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WEITZ SERIES FUND, INC.
GOVERNMENT MONEY MARKET PORTFOLIO
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1997
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NE 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
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WEITZ SERIES FUND, INC.
GOVERNMENT MONEY MARKET PORTFOLIO
SEPTEMBER 30, 1997 -- SEMI-ANNUAL REPORT
October 8, 1997
Dear Shareholder:
The yield on our Government Money Market Portfolio declined slightly since
the last time we reported to you as short-term yields moved modestly lower. As
of September 30th, our 7-day and 30-day yields were 4.9% and 4.9%, respectively.
The economy continued to surprise investors, economists, and us in the
third quarter with its ability to generate strong growth without triggering
inflation pressures. New jobs, for instance, have been created at a rate of
226,000 per month so far in 1997. The national unemployment rate remains below
5% with some individual states (Nebraska, for instance) below 3%. Incomes and
consumer confidence levels have been on the rise. Inflation, however, is
conspicuous by its absence. Consumer prices through eight months have risen at
a meager 1.6% annual rate.
The Federal Reserve is faced with a dilemma in its role in implementing
monetary policy. Historically, economic growth of the kind we are experiencing
would tend to strain the capacity of our economy and result in rising inflation.
So far, though, strong growth and low inflation have been able to coexist for
over a year. Weak overseas economies (especially in Japan), currency crises in
developing countries, and the globalization of the world-wide economy could
partly explain our "best of all worlds" predicament. This has led some market
participants to proclaim that we have entered a "new era" where the U.S. economy
can continue to grow indefinitely with little or no inflation. While we remain
cautiously optimistic regarding the outlook for interest rates, we firmly
believe that the business cycle has not been repealed and that this complacency
will lead to surprises for some down the road.
Your investment in our portfolio, while insulated from principal
fluctuations, will continue to be impacted by changes in monetary policy and the
effect such policy has on short-term interest rates. In short, our return
should continue to track that of Treasury bills.
FAREWELL TO ERIC--WELCOME TO MARY JEWELL
Eric Ball joined us last year to help clients with their investment
questions and financial planning. We and our clients enjoyed working with him.
But Eric's first love is portfolio management, and this summer he received the
offer he could not refuse. So, he has left us to help manage a private hedge
fund, and we wish him the very best.
In looking for a replacement for Eric, we asked lawyers, accountants,
bankers, and clients for the names of the investment professionals they admired,
trusted, and liked to work with. We talked to several people, none of whom were
looking for a new job, and have hired Mary Jewell. Mary is a graduate of
Creighton Law School, and comes to us after 12 years in the trust department of
a major bank. She is
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available to talk to retirement plan participants or individual shareholders
about personal financial planning, asset allocation, or any other questions you
may have. Her job is to make your financial life easier, so please feel free to
call her and introduce yourself. I think you will enjoy working with her.
We would welcome any questions or comments you may have.
Best Regards,
/s/ Wallace R. Weitz /s/ Tom Carney
Wallace R. Weitz Thomas D. Carney
President, Portfolio Manager Portfolio Manager
- --------------------------------------------------------------------------------
Yields quoted are historical and will fluctuate in the future. An investment in
the Government Money Market Portfolio is neither insured, nor guaranteed by the
United States Government and there can be no assurance that it will maintain a
steady net asset value of $1.00.
- --------------------------------------------------------------------------------
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SHAREHOLDER VOTE
On June 2, 1997, a special meeting of the shareholders of Weitz Series
Fund, Inc. (The "Fund"), consisting of the Value Portfolio, the Fixed Income
Portfolio, the Government Money Market Portfolio and the Hickory Portfolio
(each, a "Portfolio") was held at which the following proposals were approved by
the shareholders:
PROPOSAL 1: TO ELECT SIX MEMBERS OF THE BOARD OF DIRECTORS OF THE FUND.
(SHAREHOLDERS OF ALL PORTFOLIOS VOTING)
<TABLE>
<CAPTION>
FOR AGAINST/WITHHELD ABSTAIN/BROKER NON-VOTES
--- ---------------- ------------------------
<S> <C> <C> <C>
Wallace R. Weitz 15,502,256 109,974 0
John W. Hancock 15,491,314 120,916 0
Richard D. Holland 15,501,594 110,636 0
Thomas R. Pansing Jr. 15,499,945 112,285 0
Delmer L. Toebben 15,490,181 122,049 0
Lorraine Chang 15,494,823 117,407 0
PROPOSAL 2: TO RATIFY THE SELECTION OF MCGLADREY & PULLEN, LLP, AS INDEPENDENT AUDITORS FOR THE FUND. (SHAREHOLDERS OF ALL
PORTFOLIOS VOTING)
FOR AGAINST/WITHHELD ABSTAIN/BROKER NON-VOTES
--- ---------------- ------------------------
15,253,977 35,308 322,945
PROPOSAL 3: TO AMEND THE BYLAWS OF THE FUND TO CONFORM THE REQUIREMENTS THEREIN RELATING TO ELECTION OF THE BOARD OF DIRECTORS
BY THE SHAREHOLDERS TO THE REQUIREMENTS OF THE INVESTMENT COMPANY ACT OF 1940. (SHAREHOLDERS OF ALL PORTFOLIOS VOTING)
FOR AGAINST/WITHHELD ABSTAIN/BROKER NON-VOTES
--- ---------------- ------------------------
15,212,675 17,225 382,330
</TABLE>
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WEITZ SERIES FUND, INC.
GOVERNMENT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT DESCRIPTION VALUE
- ---------- ----------- -----
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES - 100.1%*
$2,250,000 Federal Home Loan Bank Discount Corp. Note 5.500% 10/15/97 $ 2,245,046
3,000,000 Federal Home Loan Bank Discount Corp. Note 5.520% 12/10/97 2,968,675
3,800,000 U.S. Treasury Bill 5.287% 1/08/98 3,746,574
-----------
Total U.S. Government and Agency Securities 8,960,295
-----------
SHORT-TERM SECURITIES - 0.3%
27,168 Norwest Treasury Money Market Fund, 4.772% 27,168
-----------
Total Investments in Securities (Cost $8,987,463)+ 8,987,463
-----------
Other Liabilities in Excess of Other Assets - (0.4%) (36,822)
-----------
Total Net Assets - 100.0% $8,950,641
-----------
-----------
</TABLE>
*Interest rates presented for treasury bills and discount notes are based upon
yield to maturity rate(s) at date(s) of purchase.
+Cost is the same for Federal income tax purposes.
See accompanying notes to financial statements.
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WEITZ SERIES FUND, INC.
GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
(UNAUDITED)
Assets:
Investments in securities at amortized cost,
which approximates value $8,987,463
Interest receivable 702
Prepaid expense 1,720
----------
Total assets 8,989,885
----------
Liabilities:
Due to adviser 1,902
Distributions payable 37,342
----------
Total liabilities 39,244
----------
Net assets applicable to outstanding capital stock $8,950,641
----------
----------
Net assets represented by:
Capital stock outstanding, at par (note 4) 8,951
Additional paid-in capital 8,941,690
----------
Net assets $8,950,641
----------
----------
Net asset value and redemption price per share of outstanding
capital stock $ 1.000
----------
----------
See accompanying notes to financial statements.
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WEITZ SERIES FUND, INC.
GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income:
Interest $ 225 578
----------
Total investment income 225,578
----------
Expenses (note 3):
Investment advisory fee $ 20,691
Administrative fee 10,346
Registration expenses 2,145
Professional fees 10,322
Directors fees 155
Other expenses 1,724
----------
Total expenses 45,383
Less advisory and administrative fees waived and other
expenses assumed by investment adviser (24,692)
----------
Net expenses 20,691
----------
Net investment income and net increase
in net assets resulting from operations $ 204,887
----------
----------
</TABLE>
See accompanying notes to financial statements.
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WEITZ SERIES FUND, INC.
GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
-------------- --------------
<S> <C> <C>
Net increase in net assets resulting from operations $ 204,887 $ 249,145
Distributions to shareholders from:
Net investment income (204,887) (249,145)
Capital share transactions, at $1.00 per share (note 4):
Proceeds from sales 10,305,225 14,177,677
Payments for redemptions (7,365,296) (12,740,140)
Reinvestment of distributions 190,774 240,799
-------------- --------------
Total increase from capital share transactions 3,130,703 1,678,336
-------------- --------------
Total increase in net assets 3,130,703 1,678,336
-------------- --------------
Net assets:
Beginning of period 5,819,938 4,141,602
-------------- --------------
End of period $ 8,950,641 $ 5,819,938
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements.
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WEITZ SERIES FUND, INC.
GOVERNMENT MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
The following financial information provides selected data for a share of the
Government Money Market Portfolio outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
Six months
ended Period August 1,
Sept. 30, Year ended March 31, 1991
1997 -------------------------------------------------------- (inception) to
(Unaudited) 1997 1996 1995 1994 1993 March 31, 1992
---------- --------- --------- --------- --------- --------- ---------------
<S> <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
---------- --------- --------- --------- --------- --------- ---------------
Income from investment operations:
Net investment income 0.025 0.047 0.051 0.042 0.028 0.031 0.031
---------- --------- --------- --------- --------- --------- ---------------
Less distributions:
Dividends from net investment income (0.025) (0.047) (0.051) (0.042) (0.028) (0.031) (0.031)
---------- --------- --------- --------- --------- --------- ---------------
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- --------- --------- --------- --------- --------- ---------------
---------- --------- --------- --------- --------- --------- ---------------
Total return 5.0%* 4.8% 5.2% 4.2% 2.9% 3.2% 4.7%*
Ratios/supplemental data:
Net assets, end of period ($000) $8,951 $5,820 $4,142 $2,669 $1,918 $555 $278
Ratio of expenses to average net assets+ 0.50%* 0.50% 0.50% 0.50% 0.25% 0.26% 0.27%*
Ratio of net investment income to
average net assets 4.95%* 4.71% 4.95% 4.18% 2.81% 3.05% 4.65%*
* Annualized
+ Absent voluntary waivers, the expense ratio would have been 1.10% for the six months
ended September 30, 1997, 1.15% and 1.14% for the years ended March 31, 1997 and
1996, respectively.
</TABLE>
See accompanying notes to financial statements.
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WEITZ SERIES FUND, INC.
GOVERNMENT MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
(1) ORGANIZATION
Weitz Series Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as an open-end management investment company issuing
shares in series, each series representing a distinct portfolio with its
own investment objectives and policies. At September 30, 1997, the Fund
had four series: the Government Money Market Portfolio, the Fixed Income
Portfolio, the Value Portfolio and the Hickory Portfolio. The accompanying
financial statements present the financial position and results of
operations of the Government Money Market Portfolio (the "Portfolio").
The Portfolio's investment objective is current income consistent with the
preservation of capital and maintenance of liquidity. The Portfolio
intends to invest principally in debt obligations issued or guaranteed by
the U.S. Government, its agencies and instrumentalities and repurchase
agreements thereon with maturities not exceeding one year. The following
significant accounting policies are in accordance with accounting policies
generally accepted in the investment company industry.
(2) SIGNIFICANT ACCOUNTING POLICIES
(a) VALUATION OF INVESTMENTS
Investment securities are carried at amortized cost, which approximates
market value. Pursuant to Rule 2a-7 of the Investment Company Act of
1940, amortized cost, as defined, is a method of valuing securities at
acquisition cost, adjusted for amortization of premium or accretion of
discount rather than at their value based on current market factors.
This method of valuation is used consistently throughout the industry by
money market funds wishing to maintain a constant net asset value per
share.
(b) FEDERAL INCOME TAXES
Since the Portfolio's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income to shareholders, no provision
for income or excise taxes is required.
(c) SECURITY TRANSACTIONS
Security transactions are accounted for on the date securities are
purchased or sold (trade date). Realized gains or losses are determined
by specifically identifying the security sold.
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In computing net investment income, the Portfolio amortizes premiums and
discounts and accrues interest income daily.
Dividends to shareholders are declared daily and paid monthly.
(d) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liablilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of increase
and decrease in net assets from operations during the period. Actual
results could differ from those estimates.
(3) RELATED PARTY TRANSACTIONS
The Fund and Portfolio have retained Wallace R. Weitz & Company (the
"Adviser") as their exclusive investment adviser. In addition, the Fund
has an agreement with Weitz Securities, Inc. to act as distributor for the
Portfolio's shares. Certain officers and directors of the Fund are also
officers and directors of the Adviser and Weitz Securities, Inc.
Under the terms of a management and investment advisory agreement, the
Adviser receives a management fee equal to 1/2% per annum of the
Portfolio's average daily net asset value. The Adviser has agreed to
reimburse the Portfolio up to the amount of advisory fees paid to the
extent that total expenses exceed 1% of the Portfolio's average annual
daily net asset value. For the six months ended September 30, 1997, the
Adviser received a management fee equal to 1/4% per annum of the
Portfolio's average daily net asset value and voluntarily capped total
expenses at .50% of the Portfolio's average daily net asset value.
Under the terms of an administration agreement, certain services are being
provided including the transfer of shares, disbursement of dividends, fund
accounting and related administrative services of the Fund for which the
Adviser is being paid a monthly fee. During the six months ended September
30, 1997, the fee was calculated at an average annual rate of .25% of the
Portfolio's average daily net assets, of which .25% was waived.
Weitz Securities, Inc., as distributor, received no compensation for the
distribution of Portfolio shares.
(4) CAPITAL STOCK
The Fund is authorized to issue a total of 100 million shares of common
stock in series with a par value of $.001 per share. Thirty million of
these shares have been authorized by the Board of Directors to be issued in
the series designated Government Money Market Portfolio shares, of which
8,950,641 shares were outstanding at September 30, 1997. The Board of
Directors may authorize additional shares in other series of the Fund's
shares without shareholder approval. Each share of stock will have a pro
rata interest in the assets of the Portfolio to which the stock of that
series relates and will have no interest in the assets of any other series.
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WEITZ SERIES FUND, INC.
BOARD OF DIRECTORS
Lorraine Chang
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
Delmer L. Toebben
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.-Government Money Market Portfolio. For more detailed
information about the Fund, its investment objectives, management, fees and
expenses, please see a current prospectus. This report is not authorized for
distribution to prospective investors unless preceded or accompanied by a
current prospectus.
