<PAGE>
As filed with the Securities and Exchange Commission
On July 30, 1999
1933 Act Registration Number 33-24263
--------
1940 Act Registration Number 811-5661
--------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 17
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 20
Weitz Series Fund, Inc.
---------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Suite 600
1125 South 103 Street
Omaha, NE 68124-6008
(Address of Principal Office)
Registrant's Telephone Number, including Area Code:
402-391-1980
Wallace R. Weitz
Suite 600
1125 South 103 Street
Omaha, NE 68124-6008
---------------------------------------------------------------
(Name and Address of Agent for Service)
Copies of all communications to:
PATRICK W.D. TURLEY, ESQ.
Dechert Price & Rhoads
1775 Eye Street
Washington, DC 10007
It is proposed that this filing will become effective July 30, 1999
pursuant to paragraph (b) of Rule 485 under the Securities Act of 1940.
<PAGE>
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Additional Information Is Available
The Statement of Additional Information (SAI) provides more detailed information
about the Funds and their policies. The SAI, which has been filed with the
Securities and Exchange Commission is incorporated by reference. Additional
information about each Fund's investments is available in the respective Fund's
Annual, Semiannual and Quarterly Reports. In the Annual Reports of the Value
Fund, the Hickory Fund and the Fixed Income Fund, you will find a discussion of
the market conditions and investment strategies that significantly affected the
respective Fund's performance during its last fiscal year. The SAI and reports
are available without charge, upon request.
You may request information, make inquiries or find additional information about
the Funds as follows:
- - By telephone:
800-232-4161 (Information)
800-773-6472 (Automated)
- - By mail:
Weitz Funds
One Pacific Place, Suite 600
1125 South 103rd Street
Omaha, Nebraska 68124-6008
- - On the Internet:
Weitz Funds
http://www.weitzfunds.com
Information about the Funds (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C. (800-SEC-0330). Information
on the operation of the Public Reference Room may be obtained by calling the SEC
at 800-SEC-0330. Reports and other information about the Funds is available on
the SEC's Internet site at http://www.sec.gov. Copies of such information can
also be obtained by sending your request and a duplicating fee to the SEC's
Public Reference Section, Washington, D.C. 20549-6009.
SEC File Number: 811-5611
508707
WEITZ SERIES FUND, INC.
VALUE FUND
HICKORY FUND
FIXED INCOME FUND
GOVERNMENT MONEY MARKET FUND
------------------------
------------------------
PROSPECTUS
JULY 30, 1999
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-------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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------------------------------------------
<PAGE>
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Weitz Equity Funds Summary (Value Fund and Hickory Fund)........................... 2
Investment Objective............................................................. 2
Summary: Investment Strategies................................................... 2
Summary: Related Risks........................................................... 2
Fund Performance--Weitz Equity Funds............................................... 3
Fund Expenses--Weitz Equity Funds.................................................. 5
More About the Weitz Equity Funds (Value Fund and Hickory Fund).................... 6
Investment Objective............................................................. 6
Investment Strategies............................................................ 6
Related Risks.................................................................... 6
Hickory Fund Closed to New Investors............................................. 7
Investment Objective, Strategies and Risks--Fixed Income Fund...................... 8
Investment Objective............................................................. 8
Investment Strategies............................................................ 8
Related Risks.................................................................... 8
Fund Performance--Fixed Income Fund................................................ 10
Fund Expenses--Fixed Income Fund................................................... 11
Investment Objective, Strategies and Risks--Government Money Market Fund........... 12
Investment Objective............................................................. 12
Investment Strategies............................................................ 12
Related Risks.................................................................... 12
Fund Performance--Government Money Market Fund..................................... 13
Fund Expenses--Government Money Market Fund........................................ 14
Purchasing Shares.................................................................. 15
Opening a Regular New Account.................................................... 15
Opening a Retirement Account..................................................... 15
Purchasing Shares of a Fund...................................................... 15
Purchasing Through Others........................................................ 17
Changing Your Address............................................................ 17
Confirmations and Shareholder Reports............................................ 17
Telephone Communications......................................................... 17
Redeeming Shares................................................................... 18
Redemption Procedures............................................................ 18
Redemption Payments.............................................................. 18
Signature Guarantees............................................................. 18
Other Redemption Information..................................................... 19
Exchanging Shares.................................................................. 20
Pricing of Shares.................................................................. 21
Distributions and Taxes............................................................ 22
Shareholder Distributions........................................................ 22
Taxation of Distributions........................................................ 22
Taxation of Sales and Exchanges.................................................. 22
Buying Shares Prior to a Distribution............................................ 22
Management......................................................................... 23
Investment Adviser............................................................... 23
Portfolio Managers............................................................... 23
Fund Distributor................................................................. 23
Additional Information............................................................. 24
Code of Ethics................................................................... 24
Year 2000........................................................................ 24
Fund Custodian................................................................... 25
Fund Auditor..................................................................... 25
Fund Legal Counsel............................................................... 25
Financial Highlights--Value Fund................................................... 26
Financial Highlights--Hickory Fund................................................. 27
Financial Highlights--Fixed Income Fund............................................ 28
Financial Highlights--Government Money Market Fund................................. 29
</TABLE>
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-1-
<PAGE>
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WEITZ EQUITY FUNDS SUMMARY
THE WEITZ EQUITY FUNDS CONSIST OF THE VALUE FUND AND THE HICKORY FUND.
INVESTMENT OBJECTIVE
The primary investment objective of the Weitz Equity Funds is capital
appreciation.
SUMMARY: INVESTMENT STRATEGIES
The Weitz Equity Funds seek to achieve their objective by investing
primarily in common stocks and a variety of securities convertible into common
stocks such as rights, warrants, convertible preferred stock and convertible
bonds. Each Fund considers long-term capital gains preferable to short-term
capital gains and dividend and interest income, but all such gains and income
are desirable. Each Fund's investment strategy (which is called "value
investing") is to invest primarily in the common stocks of sound, growing, well-
managed businesses. In implementing this strategy Weitz & Co. attempts to:
- - Identify attractive businesses that Weitz & Co. understands and which have
honest, competent management;
- - Estimate the price that an informed, rational buyer would pay for 100% of that
business; and then
- - Buy securities of that business if they are available at a significant
discount to this "business value" or "private market value."
The Hickory Fund is a non-diversified Fund which will usually hold a more
concentrated portfolio (approximately 30-40 issues) than the Value Fund
(approximately 70-90 issues). THE HICKORY FUND IS CLOSED TO NEW INVESTORS.
SUMMARY: RELATED RISKS
An investment in the Weitz Equity Funds involves certain risks. As with any
other mutual fund, the share price of the Weitz Equity Funds will fluctuate
daily depending on general market conditions and other factors. YOU MAY LOSE
MONEY IF YOU INVEST IN EITHER OF THE FUNDS.
Undervalued securities are, by definition, out of favor with investors, and
there is no way to predict when the securities may return to favor. THEREFORE,
INVESTORS SHOULD PURCHASE SHARES OF THE WEITZ EQUITY FUNDS ONLY IF THEY INTEND
TO BE PATIENT LONG-TERM INVESTORS.
Because the Hickory Fund is nondiversified, it may, with respect to 50% of
its total assets, concentrate its investments by investing more than 5% of its
total assets in the securities of any one issuer. As a result, its shares may be
more susceptible to adverse changes in the value of the securities of a
particular company.
There can be no assurance that either Fund will meet its investment
objective.
-2-
<PAGE>
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FUND PERFORMANCE--WEITZ EQUITY FUNDS
The charts and tables below provide an indication of the risks of investing
in the Weitz Equity Funds by showing changes in each Fund's performance from
year to year over the periods indicated and by showing how each Fund's average
annual returns for the periods indicated compared to those of a broad-based
securities market index. The information assumes reinvestment of dividends and
capital gain distributions. In considering the information set forth below you
should remember that past performance is not necessarily an indication of how
the Funds will perform in the future.
INVESTMENT RESULTS--VALUE FUND
The following chart shows performance during each of the last ten calendar
years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
VALUE FUND
CALENDAR YEAR TOTAL RETURNS
<S> <C>
1989 22.1%
1990 -5.2%
1991 27.6%
1992 13.6%
1993 20.0%
1994 -9.8%
1995 38.4%
1996 18.7%
1997 38.9%
1998 28.9%
The Value Fund's year-to-date return for the three months ended March 31, 1999 was 6.7%.
</TABLE>
During the ten year period shown in the chart above, the Fund's highest
quarterly return was 16.5% (quarter ended March 31, 1998) and the Fund's lowest
quarterly return was -9.7% (quarter ended September 30, 1990).
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DECEMBER 31, 1998)
<TABLE>
<CAPTION>
1 year 5 years 10 years
-------- -------- ---------
<S> <C> <C> <C>
VALUE FUND 28.9% 21.5% 18.2%
Standard & Poor's 500 Index* 28.6% 24.0% 19.2%
</TABLE>
* The Standard & Poor's 500 Index is an unmanaged index of 500 companies
generally representative of the market for the stocks of large-size U.S.
companies.
-3-
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FUND PERFORMANCE--WEITZ EQUITY FUNDS
INVESTMENT RESULTS--HICKORY FUND*
The following chart shows performance for each full calendar year since the
inception of the Hickory Fund (April 1, 1993).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HICKORY FUND
CALENDAR YEAR TOTAL RETURNS
<S> <C>
1994 -17.3%
1995 40.5%
1996 35.4%
1997 39.2%
1998 33.0%
The Hickory Fund's year-to-date return for the three months ended March 31, 1999 was 9.6%.
</TABLE>
During the period shown in the chart above, the Fund's highest quarterly
return was 24.1% (quarter ended March 31,1998) and the Fund's lowest quarterly
return was -15.6% (quarter ended September 30, 1998).
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DECEMBER 31, 1998)
<TABLE>
<CAPTION>
Since
Inception
(April 1,
1 year 5 years 1993)
-------- -------- ---------
<S> <C> <C> <C>
HICKORY FUND* 33.0% 23.8% 24.3%
Standard & Poor's 500 Index** 28.6% 24.0% 21.7%
</TABLE>
* The Hickory Fund is closed to new investors.
** The Standard & Poor's 500 Index is an unmanaged index of 500 companies
generally representative of the market for the stocks of large-size U.S.
companies.
-4-
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FUND EXPENSES--WEITZ EQUITY FUNDS
The table below describes the fees and expenses that you may pay if you
buy and hold shares of either Fund:
<TABLE>
<CAPTION>
Value Fund Hickory Fund
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases None None
Maximum Deferred Sales Charge (Load) None None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None
Redemption Fee None None
Exchange Fee None None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM
FUND ASSETS)
Management Fees 1.00% 1.00%
Distribution Fees None None
Other Expenses .26% .30%
------ ------
Total Annual Fund Operating Expenses 1.26% 1.30%
</TABLE>
Example
This example is intended to
help you compare the cost of investing
in either Fund with the cost of
investing in other mutual funds. The
example assumes that you invest
$10,000 in a Fund for the time periods
indicated and then redeem all shares
at the end of those periods. The
example also assumes that your
investment has a 5% return each year
and that the respective Fund's operat-
ing expenses remain the same. Although
your actual costs may be higher or
lower, based on these assumptions,
your costs would be:
Value Hickory
Fund Fund
1 year $128 $132
3 years 400 412
5 years 692 713
10 years 1,523 1,568
-5-
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MORE ABOUT THE WEITZ EQUITY FUNDS
THE WEITZ EQUITY FUNDS CONSIST OF THE VALUE FUND AND THE HICKORY FUND.
INVESTMENT OBJECTIVE
The primary investment objective of the Weitz Equity Funds is capital
appreciation.
INVESTMENT STRATEGIES
The Weitz Equity Funds seek to achieve their objective by investing
primarily in common stocks and a variety of securities convertible into common
stocks such as rights, warrants, convertible preferred stock and convertible
bonds. Each Fund may also invest in other securities of a company not
convertible into common stock, such as bonds and preferred stock, which Wallace
R. Weitz & Company ("Weitz & Co."), the Funds' investment adviser, determines
may offer the opportunity for capital appreciation. Such securities may be
investment grade, non-investment grade or unrated. Each Fund considers long-term
capital gains preferable to short-term capital gains and dividend and interest
income, but all such gains and income are desirable.
Each Fund's investment strategy (which is called "value investing") is to
invest primarily in the common stocks of sound, growing, well-managed
businesses. In implementing this strategy Weitz & Co. attempts to:
- - Identify attractive businesses that Weitz & Co. understands and which have
honest, competent management;
- - Estimate the price that an informed, rational buyer would pay for 100% of that
business; and then
- - Buy securities of that business if they are available at a significant
discount to this "business value" or "private market value."
At the heart of the calculation of value is an estimate of the value today
of the right to receive all of the cash that a business will generate for its
owners in the future. The valuation may focus on asset values, earning power,
the intangible value of a company's "franchise" in its market or a combination
of these variables, depending on the nature of the business. Weitz & Co. then
tries to buy shares of the company's stock at a significant discount to this
"private market value." Weitz & Co. hopes that the stock price will rise as the
value of the business grows and as the valuation discount narrows. However, even
if the analysis of business value is correct, the stock price may fail to
reflect this value.
The Hickory Fund is a non-diversified Fund which will usually hold a more
concentrated portfolio (approximately 30-40 issues) than the Value Fund
(approximately 70-90 issues).
Weitz & Co. does not try to "time" the market, but if there is cash
available for investment and there are not stocks which meet the Funds'
investment criteria or if Weitz & Co. determines market conditions warrant, the
Funds may invest without limitation in cash or high quality fixed income
securities for temporary defensive purposes. In the event that the Funds take
such a temporary defensive position, they may not achieve their investment
objective during this temporary period.
RELATED RISKS
You should be aware that an investment in the Weitz Equity Funds involves
certain risks, including the following:
- - PRICE OF FUND SHARES WILL FLUCTUATE As with any other mutual fund, the share
price of the Weitz Equity Funds will fluctuate daily depending on general
market conditions and other factors. YOU MAY LOSE MONEY IF YOU INVEST IN
EITHER OF THE FUNDS.
- - INVESTMENT IN UNDER-VALUED SECURITIES Under-valued securities are, by
definition, out of favor with investors, and there is no way to predict when
the securities may return to favor.
-6-
<PAGE>
THEREFORE, INVESTORS SHOULD PURCHASE SHARES OF THE WEITZ EQUITY FUNDS ONLY IF
THEY INTEND TO BE PATIENT LONG-TERM INVESTORS.
- - HICKORY FUND IS NONDIVERSIFIED Because the Hickory Fund is nondiversified, it
may, with respect to 50% of its total assets, concentrate its investments by
investing more than 5% of its total assets in the securities of any one
issuer. As a result, its shares may be more susceptible to adverse changes in
the value of the securities of a particular company.
- - FAILURE TO MEET INVESTMENT Objective There can be no assurance that either
Fund will meet its investment objective.
In making investment decisions, Weitz & Co. distinguishes between two types
of risk:
- - Stock Price Volatility; and
- - The Risk of Permanent Loss of Capital.
Academic studies and most financial journals and advisers equate volatility
and risk. They measure the historical volatility of a stock or a fund as a
percentage of the volatility of an index, such as the S&P 500, and calculate a
ratio, called a "beta." A fund with a beta of 0.50 has been 50% as volatile as
the index over the measuring period. A beta of 1.00 indicates the fund and the
index have been equally volatile.
Some of the stocks the Funds will own will be very volatile (high beta).
Furthermore, the Funds have, at times, been relatively concentrated in a few
industries, which means they are likely to exhibit short-term performance that
is very different from the S&P 500. The difference may be positive or negative,
but in either event, the result could be a high portfolio beta. Since the Funds
focus on long-term total return (income plus capital gains), we are not as
concerned with short-term volatility, or beta.
We ARE concerned with the risk of PERMANENT loss. We believe that by
focusing on the value of the underlying business and being disciplined about
buying stocks only when they appear to be selling below the company's business
value, we enjoy what Benjamin Graham (sometimes known as the father of "value"
investing) called a "margin of safety." The margin of safety reduces, but does
not eliminate, risk. However, we will make mistakes in measuring value, business
values may deteriorate after we buy, and stocks may sell below their business
values indefinitely, so we cannot avoid incurring losses. Also, since our
investment approach leads us to invest in stocks which are not currently
popular, the Funds are subject to extended periods during which its stocks
under-perform others or display volatile price movements.
HICKORY FUND CLOSED TO NEW INVESTORS
The Board of Directors of Weitz Series Fund, Inc. made the determination to
close the Hickory Fund to new investors as of the close of the New York Stock
Exchange on August 18, 1998. The Hickory Fund remains open to the following
investors:
1) Shareholders who had an account in the Hickory Fund as of August 18, 1998
and have not subsequently redeemed all shares in the account;
2) Current Hickory Fund shareholders who open a new account under the same tax
identification number;
3) Family members who reside at the address of record of a current Hickory Fund
shareholder;
4) Clients of financial advisors who had at least $1 million of client assets
invested in the Hickory Fund as of the date of closing;
5) Current and future members of the Board of Directors of Weitz Series Fund,
Inc. and current and future employees of Weitz & Co. and family members of
such board members or employees who reside at the same address as the board
members or employee.
The Board of Directors has reserved the right to reopen the Hickory Fund at
a future date if circumstances warrant the reopening of the Fund.
-7-
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INVESTMENT OBJECTIVE, STRATEGIES AND RISKS--FIXED INCOME FUND
INVESTMENT OBJECTIVE
The primary investment objective of the Fixed Income Fund is high current
income consistent with the preservation of capital.
INVESTMENT STRATEGIES
Under normal market conditions, the Fixed Income Fund will invest at least
65% of the value of its total assets in fixed income securities such as U.S.
government and agency securities, corporate debt securities, mortgage-backed
securities, preferred stock and taxable municipal bonds.
Weitz & Co., the Fund's adviser, selects fixed income securities whose yield
is sufficiently attractive in view of the risks of ownership. In deciding
whether the Fund should invest in particular fixed income securities, Weitz &
Co. considers a number of factors such as the price, coupon and
yield-to-maturity, as well as the credit quality of the issuer. In addition,
Weitz & Co. reviews the terms of the fixed income security, including
subordination, default, sinking fund, and early redemption provisions. Although
the Fixed Income Fund's investment restrictions do not limit the maturity of the
securities in which the fund may invest, the average maturity of the Fixed
Income Fund's portfolio has generally been less than ten years.
The Fund may invest up to 15% of its total assets in securities which are
non-investment grade or unrated if Weitz & Co. determines such securities are of
comparable quality to the rated securities in which the Fund may invest. The
Fund will normally not invest in fixed income securities which are rated below B
or are currently in default.
If Weitz & Co. determines that prevailing abnormal market or economic
conditions warrant a temporary defensive investment position, a greater portion
of the Fund's portfolio may be retained in cash or cash equivalents, such as
money market fund shares and repurchase agreements on U.S. Government
securities. In the event the Fund takes such a temporary defensive position, it
may not achieve its investment objective during this temporary period.
RELATED RISKS
You should be aware that an investment in the Fixed Income Fund involves
certain risks, including the ones listed below.
- - PRICE OF FUND SHARES WILL FLUCTUATE As with any other mutual fund, the share
price of the Fixed Income Fund will fluctuate daily depending on general
market conditions and other factors. YOU MAY LOSE MONEY IF YOU INVEST IN THE
FUND.
- - INTEREST RATE RISK The market value of a bond is significantly affected by
changes in interest rates. In general, bond prices rise when interest rates
fall and fall when interest rates rise. Generally, the longer the average
maturity of the bonds in the Fund's investment portfolio, the more the Fund's
share price will fluctuate in response to interest rate changes.
- - CREDIT RISK When a bond is purchased, its anticipated yield is dependent on
the timely payment by the issuer of each installment of interest and
principal. Lower-rated and unrated bonds, while often having a higher yield
than higher-rated bonds involve an increased possibility that the issuer may
not be able to make its payments of interest and principal. During periods of
deteriorating economic and market conditions, the market value of lower-rated
and unrated bonds may decline due to concerns over credit quality. In
addition, the liquidity of such securities may be affected, making it more
difficult for the Fund to sell the security.
- - RISKS RELATED TO MORTGAGE-BACKED SECURITIES Most mortgage-backed securities
are pass-through securities, which means that the payments received by the
Fund on such securities consist of both principal and interest as the
mortgages
-8-
<PAGE>
in the underlying mortgage pool are paid off. The yield on such
mortgage-backed securities is influenced by the prepayment experience of the
underlying mortgage pool. In periods of declining interest rates, prepayments
of the mortgages tend to increase. If the higher-yielding mortgages from the
pool are prepaid, the yield on the remaining pool will be reduced and it will
be necessary for the Fund to reinvest such prepayment, presumably at a lower
interest rate.
- - FAILURE TO MEET INVESTMENT OBJECTIVE There can be no assurance that the Fund
will meet its investment objective.
-9-
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FUND PERFORMANCE--FIXED INCOME FUND
The chart and table below provide an indication of the risks of investing in
the Fixed Income Fund by showing changes in the Fund's performance from year to
year over the periods indicated and by showing how the Fund's average annual
returns for the periods indicated compared to those of a broad-based securities
market index. The information assumes reinvestment of dividends and capital gain
distributions. In considering the information set forth below you should
remember that past performance is not necessarily an indication of how the Fund
will perform in the future.
INVESTMENT RESULTS--FIXED INCOME FUND
The following chart shows performance during each of the last ten calendar
years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FIXED INCOME FUND
CALENDAR YEAR TOTAL RETURNS
<S> <C>
1989 9.1%
1990 9.0%
1991 11.4%
1992 5.5%
1993 8.1%
1994 -2.4%
1995 15.8%
1996 4.4%
1997 8.6%
1998 6.8%
The Fixed Income Fund's year-to-date return for the three months ended March 31, 1999 was 0.7%.
</TABLE>
During the ten year period shown in the chart above, the Fund's highest
quarterly return was 5.0% (quarter ended June 30, 1995) and the Fund's lowest
quarterly return was -1.8% (quarter ended March 31, 1994).
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DECEMBER 31, 1998)
<TABLE>
<CAPTION>
1 year 5 years 10 years
--------- ----------- -----------
<S> <C> <C> <C>
FIXED INCOME FUND 6.8% 6.5% 7.5%
Lehman Brothers Intermediate Government/Corporate Index* 8.4% 6.6% 8.5%
</TABLE>
* The Lehman Brothers Intermediate Government/Corporate Index is a total return
performance benchmark consisting of government securities and publicly issued
corporate debt issued with maturities from one to ten years and rated at least
BBB by Standard & Poor's Corporation or Baa by Moody's Investors Service.
-10-
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FUND EXPENSES--FIXED INCOME FUND
The table below describes the fees and expenses that you may pay if you
buy and hold shares of the Fixed Income Fund:
<TABLE>
<CAPTION>
Fixed Income Fund
<S> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees .50%
Distribution Fees None
Other Expenses .36%
------
Total Annual Fund Operating Expenses* .86%
</TABLE>
*The Fixed Income Fund's actual total annual fund operating expenses were less
than the amount shown above because of a fee waiver by Weitz & Co. Weitz & Co.
voluntarily waives a portion of its fees in order to limit the Fund's total
operating expenses to a specified level. The fee waiver can be terminated at any
time. WITH THE FEE WAIVER, THE FUND'S ACTUAL TOTAL FUND OPERATING EXPENSES WERE
.75%.
EXAMPLE
This example is intended to help you compare
the cost of investing in the Fixed Income Fund with
the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in the Fixed
Income Fund for the time periods indicated and then
redeem all shares at the end of those periods. The
example also assumes that your investment has a 5%
return each year and that the Fixed Income Fund's
operating expenses remain the same. Although your
actual costs may be higher or lower, based on these
assumptions, your costs would be:
Fixed Income Fund
1 year $88
3 years 274
5 years 477
10 years 1,061
-11-
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INVESTMENT OBJECTIVE, STRATEGIES AND RISKS--
GOVERNMENT MONEY MARKET FUND
INVESTMENT OBJECTIVE
The primary investment objective of the Government Money Market Fund is
current income consistent with the preservation of capital and maintenance of
liquidity.
INVESTMENT STRATEGIES
The Government Money Market Fund invests substantially all of its assets in
debt obligations issued or guaranteed by the U.S. Government, its agencies and
instrumentalities and repurchase agreements on such securities with maturities
not exceeding thirteen months. The Fund limits its average portfolio maturity to
ninety days or less and buys only securities with remaining maturities of
thirteen months or less.
RELATED RISKS
You should be aware that an investment in the Government Money Market Fund
involves certain risks, including the ones listed below.
- - NO ASSURANCE OF STABLE NET ASSET VALUE Although the Government Money Market
Fund attempts to maintain a stable net asset value of $1.00 per share, there
can be no guarantee that the Fund will be able to do so. YOU MAY LOSE MONEY IF
YOU INVEST IN THE FUND.
- - NO INSURANCE OR GUARANTEE An investment in the Government Money Market Fund is
not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC)
or any other agency of the United States Government.
-12-
<PAGE>
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FUND PERFORMANCE--GOVERNMENT MONEY MARKET FUND
The chart below provides an indication of the risks of investing in the
Government Money Market Fund by showing changes in the Fund's performance from
year to year over the period indicated. The table below sets forth the Fund's
average annual returns for the periods indicated. The information assumes
reinvestment of dividends and capital gain distributions. In considering the
information set forth below you should remember that past performance is not
necessarily an indication of how the Fund will perform in the future.
INVESTMENT RESULTS--GOVERNMENT MONEY MARKET FUND
The following chart shows performance for each full calendar year since the
inception of the Government Money Market Fund (August 1, 1991).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND
CALENDAR YEAR TOTAL RETURNS
<S> <C>
1992 3.6%
1993 2.8%
1994 3.7%
1995 5.3%
1996 4.8%
1997 5.0%
1998 4.9%
The Government Money Market Fund's year-to-date return for the three months ended March 31, 1999 was 1.1%.
</TABLE>
During the period shown in the chart above the Fund's highest quarterly
return was 1.3% (quarter ended June 30, 1995) and the Fund's lowest quarterly
return was .7% (quarter ended March 31, 1993).
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DECEMBER 31, 1998)
<TABLE>
<CAPTION>
Since Inception
1 year 5 years (August 1, 1991)
----------- ----------- -------------------
<S> <C> <C> <C>
GOVERNMENT MONEY MARKET FUND 4.9% 4.7% 4.3%
</TABLE>
As of June 30, 1999, the 7-day yield of the Government Money Market Fund was
4.2%. For current yield information, call 1-800-232-4161.
-13-
<PAGE>
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FUND EXPENSES--GOVERNMENT MONEY MARKET FUND
The table below describes the fees and expenses that you may pay if you
buy and hold shares of the Government Money Market Fund:
<TABLE>
<CAPTION>
Government
Money Market
Fund
<S> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees .50%
------
Distribution Fees None
Other Expenses .53%
------
------
Total Annual Fund Operating Expenses* 1.03%
</TABLE>
*The Government Money Market Fund's actual total annual fund operating expenses
were less than the amount shown above because of a fee waiver by Weitz & Co.
Weitz & Co. voluntarily waives a portion of its fees in order to limit the
Fund's total operating expenses to a specified level. The fee waiver can be
terminated at any time. WITH THE FEE WAIVER, THE FUND'S TOTAL FUND OPERATING
EXPENSES WERE .50%.
EXAMPLE
This example is intended to help
you compare the cost of investing in the
Government Money Market Fund with the
cost of investing in other mutual funds.
The example assumes that you invest
$10,000 in the Government Money Market
Fund for the time periods indicated and
then redeem all shares at the end of
those periods. The example also assumes
that your investment has a 5% return
each year and that the Government Money
Market Fund's operating expenses remain
the same. Although your actual costs may
be higher or lower, based on these
assumptions, your costs would be:
Government Money
Market Fund
1 year $105
3 years 328
5 years 569
10 years 1,259
-14-
<PAGE>
- --------------------------------------------------------------------------------
PURCHASING SHARES
OPENING A REGULAR NEW ACCOUNT
You can open a new account by:
- - Completing and signing a Weitz Funds purchase application;
- - Enclosing a check made payable to Weitz Series Fund, Inc.;
- - Mailing the application and the check to:
BY MAIL:
Weitz Funds
P.O. Box 219320
Kansas City, Missouri 64121-9320
BY CERTIFIED OR OVERNIGHT DELIVERY:
Weitz Funds
c/o National Financial Data Services
330 W. 9th, 4th Floor
Kansas City, Missouri 64105
- - Providing other supporting legal documents that may be required in the case of
estates, trusts, guardianships, custodianships, partnerships, corporations and
certain other accounts.
PLEASE NOTE THAT THE MINIMUM INVESTMENT REQUIRED TO OPEN A REGULAR ACCOUNT IS
$25,000 WHICH MAY BE ALLOCATED AMONG THE FUNDS. THERE IS CURRENTLY NO SUBSEQUENT
MINIMUM INVESTMENT REQUIREMENT.
The Weitz Funds reserve the right, in its sole discretion, to reject any
order or subsequent purchase, to waive initial and subsequent investment
minimums for new accounts and to modify investment minimums from time to time.
All purchase orders are subject to acceptance by authorized officers of the
Weitz Funds and are not binding until so accepted.
OPENING A RETIREMENT ACCOUNT
Certain individuals may be eligible to open a traditional IRA, a Roth IRA or
a SEP IRA. In addition, existing IRA accounts and certain qualified pension and
profit sharing plans can be rolled over or transferred into a new IRA account,
which can be invested in shares of one or more of the Funds. You can request
information about establishing an IRA by calling the Weitz Funds at 402-391-1980
or 800-232-4161. After reviewing the material, you may open an IRA account by:
- - Completing the IRA application and the transfer form, if applicable;
- - Mailing the forms to the address shown above.
IRA accounts may be charged an annual maintenance fee.
Shares of the Funds may be also be purchased as an investment in other types
of pension or profit sharing plans. Although the Weitz Funds will endeavor to
provide assistance to shareholders who are participants in such plans, it does
not have forms of such plans for adoption and does not undertake to offer advice
relating to the establishment of such plans or compliance with the ongoing
requirements for such plans. Plan participants should seek the guidance of a
professional adviser before investing retirement monies in shares of a Fund.
PURCHASING SHARES OF A FUND
You pay no sales charge when you purchase shares of a Fund. The price you
pay for a Fund's shares is the respective Fund's net asset value per share which
is calculated as of the close of trading on the New York Stock Exchange
(ordinarily 3:00 p.m. Central Time) every day the exchange is open. If your
purchase request in good order is received on any day prior to such time, your
purchase price will be the net asset value calculated on that day. If your
purchase request in good order is received on any day after such time, your
purchase price will be the net asset value calculated on the next business day.
The shares you purchase must be qualified for
-15-
<PAGE>
sale in your state of residence. You can purchase shares in the following
manner:
BY MAIL. You can purchase additional shares in an existing account by:
- - Sending a check made payable to Weitz Series Fund, Inc.;
- - Completing the information on the remittance stub which is the bottom portion
of your most recent transaction statement;
- - Mailing the check and remittance stub to:
BY MAIL:
Weitz Funds
P.O. Box 219320
Kansas City, Missouri 64121-9320
BY CERTIFIED OR OVERNIGHT DELIVERY:
Weitz Funds
c/o National Financial Data Services
330 W. 9th, 4th Floor
Kansas City, Missouri 64105
If the remittance stub is not available, please indicate on your check or on a
separate piece of paper the account name, your address and your account number.
If you are purchasing shares for a new account, please see the procedures
described above under the heading "Opening a Regular New Account."
If your check is returned because of insufficient funds or because you have
stopped payment on the check, you will be responsible for any losses sustained
by a Fund as a result of custodian or transfer agent fees or a decline in the
net asset value when the shares are cancelled. If you are an existing
shareholder, losses may be collected by redeeming the appropriate amount from
your account.
BY WIRE. You can purchase shares with payment by bank wire by:
- - Calling Client Services at 402-391-1980 or 800-304-9745 and furnishing your
account name, address and account number together with the amount being wired
and the name of the wiring bank.
- - Instructing the bank to wire funds as follows:
IFTC
ABA# 101003621
DDA# 8907561075
Weitz Funds Purchase Account
For credit to (indicate appropriate Fund number):
Value 328
Fixed 329
Government 330
Hickory 332
For the account of: Your Account Number and Name
If you are purchasing shares by wire for a new account, you must send a
completed Purchase Application to the Weitz Funds at the address set forth above
PRIOR to your purchase.
Wired funds are considered received on the day they are deposited in a
Fund's account. If funds are deposited on any day prior to the close of the New
York Stock Exchange (ordinarily 3:00 p.m. Central Time) you will receive the net
asset value calculated on that day. If funds are deposited after such time, you
will receive the net asset value calculated on the next business day.
THE WEITZ FUNDS WILL NOT BE RESPONSIBLE FOR THE CONSEQUENCES OF DELAYS IN THE
BANK OR FEDERAL RESERVE WIRE SYSTEM. BANKS MAY IMPOSE A CHARGE FOR THE WIRE
TRANSFER OF FUNDS.
BY AUTOMATIC INVESTMENT. At the time you open an account you can choose to
make automatic investments in shares of a Fund at regular intervals (on the 1st
or 15th day of the month or, if such day is not a business day, on the next
following business day) by:
- - Completing the Automatic Investment Plan section of the Purchase Application;
- - Sending a voided check from your bank account.
You can add or cancel the automatic investment service or change the amount
by sending a request in writing to the Weitz Funds.
If your automatic investment transaction is returned by the bank, the Weitz
Funds may hold
-16-
<PAGE>
you responsible for any costs to a Fund resulting from (i) fees charged to a
Fund or (ii) a decline in the net asset value of a Fund when the shares issued
are canceled.
PURCHASING THROUGH OTHERS
Shares of the Funds may also be purchased through certain broker-dealers and
other financial intermediaries that have entered into selling agreements or
related arrangements with Weitz & Co. or its affiliates. You may be charged a
fee by such broker or financial intermediary if you effect transactions through
such entity. Weitz & Co. may, from time to time, make payments to broker-dealers
or other financial intermediaries for certain services to the Fund and/or its
shareholders, including sub-administration, sub-transfer agency and shareholder
servicing. Such payments are made out of Weitz & Co.'s own resources and do not
involve additional costs to the Funds or their shareholders.
CHANGING YOUR ADDRESS
You can change the address on your account by sending a written request to
the Fund. Your written request must be signed by all registered owners of the
account and should include your account name(s), account number(s) and both the
new and old addresses. To protect you and the Funds, redemptions from an account
are not allowed if the written request to change an address has been received by
the Weitz Funds within 24 hours of the redemption request.
CONFIRMATIONS AND SHAREHOLDER REPORTS
Each time you purchase, redeem or exchange shares, you will receive a
confirmation of the transaction from the Weitz Funds. At the end of each
calendar quarter you will receive a statement which will include complete
information on activity in your account during that quarter. At the end of each
year your statement will include detailed information on all transactions for
that year. You should save the year-end statement for tax purposes.
The Funds also provide quarterly shareholder reports which include a listing
of the securities in the portfolio at the end of the quarter, together with a
letter from the portfolio manager discussing, among other things, investment
results for the quarter. The report for the period ending September 30 will also
include unaudited financial statements. The annual report for the period ending
March 31 will include the respective Fund's audited financial statements for the
previous fiscal year.
To reduce the volume of mail you receive, only one copy of most financial
reports and prospectuses will be mailed to your household. You may request that
additional copies be sent by notifying the Weitz Funds.
TELEPHONE COMMUNICATIONS
Your telephone conversations with the Weitz Funds may be recorded or
monitored for verification, recordkeeping and quality assurance purposes.
-17-
<PAGE>
- --------------------------------------------------------------------------------
REDEEMING SHARES
REDEMPTION PROCEDURES
You may redeem shares of a Fund at any time by sending a redemption request
in writing to the Weitz Funds. A redemption request in good order should include
the following:
- - Your account name, account number and Fund name;
- - The amount of the redemption being requested (specified in dollars or shares);
- - The signatures of ALL account owners exactly as they are registered on the
account; if you are a corporate or trust shareholder, the signature must be by
an authorized person with an indication of the capacity in which such person
is signing;
- - A signature guarantee, if required;
- - Other supporting legal documents that may be required in the case of estates,
trusts, guardianships, custodianships, partnerships, corporations and certain
other accounts.
The redemption request can be sent by mail or facsimile transmission to:
BY MAIL:
Weitz Funds
P.O. Box 219320
Kansas City, Missouri 64121-9320
BY CERTIFIED OR OVERNIGHT DELIVERY:
Weitz Funds
c/o National Financial Data Services
330 W. 9th, 4th Floor
Kansas City, Missouri 64105
FAX NUMBER: 402-391-2125
Shares will be redeemed at the net asset value next determined after receipt
of a redemption request in good order. If your redemption request in good order
is received on any day prior to the close of the New York Stock Exchange
(ordinarily 3:00 p.m. Central Time) shares will be redeemed at the net asset
value calculated on that day. If your redemption request in good order is
received after such time, shares will be redeemed at the net asset value
calculated on the next business day. There are no fees for redeeming shares. You
must have a completed application on file with the Weitz Funds before a
redemption request will be accepted. In addition, the Weitz Funds must have
received payment for the shares being redeemed and may delay the redemption
payment (normally not more than 15 days) until the purchase funds have cleared.
Such delays can be avoided by purchasing shares with a certified or cashier's
check or by wire transfer.
You may call the Weitz Funds at 402-391-1980 or 800-304-9745 if you have
questions about the requirements for redemption requests.
REDEMPTION PAYMENTS
Payment for the shares redeemed will be made as soon as possible, but no
later than seven days after the date of the receipt of your redemption request
in good order. Payment will normally be made by check. Payment may also be made
by wire transfer in accordance with wire instructions provided in writing to the
Funds accompanied by a signature guarantee. The Weitz Funds reserves the right
to require you to pay for the cost of transmitting the wire transfer. Your bank
may also impose a charge to receive the wire transfer.
A redemption of shares is treated as a sale for tax purposes and, for the
Value, Fixed Income and Hickory Funds, will generally result in a short-term or
long-term capital gain or loss, depending on how long you have owned the shares.
SIGNATURE GUARANTEES
The Weitz Funds reserves the right to require a signature guarantee on all
redemptions. Signature guarantees WILL BE REQUIRED in the following
circumstances:
- - A redemption request which is payable to anyone other than the shareholder of
record;
-18-
<PAGE>
- - A redemption request which is to be mailed to an address other than the
address of record;
- - A redemption request which is payable to a bank account other than the bank
account of record; and
- - Instructions to establish or change wire instructions.
A SIGNATURE-GUARANTEED REQUEST MAY NOT BE SENT BY FACSIMILE.
A SIGNATURE GUARANTEE MUST BE OBTAINED FROM AN INSTITUTION PARTICIPATING IN
THE SECURITIES TRANSFER AGENT MEDALLION PROGRAM. SUCH INSTITUTIONS TYPICALLY
INCLUDE COMMERCIAL BANKS THAT ARE FDIC MEMBERS, TRUST COMPANIES, AND MEMBER
FIRMS OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC IS NOT AN ELIGIBLE
GUARANTOR.
OTHER REDEMPTION INFORMATION
Redemption payments normally will be made wholly in cash. A Fund may,
however, redeem its shares through the distribution of portfolio securities if
and to the extent that redemptions by the same shareholder during any 90-day
period exceed the lesser of (i) $250,000, or (ii) one percent of the net assets
of the respective Fund at the beginning of the period. Shareholders whose shares
are redeemed in kind may be subject to brokerage commissions or other
transaction charges upon the resale of the distributed securities.
The Funds may suspend redemption privileges or postpone payment at times
when the New York Stock Exchange is closed for other than weekends or holidays,
or under emergency circumstances as permitted by the U. S. Securities and
Exchange Commission.
-19-
<PAGE>
- --------------------------------------------------------------------------------
EXCHANGING SHARES
You can exchange shares of one Fund for shares of another Fund or for shares
of Weitz Partners, Inc.--Partners Value Fund. EXCHANGES WILL ONLY BE MADE
BETWEEN ACCOUNTS WITH IDENTICAL REGISTRATIONS. The ability to initiate such
exchanges by telephone is automatically established on your account unless you
request otherwise. You can request the exchange of shares by telephone or in
writing in the following manner:
- - If you are exchanging for shares of Partners Value Fund and do not currently
have an account in Partners Value Fund you can request a Prospectus for that
fund by calling 402-391-1980 or 800-232-4161;
- - The shares being acquired must be qualified for sale in your state of
residence;
- - Provide the name of the Fund, the account name, your address and account
number and the dollar amount of shares to be exchanged.
You should be aware that although there are no sales commissions or other
transaction fees related to exchanging shares, such an exchange involves the
redemption of shares from a Fund and the purchase of shares of the other Fund or
Partners Value Fund and any gain or loss on the redemption will be reportable on
your tax return. The price for the shares being exchanged will be the net asset
value of the shares next determined after your exchange request is received.
The Weitz Funds will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, which will include use of
specific identifying information. When such procedures are followed, the Weitz
Funds will not be liable for losses caused by following telephone instructions
which are reasonably believed to be genuine. The Weitz Funds reserve the right
to revise or terminate the telephone exchange privilege at any time.
YOU SHOULD PURCHASE SHARES OF THE FUNDS ONLY IF YOU INTEND TO BE A PATIENT
LONG-TERM INVESTOR. The exchange privilege is offered as a convenience to
shareholders and is not intended to be a means of speculating on short-term
movements in securities prices. The Weitz Funds reserve the right at any time
upon sixty days' prior notice to suspend, limit, modify or terminate exchange
privileges in order to prevent transactions considered to be harmful to existing
shareholders.
-20-
<PAGE>
- --------------------------------------------------------------------------------
PRICING OF SHARES
Each Fund's net asset value per share is determined once each day as of the
close of trading on the New York Stock Exchange (ordinarily 3:00 p.m. Central
Time) on days on which the New York Stock Exchange is open for business.
Currently the New York Stock Exchange and the Fund are closed for business on
the following holidays (or on the nearest Monday or Friday if the holiday falls
on a weekend):
- New Year's Day
- Martin Luther King, Jr. Day
- Presidents' Day
- Good Friday
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving
- Christmas
The net asset value of the Value, Fixed Income and Hickory Funds is
generally based on the market value of the securities in the respective Fund. If
market values are not available, the fair value of securities is determined
using procedures approved by the Funds' Board of Directors.
The securities in the Government Money Market Fund are valued on an
amortized-cost basis. Under this method of valuation, each security is initially
valued at its acquisition cost, and thereafter, amortization of any discount or
premium is assumed each day, regardless of the impact of fluctuating interest
rates on the market value of the security. Weitz & Co. believes that under most
conditions it will be possible to maintain the net asset value of the Government
Money Market Fund at $1.00 per share. Periodic calculations are made to compare
the value of the securities the Fund owns valued at amortized cost with the
market values of such securities. If a deviation of 1/2 of 1% or more were to
occur between the net asset value calculated by reference to market values and
the Fund's per share net asset value, or if there were any other deviation that
the Board of Directors of the Funds believed would result in a material dilution
to shareholders, the Board of Directors would promptly consider what action, if
any, should be initiated.
-21-
<PAGE>
- --------------------------------------------------------------------------------
DISTRIBUTIONS AND TAXES
SHAREHOLDER DISTRIBUTIONS
You will receive dividends from the Funds which are your share of a Fund's
net income and gain on its investments. Each Fund passes substantially all of
its earnings along to its shareholders in the form of dividends. Dividends for
the Value Fund and the Hickory Fund are generally paid in June and December of
each year. Dividends for the Fixed Income Fund are generally paid quarterly. The
Government Money Market Fund declares dividends each business day. Dividends in
the Government Money Market Fund are accrued to your account each business day
and reinvested or distributed in cash within five days of the first business day
of the following month.
You will receive your distributions from a Fund in additional shares of the
Fund unless you choose to receive your distribution in cash. If you wish to
change your instructions, you must notify the Weitz Funds in writing. Cash
payment of distributions, if requested, will generally be mailed within five
days of the date such distributions are paid. If you have elected to receive
distributions in cash and your check is returned as undeliverable, you will not
receive interest on amounts represented by the uncashed check.
TAXATION OF DISTRIBUTIONS
Dividends and distributions paid by the Funds are taxable to most investors
(unless your investment is in an IRA or other tax-advantaged account).
Distributions are taxable regardless of how long you have owned shares of a Fund
and whether your distributions are reinvested in shares of a Fund or paid to you
in cash. Distributions that are derived from net long-term capital gains from
the sale of securities a Fund owned for more than 12 months generally will be
taxed as long-term capital gains. All other distributions, including short-term
capital gains, generally will be taxed as ordinary income. The Fixed Income Fund
and the Government Money Market Fund expect that their distributions will
consist primarily of ordinary income.
Early each calendar year the Weitz Funds will send you the information you
will need to report on your tax return the amount and type of dividends and
distributions you receive.
TAXATION OF SALES AND EXCHANGES
If you sell shares of a Fund or exchange shares of a Fund for shares of
another Fund or for shares of the Partners Value Fund, you will be taxed on the
amount of any gain. The gain will generally be determined by subtracting your
tax basis in the shares from the redemption proceeds or the value of shares
received. Your tax basis will depend on the original purchase price you paid and
the price at which any dividends may have been reinvested. You should keep your
annual account statements so that you or your tax advisor will be able to
properly determine the amount of any taxable gain.
BUYING SHARES PRIOR TO A DISTRIBUTION
You should consider the tax implications of buying shares of the Value Fund,
Hickory Fund or Fixed Income Fund immediately prior to a distribution. If you
purchase shares shortly before the record date for a distribution, you will pay
a price for such shares that includes the value of the anticipated distribution
and you will be taxed on the distribution when it is received even though the
distribution represents a return of a portion of the purchase price.
-22-
<PAGE>
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MANAGEMENT
INVESTMENT ADVISER
Wallace R. Weitz & Company ("Weitz & Co.") is the Funds' investment adviser.
Weitz & Co. is located at One Pacific Place, 1125 South 103rd Street, Suite 600,
Omaha, Nebraska 68124. Weitz & Co. provides investment advice to each Fund and
is responsible for the overall management of the Funds' business affairs,
subject to the supervision of the Funds' Board of Directors. Weitz & Co. is a
Nebraska corporation formed in March, 1983 and also serves as investment adviser
to Weitz Partners, Inc., three investment limited partnerships and certain
individual accounts.
Weitz & Co. receives an annual investment management fee equal to 1% of the
average daily net assets of the Value Fund and the Hickory Fund and .5% of the
average daily net assets of the Fixed Income Fund and the Government Money
Market Fund. Each Fund pays all expenses directly attributable to it. Weitz &
Co. has voluntarily agreed to reimburse the Value Fund and the Hickory Fund or
to pay directly a portion of the respective Fund's expenses to the extent of the
advisory fee paid if expenses, excluding taxes, interest and brokerage
commissions, exceed 1.50% of the respective Fund's annual average net assets.
Weitz & Co. has also agreed to reimburse the Fixed Income Fund and the
Government Money Market Fund or to pay directly for a portion of the respective
Fund's operating expenses to the extent of the advisory fee paid if the total of
such expenses exceeds 1% of the respective Fund's annual average net assets.
Weitz & Co. also provides administrative services to each Fund pursuant to
an Administration Agreement which provides that the Funds will pay Weitz & Co. a
monthly administrative fee based on the average daily net assets of the Funds.
Weitz & Co. has contracted with National Financial Data Services, Inc. to
serve as sub-transfer agent for the Funds.
PORTFOLIO MANAGERS
Wallace R. Weitz is primarily responsible for the day-to-day management of
the Value Fund's portfolio. Mr. Weitz, a Chartered Financial Analyst, has been
portfolio manager for the Fund since its inception. Prior to founding the
investment adviser in 1983, he served as an account executive and securities
analyst with G.A. Saxton & Co., Inc. (1970-1973) and with Chiles Heider & Co.
(1973-1983).
Richard F. Lawson is primarily responsible for the day-to-day management of
the Hickory Portfolio. Mr. Lawson, a vice president of Weitz & Co. and a
Chartered Financial Analyst, is a graduate of the Harvard Business School and
has previously been associated with Temple, Barker & Sloan, a management
consulting firm. Mr. Lawson has been an analyst with Weitz & Co. since March,
1991 and a vice president since December, 1992.
Mr. Weitz and Thomas D. Carney are primarily responsible for the day-to-day
management of the Fixed Income and Government Money Market Funds. Mr. Carney,
who was previously a municipal securities analyst with Smith Barney, joined
Weitz & Co. as a fixed income analyst and securities trader in February, 1995
and became a co-portfolio manager for the Fixed Income Fund and Government Money
Market Fund in January, 1996. Mr. Weitz has managed the Fixed Income Fund since
its inception in 1988 and the Government Money Market Fund since its inception
in 1991.
FUND DISTRIBUTOR
The Funds are distributed by Weitz Securities, Inc., a Nebraska corporation
which is affiliated with Weitz & Co., the Funds' investment adviser. Shares of
each Fund are sold without any sales commissions or other transaction fees.
Weitz Securities, Inc. pays any sales or promotional costs incurred in
connection with the sale of the Funds' shares.
-23-
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ADDITIONAL INFORMATION
CODE OF ETHICS
The Funds and Weitz & Co. have each adopted a written Code of Ethics which,
among other things:
- - Requires all employees to obtain preclearance before executing any personal
securities transactions;
- - Requires all employees to report their personal securities transactions at the
end of each quarter;
- - Restricts employees from executing personal trades in a security if there are
any pending orders in that security by a Fund;
- - Restricts portfolio managers from executing personal trades in a security for
a period of seven days before and seven days after a transaction in that
security by any fund managed by that portfolio manager; and
- - Prohibits employees from profiting from the purchase and sale of the same
security within a period of 60 days.
The Funds' Board of Directors reviews the administration of the Code of
Ethics annually and may impose penalties for violations of the Code.
YEAR 2000
The Funds rely extensively on various computer systems in carrying out their
business activities, including the computer systems of its service providers
such as Weitz & Co., the Fund's investment adviser and administrator and Norwest
Bank Minnesota, N.A., the Funds' custodian. The Funds are aware of the "Year
2000 Issue" involving potential problems for computer system users after
December 31, 1999, when computers using date-sensitive software must be able to
properly identify the Year 2000 in their systems. The failure to make the proper
identification of the Year 2000 could result in a system failure or
miscalculations causing disruptions of operations such as pricing errors and
account maintenance failures.
Weitz & Co. has developed a plan to address the Year 2000 Issue. The plan
has been reviewed by the management of Weitz & Co. and the Funds' Board of
Directors. Weitz & Co.'s network is comprised of a single file server and
individual workstations with desktop machines, related peripherals and software
developed by third parties, including a combination of off-the-shelf
applications and accounting or industry specific applications developed by third
party vendors. Weitz & Co. has no internally developed or modified software
applications. Weitz & Co. has recently replaced or expanded the majority of its
network. These changes have all been effected with the Year 2000 Issue in mind.
Weitz & Co. has been in communication with critical third party service
providers who have provided assurances that they are either Year 2000 compliant
or are in the final stages of testing. As Weitz & Co. makes certain changes in
the third party service providers, Weitz & Co. is making inquiries and obtaining
assurances about the Year 2000 readiness of such providers.
The companies in which the Funds invest may also be affected by Year 2000
issues. Weitz & Co. intends to review the disclosure included in regular filings
with the Securities and Exchange Commission for certain of those companies in
which the Funds have a significant investment. In addition, Weitz & Co. receives
and will continue to receive Year 2000 readiness information from securities
analysts and from certain of the issuing companies themselves. The Funds have no
reason to believe that these steps will not be sufficient to avoid any material
adverse impact on the Funds, although there can be no assurance of this. The
costs or consequences of incomplete or untimely resolution of the Year 2000
Issue are unknown to the Funds, Weitz & Co. and its service providers at this
time, but could have a material adverse impact on the operations of the Funds,
Weitz & Co. and its service providers.
-24-
<PAGE>
FUND CUSTODIAN
Norwest Bank Minnesota, N.A., Sixth and Marquette, Minneapolis, Minnesota
55479-0001, is the Custodian for the Funds.
FUND AUDITOR
PricewaterhouseCoopers, LLP, 1177 Avenue of the Americas, New York, New York
10036, is the independent certified public accountant and auditor for the Funds.
FUND LEGAL COUNSEL
Dechert Price & Rhoads, 1775 Eye Street N.W., Washington, DC 20006-2401 is
the Funds' legal counsel.
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- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--VALUE FUND
The financial highlights table is intended to help you understand the
Value Fund's financial performance for the past 5 years. Certain information
reflects financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions). The table
is part of the Value Fund's financial statements, which are included in its
annual report and are incorporated by reference into the Statement of Additional
Information of Weitz Series Fund, Inc. (available upon request). The financial
statements in the annual report were audited by McGladrey & Pullen, LLP, the
Funds' independent accountants.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD: $ 29.31 $ 20.99 $ 19.46 $ 15.55 $ 15.68
------------ ------------ ------------ ------------ ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.27 0.22 0.18 0.16 0.15
Net gains or losses on securities (realized and
unrealized) 4.62 11.02 2.58 5.25 0.45
------------ ------------ ------------ ------------ ------------
Total from investment operations 4.89 11.24 2.76 5.41 0.60
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.17) (0.31) (0.13) (0.42) --
Distributions from realized gains (3.01) (2.61) (1.10) (1.08) (0.73)
------------ ------------ ------------ ------------ ------------
Total distributions (3.18) (2.92) (1.23) (1.50) (0.73)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 31.02 $ 29.31 $ 20.99 $ 19.46 $ 15.55
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
TOTAL RETURN 18.0% 58.8% 14.3% 35.9% 4.1%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) $1,691,031 $448,276 $275,597 $170,509 $118,776
Ratio of expenses to average net assets 1.26% 1.27% 1.29% 1.35% 1.42%
Ratio of net investment income to average net
assets 1.35% 0.87% 0.93% 0.91% 1.06%
Portfolio turnover rate 36% 39% 39% 40% 28%
</TABLE>
-26-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--HICKORY FUND
The financial highlights table is intended to help you understand the
Hickory Fund's financial performance for the past 5 years. Certain information
reflects financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions). The table
is part of the Hickory Fund's financial statements, which are included in its
annual report and are incorporated by reference into the Statement of Additional
Information of Weitz Series Fund, Inc. (available upon request). The financial
statements in the annual report were audited by McGladrey & Pullen, LLP, the
Funds' independent accountants.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996++ 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 29.41 $ 18.90 $ 15.56 $ 11.26 $ 12.23
------------ ------------ ------------ ------------ ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.11 (0.01) 0.05 -- (0.01)
Net gains or losses on securities (realized and
unrealized) 4.96 12.50 4.33 4.50 (0.51)
------------ ------------ ------------ ------------ ------------
Total from investment operations 5.07 12.49 4.38 4.50 (0.52)
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.10) (0.07) -- (0.14) --
Distributions from realized gains (0.44) (1.91) (1.04) (0.06) (0.45)
------------ ------------ ------------ ------------ ------------
Total distributions (0.54) (1.98) (1.04) (0.20) (0.45)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 33.94 $ 29.41 $ 18.90 $ 15.56 $ 11.26
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
TOTAL RETURN 17.4% 71.8% 28.2% 40.6% (4.2%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) $ 638,763 $ 44,328 $ 12,221 $ 6,658 $ 3,619
Ratio of net expenses to average net assets 1.30% 1.46% 1.50%+ 1.50%+ 1.50%
Ratio of net investment income (loss) to average
net assets 0.48% (0.13%) 0.33% 0.02% (0.17%)
Portfolio turnover rate 40% 29% 28% 28% 20%
</TABLE>
+ Absent voluntary waivers, the expense ratio would have been 1.56% for the
year ended March 31, 1997, and 1.61% for the year ended March 31, 1996.
++ Calculated using average daily shares.
-27-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--FIXED INCOME FUND
The financial highlights table is intended to help you understand the
Fixed Income Fund's financial performance for the past 5 years. Certain
information reflects financial results for a single fund share. The total
returns in the table represent the rate that an investor would have earned on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). The table is part of the Fixed Income Fund's financial
statements, which are included in its annual report and are incorporated by
reference into the Statement of Additional Information of Weitz Series Fund,
Inc. (available upon request). The financial statements in the annual report
were audited by McGladrey & Pullen, LLP, the Funds' independent accountants.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.26 $ 10.77 $ 10.90 $ 10.61 $ 10.78
------------ ------------ ------------ ------------ ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.66 0.65 0.66 0.65 0.67
Net gains or losses on securities (realized and
unrealized) (0.04) 0.47 (0.11) 0.31 (0.23)
------------ ------------ ------------ ------------ ------------
Total from investment operations 0.62 1.12 0.55 0.96 0.44
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.66) (0.63) (0.68) (0.67) (0.61)
Distributions from realized gains -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Total distributions (0.66) (0.63) (0.68) (0.67) (0.61)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 11.22 $ 11.26 $ 10.77 $ 10.90 $ 10.61
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
TOTAL RETURN 5.7% 10.7% 5.2% 9.2% 4.4%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) $ 36,314 $ 30,334 $ 22,349 $ 16,901 $ 11,824
Ratio of net expenses to average net assets+ 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net
assets 5.91% 6.18% 6.30% 6.18% 6.16%
Portfolio turnover rate 26% 21% 24% 28% 49%
</TABLE>
+ Absent voluntary waivers, the expense ratio would have been 0.86%, 0.91%,
0.93% and 0.95% for the years ended March 31, 1999, 1998, 1997 and 1996,
respectively.
-28-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--GOVERNMENT MONEY MARKET FUND
The financial highlights table is intended to help you understand the
Government Money Market Fund's financial performance for the past 5 years.
Certain information reflects financial results for a single fund share. The
total returns in the table represent the rate that an investor would have earned
on an investment in the Fund (assuming reinvestment of all dividends and
distributions). The table is part of the Government Money Market Fund's
financial statements, which are included in its annual report and are
incorporated by reference into the Statement of Additional Information of Weitz
Series Fund, Inc. (available upon request). The financial statements in the
annual report were audited by McGladrey & Pullen, LLP, the Funds' independent
accountants.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.04
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.05) (0.05) (0.05) (0.04)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
TOTAL RETURN 4.7% 5.1% 4.8% 5.2% 4.2%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) $ 33,157 $ 8,330 $ 5,820 $ 4,142 $ 2,669
Ratio of net expenses to average net assets+ 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net
assets 4.47% 4.95% 4.71% 4.95% 4.18%
</TABLE>
+ Absent voluntary waivers, the expense ratio would have been 1.03%, 1.12%,
1.15% and 1.14% for the years ended March 31, 1999, 1998, 1997 and 1996,
respectively.
-29-
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
WEITZ SERIES FUND, INC.
Value Fund
Hickory Fund
Fixed Income Fund
Government Money Market Fund
------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
JULY 30, 1999
This Statement of Additional Information is not a Prospectus. This Statement of
Additional Information relates to the Prospectus of Weitz Series Fund, Inc.
dated July 30, 1999. The financial statements of the individual series of Weitz
Series Fund, Inc., including the Value Fund, Hickory Fund, Fixed Income Fund and
Government Money Market Fund (each, a "Fund") for the period ended March 31,
1999 included in each Fund's Annual Report are incorporated by reference into
this Statement of Additional Information. Copies of the Annual Reports and the
Prospectus may be obtained from the Company without charge by calling 1-800-232-
4161 or by contacting the Company at 1125 South 103rd Street, Suite 600, Omaha,
Nebraska 68124-6008.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Investment Objective, Policies and Restrictions-
Value and Hickory Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Investment Objective and Strategy. . . . . . . . . . . . . . . . . . . . . .3
Securities and Other Investment Practices. . . . . . . . . . . . . . . . . .4
Fundamental Investment Restrictions. . . . . . . . . . . . . . . . . . . . .8
Investment Objective, Policies and Restrictions-
Fixed Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Investment Objective and Strategy. . . . . . . . . . . . . . . . . . . . . .9
Securities and Other Investment Practices. . . . . . . . . . . . . . . . . 10
Fundamental Investment Restrictions. . . . . . . . . . . . . . . . . . . . 13
Investment Objective, Policies and Restrictions-
Government Money Market Fund. . . . . . . . . . . . . . . . . . . . . . . . . . 16
Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Investment Objective and Strategy. . . . . . . . . . . . . . . . . . . . . 16
Fundamental Investment Restrictions. . . . . . . . . . . . . . . . . . . . 16
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Management of the Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Directors and Officers of the Company. . . . . . . . . . . . . . . . . . . 19
Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Principal Holders of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 21
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . . . . . 22
Investment Adviser and Distributor . . . . . . . . . . . . . . . . . . . . 22
Administrator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Sub-Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legal Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Portfolio Transactions and Brokerage Allocation. . . . . . . . . . . . . . . . . . 25
Organization and Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . 26
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Shareholder Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Pricing of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Calculation of Performance Data. . . . . . . . . . . . . . . . . . . . . . . . . . 30
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Appendix A-
Ratings of Corporate Obligations and Commercial Paper . . . . . . . . . . . . . 33
Appendix B-
Interest Rate Futures Contracts, Bond Index Futures and Related Options . . . . 36
</TABLE>
2
<PAGE>
FUND HISTORY
Weitz Series Fund, Inc. (the "Company") is a Minnesota corporation whose shares
are offered in series with each series representing a separate fund of
investments with its own investment objectives, policies and restrictions. At
the present time four series are authorized, the Value Fund, the Hickory Fund,
the Fixed Income Fund and the Government Money Market Fund (each, a "Fund").
The Hickory Fund is closed to new investors.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS-
VALUE AND HICKORY FUNDS
CLASSIFICATION
The Value Fund is a diversified, open-end investment management company as
defined in the Investment Company Act of 1940. The Hickory Fund is a
nondiversified, open-end investment management company as defined in the
Investment Company Act of 1940. Because the Hickory Fund is nondiversified, it
may, with respect to 50% of its total assets, concentrate its investments by
investing more than 5% of its total assets in the securities of any one issuer.
As a result, its shares may be more susceptible to adverse changes in the value
of the securities of a particular company.
INVESTMENT OBJECTIVE AND STRATEGY
The investment objective of the Value Fund and the Hickory Fund is capital
appreciation. Each of the Funds seeks to achieve its objective by investing
primarily in common stocks and a variety of securities convertible into common
stocks such as rights, warrants, convertible preferred stocks and convertible
bonds. The Funds may also invest in other securities of a company not
convertible into common stock, such as bonds and preferred stock, which Wallace
R. Weitz & Company ("Weitz & Co."), the Funds' investment adviser determines may
offer the opportunity for capital appreciation. Such securities may be
investment grade, non-investment grade or unrated. The receipt of income is
considered a secondary objective, as some investments may yield dividends,
interest or other income.
Each Fund's strategy (which is called "value investing") is to (1) identify
attractive businesses that the investment adviser can understand and which have
honest, competent management, (2) estimate the price that an informed, rational
buyer would pay for 100% of that business, and then (3) buy securities of the
business if they are available at a significant discount to this "business
value" or "private market value." The valuation process may focus on asset
values, earning power, the intangible value of a company's "franchise," or a
combination of these variables, depending on the type of business and other
factors. Purchasing securities at a discount to value is intended to provide
what Benjamin Graham called a "margin of safety." The margin of safety does not
eliminate risk, but it is intended to reduce the likelihood of permanent loss of
capital.
The Funds have, however, adopted a policy which allows each Fund to invest for
temporary defensive purposes a portion or all of its assets in high quality
nonconvertible preferred stock,
3
<PAGE>
high quality nonconvertible debt securities and high quality United States
Government, state and municipal and governmental agency and instrumentality
obligations, or retain funds in cash or cash equivalents, such as money market
fund shares when Weitz & Co. believes that prevailing market or economic
conditions warrant such a temporary defensive investment position. Securities
issued or guaranteed by the United States Government may include, for example,
treasury bills, notes and bonds which are direct obligations of the United
States Government. Obligations issued or guaranteed by United States Government
agencies or instrumentalities may include, for example, those of Federal
Intermediate Credit Banks, Federal Home Loan Banks, the Federal National
Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC),
the Government National Mortgage Association (GNMA) and the Farmers Home
Administration. Such securities will include, for example, those supported by
the full faith and credit of the United States Treasury or the right of the
agency or instrumentality to borrow from the Treasury as well as those supported
only by the credit of the issuing agency or instrumentality. State and
municipal obligations, which can be taxable or tax exempt, may include both
general obligation and revenue obligations, issued for a variety of public
purposes such as highways, schools, sewer and water facilities, as well as
industrial revenue bonds issued by public bodies to finance private commercial
and industrial facilities.
SECURITIES AND OTHER INVESTMENT PRACTICES
The Value Fund and the Hickory Fund have each adopted certain fundamental
investment restrictions and other nonfundamental investment policies which are
discussed below. Fundamental investment restrictions cannot be changed without
a shareholder vote. Nonfundamental investment policies can be changed by a vote
of the Board of Directors of the Company.
CONVERTIBLE SECURITIES In addition to common stocks, each Fund may invest in
other securities having equity features because they are convertible into, or
represent the right to purchase, common stock. Convertible bonds and debentures
are corporate debt instruments, frequently unsecured and subordinated to senior
corporate debt, which may be converted into common stock at a specified price.
Such securities may trade at a premium over their face amount when the price of
the underlying common stock exceeds the conversion price, but otherwise will
normally trade at prices reflecting current interest rate levels.
WARRANTS AND RIGHTS Warrants and rights are options to purchase common stock at
a specified price for a specified period of time. Their trading price will
normally reflect the relationship between the option price and the current
market price of the underlying common stock. If not sold or exercised before
their expiration date they become valueless.
OTHER SECURITIES Although the Funds primarily invest in common stocks and
securities convertible into common stocks, each Fund may also invest in other
securities, including preferred stock and debt securities, which Weitz & Co.
determines may offer the opportunity for capital appreciation. Such securities
may or may not be rated investment grade or may be
4
<PAGE>
unrated. The Funds will not invest more than 15% of their assets in
securities that are non-investment grade or unrated. Generally investment
grade securities are those with a rating of BBB or better by Standard & Poor's
or Baa or better by Moody's. A complete description of the Standard & Poor's
and Moody's ratings of securities is attached as Appendix A.
Securities rated BBB/Baa are considered "investment grade" by the financial
community, but are described by Standard & Poor's and Moody's as "medium grade
obligations" which have "speculative characteristics." The market values of
lower-rated and unrated securities tend to reflect individual corporate
developments to a greater extent than do higher-rated securities, which react
primarily to fluctuations in the general level of interest rates. Lower-rated
and unrated securities also tend to be more sensitive to economic conditions
than are higher-rated securities and thus generally involve more credit risk.
Changes in economic conditions or other circumstances may cause issuers of
lower-rated or unrated securities to have more difficulty making principal and
interest payments than issuers of higher-rated securities.
Changes in the value of lower-rated or unrated securities subsequent to their
acquisition will not affect cash income, but will be reflected in the net asset
value of shares of the Funds. The market for lower-rated or unrated securities
may be less liquid than the market for higher-rated securities. In addition,
the liquidity of these lower-rated or unrated securities may be affected by the
market's perception of their credit quality. Therefore, the judgment of Weitz &
Co. may at times play a greater role in valuing these securities than is the
case with investment grade securities. It also may be more difficult during
times of adverse market conditions to sell lower-rated or unrated securities at
their fair market value to meet redemption requests or to respond to changes in
the market. Although the ratings of established rating agencies may be
considered in evaluating a particular security, Weitz & Co. will not rely
exclusively on such ratings, but will supplement such ratings with its
independent and ongoing review of credit quality. A complete description of the
Standard & Poor's and Moody's ratings of debt securities is attached as Appendix
A.
INVESTMENT COMPANY SHARES The Funds may purchase securities of other investment
companies subject to the restrictions of the 1940 Act. Neither the Value Fund
nor the Hickory Fund intends to purchase any such securities involving the
payment of a front-end sales load, but may purchase shares of investment
companies specializing in securities in which the Funds have a particular
interest or shares of closed-end investment companies which frequently trade at
a discount from their net asset value. Investing in the shares of other
registered investment companies involves the risk that such other registered
investment companies will not achieve their objectives or will achieve a yield
or return that is lower than that of the Funds. Investing in the securities of
other investment companies indirectly results in the investor paying not only
the advisory and related fees to the Funds, but also advisory fees of the other
investment company.
FOREIGN SECURITIES The Funds may purchase foreign securities that are listed on
a principal foreign securities exchange or over-the-counter market, or which are
represented by American Depository Receipts and are listed on a domestic
securities exchange or traded in the United States over-the-counter market. The
Funds may occasionally convert U.S. dollars into foreign currency, but only to
effect securities transactions on a foreign securities exchange and not to hold
such currency as an investment. The Funds will not invest in forward foreign
currency contracts. While neither the Value Fund nor the Hickory Fund have any
present intention to
5
<PAGE>
invest any significant portion of their assets in foreign securities, the Funds
reserve the right to invest not more than 25% of the value of their respective
total assets in the securities of foreign issuers and obligors.
Investors should recognize that investments in foreign companies involve certain
considerations that are not typically associated with investing in domestic
companies. An investment may be affected by changes in currency rates and in
exchange control regulations. Foreign companies are not generally subject to
uniform accounting, auditing and financial reporting standards comparable to
those applicable to domestic companies, and there may be less publicly available
information about a foreign company than about a domestic company. Some foreign
stock markets may have substantially less trading activity than the United
States securities markets, and securities of some foreign companies may be less
liquid than securities of comparable domestic companies. Also, commissions on
transactions in foreign securities may be higher than similar transactions on
domestic stock markets and foreign governments may impose taxes on securities
transactions or ownership. There is generally less governmental regulation of
stock exchanges, brokers, and listed and unlisted companies in foreign countries
than in the United States. In addition, individual foreign economies may differ
favorably or unfavorably from the economy of the United States in such respects
as growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position.
RESTRICTED/ILLIQUID SECURITIES The Funds may invest in securities acquired in a
privately negotiated transaction directly from the issuer or a holder of the
issuer's securities and which, therefore, could not ordinarily be sold by the
Funds except in another private placement or pursuant to an effective
registration statement under the Securities Act of 1933 or an available
exemption from such registration requirements. Neither the Value Fund nor the
Hickory Fund will invest in any such restricted or illiquid securities which
will cause the then aggregate value of all such securities to exceed 15% of the
value of the respective Fund's net assets. Restricted and illiquid securities
will be valued in such manner as the Board of Directors in good faith deems
appropriate to reflect their fair value. The purchase price, subsequent
valuation and resale price of restricted securities normally reflect a discount
from the price at which such securities trade when they are not restricted,
since the restriction makes them less marketable. The amount of the discount
from the prevailing market price will vary depending upon the type of security,
the character of the issuer, the party who will bear the expenses of registering
the restricted securities, and prevailing supply and demand conditions.
COVERED CALL OPTIONS The Funds may write covered call options to generate
premium income which Weitz & Co. considers to be an acceptable investment
result. Covered call options are contracts sold on a national exchange or in
the over-the-counter options market which allow the purchaser to buy the
underlying security at a specified price (the "strike price") prior to a certain
date. "Covered" options are those in which the option seller (the "writer")
owns the underlying securities. Writing covered call options may increase the
income of the Funds since it receives a premium for writing the option. If the
Fund writes covered call options, the underlying securities will be subject to
certain deposit procedures and unavailable for sale during the term of the
option. As a result, the Funds will forego any opportunity for appreciation in
such securities during the term of the option. The Funds may attempt to protect
themselves against a decline in the price of the underlying security or may
attempt to benefit from an anticipated increase in
6
<PAGE>
such price, by closing the covered call position, that is, purchasing an
identical call in the open market. There is no assurance, however, that such
calls will always be available for purchase in the secondary market at a price
which will produce the desired result. The absence of a liquid secondary market
in such securities could result from numerous circumstances, such as
insufficient trading interest, restrictions imposed by exchanges as to options
trading generally or suspensions affecting particular securities, inadequacy of
exchange or clearing corporation facilities or decisions by exchanges to
discontinue or limit operations trading.
BANK OBLIGATIONS The Funds may purchase bank obligations, including negotiable
certificates of deposit and bankers' acceptances, which evidence the banking
institution's obligation to repay funds deposited with it for a specified period
of time at a stated interest rate. The Funds will normally purchase such
obligations from financial institutions which have capital, surplus and
undivided profits in excess of $100,000,000 as of the date of the bank's most
recently published financial statements and financial institutions whose
obligations are insured by the Federal Deposit Insurance Corporation.
Certificates of deposit generally have penalties for early withdrawal, but can
be sold to third parties subject to the same risks as other fixed income
securities.
COMMERCIAL PAPER The Funds may purchase commercial paper which consists of
short-term unsecured promissory notes. The Funds will purchase only commercial
paper either (a) rated Prime 1 by Moody's or A-1 by Standard & Poor's or (b) if
not rated, issued by or guaranteed by companies which have an outstanding debt
issue rated AA or better by Standard & Poor's or Aa or better by Moody's. See
Appendix A for a description of ratings.
WHEN ISSUED OR FORWARD COMMITMENT TRANSACTIONS The Funds may engage in when
issued or forward commitment transactions which involve the purchase or sale of
a security by a Fund with payment and delivery taking place in the future to
secure what is considered an advantageous yield and price to the Fund at the
time of entering into the transaction. To the extent a Fund enters into such
forward commitments, it will maintain a segregated account with an aggregate
value equal to the amount of its commitment in connection with such purchase
transaction.
SHORT SALES, PUT AND CALL OPTIONS The Funds may engage in short sales and buy
put and sell call options. Short sales involve the sale of a security that the
Fund does not own (but instead has borrowed) in anticipation of a decline in the
value of the security. To the extent that either Fund engages in short sales,
the Fund will place in a segregated account a sufficient amount of cash and
securities as required by applicable federal securities regulations in order to
cover the transaction. In the event that the value of the security sold short
increases in value rather than decreases, the Fund would suffer a loss when it
purchases the security sold short. Since there is, theoretically, no limit to
how high the price of the stock might rise, the potential loss from the short
sale is greater than the original proceeds of the short sale. The Funds may
also engage in short sales "against the box." A short sale "against the box"
is a form of short sale in which the Fund contemporaneously owns or has the
right to obtain at no additional cost securities identical to those sold short.
The segregation of cash or other securities is not required for short sales
"against the box." In the event that either Fund were to sell securities short
"against the box"
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and the price of such securities were to then increase rather than decrease, the
Fund would forego the potential realization of the increased value of the shares
sold short.
Options such as puts and calls are contracts giving the holder the right to
either buy or sell a financial instrument at a specified price before a
specified time. Investments in puts and calls involve certain risks including
the risk that since puts and calls are options which have an expiration date,
the Fund could lose the entire cost of those puts and calls which expire
worthless.
FUNDAMENTAL INVESTMENT RESTRICTIONS
The following investment restrictions are fundamental restrictions which cannot
be changed without the approval of a majority of the respective Funds'
outstanding shares. "Majority" means the lesser of (a) 67% or more of a Funds'
outstanding shares voting at a special or annual meeting of shareholders at
which more than 50% of the outstanding shares are represented in person or by
proxy or (b) more than 50% of a Funds' outstanding shares.
Neither the Value Fund nor the Hickory Fund may:
1. Underwrite the securities of other issuers, except the Funds may
acquire restricted securities under circumstances such that, if the
securities are sold, the Funds might be deemed to be an underwriter
for purposes of the Securities Act of 1933.
2. Purchase or sell real estate or interests in real estate, but the
Funds may purchase marketable securities of companies holding real
estate or interests in real estate.
3. Purchase or sell commodities or commodity futures contracts.
4. Issue any senior securities (as defined in the Investment Company Act
of 1940, as amended) other than that as set forth below in restriction
number 6, except to the extent that the Funds are permitted to use
options.
5. Make loans to other persons except by the purchase of a portion of an
issue of publicly distributed bonds, debentures or other debt
securities; provided that the Value Fund may purchase privately sold
bonds, debentures or other debt securities immediately convertible
into equity securities, subject to the restrictions applicable to the
purchase of restricted or illiquid securities.
6. Borrow money except for temporary or emergency purposes and then only
from banks and in an aggregate amount not exceeding 5% of the value of
the respective Fund's net assets at the time any borrowing is made.
7. Purchase securities on margin; provided, however the Funds may obtain
such short-term credits as may be necessary for the clearance of
purchases and sales of securities.
8. Participate on a joint or joint and several basis in any securities
trading account.
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9. Invest in companies for the purpose of exercising management or
control.
10. Invest more than 25% of the value of its net assets in the
securities of any one industry.
11. Adopt any investment objective otherwise than as described under
"Investment Objective and Strategy."
The Value Fund may not:
12. As to 75% of its total assets, invest more than 5% of its total assets
in securities of any one issuer (other than in U.S. Government
securities), nor own more than 10% of the outstanding voting
securities of any one issuer.
The Hickory Fund may not:
12. As to 50% of its total assets, invest more than 5% of its total
assets, taken at market value at the time of a particular purchase, in
securities of any one issuer (other than in U.S. Government
securities), nor own more than 10% of the outstanding voting
securities of any one issuer.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS-
FIXED INCOME FUND
CLASSIFICATION
The Fixed Income Fund is a diversified, open-end investment management company
as defined in the Investment Company Act of 1940.
INVESTMENT OBJECTIVE AND STRATEGY
The investment objective of the Fixed Income Fund is high current income
consistent with preservation of capital. Under normal market conditions, the
Fixed Income Fund will invest at least 65% of the value of its total assets in
fixed income securities. The fixed income securities in which the Fund may
invest include: (1) U.S. Government Securities (bills, notes, bonds, and other
debt securities issued by the U.S. Treasury); (2) U.S. Government Agency
Securities; (3) corporate debt securities; (4) preferred stock; (5) bank
obligations (certificates of deposit and bankers' acceptances); (6) commercial
paper; (7) repurchase agreements on U.S. Government and U.S. Government agency
securities; (8) securities of registered investment companies which invest in
fixed income securities.
Weitz & Co. selects fixed income securities whose yield is sufficiently
attractive taking into consideration the risk of ownership. In deciding whether
the Fund should invest in particular fixed income securities, Weitz & Co.
considers a number of factors such as the price, coupon and yield-to-maturity,
as well as the credit quality of the issuer. In addition, Weitz & Co. reviews
the terms of the fixed income security, including subordination, default,
sinking fund, and early redemption provisions. The Fund may invest up to 15% of
its total assets in securities rated below BBB by Standard & Poor's Corporation
or Baa by Moody's Investor's Service or in unrated securities which Weitz & Co.
determines are of comparable quality to the rated securities
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in which the Fund may invest. Fixed income securities rated below BBB or Baa
are generally known as "junk bonds." The Fund will normally not invest in fixed
income securities which are rated below B or are currently in default. A
complete description of the Standard & Poor's and Moody's ratings of debt
securities is attached as Appendix A.
The market values of lower-rated and unrated securities tend to reflect
individual corporate developments to a greater extent than do higher-rated
securities, which react primarily to fluctuations in the general level of
interest rates. Lower-rated and unrated securities also tend to be more
sensitive to economic conditions than are higher-rated securities and thus
generally involve more credit risk. Changes in economic conditions or other
circumstances may cause issuers of lower-rated or unrated securities to have
more difficulty making principal and interest payments than issuers of higher-
rated securities.
Changes in the value of lower-rated or unrated securities subsequent to their
acquisition will not affect cash income, but will be reflected in the net asset
value of shares of the Fund. The market for lower-rated or unrated securities
may be less liquid than the market for higher-rated securities. In addition,
the liquidity of these lower-rated or unrated securities may be affected by the
market's perception of their credit quality. Therefore, the judgment of Weitz &
Co. may at times play a greater role in valuing these securities than is the
case with investment grade securities. It also may be more difficult during
times of adverse market conditions to sell lower-rated or unrated securities at
their fair market value to meet redemption requests or to respond to changes in
the market. Although the ratings of established rating agencies may be
considered in evaluating a particular security, Weitz & Co. will not rely
exclusively on such ratings, but will supplement such ratings with its
independent and ongoing review of credit quality.
When Weitz & Co. believes that prevailing abnormal market or economic conditions
warrant a temporary defensive investment position, a greater portion or all of
the Fund's portfolio may be retained in cash or cash equivalents, such as money
market shares and repurchase agreements on U.S. Government securities.
SECURITIES AND OTHER INVESTMENT PRACTICES
The Fixed Income Fund has adopted certain fundamental investment restrictions
and other nonfundamental investment policies which are discussed below.
Fundamental investment restrictions cannot be changed without a shareholder
vote. Nonfundamental investment policies can be changed by a vote of the Board
of Directors of the Company.
CONVERTIBLE SECURITIES The Fund may invest in securities convertible into
common stock. Such convertible securities, frequently unsecured and
subordinated to senior corporate debt, may be converted into common stock at a
specified price. Such securities may trade at a premium over their face amount
when the price of the underlying common stock exceeds the conversion price, but
otherwise will normally trade at prices reflecting current interest rate trends.
U.S. GOVERNMENT SECURITIES The Fund may purchase securities issued or
guaranteed by the U.S. Government which may include U.S. Treasury bills, notes
and bonds which are direct obligations of the U.S. Government and obligations of
its agencies and instrumentalities. Obligations issued or guaranteed by the
U.S. Government agencies and instrumentalities include, for example,
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obligations of Federal Intermediate Credit Banks, Federal Home Loan Banks, the
Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage
Corporation (FHLMC), the Government National Mortgage Association (GNMA) and the
Farmers Home Administration. Certain U.S. Government agency securities, such as
those issued by GNMA, FNMA and FHLMC, are mortgage-related securities which
represent an undivided ownership interest in a pool of mortgage loans. Ginnie
Maes, securities issued by GNMA, are interests in pools of mortgage loans
insured by the Federal Housing Administration. Ginnie Maes are backed by the
full faith and credit of the United States Government. Fannie Maes and Freddie
Macs are securities issued by FNMA and FHLMC, respectively. FNMA and FHLMC,
which guarantee payment of principal and interest on Fannie Maes and Freddie
Macs, are federally chartered corporations and act as governmental
instrumentalities under authority granted by Congress. Fannie Maes and Freddie
Macs are not backed by the full faith and credit of the United States
Government; however, their close relationship with the U.S. Government makes
them high-quality securities with minimal credit risk.
Most mortgage-related securities are pass-through securities, which means that
they provide investors with payments consisting of both principal and interest
as the mortgages in the underlying mortgage pool are paid off. The actual yield
of such securities is influenced by the prepayment experience of the mortgage
pool underlying the securities. In periods of declining interest rates,
prepayment for the underlying mortgages tend to increase. If the
higher-yielding mortgages from the pool are prepaid, the yield on the remaining
pool will be reduced and it will be necessary for the Fund to reinvest such
prepayment, presumably at a lower interest rate. Although, depending on the
length of the mortgages in the pool, mortgage-related securities may have a
stated maturity of up to forty years, prepayments on the underlying mortgages
will make the effective maturity of the securities shorter. A security based on
a pool of forty-year mortgages may have an average life as short as two years.
The maturity of mortgage-related securities will be deemed to be the expected
effective maturity of the securities.
BANK OBLIGATIONS The Fund may purchase bank obligations, including negotiable
certificates of deposit and bankers' acceptances which evidence the obligation
of the banking institution to repay funds deposited with it for a specified
period of time at a stated interest rate. Certificates of deposit generally
have penalties for early withdrawal, but can be sold to third parties subject to
the same risks as other fixed income securities.
COMMERCIAL PAPER The Fund may purchase commercial paper which consists of
short-term unsecured promissory notes. The Fund will purchase only commercial
paper rated Prime 1 by Moody's or A-1 by Standard & Poor's, or if not rated,
issued or guaranteed as to payment of principal and interest by companies which
at the date of investment have an outstanding debt issue rated AA or better by
Standard & Poor's or Aa or better by Moody's. See Appendix A for a description
of ratings.
FOREIGN SECURITIES The Fund may purchase foreign securities that are listed on
a principal foreign securities exchange or over-the-counter market, or are
represented by American Depository Receipts which are listed on a domestic
securities exchange or traded in the United States over-the-counter market. The
Fund may occasionally convert U.S. dollars into foreign currency, but only to
effect securities transactions on a foreign securities exchange and not to hold
such currency as an investment. The Fund will not invest in forward foreign
currency contracts.
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While the Fund does not intend to invest any significant portion of its assets
in foreign securities, it reserves the right to invest not more than 5% of the
value of its total assets in the securities of foreign issuers and obligors.
Investors should recognize that investments in foreign companies involve certain
risks that are not typically associated with investing in domestic companies.
An investment may be affected by changes in currency rates and in exchange
control regulations. Foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic companies, and there may be less publicly available
information about a foreign company than about a domestic company. Some foreign
stock markets may have substantially less trading activity than the American
securities markets, and securities of some foreign companies may be less liquid
than securities of comparable domestic companies. Also, commissions on
transactions in foreign securities may be higher than similar transactions on
domestic stock markets and foreign governments may impose taxes on securities
transactions or ownership. There is generally less governmental regulation of
stock exchanges, brokers, and listed and unlisted companies in foreign countries
than in the United States. In addition, individual foreign economies may differ
favorably or unfavorably from the economy of the United States in such respects
as growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position.
RESTRICTED/ILLIQUID SECURITIES The Fund may invest in securities acquired in a
privately negotiated transaction directly from the issuer or a holder of the
issuer's securities and which, therefore, could not ordinarily be sold by the
Fund except in another private placement or pursuant to an effective
registration statement under the Securities Act of 1933 or an available
exemption from such registration requirements. The Fund will not invest in any
such restricted or illiquid securities which will cause the then aggregate value
of all such securities to exceed 10% of the value of the Fund's net assets.
Restricted and illiquid securities will be valued in such manner as the Board of
Directors in good faith deems appropriate to reflect their fair value. The
purchase price, subsequent valuation and resale price of restricted securities
normally reflect a discount from the price at which such securities trade when
they are not restricted, since the restriction makes them less marketable. The
amount of the discount from the prevailing market price will vary depending upon
the type of security, the character of the issuer, the party who will bear the
expenses of registering the restricted securities, and prevailing supply and
demand conditions.
WHEN ISSUED OR FORWARD COMMITMENT The Fund may engage in when issued or forward
purchase transactions which involve the purchase or sale of a security by the
Fund with payment and delivery taking place in the future to secure what is
considered an advantageous yield and price to the Fund at the time of entering
into the transaction. To the extent the Fund enters into such forward
commitments, it will maintain a segregated account with an aggregate value equal
to the amount of its commitment in connection with such purchase transactions.
INVESTMENT COMPANY SHARES The Fund may purchase securities of other open or
closed end investment companies registered under the 1940 Act. Investing in the
shares of other registered investment companies involves the risk that such
other registered investment companies will not achieve their objectives or will
achieve a yield or return that is lower than that of the Fund. Investing in the
shares of other registered investment companies indirectly results in the
investor
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paying not only the advisory fee and related fees charged by the Fund, but also
the advisory and related fees charged to the other investment companies. The
Fund will only invest in investment company securities to the extent allowed by
the 1940 Act or the fundamental investment restrictions for the Fund.
SHORT SALES The Fund may engage in short sales "against the box." A short sale
"against the box" is a form of short sale in which the Fund contemporaneously
owns or has the right to obtain at no additional cost securities identical to
those sold short. The segregation of cash or other securities is not required
for short sales "against the box." In the event that the Fund were to sell
securities short "against the box" and the price of such securities were to then
increase rather than decrease, the Fund would forego the potential realization
of the increased value of the shares sold short.
REPURCHASE AGREEMENTS The Fund may invest in repurchase agreements on U.S.
Government Securities. Repurchase agreements involve the purchase of U.S.
Government Securities and a simultaneous agreement with the seller to
"repurchase" the securities at a specified price and time, thereby determining
the yield during the purchaser's holding period. This results in a fixed rate
of return insulated from market fluctuations during such period. Repurchase
agreements usually are for short periods, such as one week. If a repurchase
agreement is construed to be a collateralized loan, the underlying securities
will not be considered to be owned by the Fund but only constitute collateral
for the seller's obligation to pay the repurchase price and, in the event of a
default by the seller, the Fund may suffer delays and incur costs or losses in
connection with the disposition of the collateral. A repurchase agreement may
involve certain risks not associated with a direct purchase of U.S. Government
Securities. For example, the bank or broker selling the repurchase agreement
may default on its obligations to deliver additional securities or to maintain
the value of collateral underling the repurchase agreement or it may fail to
repurchase the underlying securities at a time when the value has declined. The
Fund may incur a loss as a result of such default if the liquidation of the
collateral results in proceeds less than the repurchase price. In an effort to
minimize such risks, the Fund will only enter into repurchase agreements with
member banks of the Federal Reserve with assets, surplus and undivided profits
of $100,000,000 or more or recognized regional or national securities dealers.
INTEREST RATE FUTURES, BOND INDEX FUTURES, AND RELATED OPTIONS THEREON The
Fixed Income Fund may utilize interest rate futures and index futures and
related options. See Appendix B hereto for a general discussion of Interest
Rate Futures, Bond Index Futures and Related Options and the risks thereof.
FUNDAMENTAL INVESTMENT RESTRICTIONS
The following investment restrictions are fundamental restrictions which cannot
be changed without the approval of a majority of the Fund's outstanding shares.
"Majority" means the lesser of (a) 67% or more of the Fund's outstanding shares
voting at a special or annual meeting of shareholders at which more than 50% of
the outstanding shares are represented in person or by proxy or (b) more than
50% of the Fund's outstanding shares.
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The Fixed Income Fund may not:
1. Invest 25% or more of the value of its total assets in the securities
of issuers conducting their principal business activities in any one
industry. This restriction does not apply to securities of the U.S.
Government or its agencies and instrumentalities and repurchase
agreements relating thereto. The various types of utilities
companies, such as gas, electric, telephone, telegraph, satellite and
microwave communications companies, are considered as separate
industries.
2. Invest more than 5% of the value of its total assets in the securities
of any issuers which, with their predecessors, have a record of less
than three years' continuous operation. (Securities of such issuers
will not be deemed to fall within this limitation if they are
guaranteed by an entity in continuous operation for more than three
years. The value of all securities issued or guaranteed by such
guarantor and owned by the Fund shall not exceed 10% of the value of
the total assets of the Fund.)
3. Issue any senior securities (as defined in the Investment Company Act
of 1940, as amended), other than as set forth in restriction number 4
below and except to the extent that using options and futures
contracts may be deemed to constitute issuing a senior security.
4. Borrow money except from banks for temporary or emergency purposes and
then only in an amount not exceeding 5% of the value of the Fund's net
assets at the time any borrowing is made.
5. Mortgage, pledge or hypothecate its assets except in an amount not
exceeding 10% of the value of its total assets to secure temporary or
emergency borrowing. For purposes of this policy, collateral
arrangements for margin deposits on futures contracts or with respect
to the writing of options are not deemed to be a pledge of assets.
6. Make short sales of securities or maintain a short position; except
that the Fund may make short sales against the box or maintain short
positions if at all times when a short position is open the Fund owns
an equal amount of identical securities equal in amount to the
securities sold short; no more than 10% of the Fund's net assets
(taken at current value) will be held as collateral for such short
sales at any one time. (A short position in a futures contract is not
considered a short sale for this purpose.)
7. Purchase any securities on margin except to obtain such short-term
credits as may be necessary for the clearance of transactions and
except that the Fund may make margin deposits in connection with
futures contracts.
8. Write, purchase or sell puts, calls and purchase and sell puts and
calls or bond index futures except as bona fide hedging activities as
described in Appendix B hereto.
9. Invest for the purpose of exercising control or management.
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10. Purchase or sell commodities or commodity futures contracts, except
that the Fund may purchase and sell interest rate futures, bond index
futures and options thereon for bona fide hedging purposes.
11. Purchase or sell real estate or real estate mortgage loans, except
that the Fund may invest in securities secured by real estate or
interests therein or issued by companies that invest in real estate or
interests therein.
12. Purchase or sell oil, gas or other mineral leases, rights or royalty
contracts, except that the Fund may purchase or sell securities of
companies investing in the foregoing.
13. Participate on a joint or a joint and several basis in any securities
trading account (as prohibited by Section 12(a)2 of the Investment
Company Act of 1940) except to the extent that the staff of the
Securities and Exchange Commission may in the future grant exemptive
relief therefrom.
14. Act as an underwriter of securities of other issuers, except the Fund
may acquire restricted securities under circumstances such that, if
the securities are sold, the Fund might be deemed an underwriter for
purposes of the Securities Act of 1933.
15. Invest more than 10% of the Fund's net assets in (i) restricted
securities and other illiquid assets, such as securities with no
readily available market quotation or (ii) repurchase agreements with
maturities of more than seven days.
16. Invest more than 5% of its total assets in foreign securities.
17. Purchase the securities of other investment companies, except as
provided by Section 12(d)(1)(F) of the Investment Company Act of 1940,
in the open market where to the best information of Weitz & Co. no
commission, profit, or sales load to a sponsor or dealer (other than
the customary broker's commission) results from such a purchase and
where immediately after such purchase or acquisition (i) not more than
3% of the total outstanding stock of such issuer is owned by the Fund
and all affiliated persons of the Fund, (ii) no issuer of a security
acquired by the Fund pursuant to this restriction is obligated to
redeem such security in an amount exceeding 1% of the issuer's total
outstanding securities during any period of less than 30 days, and
(iii) the purchase of such securities does not exceed 10% of the total
assets of the Fund.
18. As to 75% of its total assets, invest more than 5% of its total
assets, taken at market value at the time of a particular purchase, in
securities of any one issuer (excluding U.S. Government securities),
nor own more than 10% at the time of, and giving effect to, a
particular purchase of the outstanding voting securities of any one
issuer.
19. Make loans to other persons except that the Fund may purchase fixed
income securities and enter into repurchase agreements on U.S.
Government securities.
20. Invest more than 15% of its total assets in (i) securities rated below
BBB by Standard & Poor's or Baa by Moody's, or (ii) unrated securities
which have been determined
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by Weitz & Co. to be of a quality at least equal to the rated securities in
which the Fund is permitted to invest.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS-
GOVERNMENT MONEY MARKET FUND
CLASSIFICATION
The Government Money Market Fund is a diversified, open-end investment
management company as defined in the Investment Company Act of 1940.
INVESTMENT OBJECTIVE AND STRATEGY
The investment objective of the Government Money Market Fund is current income
consistent with the preservation of capital and maintenance of liquidity. The
Fund invests substantially all of its assets (not less than 90%) in debt
obligations with maturities not exceeding 13 months issued or guaranteed by the
U.S. Government and its agencies and instrumentalities and repurchase agreements
thereon. The Fund may invest in obligations which are subject to repurchase
agreements with any member bank of the Federal Reserve System or primary dealer
in U.S. Government securities. As a matter of operating policy, the Fund will
not enter into repurchase agreements with more than seven days to maturity if it
would result in the investment of more than 10% of the value of Fund's assets in
such repurchase agreements. The Fund may purchase such securities on a when
issued or forward commitment basis and will maintain a segregated account with
the custodian of cash or liquid U.S. Government obligations in an aggregate
amount equal to the amount of its commitment in connection with such purchases.
The Fund may invest in reverse repurchase agreements which involve the temporary
transfer of a security in the portfolio of the Fund to another party, such as a
bank or broker dealer, in return for cash, and an agreement to buy the security
back at a future date and price. The Fund can invest the cash it receives or
use it to meet redemption requests. If the Fund reinvests the cash at a rate
higher than the cost of the cost of the agreement, it may earn additional
income. At the same time, the Fund is exposed to greater potential fluctuations
in the value of its assets when engaging in reverse repurchase agreements.
During the time a reverse repurchase agreement is outstanding, the Fund will
maintain cash and liquid securities in a segregated account with a value at
least equal to its obligations under the agreement.
FUNDAMENTAL INVESTMENT RESTRICTIONS
The following investment restrictions are fundamental restrictions which cannot
be changed without the approval of a majority of the Fund's outstanding shares.
"Majority" means the lesser of (a) 67% or more of the Fund's outstanding shares
voting at a special or annual meeting of shareholders at which more than 50% of
the outstanding shares are represented in person or by proxy or (b) more than
50% of the Fund's outstanding shares.
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The Government Money Market Fund may not:
1. Purchase securities except in compliance with Rule 2a-7 under the
Investment Company Act of 1940.
2. Purchase any securities except debt obligations issued or guaranteed
by the U.S. Government, its agencies and instrumentalities, repurchase
and reverse repurchase agreements thereon or the securities of other
registered management investment companies which are sold without a
sales charge and which are "Money Market Funds" complying with Rule
2a-7 of the Investment Company Act of 1940 and which have investment
objectives and policies comparable to those of the Government Money
Market Fund;
3. Underwrite the securities of other issuers;
4. Purchase or sell real estate or investments in real estate;
5. Purchase or sell commodities or commodities futures contracts;
6. Issue any senior securities (as defined in the Investment Company Act
of 1940) other than that as set forth below in restriction number 7.
7. Borrow money (including reverse repurchase agreements) except for
temporary or emergency purposes and then only from banks and in an
aggregate amount not exceeding 5% of the value of the Government Money
Market Fund's net assets at the time any borrowing is made;
8. Purchase securities on margin, except to obtain short term credits as
may be necessary for the clearance of purchases and sales of
securities;
9. Make loans to other persons, except by the purchase of a portion of an
issue of publicly distributed bonds or other debt instruments and
engaging in reverse repurchase agreements;
10. Make short sales of securities or sell puts, calls, straddles, spreads
or combinations thereof;
11. Purchase the securities of other investment companies, except as
provided by Section 12(d)(1)(F) of the Investment Company Act of 1940,
in the open market where to the best information of Weitz & Co. no
commission, profit, or sales load to a sponsor or dealer (other than
the customary broker's commission) results from such a purchase and
where immediately after such purchase or acquisition (i) not more than
3% of the total outstanding stock of such issuer is owned by the
Government Money Market Fund and all affiliated persons of the
Government Money Market Fund, (ii) no issuer of a security acquired by
the Government Money Market Fund pursuant to this restriction is
obligated to redeem such security in an amount exceeding 1% of the
issuer's total outstanding securities during any period of less than
30 days, and
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(iii) the purchase of such securities does not exceed 10% of the total
assets of the Government Money Market Fund;
12. Purchase or sell oil, gas or other mineral leases, rights or royalty
contracts;
13. Pledge, mortgage or hypothecate its assets, except as is necessary to
secure borrowings permitted by restriction number 7 above, so long as
such pledge of securities does not exceed 25% of the value of the
Government Money Market Fund's assets;
14. Invest in securities for the purpose of exercising control;
15. Purchase any security other than obligations of the U.S. Government,
its agencies or instrumentalities, if as a result more than 5% of the
value of the Government Money Market Fund total assets would then be
invested in securities of any single issuer.
16. Invest more than 25% of the value of its net assets in the
securities of any one industry.
PORTFOLIO TURNOVER
The portfolio turnover rate for the Value Fund, Fixed Income Fund and Hickory
Fund is the ratio of the lesser of annual purchases or sales of securities for
the respective Fund to the average monthly value of such securities, excluding
all securities for which the maturity or expiration date at the time of the
acquisition is one year or less. Because the Government Money Market Fund
invests solely in short term securities, portfolio turnover is not relevant. A
100% portfolio turnover rate would occur, for example, if the lesser of the
value of purchases or sales of securities for a particular year were equal to
the average monthly value of the securities owned during such year. The
portfolio turnover rate for the Value Fund for the periods ended March 31, 1999
and March 31, 1998 was 36% and 39%, respectively. The portfolio turnover rate
for the Fixed Income Fund for the periods ended March 31, 1999 and March 31,
1998 was 26% and 21%, respectively. The portfolio turnover rate for the Hickory
Fund for the periods ended March 31, 1999 and March 31, 1998 was 40% and 29%,
respectively. The Funds are not expected to have a portfolio turnover rate in
excess of 100%. The turnover rate will not be a limiting factor when management
deems portfolio changes appropriate. The higher a portfolio's turnover rate,
the higher its expenditures for brokerage commissions and related transaction
costs will be.
MANAGEMENT OF THE FUNDS
BOARD OF DIRECTORS
The Board of Directors of the Company is responsible for managing the business
and affairs of the Funds. There are currently six members of the Board of
Directors. The Board exercises all of the rights and responsibilities required
by, or made available under, Minnesota corporate law.
18
<PAGE>
DIRECTORS AND OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to the officers
and directors of the Company:
*Wallace R. Weitz President, Wallace R. Weitz & Company, a
President, Treasurer registered investment adviser, since July,
and Director 1983; President, Weitz Securities, Inc., a
Age: 50 registered broker-dealer, since January,
1986; President, Treasurer and Director,
Weitz Partners, Inc. since July, 1993;
President, Treasurer and Director, Weitz
Value Fund, Inc., January, 1986 until March,
1990; Account Executive and Financial Analyst
for Chiles, Heider & Co., Inc. (1973-1983)
and for G.A. Saxton & Co., Inc. (1970-1973);
Chartered Financial Analyst and 1970 graduate
of Carleton College with a degree in
Economics
Lorraine Chang Independent Consultant (organizational change
Director strategies--government and non-profit
Age: 48 organizations) since 1995; Associate
Assistant Secretary, United States Department
of Labor (1993-1995); General Manager, Union
Pacific Railroad (1980-1987); Director, Weitz
Partners, Inc. since June, 1997
John W. Hancock Partner, Hancock & Dana (certified public
Director accountants) since its inception in 1985;
Age: 51 Director, Weitz Partners, Inc., since July,
1993; Director, Weitz Value Fund, Inc.,
January, 1986 until March, 1990; Senior Tax
Manager, Peat, Marwick, Mitchell & Co.,
Omaha, Nebraska (1978-1985)
Richard D. Holland Prior to his retirement in 1984, Mr. Holland
Director was Vice Chairman of Rollheiser, Holland &
Age: 78 Kahler, an advertising company (1979-1984)
and President of Holland, Dreves & Reilly, an
advertising company (1954-1979); Director,
Weitz Partners, Inc. since June, 1995
*Thomas R. Pansing, Jr. Partner, Gaines, Mullen, Pansing, Hogan,
Director attorneys, since 1973; Director, Weitz
Age: 54 Partners, Inc. since July 1993; Director,
Weitz Value Fund, Inc., January, 1986 until
March, 1990
19
<PAGE>
Delmer L. Toebben President, Curzon Advertising & Display, Inc.
Director since 1977; Director, Weitz Partners, Inc.
Age: 68 since July of 1996
Mary K. Beerling Vice President, Wallace R. Weitz & Company
Vice President and since July of 1994; Vice President, Weitz
Secretary Securities, Inc. since July of 1994; Partner,
Age: 58 Kutak Rock (attorneys) (1989 to 1994)
Linda L. Lawson Vice President, Wallace R. Weitz & Company
Vice President since June of 1992; Manager, Marketing
Age: 45 Financial Management, Mutual of Omaha (1988-
1992) Linda Lawson is the sister of Richard
F. Lawson.
Richard F. Lawson Vice President, Wallace R. Weitz & Company
Vice President and since December of 1992 and a financial
Assistant Secretary analyst since January of 1991; Portfolio
Age: 41 Manager, Hickory Fund of Weitz Series Fund,
Inc. since 1992; Vice President, Weitz
Securities, Inc. since March of 1995;
Management Consultant, Temple, Barker &
Sloane, Inc. (1984-1989) Richard Lawson is
the brother of Linda L. Lawson.
*Mr. Weitz and Mr. Pansing are "interested persons" (as that term is defined in
the Investment Company Act of 1940) of the Fund and the Investment Adviser.
20
<PAGE>
COMPENSATION TABLE
The table below includes certain information with respect to compensation of all
directors of the Company for the fiscal year ended March 31, 1999. Compensation
of the officers of the Company is paid by the Adviser.
<TABLE>
<CAPTION>
Total Compensation
Aggregate From Company and
Compensation from Weitz Partners, Inc.
Name of Person, Position the Company Paid to Directors
------------------------ ----------- -----------------
<S> <C> <C>
Lorraine Chang, Director $4,800 $6,000
John W. Hancock, Director 5,172 6,600
Richard D. Holland, Director 5,172 6,600
Thomas R. Pansing, Jr., Director 4,800 6,000
Delmer L. Toebben, Director 4,000 5,000
Wallace R. Weitz, Director(1) N/A N/A
</TABLE>
(1) As a director who is also an officer of the investment adviser, Mr. Weitz
received no compensation for his services as a director.
PRINCIPAL HOLDERS OF SECURITIES
On June 30, 1999, the Company had the following number of shares outstanding:
<TABLE>
<S> <C>
Value Fund 67,514,392
Fixed Income Fund 3,808,807
Government Money Market Fund 24,105,205
Hickory Fund 21,432,505
</TABLE>
As of that date the directors and officers of the Company collectively owned
the amounts of each Fund set forth below. Also as of that date the following
persons owned 5% or more of a Fund.
VALUE FUND
The Officers and Directors of the Fund owned 777,118 shares or 1.2% of the Value
Fund's outstanding shares.
<TABLE>
<CAPTION>
Name and Address Shares Percent Owned
- ---------------- ------ -------------
<S> <C> <C>
Charles Schwab & Co., Inc. 24,124,777 35.7%
Special Custody Acct for the
Benefit of Customers
Attn Mutual Funds
101 Montgomery Street
San Francisco, California 94104-4122
National Financial Services Corp. 6,832,473 10.1%
for the Exclusive Benefit
of Our Customers
Attn Mutual Fds Dept 5th Flr
200 Liberty Street
1 World Financial Center
New York, New York 10281-1003
Donaldson Lufkin & Jenrette 3,482,122 5.2%
Securities Corp.
Mutual Funds, 5th Floor
P.O. Box 2052
Jersey City, New Jersey 07303-2052
</TABLE>
21
<PAGE>
FIXED INCOME FUND
The Officers and Directors of the Fund owned 722,031 shares or 19.0% of the
Fixed Income Fund's outstanding shares.
<TABLE>
<CAPTION>
Name and Address Shares Percent Owned
- ---------------- ------ -------------
<S> <C> <C>
Marguerite Scribante 718,900 18.9%
10030 Fieldcrest Drive
Omaha, Nebraska 68114-4939
The Holland Foundation 594,126 15.6%
Richard D. Holland President
1501 S 80 Street
Omaha, Nebraska 68124-1423
</TABLE>
GOVERNMENT MONEY MARKET FUND
The Officers and Directors of the Fund owned 4,083,085 shares or 16.9% of
the Government Money Market Fund's outstanding shares.
<TABLE>
<CAPTION>
Name and Address Shares Percent Owned
- ---------------- ------ -------------
<S> <C> <C>
Wallace R. Weitz & Company 3,615,835 15.0%
1125 S 103rd Street, Suite 600
Omaha, Nebraska 68124-6008
Mary Seina 2,031,908 8.4%
6600 Underwood Avenue
Omaha, Nebraska 68132-2618
</TABLE>
HICKORY FUND
The Officers and Directors of the Fund owned 167,414 shares or 0.8% of the
Hickory Fund's outstanding shares.
<TABLE>
<CAPTION>
Name and Address Shares Percent Owned
- ---------------- ------ -------------
<S> <C> <C>
Charles Schwab & Co., Inc. 6,297,691 29.4%
Special Custody Acct for the
Benefit of Customers
Attn Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
Donaldson Lufkin & Jenrette 2,548,501 11.9%
Securities Corp.
Mutual Funds, 5th Floor
P.O. Box 2052
Jersey City, NJ 07303-2052
National Investor Services Corp. 1,178,283 5.5%
for the Exclusive Benefit of
Customers
53 Water Street 32nd Floor
New York, NY 10004-2446
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER AND DISTRIBUTOR
Wallace R. Weitz & Company, a Nebraska corporation wholly owned by Wallace R.
Weitz, is the investment adviser for each Fund. Weitz Securities, Inc., a
Nebraska corporation also wholly owned by Wallace R. Weitz, distributes the
shares of the Funds on a continuous basis without compensation from the Funds.
In accordance with individual investment advisory agreements, the Value Fund and
the Hickory Fund pay the investment adviser, on a monthly basis, an annual
advisory fee equal to 1% of the Fund's average daily net assets. The Fixed
Income Fund and the Government Money Market Fund pay the investment adviser, on
a monthly basis, an annual advisory fee equal to .5% of the respective Fund's
average daily net assets. The total amount of advisory fees during the fiscal
years ended March 31, 1999, 1998 and 1997 was $8,928,079, $3,401,132 and
$2,514,149 for the Value Fund, $3,943,194, $199,039 and $88,889 for the Hickory
Fund, $179,033, $130,406 and $86,579 for the Fixed Income Fund and $96,481,
$41,977 and $26,351 for the Government Money Market Fund. After fee waivers the
Government Money Market Fund paid $48,241, $20,988 and $13,175, respectively.
22
<PAGE>
The investment adviser is responsible for selecting the Funds' securities. In
addition, the investment adviser also provides certain management and other
personnel to the Fund. Weitz Securities, Inc., in its capacity as principal
underwriter, will pay any sales or promotional costs incurred in connection with
the sale of the Funds' shares.
The Company pays all expenses of operations not specifically assumed by the
investment adviser. Such costs include, without limitation: custodial,
administrative and transfer agent fees; fees of legal counsel and independent
public accountants; compensation of directors (other than those that are also
officers of the investment adviser); expenses of printing and distributing to
shareholders notices, proxy solicitation material, prospectuses and reports;
brokerage commissions; taxes; interest; payment of premiums for certain
insurance carried by the Company; and expenses of complying with federal, state
and other laws. Such expenses will be charged to the Fund for which such items
were incurred, but if such items are not directly related to a Fund, they will
be allocated among the Funds based upon the relative net assets of the Fund.
The investment advisory agreements provide that neither the investment adviser
nor any of its officers or directors, agents or employees will have any
liability to the Company or its shareholders for any error of judgment, mistake
of law or any loss arising out of any investments, or for any other act or
omission in the performance of its duties as investment adviser under the
agreements, except for liability resulting from willful misfeasance, bad faith
or gross negligence on the part of the investment adviser in the performance of
its duties or from reckless disregard by the investment adviser of its
obligations under the agreements. The investment adviser has contractually
retained all rights to the use of the name "Weitz" by the Fund Company. If the
Funds were to contract with another investment adviser, the Funds could be
required to change their names.
The investment adviser has agreed to reimburse the Value Fund and the Hickory
Fund or to pay directly a portion of the respective Funds' expenses to the
extent of the advisory fee paid, if expenses, excluding interest, taxes and
brokerage commissions, exceed 1.50% of the respective Funds annual average net
assets. The investment adviser has agreed to reimburse the Fixed Income Fund
and the Government Money Market Fund or to pay directly a portion of the
respective Funds' expenses to the extent of the advisory fee paid, if expenses,
excluding interest, taxes and brokerage commissions, exceed 1% of the respective
Funds' annual average net assets.
ADMINISTRATOR
Wallace R. Weitz & Company is also the administrator for the Funds in accordance
with an administration agreement with the Company. Under the agreement each
Fund pays the administrator a monthly fee equal, on an annual basis, to the
following amounts, based upon total assets of each Fund:
23
<PAGE>
ASSET BREAK POINTS
<TABLE>
<CAPTION>
Greater Than Less Than % of NAV Minimum
------------ --------- -------- -------
<S> <C> <C> <C>
$0 $25,000,000 0.225% $25,000
25,000,000 100,000,000 0.200%
100,000,000 500,000,000 0.175%
500,000,000 0.100%
</TABLE>
In no event will the fee be less than $25,000 per year. Services provided under
the Administration Agreement include, without limitation, customary services
related to fund accounting, recordkeeping, compliance, registration, transfer
agent and dividend disbursing.
The administrative fees for the fiscal year ended March 31, 1999 were .16% for
the Value Fund, .18% for the Hickory Fund and after fee waivers, were .11% for
the Fixed Income Fund and 0.0% for the Government Money Market Fund. The total
amount of fees owed under the Administration Agreement for the fiscal years
ended March 31, 1999, 1998 and 1997, respectively, was $1,494,696, $608,221 and
$504,410 for the Value Fund, $77,853, $58,302 and $43,290 for the Fixed Income
Fund, $43,663, $20, 810 and $13,175 for the Government Money Market Fund and
$714,715, $48,725 and $22,222 for the Hickory Fund. After fee waivers, the
Fixed Income Fund paid $38,923, $16,727 and $11,982 for such fiscal years and
the Hickory Fund paid $17,068 for the fiscal year ended March 31, 1997. All
administrative fees for the Government Money Market Fund were waived in such
fiscal years. No administrative fees were waived for the Value Fund in such
fiscal years or for the Hickory Fund in the fiscal years ended March 31, 1999
and 1998.
SUB-TRANSFER AGENT
Wallace R. Weitz & Company has contracted with National Financial Data Services,
Inc. to serve as a sub-transfer agent for the Funds.
CUSTODIAN
The Fund's custodian is Norwest Bank Minnesota, N.A., Minneapolis, Minnesota.
The custodian has custody of all securities and cash of each of the Funds,
delivers and receives payment for securities sold, receives and pays for
securities purchased, collects income from investments, and performs other
duties as directed by officers of the Company.
AUDITOR
The Company's independent accountant is PricewaterhouseCoopers, LLP, 1177
Avenue of the Americas New York, New York 10036. The independent accountant
provides audit and tax services to the Funds.
LEGAL COUNSEL
The Company's legal counsel is Dechert Price & Rhoads, 1775 Eye Street N.W.,
Washington DC 20006-2401.
24
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
Weitz & Co. is responsible for recommendations on buying and selling securities
for the Funds and for determinations as to which broker is to be used in each
specific transaction. The investment adviser attempts to obtain from brokers
the most favorable price and execution available. In over-the-counter
transactions, orders are generally placed with a principal market maker unless
Weitz & Co. determines that a better price and execution can be obtained using a
broker. The best price to the Funds means the best net price without regard to
the mix between purchase or sale price and commissions, if any. In selecting
broker-dealers and determining the most favorable price and execution all
factors relevant to the best interest of the Funds are considered, including,
for example, price, the size of the transaction taking into account market
prices and trends, the reputation, experience and financial stability of the
broker-dealer involved and the quality of service rendered by the broker-dealer
in other transactions. Subject to these considerations, Weitz & Co. may place
orders for the purchase or sale of Fund securities with brokers or dealers who
have provided research, statistical or other financial information.
Because of such factors, most of which are subject to the best judgment of Weitz
& Co., Weitz & Co. may pay a broker which provides brokerage and research
services to the Funds a commission for a securities transaction that is higher
than the commission another broker would have charged, provided that Weitz & Co.
has determined in good faith that the amount of such commission is reasonable in
relation to the value of the brokerage and research services provided by the
broker, viewed in terms of either that particular transaction or the broker's
ability to execute difficult transactions in the future. Research services
furnished by brokers through whom Weitz & Co. effects securities transactions
are used by Weitz & Co. in servicing all of its accounts and are not used
exclusively with respect to transactions for the Funds.
Brokerage and research services may include, among other things, information on
the economy, industries, individual companies, statistical information,
accounting and tax law interpretations, legal developments affecting portfolio
securities, technical market action, credit analysis, risk measurement analysis
and performance analysis. Such research services are received primarily in the
form of written reports, telephone contacts and occasional meetings with
securities analysts. Such research services may also be provided in the form of
access to various computer-generated data, computer hardware and software, and
meetings arranged with corporate and industry spokesman. In some cases,
research services are generated by third parties, but are provided to Weitz &
Co. by or through brokers. Such brokers may pay for all or a portion of
computer hardware and software costs relating to the pricing of securities.
In the case where Weitz & Co. may receive both brokerage and research and other
benefits from the services provided by brokers, Weitz & Co. makes a good faith
allocation between the brokerage and research services and other benefits and
pays for such other benefits in cash.
Weitz & Co. may aggregate orders for the purchase or sale of the same security
for the Funds, other mutual funds managed by Weitz & Co. and other advisory
clients. Weitz & Co. will only aggregate trades in this manner if all
transaction costs are shared equally by the participants on a pro-rata basis.
Such aggregate trading allows Weitz & Co. to execute trades in a more timely and
equitable manner and to reduce overall commissions charges to clients. Weitz &
Co. may
25
<PAGE>
include its own proprietary accounts in such aggregate trades. Weitz & Co. will
only execute such a trade subject to its duty of obtaining the best execution of
the trade from the broker selected.
During the fiscal years ended March 31, 1999, 1998 and 1997, the Funds paid the
following brokerage commissions for securities transactions.
<TABLE>
<CAPTION>
Funds 1999 1998 1997
----- ---- ---- ----
<S> <C> <C> <C>
Value 4,251,962 948,886 689,400
Fixed Income 19,695 36,750 8,538
Government Money Market 2,187 1,602 234
Hickory 2,817,547 107,253 41,382
</TABLE>
As of March 31, 1999, Fixed Income Fund owned $1,019,060 aggregate amount of the
securities of Merrill, Lynch & Co., a regular broker-dealer of the Funds within
the meaning of Rule 10b-1 of the Investment Company Act of 1940.
Because of a significant increase in new assets coming into the Funds during the
fiscal year ended March 31, 1999, the total amount of brokerage commissions
during the year related to investing those assets was significantly higher than
total commissions for the previous two years.
ORGANIZATION AND CAPITAL STRUCTURE
GENERAL
Weitz Series Fund, Inc. is authorized to issue a total of five billion shares
of common stock in series with a par value of $.001 per share. The Articles
of Incorporation of the Company authorize ten million of these shares to be
issued as Fixed Income Fund shares, one hundred fifty million of these shares
to be issued as Value Fund shares, one hundred million of these shares to be
issued as Government Money Market Fund shares and seventy-five million of
these shares to be issued as Hickory Fund shares.
All shares, when issued, are fully paid, nonassessable, redeemable and fully
transferable. All shares, which have no preemptive or conversion rights, have
equal voting rights and can be issued as full or fractional shares. A
fractional share has pro rata the same kind of rights and privileges as a full
share.
On certain issues, such as the election of directors, all shares of Weitz Series
Fund, Inc. vote together. The shareholders of a particular Fund, however, would
vote separately on issues affecting only that particular Fund, such as the
approval of a change in a fundamental investment restriction for that Fund.
SHAREHOLDER MEETINGS
Although the Fund may hold periodic shareholder information meetings, annual
meetings of shareholders will not be held unless called by the shareholders
pursuant to Minnesota law or
26
<PAGE>
unless required by the Investment Company Act of 1940 or at the direction of the
Board of Directors of the Company. The Investment Company Act of 1940 requires
a shareholder vote for all amendments to fundamental investment policies and
investment advisory contracts.
PURCHASE OF SHARES
See "Purchasing Shares" in the Prospectus for basic information on how to
purchase shares of the Funds.
To purchase shares, you should complete a Purchase Application and transfer
funds for the purchase either by sending a check or a wire transfer to the
Company. The price paid for the shares will be the next determined net asset
value after the Company receives the application and payment for the shares.
All purchase orders are subject to acceptance by authorized officers of the
Company and are not binding until so accepted. The net asset value of a Fund's
shares is determined once each day at the close of the New York Stock Exchange
(ordinarily 3:00 p.m. Central time). If the completed order is received before
such time, the order will be effective on that day. If the completed order is
received after such time the order will be effective on the following business
day.
The Company has authorized one or more brokers or other financial
intermediaries to accept on its behalf purchase and redemption orders. Such
brokers or financial intermediaries are authorized to designate other
intermediaries to accept purchase and redemption orders on behalf of the
Company. The Company will be deemed to have received a purchase or
redemption order when an authorized intermediary or, if applicable, an
intermediary's authorized designee, accepts the order. A shareholder's order
will be priced at the net asset value of the respective Fund next computed
after such order is accepted by an authorized broker or the broker's
authorized designee.
PRICING OF SHARES
The net asset value per share of the Value, Fixed Income and Hickory Funds is
determined once each day as of the close of trading on the New York Stock
Exchange (ordinarily 3:00 p.m., Central Time) on days on which the New York
Stock Exchange is open for business. Currently the New York Stock Exchange and
the Funds are closed for business on the following holidays (or on the nearest
Monday or Friday if the holiday falls on a weekend): New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
The net asset value per share is determined by calculating the market value of
all the respective Fund's assets, deducting total liabilities and dividing the
result by the number of shares outstanding. In calculating the net asset value
of a Fund's shares:
1. Securities traded on a national or regional securities exchange and
over-the-counter securities traded on the NASDAQ national market are
valued at the last sales price; if
27
<PAGE>
there were no sales on that day, securities are valued at the mean
between the latest available and representative bid and asked prices;
2. Securities not listed on an exchange are valued at the mean between
the latest available and representative bid and asked prices;
3. The value of certain debt securities for which market quotations are
not readily available may be based upon current market prices of
securities which are comparable in coupon, rating and maturity or an
appropriate matrix utilizing similar factors; and
4. The value of securities for which market quotations are not readily
available, including restricted and not readily marketable securities,
is determined in good faith in accordance with procedures approved by
the Fund's Board of Directors.
The Securities and Exchange Commission adopted Rule 2a-7 under the Investment
Company Act of 1940 which permits the Company to compute the Government Money
Market Fund's net asset value per share using the amortized cost method of
valuing portfolio securities. As a condition for using the amortized cost
method of valuation, the Board of Directors must establish procedures to
stabilize the Fund's net asset value at $1.00 per share. These procedures
include a review by the Board of Directors as to the extent of any deviation of
net asset value based on available market quotations from the Fund's $1.00
amortized cost value per share. If such deviation exceeds $.005, the Board of
Directors will consider what action, if any, should be initiated to reasonably
eliminate or reduce material dilution or other unfair results to shareholders.
Such action may include redemption of shares in kind, selling portfolio
securities prior to maturity, withholding dividends or utilizing a net asset
value per share as determined by using available market quotations. In
addition, the Fund must maintain a dollar-weighted average portfolio maturity
appropriate to its investment objective, but in any event, not longer than 90
days, must limit portfolio investments to those instruments which the Board of
Directors determines present minimal credit risks, and must observe certain
other reporting and recordkeeping procedures.
Under the amortized cost method of valuation, a security is initially valued at
cost on the date of purchase and, thereafter, any discount or premium is
amortized on a straight-line basis to maturity, regardless of the effect of
fluctuating interest rates or the market value of the security. Accordingly,
U.S. Government obligations held by the Fund will be valued at their amortized
cost, which normally will be their face amount. Other assets and securities are
valued at a fair value determined, in good faith, by the Board of Directors.
The amortized cost method of valuation may result in some dilution of a
shareholder's interest in the Fund insofar as general market increases and
decreases of interest rates usually have an inverse effect on the value of debt
instruments. However, the significance of the effect of such general market
increases and decreases in interest rates directly corresponds to the maturity
of the debt instruments, that is, the change in the market value of the
underlying debt instruments and the corresponding change in the premium or
discount of such instruments is greater when maturities are larger and less when
maturities are shorter.
28
<PAGE>
REDEMPTION OF SHARES
Redemption of a Fund's shares may be suspended at times (a) when the New York
Stock Exchange is closed for other than customary weekend or holiday closings,
(b) when trading on the New York Stock Exchange is restricted, (c) when an
emergency exists, as a result of which disposal by the Funds of securities owned
by them is not reasonably practicable, or it is not reasonably practicable for
the Fund to fairly determine the value of their net assets, or (d) during any
other period when the Securities and Exchange Commission, by order, so permits,
provided that the applicable rules and regulations of the Securities and
Exchange Commission shall govern as to whether the conditions described in (b)
or (c) exist.
The Company has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, which obligates the Company to redeem shares in cash, with
respect to any one shareholder during any 90-day period, up to the lesser of
$250,000 or 1% of the assets of a Fund. If Weitz & Co. determines that existing
conditions make cash payments undesirable, redemption payments may be made in
whole or in part in securities or other financial assets, valued for this
purpose as they are valued in computing the Fund's net asset value per share (a
"redemption-in-kind"). Shareholders receiving securities or other financial
assets in a redemption-in-kind may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
TAXATION
The Company intends to qualify each of the Funds as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), so that the Funds will not have to pay federal income tax on its
capital gains and net investment income distributed to shareholders. To qualify
as a regulated investment company, a Fund must, among other things, receive at
least 90% of its gross income each year from dividends, interest, gains from the
sale or other disposition of securities and certain other types of income
including, with certain exceptions, income from options and futures contracts.
The Code also requires a regulated investment company to diversify its holdings.
This means that a fund must have at least 50% of its total assets in cash and
cash items and other securities and as to the securities held, the entire amount
of the securities of any one issuer owned by a fund may not exceed 5% of the
value of 50% of a fund's assets. Additionally, a fund may not invest more than
25% of its total assets in the securities of any one issuer. This
diversification test is in contrast to the diversification test under the
Investment Company Act of 1940 which restricts a fund's investment in any one
issuer to 5% as to 75% of the fund's assets. The Value Fund, Fixed Income Fund
and Government Money Market Fund are diversified under both the Investment
Company Act of 1940 and the Code, while the Hickory Fund is non-diversified
under the Investment Company Act of 1940, but is diversified under the Code.
The Internal Revenue Service has not made its position clear regarding the
treatment of options for purposes of the diversification test, and the extent to
which a Fund could buy or sell futures contracts and options may be limited by
this requirement.
29
<PAGE>
The Code requires that all regulated investment companies pay a nondeductible 4%
excise tax to the extent the regulated investment company does not distribute
98% of its ordinary income, determined on a calendar year basis, and 98% of its
capital gains, determined, in general, on an October 31 year end. The required
distributions are based only on the taxable income of a regulated investment
company.
Ordinarily, distributions and redemption proceeds paid to a Fund shareholder are
not subject to withholding of federal income tax. However, if a shareholder
fails to furnish a tax identification number or social security number, or
certify under penalties of perjury that such number is correct, the Company may
be required to withhold federal income tax at the current rate ("backup
withholding") from all dividend, capital gain and/or redemption payments to such
shareholder. Dividends and capital gain distributions may also be subject to
backup withholding if a shareholder fails to certify under penalties of perjury
that such shareholder is not subject to backup withholding or is exempt from
backup withholding. These certifications are included in the purchase
application of the Fund.
CALCULATION OF PERFORMANCE DATA
From time to time the Fixed Income Fund may quote yield in advertisements or in
reports and other communications to shareholders. For this purpose, yield is
calculated by dividing net investment income per share earned during a 30-day
period by the net asset value per share on the last day of the period. Net
investment income includes interest and dividend income earned on the Fund's
securities; it is net of all expenses. The yield calculation assumes that net
investment income earned over 30 days is compounded semiannually and then
annualized. Methods used to calculate advertised yields are standardized for
all bond mutual funds. However, these methods differ from the accounting
methods used by the Fund to maintain its books and records, and so the
advertised 30-day yield may not fully reflect the income paid to a shareholder's
account. The Fixed Income Fund's net investment income changes in response to
fluctuations in interest rates and in the expenses of the Fund. Consequently,
any given quotation should not be considered as representative of what the Fixed
Income Fund's yield may be for any specified period in the future.
Yield information may be useful in reviewing the Fixed Income Fund's performance
and for providing a basis for comparison with other investment alternatives.
However, the Fixed Income Fund's yield will fluctuate, unlike other investments
which pay a fixed yield for a stated period of time. Current yield should be
considered together with fluctuations in the Fixed Income Fund's net asset value
over the period for which yield has been calculated, which, when combined, will
indicate the Fixed Income Fund's total return to shareholders for that period.
In addition, investors should give consideration to the quality and maturity of
the securities owned by the Fixed Income Fund when comparing investment
alternatives.
Investors should recognize that in periods of declining interest rates the Fixed
Income Fund's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates the Fixed Income Fund's yield
will tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to the Fixed Income Fund from the continuous sale
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of its shares will likely be invested in instruments producing lower yields than
the balance of the Fixed Income Fund's holdings, thereby reducing the current
yield of the Fixed Income Fund. In periods of rising interest rates, the
opposite can be expected to occur. The Fixed Income Fund's yield based on the
30-day or one-month period ended March 31, 1999 was 5.5%.
The Fixed Income Fund may also quote the indices of bond prices and yields
prepared by Lehman Brothers and Salomon Brothers Inc., leading broker-dealer
firms. These indices are not managed for any investment goal. Their
composition may, however, be changed from time to time.
The Fixed Income Fund may quote the yield or total return of Ginnie Maes, Fannie
Maes, Freddie Macs, corporate bonds and Treasury bonds and notes, either as
compared to each other or as compared to the Fixed Income Fund's performance.
In considering such yields or total returns, investors should recognize that the
performance of securities in which the Fixed Income Fund may invest does not
reflect the Fixed Income Fund's performance, and does not take into account
either the effects of portfolio management or of management fees or other
expenses; and that the issuers of such securities guarantee that interest will
be paid when due and that principal will be fully repaid if the securities are
held to maturity, while there are no such guarantees with respect to shares of
the Fixed Income Fund. Investors should also be aware that the mortgages
underlying mortgage-related securities may be prepaid at any time. Prepayment
is particularly likely in the event of an interest rate decline, as the holders
of the underlying mortgages seek to pay off high-rate mortgages or renegotiate
them at potentially lower current rates. Because the underlying mortgages are
more likely to be prepaid at their par value when interest rates decline, the
value of certain high-yielding mortgage-related securities may have less
potential for capital appreciation than conventional debt securities (such as
U.S. Treasury bonds and notes) in such markets. At the same time, such
mortgage-related securities have a similar potential for capital depreciation
when interest rates rise.
The yield of the Government Money Market Fund may also be advertised. Yield for
money market funds is determined by computing the net change, exclusive of
capital changes in the value of a hypothetical preexisting account at the
beginning and ending of a seven day period having a balance of one share at the
beginning of the period, subtracting a hypothetical charge reflecting expenses
and dividing the difference by the value of the account at the beginning of the
period to obtain the base period return and then multiplying the base period
return by 365/7 and rounding the result to the nearest one hundredth of one
cent. The Government Money Market Fund's yield and effective yield for the
7-day period ended March 31, 1999, was 4.2% and 4.2%, respectively.
The Value Fund and Hickory Fund may include their respective total return in
advertisements or reports to shareholders or prospective investors. Total
return is the percentage change in the net asset value of a Fund share over a
given period of time, with dividends and distributions treated as reinvested.
Performance of the Value Fund and Hickory Fund may be shown by presenting one
or more performance measurements, including cumulative total return or
average annual total return. Cumulative total return is the actual return of
an investment in the respective Fund over a specific period of time and does
not reflect how much the value of the investment may have fluctuated during
the period of time indicated. Average annual total return is the actual
total return of an investment in the respective Fund over a specific period
of time and does not reflect how much the value of the investment may have
fluctuated during the period of time indicated. Average annual total return
is the
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annual compound total return of the respective Fund over a specific period of
time that would have produced the cumulative total return over the same
period if the Fund's performance had remained constant throughout the period.
The Value Fund and Hickory Fund may compare their respective performance to that
of certain widely managed stock indices including the Dow Jones Industrial
Average, the Standard & Poor's 500 Stock Index, the Lipper Growth Fund Index
(Hickory Fund), the Lipper Growth and Income Fund Index (Value Fund), the
Russell 2000 Index and the NASDAQ and Value Line Composites. The Funds may also
use comparative performance information compiled by entities that monitor the
performance of mutual funds generally such as Lipper Analytical Services, Inc.,
Morningstar, Inc. and The Value Line Mutual Fund Survey.
The average annual total return for the Value Fund for the one, five and ten
year periods ended March 31, 1999, was 18.0%, 24.8%, 18.2%, respectively.
Cumulative total return for the Value Fund from inception (May 9, 1986) to March
31, 1999, was 582.9%. The cumulative return for the Value Fund includes the
performance of Weitz Value Fund, Inc., the predecessor to the Value Fund. The
average annual total return for the Fixed Income Fund for the one, five and ten
year periods ended March 31, 1999 was 5.7%, 7.0% and 7.4%, respectively.
Cumulative total return for the Fixed Income Fund from inception to March 31,
1999 was 108.4%. The average annual total return for the Hickory Fund for the
one and five year periods ended March 31, 1999 and for the period since
inception (April 1, 1993) to March 31, 1999 was 17.4%, 28.4% and 25.1%
respectively. Cumulative total return for the Hickory Fund from inception to
March 31, 1999 was 283.5%.
YOU SHOULD UNDERSTAND THAT ANY PERFORMANCE DATA PRESENTED REPRESENTS PAST
PERFORMANCE OF A FUND AND IS NOT INTENDED TO BE REPRESENTATIVE OF FUTURE
PERFORMANCE. INVESTMENT RESULTS WILL FLUCTUATE OVER A PERIOD OF TIME SO THAT
YOUR SHARES IN THE VALUE FUND, FIXED INCOME FUND OR HICKORY FUND WHEN REDEEMED
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
FINANCIAL STATEMENTS
The audited statements and notes included in the Annual Reports for the Value
Fund, Fixed Income Fund, Government Money Market Fund and the Hickory Fund dated
March 31, 1999 are incorporated herein by reference. A copy of such Annual
Reports may be obtained without charge by contacting the Company at its address
or phone number shown on the cover page of this Statement of Additional
Information.
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APPENDIX A
RATINGS OF CORPORATE OBLIGATIONS AND
COMMERCIAL PAPER
RATINGS OF CORPORATE OBLIGATIONS
MOODY'S INVESTORS SERVICE, INC.
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 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.
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 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 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 long period of time may be small.
Caa: Bonds rated Caa are of poor standing. Such bonds may be in default
or there may be present elements of danger with respect to principal and
interest.
Ca: Bonds rated Ca represent obligations which are speculative in a high
degree. Such bonds are often in default or have other marked shortcomings.
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Those securities in the A and Baa groups which Moody's believes possess the
strongest investment attributes are designated by the symbols A-1 and Baa-1.
Other A and Baa securities comprise the balance of their respective groups.
These rankings (1) designate the securities which offer the maximum in security
within their quality groups, (2) designate securities which can be bought for
possible upgrading in quality, and (3) additionally afford the investor an
opportunity to gauge more precisely the relative attractiveness of offerings in
the marketplace.
STANDARD & POOR'S CORPORATION
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in a small degree.
A: Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Although they normally exhibit 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 bonds in this category than for bonds in higher rated categories. Bonds
rated BBB are regarded as having speculation characteristics.
BB--B--CCC--CC: Bonds rated BB, B, CCC, and CC are regarded, on balance,
as predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation among such bonds and CC the highest
degree of speculation. Although such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
COMMERCIAL PAPER RATINGS
STANDARD & POOR'S CORPORATION
Commercial paper ratings are graded into four categories, ranging from "A"
for the highest quality obligations to "D" for the lowest. Issues assigned the
A rating are regarded as having the greatest capacity for timely payment.
Issues in this category are further refined with the designation 1, 2 and 3 to
indicate the relative degree of safety. The "A-l" designation indicates that
the degree of safety regarding timely payment is very strong. Those issues
determined to possess overwhelming safety characteristics will be denoted with a
plus sign designation.
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MOODY'S INVESTORS SERVICE, INC.
Moody's commercial paper ratings are opinions of the ability of the issuers
to repay punctually promissory obligations not having an original maturity in
excess of nine months. Moody's makes no representation that such obligations
are exempt from registration under the Securities Act of 1933, nor does it
represent that any specific note is a valid obligation of a rated issuer or
issued in conformity with any applicable law. Moody's employs the following
three designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers:
Prime-1 Superior capacity for repayment
Prime-2 Strong capacity for repayment
Prime-3 Acceptable capacity for repayment
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APPENDIX B
INTEREST RATE FUTURES CONTRACTS, BOND INDEX FUTURES
AND RELATED OPTIONS
FUTURES - IN GENERAL Although most futures contracts by their terms call for
actual delivery or acceptance of commodities or securities, in most cases the
contracts are closed out before the settlement date without the making or taking
of delivery. Closing out a short position is effected by purchasing a futures
contract for the same aggregate amount of the specific type of financial
instrument or commodity and the same delivery month. If the price of the
initial sale of the futures contract exceeds the price of the offsetting
purchase, the seller is paid the difference and realizes a gain. Conversely, if
the price of the offsetting purchase exceeds the price of the initial sale, the
trader realizes a loss. Similarly, the closing out of a long position is
effected by the purchaser entering into a futures contract sale. If the
offsetting sale price exceeds the purchase price, the purchaser realizes a gain,
and if the purchase price exceeds the offsetting sale price, he realizes a loss.
The purchase or sale of a futures contract differs from the purchase or sale of
a security in that no price or premium is paid or received. Instead, an amount
of cash or securities acceptable to the Adviser and the relevant contract
market, which varies but is generally about 5% of the contract amount, must be
deposited with the custodian in the name of the broker. This amount is known as
"initial margin," and represents a "good faith" deposit assuring the performance
of both the purchaser and the seller under the futures contract. Subsequent
payments to and from the broker, known as "variation margin," are required to be
made on a daily basis as the price of the futures contract fluctuates, making
the long or short positions in the futures contract more or less valuable, a
process known as "marking to the market." Prior to the settlement date of the
futures contract, the position may be closed out by taking an opposite position
which will operate to terminate the position in the futures contract. A final
determination of variation margin is then made, additional cash is required to
be paid to or released by the broker, and the purchaser realizes a loss or gain.
In addition, a commission is paid on each completed purchase and sale
transaction.
INTEREST RATE FUTURES CONTRACTS The Fixed Income Fund may purchase and sell
interest rate futures contracts and options thereon. An interest rate futures
contract creates an obligation on the part of the seller (the "short") to
deliver, and an offsetting obligation on the part of the purchaser (the "long")
to accept delivery of, the type of financial instrument called for in the
contract in a specified delivery month for a stated price. A majority of
transactions in interest rate futures contracts, however, do not result in the
actual delivery of the underlying instrument, but are settled through
liquidation, i.e., by entering into an offsetting transaction. The interest
rate futures contracts to be traded by the Fixed Income Fund are traded only on
commodity exchanges--known as "contract markets"--approved for such trading by
the Commodity Futures Trading Commission ("CFTC") and must be executed through a
futures commission merchant or brokerage firm which is a member of the relevant
contract market. These contract markets, through their clearing corporations,
guarantee that the contracts will be performed. Presently, futures contracts
are based on such debt securities as long-term U. S. Treasury Bonds, Treasury
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Notes, Government National Mortgage Association modified pass-through
mortgage-backed securities, three-month U.S. Treasury Bills and bank
certificates of deposit.
The purpose of the acquisition or sale of an interest rate futures contract by
the Fixed Income Fund as the holder of fixed income securities, is to hedge
against fluctuations in rates on such securities without actually buying or
selling fixed income securities. For example, if interest rates are expected to
increase, the Fixed Income Fund might sell interest rate futures contracts.
Such a sale would have much the same effect as selling some of the fixed income
securities held by the Fixed Income Fund. If interest rates increase as
anticipated by Weitz & Co., the value of certain fixed income securities in the
Fixed Income Fund would decline, but the value of the Fixed Income Fund's
interest rate futures contracts would increase at approximately the same rate,
thereby keeping the net asset value of the Fixed Income Fund from declining as
much as it otherwise would have. Of course, since the value of the securities
held by the Fixed Income Fund will far exceed the value of the interest rate
futures contracts sold by the Fixed Income Fund, an increase in the value of the
futures contracts could only mitigate--but not totally offset the decline in the
value of the Fixed Income Fund.
Similarly, when it is expected that interest rates may decline, interest rate
futures contracts could be purchased to hedge against the Fixed Income Fund's
anticipated purchases of fixed income securities, at higher prices. Since the
rate of fluctuation in the value of interest rate futures contracts should be
similar to that of the fixed income securities, the Fixed Income Fund could take
advantage of the anticipated rise in the value of bonds without actually buying
them until the market had stabilized. At that time, the interest rate futures
contracts could be liquidated and the Fixed Income Fund's cash could then be
used to buy bonds on the cash market. The Fixed Income Fund could accomplish
similar results by selling bonds with longer maturities and investing in bonds
with shorter maturities when interest rates are expected to increase or by
buying bonds with longer maturities and selling bonds with shorter maturities
when interest rates are expected to decline. However, in circumstances when the
market for bonds may not be as liquid as that for futures contracts, the ability
to invest in such contracts could enable the Fixed Income Fund to react more
quickly to anticipated changes in market conditions or interest rates.
OPTIONS ON INTEREST RATE FUTURES CONTRACTS An interest rate futures contract
provides for the future sale by one party and the purchase by the other party of
a certain amount of a specific financial instrument (debt security) at a
specified price, date, time and place. An option on an interest rate futures
contract, as contrasted with the direct investment in such a contract, gives the
purchaser the right, in return for the premium paid, to assume a position in an
interest rate futures contract at a specified exercise price at any time prior
to the expiration date of the option. Options on interest rate futures
contracts are similar to options on securities, which give the purchaser the
right, in return for the premium paid, to purchase securities. A call option
gives the purchaser of such option the right to buy, and obliges its writer to
sell, a specified underlying futures contract at a specified exercise price at
any time prior to the expiration date of the option. A purchaser of a put
option has the right to sell, and the writer has the obligation to buy, such
contract at the exercise price during the option period. Upon exercise of an
option, the delivery of the futures position by the writer of the option to the
holder of the option will be accompanied by delivery of the accumulated balance
in the writer's future margin account, which represents the amount by which the
market price of the futures contract exceeds, in the case of a call, or is
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less than, in the case of a put, the exercise price of the option on the
futures contract. If an option is exercised on the last trading day prior to
the expiration date of the option, the settlement will be made entirely in
cash equal to the difference between the exercise price of the option and the
closing price of the interest rate futures contract on the expiration date.
The potential loss related to the purchase of an option on interest rate
futures contracts is limited to the premium paid for the option (plus
transaction costs). Because the value of the option is fixed at the point of
sale, there are no daily cash payments to reflect changes in the value of the
underlying contract; however, the value of the option does change daily and
that change would be reflected in the net asset value of the Fixed Income
Fund.
The Fixed Income Fund will purchase put and call options on interest rate
futures contracts which are traded on a United States exchange or board of trade
as a hedge against changes in interest rates, and will enter into closing
transactions with respect to such options to terminate existing positions. The
Fixed Income Fund will purchase put options on interest rate futures contracts
securities if Weitz & Co. anticipates a rise in interest rates. The purchase of
put options on interest rate futures contracts is analogous to the purchase of
put options on debt securities so as to hedge a portfolio of debt securities
against the risk of rising interest rates. Because of the inverse relationship
between the trends in interest rates and values of debt securities, a rise in
interest rates would result in a decline in the value of debt securities held in
the Fixed Income Fund. Because the value of an interest rate futures contract
moves inversely in relation to changes in interest rates, as is the case with
debt securities, a put option on such a contract becomes more valuable as
interest rates rise. By purchasing put options on interest rate futures
contracts at a time when the Adviser expects interest rates to rise, the Fixed
Income Fund will seek to realize a profit to offset the loss in value of its
portfolio securities, without the need to sell such securities.
The Fixed Income Fund will purchase call options on interest rate futures
contracts if Weitz & Co. anticipates a decline in interest rates. The purchase
of a call option on an interest rate futures contract represents a means of
obtaining temporary exposure to market appreciation at limited risk. It is
analogous to the purchase of a call option on an individual debt security, which
can be used as a substitute for a position in the debt security itself.
Depending upon the pricing of the option compared to either the futures contract
upon which it is based or to the price of the underlying debt securities, it may
or may not be less risky than ownership of the futures contract or underlying
debt. The Fixed Income Fund will purchase a call option on an interest rate
futures contract to hedge against a market advance when the Fixed Income Fund is
holding cash. The Fixed Income Fund can take advantage of the anticipated rise
in the value of long-term securities without actually buying them until the
market has stabilized. At that time, the options can be liquidated and the
Fixed Income Fund's cash can be used to buy long-term securities.
The Fixed Income Fund could also write options on an interest rate futures
contract. The writer of an option on an interest rate futures contract assumes
the opposite position from the purchaser of the option. The writer of a call
option, for example, receives the premium paid by the purchaser of the call, and
in return assumes the responsibility to enter into a seller's position in the
underlying futures contract at any time the call is exercised. Because the
writer of an option assumes the obligation to purchase or sell the underlying
futures contract at a fixed price at any time, regardless of market
fluctuations, writing options involves more risk than purchasing
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options. To alleviate this risk in part, the Fixed Income Fund would cover any
option it wrote, either by owning a position whose price changes would offset
the Fixed Income Fund's obligation under the option (for example, by purchasing
the underlying futures contract if the Fixed Income Fund had written a call
option) or by segregating assets sufficient to cover its obligations under
options it had written. In addition, the Fixed Income Fund would be required to
make futures margin payments with respect to options written on futures
contracts. An option on an interest rate futures contract written by the Fixed
Income Fund could be terminated by exercise, or the Fixed Income Fund could seek
to close out the option on a futures exchange by purchasing an identical option
at the current market price. Writing an option would provide the Fixed Income
Fund with income in the form of the option premium. In addition, writing a call
option would provide a partial hedge against declines in the value of securities
the Fixed Income Fund owned (but would also limit potential capital appreciation
in the securities), and writing a put option would provide a partial hedge
against an increase in the value of securities the Fixed Income Fund intended to
purchase (but also would expose the Fixed Income Fund to the risk of a market
decline).
The Fixed Income Fund will sell put and call options on interest rate futures
contracts only as a substitute for the purchase of a futures contract for the
purpose of hedging and as part of closing sale transactions to terminate its
options positions. There is no guarantee that such closing transactions can be
effected.
There are several risks relating to options on interest rate futures contracts.
The holder of an option on a futures contract may terminate the position by
selling or purchasing an offsetting option of the same series. There is no
guarantee that such closing transactions can be effected. The ability to
establish and close out positions on such options will be subject to the
existence of a liquid secondary market. In addition, the Fixed Income Fund's
purchase of put or call options will be based upon predictions as to anticipated
interest rate trends by the Adviser, which could prove to be inaccurate. Even
if the expectations of Weitz & Co. are correct, there may be an imperfect
correlation between the change in the value of the options and of the Fixed
Income Fund's securities.
BOND INDEX FUTURES CONTRACTS Bond index futures contracts are commodity
contracts listed on commodity exchanges. A bond index assigns relative values
to bonds included in the index and the index fluctuates with the value and
interest rate of the bonds so included. A futures contract is a legal agreement
between a buyer or seller and the clearing house of a futures exchange in which
the parties agree to make a cash settlement on a specified future date in an
amount determined by the bond index on the last trading day of the contract.
The amount is a specified dollar amount (usually $100 or $500) times the
difference between the index value on the last trading day and the value on the
day the contract was struck.
The Fixed Income Fund intends to use bond index futures contracts and related
options for hedging and not for speculation. Hedging permits the Fixed Income
Fund to gain rapid exposure to or protect itself from changes in the market.
For example, the Fixed Income Fund may find itself with a high cash position at
the beginning of a market rally. Conventional procedures of purchasing a number
of individual issues entail the lapse of time and the possibility of missing a
significant market movement. By using bond index futures, the Fixed Income Fund
can obtain
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immediate exposure to the market and benefit from the beginning stages of a
rally. The buying program can then proceed, and once it is completed (or as it
proceeds), the contracts can be closed. Conversely, in the early stages of a
market decline, market exposure can be promptly offset by entering into bond
index futures contracts to sell units of an index and individual bonds can be
sold over a longer period under cover of the resulting short contract position.
The Fixed Income Fund may enter into contracts with respect to any bond index or
sub-index. To hedge the Fixed Income Fund successfully, however, the Fixed
Income Fund must enter into contracts with respect to indexes or sub-indexes
whose movements will have a significant correlation with movements in the prices
of the Fixed Income Fund's securities.
OPTIONS ON BOND INDEX FUTURES Bond indices are calculated based on the prices
of securities traded on national securities exchanges. An option on a bond
index is similar to an option on a futures contract except all settlements are
in cash. A portfolio exercising a put, for example, would receive the
difference between the exercise price and the current index level. Such options
would be used in a manner identical to the use of options on futures contracts.
As with options on bonds, the holder of an option on a bond index may terminate
a position by selling an option covering the same contract or index and having
the same exercise price and expiration date. Trading in options on bond indexes
began only recently. The ability to establish and close out positions on such
options will be subject to the development and maintenance of a liquid secondary
market. It is not certain that this market will develop. The Fixed Income Fund
will not purchase options unless and until the market for such options has
developed sufficiently so that the risks in connection with options are not
greater than the risks in connection with bond index futures contracts
transactions themselves. Compared to using futures contracts, purchasing
options involves less risk to a portfolio because the maximum amount at risk is
the premium paid for the options (plus transaction costs). There may be
circumstances, however, when using an option would result in a greater loss to a
portfolio than using a futures contract, such as when there is no movement in
the level of the bond index.
REGULATORY MATTERS The Commodity Futures Trading Commission (the "CFTC"), a
federal agency, regulates trading activity on the exchanges pursuant to the
Commodity Exchange Act, as amended. The CFTC requires the registration of
"commodity pool operators," defined as any person engaged in a business which is
of the nature of an investment trust, syndicate or a similar form of enterprise,
and who, in connection therewith, solicits, accepts, or receives from others
portfolios, securities, or property for the purpose of trading in any commodity
for future delivery on or subject to the rules of any contract market. The CFTC
has adopted Rule 4.5, which provides an exclusion from the definition of
commodity pool operator for any registered investment company which (i) will use
commodity futures or commodity option contracts solely for bona fide hedging
purposes (provided, however, that in the alternative, with respect to each long
position in a commodity future or commodity option contract, an investment
company may meet certain other tests set forth in Rule 4.5); (ii) will not enter
into commodity futures and commodity options contracts for which the aggregate
initial margin and premiums exceed 5% of its assets; (iii) will not be marketed
to the public as a commodity pool or as a vehicle for investing in commodity
interests; (iv) will disclose to its investors the purposes of and limitations
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on its commodity interest trading; and (v) will submit to special calls of the
CFTC for information.
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PART C
OTHER INFORMATION
Item 23. EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*1. Articles of Incorporation
*1.(a) Articles of Amendment to Articles of Incorporation
**2. Amended and Restated Bylaws
**5.(a) Amended and Restated Management and Investment Advisory
Agreement dated October 28, 1996-Fixed Income Portfolio
**5.(b) Amended and Restated Management and Investment Advisory
Agreement dated October 28, 1996-Value Portfolio
**5.(c) Amended and Restated Management and Investment Advisory
Agreement dated October 28, 1996-Government Money Market
Portfolio
**5.(d) Amended and Restated Management and Investment Advisory
Agreement dated October 28, 1996-Hickory Portfolio
*6. Underwriting Agreement
*8. Custodian Agreement
9.(a) Amended and Restated Administration Agreement dated May 11,
1999
*9.(b) Agreement and Plan of Merger between Weitz Value Fund, Inc.
and Weitz Series Fund, Inc.
*10.(a) Opinion and Consent of Messrs. Cline, Williams, Wright,
Johnson & Oldfather (with respect to the Fixed Income
Portfolio)
*10.(b) Opinion and Consent of Messrs. Cline, Williams, Wright,
Johnson & Oldfather (with respect to Value Portfolio)
C-1
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*10.(c) Opinion and Consent with respect to Tax Matters arising out of
the Agreement and Plan of Merger
*10.(d) Opinion and Consent of Messrs. Cline, Williams, Wright,
Johnson & Oldfather (with respect to the Government Money
Market Portfolio)
*10.(e) Opinion and Consent of Messrs. Cline, Williams, Wright,
Johnson & Oldfather (with respect to the Hickory Portfolio)
11. Consent of McGladrey & Pullen, LLP
*13.(a) Subscription Agreement of Wallace R. Weitz
*13.(b) Subscription Agreements for initial capitalization of the
Hickory Portfolio
* Incorporated by reference in Fund's Post-Effective Amendment No. 15 filed
on July 30, 1998.
** Incorporated by reference to Fund's Post-Effective Amendment No. 14 filed
May 30, 1997.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 25. INDEMNIFICATION
Section 302A.521 of the Minnesota Business Corporation Act requires
indemnification of officers and directors of the Registrant under circumstances
set forth therein. Reference is made to Article 8.d. of the Articles of
Incorporation, Article XIII of the Bylaws of Registrant (Exhibit 2 hereto) and
to Section 10 of the Underwriting Agreement (Exhibit 6 hereto) for additional
indemnification provisions.
The general effect of these provisions is to require a corporation to
indemnify persons who are made or threatened to be made a party to a proceeding
by reason of the former or present official capacity of the person with the
corporation against judgments, penalties, fines and reasonable expenses
including attorneys' fees incurred by said person if: (1) the person has not
been indemnified by another organization for the same judgments, penalties,
fines and expenses for the same acts or omissions; (2) the person acted in good
faith; (3) the person received no improper personal benefit and any requirements
relating to directors' conflicts of interests, as applicable, have been
satisfied; (4) in the case of a criminal proceeding, the person had no
reasonable cause to believe the conduct was unlawful; and (5) in the case of
directors and officers and employees of the corporation, such persons reasonably
believed that the conduct was in the
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<PAGE>
best interests of the corporation, or in the case of directors, officers, or
employees serving at the request of the corporation for another organization,
such person reasonably believed that the conduct was not opposed to the best
interests of the corporation. A corporation is permitted to maintain insurance
on behalf of any officer, director, employee or agent of the corporation, or any
person serving as such at the request of the corporation, against any liability
of such person.
Nevertheless, Article 8.d. of the Articles of Incorporation prohibits any
indemnification which would be in violation of Section 17(h) of the Investment
Company Act of 1940, as now enacted or hereafter amended and Article XIII of the
Fund's Bylaws prohibit any indemnification inconsistent with the guidelines set
forth in Investment Company Act Releases No. 7221 (June 9, 1972) and No. 11330
(September 2, 1980). Such Releases prohibit indemnification in cases involving
willful misfeasance, bad faith, gross negligence and reckless disregard of duty
and establish procedures for the determination of entitlement to indemnification
and expense advances.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification by the Registrant is against public policy as expressed in the
Act and, therefore, may be unenforceable. In the event that a claim for such
indemnification (except insofar as it provides for the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such director, officer or controlling person and the Securities
and Exchange Commission is still of the same opinion, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
or not such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
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<PAGE>
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
<TABLE>
<CAPTION>
Principal Occupation
Positions with (Present and for
Name Adviser Past Two Years)
---- ------- --------------
<S> <C> <C>
Wallace R. Weitz President, Treasurer and See caption "Management" in the Statement of Additional
Director Information forming a part of this Registration Statement
Barbara V. Weitz Secretary and Director Faculty Member, University of Nebraska at Omaha
Mary K. Beerling Vice President and See caption "Management" in the Statement of Additional
Assistant Secretary Information forming a part of this Registration Statement
Linda L. Lawson Vice President See caption "Management" in the Statement of Additional
Information forming a part of this Registration Statement
Richard F. Lawson Vice President See caption "Management" in the Statement of Additional
Information forming a part of this Registration Statement
</TABLE>
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<PAGE>
Item 27. PRINCIPAL UNDERWRITERS
(a) The Distributor is also the principal underwriter and distributor of Weitz
Partners, Inc., a registered investment management company also advised by
Wallace R. Weitz & Company.
(b) Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
Wallace R. Weitz President, Treasurer President, Treasurer,
Suite 600 and Director and Director
1125 South 103 Street
Omaha, NE 68124-6008
Mary K. Beerling Vice President Vice President
Suite 600 and Secretary and Secretary
1125 South 103 Street
Omaha, NE 68124-6008
Richard F. Lawson Vice President Vice President
Suite 600 and Director
1125 South 103 Street
Omaha, NE 68124-6008
(c) Not applicable.
Item 28. LOCATION OF ACCOUNTS AND RECORDS
All required accounts, books and records will be maintained by Wallace R.
Weitz and Company, Suite 600, 1125 South 103 Street, Omaha, Nebraska 68124-6008.
Item 29. MANAGEMENT SERVICES
Not applicable.
Item 30. UNDERTAKINGS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
The Registrant undertakes to furnish each person to whom a Prospectus is
delivered a copy of the Registrant's latest annual report to shareholders, upon
request and without charge, in the event that the information called for by Item
5 of Form N-1A has been presented in the Registrant's latest annual report to
shareholders.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement on Form N-1A to be signed on its behalf by the
undersigned authorized individual in the City of Omaha, State of Nebraska, on
the 30th day of July, 1999. By execution hereof, the undersigned hereby
certifies that this Post-Effective Amendment meets all the requirements for
effectiveness under Rule 485(b) of the Securities Act of 1933.
WEITZ SERIES FUND, INC.
By: /s/ Wallace R. Weitz
------------------------
Wallace R. Weitz, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement on Form N-1A has been signed below by the
following persons in the capacities indicated on May 28th, 1999:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Wallace R. Weitz President, Principal Executive Officer,
- ----------------------------- Principal Financial and Accounting Officer
Wallace R. Weitz and Director
/s/ John W. Hancock* Director
- -----------------------------
John W. Hancock
/s/ Richard D. Holland* Director /s/ Wallace R. Weitz
- ----------------------------- ----------------------------
Richard D. Holland Wallace R. Weitz
Attorney-in-fact
/s/ Thomas R. Pansing, Jr.* Director
- -----------------------------
Thomas R. Pansing, Jr.
/s/ Delmer L. Toebben* Director
- -----------------------------
Delmer L. Toebben
/s/ Lorraine Chang** Director
- -----------------------------
Lorraine Chang
</TABLE>
*Pursuant to Power of Attorney filed May 30, 1997
**Pursuant to Power of Attorney filed July 30, 1998
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<PAGE>
Exhibits
To
Weitz Series Fund, Inc.
Post-Effective Amendment Number 17
To
Form N-1A
as filed on July 30, 1999
<PAGE>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
11. Consent of McGladrey & Pullen, LLP
<PAGE>
EXHIBIT 11
Consent of McGladrey & Pullen
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference or our report dated
April 15, 1999 on the financial statements of Value Portfolio, Fixed Income
Portfolio, Hickory Portfolio and Government Money Market Portfolio, series of
Weitz Series Fund, Inc., referred to therein in Post-Effective Amendment No. 17
to the Registration Statement on Form N-1A as filed with the Securities and
Exchange Commission.
We also consent to the reference to our firm in the Prospectus under the
captions "Financial Highlights".
/s/ McGladrey & Pullen, LLP
McGLADREY & PULLEN, LLP
New York, New York
July 26, 1999
