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Filed Pursuant to Rule 497(e)
Registration File No.: 2-10699
SELECTED FUNDS
SELECTED AMERICAN SHARES, INC.
SELECTED SPECIAL SHARES, INC.
SELECTED CAPITAL PRESERVATION TRUST.
SUPPLEMENT DATED DECEMBER 6, 2000
TO
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 2000
The section of the Statement of Additional Information entitled "Investment
Restrictions" is amended and restated in its entirety:
INVESTMENT RESTRICTIONS
The Funds operate in accordance with the investment objectives, policies and
restrictions described in its prospectuses and this Statement of Additional
Information.
The Funds have adopted the fundamental investment policies set forth below,
which may not be changed without a shareholder vote. Where necessary, an
explanation beneath a fundamental policy describes the Funds' practices with
respect to that policy, as allowed by current law. If the law governing a policy
changes, the Funds' practices may change accordingly without a shareholder vote.
The fundamental investment restrictions set forth below may not be changed
without the approval of the holders of the lesser of (i) 67% of the eligible
votes, if the holders of more than 50% of the eligible votes are represented, or
(ii) more than 50% of the eligible votes. All percentage limitations set forth
in these restrictions apply as of the time of an investment without regard to
later increases or decreases in the value of securities or total or net assets.
Except for the fundamental investment policies regarding illiquid securities and
borrowing, all percentage restrictions apply as of the time of an investment
without regard to any later fluctuations in the value of portfolio securities or
other assets. All references to the assets of a Fund are in terms of current
market value.
(1) DIVERSIFICATION. The Fund may not make any investment that is inconsistent
with its classification as a diversified investment company under the 1940 Act.
Further Explanation of Diversification Policy. To remain classified as a
diversified investment company under the 1940 Act, the Fund must conform with
the following: With respect to 75% of its total assets, a diversified investment
company may not invest more than 5% of its total assets, determined at market or
other fair value at the time of purchase, in the securities of any one issuer,
or invest in more than 10% of the outstanding voting securities of any one
issuer, determined at the time of purchase. These limitations do not apply to
investments in securities issued or guaranteed by the United States ("U.S.")
government or its agencies or instrumentalities.
(2) CONCENTRATION. The Fund may not concentrate its investments in the
securities of issuers primarily engaged in any particular industry.
Further Explanation of Concentration Policy. The Fund may not invest 25% or more
of its total assets, taken at market value, in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed
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by the U.S. government or its agencies or instrumentalities). The Fund generally
uses BLP Equity Economic Sectors ("BLP Code") as published by Bloomberg L.P. to
determine industry classification. The Adviser may re-classify a company if it
believes that the BLP Code on a specific company does not accurately describe
the company.
(3) ISSUING SENIOR SECURITIES. The Fund may not issue senior securities, except
as permitted under applicable law, including the 1940 Act and published SEC
staff positions.
Further Explanation of Issuing Senior Securities. The Fund may not issue senior
securities nor sell short more than 5% of its total assets, except as provided
by the 1940 Act and any rules, regulations or orders issued thereunder. This
limitation does not apply to selling short against the box. The 1940 Act defines
a "Senior Security" as any bond, debenture, note or similar obligation
constituting a security and evidencing indebtedness.
(4) BORROWING. The Fund may not borrow money, except to the extent permitted by
applicable law, including the 1940 Act and published SEC staff positions.
Further Explanation of Borrowing Policy. The Fund may borrow from banks and
enter into reverse repurchase agreements in an amount up to 33 1/3% of its total
assets, taken at market value. The Fund may also borrow up to an additional 5%
of its total assets from banks or others. The Fund may borrow only as a
temporary measure for extraordinary or emergency purposes such as the redemption
of Fund shares. The Fund may purchase additional securities so long as
borrowings do not exceed 5% of its total assets. The Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities. In the event that market fluctuations cause borrowing
to exceed the limits stated above, the Adviser would act to remedy the situation
as promptly as possible (normally within 3 business days), although it is not
required to dispose of portfolio holdings immediately if the Fund would suffer
losses as a result.
(5) UNDERWRITING. The Fund may not underwrite securities of other issuers except
to the extent permitted by applicable law, including the 1940 Act and published
SEC staff positions.
Further Explanation of Underwriting Policy. The Fund may not underwrite
securities of other issuers, except insofar as the Fund may be deemed to be an
underwriter in connection with the disposition of its portfolio securities.
(6) INVESTMENTS IN COMMODITIES AND REAL ESTATE. The Fund may not purchase or
sell commodities or real estate, except to the extent permitted by applicable
law, including the 1940 Act and published SEC staff positions.
Further Explanation of Policy Restricting Investments in Commodities and Real
Estate. The Fund may purchase or sell financial futures contracts, options on
financial futures contracts, currency contracts, and options on currency
contracts as described in its prospectus and Statement of Additional
Information. The Fund may not purchase or sell real estate, except that the Fund
may invest in securities that are directly or indirectly secured by real estate,
or securities issued by issuers that invest in real estate.
(7) MAKING LOANS. The Fund may not make loans to other persons, except as
allowed by applicable law, including the 1940 Act and published SEC staff
positions.
Further Explanation of Lending Policy. The acquisition of investment securities
or other investment instruments is not deemed to be the making of a loan.
To generate income and offset expenses, the Fund may lend portfolio securities
to broker-dealers and other financial institutions which the Adviser believes to
be creditworthy in an amount up to 33 1/3% of its total assets, taken at market
value. While securities are on loan, the borrower will pay the Fund any income
accruing on the security. The Fund may invest any collateral it receives in
additional portfolio securities, such as U.S. Treasury notes, certificates of
deposit, other high-grade, short-term obligations or interest-bearing cash
equivalents. The Fund is still subject to gains or losses due to changes in the
market value of securities which it has lent.
When the Fund lends its securities, it will require the borrower to give the
Fund collateral in cash or government securities. The Fund will require
collateral in an amount equal to at least 100% of the current market value of
the
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securities lent, including accrued interest. The Fund has the right to call a
loan and obtain the securities lent any time on notice of not more than five
business days. The Fund may pay reasonable fees in connection with such loans.
NON-FUNDAMENTAL RESTRICTIONS
In addition to the foregoing restrictions, the Funds have adopted the following
non-fundamental policies which may be changed without shareholder approval:
Illiquid Securities. The Fund may not purchase illiquid securities if more than
15% of the value of the Fund's total assets would be invested in such
securities. Selected Daily Government Fund may not purchase illiquid securities
if more than 10% of the value of the Fund's total assets would be invested in
such securities.
High-Yield, High Risk Securities. The Fund will not purchase debt securities
rated BB or Ba or lower if the securities are in default at the time of purchase
or if such purchase would then cause more than 35% of the Fund's net assets to
be invested in such lower-rated securities.
Options The Fund will not purchase an option if the purchase would cause the
total premiums (at market) of all options then owned to exceed 5% of the Fund's
total assets. The Fund will not sell covered calls if the transaction would
cause the total premiums (at market) of all covered calls then written to exceed
25% of the Fund's total assets.
Futures Contracts. The Fund will not engage in a futures transaction if the
transaction would cause the nominal value of futures contracts then purchased or
sold to exceed 25% of the Fund's total assets.
Borrowing. Pursuant to the fundamental policy stated above, the Fund is allowed
to borrow in an amount up to 33 1/3% of its total assets, taken at market value.
The board of directors will be notified in the event borrowings exceed 10% of
the Fund's total assets.
Short Selling. The Fund will not sell any security short if it would cause more
than 5% of its total assets, taken at market value, to be sold short.
The first paragraph of following section of the Statement of Additional
Information is amended and restated in its entirety:
INVESTMENT ADVISORY SERVICES
Davis Selected Advisers, L.P. (the "Adviser"), whose principal office is at 2949
East Elvira Road, Suite 101, Tucson, Arizona 85706, serves as investment adviser
for Davis New York Venture Fund, Inc., Davis Series, Inc., Davis International
Series, Inc., Davis Variable Account Fund, Inc. (collectively with the Funds,
the "Davis Funds"), Selected American Shares, Inc., Selected Special Shares,
Inc. and Selected Capital Preservation Trust (collectively the "Selected
Funds"). The Adviser also provides advisory or sub-advisory services to other
parties including other registered investment companies, private accounts,
off-shore funds, a hedge fund and managed money/wrap accounts. Currently,
Venture Advisers, Inc., an entity controlled by Shelby M.C. Davis is the
Adviser's sole general partner. As of December 31, 2000 Davis Investments, LLC,
will become the Adviser's sole general partner. Christopher C. Davis is Chief
Executive Officer of the Adviser and as the sole member of the general partner
controls the Advise. Davis Distributors, LLC ("the Distributor"), a subsidiary
of the Adviser, serves as the distributor or principal underwriter of the Davis
Funds and Selected Funds Davis Selected Advisers - NY, Inc. ("Sub-Adviser"), a
wholly owned subsidiary of the Adviser, performs investment management, research
and other services for the Davis Funds and Selected Funds on behalf of the
Adviser under sub-advisory agreements with the Adviser.
