Fund Overview
Davis Financial Fund


The Davis Financial Fund seeks to provide long term capital appreciation by investing primarily in the stocks of companies in the financial services industry. The Fund's overriding theme is looking for durable companies that are conservatively valued. It also may invest in companies outside the financial arena.1

Investment Philosophy
4 Compelling Reasons to Invest in Financial Stocks
Reliable Performance
Fund Factsheet
 Prospectus

WHAT IS THE FUND' S INVESTMENT PHILOSOPHY?

The Fund capitalizes on the Davis family's core competency, honed over three generations, of successfully investing in financial services stocks.2 The Fund's basic philosophy is to seek durable, well-managed businesses that can be purchased at value prices and held for the long term. Portfolio Managers Kenneth Feinberg and Charles Cavanaugh focus on managing risk.

A Research-Driven Approach
"Understanding a company's products and financial statements is critical, but it doesn't give you enough of an edge. We also work hard to evaluate the vision, character and goals of a company's management because that's the only way to gain conviction about a stock. And only with conviction can you buy when others are panicking and selling." Christopher C. Davis, Davis Advisors

A Strong Price Discipline
"We think of ourselves as opportunistic buyers. We generally purchase companies when they are under a cloud —that is, when some short-term disappointment has created an opportunity. This strict price discipline helps us mitigate risk and can be particularly crucial in volatile markets." 3 Kenneth Charles Feinberg, Portfolio Manager

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4 COMPELLING REASONS TO INVEST IN FINANCIAL STOCKS

We believe financial stocks offer attractive investment opportunities over the long term for four compelling reasons: 4

  • Powerful demographic trends—not only in America where 76 million baby boomers are entering their peak earning and investing years, but also in Europe and Asia—should lead to greater demand for financial products worldwide.

  • Companies with strong brand-names are emerging in financial services that should increasingly gain market share from weaker competitors.

  • Consolidation within financial services industries is a continuing trend that should result in improving profit margins for surviving companies.

  • Many financial companies generate strong free cash flow that can be used to increase value for shareholders through share repurchases, acquisitions and higher dividends.

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RELIABLE PERFORMANCE 2

Davis Financial Fund Class A shares 5/1/91-12/31/07
 Fund performance includes 4.75% maximum sales charge and reflects reinvested
distribution and changes in net asset value for Class A shares.

As of December 31, 2007
1 Year
5 Years
10 Years
Davis Financial Fund Class A
-9.81%
12.17%
6.93%

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 Financial Fund Class A shares as of the most recent prospectus was 0.98%. Current month end performance can be obtained by clicking here or by calling 1 (800) 279-0279.

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This material must be accompanied or preceded by a current Davis Series, Inc., Prospectus. Carefully consider the fund's investment objectives, 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.

1 Because Davis Financial Fund concentrates its investments in the financial sector it may be subject to greater risks than a fund that does not concentrate its investments. The Fund’s investment performance, both good and bad, is expected to reflect the economic performance of the financial sector much more than a fund that does not concentrate its portfolio.
2 Past performance is not a guarantee of future results. There can be no guarantee that the Fund will achieve its investment objective or continue to deliver consistent investment performance. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
3 Davis Financial Fund manages risk by adherence to a strict price discipline. Equity markets are volatile and there can be no guarantee that investors will earn a profit. The Fund’s net asset value per share will fluctuate and an investor in the Fund may lose money.
4 There is no guarantee that the financial services sector will continue to outperform the overall market in the future.

The S&P 500®  Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends, weighted towards stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. Investments cannot be made directly in the S&P 500®  Index.

Shares of the Davis Funds are not deposits or obligation 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.

Davis Financial Fund's investment objective is long-term growth of capital. There can be no assurance that the Fund will achieve its objective. Under normal circumstances the Fund invests at least 80% of its net assets, plus any borrowing for investment purposes, in securities issued by companies principally engaged in the financial services sector. Securities within the financial services sector are more prone to regulatory action in the financial services industry, more sensitive to interest rate fluctuations and are the target of increased competition. As of December 31, 2007, Davis Financial Fund had 14.8% of assets invested in foreign companies. Companies operating, incorporated, or principally traded in foreign countries may have more fluctuation as foreign economies may not be as strong or diversified, foreign political systems may not be as stable, and foreign financial reporting standards may not be as rigorous as they are in the United States. See the prospectus for a complete listing of the principal risks.