Overview

The Fund seeks current income by investing in debt securities guaranteed or issued by the U.S. government or its agencies. These include mortgage-backed securities, which may comprise a large portion of the Fund.

The Fund can help create a strong foundation for any long-term investment portfolio—offering an excellent means of balancing equity holdings.

The Fund's strategy is to diversify among different types of government securities, maturity lengths, call provisions, and interest rate coupons. The Fund seeks to smooth out performance and reduce volatility in a variety of market climates.

Investment Strategy

In selecting U.S. Government Securities for the Fund, Davis Advisors uses fundamental research to attempt to achieve competitive returns over the long term.

Unlike many government bond funds that invest a portion of their assets in riskier corporate paper, Davis Government Bond Fund invests only in U.S. Treasury securities, U.S. government agency securities and U.S. government agency mortgage securities.

The Fund emphasizes undervalued sectors of the market which our research leads us to believe the potential for superior returns. The Fund seeks to maintain a weighted average maturity of three years or less. In general, longer weighted average maturities result in greater changes in the price of the Fund's shares when prevailing interest rates change.

What the Davis Government Bond Fund Can Contribute
to Your Portfolio

Monthly Dividends
The Fund can be a dependable source of income, which can be used for current expenses or compounded for future needs. The Fund's monthly dividends may be taken in cash or reinvested, without charge, in additional shares.

Conservative Investment
Among the safest investments in the world in terms of credit quality, many issues held in the Davis Government Bond Fund have interest payments and principal which are guaranteed by the U.S. government, its agencies or instrumentalities.*

Good Balance
The Fund can help create a strong foundation for any long-term financial portfolio - offering an excellent means of balancing equity holdings.

Opportunity for Capital Appreciation
Unlike many other income-oriented investments such as CDs and money market funds, when interest rates decline, bond prices move higher providing the potential for capital appreciation. Conversely, when interest rates rise, bond prices decline.