sub-Adviser, will consider whether Rule 144A Securities being purchased
or held by a Fund are illiquid and thus subject to that Fund's policies
limiting investment in illiquid securities. In making this determination,
the Manager or Sub-Adviser will consider the frequency of trades and
quotes, the number of dealers and potential purchasers, dealer
undertakings to make a market, and the nature of the security and the
market place trades (for example, the time needed to dispose of the
security, the method of soliciting offers and the mechanics of transfer).
The liquidity of Rule 144A Securities will also be monitored by the
Manager or Sub-Adviser and, if as a result of changed conditions, it is
determined that a Rule 144A Security is no longer liquid, a Fund's holding
of illiquid securities will be reviewed to determine what, if any, action is
appropriate in light of the policy limiting investments in such securities.
There is no limitation on the percentage of the Funds' assets that can be
invested in liquid Rule 144A Securities. Investing in Rule 144A Securities
could have the effect of increasing the amount of investments in illiquid
securities if qualified institutional buyers are unwilling to purchase such
securities.
PORTFOLIO TRANSACTIONS. Subject to an overall policy to place
portfolio transactions as efficiently as possible and at favorable prices,
research services and sales of Fund shares may be considered as factors
in placing portfolio transactions for a Fund. Usually the portfolio
transactions of Selected Government Income and the Selected Daily
Government are principal transactions without brokerage commissions,
although a profit or loss to a dealer may be incurred. In principal
transactions the sole consideration in determining the amount paid is
efficient execution at a favorable price. Due to differences in the
investment objectives of the Funds, portfolio turnover rates may vary. At
times it could be high, which, for Selected Special and Selected American,
would require the payment of larger amounts in brokerage commissions.
The Funds' portfolio turnover rates are set forth in "Financial Highlights."
FUNDAMENTAL POLICIES. The investment objectives of the Funds and
the restrictions set forth in the Statements of Additional Information,
including those set forth in respect to borrowing and diversification as
discussed above, are fundamental policies. The policies with respect to
permissible investments are fundamental policies of Selected Government
Income and Selected Daily Government. All other investment objectives
and policies of the Selected Funds are not fundamental and may be changed
without shareholder approval.
Any percentage restrictions set forth in this Prospectus or in the
Statements of Additional Information, other than those with respect to
illiquid securities, apply as of the time of investment without regard to
later increases or decreases in the values of securities or total or net
assets.
<PAGE>
MANAGER, SUB-ADVISER AND DISTRIBUTOR
Davis Selected Advisers, L.P., whose principal office is at 124 E.
Marcy Street, Santa Fe, New Mexico 87501, serves as the manager and
distributor for the Selected Funds. The sole general partner of the
Manager is Venture Advisers, Inc. (the "General Partner"), 124 E. Marcy
Street, Santa Fe, New Mexico 87501, a New York corporation. Shelby M.C.
Davis is the controlling shareholder of the General Partner. The Manager is
responsible for investment management, administration and distribution
activities for the Selected Funds. As discussed below, the Manager has
hired Bramwell Capital Management, Inc. as the Sub-Adviser for Selected
Special.
The Manager receives advisory fees monthly based upon each Fund's
average daily net assets at the following annual rates: Selected American
- - 0.65% on the first $500 million, 0.60% on the next $500 million, and
0.55% on amounts over $1 billion; Selected Special - 0.70% on the first
$50 million, 0.675% on the next $100 million, 0.65% on the next $100
million and 0.60% on amounts over $250 million; Selected Government
Income - 0.50% on all amounts; Selected Daily Government - 0.30% on all
amounts.
The Manager has agreed to absorb Fund operating expenses during
1995 to the extent that the ratio of expenses to average net assets
exceeds 0.75% for Selected Daily Government and exceeds 1.50% for
Selected Government Income.
Bramwell Capital Management, Inc. (the "Sub-Adviser"), is the
sub-adviser for Selected Special. The Sub-Adviser is employed by the
Manager to manage the day to day investment operations for Selected
Special subject to the Manager's responsibility to monitor the
performance and effectiveness of the Sub-Adviser. Selected Special pays
no fees directly to the Sub-Adviser. The Sub-Adviser receives from the
Manager a fee in an amount equal to 50% of the advisory fees received by
the Manager from Selected Special less 50% of any trail commissions paid
to dealers by the Manager in excess of 0.25% of the Fund's net assets per
annum, with a minimum annual fee of $150,000. The Sub-Adviser also
provides investment advisory services to individuals and institutional
investors as well as the Bramwell Funds, Inc. The Sub-Adviser's offices
are located at 745 Fifth Avenue, New York, New York 10151. Elizabeth R.
Bramwell is the controlling shareholder of the Sub-Adviser.
The shares of the Selected Funds are distributed by the Manager. The
Manager is paid a fee provided by Distribution Plans adopted and approved
by the Funds' Boards and shareholders in accordance with Rule 12b-1 under
the Investment Company Act of 1940. This Rule regulates the manner in
which a mutual fund may assume the costs of distributing and promoting
the sale of its shares. The Manager provides office space and equipment,
personnel, literature distribution and advertising to promote the sale of
the Funds' shares. Each Fund pays a monthly distribution fee at the annual
rate of 0.25% of average daily net assets. In addition, the Plans provide
that the Manager, in its sole discretion, may utilize its own resources for
distributing and promoting sales of Fund shares, including any profits
from its management fees.
The Manager has agreements with securities dealers for distributing
shares of the Funds and providing services to shareholders. The Manager
may pay such firms service fees of up to 0.55% of the average net asset
value of the shares of Selected American and Selected Special and up to
0.25% of the average net asset value of the shares of Selected Government
Income in accounts for which representatives of the dealers are
responsible and provide services.
<PAGE>
Shares of the Selected Funds may be sold through banks or
bank-affiliated dealers. If it is determined that the Glass-Steagall Act
(which limits the ability of a bank to be an underwriter of securities)
prohibits banks from selling shares of the Funds, there would be no
material adverse effects on the Funds. State securities laws may require
such firms to be licensed as securities dealers in order to sell shares of
the Selected Funds.
PORTFOLIO MANAGERS
Shelby M.C. Davis is the principal portfolio manager for Selected
American. Mr. Davis has been the portfolio manager since May 1, 1993.
Since 1968, he has been a director of the General Partner. He is also a
director and officer of all investment companies managed by the Manager.
Mr. Davis has been the primary portfolio manager for Davis New York Venture
Fund, Inc. (formerly, New York Venture Fund, Inc.), a mutual fund seeking to
achieve growth of capital by investing primarily in common stocks and
securities convertible into common stocks, since it began operations in 1969.
Christopher C. Davis is the portfolio co-manager for Selected American
and the primary portfolio manager of the Davis Series, Inc., Davis
Financial Fund, (formerly, Retirement Planning Funds of America, Inc.,
Financial Value Fund). He was co-portfolio manager of the Davis Financial
Fund, with Shelby M.C. Davis, from its inception on May 1, 1991 until
December 1, 1994. He has been employed by the Adviser since September,
1989 as an assistant portfolio manager and research analyst.
Elizabeth R. Bramwell is the primary portfolio manager of Selected
Special. Since February, 1994, Ms. Bramwell has been the Chief Executive
Officer and sole director of the Sub-Adviser. Prior to February, 1994, Ms.
Bramwell was President, Chief Investment Officer, Portfolio Manager and
a Trustee of The Gabelli Growth Fund from its inception, April 10, 1987.
Carolyn H. Spolidoro is the primary portfolio manager of Selected
Government Income and Selected Daily Government. She has been
employed by the Adviser since August 1985. She is a Vice President of
the Manager's General Partner and Vice President of all of the investment
companies managed by the Manager, except the Selected Funds. She is also
portfolio manager of the Davis Series, Inc., Davis Government Bond Fund
and Davis Government Money Market Fund (formerly, Retirement Planning
Funds of America, Inc., Bond Fund and Government Money Market Fund).
BUYING SHARES
Shares of the Funds may be purchased through a securities dealer
having a sales agreement with the Manager (a "Qualified Dealer") or
directly from the Funds. No matter how you purchase your shares, you pay
no sales load. You buy shares at the net asset value computed after
receipt of your investment in proper form as described below. Shares
purchased through a Qualified Dealer may be subject to administrative
charges or transaction fees imposed by the Dealer.
INITIAL INVESTMENT ($1,000 MINIMUM)
You may make an initial investment in any of the Selected Funds for
$1,000 or more.
DIRECTLY BY WIRE. Opening an account directly by wire means that
your money is invested earlier than if you mail a check and will go to work
for you sooner.
To open an account, just call us at 1-800-243-1575 and we will ask
you your name, address, social security or tax I.D. number, the name of the
Fund in which you want to invest, the amount of your
<PAGE>
investment and the name and address of the financial institution that will be
wiring your investment to the Selected Funds and we will immediately give you
an account number. (We will mail you an application form, which you will
need to complete, sign and return to us immediately.) Then have your
financial institution wire federal funds to the Selected Funds' Custodian
with the following instructions:
Selected Funds
c/o Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, MO 64105
ABA #101003621
Selected Funds Group Account No. 7523734
The name of the Selected Fund(s) in which you wish to invest
Your shareholder account number
The name in which your account is registered
We accept wires at no charge. However, your bank may charge you
for this service.
DIRECTLY BY MAIL. All it takes to open an account is a check and the
enclosed application. Once you've completed the application, mail it along
with your check to:
Selected Funds
P.O. Box 419782
Kansas City, MO 64141-6782
Please make your check payable to the Selected Funds, and don't
forget to indicate on the application the Fund(s) and amount(s) you are
investing. An investment in Selected American, Selected Special or
Selected Government Income will be effected at the next net asset value
computed after your order is received in good form. Your investment in
Selected Daily Government will be effected when your check is converted
to federal funds (money credited to a financial institution's account at a
Federal Reserve Bank), which usually takes at least two business days.
SUBSEQUENT INVESTMENTS ($100 MINIMUM)
DIRECTLY BY WIRE. Follow the instructions above for initial
investments except that you don't need to call us first. Just contact your
financial institution.
DIRECTLY BY MAIL. To add to your account by mail, please send your
check or money order with the detachable stub which you'll find at the
bottom of your most recent account statement, or you may drop us a note
that includes the registered account name, name of the Fund, account
number, and amount you wish to invest. Please remember that purchases
should be sent to:
Selected Funds
P.O. Box 419798
Kansas City, MO 64141-6798
AUTOMATIC INVESTING THROUGH YOUR BANK
Whether you purchase through a Qualified Dealer or directly, you may
arrange for automatic monthly investing whereby Investors Fiduciary
Trust Company will be authorized to initiate a debit to
<PAGE>
your bank account of a specific amount (minimum $100) each month to be used
to purchase Fund shares. After each automatic investment, you will receive a
transaction confirmation and the debit should be reflected on your next
bank statement. You may terminate the plan at any time, and we may
modify or terminate the plan at any time. If you desire to utilize this
investment option, you may use the Automatic Investment Plan form
located at the back of this Prospectus.
PROTOTYPE RETIREMENT PLANS
The Manager has available various types of prototype retirement
plans, including Individual Retirement Accounts ("IRAs"). See "Retirement
Plans" for more information.
GENERAL
Selected American, Selected Special and Selected Government
Income do not issue share certificates unless you specifically request one
each time you make a purchase. We don't issue certificates for Selected
Daily Government shares, for fractional shares, or to shareholders who
have elected the Automatic Withdrawals plan. Also, shares represented by
certificates may not be redeemed by wire or by telephone. See "Selling
Shares" for information on how to sell shares.
Because clearance of foreign checks generally takes longer than
checks drawn on domestic banks, shares will not be purchased until the
Funds have collected funds from checks drawn on foreign banks. Any fees
involved in collecting on foreign checks will be charged to the
shareholder.
SELLING SHARES
With any of our Funds, you can access all or part of your account by
selling (redeeming) your shares through your securities dealer (who may
charge you a fee for this service) or directly by using one of the methods
described below. You sell shares at the net asset value computed after
receipt of your redemption request in proper form. Please refer to
"Dividends" and "Determining the Price of Shares - Net Asset Value" for
information on dividends and redemptions and the price you will receive
for your shares upon redemption.
To keep expenses low, we reserve the right to redeem any single
Fund account that falls below $750. Because we value you as a
shareholder, before your account is redeemed, you will be notified in
writing and we will allow you 60 days to make additional share purchases
to bring your account value up to the minimum level.
You may not sell shares by wire or through the Automatic
Withdrawals plan or write checks against a Selected Daily Government
account until the shares have been on the Funds' books for at least 15
days, although there is no delay for selling shares which have been
purchased by wire.
BY WIRE
You can sell shares by wire if you have selected this option in your
application and have named a commercial bank or savings institution with
a Federal Reserve Bank routing number to which we can send your money.
There's a redemption minimum of $1,000 for Selected Daily Government
and a $10,000 redemption minimum for the other Funds. You will be
charged a service fee of $5 for each wire redemption.
<PAGE>
Once you have applied for the wire redemption privilege, you or any
other person can make a request to use this privilege by calling
1-800-243-1575. You may also use your wire privilege by mailing to the
Funds a signed request that includes the Fund name, account number and
amount you wish to have wired. The proceeds will be sent only to the
financial institution you have designated on your application. You may
terminate the wire redemption privilege by notifying us in writing. See
"Please Note" following "By Telephone," as the conditions set forth in the
note also apply to wire redemptions.
Changes in your bank account ownership or bank account number
(including the name of the financial institution) may be made by written
notice to us with your signature and those of the new owner(s) guaranteed.
See "By Mail" for signature guarantee instructions. Additional documents
may be required when shares are held by a corporation, partnership,
executor, administrator, trustee or guardian.
Requests for wire redemptions are normally paid by the next
business day. However, in the event that the Manager determines that
such redemptions would adversely affect the Funds by requiring untimely
disposition of portfolio securities, such payment may be delayed for up to
seven calendar days.
AUTOMATIC WITHDRAWALS PLAN
This Plan is for you if you have special income needs or recurring
major expenses and your account balance is $5,000 or more. Under the
Automatic Withdrawals plan, you may choose to have your shares
redeemed from your account monthly, quarterly or semi-annually and a
check is sent to you or anyone you choose. Just let us know what the
amount of the check should be, although there is a $100 minimum for the
Plan. Any income and capital gains dividends will be automatically
reinvested in your account on the dividend reinvestment date. Shares
are redeemed and checks are issued at the end of the month so you should
receive your check during the first week of the next month.
As these withdrawals involve redemption of shares, they may result
in a gain or loss for income tax purposes (although generally no gain or
loss results from redemption of shares of Selected Daily Government).
Purchases of Selected American, Selected Special or Selected Government
Income shares at the same time you are selling shares may not be
advantageous because of tax consequences. In addition, depending upon the
size of the requested payment and fluctuations in the share price, you may
exhaust your account.
By Telephone
You can sell shares by calling 1-800-243-1575 (see "How to Reach
Us") and receive a check by mail, but please keep in mind:
The check can be issued only in amounts up to $25,000;
The check can be issued only to the registered owner (who must be
an individual);
The check can be sent only to the address of record; and
Your current address of record must have been on file for 60 days.
Please Note:
Unless you have provided in your application that the telephone
privilege is not to be available, the telephone privilege is automatically
available for selling or exchanging shares. By exercising the telephone
privilege to sell or exchange shares, you agree that the Fund will not
be liable for following
<PAGE>
telephone instructions reasonably believed to be genuine. Reasonable
procedures will be employed to confirm that such instructions are genuine
and if not employed, the Fund may be liable for unauthorized instructions.
Such procedures will include a request for personal identification
(account or social security number) and tape recording of the instructions.
You should be aware that during unusual market conditions we may have
difficulty in accepting telephone requests, in which case you should mail
your redemption request. See "By Mail" below.
By Mail
Simply send your written request to redeem your shares as follows:
Selected Funds
P.O. Box 419782
Kansas City, MO 64141-6782
This written request must: (1) be signed by all account owners
exactly as the account is registered (both parties must sign in the case of
joint accounts); (2) state the dollar amount or number of shares to be
redeemed; and (3) specify the Fund and account number from which shares
are to be redeemed. Please remember that you cannot place any conditions
on your request. If any share certificates were issued, they must also be
returned duly endorsed or accompanied by a separate stock assignment.
For your protection, you should send your share certificates by registered
mail.
If the redemption proceeds are $25,000 or less and are to be paid to
an individual shareholder of record at the address of record, a signature
guarantee is not required (unless there has been an address change within
60 days). All other redemption requests must have signatures guaranteed.
Signatures may be guaranteed by a commercial bank, trust company,
savings and loan association, federal savings bank, a member firm of a
national stock exchange, credit union or other eligible financial
institution. An acknowledgment by a notary public is not acceptable.
Certain shareholders, such as corporations, trusts and estates, may be
required to submit additional documents.
Normally, payment by check is made within seven days after the
redemption request is received with all required documents in proper
form. However, if you bought your shares by check, a Fund will delay
sending redemption proceeds until it has determined that your check has
cleared, which is generally within 15 days.
By Check - Selected Daily Government Only
If you are a shareholder in Selected Daily Government, you can also
redeem shares by check. If you choose this free check writing privilege in
your account application (or request it later), you will be provided with a
supply of checks. These checks will be imprinted with your name, the
Fund name and your account number, and can be made payable to any person
with a $250 minimum and $5 million maximum amount. You may not sell
shares by writing checks against your Selected Daily Government account
until the shares have been on the Fund's books for at least 15 days.
When a check is presented for payment, a sufficient number of
shares in your account will be redeemed to cover the amount of the redemption
check. You will continue to earn dividends on these shares until the check
clears. All checks must be signed exactly as the account is registered so
that, unless only
<PAGE>
one signer is authorized on the account application, these redemption checks
must be signed by all account owners. You should not write a check to
close your account because the amount in your account varies daily
(due to the daily declaration of dividends). If you wish to close your
account, you should do so by the other redemption procedures described above.
IRA or other retirement plan accounts and certain accounts
established through brokers may not use the check redemption feature.
Your account will be charged a $10 service fee if you:
Write a check for less than the $250 minimum;
Overdraw your available account balance;
Draw against shares owned for less than 15 days (does not apply
to shares purchased by wire); or
Order a "stop payment."
The Fund will not honor checks when the right to redeem shares has
been suspended or postponed, or whenever the account has been otherwise
restricted.
Please Note:
The Funds reserve the right to terminate, suspend or modify the
Automatic Withdrawals plan, check-writing privilege or telephone
redemption privilege. A Fund may suspend the right of redemption or delay
payment (1) during any period when the New York Stock Exchange is
closed (other than customary weekend and holiday closings), (2) when
trading in the markets that a Fund normally utilizes is restricted, or an
emergency exists as determined by the Securities and Exchange
Commission so that the disposal of any of a Fund's investments or the
determination of its net asset value is not reasonably practicable, or (3)
for such other periods as the Securities and Exchange Commission by
order may permit for protection of a Fund's shareholders. In case of
suspension of the right of redemption, you may either withdraw your
request for redemption or, if your request is not withdrawn, receive
payment based on the next net asset value computed after termination of
the suspension.
EXCHANGING SHARES
You may exchange your shares in one Selected Fund for shares of
another Selected Fund. Please remember that you cannot place any
conditions on your request. Simply send us a written request that
includes:
Your name;
Your account number;
The name of the Fund you currently own;
The name of the Fund you wish to exchange into; and
The dollar amount or number of shares you wish to exchange.
If you have any share certificates, you must include them with your
request. A signature guarantee is not required except in cases where
shares are also redeemed for cash at the same time. For certificate
delivery and signature guarantee instructions, please see "Selling Shares -
By Mail."
<PAGE>
You may also make exchanges by calling 1-800-243-1575 (see "How
to Reach Us"). Exchanges made over the phone may be made by any person,
not just the shareholder of record. Please remember that during unusual
market conditions, we may have difficulty in accepting telephone
requests, in which case you should mail your request. In addition,
exchanges may also be made through securities dealers who may charge
you a fee for effecting an exchange. See "Please Note" following "Selling
Shares-By Telephone," as the conditions set forth in the note also apply
to exchanges.
An exchange of shares is considered a sale for federal income tax
purposes. A shareholder may realize a gain or loss depending upon
whether the value of the shares being exchanged is more or less than the
adjusted cost basis. This is usually the case except when exchanging
shares of Selected Daily Government for shares of another Selected Fund.
Since excessive trading may hurt Fund performance, disrupt
portfolio management and increase transaction costs, the Funds have
determined to limit excessive exchange activity. Exchanges out of a Fund
are limited to four per calendar year. This exchange limitation may be
terminated or amended at any time upon such notice as is required by
applicable regulatory authorities.
Exchanges are available only in states where shares of a particular
Fund being acquired may legally be sold. The Funds reserve the right to
suspend, terminate or modify the exchange privilege at any time, but will
normally give you advance notice.
FUND PERFORMANCE
The Funds may quote information from publications such as The Wall
Street Journal, Money Magazine, Forbes, Barron's, Newsweek, Chicago
Tribune, The New York Times, U.S. News and World Report, USA Today,
Fortune, Investors Business Daily, Financial World, Smart Money, No-Load
Fund Investor and Kiplinger's and may cite information from Morningstar,
Value Line or the Investment Company Institute. Selected American,
Selected Special and Selected Government Income may compare their
performance to the Consumer Price Index, Dow Jones Industrial Average,
Standard & Poor's 500 Stock Index, the Russell 2,000 Index or Wilshire
5,000 and to the performance of mutual fund indexes as reported by Lipper
Analytical Services, Inc. ("Lipper") or CDA Investment Technologies, Inc.,
two widely recognized independent mutual fund reporting services. We
invite you to compare the performance of the Selected Funds to the
historical returns of various investments, performance indexes or
economic indicators such as stocks, bonds, certificates of deposit, money
market funds and U.S. Treasury Bills. Some of these investments may
offer fixed rates of return and guaranteed principal and may be insured.
For more information on the Funds' performance, see "Performance Data"
in the Statements of Additional Information. Please remember that
performance information is based upon historical results and is not
necessarily indicative of future performance.
The Funds' Annual Report contains additional performance
information. Such Annual Report will be made available upon request and
without charge.
Stock-Oriented Funds
We may advertise the performance of Selected American or
Selected Special expressed in terms of "total return" or "average annual
total return." Average annual total return (which is standardized in
<PAGE>
accordance with Securities and Exchange Commission regulations) and
total return reflect the change in the value of an investment in a Fund over
a stated period. Total return and average annual total return measure both
the net investment income from, and any realized or unrealized
appreciation of, a Fund's holdings for a stated time period and assume that
all dividends were reinvested. The average annual total return calculation
is annualized and is shown as a percentage change over the time period
while total return represents the aggregate percentage or dollar value
change over the stated period. Performance data will generally be stated
for one, five and ten year periods, but may also be quoted for other longer
or shorter periods.
Selected Government Income
In addition to advertising "total return" or "average annual total
return" (see discussion under "Fund Performance- Stock-Oriented Funds"),
Selected Government Income's "yield" may also be advertised. "Yield" with
respect to Selected Government Income refers to the net investment
income generated by a hypothetical investment in the Fund during a thirty
day or one month period. The income is then annualized by assuming the
same income was generated each month for a twelve month period, and is
shown as a percentage of the investment.
Selected Daily Government
Selected Daily Government may, from time to time, advertise its
"yield," and "compounded yield."
"Yield" with respect to Selected Daily Government refers to the net
investment income generated by a hypothetical investment in the Fund
during a seven-day period. The income is then annualized by assuming the
same income was generated each week during a 52-week period, and is
shown as a percentage of the investment. "Compounded yield" is
determined similarly but, when annualized, the income earned by an
investment is assumed to be compounded weekly. Compounded yield will
be slightly higher than yield because of the effects of compounding.
The performance of Selected Daily Government may be compared to
that of other money market mutual funds tracked by Lipper or rated by
Donaghue's Money Fund Report, a money market fund reporting service.
Investors may want to compare the Fund's performance to that of various
bank products as reported by BANK RATE MONITOR, a financial reporting
service that publishes each week average rates of bank and thrift
institution money market deposit accounts, Super N.O.W. accounts and
certificates of deposit.
DETERMINING THE PRICE OF SHARES - NET ASSET VALUE
The price you pay when you buy shares in a Fund and the price you
receive if you redeem is the next net asset value computed after we
receive your order to buy or redeem in proper form. The net asset value per
share of a Fund is computed by dividing the total value of the assets of a
Fund, minus its liabilities, by the total number of its shares outstanding.
The net asset value per share is determined on each day the New
York Stock Exchange is open, at the earlier of the close of the Exchange or
4:00 p.m. New York time. The price per share for purchases or redemptions
made directly through Investors Fiduciary Trust Company is such value
next computed after
<PAGE>
Investors Fiduciary Trust Company receives the purchase order or redemption
request. If the purchase order or redemption request is placed with a
Qualified Dealer, then the applicable price is computed as of 4:00 p.m.
New York time, provided that the Qualified Dealer receives the order before
4:00 p.m. New York time and the Distributor receives the order before
5:30 p.m. New York time. Otherwise the applicable price is the next determined
net asset value. It is the responsibility of Qualified Dealers to promptly
forward purchase and redemption orders to the Distributor. Note that in the
case of redemptions and repurchases of shares owned by corporations, trusts
or estates, the Transfer Agent may require additional documents to effect the
redemption and the applicable price will be that next determined following the
receipt of the required documentation.
Method of Valuation
Selected American, Selected Special and Selected Government
Income each value their security holdings on the basis of market value
which, with respect to fixed-income securities, may be based on prices
provided by a pricing service. If no market value is readily available, such
securities will be valued at a fair value determined by the Boards.
Selected Daily Government investments are normally valued at
amortized cost, which means that they are valued at acquisition cost (and
adjusted for amortization of premium or discount) rather than current
market value. This enables Selected Daily Government to maintain a
stable net asset value or share price of $1.00, although there can be no
assurance that a stable price of $1.00 will always be maintained.
If a deviation of 1/2 of 1% or more were to occur between Selected
Daily Government's net asset value per share calculated at current market
values and amortized cost, or if there were any other deviations that the
Board of Trustees believed would result in a material dilution to
shareholders, the Board of Trustees would promptly consider what
action, if any, should be taken. Please see "Net Asset Value" in the
Statement of Additional Information for further discussion.
TAXES
The Funds intend to continue to qualify as "regulated investment
companies" under the Internal Revenue Code (the "Code"). The Funds
distribute all of their taxable net income and net realized capital gains to
shareholders so that the Funds themselves do not pay any income taxes.
You should consult your tax adviser about the effects of federal, state and
local tax laws on investments in the Funds.
Distributions of net investment income from a Fund are taxable to
shareholders as ordinary income. A portion of the income dividends
received by the Funds from U.S. corporations may qualify for the
"dividends received" deduction available to corporate shareholders.
Distributions from net long-term capital gains are taxable as long-term
capital gains regardless of how long Fund shares are owned. Distributions
from net short-term capital gains are taxable as ordinary income.
Shareholders are informed annually of the amount and nature of any
income or gain. Distributions are taxable whether received in cash or
reinvested in additional shares.
If for any reason you don't provide us with your correct Social
Security or Tax I.D. number (or certify that you are not subject to backup
withholding), we are required by the Code to withhold 31% of taxable
dividends and proceeds of certain exchanges and redemptions.
<PAGE>
If a Fund distributes less than the amount it is required to
distribute during any year, a 4% excise tax will be imposed on the
undistributed amount. The Funds intend to declare and distribute
dividends during each year sufficient to prevent imposition of the excise
tax.
DIVIDENDS
To help keep your account growing, income and capital gains
dividends from any Fund are automatically reinvested on the payment date
for you as additional shares of that Fund, unless you request payment by
check on your account application or make such a request later. You can
make such a request by writing to the Funds. Your request will be
effective for the current dividend or distribution if it is received before
the record date. Requests received after that time will be effective
beginning with the next dividend or distribution.
Stock-Oriented Funds
Selected American pays any income dividends quarterly and any
capital gains dividends at least annually. Selected Special pays any
income and capital gains dividends at least annually.
Selected Government Income
Net income dividends are accrued daily and paid monthly. Shares
earn dividends as of the day after the effective purchase date up to, but
not including, the date of redemption. Capital gains dividends, if any, are
paid at least annually.
Selected Daily Government
Dividends from the net income of Selected Daily Government are
accrued daily and paid monthly. Shares earn dividends as of the first
business day after the effective purchase date up through the date of
redemption.
All Funds
As a protection, if two of your dividend checks are returned as
undeliverable, those undelivered dividends will be invested in additional
shares at the then current net asset value, and the account will be
redesignated as a dividend reinvestment account.
RETIREMENT PLANS
The Selected Funds offer prototype retirement plans including
401(k), profit sharing, money purchase, IRAs, Simplified Employee Pension
("SEP") plans and model 403(b) and 457 plans for charitable, educational
and governmental entities. These plans utilize the shares of the Funds as
their investment vehicle. Investors Fiduciary Trust Company ("IFTC") acts
as custodian or trustee for the plans and charges the participant $12
per account annual maintenance fee (which will be redeemed automatically at
year end from your account, unless you elect to pay the fee directly to
IFTC each year).
The Funds' custodian, IFTC acts as the trustee or custodian under the
IRA, SEP and 403(b) plans and may act as trustee or custodian under the
other plans. For information, please call 1-800-243-1575, or write us at
Selected Funds, P.O. Box 419782, Kansas City, MO 64141-6782.
<PAGE>
Please do not use the application included with this prospectus to
open your retirement plan account. Instead call 1-800-243-1575 for a
retirement plan account application. Please consult your tax adviser to
determine the effect of any of the plans on your financial picture.
ORGANIZATION OF THE FUNDS
Stock-Oriented Funds
Selected American, organized in 1933, and Selected Special,
organized in 1939, are Maryland corporations and are both diversified,
open-end management investment companies. Selected American and
Selected Special each issue one series of common stock. Shares when
issued are fully paid, non-assessable, and freely transferable. Shares of
each Fund have equal non-cumulative voting rights and equal rights with
respect to dividends, assets and liquidation.
Selected Government Income and Selected Daily Government
Selected Government Income and Selected Daily Government are each
separate series of Selected Capital Preservation Trust. The Trust is a
diversified open-end management investment company organized as a
business trust under the laws of Ohio in 1987. Shares of the Trust when
issued are fully paid, non-assessable and freely transferable.
Shares of each series have equal voting rights with other shares of
that series and each share is entitled to one vote at a shareholder
meeting. On certain matters, such as election of the Board of Trustees
and ratification of the selection of independent auditors, all series vote
together. However, on certain matters affecting a particular series, such
as changes in investment restrictions, the shares of that series vote
separately.
All Funds
The Funds do not have annual shareholder meetings but do have
special shareholder meetings when the Boards believe it is necessary or
when required by law. A Fund will have a special meeting when requested
in writing by the holders of at least 10% of the shares that could vote at a
meeting.
In the opinion of the staff of the Securities and Exchange
Commission, the use of this combined Prospectus may make each Fund
liable for any misstatement or omission in this Prospectus regardless of
the particular Fund to which it pertains.
DIRECTORS AND TRUSTEES
The following persons serve as Directors and Trustees of the
Selected Funds:
William P. Barr Walter E. Hoadley
Floyd A. Brown James J. McMonagle
William G. Cole Martin H. Proyect
Shelby M.C. Davis Larry Robinson
Robert J. Greenebaum
More information concerning the Directors and Trustees is contained
in the Statements of Additional Information.
<PAGE>
HOW TO REACH US
You can have your questions answered about any of the Selected
Funds or the status of your account simply by calling 1-800-243-1575
Monday through Friday from 8:00 a.m. to 4:00 p.m. Mountain time. The
Funds are closed on days on which the New York Stock Exchange is closed.
Whenever you want to contact us by mail, please write to us at:
Selected Funds
P.O. Box 419782
Kansas City, MO 64141-6782
QUALITY RATINGS OF BONDS
Portfolio Quality Ratings
The table on the following page reflects Selected American's
portfolio quality ratings for the year ended December 31, 1994 calculated
on the basis of the average weighted ratings of all bonds held during the
year. The table reflects the percentage of total assets represented by
fixed income securities rated by Moody's or S&P, by unrated fixed-income
securities and by other assets. The percentages shown reflect the higher
of the Moody's or S&P rating. U.S. Government Securities, whether or not
rated, are reflected as Aaa and AAA (highest quality). Other assets may
include money market instruments, repurchase agreements, equity
securities, net payables and receivables and cash. The allocations in the
table are not necessarily representative of portfolio composition at other
times. Portfolio quality ratings will change over time.
The description of each bond quality category set forth below is
intended to be a general guide and not a definitive statement as to how
Moody's and S&P define such rating category. A more complete description
of the rating categories is set forth following the table. The ratings of
Moody's and S&P represent their opinions as to the quality of the
securities that they undertake to rate. It should be emphasized, however,
that ratings are relative and subjective and are not absolute standards of
quality. There is no assurance that a rating assigned initially will not
change. Selected American may retain a security whose rating has
changed or has become unrated.
<TABLE>
Portfolio Composition of Selected American by
Quality Rating as a
Percentage of Total Assets at
December 31, 1994
<CAPTION>
Fund's Assessment of General Definition
Moody's/S&P Rating Category Percentage Unrated Securities of Bond Quality
___________________________ __________ ____________________ __________________
<S> <C> <C> <C>
Aaa/AAA.................... - - Highest quality
Aa/AA...................... - - High quality
A/A........................ - - Upper medium grade
Baa/BBB.................... 4.45% - Medium grade
Ba/BB...................... - - Some speculative elements
B/B........................ - - Speculative
Caa/CCC.................... - - More speculative
Ca,C/CC,C,D................ - - Very speculative, may be in default
Not Rated.................. - - Not rated by Moody's or S&P
Common and Preferred Stock. 95.55% -
Short-term Investments..... - -
_______ ______
100.00% -
</TABLE>
<PAGE>
Moody's Investors Service, Inc. Corporate Bond Ratings
Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large or
an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are unlikely to impair the fundamentally strong position of
such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long term risks appear
somewhat greater than Aaa securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e. they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any longer period of time
may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect
to principal or interest.
Ca - Bonds which are rated Ca represent obligations which are
speculative to a high degree. Such issues are often in default or have
other marked shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Standard & Poor's Corporation Corporate Bond Ratings
AAA - Debt rated AAA has the highest rating assigned by Standard
and Poor's. Capacity to pay interest and repay principal is extremely
strong.
<PAGE>
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher
rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories.
BB - Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties
or exposure to adverse business, financial, or economic conditions which
could lead to inadequate capacity to meet timely interest and principal
payments. The BB rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The B rating
category is also used for debt subordinated to senior debt that is assigned
an actual or implied BB or BB- rating.
CCC - CC - C- is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay
principal. C indicates the highest degree of speculation. While such debt
will likely have some quality and protective characteristics, these are
out-weighed by large uncertainties or major exposures to adverse
conditions.
D - This rating indicates that the issue is either in default as to
payment of interest and/or repayment of principal or is expected to be in
default upon maturity.
HIGH YIELD, HIGH RISK DEBT SECURITIES
Selected American and Selected Special may invest in debt
securities, including securities convertible into common stocks.
Investments may be made in convertible securities to provide an
opportunity for appreciation as the value of the common stock
appreciates. However, convertible securities are often viewed by the
issuer as future common stock subordinated to other debt and carry a
lower rating than the issuer's non-convertible debt obligations.
The debt securities (including convertible securities) in which the
Funds may invest include securities rated BB or lower by S&P or Ba or
lower by Moody's or, if unrated, deemed by management to be comparable
to such ratings. Securities rated BB or Ba or lower are referred to in the
financial community as "junk bonds." While likely to have some quality
and protective characteristics, such securities, whether or not
convertible into common stock, usually involve increased risk as to
payment of principal and interest. Such securities are subject to greater
price volatility than higher rated securities, tend to decline in price
<PAGE>
more steeply than higher rated securities in periods of economic difficulty or
accelerating interest rates and are subject to greater risk of non-payment
in adverse economic times. There may be a thin trading market for such
securities. This may have an adverse impact on market price and the
ability of the Funds to dispose of particular issues and may cause the
Funds to incur special securities registration responsibilities, liabilities
and costs and liquidity and valuation difficulties. Unexpected net
redemptions may force the Funds to sell high yield, high risk debt
securities without regard to investment merit, thereby possibly reducing
return rates. Such securities may be subject to redemptions or call
provisions which, if exercised when investment rates are declining, could
result in the replacement of such securities with lower yielding
securities, resulting in a decreased return. To the extent that the Funds
invest in bonds that are original issue discount, zero coupon, pay-in-kind
or deferred interest bonds, the Funds may have taxable interest income in
excess of the cash actually received on these issues. In order to avoid
taxation to the Funds, the Funds may have to sell portfolio securities to
meet taxable distribution requirements.
See the Statements of Additional Information for more detailed
information on high yield, high risk debt securities.
<PAGE>
Selected Daily INFORMATION CONCERNING THE DRAFTS USED FOR CHECK
Government Check WRITING PRIVILEGE:
Writing Privilege:
/_/If you wish to 1. Your Selected Daily Government Fund drafts are
use this privilege paid from an account at Investors Fiduciary
please check the Trust Company ("IFTC").
box to the left
and complete the 2. In connection with this account, you will have
signature card below. the same rights and duties with respect to
stop payment orders, "stale" drafts,
unauthorized signatures, alterations, and
unauthorized endorsements as bank checking
account customers do under the Kansas Uniform
Commercial Code. All notices with regard to
those rights and duties must be given to IFTC.
3. Stop payment instructions must be given to
Davis Selected Advisers, L.P. by calling
their service telephone number for the
Selected Funds: (800) 243-1575 or by writing
to IFTC. IFTC's address is Investors
Fiduciary Trust Company, c/o The Selected
Funds, P.O. Box 419782, Kansas City,
MO 64141-6782.
4. These rules may be amended from time to time.
THE SELECTED DAILY GOVERNMENT FUND SIGNATURE CARD (Type or Print)
Account number__________________________________________________
Shareholder Name________________________________________________
Co-Shareholder Name_____________________________________________
BY SIGNING THIS SIGNATURE CARD THE UNDERSIGNED AGREE(S) TO BE
SUBJECT TO THE INSTRUCTIONS AND RULES, AS NOW IN EFFECT AND AS
AMENDED FROM TIME TO TIME, OF THE SELECTED DAILY GOVERNMENT FUND,
THAT PERTAIN TO THE USE OF REDEMPTION CHECKS. (SOME OF THE
CURRENT RULES APPEAR ABOVE.) EACH SIGNATORY GUARANTEES THE
OTHER'S SIGNATURE.
(Signature)_____________________________________________________
(Signature of Co-Shareholder)___________________________________
/_/ Check here if both signatures are required on checks.
/_/ Check here if only one signature is required on checks.
If neither box is checked, all checks will require both
signatures.
<PAGE>
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
<S> <C>
Summary............................................................... 2
Fund Expenses......................................................... 3
Financial Highlights.................................................. 3
Investment Objectives................................................. 8
Manager, Sub-Adviser and Distributor.................................. 15
Portfolio Managers.................................................... 16
Buying Shares......................................................... 16
Selling Shares........................................................ 18
Exchanging Shares..................................................... 21
Fund Performance...................................................... 22
Determining the Price of Shares -
Net Asset Value..................................................... 23
Taxes................................................................. 24
Dividends............................................................. 25
Retirement Plans...................................................... 25
Organization of the Funds............................................. 26
Directors and Trustees................................................ 26
How to Reach Us....................................................... 27
Quality Ratings of Bonds.............................................. 27
High Yield, High Risk Debt Securities................................. 29
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION May 1, 1995
As Revised October 1, 1995
SELECTED CAPITAL PRESERVATION TRUST
124 East Marcy Street
Santa Fe, New Mexico 87501
Call Toll-Free l-800-243-1575
Selected Capital Preservation Trust (the "Trust") is a diversified,
open-end, management investment company currently offering two
separate funds (the "Funds"):
Selected U.S. Government Income Fund ("Selected Government Income") ,
and
Selected Daily Government Fund ("Selected Daily Government")
This Statement of Additional Information is not a Prospectus and should
be read in conjunction with the Prospectus dated May 1, 1995, as revised
October 1, 1995. The Prospectus may be obtained from the Trust.
This Statement is accompanied by the Fund's December 31, 1994 Annual
Report and June 30, 1995 Semi-Annual Report accompany this Statement
of Additional Information. The Financial Statements appearing in these
reports are incorporated herein by reference. All interim financial
information reflects all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for such interim
period.
<PAGE>
<TABLE>
TABLE OF CONTENTS
<CAPTION>
TOPIC PAGE
<S> <C>
Permissible Investments.................................................. 3
Selected Government Income ...................................... 3
General Factors...................................................... 6
Additional Information Regarding Repurchase Agreements............... 7
Options and Related Risks............................................ 3
Futures Contracts, Options on Futures Contracts and Related Risks.... 4
Options on U.S. Government Securities Indices........................ 6
Selected Daily Government ....................................... 7
Investment Restrictions.................................................. 7
Net Asset Value.......................................................... 9
Selected Government Income ...................................... 10
Selected Daily Government ....................................... 10
Trustees and Officers.................................................... 10
Manager.................................................................. 12
Expense Limitations.................................................... 13
Selected Government Income .................................... 13
Selected Daily Government ..................................... 13
Custodian and Transfer Agent............................................. 13
Independent Auditors..................................................... 13
Distribution Plans....................................................... 14
Portfolio Transactions................................................... 14
Taxes.................................................................... 15
Selected Government Income ...................................... 16
Trust Shares............................................................. 16
Major Shareholders....................................................... 16
Shareholder Meetings..................................................... 17
Ratings of Permissible Investments....................................... 17
Commercial Paper, Loans and Notes...................................... 17
Description of S&P's Two Highest Bond Ratings.......................... 17
Description of Moody's Two Highest Bond Ratings....................... 17
Performance Data......................................................... 18
</TABLE>
<PAGE>
INVESTMENTS
The following information supplements the discussion of
investment objectives contained in the Prospectus.
Selected Government Income
Selected Government Income seeks to achieve its investment
objective by investing primarily in U.S. Treasury bills, notes, bonds and
other obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities ("U.S. Government Securities") and
repurchase agreements secured by such obligations. Direct obligations
issued by the U.S. Treasury include bills, notes and bonds which differ
from each other only in interest rates, maturities and times of issuance:
Treasury bills have maturities of one year or less, Treasury notes have
initial maturities of one to ten years and Treasury bonds have initial
maturities of greater than ten years.
Examples of obligations issued by agencies or instrumentalities
established or sponsored by the U.S. Government include, among others,
securities issued by the Central Bank for Cooperatives, Export-Import
Bank of the United States, Farmers Home Administration, Federal Home
Loan Mortgage Corporation ("FHLMC") , Federal Housing Administration,
Federal Intermediate Credit Banks, Federal National Mortgage Association
("FNMA") , General Services Administration, Government National
Mortgage Association ("GNMA") , the International Bank for
Reconstruction and Development, Maritime Administration, Small
Business Administration, and The Tennessee Valley Authority. Selected
Government Income may also invest in securities issued by agencies or
instrumentalities which may be established or sponsored by the U.S.
Government in the future.
GNMA Certificates are mortgage-backed securities representing
part ownership of a pool of mortgage loans. A "pool" or group of such
mortgages is assembled and, after being approved by GNMA, typically is
offered to investors through securities dealers. Once approved by GNMA,
the timely payment of interest and principal on each mortgage is
guaranteed by GNMA and backed by the full faith and credit of the U.S.
Government. GNMA Certificates differ from bonds in that principal is paid
back monthly by the borrower over the term of the loan rather than
returned in a lump sum at maturity. GNMA Certificates are called
"pass-through" securities because both interest and principal payments
(including prepayments) are passed through to the holder of the
Certificate. FNMA and FHLMC Certificates are similar to GNMA
Certificates except that timely payment of interest and principal on each
mortgage may not be guaranteed by the full faith and credit of the U.S.
Government.
General Factors. The value of fixed-rate debt securities generally is
_______________
affected by three factors: (1) quality (the credit risk); (2) yield (the
interest rate); and (3) maturity (the length of time remaining until
principal is due). Because of the high quality of the permissible
investments in Selected Government Income, the credit risk is minimal
and should not significantly impact the value of portfolio securities.
However, changes in prevailing interest rates can be expected to cause
changes in the value of portfolio securities and therefore the net asset
value per share; the degree of such changes will depend on the yield and
maturity of such securities. Generally speaking, the longer the average
maturity of the portfolio, the more susceptible the portfolio securities
will be to changes in value as the result of fluctuations in interest rates.
Investors purchasing shares of Selected Government Income should
understand that it is not a money market fund and should expect the net
asset value of the shares to fluctuate as interest rates change and as
dividends are declared and paid. Accordingly, investors seeking a constant
net asset value should consider investing in Selected Daily Government.
Additional Information Regarding Repurchase Agreements. The
______________________________________________________
Manager, under guidelines and standards of review established by the
Trust's Board of Trustees, evaluates the creditworthiness of sellers and
enters into repurchase agreements only with those institutions that it
believes present minimal credit risks. The Manager has been directed to
obtain from the seller full collateral for the amount of any repurchase
<PAGE>
agreement and to require the seller to maintain collateral, on a daily
basis, at least equal to the repurchase price.
Futures and Options Transactions. Selected Government Income is
________________________________
not prohibited from engaging in transactions in futures and options.
However the Fund has not done so for several years and does not intend to
do so in the near future. In the event that the Manager determines that
such investments would be in the best interest of the Fund, shareholders
will be given advance notice and the proper disclosure will be provided in
the Fund's registration statement, including the Prospectus.
Selected Daily Government
Selected Daily Government may invest in U.S. Treasury bills, notes,
bonds and other U.S. Government Securities and repurchase agreements
secured by such obligations. The Fund limits its investments to securities
and repurchase agreements which will mature 397 days or less form the
date of purchase. Such period is calculated pursuant to the provision of
Rule 2a-7 under the Investment Act of 1940 which governs the use of
amortized cost valuation, maturities of securities collateralizing
repurchase agreements are not so limited.
INVESTMENT RESTRICTIONS
The Funds have adopted as fundamental policies their investment
objectives as described in the Prospectus and the investment restrictions
enumerated below. These cannot be changed unless authorized by the
holders of a majority of the outstanding shares of the Funds, as defined
in the Investment Company Act of 1940 (the "1940 Act").
Selected Government Income may not:
(1) purchase securities or make any investments other than those
described in the Prospectus and/or Statement of Additional Information;
(2) invest 25% or more of its total assets in any one industry, except
that this restriction shall not apply to securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities (U.S.
Government Securities") ;
(3) borrow money except for temporary or emergency non-investment
purposes, such as to accommodate abnormally heavy redemption requests,
and then only in an amount not exceeding 10% of the value of Selected
Government Income's total assets at the time of borrowing;
(4) pledge, mortgage or hypothecate its assets, except that to secure
borrowings permitted by (3) above, it may pledge securities having a
market value at the time of pledge not exceeding 15% of Selected
Government Income's total assets; provided, however, that the deposit
of underlying securities and other assets in escrow in connection with the
writing of put or call options and collateral arrangements with respect to
margin for futures contracts and options thereon are not to be
considered pledges or other encumbrances;
(5) purchase securities on margin except that Selected Government
Income may obtain such short-term credits as may be necessary for the
clearance of purchases and sales of securities and further excepting that
the deposit or payment by Selected Government Income of initial or
variation margin in connection with futures contracts or related options
transactions is not to be considered the purchase of a security on margin;
(6) make short sales of securities;
(7) underwrite any securities issued by others except to the extent that,
in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under certain Federal securities laws;
<PAGE>
(8) purchase or sell real estate, real estate mortgage loans,
commodities or commodity futures contracts, or oil, gas, or mineral
exploration or development interests except that Selected Government
Income may invest in futures contracts and related options as described
in the Prospectus and Statement of Additional Information;
(9) make loans, other than (a) by entering into repurchase agreements,
(b) through the purchase of other permitted investments in accordance
with its investment objective and policies, and (c) through the lending of
portfolio securities with respect to not more than 30% of its assets;
(10) enter into a repurchase agreement maturing in more than seven days,
or knowingly purchase securities that are subject to restrictions on
resale or for which there are no readily available market quotations if, as
a result, more than 10% of the value of Selected Government Income's
total assets (taken at current value) at the time would be invested in such
securities;
(11) invest in securities for the purpose of exercising control;
(12) invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of
assets;
(13) issue senior securities as defined in the 1940 Act, except insofar as
Selected Government Income may be deemed to have issued a senior
security by reason of (a) entering into any repurchase agreements; (b)
permitted borrowings of money; (c) purchasing securities on a
"when-issued" or delayed delivery basis; or (d) purchasing options, futures
contracts and related options;
(14) purchase or sell futures contracts or options on futures contracts if,
as a result, the sum of the initial margin deposits on Selected
Government Income's existing futures contracts and related options
positions and the premiums paid for options on futures contracts would
exceed 5% of the fair market value of Selected Government Income's
assets after taking into account unrealized profits and unrealized losses
on any such contracts it has entered into; provided, however, that in the
case of an option that is "in-the-money" at the time of the purchase, the
"in-the-money" amount may be excluded in computing such 5%; or
(15) invest more than 10% of its total assets (determined at the time of
investment) in illiquid securities, securities which are not readily
marketable and repurchase agreements which have a maturity of longer
than seven days. In addition, Selected Government Income will not
invest more than 5% of its total assets in securities the disposition of
which is restricted under federal securities laws. The staff of the SEC
has taken the position that OTC Options and the assets used as "cover" for
written OTC Options should generally be treated as illiquid securities.
However, if a dealer recognized by the Federal Reserve Bank as a "primary
dealer" in U.S. Government Securities is the other party to an option
contract written by a fund, and that fund has the absolute right to
repurchase the option from the dealer at a formula price established in a
contract with the dealer, the SEC staff has agreed that fund only needs to
treat as illiquid that amount of the "cover" amount equal to the amount by
which (a) the formula price exceeds (b) any amount by which the market
value of the security subject to the option exceeds the exercise price of
the option (the amount by which the option is "in-the-money"). Although
the Manager does not believe that OTC Options are generally illiquid, it
has agreed that pending resolution of this issue, Selected Government
Income will conduct its operations in conformity with the views of
the staff.
If a percentage restriction or limitation is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a
change in values of net or total assets will not be considered a violation
thereof.
Selected Daily Government may not:
(1) purchase securities, if immediately after such purchase more than
5% of its total assets would be invested in the securities of any one
issuer excluding U.S. Government Securities , and repurchase
agreements with respect to such securities;
<PAGE>
(2) invest 25% or more of its total assets in any one industry, except
that this restriction shall not apply to U.S. Government Securities ;
(3) borrow money, except for temporary or emergency non-investment
purposes such as to accommodate abnormally heavy redemption requests,
and then only in an amount not exceeding 10% of the value of its total
assets at the time of borrowing;
(4) pledge, mortgage or hypothecate its assets, except that to secure
borrowings permitted by (3) above, it may pledge securities having a
market value at the time of pledge not exceeding 15% of its total assets;
(5) sell securities short or purchase any securities on margin, except
for such short-term credits as are necessary for clearance or portfolio
transactions;
(6) write, purchase or sell put or call options;
(7) underwrite any securities issued by others (except that it may
technically be considered an underwriter if it sells restricted
securities);
(8) purchase or sell real estate, real estate mortgage loans,
commodities, commodity contracts (including futures contracts) or
oil and gas interests;
(9) make loans, other than by entering into repurchase agreements and
through the purchase of other permitted investments in accordance with
its investment objective and policies;
(10) invest in companies for the purpose of exercising control or
management of another company;
(11) invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of
assets;
(12) enter into a repurchase agreement maturing in more than seven days
or knowingly purchase securities that are subject to restrictions on
resale or for which there are no readily available market quotations if, as
a result of such purchase more than 10% of a Fund's assets would be
invested in such securities;
(13) purchase or retain securities of any issuer if its officers and
Trustees, or the officers and Directors of its Manager, who individually
own more than 1/2 of 1% of the outstanding securities of such issuer,
together beneficially own more than 5% of such outstanding securities;
(14) purchase from, or sell to, any of its officers or Trustees, or the
officers or Directors of its Manager, its portfolio securities; or
(15) issue any class of securities senior to any other class of securities.
If a percentage restriction or limitation is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a
change in values or net or total assets will not be considered a violation
thereof.
NET ASSET VALUE
The net asset value per share of the Funds is calculated on each day
that the New York Stock Exchange (the "Exchange") is open for business.
The Exchange is currently closed on weekends and on New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The method of valuing portfolio securities is as set forth below.
<PAGE>
Selected Government Income
The net asset value per share is determined by calculating the total
value of the Fund's assets, which normally will be comprised chiefly of
investment securities, deducting total liabilities and dividing the result
by the number of shares outstanding. Fixed income securities are valued
by using market quotations, or independent pricing services that use
prices provided by market makers or estimates of market values obtained
from yield data relating to instruments or securities with similar
characteristics. Portfolio securities that are primarily traded on a
securities exchange or securities listed on the NASDAQ National Market
are valued at the last sale price on the exchange or market where
primarily traded or listed or, if there is no recent sale price available, at
the last current bid quotation. Securities not so traded or listed are
valued at the last current bid quotation if market quotations are available.
Exchange traded fixed income options are valued at the last sale price
unless there is no sale price, in which event current prices provided by
market makers are used. Over-the-counter traded options are valued
based upon current prices provided by market makers. Financial futures
and options thereon are valued at the settlement price established each
day by the board of trade or exchange on which they are traded. Other
securities, including restricted securities, and other assets are valued at
fair value as determined in good faith by the Board of Trustees. On each
day the Exchange is open for trading, the net asset value is determined as
of the earlier of 4:00 p.m. New York time or the close of the Exchange.
Selected Daily Government
Investment securities are valued using the amortized cost method
whereby a security is valued at cost adjusted for the amortization of any
premiums or discounts over the period until maturity. With respect to
repurchase agreements, which are collateralized by U.S. Government
Securities, the market value of the collateral is evaluated daily.
As discussed in the Prospectus, if a deviation of 1/2 of 1% or more
were to occur between Selected Daily Government's net asset value per
share calculated at current market values and amortized cost, or if there
were any other deviation the Board of Trustees believed would result in a
material dilution to shareholders, the Board of Trustees would consider
certain temporary actions to protect the interests of the shareholders.
Such action could include withholding dividends, paying dividends out of
surplus, realizing gains or losses, or using market asset valuation.
TRUSTEES AND OFFICERS
The trustees and officers of the Trust, together with information as
to their principal occupations during the past 5 years, are listed below.
Each of the Trust's trustees is also a director of Selected American
Shares, Inc. and Selected Special Shares, Inc. (collectively with the Trust,
the "Selected Funds"). For the years ended December 31, 1994 and 1993,
the "non-interested" trustees as a group received aggregate
remuneration, including expense reimbursements, from the Trust
totaling, $21,159, and $52,986, respectively.
William P. Barr (5/23/50) - Trustee. Senior Vice President, General
Counsel, GTE Corporation since July 1994. Attorney General of the United
States from August 1991 to January 1993. Deputy Attorney General from
May 1990 to August 1991. Assistant Attorney General from April 1989 to
May 1990. Partner with the law firm of Shaw, Pittman, Potts &
Trowbridge from 1984 to April 1989 and January 1993 to August 1994.
His address is One Stamford Forum, Stamford, CT 06904.
Floyd A. Brown (11/5/30) - Trustee. Staff announcer and program host for
WGN Radio and Television, Chicago, Illinois. Sole proprietor of The Floyd
Brown Co., Elgin, Illinois (advertising, media production and mass media
marketing). His address is 51 Douglas Avenue, Elgin, Illinois 60120.
William G. Cole (3/7/17) - Trustee. Retired educator; writer. His address
is 544 W. Brompton, Chicago, Illinois 60657.
**Shelby M.C. Davis (3/20/37)* - Trustee and Executive Vice President.
Chairman, President and Chief Executive Officer of Venture Advisers, Inc.
Director, President and Chief Executive Officer of Davis New
York Venture Fund (formerly, New York Venture Fund, Inc.), Davis
<PAGE>
Series, Inc. (formerly, Retirement Planning Funds of America, Inc.),
Davis Tax-Free High Income Fund (formerly, Venture Muni (+)
Plus, Inc.), Davis High Income Fund (formerly, Venture Income (+) Plus,
Inc.) and Davis International Series, Inc. (formerly, Venture Series, Inc.) ;
Employee of Capital Ideas, Inc. (financial consulting firm); Consultant to
Fiduciary Trust Company International. Director of Shelby Cullom
Davis Financial Consultants, Inc. Prior to December 31, 1992, Chairman of
Venture Pension Advisers, Inc. His address is P.O. Box 205, Hobe Sound,
Florida 33455.
**Robert J. Greenebaum (7/30/17) - Trustee and Chairman of the Board.
Retired. Engaged in investment consulting and private investment
activities. Director, Blue Chip Value Fund, Inc. and United Asset
Management Corporation (a holding company in the investment
management field). His address is 111 West Washington Street, Chicago,
Illinois 60602.
Walter E. Hoadley (8/16/16) - Trustee. Economic and financial
specialist and lecturer. Senior Research Fellow, Hoover Institution,
Stanford University. Director, PLM International, Inc. and Transcisco
Industries, Inc. From 1989 to 1991, Regent, University of California.
His address is c/o Bank of America Center, Dept. 3001-B, P.O. Box 37000,
San Francisco, California 94137.
James J. McMonagle (10/01/44) - Trustee. Senior Vice President and
General Counsel of University Health System, Inc. and University Hospitals
of Cleveland. From 1976 to 1990, Judge of the Court of Common Pleas,
Cuyahoga County, Ohio. His address is 11100 Euclid Avenue, Cleveland,
Ohio 44106.
**Martin H. Proyect (10/24/32)* - Trustee, President and Chief
Executive Officer. Chairman, President and Treasurer of Venture
Advisers, Inc. until August 15, 1995. Director of Davis New York
Venture Fund, Davis Series, Inc., Davis High Income Fund, Davis Tax-Free High
Income Fund and Davis International Series, Inc. Prior to December 31,
1992, Secretary and Treasurer of Venture Pension Advisers, Inc. His address
is P.O. Box 80176, Las Vegas, Nevada 89180-0176.
Larry Robinson (10/28/28) - Trustee. General Partner, Robinson
Investment Company. Management Consultant. Corporate Liaison for Mayor
Michael R. White of Cleveland, Ohio. Adjunct Professor at Weatherhead
School of Management, Case Western Reserve University. His address is
950 Terminal Tower, 50 Public Square, Cleveland, Ohio 44113.
**Carl R. Luff (4/30/54) - Vice President, Treasurer and Assistant
Secretary. Director, Co-President and Treasurer of Venture
Advisers, Inc. Vice President, Treasurer and Assistant Secretary of
Davis New York Venture Fund, Davis High Income Fund, Davis
Tax-Free High Income Fund, Davis Series, Inc. and Davis International Series,
Inc. Hisaddress is 124 East Marcy Street, Santa Fe, New Mexico 87501.
**Louis R. Proyect (3/7/45) - Vice President and Secretary. Director,
Executive Vice President and Secretary of Venture Advisers, Inc. Vice
President of Davis New York Venture Fund, Davis High Income Fund, Davis
Tax-Free High Income Fund, Davis Series, Inc. and Davis International Series,
Inc. Secretary of Shelby Cullom Davis Financial Consultants, Inc. Formerly,
General Partner and General Counsel of Spear, Leeds and Kellogg, a
registered broker dealer. His address is 124 East Marcy Street, Santa Fe,
New Mexico 87501.
**Raymond O. Padilla (2/22/51) - Vice President and Assistant Secretary.
Senior Vice President, Venture Advisers, Inc. Vice President, Secretary
and Assistant Treasurer of Davis New York Venture Fund, Davis High
Income Fund, Davis Tax-Free High Income Fund, Davis Series, Inc. and Davis
International Series, Inc. His address is 124 East Marcy Street, Santa Fe,
New Mexico 87501.
**Eileen R. Street (3/11/62) - Assistant Treasurer and Assistant
Secretary. Senior Vice President, Venture Advisers, Inc. Assistant
Treasurer and Assistant Secretary of Davis New York Venture Fund, Davis
High Income Fund, Davis Tax-Free High Income Fund, Davis Series, Inc. and
Davis International Series, Inc. Her address is 124 East Marcy Street,
Santa Fe, New Mexico 87501.
<PAGE>
**Arthur Don (9/24/53) - Assistant Secretary. Partner, D'Ancona &
Pflaum, Fund Legal Counsel. Assistant Secretary of Davis New York
Venture Fund, Davis High Income Fund, Davis Tax-Free High Income Fund,
Davis Series, Inc. and Davis International Series, Inc. His address is 30
North LaSalle Street, Suite 2900, Chicago, Illinois 60602.
**Sheldon R. Stein (11/29/28) - Assistant Secretary. Partner, D'Ancona &
Pflaum, Fund Legal Counsel. Assistant Secretary of Davis New York
Venture Fund, Davis High Income Fund, Davis Tax-Free High Income Fund,
Davis Series, Inc. and Davis International Series, Inc. His address is 30
North LaSalle Street, Suite 2900, Chicago, Illinois 60602.
As of July 14 , 1995, the trustees and officers of the Trust as a
group owned 5.32% and 3.71% of the outstanding shares of Selected
Daily Government and Selected Government Income , respectively. As of
such date, Mr. Martin Proyect owned 6,742,741 shares of Selected
Daily Government , constituting 5.29% of the outstanding shares of
such Fund.
_____________________________
* A Trustee who is an "interested person" of the Fund (as defined in the
1940 Act).
** Holds same office(s) with Selected American Shares, Inc. and Selected
Special Shares, Inc.
TRUSTEES' COMPENSATION SCHEDULE
During the fiscal year ended December 31, 1994 the compensation
paid to trustees who are not considered to be interested persons of the
Trust was as follows:
<TABLE>
<CAPTION>
Aggregate Trust Total Complex
Name Compensation Compensation<F1>
____ _______________ ________________
<S> <C> <C>
William P. Barr 2,088 22,667
Floyd A Brown 2,026 22,000
William G. Cole 2,579 28,000
Robert J. Greenebaum 4,421 48,000
Walter E. Hoadley 2,579 28,000
James J. McMonagle 2,211 24,000
Larry Robinson 2,026 22,000
<FN>
<F1>Complex compensation is the aggregate compensation paid, for
services as a Trustee, by all mutual funds with the same investment
adviser.
</FN>
</TABLE>
MANAGER
Davis Selected Advisers, L.P. (formerly, Selected/Venture Advisers,
L.P.) , 124 East Marcy Street, Santa Fe, New Mexico 87501, a Colorado
limited partnership, has served as the Manager since May 1, 1993. The
Manager's general partner is Venture Advisers, Inc. (the "General
Partner"), 124 East Marcy Street, Santa Fe, New Mexico 87501, a New York
corporation. Shelby M.C. Davis is the controlling shareholder of the
General Partner.
The Manager, subject to the general supervision of the Funds' Board
of Trustees, provides the Funds with investment advice and management.
It furnishes statistical, executive and clerical personnel, bookkeeping,
office space, and equipment necessary to carry out its investment
advisory functions and such corporate managerial duties as are requested
by the Board of Trustees of the Funds. The Manager pays all salaries of
officers and fees and expenses of trustees who are directors, officers or
employees of the Manager or any of its affiliates. The Funds pays all other
Fund expenses. Under the Investment Management Agreement between the
<PAGE>
Fund and the Manager, in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties, the Manager will not
be liable for any act or omission in the cause of, or connected with,
rendering service under the Agreement or for any losses that may be
sustained in the purchase, holding or sale of any security.
The Manager is paid a fee for its services at the annual rates of .50
of 1% of average daily net assets for Selected Government Income and .30
of 1% of average daily net assets for Selected Daily Government.
During the six months ended June 30, 1995, Selected Government
Income and Selected Daily Government each paid advisory fees of $20,596
and $187,228, respectively.
During the year ended December 31, 1994, Selected Government
Income and Selected Daily Government each paid advisory fees of $46,401
and $122,232, respectively. During the year ended December 31, 1993,
Selected Government Income and Selected Daily Government each paid
advisory fees of $62,396 and $19,736, respectively. During 1992,
Selected Government Income and Selected Daily Government each paid
advisory fees of $84,000 and $65,000, respectively.
EXPENSE LIMITATIONS
Selected Government Income
Pursuant to the Investment Management Agreement , if the
aggregate expenses (including the management fee and any fee paid
pursuant to a distribution expense plan, but excluding taxes, interest,
brokerage fees and commissions, and where permitted under expense
limitations imposed by state securities administrators, extraordinary
expenses) for any fiscal year exceed 1.5% of the average daily net assets
of Selected Government Income (or any lesser limitation imposed by a
state regulatory authority), the Manager will refund, or otherwise bear,
the excess over the specified percentage.
In addition, the Manager has voluntarily undertaken to limit to
1.50% the ratio of expenses (including management and distribution
fees but excluding taxes, interest, brokerage fees, commissions and
extraordinary expenses) to average annual net assets of Selected
Government Income through at least December 31, 1995 and will reimburse or
absorb expenses in excess of that amount. During the six months ended June
30, 1995 and the years ended December 31, 1994 and 1993, Selected
Government Income was reimbursed $8,469, $25,233 and $67,395,
respectively of expenses by the Manager.
Selected Daily Government
The expense limitation applicable to Selected Daily Government is
such that if the total expenses exceed any applicable expense limitation
prescribed by any statute or regulatory authority of a jurisdiction in
which a Fund's shares are qualified for offer and sale, the Manager will
reimburse the Fund in the amount of such excess to the extent required by
such securities law or regulation. California and South Dakota are
currently the only states which have such limitations. California's
limitation is 2.5% of the first $30 million of average net assets, 2.0% of
the next $70 million of average net assets and 1.5% of the remaining net
assets. South Dakota's limitation is 2.5% of average net assets.
In addition, the Manager has voluntarily undertaken to limit to
0.75% the ratio of expenses (including management and distribution fees
but excluding taxes, interest, brokerage fees, commissions and extraordinary
expenses) to average annual</> net assets of
Selected Daily Government
through December 31, 1995 and will reimburse or absorb expenses in
excess of that amount. During the six months ended June 30, 1995 and the
years ended December 31, 1994 and 1993, Selected Daily Government was
reimbursed $54,263, $131,931 and $100,901, respectively of expenses
by the Manager.
CUSTODIAN AND TRANSFER AGENT
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street,
Kansas City, Missouri 64105, serves as the Funds' custodian and the
United Missouri Bank of Kansas City, N.A., Tenth and Grand Streets, Kansas
<PAGE>
City, Missouri 64106, serves as the Funds' sub-custodian. The custodian
and sub-custodian have custody of all securities and cash of the Funds.
The custodian and sub-custodian attend to the collection of principal and
income and the payment for, and the collection of, proceeds of securities
bought and sold by the Funds. IFTC is also the Funds' transfer agent and
dividend-paying agent.
INDEPENDENT AUDITORS
The Trust's auditors are Tait, Weller & Baker, Two Penn Center,
Suite 700, Philadelphia, Pennsylvania 19102-1707. The services of Tait,
Weller & Baker include an audit of the Funds' annual financial statements
included in the annual reports to shareholders, a review of the
semi-annual reports to shareholders and amendments to the registration
statement filed with the Securities and Exchange Commission,
consultation on financial accounting and reporting matters and meeting
with the Audit Committee of the Board of Trustees. In addition, the
auditors normally provide assistance in preparation of federal and state
income tax returns and related forms.
DISTRIBUTION PLANS
The Manager has served as the Distributor of the shares of the Funds
since May 1, 1993. The Trust has adopted Distribution Plans (the "Plans")
under Rule l2b-l of the 1940 Act with respect to each Fund. Rule l2b-l
permits an investment company to finance, directly or indirectly, any
activity which is primarily intended to result in the sale of its shares
only if it does so in accordance with the provisions of such Rule.
The Plans permit each Fund to incur expenses related to the
distribution of its shares, but only as specifically contemplated by the
Plan. Under the Plans, each Fund pays the Distributor an annual
compensatory fee of 0.25% of average daily net assets for distributing
the Fund's shares. The Distributor pays all the costs of distribution
except for the cost of prospectuses and reports sent to current
shareholders. The Board of Trustees has determined that there is a
reasonable likelihood that the Plans will benefit the Funds and their
shareholders.
The Board of Trustees has been informed by the Manager that the
expenses of distribution currently exceed, and for the foreseeable future
are expected to exceed, the amounts paid by the Funds under the Plans.
Such excess is and will be paid out of the Manager's own resources and not
by the Funds.
During the six months ended June 30, 1995 and the year ended
December 31, 1994, Selected Government Income paid distribution fees of
$10,298 and $23,200, respectively . The Distributor reported that it
spent $22,596 and $32,628, respectively, on plan expenses related to the
offer and sale of Selected Government Income shares, of which $-0- and
$22,565, respectively, was spent on advertising, $5,362 and $1,837,
respectively on printing and mailing prospectuses and sales literature to
other than current shareholders, $7,211 and $3,994, respectively on fees
to brokers and $2,116 and $4,232, respectively, on registration and
filing fees.
During the six months ended June 30, 1995 and the year ended
December 31, 1994 Selected Daily Government paid distribution fees of
$156,023 and $101,898, respectively. The Distributor reported that it spent
the following amounts on the indicated items: $-0- and $15,044,
respectively on advertising for Selected Daily Government; $3,574 and
$1,224, respectively on printing and mailing prospectuses and sales
literature to other than current shareholders of Selected Daily
Government; $2,116 and $4,232, respectively on registration and filing
fees. No fees were paid to brokers with respect to Selected Daily
Government during the year ended December 31, 1994.
PORTFOLIO TRANSACTIONS
The Manager makes investment decisions and decisions as to the
execution of portfolio transactions for the Funds, subject to the general
supervision of the Board of Trustees. On occasions, the Manager may deem
the purchase or sale of a security to be in the best interests of one or
more of the Funds as well as other fiduciary
<PAGE>
accounts. In such event, the Manager may aggregate such purchase or sale in
order to obtain the best net price and most favorable execution. Allocation
will be made by the Manager in the manner considered to be most equitable and
consistentwith its fiduciary obligations to all such fiduciary accounts,
including the Funds. In some instances, this procedure could adversely effect
the Funds but the Fund deems that any disadvantage in the procedure would be
outweighed by the increased selection available and the increased
opportunity to engage in volume transactions.
Selected Daily Government expects that most of the purchase and
sale transactions will be with the issuer or an underwriter or with major
dealers in money market instruments acting as principals or as agents.
Such transactions are normally on a net basis and generally do not
involve payment of brokerage commissions. However, the cost of
securities purchased from an underwriter normally includes a
commission paid by the issuer to the underwriter. Purchases and sales
from dealers will normally reflect the spread between bid and ask prices.
In placing portfolio transactions with brokers or dealers for Selected
Daily Government , the Manager's sole consideration is the ability to
promptly execute and clear orders in an efficient manner and at favorable
prices. Selected Daily Government did not pay any brokerage commissions
during the last three fiscal years.
It is the policy of Selected Government Income to seek to place
portfolio transactions with brokers or dealers who will execute
transactions as efficiently as possible, and at a favorable price. Selected
Government Income does not usually pay brokerage commissions in
connection with the purchase of U.S. Government Securities , although
purchases or sales from or to dealers will normally reflect the spread
between bid and asked prices. During 1993 and the year ended December
31, 1994, Selected Government Income did not pay brokerage
commissions. During 1992, Selected Government Income paid brokerage
commissions of $14,000, 30% of which was paid to brokers providing
research services to Selected Government Income.
The Manager, in effecting purchases and sales of portfolio securities
for Selected Government Income , will place orders in such manner as in
the opinion of the manager will offer a favorable price and market for
the execution of each transaction. In seeking a favorable price and market for
securities traded only in the over-the-counter market, Selected
Government Income will generally deal directly with the issuer or with
major dealers acting as principals or as agents . Subject to the
foregoing policy, it will be the practice of Selected Government Income ,
when purchasing through dealers, to select them primarily on the basis of
research information and statistical and other services furnished to
the Manager as well as satisfactory execution. It is not always possible
to place a dollar value on information and services received from dealers.
Since it is only supplementary to the Manager's own research efforts, the
receipt of research information is not expected to significantly reduce
the Manager's expenses. Selected Government Income may also consider,
subject to the requirement of favorable execution and price, dealers'
sales of the Funds' shares when selecting dealers to execute portfolio
transactions.
Research services furnished by brokers and used by Selected
Government Income for portfolio transactions may be utilized by the
Manager in connection with its investment services for other accounts
and, conversely, research services provided by brokers used for
transactions in other accounts may be utilized by the Manager in
performing its services for Selected Government Income.
TAXES
Each of the Funds has qualified and intends to remain qualified as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). To qualify as a regulated
investment company, the Funds must, among other things, derive less than
30% of their gross income from the sale or other disposition of
securities, options or futures held for less than three months. Selected
Government Income may be limited in its options or futures transactions
in order to prevent recognition of such income. Further, Selected
Government Income's options and futures transactions are subject to
special tax provisions that may accelerate or defer recognition of certain
gains or losses, change the character of certain gains or losses or alter
the holding periods of certain of the Fund's assets.
<PAGE>
A Fund may be subject to an excise tax of 4% to the extent that its
distributions do not meet the "required distribution" pursuant to the
Code. The required distribution for any calendar year is the sum of 98%
of a Fund's ordinary income for that year plus 98% of the Fund's capital
gain net income for the one-year period ending on October 31 of that year.
The Funds intend not to incur any excise tax and, if necessary, will make
special distributions to shareholders in order to avoid such tax.
Federal law may require the Funds or your broker to withhold 31% of
all distributions and the proceeds of any redemptions or the value of any
exchanges of a Fund's shares, if you fail to furnish the Fund or your broker
with your correct taxpayer identification number, under-report dividend
or interest income, or fail to certify to the Fund or your broker that you
are not subject to such withholding. If you are an individual, your
taxpayer identification number is your social security number.
Fund dividends that are derived from interest on direct (but not
guaranteed) obligations of the U.S. Government and certain of its agencies
and instrumentalities may be exempt from state and local taxes in certain
states. In other states, arguments can be made that such distributions
should be exempt from state and local taxes based on federal law, 31 U.S.
C. Section 3124, and the U.S. Supreme Court's interpretation of that
provision in American Bank and Trust Co. v. Dallas County, 463 U.S. 855
(1983). Selected Government Income and Selected Daily Government
currently intend to advise shareholders of the proportion of dividends
that consists of such interest. Shareholders should consult their tax
advisers regarding the possible exclusion of such portion of their
dividends for state and local income tax purposes.
Selected Government Income
Dividends derived from interest or dividends in respect of portfolio
securities held by Selected Government Income or from short-term capital
gains are taxable to you as ordinary income even if reinvested in
additional shares of Selected Government Income . Distributions of the
excess, if any, of net capital gain (i.e., the excess of any realized net
long-term capital gain over any net realized short-term capital loss), to
the extent so designated by Selected Government Income , will be taxable
to you as long-term capital gain irrespective of your holding period for
Selected Government Income's shares. Dividend distributions will not
qualify for the dividends received deduction for corporations. You will
realize a taxable gain or loss on your shares when they are sold or
redeemed for an amount different from your original cost. Such a gain or
loss will generally constitute a long-term capital gain or loss if the
shares were held for more than one year and a short-term capital gain or
loss if the shares were held for one year or less. However, if you
recognize a loss on the sale of shares that you had held for six months or
less, your loss will be a long-term capital loss to the extent of any net
capital gain distributions that you received with respect to those
shares. Information as to capital gains distributions, if any, and the tax
status of your dividends and distributions will be mailed annually shortly
after the end of the calendar year.
You should be aware of the tax implication of purchasing shares of
Selected Government Income just prior to a distribution on such shares.
When distributions are paid shortly after a purchase, you will suffer a
reduction in the per share net asset value of your shares by the amount of
the distribution. Although, in effect, this is a return of your capital, such
distributions are subject to Federal income tax.
TRUST SHARES
Upon issuance and sale in accordance with the terms of the
Prospectus and this Statement of Additional Information, each share of
the Trust will be fully paid and non-assessable. Shares of the Trust have
no preemptive, subscription or conversion rights and are redeemable as
set forth in the Prospectus. Assets received for the issue or sale of the
shares of each Fund and all income, earnings, profits and proceeds thereof
are exclusively allocated to each such Fund and constitute the underlying
assets of each such Fund. The underlying assets of each Fund are
segregated on the books of account and are to be charged with the
liabilities of each such Fund and with a share of the general liabilities of
the Trust. All creditors, persons contracting with the
<PAGE>
Trust or persons having any claim against the Trust may look solely to the
assets of the Fund with which such person dealt for payments of such credit,
contract or claim.
MAJOR SHAREHOLDERS
As of July 14 , Martin H. Proyect Tr., 080 Loco Tract D Trust, P.O.
Box 1688, Santa Fe, NM 87504-1688, owned of record 6,742,741.640 shares
of Selected Daily Government , constituting 5.29% of the
outstanding shares of such stock. Shelby Cullom Davis & Co., 70 Pine St., New
York, NY 10220-0002, owned of record 99,381,749.260 shares of Selected
Daily Government , constituting 78.04% of the outstanding shares of
such stock. Baden Baden c/o Spring Valley Bank, P.O. Box 191, French Lick, IN
47432, owned of record 91,504.943 shares of Selected Government
Income , constituting 10.63% of the outstanding shares of such stock.
SHAREHOLDER MEETINGS
The Trust does not hold annual meetings and will hold special
meetings of shareholders as required by the 1940 Act such as to elect
trustees or when called by Trustees for any other purpose they deem
appropriate. The Secretary is required to call a special meeting of
shareholders upon written request of at least 10% of the shares entitled
to be cast as votes at the meeting.
Trustees may be removed from office by a vote of the holders of a
majority of the outstanding shares at a meeting called for that purpose,
which meeting shall be held upon the written request of the holders of not
less than 10% of the outstanding shares. Upon the written request of ten
or more shareholders who have been such for at least six months and who
hold shares constituting at least 1% of the outstanding shares of the Trust
stating that such shareholders wish to communicate with the other
shareholders for the purpose of obtaining the signatures necessary to
demand a meeting to consider removal of a Trustee, the Trust has
undertaken to disseminate appropriate materials at the expense of the
requesting shareholders.
RATINGS OF PERMISSIBLE INVESTMENTS
The following is a description of Standard & Poor's Corporation
("S&P") and Moody's Investors Services, Inc. ("Moody's") highest
commercial paper and bond ratings. To the extent that ratings accorded by
S&P or Moody's may change as a result of changes in such organizations,
the Funds will attempt to use comparable rating standards for their
permissible investments.
Commercial Paper, Loans and Notes. Commercial paper rated A-1 by
__________________________________
S&P indicates that the degree of safety regarding timely payment is
either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics are denoted with a plus (+) sign
designation.
The rating Prime-1 is the highest commercial paper rating assigned
by Moody's. Issuers rated Prime-1 (or related supporting institutions)
have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity will normally be evidenced by
the following characteristics:
- Leading market positions in well established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate reliance on
debt and ample asset production.
- Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
- Well established access to a range of financial markets and assured
sources of alternate liquidity.
Description of S&P's Two Highest Bond Ratings. AAA - Bonds rated
_____________________________________________
AAA have the highest rating assigned by S&P. Capacity to pay interest and
repay principal is extremely strong.
<PAGE>
AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and usually differ from the higher rated issues only in
small degree.
Plus (+) or Minus (-): The rating AA may be modified by the addition
of a plus or minus sign to show relative standing within the major rating
categories.
Description of Moody's Two Highest Bond Ratings. Aaa - Bonds which
_______________________________________________
are Aaa are judged to be of the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt-edge."
Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long term risks appear
somewhat larger than in Aaa securities.
Moody's also applies the numerical modifiers 1, 2 and 3 in the
generic rating classification of Aa. 1 indicates that a security ranks in
the higher end of a rating category, 2 in the mid-range of a category and
3 in the lower end of a category.
PERFORMANCE DATA
The current yield quotations for Selected Daily Government as they
appear in advertising and sales materials are computed by determining the
net change, exclusive of capital changes, over a seven-day base period in
the value of a hypothetical pre-existing account having a balance of one
share at the beginning of the period. The net change in account value is
divided by the value of the account at the beginning of the base period to
obtain the base period return. The base period return is then multiplied by
(365/7), with the resulting annualized yield figure carried to the nearest
1/100 of 1%. For purposes of calculating current yield, net change in
account value reflects: (1) the value of additional shares purchased with
dividends from the original shares and dividends declared on both the
original shares and any such additional shares, and (2) all fees (other than
non-recurring account charges) that are charged to all shareholder
accounts in proportion to the length of the base period and the average
account size of Selected Daily Government . The capital changes excluded
from the calculation of current yield are realized gains and losses from
the sale of securities and unrealized appreciation and depreciation.
The effective yield quotations for Selected Daily Government are
computed by compounding the unannualized seven-day base period return
as follows: 1 is added to the base period return and this sum is then raised
to a power equal to (365/7), and 1 is then subtracted from the result.
Based upon the seven days ended June 30, 1995, Selected Daily
Government's current and effective yields were 5.25% and 5.39%,
respectively.
Selected Government Income's average annual total return for the
one year and five years ended June 30, 1995 and for the period from
November 24, 1987 through June 30, 1995 was, 9.80%, 7.86% and
7.08% , respectively. Average annual total return measures both the net
investment income generated by, and the effect of any realized or
unrealized appreciation or depreciation of, the underlying investments in
Selected Government Income's portfolio. Selected Government
Income's average annual total return figures are computed by determining
the average annual compounded rates of return over the periods indicated in
the advertisement, sales literature or shareholders' report, that would
equate the initial amount invested to the ending redeemable value,
according to the following formula:
<PAGE>
P(l + T)^n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of such period
This calculation (1) assumes all dividends and distributions are
reinvested at net asset value on the appropriate reinvestment dates as
described in the Prospectus and (2) deducts all recurring fees, such as
advisory fees, charged as expenses to all shareholder accounts.
Selected Government Income's total return for the one year and five
years ended June 30, 1995 and for the period from November 24, 1987
through June 30, 1995 was 9.80%, 46.03% and 68.21% , respectively. Total
return is the cumulative rate of investment growth which assumes that
income dividends and capital gains are reinvested. It is determined by
assuming a hypothetical investment at the net asset value at the
beginning of the period, adding in the reinvestment of all income dividends
and capital gains, calculating the ending value of the investment at the
net asset value as of the end of the specified time period, subtracting the
amount of the original investment, and dividing this amount by the amount
of the original investment. This calculated amount is then expressed as a
percentage by multiplying by 100.
Selected Government Income's yield for the thirty day period ended
June 30, 1995 was 5.29%. Yield refers to the net investment income
generated by a hypothetical investment in the Fund during a thirty-day or
one month period. The income is then annualized by assuming the same
income was generated each month for a twelve month period, and is shown
as a percentage of the investment.
The value of the portfolio securities of Selected Government Income
fluctuates with market and economic conditions, causing the value of its
shares to fluctuate. Depending upon when shares are redeemed, their
value may be higher or lower than their value on the date of purchase. The
performance figures of Selected Government Income as described above
will vary from time to time depending upon market and economic
conditions, the composition of its portfolio and operating expenses. These
factors should be considered when comparing the performance figures of
Selected Government Income with those of other investment companies
and investment vehicles.
Unlike bank deposits and other investments that pay a fixed rate of
interest, the average annual total return rates on Selected Government
Income's shares fluctuate. Accordingly, you should not consider such
rates as representative of what your investment may earn in any future
period. At any time in the future, such rates may be higher or lower than
past rates, and there is no assurance that any historical rate will
continue.
The performance of Selected Daily Government may be compared to
that of other money market mutual funds tracked by Lipper Analytical
Services, Inc. ("Lipper"), a widely used independent research firm that
ranks mutual funds by overall performance, investment objective and
assets. Lipper performance calculations include the reinvestment of all
capital gain and income dividends for the periods covered by the
calculation.
The performance and relative size of Selected Daily Government may
be compared to other money market mutual funds rated by Donaghue's
Money Fund Report ("Donaghue"), a reporting service on money market
funds. As reported by Donaghue's, all investment results represent total
return (annualized results for the period net of management fees and
expenses) and one year investment results are effective annual yields
assuming reinvestment of dividends.
Investors may want to compare the performance of Selected Daily
Government to that of various bank products as reported by BANK RATE
MONITOR,Registered Trademark, a financial reporting service that publishes each
week
<PAGE>
average rates of bank and thrift institution money market deposit
accounts, Super N.O.W. accounts and certificate of deposit. The rates
published by the Bank Rate Monitor National Index are averages of the
personal account rates offered on the Wednesday prior to the date of
publication by 100 large banks and thrifts in the top ten Consolidated
Standard Metropolitan Statistical Areas.
With respect to money market deposit accounts and Super N.O.W.
accounts, account minimums range upward from $2,000 in each institution
and compounding methods vary. Super N.O.W. accounts generally offer
unlimited check writing while money market deposit accounts generally
restrict the number of checks that may be written. If more than one rate
is offered, the lowest rate is used. Rates are determined by the financial
institution and are subject to change at any time specified by the
institution. Generally, the rates offered for these products take
market conditions and competitive product yields into consideration
when set. Bank products represent a taxable alternative income
producing product. Bank and thrift institution deposit accounts may be
insured, while shareholder accounts in Selected Daily Government are not
so insured. Bank passbook savings accounts compete with money market
mutual fund products with respect to certain liquidity features but may
not offer all of the features available from a money market mutual fund,
such as check writing. Bank passbook savings accounts normally offer a
fixed rate of interest while the yield of Selected Daily Government
fluctuates. Bank checking accounts normally do not pay interest but
compete with money market mutual fund products with respect to certain
liquidity features (e.g., the ability to write checks against the account).
Bank certificates of deposit may offer fixed or variable rates for a set
term. (Normally, a variety of terms are available.) Withdrawal of these
deposits prior to maturity will normally be subject to a penalty. In
contrast, shares of Selected Daily Government are redeemable at the net
asset value (normally, $1.00 per share) next determined after a request is
received, without charge.
<PAGE>
PART C
OTHER INFORMATION
_________________
Item 24. Financial Statements and Exhibits
(a) Financial statements:
Included in Part A:
Financial Highlights.
Included in Part B by incorporation from the 1994 Annual Report:
Tait, Weller & Baker Auditor's Report.
Portfolio of Investments at December 31, 1994.
Statement of Assets and Liabilities at December 31, 1994.
Statement of Operations for the year ended December 31, 1994.
Statement of Changes in Net Assets for the years ended
December 31, 1994 and 1993.
Notes to Financial Statements.
Included in Part B:
Report of Tait, Weller & Baker.
(b) Exhibits:
(1) Amended Declaration of Trust, incorporated by reference to
Exhibit (1) to Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A, File No. 33-15807.
(2) Amended and Restated By-Laws as of January 22, 1992,
incorporated by reference to Exhibit (2) to Post-Effective
Amendment No. 11 to Registrant's Registration Statement on
Form N-1A, File No. 33-15807.
(4) (a) Specimen copy of share certificate for Selected U.S.
Government Income Fund, incorporated by reference to
Exhibit (4) (a) to Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form N-1A, File
No. 33-15807.
(4) (b) Specimen copy of share certificate for Selected Daily
Government Fund, incorporated by reference to
Exhibit (4) (a) (3) to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A, File
No. 33-15807.
<PAGE>
(5) Management Agreement dated May 1, 1993, incorporated by
reference to Exhibit (5) to Post-Effective Amendment No. 13
to Registrant's Registration Statement on Form N-1A, File
No. 33-15807.
(6)/(15) Distribution Services Agreement and Plan of Distribution
dated May 1, 1993, incorporated by reference to Exhibit
(6)/(15) to Post-Effective Amendment No. 13 to Registrant's
Registration Statement on Form N-1A, File No. 33-15807.
(8) (a) Custody Agreement dated November 25, 1991, incorporated by
reference to Exhibit (8) (a) to Post-Effective Amendment
No. 11 to Registrant's Registration Statement on Form N-1A,
File No. 33-15807.
(8) (b) Agency Agreement dated November 25, 1991,
incorporated by reference to Exhibit (8) (b) to
Post-Effective Amendment No. 11 to Registrant's Registration
Statement on Form N-1A, File No. 33-15807.
(11) Consent of Tait, Weller & Baker.
(14) (a) Individual Retirement Account Plan Documents,incorporated by
reference to Exhibit (14) (a) to Post-Effective Amendment
No. 12 to Registrant's Registration Statement on Form N-1A,
File No.33-15807.
(14) (b) Money Purchase Pension and Profit Sharing Plan Basic
Document, incorporated by reference to Exhibit (14) (b) to
Post-Effective Amendment No. 13 to Registrant's
Registration Statement on form N-1A, File No. 33-15807.
(14) (c) Money Purchase Pension Adoption Agreement,
incorporated by reference to Exhibit (14) (c) to
Post-Effective Amendment No. 13 to Registrant's Registration
Statement on Form N-1A, File No. 33-15807.
(14) (d) Profit-Sharing Adoption Agreement, incorporated by
reference to Exhibit (14) (d) to Post-Effective Amendment
No. 13 to Registrant's Registration Statement on Form N-1A,
File No. 33-15807.
(14) (e) Profit-Sharing 401(k) Plan, incorporated by reference to
Exhibit (14) (e) to Post-Effective Amendment No. 13 to
Registrant's Registration Statement on Form N-1A, File
No. 33-15807.
(14) (f) 403 (b) Plan Documents, incorporated by reference to
Exhibit (14) (f) to Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form N-1A, File
No. 33-15807.
(14) (g) Prototype Simplified Employee Pension Plan Documents,
incorporated by reference to Exhibit (14) (g) to
Post-Effective Amendment No. 10 to Registrant's
Registration Statement on Form N-1A, File No.33-15807.
<PAGE>
(14) (h) Deferred Compensation Section 457 Savings Plan,
incorporated by reference to Exhibit (14) (h) to
Post-Effective Amendment No. 10 to Registrant's
Registration Statement on Form N-1A, File No. 33-15807.
(14) (i) Defined Contribution Trust, incorporated by reference to
Exhibit (14) (i) to Post-Effective Amendment No. 13 to
Registrant's Registration Statement on Form N-1A, File
No. 33-15807.
(16) (a) Sample Computations of Performance Quotations,
incorporated by reference to Exhibit (16) (a) to
Post-Effective Amendment Nos. 2 and 11 to Registrant's
Registration Statement on Form N-1A, File
No. 33-15807.
(16) (b) Sample Computations of Total Return, incorporated by
reference to Exhibit (16) (b) to Post-Effective Amendment
No. 11 to Registrant's Registration Statement on Form N-1A,
File No. 33-15807.
(17) Powers of Attorney, incorporated by reference to Exhibit
(16) to Registrant's Registration Statement on Form N-1A,
File No. 33-15807, and Exhibit (17) (b) to Post-Effective
Amendment No. 2, Exhibit (17) to Post-Effective Amendment
Nos. 5 and 9 and Exhibit (17) (a) to Post-Effective
Amendment No. 13 of Registrant's Registration Statement
on Form N-1A, File No. 33-15807, and Exhibit (16) (b) to
Registrant's Registration Statement on Form N-14 filed on
September 30, 1993 and February 10, 1994.
Item 25. Persons Controlled by or under Common Control with Registrant
_____________________________________________________________
Not applicable.
Item 26. Number of Holders of Securities
_______________________________
Number of Record Holders
Title of Class as of July 14, 1995
______________ _________________________
Shares of Beneficial Interest,
par value $.10 per share:
Selected U.S. Government Income Fund 749
Selected Daily Government Fund 3,547
Item 27. Indemnification
_______________
Reference is made to Article V of the Amended Declaration of
Trust of the Registrant, previously filed as Exhibit (1) to Post-Effective
Amendment No. 2 to Registrant's Registration Statement on Form N-1A,
File No. 33-15807. Officers and Trustees of Registrant are insured
against liability by reason of acts, errors, or omissions in such capacities.
Item 28. Business and Other Connections of Investment Adviser
____________________________________________________
Davis Selected Advisers, L.P. (formerly, Selected/Venture
Advisers, L.P.), the Registrant's investment adviser, renders investment
advisory services to individual, institutional
<PAGE>
and pension and profit-sharing plan accounts, as well as to Selected American
Shares, Inc.and Selected Special Shares, Inc., Davis New York Venture Fund
(formerly,New York Venture Fund, Inc.), Davis High Income Fund (formerly,
Venture Income (+) Plus, Inc.), Davis Tax-Free High Income Fund (formerly,
Venture Muni (+) Plus, Inc.), Davis Series, Inc. (formerly, Retirement Planning
Funds of America, Inc.) and Davis International Series, Inc. (formerly,
Venture Series, Inc.).
Martin H. Proyect is the Chairman and Treasurer of the
adviser's general partner, Venture Advisers, Inc., 124 East Marcy Street,
Santa Fe, New Mexico 87501 (the "General Partner"). Shelby M.C. Davis is
a Director, President and principal owner of the General Partner and is a
Director of Shelby Cullom Davis Financial Consultants, 70 Pine Street,
New York, New York 10270 ("SCDFC"). Louis R. Proyect is a Director and
Executive Vice President of the General Partner and is Secretary of SCDFC.
Carl R. Luff is a Director, Executive Vice President and Secretary of the
General Partner.
Item 29. Principal Underwriter
_____________________
(a) Davis Selected Advisers, L.P., located at 124 East Marcy
Street, Santa Fe, New Mexico 87501, serves as the principal underwriter
of the Registrant and also serves as principal underwriter for Selected
American Shares, Inc. and Selected Special Shares, Inc., Davis New York
Venture Fund, Davis High Income Fund, Davis Tax-Free High Income Fund,
Davis Series, Inc. and Davis International Series, Inc.
(b) Management of the General Partner of the Principal Underwriter.
<TABLE>
<CAPTION>
Positions and Offices Positions and
Name and Principal with General Partner of Offices with
Business Address Principal Underwriter Registrant
__________________ _______________________ ______________
<S> <C> <C>
Martin H. Proyect Chairman Trustee,
P.O. Box 80176 and Treasurer President and
Las Vegas, NV 89180 Chief Executive
Officer
Shelby M.C. Davis Director and Trustee and
P.O. Box 205 President Executive Vice
Hobe Sound, FL 33455 President
Carl R. Luff Director, Executive Vice President,
124 East Marcy Street Vice President and Treasurer and
Santa Fe, NM 87501 Secretary Assistant Secretary
Louis R. Proyect Director and Executive Vice President,
124 East Marcy Street Vice President and Secretary
Santa Fe, NM 87501
Raymond O. Padilla Senior Vice President Vice President and
124 East Marcy Street Assistant Secretary
Santa Fe, NM 87501
B. Clark Stamper Senior Vice President None
124 East Marcy Street
Santa Fe, NM 87501
<PAGE>
Positions and Offices Positions and
Name and Principal with General Partner of Offices with
Business Address Principal Underwriter Registrant
__________________ _______________________ ______________
Eileen R. Street Senior Vice President Assistant Treasurer
124 East Marcy Street and Assistant
Santa Fe, NM 87501 Secretary
Carolyn H. Spolidoro Vice President None
124 East Marcy Street
Santa Fe, NM 87501
Andrew Davis Vice President None
124 East Marcy Street
Santa Fe, NM 87501
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records
________________________________
All records and documents required to be maintained under
Section 31 (a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession of Davis Selected Advisers,
L.P., 124 East Marcy Street, Santa Fe, New Mexico 87501, the investment
adviser of the Registrant, except that shareholder account records are in
the possession of Investors Fiduciary Trust Company, 127 West 10th
Street, Kansas City, Missouri 64105, custodian and transfer agent, and
current minute books are in the possession of D'Ancona & Pflaum, 30 North
LaSalle Street, Chicago, Illinois 60602. Davis Selected Advisers, L.P.
maintains copies of the minutes.
Item 31. Management Services
___________________
Not applicable.
Item 32. Undertakings
____________
Registrant undertakes to furnish to each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report to
shareholders upon request and without charge.
<PAGE>
SELECTED CAPITAL PRESERVATION TRUST
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Fe and State of New Mexico
on the 1st day of August, 1995
SELECTED CAPITAL PRESERVATION TRUST
By: /s/ Martin H. Proyect
______________________
Martin H. Proyect,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
_________ _____ ____
Martin H. Proyect* President and August 1, 1995
____________________ Chief Executive
Martin H. Proyect Officer
Carl R. Luff* Vice President, August 1, 1995
____________________ Treasurer and
Carl R. Luff Assistant Secretary
*By: /s/ Sheldon R. Stein
___________________________
Sheldon R. Stein,
Attorney-in-Fact
*Sheldon R. Stein signs this document on behalf of the foregoing
officers pursuant to the powers of attorney filed as Exhibit 17 to this
Registration Statement on Form N-1A.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed
on August 1, 1995 by the following persons in the capacities indicated.
Signature Title
_________ _____
William P. Barr* Trustee
_________________________
William P. Barr
Floyd A. Brown* Trustee
_________________________
Floyd A. Brown
William G. Cole* Trustee
_________________________
William G. Cole
Shelby M.C. Davis* Trustee
_________________________
Shelby M.C. Davis
Robert J. Greenebaum* Trustee
_________________________
Robert J. Greenebaum
Walter E. Hoadley* Trustee
_________________________
Walter E. Hoadley
James J. McMonagle* Trustee
_________________________
James J. McMonagle
Martin H. Proyect* Trustee
_________________________
Martin H. Proyect
Larry J.B. Robinson* Trustee
_________________________
Larry J.B. Robinson
*By: /s/ Sheldon R. Stein
________________________
Sheldon R. Stein,
Attorney-in-Fact
*Sheldon R. Stein signs this document on behalf of the foregoing
persons pursuant to the powers of attorney filed as Exhibit 17 to this
Registration Statement on Form N-1A.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm in the Registration Statement,
(Form N-1A), and related Statement of Additional Information of Selected
Capital Preservation Trust and to the inclusion of our report dated February 3,
1995 to the Shareholders and Board of Directors/Trustees of Selected American
Shares, Inc., Selected Special Shares, Inc. and Selected Capital Preservation
Trust.
/s/Tait, Weller & Baker
___________________________
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
July 27, 1995
EXHIBIT 17
SELECTED CAPITAL PRESERVATION TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
constitutes and appoints Robert J. Greenebaum, Sheldon R. Stein and
Arthur Don, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign any
post-effective amendments to the registration statement under the
Securities Act of 1933 (Registration No. 33-15807) and/or the Investment
Company Act of 1940 (Registration No. 811-5240), whether on Form N-1A
or any successor forms thereof, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission and all appropriate state or federal regulatory
authorities. Each of the undersigned hereby ratifies and confirms all that
each of the aforenamed attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 14th day of July, 1995
/s/ William P. Barr /s/ Floyd A. Brown
__________________________ ___________________________
William P. Barr, Floyd A. Brown,
Trustee Trustee
/s/ William G. Cole /s/ Shelby M.C. Davis
___________________________ ___________________________
William G. Cole, Shelby M.C. Davis,
Trustee Trustee
/s/ Robert J. Greenebaum /s/ Walter E. Hoadley
____________________________ ____________________________
Robert J. Greenebaum, Walter E. Hoadley,
Trustee Trustee
/s/ James J. McMonagle /s/ Martin H. Proyect
____________________________ ____________________________
James J. McMonagle, Martin H. Proyect,
Trustee Chief Executive Officer and Trustee
/s/ Larry J.B. Robinson /s/ Carl R. Luff
_____________________________ _____________________________
Larry J.B. Robinson, Carl R. Luff,
Trustee Vice President, Treasurer
and Assistant Secretary
<PAGE>
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, acting on
behalf of Selected Capital Preservation Trust, an Ohio business trust
constitutes and appoints Martin H. Proyect, Andrew Davis, Louis R.
Proyect, Carl R. Luff, Raymond O. Padilla, Sheldon R. Stein, Arthur Don and
Jessica Randall, and each of them, his attorneys-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
post-effective amendments to the registration statement under the
Securities Act of 1933 (Registration No. 33-15807) and/or the Investment
Company Act of 1940 (Registration No. 811-5240), whether on Form N-1A
or any successor forms thereof, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission and all appropriate state or federal regulatory
authorities. Each of the undersigned hereby ratifies and confirms all that
each of the aforenamed attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Dated this 29th day of July, 1995.
Selected Capital Preservation Trust
By: /s/Martin H. Proyect
______________________________
Martin H. Proyect
President
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> SELECTED GOVERNMENT INCOME FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 7,466,183
<INVESTMENTS-AT-VALUE> 7,670,792
<RECEIVABLES> 70,515
<ASSETS-OTHER> 10,120
<OTHER-ITEMS-ASSETS> 64,687
<TOTAL-ASSETS> 7,816,114
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 35,159
<TOTAL-LIABILITIES> 35,159
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,577,189
<SHARES-COMMON-STOCK> 865,020
<SHARES-COMMON-PRIOR> 1,214,523
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (843)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 204,609
<NET-ASSETS> 7,780,955
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 318,246
<OTHER-INCOME> 0
<EXPENSES-NET> 59,819
<NET-INVESTMENT-INCOME> 258,427
<REALIZED-GAINS-CURRENT> 4,908
<APPREC-INCREASE-CURRENT> 550,560
<NET-CHANGE-FROM-OPS> 813,895
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 258,427
<DISTRIBUTIONS-OF-GAINS> 25,186
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 40,135
<NUMBER-OF-SHARES-REDEEMED> 416,133
<SHARES-REINVESTED> 26,495
<NET-CHANGE-IN-ASSETS> (2,481,955)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 19,435
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 20,596
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 68,288
<AVERAGE-NET-ASSETS> 8,238,578
<PER-SHARE-NAV-BEGIN> 8.45
<PER-SHARE-NII> 0.27
<PER-SHARE-GAIN-APPREC> 0.58
<PER-SHARE-DIVIDEND> 0.27
<PER-SHARE-DISTRIBUTIONS> 0.03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.00
<EXPENSE-RATIO> 1.44
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 002
<NAME> SELECTED DAILY GOVERNMENT FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 133,040,992
<INVESTMENTS-AT-VALUE> 133,040,992
<RECEIVABLES> 118,456
<ASSETS-OTHER> 9,301
<OTHER-ITEMS-ASSETS> 2,445
<TOTAL-ASSETS> 133,171,194
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 832,003
<TOTAL-LIABILITIES> 832,003
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 132,339,191
<SHARES-COMMON-STOCK> 132,339,191
<SHARES-COMMON-PRIOR> 121,885,823
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 132,339,191
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,798,016
<OTHER-INCOME> 0
<EXPENSES-NET> 473,626
<NET-INVESTMENT-INCOME> 3,324,390
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 3,324,390
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,324,390
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 76,472,984
<NUMBER-OF-SHARES-REDEEMED> 69,178,633
<SHARES-REINVESTED> 3,159,018
<NET-CHANGE-IN-ASSETS> 10,453,368
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 187,228
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 527,889
<AVERAGE-NET-ASSETS> 125,852,893
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .026
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .026
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
