Breakpoints
How To Reduce Your Sales Charge On Class A Shares

There are a few different ways to reduce the amount of sales charge paid when investing in Class A shares of Davis Funds.

Please note that Davis Funds must be made aware by either the shareholder or brokerage firm/financial consultant if the shareholder wishes to take advantage of certain sales charge reduction privileges. Failure to do so may result in not receiving a reduced sales charge for a purchase(s).

Listed here are the ways a shareholder could reduce the sales charge on his/her investments in Class A shares:

  • Rights of Accumulation
  • Statement of Intention
  • Aggregating Accounts*

*Aggregating Accounts
 Shareholders may aggregate (link) accounts for Rights of Accumulation or Letter of Intent Privileges. Please see below for eligible account registrations that can be aggregated:

  • A shareholder may aggregate investments in Davis Funds made by a shareholder or their immediate family: their spouse, or minor children (under the age of 21).
  • Trust accounts established by persons listed above for which they or their immediate family are the beneficiaries. If the person(s) who established the trust is/are deceased, the trust account may be aggregated with accounts of the person who is the primary beneficiary of the trust.
  • Solely controlled business accounts.
  • Single participant retirement plans
  • Endowments or foundations established and controlled by the shareholder(s) and/or other immediate family members.
  • In addition, organized groups can also aggregate accounts as long as a group is organized for a purpose other than buying mutual fund shares.

In regards to employee benefit plans where shares may be bought through a trust or fiduciary accounts and Individual Retirement Accounts (IRAs) of a single employer, the purchases will be treated as single purchases.

Rights of Accumulation
Rights of Accumulation (ROA) allow shareholders to link any Davis Fund account* in any share class** in order to reach a breakpoint for a Class A purchase. For example, a shareowner may have an IRA account in New York Venture Fund Class A and an Individual retail account in the Opportunity Fund, Class B. The shareowner could send in a written request to link these two accounts together for Rights of Accumulation. When the shareowner makes a purchase into the IRA (Class A shares), the system will determine if the combined value of both accounts makes the purchase eligible for a breakpoint.

*Money Market accounts, regardless of share class, are ineligible for using towards ROA. **Class Y and R shares are ineligible for using towards ROA.

Some important elements of Rights of Accumulation:

  • Eligible Accounts . Please see Aggregating Accounts above.
  • Request must come in writing . The shareholder must request this option in writing with a list of all the account numbers that the shareholder would like to link and signed by all shareholders. This request may come in the form of a letter, on the application form when the account(s) is first being established, or on an Account Service Form.
  • How the system calculates account values . The total account values (including appreciation, capital gain reinvestments, and dividend reinvestments) are used toward reaching a breakpoint. The current value of all accounts linked is based on Public Offering Price (POP), not Net Asset Value (NAV).

It is important to note that since ROA is based on account value and not dollars invested, it is possible that in a down market accounts could depreciate. This means that a shareholder that may have been eligible on a certain date for a breakpoint may find that due to depreciation they may not be eligible at a different date. Redemptions could also affect breakpoint reductions for purposes of ROA.

Letter of Intent (LOI)
A Letter of Intent is a contract in which a shareholder states that they intend to invest a specific dollar amount in one or more Class A share accounts over a 13 month period (no extensions allowed). *
*Shares purchased into the Davis Government Money Market Fund do not count toward completing a Letter of Intent.

Some important elements of Letter of Intent:

  • Request must come in writing . The shareholder must request this option in writing with a list of all the account numbers that the shareholder would like to link and signed by all shareholders. The shareholder(s) should indicate what breakpoint they intend to meet within the 13-month period. This request may come in the form of a letter, or on the Application Form when the account(s) is first being established, or on an Account Service Form.
  • Assessing Breakpoints . Each purchase made under the Letter of Intent receives the breakpoint and reduced sales charge at the time of purchase. Remember, Money Market purchases DO NOT count.
  • Escrow . Just in case the shareholder(s) is unable to complete the agreement, up to 5% of the LOI amount is held in Escrow. This guards the Fund against a loss and will be used to reimburse the Fund and the broker if the shareowner does not fulfill the contract. The Escrowed shares are eligible for dividend and capital gains distributions and are considered part of the overall account balance. Upon fulfillment of the contract the Escrow status will be removed.
  •  Reminder Letter. A reminder letter is sent to the shareowner(s) in the 11th month of the LOI period if the contract has not yet been fulfilled. If the LOI is not completed within the 13-month period the shareowner will be charged for the difference in sales charge. This can be paid directly by the shareowner or taken out of the Escrowed shares.
  • 90-Day Prior Purchase Privilege . Upon shareowner(s) request, the LOI privilege will extend back to any purchase made during the last 90 days prior to the agreement being established. This means any purchases made within 90 days prior to the LOI going into effect will be counted toward satisfying the contract.
  • Eligible Transactions . Only the amounts actually invested in the account(s) count towards fulfilling an LOI. Appreciation and reinvested dividends and capital gains are excluded from counting towards satisfying an LOI. Redemptions are also taken into consideration. If the shareholder(s) invests the amount necessary to fulfill the contract before the 13-month contract period has elapsed then the shareholder will be considered to have fulfilled the contract.

Combining Rights of Accumulation (ROA) with Letter of Intent (LOI)
 ** A shareholder can use a LOI and ROA in conjunction with one another; the LOI will take precedence over the ROA. Once the LOI has been satisfied any new purchases into any of the linked Class A share accounts will receive the reduced sales charge. Again, Money Market Fund accounts do not count toward either privilege nor do accounts invested in R or Y shares classes.

Class A Shares Sales Charges
for all Davis Funds except Davis Government Money Market Fund

 

Amount of Purchase

 

Sales Charge percentage of
 offering price

 

Sales Charge approximate percentage of net amount invested

Amount of Sales Charge Retained
 by Dealer
 percentage of
offering price

Under $100,000

4.75%

5.00%

4.00%

$100,000 - $250,000

3.50%

3.60%

3.00%

$250,000 - $500,000

2.50%

2.60%

2.00%

$500,000 - $750,000

2.00%

2.04%

1.75%

$750,000 - $1 million

1.00%

1.01%

0.75%

$1 million or more*

None

None

None

* You pay no front-end sales charge on purchases of $1 million or more, but if you sell those shares (in any Davis Fund other than Davis Government Money Market Fund) within the first year, a deferred sales charge of 0.75% will be deducted from the redemption proceeds. Effective December 1, 2007, the deferred sales charge for sales within the first year, of $1 million or more, will be reduced to 0.50%.