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DECEMBER 3, 1999
SELECTED AMERICAN SHARES, INC.
SELECTED SPECIAL SHARES, INC.
SELECTED CAPITAL PRESERVAITON TRUST
The section of the Fund's Statement of Additional Information entitled
"Portfolio Transactions" is restated in its entirety to provide as follows:
PORTFOLIO TRANSACTIONS
The Adviser and Sub-Adviser are responsible for the placement of
portfolio transactions, subject to the supervision of the Board of Directors.
Each of the Funds have adopted a policy of seeking to place portfolio
transactions with brokers or dealers who will execute transactions as
efficiently as possible and at the most favorable price. Subject to this policy,
research services, payment of bona fide fund expenses, and placement of orders
by securities firms for Funds shares may be taken into account as a factor in
placement of portfolio transactions. In seeking the Funds' investment
objectives, the Funds may trade to some degree in securities for the short-term
if the Adviser or Sub-Adviser believes that such trading is advisable.
In placing executions and paying brokerage commissions or dealer
markups, the Adviser or Sub-Adviser considers the financial responsibility and
reputation of the broker or dealer, the range and quality of the services made
available to the Funds and the professional services rendered, including
execution, clearance
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procedures, payment of bona fide expenses of the Funds (such as sub-transfer
agency or sub-accounting fees) which they would otherwise have to pay in cash,
wire service quotations and ability to provide supplemental performance,
statistical and other research information for consideration, analysis and
evaluation by the Adviser's or Sub-Adviser's staff.
The Funds have approved a policy which allows them to use commissions
to purchase research. The Funds will not use markups to purchase research. In
accordance with this policy, brokerage transactions may not be executed solely
on the basis of the lowest commission rate available for a particular
transaction. Research services provided to the Adviser or Sub-Adviser by or
through brokers who effect portfolio transactions for the Funds may be used in
servicing other accounts managed by the Adviser, and likewise research services
provided by brokers used for transactions of other accounts may be utilized by
the Adviser or Sub-Adviser in performing services for the Funds. Subject to the
requirements of best execution, the placement of orders by securities firms for
shares of the Funds may be taken into account as a factor in the placement of
portfolio transactions.
On occasions when the Adviser or Sub-Adviser deems the purchase or sale
of a security to be in the best interests of a Fund as well as other fiduciary
accounts, the Adviser or Sub-Adviser may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for other accounts in
order to obtain the best net price and most favorable execution. In such event,
the allocation will be made by the Adviser or Sub-Adviser in the manner
considered to be most equitable and consistent with its fiduciary obligations to
all such fiduciary accounts, including the Fund involved. In some instances,
this procedure could adversely affect a Fund but the Adviser and Sub-Adviser
deem that any disadvantage in the procedure would be outweighed by the increased
selection available and the increased opportunity to engage in volume
transactions.
The Adviser and Sub-Adviser believe that research from brokers and
dealers is desirable, although not essential, in carrying out their functions,
in that such outside research supplements the efforts of the Adviser and
Sub-Adviser by corroborating data and enabling the Adviser and Sub-Adviser to
consider the views, information and analyses of other research staffs. Such
views, information and analyses include such matters as communicating with
persons having special expertise on certain companies, industries, areas of the
economy and/or securities prices, obtaining written materials on these or other
areas which might affect the economy and/or securities prices, obtaining
quotations on securities prices and obtaining information on the activities of
other institutional investors. The Adviser and Sub-Adviser research, at their
own expense, each security included in, or being considered for inclusion in,
the Funds' portfolios. As any particular research obtained by the Adviser or
Sub-Adviser may be useful to the Funds, the Board of Directors or its Committee
on Brokerage, in considering the reasonableness of the commissions paid by the
Funds, will not attempt to allocate, or require the Adviser or Sub-Adviser to
allocate, the relative costs or benefits of research.
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The Funds paid the following brokerage commissions:
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Fiscal year ended
December 31,
1998 1997 1996
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<S> <C> <C> <C>
Selected American Shares
Brokerage Commissions Paid $1,418,329 $1,061,947 $ 800,020
Amount Paid to Brokers Providing Research 79% 93% 97%
Brokerage Commissions Paid
to Shelby Cullom Davis & Co.(1) $ 155,832 $ 64,872 $ 12,000
Selected Special Shares
Brokerage Commissions Paid $ 65,886 $ 54,724 $ 117,165
Amount Paid to Brokers Providing Research 85% 72% 97%
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(1) Shelby Cullom Davis & Co. is a broker-dealer who may be considered an
affiliated person of the Adviser. During the fiscal year ended December 31,
1998, commissions received represented 10.99% of total commissions paid and
13.93% of the aggregate dollar amount of transactions involving the payment
of commissions by Selected American Shares.
Because of the Funds' investment policies, portfolio turnover rate will
vary. At times it could be high, which could require the payment of larger
amounts in brokerage commissions. The Adviser and Sub-Adviser are authorized to
place portfolio transactions with Shelby Cullom Davis & Co., a member of the New
York Stock Exchange, which may be deemed to be an affiliate of the Adviser, if
the commissions are fair and reasonable and comparable to commissions charged by
non-affiliated qualified brokerage firms for similar services. The Funds
anticipate that, during normal market conditions, their annual portfolio
turnover rate will be less than 100%.
