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WEITZ SERIES FUND, INC.
BOARD OF DIRECTORS
Carroll E. Fredrickson
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
Wallace R. Weitz
OFFICERS
Wallace R. Weitz, President
Mary K. Beerling, Vice-President & Secretary
Linda L. Lawson, Vice-President
Richard F. Lawson, Vice-President
INVESTMENT ADVISER
Wallace R. Weitz & Company
DISTRIBUTOR
Weitz Securities, Inc.
CUSTODIAN
Norwest Bank Nebraska, N.A.
TRANSFER AGENT AND DIVIDEND PAYING AGENT
Wallace R. Weitz & Company
This report has been prepared for the information of shareholders of Weitz
Series Fund, Inc. -- Fixed Income Portfolio and is not authorized for
distribution to prospective investors unless preceded or accompanied by a
current prospectus which describes the Fund's objectives, policies and other
information.
FIXED INCOME PORTFOLIO
Q U A R T E R L Y
R E P O R T
DECEMBER 31, 1995
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
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WEITZ SERIES FUND INC. -- FIXED INCOME PORTFOLIO
PERFORMANCE SINCE INCEPTION
A long-term perspective on our fund's performance is shown below. The table
shows how an investment of $10,000 in the Fixed Income Portfolio at its
inception would have grown over the years (after deducting all fees and expenses
and assuming reinvestment of all dividends). The table also sets forth average
annual total return data for the Fixed Income Portfolio for the one and five
year periods ended December 31, 1995, and for the period since inception,
calculated in accordance with SEC standardized formulas.
<TABLE>
<CAPTION>
VALUE OF VALUE OF VALUE OF
INITIAL CUMULATIVE CUMULATIVE TOTAL
$10,000 CAPITAL GAIN REINVESTED VALUE OF ANNUAL RATE
PERIOD ENDED INVESTMENT DISTRIBUTIONS DIVIDENDS SHARES OF RETURN
- ----------------- ----------- ----------------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C>
Dec. 23, 1988 $ 10,000 -- -- $ 10,000 --
Dec. 31, 1988 9,939 -- 68 10,007 --
Dec. 31, 1989 10,020 -- 900 10,920 9.1%
Dec. 31, 1990 10,232 12 1,661 11,905 9.0
Dec. 31, 1991 10,625 13 2,597 13,235 11.4
Dec. 31, 1992 10,557 13 3,396 13,966 5.5
Dec. 31, 1993 10,820 14 4,258 15,092 8.1
Dec. 31, 1994 9,961 13 4,763 14,737 -2.4
Dec. 31, 1995 10,847 14 6,199 17,060 15.8
</TABLE>
The Portfolio's average annual total return for the one and five year periods
ended December 31, 1995, and for the period since inception (December 23, 1988),
were 15.8%, 7.5% and 7.9%, respectively. These returns assume redemption at the
end of each period.
Since inception, the total amount of capital gains distributions reinvested in
shares was $13, and the total amount of "income" distributions reinvested was
$5,955. This information represents past performance of the Portfolio and is not
indicative of future performance. The investment return and the principal value
of an investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than the original cost. Additional information is
available from Wallace R. Weitz & Co. at the address listed on the front cover.
2
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WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
DECEMBER 31, 1995 - QUARTERLY REPORT
January 15, 1996
Dear Fellow Shareholder:
The Fixed Income Portfolio grew by 3.3% in the 4th quarter, bringing our
total return for the year to +15.8%, which represents a combination of +6.2%
from net interest income (after deducting fees and expenses) and +9.6% from
(unrealized) appreciation of our bonds.
INVESTMENT REVIEW
The last two years have been unusually volatile ones for the bond market.
In 1994, the Federal Reserve raised interest rates several times during the
year, and bonds suffered their worst annual decline in 70 years. Interest rates
began to decline in early 1995, and bond prices rebounded. During this period,
long-term treasury bond total returns swung from, approximately, -12% in 1994 to
+32% in 1995.
Our strategy is to invest in relatively short-term, high quality bonds to
capture most of the return available on long-term bonds while avoiding some of
the volatility associated with long bonds. As a result, our total returns during
this volatile period were -2.4% in 1994 and +15.8% in 1995. Thus, our TWO-YEAR
total return was 13.0% (100 X .976 = 97.6; 97.6 X 1.158 = 113.0) while long
treasuries returned approximately 16.2% for the two years (100 X .88 = 88; 88 X
1.32 = 116.2). The effect is that we sacrificed 3.2 percentage points of return,
over two years, in the interest of greater stability and comfort.
The entire portfolio is listed later in this report, but the following
table gives a capsule summary of the investment profile of our bonds at year
end:
<TABLE>
<S> <C>
Average Maturity 7.2years
Average Duration 3.3years
Average Coupon 7.1%
30-Day Average Yield at 12-31-95 6.1%
Average Rating A1
</TABLE>
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The outlook for the bond market continues to be favorable. Inflation has
remained subdued, the economy is growing slowly, and the Federal Reserve seems
to be leaning slightly in the direction of lower interest rates. We never take
extreme positions in this portfolio, but given these positive conditions, we
have extended our maturities slightly over the past few months.
PORTFOLIO MANAGEMENT
In the first quarter of 1995, Tom Carney joined us as fixed income analyst
and trader. As I mentioned in my April letter, Tom is an experienced fixed
income investment professional, and he has been very helpful to me in managing
the Fixed Income Fund this year. In recognition of his abilities and his
contribution to the bond portfolio management process, we have named him co-
portfolio manager of the Fixed Income Fund, as of January 1, 1996. Tom and I
will collaborate on the management of the fund, and the investment objectives
and portfolio strategy of the fund will remain the same.
If you have any questions about this letter or about our portfolio, please
feel free to call Tom or me any time.
Sincerely,
/s/ Wallace R. Weitz
Wallace R. Weitz
President
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WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
RATING FACE AMOUNT COST MARKET VALUE
- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
CORPORATE BONDS -- 37.1%
A- $ 250,000 General Motors Acceptance Corp. Debs. 8.75% 2/1/96 $ 250,013 $ 250,479
AA- 500,000 Norwest Financial Corp. Notes 7.1% 11/15/96 500,000 506,251
A 500,000 Lehman Brothers Holdings Notes 7.625% 7/15/99 500,279 521,145
BBB 500,000 Salomon, Inc. Sr. Notes 7.125% 8/1/99 500,000 509,155
A 500,000 Phillip Morris Notes 7.125% 8/15/02 500,000 524,185
BBB- 500,000 Tenneco, Inc. Notes 7.875% 10/1/02 497,828 542,072
A+ 1,000,000 Merrill Lynch Notes 7.25% 6/14/04 996,705 1,015,068
BBB- 1,000,000 ConAgra, Inc. Sub. Notes 7.4% 9/15/04 1,000,000 1,067,834
A- 600,000 General Motors Acceptance Corp. Debs. 6.625% 10/15/05 596,751 611,809
BB 200,000 Dime Savings 10.5% 11/15/05 219,941 221,000
AAA 1,000 Berkshire Hathaway, Inc. Debs. 9.75% 1/15/18 1,063 1,063
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Total Corporate Bonds 5,562,580 5,770,061
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TAXABLE MUNICIPAL BONDS -- 5.9%
AA+ 160,000 Missouri Hsg. Dev. Comm. 8.6% 9/1/05 161,158 161,600
AAA 250,000 Oklahoma Hsg. Fin. Auth. 8.7% 9/1/13 250,000 252,500
AAA 500,000 Oklahoma Hsg. Fin. Auth. 7.3% 12/1/14 500,000 505,000
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Total Taxable Municipal Bonds 911,158 919,100
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U.S. GOVERNMENT AND AGENCY SECURITIES -- 54.8%
AAA 88,395 U.S. Treasury Coupon Receipts 5/15/96 86,825 86,621
AAA 80,377 Federal Home Loan Mtg. REMIC Trust 9% 11/15/19 (Avg. Life
1.1 years) 80,377 80,377
AAA 100,125 U.S. Treasury Coupon Receipts 2/15/97 94,419 94,327
AAA 88,721 Federal Natl. Mtg. Assn. 11% 1/1/01
(Avg. Life 1.8 years) 90,610 90,053
AAA 100,100 U.S. Treasury Coupon Receipts 2/15/98 88,893 89,204
AAA 116,754 Federal Home Loan Mtg. Corp. 9.5% 9/1/03
(Avg. Life 2.5 years) 117,214 121,133
AAA 99,960 U.S. Treasury Coupon Receipts 2/15/99 83,411 84,177
</TABLE>
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WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
RATING FACE AMOUNT COST MARKET VALUE
- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES -- CONTINUED
AAA $ 1,000,000 Federal Home Loan Mtg. REMIC Trust 5.8% 1/15/05
(Avg. Life 3.4 years) $ 989,169 $ 996,250
AAA 1,000,000 Federal Home Loan Mtg. Corp. 6.52% 8/10/99 1,000,000 1,000,938
AAA 250,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 250,000 251,445
AAA 500,000 Federal Natl. Mtg. Assn. 6.5% 10/25/18
(Avg. Life 6.2 years) 484,581 488,125
AAA 500,000 Federal Home Loan Mtg. Corp. 6.65% 9/15/21
(Avg. Life 6.5 years) 489,624 492,344
AAA 2,500,000 Federal Natl. Mtg. Assn. 7.55% 6/10/04 2,497,739 2,621,484
AAA 500,000 Federal Natl. Mtg. Assn. 8.05% 7/14/04 509,933 515,234
AAA 1,000,000 Federal Home Loan Mtg. Corp. 7.09% 6/1/05 1,003,282 1,020,775
AAA 500,000 Federal Home Loan Bank 6.44% 11/28/05 500,780 501,250
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Total U.S. Government and Agency Securities 8,366,857 8,533,737
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SHORT-TERM SECURITIES -- .9%
147,539 Norwest U.S. Government Money Market Fund, 5.2% 147,539 147,539
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Total Investments in Securities $ 14,988,134* 15,370,437
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Other Assets Less Liabilities -- 1.3% 196,020
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Total Net Assets -- 100% $15,566,457
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Net Asset Value Per Share $ 11.001
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</TABLE>
*Also approximates cost for federal income tax purposes
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