Fund Overview
Davis Appreciation & Income Fund


The Fund is designed to combine the growth potential of stocks with the income of bonds. It may use a combination of convertible securities, stocks and bonds to provide investors with a way to participate in equity market total returns with a degree of downside protection.

Potential To Benefit From Upside Potential And Downside Protection
A Research-Driven Approach
Compounded Performance Results
Fund Factsheet
Prospectus

POTENTIAL TO BENEFIT FROM UPSIDE POTENTIAL AND DOWNSIDE PROTECTION
The Fund seeks durable, well-managed businesses that can be purchased at value prices and hold them for the long term.* The Portfolio Managers seek to structure a portfolio that tends to increase more than decline, given an equal upward or downward move in the price of the underlying stock.

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A RESEARCH-DRIVEN APPROACH
 True to the Davis style of investing, extensive firsthand research is conducted in selecting convertible security, stock and bond investments. In addition, comprehensive information on economic trends, market conditions and performance updates are thoroughly analyzed.

Portfolio Managers Andrew Davis and Keith Sabol follow a three-step investment process:

  • First, they carefully consider valuations, creating valuation models for each of the companies considered.

  • Second, they analyze the investment potential of businesses using the time-tested Davis Investment Discipline, purchasing only those that are trading at a discount to their estimate of fair value.

  • Third, having identified attractively priced convertible securities, stocks and bonds issued by durable businesses, they seek to structure a portfolio with the potential to participate in some of the stock's upside potential while providing a degree of downside risk.*

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Davis Appreciation & Income Fund, Class A Shares 5/1/92-12/31/07
 Includes 4.75% maximum sales charge and reflects reinvested
dividends and changes in net asset value for Class A Shares

As of December 31, 2007
1 Year
5 Years
10 Years
Davis Appreciation & Income Fund Class A
-3.50%
11.14%
5.46%
Performance quoted represents past performance and is not a guarantee of future results. Current performance may be higher or lower than the performance quoted. Investment principal and return will vary so that an investor's shares when redeemed may be worth more or less than their original cost. Fund performance includes the maximum 4.75% sales charge. The total annual operating expense ratio for Davis Appreciation and Income Fund Class A shares as of the most recent prospectus was 1.06%. Current month end performance can be obtained by clicking here or by calling 1-800-279-0279.

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* While Davis Appreciation and Income Fund seeks to structure a portfolio with the potential to participate in some of the stock's upside potential while providing a degree of downside risk, there can be no assurance that the portfolio will actually perform in line with our expectations. There can be no assurance that securities we purchase will increase in value when the S&P 500® Index increases in value, or that they will provide downside protection when the S&P 500® Index declines in value.

From inception (May 1, 1992) until July 1, 2003, Davis Appreciation & Income Fund was named Davis Convertible Securities Fund and invested primarily in convertible securities.

Davis Appreciation and Income Fund's investment objective is total return through a combination of growth and income. There can be no assurance that the Fund will achieve its objective. Davis Appreciation and Income Fund is subject to both equity and debt risk. One of the most important risks of an investment in the Fund is small- and medium-capitalization risk. Small-and medium-capitalization companies' share prices tend to fluctuate more often as they tend to have limited product lines, markets and financial resources, and their securities may trade less frequently and in more limited volume than those of larger companies. Derivatives can be illiquid, may disproportionately increase losses and have a potentially large impact on the Fund's performance. See the prospectus for a complete listing of the principal risks.

This material must be accompanied or preceded by a current Davis Series, Inc., Prospectus. Carefully consider the fund's investment strategies, risks, charges and expenses before investing or sending money. The prospectus contains this and other information and can be obtained by clicking here or calling 1 (800) 279-0279.

The Fund's shares are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency and involve investment risks, including possible loss of the principal amount invested.