Davis Financial Fund
Morningstar
Analyst Rating
Overview
Investment Strategy
The Davis Financial Fund seeks to purchase durable, well-managed financial businesses at value prices and hold them for the long term. It may also invest a small portion of assets in companies outside the financial industry.
We use the Davis Investment Discipline to uncover financial companies with competitive advantages, strong balance sheets, solid free cash flows and earnings growth potential, and proven outstanding management. We believe these types of businesses, purchased at attractive prices, should perform well for investors over time.
Why Invest in the Davis Financial Fund
According to Morningstar
“Davis Financial Fund is skilled at exploiting a sector many fear to tread. The 2008 meltdown in financial stocks reminded investors how risky investing in these stocks can be and of the industry expertise one needs in order to profit from the sector over the long term. This Fund has that expertise in Ken Feinberg, who has managed the Fund since 1997. ... More importantly, his strategy has proved resilient time and again. ...” – Morningstar Analysis – 1/10
Sixty Years of Experience
The Davis family has compounded wealth for investors over six decades and three generations.
Long-Term Results
The Fund delivered an average annual return of 10.88% from its inception on May 1, 1991 through December 31, 2011 versus a return of 9.49% for the Lipper category average.1
Aligned with Shareholders
With more than $2 billion invested side by side with fellow shareholders, we experience the same risks and reap the same rewards.2
Our Culture of Shareholder Stewardship
Morningstar has recognized Davis Advisors commitment to shareholders by awarding the Fund its highest overall Stewardship Grade of A, a level achieved by less than 11% of the funds Morningstar grades.3
Lower than Average Expense Ratio4
Davis Financial Fund A, 0.95%; Lipper category average, 1.35%
Lower than Average Turnover Rate4
Davis Financial Fund, 2%; Lipper category average, 158%
Performance as of 12/31/11
The chart below illustrates the attractive long-term performance for the Davis Financial Fund.
| Total Returns As of December 31, 2011 |
YTD* | 1 Year |
3 Years |
5 Years |
10 Years |
15 Years |
20 Years |
Since 5/1/91 |
|---|---|---|---|---|---|---|---|---|
|
Davis Financial Fund Class A Shares without sales charge |
-9.02% | -9.02% | 13.91% | -5.32% | 1.95% | 5.96% | 10.11% | 10.88% |
| with a maximum 4.75% sales charge | -13.34% | -13.34% | 12.08% | -6.23% | 1.46% | 5.62% | 9.84% | 10.62% |
| S&P 500® Index | 2.11% | 2.11% | 14.11% | -0.25% | 2.92% | 5.45% | 7.81% | 8.15% |
*YTD is not annualized.
The performance presented represents past performance and is not a guarantee of future results. Total return assumes reinvestment of dividends and capital gain distributions. Investment return and principal value will vary so that, when redeemed, an investor’s shares may be worth more or less than their original cost. The total annual operating expense ratio for Class A shares as of the most recent prospectus was 0.95%. The total annual operating expense ratio may vary in future years. Returns and expenses for other classes of shares will vary. Current performance may be higher or lower than the performance quoted. For most recent month-end performance, click here or call 800.279.0279. The Fund received a favorable class action settlement from a company that it no longer owns. This settlement had a material impact on the investment performance of the Fund in 2009. This was a one time event that is unlikely to be repeated.
Portfolio Characteristics as of 12/31/11
Portfolio Composition
| Financial Fund | S&P 500® Index | |
|---|---|---|
| Forecast P/E Ratio | 13.1 | 12.7 |
| P/B Ratio | 1.6 | 3.3 |
| Weighted Average Market Cap ($bn) | 30.9 | 95.3 |
| Beta (3 year) | 1.1 | 1.0 |
| Standard Deviation (5 year, A Shares) | 23.1 | 18.9 |
| Number of Holdings | 31 | 500 |
Turnover and Expenses
| Financial Fund |
Lipper Category Average | |
|---|---|---|
| Turnover Rate4 | 2% | 158% |
| Expense Ratio4 (A Shares) | 0.95% | 1.35% |
Morningstar
| Analyst Rating | Stewardship Grade |
|---|---|
|
|
A |
Top 10 Holdings
| Transatlantic Holdings, Inc. | 11.0% |
| American Express Co. | 9.8% |
| Oaktree Capital Group | 9.4% |
| Wells Fargo & Co. | 8.5% |
| Markel Corp. | 6.0% |
| Loews Corp. | 6.0% |
| Julius Baer Group Ltd. | 5.6% |
| Bank of New York Mellon Corp. | 5.1% |
| State Bank of India Ltd. GDR | 4.6% |
| Progressive Corp. | 4.4% |
Top 5 Industries
| Diversified Financials | 44.2% |
| Insurance | 32.9% |
| Banks | 16.0% |
| Food & Staples Retailing | 2.8% |
| Energy | 2.3% |
Literature
| Fact Sheet | ||
|---|---|---|
| Fund Fact Sheet | Download Share | Applying the Davis Investment Discipline to a broad spectrum of financial companies, Portfolio characteristics, top holdings, and performance. |
| Portfolio Composition | Download Share | Quarterly update of portfolio characteristics. |
| Portfolio Manager Commentary | ||
| Manager Commentary - Annual Review 2012 | Download View Share | Portfolio Managers Kenneth Charles Feinberg and Charles Cavanaugh offer their thoughts on the financial sector, individual companies in the Portfolio, and recent performance. |
This material must be accompanied or preceded by a current Davis Financial Fund Prospectus. You should carefully consider the Fund’s investment objective, risks, charges, and expenses before investing. The prospectus contains this and other information and can be obtained by clicking here or calling 800.279.0279. Read the prospectus carefully before you invest or send money.
1Class A shares, not including a sales charge. As of December 31, 2011, the Davis Financial Fund had been categorized by Lipper as Financial Services. Past performance is not a guarantee of future results.
2As of December 31, 2011.
3As of December 31, 2011.
4See Expense ratio/Turnover link below.
(21) Read here for objective/risk disclosures
(22) Read here for Morningstar disclosures
(23) Read here for Expense ratio/Turnover disclosures
Davis Distributors, LLC, 2949 East Elvira Road, Suite 101, Tucson, AZ 85756