<PAGE>
WEITZ SERIES FUND, INC.
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
Lorraine Chang
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
Delmer L. Toebben
Wallace R. Weitz
OFFICERS
Wallace R. Weitz, President
Mary K. Beerling, Vice-President & Secretary
Linda L. Lawson, Vice-President
Richard F. Lawson, Vice-President
INVESTMENT ADVISER
Wallace R. Weitz & Company
DISTRIBUTOR
Weitz Securities, Inc.
CUSTODIAN
Norwest Bank Minnesota, N.A.
TRANSFER AGENT AND DIVIDEND PAYING AGENT
Wallace R. Weitz & Company
SUB-TRANSFER AGENT
National Financial Data Services, Inc.
This report has been prepared for the information of shareholders of Weitz
Series Fund, Inc. -- Value Fund. For more detailed information about the Fund,
its investment objectives, management, fees and expenses, please see a current
prospectus. This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.
01/24/2000
512125
VALUE FUND
QUARTERLY
REPORT
DECEMBER 31, 1999
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
www.weitzfunds.com
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE FUND
PERFORMANCE SINCE INCEPTION
A long-term perspective on the Value Fund's performance is shown below. The
table below shows how an investment of $25,000 in the Value Fund at its
inception would have grown over the years (after deducting all fees and expenses
and assuming reinvestment of all dividends). The table also sets forth average
annual total return data for the Value Fund for the one, five and ten year
periods ended December 31, 1999, calculated in accordance with SEC standardized
formulas.
<TABLE>
<CAPTION>
VALUE OF VALUE OF VALUE OF
INITIAL CUMULATIVE CUMULATIVE TOTAL ANNUAL
$25,000 CAPITAL GAIN REINVESTED VALUE OF RATE OF
PERIOD ENDED INVESTMENT DISTRIBUTIONS DIVIDENDS SHARES RETURN
- ------------ ---------- ------------- --------- ------ ------
<S> <C> <C> <C> <C> <C>
May 9, 1986 $25,000 -- -- $25,000 --
Dec. 31, 1986 25,863 -- -- 25,863 3.5%+
Dec. 31, 1987 24,253 264 1,205 25,722 -0.5
Dec. 31, 1988 27,430 299 2,223 29,952 16.5
Dec. 31, 1989 30,763 2,103 3,701 36,567 22.1
Dec. 31, 1990 28,040 2,112 4,500 34,652 -5.2
Dec. 31, 1991 33,940 3,811 6,475 44,226 27.6
Dec. 31, 1992 36,350 6,019 7,884 50,253 13.6
Dec. 31, 1993 42,010 9,114 9,199 60,323 20.0
Dec. 31, 1994 36,075 10,414 7,899 54,388 -9.8
Dec. 31, 1995 45,955 17,447 11,855 75,257 38.4
Dec. 31, 1996 51,478 24,054 13,792 89,324 18.7
Dec. 31, 1997 62,878 42,824 18,398 124,100 38.9
Dec. 31, 1998 72,675 65,163 22,181 160,019 28.9
Dec. 31, 1999 82,700 83,540 27,328 193,568 21.0
</TABLE>
The fund's average annual total return for the one, five and ten year periods
ending December 31, 1999, was 21.0%, 28.9% and 18.1%, respectively. These
returns assume redemption at the end of each period and reinvestment of
dividends.
Since inception, the total amount of capital gains distributions reinvested in
shares was $54,888, and the total amount of income distributions reinvested was
$12,930. This information represents past performance of the fund and is not
indicative of future performance. The investment return and the principal value
of an investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than the original cost. Additional information is
available from the Weitz Funds at the address listed on the front cover.
+Return is for the period 5/9/86 through 12/31/86
2
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE FUND
DECEMBER 31, 1999 - QUARTERLY REPORT
January 5, 2000
Dear Fellow Shareholder:
1999 was a good year for the Value Fund. A 4th quarter gain of +6.9%
brought our total return for the year to +21.0% (after all fees and expenses).
This compares to gains of 14.9% for the quarter and +21.0% for the year for the
S&P 500 (with dividends reinvested).
The longer-term results, which are much more important, have also been
good. The table below compares our returns to those of the S&P 500 (very large
companies), the Russell 2000 (an index of smaller companies), and our peer group
of mutual funds (according to Lipper Analytical Services). All of the
performance data assumes reinvestment of dividends and are calculated after
deducting expenses.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
VALUE FUND 21.0 % 29.4 % 28.9 % 18.1 %
S&P 500 Index 21.0 27.6 28.5 18.2
Russell 2000 Index 21.3 13.1 16.7 13.4
Average Growth and Income Fund 13.8 18.4 21.7 14.7
</TABLE>
Tables like this one emphasize RELATIVE performance, and ours has been
reasonably good over the life of the fund. However, shareholders should also
notice the ABSOLUTE performance of all of the entries over the past 10 years.
Even the beleaguered Russell 2000 has out-performed the very long-term average
total return on stocks of about 10%, and the average annual returns on both our
Fund and the S&P 500 are about 8 full percentage points above the average. This
has been wonderful for all of us as stock investors, but it would be virtually
impossible for stocks, in the aggregate, to repeat that performance over the
next 10 years. Warren Buffett, in the November 22, 1999 issue of FORTUNE, makes
a very persuasive case that total returns on domestic stocks might average 6%
over the next 17 years. (We'll do our best to emulate the children of Lake
Woebegone and be above average.)
A TALE OF TWO MARKETS
This is a very interesting time for stock investors. The market's split
personality is more pronounced than ever, with the favored few soaring to
seemingly nonsensical levels of over-valuation, while the majority of stocks
have been in a quiet bear market for several quarters.
3
<PAGE>
A handful of very large companies have captured investors' imaginations, and
they now dominate the popular market averages. Consider:
- 5% of the S&P 500 (25 stocks) account for 50% of the value of the index;
- 5 STOCKS of the 4400 in the NASDAQ Composite Index have a combined market
valuation of $1.5 TRILLION, and account for 50% of the value of the index.
The top 10 stocks account for $2 trillion, or 2/3 of the index.
(Incidentally, the average P/E ratio of all the stocks in the NASDAQ Index
is approaching 200X!);
- Microsoft has a higher market capitalization than THE ENTIRE RUSSELL 2000
INDEX.
This is not good or bad, PER SE, but it seems to me to be an inherently unstable
situation (a tech stock "bubble"). It also means that these indexes have lost
some of their meaning as benchmarks. Some money managers concerned about keeping
up with these benchmarks have adopted an "if you can't lick 'em, join 'em"
attitude and jumped onto the bandwagon. This only reinforces the trend.
Our response to this phenomenon has been to sell off shares of some of our
cable and telecom stocks which (happily) have been infected with Internet or
".com" fever, and to buy more of our "old economy" favorites, especially
financial service companies. This puts us even further out of step with the
mainstream indexes, such as the S&P, so it will hurt our relative performance
for as long as the two-tier market persists. However, I believe that it will
serve us well when stock prices and business values are re-aligned.
PORTFOLIO REVIEW
Our portfolio changes very little from quarter to quarter, so I often have
trouble finding new things to say about our favorite stocks. This quarter, it
was particularly striking to re-read the 3rd quarter '99 letter and find that it
could be dropped into this letter practically untouched--except that the prices
of many of our favorites were down 10-20% since September 30. (This is why our
large lead over the S&P during the first 9 months of the year evaporated during
the 4th quarter.) At any rate, for those who remember this section of the 3rd
quarter letter, and for those who weren't interested then and aren't interested
now, you can skip the next several paragraphs. (This reminds me of the Wesco
Financial annual report in which Charlie Munger announced that what he had
written last year was still equally valid, so he was reprinting last year's
letter in lieu of a new one.)
4
<PAGE>
BANKS--Greenpoint, Golden State, and Washington Mutual are large, profitable,
growing banks selling at about 7 times next year's earnings per share and buying
back their own stock. With modest earnings growth and some P/E multiple
expansion, 50% total returns over the next 2-3 years seem like a realistic
possibility. Other banks in our portfolio, such as North Fork, are growing
faster and sell at slightly higher multiples, but have similar potential.
REAL ESTATE--Host Marriott, Hilton, Forest City, and Catellus are all selling at
discounts to the current liquidation values of their underlying real estate, and
each is generating strong cash flows that are available for dividends,
acquisitions, and stock buybacks. Host Marriott is a real estate investment
trust (REIT) that owns luxury and full-service hotels such as Ritz Carlton, Four
Seasons, Marriott, and Hyatt. Their properties could probably be sold for $13-15
per share with one phone call, yet the stock sells for about $8. The $.84
dividend is well covered and provides a 10% current yield, and the underlying
value of the business is growing. The other three companies are not REITs and do
not pay large dividends, but the degrees of under-valuation are similar. In each
case, the expectation of a total return of 50% over the next 2-3 years does not
seem outlandish.
MORTGAGE BANKING--Countrywide Credit has two parts to its business--originating
and servicing mortgages. Originating mortgages, to finance a home purchase or to
refinance an existing mortgage, generates one-time origination fee income.
Servicing involves collecting monthly payments and dealing with escrow accounts,
and generates a stream of fee income over the life of the mortgage. Higher
interest rates generally mean lower new mortgage activity, thus lower
origination fees, but it also means that existing mortgages remain outstanding
longer so the value of the servicing "annuity" rises. As interest rates have
risen in recent months, investors have focused on the negative side of this
equation and ignored the positive, so Countrywide has declined from over $50 per
share (where we had been sellers) to a recent $25. At this level, Countrywide
sells at under 7 times next years expected earnings and we have added
significantly to our position from the low $30's to the mid-$20's. Other
mortgage bankers which focus on originations, such as New Century Financial and
Resource Bancshares Mortgage, are more adversely affected by higher rates, but
both stocks are so severely depressed that they ought to be good contributors to
our future results from today's prices.
OTHER FINANCIAL SERVICES--Fears of higher interest rates, a slower economy, a
weaker stock market, etc. have depressed several others of our financial
services companies. United Asset Management is a holding company of investment
management businesses whose stock sells for about 50-60% of its value in a
takeover. It has operating problems that I believe are fixable, and
5
<PAGE>
it is buying in its own stock very aggressively. Berkshire Hathaway has fallen
from over $80,000 per share to under $52,000 over the past 18 months, and now
sells very close to its adjusted book value and well below its intrinsic
business value. Redwood Trust sells at $12, while its portfolio has a
liquidation value of $22, and its management is very intelligent, motivated, and
shareholder-oriented. It has become a relatively small position in our portfolio
since we own as many shares as the company's by-laws permit and our portfolio
has grown while its price has shrunk. However, the risk-reward equation for
Redwood and several other smaller financial companies appears to be very
favorable.
UTILITIES--Western Resources (WR) is an electric utility with assets worth at
least $25-30 per share, which has been under the multiple clouds of a failed
merger and a home security business with operating problems. Management is under
severe pressure to realize the values, and the stock at $17 should generate a
good return from this level. Citizens Utilities is also a company with great
assets, selling at a discount to their underlying value, whose management has
announced plans to restructure the company in order to recognize value. This is
the same management that built and sold Century Communications and Centennial
Cellular, both of which were very profitable holdings for our fund.
CABLE TELEVISION AND CELLULAR TELEPHONE--We have lost most of our cable and
cellular stocks to takeovers, and those that remain are not as cheap as they
used to be. Nevertheless, they are strong companies with good futures. Our
favorite is Liberty Media. It is a fabulous collection of programming and other
media assets, managed by John Malone, the master developer of media "content"
properties.
CASH RESERVES AND MARKET TIMING--The level of our cash position is a function of
new investments in the fund by shareholders plus proceeds from sales of stocks,
minus new purchases--not a market timing call. We continue to be a net buyer of
stocks, so our cash and other "reserves" were reduced to 17% of the portfolio at
year-end.
OUTLOOK
In the new year, we may have to deal with the deflation of the tech stock
bubble--gradually or dramatically. If that happens, selling in the favorites may
spread to the rest of the market, and our perfectly sane, bargain-priced stocks
could be carried along (down) by the mob. (We have seen hints of this in the
first few days of January.) For those who are uncomfortable with this prospect,
risk-free short-term U.S. government bonds yield about 6%, and high quality
municipal bonds yield 4-5%. Both of these are roughly equivalent on an after-
6
<PAGE>
tax basis to Warren Buffett's predicted 6% total return on stocks. For those who
can stand some volatility, I believe it is still worth the effort (and
occasional discomfort) to buy cheap stocks when we find them and not to try to
be fancy with the timing.
SHAREHOLDER INFORMATION
ANNUAL SHAREHOLDER INFORMATION MEETING: Please mark your calendars for
May 24, 2000. The meeting will be held at the Omaha Marriott and will begin at
4:30. It is a great opportunity to meet your fellow shareholders and the client
service people you have talked to on the phone. There should be no official
business, so the whole meeting can be devoted to answering shareholder
questions. We look forward to seeing you then.
WEBSITE: Our website address is www.weitzfunds.com. It contains daily
prices, our prospectus, published shareholder communications and forms, a list
of each fund's top 10 holdings, historical performance data, and answers to
frequently asked questions. We are working on giving shareholders the ability to
look up account balances and other historical transaction data, and we will keep
you posted on our progress. In the meantime, remember that you can use our
automated phone system to check balances and recent transactions. The number for
that service is: (800) 773-6472.
If you have ideas on how we could improve on the content or
user-friendliness of the website, our client service people would welcome your
suggestions.
Sincerely,
/s/ WALLACE R. WEITZ
Wallace R. Weitz
President, Portfolio
Manager
7
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- -------------- --------------
<C> <S> <C> <C>
COMMON STOCKS -- 81.4%
AUTO SERVICES -- 0.4%
645,100 Insurance Auto Auctions, Inc.* $ 7,525,098 $ 10,160,325
-------------- --------------
BANKING -- 14.4%
165,300 Astoria Financial Corp. 6,107,297 5,031,319
1,887,320 Commercial Federal Corp. 41,896,256 33,617,887
465,000 East West Bancorp, Inc. 4,439,375 5,318,438
67,500 First Federal Bankshares, Inc. 672,813 582,188
178,000 First Place Financial Corp. 1,936,188 1,891,250
4,800,900 Golden State Bancorp, Inc.* 94,993,804 82,815,525
3,233,800 Greenpoint Financial Corp. 86,398,719 77,004,863
343,300 Local Financial Corp.* 3,191,222 3,561,738
3,281,200 North Fork Bancorporation, Inc. 61,298,285 57,421,000
170,000 South Jersey Financial Corp., Inc.* 1,840,683 2,656,250
50,000 Troy Financial Corp.* 491,875 509,375
848,000 U.S. Bancorp 24,814,069 20,193,000
447,000 Virginia Capital Bancshares, Inc. 5,719,344 7,207,875
3,358,602 Washington Mutual, Inc. 104,981,233 87,323,652
-------------- --------------
438,781,163 385,134,360
-------------- --------------
CABLE TELEVISION -- 5.8%
2,060,433 Adelphia Communications Corp. CL A* 61,965,938 135,215,916
272,000 MediaOne Group, Inc.* 7,318,880 20,893,000
-------------- --------------
69,284,818 156,108,916
-------------- --------------
CONSUMER PRODUCTS AND SERVICES -- 2.2%
633,400 American Classic Voyages Co.* 10,522,188 22,169,000
644,350 LabOne, Inc. 8,795,635 4,429,906
4,875 Lady Baltimore Foods, Inc. CL A 227,781 286,406
919,000 Premier Parks, Inc.* 23,554,683 26,536,125
2,744,000 Protection One, Inc.* 14,948,651 5,316,500
-------------- --------------
58,048,938 58,737,937
-------------- --------------
</TABLE>
8
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- -------------- --------------
<C> <S> <C> <C>
FEDERAL AGENCIES -- 3.1%
75,000 Fannie Mae $ 1,270,544 $ 4,682,813
90,000 Freddie Mac 385,147 4,235,625
1,735,900 SLM Holding Corp. 61,023,762 73,341,775
-------------- --------------
62,679,453 82,260,213
-------------- --------------
FINANCIAL SERVICES -- 9.8%
1,357,300 Allied Capital Corp. 23,911,458 24,855,556
350,000 American Capital Strategies, Ltd. 5,950,000 7,962,500
204 Berkshire Hathaway, Inc. CL A* 7,307,540 11,444,400
50,745 Berkshire Hathaway, Inc. CL B* 103,303,209 92,863,350
2,835,500 Imperial Credit Industries, Inc.* 37,083,542 17,721,875
1,541,850 The PMI Group, Inc. 44,124,709 75,261,553
30,000 PS Group Holdings, Inc. 121,525 337,500
1,741,000 United Asset Management Corp. 39,557,202 32,317,313
300,000 United Panam Financial Corp.* 2,019,813 581,250
-------------- --------------
263,378,998 263,345,297
-------------- --------------
INFORMATION AND DATA PROCESSING -- 0.8%
1,195,600 Data Transmission Network Corp.* 26,547,062 20,624,100
180,000 Intelligent Systems Corp.* 380,869 720,000
-------------- --------------
26,927,931 21,344,100
-------------- --------------
LODGING AND GAMING -- 4.8%
958,100 Extended Stay America, Inc.* 7,441,583 7,305,512
546,000 Harrah's Entertainment, Inc.* 7,985,042 14,434,875
5,268,900 Hilton Hotels Corp. 57,562,191 50,713,162
469,000 Mandalay Resort Group* 5,905,464 9,438,625
3,841,500 Park Place Entertainment Corp.* 23,557,302 48,018,750
-------------- --------------
102,451,582 129,910,924
-------------- --------------
MEDIA AND ENTERTAINMENT -- 9.5%
3,404,536 AT&T Corp. - Liberty Media Group A* 56,836,073 193,207,418
221,270 Chris-Craft Industries, Inc.* 9,212,917 15,959,099
58,700 Daily Journal Corp.* 1,306,716 1,915,088
74,500 Gabelli Global Multimedia Trust, Inc. 507,345 1,396,875
1,020,300 Valassis Communications, Inc.* 19,135,221 43,107,675
-------------- --------------
86,998,272 255,586,155
-------------- --------------
</TABLE>
9
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- -------------- --------------
<C> <S> <C> <C>
MORTGAGE BANKING -- 4.3%
4,126,800 Countrywide Credit Industries, Inc. $ 137,931,766 $ 104,201,700
144,800 New Century Financial Corp.* 1,308,625 2,280,600
1,380,400 Resource Bancshares Mtg. Grp., Inc. 18,271,246 6,254,937
391,606 WMF Group, Limited* 2,762,590 2,251,735
-------------- --------------
160,274,227 114,988,972
-------------- --------------
PRINTING SERVICES -- 0.8%
1,547,300 Mail-Well, Inc.* 20,341,627 20,888,550
-------------- --------------
REAL ESTATE AND CONSTRUCTION -- 2.3%
3,595,100 Catellus Development Corp.* 46,275,216 46,062,219
545,600 Forest City Enterprises, Inc. CL A 11,075,278 15,276,800
30,000 Syntroleum Corp.* 95,750 243,750
-------------- --------------
57,446,244 61,582,769
-------------- --------------
REAL ESTATE INVESTMENT TRUSTS -- 6.7%
1,571,500 Capital Automotive REIT 20,768,123 19,152,656
416,000 Dynex Capital, Inc. 11,646,215 2,678,000
1,287,980 Fortress Investment Corp. 23,764,204 21,895,660
301,300 Hanover Capital Mortgage Holdings, Inc. 3,187,130 1,054,550
62,805 Healthcare Financial Partners Units** 6,252,238 6,280,500
12,631,700 Host Marriott Corp. 113,998,356 104,211,525
465,000 IMPAC Mortgage Holdings, Inc. 6,443,707 1,918,125
576,200 Imperial Credit Commercial Mtg. Inv. Corp. 6,080,510 6,554,275
475,000 NovaStar Financial, Inc. 7,282,611 1,484,375
1,198,117 Redwood Trust, Inc. 28,274,792 14,976,462
-------------- --------------
227,697,886 180,206,128
-------------- --------------
RESTAURANTS -- 0.3%
690,200 CBRL Group, Inc. 11,149,531 6,697,097
-------------- --------------
RETAIL DISCOUNT -- 0.8%
1,378,000 Consolidated Stores Corp.* 21,189,503 22,392,500
-------------- --------------
SATELLITE SERVICES -- 0.9%
1,317,300 Orbital Sciences Corp.* 17,920,702 24,452,381
-------------- --------------
</TABLE>
10
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- -------------- --------------
<C> <S> <C> <C>
TELECOMMUNICATIONS -- 8.6%
128,800 Alltel Corp. $ 2,823,211 $ 10,650,150
308,300 Centennial Cellular Corp. CL A* 3,328,833 25,550,362
561,000 Corecomm, Limited* 3,350,600 33,309,375
1,225,100 Telephone and Data Systems, Inc. 50,558,647 154,362,600
73,100 United States Cellular Corp.* 3,321,288 7,378,531
-------------- --------------
63,382,579 231,251,018
-------------- --------------
UTILITIES -- 5.9%
6,709,600 Citizens Utilities Co. CL B * 68,174,346 95,192,450
24,100 Empire District Electric Co. 615,996 545,263
325,000 Kansas City Power and Light Co. 7,531,875 7,170,312
3,226,100 Western Resources, Inc. 76,448,297 54,843,700
-------------- --------------
152,770,514 157,751,725
-------------- --------------
Total Common Stocks 1,848,249,066 2,182,799,367
-------------- --------------
WARRANTS -- 0.0%
338,100 Hanover Capital Mtg. Holdings, Inc., Expiring 9/15/00 42,263 5,284
350,000 NovaStar Financial, Inc., Expiring 2/03/01 175,000 17,500
-------------- --------------
Total Warrants 217,263 22,784
-------------- --------------
CONVERTIBLE PREFERRED STOCKS -- 0.5%
2,100,000 NovaStar Financial, Inc. 7% Pfd. Class B Cumulative 13,911,099 12,495,000
-------------- --------------
NON-CONVERTIBLE PREFERRED STOCKS -- 0.1%
15,000 Crown American Realty Trust 11.0% Pfd. Series A 667,500 530,625
30,000 Prime Retail, Inc. 10.5% Pfd. Series A 645,000 440,625
34,000 RB Asset, Inc. 15.0% Pfd. Series A 845,750 510,000
-------------- --------------
Total Non-Convertible Preferred Stocks 2,158,250 1,481,250
-------------- --------------
<CAPTION>
FACE
AMOUNT
- -----------
<C> <S> <C> <C>
CORPORATE BONDS -- 0.3%
$ 4,500,000 USA Networks, Inc. 7.0% 7/01/03 4,425,298 4,680,000
750,000 Local Financial Corp. 11.0% 9/08/04 750,000 783,750
2,000,000 Harcourt General 6.5% 5/15/11 1,944,538 1,690,000
-------------- --------------
Total Corporate Bonds 7,119,836 7,153,750
-------------- --------------
</TABLE>
11
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT COST VALUE
- ----------- -------------- --------------
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES -- 3.9%
$15,000,000 U.S. Treasury Note 5.5% 3/31/00 $ 14,996,720 $ 15,004,695
4,750,000 Fannie Mae 6.625% 7/12/00 4,750,241 4,759,785
13,000,000 Federal Home Loan Bank 5.5% 7/14/00 12,992,127 12,952,303
40,000,000 Freddie Mac 5.0% 2/15/01 39,627,904 39,410,560
25,000,000 Fannie Mae 5.88% 3/25/04 24,627,890 24,078,675
3,000,000 Federal Home Loan Bank 6.04% 9/08/05 3,000,000 2,846,781
1,000,000 Federal Home Loan Bank 6.44% 11/28/05 1,000,954 976,123
6,000,000 Fannie Mae 6.56% 11/26/07 6,000,000 5,699,646
-------------- --------------
Total U.S. Government and Agency Securities 106,995,836 105,728,568
-------------- --------------
SHORT-TERM SECURITIES -- 14.0%
74,190,638 Wells Fargo Government Money Market Fund 74,190,638 74,190,638
22,000,000 U. S. Treasury Bill 1/20/00 21,938,817 21,947,948
110,000,000 Freddie Mac Discount Note 1/27/00 109,562,700 109,615,770
70,000,000 Freddie Mac Discount Note 3/02/00 69,317,986 69,366,710
102,000,000 U. S. Treasury Bill 5/04/00 100,150,538 100,167,978
-------------- --------------
Total Short-Term Securities 375,160,679 375,289,044
-------------- --------------
Total Investments in Securities $2,353,812,029 2,684,969,763
============== --------------
Covered Call Options Written at Market Value -- (0.0%) (73,750)
Other Liabilities in Excess of Other Assets -- (0.2%) (5,123,558)
--------------
Total Net Assets -- 100% $2,679,772,455
==============
Net Asset Value Per Share $ 33.08
==============
</TABLE>
<TABLE>
<CAPTION>
NO. OF EXPIRATION DATE/
CONTRACTS STRIKE PRICE VALUE
- ----------- ------------------- --------------
<C> <S> <C> <C>
COVERED CALL OPTIONS WRITTEN AT
MARKET VALUE
400 Mandalay Resort Group March 2000/22.5 $ (50,000)
400 Mandalay Resort Group March 2000/25 (23,750)
--------------
Total Call Options Written
(premiums received $182,594) $ (73,750)
==============
</TABLE>
*Non-income producing
**Each unit, which is restricted as to sale, consists of five shares of common
stock and one stock purchase warrant. The company distributed an additional
warrant per unit to unitholders during 1998. The warrants currently have no
value or cost assigned to them.
12
