SELECTED FUNDS
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
- -------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Dear Shareholder:
1995 was a very good year for the stock and bond markets. The stock
market had its best year in two decades. While we are enjoying returns
such as last year's and are generally optimistic, we always encourage our
shareholders to maintain a long-term outlook when investing.
Selected American Shares had strong performance in 1995, rising 38.1%
vs. the S&P 500's 37.6% gain. Financial services and technology stocks led
the fund's strong performance. Financial services stocks should continue
to benefit over the next decade as baby boomers reach the ages in which
they increasingly become savers for their retirement, rather than
spenders. Over the long run, technology stocks continue to be a fast
growing part of the economy in a slow growing world.
Selected Special Shares had strong performance in 1995, appreciating
34.2% vs. 31.0% for the S&P 400 Midcap Index and 31.5% for the Lipper
Small Company Growth Fund Index. The fund is invested primarily in the
following areas: technology, industrial products, retailing, and financial
services. Attractive opportunities within these industries exist in small
cap companies which are selling at discounts to their future growth rates.
Many of these companies are rapidly growing with innovative products.
The Selected U.S. Government Income Fund's return was an attractive
16.0% in 1995. The bond market rallied last year as interests rates fell.
The yield on the 30 year treasury fell from 7.9% to 5.9% and the yield on
the 2 year bond fell from 7.7% to 5.2%. When yields change like this, the
positive effect is greater on longer bonds than on shorter bonds. We are
lengthening the maturity of the fund since we anticipate a further rally in
the bond market for 1996, though not as intense as in 1995. The fund is
being positioned as an "all-weather" fund with a somewhat even
distribution of securities over an intermediate maturity range. This
balance is designed to smooth out the performance and provide stability in
a variety of market climates.
We believe that although the markets fluctuate, they are likely to continue
to grow for many years and provide one of the best opportunities for
building wealth. We do not take a short-term outlook when selecting
investments on your behalf and encourage you to take a long-term
perspective when investing with us. An outlook which narrowly focuses
on the volatility during shorter periods may cause one to overlook the
more meaningful long-term potential offered by stock market growth.
Sincerely,
/s/ Robert J. Greenebaum /s/ Shelby M.C. Davis
Robert J. Greenebaum Shelby M. C. Davis
Chairman President
February 16, 1996
<PAGE>
SELECTED AMERICAN SHARES, INC.
Comparison of Selected American Shares, Inc. and
Standard & Poor's 500 Stock Index
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Average Annual Total Return For the Periods ended December 31, 1995.
One Year......................... 38.09%
Five Years....................... 16.86%
Ten Years........................ 13.67%
$10,000 invested over ten years. Let's say you invested $10,000 in
Selected American Shares ("SAS") on December 31, 1985. As the chart
below shows, by December 31, 1995 the value of your investment would
have grown to $36,049 - a 260.49% increase on your initial investment.
For comparison, the Standard & Poor's 500 Stock Index is also presented
on the chart below.
Graph omitted - details of graph are as follows:
Measurement period Selected American S&P 500
Shares, Inc. Index
------------------ ------------------- ---------------
FYE 12/31/85 $10,000 $10,000
FYE 12/31/86 11,715 11,847
FYE 12/31/87 11,743 12,467
FYE 12/31/88 14,328 14,562
FYE 12/31/89 17,204 19,148
FYE 12/31/90 16,533 18,541
FYE 12/31/91 24,180 24,190
FYE 12/31/92 25,581 26,021
FYE 12/31/93 26,968 28,627
FYE 12/31/94 26,106 28,994
FYE 12/31/95 36,049 39,878
Standard & Poor's is an unmanaged index which has no specific investment
objective. Investments cannot be made directly into the index. The index
used includes net dividends reinvested.
The performance data for Selected American Shares contained in this
report represents past performance and assumes that all distributions
were reinvested, and should not be considered as an indication of future
performance from an investment of the Fund today. The investment return
and principal value will fluctuate so that shares may be worth more or
less than their original cost when redeemed.
<PAGE>
SELECTED SPECIAL SHARES, INC.
Comparison of Selected Special Shares, Inc. and
Standard & Poor's 500 Stock Index
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Average Annual Total Return For the Periods ended December 31, 1995.
One Year..................... 34.24%
Five Years................... 14.56%
Ten Years.................... 11.81%
$10,000 invested over ten years. Let's say you invested $10,000 in
Selected Special Shares ("SSS") on December 31, 1985. As the chart
below shows, by December 31, 1995 the value of your investment would
have grown to $30,552 - a 205.52% increase on your initial investment.
For comparison, the Standard & Poor's 500 Stock Index is also presented
on the chart below.
Graph omitted - details of graph are as follows:
Measurement period Selected Special S&P 500
Shares, Inc. Index
------------------ ------------------- ---------------
FYE 12/31/85 $10,000 $10,000
FYE 12/31/86 10,729 11,847
FYE 12/31/87 10,783 12,467
FYE 12/31/88 12,893 14,562
FYE 12/31/89 16,621 19,148
FYE 12/31/90 15,479 18,541
FYE 12/31/91 19,431 24,190
FYE 12/31/92 21,069 26,021
FYE 12/31/93 23,334 28,627
FYE 12/31/94 22,759 28,994
FYE 12/31/95 30,552 39,878
Standard & Poor's is an unmanaged index which has no specific investment
objective. Investments cannot be made directly into the index. The index
used includes net dividends reinvested.
The performance data for Selected Special Shares contained in this report
represents past performance and assumes that all distributions were
reinvested, and should not be considered as an indication of future
performance from an investment of the Fund today. The investment return
and principal value will fluctuate so that shares may be worth more or
less than their original cost when redeemed.
<PAGE>
SELECTED U.S. GOVERNMENT INCOME FUND
Comparison of U.S. Government Income Fund and the Lehman Brothers
Intermediate Term U.S. Treasury Securities Index
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Average Annual Total Return For the Periods ended December 31, 1995.
One Year........................... 15.97%
Five Years......................... 7.78%
Life of Fund....................... 7.30%
$10,000 invested over the life of the Fund. Let's say you invested $10,000
in U.S. Government Income Fund ("USGIF") on November 24, 1987 (inception
of the Fund). As the chart below shows, by December 31, 1995 the value of
your investment would have grown to $17,707 - a 77.07% increase on your
initial investment. For comparison, the Lehman Brothers Intermediate
Term U.S. Treasury Securities Index is also presented on the chart below.
Graph omitted - details of graph are as follows:
Lehman Brothers
Intermediate Term
Measurement period Selected U.S. Government U.S. Treasury
Income Fund Securities Index
------------------ ------------------- ----------------
FYE 11/24/87 $10,000 $10,000
FYE 12/31/87 10,045 10,132
FYE 12/31/88 10,341 10,781
FYE 12/31/89 11,217 12,148
FYE 12/31/90 12,174 13,309
FYE 12/31/91 13,827 15,191
FYE 12/31/92 14,543 16,250
FYE 12/31/93 15,694 17,592
FYE 12/31/94 15,269 17,231
FYE 12/31/95 17,707 19,727
The Lehman Brothers Intermediate Term U.S. Treasury Securities Index is
an unmanaged index which has no specific investment objective.
Investments cannot be made directly into the index.
The performance data for Selected U.S. Government Income Fund contained
in this report represents past performance and assumes that all
distributions were reinvested, and should not be considered as an
indication of future performance from an investment of the Fund today.
The investment return and principal value will fluctuate so that shares
may be worth more or less than their original cost when redeemed.
<PAGE>
SELECTED FUNDS
Management's Discussion of Fund Performance
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Interview with Shelby M.C. Davis & Christopher C. Davis, Portfolio
Managers of Selected American Shares:
Q&A
- ---
Q. Describe the addition to the fund's portfolio management team which was
made in 1995.
A. During the past year the portfolio management of the fund has been
strengthened by the addition of Christopher C. Davis as co-portfolio
manager. Christopher C. Davis brings his ten years of experience and
judgment in investment management to benefit the fund in selecting
investments.
Q. Why did Selected American Shares perform better than the stock
market measured by the S&P 500?
A. We actively research industries and companies to find those which
will outperform the stock market in general. Currently, we find such
companies in the financial services area. Financial stocks benefit in the
environment of low interest rates, low inflation, and good earnings
growth we have today. As baby boomers increasingly become savers and
investors, insurance companies, banks, and brokerage firms benefit.
Q. Apart from financial and technology stocks, what are the largest
areas and companies in which the fund has invested?
A. Real estate (8.3%) and convertible preferred stock (7.4%) represent
the next largest categories in which we have made investments. Among
our real estate holdings, the largest are Centerpoint Properties
Corporation, Vornado Realty Trust and Host Marriott Corp. Among our
convertible preferred stock holdings, the largest are News Corp. Ltd.,
Citicorp, and Salomon Inc.
Q. What are the top ten yielding securities in the fund?
A. Most of the top yielding securities are real estate investments
trusts, or REITS. REITS are currently benefiting from the real estate
recovery both in terms of rising rental rates and acquisitions at less
than replacement cost. Moreover, the dividend stream provided by the REITS
should continue to grow faster than inflation.
Following is a list of the top 10 yielding holdings:
Saul Centers, Inc. Mitsubishi Bank Ltd. Convertible Bonds
Capstead Mortgage Corp. Federal Realty Investment Trust
Mid-America Apartment MidAmerica Energy Co
Communities, Inc. .
Sovran Self Storage Inc. Bay Apartment Communities, Inc.
Equitable Companies, Inc. Centerpoint Properties Corporation
Convertible Bonds
Q. What is the guiding philosophy behind the way the fund invests
shareholders' money?
A. Our investment principles consistently stress a research-driven,
long-term, and disciplined approach to investing. As stewards of your
investment, we focus on the fundamentals of understanding a company's
financial situation inside and out, combined with getting to know a
company's management and their strategies for the future.
<PAGE>
SELECTED FUNDS
Management's Discussion of Fund Performance (Continued)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Interview with Elizabeth Bramwell, Portfolio Manager of Selected Special
Shares:
Q&A
- ---
Q. What was your performance in 1995?
A. Selected Special Shares appreciated 34.2% in 1995. This compares
to 31.0% for the S&P Midcap Index and 31.5% for the Lipper Small Company
Growth Fund Index.
Q. What were your largest holdings at the end of 1995?
A. The Fund's top ten holdings as of December 31, 1995 were:
Eckerd Corporation Robert Half International, Inc.
Thermo Electron Corporation Loral Corporation
TCF Financial Corporation LSI Logic Corporation
AVX Corp. Regal Cinemas, Inc.
Lone Star Steakhouse and Saloon, Inc. On Assignment, Inc.
Q. What was Selected Special's exposure to technology?
A. Technology and communications stocks represented 20% of the
portfolio at the end of December. Electronics continue to penetrate more
and more products and the outlook over the next several years for new
multimedia, networking and other products remains bright. Other large
industry sectors include industrial products (15%), retailing (13%) and
financial services (11%).
Q. What is your economic outlook?
A. We look for 1996 economic growth to be about 2% and for S&P
corporate profits to slow to mid-single digits from more than 15% in
1995. We see consumer spending remaining cautious, given slow job
expansion, and capital spending moderating in the first half but picking
up later in the year as new communications and computer technologies come
to market. Inflation is expected to slow to some 2% in response to global
competition, a stronger U.S. dollar, technological advances and bipartisan
efforts to constrain the federal deficit. We expect interest rates to
continue to decline in view of low inflation and the historically wide
spread between the Fed Funds rate of 5.25% and inflation. Lower interest
rates would encourage higher price/earnings ratios and positively impact
the stock market.
Q. Is this a good time to invest in small cap stocks?
A. We believe that at the current time, there is a particularly broad
universe of rapidly-growing small cap stocks with innovative products
and services that are selling at discounts to their future growth rates
compared to many large cap growth stocks that are selling at 1.5 times
their individual future growth rates or compared to the S&P 500 Index
which we estimate is selling at twice its secular growth rate. We believe
that the equity markets should broaden to what we perceive as less
efficiently valued small cap equities.
<PAGE>
SELECTED FUNDS
Management's Discussion of Fund Performance (Continued)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Interview with Elizabeth Bramwell, Portfolio Manager of Selected Special
Shares: (Continued)
Q&A
- ---
Q. Where are you finding interesting ideas?
A. We look for various investment themes where we believe that the
outlook for individual companies may largely transcend a slow overall
economy. Areas of interest include:
Outsourcing (component manufacturing, financial data processing and
labor) to improve productivity and global competitiveness; intellectual
property, which can leverage know-how across expanding multimedia
alternatives; innovators covering a wide range of investment
opportunities; global expansion of brand name franchises; geographically -
positioned company plays such as in the rapidly growing Pacific
Northwest and Asian Pacific; and financial services where aging baby
boomers are driving demand.
Interview with Carolyn H. Spolidoro, Portfolio Manager of Selected U.S.
Government Income.
Q&A
- ---
Q. Can you explain how the attractive 16% return was attained?
A. The 1995 fall in interest rates was beneficial for most bonds. As
interest rates fell, the valuation of bonds increased. This effect was
most dramatic in the long end of the yield curve. Securities with longer
maturities outperformed shorter securities. Our fund tracked the
intermediate maturity governments. This middle range is a good position
because the fund can participate in rallies and yet not sacrifice some
down-side protection.
Q. How is the fund positioned?
A. Our fund is being positioned to be a well-rounded, all-weather fund.
Our plan is to have a variety of securities with a spread of maturities
over the intermediate range of the yield curve. This diversity, in terms
of types of government securities, maturity length, call provisions, and
size of coupon is an asset in smoothing out price variability in different
market environments.
Q. What type of bond market do you foresee for 1996?
A. I believe the rally of 1995 will continue into 1996, although it will
not be as powerful as the 1995 rally was. The year may start out with
some choppiness as the market adjusts and gains confidence that the rally
wasn't overdone. This is why the positioning of the fund is so important;
the different market sectors respond differently to the changing
environment.
<PAGE>
Our Directors
Photograph omitted.
Robert J. Greenebaum
Chairman
Photograph omitted. Photograph omitted.
Shelby M.C. Davis William P. Barr
President
<PAGE>
Our Directors
Photograph omitted. Photograph omitted.
Floyd A. Brown William G. Cole
Photograph omitted. Photograph omitted.
Walter E. Hoadley James J. McMonagle
<PAGE>
Our Directors
Photograph omitted. Photograph omitted.
Martin H. Proyect Larry Robinson
<PAGE>
<TABLE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED AMERICAN SHARES, INC.
<CAPTION>
VALUE
SHARES (NOTE1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - (89.62%)
AUTOMOBILES - (2.54%)
445,000 General Motors Corp................................................................................ $ 23,529,375
-------------
BANKS AND SAVING AND LOAN ASSOCIATIONS - (8.91%)
425,000 Banc One Corp...................................................................................... 16,043,750
402,154 First Bank Systems, Inc............................................................................ 19,956,892
183,800 Golden West Financial Corp......................................................................... 10,154,950
150,000 Northern Trust Corp................................................................................ 8,400,000
27,434 Norwest Corp....................................................................................... 905,322
125,000 Wells Fargo & Co................................................................................... 27,000,000
-------------
82,460,914
-------------
COMPUTER PRODUCTS - (4.52%)
134,000 Hewlett-Packard Co................................................................................. 11,222,500
540,000 Intel Corp......................................................................................... 30,645,000
-------------
41,867,500
-------------
CONSUMER PRODUCTS - (0.85%)
227,000 Seagram Co. Ltd. (The)............................................................................. 7,859,875
-------------
ELECTRONICS - (2.13%)
380,600 Texas Instruments, Inc............................................................................. 19,696,050
-------------
ENERGY - (4.32%)
280,000 Amerada Hess Corp.................................................................................. 14,840,000
34,285 Amoco Corp......................................................................................... 2,464,234
300,000 Burlington Resources, Inc.......................................................................... 11,775,000
250,000 Panhandle Eastern Corp............................................................................. 6,968,750
50,000 Texaco Inc......................................................................................... 3,925,000
-------------
39,972,984
-------------
ENTERTAINMENT - (0.80%)
125,000 Disney (Walt) Co. (The)............................................................................ 7,375,000
FINANCIAL - (14.82%)
710,000 American Express Co................................................................................ 29,376,250
99,031 Dean Witter, Discover & Co......................................................................... 4,654,457
269,900 Donaldson, Lufkin & Jenrette, Inc.................................................................. 8,434,375
200,000 Equifax, Inc....................................................................................... 4,275,000
275,000 Federal Home Loan Mortgage Corp.................................................................... 22,962,500
235,000 Morgan (J.P.) & Co., Inc........................................................................... 18,858,750
287,900 Morgan Stanley Group Inc........................................................................... 23,211,938
403,333 Travelers Group Inc................................................................................ 25,359,562
-------------
137,132,832
-------------
FOOD/BEVERAGE & RESTAURANT - (4.89%)
250,000 Coca-Cola Company.................................................................................. 18,562,500
430,000 McDonald's Corp.................................................................................... 19,403,750
280,000 Tyson Foods, Inc., Class A......................................................................... 7,315,000
-------------
45,281,250
-------------
<PAGE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED AMERICAN SHARES, INC. - Continued
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
HEALTH CARE - (4.56%)
200,000 Gillette Co., (The)................................................................................ $ 10,425,000
150,000 Johnson & Johnson.................................................................................. 12,843,750
300,000 Pfizer Inc......................................................................................... 18,900,000
-------------
42,168,750
-------------
INSURANCE - (18.95%)
527,514 Allstate Corp. (The)............................................................................... 21,694,013
225,000 American International Group,Inc................................................................... 20,812,500
258,000 Berkley (W.R.) Corp................................................................................ 13,867,500
215,200 Chubb Corp......................................................................................... 20,820,600
881,000 Equitable Companies Inc............................................................................ 21,144,000
130,200 General Re Corp.................................................................................... 20,181,000
300,000 National Re Corp................................................................................... 11,400,000
225,000 Progressive Corp. (Ohio)........................................................................... 10,996,875
380,000 Risk Capital Holdings, Inc.<F1>.................................................................... 8,882,500
368,775 SunAmerica, Inc.................................................................................... 17,516,813
2,016 Transport Holdings, Inc., Class A<F1>.............................................................. 82,152
145,600 UNUM Corp.......................................................................................... 8,008,000
-------------
175,405,953
-------------
PAPER PRODUCTS - (3.51%)
615,200 Fort Howard Corp.<F1>.............................................................................. 13,842,000
367,000 Jefferson Smurfit Corporation<F1>.................................................................. 3,486,500
318,000 Union Camp Corp.................................................................................... 15,144,750
-------------
32,473,250
-------------
PHOTOGRAPHIC - (1.10%)
152,000 Eastman Kodak Co................................................................................... 10,184,000
-------------
PUBLISHING - (3.22%)
236,200 Gannett Co., Inc................................................................................... 14,496,775
250,000 Tribune Co......................................................................................... 15,281,250
-------------
29,778,025
-------------
RAILROAD - (1.38%)
333,600 Illinois Central Corp.............................................................................. 12,801,900
-------------
REAL ESTATE - (8.33%)
32,000 Bay Apartment Communities, Inc..................................................................... 776,000
75,000 Capstead Mortgage Corp............................................................................. 1,715,625
814,394 Centerpoint Properties Corporation................................................................. 18,832,861
91,500 Federal Realty Investment Trust.................................................................... 2,081,625
919,300 Host Marriott Corp................................................................................. 12,180,725
150,000 Kimco Realty Corp.................................................................................. 4,087,500
50,000 Merry Land & Investment Co., Inc................................................................... 1,181,250
75,000 Mid-America Apartment Communities, Inc............................................................. 1,856,250
60,000 Public Storage, Inc................................................................................ 1,140,000
<PAGE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED AMERICAN SHARES, INC. - Continued
VALUE
SHARES/PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
REAL ESTATE - Continued
272,500 Saul Centers, Inc.................................................................................. $ 3,712,813
35,000 Sovran Self Storage Inc............................................................................ 923,125
75,000 Storage USA, Inc................................................................................... 2,446,875
406,900 Vornado Realty Trust............................................................................... 15,258,750
287,300 Weingarten Realty Investors........................................................................ 10,917,400
-------------
77,110,799
-------------
RETAIL - (1.40%)
205,000 Harcourt General, Inc.............................................................................. 8,584,375
90,000 Home Depot, Inc.................................................................................... 4,308,750
600 Tandy Corp......................................................................................... 24,900
-------------
12,918,025
-------------
TELECOMMUNICATIONS - (2.04%)
300,000 AirTouch Communications,Inc.<F1>................................................................... 8,475,000
400,000 MCI Communications Corp............................................................................ 10,450,000
-------------
18,925,000
-------------
TIMBER PRODUCTS - (0.71%)
151,000 Weyerhaeuser Co.................................................................................... 6,530,750
-------------
UTILITIES - (0.64%)
351,600 MidAmerica Energy Co............................................................................... 5,889,300
-------------
Total Common Stock - (identified cost $616,941,570)........................................ 829,361,532
-------------
CONVERTIBLE PREFERRED STOCK - (7.41%)
50,000 Banc One Pfd., $3.50, Ser. C Conv. Pfd............................................................. 3,281,250
50,000 Barnett Banks Inc., $4.50, Ser. A Conv. Pfd........................................................ 5,575,000
89,595 Citicorp, $1.217, Ser. 15 Conv. Pfd................................................................ 16,384,686
89,000 Delta Air Lines, Inc., Depository Shares, $3.50, Ser. C Conv. Pfd.................................. 5,284,375
50,000 First Bank Systems, Inc., $3.5625, Ser. 1991-A Conv. Pfd........................................... 4,287,500
899,000 News Corp. Ltd. (The), Sponsored ADR Pfd........................................................... 17,305,750
81,700 Salomon Inc. - Hewlett-Packard Company, ELK, 5.25%, 01/01/97....................................... 8,210,850
99,000 SunAmerica Inc., Depository Shares, $2.78, Ser. D Conv. Pfd........................................ 4,727,250
22,500 Travelers Group Inc., 5.50%, Ser. B Conv. Pfd...................................................... 1,963,125
30,000 Unocal Corp., 3.50%, Conv. Pfd..................................................................... 1,601,250
-------------
Total Convertible Preferred Stock - (identified cost $54,943,315).......................... 68,621,036
-------------
CONVERTIBLE BONDS - (1.46%)
$ 4,000,000 AMR Corp., Conv. Sub. Qrtly. Income Cap. Secs., 6.125%, 11/01/24................................... 4,140,000
4,000,000 Chevron Corp., Exchangeable Sr. Deb., 6.50%, 01/15/03.............................................. 5,020,000
3,000,000 Equitable Companies Inc., 6.125%, 12/15/24......................................................... 3,375,000
850,000 Mitsubishi Bank Ltd., 3.00%, 11/30/02.............................................................. 998,750
-------------
Total Convertible Bonds _ (identified cost $12,864,834).................................... 13,533,750
-------------
<PAGE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED AMERICAN SHARES, INC. - Continued
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
SHORT TERM - (1.48%)
$13,740,000 Federal Home Loan Mortgage Corporation Discount Note, 5.50%, 01/02/96
- (identified cost $13,737,900)................................................................. $ 13,737,900
-------------
TOTAL INVESTMENTS - (99.97%) - (identified cost $698,487,619) - <F2>.............................. 925,254,218
OTHER ASSETS LESS LIABILITIES _ (0.03%)........................................................... 257,482
-------------
NET ASSETS - (100%).......................................................................... $ 925,511,700
=============
<FN>
<F1> Non-Income Producing Security
<F2> Aggregate cost for Federal Income Tax purposes is $698,487,619.
At December 31, 1995 unrealized appreciation (depreciation) of
securities for Federal Income Tax purposes is as follows:
Unrealized appreciation.................................................................................. $ 233,738,862
Unrealized depreciation.................................................................................. (6,972,263)
-------------
Net unrealized appreciation......................................................................... $ 226,766,599
=============
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED SPECIAL SHARES, INC.
<CAPTION>
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - (99.71%)
APPAREL - (2.97%)
17,000 Cutter & Buck, Inc.<F1>........................................................................... $ 144,500
25,000 Oakley, Inc.<F1>.................................................................................. 850,000
30,000 Sola International, Inc........................................................................... 757,500
-------------
1,752,000
-------------
AUTOMOTIVE/HEAVY EQUIPMENT - (0.81%)
10,500 Case Corporation.................................................................................. 480,375
-------------
COMMUNICATIONS - (4.37%)
18,000 Infinity Broadcasting Corporation<F1>............................................................. 670,500
10,000 Microwave Power Devices, Inc.<F1>................................................................. 111,250
10,000 Nokia Corp. - ADR................................................................................. 388,750
15,000 PairGain Technologies, Inc.<F1>................................................................... 821,250
8,000 StrataCom, Inc.<F1>............................................................................... 588,000
-------------
2,579,750
-------------
ENTERTAINMENT - (5.98%)
20,000 Cinar Films, Inc., Class B<F1>.................................................................... 302,500
47,045 Gaylord Entertainment Company..................................................................... 1,305,499
20,000 Pixar, Inc.<F1>................................................................................... 577,500
45,000 Regal Cinemas, Inc.<F1>........................................................................... 1,338,750
-------------
3,524,249
-------------
FINANCIAL SERVICES - (10.96%)
15,000 Alex Brown, Inc................................................................................... 630,000
40,000 Charles Schwab Corporation (The).................................................................. 805,000
25,000 Collective Bancorp, Inc........................................................................... 634,375
15,000 Dow Jones & Company, Inc.......................................................................... 598,125
15,000 Northern Trust Company............................................................................ 840,000
50,000 TCF Financial Corporation......................................................................... 1,656,250
45,000 Washington Mutual, Inc............................................................................ 1,299,375
-------------
6,463,125
-------------
FOOD & BEVERAGE - (0.37%)
19,000 Pepsi Cola Puerto Rico Bottling Company........................................................... 218,500
HEALTHCARE PRODUCTS - (1.87%)
25,000 Ballard Medical Products.......................................................................... 446,875
10,000 Merck & Company, Inc.............................................................................. 657,500
-------------
1,104,375
-------------
HEALTHCARE SERVICES - (0.61%)
10,000 Healthsource, Inc.<F1>............................................................................ 360,000
-------------
INDUSTRIAL PRODUCTS - (15.08%)
60,000 AVX Corp.......................................................................................... 1,590,000
15,000 C.P. Clare Corporation<F1>........................................................................ 307,500
10,300 Illinois Tool Works, Inc.......................................................................... 607,700
25,000 KEMET Corporation<F1>............................................................................. 596,875
<PAGE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED SPECIAL SHARES, INC. - Continued
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - Continued
INDUSTRIAL PRODUCTS - Continued
30,000 Kennametal, Inc................................................................................... $ 952,500
34,500 Methode Electronics, Inc. - A..................................................................... 491,625
33,000 Minerals Technologies, Inc........................................................................ 1,204,500
40,500 Molex Inc., Class A............................................................................... 1,240,312
25,000 Vishay Intertechnology Group, Inc.<F1>............................................................ 787,500
34,000 Waters Corporation<F1>............................................................................ 620,500
35,000 X-Rite, Inc....................................................................................... 494,375
-------------
8,893,387
-------------
INFORMATION PROCESSING - OFFICE EQUIPMENT - (0.38%)
6,000 Danka Business Systems PLC - ADR.................................................................. 222,000
INFORMATION PROCESSING - SERVICES - (3.23%)
6,000 Ciber, Inc.<F1>................................................................................... 140,250
20,000 DST Systems, Inc.<F1>............................................................................. 570,000
10,101 First Data Corporation............................................................................ 675,504
10,000 General Motors Corporation, Class E............................................................... 520,000
-------------
1,905,754
-------------
INSURANCE - (2.98%)
7,000 Berkley (W.R.) Corporation........................................................................ 376,250
20,000 Horace Mann Educators Corporation................................................................. 625,000
10,000 Markel Corporation<F1>............................................................................ 755,000
-------------
1,756,250
-------------
LODGING - (2.89%)
15,000 Micros Systems, Inc.<F1>.......................................................................... 738,750
55,300 Red Lion Hotels, Inc.<F1>......................................................................... 967,750
-------------
1,706,500
-------------
METALS - (1.96%)
30,000 OM Group, Inc..................................................................................... 993,750
15,000 Universal Stainless & Alloy Products, Inc.<F1>.................................................... 159,375
-------------
1,153,125
-------------
PACKAGING - (2.20%)
15,000 Sealed Air Corporation<F1>........................................................................ 421,875
33,250 Sonoco Products Company........................................................................... 872,812
-------------
1,294,687
-------------
RESTAURANTS - (2.60%)
40,000 Lone Star Steakhouse and Saloon, Inc.<F1>......................................................... 1,535,000
-------------
RETAILING - (13.16%)
56,000 Eckerd Corporation <F1>........................................................................... 2,499,000
25,000 Just For Feet, Inc.<F1>........................................................................... 893,750
20,100 Kohl's Corporation<F1>............................................................................ 1,055,250
35,000 OfficeMax, Inc.<F1>............................................................................... 783,125
20,000 Sunglass Hut International<F1>.................................................................... 475,000
<PAGE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED SPECIAL SHARES, INC. - Continued
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK _ Continued
RETAILING - Continued
40,000 Talbots, Inc. (The)............................................................................... $ 1,150,000
18,000 Tiffany & Co...................................................................................... 906,750
-------------
7,762,875
-------------
SERVICES - TEMPORARY HELP - (6.21%)
25,000 Interim Services, Inc.<F1>........................................................................ 868,750
40,500 On Assignment, Inc.<F1>........................................................................... 1,326,375
35,000 Robert Half International, Inc.<F1>............................................................... 1,465,625
-------------
3,660,750
-------------
TECHNOLOGY - SEMICONDUCTORS/EQUIPMENT - (10.22%)
25,000 Analog Devices, Inc.<F1>.......................................................................... 884,375
20,000 Applied Materials, Inc.<F1>....................................................................... 787,500
10,000 Cisco Systems, Inc.<F1>........................................................................... 746,250
25,000 Fusion Systems Corporation<F1>.................................................................... 700,000
5,000 KLA Instruments Corporation<F1>................................................................... 130,313
42,000 LSI Logic Corporation<F1>......................................................................... 1,375,500
12,000 Lam Research Corporation<F1>...................................................................... 549,000
35,000 Tencor Instruments<F1>............................................................................ 853,125
-------------
6,026,063
-------------
TECHNOLOGY - OTHER - (6.01%)
41,000 Loral Corporation................................................................................. 1,450,375
40,300 Thermo Electron Corporation<F1>................................................................... 2,095,600
-------------
3,545,975
-------------
TRANSPORTATION - (4.85%)
50,000 Bombardier, Inc. Class B.......................................................................... 654,750
31,000 Fritz Companies, Inc.<F1>......................................................................... 1,286,500
20,000 Kansas City Southern Industries, Inc.............................................................. 915,000
-------------
2,856,250
-------------
Total Common Stock - (identified cost $45,912,068)........................................ 58,800,990
-------------
<PAGE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED SPECIAL SHARES, INC. - Continued
VALUE
PRINCIPAL (NOTE 1)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
SHORT TERM - (4.87%)
$2,875,000 Federal Home Loan Mortgage Corporation Discount Note, 5.50%, 01/02/96
- (identified cost $2,874,561).................................................................. $ 2,874,561
TOTAL INVESTMENTS - (104.58%) - (identified cost $48,786,629)- <F2>............................... 61,675,551
LIABILITIES LESS OTHER ASSETS - (4.58%).......................................................... (2,700,767)
-------------
NET ASSETS - (100%).......................................................................... $ 58,974,784
=============
<FN>
<F1> Non-Income Producing Security.
<F2> Aggregate cost for Federal Income Tax purposes is $48,786,629. At
December 31, 1995 unrealized appreciation (depreciation) of securities
for Federal Income Tax purposes is as follows:
Unrealized appreciation........................................................................ $ 13,906,263
Unrealized depreciation........................................................................ (1,017,341)
-------------
Net unrealized appreciation.................................................................... $12,888,922
=============
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED CAPITAL PRESERVATION TRUST -
SELECTED U.S. GOVERNMENT INCOME FUND
<CAPTION>
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGES - (1.19%)
<S> <C> <C>
$ 28,656 Government National Mortgage Association, Pool No.008901, 7.00%, 01/20/22......................... $ 29,432
29,830 Government National Mortgage Association, Pool No. 008299, 7.25%, 09/20/23........................ 30,403
31,907 Government National Mortgage Association, Pool No. 008360, 7.00%, 01/20/24........................ 32,631
-------------
Total ARM - (identified cost $83,245)..................................................... 92,466
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - (12.01%)
139,836 9.00%, 09/01/10, Pool No. 309702................................................................. 146,970
248,590 8.00%, 09/01/21, Pool No. D2-7906................................................................. 259,039
325,783 8.00%, 10/01/21, Pool No. D2-7334................................................................. 339,157
185,488 8.00%, 06/01/22, Pool No. D2-0670................................................................. 192,908
-------------
Total FHLMC - (identified cost $909,021).................................................. 938,074
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - (0.82%)
13,859 10.00%, 07/01/05, Pool No. 98835.................................................................. 14,591
20,281 10.00%, 08/01/05, Pool No. 99903.................................................................. 21,352
15,419 8.50%, 07/01/17, Pool No. 51539.................................................................. 16,188
11,406 8.50%, 04/01/21, Pool No. 117725................................................................. 11,954
-------------
Total FNMA - (identified cost $62,928).................................................... 64,085
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - (19.91%)
67,221 10.00%, 09/15/01, Pool No. 265.................................................................... 71,268
71,978 9.00%, 04/15/16, Pool No. 147.................................................................... 76,904
95,423 9.00%, 05/15/16, Pool No. 161.................................................................... 101,879
209,703 9.00%, 06/15/16, Pool No. 157.................................................................... 223,890
137,514 9.00%, 07/15/16, Pool No. 162.................................................................... 146,915
144,974 9.00%, 11/15/16, Pool No. 179.................................................................... 154,782
101,367 9.00%, 06/15/17, Pool No. 225.................................................................... 108,146
94,294 9.00%, 08/15/17, Pool No. 209.................................................................... 100,600
38,485 9.00%, 05/15/18, Pool No. 23..................................................................... 541,029
92,166 9.00%, 08/15/18, Pool No. 258.................................................................... 98,258
229,796 9.00%, 08/15/19, Pool No. 227.................................................................... 244,804
176,479 8.50%, 10/15/19, Pool No. 277.................................................................... 186,812
-------------
Total GNMA - (identified cost $1,471,160)................................................. 1,555,287
-------------
MEDIUM TERM NOTES - (19.53%)
300,000 Federal Home Loan Bank, 8.00%, 08/16/10........................................................... 304,939
200,000 Federal Home Loan Bank, 7.24%, 11/09/10........................................................... 203,950
500,000 Federal Home Loan Mortgage Corporation, 6.615%, 03/03/04.......................................... 500,390
500,000 Federal National Mortgage Association, 6.42%, 12/01/08............................................ 516,350
-------------
Total Medium Term Notes - (identified cost $1,450,710).................................... 1,525,629
-------------
<PAGE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED CAPITAL PRESERVATION TRUST _
SELECTED U.S. GOVERNMENT INCOME FUND - Continued
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS & REAL ESTATE MORTGAGE
INVESTMENT CONDUITS - (43.64%)
$ 500,000 Federal Home Loan Mortgage Corporation, 1992 CL 1340 H, 7.50%, 08/15/07........................... $ 533,590
107,993 Federal Home Loan Mortgage Corporation, CL 1403, 6.00%, 11/15/21.................................. 107,554
127,846 Federal Home Loan Mortgage Corporation, CL 1487 H, 6.00%, 03/15/23................................ 126,568
500,000 Federal National Mortgage Association, 1992 CL 152 M, 7.75%, 08/25/07............................. 529,375
500,000 Federal National Mortgage Association, 1993 CL 11 O, 7.35%, 02/25/08.............................. 525,155
500,000 Federal National Mortgage Association, 1993 CL 47 C, 7.00%, 04/25/08.............................. 506,250
591,867 Federal National Mortgage Association, 1993 CL 121 Z, 7.00%, 07/25/23............................. 561,535
500,000 United States Department of Veteran Affairs, Mortgage Trust 1992-1,
7.75%, 07/15/17................................................................................. 518,750
-------------
Total CMO'S & REMIC'S - (identified cost $3,245,253)...................................... 3,408,777
-------------
SHORT TERM - (1.28%)
100,000 Federal National Mortgage Association Discount Note, 5.60%, 01/03/96
(identified cost $99,969)....................................................................... 99,969
-------------
TOTAL INVESTMENTS - (98.38%) - (identified cost $7,322,286) - <F1>........................ 7,684,287
OTHER ASSETS LESS LIABILITIES - (1.62%)................................................... 126,765
-------------
NET ASSETS - (100%).................................................................. $ 7,811,052
=============
<FN>
<F1> Aggregate cost for Federal Income Tax purposes is $7,322,286. At
December 31, 1995 unrealized appreciation (depreciation) of securities
for Federal Income Tax purposes is as follows:
Unrealized appreciation........................................................................ $ 362,765
Unrealized depreciation........................................................................ (764)
-------------
Net unrealized appreciation................................................................ $ 362,001
=============
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED CAPITAL PRESERVATION TRUST -
SELECTED DAILY GOVERNMENT FUND
<CAPTION>
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
FEDERAL FARM CREDIT BANK - (2.76%)
<S> <C> <C>
$ 2,125,000 5.65%, 01/12/96 Discount Note................................................................. $ 2,121,331
3,000,000 5.58%, 02/07/96 Discount Note................................................................. 2,982,795
------------
Total Federal Farm Credit Bank - (identified cost $ 5,104,126)............................ 5,104,126
------------
FEDERAL HOME LOAN BANK - (15.72%)
10,000,000 5.48%, 01/19/96 Discount Note................................................................. 9,972,600
10,000,000 5.47%, 02/22/96 Discount Note................................................................. 9,920,989
9,240,000 5.45%, 03/22/96 Discount Note................................................................. 9,126,695
------------
Total Federal Home Loan Bank - (identified cost $29,020,284).............................. 29,020,284
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - (27.80%)
2,825,000 5.50%, 01/02/96 Discount Note................................................................. 2,824,568
1,335,000 5.50%, 01/04/96 Discount Note................................................................. 1,334,388
3,485,000 5.60%, 01/05/96 Discount Note................................................................. 3,482,832
5,045,000 5.58%, 01/09/96 Discount Note................................................................. 5,038,744
350,000 5.59%, 01/10/96 Discount Note................................................................. 349,511
5,020,000 5.66%, 01/16/96 Discount Note................................................................. 5,008,161
5,330,000 5.55%, 01/22/96 Discount Note................................................................. 5,312,744
15,850,000 5.48%, 02/08/96 Discount Note................................................................. 15,758,317
4,900,000 5.43%, 02/15/96 Discount Note................................................................. 4,866,741
2,390,000 5.48%, 03/07/96 Discount Note................................................................. 2,365,988
5,100,000 5.27%, 06/03/96 Discount Note................................................................. 4,985,026
------------
Total Federal Home Loan Mortgage Corporation - (identified cost $51,327,020).............. 51,327,020
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - (51.57%)
1,890,000 5.58%, 01/25/96 Discount Note................................................................. 1,882,969
595,000 5.50%, 01/31/96 Discount Note................................................................. 592,273
1,995,000 5.58%, 02/12/96 Discount Note................................................................. 1,982,013
3,500,000 5.58%, 02/20/96 Discount Note................................................................. 3,472,875
5,000,000 5.58%, 02/21/96 Discount Note................................................................. 4,960,475
13,095,000 5.54%, 02/27/96 Discount Note................................................................. 12,980,135
3,765,000 5.49%, 03/05/96 Discount Note................................................................. 3,728,254
2,025,000 5.34%, 03/19/96 Discount Note................................................................. 2,001,571
12,200,000 5.33%, 03/21/96 Discount Note................................................................. 12,055,498
10,000,000 5.34%, 03/26/96 Discount Note................................................................. 9,873,917
1,550,000 5.30%, 05/07/96 Discount Note................................................................. 1,521,019
8,540,000 5.34%, 05/07/96 Discount Note................................................................. 8,379,121
13,310,000 5.17%, 06/27/96 Discount Note................................................................. 12,969,759
8,855,000 5.27%, 07/19/96 Discount Note................................................................. 8,595,745
10,560,000 5.14%, 12/26/96 Discount Note................................................................. 10,196,636
------------
Total Federal National Mortgage Association - (identified cost $95,192,260)............... 95,192,260
------------
<PAGE>
SELECTED FUNDS
SCHEDULE OF INVESTMENTS AT DECEMBER 31, 1995
SELECTED CAPITAL PRESERVATION TRUST -
SELECTED DAILY GOVERNMENT FUND - Continued
VALUE
PRINCIPAL (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
TENNESSEE VALLEY AUTHORITY - (2.65%)
$ 2,705,000 5.56%, 01/17/96 Discount Note................................................................. $ 2,698,316
2,195,000 5.60%, 01/26/96 Discount Note................................................................. 2,186,464
-------------
Total Tennessee Valley Authority - (identified cost $4,884,780)........................... 4,884,780
-------------
TOTAL INVESTMENTS - (100.50%) - (identified cost $185,528,470) - <F1>.......................... 185,528,470
LIABILITIES LESS OTHER ASSETS - (0.50%)........................................................ (925,293)
-------------
NET ASSETS - (100%)....................................................................... $ 184,603,177
=============
<FN>
<F1> Aggregate cost for Federal income tax purposes is $185,528,470.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
SELECTED FUNDS
STATEMENT OF ASSETS AND LIABILITIES
At December 31, 1995
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
AMERICAN SPECIAL GOVERNMENT DAILY
SHARES SHARES, INCOME GOVERNMENT
INC. INC. FUND Fund
-------- ------- ---------- ---------- ____________
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value
(see schedules of investments).............. $ 925,254,218 $ 61,675,551 $ 7,684,287 $ 185,528,470
Cash.......................................... 11,337 - 27,670 4,435
Receivables:
Dividends and interest...................... 2,110,435 13,948 60,582 -
Capital stock sold.......................... 984,193 108,683 51,362 3,656
Investment securities sold.................. - 536,020 1,339 _
Due from adviser............................ _ - 10,709 _
------------- ------------ ----------- -------------
Total assets.............................. 928,360.183 62,334,202 7,835,949 185,536,561
------------- ------------ ----------- -------------
LIABILITIES:
Payables:
Capital stock reacquired.................... 61,268 609,957 500 96,317
Investment securities purchased............. 1,886,388 2,568,084 _ _
Cash Overdraft................................ - 78,472 - -
Accrued expenses.............................. 920,827 102,905 10,880 120,006
Payable to adviser............................ _ _ - 386,626
Distributions payable......................... - - 13,517 330,435
------------- ------------ ----------- -------------
Total liabilities......................... 2,848,483 3,359,418 24,897 933,384
------------- ------------ ----------- -------------
NET ASSETS:..................................... $ 925,511.700 $ 58,974,784 $ 7,811,052 $ 184,603,177
============= ============ =========== =============
SHARES OUTSTANDING (NOTE 5)..................... 52,345.096 5,459,987 849,083 184,603,177
============= ============ =========== =============
NET ASSET VALUE, offering and
redemption price per share (Net
assets shares outstanding)................ $ 17.68 $ 10.80 $ 9.20 $ 1.00
========== ========== ========= ==========
NET ASSETS CONSIST OF:
Paid-in capital............................... $ 682,985,857 $ 44,292,452 $ 7,435,712 $ 184,603,177
Accumulated net investment income............. 150,136 _ _ _
Accumulated net realized gain................. 15,609,108 1,793,410 13,339 _
Unrealized appreciation on investments........ 226,766,599 12,888,922 362,001 _
------------- ------------ ----------- -------------
$ 925,511,700 $ 58,974,784 $ 7,811,052 $ 184,603,177
============= ============ =========== =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
SELECTED FUNDS
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
U.S.
SELECTED SELECTED GOVERNMENT DAILY
AMERICAN SPECIAL INCOME GOVERNMENT
SHARES SHARES FUND FUND
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Dividends.................................... $ 17,114,790 $ 359,415 $ _ $ _
Interest..................................... 1,606,958 126,877 600,323 7,755,139
------------- ------------- ------------- ------------
Total income............................... 18,721,748 486,292 600,323 7,755,139
------------- ------------- ------------- ------------
Expenses:
Management fees (Note 2)..................... 4,719,283 377,851 39,8473 96,025
Custodian fees............................... 262,482 45,968 18,605 58,217
Transfer agent fees.......................... 669,566 121,913 13,883 92,889
Audit fees................................... 26,584 12,053 7,137 11,977
Legal fees................................... 133,351 33,267 3,469 35,868
Reports to shareholders...................... 70,407 9,613 1,046 7,595
Directors fees and expenses.................. 195,241 20,559 2,227 28,461
Registration and filing fees................. 71,779 25,947 16,151 50,406
Miscellaneous................................ 99,677 18,015 3,611 13,239
Commissions paid under
distribution plan (Note 3)................. 1,862,201 135,367 19,854 330,022
------------- ------------- ------------- ------------
Total expenses........................... 8,110,571 800,553 125,830 1,024,699
Reimbursement of expenses by
adviser (Note 2)............................. _ _ (10,709) (35,315)
------------- ------------- ------------- ------------
Net expenses............................. 8,110,571 800,553 115,1219 89,384
------------- ------------- ------------- ------------
Investment income (loss) - net........... 10,611,177 (314,261) 485,202 6,765,755
------------- ------------- ------------- ------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain from
investment transactions...................... 23,827,346 7,761,984 22,157 _
Net increase in unrealized
appreciation of investments
during the period............................ 195,166,050 8,178,588 707,952 _
------------- ------------- ------------- ------------
Net realized and unrealized
gain on investments...................... 218,993,396 15,940,572 730,109 _
------------- ------------- ------------- ------------
Net increase in net
assets resulting from
operations................................... $ 229,604,573 $ 15,626,311 $ 1,215,311 $ 6,765,755
============= ============= ============= ============
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
SELECTED FUNDS
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1995
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
U.S.
SELECTED SELECTED GOVERNMENT DAILY
AMERICAN SPECIAL INCOME GOVERNMENT
SHARES SHARES FUND FUND
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income (loss) - net $ 10,611,177 $ (314,261) $ 485,202 $ 6,765,755
Net realized gain from
investment transactions................. 23,827,346 7,761,984 22,157 -
Net increase in unrealized
appreciation of investments............. 195,166,050 8,178,588 707,952 _
------------- ------------- ------------ -------------
Net increase in net
assets resulting from operations........ 229,604,573 15,626,311 1,215,311 6,765,755
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income..................... (10,461,040) _ (485,202) (6,765,755)
Realized gains from investment
transactions............................ (7,784,550) (6,343,274) (28,252) _
CAPITAL SHARE
TRANSACTIONS
(NOTE 5).................................... 184,748,738 2,417,083 (3,153,715) 62,717,354
------------- ------------- ------------ -------------
Total increase (decrease)
in net assets......................... 396,107,721 11,700,120 (2,451,858) 62,717,354
NET ASSETS:
Beginning of period....................... 529,403,979 47,274,664 10,262,910 121,885,823
------------- ------------- ------------ -------------
End of period (including
accumulated net
investment income for
American Shares of...................... $ 925,511,700 $ 58,974,784 $ 7,811,052 $ 184,603,177
============= ============= ============ =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
SELECTED FUNDS
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1994
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
U.S.
SELECTED SELECTED GOVERNMENT DAILY
AMERICAN SPECIAL INCOME GOVERNMENT
SHARES SHARES FUND FUND
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................. $ 6,752,031 $ (133,507) $ 529,002 $ 1,628,403
Net realized gain from
investment transactions..................... 26,863,975 3,157,926 19,435 _
Net decrease in unrealized
appreciation of investments................. (48,149,370) (4,390,260) (794,831) -
------------- ------------ ----------- -------------
Net increase (decrease) in net
assets resulting from operations............ (14,533,364) (1,365,841) (246,394) 1,628,403
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income......................... (6,752,031) _ (529,002) (1,628,403)
Realized gains from investment transactions... (31,189,684) (4,574,351) _ _
Paid-in Capital............................... (443,937) _ _ _
CAPITAL SHARE
TRANSACTIONS
(NOTE 5)...................................... 130,931,017 (42,063) 702,090 113,154,297
------------- ------------ ----------- -------------
Total increase (decrease)
in net assets............................. 78,012,001 (5,982,255) (73,306) 113,154,297
NET ASSETS:
Beginning of period........................... 451,391,978 53,256,919 10,336,216 8,731,526
------------- ------------ ----------- -------------
End of period................................. $ 529,403,979 $ 47,274,664 $10,262,910 $ 121,885,823
============= ============ =========== =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
SELECTED FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Selected Funds consist of Selected American Shares, Inc.,
Selected Special Shares, Inc. and the Selected Capital Preservation Trust.
The Companies and Trust are registered under the Investment Company Act
of 1940, as amended, as diversified, open-end management investment
companies. The Selected Capital Preservation Trust operates as a series
fund, consisting of the U.S. Government Income Fund and Daily Government
Fund. The Trust accounts separately for the assets, liabilities and
operations of each series. Davis Selected Advisers, L.P. (formerly,
Selected/Venture Advisers, L.P.) became investment adviser effective May
1, 1993. Prior to May 1, 1993, Selected Financial Services, Inc. was the
investment manager. The following is a summary of significant
accounting policies followed by the Funds in the preparation of financial
statements.
Selected American Shares, Inc. and Selected Special Shares, Inc. are
diversified, professionally managed stock-oriented funds.
Selected U.S. Government Income Fund seeks to obtain current
income consistent with preservation of capital by investing primarily in
debt obligations of the U.S. Government, its agencies or instrumentalities.
Selected Daily Government Fund seeks to provide a high level of
current income from short-term money market securities consistent with
prudent investment management, preservation of ca-pital and maintenance
of liquidity. It invests in U.S. Government Securities and repurchase
agreements in respect thereto.
An investment in any of the Funds, as with any mutual fund, includes
risks that vary depending upon the Fund's investment objectives and
policies. There is no assurance that the investment objective of any Fund
will be achieved. A Fund's return and net asset value will fluctuate,
although Selected Daily Government seeks to maintain a net asset value of
$1.00 per share.
A. VALUATION OF SECURITIES - Securities listed on national securities
exchanges are valued at the last reported sales price on the day of
valuation. Securities traded in the over the counter market and listed
securities for which no sale was reported on that date are stated at the
last quoted bid price. Securities for which market quotations are not
readily available are valued at fair value as determined by the Boards of
Directors/Trustees. The Daily Government Fund uses the amortized cost
method of valuing investment securities which represents fair value as
determined by the Board of Trustees.
B. FEDERAL INCOME TAXES - It is each Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its income to
shareholders.
C. USE OF ESTIMATES IN FINANCIAL STATEMENTS - In preparing financial
statements in conformity with generally accepted accounting principles,
management makes estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements,
as well as the reported amounts of income and expenses during the
reporting period. Actual results may differ from these estimates.
D. OTHER - Securities transactions are accounted for on the trade date
(date the order to buy or sell is executed) with gain or loss on the sale of
securities being determined based upon identified cost. Interest income is
recorded on the accrual basis. Dividends and distributions to shareholders
are recorded on the ex-dividend date.
<PAGE>
SELECTED FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 - (Continued)
NOTE 2 - INVESTMENT ADVISORY FEES
Advisory fees are paid monthly to the investment adviser. The rate
for American Shares, Inc. is .65% on the first $500 million of average
daily net assets, .60% on the next $500 million and .55% of average daily
net assets in excess of $1 billion. The rate for Special Shares, Inc. is .70%
on the first $50 million of average daily net assets, .675% on the next
$100 million, .65% on the next $100 million and .60% of average daily net
assets in excess of $250 million. The rate for the U.S. Government Income
Fund is .50% of 1% of average daily net assets. The rate for the Daily
Government Fund is based upon daily net assets at an annual rate of .30%.
The Adviser will reimburse each Fund for any expenses (including the fee
under the agreement but excluding interest, taxes, brokerage fees,
payments made to the Distributor under any Rule 12b-1 Distribution Plan
and, where permitted, extraordinary expenses) in excess of the most
restrictive applicable expense limitation prescribed by any statute or
regulatory authority of any jurisdiction in which each Fund's shares are
qualified for offer and sale. The Adviser believes that the most
restrictive expense limitations presently applicable are 2 1/2% for the
first $30 million of average net assets, 2% for the next $70 million of
average net assets and 1 1/2% for any additional average net assets. The
Adviser has voluntarily agreed to reimburse the U.S. Government Income
Fund and the Daily Fund for any expenses in excess of 1.44% and .75%,
respectively, of average net assets.
NOTE 3 - DISTRIBUTION
For services under the distribution agreement, the Funds pay a fee of
..25% of average daily net assets. For the year ended December 31, 1995,
for American Shares, Special Shares, U.S. Government Income and Daily
Government Funds, the Funds incurred distribution services fees totaling
$1,862,201, $135,367, $19,854, and $330,022, respectively.
NOTE 4 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) during the year ended December 31, 1995 for American Shares,
Special Shares and U.S. Government Income Fund were as follows:
SELECTED SELECTED
AMERICAN SPECIAL U.S. GOVERNMENT
SHARES SHARES INCOME FUND
------ ------ -----------
Cost of purchases....... $ 360,220,925 $ 67,498,050 $ 5,683,791
Proceeds of sales....... $ 197,432,379 $ 66,011,497 $ 8,439,312
<PAGE>
SELECTED FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 - (Continued)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
NOTE 5 - CAPITAL STOCK
At December 31, 1995, there were 100 million shares of capital
stock of Selected American Shares ($1.25 par value per share) authorized.
At December 31, 1995, 1995, there were 100 million shares of capital
stock of Selected Special Shares ($0.25 par value per share) authorized. At
December 31, 1995, there were unlimited shares of capital stock of
Selected Capital Preservation Trust ($0.10 par value per share)
authorized. Transactions in capital stock were as follows:
<TABLE>
Year ended
December 31, 1995
------------------------------------------------------------------
<CAPTION>
AMERICAN SPECIAL U.S. GOVERNMENT DAILY
SHARES SHARES INCOME GOVERNMENT
INC. INC. FUND FUND
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold......................... 16,050,736 652,908 57,950 176,384,445
Shares issued in reinvestment
of distributions.................. 1,007,620 552, 9454 7,783 6,595,015
------------- ------------ ------------ -------------
17,058,356 1,205,853 105,733 182,979,460
Shares redeemed..................... (5,166,217) (988,505) (471,173) (120,262,106)
------------- ------------ ------------ -------------
Net increase (decrease)........... 11,892,139 217,348 (365,440) 62,717,354
============= ============ ============ =============
Proceeds from shares sold........... $ 248,521,260 $ 7,243,689 $ 519,478 $ 176,384,445
Proceeds from shares issued in
reinvestment of distributions..... 16,843,614 5,824,570 424,317 6,595,015
------------- ------------ ------------ -------------
265,364,874 13,068,259 943,795 182,979,460
Cost of shares redeeme.............. (80,616,136) (10,651,176) (4,097,510) (120,262,106)
------------- ------------ ------------ -------------
Net increase (decrease)........... $ 184,748,738 $ 2,417,083 $(3,153,715) $ 62,717,354
============= ============ ============ =============
</TABLE>
<PAGE>
SELECTED FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 - (Continued)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTE 5 - CAPITAL STOCK - (continued)
<TABLE>
Year ended
December 31, 1994
-------------------------------------------------------------------------
<CAPTION>
U.S.
SELECTED SELECTED GOVERNMENT DAILY
AMERICAN SPECIAL INCOME GOVERNMENT
SHARES SHARES FUND FUND
------ ------ ---- ----
<S> <C> <C> <C> <C>
Shares sold........................................ 16,923,819 939,546 355,338 211,405,719
Shares issued in connection with the acquisition of
Selected Daily Income Fund (Note 6).............. _ _ _ 20,857,578
Shares issued in reinvestment
of distributions................................. 2,609,127 455,007 48,701 1,384,606
------------- ------------ ----------- -------------
19,532,946 1,394,553 404,039 233,647,903
Shares redeemed.................................... (10,019,942) (1,371,205) (313,474) (120,493,606)
------------- ------------ ----------- -------------
Net increase (decrease)........................ 9,513,004 23,348 90,565 113,154,297
============= ============ =========== =============
Proceeds from shares sold.......................... $ 239,594,107 $ 9,353,457 $ 3,031,765 $ 211,405,719
Proceeds from shares issued in connection
with the acquisition of Selected Daily
Income Fund (Note 6)............................. _ _ _ 20,857,578
Proceeds from shares issued in
reinvestment of distributions.................... 34,897,106 4,209,023 427,420 1,384,606
------------- ------------ ----------- -------------
274,491,213 13,562,480 3,459,185 233,647,903
Cost of shares redeemed............................ (143,560,196) (13,604,543) (2,757,095) (120,493,606)
------------- ------------ ----------- -------------
Net increase (decrease)........................ $ 130,931,017 $ (42,063) $ 702,090 $ 113,154,297
============= ============ =========== =============
</TABLE>
NOTE 6 - REORGANIZATION OF SELECTED DAILY INCOME FUND
On April 23, 1994 the shareholders of Selected Daily Income Fund
("Income") approved a Plan of Reorganization ("the Plan"). The Plan
provided for the transfer of the assets and liabilities of Income to
Selected Daily Government Fund. The transaction was effected on April
29, 1994, in a tax-free exchange by issuing 20,857,578 shares of Selected
Daily Government Fund for an equal number of shares of Income at a value
of $1.00 per share. There was no unrealized appreciation or depreciation
at that date. The aggregate net assets of Income and Selected Daily
Government Fund immediately before the acquisition were $20,857,578
and $6,140,964, respectively.
<PAGE>
<TABLE>
SELECTED FUNDS
FINANCIAL HIGHLIGHTS
SELECTED AMERICAN SHARES, INC.
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
The following financial information represents selected data for each
share of capital stock outstanding throughout each period:
Year ended December 31,
---------------------------------------------------------------
<CAPTION>
1995 1994 1993<F2> 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................. $ 13.09 $ 14.59 $ 17.13 $ 18.43 $ 12.79
------- ------- ------- ------- -------
Income From Investment Operations
- ---------------------------------
Net Investment Income............................... .22 .20 .24 .19 .23
Net Gains or Losses on Securities
(both realized and unrealized).................... 4.74 (.66) .70 .89 5.65
------- ------- ------- ------- -------
Total From Investment Operations.................. 4.96 (.46) .94 1.08 5.88
Less Distributions
- ------------------
Dividends (from net investment
income)........................................... (.22) (.20) (.24) (.19) (.23)
Distributions (from capital gains).................. (.15) (.83) (3.24) (2.19) _
Distributions in Excess of Net
Investment Income................................. _ (.01) _ _ (.01)
------- ------- ------- ------- -------
Total Distributions............................... (.37) (1.04) (3.48) (2.38) (.24)
------- ------- ------- ------- -------
Net Asset Value, End of Period........................ $ 17.68 $ 13.09 $ 14.59 $ 17.13 $ 18.43
======= ======= ======= ======= =======
Total Return.......................................... 38.09% (3.20)% 5.42% 5.78% 46.37%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)..................................... 925,512 529,404 451,392 580,889 711,905
Ratio of Expenses to Average
Net Assets........................................ 1.09% 1.26% 1.01%<F1> 1.17% 1.19%
Ratio of Net Income to Average
Net Assets........................................ 1.42% 1.42% 1.37% .95% 1.41%
Portfolio Turnover Rate............................. 27% 23% 79% 50% 21%
<FN>
<F1> Had the Adviser not absorbed certain expenses, the ratio of expenses
for the year ended December 31, 1993 would have been 1.22%.
<F2> Effective May 1, 1993, Davis Selected Advisers, became the
investment adviser. Until May 1, 1993, Selected Financial Services, Inc.
was the investment adviser.
</FN>
</TABLE>
<PAGE>
<TABLE>
SELECTED FUNDS
FINANCIAL HIGHLIGHTS
SELECTED SPECIAL SHARES, INC.
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
The following financial information represents selected data for each
share of capital stock outstanding throughout each period:
Year ended December 31,
-------------------------------------------------------------------
<CAPTION>
1995 1994 1993<F2><F3> 1992<F3> 1991<F3>
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 9.02 $ 10.20 $ 10.40 $ 10.16 $ 9.04
------- ------- ------- ------- -------
Income From Investment Operations
- ---------------------------------
Net Investment Income................................ _ (.03) _ .07 .12
Net Gains or Losses on Securities
(both realized and unrealized)..................... 3.04 (.22) 1.10 .782 .11
------- ------- ------- ------- -------
Total From Investment Operations................... 3.04 (.25) 1.10 .852 .23
Less Distributions
- ------------------
Dividends (from net investment
income)............................................ _ _ _ (.07) (.13)
Distributions (from capital gains)................... (1.26) (.93) (1.30) (.54) (.98)
------- ------- ------- ------- -------
Total Distributions................................ (1.26) (.93) (1.30) (.61) (1.11)
------- ------- ------- ------- -------
Net Asset Value, End of Period......................... $ 10.80 $ 9.02 $ 10.20 $ 10.40 $ 10.16
======= ======= ======= ======= =======
Total Return........................................... 34.24% (2.56)% 10.81% 8.43% 25.53%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)...................................... 58,975 47,275 53,257 57,605 60,216
Ratio of Expenses to Average
Net Assets......................................... 1.48% 1.41%<F1> 1.24%<F1> 1.41% 1.39%
Ratio of Net Income to Average
Net Assets......................................... (.58)% (.27)% (.07)% .56% 1.11%
Portfolio Turnover Rate.............................. 127% 99% 100% 41% 74%
<FN>
<F1> Had the former manager not absorbed certain expenses, the ratio of
expenses for the year ended December 31, 1992 would have been 1.47%.
Had the Adviser not absorbed certain expenses, the ratio of expenses for
the years ended December 31, 1993 and 1994 would have been 1.51% and
1.62%, respectively.
<F2> Effective May 1, 1993, Davis Selected Advisers became the
investment adviser. Until May 1, 1993, Selected Financial Services, Inc.
was the investment adviser.
<F3> Per share data has been restated to give effect to a 2 for 1 stock
split to shareholders of record as of the close of January 4, 1994.
</FN>
</TABLE>
<PAGE>
<TABLE>
SELECTED FUNDS
FINANCIAL HIGHLIGHTS
SELECTED U.S. GOVERNMENT INCOME FUND
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
The following financial information represents selected data for each
share of capital stock outstanding throughout each period:
Year ended December 31,
---------------------------------------------------------------
<CAPTION>
1995 1994 1993<F2> 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..................... $ 8.45 $ 9.20 $ 9.31 $ 9.70 $ 9.22
------ ------ ------ ------ ------
Income From Investment Operations
- ---------------------------------
Net Investment Income.................................. .54 .50 .56 .61 .60
Net Gains or Losses on Securities
(both realized and unrealized)....................... .78 (.75) .21 (.13) .58
------ ------ ------ ------ ------
Total From Investment Operations..................... 1.32 (.25) .77 .48 1.18
Less Distributions
- ------------------
Dividends (from net investment
income).............................................. (.54) (.50) (.56) (.61) (.60)
Distributions (from capital gains)..................... (.03) _ (.32) (.26) _
Distributions in Excess of Net
Investment Income.................................... _ _ _ _ (.10)
------ ------ ------ ------ ------
Total Distributions.................................. (.57) (.50) (.88) (.87) (.70)
------ ------ ------ ------ ------
Net Asset Value, End of Period........................... $ 9.20 $ 8.45 $ 9.20 $ 9.31 $ 9.70
====== ====== ====== ====== ======
Total Return............................................. 15.97% (2.71)% 7.99% 5.11% 13.46%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)....................................... 7,811 10,263 10,336 13,945 22,019
Ratio of Expenses to Average
Net Assets.......................................... 1.44%<F1> 11.42%<F1> 1.34%<F1> 11.44%<F1> 11.41%
Ratio of Net Income to Average
Net Assets.......................................... 6.09% 5.70% 5.85% 6.26%<F1> 16.51%
Portfolio Turnover Rate............................... 76% 65% 29% 53% 36%
<FN>
<F1> Had the former manager not absorbed certain expenses, the ratio of
expenses would have been 1.72% for the year ended December 31, 1992.
Had the Adviser not absorbed certain expenses, the ratio of expenses for
the years ended December 31, 1993, 1994 and 1995 would have been
1.88%, 1.69% and 1.58%, respectively.
<F2> Effective May 1, 1993, Davis Selected Advisers became the
investment adviser. Until May 1, 1993, Selected Financial Services, Inc.
was the investment adviser.
</FN>
</TABLE>
<PAGE>
<TABLE>
SELECTED FUNDS
FINANCIAL HIGHLIGHTS
SELECTED DAILY GOVERNMENT FUND
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
The following financial information represents selected data for each
share of capital stock outstanding throughout each period:
Year ended December 31,
---------------------------------------------------------------
<CAPTION>
1995 1994 1993<F2> 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
Income From Investment Operations
- ---------------------------------
Net Investment Income................................ .051 .034 .023 .030 .054
Less Distributions
- ------------------
Dividends (from net
investment income)................................... (.051) (.034) (.023) (.030) (.054)
------- ------- ------- ------- -------
Net Asset Value, End of Period......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
Total Return........................................... 5.23% 3.51% 2.34% 3.07% 5.51%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)...................................... 184,603 121,886 8,732 6,626 30,706
Ratio of Expenses to Average
Net Assets......................................... .75%<F1> 1.75%<F1> 1.75%<F1> 1.75%<F1> 1.68%
Ratio of Net Income to Average
Net Assets......................................... 5.13% 3.44% 2.31% 3.02%<F1> 15.37%
<FN>
<F1> Had the former manager not absorbed certain expenses, the ratio of
expenses for the year ended December 31, 1992 would have been 1.23%.
Had the Adviser not absorbed certain expenses, the ratio of expenses for
the years ended December 31, 1993, 1994 and 1995 would have been
2.29%, 1.07% and 0.78%, respectively.
<F2> Effective May 1, 1993, Davis Selected Advisers became the
investment adviser. Until May 1, 1993, Selected Financial Services, Inc.
was the investment adviser.
<F3> Annualized
</FN>
</TABLE>
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors/Trustees
of Selected American Shares, Inc., Selected Special Shares, Inc. and
Selected Capital Preservation Trust.
We have audited the accompanying statement of assets and
liabilities of Selected American Shares, Inc., Selected Special Shares, Inc.
and Selected Capital Preservation Trust, (comprising, respectively, the
U.S. Government Income Fund and Daily Government Fund) including the
schedules of portfolio investments as of December 31, 1995 and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years then ended and the
financial highlights for each of the five years then ended. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of December 31, 1995, by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Selected American Shares, Inc., Selected Special Shares, Inc.,
U.S. Government Income Fund and Daily Government Fund as of December
31, 1995, the results of operations for the year then ended, the changes in
net assets for each of the two years then ended and the financial
highlights for each of the five years then ended, in conformity with
generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 1, 1996
<PAGE>
SELECTED
FUNDS
124 East Marcy Street Santa Fe, New Mexico 87501
- -------------------------------------------------
- -------------------------------------------------
Directors Officers
William P. Barr Robert J. Greenebaum
Floyd A. Brown Chairman
William G. Cole Shelby M.C. Davis
Shelby M.C. Davis President
Robert J. Greenebaum Carl R. Luff
Walter E. Hoadley Vice President, Treasurer
James J. McMonagle & Assistant Secretary
Martin H. Proyect Raymond O. Padilla
Larry Robinson Vice President &
Secretary
Eileen R. Street
Assistant Treasurer &
Assistant Secretary
Investment Adviser & Distributor
Davis Selected Advisers, L. P.
124 East Marcy Street
Santa Fe, New Mexico 87501
Transfer Agent & Custodian
Investors Fiduciary Trust Company
P.O. Box 419782
Kansas City, MO 64141-6782
Counsel
D'Ancona & Pflaum
30 North LaSalle Street
Chicago, Illinois 60602
Auditors
Tait, Weller & Baker
Two Penn Center, Suite 700
Philadelphia, Pennsylvania 19102-1707
- --------------------------------------------
- --------------------------------------------
For more information about the Selected
Funds, including management fee, charges and
expenses, see the current prospectus which
must precede or accompany this report.
- --------------------------------------------
- --------------------------------------------
9602-35 SF70
